Compensation of Directors

The Directors of the Company, the BankBar Harbor Banking and Trust Company, and BTI receiveFinancial Group received a fee of $300 for each meeting of the CompanyBankshares and Subsidiary Boardssubsidiary boards attended and $250 for each Committee Meeting attended.committee meeting attended in 2003. The fee paid for the attendance at the 2003 Annual Meeting iswas $500 per member of the Board of Directors. The ChairmanChairperson of the Company Board receivesreceived an annual retainer of $3,000 in addition to meeting fees. The ChairmanChairperson of the BTI Financial Group Board receivesreceived an annual retainer of $1500$1,500 in addition to meeting fees. Meetings of the Board of Directors of the Company are held monthly. ThoseDirector Murphy, who also serves as an officer of the Company, does not receive directors’ fees.

The Board of Directors of the Company who are also Executive Officers do not receive Director fees.voted to increase director fees to $400.00 for attendance at Company and Subsidiary Board meetings, committee meetings, and the Annual Stockholder’s meeting beginning in January 2004.

Bernard K. Cough defersdeferred his Director fees.director fees until his retirement in May 2003. These fees arewere credited to an account established for that purpose. These deferred fees will be paidare being distributed to Mr. Cough, or his designated beneficiary, uponsince his retirement as a Director.director.

EMPLOYEE BENEFIT PLANS

401(k) Plan

The Company has a contributory 401(k) plan available to all employees.employees including the named executive officers. Employees may contribute between 1% and 50% of their compensation (subject to applicable regulatory restrictions), to which the Company will match 50% of the first 3% deferred by an employee and 25% on the second 3% deferred. The Board of Directors voted to credit each eligible participant’s 401(k) account with 4% of salary for the years 2003, 2002 2001 and 2000.2001. Total Company contributions madeinto the 401(k) Plan were $392,824, $321,085, $244,345, and $240,809$244,345, for the years ended December 31, 2003, 2002, 2001, and 2000,2001, respectively.

Supplemental Executive Retirement Agreements

The Company Board of Directors has authorized the Company, subject to any applicable regulatory requirements, to enter intoCompany’s maintains a Supplemental Executive Retirement Plans withPlan effective January 1, 2003 providing Joseph M. Murphy, President and CEO of the Company and BTI, Gerald Shencavitz, Chief FinancialExecutive Officer of the CompanyCompany; Gerald Shencavitz, the Company’s Chief Financial Officer; and Dean S. Read, President of Bar Harbor Banking and CEO of the Bank. The terms of thoseTrust Company with certain supplemental retirement plans have not been finalized as of the date of this Proxy Statement, but are expected to provide forbenefits. This plan provides a stream of future payments in accordance with aindividually defined vesting scheduleschedules upon retirement, or termination, of the named Executives, or in the event that the Executiveexecutive leaves the Company following a change of control. The Company has accrued amounts in accordance with generally accepted accounting principles, to providecontrol event.

Upon Normal Retirement Age defined as age 68 for estimated future payment obligations under the Supplemental Executive Retirement Plans once finalizedMr. Murphy and effective. As of December 31, 2002, the Company accrued a total of $327,908 in connection with the plans authorizedage 65 for Mr. Read and Mr. Shencavitz. Shencavitz, monthly payments of $11,200, $10,458, and $8,583 will be paid under this plan to the named executives (or their beneficiary) for a period of 240 months. There are also provisions under the plan for reduced monthly payments in the event of an early retirement by any of these individuals. As of December 31, 2003, Messrs Murphy, Read, and Shencavitz have vested, monthly benefits of $1,597, $2,012, and $535, respectively.

Employment Contracts and Change of Control Agreements

Change of Control Agreements

The Company began accruing amounts on January 1, 2003 in connectionhas also entered into Change of Control Agreements with the plan authorizedMessrs. Murphy, Read, and Shencavitz. These Change of Control Agreements provide for severance of both salary and benefits for twenty-four months for Mr. Murphy. ImplementationMurphy and eighteen months for Messrs. Read and Shencavitz. These payments will be made in the event of these Supplemental Executive Retirement Plans is subject to compliance with applicable regulatory requirements and to review and final approval by the Company’s Boardboth a change of Directors, and execution and delivery by the Company and the named Executive Officers of formal written agreements.

