CAMDEN NATIONAL CORP

Compensation Discussion and Analysis

LONG-TERM INCENTIVE PROGRAM (“LTIP”)

Awards made under the LTIP are used to achieve multiple objectives in our compensation philosophy: (1) reward performance of predefined three-year performance goals; (2) align executive incentive compensation with increases in shareholder value; and (3) retain key employees using equity compensation with multi-year vesting schedules. As of December 31, 2023, there were three LTIPs with outstanding, unvested awards: (1) the 2021 – 2023 LTIP of which there were eight participants, including the named executive officers (other than Mr. Griffiths; (2) the 2022 – 2024 LTIP of which there were ten participants, including the named executive officers; and (3) the 2023 – 2025 LTIP of which there were ten participants, including the named executive officers.

2023 – 2025 LTIP Design and Awards

The 2023 – 2025 LTIP consists of a combination of service-based equity awards in the form of restricted stock awards (50%) and performance-based equity awards in the form of performance shares (50%). The 2023 – 2025 LTIP is designed to meet the Company’s objectives to reward executives for driving long-term performance, align executives with shareholder interests and bolster retention of high performing executives.

Each named executive officer has a predetermined target award level, which is reflected as a percentage of base salary at the beginning of the three-year period, based on competitive market data for each position.

Restricted stock awards vest one-third each year over a three-year vesting period.

Performance-based equity awards (i.e., performance share units) cliff-vest three years from the grant date, if: (1) the predefined performance measures are met at the end of each three-year performance period and (2) subject to the participant’s continued employment with the Company through the vesting date. The vested performance-based equity will be delivered in Company shares based on the performance level achieved. If a minimum level of performance is not achieved, the performance-based grants are forfeited. The Compensation Committee also retains discretion to make certain adjustments to equity awards granted under the 2022 Equity and Incentive Plan, including providing for objectively determinable adjustments, modifications or amendments to any performance criteria, as the Compensation Committee may deem appropriate.

Annually, the Compensation Committee approves the predefined performance measures, and such measures may change from time-to-time to best align with shareholder interest and priorities, as well as consideration of markets and evolution of compensation pay practices for the Company’s peer group. The Compensation Committee selected two financial metrics as the performance metrics for the performance shares granted in 2023 for the 2023 – 2025 LTIP awards: (1) relative core return on average assets (“Core ROAA”); and (2) relative core return on average equity (“Core ROAE”), each weighted equally. The Core ROAA and Core ROAE financial metrics will each be evaluated relative to a predefined industry index. The Compensation Committee determined that these two financial metrics aligned well with shareholder interests as they balance the generation of profitable growth with shareholders’ long-term interests. The use of “core” metrics enables the Company’s operating performance to be measured in comparison to its peers’ operating performance, excluding certain transactions and nonrecurring items that are not reflective of the Company or peer groups core businesses.

•Core ROAA: Core ROAA, as defined by S&P Global, is net income after taxes and before extraordinary items, less net income attributable to noncontrolling interests, gain or loss on the sale of held to maturity and available for sale securities, amortization of intangible assets, goodwill and other nonrecurring items, as applicable, as a percentage of average assets as reported in the Company’s audited financial statements. Core ROAA performance is measured by the percentile rank of three-year average Core ROAA relative to an Industry Index (S&P U.S. SmallCap Banks Index, exchange-traded commercial banks with assets between $2 billion and $10 billion as of December 31, 2022). Performance between payout levels at or above threshold (i.e., between the threshold, target and stretch levels noted below) is calculated using a straight-line interpolation methodology.

•Core ROAE: Core ROAE, as defined by S&P Global, is net income after taxes and before extraordinary items, less net income attributable to noncontrolling interests, gain or loss on the sale of held to maturity and available for sale securities, amortization of intangible assets, goodwill and other nonrecurring items, as applicable, as a percentage of average equity as reported in the Company’s audited financial statements. Core ROAE performance is measured by the percentile rank of three-year average Core ROAE relative to an Industry Index (S&P U.S. SmallCap Banks Index, exchange-traded commercial banks with assets between $2 billion and $10 billion as of December 31, 2022). Performance between payout levels at or above threshold (i.e., between the threshold, target and stretch levels noted below) is calculated using a straight-line interpolation methodology.

