# EDGAR Filing Document

**Accession Number:** 0001060822
**File Stem:** 0001060822-26-000059
**Filing Date:** 2026-4
**Character Count:** 311676
**Document Hash:** 9c81f77f0b275818dd57834551833704
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001060822-26-000059.hdr.sgml**: 20260401

**ACCESSION NUMBER**: 0001060822-26-000059

**CONFORMED SUBMISSION TYPE**: DEF 14A

**PUBLIC DOCUMENT COUNT**: 51

**CONFORMED PERIOD OF REPORT**: 20260513

**FILED AS OF DATE**: 20260401

**DATE AS OF CHANGE**: 20260401

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CARTERS INC
- **CENTRAL INDEX KEY:** 0001060822
- **STANDARD INDUSTRIAL CLASSIFICATION:** APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 133912933
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0103

**FILING VALUES:**
- **FORM TYPE:** DEF 14A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-31829
- **FILM NUMBER:** 26828472

**BUSINESS ADDRESS:**
- **STREET 1:** PHIPPS TOWER
- **STREET 2:** 3438 PEACHTREE ROAD NE SUITE 1800
- **CITY:** ATLANTA
- **STATE:** GA
- **ZIP:** 30326
- **BUSINESS PHONE:** 678-399-1000

**MAIL ADDRESS:**
- **STREET 1:** PHIPPS TOWER
- **STREET 2:** 3438 PEACHTREE ROAD NE SUITE 1800
- **CITY:** ATLANTA
- **STATE:** GA
- **ZIP:** 30326

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CARTER HOLDINGS INC
- **DATE OF NAME CHANGE:** 19980430

?xml version='1.0' encoding='ASCII'? cri-20260401

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

__________________________________

**SCHEDULE 14A**

**(Rule 14a-101)**

**INFORMATION REQUIRED IN PROXY STATEMENT**

**SCHEDULE 14A INFORMATION**

**Proxy Statement Pursuant to Section 14(a) of the**

**Securities Exchange Act of 1934**

**(Amendment No.)**

___________________________________

Filed by the Registrant ☒ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐ 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's, Inc.**

**(Name of Registrant as Specified In Its Charter)**

**Not applicable.**

**(Name of Person(s) Filing Proxy Statement, if other than the Registrant)**

Payment of Filing Fee (Check the appropriate box):

☒ No fee required.

☐ Fee paid previously with preliminary materials.

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

![Carter's.jpg](cri-20260401_g1.jpg)

April 1, 2026

Dear Stockholder,

It is my pleasure to invite you to attend our 2026 Annual Meeting of Stockholders on Wednesday, May

13, 2026 (the "Annual Meeting"). The meeting will be held in a virtual format.

The attached 2026 Notice of Annual Meeting of Stockholders and Proxy Statement describe the formal

business to be conducted at the meeting. Whether or not you plan to attend the Annual Meeting, your

shares can be represented if you promptly submit your voting instructions over the internet, by

telephone, by completing, signing, dating, and returning your proxy card in the enclosed envelope, or by

following the instructions you have received from your broker or other nominee.

On behalf of our Board of Directors and Leadership Team, thank you for your investment in Carter's,

Inc.

Sincerely,

![Gretchen Schar Signature.jpg](cri-20260401_g2.jpg)

Gretchen W. Schar

Non-Executive Chair of the Board of Directors

![Carter's.jpg](cri-20260401_g1.jpg)

**2026 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS**

This Meeting Notice highlights information described in other parts of this 2026 Proxy Statement and does not contain all

information you should consider in voting. Please read the entire 2026 Proxy Statement carefully before voting.

**To our stockholders,** 

You are invited to attend our 2026 Annual Meeting to be held as follows in a virtual meeting format:

![2026 Annual Meeting Information.jpg](cri-20260401_g3.jpg)

**ITEMS OF BUSINESS**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Item** | **Board's** <br>**Recommendation**<br>| **Voting Approval** <br>**Standard**<br>| **Effect of Abstention** | **Effect of Broker Non-**<br>**Vote**<br>|
| Election of nine <br>nominated directors<br>| FOR | More votes "For" than <br>"Against"<br>| No effect | No effect |
| Advisory approval of <br>compensation of named <br>executive officers<br>| FOR | More votes "For" than <br>"Against"<br>| No effect | No effect |
| Approval of amended and <br>restated equity incentive <br>plan<br>| FOR | Majority of votes <br>properly cast at the <br>meeting<br>| No effect | No effect |
| Ratification of <br>appointment of <br>PricewaterhouseCoopers <br>LLP for fiscal 2026<br>| FOR | Majority of votes <br>properly cast at the <br>meeting<br>| No effect | Not applicable |

---

In addition, at the Annual Meeting we will conduct any other business that may properly come before the meeting. See

Question 19 of the "Questions and Answers About the 2026 Annual Meeting" beginning on page 87 for more information.

**PROXY SOLICITATION**

The Board solicits the enclosed proxy for the 2026 Annual Meeting and any adjournment or postponement of the 2026 Annual

Meeting. Any proxy may be revoked at any time prior to its exercise at the 2026 Annual Meeting.

**VOTING**

You may vote if you held shares of Carter's common stock as of the record date (March 20, 2026). You are able to vote your

shares by providing instructions to the proxy holders who will then vote in accordance with your instructions. We urge you to

read the 2026 Proxy Statement carefully and to vote in accordance with the recommendations of the Board.

**QUESTIONS AND ANSWERS ABOUT THE 2026 ANNUAL MEETING**

We encourage you to review the section "Questions and Answers About the 2026 Annual Meeting" for answers to common

questions about the virtual meeting, proxy materials, voting, and other topics.

By order of the Board of Directors,

![Image_11.jpg](cri-20260401_g4.jpg)

Antonio D. Robinson

Secretary

*Approximate Date of Mailing of Proxy Materials or Notice of Internet Availability:*

**April 1, 2026**

**TABLE OF CONTENTS** 

---

| | |
|:---|:---|
| [BOARD OF DIRECTORS AND](#i0f96eb6978df4bdc96c28556de6c4b09_19)<br>[CORPORATE GOVERNANCE](#i0f96eb6978df4bdc96c28556de6c4b09_19)<br>[INFORMATION](#i0f96eb6978df4bdc96c28556de6c4b09_19)<br>| 2 |
| [PROPOSAL NUMBER ONE:](#i0f96eb6978df4bdc96c28556de6c4b09_43)<br>[ELECTION OF DIRECTORS](#i0f96eb6978df4bdc96c28556de6c4b09_43)<br>| 26 |
| [COMPENSATION OF DIRECTORS](#i0f96eb6978df4bdc96c28556de6c4b09_46) | 27 |
| [EXECUTIVE OFFICERS'](#i0f96eb6978df4bdc96c28556de6c4b09_49)<br>[BIOGRAPHICAL INFORMATION](#i0f96eb6978df4bdc96c28556de6c4b09_49)<br>[AND EXPERIENCE](#i0f96eb6978df4bdc96c28556de6c4b09_49)<br>| 29 |
| [COMPENSATION DISCUSSION](#i0f96eb6978df4bdc96c28556de6c4b09_52)<br>[AND ANALYSIS](#i0f96eb6978df4bdc96c28556de6c4b09_52)<br>| 33 |
| [COMPENSATION & HUMAN](#i0f96eb6978df4bdc96c28556de6c4b09_79)<br>[CAPITAL COMMITTEE REPORT](#i0f96eb6978df4bdc96c28556de6c4b09_79)<br>| 52 |
| [COMPENSATION & HUMAN](#i0f96eb6978df4bdc96c28556de6c4b09_79)<br>[CAPITAL COMMITTEE](#i0f96eb6978df4bdc96c28556de6c4b09_79)<br>[INTERLOCKS AND INSIDER](#i0f96eb6978df4bdc96c28556de6c4b09_79)<br>[PARTICIPATION](#i0f96eb6978df4bdc96c28556de6c4b09_79)<br>| 52 |
| [FISCAL 2025 SUMMARY](#i0f96eb6978df4bdc96c28556de6c4b09_82)<br>[COMPENSATION TABLE](#i0f96eb6978df4bdc96c28556de6c4b09_82)<br>| 53 |
| [FISCAL 2025 GRANTS OF PLAN-](#i0f96eb6978df4bdc96c28556de6c4b09_85)<br>[BASED AWARDS](#i0f96eb6978df4bdc96c28556de6c4b09_85)<br>| 55 |
| [OUTSTANDING EQUITY AWARDS](#i0f96eb6978df4bdc96c28556de6c4b09_88)<br>[AT FISCAL 2025 YEAR-END](#i0f96eb6978df4bdc96c28556de6c4b09_88)<br>| 57 |
| [OPTION EXERCISES AND STOCK](#i0f96eb6978df4bdc96c28556de6c4b09_91)<br>[VESTED IN FISCAL 20](#i0f96eb6978df4bdc96c28556de6c4b09_91)25<br>| 59 |
| [NONQUALIFIED DEFERRED](#i0f96eb6978df4bdc96c28556de6c4b09_94)<br>[COMPENSATION](#i0f96eb6978df4bdc96c28556de6c4b09_94)<br>| 59 |
| [POTENTIAL PAYMENTS UPON](#i0f96eb6978df4bdc96c28556de6c4b09_97)<br>[TERMINATION OR CHANGE OF](#i0f96eb6978df4bdc96c28556de6c4b09_97)<br>[CONTROL](#i0f96eb6978df4bdc96c28556de6c4b09_97)<br>| 61 |
| [PAY RATIO DISCLOSURE](#i0f96eb6978df4bdc96c28556de6c4b09_100) | 64 |
| [PAY VERSUS PERFORMANCE](#i0f96eb6978df4bdc96c28556de6c4b09_106)<br>[DISCLOSURE](#i0f96eb6978df4bdc96c28556de6c4b09_106)<br>| 65 |
| [TRANSACTIONS WITH RELATED](#i0f96eb6978df4bdc96c28556de6c4b09_109)<br>[PERSONS, PROMOTERS, AND](#i0f96eb6978df4bdc96c28556de6c4b09_109)<br>[CERTAIN CONTROL PERSONS](#i0f96eb6978df4bdc96c28556de6c4b09_109)<br>| 70 |

---

---

| | |
|:---|:---|
| [SECURITIES OWNERSHIP OF](#i0f96eb6978df4bdc96c28556de6c4b09_112)<br>[CERTAIN BENEFICIAL OWNERS,](#i0f96eb6978df4bdc96c28556de6c4b09_112)<br>[DIRECTORS, AND EXECUTIVE](#i0f96eb6978df4bdc96c28556de6c4b09_112)<br>[OFFICERS](#i0f96eb6978df4bdc96c28556de6c4b09_112)<br>| 71 |
| [DELINQUENT SECTION 16](#i0f96eb6978df4bdc96c28556de6c4b09_115)<br>[REPORTS](#i0f96eb6978df4bdc96c28556de6c4b09_115)<br>| 73 |
| [PROPOSAL NUMBER TWO:](#i0f96eb6978df4bdc96c28556de6c4b09_118)<br>[ADVISORY VOTE ON APPROVAL](#i0f96eb6978df4bdc96c28556de6c4b09_118)<br>[OF EXECUTIVE COMPENSATION](#i0f96eb6978df4bdc96c28556de6c4b09_118)<br>| 74 |
| PROPOSAL NUMBER THREE: <br>APPROVAL OF THE COMPANY'S <br>AMENDED AND RESTATED <br>EQUITY INCENTIVE PLAN<br>| 75 |
| [AUDIT COMMITTEE REPORT](#i0f96eb6978df4bdc96c28556de6c4b09_121) | 83 |
| [PROPOSAL NUMBER FOUR:](#i0f96eb6978df4bdc96c28556de6c4b09_124)<br>[RATIFICATION OF INDEPENDENT](#i0f96eb6978df4bdc96c28556de6c4b09_124)<br>[REGISTERED PUBLIC](#i0f96eb6978df4bdc96c28556de6c4b09_124)<br>[ACCOUNTING FIRM](#i0f96eb6978df4bdc96c28556de6c4b09_124)<br>| 84 |
| [OTHER MATTERS](#i0f96eb6978df4bdc96c28556de6c4b09_127) | 86 |
| [QUESTIONS AND ANSWERS](#i0f96eb6978df4bdc96c28556de6c4b09_130)<br>[ABOUT THE 2026 ANNUAL](#i0f96eb6978df4bdc96c28556de6c4b09_130)<br>[MEETING](#i0f96eb6978df4bdc96c28556de6c4b09_130)<br>| 87 |
| [APPENDIX](#i0f96eb6978df4bdc96c28556de6c4b09_133) A — NON-GAAP <br>DISCLOSURES<br>| 94 |
| APPENDIX B — CARTER'S, INC. <br>AMENDED AND RESTATED <br>EQUITY INCENTIVE PLAN<br>| 96 |

---

**FORWARD-LOOKING STATEMENTS**

Statements contained in this proxy statement that are not historical fact and use predictive words such as

"estimates", "outlook", "guidance", "expect", "believe", "intend", "designed", "target", "plans", "may", "will", "are

confident" and similar words are forward-looking statements (as such term is defined in the Private Securities

Litigation Reform Act of 1995). These forward-looking statements and related assumptions involve risks and

uncertainties that could cause actual results and outcomes to differ materially from any forward-looking

statements or views expressed in this proxy statement. These risks and uncertainties include, but are not

limited to, those discussed in the subsection entitled "Risk Factors" under Part I, Item 1A, of our most recent

Annual Report on 10-K, and otherwise in our reports and filings with the Securities and Exchange Commission,

as well as the following factors: changes in global economic and financial conditions, and the resulting impact

on consumer confidence and consumer spending, as well as other changes in consumer discretionary

spending habits; risks related to public health crises; risks related to the organizational restructuring plan,

including, but not limited to, our ability to achieve the expected savings from the plan and to fully implement the

plan; risks related to consumer tastes and preferences, as well as fashion trends; the failure to protect our

intellectual property; the diminished value of our brands, potentially as a result of negative publicity or

unsuccessful branding and marketing efforts; delays, product recalls, or loss of revenue due to a failure to

meet our quality standards; risks related to uncertainty regarding the future of international trade agreements

and the United States' position on international trade, as well as significant political, trade, and regulatory

developments and other circumstances beyond our control; the roll-back of incremental tariffs imposed under

the International Emergency Economic Powers Act (the "incremental tariffs") and any additional actions taken

in response to their roll-back, including tariffs imposed pursuant to Section 122 of the Trade Act of 1974 (the

"122 tariffs"); our ability to recover refunds of incremental tariff amounts or other tariff amounts paid; increased

competition in the marketplace; financial difficulties for one or more of our major customers; identification of

locations and negotiation of appropriate lease terms for our retail stores; distinct risks facing our eCommerce

business; failure to forecast demand for our products and our failure to manage our inventory; increased

margin pressures, including increased cost of materials and labor and our inability to successfully increase

prices to offset these increased costs; continued inflationary pressures with respect to labor and raw materials

and global supply chain constraints that have, and could continue, to affect freight, transit, and other costs;

fluctuations in foreign currency exchange rates; unseasonable or extreme weather conditions; risks associated

with corporate responsibility issues; our foreign sourcing arrangements; a relatively small number of vendors

supply a significant amount of our products; disruptions in our supply chain, including increased transportation

and freight costs; our ability to effectively source and manage inventory; problems with our Braselton, Georgia

distribution facility; pending and threatened lawsuits; a breach of our information technology systems and the

loss of personal data or a failure to implement new information technology systems successfully; unsuccessful

expansion into international markets; failure to comply with various laws and regulations; failure to properly

manage strategic initiatives; retention of key individuals; acquisition and integration of other brands and

businesses; failure to achieve sales growth plans and profitability objectives to support the carrying value of

our intangible assets; our continued ability to meet obligations related to our debt; changes in our tax

obligations, including additional customs, duties or tariffs; our continued ability to declare and pay a dividend;

volatility in the market price of our common stock; and the cost or effort required for our stockholders to bring

certain claims or actions against us, as a result of our designation of the Court of Chancery of the State of

Delaware as the sole and exclusive forum for certain types of actions and proceedings. Except for any ongoing

obligations to disclose material information as required by federal securities laws, the Company does not

undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of

new information, future events, or otherwise. The inclusion of any statement in this proxy statement does not

constitute an admission by the Company or any other person that the events or circumstances described in

such statement are material.

**BOARD OF DIRECTORS AND CORPORATE GOVERNANCE** 

**INFORMATION**

Each of our directors stands for election annually and thereafter holds office for a one-year term. At

our Annual Meeting, we are asking our stockholders to elect nine proposed nominees, including the

eight independent directors set forth below and Douglas C. Palladini, our Chief Executive Officer &

President.

The following table and charts show the committee assignments of each of our independent director

nominees, information regarding the composition of Carter's Board of Directors (the "Board"), the

definition of skills used for our Board skills matrix, the Board skills matrix, and a chart showing the

skills and experience held by the Board.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Director** | **Audit** <br>**Committee**<br>| **Compensation**<br> **& Human** <br>**Capital** <br>**Committee**<br>| **Nominating** <br>**& Corporate** <br>**Governance** <br>**Committee**<br>| **Business** <br>**Transformation** <br>**Committee**<br>|
| Rochester Anderson, Jr. |  | •  | •  |  |
| Jeffrey H. Black<sup>(1)</sup> | ℂ |  | •  |  |
| Luis Borgen | •  |  |  |  |
| Jevin S. Eagle | •  |  |  | •  |
| Mark P. Hipp | •  | •  |  | •  |
| Stacey S. Rauch<sup>(2)</sup> |  | ℂ | •  | •  |
| Gretchen W. Schar<sup>(3)</sup> |  |  | ℂ |  |
| Stephanie P. Stahl |  | •  | •  | ℂ |

---

ℂ = Chair• = Member

1. Mr. Black was appointed Chair of the Audit Committee on November 13, 2025.

2. Ms. Rauch was appointed Chair of the Compensation & Human Capital Committee on February 10, 2026.

3. Ms. Schar was appointed Chair of the Nominating & Corporate Governance Committee on November 13, 2025.

**DIRECTOR SKILLS MATRIX**

The Board believes that the combination of backgrounds, skills, and experiences collectively

possessed by the members of the Board well-qualifies the Board to exercise oversight responsibilities

on behalf of our stockholders in light of Carter's current and future strategic plans. The following

tables describe the key skills and definitions of those skills, a breakdown of the number of directors

that hold each skill, and the self-identified skills for each independent member of our Board

nominated for election at the 2026 Annual Meeting. We use the general Board membership criteria

listed in our Corporate Governance Principles, along with the desired skills and qualifications listed in

the following tables, to identify, screen, and recruit director candidates and make director nomination

recommendations to the full Board.

---

| | |
|:---|:---|
| **Skill** | **Definitions** |
| **Senior** <br>**Leadership**<br>| Experience in an executive officer role |
| **Governance** | Public company board experience, including more than three years on Carter's <br>board<br>|
| **Retail Industry** <br>**Experience**<br>| Executive officer level experience or service on the board of directors at a retail <br>and/or consumer products company<br>|
| **Consumer** <br>**Strategy**<br>| Executive officer level experience in marketing, brand management, consumer <br>insights, and brand strategy, or service on the board of directors of a retail or <br>consumer products company<br>|
| **Digital /** <br>**Technology**<br>| Executive officer experience with technology, digital platforms and new media, <br>data security, and data analytics; or service on the board of directors of a digital <br>platforms, digital media, data security, or data analytics company<br>|
| **Financial** <br>**Expertise**<br>| Expertise with financial reporting, accounting, risk management, and capital <br>allocation. Qualifies as an audit committee financial expert as defined under <br>SEC and NYSE rules<br>|
| **HR and Talent** <br>**Management**<br>| Executive or board level experience in managing large workforce and/or <br>experience with executive compensation, employee engagement, and Chief <br>Executive Officer ("CEO") succession<br>|
| **ESG** | Executive officer or board level experience with relevant environmental, social, <br>and governance ("ESG") matters<br>|
| **International** <br>**Expansion**<br>| Executive officer or board level experience in managing business operations <br>and growth in global markets<br>|
| **Global Supply** <br>**Chain**<br>| Executive officer or board level experience with a company with global supply <br>chain operations<br>|

---

**SKILLS AND EXPERIENCE**

![Skills Matrix.jpg](cri-20260401_g5.jpg)

![Skills Composition.jpg](cri-20260401_g6.jpg)

![Ethnicity and Gender Composition.jpg](cri-20260401_g7.jpg)

**2026 NOMINEES FOR DIRECTOR**

After considering the recommendations of the Nominating & Corporate Governance Committee, the

Board has set the number of directors at nine and nominated all current directors to stand for re-

election, except for Mr. Montgoris and Ms. Borenstein, who are not standing for re-election. The

Board believes that each of the nominees is qualified to serve as a director of Carter's and, in

addition to the skills listed in the table on page 4, certain key qualifications of each nominee that

were considered by the Board follow each nominee's biographical description.

We believe that all nominees will be able and willing to serve if elected. However, if any nominee

should become unable or unwilling to serve for any reason, proxies may be voted for another person

nominated as a substitute by the Board, or the Board may reduce the number of directors.

![Rock Anderson.jpg](cri-20260401_g8.jpg)

***Rochester Anderson, Jr.*** has over 30 years of human

resources and operational experience at various public and

private corporations, including more than 15 years of

experience leading human resource organizations and more

than 15 years of operational experience with public and

private corporations and non-profit organizations. Mr.

Anderson is currently Chief Human Resources Officer, Emory

Healthcare, which he joined in September 2022. Previously,

from February 2020 to September 2022, Mr. Anderson served

as Chief Human Resources Officer of AutoNation, Inc., a

publicly-traded company and the nation's largest automobile

dealer with over 21,000 associates, working in over 400

locations across 18 states.

Mr. Anderson previously served as Senior Vice President,

People Solutions for the Financial Industry Regulatory

Authority, from May 2019 to February 2020, and served from

2006 to 2018 in various human resource focused and

operational roles at Cox Automotive Inc., including serving as

Chief Human Resources Officer and Executive Vice President

from 2014 to 2018. Mr. Anderson's experience focuses on

human capital management, career development and

training, operational management, and diversity and inclusion.

*Director Qualifications:*

*•Significant human capital management,* 

*organizational improvement, compensation and* 

*benefits, and executive management experience* 

*•Valuable insights into workforce dynamics, diversity,* 

*equity and inclusion, and executive development*

*•Substantial operational experience in retail and* 

*consumer-focused businesses and inclusion, and* 

*executive development*

**ROCHESTER ANDERSON, JR.**

*Independent Director* since 2022

**Age:** 64

**Committees:**

**•**Compensation & Human

Capital

• Nominating & Corporate

Governance

![Black.jpg](cri-20260401_g9.jpg)

***Jeffrey H. Black*** served as Senior Partner and Vice

Chairman of Deloitte LLP from 2002 to 2016 and as Partner-

in-Charge of Arthur Andersen LLP's Metro New York audit

practice from 1988 to 2002. Mr. Black has 40 years of

experience leading teams serving those firms' largest and

most complex global clients.

*Director Qualifications:*

• *Significant accounting, financial reporting, and* 

*executive leadership experience, as well as valuable* 

*insights into risk and crisis management and* 

*oversight of publicly-traded, global businesses* 

• *Valuable experience in cyber and information* 

*governance oversight and has earned a Computer* 

*Emergency Readiness Team ("CERT") Certificate in* 

*Cybersecurity Oversight issued by the CERT Division* 

*of the Software Engineering Institute at Carnegie* 

*Mellon University, as well as the National Association* 

*of Corporate Directors master course in* 

*Cybersecurity* 

**JEFFREY H. BLACK**

*Independent Director* since 2022

**Age:** 71

**Committees:**

• Audit (Chair)

• Nominating & Corporate

Governance

 **Other Public Company** 

**Directorships:**

• Otis Worldwide Corp. since

2020

![Borgen.jpg](cri-20260401_g10.jpg)

***Luis Borgen*** has over 25 years of finance and operational

experience at various public and private equity-backed

companies. He was the Chief Financial Officer of athenahealth,

Inc., a healthcare technology company from 2019 to 2022. Prior

to that, he was Chief Financial Officer for Vistaprint, an e-

commerce company that produces marketing products for small

and microcap businesses, from 2017 to 2019. Prior to that, he

served from 2012 to 2017 as Chief Financial Officer for

DAVIDsTEA Inc., a specialty tea retailer in the United States

and Canada that became publicly-traded in 2015, and from

2010 to 2012 he served as Chief Financial Officer of DaVita Inc.

("DaVita"), a publicly traded healthcare provider. Prior to DaVita,

Mr. Borgen spent 13 years at Staples, Inc. culminating in his

role as Senior Vice President Finance and Chief Financial

Officer for the U.S. Retail division. Mr. Borgen began his career

as an officer in the U.S. Air Force.

*Director Qualifications:*

• *Broad experience in finance, accounting, capital* 

*markets, investor relations, M&A and international* 

*expansion* 

• *Meaningful experience in the oversight of executive* 

*compensation, risk management, and corporate* 

*governance* 

*•Substantial operational experience in retail and* 

*consumer-focused businesses*

**LUIS BORGEN**

*Independent Director* since

2021

**Age:** 56

**Committee:**

• Audit

**Other Public Company and** 

**Investment Company** 

**Directorships:**

• Dodge & Cox Funds

Board of Trustees (Fund

Complex Consisting of

Seven Registered

Investment Companies)

• Eastern Bankshares,

Inc., since 2016

• Synopsys, Inc., since

2022 (Not Standing for

Re-election in

Connection with

Synopsys, Inc.'s 2026

Annual Meeting)

![Eagle.jpg](cri-20260401_g11.jpg)

***Jevin S. Eagle*** has served as Chief Executive Officer of Boston

University Hillel since 2017. From 2022 to 2025 he was also

Professor of the Practice, Strategy and Innovation and Executive

Director of Social Impact Initiatives at Boston University's

Questrom School of Business. Mr. Eagle served as Chief

Executive Officer and director of DAVIDsTEA Inc., a specialty tea

retailer in the United States and Canada, from April 2012 to April

2014. Mr. Eagle previously held several senior leadership positions

at Staples, Inc. from 2002 to 2012, including Executive Vice

President, Merchandising and Marketing. Prior to joining Staples,

Inc., Mr. Eagle worked for McKinsey & Company, Inc. from 1994 to

2001, ultimately serving as a partner in the firm's retail practice.

*Director Qualifications:*

• *Broad experience in a number of areas as the former Chief* 

*Executive Officer and director of DAVIDsTEA Inc. and* 

*Executive Vice President, Merchandising and Marketing of* 

*Staples, Inc., including retail, management,* 

*merchandising, sourcing, strategic planning, and brand* 

*marketing*

• *Valuable experience with developing strategies and* 

*programs for teaching social impact business education,* 

*including matters relating to environmental, social, and* 

*governance ("ESG") through his prior role as Professor* 

*and Executive Director of Social Impact Initiatives for* 

*Boston University's Questrom School of Business*

*•Meaningful experience in business strategy and the retail* 

*industry provides our Board with critical insights*

**JEVIN S. EAGLE**

*Independent Director* since

2010

**Age:** 59

**Committees:**

• Audit

• Business

Transformation

![Hipp.jpg](cri-20260401_g12.jpg)

***Mark P. Hipp*** has been the Chief Executive Officer of

H2IDD, an advisory firm focused on public and private

mergers and acquisitions since January 2013. From

November 2013 until April 2017, Mr. Hipp was the operating

partner at Sterling Partners, a private equity firm. Prior to

that, he spent over 28 years at Hewlett Packard Enterprise

Company, most recently as Vice President & General

Manager, HP Software and Global Networking Business

Management.

*Director Qualifications:*

• *Valuable perspective and insight with respect to* 

*issues relating to information technology, including* 

*cybersecurity and eCommerce, as well as global* 

*supply chain and logistics* 

*•Meaningful experience in strategic growth* 

*transactions including through investments,* 

*strategic relationships, and mergers and* 

*acquisitions*

**MARK P. HIPP**

*Independent Director* since 2018

**Age:** 64

**Committees:**

• Audit

• Business Transformation

• Compensation & Human

Capital

![Doug.jpg](cri-20260401_g13.jpg)

***Douglas C. Palladini*** joined Carter's on April 3, 2025 as

Chief Executive Officer & President and a member of the

Board. Mr. Palladini served as the founder and owner of

Kickstand, LLC, a consulting and advisory business

focused on brand and consumer strategy, from April 2022

until March 2025. Prior to founding Kickstand, LLC, from

June 2004 to March 2022, Mr. Palladini served in various

roles of increasing responsibility at Vans, a subsidiary of

V.F. Corporation, culminating in his role as Global Brand

President of Vans from July 2016 through March 2022.

*Director Qualifications:*

• *Deep experience with growing brands and* 

*consumer-driven strategies, and expertise in* 

*creating global brand connections*

*•Valuable perspective as an executive with* 

*decades of experience working in the retail and* 

*apparel industry and operating within multiple* 

*sales channels*

**DOUGLAS C. PALLADINI**

*Director* since 2025

**Age:** 59

***Stacey S. Rauch*** is a Senior Partner Emeritus of

McKinsey & Company ("McKinsey"). Ms. Rauch was a

leader in McKinsey's Retail and Consumer Goods

Practices, served as Head of the North American Retail

and Apparel Practice, and as Global Retail Practice

Convener. A 24-year veteran of McKinsey, Ms. Rauch led

engagements for a wide range of retailers, apparel

wholesalers, and consumer goods manufacturers in the

U.S. and internationally. Ms. Rauch was a co-founder of

McKinsey's New Jersey office and was the first woman at

McKinsey appointed as an industry practice leader. Since

retiring from McKinsey, Ms. Rauch has served as a

member or chair of various companies' boards.

*Director Qualifications:*

• *Strategic leadership expertise and deep* 

*experience in international business with a* 

*significant focus on the retail, apparel, and* 

*consumer goods industries*

*•Meaningful experience in the oversight of* 

*executive compensation, corporate governance,* 

*and financial reporting*

![Rauch.jpg](cri-20260401_g14.jpg)

**STACEY S. RAUCH**

*Independent Director* since 2022

**Age:** 68

**Committees:**

• Compensation & Human

Capital (Chair)

• Business Transformation

• Nominating & Corporate

Governance

**Prior Public Company** 

**Directorships:**

• Ascena Retail Group (2017 to

2021)

• Land Securities Group PLC

(2012 to 2021)

• Fiesta Restaurant Group, Inc.

(2012 to 2023) (Chair from

2017 to 2023)

• Heidrick & Struggles

International, Inc. (2019 to

2025)

***Gretchen W. Schar*** served as Executive Vice President

and Chief Financial and Administrative Officer of Arbonne

International LLC, a beauty and nutritional products

company, from 2011 until 2018 and from 2008 until 2011

served as Executive Vice President and Chief Financial

Officer of philosophy, inc., an international prestige

beauty brand. Prior to that, Ms. Schar spent over 30 years

at The Procter & Gamble Company in finance, general

management, and global operations roles of increasing

responsibility.

*Director Qualifications:*

• *Broad experience in finance, accounting,* 

*auditing and financial reporting, capital* 

*management, investor relations, and global* 

*operations* 

• *Meaningful experience with strategic growth,* 

*including mergers and acquisitions*

*•Significant public company board oversight* 

*experience, including in financial and accounting* 

*controls, public company reporting, engagement* 

*with independent public accounting firms,* 

*corporate governance, and executive* 

*compensation*

![Schar.jpg](cri-20260401_g15.jpg)

**GRETCHEN W. SCHAR**

*Independent Director* since 2019

*Non-Executive Chair*

**Age:** 71

**Committee:**

• Nominating & Corporate

Governance (Chair)

**Other Public Company** 

**Directorships:**

• Cincinnati Financial Corp.

since 2002

![Stahl.jpg](cri-20260401_g16.jpg)

***Stephanie P. Stahl*** is currently a Senior Advisor and

Executive Coach at the Boston Consulting Group

(since 2022), and previously served as Global

Marketing & Strategy Officer of Coach, Inc from 2012

through 2015. She is the Founder of her investment

and advisory company Studio Pegasus LLC, which she

launched in 2015 to focus on supporting early-stage

consumer ventures. Ms. Stahl previously held

executive positions at several leading retail and

consumer products companies and served as a

Partner at The Boston Consulting Group from 1992

until 2003.

*Director Qualifications:*

*•Significant experience in the retail/*

*consumer sector including experience* 

*developing, executing, and optimizing* 

*major change initiatives including* 

*fundamental business transformations,* 

*mergers and acquisitions, and post-*

*merger integrations*

*•Deep experience in marketing, data* 

*analytics, digital strategy, sustainability,* 

*brand building, and strategy*

*•Meaningful experience in the oversight of* 

*corporate governance, investor engagement,* 

*and ESG*

**STEPHANIE P. STAHL**

*Independent Director* since 2022

**Age:** 59

 **Committees:**

• Business Transformation (Chair)

• Compensation & Human Capital

• Nominating & Corporate

Governance

**Other Public Company** 

**Directorships:**

• Dollar Tree, Inc., since 2018

• Newell Brands, Inc., since 2023

• Edgewell Personal Care

Company, since 2024

**Prior Public Company** 

**Directorships:**

Knoll, Inc. (2013 to 2021)

**BOARD LEADERSHIP STRUCTURE**

Carter's Corporate Governance Principles provide that the positions of the Board Chair and Carter's

Chief Executive Officer may be combined if the non-management directors determine it is in the best

interest of Carter's. Since January 2025, upon the retirement of the Company's prior Chairman and

Chief Executive Officer & President, the Board has approved separating the positions. The Board

currently believes that a separate Chair and Chief Executive Officer leadership structure is

appropriate at this time to enable the Chief Executive Officer to focus on executing on the strategic

direction and operation of the Company, while allowing the Non-Executive Board Chair to focus on

day-to-day management of Board matters. However, the Board may choose to change this separation

of roles if it determines to be best for the Company under the then-existing circumstances. Should the

Board Chair be held by the CEO, the Board will appoint a lead independent director as required under

the Company's Corporate Governance Principles.