        Executive Officers of the Company are entitled to participate in certain group health, dental and life insurance benefits. In accordance with Company policy, all such benefits are generally available to employeescontrol of the Company and its Subsidiaries.

TRANSACTIONS WITH DIRECTORS, OFFICERS AND PRINCIPAL STOCKHOLDERS

subsequent termination (or constructive termination) of the executive within twelve months after a change of control, unless such termination was for cause. The Company has had, and expectsalso agreed to have inpay any excise tax imposed on the future, banking transactions in the ordinary course of its business with Directors, Officers, principal stockholders, and their associates, including membersexecutive under Section 4999 of the Compensation CommitteeInternal Revenue Code and Audit Committee. All such transactions have beenprovide for health insurance and will be made on substantially the same terms, including interest ratesother standard benefits for a period of 18 months. These agreements were entered into as part of a total compensation program to attract and collateral, as those prevailing at the time for comparable transactions with others. No such transactions have involved more than normal risk of collectability or presented other unfavorable features,retain qualified executives and no loans outstandingnot entered into in response to any Director, Officer, principal stockholder,effort known to the Board of Directors by any party or their associates in an amount in excessentity to acquire control of $60,000 are non-accruing or past due or are otherwise considered to be potential problem loans. the Company.

Employment Contracts

Joseph M. Murphy, CEO

        TheOn November 7, 2003, the Company entered into aamended its written employment agreement with Joseph M. Murphy (the "President")(CEO) originally dated January 3, 2003 (the "Employment Agreement")Employment Agreement) in connection with his service as President and CEO ofChief Executive Officer Bar Harbor Bankshares.Bankshares to reflect changes in the Company’s Supplemental Retirement Programs and implementation of Change of Control Agreements. The Employment Agreement provides for the payment of an annual base salary to the President ofChief Executive Officer not less than $18,333.33 per month (an annualized rate of not less than $220,000.00 per annum). The Employment Agreement provides for a review of the President’sChief Executive Officer base salary not less than annually and may be adjusted at the Company’s sole discretion. The PresidentChief Executive Officer is also eligible to participate in a performance compensation plan with goals and incentive payments to be developed during 2003approved by mutual agreement between the President and the Company. This performance compensation plan has not been finalized s of the date of this Proxy Statement.Board annually. The Employment Agreement is for an initial term of two (2) years with provisions for automatic extensions of one (1) year each in the absence of notice from the Company of its intention not to extend the term of the Employment Agreement. The initial term of the Employment Agreement commenced on January 3, 2003 and continues through January 3, 2005, unless sooner terminated. The Employment Agreement contains restrictions on competition by the PresidentChief Executive Officer with the Company during the term of the Employment Agreement and for a period of one (1) year following the cessation of the President’sCEO’s employment with the Company regardless of reason. The Employment Agreement also provides, with limited exceptions, for a severance payment to the PresidentChief Executive Officer in the event his employment is terminated within one (1) year following certain events defined to constitute a change in control of the Company. This severance payment resulting from a termination of employment following a change in control is equal to two (2) times the President’sChief Executive Officer ‘s base annual salary, plus incentive compensation payments earned, and any accrued but unused vacation time. Both the Compensation and Human Resources Committee and the Board of Directors have reviewed and approved the Employment Agreement.

Executive Officers of the Company are entitled to participate in certain group health, dental and term life insurance benefits. In accordance with Company policy, all such benefits are generally available to employees of the Company and its subsidiaries.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None of the nominees for directors, other continuing directors, or named executive officers of the company or any of its subsidiaries engaged in 2003 in any transaction with the Company or any of its subsidiaries, in which the amount involved or exceeds $60,000 other than the financial transactions described below under the heading "Indebtedness of Management".