Compensation Discussion and Analysis

The grants awarded in 2023 for the 2023 – 2025 LTIP are summarized in the following table and reported in our “Grants of Plan-Based Awards” on page 67.

2023 – 2025 LTIP Grant

1. The values reported reflect the aggregate grant date fair value of the stock award, as determined in accordance with ASC Topic 718. For a discussion of the assumptions used in the calculations of these stock award amounts, refer to Note 17 of the Company’s consolidated financial statements for the year ended December 31, 2023.

2. The restricted stock awards vest over a three-year period. The number of shares granted was determined by taking the total value and dividing the Service-Based Shares Value by the April 25, 2023 (grant date) closing share price of $32.30 for the named executive officers (other than Mr. Griffiths) and by the December 15, 2023 (grant date) closing price of $37.86 for Mr. Griffiths.

3. The performance share units are tied to performance goals (discussed above), which are set by the Compensation Committee at the beginning of the three-year performance period. The actual shares earned at the end of the three-year performance period will range from 0% to 200% of the target award depending upon the Company’s actual performance against the three-year performance metrics. The value presented assumes the achievement of the target performance level.

4. Mr. Griffiths joined the Company and the Bank on November 20, 2023 as EVP, Chief Operating Officer, and was then appointed as President and CEO of the Company and Bank on January 1, 2024. Under the terms of the LTIP, Mr. Griffiths was granted a pro-rata restricted stock award and performance share units for the 2023 - 2025 LTIP for the period he will contribute to the three-year performance period.

2021 – 2023 LTIP Performance Period Results

Overview

In 2021, the Compensation Committee approved the following two performance metrics for the 2021 – 2023 LTIP: (1) absolute three-year cumulative diluted earnings per share (“EPS”); and (2) relative ROAE, measured by the percentile rank of three-year average ROE relative to an industry index.

Over the course of the three-year performance period for the 2021 — 2023 LTIP, the Compensation Committee monitored the projected payout and performance level for the 2021 — 2023 LTIP.

•Through the first two years of the 2021 — 2023 LTIP performance period, the Company reported cumulative diluted EPS of $8.77, which was 74% of threshold level performance for its absolute three-year cumulative EPS performance metric, 73% of target level performance for its absolute three-year cumulative EPS performance metric, and 71% of stretch level performance for its absolute three-year cumulative EPS performance metric.

Compensation Discussion and Analysis

For the first half of 2023, the Company reported diluted EPS of $1.72 bringing the cumulative diluted EPS total for two-and-a-half of the three-year performance period to $10.49, which was 89% of threshold level performance for its absolute three-year cumulative EPS performance metric, 87% of target level performance for its absolute three-year cumulative EPS performance metric, and 85% of stretch level performance for its absolute three-year cumulative EPS performance metric.

•Through the first two years of the 2021 — 2023 LTIP performance period, the Company reported a ROAE of 12.72% for 2021 and a ROAE of 13.15% for 2022, which resulted in a ROAE for the two-year period of 12.93%. The Company’s relative ROAE performance compared to its industry index over the two-year period was 64 th percentile and slightly below the pre-established target level of performance of 65 th percentile.

For the first half of 2023, the Company reported a ROAE for the six months ended June 30, 2023, of 10.91%, and resulted in a ROAE of 12.51% through the two-and-a-half year period. The Company’s relative ROAE performance compared to its industry index over the two-and-a-half year period was 63 rd percentile and slightly below the pre-established target level of performance of 65 th percentile.

In response to the significant change in the macroeconomic environment and banking industry and our shift in strategic priorities, as further described in the “Executive Summary” on page 39, we voluntarily executed certain investment loss trades to reposition the Company for the betterment of future earnings and profitability, fully knowing this would result in lower earnings and financial returns for 2022 and 2023. Doing so resulted in investment losses totaling $11.2 million before income taxes over the three-year performance period for the 2021 – 2023 LTIP.

The Compensation Committee believed the financial impact of these investment loss trades taken in 2022 and 2023, which totaled $0.61 of diluted EPS, did not reflect the Company’s overall operating financial performance over the three-year performance period for the 2021 — 2023 LTIP. The Compensation Committee recognized that the investment losses were voluntarily taken by senior management to improve future earnings and profitability for the long-term benefit of the Company’s shareholders. The Compensation Committee used its judgment and made certain adjustments to each of the performance measures for the 2021 — 2023 LTIP to neutralize the effect of the voluntary investment losses that were taken in response to the significant change in the macroeconomic environment and banking industry and the related shift in the Company’s strategic priorities.