**DIRECTOR INDEPENDENCE**

The New York Stock Exchange ("NYSE") listing standards and Carter's Corporate Governance

Principles require a majority of Carter's directors to be independent from Carter's and Carter's

management. For a director to be considered independent, the Board must determine that the director

has no direct or indirect material relationship with Carter's. The Board considers all relevant

information provided by each director regarding any relationships each director may have with

Carter's or management. As a result of this review, our Board has determined that all of our current

non-employee directors are independent and meet the independence requirements under the listing

standards of the NYSE, the rules and regulations of the U.S. Securities and Exchange Commission

(the "SEC"), and Carter's Corporate Governance Principles.

**BOARD AND COMMITTEE EVALUATIONS**

The Board recognizes that a robust and constructive evaluation process is an essential component of

good corporate governance and Board and committee effectiveness. Through this process, directors

provide feedback and assess Board, committee and director performance, including areas where the

Board believes it is functioning effectively and areas where the Board believes it can improve. The

Board and the committees may, from time to time, engage outside third parties to help with this

process.

In fiscal 2025, under the leadership of Mr. Montgoris, the Nominating & Corporate Governance

Committee oversaw the Board's annual evaluation process, which focused on the Board as a whole

and each of the committees, as well as individual peer-to-peer assessments. These assessments

were facilitated by Carter's legal department and included individual interviews with each director with

feedback given to each director.

**RETIREMENT POLICY**

Our Corporate Governance Principles include a retirement policy providing that each independent

director's retirement will be automatic at the annual meeting of stockholders following such director

reaching the age of seventy-five (75), and no person shall be eligible for nomination or election as an

independent director after reaching the age of seventy-five (75), subject to the following exceptions:

(a)Our Board previously approved an exception for Mr. Montgoris to remain on the Board until the

2026 annual meeting; and

(b)The Board may waive this policy with respect to an individual upon the recommendation of the

Nominating & Corporate Governance Committee. A waiver may be granted on a case-by-case

basis for any reasonable purpose including, but not limited to, the particular skills and

experiences the director brings to the Board, the director's past performance and ability to

continue to constructively contribute going forward, and the then-current composition of the

Board. The affected director shall not participate in any vote regarding the waiver if he or she is

an incumbent director.

The Board, as recommended by the Nominating & Corporate Governance Committee, may use

reasonable discretion to allow a director to serve past his or her seventy-fifth (75th) birthday in the

future.

**BOARD AND ANNUAL MEETINGS**

Our Corporate Governance Principles require at least four regularly scheduled Board meetings each

year, and each director is expected to attend each meeting. The Board held four regularly scheduled

quarterly meetings during fiscal 2025; and held 16 additional special meetings to discuss business

developments and the overall strategy and performance of Carter's.

In fiscal 2025, no director participated in less than 75% of the aggregate number of all the Board and

applicable committee meetings that they were eligible to attend.

Although Carter's does not have a policy regarding director attendance at annual meetings of

stockholders, all directors are encouraged to attend the Annual Meeting. All of the directors then

standing for election attended Carter's virtual annual meeting of stockholders in fiscal 2025.

**EXECUTIVE SESSIONS**

Executive sessions of non-management directors are held at least four times a year. Any non-

management director can request that additional executive sessions be scheduled. The Non-Executive

Board Chair presides at the executive sessions of non-management directors.

**BOARD COMMITTEES**

Our Board has the following standing committees: the Audit Committee, the Compensation & Human

Capital Committee, the Nominating & Corporate Governance Committee, and the Business

Transformation Committee (formed in September 2024). The Board may also establish other

committees to assist in the discharge of its responsibilities.

All members of each committee are independent directors. Each committee operates under a written

charter, a current copy of which is available on the Investor Relations section of our website at

ir.carters.com, or in print by contacting Mr. Robinson at Carter's address: 3438 Peachtree Road NE,

Suite 1800, Atlanta, Georgia 30326. In fulfilling the oversight and other responsibilities delegated by

the Board, each Committee:

• provides the Board with regular reports of its activities;

• has the sole authority to retain or terminate its consultants and other advisors;

• receives appropriate funding to pay for necessary resources and administrative expenses; and

• annually evaluates its performance.

![Audit Committee Overview.jpg](cri-20260401_g17.jpg)

![Business Transformation Cmte Overview.jpg](cri-20260401_g18.jpg)

![Comp Cmte Overview.jpg](cri-20260401_g19.jpg)

![NomGov Cmte Overview.jpg](cri-20260401_g20.jpg)

**ELECTION NOMINATION PROCESS**

***Governance Principles***

Our process for election of directors is based on the following core principles:

• All directors are elected annually.

• "Majority Voting" standard for election of directors — each director in an uncontested election

must receive more votes "For" his or her election than votes "Against" in order to be elected.

• A director nominee who is not re-elected under our majority voting standard must tender his or

her resignation for consideration by the Board. The Nominating & Corporate Governance

Committee is then required to make a recommendation to the Board as to whether it should

accept or reject such resignation, and the Board must accept or reject the offer to resign and

publicly disclose its decision within 90 days of the certification of the results of the election. In

addition, pursuant to the Company's Corporate Governance Principles and the Nominating &

Corporate Governance Committee charter, the Board expects directors to ensure that their

time commitments do not interfere with their duties and responsibilities as a director, and will

consider a director candidate's time commitments when evaluating the potential candidate.

***Board Membership Criteria and Identifying Candidates***

Our Corporate Governance Principles outline the following criteria for Board membership:

• Our Nominating & Corporate Governance Committee shall include, in each director search,

candidates who reflect diverse backgrounds, experiences, and points of view, including

diversity of gender, race, and/or ethnicity.

• On an annual basis, the Nominating & Corporate Governance Committee shall review with the

Board the appropriate skills and characteristics required of Board members in the context of

the current composition of the Board and provide an assessment of the perceived needs of the

Board at that point in time. The Nominating & Corporate Governance Committee's review may

include consideration of all relevant factors, including the experience, integrity, diversity, and

reputation of potential candidates.

Our leadership team and, occasionally, a third-party search firm, assist the Nominating & Corporate

Governance Committee to identify candidates using the general Board membership criteria and current

desired skills described in this proxy statement and Carter's Corporate Governance Principles. In

addition, the Nominating & Corporate Governance Committee considers candidates who are

recommended by stockholders, other Board members, and our leadership team against those same

general Board membership criteria and desired skills.

Any stockholder who wants to recommend a director candidate for the Nominating & Corporate

Governance Committee to consider nominating for the 2027 Annual Meeting should submit a written

request and related information to Mr. Robinson no later than December 31, 2026, in order to allow for

sufficient time to consider the recommendation. Stockholders may also nominate director candidates

directly if they comply with the procedures set forth in our amended and restated bylaws ("Bylaws"),

which are described in more detail in Question 23 "How do I submit a proposal or nominate a director

candidate for the 2027 Annual Meeting?" on page 92.

**STOCKHOLDER COMMUNICATION WITH DIRECTORS**

A stockholder or other interested party may submit a written communication to the Board, the Non-

Executive Board Chair, or other individual non-management directors. The submission should be

delivered to Mr. Robinson at Carter's address: 3438 Peachtree Road NE, Suite 1800, Atlanta, Georgia

30326. The Board, the Non-Executive Board Chair, or other non-management directors may require the

submitting stockholder to furnish such information as may be reasonably required or deemed necessary

to sufficiently review and consider the submission of such stockholder.

Each submission will be forwarded, without editing or alteration, to the Board, the Non-Executive Board

Chair, or individual non-management directors, as appropriate, at, or prior to, the next scheduled

meeting of the Board. The Board or the Non-Executive Board Chair, as appropriate, will determine, in

their sole discretion, the method by which such submission will be reviewed and considered.

**RISK OVERSIGHT**

Oversight of the various risks we face is integral to the Board's oversight of our business. The Board,

each of our committees, and management have specific roles and responsibilities with respect to

those risks. Carter's management is responsible for identifying, assessing, managing, and mitigating

Carter's strategic, financial, operational, and compliance risks. The chart below provides an overview

of the Board's and its committees' risk oversight responsibilities.

![Risk Oversight Overview.jpg](cri-20260401_g21.jpg)

The Board and its committees receive updates from senior management on relevant risks and

management efforts in these areas at Board and committee meetings at least annually and more

frequently, as appropriate.

***Cybersecurity Oversight***

The Audit Committee of the Board oversees risks from cybersecurity threats, including through

quarterly reports to the Audit Committee by the Company's Chief Information Security Officer ("CISO")

and officer overseeing the CISO and, as needed, special reports to the Audit Committee and/or the

Chairperson of the Audit Committee. The Audit Committee includes members with technology and

cybersecurity experience and certifications, including a Committee member with over 28 years of

experience working for Hewlett Packard Enterprise Company and a Committee member with a

Computer Emergency Readiness Team ("CERT") Certificate in Cybersecurity Oversight issued by the

CERT Division of the Software Engineering Institute at Carnegie Mellon University and completion of

the National Association of Corporate Directors Master Course in Cybersecurity.

Management plays an integral role in assessing and managing the Company's material risk from

cybersecurity risks. The assessment and management of those risks is led by the Company's CISO,

who has over 20 years of experience working in information technology, including over 10 years

specifically focused on information security, infrastructure, and strategy, and implemented by the

CISO's team, who are responsible for leading enterprise-wide cybersecurity strategy, policy, standards,

architecture, processes and operations. The CISO leads quarterly meetings of the Company's Security

Executive Steering Committee (the "Steering Committee"), which is composed of the Company's Chief

Financial Officer & Chief Operating Officer and the Company's Chief Administrative & Compliance

Officer, Corporate Secretary. The Steering Committee drives awareness, ownership and alignment

across broad governance and risk stakeholder groups for effective cybersecurity risk management and

reporting.

The Company's management has implemented, and maintains, a written Incident Response Plan,

which is reviewed and updated on an annual basis and includes an Incident Response Plan Executive

Committee consisting of the Company's CISO, the executive officer overseeing the CISO, and the Chief

Administrative & Compliance Officer, Corporate Secretary. In addition, members of the CISO's teams

monitor the Company's systems and processes and promptly report incidents as required under the

Incident Response Plan, including, but not limited to, reporting to the appropriate members of

management and, as needed, the Audit Committee.

The Incident Response Plan has been developed to align with the four phases for the security handling

lifecycle set forth in the National Institute for Standards and Technology Special Publication 800-61: (1)

Preparation, (2) Detection & Analysis, (3) Containment Eradication & Recovery, and (4) Post-Incident

Activity.

***ESG Oversight***

We believe a strong management team and governance are essential to demonstrating accountability

and driving our desired results when it comes to important ESG matters, including climate change,

product quality and safety, workers' rights, product design and innovation, supply chain management,

and employee engagement. The following is a high-level overview of oversight for ESG matters at our

company.

![ESG Oversight.jpg](cri-20260401_g22.jpg)

More information about our ESG efforts, including our latest sustainability report, can be found at

esg.carters.com. This website and others referenced herein are not incorporated by reference into

this proxy statement.

***Compensation Program Risk Assessment***

As part of its oversight role, the Compensation & Human Capital Committee considers the impact of

our compensation program, policies and practices (both at the executive and below-executive levels)

on Carter's overall risk profile. Specifically, the Compensation & Human Capital Committee reviews

Carter's compensation policies and practices, discusses and reviews whether the incentive

compensation arrangements promote appropriate approaches to the taking and management of risk,

and, specifically, do not encourage executive officers to take unnecessary and excessive risks. We

believe that our pay program provides an effective balance in cash and equity and a mix of short- and

longer-term performance periods and also requires the Compensation & Human Capital Committee to

approve payouts. Based on the Compensation & Human Capital Committee's most recent review, the

Compensation & Human Capital Committee determined that the risks arising from Carter's

compensation policies and practices are not reasonably likely to have a material adverse effect on

Carter's.

**CORPORATE GOVERNANCE PRINCIPLES AND CODE OF ETHICS**

Carter's is committed to conducting its business with the highest level of integrity and maintaining the

highest standards of corporate governance. Our Corporate Governance Principles and Code of Ethics

provide the structure within which our Board and management operate Carter's. Our Code of Ethics

applies to all directors and Carter's employees. Our Corporate Governance Principles and Code of

Ethics are available in the Investor Relations section of our website at ir.carters.com or in print by

contacting Mr. Robinson at Carter's address set forth in the 2026 Notice of Annual Meeting.

**PROPOSAL NUMBER ONE: ELECTION OF DIRECTORS**

The Board proposes that the following nine director nominees be elected to the Board to serve until

the next annual meeting in 2027, or until his or her earlier resignation, death, or removal. Each

nominee is listed below, along with their age as of the date of the Annual Meeting. For more

information about each of the director nominees, including individual biographies. Please see "Board

of Directors and Corporate Governance Information—2026 Nominees for Director."

---

| | |
|:---|:---|
| **Name** | **Age** |
| Rochester Anderson, Jr. | 64 |
| Jeffrey H. Black | 71 |
| Luis Borgen | 56 |
| Jevin S. Eagle | 59 |
| Mark P. Hipp | 64 |
| Douglas C. Palladini | 59 |
| Stacey S. Rauch | 68 |
| Gretchen W. Schar | 71 |
| Stephanie P. Stahl | 59 |

---

**The Board recommends a vote FOR the election of each of the director nominees listed** 

**above.**

**VOTE REQUIRED**

Pursuant to our Bylaws and our Corporate Governance Principles, the number of votes properly

cast "for" a director nominee must exceed the aggregate number of votes cast "against" that

nominee for that nominee to be elected. Abstentions and broker non-votes will be counted towards a

quorum. Abstentions and broker non-votes will not have any impact on the outcome of this vote.

Any nominee who is an existing director who does not receive a majority of votes cast "for" their

election is required to tender his or her resignation for consideration by the Board. The Nominating

and Corporate Governance Committee is then required to make a recommendation to the Board as

to whether it should accept or reject such resignation. The Board, taking into account such

recommendation, will decide whether to accept such resignation. The Board's decision will be

publicly disclosed within ninety (90) days after the results of the election are certified. A director

whose resignation is under consideration shall abstain from participating in any recommendation or

decision regarding his or her resignation. If the resignation is not accepted, the director will continue

to serve until the next annual meeting of stockholders and until such director's successor is elected

and qualified.

**COMPENSATION OF DIRECTORS**

When they are initially appointed to the Board, each of our non-management directors receives a

one-time restricted stock grant, equal to the value of the annual retainer, that cliff vests after three

years. Thereafter, each of our non-management directors receives an annual cash retainer and an

annual stock award that vests immediately upon the grant date, and each of our committee

chairpersons and our Non-Executive Board Chair receives an additional annual cash retainer. Non-

management directors also receive fees for each meeting they attend.

For fiscal 2025, each director's annual retainer was comprised of a cash payment of $90,000

and an immediately vested grant of our common stock valued at approximately $160,000. In

addition to the annual retainer:

• our Non-Executive Board Chair received a $150,000 cash retainer (including a pro-rated payment of

$36,667 for Mr. Montgoris' service as Non-Executive Board Chair through the 2025 annual

meeting);

• the chairs of our Audit Committee and our Business Transformation Committee received a

$30,000 cash retainer and the chairs of our Compensation & Human Capital and Nominating

& Corporate Governance Committees each received $25,000 cash retainers; and

• each director received meeting fees of $2,500 for each regularly scheduled Board meeting, and

$1,000 for each special meeting of the Board and regularly scheduled or special meeting of the

standing Board committees.

We also reimburse directors for travel expenses incurred in connection with attending Board and

committee meetings and for other expenses incurred while conducting Company business.

Mr. Palladini received no additional compensation for serving on the Board.

The following table provides information concerning the compensation of our non-management

directors serving during fiscal 2025.

**FISCAL 2025 DIRECTOR COMPENSATION TABLE**<sup>(a)</sup>

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Fees** <br>**Earned or** <br>**Paid in Cash**<br>**($)**<br>**(b)**<br>| **Stock** <br>**Awards** <br>**($)**<br>**(c)**<br>| **Total ($)** |
| Rochester Anderson, Jr. | $135000 | $160003 | $295003 |
| Jeffrey H. Black | $133000 | $160003 | $293003 |
| Hali Borenstein | $132000 | $160003 | $292003 |
| Luis Borgen | $149000 | $160003 | $309003 |
| Jevin S. Eagle | $180000 | $160003 | $340003 |
| Mark P. Hipp | $149000 | $160003 | $309003 |
| William J. Montgoris | $356667 | $160003 | $516670 |
| Stacey S. Rauch | $150000 | $160003 | $310003 |
| Gretchen W. Schar | $175000 | $160003 | $335003 |
| Stephanie P. Stahl | $202000 | $160003 | $362003 |

---

(a)As a NEO and former management director, Mr. Casey's compensation information is omitted from this table and presented in the

Summary Compensation Table. Similarly, as a NEO and current management director, Mr. Palladini's compensation information

is omitted from this table and presented in the Summary Compensation Table.

(b)This column reports the amount of cash compensation earned in fiscal 2025 through annual cash retainers and meeting fees.

(c)On May 15, 2025, we issued 4,409 fully vested shares of common stock to each non-management director who was a member of

the Board on that date with a grant date fair value of $36.29 per share, computed in accordance with FASB ASC Topic 718. This

column does not include the vesting of the one-time restricted stock grants, equal to the value of the annual retainer, that cliff-

vested in fiscal 2025 for each of Mses. Rauch and Stahl and Messrs. Anderson and Black, as the grant-date fair value of those

shares of restricted stock were reported in the director compensation table for fiscal 2022 (the year of the grants).

For complete beneficial ownership information of our common stock for each director, see the

information presented below the heading "Securities Ownership of Beneficial Owners, Directors, and

Executive Officers" on page 71.

Under Carter's minimum ownership guidelines, no director may sell Carter's stock unless he or she

owns shares of Carter's stock with a total market value in excess of five times his or her annual cash

retainer, or $450,000, by the end of his or her sixth year of service on the Board. Each of our directors

complied with these ownership guidelines in fiscal 2025.

There are no family relationships among any of the directors or our executive officers and none of our

non-management directors performed any services for Carter's other than services as directors.

**EXECUTIVE OFFICERS' BIOGRAPHICAL INFORMATION AND** 

**EXPERIENCE**

---

| | |
|:---|:---|
| ![Palladini Headshot.jpg](cri-20260401_g23.jpg)<br>**DOUGLAS C. PALLADINI**<br>*Chief Executive Officer &* <br>*President, Director*<br>**Age:** 59<br>| ***Douglas C. Palladini*** joined Carter's on April 3, 2025 as <br>Chief Executive Officer & President and a member of the <br>Board. Mr. Palladini served as the founder and owner of <br>Kickstand, LLC, a consulting and advisory business focused <br>on brand and consumer strategy, from April 2022 until March <br>2025. Prior to founding Kickstand, LLC, from June 2004 to <br>March 2022, Mr. Palladini served in various roles of <br>increasing responsibility at Vans, a subsidiary of V.F. <br>Corporation, culminating in his role as Global Brand President <br>of Vans from July 2016 through March 2022. <br>|

---

---

| | |
|:---|:---|
| ![Westenberger Headshot.jpg](cri-20260401_g24.jpg)<br>**RICHARD F.** <br>**WESTENBERGER**<br>*Chief Financial Officer &* <br>*Chief Operating Officer, former* <br>*Interim Chief Executive Officer*<br>**Age:** 57<br>| ***Richard F. Westenberger*** joined Carter's in 2009 as <br>Executive Vice President & Chief Financial Officer and was <br>appointed Senior Executive Vice President, Chief Financial <br>Officer & Chief Operating Officer in March 2024. He <br>concurrently served as Interim Chief Executive Officer from <br>January 2025 to April 2025 and was named Chief Financial <br>Officer & Chief Operating Officer in May 2025. Mr. <br>Westenberger's responsibilities in his role as Senior Executive <br>Vice President, Chief Financial Officer & Chief Operating <br>Officer include management of Carter's finance, enterprise <br>risk management, information technology, real estate, and <br>internal audit functions. Prior to joining Carter's, Mr. <br>Westenberger served as Vice President of Corporate Finance <br>and Treasurer of Hewitt Associates, Inc. from 2006 to 2008. <br>From 1996 to 2006, Mr. Westenberger held various senior <br>financial management positions at Sears Holdings <br>Corporation and its predecessor organization, Sears, <br>Roebuck and Co. (collectively, "Sears"), including Senior Vice <br>President & Chief Financial Officer of Lands' End, Inc., Vice <br>President of Corporate Planning & Analysis, and Vice <br>President of Investor Relations. Prior to Sears, Mr. <br>Westenberger was with Kraft Foods, Inc. He began his career <br>at Price Waterhouse LLP, a predecessor firm to <br>PricewaterhouseCoopers LLP, and is a certified public <br>accountant.<br>|

---

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| | |
|:---|:---|
| ![Crockett Headshot.jpg](cri-20260401_g25.jpg)<br>**SARAH J. CROCKETT**<br>*Chief Marketing Officer*<br>**Age:** 43<br>| ***Sarah J. Crockett*** joined Carter's in June 2025 as Chief <br>Marketing Officer. From June 2024 to June 2025, Ms. Crockett <br>was with Designer Brands Inc., serving as Chief Marketing <br>Officer of DSW Designer Shoe Warehouse. From October <br>2023 to June 2024, she was with Nature's Sunshine Products, <br>Inc., serving as Global Chief Marketing Officer. From May <br>2022 to October 2023, Ms. Crockett served as Global Chief <br>Marketing Officer at Dickies, a V.F. Corporation brand. Ms. <br>Crockett was with Backcountry.com, serving as Chief <br>Marketing Officer from June 2020 to May 2022. Ms. Crockett <br>also has held leadership positions at other specialty retail <br>brands including Burton Snowboards, REI, Vans, and Lucky <br>Brand.<br>|

---

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| | |
|:---|:---|
| ![D'Emilio Headshot.jpg](cri-20260401_g26.jpg)<br>**JULIE A. D'EMILIO**<br>*Chief Sales Officer*<br>**Age:** 59<br>| ***Julie A. D'Emilio*** joined Carter's in 2006 as Vice President <br>of Sales. Ms. D'Emilio was named Senior Vice President of <br>Sales in 2013, Executive Vice President, Sales in 2016, <br>Executive Vice President, Global Sales in 2020, and Chief <br>Sales Officer in 2025. Prior to joining Carter's, Ms. D'Emilio <br>was with Calvin Klein Jeans, a division of The Warnaco <br>Group, Inc., in various management positions, including <br>Executive Vice President of Juniors' and Girls, and Vice <br>President of the Women's Division. Ms. D'Emilio began her <br>career with Liz Claiborne Inc. and also worked for London <br>Fog Industries, Inc. and Jones Apparel Group, a <br>predecessor of The Jones Group, Inc.<br>|

---

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| | |
|:---|:---|
| ![Evert Headshot.jpg](cri-20260401_g27.jpg)<br>**EMILY D. EVERT**<br>*Chief Strategy Officer*<br>**Age:** 38<br>| ***Emily D. Evert*** joined Carter's in August 2025 as Chief <br>Strategy Officer. Prior to joining Carter's, Ms. Evert served as <br>a Managing Director and Partner at The Boston Consulting <br>Group, Inc. from September 2021 through July 2025, and <br>prior to that served in various roles at AlixPartners, LLP from <br>January 2014 to September 2021, including as a Director from <br>January 2017 through September 2021. Ms. Evert began her <br>career with Alvarez & Marsal Holdings LLC.<br>|

---

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| | |
|:---|:---|
| ![Peterson Headshot.jpg](cri-20260401_g28.jpg)<br>**ALLISON PETERSON**<br>*Chief Retail & Digital Officer*<br>**Age:** 51<br>| ***Allison Peterson*** joined Carter's in July 2024 as Executive <br>Vice President, Chief Retail & Digital Officer and was named <br>Chief Retail & Digital Officer in 2025. From 2004 to 2023, Ms. <br>Peterson was with Best Buy Co., Inc. ("Best Buy"), serving most <br>recently as Executive Vice President, Chief Customer Officer <br>with responsibilities for strategy, customer experience and <br>insights, marketing, and loyalty. Her previous management <br>positions at Best Buy included Senior Vice President, Chief <br>Customer & Marketing Officer, President, E-Commerce, and <br>Vice President, Category Marketing, Brand Strategy & Planning. <br>Prior to Best Buy, Ms. Peterson worked for Target Corporation <br>in merchandising and planning roles of increasing responsibility.<br>|

---

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| | |
|:---|:---|
| ![Robinson Screenshot.jpg](cri-20260401_g29.jpg)<br>**ANTONIO D. ROBINSON**<br>*Chief Administrative &* <br>*Compliance Officer, Corporate* <br>*Secretary*<br>**Age:** 54<br>| ***Antonio D. Robinson*** joined Carter's in 2010 as Vice <br>President, Associate General Counsel. Mr. Robinson was <br>named Vice President, Deputy General Counsel & Chief <br>Compliance Officer in 2019, Senior Vice President, Corporate <br>Social Responsibility in 2020, Senior Vice President, General <br>Counsel, Secretary, Corporate Social Responsibility & Chief <br>Compliance Officer in 2023, Chief Legal & Compliance Officer <br>and Secretary in 2025, and Chief Administrative & Compliance <br>Officer, Corporate Secretary in 2026. Prior to joining Carter's, <br>Mr. Robinson was a shareholder and attorney in private <br>practice in the Atlanta office of Littler Mendelson P.C.<br>|

---

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| | |
|:---|:---|
| ![Smith Headshot.jpg](cri-20260401_g30.jpg)<br>**KAREN G. SMITH**<br>*Chief Supply Chain Officer*<br>**Age:** 59<br>| ***Karen G. Smith*** joined Carter's in 2022 as Executive Vice <br>President, Supply Chain and was named Chief Supply Chain <br>Officer in 2025. From 2019 to 2022, Ms. Smith was with <br>Kontoor Brands, inc. ("Kontoor"), serving most recently as <br>Executive Vice President of Supply Chain and previously as <br>Vice President of Global Supply Chain Operations, a role she <br>assumed after Kontoor's 2019 spinoff from V.F. Corporation. <br>From 2014 to 2019, she was with V.F. Corporation in various <br>management positions, including Vice President, Supply Chain <br>Operations, Americas East. Prior to V.F. Corporation, Ms. <br>Smith worked for Jockey International in supply chain <br>leadership roles of increasing responsibility.<br>|

---

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| | |
|:---|:---|
| ![Tichiaz Headshot.jpg](cri-20260401_g31.jpg)<br>**David B. Tichiaz**<br>*Chief Brand Officer*<br>**Age:** 44<br>| ***David B. Tichiaz*** joined Carter's in January 2026 as Chief <br>Brand Officer. From May 2023 to November 2025, Mr. <br>Tichiaz was with Stance, Inc., a sock and apparel lifestyle <br>brand, serving initially as President and subsequently as <br>Chief Executive Officer. Prior to Stance, from 2006 to 2023, <br>he served in various roles of increasing responsibility at <br>Vans, a subsidiary of V.F. Corporation, culminating in his <br>role as Vice President / General Manager, Americas from <br>February 2020 to March 2023. Mr. Tichiaz began his career <br>at Nordstrom, Inc.<br>|

---

**COMPENSATION DISCUSSION AND ANALYSIS**

**OVERVIEW**

This Compensation Discussion and Analysis, or CD&A, is intended to provide information regarding

Carter's executive compensation program and practices. This CD&A covers a variety of topics,

including Carter's compensation philosophy regarding executive compensation, the role of our

Compensation & Human Capital Committee (also referred to in this CD&A as the "Committee"), in

setting the compensation of our executive officers, including our Named Executive Officers ("NEOs"),

and our executive compensation decisions for fiscal 2025.

Our NEOs (with their titles as of the filing of this proxy statement) for fiscal 2025 were:

---

| | |
|:---|:---|
| **NEO** | **Position** |
| Douglas C. Palladini<sup>1</sup> | Chief Executive Officer & President, Director |
| Richard F. Westenberger<sup>2</sup> | Chief Financial Officer & Chief Operating Officer |
| Emily D. Evert<sup>3</sup> | Chief Strategy Officer |
| Allison M. Peterson | Chief Retail & Digital Officer |
| Karen G. Smith | Chief Supply Chain Officer |
| Michael D. Casey<sup>4</sup> | Former Chairman, Chief Executive Officer & <br>President<br>|
| Kendra D. Krugman<sup>5</sup> | Former Chief Product Officer |

---

<sup>1</sup> Mr. Palladini joined Carter's as Chief Executive Officer & President on April 3, 2025. Mr. Westenberger served as Interim

Chief Executive Officer from January 2025 until the appointment of Douglas C. Palladini as Chief Executive Officer and

President on April 3, 2025.

<sup>2</sup> Mr. Westenberger also served as Interim Chief Executive Officer from January 2025 until the appointment of Mr. Palladini as

Chief Executive Officer & President on April 3, 2025.

<sup>3</sup> Ms. Evert joined Carter's in August 2025.

<sup>4</sup>Mr. Casey ceased serving as an officer and director of Carter's in January 2025, and after serving in an advisory capacity

from January 2025 through February 28, 2025, retired from Carter's.

<sup>5</sup> Ms. Krugman departed Carter's in October 2025.

Fiscal 2025 was a year of significant change for the Company, as it welcomed a new Chief Executive

Officer & President (Douglas C. Palladini) upon the retirement of its long-serving Chairman, Chief

Executive Officer & President (Michael D. Casey), as well as a new Chief Strategy Officer (Emily D.

Evert) and a new Chief Marketing Officer (Sarah J. Crockett).

**OVERVIEW OF EXECUTIVE COMPENSATION PROCESS FOR FISCAL 2025**

This CD&A presents information regarding the Committee's consideration of Carter's performance in

2025 and related compensation decisions.

Consistent with previous years, the Committee approved Carter's compensation programs and final

target metrics in the first quarter of 2025, based on forecasted financial results for the fiscal year. The

Committee considered various factors in determining the design of Carter's compensation programs

for 2025, including the overarching goal of returning the Company to topline growth while maintaining

profitability, strategic objectives to position the Company for additional growth, and uncertainty from

the potential impact of tariffs. At the time the Committee approved the final target metrics, the

Committee also took into account the recent retirement of the Company's Chairman of the Board,

Chief Executive Officer & President, as well as the expected appointment of a new Chief Executive

Officer & President.

**2025 CARTER'S PERFORMANCE HIGHLIGHTS**

The following provides key performance highlights for 2025, which reflects meaningful progress in

stabilizing our business while managing through a challenging tariff environment and international

uncertainty. Unless otherwise stated, comparisons are to fiscal 2024 and include both GAAP financial

measures and adjusted, non-GAAP financial measurements. We believe the non-GAAP adjustments

provide a meaningful comparison of the Company's results and afford investors a view of what

management considers to be the Company's underlying performance. These measures are presented

for informational pay-related purposes only. See the Appendix to this Proxy Statement for additional

disclosures and reconciliations regarding these non-GAAP financial measures.

Unless otherwise stated, comparisons are to fiscal 2024.

• Consolidated net sales increased $54.3 million, or 1.9%, to $2.90 billion.

• Consolidated gross profit decreased $50.5 million, or 3.7%, to $1.31 billion, and consolidated

gross margin decreased 260 bps to 45.4%.

• Consolidated operating income decreased $110.8 million, or 43.5%, to $143.9 million. Adjusted

operating income, a non-GAAP financial measure, decreased $110.6 million, or 38.6%, to

$176.0 million.

• Diluted net income per common share decreased $2.59, or 50.6%, to $2.53, and adjusted

diluted net income per common share, a non-GAAP financial measure, decreased $2.34, or

40.3%, to $3.47.

• Inventories increased $42.3 million, or 8.4%, to $544.6 million, driven by incremental tariff-

related costs.

• As a result of our strong financial position and available liquidity, we returned $56.4 million in

cash dividends to stockholders in fiscal 2025.

**EXECUTIVE COMPENSATION HIGHLIGHTS FOR FISCAL 2025**

The Committee believes that our executive compensation program is appropriately designed to attract

and retain superior executive talent and drive performance.

Reflective of this belief, approximately 94% of the votes cast at our 2025 Annual Meeting of

stockholders, were in favor of the advisory vote to approve executive compensation ("say-on-pay").

While this vote was non-binding, the Committee carefully considered the result of the say-on-pay vote

in the context of our overall compensation philosophy, policies, and related decisions. After reflecting on

the say-on-pay vote, the Committee decided that no material changes to Carter's compensation

philosophy were necessary. At the 2026 Annual Meeting, we will have an annual advisory vote to

approve executive compensation (Proposal Number Two). The Committee plans to continue to

consider the results from this year's vote and future advisory votes on executive compensation.

We believe our pay for performance compensation philosophy is demonstrated by the alignment of

actual pay with our performance. For example, in 2025, the Committee did not approve any base salary

increases for the executive officers who were with the Company at the time of such approval.

As described more fully in this CD&A, the Committee took the following actions, among others, with

respect to fiscal 2025 compensation for our NEOs:

• structured annual incentive compensation for fiscal 2025 to consist of three performance metrics,

weighted as follows: (1) net sales (30%); (2) operating income (with attainment to be measured

based on adjusted results as reported to stockholders) (35%); and (3) strategic objectives (30%),

consisting of the following: (a) execute concept-to-consumer transformation initiative; (b) deliver

best-in-class direct to consumer experience (both in our stores and online); and (c) develop a

strategy to realize off-price channel opportunities with retailers;

• as a result of the then-ongoing search for a new CEO and ongoing business transformation

initiatives, and to help attract new talent, approved new equity awards consisting of time-based

restricted stock vesting annually over four years. This represented a one-year pause on the

grant of performance-based restricted stock, and for 2026, the Committee has approved equity

awards to its executive officers consisting of a split of 60% performance-based restricted stock

and 40% time-based restricted stock;

• reviewed the peer group as a source of comparative compensation data for fiscal 2025, and

determined that the existing peer group remained appropriate with no necessary adjustments

(the Committee did, however, modify the peer group in late 2025 with respect to 2026

compensation decisions, as described more fully below); and

• benchmarked compensation for all executive officers, including the NEOs, using a combination of

proxy disclosures by Carter's peer group and retail industry survey data, and concluded that no

changes to overall compensation structure and amounts were needed.