Indebtedness of Management

The Company’s wholly owned subsidiary, Bar Harbor Banking and Trust Company, has had, and expects to have in the future, banking transactions in the ordinary course of its business with directors, officers, principal stockholders, and their associates. All such transactions have been and will be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others. No such transactions have involved more than normal risk of collectability or presented other unfavorable features, and no loans outstanding to directors, officers, principal stockholders, or their associates in an amount in excess of $60,000 are non-accruing or past due or are otherwise considered to be potential problem loans.

PERFORMANCE GRAPH

The following graph illustrates the estimated yearly percentage change in the Company’s cumulative total shareholderstockholder return on its common stock for each of the last five years. Total shareholderstockholder return is computed by taking the difference between the ending price of the common stock at the end of the previous year and the current year, plus any dividends paid divided by the ending price of the common stock at the end of the previous year. For purposes of comparison, the graph also illustrates comparable shareholderstockholder return of American Stock Exchange (AMEX) banks as a group as measured by the AMEX Market Index and the peer group index as defined by AMEX. The graph assumes a $100 investment on December 31, 19971998 in the common stock of each of the Company, the AMEX peer group banks and the AMEX Market Index as a group and measures the amount by which the market value of each, assuming reinvestment of dividends, has increased as of December 31 of each calendar year since the base measurement point of December 31, 1997.1998.

Market values for 1998, 1999, 2000, 2001, 2002 and 20022003 are based on information obtained from the American Stock Exchange.

(GRAPH)

SELECTION OF AUDITORS

        Stockholder approvalOn March 26, 2004, the Audit Committee of the selectionBoard of auditors is not required, but the Board is of the view that an expression of opinion by the stockholders as to the appropriateness of this selection is desirable. The Board recommends that its selection ofDirectors Bar Harbor Bankshares (the "Company") dismissed Berry Dunn, McNeil & Parker ("BDMP") as its independent accountants, and approved the appointment of KPMG LLP as its independent public accountants for the Company’s fiscal year ending December 31, 2004, subject to KPMG LLP completing their client acceptance processes and procedures. The Company intends to file a Form 8-K upon completion of the acceptance process and procedures.

The reports of BDMP on the Company’s consolidated financial statements for the years ended December 31, 2003 and 2002 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.

During the Company’s fiscal years 2003 and 2002 and the interim period preceding the dismissal of BDMP on March 26, 2004, there have been no disagreements between the Company and BDMP on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreement(s), if not resolved to the satisfaction of BDMP, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its prior reports.

During the two-year period ending December 31, 2003, and the interim period preceding the dismissal of BDMP, no reportable events occurred in connection with the relationship between BDMP and the Company.

We do not anticipate that representatives of BDMP or KPMG LLP will be present at the Annual Stockholders’ meeting or will be available to respond to questions or make a statement(s) at the meeting.

Audit Fees

The following summarizes BDMP’s audit fees for 2003 and 2002.

1.Audit Fees. The aggregate fees billed for professional services rendered by the principal independent accountant, for the Company for the year 2003 be ratified. If the Board selection is not ratified, the Board will take action to appoint a different auditor for the Bar Harbor Bankshares and its Subsidiaries. It is anticipated that a representative of Berry, Dunn, McNeil & Parker will be present at the Meeting to respond to appropriate questions or to make a statement.

1. Audit Fees. The aggregate fees of Berry, Dunn, McNeil & Parker(BDMP), for the auditsaudit of Bar Harbor Bankshares’ and Subsidiariesthe Company’s annual financial statements at and review of financial statements included in the Company’s Forms 10-Q for the yearyears ended December 31, 2003 and 2002 were $74,815 and reviews of Bar Harbor Bankshares’ quarterly reports on Form 10-Q were $86,500, of which an aggregate amount of $38,850 has been billed through December 31, 2002.respectively.

2. Audit Related Fees. The aggregate fees billed for assurance and related services rendered by BDMP related to the performance of Berry, Dunn, McNeil & Parker for the audit or review of the Bar Harbor BanksharesCompany’s financial statements in the years ended December 31, 2003 and Subsidiaries2002 were $35,544 and $77,393, respectively. These services related to the Sarbanes-Oxley Act of 2002, implementation of internal control reporting under FDICIA, an employee benefit plan audit, the acquisition of the Rockland Branch of Androscoggin Savings Bank, and accounting consultations, Sarbanes-Oxley implementation issues, SEC reporting changes, and internal control reviews were $77,393, all of which has been billed through December 31, 2002.consultations.

