submitting another signed proxy bearing a later date.

If your shares are not registered in your own name, you will need appropriate documentation from the shareholder of record in order for you to vote at the Annual Meeting. Examples of such documentation include a broker’s statement, letter or other document that will confirm your beneficial ownership of the shares. If your shares are held by your broker, bank or another party as a nominee or agent, you should follow the instructions provided by such party.

A list of shareholders entitled to vote at the Annual Meeting will be available for inspection by any shareholder of Bar Harbor Bankshares beginning promptly after the record date and will remain available for inspection through the Annual Meeting or any adjournment thereof.

By Order of the Board of Directors

Marsha C. Sawyer, Clerk

April 11, 2018

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on May 15, 2018: This proxy statement and our Annual Report are available free of charge on the Shareholder Relations section of our website www.bhbt.com~~www.bhbt.com~~.

Bar Harbor Bankshares Ÿ• 82 Main Street Ÿ• P.O. Box 400 Ÿ• Bar Harbor, Maine 04609 Ÿ• 207-288-3314

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TABLE OF CONTENTS



	Page
PROXY SUMMARY	1
SHAREHOLDERS ENTITLED TO VOTE	2
VOTING PROCEDURES AND METHOD OF COUNTING VOTES	2
ATTENDING THE ANNUAL MEETING	45
ELECTRONIC ACCESS TO PROXY MATERIALS	45
CORPORATE GOVERNANCE	45
GOVERNANCE PROCEDURES AND RELATED MATTERS	810
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS	911
SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE	1213
PROPOSAL 1 - ELECTION OF DIRECTORS	1314
DIRECTORS AND EXECUTIVE OFFICERS	1415
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	2021
COMPENSATION OF DIRECTORS	2223
COMPENSATION OF EXECUTIVE OFFICERS	24
CEO PAY RATIO	4544
PROPOSAL 2 - NON-BINDING, ADVISORY RESOLUTION ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS	48
PROPOSAL 3 - RATIFICATION OF AN ARTICLES OF AMENMDENT TO OUR ARTICLES OF INCORPORATION, AS AMENDED, FILED WITH THE SECRETARY OF STATE OF THE STATE OF MAINE ON MAY 22, 2015	49
PROPOSAL 4 - APPROVAL OF THE BAR HARBOR BANKSHARES 2018 EMPLOYEE STOCK PURCHASE PLAN	5152
PROPOSAL 5 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	5860
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES	5860
OTHER MATTERS	6062
APPENDIX A - REPORT OF THE AUDIT COMMITTEE	6264
APPENDIX B - 2018 EMPLOYEE STOCK PURCHASE PLAN	6366

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PROXY STATEMENT

2018 Annual Meeting of Shareholders

PROXY SUMMARY

General

This proxy statement is furnished to the shareholders of Bar Harbor Bankshares (“the Company”) in connection with the solicitation of proxies on behalf of the Board of Directors (the “Board”) for use at the Annual Meeting. The Annual Meeting will be held on Tuesday, May 15, 2018, at 11:00 a.m. EDT at the Bar Harbor Club located at 111 West Street in Bar Harbor, Maine. The official Notice of the Annual Meeting of Shareholders accompanies this Proxy Statement. A Form of Proxy for use at the meeting or to vote in advance and a return envelope for the proxy are enclosed.

The Notice of Annual Meeting, proxy statement, and proxy card were first mailed to the Company’s shareholders on or about April 11, 2018 to solicit proxies for the Annual Meeting.

In absence of specific instructions to the contrary, shares represented by properly executed proxies received by the Company, including unmarked proxies, will be voted “FOR” Proposals 1, 2, 3, 4 and 5. Except for procedural matters incidental to the conduct of the Annual Meeting, the Board does not know of any matters other than those described in the Notice of Annual Meeting of Shareholders that are to come before the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in the proxy will vote the shares represented by such proxy on such matters as determined by a majority of the Board.

Solicitation of Proxies

The Company will bear the entire cost of soliciting proxies from you. In addition, we will request that banks, brokers and other holders of record send notice of the annual meeting to the beneficial owners of Bar Harbor Bankshares common stock and secure their voting instructions, if necessary. In addition, the Company has engaged Alliance Advisors to assist in the solicitation of the proxies for a fee of $6,500 plus reimbursement of customary expenses.

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SHAREHOLDERS ENITLED TO VOTE

Record Date

The Board has fixed March 29, 2018 as the record date for determining our shareholders entitled to notice of and to vote at the 2018 Annual Meeting. Only holders of record of shares of common stock at the close of business on that date are entitled to notice of and to vote at the Annual Meeting. On the record date, there were approximately ~~[________]~~1,640 holders of record of our common stock and ~~[___________]~~16,384,353 shares of our common stock ~~outstanding.~~outstanding, including treasury shares.

VOTING PROCEDURES AND METHOD OF COUNTING VOTES

Quorum Requirements

The presence at the Annual Meeting, either in person or by proxy, of the holders of not less than a majority of the shares entitled to vote at any meeting will constitute a quorum. If there is no quorum, the holders of a majority of shares present at the Annual Meeting in person or represented by proxy may adjourn the Annual Meeting to another date.

In addition, as a result of the vote being taken at the Annual Meeting on the ratification of the 2015 Amendment, shareholders of record as of March 24, 2015, other than holders whose identities or addresses cannot be determined from our records, are being given notice of the Annual Meeting, but are not entitled to attend the Annual Meeting or vote on any matter presented at the Annual Meeting unless they were also shareholders as of March 29, 2018, the record date for the Annual Meeting. This notice and the attached proxy statement constitutes the notice required to be given to our shareholders in connection with the ratification of the 2015 Amendment, including to our shareholders as of March 24, 2015, other than holders whose identities or addresses cannot be determined from our records.

Voting Rights

Each share is entitled to cast one vote for each matter to be voted on at the Annual Meeting. Cumulative voting is not permitted.

Required Vote

Each share of common stock entitles a holder of record on the record date to one vote on each matter to be presented at the annual meeting, and all such shares vote together as a single class. The voting requirements for each matter presented are as follows:

Proposal 1: Election of Directors. Directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.

Proposal 2: Approval of a Non-binding Advisory Resolution on the Compensation of the Named Executive Officers. The approval of this proposal will require that a majority of votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy and entitled to vote be cast “FOR” this proposal.

Proposal 3: Ratification of the filing and effectiveness of an Articles of Amendment to our Articles of Incorporation, as amended, filed with the Secretary of State of the State of Maine on May 22, 2015. The approval of this proposal will require that a majority of all the votes entitled to be cast at the Annual Meeting be voted “FOR” this proposal.

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Proposal 4: Approval of the Bar Harbor Bankshares 2018 Employee Stock Purchase Plan. The approval of this proposal will require that a majority of votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy and entitled to vote be cast “FOR” this proposal.

Proposal 5: Ratification of the appointment of RSM US LLP as our independent registered public accounting. The approval of this proposal will require that a majority of votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy and entitled to vote be cast “FOR” this proposal.

Effect of Broker Non-Votes and Abstentions

A broker non-vote occurs when a broker or other nominee holder, such as a bank, submits a proxy representing shares that another person actually owns, and that person has not provided specific voting instructions to the broker or other nominee holder. Brokers who hold their customers’ shares in “street name” may, under the applicable rules of the exchange and other self-regulatory organizations of which the brokers are members, sign and submit proxies for such shares and may vote such shares on routine matters, which typically include the ratification of the appointment of our independent registered public accounting firm. Proposals 1, 2, and 4 are considered “non-routine” and Proposals 3 and 5 are considered “routine.” The inspector of election will treat abstentions and broker non-votes as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Abstentions and broker non-votes, if they occur in connection with Proposals 1, 2, 3, 4 and 5, will not, in the case of Proposals 1, 2, and 4 be counted as “votes” and will have no effect on the proposals.

Voting Procedures

If you held your Bar Harbor Bankshares shares directly through our transfer agent, as of the record date, you can vote your shares using any of the following methods:

By Mail - shareholders can ensure that their shares are voted at the Annual Meeting by completing, signing, dating and mailing the enclosed proxy card in the enclosed, postage prepaid envelope.