**COMPENSATION GOVERNANCE**

The Committee and the Board have established executive compensation-related policies and

procedures, including those discussed below, that they believe are appropriate for Carter's and its

stockholders in light of the sector in which Carter's operates, its business model, and its financial and

operational performance.

&nbsp;&nbsp;&nbsp;&nbsp;

**What We Do: What We Do Not Do:**

• **Align Pay with Carter's Performance:** A

significant portion of our NEOs' total direct

compensation is linked to Carter's performance

in the form of annual incentive compensation

and long-term equity compensation tied to

performance criteria (with the exception of 2025

in light of the then-ongoing CEO transition,

ongoing business transformation initiatives, and

the need to attract new talent).

• **Retain an Independent Compensation** 

**Consultant:** The Committee retains an independent

consultant to advise it on executive and director

compensation matters and to help analyze

comparative compensation data to confirm that the

design and pay levels of our compensation program

are consistent with market practices.

• **Utilize Stock Ownership Guidelines:** We have

minimum stock ownership guidelines for our

executive officers to encourage them to maintain a

meaningful equity interest in Carter's in order to

align their interests with those of our stockholders.

• Prohibit Dividend Payments on Unvested

Awards and Require One-Year Minimum

Vesting**:** As described more fully in the proposal

to amend our Equity Incentive Plan (the "Equity

Incentive Plan Proposal"), if approved by

stockholders, our Amended and Restated Equity

Incentive Plan would prohibit the payment of

dividends on unvested awards and would require

a minimum vesting period of one year (subject to

a 5% exemption).

• **Have Double-Trigger Cash Severance** 

**Arrangements in the Event of a Change of** 

**Control:** In the event of a change of control, our

severance agreements with our NEOs provide for

cash severance benefits to be paid only if there is

a qualifying termination within a set period of time

following the change of control.

• Our Equity Incentive Arrangements Include

**Double-Trigger** Provisions and Mandatory

Clawback Provisions**:** Beginning in fiscal 2024,

Carter's equity awards include double-trigger

change of control provisions, as well as mandatory

clawback provisions consistent with the

requirements of Rule 10D-1 under the Securities

Exchange Act of 1934, as amended (the

"Exchange Act"), related NYSE listing standards,

and our Clawback policy.

• No Guaranteed Annual Salary Increases or

Guaranteed Bonuses

• No Re-Pricing of Stock Options

• No Hedging, Pledging, or Short Sales of

Company Stock

• No Special Perquisites Provided to Our NEOs

• No Equity Grants Below 100% Fair Market Value

• No Annual Equity Grants or Trading During

Closed Insider Trading Windows

**COMPENSATION STRUCTURE AND DETERMINATION**

Our compensation philosophy is to set our NEOs' total direct compensation at levels that will attract,

motivate, and retain superior executive talent in a highly competitive environment. Carter's

compensation program for our NEOs is designed to support these objectives and encourage strong

financial performance on an annual and long-term basis by linking a significant portion of our NEOs'

total direct compensation to Company performance and stockholder value creation in the form of

annual cash incentive compensation and long-term equity incentive compensation.

The principal components of the compensation structure for our NEOs are:

• base salary;

• annual cash incentive compensation; and

• long-term equity incentive compensation.

Together, we refer to these three components as "total direct compensation."

***GENERAL***

In setting a total direct compensation target for each NEO, the Committee considers both objective and

subjective factors set forth below. The Committee also reviews total direct compensation, and its

individual components, at the 25th, 50th, and 75th percentile levels paid to executives in similar

positions at the companies in our peer group and a broader retail survey, in order to assess where the

compensation it sets falls relative to market practices.

In setting compensation of Carter's NEOs, the Committee considered multiple objective and subjective

factors, including:

• the nature and scope of each executive officer's responsibilities;

• comparative compensation data for executive officers in similar positions at companies in our

peer group and a broader retail survey;

• each executive officer's experience, performance, and contribution to Carter's;

• Carter's performance;

• prior equity awards and potential future earnings from equity awards;

• retention needs; and

• any other factors the Committee deems relevant.

***BASE SALARY***

When setting base salaries for our NEOs, the Committee considers the objective and subjective factors

set forth above and also reviews base salaries at the 25th, 50th, and 75th percentile levels paid to

executives in similar positions at the companies in our peer group and a broader retail survey, as

appropriate.

***ANNUAL CASH INCENTIVE COMPENSATION***

Carter's makes annual cash incentive compensation (through the Carter's, Inc. Amended and

Restated Annual Incentive Compensation Plan, the "Incentive Compensation Plan") a significant

component of our NEOs' targeted total direct compensation in order to motivate our executive officers

to meet and exceed Carter's annual operating plans. For each NEO, the Committee approves target

annual cash incentive compensation as a percentage of such NEO's base salary. In establishing

these annual cash incentive compensation targets, the Committee considers our NEOs' potential total

direct compensation in light of Carter's compensation philosophy and comparative compensation

data.

The Committee has the discretion to reduce or not to award annual cash incentive compensation,

even if Carter's achieves its financial performance targets, and to take into account personal

performance in determining the percentage of each NEO's annual cash incentive compensation to

be paid, if any. This discretion, however, was not exercised by the Committee to reduce or not to

award annual cash incentive compensation in fiscal 2025. Furthermore, the Board has adopted a

clawback policy, consistent with the requirements of Rule 10D-1 under the Exchange Act and the

related NYSE listing standards (referred to in this proxy statement as the "clawback policy"), that

requires an executive officer (as defined in the clawback policy) to repay or return erroneously

awarded compensation in the event of an accounting restatement of previously-reported financial

results.

***LONG-TERM EQUITY INCENTIVE COMPENSATION***

The Carter's, Inc. Amended and Restated Equity Incentive Plan (the "Equity Incentive Plan") allows

for various types of equity awards, including stock options, restricted stock (both time and

performance-based), restricted stock units (structured as deferred restricted stock), stock

appreciation rights, and deferred stock. Awards under our Equity Incentive Plan are granted to recruit,

motivate, and retain employees and in connection with promotions or increased responsibility.

Historically, the Committee has awarded a combination of time and performance-based restricted

stock and time-based restricted stock units (structured as deferred restricted stock), although it varied

this practice in 2025 due uncertainty related to the then-ongoing CEO transition, ongoing business

transformation initiatives, and to attract new talent, and the Committee may choose to use other

forms of equity awards in the future.

All awards under our Equity Incentive Plan must be approved by the Committee. The Committee

determines the type, timing, and amount of equity awards granted to each of our NEOs after

considering their previous equity awards, base salary, and target annual cash incentive compensation

in light of Carter's compensation philosophy. The Committee also considers the comparative

compensation data in our peer group and, as needed, a broader retail survey, and our desire to retain

and motivate our NEOs and to align their goals with the long-term goals of our stockholders.

The Committee's practice is to approve equity grants at regularly scheduled meetings, but may also

make equity grants at special meetings or by unanimous written consent, and could select a date

subsequent to a regularly scheduled meeting on which to grant equity awards. The Committee does

not take into account material non-public information when determining the timing or terms of equity

awards, nor does Carter's time disclosure of material non-public information for the purpose of

affecting the value of executive compensation. During fiscal 2025, the Company did not grant stock

options (or similar awards) to any executive officer during any period beginning four business days

before and ending one business day after the filing of any periodic report on Form 10-Q or Form 10-K,

or the filing or furnishing of any current report on Form 8-K that disclosed material non-public

information. More broadly, the Company has not awarded stock options (or similar awards) since

fiscal 2018.

In considering the value of equity awards, we calculate the value of time-based and performance-based

restricted stock awards using the closing price of our common stock on the date of grant.

Effective February 15, 2024, Carter's amended its Equity Incentive Plan to include double-trigger

change of control provisions to more closely-align Carter's pay practices with market practice. Effective

with equity award grants in fiscal 2024, the vesting of the awards will be accelerated if either (1) the

surviving entity does not provide replacement awards that meet criteria as set forth in the Equity

Incentive Plan or, if applicable, the award agreement (referred to as "qualifying replacement awards"),

or (2) the surviving entity provides qualifying replacement awards, but there is a termination of

employment for cause or resignation for good reason (as defined in the Equity Incentive Plan) within

two years after the change in control.

In addition, the Equity Incentive Plan was amended to include mandatory clawback provisions

consistent with the requirements of Rule 10D-1 under the Exchange Act, related NYSE listing

standards, and Carter's clawback policy. Under the Equity Incentive Plan, and consistent with Carter's

clawback policy, the executive is required to repay or return erroneously awarded compensation in the

event of an accounting restatement of previously-reported financial results. No other changes were

made to the Equity Incentive Plan, including to the maximum number of shares that may be delivered

under the Equity Incentive Plan.

Effective February 19, 2026, Carter's amended its Equity Incentive Plan to increase the number of

shares available for issuance under the plan as well as to remove the fungibility provisions in the share

reserve, to require that dividends and dividend equivalents be subject to the same vesting conditions as

the underlying awards, and to add a minimum vesting requirement such that awards generally may not

vest prior to the one-year anniversary of the grant date. The effectiveness of the amendment is subject

to stockholder approval and is more fully described in the Equity Incentive Plan Proposal.

**ROLE OF THE COMPENSATION AND HUMAN CAPITAL COMMITTEE, INDEPENDENT** 

**CONSULTANT, AND MANAGEMENT**

The Committee sets the total direct compensation of our NEOs, as well as the financial performance

targets for our NEOs' annual cash incentive compensation and vesting terms for their equity awards,

including performance-based awards.

For fiscal 2025, the Committee engaged Meridian Compensation Partners, LLC, an independent

compensation consultant ("Meridian"), to advise it on executive and director compensation matters.

Meridian informs the Committee on market trends, as well as regulatory issues and developments

and how they may impact Carter's executive compensation program. Among other things, Meridian

also:

• participates in the design of the executive compensation program to help the Committee

evaluate the linkage between pay and performance;

• reviews market data and advises the Committee regarding the compensation of Carter's executive

officers; and

• reviews and advises the Committee regarding director compensation.

Meridian serves at the discretion of the Committee and regularly attends executive sessions with the

Committee at which management is not present. At the direction of the Committee, our Chief

Executive Officer works with Meridian to review comparative compensation data and makes

recommendations for base salary, annual cash incentive compensation, and long-term equity

incentive compensation for our NEOs, other than himself. Compensation for our Chief Executive

Officer is set by the Committee, without any involvement by the Chief Executive Officer and reflecting

feedback provided by Meridian to the Committee.

The Committee has assessed the independence of Meridian pursuant to applicable NYSE and SEC

rules and has determined that it is independent, and the work provided by it did not raise a conflict

of interest.

**PEER GROUP ANALYSIS AND RETAIL SURVEY**

To assess the market competitiveness of our NEOs' compensation, the Committee and management

review data provided by Meridian from two sources: our peer group and, as needed, a broader retail

survey.

The Committee has established a peer group, which is generally comprised of companies in the

retail or wholesale sectors which primarily conduct business in apparel or related accessories, sell

products under multiple brands through retail stores and online, and have net sales generally

between one-half and two times Carter's net sales.

In setting fiscal 2025 compensation, our peer group was comprised of the following fifteen companies:

---

| | |
|:---|:---|
| Abercrombie & Fitch Co. | Kontoor Brands, Inc. |
| American Eagle Outfitters, Inc. | Levi Strauss & Co. |
| The Children's Place, Inc. | Oxford Industries, Inc. |
| Columbia Sportswear Company | Tapestry, Inc. |
| G-III Apparel Group, Ltd. | Under Armour, Inc. |
| Gildan Activewear, Inc. | Urban Outfitters, Inc. |
| Guess?, Inc. | Victoria's Secret & Co. |
| HanesBrands Inc. |  |

---

The Committee, with the advice of Meridian, also uses select information from a broader retail survey

(that includes apparel and related products retailers or department stores which primarily sell apparel

and related products) for executive compensation market assessment in order to supplement

compensation data provided by the peer group analysis that may not be adequately represented in

the data that is available from our peer group.

In October 2025, the Committee conducted its annual review of the Company's peer group and

approved changes to the peer group for purposes of determining 2026 compensation for the

Company's executive officers. As revised, the new peer group for the Company with respect to 2026

compensation decisions is as follows:

---

| | |
|:---|:---|
| Caleres, Inc. | Levi Strauss & Co. |
| Canada Goose Holdings Inc. | Oxford Industries, Inc. |
| Crocs, Inc. | Ralph Lauren Corporation |
| Columbia Sportswear Company | Steve Madden, Ltd. |
| G-III Apparel Group, Ltd. | Tapestry, Inc. |
| Genesco Inc. | Under Armour, Inc. |
| Kontoor Brands, Inc. | Yeti Holdings, Inc. |
| Lands' End, Inc. |  |

---

**2025 TOTAL DIRECT COMPENSATION**

During fiscal 2025, the Committee reviewed compensation data from our peer group and, as needed,

a broader retail survey, and compared that data to the compensation of our NEOs, in connection with

approving total direct compensation for 2025. In setting total direct compensation for 2025, the

Committee also considered the various factors noted earlier in this CD&A.

The components of total direct compensation are discussed more fully below.

***2025 BASE SALARY***

In February 2025, the Committee approved no change in the base salaries for each of our NEOs

employed with the Company at the time. The base salary rate for each NEO for fiscal 2025 is set forth

below.

---

| | | | |
|:---|:---|:---|:---|
| **Executive** | **2024 Base Salary** | **2025 Base Salary** | **% Change** |
| Douglas C. Palladini<sup>1</sup> | N/A | $1200000 | N/A |
| Richard F. Westenberger<sup>2</sup> | $775000 | $775000 | —% |
| Emily D. Evert<sup>3</sup> | N/A | $650000 | N/A |
| Allison M. Peterson | $750000 | $750000 | —% |
| Karen G. Smith | $595000 | $595000 | —% |
| Michael D. Casey<sup>4</sup> | $1340000 | $1340000 | —% |
| Kendra D. Krugman<sup>5</sup> | $775000 | $775000 | —% |

---

<sup>1</sup>Mr. Palladini joined Carter's in April 2025.

<sup>2</sup>In addition to serving as Chief Financial Officer and Chief Operating Officer during 2025, Mr. Westenberger served as Interim

Chief Executive Officer & President from January 5, 2025 through April 3, 2025. In connection with his service as Interim Chief

Executive Officer & President, Mr. Westenberger received additional cash and equity compensation, including an additional

cash stipend of $110,000 per month.

<sup>3</sup>Ms. Evert joined Carter's in August 2025.

<sup>4</sup>Mr. Casey left Carter's in February 2025.

<sup>5</sup> Ms. Krugman departed Carter's in October 2025.

***2025 ANNUAL CASH INCENTIVE COMPENSATION***

In February 2025, the Committee set the following fiscal 2025 annual cash incentive compensation

targets for our NEOs:

• 100% of base salary for Mr. Westenberger (an increase from 85% in 2024 to align his target

percentage with increased responsibility assumed by Mr. Westenberger and the market based on

benchmarking results)

• 85% of base salary for Ms. Krugman (unchanged from 2024); and

• 75% of base salary for Mses. Peterson and Smith (unchanged from 2024)

The above targets were determined based on each NEO's responsibilities, expected contribution and

market data.

No fiscal 2025 annual cash incentive compensation target was set for Mr. Casey, as he retired from

Carter's in February 2025.

Upon Mr. Palladini joining Carter's in April 2025, the Committee set Mr. Palladini's fiscal 2025 annual

incentive Compensation as 150% of his base salary, and upon Ms. Evert joining Carter's in August

2025, the Committee set the fiscal 2025 annual cash incentive compensation target as 75% of her base

salary.

In light of the Company's overarching goal of returning to growth in net sales while maintaining

profitability, while also positioning the Company for additional growth in the future, management

recommended, and the Committee approved, a 2025 annual cash incentive compensation structure

that included the following metrics and objectives:

• net sales (weighted at 35%), as may be adjusted for the impacts of foreign exchange rate

fluctuations;

• operating income (weighted at 35%) (with attainment to be based on adjusted results as reported

to stockholders); and

• strategic objectives (weighted at 30%), which consisted of the following objectives: (a) execute

concept-to-consumer transformation initiative; (b) deliver best-in-class direct to consumer

experience (both in the fleet and online); and (c) develop a strategy to realize off-price channel

opportunities with retailers.

The Committee selected net sales, operating income (as it may be adjusted and reported to

stockholders), and strategic objectives as performance metrics because it believes these metrics are

key measures that align with the interests of our stockholders, namely growth, profitability, and strategic

objectives related to positioning the Company for additional growth in the future. As described below,

our NEOs could have earned from 0% to 150% of their target annual cash incentive compensation in

fiscal 2025 based upon Carter's achievement of net sales and operating income (as it may be adjusted)

financial performance metrics and the strategic objectives metric. In light of ongoing uncertainty

regarding the CEO transition, the Company set the target performance metrics under the 2025 annual

incentive plan below the actual performance for 2024 but also set a lower maximum payout (150% for

2025 vs. 200% for 2024). In making these determinations, the Committee focused on metrics and

objectives that the Committee believed would help position the Company to return to growth, while also

balancing reasonable goal setting with historical performance levels.

The payment grid for the 2025 annual incentive compensation program is set forth below.

***2025 ANNUAL CASH INCENTIVE COMPENSATION — PERFORMANCE METRICS***

---

| | | | |
|:---|:---|:---|:---|
|  | **Net Sales**<br>**(35%)**<br>**(in millions)**<br>| **Adj. Operating** <br>**Income (35%)**<br>**(in millions)**<sup>1</sup><br>| **Strategic Objectives** <br>**(30%)**<br>|
| 25% of Target (Threshold <br>Performance)<br>| $2659 | $153 | N/A |
| 100% of Target (Target Performance) | $2830 | $196 | N/A |
| 150% of Target (Maximum <br>Performance)<br>| $2985 | $235 | N/A |
| **Fiscal 2025 Performance**<sup>2</sup> | **$2882** | **$176.0** | **N/A** |

---

<sup>1</sup>See the Appendix to this Proxy Statement for a reconciliation of Adjusted Operating Income to its most directly comparable

GAAP measure, Operating Income.

<sup>2</sup> Fiscal 2025 Net Sales reflect a reduction of $16 million from actual Net Sales of $2,898 million for fiscal 2025 for the impact

of foreign exchange fluctuations.

In January 2026, the Committee determined that based on Carter's performance noted above, as well

as the achievement of 75% of the strategic objectives, Carter's achieved an overall performance at 91%

of target, with the payouts to our NEOs as follows:

---

| | | |
|:---|:---|:---|
| | **Annual Cash**<br>**Incentive**<br>**Compensation**<br>**Targets ($)**<br>| **Annual Cash** <br>**Incentive** <br>**Compensation**<br>**Actually Paid**<br>**at 91% of** <br>**Target ($)**<br>|
| Douglas C. Palladini<sup>1</sup> | $1346300 | $1225200 |
| Richard F. Westenberger | $775000 | $705300 |
| Emily D. Evert<sup>2</sup> | $487500 | $443700 |
| Allison M. Peterson | $562500 | $511900 |
| Karen G. Smith | $446250 | $406100 |
| Michael D. Casey<sup>3</sup> | $— | $— |
| Kendra D. Krugman<sup>4</sup> | $530600 | $482900 |

---

<sup>1</sup>Mr. Palladini joined Carter's in April 2025 and received a pro-rated payment based on the number of days of service in 2025.

<sup>2</sup> Ms. Evert received a payment based on a full-year of service pursuant to the offer letter entered into with Ms. Evert prior to

her joining Carter's, in recognition of her seconded work performed for Carter's during fiscal 2025.

<sup>3</sup>Mr. Casey retired from Carter's in February 2025 and did not receive any 2025 annual cash incentive compensation.

<sup>4</sup>Ms. Krugman departed from Carter's in October 2025 and received a pro-rated payment based on the number of days of

service in 2025.

***2025 LONG-TERM EQUITY INCENTIVE COMPENSATION***

We provide long-term equity incentive awards to our NEOs under our Equity Incentive Plan to balance the

short-term focus of the annual cash incentive program by tying a significant portion of total compensation

to stock-price performance achieved by the Company over multi-year periods.

***AWARD MIX***

In fiscal 2025, the Committee approved 100% time-based restricted stock grants (which vest over four

years in 25% increments on the annual anniversary of the grant date). These grants reflect a one-year

pause from our historical practice of awarding a combination of time-based and performance- based

restricted stock to Carter's NEOs and reflect the Company's overall goal of returning the Company to

baseline revenue growth and focusing the attention of our executive officers of strategic objectives

designed to position the Company for additional growth in the future.

***FISCAL 2025 LONG-TERM EQUITY INCENTIVE AWARD OPPORTUNITIES***

Each NEO's annual equity grant is determined based on his or her performance, market pay data, and

considerations of the competitiveness of their overall compensation package. Based on these factors, for

fiscal 2025 the Committee determined to grant long-term equity incentive awards to the NEOs with the

aggregate grant date fair value shown below.

In connection with Mr. Palladini joining Carter's in April 2025, he received a grant of equity that consisted

of 50% restricted stock that vests in four equal increments over a four-year period, and 50% performance-

based restricted stock that will be earned upon achieving certain share price hurdles for 20 consecutive

trading days over a three-year performance period.

---

| | |
|:---|:---|
| **NEO** | **2025 Long-Term Equity Incentive Award** |
| Douglas C. Palladini<sup>1</sup> | $4955424 |
| Richard F. Westenberger<sup>2</sup> | $1900195 |
| Emily D. Evert<sup>3</sup> | $2000092 |
| Allison M. Peterson | $650035 |
| Karen G. Smith | $750080 |
| Michael D. Casey<sup>4</sup> | $— |
| Kendra D. Krugman<sup>5</sup> | $1000106 |

---

<sup>1</sup> While Mr. Palladini's grants he received upon joining Carter's had a target value of $7 million based on the closing price of the

Company's common stock on the date of grant, because 50% of the grant consisted of performance-based restricted stock that is

valued based on a Monte-Carlo simulation, the aggregate grant date fair value of the award was $4,955,424.

<sup>2</sup> In connection with Mr. Westenberger's service as Interim Chief Executive Officer, in addition to Mr. Westenberger's annual grant

of restricted stock (vesting over four years in 25% increments on the annual anniversary of the grant date), Mr. Westenberger

received (1) a $300,000 quarterly award (for the first quarter of fiscal 2025) and (2) a $100,000 quarterly award (for a portion of

the second quarter of 2025) for his service as Interim Chief Executive Officer. The quarterly awards vest on the one-year

anniversary of the grant date, but are subject to accelerated vesting if Mr. Westenberger is terminated without "Cause" or resigns

for "Good Reason" (each as defined in Mr. Westenberger's Amended and Restated Severance Agreement), or upon his death or

disability.

<sup>3</sup> In connection with Ms. Evert joining Carter's in August 2025, she received an award of time-based restricted stock that vests

over four years in 25% increments on the annual anniversary of the grant date.

<sup>4</sup> Mr. Casey retired from Carter's in February 2025 and did not receive any long-term equity incentive awards in 2025.

<sup>5</sup> Ms. Krugman departed from Carter's in October 2025 and subsequently forfeited her annual award of restricted stock which was

granted in February 2025.

***COMPLETED PERFORMANCE SHARE AWARD CYCLES***

The final measurement period for the fiscal 2023 to fiscal 2025 cycle for performance share awards

("PSAs") was completed as of the end of fiscal 2025. A summary of the net sales and adjusted earnings

per share ("EPS") metrics are below, and as indicated in the table, a 37% attainment was certified by the

Committee for these PSAs.

**Fiscal 2023 to Fiscal 2025** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **PSA Metric** | **Threshold** | **Target** | **Maximum** | **Actual** | **Payout %**<br>|
| Net Sales <br>(50% <br>weighting) <br>(in millions)<br>| •**<u>2023</u>**: $2,840 <br>•**<u>2024</u>**: 1% <br>growth in <br>actual 2023 <br>net sales<br>•**<u>2025</u>**: 1% <br>growth in <br>actual 2024 <br>net sales<br>| •**<u>2023</u>**: $3,021<br>•**<u>2024</u>**: 6% growth <br>in actual 2023 net <br>sales <br>•**<u>2025</u>**: 5% growth <br>in actual 2024 net <br>sales<br>| •**<u>2023</u>**: $3,213 <br>•**<u>2024</u>**: 8% growth <br>in actual 2023 net <br>sales <br>•**<u>2025</u>**: 8% growth <br>in actual 2024 net <br>sales<br>| •**<u>2023</u>**: $2,946<br>•**<u>2024</u>**: $2,844<br>•**<u>2025</u>**: $2,898<br>| 47% |
| Adjusted <br>EPS (50% <br>weighting)<br>| •**<u>2023</u>**: $5.63<br>•**<u>2024</u>**: 4% <br>growth in <br>actual 2023 <br>adjusted EPS<br>•**<u>2025</u>**: 4% <br>growth in <br>actual 2024 <br>adjusted EPS<br>| •**<u>2023</u>**: $6.40<br>•**<u>2024</u>**: 11% growth <br>in actual 2023 <br>adjusted EPS<br>•**<u>2025</u>**: 12% growth <br>in actual 2024 <br>adjusted EPS<br>| •**<u>2023</u>**: $7.18<br>•**<u>2024</u>**: 15% growth <br>in actual 2023 <br>adjusted EPS<br>•**<u>2025</u>**: 15% growth <br>in actual 2024 <br>adjusted EPS<br>| •**<u>2023</u>**: $6.19<br>•**<u>2024</u>**: $5.81<br>•**<u>2025</u>**: $3.47<br>| 27% |
| **Total** <br>**Attainment**<br>|  |  |  |  | **37%** |

---

Based on the certification of the performance metrics noted above, the following NEOs vested in the fiscal

2023 to fiscal 2025 PSAs as follows:

---

| | |
|:---|:---|
| **NEO** | **# of PSAs Vesting** |
| Richard F. Westenberger | 3874 |
| Karen G. Smith | 2000 |
| Michael D. Casey<sup>1</sup> | 11449 |

---

<sup>1</sup> Vested award was pro-rated based on Mr. Casey's final date of employment with Carter's.

***TIME-BASED RESTRICTED STOCK*** 

Except as outlined further below, all of the time-based restricted stock awards granted to our NEOs in fiscal

2025:

• are subject to the clawback and hedging policies described below;

• are contingent on the NEO's continued employment with Carter's through each vesting date; and

• vest in four equal annual installments on the first through fourth anniversaries of each grant date.

The exceptions to the general features noted above were as follows:

• during his service as Interim Chief Executive Officer, Mr. Westenberger received quarterly restricted

stock awards that vest on the first anniversary of each award's grant date.

**STOCK OWNERSHIP GUIDELINES AND EQUITY RETENTION POLICY**

The Committee regularly reviews the equity ownership of our NEOs compared to our minimum

ownership guidelines. Under our minimum ownership guidelines, no NEO may sell shares of Carter's

stock (other than to cover the tax obligations resulting from the vesting of Carter's restricted stock (both

time and performance-based) or from exercising vested stock options) until they own shares of Carter's

stock with a total market value in excess of a specified multiple of his or her base salary and continue to

maintain such level of ownership after such sale. For fiscal 2025 (similar to the multiples for 2024), the

ownership multiples for our NEOs were as follows:

---

| | |
|:---|:---|
| | **Multiple of** <br>**Base Salary**<br>|
| Chief Executive Officer & President | 7x |
| Other Executive Officers | 3x |

---

Under our minimum ownership guidelines, all unvested restricted stock and vested shares are included

in determining compliance with the ownership multiple, but unvested performance-based restricted

stock are excluded from the calculation of shares of stock held by the executive.

During fiscal 2025, each of our NEOs was in compliance with his or her applicable minimum stock

ownership requirement.

**401(k) PLAN**

Carter's 401(k) plan provides for a Company match of employee contributions, including contributions

by NEOs, at the discretion of Carter's, based on Carter's performance. In January 2026, the

Committee approved that employee contributions made to Carter's 401(k) plan in fiscal 2025 would

be matched by Carter's 100% up to 4% of the employee's eligible compensation for all eligible

employees, up to the maximum amount permitted by the Internal Revenue Code. This matching

contribution was approved by the Committee following its consideration of our employees' efforts for

fiscal 2025.

In fiscal 2025, the Board approved a safe harbor 401(k) plan design, which eliminated discretionary

matching by the Company commencing with fiscal 2026 and instead, provides for safe harbor

matching contributions of 100% on the first 3% of each participant's deferral contributions and 50% on

the next 2% of each participant's deferral contributions.

**PERQUISITES AND OTHER BENEFITS**

Our NEOs do not receive any perquisites or other benefits on an annual basis that are not otherwise

available to all employees, and do not receive any tax gross-ups. The cost of providing these

benefits and perquisites to the NEOs is included in the amounts shown in the "All Other

Compensation" column of the Summary Compensation Table and detailed in the footnotes to such

table.

**INSIDER TRADING POLICY**

We maintain an Insider Trading Policy governing the purchase, sale, and/or other dispositions of our

securities by our directors, officers, and employees, as well as by Carter's, that we believe is

reasonably designed to promote compliance with insider trading laws, rules, and regulations, and the

exchange listing standards applicable to us.

**CLAWBACK AND HEDGING POLICIES**

Carter's has adopted a clawback policy, consistent with the requirements of Rule 10D-1 under the

Exchange Act and the related NYSE listing standards, that requires an executive officer to repay or

return erroneously awarded compensation in the event of an accounting restatement of previously-

reported financial results.

Further, hedging and pledging of Company stock by any Board member or employee of Carter's,

including our NEOs, is prohibited under our policies to ensure that the interests of the holders of

Carter's stock are fully aligned with those of stockholders in general. During fiscal 2025, none of our

NEOs entered into a hedging arrangement or pledged any shares of Carter's stock.

**RETIREMENT OF FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER &** 

**RETIREMENT AGREEMENT**

In connection with Mr. Casey's retirement in February 2025, Carter's and Mr. Casey entered into a

Retirement Agreement and Release, dated February 20, 2025. Mr. Casey remained with the Company

in an advisory capacity from January 3, 2025 to February 28, 2025 to support the transition. During the

transition period, he continued to receive his current salary and benefits, and remained eligible to

receive a bonus pursuant to the Incentive Compensation Plan with respect to the services he provided

in 2024, but he was not eligible for a bonus for fiscal 2025. In addition, under the Retirement Agreement

and Release, Mr. Casey received accelerated vesting of his outstanding unvested time-based restricted

stock awards and pro-rated vesting of his PSAs issued in 2023 and 2024 (subject to the attainment of

the performance metrics under those awards).

**APPOINTMENT OF INTERIM CHIEF EXECUTIVE OFFICER**

In connection with Mr. Casey's retirement as Chairman and Chief Executive Officer, the Board

appointed Richard F. Westenberger as Interim Chief Executive Officer, effective January 5, 2025. Mr.

Westenberger's appointment ended on April 3, 2025 in connection with the appointment of Douglas C.

Palladini as Chief Executive Officer & President. Mr. Westenberger has continued to serve in his role as

Chief Financial Officer & Chief Operating Officer.

In his capacity as Interim CEO, Mr. Westenberger received a monthly cash stipend of $110,000, and

also received restricted stock awards in an amount of $300,000 pursuant to the Company's Equity

Incentive Plan on a quarterly basis (the "Westenberger Awards"), each of which vest on the one year

anniversary of the grant date of the relevant Westenberger Award.

**APPOINTMENT OF CHIEF EXECUTIVE OFFICER & PRESIDENT**

On March 26, 2025, the Company announced that the Board approved the appointment of Douglas C.

Palladini as Chief Executive Officer and President of the Company and a member of the Board,

effective April 3, 2025 (the "<u>Effective Date</u>"). On the Effective Date, Richard F. Westenberger, who was

serving as the Company's Interim Chief Executive Officer, ceased to serve in that capacity but has

continued to serve as our Chief Financial Officer & Chief Operating Officer.

In connection with Mr. Palladini's appointment, Mr. Palladini and the Company executed an offer letter

on March 21, 2025 (the "<u>Offer Letter</u>"). Pursuant to the Offer Letter, during Mr. Palladini's employment

with the Company, he will receive an initial base salary of $1,200,000 per year, and an annual cash

incentive opportunity at target of 150%, which will be prorated for fiscal year 2025. Commencing in the

Company's fiscal year 2026, Mr. Palladini will be eligible to receive annual equity awards with a target

value of $5,500,000, pursuant to the terms of the Company's Equity Incentive Plan.

Pursuant to the Offer Letter, on April 3, 2025, Mr. Palladini received a $7,000,000 sign-on equity grant,

with 50% of the grant in the form of time-based restricted stock and 50% in the form of performance-

based restricted stock. The time-based restricted stock vests in four equal increments over a four-year

period on each of the anniversaries of the grant date. The performance-based restricted stock will be

earned upon achieving share price hurdles for 20 consecutive trading days over a three-year

performance period, starting on the award grant date (April 3, 2025) and ending on the third anniversary

of the award grant date (April 3, 2028). These share price hurdles are based on the closing price of

stock on the grant date ($35.57 per share on April 3, 2025), using the following growth rates:

• 1/3 at 30% growth ($46.24 per share);

• 1/3 at 60% growth ($56.91 per share);

• 1/3 at 90% growth ($67.58 per share).