3. Tax fees. The aggregate fees billed for professional services rendered by BDMP for tax compliance, tax advice and tax planning in the years ended December 31, 2003 and 2002 were $11,402 and $13,080, respectively. The nature of Berry, Dunn, McNeil & Parker for the quarterly tax calculation review andservices comprising the fees disclosed under this category is preparation of the annualfederal and state tax return for Bar Harbor Banksharesreturns, review of estimated tax payments, and Subsidiaries were $13,080, of which an aggregate amount of $5,180 has been billed through December 31, 2002.tax planning.

4. All other fees: The aggregate fees of Berry, Dunn, McNeil & Parker rendered to Bar Harbor Bankshares and Subsidiariesbilled for services provided by BDMP, other than those discussedthe services reported in the paragraphs above, primarily forin the years ended December 31, 2003 and 2002 were $38,468 and $13,795 respectively. The nature of the services comprising the fees disclosed under this category is assistance with the strategic planning process, and arbitration proceedings were $13,795,

The Audit Committee’s pre-approval policies and procedures require the Audit Committee Chair to pre-approve all of which has been billed through December 31, 2002.audit and non-audit services, and report such pre-approvals to the Audit Committee at its next regularly scheduled meeting.

No services were rendered by Berry, Dunn, McNeil & Parkerrequired to Bar Harbor Bankshares and Subsidiaries for financial information systems design and implementation or internal audit.be approved pursuant to 17 CFR 210.2-01 ( c) (7) (i) ( C ).

OTHER MATTERS

Management knows of no other matters to be presented for action at the Meeting. If any other matters properly come before the Meeting, the shares represented by the proxies will be voted with respect thereto in accordance with the judgment of the person(s) voting the proxies.

FINANCIAL STATEMENTS

A copy of the Company’s Annual Report is being provided to each stockholder with thethis Proxy Statement.

THE COMPANY IS ALSO INCLUDING A COPY OF THE ANNUAL REPORT BY THE COMPANY TO THE SECURITIES AND EXCHANGE COMMISSION ON FORM 10-K, INCLUDING CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES FOR THE LAST FISCAL YEAR IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. UPON WRITTEN REQUEST, STOCKHOLDERS MAY ALSO OBTAIN THE MOST RECENT ANNUAL DISCLOSURE STATEMENT THAT CONTAINS FINANCIAL INFORMATION COVERING THE LAST TWO YEARS.

Any request for a copy of the Annual Disclosure Statement must contain a representation that the person making the request was a beneficial owner of Common Stock on April 7, 2003,March 19, 2004, which is the record date for this proxy solicitation. Requests should be addressed to: Marsha C. Sawyer, Clerk, Bar Harbor Bankshares, 82 Main Street, Bar Harbor, ME 04609.

STOCKHOLDER PROPOSALS and COMMUNICATIONS WITH THE BOARD

Stockholders may submit proposals for consideration at the 20042005 Annual Meeting, which presently is scheduled for May 18, 2004.17, 2005. In order to be included in the Company’s Proxy Statement and Form of Proxy relating to that meeting, such proposals must be received by the Company no later than January 20,December 7, 2004, which is 120 days in advance of the proposed mailing date of the 20042005 proxy materials. Proposals should be addressed to Marsha C. Sawyer, Clerk, Bar Harbor Bankshares, 82 Main Street, Bar Harbor, ME 04609.

The Board of Directors does not have a formal process for stockholders to send communications to the Board. In view of the infrequency of stockholder communications to the Board of Directors, the Board does not believe that a formal process is necessary. Written communications received by the Company from stockholders will be shared with the full Board of Directors no later than the next regularly scheduled Board meeting.

By Order of the Board of Directors

 /s/ /s/Marsha C. Sawyer, Clerk 

Marsha C. Sawyer, Clerk

 APPENDIX A

REPORT OF THE AUDIT COMMITTEE

                                                                                               March 26, 20032004

To the Board of Directors of Bar Harbor Bankshares:

            The Audit Committee has reviewed and discussed with management the Company’s audited financial statements as of and for the year ended December 31, 2002.2003.