By Telephone or the Internet - if you choose to vote by telephone or the Internet, instructions to do so are set forth on the enclosed proxy card. If you vote by telephone or the Internet, you do not have to mail in your proxy card, but your vote must be received by the voting deadline set forth on the proxy card.

In Person - You may attend the Annual Meeting and vote in person.

If you sign the proxy card, but do not make specific choices, the proxy will vote your shares “FOR” 1, 2, 3, 4 and 5.

If any other matters are properly presented at the Annual Meeting, the proxy will be voted with respect to any such matter by the proxy holders in accordance with the recommendations of the Board. As of the date of this proxy statement, it is not anticipated that any matters will be presented at the Annual Meeting other than those set forth in the accompanying Notice of the Annual Meeting of Shareholders.

Voting by Other Shareholders

If your shares are held by a bank, broker, or other nominee, please follow the instructions provided with your proxy materials supplied by your bank or broker.

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Revocation of Proxies

Any shareholder who executes and delivers a proxy has the right to revoke it at any time before it is exercised. Revocation may be made prior to the Annual Meeting by (i) filing a written revocation with our Corporate Clerk, (ii) entering a new vote over the Internet or by telephone, (iii) by submitting a duly executed proxy card bearing a later date, or (iv) by revoking the proxy personally at the Annual Meeting prior to the voting of the proxy. If your shares are held in street name, you should follow the instructions of your broker, bank or nominee regarding the revocations of proxies.

Your personal attendance at the Annual Meeting does not revoke your proxy. Your last vote, prior to or at the Annual Meeting, is the vote that will be counted.

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ATTENDING THE ANNUAL MEETING

If you plan to attend the annual meeting in person, you will need to bring a form of official photo ID (such as a drive ~~r's~~r’s license), along with either your Notice, proxy card or other proof of stock ownership with you to the meeting. If you are a beneficial owner but not a shareholder of record, you must present both a form of official photo ID and proof of ownership consisting of a bank or brokerage account statement.

We may refuse admission to anyone who is not a shareholder or does not comply with these requirements.

ELECTRONIC ACCESS TO PROXY MATERIALS

This proxy statement and our 2017 Annual Report on Form 10-K are available on our website at www.bhbt.com.

CORPORATE GOVERNANCE

Board of Directors

The Board oversees our business and monitors the performance of our management. In accordance with our corporate governance procedures, the Board does not involve itself in our day-to-day operations. Our executive officers and management oversee the day-to-day operations. Our directors fulfill their duties and responsibilities by attending regular meetings of the Board, which are held each month. Our directors also discuss business and other matters with key executives and our principal external advisors (legal counsel, auditors, financial advisors and other consultants).

The Board held a total of 12 regular meetings, two strategic planning meetings and one annual meeting during 2017. Each director attended at least 75% of the total number of board and committee meetings that he or she was eligible to attend.

The Board encourages each director to attend its Annual Meeting. All of the Board’s members attended the 2017Annual Meeting.

Board Leadership Structure

Currently, the positions of Chairman of the Board and CEO of the Company are held by separate individuals, with Mr. Woodside serving as Chairman of the Board and Mr. Simard serving as CEO. The Board believes that this leadership structure best serves the Company at this time because it allows Mr. Simard to focus on the Company’s operations and strategy, while Mr. Woodside, among other things, can provide independent leadership for the Board, set the agenda for meetings, and enable other directors to raise issues and concerns for Board consideration without immediately involving the CEO or other management.

The leadership structure of the Company is guided by its Governance Committee. The Company’s Governance Committee nominates individuals to serve as members of the Company’s Board, including any management directors. All director-nominees of the Company are considered “independent directors” under the NYSE American corporate governance standards, set out in the NYSE American Company Guide (the “NYSE American Rules”), except the CEO of the Company. The Chairman of the Board is an “independent director”. Management directors do not vote or serve as Chairs of any Board committees. The Governance Committee nominates persons to serve in the Chairman’s role for election by the entire Board. The “independent directors” meet in executive session immediately after Board meetings periodically to ensure that there is adequate oversight of Company management and to ensure that there is ample time to assess the Company’s activities separate from management. The Governance Committee believes this leadership structure is prudent and provides sufficient segregation and independence. The Governance Committee and the Board have made the decision that an independent director serving in the role of Board Chairman segregates the role from that of the CEO and provides a strong and appropriate level of management oversight.

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The Company’s Audit Committee meets quarterly and receives reports from its independent registered public accounting firm, the independent loan review consultants, and the Bank’s internal audit function. The internal

auditor conducts an annual risk-based audit program and provides audit findings quarterly to the Audit Committee.

Risk Oversight

The Board monitors and manages risks through the activities of specialized Board committees and other committees in conjunction with management, internal audit, the independent registered public accounting firm, and other independent advisors.

One such specialized committee, the Board Risk Committee, is presently composed of directors Caras, Fernald, Smith, Toothaker, Simard, Theroux, and Woodside. Mr. Caras serves as Chairman. The members are appointed by the Board and provide oversight of the following functions: (i) the Company’s risk governance structure, (ii) the Company’s risk management and risk assessment guidelines and policies regarding market, credit, operational, liquidity, funding, reputational, compliance and franchise risk, and such other risks as necessary to fulfill the Committee’s duties and responsibilities, (iii) the Company’s risk appetite and tolerance, and (iv) the Company’s capital, liquidity and funding in coordination with BHBT’s Asset/Liability Committee. The Company’s risk profile includes, but is not limited to: internal controls over financial reporting, credit risk, interest rate risk, liquidity risk, operational risk, cyber risk, incentive compensation risk, reputational risk and compliance risk. The Board Risk Committee meets at least monthly.

The Board Risk Committee also reviews and discusses on a quarterly basis the Bank’s bank-wide risk assessments. The resulting risk assessments are aggregated, shared and also discussed with the Board at least annually. The risk assessments are supplemented by regular reports from the Chief Risk Officer regarding emerging risks at monthly Board meetings.

The Board Risk Committee also sets loan policy, establishes credit authorities, and approves or ratifies all extensions of credit to borrowers with loan relationships over $5,000,000, and regularly reviews credit trends, delinquencies, non-performing loans, charged-off loans and management’s quarterly assessment of the adequacy of the Loan Loss reserve. The committee, in conjunction with the Audit Committee, reviews reports prepared by an independent loan review firm and those issued by the Internal Audit function to assist in their on-going assessment of credit risk.

The Board manages compensation, including incentive compensation risk, through its Compensation and Human Resources Committee. The Compensation and Human Resources Committee has engaged Pearl Meyer, as independent compensation consultants to provide the committee with both competitive market data and research into compensation best practices to guide the decisions of the committee. To mitigate the inherent risks of incenting behaviors potentially adverse to the Company and its shareholders, the committee reviews compensation matters with the assistance of the Company’s Risk Committee. The results are reviewed by the Board to ensure that incentive plans for senior officers and others do not encourage excessive risk-taking.

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Risk assessment and risk management are the responsibility of the Company’s management. The Committee’s responsibility in this regard is one of oversight and review. Oversight is, in part, conducted through the established Enterprise Risk Management Program (the “ERM”) that is administered on its behalf and the Board of Directors by Executive Vice President, Chief Operating Officer and Chief Risk Officer, Mr. Richard B. Maltz. As part of the ERM, information from the Bank’s lines of business is collected and analyzed to identify, monitor, track and report various risks within the organization.

To assist the Board in fulfilling its risk management responsibilities, a network of management oversight committees has been established. These oversight committees, as defined below, have been delegated authority and duties specific to the execution of the Bank’s risk management policy. Specifically, these committees are responsible for the ongoing identification, measurement, monitoring and management of risk.

The Risk Management Committee is responsible for reviewing and recommending for approval risk mitigation strategies, risk acceptance, ongoing assessment of the adequacy and effectiveness of internal controls, and oversight of any risk mitigation plans. This committee ensures an appropriate balance between business

development objectives, risk tolerances, cost of internal control, operational efficiency, regulatory requirements and customer experience. The Risk Management Committee ensures the continued development of an overall approach to risk assessment and management; oversees the refinement of policies and procedures as required; reviews the overall assessment of risk and related control activities; monitors the overall direction of risk; reviews and monitors corrective action plans; and periodically reports results to the Board.