The growth objectives may be achieved at any time over the three-year period, and the corresponding

number of shares earned, but the shares will not vest until the end of the three-year period.

**DEPARTURE OF CHIEF PRODUCT OFFICER**

On August 18, 2025, the Company announced the departure of Kendra D. Krugman, Chief Product

Officer, effective as of October 21, 2025. The Company made this organizational change on August 18,

2025, as part of the Company's transition in our operating model, to enhance agile decision making and

strengthen competitiveness. Ms. Krugman's departure was treated as an involuntary termination

without cause consistent with her existing severance agreement with the Company, and Ms. Krugman

and the Company entered into a separation agreement which confirmed the severance benefits and

post-termination obligations applicable to Ms. Krugman. Ms. Krugman's separation benefits are

described below under "—Potential Payments Upon Termination or Change of Control".

**SEVERANCE AGREEMENTS WITH NEOS**

Each of our NEOs has a severance agreement with Carter's, other than Mr. Casey and Ms. Krugman

whose employment with Carter's terminated in 2025. For more information on the payments and

benefits they received in connection with their termination of employment, please see the section

entitled "Potential Payments Upon Termination or Change of Control.". In the event that an NEO is

terminated by Carter's for any reason, the NEO or his or her estate will be provided the following

accrued amounts: (a) the NEO's base salary earned but not paid during the final payroll period, (b) pay

for any vacation time earned but not used through the separation date, and (c) any business expenses

incurred by the NEO but unreimbursed on the separation date.

If an NEO is terminated without "cause," or an NEO terminates his or her employment for "good

reason" (with "cause" and "good reason" defined in each NEO's respective severance agreement and

summarized below), the NEO is entitled to the following severance payments and benefits, subject to

the NEO's execution of an effective general release of any claims against the Company: (i) continued

payment of the NEO's base salary for 24 months in the case of Mr. Palladini, and 12 months in the

cases of Mr. Westenberger and Mses. Evert, Peterson, and Smith, payable in accordance with the

Company's normal payroll practices; (ii) a pro-rated annual cash incentive compensation bonus that

would have been earned by each such NEO if he or she had been employed at the end of the year in

which his or her employment was terminated, based solely on the extent to which the applicable

Company performance goals have been met (excluding any individual performance goals); and (iii) in

the case of Mr. Westenberger and Ms. Smith, continued employer contributions for basic life insurance

coverage for 12 months.

Further, subject to the NEO's eligibility for and timely election of COBRA, the Company will pay the

employer portion of the COBRA continuation premiums until the earlier of (i) 18 months (in the case of

Mr. Palladini) and 12 months (in the case of Mr. Westenberger and Mses. Evert, Peterson, and Smith)

following his or her separation date, (ii) the date the NEO becomes eligible for coverage under the

health plans of another employer, or (iii) the date the NEO otherwise ceases to be eligible for COBRA.

In the event that, within two years following a "change of control" (with "change of control" defined in

each executive's severance agreement and summarized below) the Company terminates the NEO's

employment, other than for "cause" or such executive terminates his or her employment for "good

reason," the Company will pay to the NEOs the following severance benefits in addition to the

severance benefits in addition to the severance benefits in the preceding paragraph: (a) base salary for

an additional 12 months, (b) subject to certain exceptions as provided in the agreements, if following

the expiration of the 12-month anniversary of such termination, the NEO has not yet become eligible for

coverage under the health and/or dental plans of another employer, then the Company will pay the

COBRA amount for an additional 6-month or 12-month period thereafter (or, if earlier, until the date the

NEO becomes eligible for coverage under the health and/or dental plans of another employer) and (c)

with respect to Mr. Westenberger and Ms. Smith, continued employer contributions for basic life

insurance coverage for an additional 12 months. In addition, under the award agreements governing

the NEOs equity awards, in the event of a "change of control" of the Company: (1) for all unvested stock

options and all unvested shares of restricted stock (both time and performance-based) held by the NEO

that were awarded prior to February 15, 2024, such awards will fully vest; and (2) for all unvested equity

awards made on or after February 15, 2024, such awards will fully vest if there is a qualifying

termination of employment within two years after the change in control or if the surviving entity does not

provide qualifying replacement awards.

Under the severance agreements with each of our NEOs, "cause" is generally deemed to exist when

such NEO has: (a) been convicted of a felony or entered a plea of guilty or no contest to a felony; (b)

committed fraud or other act involving dishonesty for personal gain which is materially injurious to the

Company or an affiliate; (c) materially breached his or her obligations of confidentiality, intellectual

property assignment, non-competition, non-solicitation, or non-disparagement against the Company

after a cure period; (d) willfully engaged in gross misconduct which is injurious to the Company or its

affiliates; or (e) after a cure period, willfully and continually refused to substantially perform his or her

duties or is grossly negligent in performance of such duties.

Under the agreements with our NEOs, "good reason" is generally deemed to exist when there is: (a) a

material reduction in the executive's title, duties, or responsibilities (including with respect to Mr.

Palladini, a material reduction in title, base salary and target annual incentive compensation

opportunity); (b) a material change in the geographic location at which the executive must perform

services; or (c) a material breach of the executive's agreement by the Company, provided the NEO

complies with the written notice requirements and the cure period provided to Carter's.

Under the agreements, "change in control" generally means (i) any transaction in which any person who

is not an affiliate and who did not own shares of common stock of the Company representing 50% or

more of the voting power at elections of the Board acquires (whether by purchase, exchange, tender

offer, merger, consolidation, recapitalization or otherwise) or becomes the owner of shares of common

stock of the Company or its subsidiaries (or shares in a successor corporation by merger, consolidation

or otherwise), such that following such transaction, such person beneficially owns 50% or more of the

voting power at elections for the Board or the Board of Directors of The William Carter Company or any

successor corporation, or (ii) the sale or transfer of all or substantially all the assets of either the

Company or The William Carter Company.

In addition, the agreements contain restrictive covenants, including confidentiality provisions,

intellectual property assignment, and non-disparagement provisions as well as 24-month (with respect

to Mr. Palladini) or 12-month (with respect to the other NEOs) non-competition and non-solicitation

covenants.

See "Potential Payments Upon Termination or Change of Control" below for a discussion and

presentation of amounts our NEOs may be entitled to in the event of their termination, including

following a change in control.

**TAX CONSIDERATIONS IN SETTING EXECUTIVE COMPENSATION**

Under Federal tax rules in effect for tax years beginning on and after January 1, 2018 (which tax rules

eliminated a performance-based compensation exception that was previously available), compensation

over $1 million paid annually for certain covered employees, including the NEOs, generally is not

deductible for federal tax purposes. The Committee believes that the lost tax deduction on

compensation payable in excess of the $1 million limitation for the NEOs is not material relative to the

benefit of attracting and retaining talented management and therefore, consistent with past practice, the

Committee retains the flexibility to pay compensation to our NEOs in appropriate circumstances, even if

such compensation is not fully deductible.

**COMPENSATION & HUMAN CAPITAL COMMITTEE** 

**REPORT**

The Compensation & Human Capital Committee of the Board has reviewed and discussed with

Company management the Compensation Discussion and Analysis included in this proxy statement.

Based on such review and discussions, the Compensation and Human Capital Committee has

recommended to the Board that the Compensation Discussion and Analysis be included in this proxy

statement for filing with the SEC.

**Submitted by the Compensation & Human Capital** 

**Committee**

&nbsp;&nbsp;&nbsp;&nbsp;Ms. Stacey S. Rauch (Chair)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr. Rochester Anderson

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr. Mark P. Hipp

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ms. Stephanie P. Stahl

**COMPENSATION & HUMAN CAPITAL COMMITTEE** 

**INTERLOCKS AND INSIDER PARTICIPATION**

The Compensation & Human Capital Committee is composed entirely of the four independent

directors listed above. No member of the Compensation & Human Capital Committee is a current, or

during fiscal 2025 was a former, officer or employee of the Company or any of its subsidiaries. During

fiscal 2025, no member of the Compensation & Human Capital Committee had a relationship that

must be described under the SEC rules relating to disclosure of transactions with related persons. In

fiscal 2025, none of our executive officers served on the board of directors or compensation

committee of any entity that had one or more of its executive officers serving on the Board or the

Compensation & Human Capital Committee.

**FISCAL 2025 SUMMARY COMPENSATION TABLE\***

The table below provides information concerning the compensation of our NEOs.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and**<br>**Principal Position**<br>| **Fiscal** <br>**Year**<br>| **Salary**<br> **($)**<br> **(a)**<br>| **Bonus**<br> **($)**<br> **(b)**<br>| **Stock** <br>**Awards ($)**<br> **(c)**<br>| **Non-Equity** <br>**Incentive Plan** <br>**Compensation** <br>**($)**<br>**(d)**<br>| **All Other** <br>**Compensation** <br>**($)**<br>**(e)**<br>| **Total** <br>**($)**<br>|
| **Douglas C. Palladini** | 2025 | $882803 | $— | $4955424 | $1225200 | $433252 | $7496679 |
| Chief Executive Officer & <br>President, Director<br>| 2024 | $— | $— | $— | $— | $— | $— |
|  | 2023 | $— | $— | $— |  | $— | $— |
| **Richard F. Westenberger** | 2025 | $787740 | $440000 | $1900195 | $705300 | $131703 | $3964938 |
| Chief Financial Officer & Chief <br>Operating Officer<br>| 2024 | $763462 | $— | $1609960 | $33000 | $176496 | $2582918 |
|  | 2023 | $704615 | $— | $1550520 | $471900 | $169734 | $2896769 |
| **Emily D. Evert** | 2025 | $260685 | $— | $2000092 | $443700 | $43165 | $2747642 |
| Chief Strategy Officer | 2024 | $— | $— | $— | $— | $— | $— |
|  | 2023 | $— | $— | $— | $— | $— | $— |
| **Allison M. Peterson** | 2025 | $762329 | $— | $650035 | $511900 | $94694 | $2018958 |
| Chief Retail & Digital Officer | 2024 | $346154 | $— | $2500190 | $13700 | $224104 | $3084148 |
|  | 2023 | $— | $— | $— | $— | $— | $— |
| **Karen G. Smith** | 2025 | $604781 | $— | $750080 | $406100 | $71388 | $1832349 |
| Chief Supply Chain Officer | 2024 | $581154 | $— | $698015 | $22400 | $92962 | $1394531 |
|  | 2023 | $544616 | $— | $800440 | $293040 | $75389 | $1713485 |
| **Michael D. Casey** | 2025 | $257692 | $— | $— | $— | $129493 | $387185 |
| Former Chairman, Chief <br>Executive Officer & President<br>| 2024 | $1326154 | $— | $6976664 | $100500 | $743451 | $9146769 |
|  | 2023 | $1282692 | $— | $6500098 | $1716000 | $589342 | $10088132 |
| **Kendra D. Krugman** | 2025 | $676635 | $250000 | $1000106 | $482900 | $231132 | $2640773 |
| Former Chief Product Officer | 2024 | $760577 | $— | $1609960 | $33000 | $180810 | $2584347 |
|  | 2023 | $683846 | $— | $1800489 | $462000 | $149459 | $3095794 |

---

\* Amounts in rows may not add exactly to the total due to rounding.

(a)Base salary for each NEO was based on a 371-day fiscal year for fiscal 2025, and 364-day fiscal year for fiscal years 2024 and 2023.

(b)The amounts in this column consist of the following: (1) $110,000 per month stipend paid to Mr. Westenberger in connection with his service as Interim

Chief Executive Officer prior to Mr. Palladini's appointment as Chief Executive Officer and President; and (2) $250,000 cash retention award (announced

in connection with Mr. Westenberger's appointment as Interim Chief Executive Officer) which was accelerated and paid to Ms. Krugman upon her

departure from Carter's in fiscal 2025.

(c)The amounts disclosed in this column represent the total grant date fair value for the following grants computed in accordance with FASB ASC Topic 718:

i.The time-based restricted stock granted in 2025, 2024, and 2023 vest in four equal, annual installments beginning one year from the date of the

grant, subject to continued service, except for special quarterly restricted stock awards granted to Mr. Westenberger (in connection with his service

as interim CEO) in 2025 that vest on the one-year anniversary of each quarterly award's grant date, and Ms. Krugman (in connection with her

promotion in 2023) that include a portion that cliff vests on the third anniversary of the date of grant, subject to continued service.

ii.Vesting of the performance-based restricted stock granted in fiscal 2024 is contingent upon meeting specific performance targets for each of

the three fiscal years 2024, 2025, and 2026, individually, and vest, as and to the extent performance criteria are met, in 2027 following

completion of fiscal year 2026. For 2024, 34% of the total award of performance-based restricted shares included a relative TSR component

(the "Market-Based Restricted Shares"). Assuming the achievement of maximum performance under the performance-based restricted

shares, the values of the 2024 awards would be as follows: (1) Mr. Westenberger: $1,719,907; (2) Ms. Smith: $745,675; (3) Mr. Casey:

$7,453,053; and (4) Ms. Krugman: $1,719,907.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Grant Date** | **Time-Based** <br>**Restricted**<br> **Shares – 4** <br>**Year**<br> **Vest**<br>| **Time-Based** <br>**Restricted** <br>**Shares – 3** <br>**Year** <br>**Cliff Vest**<br>| **Time-Based** <br>**Restricted**<br> **Shares – 1** <br>**Year**<br> **Vest**<br>| **Performance-**<br>**Based** <br>**Restricted** <br>**Shares**<br>| **Market-**<br>**Based** <br>**Restricted** <br>**Shares**<br>| **Grant** <br>**Date Fair** <br>**Value per** <br>**Share**<br>|
| Douglas C. <br>Palladini<br>| 4/3/2025 | 98400 |  |  |  |  | $35.57 |
|  | 4/3/2025 |  |  |  |  | 98400 | $14.79 |
| Richard F. <br>Westenberger<br>| 1/8/2025 |  |  | 5878 |  |  | $51.04 |
|  | 2/26/2025 | 35448 |  |  |  |  | $42.32 |
|  | 4/1/2025 |  |  | 2436 |  |  | $41.06 |
|  | 2/28/2024 | 9152 |  |  | 6040 |  | $81.95 |
|  | 2/28/2024 |  |  |  |  | 3112 | $117.28 |
|  | 2/27/2023 | 10468 |  |  | 10468 |  | $74.06 |
| Emily D. Evert | 8/8/2025 | 78868 |  |  |  |  | $25.36 |
|  | 2/28/2024 |  |  |  |  |  | $81.95 |
|  | 2/27/2023 |  |  |  |  |  | $74.06 |
| Allison M. <br>Peterson<br>| 2/26/2025 | 15360 |  |  |  |  | $42.32 |
|  | 8/9/2024 | 39930 |  |  |  |  | $62.63 |
|  | 2/27/2023 |  |  |  |  |  | $74.06 |
| Karen G. Smith | 2/26/2025 | 17724 |  |  |  |  | $42.32 |
|  | 2/28/2024 | 3968 |  |  | 2619 |  | $81.95 |
|  | 2/28/2024 |  |  |  |  | 1349 | $117.28 |
|  | 2/27/2023 | 5404 |  |  | 5404 |  | $74.06 |
| Michael D. <br>Casey<br>| 2/28/2024 | 39660 |  |  | 26176 |  | $81.95 |
|  | 2/28/2024 |  |  |  |  | 13484 | $117.28 |
|  | 2/27/2023 | 43884 |  |  | 43884 |  | $74.06 |
| Kendra D. <br>Krugman<br>| 2/26/2025 | 23632 |  |  |  |  | $42.32 |
|  | 2/28/2024 | 9152 |  |  | 6040 |  | $81.95 |
|  | 2/28/2024 |  |  |  |  | 3112 | $117.28 |
|  | 2/27/2023 | 5404 |  |  | 5404 |  | $74.06 |
|  | 3/21/2023 |  | 14022 |  |  |  | $71.32 |

---

(d)Reflects dollar value of all compensation earned in fiscal 2025, 2024, and 2023 pursuant to the Incentive Compensation Plan, including all annual

cash incentive compensation.

(e)The amounts shown as "All Other Compensation" for fiscal 2025 consist of the following:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Relocation** <br>**Expenses** <br>**(i)** <br>| **Severance** <br>**(ii)** <br>| **401 (k)**<br>**Company**<br>**Match**<br>| **Dividends**<br>**Paid on**<br>**Unvested**<br>**Restricted**<br>**Stock**<br>| **Other**<br>**(iii)**<br>| **Total**  |
| Douglas C. Palladini | $267450 | $— | $13846 | $147600 | $4355 | $433251 |
| Richard F. Westenberger | $— | $— | $14000 | $117703 | $— | $131703 |
| Emily D. Evert | $— | $— | $3500 | $39434 | $231 | $43165 |
| Allison M. Peterson | $— | $— | $14000 | $80694 | $— | $94694 |
| Karen G. Smith | $— | $— | $14000 | $57388 | $— | $71388 |
| Michael D. Casey | $— | $— | $— | $129493 | $— | $129493 |
| Kendra D. Krugman | $— | $149039 | $— | $82094 | $— | $231133 |

---

(i) Represent relocation expenses paid to Mr. Palladini in connection with his relocation from California to the Company's

headquarters in Atlanta, Georgia.

(ii) Represents severance paid to Ms. Krugman which is described in the section entitled "Potential Payments upon

Termination or Change of Control".

(iii) Consist of benefits paid to Ms. Evert as part of Carter's Bring Your Own Device policy, and reimbursement for legal

fees in connection with reviewing an offer letter and related documentation with respect to Mr. Palladini.

**FISCAL 2025 GRANTS OF PLAN-BASED AWARDS**

The following table provides information concerning each grant of plan-based awards made to an

NEO in fiscal 2025. This includes incentive compensation awards granted under our Incentive

Compensation Plan and restricted stock awards granted under our Equity Incentive Plan. The

threshold, target, and maximum columns reflect the range of estimated payouts under these plans for

fiscal 2025. The last column reports the aggregate grant date fair value of all awards made in fiscal

2025 as if they were fully vested on the grant date, computed in accordance with FASB ASC Topic

718. For equity awards that are subject to performance conditions, the last column reports the value

at the grant date based upon the probable outcome of such conditions consistent with the estimate of

aggregate compensation cost to be recognized over the service period determined as of the grant

date under FASB ASC Topic 718, excluding the effect of estimated forfeitures.

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| <br>**Name** | <br>**Award**<br>**Type**<br>| <br>**Grant**<br>**Date**<br>| **Estimated**<br>**Future** <br>**Payouts** <br>**Under**<br>**Non-**<br>**Equity** <br>**Incentive** <br>**Plan** <br>**Awards** <br>**(a)**<br>**Threshold**<br>**($)**<br>| <br>**Target**<br>**($)**<br>| <br>**Maximum**<br>**($)**<br>| **Estimated** <br>**Future** <br>**Payouts** <br>**Under**<br>**Equity** <br>**Incentive** <br>**Plan** <br>**Awards**<br>**Threshold**<br>**(#)**<br>| <br>**Target**<br>**(#)**<br>| <br>**Maximum**<br>**(#)**<br>| **All**<br>**Other Stock**<br>**Awards:**<br>**Number of**<br>**Shares or**<br>**Units**<br>**(#)** | **Grant**<br>**Date Fair**<br>**Value of**<br>**Stock and** <br>**Option**<br>**Name**<br>**Awards**<br>|
| Douglas C. <br>Palladini<br>| Cash Incentive <br>Compensation<br>|  | $336575 | $1346300 | $2019450 |  |  |  |  | $— |
|  | Shares (b) | 4/3/2025 |  |  |  |  |  |  | 98400 | $3500088 |
|  | Shares (c) | 4/3/2025 |  |  |  | 32800 | 65600 | 98400 |  | $1455336 |
| Richard F. <br>Westenberger<br>| Cash Incentive <br>Compensation<br>|  | $193750 | $775000 | $1162500 |  |  |  |  | $— |
|  | Shares (b) | 2/26/2025 |  |  |  |  |  |  | 35448 | $1500159 |
|  | Shares (d) | 1/8/2025 |  |  |  |  | 5878 | 5878 | 5878 | $300013 |
|  | Shares (d) | 4/1/2025 |  |  |  |  | 2436 | 2436 | 2436 | $100022 |
| Emily D. Evert | Cash Incentive <br>Compensation<br>|  | $121875 | $487500 | $731250 |  |  |  |  | $— |
|  | Shares (b) | 8/8/2025 |  |  |  |  |  |  | 78868 | $2000092 |
| Allison M. <br>Peterson<br>| Cash Incentive <br>Compensation<br>|  | $140625 | $562500 | $843750 |  |  |  |  | $— |
|  | Shares (b) | 2/26/2025 | $— | $— | $— |  |  |  | 15360 | $650035 |
| Karen G. <br>Smith<br>| Cash Incentive <br>Compensation<br>|  | $111575 | $446250 | $669375 |  |  |  |  | $— |
|  | Shares (b) | 2/26/2025 |  |  |  |  |  |  | 17724 | $750080 |
| Michael D. <br>Casey<br>| Cash Incentive <br>Compensation<br>|  | $— | $— | $— |  |  |  |  | $— |
| Kendra D. <br>Krugman<br>| Cash Incentive <br>Compensation<br>|  | $132650 | $530600 | $795900 |  |  |  |  | $— |
|  | Shares (b) | 2/26/2025 |  |  |  |  |  |  | 23632 | $1000106 |

---

(a)The amounts shown under the "Threshold" column represent 25% of the target cash incentive compensation, assuming threshold-level performance is

achieved under the financial performance measures and strategic objectives component. The amounts shown under the "Target" column represent

100% of the target cash incentive compensation, assuming target-level performance is achieved under the financial performance measures and

strategic objectives component. The amounts shown under the "Maximum" column represent 150% of the target cash incentive compensation,

assuming maximum-level performance is achieved under the financial performance measures and the strategic objectives component. The Company

achieved 91% of "Target" for 2025 resulting in annual cash incentive compensation payouts of: $1,225,200 with respect to Mr. Palladini, $705,300 with

respect to Mr. Westenberger, $443,700 with respect to Ms. Evert, $511,900 with respect to Ms. Peterson, $406,100 with respect to Ms. Smith, and

$482,900 with respect to Ms. Krugman. Mr. Casey did not receive annual cash incentive compensation due to his retirement. The amounts also reflect

pro-ration with respect to Mr. Palladini and Ms. Krugman based on the number of days in 2025 that they worked at Carter's. For more information, see

the "2025 Annual Cash Incentive Compensation" section.

(b)Shares of time-based restricted stock were granted pursuant to the Equity Incentive Plan. These restricted shares vest ratably in four equal, annual

installments beginning one year from the date of the grant, subject to continued service.

(c)Market-Based Restricted Shares were granted pursuant to the Equity Incentive Plan. The amounts shown under the "Threshold" column represent 1/3

of the award, assuming 30% growth (over the stock price on the date of grant) in the Company's stock price for 20 consecutive trading days within three

years of the grant date. The amounts shown under the "Target" column represent another 1/3 of the award, assuming 60% growth (over the stock price

on the date of grant) in the Company's stock price for 20 consecutive trading days within three years of the grant date. The amounts shown under the

"Maximum" column represent another 1/3 of the award, assuming 90% growth (over the stock price on the date of grant) in the Company's stock price

for 20 consecutive trading days within three years of the grant date. The dollar amounts under the "Grant Date Fair Value of Stock and Option Awards"

are calculated based on the number of awards reported under the "Target" column

(d)Shares of time-based restricted stock were granted pursuant to the Equity Incentive Plan. These restricted shares vest on the one-year anniversary of

the grant date, subject to continued service.

**OUTSTANDING EQUITY AWARDS AT FISCAL 2025 YEAR-**

**END**

The following table provides information regarding unexercised stock options, stock that has not yet

vested, and equity incentive plan awards for each NEO outstanding as of the end of fiscal 2025. Each

outstanding award is represented by a separate row that indicates the number of securities underlying

the award.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | | | **Stock Awards** | **Stock Awards** |
| <br>**Name** | **Options Awards**<br>**Number of**<br>**Securities**<br>**Underlying**<br>**Unexercised**<br>**Options**<br>**(#)**<br>**(Exercisable)**<br>| <br>**Number of**<br>**Securities**<br>**Underlying**<br>**Unexercised**<br>**Options**<br>**(#)**<br>**(Unexercisable)**<br>| <br>**Equity Incentive**<br>**Plan Awards:**<br>**Number of**<br>**Securities**<br>**Underlying**<br>**Unexercised**<br>**Unearned**<br>**Options**<br>**(#)**<br>| <br>**Option**<br>**Exercise**<br>**Price**<br>**($)**<br>| <br>**Option**<br>**Expiration**<br>**Date (a)**<br>| **Equity Incentive** <br>**Plan Awards:** <br>**Number of**<br>**Unearned Shares,**<br>**Units or**<br>**Other Rights**<br>**That Have**<br>**Not Vested**<br>**(#) (b)**<br>| **Equity Incentive**<br>**Plan Awards:**<br>**Market or**<br>**Payout Value**<br>**of**<br>**Unearned Shares,**<br>**Units or Other**<br>**Rights That Have**<br>**Not Vested**<br>**($) (c)**<br>|
| Douglas C. Palladini |  |  |  | $— | $— |  |  |
|  |  |  |  |  |  | 196800 | $6533760 |
| Richard F. Westenberger | 5048 |  |  | $120.25 | 2/21/2028 |  |  |
|  | 7000 |  |  | $83.84 | 2/14/2027 |  |  |
|  | 5220 |  |  | $90.66 | 2/16/2026 |  |  |
|  |  |  |  |  |  | 77195 | $2562874 |
| Emily D. Evert |  |  |  | $— |  |  |  |
|  |  |  |  |  |  | 78868 | $2618418 |
| Allison M. Peterson |  |  |  | $— |  |  |  |
|  |  |  |  |  |  | 45300 | $1503960 |
| Karen G. Smith |  |  |  | $— |  |  |  |
|  |  |  |  |  |  | 35308 | $1172226 |
| Michael D. Casey |  |  |  |  |  |  |  |
|  |  |  |  |  |  | 83544 | $2773661 |
| Kendra D. Krugman |  |  |  | $— |  |  |  |
|  |  |  |  |  |  |  | $— |

---

[See next page for footnotes to table]

(a)Mr. Westenberger's stock options previously fully vested in 2020, 2021, and 2022.

(b)Equity Incentive Plan awards relate to the following grants:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Grant Date** | **Time-Based** <br>**Restricted** <br>**Shares – 4** <br>**Year** <br>**Vest #**<br>| **Time-Based** <br>**Restricted** <br>**Shares – 3** <br>**Year** <br>**Cliff Vest #**<br>| **Time-Based** <br>**Restricted** <br>**Shares – 1** <br>**Year** <br>**Vest #**<br>| **Performance-**<br>**Based** <br>**Restricted**<br>**Shares**<br>| **Market-**<br>**Based** <br>**Restricted**<br>**Shares**<br>| **Grant** <br>**Date Fair** <br>**Value per** <br>**Share**<br>|
| Douglas C. <br>Palladini<br>| 4/3/2025 | 98400 |  |  |  |  | $35.57 |
|  | 4/3/2025 |  |  |  |  | 98400 | $14.79 |
| Richard F. <br>Westenberger<br>| 1/8/2025 |  |  | 5878 |  |  | $51.04 |
|  | 2/26/2025 | 35448 |  |  |  |  | $42.32 |
|  | 4/1/2025 |  |  | 2436 |  |  | $41.06 |
|  | 2/28/2024 | 6864 |  |  | 6040 |  | $81.95 |
|  | 2/28/2024 |  |  |  |  | 3112 | $117.28 |
|  | 2/27/2023 | 5234 |  |  | 10468 |  | $74.06 |
|  | 2/16/2022 | 1715 |  |  |  |  | $91.12 |
| Emily D. Evert | 8/8/2025 | 78868 |  |  |  |  | $25.36 |
| Allison M. <br>Peterson<br>| 2/26/2025 | 15360 |  |  |  |  | $42.32 |
|  | 8/9/2024 | 29940 |  |  |  |  | $62.63 |
| Karen G. Smith | 2/26/2025 | 17724 |  |  |  |  | $42.32 |
|  | 2/28/2024 | 2976 |  |  | 2619 |  | $81.95 |
|  | 2/28/2024 |  |  |  |  | 1349 | $117.28 |
|  | 2/27/2023 | 2702 |  |  |  |  | $74.06 |
|  | 2/27/2023 |  |  |  | 5404 |  | $74.06 |
|  | 8/12/2022 | 2534 |  |  |  |  | $83.89 |
| Michael D. <br>Casey<br>| 2/28/2024 |  |  |  | 26176 |  | $81.95 |
|  | 2/28/2024 |  |  |  |  | 13484 | $117.28 |
|  | 2/27/2023 |  |  |  | 43884 |  | $74.06 |
| Kendra D. <br>Krugman<br>|  |  |  |  |  |  | $— |

---

(c) Amount based on the closing market price per share of the Company's common stock as traded on the NYSE

&nbsp;&nbsp;&nbsp;&nbsp;on January 2, 2026, the last trading day of fiscal 2025, of $33.20.

**OPTION EXERCISES AND STOCK VESTED IN FISCAL 2025**

The following table provides information concerning our NEOs' exercises of stock options and vesting

of restricted stock (both time and performance-based) during fiscal 2025. The table reports, on an

aggregate basis, the number of securities acquired upon exercise of stock options, the dollar value

realized upon exercise of stock options, the number of shares of restricted stock that have vested,

and the dollar value realized upon the vesting of restricted stock.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Option Awards** | **Option Awards** | **Stock Awards** | **Stock Awards** |
| **Name** | **Number of** <br>**Shares** <br>**Acquired**<br> **on Exercise** <br>**(#)**<br>| **Value Realized**<br> **on Exercise**<br> **($)**<br>| **Number of** <br>**Shares** <br>**Acquired** <br>**on Vesting**<br> **(#)**<br>| **Value Realized** <br>**on Vesting** <br>**($) (a)**<br>|
| Douglas C. Palladini |  | $— |  | $— |
| Richard F. Westenberger |  | $— | 9425 | $441871 |
| Emily D. Evert |  | $— |  | $— |
| Allison M. Peterson |  | $— | 9980 | $253093 |
| Karen G. Smith |  | $— | 4877 | $160930 |
| Michael D. Casey |  | $— | 106981 | $4709606 |
| Kendra D. Krugman |  | $— | 6479 | $300567 |

---

(a)Aggregate dollar amount was calculated by multiplying the number of shares acquired on vesting by the closing market price of the

Company's common stock as traded on the NYSE on the date of vesting.

**NONQUALIFIED DEFERRED COMPENSATION**

Historically, eligible employees, including our NEOs, could elect annually to defer a portion of their

base salary and annual cash incentive compensation under The William Carter Company Deferred

Compensation Plan (the "Deferred Compensation Plan"), a nonqualified deferred compensation

plan. Under the Deferred Compensation Plan, participants could defer up to 75% of their salary

and/or 90% of their cash bonus. At the option of the participant, these amounts could be deferred to

a specific date at least two years from the last day of the year in which deferrals are credited into

the participant's account. Interest on deferred amounts were credited to the participant's account

based upon the earnings and losses of one or more of the investments selected by the participant

from the various investment alternatives available under the Deferred Compensation Plan.

At the time of deferral, a participant was required to indicate whether he or she wishes to receive the

amount deferred in either a lump sum or in substantially equal annual installments over a period of up

to five years for "Specified Date" accounts or up to ten years for "Retirement" accounts. If a participant

who is an employee of the Company were to separate from service prior to the elected

commencement date for distributions and had not attained age 62, or age 55 and completed ten years

of service, then the deferred amounts would be distributed as a lump sum, regardless of the method

of distribution originally elected by the participant. If the participant in question had attained age 62, or

age 55 with ten years of service and had previously elected to do so on a timely basis, then the

participant would have received the amounts in substantially equal annual installments over a period

of up to ten years. There is a six-month delay in the commencement of distributions for all

participants, if triggered by the participant's termination or retirement. Changes to deferral elections

with respect to previously deferred amounts are permitted only under the limited terms and conditions

specified in the Code and early withdrawals from deferred accounts are permitted only in extreme

cases, such as unforeseen financial hardship resulting from an illness or accident of the participant

that is demonstrated to the Company's Retirement Committee.

On August 14, 2025, the Board, upon the recommendation of the Committee, terminated the Deferred

Compensation Plan, effective as of September 30, 2025 (the "Termination Date"). The Board

terminated the Deferred Compensation Plan in response to, among other things, low participation by

the Company's eligible employees combined and ongoing administrative complexity and costs.

In accordance with Section 409A of the Internal Revenue Code of 1986, as amended, and as a result of

termination of the Deferred Compensation Plan, all plan participants (and any beneficiaries) will receive

a single, lump sum payout of the full balance of their respective accounts as of a final payment date,

which is scheduled to occur as soon as practicable after twelve months following the Termination Date,

but in no event later than 24 months after the Termination Date. Until the final payment date, the

Deferred Compensation Plan will continue to operate in the ordinary course. For example, distributions

of accounts that are set to occur prior to the final payment date will be made as scheduled under the

terms of the Deferred Compensation Plan and plan participants' accounts will continue to be adjusted

for earnings and losses based on the selected deemed investments in accordance with the terms of the

Deferred Compensation Plan, but no deferrals will occur after the Termination Date and no new

participants will be permitted to enroll after the Termination Date.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name** | **Employee** <br>**Contributions** <br>**in 2025**<br>**(a)**<br>| **Company** <br>**Contributions** <br>**in 2025**<br>| **Aggregate** <br>**Earnings in** <br>**2025 (b)**<br>| **Aggregate** <br>**Withdrawals** <br>**or** <br>**Distributions**<br>| **Aggregate** <br>**Balance at** <br>**End of** <br>**2025 (c)**<br>|
| Douglas C. Palladini | $— | $— | $— | $— | $— |
| Richard F. <br>Westenberger<br>| $3815 | $— | $43799 | $— | $382166 |
| Emily D. Evert | $— | $— | $— | $— | $— |
| Allison M. Peterson | $17308 | $— | $2435 | $— | $19743 |
| Karen G. Smith | $— | $— | $— | $— | $— |
| Michael D. Casey | $— | $— | $— | $— | $— |
| Kendra D. Krugman | $— | $— | $— | $— | $— |

---

(a)All of the amounts reported in this column for Mr. Westenberger and Ms. Peterson are also included within the amounts reported for that

officer in the Summary Compensation Table.