              The Audit Committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, "Communication with Audit Committees," as amended, by the Auditing Standards Board of the American Institute of Certified Public Accountants.

              The Audit Committee has received and reviewed the written disclosures and the letter from the independent auditors required by Independence Standard No. 1, "Independence Discussions with Audit Committees," as amended, by the Independence Standards Board, and has discussed with the auditors the auditors’ independence.

              Based on the reviews and discussions referred to above, the Audit Committee recommends to the Board of Directors that the financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.2003.

              Each of the members of the Audit Committee is independent as defined under the listing standards of the American Stock Exchange as of December 31, 2002.2003.

            The Board of Directors has determined that the Company has at least one "audit committee financial expert" serving on its Audit Committee. Mr. Scott Toothaker, CPA, meets the criteria for an "audit committee financial expert" and is "independent" within the meaning of the rules adopted by the American Stock Exchange pursuant to the Sarbanes-Oxley Act of 2002.

Thomas A. Colwell, Chair
Ruth A. Foster
Cooper F. Friend
John P. Reeves
Scott G. Toothaker
David B. Woodside

BAR HARBOR BANKSHARES
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER

1. PURPOSE

The Audit Committee (the "Committee") is appointed by the Board of Directors (the "Board") of Bar Harbor Bankshares (the "Company") to assist the Board in their responsibilities to oversee the independence of the independent auditor and to evaluate the financial reporting practices, accounting policies, internal controls and disclosure controls structures of the Company and its subsidiaries.

2. COMPOSITION

The Committee will be comprised of at least three directors. The members of the Committee shall meet the independence and experience requirements of the American Stock Exchange ("AMEX"), Section 10A(m)(3) of the Securities Exchange Act of 1934 (the "Act") and the rules and regulations of the Securities and Exchange Commission ("the Commission). Effective with the issuance of final regulations by AMEX, one member of this Committee must qualify as a "financial expert" as defined by those regulations.The members of the Committee shall be appointed by the Board on the recommendation of a Nominating Committee comprised entirely of independent directors to the extent required by AMEX rules. The Board may replace committee members. The Board will elect one Committee member as the Committee Chair.

3. AUTHORITY

The Committee has authority to investigate any matter or activity involving financial accounting, financial reporting, and the internal controls of the Company. The Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. The Company shall provide appropriate funding, as determined by the Committee, for payment of compensation to the independent auditor for the purpose of rendering and issuing an audit report and to any advisors employed by the Committee. All employees will be directed to cooperate with the Committee.

4. MEETINGS

The Committee shall meet as often as it determines necessary, but not less frequently than quarterly. The Committee may, at its discretion, meet in separate executive sessions with the chief executive officer, chief financial officer, independent auditor and internal auditor. The Committee may request that any officer or employee of the Company or the Company’s outside counsel or independent auditor attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.

5. ATTENDANCE

Committee members will strive to be present at all meetings.

6. RESPONSIBILITIES AND DUTIES
   The Committee shall have the sole authority to appoint and replace the independent auditor (subject, if applicable, to shareholder ratification). The Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including the resolution of disagreements between management and the auditors regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent auditor shall report directly to the Committee.

The Committee shall prepare the "Audit Committee Report" required by the Commission, Regulation S-K, Item 306, to be included in the Company’s annual proxy statement.

The Committee shall pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor, subject to the de minimus exceptions for non-audit services described in Section 10A(i)(1)(B) of the Act which are approved by the Committee prior to the completion of the audit.

The Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that the decisions of such subcommittee to grant pre-approvals shall be presented to the full Committee for ratification at its next scheduled meeting.

The Committee shall meet privately with the Independent Auditor as it deems necessary but in no event less frequently than may be required by AMEX rules.

The Committee shall be responsible for the review and oversight of all related party transactions entered into by the Company.