The Asset Liability Management Committee (the “ALCO”) is responsible for the management of interest rate risk, liquidity risk, market risk, and capital adequacy levels of the Bank, as well as for developing strategies governing the effective management of the Bank’s balance sheet and income statement.

The Management Loan Committee (the “MLC”) is responsible for the management of credit risk related to all aspects of the lending portfolio of the Bank and related activities, including credit quality, loan production, credit delivery activities, credit policies, problem loan management and the collection processes. The MLC meets regularly and can approve aggregate loan exposure for borrowers up to and including $5,000,000.

The Bank’s Information Technology & Operations Committee (the “ITOC”) oversees the development and implementation of the technology and operations strategies of the Bank and its subsidiaries. The ITOC oversees the implementation of operational risk management practices, including the development of internal policies & procedures and risk appetite, while providing oversight of the quality and performance of the Bank’s project management practices to ensure objectives are met in a safe and sound ~~manner~~manner.

The Company believes that its risk management activities and procedures provide sufficient information to management and the Board to assist them in properly and adequately evaluating the Company’s compliance with its risk management programs and policies. There can be no assurance that the Board’s risk oversight structure has identified and addressed every potential material risk and there may be additional risks that could arise in the Company’s business. Both known and unknown risks could result in potentially material financial and/or business losses despite the Board’s efforts to oversee risk.

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Committees

The Board has a standing Executive Committee, Audit Committee, Governance Committee, Board Risk Committee, and Compensation Committee.

Executive Committee

Our Bylaws provide that after each annual meeting of shareholders, the Board shall designate from among its members an Executive Committee with the authority to exercise all the powers of the Board in regard to ordinary operations of our business when the Board is not in session, subject to any specific vote of the Board. The Executive Committee is presently composed of directors Woodside, Caras, Dudman, Fernald, Simard, Smith, and Toothaker. Mr. Woodside serves as Chairman. The Executive Committee held one meeting in 2017.

Audit Committee

The Audit Committee is composed of directors Toothaker, Belair, Caras, Colter, and Ensign. Mr. Toothaker serves as Chairman of the Committee. The Audit Committee met four times during 2017. See Appendix A for the Report of the Audit Committee. The Audit Committee Charter may be viewed on our website under the Shareholder Relations section at www.bhbt.com~~www.bhbt.com~~.

The Board has determined that the Audit Committee is solely composed of independent directors, in accordance with applicable NYSE American listing requirements and Rule 10A-3(b)(1) under the Exchange Act. The Audit Committee operates under a written charter, which has been adopted by the Audit Committee and the Board. Audit Committee members do not accept any consulting, advisory or other compensatory fees (except directors’ fees) and are not affiliated with us (except as a director) or any of our subsidiaries. The Board has determined that each Audit Committee member is financially literate and that it has at least one “audit committee financial expert.” Mr. Scott G. Toothaker, CPA, meets the criteria as an “audit committee financial expert” as defined in applicable SEC rules.

The Audit Committee has the sole authority to appoint and replace the independent registered public accounting firm. The Audit Committee is responsible for the compensation and oversight of the independent registered public accounting firm and this firm reports directly to the Audit Committee. The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to (i) the financial information to be provided to shareholders and the SEC, (ii) the review of quarterly financial statements, (iii) the system of financial reporting controls management has established, and (iv) the internal audit, external audit, and loan review processes.

Governance Committee

The Governance Committee is presently composed of directors Fernald, Belair, Cashman, Caras, Dimick, and Woodside. Director Cashman will serve on the Committee through May 2018. Mrs. Fernald serves as Chairman of the Committee. The Governance Committee met four times during 2017. The Board has determined that each member of the Governance Committee is independent under NYSE American Rules.

The Governance Committee’s responsibilities include screening director candidates, recommending nominees to the full Board (including the slate of returning directors) to be elected each year, making recommendations concerning the size and composition of the Board, recommending Committee structure and membership, and sponsoring new director orientation and education. The Governance Committee has a written charter, which may be viewed on our website under the Shareholder Relations section at www.bhbt.com.

~~www.bhbt.com~~8.

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The Governance Committee expects to identify nominees to serve as directors of the Company primarily by accepting and considering the suggestions and nominee recommendations made by directors, management, and shareholders. To date, the Governance Committee has not engaged any third parties to assist it in identifying candidates for the Board. The Governance Committee considers, among other things, a potential candidate’s background, business and professional experience, demonstrated business acumen, (including any requisite financial expertise or other special qualifications), current employment, the ability to exercise sound business judgment, commitment to understand BHB, its business and the industry in which it operates. They also consider a candidates’s experience at a regulated financial institution. The Committee also considers if a candidate has sufficient time to devote to responsibilities of being a director, their community service or other board service as well as racial, ethnic, and gender diversity of the Board as a whole. Candidates are subject to a satisfactory background check and they must be clear of any judgments or sanctions. The Governance Committee generally considers a candidate’s qualifications in light of these broad criteria and assesses whether the candidate can make decisions on behalf of or while representing us in a manner consistent with our stated business goals and objectives. The Governance Committee will also consider the candidate’s “independent” status in accordance with applicable regulations and listing standards. The Governance Committee will consider nominees recommended by shareholders. Any shareholder wishing to nominate a candidate for director must follow the procedures for submission of proposals set forth in the section of this proxy statement entitled “Nominations by Shareholders.”

Compensation Committee

The Compensation Committee reviews and considers recommendations from management, consultants, and directors concerning executive compensation policies, employee benefit plans, and salary administration programs, and reviews annually the performance of, and total compensation for, and recommends adjustments for, all of our executive officers. The deliberations of the Compensation Committee are reported to the Board for review and approval by the independent board members. The Compensation Committee has a written charter, which may be viewed on our website under the Shareholder Relations section at www.bhbt.com~~www.bhbt.com~~.

The Compensation Committee is presently composed of directors Smith, Cashman, Colter, Dimick, Dudman, Fernald, and Woodside. Director Cashman will serve on the Committee through May 2018. Mr. Smith serves as Chairman of the Compensation Committee. All members of the Compensation Committee are independent under NYSE American Rules. The Compensation Committee met six times in 2017.

Further information regarding the Compensation Committee can be found below in this proxy statement beginning under the caption “Role of the Compensation Committee.”

Board Risk Committee

See the sections entitled “Board Leadership ~~Structure"~~Structure” and ~~"Risk~~“Risk Oversight” on page 44 for further details regarding the Board Risk Committee.

Compensation Committee Interlocks and Insider Participation

No NEO serves as a member of a compensation committee of any other company that has an executive officer serving as a member of the Board. No NEO serves as a member of the board of directors of any other company that has an executive officer serving as a member of the Compensation Committee.

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GOVERNANCE PROCEDURES AND RELATED MATTERS

Code of Conduct and Business Ethics

We have a written Code of Conduct and Business Ethics (“Code of Conduct”) which articulates our philosophy with respect to ethical conduct in the workplace and establishes standards for behavior, including standards with respect to compliance with laws and regulations, actual or potential conflicts of interest, fairness, insider trading, use of the Company’s or customer information and public and financial disclosure. This Code of Conduct is applicable to all directors, executive officers and other employees of the Company. Additionally, we have adopted a Code of Ethics for Senior Financial Officers that supplements the more general Code of Conduct and conforms to the requirements of the Sarbanes-Oxley Act of 2002 and NYSE American listing standards. We will disclose within four business days any substantive changes in or waivers of the Code of Conduct granted to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on our website as set forth above rather than by filing a Current Report on Form 8-K. In the case of a waiver of our Code of Conduct for an executive officer or a director, the required disclosure also will be made available on our website within four business days of the date of such waiver.

Securities and Insider Trading Policy

We maintain a Securities and Insider Trading Policy that applies to all directors, executive officers and other employees of the Company. The policy is designed to prevent insider trading, allegations of insider trading, and to protect the ~~Company's~~Company’s reputation for integrity and ethical conduct.