(b)None of the amounts reported in this column are reported in the Summary Compensation Table because the Company does not pay above-

market or preferential earnings on deferred compensation.

(c)Amounts reported in this column for each NEO include amounts previously reported in the Company's Summary Compensation Table in

previous years when earned if that NEO's compensation was required to be disclosed in a previous year.

**POTENTIAL PAYMENTS UPON TERMINATION OR** 

**CHANGE OF CONTROL**

**TERMINATION**

As described in more detail above under the heading "Severance Agreements with NEOs," we have

entered into certain agreements and maintain certain plans that may require us in the future to make

certain payments and provide certain benefits in the event of a termination of employment.

For purposes of the table below, a hypothetical termination without "cause" or resignation for "good

reason" is assumed to have occurred as of January 3, 2026, the last day of fiscal 2025. The table

below indicates the payment and provision of other benefits that would be owed to each of our NEOs

as the result of such a termination, as well as unvested performance-based restricted stock that is

eligible for "retirement" treatment under the applicable award agreements. There can be no

assurance that a termination of employment of any of our NEOs would produce the same or similar

results as those set forth below on any other date. The terms "without cause" and "good reason" are

defined in the agreements with our executives and summarized above under the heading "Severance

Agreements with NEOs." In addition, in the table below, we have included the potential vesting of

performance-based restricted stock for those executives who are eligible to receive "retirement"

treatment for those outstanding awards. Under the award agreements for the outstanding

performance-based restricted stock grants, a recipient is eligible for "retirement" treatment if the

executive ends his or her employment with the Company on or after the date that they have reached

age 60 and completed at least five years of service with the Company (but only to the extent that

circumstances constituting "cause", as defined under the agreement, do not exist). For awards that

receive "retirement" treatment, the executive is eligible to receive pro-rated vesting (if any) of the

performance-based restricted stock (calculated based on the number of days the executive worked at

the Company from the grant date through the retirement date) subject to the ultimate achievement, by

the Company, of the performance metrics under the applicable award agreements.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Douglas C.** <br>**Palladini**<br>| **Richard F.** <br>**Westenberger**<br>| **Emily D. Evert** | **Allison M.** <br>**Peterson**<br>| **Karen G.** <br>**Smith**<br>| **Michael D.** <br>**Casey (a)**<br>| **Kendra D.** <br>**Krugman (b)**<br>|
| Base Salary | $2400000 | $775000 | $650000 | $750000 | $595000 | $257692 | $775000 |
| Cash Incentive Compensation (c) | 1225200 | 705300 | 443700 | 511900 | 406100 |  | 482900 |
| Health and Other Benefits | 20768 | 17119 | 17122 | 16184 | 16184 |  | 6482 |
| Accelerated vesting of unvested <br>restricted stock awards (time-<br>based and performance-based <br>awards) (d)<br>|  |  |  |  |  | 3550670 |  |
| Other (e) |  | 276025 |  |  |  |  | 250000 |
| Total | $3645968 | $1773444 | $1110822 | $1278084 | $1017284 | $3808362 | $1514382 |

---

(a)Mr. Casey ceased to be an officer and director of Carter's in January 2025, and after serving in an advisory capacity from January 2025 through

February 28, 2025, retired from Carter's. As permitted by SEC guidance, the amounts shown are the actual amounts Mr. Casey received in

connection with his retirement pursuant to his Separation Agreement.

(b)Ms. Krugman departed Carter's in October 2025. Ms. Krugman's departure was treated as an involuntary termination without cause. As permitted

by SEC guidance, the amounts shown are the actual amounts Ms. Krugman received in connection with her termination without cause pursuant

to her Separation Agreement. The severance benefits payable to Ms. Krugman in connection with her departure are described below.

(c)Cash incentive compensation calculations are based on cash incentive compensation targets achieved in fiscal 2025 described in more detail

under the heading "Annual Cash Incentive Compensation" above.

(d)Represents accelerated vesting of unvested restricted stock awards and pro-rated vesting of performance-based restricted stock awards (subject

to the attainment of the performance metrics under those awards) held by Mr. Casey pursuant to Mr. Casey's Retirement Agreement and

Release (as discussed below). The amounts shown were calculated based on the closing stock price ($33.20) of the Company's stock on the last

trading day (January 2, 2026) of the Company 2025 fiscal year, and assuming that the Committee certifies performance at "Target" under the

applicable award agreements for the performance-based restricted stock.

(e)As described below, pursuant to Ms. Krugman's Separation Agreement with the Company, the Company further accelerated and paid to Ms.

Krugman her previously-announced $250,000 cash retention award (which was announced in connection with Mr. Westenberger's appointment

as Interim Chief Executive Officer). In addition, pursuant to the terms of Mr. Westenberger's quarterly awards he received during his service as

Interim CEO, if Mr. Westenberger were terminated without cause, those quarterly awards would immediately vest. The amounts above assume

accelerated vesting of Mr. Westenberger's quarterly awards.

In connection with Mr. Casey's retirement in February 2025, Carter's and Mr. Casey entered into a

Retirement Agreement and Release, dated February 20, 2025. Under the Retirement Agreement and

Release, Mr. Casey received accelerated vesting of his outstanding unvested restricted stock awards

and pro-rated vesting of his performance share awards issued in 2023 and 2024 (subject to the

attainment of the performance metrics under those awards).

In connection with Ms. Krugman's departure, which was effective as of October 21, 2025 and was

treated as an involuntary termination without cause, Carter's and Ms. Krugman entered into a

separation agreement, which confirmed the severance benefits and post-termination obligations

applicable to Ms. Krugman pursuant to her existing severance agreement with Carter's, as well as a

customary release of claims (the "Separation Agreement"). Pursuant to the Separation Agreement, Ms.

Krugman's severance benefits included the following: (i) 12 months of Ms. Krugman's base salary then

in effect ($775,000), paid in bi-weekly installments (coinciding with the Company's regular pay periods

commencing on December 31, 2025), (ii) a pro-rated annual cash incentive compensation amount for

fiscal 2025, pro-rated based on her number of days of service in 2025 ($482,900), and (iii) continued

coverage by the Company of the employer portion of medical and dental benefits for Ms. Krugman until

the earlier of (a) (i) 12 months following her separation date, (b) the date she becomes eligible for

coverage under the health and/or dental plans of another employer, or (c) the date she otherwise

ceases to be eligible to continue participation in the Company's health and dental plans under COBRA.

In addition, pursuant to the Separation Agreement, the Company further accelerated and paid to Ms.

Krugman her previously announced $250,000 cash retention award (which was announced in

connection with Mr. Westenberger's appointment as Interim Chief Executive Officer).

**CHANGE OF CONTROL AND TERMINATION FOLLOWING CHANGE OF CONTROL**

In the event of a change of control, which is defined under the Equity Incentive Plan and individual

awards as a "covered transaction" (as is more fully described in the Equity Incentive Plan Proposal),

all unvested stock options and all unvested shares of time-based restricted stock will fully vest, and all

unvested shares of performance-based restricted stock will vest at their respective "target" amounts.

In addition, as described in more detail above under the heading "Severance Agreements with NEOs,"

we have entered into certain agreements that may require us to make certain payments and provide

certain benefits to our NEOs in the event of their termination in relation to a change of control (with

"change of control" as defined in each executive's severance agreement and summarized in the

section entitled "Severance Agreements with NEOs").

For purposes of the table below, we have assumed that all unvested stock options, and all unvested

shares of time-based restricted stock and performance-based restricted stock, have fully vested

immediately prior to a change of control on January 3, 2026, the last day of fiscal 2025, and that a

termination without "cause" (as defined under the Equity Incentive Plan) occurred immediately

following a change of control on January 3, 2026. The estimated benefit amount for unvested options

was calculated by multiplying the number of in-the-money unvested options held by the applicable

NEO by the difference between the closing price of our common stock on January 2, 2026 (which

was the last trading day before the end of fiscal 2025), as reported by the NYSE, which was $33.20,

and the exercise price of the option. The estimated benefit amount of unvested restricted stock was

calculated by multiplying the number of restricted shares held by the applicable NEO by the closing

price of our common stock on January 2, 2026 (which was the last trading day before the end of fiscal

2025), as reported by the NYSE, which was $33.20. Effective February 15, 2024, the Company

amended its Equity Incentive Plan to include double-trigger change of control provisions to more

closely-align the Company's pay practices with market practice. For equity awards in fiscal 2024 and

beyond, the vesting of the awards will be accelerated if either (1) the surviving entity does not provide

replacement awards that meet criteria as set forth in the Equity Incentive Plan or, if applicable, the

award agreement (referred to as "qualifying replacement awards"), or (2) the surviving entity provides

qualifying replacement awards, but there is a termination of employment for "cause" or resignation for

"good reason" (as defined in the Equity Incentive Plan) within two years after the change in control.

There can be no assurance that a change of control would produce the same or similar results as

those set forth below on any other date or at any other price. These amounts do not include vested

stock options, vested shares of time-based restricted stock, or vested shares of performance-based

restricted stock. For a list of earned vested stock options, see the "Outstanding Equity Awards at

Fiscal 2025 Year-End" table beginning on page [5](#i0f96eb6978df4bdc96c28556de6c4b09_88)7.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Douglas C.** <br>**Palladini**<br>| **Richard F.** <br>**Westenberger**<br>| **Emily D.** <br>**Evert**<br>| **Allison M.** <br>**Peterson**<br>| **Karen G.** <br>**Smith**<br>| **Michael D.** <br>**Casey**<br>| **Kendra D.** <br>**Krugman**<br>|
| Base Salary | $3600000 | $1550000 | $1300000 | $1500000 | $1190000 | $4020000 | $1550000 |
| Cash Incentive <br>Compensation (a)<br>| 1225200 | 705300 | 443700 | 511900 | 406100 |  | 482900 |
| Health and Other <br>Benefits<br>| 31152 | 34238 |  | 32367 |  | 51353 | 12964 |
| Stock Value (b) | 6533760 | 2562874 | 2618418 | 1503960 | 1172226 | 2773661 |  |
| Total | $11390112 | $4852412 | $4362118 | $3548227 | $2768326 | $6845014 | $2045864 |

---

(a)Cash incentive compensation calculations are based on cash incentive compensation targets achieved in fiscal 2025 described in more detail

under the heading "Annual Cash Incentive Compensation" above.

(b)Assumes acceleration of the executive's equity awards upon a change of control.

**PAY RATIO DISCLOSURE**

The following information about the relationship between the compensation of our employees and the

compensation of Mr. Palladini, our Chief Executive Officer & President (our Principal Executive

Officer, or "PEO," for fiscal 2025), is provided in compliance with the requirements of Item 402(u) of

Regulation S-K (the "Pay Ratio Disclosure Requirement"). In fiscal 2025, the total compensation of

our median-compensated employee was $13,844.

We selected a new median employee in fiscal 2025 due to last year's median employee departing the

Company in fiscal 2025.

Our median employee is a part-time employee at one of our U.S. retail store locations whose annual

total compensation for fiscal 2025 (as calculated pursuant to Item 402(c)(2)(x) of Regulation S-K) was

$13,844. The annual total compensation for fiscal 2025 for our PEO was $7,496,679. The resulting ratio

of our PEO's pay to the pay of our median employee for fiscal 2025 was 542:1.

**METHODOLOGY TO IDENTIFY OUR MEDIAN EMPLOYEE**

In order to identify our median employee, we began with a list of all of our employees, world-wide,

who were employed by Carter's or one of its wholly-owned subsidiaries on October 1, 2025. Of these

employees, approximately 43% were full-time employees, 60% were part- time employees, and 11%

were seasonal or temporary employees. Approximately 76% of our employees were employed in our

retail stores in North America, and approximately 77% of those retail employees were part-time.

We then calculated each employee's compensation for 2025. When making this calculation, we:

• consistently used each employee's total salary for the 2025 calendar year as stated on the gross

compensation line on their Form W-2 (or international equivalent);

• annualized salaries for those full-time and part-time employees that were not employed for the full

calendar year of 2025 (but we did not annualize seasonal or temporary employee data);

• excluded benefits, such as health care contributions; and

• for compensation paid in currencies other than U.S. dollars, applied an exchange rate into

U.S. dollars that was based on rates published by xe.com on October 1, 2025.

This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules. Because the

SEC rules for identifying the median compensated employee and calculating the pay ratio based on

that employee'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, the pay ratio reported by other companies—including companies in our peer

group—may not be comparable to the pay ratio reported above. Other companies may have different

employment and compensation practices, different geographic breadth, perform different types of work,

and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own

pay ratios. This information is being provided for compliance purposes. Neither the Compensation &

Human Capital Committee nor management of the Company used the pay ratio measure in making

compensation decisions.

**PAY VERSUS PERFORMANCE DISCLOSURE**

As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of Regulation S-K, the table

summarizing executive compensation paid versus financial performance measures for our five most

recently completed fiscal years is set forth below:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year** <br>**(a)** |  |  |  |  |  |  |  |  |
| **Year** <br>**(a)** | **Summary** <br>**Compensation** <br>**Table Total**<br>**for Michael D.** <br>**Casey**<br>**(b)**<br>| **Compensation** <br>**Actually Paid** <br>**to Michael D.** <br>**Casey**<sup>(1)</sup><br>**(c)**<br>| **Summary** <br>**Compensation** <br>**Table Total**<br>**for Douglas C.** <br>**Palladini**<br>**(b)**<br>| **Compensation** <br>**Actually Paid** <br>**to Douglas C.** <br>**Palladini** <sup>(2)</sup><br>**(c)**<br>| **Summary** <br>**Compensation** <br>**Table Total**<br>**for Richard F.** <br>**Westenberger**<br>**(b)**<br>| **Compensation** <br>**Actually Paid** <br>**to Richard F.** <br>**Westenberger** <br><sup>(3)</sup><br>**(c)**<br>| **Average** <br>**Summary** <br>**Compensation** <br>**Table Total for** <br>**Non-PEO** <br>**NEOs**<br>**(d)**<br>| **Average** <br>**Compensation** <br>**Actually Paid** <br>**to Non-PEO** <br>**NEOs**<sup>(4)</sup><br>**(e)**<br>|
| 2025 | $387185 | $(1952845) | $7496679 | $7176879 | $3964938 | $2979091 | $2309931 | $1273085 |
| 2024 | 9146769 | 2030618 |  |  |  |  | 2242388 | 586590 |
| 2023 | 10088133 | 7858875 |  |  |  |  | 3061079 | 2624467 |
| 2022 | 8606754 | 4760564 |  |  |  |  | 2264230 | 1619056 |
| 2021 | 11056385 | 13931119 |  |  |  |  | 3801288 | 4249437 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year (a)** | **Value of Initial Fixed $100**<br> **investment based on:**  | **Value of Initial Fixed $100**<br> **investment based on:**  |  |  |
| **Year (a)** | **Total Shareholder**<br>**Return**<sup>(5)</sup><br>**(f)**<br>| **Peer Group**<br>**Total Shareholder**<br>**Return**<sup>(6)</sup><br>**(g)**<br>| **Net Income (*dollars in*** <br>***thousands)***<sup>(7)</sup><br>**(h)**<br>| **Adjusted Operating** <br>**Income (*dollars in*** <br>***thousands)***<sup>(8)</sup><br>**(i)**<br>|
| 2025 | $41.57 | $68.73 | $91796 | $175991 |
| 2024 | 66.48 | 75.04 | 185509 | 286550 |
| 2023 | 87.61 | 79.40 | 232500 | 327816 |
| 2022 | 83.53 | 73.49 | 250038 | 388171 |
| 2021 | 109.08 | 112.50 | 339748 | 500764 |

---

(1)The dollar amounts reported in the column "Compensation Actually Paid to Michael D. Casey" (column (c)) represent the amount of Compensation

Actually Paid to Michael Casey, our former CEO, 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 the CEO during the applicable year.

(2)The dollar amounts reported in the column "Compensation Actually Paid to Douglas C. Palladini" (column (c)) represent the amount of Compensation

Actually Paid to Mr. Palladini, our Chief Executive Officer & President, 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 the CEO during the applicable year.

(3)The dollar amounts reported in the column "Compensation Actually Paid to Richard F. Westenberger" (column (c)) represent the amount of

Compensation Actually Paid to Mr. Westenberger, who served as Interim Chief Executive Officer & President from January 5, 2025 through April 3,

2025, 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 the CEO during the applicable year. To calculate Compensation Actually Paid to the CEO, for each of the years shown, the following amounts

were deducted from and added to Summary Compensation Table total compensation:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **PEO Summary Compensation Table Total to Compensation Actually Paid** <br>**Reconciliation for Michael D. Casey** | **PEO Summary Compensation Table Total to Compensation Actually Paid** <br>**Reconciliation for Michael D. Casey** |  |  |
| **Year** | **Summary** <br>**Compensation** <br>**Table Total**<br>| **Deductions**<br>**from Summary** <br>**Compensation Table**<br>**Total**<sup>(i)</sup><br>| **Equity Award**<br>**Adjustments**<sup>(ii)</sup><br>| **Compensation** <br>**Actually Paid**<br>|
| 2025 | $387185 | $— | $(2340030) | $(1952845) |
| 2024 | 9146769 | (6976664) | (139487) | 2030618 |
| 2023 | 10088133 | (6500098) | 4270840 | 7858875 |
| 2022 | 8606754 | (6500136) | 2653947 | 4760564 |
| 2021 | 11056385 | (6500323) | 9375057 | 13931119 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **PEO Summary Compensation Table Total to Compensation Actually Paid** <br>**Reconciliation for Douglas C. Palladini** | **PEO Summary Compensation Table Total to Compensation Actually Paid** <br>**Reconciliation for Douglas C. Palladini** |  |  |
| **Year** | **Summary** <br>**Compensation** <br>**Table Total**<br>| **Deductions**<br>**from Summary** <br>**Compensation Table**<br>**Total**<sup>(i)</sup><br>| **Equity Award**<br>**Adjustments**<sup>(ii)</sup><br>| **Compensation** <br>**Actually Paid**<br>|
| 2025 | $7496679 | $(4955424) | $4635624 | $7176879 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **PEO Summary Compensation Table Total to Compensation Actually Paid** <br>**Reconciliation for Richard F. Westenberger** | **PEO Summary Compensation Table Total to Compensation Actually Paid** <br>**Reconciliation for Richard F. Westenberger** |  |  |
| **Year** | **Summary** <br>**Compensation** <br>**Table Total**<br>| **Deductions**<br>**from Summary** <br>**Compensation Table**<br>**Total**<sup>(i)</sup><br>| **Equity Award**<br>**Adjustments**<sup>(ii)</sup><br>| **Compensation** <br>**Actually Paid**<br>|
| 2025 | $3964938 | $(1900195) | $914348 | $2979091 |

---

(i)Represents the grant date fair value of equity-based awards granted each year, as shown in the Stock Awards column of the Summary

Compensation Table.

(ii)Reflects the value of equity-based awards calculated in accordance with the SEC methodology for determining Compensation Actually Paid for each

year shown under generally accepted accounting principles. The fair value of our performance-based restricted stock is calculated based on the

probable outcome of the performance conditions determined as of the last day of the fiscal year and our closing stock price on such day. The

determination of equity award adjustments to Summary Compensation Table total compensation is detailed in the supplemental table below.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **PEO Equity Component of Compensation Actually Paid for Michael D. Casey** | **PEO Equity Component of Compensation Actually Paid for Michael D. Casey** | **PEO Equity Component of Compensation Actually Paid for Michael D. Casey** | **PEO Equity Component of Compensation Actually Paid for Michael D. Casey** | **PEO Equity Component of Compensation Actually Paid for Michael D. Casey** |  |  |
| Year | Fair Value of<br>Equity<br>Awards<br>Granted in<br>the Year<br>and<br>Outstanding<br>and<br>Unvested as<br>of Year End<br>| Year over Year <br>Change in Fair Value <br>of Equity Awards <br>Granted in Prior <br>Years and <br>Outstanding and <br>Unvested as of Year <br>End<br>| Fair Value as of<br>Vesting Date of<br>Equity Awards<br>Granted and<br>Vested in the<br>Year<br>| Year over Year<br>Change in Fair<br>Value of<br>Equity Awards<br>Granted in<br>Prior Years<br>that Vested in<br>the Year<br>| Fair Value at the<br>End of the Prior<br>Year of Equity<br>Awards that were<br>Forfeited in the<br>Year<br>| Value of<br>Dividends or<br>other Earnings<br>Paid on Equity<br>Awards not<br>Otherwise<br>Reflected in Fair<br>Value or Total<br>Compensation<br>| Total<br>Equity<br>Award<br>Adjustments<br>|
| 2025 | $— | $(1226660) | $— | $(1113370) |  |  | $(2340030) |
| 2024 | 3470704 | (3882120) |  | 271929 |  |  | (139487) |
| 2023 | 5587004 | (1441983) |  | 125819 |  |  | 4270840 |
| 2022 | 4923201 | (1890720) |  | (378534) |  |  | 2653947 |
| 2021 | 6710481 | 2626294 |  | 38282 |  |  | 9375057 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **PEO Equity Component of Compensation Actually Paid for Douglas C. Palladini** | **PEO Equity Component of Compensation Actually Paid for Douglas C. Palladini** | **PEO Equity Component of Compensation Actually Paid for Douglas C. Palladini** | **PEO Equity Component of Compensation Actually Paid for Douglas C. Palladini** | **PEO Equity Component of Compensation Actually Paid for Douglas C. Palladini** |  |  |
| Year | Fair Value of<br>Equity<br>Awards<br>Granted in<br>the Year<br>and<br>Outstanding<br>and<br>Unvested as<br>of Year End<br>| Year over Year <br>Change in Fair Value <br>of Equity Awards <br>Granted in Prior <br>Years and <br>Outstanding and <br>Unvested as of Year <br>End<br>| Fair Value as of<br>Vesting Date of<br>Equity Awards<br>Granted and<br>Vested in the<br>Year<br>| Year over Year<br>Change in Fair<br>Value of<br>Equity Awards<br>Granted in<br>Prior Years<br>that Vested in<br>the Year<br>| Fair Value at the<br>End of the Prior<br>Year of Equity<br>Awards that were<br>Forfeited in the<br>Year<br>| Value of<br>Dividends or<br>other Earnings<br>Paid on Equity<br>Awards not<br>Otherwise<br>Reflected in Fair<br>Value or Total<br>Compensation<br>| Total<br>Equity<br>Award<br>Adjustments<br>|
| 2025 | $4635624 | $— | $— | $— |  |  | $4635624 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **PEO Equity Component of Compensation Actually Paid for Richard F. Westenberger** | **PEO Equity Component of Compensation Actually Paid for Richard F. Westenberger** | **PEO Equity Component of Compensation Actually Paid for Richard F. Westenberger** | **PEO Equity Component of Compensation Actually Paid for Richard F. Westenberger** | **PEO Equity Component of Compensation Actually Paid for Richard F. Westenberger** |  |  |
| Year | Fair Value of<br>Equity<br>Awards<br>Granted in<br>the Year<br>and<br>Outstanding<br>and<br>Unvested as<br>of Year End<br>| Year over Year <br>Change in Fair Value <br>of Equity Awards <br>Granted in Prior <br>Years and <br>Outstanding and <br>Unvested as of Year <br>End<br>| Fair Value as of<br>Vesting Date of<br>Equity Awards<br>Granted and<br>Vested in the<br>Year<br>| Year over Year<br>Change in Fair<br>Value of<br>Equity Awards<br>Granted in<br>Prior Years<br>that Vested in<br>the Year<br>| Fair Value at the<br>End of the Prior<br>Year of Equity<br>Awards that were<br>Forfeited in the<br>Year<br>| Value of<br>Dividends or<br>other Earnings<br>Paid on Equity<br>Awards not<br>Otherwise<br>Reflected in Fair<br>Value or Total<br>Compensation<br>| Total<br>Equity<br>Award<br>Adjustments<br>|
| 2025 | $1452898 | $(467418) | $— | $(71132) |  |  | $914348 |

---

(4)The dollar amounts reported in the column "Average Compensation Actually Paid to Non-PEO NEOs" (column (e)) represent the average amount of

Compensation Actually Paid to the non-CEO named executive officers ("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. The Non-CEO NEOs reflected in columns (d) and (e) consist of the following individuals for each of the years shown: 2025—Emily Evert,

Allison Peterson, Karen Smith, and Kendra Krugman; 2024—Richard Westenberger, Kendra Krugman, Allison Peterson, Raghu Sagi, and Brian Lynch;

2023—Richard Westenberger, Brian Lynch, Kendra Krugman, and Julie D'Emilio; 2022—Richard Westenberger, Brian Lynch, Patrick Moore, and Kendra

Krugman; 2021—Richard Westenberger, Brian Lynch, Patrick Moore, and Peter Smith. To calculate Compensation Actually Paid to our Non-CEO NEOs

for each of the years shown, the following amounts were deducted from and added to Summary Compensation Table total compensation.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Average Non-PEO NEOs Summary Compensation Table Total to** <br>**Compensation Actually Paid Reconciliation\*** | **Average Non-PEO NEOs Summary Compensation Table Total to** <br>**Compensation Actually Paid Reconciliation\*** |  |  |
| **<u>Year</u>** | Summary Compensation Table <br>Total<br>| Deductions<br>from Summary Compensation <br>Table<br>Total<sup>(i)</sup><br>| Equity<br>Award<br>Adjustments<sup>(ii)</sup><br>| Compensation <br>Actually Paid<br>|
| 2025 | $2309931 | $(1100078) | $63232 | $1273085 |
| 2024 | 2242388 | (1680057) | 24259 | 586590 |
| 2023 | 3061079 | (1662929) | 1226317 | 2624467 |
| 2022 | 2264230 | (1313039) | 667866 | 1619056 |
| 2021 | 3801288 | (1987866) | 2436014 | 4249437 |

---

\*Amounts in rows may not add exactly to the total due to rounding.

(i)Represents the grant date fair value of equity-based awards granted each year, as shown in the Stock Awards column of the Summary

Compensation Table.

(ii)Reflects the value of equity-based awards calculated in accordance with the SEC methodology for determining Compensation Actually Paid for each

year shown under generally accepted accounting principles. The fair value of our performance-based restricted stock is calculated based on the

probable outcome of the performance conditions determined as of the last day of the fiscal year and our closing stock price on such day. The

determination of equity award adjustments to SCT total compensation is detailed in the supplemental table below*.*

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Average Non-PEO NEOs Equity Component of Compensation Actually** <br>**Paid** | **Average Non-PEO NEOs Equity Component of Compensation Actually** <br>**Paid** | **Average Non-PEO NEOs Equity Component of Compensation Actually** <br>**Paid** | **Average Non-PEO NEOs Equity Component of Compensation Actually** <br>**Paid** |  |  |
| Year | Fair Value of<br>Equity Awards<br>Granted in the<br>Year and<br>Outstanding<br>and Unvested<br>as of Year End<br>| Year over Year<br>Change in Fair<br>Value of<br>Equity Awards<br>Granted in<br>Prior Years<br>and<br>Outstanding<br>and Unvested<br>as of Year End<br>| Fair Value <br>as<br>of Vesting<br>Date of<br>Equity<br>Awards<br>Granted and<br>Vested in<br>the Year<br>| Year over Year<br>Change in Fair<br>Value of<br>Equity Awards<br>Granted in<br>Prior Years<br>that Vested in<br>the Year<br>| Fair Value <br>at<br>the End of <br>the<br>Prior Year <br>of<br>Equity <br>Awards<br>that were<br>Forfeited in<br>the Year<br>| Value of<br>Dividends or<br>other<br>Earnings Paid<br>on Equity<br>Awards not<br>Otherwise<br>Reflected in<br>Fair Value or<br>Total<br>Compensation<br>| Total<br>Equity<br>Award<br>Adjustments<br>|
| 2025 | $1125347 | $(443311) | $— | $(148910) | $(469894) | $— | $63232 |
| 2024 | 1140756 | (919949) |  | 124924 | (321472) |  | 24259 |
| 2023 | 1476966 | (269558) |  | 18909 |  |  | 1226317 |
| 2022 | 994495 | (272340) |  | (54289) |  |  | 667866 |
| 2021 | 2052134 | 372284 |  | 11596 |  |  | 2436014 |

---

(5)The amounts in the column "Total Shareholder Return" (column (f)) are calculated by dividing the sum of the cumulative amount of dividends for the

measurement period, assuming reinvestment of all dividends, if any, and the difference between the Company's share price at the end and the

beginning of the measurement period by the Company's share price at the beginning of the measurement period.

(6)Represents the weighted peer group Total Shareholder Return, 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 Composite 1500 Apparel, Accessories &

Luxury Goods.

(7)The dollar amounts reported represent the amount of net income reflected in the Company's audited financial statements for the applicable year.

(8)Management defines and calculates Adjusted Operating Income as Operating Income as calculated under generally accepted accounting principles,

excluding infrequent or extraordinary items. Adjusted Operating Income is a non-GAAP measure. A reconciliation of Operating Income to Adjusted

Operating Income can be found in the Appendix to this Proxy Statement.

**PAY VERSUS PERFORMANCE LIST OF IMPORTANT FINANCIAL MEASURES**

The list below consists of our most important performance measures used to link "Compensation

Actually Paid" to our NEOs for our performance, over the fiscal year ending January 3, 2026. These

measures are used to determine annual incentive payouts and are also key metrics under our

performance-based restricted stock awards. The performance measures included in this list are not

ranked by relative importance:

• Net Sales

• Adjusted Operating Income

• Adjusted Diluted EPS

• Operating Cash Flow

Net Sales and Operating Cash Flow are calculated in accordance with generally accepted accounting

principles. As noted above, management defines and calculates Adjusted Operating Income as

Operating Income as calculated under generally accepted accounting principles, excluding infrequent or

extraordinary items, and management defines Adjusted Diluted EPS as Diluted EPS as calculated

under generally accepted accounting principles, excluding infrequent or extraordinary items.

**PAY VERSUS PERFORMANCE DESCRIPTIVE DISCLOSURE**

Actual compensation paid ultimately depends on 1) the ability to meet the specific Company targets

(net sales, adjusted operating income, adjusted diluted EPS, and operating cash flow) and/or the

progress in meeting the specific Company targets and 2) the performance of the Company's stock

price.

The following graph summarizes the relationship between Total Shareholder Return ("TSR") and

executive compensation actually paid to the CEO and the Non-CEO NEOs and the relationship

between the TSR of the Company and its peer group over the last four completed years:

![6229](cri-20260401_g32.gif)

The following graph summarizes the relationship between the adjusted operating income and net

income performance measures included in the table and the executive compensation actually paid to

the CEO and the Non-CEO NEOs over the last five completed years:

![6488](cri-20260401_g33.gif)

**TRANSACTIONS WITH RELATED PERSONS,** 

**PROMOTERS, AND CERTAIN CONTROL PERSONS**

The Company has a written policy that requires all transactions with related persons required to

be disclosed under Item 404(a) of Regulation S-K, promulgated under the Exchange Act, to be

reviewed by our Chief Financial Officer & Chief Operating Officer and our Chief Administrative

& Compliance Officer, Corporate Secretary (or their designees) with our Audit Committee and

approved by our Audit Committee. In connection with exercising such oversight, the Audit

Committee reviewed and approved the following related party transaction.

Prior to her appointment as Chief Strategy Officer of the Company in August 2025, Emily D.

Evert was a managing director and partner at The Boston Consulting Group, Inc. ("BCG"), a

global strategic management consulting firm.

In fiscal 2024, the Company engaged BCG to provide general consulting services and to

support operating model improvement initiatives in fiscal 2025. The aggregate fees paid to

BCG were approximately $4.9 million in fiscal 2024 and $14.8 million in fiscal 2025. These

transactions were entered into with BCG prior to Ms. Evert's joining the Company and the

engagements with BCG were entered into on terms Management believes to be consistent with

those negotiated in an arm's-length transaction with an unrelated third party.

The Company considers the following to be related parties: any director or executive officer of the

Company; any nominee for election as a director; any security holder who is known to the Company to

own more than five percent of any class of the Company's voting securities; and any member of the

immediate family of any of the parties listed above including such party's spouse, parents, children,

siblings, mothers and fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law.

**SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL** 

**OWNERS, DIRECTORS, AND EXECUTIVE OFFICERS**

The following table sets forth the number of shares of Carter's common stock owned by each of the

following parties as of the record date of March 20, 2026, or as of such other date as indicated: (a)

each person known by Carter's to own beneficially more than five percent of the outstanding common

stock; (b) our NEOs; (c) each director; and (d) all directors and executive officers as a group. Unless

otherwise indicated below, the holder's address is 3438 Peachtree Road NE, Suite 1800, Atlanta,

Georgia 30326.