In 2023, the Compensation Committee evaluated the program design of the LTIP, and, through consultation with Meridian, for the 2023 — 2025 LTIP changed its performance measures to two relative performance measures that each measure core financial results compared to an industry index, as described beginning on page 55. The change to our performance metrics was done so to account for the current volatility in bank earnings, to help ensure our program remains competitive and reflects current market practices across our proxy peers, and continues to motivate and appropriately reward the Company’s executives, including the named executive officers, while aligning with shareholder value creation.

2021 — 2023 Performance Metrics

In 2021, the Compensation Committee approved the following two performance metrics for the 2021 – 2023 LTIP: (1) absolute three-year cumulative diluted earnings per share (“EPS”); and (2) relative ROAE, measured by the percentile rank of three-year average ROE relative to an industry index measured by financial statements for such companies within the industry index (SNL Small Cap U.S. Bank Index, exchange-traded commercial banks with assets of $2.0 billion to $10.0 billion as of December 31, 2020) weighted equally.

2021 — 2023 Performance Assessment

As described above, the Compensation Committee monitored the Company’s performance against each performance measure throughout the three-year performance period of the 2021 – 2023 LTIP.

The Compensation Committee observed that in light of the voluntary investment losses taken by the Company in 2022 and 2023, as described above, the performance share payout for the three-year cumulative diluted EPS performance metric and the relative ROAE performance metrics would each be 0% of target, which would have resulted in no payout for the 2021 – 2023 LTIP.

After substantial discussion and consideration, in March 2024, the Compensation Committee exercised its judgment and approved adjustments to each of the financial metrics used for the 2021 – 2023 LTIP to neutralize the effect of the voluntary investment losses. The Compensation Committee approved the following adjustments:

Compensation Discussion and Analysis

1. A $0.61 adjustment to increase reported three-year cumulative diluted EPS which reflected the voluntary investment losses, but not the tax-effected impact of the Signature Bank bond loss, as shown in the reconciliation of non-GAAP to GAAP financial information in Appendix A beginning on page 86; and

2. The use of relative core ROAE in replacement of relative ROAE, using the same definition of core ROAE from S&P Global that is used for the 2023 – 2025 LTIP, as discussed above

In assessing the need for adjustments to each of the financial metrics the Compensation Committee considered:

•The Company voluntarily took the investment losses for the betterment of future earnings and profitability for the benefit of the Company’s shareholders, which negatively impacted the absolute three-year cumulative diluted EPS performance for the 2021 – 2023 LTIP; and

•The effectiveness of the relative ROAE measure to assess the Company’s performance depends on the consistency and comparability of ROAE of the other companies. The Compensation Committee monitored the Company’s relative ROAE performance in 2023 and recognized that relative ROAE across companies within our industry index was not directly comparable because reported financial results across these companies may or may not include transactions that are unusual, infrequent, and/or not core to normal business operations, such as, but not limited to, investment gains or losses.

In designing the 2023 – 2025 LTIP, the Compensation Committee recognized, and took into account, that use of relative ROAE may not accurately reflect the Company’s operational performance and may create inconsistencies in comparability across companies within the industry index. As such, the Compensation Committee determined to not use relative ROAE for the 2023 – 2025 LTIP. Please refer to “2023 – 2025 LTIP Design and Awards” on page 55 for further discussion.

The Compensation Committee made no other changes to the 2021 – 2023 LTIP.

2021 — 2023 Performance Determination

The performance shares payout for the three-year cumulative adjusted diluted EPS performance metric (as described above) was at 194% of target and the relative core ROAE performance metric (as described above) was at 66% of target, which resulted in a total achievement of at 130% of target. Given the adjustments made to the two performance measures (as described above), the Compensation Committee considered capping performance share payouts for the 2021 – 2023 LTIP at target level (i.e.100%) for each of the participants, including the named executive officers (other than Mr. Griffiths). In making its payout determination, the Compensation Committee considered that the investment losses taken by senior management were voluntary and were done so with the objective to improve future earnings capacity and improve profitability without consideration of the negative effect it would have on their own compensation. The Compensation Committee also considered the financial impact to the Company and to each of the participants of paying out the performance shares at 130% of target or capping at 100%. The Compensation Committee concluded the financial impact of capping out at 100% of target was not significant to the Company and providing the payout at 130% of target was appropriate in context of total compensation relative to peers and each executive’s total compensation.