The Committee shall assist the Board in fulfilling its oversight responsibilities with respect to (i) the financial information to be provided to shareholders and the Commission; (ii) the review of quarterly financial statements; (iii) the system of internal controls and disclosure controls that management has established; and (iv) the internal audit, external audit and loan review processes. The Committee will make regular reports to the Board concerning its activities.

To fulfill its responsibilities and duties the Audit Committee shall:

1. Review and reassess the adequacy of this charter annually and recommend any proposed changes to the Board for approval in compliance with applicable Amex Audit Committee requirements. The charter is to be published as an appendix to the proxy statement every three years.
2. Review the scope and general extent of the independent auditor’s annual audit. The Committee’s review should include an explanation from the independent auditor of the factors considered by the independent auditor in determining the audit scope, including the major risk factors. The independent auditor should confirm to the Committee that no limitations have been placed on the scope or nature of its audit procedures. The Committee will review annually with management the fee arrangement with the independent auditor.
3. Discuss with management and the internal auditor and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting principles.
4. Review with management and the internal auditor and the independent auditor the Company’s accounting and financial reporting controls and disclosure controls and any special steps adopted in light of any material control deficiencies.
5. Review with management, the internal auditor and the independent auditor significant accounting and reporting principles, practices and procedures applied by the Company in preparing its financial statements. Solicit the independent auditor’s judgment about the quality, not just the acceptability, of the Company’s accounting principles used in financial reporting. Review legal and regulatory matters that may significantly impact the financial affairs or operations of the Company.
6. Review the independence of the independent auditor and obtain from the independent auditor, at least annually, a formal written statement delineating all relationships between the independent auditor and the Company as contemplated by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees.
7. Review and discuss with financial management and the independent auditor the quarterly financial statements preferably prior to the release of earnings but no later than the filing of Form 10-Q. The review will focus on the impact of significant events, transactions and changes in accounting estimates considered by the independent auditor in performing its review of the Company’s interim financial statements. The Chair of the Committee, or another member designated by the Chair, may represent the entire Committee for purpose of this review.
8. At the completion of the annual audit, review with management, internal audit and the independent auditor the following:

• The annual financial statements and related footnotes and financial information to be included in the Company’s annual report to shareholders and on Form 10-K.
• Results of the audit of the financial statements and the related report thereon and, if applicable, a report on changes during the year in accounting principles and their application.
• Any significant changes to the audit plan and any serious disputes or difficulties with management encountered during the audit. Inquire about the cooperation received by the independent auditor during the audit, including access to all requested records, data and information. Inquire of the independent auditor whether there have been any disagreements with management which, if not satisfactorily resolved, would have caused the auditor to issue a nonstandard report on the Company’s financial statements.
• Other required communications by the independent auditor under Statement of Auditing Standards (SAS) 61 as amended by SAS 90 relating to the conduct of the audit and the quality of the Company’s accounting principles.
• If deemed appropriate after such review and discussion, recommend to the Board that the financial statements be included in the Company’s annual report on Form 10-K.

9. Meet with management, the internal auditor and the independent auditor to discuss any relevant significant recommendations that the independent auditor may have, particularly those characterized as "reportable conditions." The Committee should review responses of management to the reportable conditions from the independent auditor and receive follow-up reports on action taken concerning the recommendations.

10. Review the appointment, performance, replacement and compensation of the internal auditor. The internal auditor will report directly to the Committee Chairman and for administrative purposes to the CEO of Bar Harbor Bankshares.

11.  Review and approve the scope and any significant changes to the annual internal audit and loan review plans. Evaluate the internal auditor’s risk assessment of the Company’s activities used in developing the annual audit plan.

12. Receive reports of major findings from the internal auditor and evaluate management’s response in addressing the reported conditions.

13.  Review disclosures made to the Committee by the Company’s CEO and CFO during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or disclosure controls and any fraud involving management or other employees who have a significant role in the Company’s internal controls and disclosure controls.

14.  Ensure the rotation of the lead (or coordinating) independent audit partner having primary responsibility for the audit and the independent audit partner responsible for reviewing the audit as required by law.

15.  Recommend to the Board of the Company a policy for the hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the Company.

16.  Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

VII. Limitation of Audit Committee’s Role

    While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor.

Restated and approved February 14, 2003