Prohibition on Hedging

Our Insider Trading Policy prohibits directors, executive officers and other employees from engaging in any hedging activity involving our securities.

Board Independence

Under the NYSE American corporate governance standards, set out in the NYSE American Rules, at least a majority of the Board must be “independent directors” as defined in Section 803A of the NYSE American Rules. According to Section 803A, “independent director” means a person other than an executive officer or employee of the Company. In addition, to qualify as an “independent director,” the Board must affirmatively determine that the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has determined that all of the named director-nominees listed in this proxy statement, with the exception of Mr. Simard, meet applicable independence standards under NYSE American Rules. Mr. Simard is NOT a member of the Audit, Compensation, or Governance Committees. Although Stephen R. Theroux, Former President and CEO of Lake Sunapee Bank Group ~~("LSBG"~~(“LSBG”), satisfies the definition of independence under the NYSE American Rules, the Board has not appointed him to the Audit Committee, Compensation Committee, or Governance Committee.

Director Tenure

The board has not established limits on the number of terms that may be served by a director because it believes our best interests are served when it is represented by individuals who have developed, over time, valuable insight into our operations and businesses.

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Bar Harbor Trust Services and Charter Trust Company Committees

The Company has two additional subsidiaries through its wholly owned bank subsidiary, Bar Harbor Bank & Trust. Committees with identical membership presently composed of directors Dudman, Ensign, Smith, Theroux, Belair, and Simard oversee both of these trust and wealth management subsidiaries. Martha T. Dudman serves as Chairperson. The Bar Harbor Trust Services and the Charter Trust Company committees provide oversight for these two entities that offer trust and wealth management services to clients.

Incentive Compensation Clawbacks

The Company has provisions in its incentive programs guidance requiring each current and former executive officer to forfeit any erroneously awarded incentive-based compensation received by any such officer during the three completed years preceding the date on which the Company is required to prepare an accounting restatement due to the material non-compliance of the Company with any financial reporting requirement under the federal securities laws.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

The following table sets forth information with respect to the beneficial ownership of our common stock as of March 20, 2018 by: (i) each person or entity known by us to own beneficially more than 5% of the outstanding common stock calculated on the outstanding shares on March 20, 2018; (ii) each current director and nominee for election to the Board; (iii) our NEOs; and (iv) all executive officers and directors as a group. We had 15,456,831 shares of common stock, net of treasury shares, outstanding as of March 20, 2018.

BlackRock, Inc. holdings are disclosed based on their ownership as of December 31, 2017 as filed on Form Schedule 13G on February 1, 2018.

The information provided is based on our records and on information furnished by the persons listed. We are not aware of any arrangement that could at a subsequent date result in a change in control of the Company.

Name of Beneficial Owners	Title of Class	Amount of Beneficial Ownership¹	Footnotes	Percent of Class
5% or more beneficial owners
BlackRock, Inc.		804,674		5.2%

Directors/Nominees:
Daina H. Belair	Common	2,326	⁹	*
Matthew L. Caras	Common	8,327	⁹	*
Leonard R. Cashman	Common	27,550	^2,9	*
David M. Colter	Common	1,670	^3,9	*
Steven H. Dimick	Common	5,026	⁹	*
Martha T. Dudman	Common	11,639	⁹	*
Stephen W. Ensign	Common	96,669	^4,9	*
Lauri E. Fernald	Common	8,043	⁹	*
Brendan O’Halloran (Nominee)	Common	500	⁹	*
Curtis C. Simard (Director and NEO)	Common	27,285	^9,11	*
Kenneth E. Smith	Common	11,458	^5,9	*
Stephen R. Theroux	Common	50,570	^6,9	*
Scott G. Toothaker	Common	15,174	^7,9	*
David B. Woodside	Common	9,349	^8,9	*

NEOs:
Josephine Iannelli	Common	2,929	¹¹	*
Richard B. Maltz	Common	7,744	¹¹	*
William J. McIver	Common	6,149	^10,11	*
Gregory W. Dalton	Common	16,362	¹¹	*
Total Ownership of all directors, NEOs, and specified Trust shares of the Company as a group 18 persons		329,531	¹²	2.13%

Name of
Beneficial Owners
Title of Class
Amount of
Beneficial
Ownership¹
Footnotes
Percent
of
Class
5% or more beneficial owners
BlackRock, Inc. 5.2%

Directors/Nominees:
Daina H. Belair Common 2,326

⁹
*
Matthew L. Caras Common 8,327

⁹
*
Leonard R. Cashman Common 27,550

^2,9
*
David M. Colter Common 1,670

^3,9
*
Steven H. Dimick Common 5,026

⁹
*
Martha T. Dudman Common 11,639

⁹
*
Stephen W. Ensign Common 96,669

^4,9
*
Lauri E. Fernald Common 8,043

⁹
*
Brendan O’Halloran (Nominee) Common 500

⁹
*
Curtis C. Simard (Director and NEO) Common 27,285

^9,11
*
Kenneth E. Smith Common 11,458

^5,9
*
Stephen R. Theroux Common 50,570

^6,9
*
Scott G. Toothaker Common 15,174

^7,9
*
David B. Woodside Common 9,349

^8,9
*

NEOs:
Josephine Iannelli Common 2929

¹¹
*
Richard Maltz Common 7,744

¹¹
*
William J. McIver Common 6,149

^10,11
*
Gregory W. Dalton Common 16,362

¹¹
*
Total Ownership of all directors, NEOs, and specified Trust shares of the Company as a group 18 persons 329,531

¹²
2.13%

^1.

The number of shares beneficially owned by the persons set forth above is determined under the rules of Section 13 of the Exchange Act, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, an individual is considered to beneficially own any shares of common stock if he or she directly or indirectly has or shares, (i) voting power, which includes the power to vote or to direct the voting of the shares, or (ii) investment power, which includes the power to dispose or direct the disposition of shares. Unless otherwise indicated, an individual has sole voting power and sole investment power with respect to the indicated shares. All individual holdings amounting to less than 1% of issued and outstanding common stock are marked with an (*).


^2.	Includes 5,542 shares over which voting and dispositive powers are shared jointly with Mr. Cashman’s spouse. This number does not include 2,803 shares owned by Mr. Cashman’s spouse over which he does not have voting or dispositive powers.


^3.	Includes 30 shares owned by Mr. Colter’s children registered in a custodial account.


^4.	This number does not include 13,920 shares held within a Supplemental Executive Retirement Plan for Mr. Ensign over which he does not have voting or dispositive powers.


^5.	Includes 3,381 shares over which voting and dispositive powers are shared jointly with Mr. Smith’s spouse.

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^6.	Includes 34,868 shares over which voting and dispositive powers are shared jointly with Mr. Theroux’s spouse. This number does not include 37,124 shares held within a Supplemental Executive Retirement Plan; or 7,744 shares owned by Mr. Theroux’s spouse over which he does not have voting or dispositive powers.

~~Plan; or 7,744 shares owned by Mr. Theroux’s spouse over which he does not have voting or dispositive powers.~~


^7.	Includes 4,500 shares over which voting and dispositive powers are shared with Mr. Toothaker’s spouse.


^1.2.	The figures shown are determined as of the plan’s measurement date during 2017 under FASB ASC Topic 715 for purposes of our audited financial statements. For the discount rate and other assumptions used for this purpose, please refer to Note 16 in the Notes to Consolidated Financial Statements attached to the Annual Report on Form 10-K for the year ended December 31, 2017.


^2.	~~Years of credited service are determined by the vesting schedule contained within the Plan and not years of employment with the Company.~~

Nonqualified Deferred Compensation

The following table includes information about the activity in, amounts earned, and balances of, each NEO’s account balance SERP.