After substantial discussion and consideration, the Compensation Committee approved the performance shares payout for the 2021 – 2023 LTIP at 130% of target on March 29, 2024, and the performance shares are scheduled to vest on April 27, 2024, the third anniversary of the grant date, subject to continued employment of each named executive officer, with the exception of: (1) Mr. Dufour, who qualified for retirement treatment under the terms of the award and his transition and retention arrangement (as described in “CEO Transition Arrangements” on page 58); and (2) Mr. Griffiths, who joined the Company on November 20, 2023, and, accordingly, was not granted any performance shares under the 2021 – 2023 LTIP.

Compensation Discussion and Analysis

Performance Shares Approved for Payout Under the 2021 – 2023 LTIP for the Named Executive Officers —On March 29, 2024, the Compensation Committee approved the payout of performance shares under the 2021 — 2023 LTIP for the named executive officers (other than Mr. Griffiths) as follows:

1. Mr. Griffiths joined the Company and the Bank on November 20, 2023 and was not granted any performance shares under the 2021 – 2023 LTIP.

2. Represents the performance shares vested under the 2021 – 2023 LTIP for the absolute three-year cumulative adjusted diluted EPS component at 194% of target as measured over the period January 1, 2021 - December 31, 2023, determined using the Company’s closing market price of $46.95 on April 27, 2021 (the grant date for the 2021 – 2023 LTIP).

3. Represents the performance shares vested under the 2021 – 2023 LTIP for the relative core ROAE component at 66% of target as measured over the period January 1, 2021 – December 31, 2023 as compared to the industry index (SNL Small Cap U.S. Bank Index, exchange-traded commercial banks with assets of $2.0 billion to $10.0 billion as of December 31, 2020), determined using the Company's closing market price of $46.95 on April 27, 2021 (the grant date for the 2021 – 2023 LTIP).

4. Represents total performance shares vested and issued under the 2021 – 2023 LTIP at 130% of target, based on (1) a 50% weighting of actual three-year cumulative adjusted diluted EPS ratio achieving 194% of target and (2) a 50% weighting of relative core ROAE achieving 66% of target.

5. Mr. Archer participated in the 2021 – 2023 LTIP for two-thirds of the performance period, commencing participation in the program with a pro-rated award upon his appointment as the Company's and the Bank's EVP, CFO on January 3, 2022.

CEO TRANSITION ARRANGEMENTS

2023 Restricted Stock Units (“RSU”) Awards

Following the public announcement in late March 2023 that the Board had established a temporary committee to assist in succession planning, the Compensation Committee considered the importance of maintaining select executives through the transitional period of identifying and onboarding a new CEO and other executive-level transitions. After substantial discussion and consideration, the Compensation Committee granted awards of RSUs on April 25, 2023 to Mr. Archer, Mr. Martel and Ms. Rose and other selected members of senior management to retain the leadership team’s focus on executing on the Company’s long-term strategic priorities during this period. The Compensation Committee also considered the competitive nature for executive-level positions within the current market and tight labor force, the known challenges recruiting highly qualified executives within our markets, the macroeconomic conditions creating financial headwinds for the Company (and the broader banking industry), and the need for retaining our executive team.

The terms of the RSUs were tailored with this purpose, with no vesting until the second anniversary of the grant date, subject to the executive’s continued employment with the Company. The RSUs were granted in an amount equal to 25% of each executive’s salary at the grant date. Further details of these awards are provided in the “2023 Grants of Plan-Based Awards Table” on page 63.

Compensation Discussion and Analysis

Gregory A. Dufour

On August 16, 2023 (“Effective Date”), the Company and the Bank entered into a transition employment and retention agreement (the “Transition Agreement”) with Gregory A. Dufour in response to Mr. Dufour’s anticipated retirement as President and CEO of the Company and the Bank on December 31, 2023, and to effectuate the successful transition to Mr. Griffiths.