---

| | | |
|:---|:---|:---|
| **Name of Beneficial Owner** | **Shares** | **Percent** |
| BlackRock, Inc. (1) | 5282565 | 14.3% |
| RWWM, Inc. (2) | 2574729 | 7.0% |
| Michael D. Casey (3) | 367091 | 1.0% |
| Emily D. Evert (3) | 97468 | \* |
| Kendra D. Krugman (3) | 87833 | \* |
| Douglas C. Palladini (3) | 354168 | \* |
| Allison M. Peterson (3) | 67723 | \* |
| Karen G. Smith (3) | 55575 | \* |
| Richard F. Westenberger (3) | 183923 | \* |
| Rochester Anderson, Jr.  | 13037 | \* |
| Jeffrey H. Black  | 13037 | \* |
| Hali Borenstein | 17007 | \* |
| Luis Borgen  | 13405 | \* |
| Jevin S. Eagle | 22729 | \* |
| Mark P. Hipp | 16918 | \* |
| William J. Montgoris | 49612 | \* |
| Stacey S. Rauch  | 13037 | \* |
| Gretchen W. Schar | 17475 | \* |
| Stephanie P. Stahl  | 13037 | \* |
| All directors, including nominees, and current executive officers as a <br>group (19 persons) (3)<br>| 1168162 | 3.2% |

---

\*Indicates less than 1% of our common stock.

(1)This information is based on Schedule 13G/A filed with the SEC on July 17, 2025. BlackRock, Inc. has sole voting power

covering 5,194,680 shares and sole dispositive power covering 5,282,565 shares of our common stock. The address for

BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001.

(2)This information is based on Schedule 13G/A, filed with the SEC on March 6, 2026. RWWM Inc. has sole dispositive power covering

2,566,125 and shared dispositive power covering 8,604 shares of our common stock; RWWM Inc. 401(k) Profit Sharing Plan has

shared voting power covering 8,604 shares of our common stock; Scott P. Roseman has shared voting power covering 8,604 shares

and shared dispositive power covering 2,574,729 of our common stock: and Aaron J. Wagner has sole voting power covering 849

shares and shared voting power covering 8,864 shares and sole dispositive power covering 849 shares and shared dispositive power

covering 2,574,729 of our common stock. The address for each entity is 4970 Rocklin Road, Suite 200, Rocklin, California 95677.

(3)This amount includes the (a) number of shares subject to exercisable stock options, including stock options that will become

exercisable during the 60 days after March 20, 2026, and (b) shares of unvested restricted stock and unvested performance-

based restricted stock. See the detail for each NEO and all current executive officers as a group below.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name** | **Owned &** <br>**Vested** <br>**Common** <br>**Stock**<br>| **Exercisable Stock** <br>**Options**<br>| **Restricted** <br>**Common** <br>**Stock**<br>| **Unvested** <br>**Performance-**<br>**Based** <br>**Restricted** <br>**Stock**<br>|
| Douglas C. Palladini |  |  | 161347 | 192821 |
| Richard F. Westenberger | 83588 | 12048 | 53383 | 34904 |
| Emily D. Evert |  |  | 86308 | 11160 |
| Allison M. Peterson | 7663 |  | 48900 | 11160 |
| Karen G. Smith | 10985 |  | 27746 | 16844 |
| Michael D. Casey | 327431 |  |  | 39660 |
| Kendra D. Krugman | 87833 |  |  |  |
| All current executive officers as a group | 517500 | 12048 | 377684 | 306549 |

---

**DELINQUENT SECTION 16 REPORTS**

Section 16(a) of the Securities Exchange Act requires that the Company's executive officers and

directors, and persons who beneficially own more than ten percent (10%) of the Company's common

stock, file initial reports of ownership and changes in ownership with the SEC. Based on a review of

the copies of such forms furnished to the Company with respect to fiscal 2025, the Company believes

that all forms were filed in a timely manner during fiscal 2025.

**PROPOSAL NUMBER TWO:**

**ADVISORY VOTE ON APPROVAL OF EXECUTIVE** 

**COMPENSATION**

The Compensation Discussion and Analysis section of this proxy statement beginning on page [3](#i0f96eb6978df4bdc96c28556de6c4b09_52)3

describes Carter's executive compensation program and the compensation decisions that the

Compensation and Human Capital Committee and Board of Directors made in fiscal 2025 with

respect to the compensation of Carter's NEOs.

Carter's is committed to achieving long-term, sustainable growth and increasing stockholder value.

Carter's compensation program for its NEOs is designed to support these objectives and encourage

strong financial performance on an annual and long-term basis by linking a significant portion of the

NEOs' total direct compensation to Carter's performance in the form of incentive compensation.

The Board of Directors is asking stockholders to cast a non-binding, advisory vote **FOR** the following

resolution:

"RESOLVED, that the compensation paid to Carter's NEOs, as disclosed in Carter's Proxy

Statement for the 2026 Annual Meeting of Stockholders, including the Compensation

Discussion & Analysis, compensation tables and narrative discussion, is hereby APPROVED."

This proposal is commonly referred to as the "say-on-pay" vote and is required pursuant to Section

14A of the Exchange Act. This vote 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. Although the vote we are asking you to cast is non-binding, the Compensation & Human

Capital Committee and the Board value the views of our stockholders and intend to consider the

outcome of the vote when determining future compensation arrangements for our NEOs.

**The Board recommends a vote FOR the** 

**approval of compensation of Carter's** 

**NEOs as disclosed in this proxy** 

**statement.**

**VOTE REQUIRED**

Because this Proposal Number Two asks for a non-binding, advisory vote, there is no required vote

that would constitute approval. We value the opinions expressed by our stockholders in this advisory

vote, and our Compensation & Human Capital Committee will consider the outcome of the vote when

designing our compensation programs and making future compensation decisions for our NEOs.

Abstentions and broker non-votes, if any, will not have any impact on this advisory vote.

**PROPOSAL NUMBER THREE:**

**APPROVAL OF THE COMPANY'S AMENDED AND** 

**RESTATED EQUITY INCENTIVE PLAN**

**Introduction and Background**

The Company's Amended and Restated Equity Incentive Plan, as adopted on April 15, 2001 and

approved by stockholders on August 15, 2001, and subsequently amended, restated and renamed (the

"Existing Equity Incentive Plan"), provides for the grant or award of stock options, stock appreciation

rights, restricted stock, unrestricted stock, deferred stock, and performance awards to eligible

employees and directors. To date, we have granted stock options and restricted stock awards, subject

to time and/or performance vesting, under the Existing Equity Incentive Plan, including the grants to the

NEOs shown above in this proxy statement. We believe that the grants awarded under the Existing

Equity Incentive Plan help with retention of our NEOs and other executives and key personnel and also

serve to link a portion of their compensation to measures of our performance to provide an incentive for

successful long-term strategic management of the Company. The Compensation & Human Capital

Committee (the "Committee"), the Board, and the Company's management believe it is in the best

interest of the Company and its stockholders to amend and restate the Existing Equity Incentive Plan

(as amended and restated, the "Equity Incentive Plan") to, among other things, increase the number of

shares available for issuance. In recommending that the Board adopt the Equity Incentive Plan, the

Committee, along with its independent compensation consultant, considered our historical and

expected usage of equity compensation (also referred to as burn rate), the number of shares remaining

for awards under the Existing Equity Incentive Plan, potential dilution from the Equity Incentive Plan, the

importance of continuing the Company's long-standing successful compensation program, the number

of shares relative to our peers and anticipated grant practices, and the potential effect of the Equity

Incentive Plan on our stockholders. The Committee also indicated its desire to seek approval of a

number of shares that are expected to allow the Company to award equity compensation for the next

three years before again needing to seek stockholder approval. Accordingly, our stockholders are being

asked to approve the Equity Incentive Plan. We believe that the increase in shares available for awards

under the Equity Incentive Plan is essential to our continued success in attracting, retaining, motivating

and rewarding our employees and directors and therefore, the amendment and restatement is in the

best interests of the Company and our stockholders.

The Existing Equity Plan will be amended and restated to:

• Increase the maximum number of shares of stock available for delivery under the Equity

Incentive Plan to 20,778,392 shares, which consists of 582,345 shares of previously authorized,

but unissued, equity (as of the Record Date) under the Existing Equity Incentive Plan and

2,000,000 newly authorized shares;

• Remove the fungible share limit (i.e., where stock options and stock appreciation rights count

against the Equity Incentive Plan's share limit as 1.46 shares for every one share of stock

underlying the award);

• Add a one-year minimum vesting requirement for all awards, except for up to 5% of the shares

of stock available for issuance under the Equity Incentive Plan and certain assumed and

substituted awards in a corporate transaction; and

• Specifically prohibit the payment of dividends and dividend equivalents on unvested awards.

In light of these changes, the Equity Incentive Plan is being submitted to stockholders for approval at

the Annual Meeting (as described more fully below under "Vote Required").

As of March 20, 2026, there were 1,382,068 shares of our stock subject to outstanding unvested

restricted stock awards (time-based and performance-based) and 100,123 shares of our stock subject

to outstanding stock options, with a weighted average exercise price of $103.27 and a weighted

average remaining term of 1.21 years. The market value of the stock underlying these outstanding

restricted stock awards and stock options was approximately $50,735,398, based on the closing price

of our stock on March 20, 2026.

The modifications described above and the following descriptions of the Equity Incentive Plan are each

a summary of the principal features of the Equity Incentive Plan but may not contain all the information

you may wish to know. We encourage you to review the entire text of the Equity Incentive Plan which is

attached hereto as <u>Appendix B</u>. The Equity Incentive Plan is not qualified under Section 401 of the

Code nor is it subject to the provisions of the Employee Retirement Income Security Act of 1974, as

amended. The Board and the Committee have approved the Equity Incentive Plan, subject to

stockholder approval.

The Company intends to file a registration statement under the Securities Act of 1933, as amended,

covering additional shares of common stock reserved for issuance under the Equity Incentive Plan after

approval of the Equity Incentive Plan.

**Summary of the Equity Incentive Plan** 

**Purpose**. The Equity Incentive Plan enhances the Company's ability to continue to attract and retain

key employees and directors, reward such individuals for their contributions, and encourage such

individuals to take into account the long-term interests of the Company and its subsidiaries. To this end,

the Equity Incentive Plan permits the Company to grant a variety of stock-based awards and related

benefits, including stock options, stock appreciation rights, restricted or unrestricted stock awards,

promises to deliver stock in the future, and rights to receive stock based on performance.

**Eligibility and Participation**. Directors and key employees who, in the opinion of the Equity Incentive

Plan's administrator, are in a position to make a significant contribution to the success of the Company

and its subsidiaries will be eligible to receive awards under the Equity Incentive Plan. As of March 20,

2026, the Company estimated it had approximately 167 employees and directors eligible to receive

awards under the Equity Incentive Plan.

**Effective Date and Term**. If Proposal Number Three is approved, the effective date of the Equity

Incentive Plan will be February 19, 2026, the date our Board of Directors approved the Equity Incentive

Plan; however, except as provided in the Equity Incentive Plan, any award under the Equity Incentive

Plan made prior to stockholder approval of the Equity Incentive Plan shall be subject to the terms of the

Existing Equity Incentive Plan (as in effect prior to its amendment and restatement to be approved at

this Annual Meeting). Although the number of shares that may be granted under the Equity Incentive

Plan is limited, as described below, there is no time limit on the duration of the Equity Incentive Plan

itself.

**Administration**. The Equity Incentive Plan is administered by, or under the direction of, the Committee

(the "Administrator"). The Administrator will set the terms of all awards including the exercise price for

awards that have one. Subject only to the limitations provided in the Equity Incentive Plan, the

Administrator has discretionary authority to interpret the Equity Incentive Plan; determine eligibility for

and grant awards; determine, modify, or waive the terms and conditions of any award; prescribe forms,

rules, and procedures; and otherwise do all things necessary to carry out the purposes of the Equity

Incentive Plan.

**Shares Subject to the Equity Incentive Plan** 

**Number of Shares**. Subject to possible adjustment as described in <u>Appendix B</u>, the aggregate

maximum number of shares of common stock that may be delivered in satisfaction of awards under the

Equity Incentive Plan is 20,778,392 (assuming the Equity Incentive Plan is approved by stockholders).

This represents an increase of 2,000,000 shares from the number of shares of common stock that

could be delivered under the Existing Equity Incentive Plan (18,778,392), of which 542,178 remained

available for future grants and awards as of the Record Date. This amount is subject to adjustment in

the event of certain changes in our capitalization as described below. In addition, the actual share limit

that will be set forth in the final terms of the Equity Incentive Plan will reflect incremental changes in the

number of shares of stock remaining available under the Existing Equity Incentive Plan to reflect

issuances and forfeitures of equity awards following our March 20, 2026 record date through the

effective date of the Equity Incentive Plan (assuming stockholder approval).

With respect to stock appreciation rights, if such a right is exercised, the number of shares of stock

deemed to have been issued under the Equity Incentive Plan will be reduced by the aggregate number

of shares subject to the stock appreciation right and not just the number of shares actually delivered

upon exercise of the stock appreciation right. If shares of common stock are withheld from an award

granted under the Equity Incentive Plan in order to satisfy tax withholding obligations, the number of

shares of stock deemed to have been issued under the Equity Incentive Plan will be the aggregate

number of shares subject to the award or the portion of the award that was exercised or settled and not

the net number of shares actually issued. No incentive stock options may be granted under the Equity

Incentive Plan.

If any award granted under the Equity Incentive Plan terminates, or is otherwise forfeited in whole or in

part, before it is fully exercised, or upon exercise is satisfied other than by delivery of stock, the number

of shares as to which such award was not exercised shall be available for future grants.

**Individual Award Limits.** The maximum number of shares of stock with respect to which stock options

or stock appreciation rights may be granted to any person in any calendar year and the maximum

number of shares of stock subject to stock appreciation rights granted to any person in any calendar

year will each be 1,000,000. The maximum benefit that may be paid to any person under other awards

in any calendar year will be, to the extent paid in shares, 1,000,000 shares (or their value in dollars).

**Adjustments to Awards**

In the event of a stock dividend, stock split, or combination of shares (including a reverse stock split),

recapitalization or other change in our capital structure, the Administrator will make appropriate

adjustments to the maximum number of shares that may be delivered under the Equity Incentive Plan

and to the maximum share limits on awards to individual participants. The Administrator will also make

appropriate adjustments to the number and kind of shares of stock or securities subject to awards then

outstanding or subsequently granted, any exercise prices relating to awards, and any other provision of

awards affected by such change. In general, such adjustments may be made only if and to the extent

that such adjustments will not constitute a modification, extension or renewal of such awards under

Section 424(h)(3) of the Code (in the case of incentive stock options), a modification under Section

409A of the Code (in the case of nonstatutory stock options), or adversely affect the exemption

provided pursuant to Rule 16b-3 under the Exchange Act.

**Shares to be Delivered**. Shares delivered under the Equity Incentive Plan will be authorized but

unissued common stock, or previously issued common stock that we acquire and hold in our treasury.

No fractional shares will be delivered under the Equity Incentive Plan.

**Awards** 

**Stock Options**. The Administrator may from time to time award stock options to any participant subject

to the limitations described above. Stock options give the holder the right to purchase shares of our

common stock within a specified period of time at a specified price and subject to other terms and

conditions. Only non-statutory options may be granted under the Equity Incentive Plan. The expiration

date of a stock option cannot be more than ten years after the date of the original grant. The exercise

price of any option granted under the Equity Incentive Plan cannot be less than the fair market value of

the underlying stock on the date of grant. The Administrator also determines all other terms and

conditions related to the exercise of a stock option, including the consideration to be paid, if any, for the

grant of the stock options, the time at which stock options may be exercised, and conditions related to

the exercise of stock options.

**Stock Appreciation Rights**. The Administrator may grant stock appreciation rights under the Equity

Incentive Plan. A stock appreciation right entitles the holder upon exercise to receive common stock

equal in value to the excess of the fair market value of the shares of stock subject to the right over the

fair market value of such shares on the date of grant. The expiration date of a stock appreciation right

cannot be more than ten years after the date of the original grant.

**Restricted and Unrestricted Stock Awards; Deferred Stock**. The Equity Incentive Plan provides for

awards of nontransferable shares of restricted common stock, as well as unrestricted shares of

common stock. Awards of restricted and unrestricted stock may be made in exchange for past services

or other lawful consideration. Generally, awards of restricted stock are subject to the requirement that

the shares be forfeited or resold to us unless specified conditions are met such as vesting

requirements. Other awards under the Equity Incentive Plan may also be settled with restricted stock.

The Equity Incentive Plan also provides for deferred stock grants entitling the recipient to receive

shares of common stock in the future on such conditions as the Committee may specify.

**Performance Awards**. The Committee may also make awards subject to the satisfaction of specified

performance criteria. Whether a performance award results in payment to a participant will depend on

the extent to which the performance goals or other conditions established by the Committee are

satisfied at the end of the performance period. The performance criteria used in connection with a

particular performance award will be determined by the Committee during the first 90 days of the

applicable performance period based on one or more of criteria, including, but limited to: sales;

revenues; assets; expenses; earnings before or after deduction for all or any portion of interest, taxes,

depreciation or amortization, whether or not on a continuing operations or an aggregate or per share

basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing levels,

leverage ratios or credit rating; market share; capital expenditures; cash flow; stock price; shareholder

return; sales of particular products or services; customer acquisition or retention; acquisitions and

divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-ups and the like;

reorganizations; or recapitalizations, restructurings, financings (issuance of debt or equity) or

refinancings. The performance goals can be established on an absolute or relative basis to measure

the performance of the Company as a whole, or any division, subsidiary, line of business, operational

unit, project or geographical basis of the Company, or as compared to the performance of a group of

comparable companies, or published or special index that the Committee, in its sole discretion, deems

appropriate.

Following the completion of a performance period, the Committee will certify in writing whether, and to

what extent, the performance goals have been achieved and, if so, calculate and certify in writing the

amount of the performance awards earned for the period. The Committee will have the discretion to

adjust downward, the amount of the performance award that is earned and payable.

The Committee, in its evaluation of the achievement of the performance goals, may adjust the

calculation by including or excluding the following events to prevent the dilution or enlargement of the

award: (a) asset write-downs; (b) litigation or claim judgments or settlements; (c) the effect of changes

in tax laws, accounting principles, or other laws or regulatory rules affecting reported results; (d) any

reorganization and restructuring programs; (e) unusual and/or infrequently occurring items as presented

in the Company's financial statements; (f) acquisitions or divestitures; (g) any other specific unusual or

nonrecurring events, or objectively determinable category thereof; (h) foreign exchange gains and

losses; and (i) a change in the Company's fiscal year.

**Vesting.** Awards granted after the stockholders approve the Equity Incentive Plan may not vest prior to

the one-year anniversary of the date of grant; provided, however, that the following awards are not

subject to this minimum vesting requirement: (a) awards granted pursuant to an assumption of, or

substitution for, another award in connection a "covered transaction" (as defined in the Equity Incentive

Plan) or similar corporate transaction and (b) up to 5% of the number of shares of stock available for

issuance under the Equity Incentive Plan (including the shares that become available for issuance

again under the Equity Incentive Plan).

**Dividends & Dividend Equivalents**. With the exception of stock options and stock appreciation rights,

the Committee may provide for the payment of amounts in lieu of cash dividends or other cash

distributions with respect to stock subject to an award, consistent with an exemption from or, in

compliance with, the requirements of Section 409A of the Code. However, dividends, dividend

equivalents or similar entitlements are subject to the same restrictions and vesting conditions that apply

to the underlying award and will be paid (without interest) in accordance with the terms of the

underlying award (if not forfeited).

**Non-Transferability**. No award may be transferred other than by will or by the laws of descent and

distribution, and during a participant's lifetime an award may be exercised only by him or her; provided,

however, that the foregoing provisions shall not prohibit the transfer of (a) an award of unrestricted

stock or (b) an award of restricted stock after such award ceases to be subject to restrictions requiring

that it be redelivered or offered for sale to the Company if specified conditions are not satisfied.

**Treatment of Awards in Connection with a Covered Transaction.** For purposes of the Equity

Incentive Plan, a "covered transaction" generally means any of the following: (a) an acquisition of

Company stock by a person (or more than one person acting as a group) that, together with the stock

already held by such person or group, result in such person or group owning more than 50% of the total

value or total voting power of the Company; (b) a person (or more than one person acting as a group)

acquiring more than 50% of the Company's stock; (c) a change in composition of a majority of the

members of the Board; or (d) a sale of substantially all of the Company's assets. In connection with a

"covered transaction," the Administrator may provide for the assumption or substitution of some or all

outstanding awards by the acquirer or survivor. If there is no assumption or substitution, then except as

otherwise provided in the award agreement, awards will generally be treated as follows:

• Stock appreciation rights will become fully exercisable and such shares issued, and the delivery

of shares of stock issuable under each outstanding deferred stock award will be accelerated, in

each case on a basis that gives the holder the opportunity to participate as a stockholder in the

covered transaction.

• With respect to restricted stock awards, all forfeiture and transfer restrictions will lapse, unless

the Administrator determines that the amounts paid in respect of such restricted stock in

connection with the covered transaction should be placed in escrow or otherwise made subject

to such restrictions in order to carry out the intent of the Equity Incentive Plan.

• With respect to stock options, the Administrator may, in its sole discretion, (a) make any

outstanding stock options exercisable in part or in full, (b) remove any performance or other

conditions or restrictions on any stock options, and/or (c) cancel the stock options in exchange

for a payment equal to the difference between the option exercise price and the fair market

value of the Company's stock.

Notwithstanding any provision of the Equity Incentive Plan to the contrary, in the event of a covered

transaction, the Administrator may in its discretion and upon at least five days' advance notice, cancel

any outstanding awards and pay to the holders thereof, in cash or stock, or any combination thereof,

the value of such awards based upon the price per share of Stock received or to be received by other

stockholders of the Company. In the case of any stock option or stock appreciation right with an

exercise price that equals or exceeds the price to be paid for a share of stock in connection with the

"covered transaction," the Administrator may cancel the award without the payment of consideration

therefor.

If an award is substituted and within two years following the "covered transaction," the employee is

terminated by the successor employer without "cause" (as defined in the Equity Incentive Plan) or if the

employee is an executive officer (who is subject to reporting under Section 16 of the Exchange Act) and

the employee terminates his or her employment for "good reason" (as defined in the Equity Incentive

Plan) then, unless otherwise provided in an award agreement: (a) all stock options and stock

appreciation rights will become immediately vested and exercisable, (b) all restrictions on restricted

stock will lapse, (c) performance awards will vest with respect to each performance measurement

tranche completed during the performance period prior to termination (or, if the performance period is

not divided into separate performance measurement tranches, then proportionately), with payment to

be made based on the greater of target performance or actual performance in cash or in stock, and (d)

the delivery of shares issuable under deferred stock awards will be accelerated.

**Effect, Discontinuance, Cancellation, Amendment, and Termination**. Neither adoption of the Equity

Incentive Plan nor the grant of awards to a participant shall affect our right to make awards to such

participant that are not subject to the Equity Incentive Plan, to issue shares to such participant as a

bonus or otherwise, or to adopt other plans or compensation arrangements under which shares may be

issued.

The Administrator may at any time discontinue granting awards under the Equity Incentive Plan. With

the consent of the participant, the Administrator may at any time cancel an existing award in whole or in

part and grant another award for such number of shares as the Administrator specifies. The

Administrator may, but is not obligated to, at any time amend the Equity Incentive Plan or any

outstanding award for the purpose of satisfying the requirements of Section 409A or Section 422 of the

Code, or of any changes in applicable laws or regulations or for any other purpose that may at the time

be permitted by law, or may at any time terminate the Equity Incentive Plan as to any further grants of

awards. However, except to the extent expressly required by the Equity Incentive Plan, no such

amendment may materially adversely affect the rights of any participant (without his or her consent)

under any award previously granted, nor may such amendment, without the approval of the

stockholders, effectuate a change for which stockholder approval is required under the listing standards

of the NYSE or in order for the Equity Incentive Plan to continue to qualify for the award of incentive

stock options under Section 422 of the Code.

The Equity Incentive Plan prohibits, without stockholder approval, the "re-pricing" of any award, which

includes (i) a lowering of the exercise price, (ii) the cancellation of an outstanding stock option or SAR

accompanied by the grant of a replacement award of the same or a different type and (iii) the

cancellation of a stock option or SAR whose exercise price is greater than the fair market value of such

award accompanied by the payment of cash to the participant.

**Clawback**

All awards granted under the Equity Incentive Plan, including shares of stock or other cash or property

received with respect to the award, are subject to reduction, cancellation, forfeiture and recoupment to

the extent necessary to comply with any clawback, recovery, recoupment or other similar policy,

including the Carter's, Inc. Clawback Policy, as in effect from time to time. The Administrator may

impose such other clawback, recovery or recoupment provisions as are necessary or appropriate. By

accepting an award, a holder agrees to be bound by any clawback policy.

**Federal Tax Effects** 

The following discussion summarizes the material Federal income tax consequences of the awards

under the Equity Incentive Plan, based on the federal income tax laws in effect on the date of this proxy

statement. The summary does not purport to be a complete description of federal tax consequences

that may be associated with the Equity Incentive Plan, nor does it cover state, local, or non-United

States taxes.

**Non-Statutory Options**. In general, an optionee realizes no taxable income at the time of the grant of a

non-statutory option, but realizes ordinary income in connection with the exercise of the option in an

amount equal to the excess of the fair market value of the shares at the time of exercise over the

exercise price. A corresponding deduction is available to the Company. Any gain or loss recognized

upon a subsequent sale or exchange of the shares is treated as a long-or short-term capital gain or

loss, depending on the period the shares are held, for which we are not entitled to a deduction.

**Restricted Stock.** A participant will not recognize any taxable income upon an award of restricted stock

if such shares are not transferable and are subject to a substantial risk of forfeiture. Generally, the

participant will recognize taxable ordinary income in an amount equal to the fair market value of the

shares at the time such shares become transferable or are no longer subject to a substantial risk of

forfeiture. This tax treatment will generally apply unless the participant elects, pursuant to Section 83(b)

of the Code, to be taxed at the award date based on the fair market value of the shares on the award

date. Assuming compliance with the applicable tax withholding and reporting requirements, the

Company will be entitled to a tax deduction equal to the amount of ordinary income recognized by the

participant in connection with his or her restricted stock award in the same tax year in which the

participant recognizes that ordinary income. Dividends paid with respect to restricted stock will be

taxable as compensation income to the participant; provided that if a participant makes an election

pursuant to Section 83(b) of the Code (as discussed above), any dividends paid with respect to that

restricted stock will be treated as dividend income rather than compensation income.

**Performance Awards, Deferred Stock, Dividends and Dividend Equivalents***.* The grant of

performance awards, deferred stock, dividends, dividend equivalents or similar entitlements generally

should not result in the recognition of taxable income by the participant or a tax deduction by the

Company. Upon the settlement or payment of such an award, the participant will generally have taxable

ordinary income equal to the amount of any cash received (before applicable tax withholding) or the

then-current fair market value of the shares of stock received, and the Company will have a

corresponding tax deduction. If the shares covered by the award are not transferable and subject to a

substantial risk of forfeiture, the tax consequences to the participant and the Company will be similar to

the tax consequences for restricted stock, described above. If the award consists of unrestricted shares

of stock, the participant will immediately recognize taxable ordinary income equal to the fair market

value of those shares on the date of the award, and the Company will be entitled to a corresponding tax

deduction.

**Withholding.** The Company will have the right to deduct any federal, state, local, or foreign taxes

required by law to be withheld from all awards paid in cash. If awards are paid in shares of stock, the

Company may withhold a portion of the shares issuable to the participant, the fair market value of which

equals such withholding taxes.

**Section 409A**. Section 409A of the Code governs deferred compensation arrangements. The Company

intends that awards under the Equity Incentive Plan will generally not be subject to the provisions of

Section 409A. If an award may be covered by Section 409A, the Company may unilaterally make

changes to the award to the extent necessary to avoid adverse tax treatment under Section 409A. If an

award constitutes nonqualified deferred compensation and fails to comply with Section 409A, the award

will be subject to immediate taxation and tax penalties in the year the award vests.

**Section 280G**. Under certain circumstances, the accelerated vesting, exercise or payment of awards

under the Equity Incentive Plan in connection with a "change of control" might be deemed an "excess

parachute payment" for purposes of the provisions of Section 280G of the Code. To the extent it is so

considered, the participant holding the award would be subject to an excise tax equal to 20% of the

amount of the excess parachute payment, and the Company would be denied a tax deduction for the

excess parachute payment.

**Section 162(m).** Under Section 162(m) of the Code, we may not deduct compensation of more than $1

million paid to the Company's "covered employees," which includes (a) any individual who at any time

during the taxable year is either our principal executive officer or principal financial officer, or an

employee whose total compensation for the tax year is required to be reported to our stockholders

because he or she is among the three highest compensated officers for the tax year, other than the

principal executive officer or principal financial officer, and (b) any person who was a covered employee

at any time after December 31, 2016.

**Plan Benefits**. The future benefits or amounts that executive officers, non-management directors, and

non-executive officer employees may receive under the Equity Incentive Plan are discretionary and are

therefore not determinable at this time.

Information regarding our recent practices with respect to equity-based compensation under the Equity

Incentive Plan is presented elsewhere in this proxy statement and in our Annual Report on Form 10-K

for the fiscal year ended January 3, 2026.

The foregoing is only a summary of the Equity Incentive Plan and is qualified in its entirety by reference

to its full text, a copy of which is attached hereto as <u>Appendix B</u>.

**The Board recommends a vote FOR the approval of the Equity Incentive Plan.** 

**VOTE REQUIRED**

The approval of Proposal Number Three requires the affirmative vote of a majority of the votes cast by

the stockholders present in person or represented by proxy at our Annual Meeting. Votes to abstain and

broker non-votes will be counted toward a quorum, but will be excluded entirely from the tabulation of

votes and, therefore, will not affect the outcome of the vote on this proposal.

**EQUITY COMPENSATION PLAN INFORMATION**

The following table provides information about the Company's equity compensation plan as of the end

of its last fiscal year:

---

| | | | |
|:---|:---|:---|:---|
| **<u>Plan Category</u>** | **Number of** <br>**securities to be** <br>**issued upon** <br>**exercise of** <br>**outstanding** <br>**options, warrants,** <br>**and rights**<br>| **Weighted-average** <br>**exercise price of** <br>**outstanding** <br>**options, warrants,** <br>**and rights**<br>| **Number of** <br>**securities** <br>**remaining available** <br>**for future issuance** <br>**under equity** <br>**compensation** <br>**plans (excluding** <br>**securities reflected** <br>**in first column)**<br>|
| Equity compensation plans approved by security holders<sup>(a)</sup> | 129571 <sup>(b)</sup> | $100.51 | 1336742 |
| Equity compensation plans not approved by security <br>holders<br>|  |  |  |
| Total | 129571 | $100.51 | 1336742 |

---

(a)Represents stock options that are outstanding or that are available for future issuance pursuant to the Carter's, Inc. Amended and

Restated Equity Incentive Plan.

(b)The weighted-average contractual life for all outstanding stock options as of fiscal year end was approximately 1.31 years. No such

value is included for restricted shares.

**AUDIT COMMITTEE REPORT**

The Audit Committee reviews the Company's accounting, auditing, and financial reporting process on

behalf of the Board. The Audit Committee's charter is available in the investor relations section of our

website at ir.carters.com. Management has the primary responsibility for establishing and maintaining

adequate internal financial controls, for preparing the financial statements, and for the public reporting

process. PricewaterhouseCoopers LLP ("PwC"), the Company's independent registered public

accounting firm, is responsible for expressing opinions on the conformity of the Company's audited

consolidated financial statements with accounting principles generally accepted in the United States

and on the effectiveness of the Company's internal control over financial reporting.

In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the Company's

audited financial statements for the year ended January 3, 2026 with management, including a

discussion of the quality of financial reporting, the reasonableness of significant judgments, and the

clarity of disclosures in the financial statements. The Audit Committee also discussed with PwC the

matters required to be discussed by Auditing Standard No. 1301, as adopted by the Public Company

Accounting Oversight Board, relating to communication with audit committees.

In addition, the Audit Committee received the written disclosures and the letter from the independent

registered public accounting firm required by the applicable requirements of the Public Company

Accounting Oversight Board regarding the independent registered public accounting firm's

communications with the Audit Committee concerning independence and discussed with PwC its

independence from the Company and the Company's management.

Based on the reviews and discussions described in the preceding paragraphs, the Audit Committee

recommended to the Board that the audited financial statements of the Company be included in the

Annual Report on Form 10-K for filing with the SEC.

**Submitted by the Audit Committee**

Mr. Jeffrey H. Black, Chairperson

Mr. Luis Borgen

Mr. Jevin S. Eagle

Mr. Mark P. Hipp

*The Audit Committee Report does not constitute soliciting material and shall not be deemed to be* 

*filed or incorporated by reference into any other filing under the Securities Act of 1933, as amended,* 

*or the Exchange Act, except to the extent that we specifically incorporate the Audit Committee* 

*Report by reference therein.*

**PROPOSAL NUMBER FOUR:**

**RATIFICATION OF INDEPENDENT REGISTERED PUBLIC** 

**ACCOUNTING FIRM**

The Audit Committee of the Board has appointed PwC to serve as Carter's independent registered

public accounting firm for fiscal 2026. The Board is submitting the appointment of PwC as Carter's

independent registered public accounting firm for stockholder ratification and recommends that

stockholders ratify this appointment. The Board recommends that stockholders ratify this appointment

at the Annual Meeting. Stockholder ratification of the appointment of PwC is not required by law or

otherwise. The Board is submitting this matter to stockholders for ratification because the Board

believes it to be a good corporate governance practice. If the stockholders do not ratify the

appointment, the Audit Committee may reconsider whether or not to retain PwC. Even if the

appointment is ratified, the Audit Committee may appoint a different independent registered public

accounting firm at any time during the year if, in its discretion, it determines that such a change would

be in Carter's best interest and that of Carter's stockholders. A representative of PwC is expected to

virtually attend the Annual Meeting, and he or she will have the opportunity to make a statement and

will be available to respond to appropriate questions. For additional information regarding Carter's

relationship with PwC, please refer to the Audit Committee Report above.