(a)
Name	Executive Contributions in 2017	Company Contributions in 2017	Aggregate Earnings in 2017	Aggregate Withdrawals/Distributions in 2017		Aggregate Balance at December 31, 2017	Executive Contributions in 2017		Company Contributions in 2017		Aggregate Earnings in 2017		Aggregate Withdrawals/Distributions in 2017			Aggregate Balance at December 31, 2017
(a)	(b)	(c)	(d)¹	(e)²		(e)	(b)		(c)		(d)¹		(e)²			(e)
Curtis C. Simard	—	—	—	—		—	$	—	$	—	$	—	$	—		$	—
Josephine Iannelli	—	—	—	—		—	—		—		—		—			—
Richard B. Maltz	—	—	—	—		—	—		—		—		—			—
William J. McIver	—	—	3,768	(196	)	160,047	—		—		3,768		(196		)	160,047
Gregory W. Dalton	—	—	—	—		—	—		—		—		—			—


^1.	The earnings represent amounts disclosed as part of Note 10 in the Notes to the Consolidated Financial Statements attached to the Annual Report on Form 10-K for the year ended December 31, 2017.


^2.	This amount represents annual regulatory account fees.

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Potential Payments upon Termination or Change in Control

We have entered into change in control agreements and maintain certain benefit plans that require us to provide compensation to executive officers in the event of a termination of employment or a change in control. The tables below set forth the amount and types of compensation payable to each executive officer upon voluntary termination without good reason, involuntary termination without cause, voluntary termination for good reason, termination for cause, death, disability, retirement, or termination after a change in control. The amounts assume a hypothetical termination of employment effective as of December 31, 2017 and include estimates

of the amounts which would be paid to the executives in each specified circumstance. The actual amounts to be paid can only be determined at the time of an executive’s actual separation.

Termination and Change in Control Benefits

Termination Event	Curtis Simard⁽¹⁾		Josephine Iannelli⁽²⁾		Richard Maltz⁽³⁾		William McIver⁽⁴⁾		Gregory Dalton⁽⁵⁾
Voluntary Termination Without Cause
Cash Severance^(A)	$	—	$	—	$	—	$	—	$	—
Pro Rata Incentive Bonus Payout^(B)	299,250		147,000		147,000		136,500		75,000
Stock Options/SARS^(C)	—		—		—		—		—
Accelerated Equity/SARS^(D)	—		—		—		—		—
COBRA Eligible Benefits^(E)	—		—		—		—		—
Qualified and Nonqualified Deferred Compensation^(F)	—		—		—		1,123,537		—
Life Insurance or Proceeds/Disability Benefits^(G)	—		—		—		—		—
Other Perquisites^(H)	—		—		—		—		—
Total	$	299,250	$	147,000	$	147,000	$	1,260,037	$	75,000

Retirement⁽¹⁾
Cash Severance^(A)	$	—	$	—	$	—	$	—	$	—
Pro Rata Incentive Bonus Payout ^(B)	—		—		—		136,500		—
Stock Options/SARS^(C)	—		—		—		77,423		—
Accelerated Equity/SARS^(D)	—		—		—		—		—
COBRA Eligible Benefits^(E)	—		—		—		—		—
Qualified and Nonqualified Deferred Compensation^(F)	—		—		—		1,123,537		—
Life Insurance or Proceeds/Disability Benefits^(G)	—		—		—		—		—
Other Perquisites^(H)	—		—		—		—		—
Total	$	—	$	—	$	—	$	1,337,460	$	—

Termination Upon Disability
Cash Severance^(A)	$	—	$	—	$	—	$	—	$	—
Pro Rata Incentive Bonus Payout ^(B)	299,250		147,000		147,000		136,500		75,000
Stock Options/SARS^(C)	256,928		115,398		148,202		77,423		95,715
Accelerated Equity/SARS^(D)	—		—		—		—		—
COBRA Eligible Benefits^(E)	—		—		—		—		—
Qualified and Nonqualified Deferred Compensation^(F)	—		—		—		1,123,537		—
Life Insurance or Proceeds/Disability Benefits^(G)	200,400		180,000		200,400		180,000		138,000
Other Perquisites^(H)	—		—		—		—		—
Total	$	756,578	$	442,398	$	495,602	$	1,517,460	$	308,715

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Termination Event	Curtis Simard⁽¹⁾		Josephine Iannelli⁽²⁾		Richard Maltz⁽³⁾		William J. McIver⁽⁴⁾		Gregory Dalton⁽⁵⁾		Curtis Simard⁽¹⁾		Josephine Iannelli⁽²⁾		Richard Maltz⁽³⁾		William McIver⁽⁴⁾		Gregory Dalton⁽⁵⁾
Voluntary Termination Without Cause
Termination Upon Death
Cash Severance^(A)	—		—		—		—		—		$	—	$	—	$	—	$	—	$	—
Pro Rata Incentive Bonus Payout^(B)	299,250		147,000		147,000		136,500		75,000		299,250		147,000		147,000		136,500		75,000
Stock Options/SARS^(C)	—		—		—		—		—		256,928		115,398		148,202		77,423		95,715
Accelerated Equity/SARS^(D)	—		—		—		—		—		—		—		—		—		—
COBRA Eligible Benefits^(E)	—		—		—		—		—		—		—		—		—		—
Qualified and Nonqualified Deferred Compensation^(F)	—		—		—		1,123,537		—		—		—		—		1,123,537		—
Life Insurance or Proceeds/Disability Benefits^(G)	—		—		—		—		—		750,000		700,000		600,000		942,500		460,000
Other Perquisites^(H)	—		—		—		—		—		—		—		—		—		—
Total	$	299,250	$	147,000	$	147,000	$	1,260,037	$	75,000	$	1,306,178	$	962,398	$	895,202	$	2,279,960	$	630,715

Retirement⁽¹⁾
Involuntary Termination Without Cause
Cash Severance^(A)	—		—		—		—		—		$	1,050,000	$	700,000	$	—	$	325,000	$	—
Pro Rata Incentive Bonus Payout ^(B)	—		—		—		136,500		0		299,250		147,000		—		136,500		—
Stock Options/SARS^(C)	—		—		—		77,423		0		256,928		115,398		—		77,423		—
Accelerated Equity/SARS^(D)	—		—		—		—		—		—		—		—		—		—
COBRA Eligible Benefits^(E)	—		—		—		—		—		42,841		28,130		—		16,141		—
Qualified and Nonqualified Deferred Compensation^(F)	—		—		—		1,123,537		—		—		—		—		1,123,537		—
Life Insurance or Proceeds/Disability Benefits^(G)	—		—		—		—		—		—		—		—		—		—
Other Perquisites^(H)	—		—		—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	1,337,460	$	—	$	1,649,019	$	990,528	$	—	$	1,678,601	$	—

Termination Upon Disability
Voluntary Termination For Good Reason
Cash Severance^(A)	—		—		—		—		—		$	1,050,000	$	700,000	$	—	$	325,000	$	—
Pro Rata Incentive Bonus Payout ^(B)	299,250		147,000		147,000		136,500		75,000		299,250		147,000		—		136,500		—
Stock Options/SARS^(C)	256,928		115,398		148,202		77,423		95,715		256,928		115,398		—		77,423		—
Accelerated Equity/SARS^(D)	—		—		—		—		—		—		—		—		—		—
COBRA Eligible Benefits^(E)	—		—		—		—		—		42,841		24,211		—		16,141		—
Qualified and Nonqualified Deferred Compensation^(F)	—		—		—		1,123,537		—		—		—		—		1,123,537		—
Life Insurance or Proceeds/Disability Benefits^(G)	200,400		180,000		200,400		180,000		138,000
Life Insurance Proceeds/Disability Benefits^(G)											—		—		—		—		—
Other Perquisites^(H)	—		—		—		—		—		—		—		—		—		—
Total	$	756,578	$	442,398	$	495,602	$	1,517,460	$	308,715	$	1,649,019	$	986,609	$	—	$	1,678,601	$	—