Under the terms of the Transition Agreement, Mr. Dufour departed from his position as President and CEO and as a member of the Company Board of Directors and Bank Board of Directors, effective December 31, 2023 (the “Transition Date”), and continued to support the Company and the Bank as an advisor from the Transition Date through March 31, 2024. Key terms of the Transition Agreement included:

•Mr. Dufour’s annual base salary continued at the rate then in effect as of the Effective Date;

•Mr. Dufour continued to participate in all applicable employee retirement benefit, health and welfare benefit, fringe benefit, and incentive compensation benefit plans, programs, policies or practices provided or applicable to senior executives of the Company and the Bank, with respect to his period of service as President and CEO, and similarly situated employees of the Company and the Bank, with respect to his period of service as advisor;

•Mr. Dufour was eligible to receive bonus and incentive compensation in respect of the period prior to the Transition Date in accordance with the terms of the bonus and incentive compensation plans and programs in which he participated immediately before the Effective Date;

•Mr. Dufour’s termination of employment in accordance with the Transition Agreement (other than by the Company or Bank for “Cause” (as defined in the Transition Agreement)) was considered a “retirement”, for purposes of the performance share units granted to him in 2021, 2022 and 2023; and

•Subject to Mr. Dufour’s execution and non-revocation of a release, the Company fully accelerated the vesting of any outstanding and unvested restricted share awards granted to Mr. Dufour on April 27, 2021, April 26, 2022 and April 25, 2023 as of March 31, 2024.

Simon R. Griffiths

On August 16, 2023, the Company and Bank entered into a letter agreement (the “Letter Agreement”) with Simon R. Griffiths, pursuant to which he will (i) serve as EVP and Chief Operating Officer of the Company and the Bank upon joining the Company on November 20, 2023 (the “Employment Date”) and continuing through the Transition Date and (ii) serve as President and CEO of the Company and Bank and member of the Company’s Board of Directors and Bank Board of Directors effective as of January 1, 2024.

Pursuant to the Letter Agreement, Mr. Griffiths’ terms of employment included:

•An annual base salary commencing on the Employment Date of $825,000, which will not be reviewed for adjustment until 2025;

•A sign-on cash award of $500,000, payable within 30 days of the Employment Date, which is subject to repayment in the event of certain terminations of Mr. Griffiths’ employment;

•A sign-on equity award with an aggregate grant date value of $700,000, comprised of (1) a pro-rata award of performance share units and restricted stock awards under the Company’s LTIP in respect to the 2022 to 2024 and 2023 to 2025 performance periods (the “Pro-rata LTIP Award”), with terms and conditions, including vesting, in accordance with the LTIP and performance share units and restricted stock awards granted to the CEO and other named executives and (2) a number of restricted stock units with a grant date value equal to the difference between $700,000 and the grant date value of the Pro-rata LTIP Award, which restricted stock units will vest in equal installments on each of the first three anniversaries of the grant date;

•A relocation assistance payment, net of taxes, of $125,000 (and totaled $233,644 before taxes), which is subject to repayment in the event of certain terminations of Mr. Griffiths’ employment;

•Eligibility to participate in the 2024 EAIP, with a target incentive opportunity of 50% Mr. Griffiths’ annual base salary;

Compensation Discussion and Analysis

•Eligibility to participate in the LTIP, with a target incentive opportunity of 60% of Mr. Griffiths’ annual base salary;

•Eligibility to participate in the MSPP, the DCRP and the DCP;

•Eligibility to participate in the Company’s employee benefit plans covering employees of the Company on the same terms and conditions as the other named executive officers;

•Entry into the Company’s standard Change of Control, Confidentiality and Non-Competition Agreement (the “CIC Agreement”), which provides for the payment of severance, generally in the form of a lump sum cash payment equal to three times the sum of Mr. Griffiths’ base salary plus three-year average bonus, and the continuation of certain benefits in the event Mr. Griffiths’ employment terminates, including for “good reason” and other than as a result of “disability” or for “cause” (as each are defined in the CIC Agreement), and Mr. Griffiths’ separation from service occurs within three months prior or 24 months after a change in control of the Company.

The Search and Transition Committee and Compensation Committee received advice and peer benchmarking information from Meridian, as well as current market data obtained from the various CEO candidates, in reaching agreement with Mr. Griffiths on his terms of employment as outlined within the Letter Agreement.