The Audit Committee has also adopted policies and procedures for pre-approving all non-audit work

performed by PwC. The Audit Committee has pre-approved the use, as needed, of PwC for specific

types of services that fall within categories of non-audit services, including various tax services. The

Audit Committee receives regular updates as to the fees associated with the services that are

subject to pre-approval. Services that do not fall within a pre-approved category require specific

consideration and pre-approval by the Audit Committee or, pursuant to a limited delegation of

authority by the Audit Committee to its Chair, by the Chair of the Audit Committee. All services

rendered by PwC in the table below were pre-approved by the Audit Committee.

The aggregate fees that Carter's incurred for professional services rendered by PwC for fiscal years

2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Audit Fees | $2761815 | $2331100 |
| Audit-Related Fees | 340000 |  |
| Tax Fees | 140000 | 155000 |
| All Other Fees | 2000 | 2000 |
| Total Fees | $3243815 | $2488100 |

---

• *Audit Fees* for fiscal years 2025 and 2024 were for professional services rendered for the

integrated audit of the consolidated financial statements and internal control over financial

reporting of Carter's, other auditing procedures related to goodwill and intangible asset impairment

testing, and related out-of-pocket expenses.

• *Audit-Related Fees* for fiscal 2025 were for pre-implementation work for IT systems. There were no

audit-related fees for 2024.

• *Tax Fees* for fiscal years 2025 and 2024 were for tax compliance services.

• *All Other Fees* for fiscal years 2025 and 2024 consisted of software license fees.

**The Board recommends a vote FOR the ratification of the appointment of** 

**PricewaterhouseCoopers LLP as the Company's independent** 

**registered public accounting firm for fiscal 2026.**

**VOTE REQUIRED**

The approval of Proposal Number Four requires the affirmative vote of a majority of the votes

properly cast at our Annual Meeting. Abstentions will not affect the outcome of this proposal. A

broker or other nominee will generally have discretionary authority to vote on this proposal because

it is considered a routine matter, and, therefore, we do not expect broker non-votes with respect to

this proposal.

**OTHER MATTERS**

As of the date of this proxy statement, we know of no business that will be presented for

consideration at the Annual Meeting, other than the items referred to above. If any other matter is

properly brought before the Annual Meeting for action by stockholders, proxies in the enclosed form

returned to Carter's will be voted in accordance with the recommendation of the Board or, in the

absence of such a recommendation, in accordance with the judgment of the proxy holder.

\* \* \*

The following performance graph and return to stockholder information shown below are provided

pursuant to Item 201(e) of Regulation S-K promulgated under the Exchange Act. The graph and

information are not deemed to be "filed" under the Exchange Act or otherwise subject to liabilities

thereunder, nor are they to be deemed to be incorporated by reference in any filing under the

Securities Act or Exchange Act unless we specifically incorporate them by reference.

![Total Shareholder Return Graph.jpg](cri-20260401_g34.jpg)

**QUESTIONS AND ANSWERS ABOUT THE 2026 ANNUAL** 

**MEETING**

1. WHY AM I RECEIVING THIS PROXY STATEMENT?

The Board of Directors (the "Board") of Carter's, Inc. ("we," "us," "our," "Carter's," or the "Company") is

soliciting proxies for our virtual 2026 Annual Meeting of Stockholders on May 13, 2026, at 1:00 p.m.

Eastern Time (the "Annual Meeting"). This proxy statement and accompanying proxy card are being

mailed on or about April 1, 2026, to stockholders of record as of March 20, 2026, the record date (the

"Record Date") for the Annual Meeting.

You are receiving this proxy statement because you owned shares of Carter's common stock on the

Record Date and are therefore entitled to vote at the Annual Meeting. By use of a proxy, you can vote

regardless of whether or not you attend the Annual Meeting. This proxy statement provides

information on the matters on which the Board would like you to vote so that you can make an

informed decision.

2. WHAT IS THE PURPOSE OF THE ANNUAL MEETING?

The purpose of the Annual Meeting is to address the following business matters:

1. Election of the nine nominated directors (see page 26);

2. Advisory approval of the compensation for our named executive officers for 2025 ("NEOs") (the

"say-on-pay" vote) (see page 74);

3. Approval of the Carter's Amended and Restated Equity Incentive Plan (see page 75)

4. Ratification of the appointment of PricewaterhouseCoopers LLP ("PwC") as Carter's

independent registered public accounting firm for fiscal 2026 (see page 84); and

5. All other business that may properly come before the meeting.

3. WHO IS ASKING FOR MY VOTE?

Carter's is soliciting your proxy on behalf of the Board and is paying for the costs of this solicitation and

proxy statement. Okapi Partners LLC has been retained by the Company to assist in the solicitation of

proxies for a base fee not to exceed $12,500 (with select additional campaign services to be provided if

requested at an additional fee), plus reimbursement for out-of-pocket expenses, to be borne by the

Company.

4. WHO CAN ATTEND THE ANNUAL MEETING?

All stockholders of record, or their duly appointed proxies, may attend the virtual Annual Meeting.

Beneficial holders who hold shares "in street name" may also be admitted to the virtual Annual Meeting,

provided they obtain the appropriate control number from their broker or other nominee in order to

access the virtual meeting. As of the Record Date, there were 36,877,450 shares of common stock

issued and outstanding.

In order to attend the Annual Meeting, you must register at www.proxydocs.com/CRI. Upon completing

your registration, you will receive further instructions via email, including a unique link that will allow you

access to the Annual Meeting and the ability to vote and submit questions during the Annual Meeting.

As part of the registration process, you must enter the control number located on your proxy card or

voting instruction form. If you are a beneficial owner of shares registered in the name of a broker, bank

or other nominee, you will also need to provide the registered name on your account and the name of

your broker, bank or other nominee as part of the registration process.

On the day of the Annual Meeting, May 13, 2026, stockholders may begin to login to the virtual Annual

Meeting fifteen minutes prior to the meeting, which will begin promptly at 1:00 p.m. Eastern Time.

5. HOW WILL THE VIRTUAL MEETING WORK?

We have designed the format of the Annual Meeting to provide our stockholders with the same rights

and opportunities to participate as they would have at an in-person meeting.

During the Annual Meeting, we will hold a question and answer session during which we intend to

answer questions submitted during the meeting that are pertinent to Carter's, as time permits, and in

accordance with our Rules and Procedures for Conduct of the Annual Meeting. On the day of and

during the Annual Meeting, you can view our Rules and Procedures for Conduct of the Annual

Meeting and submit any questions on the virtual meeting platform by using your unique link included

in the email that you will receive one hour prior to the start of the Annual Meeting. Answers to any

questions not addressed during the meeting will be posted following the meeting on the Investor

Relations page of our website at ir.carters.com. Questions and answers will be grouped by topic, and

substantially similar questions will be answered only once. To promote fairness, efficiently use

Carter's resources, and ensure all stockholder questions are able to be addressed, we will respond to

no more than three questions from any single stockholder.

Prior to and during the Annual Meeting, we will have support available to assist stockholders with any

technical difficulties they may have accessing or hearing the virtual meeting. The technical support

telephone number will be included in the access email you will receive one hour prior to the start of the

Annual Meeting.

6. WHAT ARE MY VOTING RIGHTS?

Each share of common stock is entitled to one vote on each matter submitted to stockholders at the

Annual Meeting.

7. WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A STOCKHOLDER

OF RECORD AND AS A BENEFICIAL OWNER "IN STREET NAME"?

If your shares are registered directly in your name with the Company's transfer agent, Equiniti Trust

Company, you are considered the stockholder of record for these shares. As the stockholder of

record, you have the right to grant your voting proxy directly to the person(s) listed on your proxy card

or vote in person (virtually) at the Annual Meeting.

If your shares are held in a brokerage account or through another nominee, such as a trustee, you

are considered the beneficial owner of shares held "in street name." These proxy materials are being

forwarded to you together with a voting instruction card. As a beneficial owner, you have the right to

direct your broker or other nominee how to vote, and you are also invited to attend the Annual

Meeting. Because you are a beneficial owner and not the stockholder of record, you may not vote

your shares in person (virtually) at the Annual Meeting <u>unless</u> you obtain a proxy from the broker or

other nominee that holds your shares. Your broker or other nominee should have provided directions

for you to instruct the broker or nominee on how to vote your shares.

8. WHAT IS A BROKER NON-VOTE?

If you are a beneficial owner whose shares are held "in street name" and you do not provide voting

instructions to your broker, your shares will not be voted on any proposal as to which the broker does

not have discretionary authority to vote. This is called a "broker non-vote." Your broker **only** has

discretionary authority to vote on Proposal Number Four. Therefore, your broker will not have

discretion to vote on any other proposal <u>unless</u> you specifically instruct your broker how to vote your

shares by returning your completed and signed voting instruction card.

9. WHAT CONSTITUTES A QUORUM?

A quorum is the minimum number of shares required to be present to transact business at the

Annual Meeting. Pursuant to Carter's Bylaws, the presence at the Annual Meeting, in person (not

available at this virtual Annual Meeting), by proxy, or by remote communication of the holders of at

least a majority of the shares issued and outstanding and entitled to vote at the Annual Meeting will

constitute a quorum. Broker non-votes and abstentions will be counted as shares that are present at

the meeting for purposes of determining a quorum. If a quorum is not present, the meeting will be

adjourned until a quorum is obtained.

10. WHAT ARE MY CHOICES WHEN CASTING A VOTE WITH RESPECT TO THE

ELECTION OF THE NINE NOMINATED DIRECTORS, AND WHAT VOTE IS NEEDED TO

ELECT THE DIRECTOR NOMINEES?

In voting on the election of the director nominees ("Proposal Number One"), stockholders may:

1. vote for any of the nominees;

2. vote against any of the nominees; or

3. abstain from voting on any of the nominees.

Pursuant to our Bylaws, a nominee will be elected if the number of votes properly cast "for" such

director nominee exceed the number of votes cast "against" that nominee. Any nominee not receiving

such majority, who is then serving as a director, must tender his or her resignation for consideration

by the Board. Any nominee appointed to the Board, subject to stockholder approval, will not have

been elected as a director at the Annual Meeting. Abstentions and broker non-votes will not have any

impact on the outcome of this vote.

11. WHAT ARE MY CHOICES WHEN CASTING AN ADVISORY VOTE ON APPROVAL OF

COMPENSATION OF CARTER'S NEOS, COMMONLY REFERRED TO AS THE "SAY-ON-

PAY" VOTE, AND WHAT VOTE IS NEEDED TO APPROVE THIS PROPOSAL?

In voting on the compensation of Carter's NEOs ("Proposal Number Two"), stockholders may:

1. vote for the approval of compensation of Carter's NEOs, on an advisory basis, as described in this

proxy statement;

2. vote against the approval of compensation of Carter's NEOs, on an advisory basis, as described

in this proxy statement; or

3. abstain from voting on compensation of Carter's NEOs, on an advisory basis, as described in this

proxy statement.

Because Proposal Number Two asks for a non-binding, advisory vote, there is no required vote that

would constitute approval. We value the opinions expressed by our stockholders in this advisory vote,

and our Compensation & Human Capital Committee will consider the outcome of the vote when

evaluating our compensation programs and making future compensation decisions for our NEOs.

Abstentions and broker non-votes, if any, will not have any effect on this advisory vote.

12. WHAT ARE MY CHOICES WHEN CASTING A VOTE WITH RESPECT TO APPROVAL

OF THE CARTER'S AMENDED AND RESTATED EQUITY INCENTIVE PLAN, AND WHAT

VOTE IS NEEDED TO APPROVE THIS PROPOSAL?

In voting on the Amended and Restated Equity Incentive Plan ("Proposal Number Three"), stockholders

may:

1. vote for the approval of the Amended and Restated Equity Incentive Plan;

2. vote against the Amended and Restated Equity Incentive Plan; or

3. abstain from voting.

Proposal Number Three requires the affirmative vote of a majority of the votes properly cast at our

Annual Meeting. Abstentions and broker non-votes will not have any impact on the outcome of this

vote.

13. WHAT ARE MY CHOICES WHEN VOTING ON THE RATIFICATION OF THE

APPOINTMENT OF PWC AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM FOR FISCAL 2026, AND WHAT VOTE IS NEEDED TO APPROVE

THIS PROPOSAL?

In voting on the ratification of PwC ("Proposal Number Four"), stockholders may:

1. vote to ratify PwC's appointment;

2. vote against ratifying PwC's appointment; or

3. abstain from voting on ratifying PwC's appointment.

The approval of Proposal Number Four requires the affirmative vote of a majority of the votes

properly cast at our Annual Meeting. Abstentions are not considered votes cast and thus will not

affect the outcome of this proposal. A broker or other nominee will generally have discretionary

authority to vote on this proposal because it is considered a routine matter, and, therefore, we do

not expect broker non-votes with respect to this proposal.

14. HOW DOES THE BOARD RECOMMEND THAT I VOTE?

The Board recommends a vote:

**FOR** the election of the nine nominated directors (Proposal Number One);

**FOR** the approval of the compensation of Carter's NEOs, on an advisory basis, as described in this

proxy statement (Proposal Number Two);

**FOR** the approval of the Amended and Restated Equity Incentive Plan (Proposal Number Three); and

**FOR** the ratification of the appointment of PwC (Proposal Number Four).

15. HOW DO I VOTE?

**You may hold Company shares in multiple accounts and therefore receive more than one set** 

**of the proxy materials. To ensure that all of your shares are voted, please submit your proxy** 

**or voting instructions for each account for which you have received a set of the proxy** 

**materials.**

*Shares Held of Record.* If you hold your shares in your own name as a holder of record with our

transfer agent, Equiniti Trust Company, you may authorize that your shares be voted at the Annual

Meeting in one of the following ways:

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| | |
|:---|:---|
| **By Internet** | If you received a printed copy of the proxy materials, follow the instructions <br>on the proxy card.<br>|
| **By Telephone** | If you received a printed copy of the proxy materials, follow the instructions <br>on the proxy card.<br>|
| **By Mail** | If you received a printed copy of the proxy materials, complete, sign, date, <br>and mail your proxy card in the enclosed, postage-prepaid envelope.<br>|
| **In Person** <br>**(Virtual)**<br>| You may also vote by attending the meeting virtually through <br>www.proxydocs.com/CRI. To attend the Annual Meeting and vote your <br>shares, you must register for the Annual Meeting and provide the control <br>number located on your proxy card.<br>|

---

*Shares Held in Street Name.* If you hold your shares through a broker, bank or other nominee (that is,

in street name), you will receive instructions from your broker, bank or nominee that you must follow

in order to submit your voting instructions and have your shares voted at the Annual Meeting. If you

want to vote in person (virtually), you must register in advance at www.proxydocs.com/CRI. You may

be instructed to obtain a legal proxy from your broker, bank or other nominee and to submit a copy in

advance of the meeting. Further instructions will be provided to you as part of your registration

process.

**Even if you plan to attend the Annual Meeting, we recommend that you submit your proxy or** 

**voting instructions in advance of the meeting as described above so that your vote will be** 

**counted if you later decide not to attend or are unable to attend.**

16. CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?

Yes. If you are a stockholder of record, you may revoke your proxy at any time before it is exercised in

any of the following three methods:

• by submitting written notice of revocation to Mr. Robinson at Carter's address set forth in the 2026

Notice of Annual Meeting;

• by submitting another proxy by telephone, over the Internet, or by mail that is later dated and, if by

mail, that is properly signed; or

• by voting at the virtual Annual Meeting.

If you hold your shares through a broker or other nominee and would like to change your voting

instructions, please review the directions provided to you by that broker or nominee.

17. MAY I VOTE CONFIDENTIALLY?

Yes. Our policy is to keep your individual votes confidential, except as appropriate to meet legal

requirements, to allow for the tabulation and certification of votes, or to facilitate proxy solicitation.

18. WHO WILL COUNT THE VOTES?

A representative of Mediant, Inc. will count the votes and act as the inspector of election for the Annual

Meeting.

19. WHAT HAPPENS IF ADDITIONAL MATTERS ARE PRESENTED AT THE ANNUAL

MEETING?

As of the date of this proxy statement, the Board knows of no matters other than those set forth herein

that will be presented for determination at the Annual Meeting. If, however, any other matters properly

come before the Annual Meeting and call for a vote of stockholders, the Board intends proxies to be

voted in accordance with the judgment of the proxy holders.

20. WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?

We intend to announce preliminary voting results at the Annual Meeting and publish final results in

our current report on Form 8-K within four business days after the Annual Meeting.

21. WHAT IS "HOUSEHOLDING" OF THE ANNUAL MEETING MATERIALS?

The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy

delivery requirements for proxy statements with respect to two or more stockholders sharing the same

address, by delivering a single proxy statement to those stockholders. This process, which is

commonly referred to as "householding," potentially provides extra convenience for stockholders and

cost savings for companies. Carter's and some brokers "household" proxy materials, delivering a

single proxy statement and annual report to multiple stockholders sharing an address unless contrary

instructions have been received from the affected stockholders. If, at any time, you no longer wish to

participate in householding and would prefer to receive a separate proxy statement and annual report,

or if you are receiving multiple copies of the proxy statement and annual report and wish to receive

only one, please notify your broker if your shares are held in a brokerage account, or Carter's if you

hold shares registered directly in your name. You can notify Carter's by sending a written request to

Mr. Robinson at Carter's address set forth in the 2026 Notice of Annual Meeting or by calling us at

(678) 791-1000.

22. HOW MAY I OBTAIN A COPY OF CARTER'S ANNUAL REPORT?

A copy of our fiscal 2025 Annual Report on Form 10-K (the "Annual Report") accompanies this

proxy statement and is available at https://ir.carters.com/financial-information/annual-reports.

Stockholders may also obtain a free copy of our Annual Report by sending a request in writing

to Mr. Robinson at Carter's address at 3438 Peachtree Road NE, Suite 1800, Atlanta, Georgia

30326, or by calling us at (678) 791-1000.

23. HOW DO I SUBMIT A PROPOSAL OR NOMINATE A DIRECTOR CANDIDATE FOR THE

2027 ANNUAL MEETING?

Any stockholder proposals or director nominations must be submitted in writing to our Secretary c/o

Carter's, Inc., 3438 Peachtree Road NE, Atlanta, Georgia 30326. Additional details for those

submissions are as follows.

***Stockholder Proposals***

This section relates to stockholder proposals for the 2027 Annual Meeting other than director

nominations. If you wish to nominate a director candidate, please see the section that follows under the

heading "Nomination of Director Candidates". The deadlines and requirements for submitting a

stockholder proposal depend on whether the stockholder seeks to have the proposal included in the

2027 Proxy Statement using Rule 14a-8 under the Exchange Act:

• **Proposals of Business Not Using Rule 14a-8**: Under our Bylaws, if a stockholder wants to

propose an item of business to be considered at the 2027 Annual Meeting, the stockholder

must give advance written notice to our Secretary, which must be received no earlier than the

close of business on January 13, 2027, and no later than the close of business on February 12,

2027. If, however, our 2027 Annual Meeting is held more than 30 days before or after May 13,

2027 (the one-year anniversary of our 2026 Annual Meeting), the notice must be received no

earlier than the close of business on the 120th day before such annual meeting and no later

than the close of business on the later of (1) the 90th day before such annual meeting or (2)

the tenth day following the date on which the public announcement of the date of such meeting

is first made by Carter's. The advance written notice must comply with all applicable statutes

and regulations, as well as certain other provisions contained in our Bylaws, which generally

require the stockholder to provide a brief description of the proposed business, reasons for

proposing the business, and certain information about the stockholder and Carter's securities

held by the stockholder.

• **Proposals of Business Using Rule 14a-8**: A stockholder who wants to propose an item of

business to be included in our 2027 Proxy Statement using Rule 14a-8 must follow the

procedures provided in Rule 14a-8. In addition, the proposal must be received by our Secretary

by December 2, 2026.

***Nomination of Director Candidates***

This section relates to nomination of director candidates. The deadlines and requirements for director

candidates recommended for consideration or nominated by a stockholder are as follows:

• **Recommending a Candidate for Nominating & Corporate Governance Committee** 

**Consideration**: Any stockholder who wishes to recommend a candidate for our Nominating &

Corporate Governance committee to consider nominating as a director at the 2027 Annual

Meeting should submit a written request and related information to our Secretary no later than

December 31, 2026, in order to allow for sufficient time to consider the recommendation.

• **Directly Nominating a Director Candidate Under our Bylaws**: Under our Bylaws, if a

stockholder plans to directly nominate a person as a director at the 2027 Annual Meeting, the

stockholder must give advance written notice of the director nomination to our Secretary, which

must be received no earlier than the close of business on January 13, 2027, and no later than

the close of business on February 12, 2027. If, however, our 2027 Annual Meeting is held more

than 30 days before or after May 13, 2027 (the one-year anniversary of our 2026 Annual

Meeting), the notice must be received no earlier than the close of business on the 120th day

before such annual meeting and no later than the close of business on the later of (1) the 90th

day before such annual meeting or (2) the tenth day following the date on which the public

announcement of the date of such meeting is first made by Carter's. The notice must comply

with all applicable statutes and regulations, as well as certain other provisions contained in our

Bylaws, which generally require the stockholder to provide certain information about the

proposed nominee, the stockholder, and Carter's securities held by the stockholder, the

nominee, and associated persons. In addition to satisfying those advance notice and other

requirements in our Bylaws within the window set forth above, any stockholder who intends to

solicit proxies in support of director nominees other than the Board's nominees must comply

with the Universal Proxy Rules set forth in Rule 14a-19 under the Exchange Act.

24. WHAT DO YOU MEAN BY FISCAL YEARS IN THIS PROXY STATEMENT?

Our fiscal year ends on the Saturday, in December or January, nearest the last day of December,

resulting in an additional week of results every five or six years. Fiscal 2025 (which ended on January

3, 2026) contained 53 weeks, whereas Fiscal 2024 (which ended on December 28, 2024), and Fiscal

2023 (which ended on December 30, 2023) contained 52 weeks. Fiscal 2026 (which will end on

January 2, 2027) contains 52 weeks.

25. WHO CAN HELP ANSWER MY QUESTIONS?

If you have any questions about the Annual Meeting or how to submit or revoke your proxy, or to

request an invitation to the Annual Meeting (which is being held virtually), contact Mr. Robinson at

Carter's address set forth in the 2026 Notice of Annual Meeting or by calling us at (678) 791-1000.

**APPENDIX A**

**RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES**

We have provided non-GAAP adjusted operating income and diluted net income per common share measures, which exclude

certain items presented below. We believe that this information provides a meaningful comparison of our results and affords

investors a view of what management considers to be our core performance, and we also, from time to time, use some of

these non-GAAP measures, such as adjusted operating income, as performance metrics in awards under our annual and long-

term incentive compensation plans. These measures are not in accordance with, or an alternative to, generally accepted

accounting principles in the U.S. (GAAP). The most comparable GAAP measures are operating income and diluted net income

per common share, respectively. Adjusted operating income and diluted net income per common share should not be

considered in isolation or as a substitute for analysis of our results as reported in accordance with GAAP. Other companies

may calculate adjusted operating income and diluted net income per common share differently than we do, limiting the

usefulness of the measure for comparisons with other companies.

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** | **Fiscal Year Ended** |  |  |
|  | **January 3, 2026**<sup>(\*)</sup> | **January 3, 2026**<sup>(\*)</sup> | **December 28, 2024** | **December 28, 2024** | **December 30, 2023** | **December 30, 2023** | **December 31, 2022** | **December 31, 2022** | **January 1 2022** | **January 1 2022** |
| (In millions, <br>except earnings <br>per share)<br>| **Operating** <br>**Income**<br>| **Diluted Net** <br>**Income per** <br>**Common** <br>**Share**<br>| **Operating** <br>**Income**<br>| **Diluted Net** <br>**Income per** <br>**Common** <br>**Share**<br>| **Operating** <br>**Income**<br>| **Diluted Net** <br>**Income per** <br>**Common** <br>**Share**<br>| **Operating** <br>**Income**<br>| **Diluted** <br>**Net** <br>**Income** <br>**per** <br>**Common** <br>**Share**<br>| **Operating** <br>**Income**<br>| **Diluted** <br>**Net** <br>**Income** <br>**per** <br>**Common** <br>**Share**<br>|
| **As reported** <br>**(GAAP)**<br>| **$143.9** | **$2.53** | **$254.7** | **$5.12** | **$323.4** | **$6.24** | **$379.2** | **$6.34** | **$497.1** | **$7.81** |
| Operating <br>model <br>improvement <br>costs <sup>(1)</sup><br>| 14.2 | 0.30 |  |  |  |  |  |  |  |  |
| Organizational <br>restructuring <sup>(2)</sup><br>| 9.8 | 0.20 | 1.8 | 0.04 | 4.4 | 0.09 |  |  | 2.4 | 0.04 |
| Leadership <br>transition costs <br><sup>(3)</sup><br>| 8.1 | 0.20 |  |  |  |  |  |  |  |  |
| Intangible asset <br>impairment <sup>(4)</sup><br>|  |  | 30.0 | 0.63 |  |  | 9.0 | 0.17 |  |  |
| Pension plan <br>settlement <sup>(5)</sup><br>|  | 0.18 |  | 0.02 |  |  |  |  |  |  |
| Legal <br>settlement <sup>(6)</sup><br>|  |  |  |  |  | (0.14) |  |  |  |  |
| Loss on <br>extinguishment <br>of debt <sup>(7)</sup><br>|  | 0.03 |  |  |  |  |  | 0.38 |  |  |
| Deferred <br>compensation <br>plan termination <br><sup>(8)</sup><br>|  | 0.03 |  |  |  |  |  |  |  |  |
| COVID-19 <br>expenses<sup>(9)</sup><br>|  |  |  |  |  |  |  |  | 3.9 | 0.07 |
| Retail store <br>operating <br>leases and <br>other long-lived <br>asset <br>impairments, <br>net <sup>(10)</sup><br>|  |  |  |  |  |  |  |  | (2.6) | (0.05) |
| **As adjusted** | **$176.0** | **$3.47** | **$286.6** | **$5.81** | **$327.8** | **$6.19** | **$388.2** | **$6.90** | **$500.8** | **$7.87** |

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(\*) Fiscal year 2025 included 53 weeks, compared to 52 weeks in fiscal 2024, 2023, 2022, and 2021.

(1)Primarily related to third-party consulting costs.

(2)Related to charges for severance and other termination benefits as a result of an organizational restructuring in fiscal 2025. Related to

charges for organizational restructuring in fiscal 2024. Fiscal 2023 relates to charges for organizational restructuring and related

corporate office lease amendment actions. Fiscal 2021 and 2020 amounts relate to certain lease exit, severance and related costs

resulting from restructuring actions (not related to COVID-19).

(3)Related to costs associated with the transition of our former CEO, including accelerated vesting of outstanding time-based restricted

stock awards.

(4)Related to a non-cash impairment charge on the *OshKosh* indefinite-lived tradename asset in fiscal 2024. Fiscal 2022 write-down relates

to *Skip Hop* tradename asset. Fiscal 2020 write-down relates to OshKosh and Skip Hop tradename assets.

(5)Related to a non-cash pension settlement charges for settlement of the OshKosh B'Gosh Pension Plan in fiscal 2025 and fiscal 2024.

(6)In fiscal 2023, a pre-tax adjustment of approximately $6.9 million ($5.3 million net of tax, or $0.14 per diluted share) was made related to

a gain on a court-approved settlement in December 2023.

(7)In fiscal 2025, related to the redemption of the $500 million senior notes due 2027 and cash-flow based revolving credit facility. In fiscal

2022, related to the redemption of the $500 million aggregate principal amount of senior notes due 2025 in April 2022.

(8)Incremental income tax impact resulting from the announced termination of the Company's deferred compensation plan.

(9)Net expenses incurred due to the COVID-19 pandemic.

(10)Impairments include an immaterial gain on the remeasurement of retail store operating leases.

*Note: Results may not be additive due to rounding.*

**APPENDIX B**

**CARTER'S, INC.**

**AMENDED AND RESTATED EQUITY INCENTIVE PLAN**

***1.Definitions.***

<u>Exhibit A</u>, which is incorporated by reference, defines the terms used in the Plan and sets forth certain

operational rules related to those terms.

***2. Purpose.***

The purpose of this amended and restated Plan is to advance the interests of the Company by

enhancing the ability of the Company and its subsidiaries to attract and retain able Employees and

Directors; to reward such individuals for their contributions; and to encourage such individuals to take

into account the long-term interests of the Company and its subsidiaries by providing for the grant to

Participants of Stock-based incentive Awards.

***3.Administration.***

The Administrator has discretionary authority, subject only to the express provisions of the Plan, to

interpret the Plan; determine eligibility for and grant Awards; determine, modify or waive the terms and

conditions of any Award; prescribe forms, rules and procedures; and otherwise do all things necessary

to carry out the purposes of the Plan. Determinations of the Administrator made under the Plan will be

conclusive and will bind all parties.

***4.Effective Date and Term of Plan.***

The Plan was originally adopted on August 15, 2001 and was approved by shareholders on August 15,

2001. The Plan was last amended and restated effective as of February 15, 2024. The provisions of

this amendment and restatement of the Plan are effective as of February 19, 2026 (the "Effective

Date"), the date on which the Board approved this amendment and restatement of the Plan, subject to

approval by shareholders. Except as hereinafter provided, any Award made prior to shareholder

approval of the amendment and restatement set forth herein shall be subject to the terms of the Plan as

in effect prior to such amendment and restatement. Notwithstanding the foregoing, an Award may be

made under the terms of this amendment and restatement of the Plan but prior to shareholder approval

of such amendment and restatement if the Award is conditioned upon such approval.

ISOs may be granted under the Plan only with respect to the 3,725,000 new shares of Stock that the

shareholders of the Company approved on May 13, 2011; provided that no ISOs may be granted by the

Company after May 12, 2021.

***5.Shares Subject to the Plan.***

(a)*Number of Shares*. Subject to possible adjustment as provided in Section 8, the aggregate

maximum number of shares of Stock that may be delivered in satisfaction of Awards under

the Plan shall be 20,778,392, of which 2,582,345 shares of Stock may be delivered in

satisfaction of any new Awards granted after the date this amendment and restatement is

approved by the shareholders of the Company. With respect to SARs, if a SAR is exercised

the number of shares of Stock deemed to have been issued under the Plan shall be the

aggregate number of shares subject to the SAR and not just by the number of shares

actually delivered upon exercise of the SAR. For the avoidance of doubt, if any Award

granted under the Plan terminates without having been exercised in full, or is otherwise

forfeited in whole or in part, or upon exercise is satisfied other than by delivery of Stock, the

number of shares of Stock as to which such Award was not exercised shall be available for

future grants. If shares of Stock are withheld from an Award in order to satisfy a

Participant's tax withholding obligations with respect to such Award pursuant to Section

7(a)(iv) of the Plan, the number of shares of Stock deemed to have been issued under the

Plan shall be the number of shares of Stock that were subject to the Award or portion

thereof so exercised or settled and not the net number of shares of Stock actually issued

upon the exercise or settlement.

(b)*Shares to be Delivered*. Stock delivered under the Plan shall be authorized but unissued

Stock, or if the Administrator so decides in its sole discretion, previously issued Stock

acquired by the Company and held in its treasury. No fractional shares of Stock shall be

delivered under the Plan.

(c)*Individual Award Limits*. The maximum number of shares of Stock for which Stock Options

may be granted to any person in any calendar year and the maximum number of shares of

Stock subject to SARs granted to any person in any calendar year will each be 1,000,000.

The maximum benefit that may be paid to any person under other Awards in any calendar

year will be, to the extent paid in shares, 1,000,000 shares (or their value in dollars).

**6.*Eligibility and Participation***

Persons eligible to receive Awards under the Plan shall be such Employees and Directors selected by

the Administrator. Eligibility for ISOs is limited to Employees of the Company or of a "parent

corporation" or a "subsidiary corporation" of the Company as those terms are defined in Section 424 of

the Code.

**7.*Terms and Conditions of Awards.***

(a) All Awards

(i)<u>Award Provisions</u>. The Administrator will determine the terms of all Awards, subject

to the limitations provided herein.

(ii)<u>Transferability</u>. No Award may be transferred other than by will or by the laws of

descent and distribution, and during a Participant's lifetime an Award may be

exercised only by him or her; provided, however, that the foregoing provisions shall

not prohibit the transfer of (A) an Award of Unrestricted Stock or (B) an Award of

Restricted Stock after such Award ceases to be subject to restrictions requiring that

it be redelivered or offered for sale to the Company if specified conditions are not

satisfied.

(iii)<u>Vesting, Etc</u>. An Award will vest or become exercisable at such time or times and

upon such conditions as the Administrator shall specify. Without limiting the

foregoing, the Administrator may at any time accelerate the vesting or exercisability

of all or any part of an Award. Notwithstanding anything to the contrary, no Award

granted on or after the Effective Date may vest prior to the one-year anniversary of

the date of grant; provided, however, that the following Awards shall not be subject

to the foregoing minimum vesting requirement: (A) Awards granted pursuant to an

assumption of, or substitution for, another award in connection a Covered

Transaction or similar corporate transaction and (B) up to 5% of the number of

shares of Stock available for issuance under the Plan pursuant to Section 5(a)

(including the number of shares that become available for issuance again under the

Plan in accordance with Section 5(a)).

(iv)<u>Taxes</u>. The Administrator will make such provision for the withholding of taxes as it

deems necessary. The Administrator may, but need not, hold back shares of Stock

from an Award or permit a Participant to tender previously owned shares of Stock

(which in the case of Stock acquired from the Company shall have been owned by

the Participant for such minimum time, if any, as the Administrator may determine) in

satisfaction of tax withholding requirements (but not in excess of the maximum

statutory withholding rates).