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Termination Event	Curtis Simard⁽¹⁾		Josephine Iannelli⁽²⁾		Richard Maltz⁽³⁾		William McIver⁽⁴⁾		Gregory Dalton⁽⁵⁾
Termination After a Change In Control
Cash Severance^(A)	$	1,050,000	$	700,000	$	700,000	$	325,000	$	230,000
Pro Rata Incentive Bonus Payout ^(B)	299,250		147,000		147,000		136,500		75,000
Stock Options/SARS^(C)	—		—		—		—		—
Accelerated Equity/SARS(D)	585,357		284,394		348,556		185,954		154,512
COBRA Eligible Benefits^(E)	42,841		24,211		16,141		16,141		16,141
Qualified and Nonqualified Deferred Compensation^(F)	—		—		—		1,123,547		—
Life Insurance or Proceeds/Disability Benefits^(G)	—		—		—		—		—
Other Perquisites^(H)	—		—		—		—		—
Tax Gross-Up	—		—		—		—		—
Total	$	1,977,448	$	1,155,605	$	1,211,697	$	1,787,132	$	475,653

Termination for Cause
Cash Severance^(A)	$	—	$	—	$	—	$	—	$	—
Pro Rata Incentive Bonus Payout ^(B)	—		—		—		—		—
Stock Options/SARS^(C)	—		—		—		—		—
Accelerated Equity/SARS^(D)	—		—		—		—		—
COBRA Eligible Benefits^(E)	—		—		—		—		—
Qualified and Nonqualified Deferred Compensation^(F)	—		—		—		443,736		—
Life Insurance or Proceeds/Disability Benefits^(G)	—		—		—		—		—
Other Perquisites^(H)	—		—		—		—		—
Total	$	—	$	—	$	—	$	443,736	$	—

Termination Event
Curtis Simard⁽¹⁾

Josephine Iannelli⁽²⁾

Richard Maltz⁽³⁾

William J. McIver⁽⁴⁾

Gregory Dalton⁽⁵⁾
Termination Upon Death
Cash Severance^(A)
—
—
—
—
—
Pro Rata Incentive Bonus Payout ^(B)
299,250
147,000
147,000
136,500
75,000
Stock Options/SARS^(C)
256,928
115,398
148,202
77,423
95,715
Accelerated Equity/SARS^(D)
—
—
—
—
—
COBRA Eligible Benefits^(E)
—
—
—
—
—
Qualified and Nonqualified Deferred Compensation^(F)
—
—
—
1,123,537
—
Life Insurance or Proceeds/Disability Benefits^(G)
750,000
700,000
600,000
942,500
460,000
Other Perquisites^(H)
—
—
—
—
—
Total $ 1,306,178
$ 962,398
$ 895,202
$ 2,279,960
$ 630,715

Involuntary Termination Without Cause
Cash Severance^(A)
1,050,000
700,000
—
325,000
—
Pro Rata Incentive Bonus Payout ^(B)
299,250
147,000
—
136,500
—
Stock Options/SARS^(C)
256,928
115,398
—
77,423
—
Accelerated Equity/SARS^(D)
—
—
—
—
—
COBRA Eligible Benefits^(E)
42,841
28,130
—
16,141
—
Qualified and Nonqualified Deferred Compensation^(F)
—
—
—
1,123,537
—
Life Insurance or Proceeds/Disability Benefits^(G)
—
—
—
—
—
Other Perquisites^(H)
—
—
—
—
—
Total $ 1,649,019
$ 990,528
$ —
$ 1,678,601
$ —

Voluntary Termination For Good Reason
Cash Severance^(A)
1,050,000
700,000
—
325,000
—
Pro Rata Incentive Bonus Payout ^(B)
299,250
147,000
—
136,500
—
Stock Options/SARS^(C)
256,928
115,398
—
77,423
—
Accelerated Equity/SARS^(D)
—
—
—
—
—
COBRA Eligible Benefits^(E)
42,841
24,211
—
16,141
—
Qualified and Nonqualified Deferred Compensation^(F)
—
—
—
1,123,537
—
Life Insurance Proceeds/Disability Benefits^(G)
—
—
—
—
—
Other Perquisites^(H)
—
—
—
—
—
Total
$1,649,019

$986,609
$ —
$ 1,678,601
$ —

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Termination Event
Curtis Simard⁽¹⁾

Josephine Iannelli⁽²⁾

Richard Maltz⁽³⁾

William J. McIver⁽⁴⁾

Gregory Dalton⁽⁵⁾
Termination After a Change In Control
Cash Severance^(A)
1,050,000
700,000
700,000
325,000
230,000
Pro Rata Incentive Bonus Payout ^(B)
299,250
147,000
147,000
136,500
75,000
Stock Options/SARS^(C)
—
—
—
—
—
Accelerated Equity/SARS(D) 585,357
284,394
348,556
185,954
154,512
COBRA Eligible Benefits^(E)
42,841
24,211
16,141
16,141
16,141
Qualified and Nonqualified Deferred Compensation^(F)
—
—
—
1,123,547
—
Life Insurance or Proceeds/Disability Benefits^(G)
—
—
—
—
—
Other Perquisites^(H)
—
—
—
—
—
Tax Gross-Up —
—
—
—
—
Total $ 1,977,448
$ 1,155,605
$ 1,211,697
$ 1,787,132
$ 475,653

Termination for Cause
Cash Severance^(A)
—
—
—
—
—
Pro Rata Incentive Bonus Payout ^(B)
—
—
—
—
—
Stock Options/SARS^(C)
—
—
—
—
—
Accelerated Equity/SARS^(D)
—
—
—
—
—
COBRA Eligible Benefits^(E)
—
—
—
—
—
Qualified and Nonqualified Deferred Compensation^(F)
—
—
—
443,736
—
Life Insurance or Proceeds/Disability Benefits^(G)
—
—
—
—
—
Other Perquisites^(H)
—
—
—
—
—
Total $ —
$ —
$ —
$ 443,736
$ —



A	Cash Severance. Severance payable to all executives represents a payment due upon a hypothetical change in control event on December 31, 2017. Twenty-four months of severance would have been payable to Mr. Simard and Ms. Iannelli if their employment was terminated by the Company for any reason other than cause, death, disability, or retirement as defined in their written Employment Agreements. Payments disclosed represent twenty-four months of salary for Mr. Maltz and twelve months of salary for Mr. McIver and Mr. Dalton under their Change of Control Agreements.

B	Bonus. The amount disclosed in this row represents the bonus/incentive amounts due for 2017 but not yet paid, to each executive on December 31, 2017. These amounts were paid in February 2017. The amount of incentive payments earned for the fiscal year 2017 has also been disclosed in the “Summary Compensation Table”. Payment of amounts due under the voluntary or involuntary reasons would be subject to approval by the Board, but have been included in these tables for illustration purposes.

C	Stock Options/SARs. No executive has incentive stock options.

D	Equity, Stock Options/SARs Accelerated. Figures on this line item represent the value of unvested equity grants, stock options/SARs in the event of acceleration due to a change of control event occurring on December 31, 2017. Performance shares are accelerated at Target.

E	COBRA Eligible Benefits. The amount disclosed represents the cost of continued health, dental, and vision coverage for a period of 24 months for Simard, 18 months for Iannelli, and 12 months for Maltz, McIver, and Dalton.

F	Qualified and Nonqualified Deferred Compensation Plans. Figures in this column represent the values of the Defined Benefit Retirement Plan, amounts payable under the Supplemental Executive Retirement Plan (SERP), and a Salary Continuation Agreement as of December 31, 2017 for the benefit of Mr. McIver. Mr. McIver receives payment under the Defined Benefit Retirement Plan and his SERP under Termination for Cause.

G	Life Insurance Proceeds/Disability Benefits. Amounts represent benefits payable by a third-party insurer (UNUM) to the designated executives or their beneficiaries under our life and disability programs. These life and disability insurance programs were generally available to all of our employees. The disability amount quoted represents a twelve-month paid benefit with a cap of $15,000 per month paid for by the Company and $16,700 due Mr. Simard and Mr. Maltz who purchase an additional level of group coverage. Total benefits due would be dependent upon the severity, the length of a disability, and insurance policy interpretation.

H	Other Perquisites.


^1.	Under certain termination circumstances leading up to or following a Change of Control, Mr. Simard may be eligible for two times salary and COBRA eligible benefits for twenty-four months.

In the event of a termination of employment due to death or long term disability, Mr. Simard (or his estate) would be eligible for a pro-rata share of an award from the 2015-2017, 2016-2018 and 2017-2019 Long Term Incentive Plans. However, payments would be calculated at the end of the performance periods and due on the same schedule as with other participants. Performance shares are calculated at Target under the Change of Control illustration. Mr. Simard would not meet retirement eligibility due to his age as of December 31, 2017.

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Any payments due the executive in a Change in Control would be reduced to the extent necessary to ensure that no portion of such payment would be non-deductible to the Company under Code Section 280G or subject to excise tax imposed by Code Section 4999.


^2.	Under certain termination circumstances leading up to or following a Change of Control, Ms. Iannelli may be eligible for two times salary and COBRA eligible benefits for eighteen months.

In the event of a termination of employment due to death or long term disability, Ms. Iannelli (or her estate) would be eligible for a pro-rata share of an award from the 2015-2017, 2016-2018 and 2017-2019 Long Term Incentive Plans representing her service during those years. However, payments would be calculated at the end of the performance periods and due on the same schedule as with other participants. Performance shares are calculated at Target under the Change of Control illustration. Ms. Iannelli would not meet retirement eligibility due to her age as of December 31, 2017.

³~~Under certain termination circumstances leading up to or following a Change of Control, Mr. Maltz may be eligible for two times salary and COBRA eligible benefits for twelve months.~~

Under certain termination circumstances leading up to or following a Change of Control, Mr. Maltz may be eligible for two times salary and COBRA eligible benefits for twelve months.

In the event of a termination of employment due to death or long term disability, Mr. Maltz (or his estate) would be eligible for a pro-rata share of an award from the 2015-2017, 2016-2018 and 2017-2019 Long Term Incentive Plans representing his service during those years. However, payments would be calculated at the end of the performance periods and due on the same schedule as with other participants. Performance shares are calculated at Target under the Change of Control illustration. Mr. Maltz would not meet retirement eligibility due to his age as of December 31, 2017.

^4. ~~Under certain termination circumstances leading up to or following a Change of Control, Mr. McIver may be eligible for 12 months of salary and COBRA eligible benefits for twelve months.~~

^4.

Under certain termination circumstances leading up to or following a Change of Control, Mr. McIver may be eligible for 12 months of salary and COBRA eligible benefits for twelve months.

In the event of a termination of employment due to death or long term disability Mr. McIver (or his estate) would be eligible for a pro-rata share of an award from the 2015-2017, 2016-2018 and 2017-2019 Long Term Incentive Plans. However, payments would be calculated at the end of the performance periods and due on the same schedule as with other participants. Performance shares are calculated at Target under the Change of Control illustration. Mr. McIver would meet retirement eligibility due to his age as of December 31, 2017

^5.~~Under certain termination circumstances leading up to or following a Change of Control, Mr. Dalton may eligible for 12 months of salary and COBRA eligible benefits for twelve months.~~

^5.

Under certain termination circumstances leading up to or following a Change of Control, Mr. Dalton may eligible for 12 months of salary and COBRA eligible benefits for twelve months.

In the event of a termination of employment due to death or long term disability, Mr. Dalton (or his estate) would be eligible for a pro-rata share of an award from the 2015-2017, 2016-2018 and 2017-2019 Long Term Incentive Plans. However, payments would be calculated at the end of the performance periods and due on the same schedule as with other participants. Performance shares are calculated at Target under the Change of Control illustration. Mr. Dalton would not meet retirement eligibility due to his age as of December 31, 2017.

Any payments due the executive in a Change in Control would be reduced to the extent necessary to ensure that no portion of such payment will be non-deductible to the Company under Code Section 280G or subject to excise tax imposed by Code Section 4999.

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CEO PAY RATIO

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Curtis C. Simard, our Chief Executive Officer and President (our “CEO”):

For 2017, our last completed year:

The median of the annual total compensation of all employees of our Company other than our CEO was $46,610.

The annual total compensation of our CEO, as reported in the Summary Compensation Table was $1,203,034.

Based on this information for 2017, the ratio of the annual total compensation of Mr. Simard, our CEO, to the median of the total annual compensation of all employees was 1:26.

To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our CEO for this purpose, we took the following steps:


a.	We selected, November 15, 2017 which is within the last three months of 2017, as the date upon which we would identify the “median employee” because it enabled us to make such identification in a reasonably efficient and economical manner.


b.	To identify the “median employee” from our employee population, we included annualized base salary calculated on their November 15^th compensation rate, overtime, incentives, commissions, matching contributions to participants in our Section 401(k) plan, and the employer subsidy contributions for our health programs.


c.	In making this determination, we annualized the compensation of the employees who were hired in 2017, but did not work for us for the entire fiscal year.

Since we do not widely distribute annual equity awards to our employees, such awards were excluded from our compensation measure for all employees with the exception of our CEO.

We identified our median employee using compensation measures identified in (b) consistently applied to all our employees included in the calculation, including our CEO.

CEO Employment Agreement

In 2013, we entered into a written employment agreement with Mr. Simard, as President and CEO (“the CEO Employment Agreement”). The CEO Employment Agreement provides for the payment of an annual base salary to him of not less than $375,000 paid in substantially equal installments in accordance with our compensation policies and procedures on the pay dates established by us for our senior executive officers. He also participates in any short-term, long-term, or other performance compensation plans agreed upon by the parties during the term of the CEO Employment Agreement in concert with our evolving goals and objectives. The CEO Employment Agreement currently has a term of one year with automatic extensions of one year each in the absence of notice from us of our intention not to extend the term of the CEO Employment Agreement.

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The 2013 CEO Employment Agreement also provides for a lump sum payment of two times his salary plus medical, dental and vision benefits for Mr. Simard and his eligible dependents in the event Mr. Simard is involuntary terminated without cause or voluntarily terminated for good reason. This payment shall be reduced to a one times multiplier in the event the CEO Employment Agreement is not renewed. With limited exceptions, it also allows for a severance payment to him in the event his employment is terminated within one year prior to or following certain events defined to constitute a change in control of the Company. This severance payment resulting from a termination of employment (constructive termination) following a change in control is equal

to two times his base annual salary, incentive compensation payments earned and any accrued but unused vacation time. In addition, if Mr. Simard had any unvested stock options/grants they would vest in accordance with the terms of the plans under which they were granted and vest fully upon a change in control. Any payments due him would be reduced to the extent necessary to ensure that no portion of such payment will be non-deductible by us under Code Section 280G or will be subject to excise tax imposed by Code Section 4999.

The 2013 CEO Employment Agreement also restricts Mr. Simard’s ability to compete with us during the term and for a period of one year following the cessation of his employment with us regardless of reason within a 150-air mile radius from Bar Harbor, Maine.

In February, 2018 the Company executed a new CEO Employment Agreement with Mr. Simard in order to retain Mr. Simard. This new agreement replaces Mr. Simard’s 2013 agreement.

The term of the Employment Agreement is three years from January 1, 2018, with automatic one-year renewals each January 1st thereafter unless the Employer elects not to extend the term of the Employment Agreement by providing Mr. Simard with 90 days’ written notice. The Employment Agreement includes certain restrictive covenants with respect to competition with the Company and non-solicitation of customers and employees that apply during the term of the Employment Agreement and for a period of one-year following Mr. Simard’s termination of employment, the geographic scope of which has been expanded to cover a fifty air miles radius of any location where the Employer maintains an office as of the date of the termination of employment.

Under the terms of the Employment Agreement, Mr. Simard is entitled to receive an annual base salary of $605,000, which amount is not subject to automatic increase, but will be reviewed annually, and further provides that his base compensation will not be reduced downward during the term of the Employment Agreement. Mr. Simard will be eligible to continue to participate in our annual incentive and long-term incentive plans approved by the Board and in our medical, dental, disability, retirement, life insurance, and other employee benefit plans.