(v)<u>Dividends, Dividend Equivalents, Etc.</u> With the exception of Stock Options and

SARs, the Administrator may provide for the payment of amounts in lieu of cash

dividends or other cash distributions with respect to Stock subject to an Award. Any

entitlement to dividends, dividend equivalents or similar entitlements shall be subject

to the same restrictions and vesting conditions that apply to the underlying Award

and paid to the Participant (without interest) in accordance with the terms of the

underlying Award (if not forfeited). Dividend equivalent and similar entitlements shall

be established and administered either consistent with an exemption from or, in

compliance with, the requirements of Section 409A of the Internal Revenue Code of

1986, as amended ("Section 409A"). In addition, any amounts payable in respect of

Restricted Stock may be subject to such limits or restrictions as the Administrator

may impose.

(b) Performance Awards

(i)<u>General.</u> The Administrator shall have the authority, at the time of grant of any

Award described in this Plan to designate such Award as a Performance Award. In

addition, the Administrator shall have the authority to make an Award of a cash

bonus to any Participant and designate such Award as a Performance Award.

(ii)<u>Eligibility</u>. The Administrator will, in its sole discretion, designate in writing within the

first 90 days of a Performance Period which Participants will be eligible to receive

Performance Awards in respect of such Performance Period. However, designation

of a Participant eligible to receive a Performance Award hereunder for a

Performance Period shall not in any manner entitle the Participant to receive

payment in respect of any Performance Award for such Performance Period. The

determination as to whether or not such Participant becomes entitled to payment in

respect of any Performance Award shall be decided solely in accordance with the

provisions of this Section 7(b). Moreover, designation of a Participant eligible to

receive a Performance Award hereunder for a particular Performance Period shall

not require designation of such Participant eligible to receive a Performance Award

hereunder in any subsequent Performance Period and designation of one person as

a Participant eligible to receive a Performance Award hereunder shall not require

designation of any other person as a Participant eligible to receive a Performance

Award hereunder in such period or in any other period.

(iii)<u>Discretion of Administrator with Respect to Performance Awards</u>. With regard to a

particular Performance Period, the Administrator shall have full discretion to select

the length of such Performance Period (provided any such Performance Period shall

be not less than one fiscal year in duration), the type(s) of Performance Awards to

be issued, the Performance Criteria that will be used to establish the Performance

Goal(s), the kind(s) and/or level(s) of the Performance Goal(s) that is (are) to apply

to the Company and the Performance Formula. Within the first 90 days of a

Performance Period, the Administrator shall, with regard to the Performance Awards

to be issued for such Performance Period, exercise its discretion with respect to

each of the matters enumerated in the immediately preceding sentence of this

Section 7(b)(iii) and record the same in writing.

(iv)<u>Payment of Performance Awards</u>.

(A)<u>Condition to Receipt of Payment.</u> Unless otherwise provided in the applicable

Award Agreement, a Participant must be employed by the Company on the last

day of a Performance Period to be eligible for payment in respect of a

Performance Award for such Performance Period.

(B)<u>Limitation</u>. A Participant shall be eligible to receive payment in respect of a

Performance Award only to the extent that: (1) the Performance Goals for such

period are achieved; and (2) the Performance Formula as applied against such

Performance Goals determines that all or some portion of such Participant's

Performance Award has been earned for the Performance Period.

(C)<u>Certification</u>. Following the completion of a Performance Period, the

Administrator shall review and certify in writing whether, and to what extent, the

Performance Goals for the Performance Period have been achieved and, if so,

calculate and certify in writing the amount of the Performance Awards earned for

the period based upon the Performance Formula. The Administrator shall then

determine the actual size of each applicable Participant's Performance Award for

the Performance Period and, in so doing, may apply negative discretion in

accordance with Section 7(b)(iv)(D) hereof, if and when it deems appropriate.

(D)<u>Use of Discretion</u>. In determining the actual size of an individual Performance

Award for a Performance Period, the Administrator may reduce or eliminate the

amount of the Performance Award earned under the Performance Formula in the

Performance Period through the use of negative discretion if, in the

Administrator's sole judgment, such reduction or elimination is appropriate. The

Administrator shall not have the discretion to (1) grant or provide payment in

respect of Performance Awards for a Performance Period if the Performance

Goals for such Performance Period have not been attained or (2) increase a

Performance Award above the maximum amount payable under Section 5(c)

hereof.

(E)<u>Timing of Award Payments</u>. Performance Awards granted for a Performance

Period shall be paid to Participants as soon as administratively practicable

following completion of the certifications required by this Section 7(b), but in no

event later than 2-1/2 months following the end of the fiscal year during which the

Performance Period is completed.

(C) Awards Requiring Exercise

(i)<u>Time and Manner of Exercise of Awards</u>. Any exercise of an Award shall be in

writing, signed by the proper person and furnished to the Company,

accompanied by (A) such documents as may be required by the Administrator

and (B) payment in full as specified below. A Stock Option shall be exercisable

during such period or periods as the Administrator may specify. The latest date

on which a Stock Option or SAR may be exercised shall be the Expiration Date.

(ii)<u>Exercise Price</u>. The Exercise Price shall be determined by the Administrator, but

shall not be less than 100% of the Fair Market Value at the time the Stock Option

or SAR is granted; nor shall the Exercise Price be less, in the case of an original

issue of authorized stock, than par value. No such Award, once granted, may be

re-priced (which includes (i) a lowering of the Exercise Price, (ii) the cancellation

of an outstanding Stock Option or SAR accompanied by the grant of a

replacement Award of the same or a different type and (iii) the cancellation of a

Stock Option or SAR whose Exercise Price is greater than the Fair Market Value

of such Award accompanied by the payment of cash to the Participant) other

than in accordance with the applicable shareholder approval requirements of the

New York Stock Exchange (or the rules of such other market in which the shares

of the Company's stock then are listed). In no event shall the Exercise Price of

an ISO granted to a ten-percent shareholder be less than 110% of the Fair

Market Value at the time the Stock Option is awarded. For this purpose, "ten-

percent shareholder" shall mean any Participant who at the time of grant owns

directly, or by reason of the attribution rules set forth in Section 424(d) of the

Code is deemed to own, stock possessing more than 10% of the total combined

voting power of all classes of stock of the Company or of any of its parent or

subsidiary corporations.

(iii)<u>Term</u>. The Administrator shall determine the term of each Stock Option and

SAR, provided that in no event shall such term extend beyond the Expiration

Date.

(iv)<u>Payment of Exercise Price.</u> Stock purchased upon exercise of a Stock Option

under the Plan shall be paid for as follows: (i) in cash, by check acceptable to the

Administrator (determined in accordance with such guidelines as the

Administrator may prescribe), or by money order payable to the order of the

Company, or (ii) if so permitted by the Administrator, (A) through the delivery of

shares of Stock (which, in the case of Stock acquired from the Company, shall

have been held for at least six months unless the Administrator approves a

shorter period) having a Fair Market Value on the last business day preceding

the date of exercise equal to the Exercise Price, (B) through a broker- assisted

exercise program acceptable to the Administrator, (C) by other means

acceptable to the Administrator or (D) by any combination of the foregoing

permissible forms of payment.

(v)<u>Delivery of Stock</u>. A Participant shall not have the rights of a shareholder with

regard to Awards under the Plan except as to Stock actually received by him or

her under the PlanThe Company shall not be obligated to deliver any shares of

Stock under the Plan (i) until, in the opinion of the Company's counsel, all

applicable federal and state laws and regulations have been complied with, (ii) if

the outstanding Stock is at the time listed on any stock exchange, until the

shares to be delivered have been listed or authorized to be listed on such

exchange upon official notice of issuance, and (iii) until all other legal matters in

connection with the issuance and delivery of such shares have been approved

by the Company's counsel. Without limiting the generality of the foregoing, if the

sale of Stock has not been registered under the Securities Act, the Company

may require, as a condition to exercise of the Award, such representations or

agreements as counsel for the Company may consider appropriate to avoid

violation of the Securities Act and may require that the certificates evidencing

such Stock bear an appropriate legend restricting transfer.

If an Award is exercised by the executor or administrator of a deceased

Participant, or by the person or persons to whom the Award has been transferred

by the Participant's will or the applicable laws of descent and distribution, the

Administrator shall be under no obligation to deliver Stock pursuant to exercise

until the Administrator is satisfied as to the authority of the person or persons

exercising the Award.

(vi)<u>ISOs</u>. In the case of an ISO, the Administrator will require as a condition of

exercise that the Participant exercising the ISO agree to inform the Company

promptly of any disposition (within the meaning of Section 424(c) of the Code and

the regulations thereunder) of Stock received upon exercise of the ISO.

(d) *Awards Not Requiring Exercise.*

Awards of Restricted Stock and Unrestricted Stock may be made in exchange for past

services or other lawful consideration.

(e) *Section 409A.*

Notwithstanding any other provision hereunder, this Plan and all payments

hereunder are intended to comply with the requirements of Section 409A,

including transition relief and exemptive provisions thereunder, and shall be

construed and administered accordingly. Notwithstanding anything to the

contrary in the Plan, neither the Company, nor any Affiliate, nor the

Administrator, nor any person acting on behalf of the Company, any Affiliate, or

the Administrator, shall be liable to any Participant or to the estate or beneficiary

of any Participant or to any other holder of an Award by reason of any

acceleration of income, or any additional tax, asserted by reason of the failure of

an Award to satisfy the requirements of Section 409A of the Code.

8. ***Effect of Certain Transactions.***

(a)Mergers, Etc.

Except as otherwise provided in an Award, in the event of a Covered Transaction in which there is an

acquiring or surviving entity the following rules shall apply:

(i)<u>Awards Other Than Stock Options</u>.

(A)The Administrator may provide for the assumption of some or all outstanding

Awards, or for the grant of new awards in substitution therefore, by the acquirer

of the Company or survivor or an affiliate of the acquirer or survivor of the

Company (a "Successor"), in each case on such terms and subject to such

conditions as the Administrator determines and with respect to substituted

Awards, subject to Section 8(a)(iii).

(B)In the absence of such an assumption or if there is no substitution, except as

otherwise provided in the Award Agreement, each SAR and other Award

requiring exercise (other than Stock Options) will become fully exercisable, and

the delivery of shares of Stock issuable under each outstanding Award of

Deferred Stock will be accelerated and such shares will be issued, prior to the

Covered Transaction, in each case on a basis that gives the holder of the Award

a reasonable opportunity, as determined by the Administrator, following exercise

of the Award or the issuance of the shares, as the case may be, to participate as

a shareholder in the Covered Transaction, and the Award will terminate upon

consummation of the Covered Transaction, provided, that the Administrator may

not exercise its discretion under this Section 8(a)(i)(B) with respect to an Award

or portion thereof providing for "nonqualified deferred compensation" subject to

Section 409A in a manner that would constitute an extension or acceleration of,

or other change in, payment terms if such change would be inconsistent with the

applicable requirements of Section 409A.

(C)In the case of Restricted Stock, the Administrator may require that any amounts

delivered, exchanged or otherwise paid in respect of such Stock in connection

with the Covered Transaction be placed in escrow or otherwise made subject to

such restrictions as the Administrator deems appropriate to carry out the intent of

the Plan, and, for the avoidance of doubt, in the absence of any such action by

the Administrator, all forfeiture and transfer restrictions will lapse.

(ii) <u>Stock Options</u>.

(A)Subject to Section 8(a)(ii)(B) below, all outstanding Stock Options will cease to

be exercisable and will be forfeited (after any payment or other consideration

deemed equitable by the Administrator for the termination of any vested portion

of any Award is made), as of the effective time of the Covered Transaction;

provided, that the Administrator may in its sole discretion on or prior to the

effective date of the Covered Transaction, (1) make any outstanding Stock

Options exercisable in part or in full, (2) remove any performance or other

conditions or restrictions on any Stock Options, and/or (3) in the event of a

Covered Transaction under the terms of which holders of the Stock of the

Company will receive upon consummation thereof a payment (whether cash,

non-cash or a combination of the foregoing) for each share of such Stock

surrendered in the Covered Transaction, make or provide for a payment

(whether cash, non-cash or a combination of the foregoing) to the Participant

equal to the difference between (A) the Fair Market Value times the number of

shares of Stock subject to outstanding Stock Options (to the extent then

exercisable at prices not in excess of the Fair Market Value) and (B) the

aggregate Exercise Price of all such outstanding Stock Options in exchange for

the termination of such Stock Options.

(B)With respect to an outstanding Stock Option held by a Participant who, following

the Covered Transaction, will be employed by or otherwise providing services to

an entity which is a surviving or acquiring entity in the Covered Transaction or an

affiliate of such an entity, the Administrator may at or prior to the effective time of

the Covered Transaction, in its sole discretion and in lieu of the action described

in paragraph 8(a)(ii)(A) above, arrange to have such surviving or acquiring entity

or affiliate assume any Stock Option held by such Participant outstanding

hereunder or grant a replacement or substitute award which, in the judgment of

the Administrator, is substantially equivalent to any Stock Option being replaced

or substituted.

(iii) <u>Certain Substituted Awards</u>. Notwithstanding anything to the contrary, if an Award is

substituted by a Successor in connection with a Covered Transaction and within two

years following such Covered Transaction, (i) the Participant's Employment is

terminated by the Successor without Cause or (ii) if the Employee is an executive officer

of the Company (who is subject to reporting under Section 16 of the Exchange Act) and

resigns employment for Good Reason, the following rules shall apply to such substituted

Awards effective on the date of such termination, unless otherwise specifically provided

in the applicable Award Agreement:

(A)Any and all Stock Options and SARs shall become immediately vested and

exercisable.

(B)Any restrictions imposed on Restricted Stock shall lapse.

(C)Each Performance Award shall vest with respect to each performance

measurement tranche completed during the Performance Period prior to the

Participant's termination or resignation (or, if the Performance Period is not

divided into separate performance measurement tranches, proportionately based

on the portion of the Performance Period completed prior to such resignation or

termination and expressed in terms of the total of completed months out of the

total number of months within the Performance Period), with payment to be

made, based on the greater of (1) target performance or (2) actual performance

(if determinable at the time of the vesting event), in cash or stock at such time as

specified in the Award Agreement.

(D)The delivery of shares of Stock issuable under each Award of Deferred Stock will

be accelerated; provided, however, no such accelerated delivery of shares of

Stock shall occur if the Award or portion thereof provides for "nonqualified

deferred compensation" subject to Section 409A and the accelerated delivery of

shares of Stock would constitute an extension or acceleration of, or other change

in, the Award's payment terms that is inconsistent with the applicable

requirements of Section 409A.

(E)A transfer of Employment among the Successor and its affiliates shall not, in and

of itself, be deemed a termination or resignation of employment.

The Administrator may grant Awards under the Plan in substitution for awards held by Employees and

Directors of another corporation who concurrently become Employees or Directors of the Company or a

subsidiary of the Company as the result of a merger or consolidation of that corporation with the

Company or a subsidiary of the Company, or as the result of the acquisition by the Company or a

subsidiary of the Company of property or stock of that corporation. The Company may direct that

substitute Awards be granted on such terms and conditions as the Administrator considers appropriate

in the circumstances, subject to Section 8(a)(iii).

Notwithstanding any provision of the Plan to the contrary, in the event of a Covered Transaction, the

Administrator may in its discretion and upon at least five days' advance notice to the affected persons,

cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination

thereof, the value of such Awards based upon the price per share of Stock received or to be received

by other shareholders of the Company in the event. In the case of any Stock Option or SAR with an

Exercise Price that equals or exceeds the price to be paid for a share of Stock in connection with the

Covered Transaction, the Administrator may cancel the Stock Option or SAR without the payment of

consideration therefor.

(b) Changes in and Distributions with Respect to the Stock.

(i)<u>Basic Adjustment Provisions.</u> In the event of a stock dividend, stock split or combination

of shares (including a reverse stock split), recapitalization or other change in the Company's

capital structure, the Administrator will make appropriate adjustments to the maximum number

of shares that may be delivered under the Plan under Section 5(a) and to the maximum share

limits described in Section 5(c), and will also make appropriate adjustments to the number and

kind of shares of stock or securities subject to Awards then outstanding or subsequently

granted, any Exercise Prices relating to Awards and any other provision of Awards affected by

such change, whose determination will be binding on all persons.

(ii)<u>Certain Other Adjustments</u>. In the case of adjustments made pursuant to this Section

8(b), unless the Administrator specifically determines that such adjustment is in the best

interests of the Company or its Affiliates, the Administrator shall, in the case of ISOs, ensure

that any adjustments under this Section 8(b) will not constitute a modification, extension or

renewal of the ISOs within the meaning of Section 424(h)(3) of the Code and in the case of

Options that are not ISOs, ensure that any adjustments under this Section 8(b) will not

constitute a modification of such Options within the meaning of Section 409A of the Code. Any

adjustments made under this Section 8(b) shall be made in a manner which does not adversely

affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company

shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment

shall be conclusive and binding for all purposes.

**9. *Termination of Employment.***

In the case of any Award, the Administrator may, through agreement with the Participant, (including,

without limitation, any shareholder agreement of the Company to which the Participant is a party)

resolution, or otherwise, provide for post-termination exercise provisions different from those expressly

set forth in this Section 9, including without limitation the vesting immediately prior to termination of all

or any portion of an Award not otherwise vested prior to termination, and terms allowing a later exercise

by a former Employee or Director (or, in the case of a former Employee or Director who is deceased,

the person or persons to whom the Award is transferred by will or the laws of descent and distribution)

as to all or any portion of the Award not exercisable immediately prior to termination of Employment, but

in no case may an Award be exercised after the Expiration Date. If the Administrator does not

otherwise provide for such provisions and if a Participant's Employment terminates prior to the

Expiration Date (including by reason of death) the following provisions shall apply, subject to Section

8(a)(iii):

(a)All Stock Options and SARs held by the Participant immediately prior to the cessation of the

Participant's Employment that are not vested immediately prior to the cessation of Employment

shall automatically terminate upon such cessation of Employment.

(b)To the extent vested immediately prior to cessation of Employment, the Stock Option or SAR

shall continue to be vested and shall be exercisable thereafter during the period prior to the

Expiration Date for 60 days following such cessation (120 days in the event that a Participant's

service terminates by reason of death); provided, however, that if the Participant's Employment

is terminated "for Cause" as defined herein, all unvested or unexercised Awards shall terminate

immediately.

(c)Except as otherwise provided in an Award, after completion of the exercise period described in

paragraph (b) above, the Awards described in paragraph (b) above shall terminate to the extent

not previously exercised, expired, or terminated.

No Award requiring exercise shall be exercised or surrendered in exchange for a cash payment after

the Expiration Date.

**10. *Clawback.*** 

Notwithstanding any other provision in this Plan, all Awards granted under the Plan, including shares of

Stock or other cash or property received with respect to the Award, are subject to reduction,

cancellation, forfeiture and recoupment to the extent necessary to comply with any clawback, recovery,

recoupment or other similar policy adopted by the Company or required to adopted by the Company

pursuant to the listing standards of any national securities exchange on which the Company's securities

are listed or other applicable law, including the Carter's Inc. Clawback Policy, as in effect from time to

time ("Clawback Policy"). In addition, the Administrator may impose such other clawback, recovery or

recoupment provisions in an Award Agreement as the Administrator determines necessary or

appropriate. By accepting an Award, the Participant is agreeing to be bound by the Clawback Policy,

as in effect or as may be adopted and/or modified from time to time by the Company in its discretion.

**11. *Employment Rights.***

Neither the adoption of the Plan nor the grant of Awards shall confer upon any Participant any right to

continue as an Employee or Director of the Company or any subsidiary or affect in any way the right of

the Company or a subsidiary to terminate the Participant's relationship at any time. Except as

specifically provided by the Administrator in any particular case, the loss of existing or potential profit on

Awards granted under this Plan shall not constitute an element of damages in the event of termination

of the relationship of a Participant even if the termination is in violation of an obligation of the Company

to the Participant by contract or otherwise.

**12. *Effect, Discontinuance, Cancellation, Amendment, and Termination.***

Neither adoption of the Plan nor the grant of Awards to a Participant shall affect the Company's right to

make awards to such Participant that are not subject to the Plan, to issue to such Participant Stock as a

bonus or otherwise, or to adopt other plans or compensation arrangements under which Stock may be

issued.

The Administrator may at any time discontinue granting Awards under the Plan. With the consent of

the Participant, the Administrator may at any time, subject to the limitations of Section 7(c)(ii) and the

second sentence of Section 8(b)(ii), cancel an existing Award in whole or in part and grant another

Award for such number of shares as the Administrator specifies. The Administrator may, but shall not

be obligated to, at any time or times amend the Plan or any outstanding Award for the purpose of

satisfying the requirements of Sections 409A and 422 of the Code or of any changes in applicable laws

or regulations or for any other purpose that may at the time be permitted by law, or may at any time

terminate the Plan as to any further grants of Awards; provided, that except to the extent expressly

required by the Plan, no such amendment shall materially adversely affect the rights of any Participant

(without his or her consent) under any Award previously granted, nor shall such amendment, without

the approval of the shareholders of the Company, effectuate a change for which shareholder approval

is required under the listing standards of the New York Stock Exchange (or the rules of such other

market in which the shares of the Company's Stock then are listed) or in order for the Plan to continue

to qualify for the Award of incentive stock options under Section 422 of the Code.

**13. *Choice of Law.***

The law of the State of Delaware shall govern all questions concerning the construction, validity and

interpretation of this Plan, without regard to such state's conflict of law rules.

**EXHIBIT A**

**Definition of Terms**

The following terms, when used in the Plan, will have the meanings and be subject to the provisions set

forth below:

"Administrator": The committee of the Board, consisting of two or more Directors, all of whom shall be

"non-employee Directors" within the meaning of Rule 16b-3 under the 1934 Act; provided that with

respect to any Performance Award intended to qualify as "performance-based compensation" within the

meaning of Section that 162(m) of the Code, as amended by the Tax Cuts and Jobs Act, that is

provided pursuant to a written binding contract which was in effect on November 2, 2017, and which

was not modified in any material respect on or after such date, then each committee member shall also

be an "outside Director" within the meaning of Section 162(m). In addition, membership of the

committee shall satisfy such independence or other requirements as may be imposed by the rules of

the New York Stock Exchange (or the rules of such other market in which the shares of the Company's

Stock then are listed). The Administrator may delegate any of its duties and responsibilities with

respect to any aspect of the Plan's administration to such persons as it deems appropriate, so long as

(and only to the extent that) such delegation (i) is permitted by applicable laws, the listing standards of

the New York Stock Exchange (or the rules of such other market in which the shares of the Company's

Stock are listed), and the Company's governance documents, as in effect from time to time, and (ii)

does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act.

"Affiliate": Any corporation or other entity owning, directly or indirectly, 50% or more of the outstanding

Stock of the Company, or in which the Company or any such corporation or other entity owns, directly

or indirectly, 50% of the outstanding capital stock (determined by aggregate voting rights) or other

voting interests.

"Award": Any or a combination of the following:

i.Stock Options;

ii.SARs;

iii.Restricted Stock;

iv.Unrestricted Stock;

v.Deferred Stock; and

vi.Performance Awards.

"Award Agreement": An agreement between the Company and a Participant or other documentation

evidencing an Award.

"Board": The Board of Directors of the Company.

"Cause":

With respect to any Employee: (a) If the Employee is a party to an employment or service agreement

with the Company or its Affiliates and such agreement provides for a definition of Cause, the definition

contained therein; or (b) if no such agreement exists, or if such agreement does not define Cause, the

determination by the Administrator (or the authorized delegate of the Administrator, to the extent

applicable), in its reasonable judgment, that any one or more of the following has occurred:

i.the Employee shall have been convicted of, or shall have pleaded guilty or nolo

contendere to, any felony or any crime involving dishonesty or moral turpitude;

ii.the Employee shall have committed any fraud, theft, embezzlement,

misappropriation of funds, breach of fiduciary duty or act of dishonesty;

iii.the Employee shall have breached in any material respect any of the provisions

of any agreement between the Employee and the Company or an Affiliate;

iv.the Employee shall have engaged in conduct likely to make the Company or any

of its Affiliates subject to criminal liabilities other than those arising from the

Company's normal business activities; or

v.the Employee shall have willfully engaged in any other conduct that involves a

breach of fiduciary obligation on the part of the Employee or otherwise could

reasonably be expected to have a material adverse effect upon the business,

interests or reputation of the Company or any of its Affiliates.

With respect to any Director, a determination by a majority of the disinterested Board members that the

Director has engaged in any of the following: (i) malfeasance in office; (ii) gross misconduct or neglect;

(iii) false or fraudulent misrepresentation inducing the director's appointment; (iv) willful conversion of

corporate funds; or (v) repeated failure to participate in Board meetings on a regular basis despite

having received proper notice of the meetings in advance. The Administrator (or the authorized

delegate of the Administrator, to the extent applicable), in its absolute discretion, shall determine the

effect of all matters and questions relating to whether a Participant has been discharged for Cause.

"Code": The U.S. Internal Revenue Code of 1986, as from time to time amended and in effect, or any

successor statute as from time to time in effect.

"Company": Carter's, Inc., a Delaware corporation.

"Covered Transaction": Any of the following: (i) a person (or more than one person acting as a group)

acquires ownership of stock of the Company that, together with the stock held by such person or group,

constitutes more than 50% of the total Fair Market Value or total voting power of the Stock of the

Company; provided, that, a Covered Transaction shall not occur if any person (or more than one person

acting as a group) owns more than 50% of the total Fair Market Value or total voting power of the Stock

of the Company and acquires additional Stock; (ii) one person (or more than one person acting as a

group) acquires (or has acquired during the twelve-month period ending on the date of the most recent

acquisition) ownership of the Stock of the Company possessing 50% or more of the total voting power

of the stock of such corporation; (iii) a majority of the members of the Board are replaced during any

twelve-month period by directors whose appointment or election is not endorsed by a majority of the

Board before the date of appointment or election; or (iv) one person (or more than one person acting as

a group), acquires all of substantially all of the Company's assets. Where a Covered Transaction

involves a tender offer that is reasonably expected to be followed by a merger described in clause (i)

(as determined by the Administrator), the Covered Transaction shall have deemed to have occurred

upon the consummation of the tender offer.

"Deferred Stock": An unfunded and unsecured promise to deliver Stock or other securities in the future

on specified terms.

"Director" : A member of the Board.

"Employee": Any person who is employed by the Company or an Affiliate; provided, that, for purposes

of determining eligibility to receive ISOs, an Employee shall mean an employee of the Company or an

Affiliate within the meaning of Section 424 of the Code.

"Employment": A Participant's employment or other service relationship with the Company and its

Affiliates. Employment will be deemed to continue, unless the Administrator expressly provides

otherwise, so long as the Participant is employed by, or otherwise is providing services in a capacity

described in Section 6 to the Company or its Affiliates. If a Participant's employment or other service

relationship is with an Affiliate and that entity ceases to be an Affiliate, the Participant's Employment will

be deemed to have terminated when the entity ceases to be an Affiliate unless the Participant transfers

Employment to the Company or its remaining Affiliates.

"Exercise Price": The price at which a share of Stock may be purchased under a Stock Option or the

value an increase above which may allow Stock to be purchased under a SAR.

"Exchange Act": The United States Securities Exchange Act of 1934, as amended.

"Expiration Date": In the case of an Award requiring exercise, the date which is ten years (five years in

the case of an ISO granted to a "ten percent shareholder" as defined in Section 7(c)(ii)) from the date

the Award was granted or such earlier date as may be specified by the Administrator at the time the

Award is granted.

"Fair Market Value": The value of one share of Stock, determined as follows:

i.if the Stock is listed on a national securities exchange (such as the New York

Stock Exchange) or is quoted on The NASDAQ Stock Market ("NASDAQ"), the

closing price of a share of Stock on the relevant date (or, if such date is not a

business day or a day on which quotations are reported, then on the immediately

preceding date on which quotations were reported), as reported by the principal

national exchange on which such shares are traded (in the case of an exchange)

or by NASDAQ, as the case may be;

ii.if the Stock is not listed on a national securities exchange or quoted on NASDAQ,

but is actively traded in the over-the-counter market, the average of the closing

bid and asked prices for a share of the Stock on the relevant date (or, if such

date is not a business day or a day on which the quotations are reported, then on

the immediately preceding date on which quotations were reported), or the most

recent date for which such quotations are reported; and

iii.if, on the relevant date, the Stock is not publicly traded or reported as described

in (i) or (ii) above, the value determined in good faith in accordance with such

reasonable valuation method as the Administrator may determine.

"Good Reason":

With respect to any Employee: (a) If the Employee is a party to a severance, employment, or service

agreement with the Company or its Affiliates and such agreement provides for a definition of Good

Reason, the definition contained therein; or (b) if no such agreement exists, or if such agreement does

not define Good Reason, the determination by the Administrator (or the authorized delegate of the

Administrator, to the extent applicable), in its reasonable judgment, that the following has occurred

without the Employee's consent: material diminution in the Employee's authority, duties, and

responsibilities (but not occurring solely as a result of the Company's ceasing to be a publicly traded

entity) existing immediately prior to the date of a Covered Transaction, excluding for this purpose an

isolated, insubstantial and inadvertent action not taken in bad faith; provided, however, that "Good

Reason" shall not be deemed to exist unless (i) written notice of termination on account thereof is given

by the Employee to the Successor no later than 60 days after the time at which the event or condition

purportedly giving rise to Good Reason first occurs or arises; (ii) if there exists (without regard to this

clause (ii)) an event or condition that constitutes Good Reason, the Successor shall have 30 days from

the date notice of such a termination is given to cure such event or condition and, if the Successor does

so, such event or condition shall not constitute Good Reason hereunder; and (iii) if not cured, the

Employee must resign for Good Reason within 60 days following the last day of the Successor's cure

period. Any good faith determination of "Good Reason" made by the Administrator shall be conclusive.

The Employee's mental or physical incapacity following the occurrence of an event described in above

clauses shall not affect the Employee's ability to terminate employment for Good Reason.

"ISO": A Stock Option intended to be an "incentive stock option" within the meaning of Section 422 of

the Code. Each Stock Option granted pursuant to the Plan will be treated as providing by its terms that

it is to be a non-incentive stock option unless, as of the date of grant, it is expressly designated as an

ISO.

"Participant": A person who is granted an Award under the Plan.

"Performance Award": An Award designated by the Administrator as a Performance Award pursuant to

Section 7(b) of the Plan.

"Performance Criteria": The criterion or criteria that the Administrator shall select for purposes of

establishing the Performance Goal(s) for a Performance Period with respect to any Performance Award

under the Plan. The Performance Criteria that will be used to establish the Performance Goal(s) shall

be based on the attainment of specific levels of performance of the Company (or Affiliate, division,

business unit or operational unit of the Company) and shall include, but not be limited to, the following:

sales; revenues; assets; expenses; earnings before or after deduction for all or any portion of interest,

taxes, depreciation or amortization, whether or not on a continuing operations or an aggregate or per

share basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing

levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; stock price;

shareholder return; sales of particular products or services; customer acquisition or retention;

acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-

ups and the like; reorganizations; or recapitalizations, restructurings, financings (issuance of debt or

equity) or refinancings.

Any one or more of the above Performance Criteria may be used on an absolute or relative basis to

measure the performance of the Company and/or an Affiliate as a whole or any division, subsidiary, line

of business, operational unit, project or geographical basis of the Company and/or an Affiliate or any

combination thereof, as the Administrator may deem appropriate, or as compared to the performance of

a group of comparable companies, or published or special index that the Administrator, in its sole

discretion, deems appropriate. The Administrator also has the authority to provide for accelerated

vesting of any Performance Award based on the achievement of Performance Goals pursuant to the

Performance Criteria specified above. The Administrator shall, within the first 90 days of a

Performance Period, define in an objective fashion the manner of calculating the Performance Criteria it

selects to use for such Performance Period. In the event that applicable tax and/or securities laws

change to permit the Administrator discretion to alter the governing Performance Criteria without

obtaining shareholder approval of such changes, the Administrator shall have sole discretion to make

such changes without obtaining shareholder approval.

"Performance Formula": For a Performance Period, the one or more objective formulas applied against

the relevant Performance Goal to determine, with regard to the Performance Award of a particular

Participant, whether all, some portion but less than all, or none of the Performance Award has been

earned for the Performance Period.

"Performance Goals": For a Performance Period, the one or more goals established by the

Administrator for the Performance Period based upon the Performance Criteria. The Administrator is

authorized, in its sole and absolute discretion, to adjust or modify the calculation of a Performance Goal

for a Performance Period in order to prevent the dilution or enlargement of the rights of Participants

based on the following events: (i) asset write-downs; (ii) litigation or claim judgments or settlements; (iii)

the effect of changes in tax laws, accounting principles, or other laws or regulatory rules affecting

reported results; (iv) any reorganization and restructuring programs; (v) unusual and/or infrequently

occurring items as presented in the Company's financial statements; (vi) acquisitions or divestitures;

(vii) any other specific unusual or nonrecurring events, or objectively determinable category thereof;

(viii) foreign exchange gains and losses; and (ix) a change in the Company's fiscal year.

"Performance Period": The one or more periods of time not less than one fiscal year in duration, as the

Administrator may select, over which the attainment of one or more Performance Goals will be

measured for the purpose of determining a Participant's right to and the payment of a Performance

Award.

"Plan": The Carter's, Inc. Amended and Restated Equity Incentive Plan, as from time to time amended

and in effect.

"Restricted Stock": An Award of Stock for so long as the Stock remains subject to restrictions requiring

that it be redelivered or offered for sale to the Company if specified conditions are not satisfied.

"Section 162(m)": Section 162(m) of the Code.

"SARs": Rights entitling the holder upon exercise to receive Stock equal in value to the excess of the

Fair Market Value of the shares of Stock subject to the right over the Fair Market Value of such shares

of Stock on the date of grant.

"Securities Act": The Securities Act of 1933, as amended.

"Stock": Common Stock of the Company, par value $.01 per share.

"Stock Options": Options entitling the recipient to acquire shares of Stock upon payment of the

Exercise Price.

"Unrestricted Stock": An Award of Stock not subject to any restrictions under the Plan

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