If Mr. Simard’s employment is terminated by the Employer without “cause” or he resigns for “good reason” (each as defined in the Employment Agreement), Mr. Simard is entitled to receive, in addition to accrued benefits, (i) a lump sum payment equal to the base compensation that would have been paid during the remaining unexpired term of the Employment Agreement, (ii) insurance continuation for the greater of the remaining unexpired term of the Employment Agreement or the duration of COBRA coverage, (iii) payment of a pro-rated amount of any incentive compensation earned for the calendar year of termination, and (iv) immediate vesting of all time-based equity awards and vesting at target of all performance-based equity awards. In addition, if Mr. Simard’s employment is terminated by the Employer without cause or he resigns for good reason within six months prior to or within twelve months following a change in control of our Company (as defined in the Employment Agreement), then, in addition to accrued benefits, he is entitled to receive (i) a lump sum payment equal to three times his base compensation and target bonus in effect during the year of termination, (ii) insurance continuation for three years, (iii) payment of a pro-rated amount of any incentive compensation earned for the calendar year of termination, and (iv) immediate vesting of all time-based equity awards and vesting at target of all performance-based equity awards. If the payment of the severance benefits upon a change in control is determined to constitute an “excess parachute payment” under Code Section 280G, then the payments will be reduced so that no portion of the severance benefits will be non-deductible to the Employer or will be subject to excise taxes.

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Compensation of the CEO. On an annual basis, the Compensation Committee reviews the existing compensation plan for our CEO. The Compensation Committee reviews his compensation plan in the context of our overall performance, the achievement of certain financial and non-financial goals and the judgment of the entire Board as to the quality of his leadership. In addition, the Compensation Committee will compare his compensation to CEOs of our Compensation Peer Group and salary survey information for comparable positions. In making these comparisons, the Compensation Committee will take into account appropriate differences in the size, business model, and financial performance of the other banking institutions.

In accordance with the CEO Employment Agreement, the Compensation Committee reviews his base salary no less often than annually and may recommend an increase in his base salary to the Board at the Compensation Committee’s sole discretion.

As further discussed below, Mr. Simard participated in the structured annual incentive cash compensation plan provided to all executive officers. During 2017, Mr. Simard earned an award amounting to $299,250.

During 2017, the Compensation Committee granted Mr. Simard restricted time-vested shares and the potential for an issue of restricted performance shares under the 2017-2019 Long Term Incentive Program. He is required to hold the time-vested and any performance shares issued for a minimum of three years from the issue date. Mr. Simard is a member of the Board. He does not receive any director fees for participating in the activities of the Board.

Other Employment Agreements, Change in Control, Confidentiality and Non-Competition Agreements. We entered into an employment agreement with Ms. Iannelli which includes change in control, confidentiality and non-competition provisions. This agreement provides Ms. Iannelli severance of salary for 24 months and benefits for a period of 18 months in the event of both a change of control of the Company and subsequent termination (or constructive termination) within 12 months after a change of control, unless such termination was for cause. In addition, Ms. Iannelli’s equity grants will vest in accordance with the terms of the plans under which they were granted and vest fully upon a change in control.

Mr. McIver entered into an Employment Agreement in May, 2016 in anticipation of the Company’s acquisition of LSBG. He assumed the role of Executive Vice President, Regional President of NH/VT on January 13, 2017 upon the legal close of the transaction. This Employment Agreement ran through May, 2019 and provided him with an annual salary of at least $295,000. In addition it provided Mr. McIver severance and benefits for 12 months in the event of both a change of control, involuntary termination without cause or voluntary termination for good reason. Upon Mr. McIver’s retirement announcement, a subsequent agreement was executed providing him with current base salary and benefits through June 30, 2018.

We have also entered into change in control, confidentiality and non-competition agreements with BHBT’s Executive Vice Presidents, Richard B. Maltz and Gregory W. Dalton along with four other management employees. Their agreements provide for severance of salary for a period of 12 to 24 months and benefits for 12 months in the event of both a change of control of the Company and subsequent termination (or constructive termination) within 12 months of a change of control, unless such termination was for cause.

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All of these agreements were entered into as part of a total compensation program to attract and/or retain qualified executives and not entered into in response to any effort known to the Board by any party or entity to acquire control of the Company.

Incentive Cash Compensation. During 2017 NEOs, Messrs. Simard, Maltz, McIver, Dalton, and Ms. Iannelli participated in an annual cash incentive compensation program with team goals representing opportunities for incentive payments. We paid out a total of $804,750 in February 2018 to the five NEOs based on the 2017 measurement period.

The altering, inflating, and/or inappropriate manipulation of performance/financial results or any other infraction of recognized ethical business standards will subject any participant to disciplinary action up to and including termination of employment. In addition, any incentive compensation as provided by the plan to which the participant would otherwise be entitled will be revoked or subject to “claw back.”

The plan is based on a balance of multiple measures, layered oversight, and reasonable ceilings for exceptional performance. These two basic plan features structure the plan to discourage excessive risk but rewards strong performance. The Compensation Committee and the Board Risk Committee both reviewed the plan design to insure it is in line with best practices for risk.

~~PROPOSAL 2~~

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PROPOSAL 2

NON-BINDING, ADVISORY RESOLUTION ON THE COMPENSATION

OF OUR NAMED EXECUTIVE OFFICERS

Section 14A of the Securities Exchange Act of 1934, as amended, (“the Exchange Act”) requires us to provide shareholders an opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers (“NEOs”), as disclosed in this proxy statement. This vote does not address any specific item of compensation, but rather the overall compensation of our NEOs and our compensation philosophy, policies and practices, as disclosed in this proxy statement. At the 2017 annual meeting of shareholders, shareholders voted to have the opportunity to express their opinion on the overall compensation program through this non-binding voting mechanism on an annual basis.

The Company’s NEOs in this proxy statement are Curtis C. Simard, Josephine Iannelli, Richard B. Maltz, Gregory W. Dalton, and William J. McIver. Mr. McIver has announced his retirement effective June 30, 2018. The compensation of our NEOs is disclosed in the “Compensation Discussion and Analysis” section, the summary compensation table, and the other related tables and narrative disclosure contained elsewhere in this proxy statement. As discussed in those disclosures, the Board believes that our executive compensation philosophy, policies, and procedures provide a strong link between each NEO’s compensation and our short- and long-term performance. The objective of our executive compensation program is to provide compensation which is competitive based on our performance, and aligned with the long-term interests of our shareholders.

We are asking our shareholders to indicate their support of our NEOs’ compensation as described in this proxy statement. This proposal will be presented at the Annual Meeting as a resolution in substantially the following form:

RESOLVED, on an advisory basis, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the “Compensation Discussion and Analysis” section, compensation tables and narrative discussion, is hereby APPROVED.

Vote Required

The approval of the non-binding, advisory resolution on the compensation of our NEOs will require that a majority of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy and entitled to vote be cast “FOR” this proposal. In addition, an abstention shall not constitute a vote cast and will have no effect on the vote. Brokers do not have discretionary authority to vote shares on this proposal without direction from the beneficial owner. Therefore, broker non-votes will have no effect on the vote.

Our Recommendation

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THIS PROPOSAL.

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PROPOSAL 3

RATIFICATION OF AN ARTICLES OF AMENMDENT TO OUR ARTICLES OF INCORPORATION, AS AMENDED, FILED WITH THE SECRETARY OF STATE OF THE STATE OF MAINE ON MAY 22, 2015

Our Board is requesting shareholder ratification of an Articles of Amendment to our Articles of Incorporation, as amended, to increase the number of authorized shares of our common stock by 10,000,000 shares from 10,000,000 shares to 20,000,000 shares (the “Authorized Share Increase”) that was filed with the Secretary of State of the State of Maine on May 22, 2015 (the “2015 Amendment”).

Overview

At the 2015 Annual Meeting, we presented a proposal (the “Prior Proposal”) seeking shareholder approval of the 2015 Amendment with respect to the Authorized Share Increase. At the 2015 Annual Meeting, it was determined that the Prior Proposal received the requisite shareholder approval and certified that the Prior Proposal passed. We subsequently filed the 2015 Amendment with the Secretary of State of the State of Maine on May 22, 2015.

As part of the determination of our voting results, votes cast by brokers/nominees without instruction from the beneficial owners of certain of our outstanding shares were counted in favor of the Prior Proposal in accordance with the rules of the NYSE that govern how brokers may cast such votes. Certain statements made in the definitive proxy statement for the 2015 Annual Meeting, which was filed on Schedule 14A with the SEC on April 8, 2015 (the “2015 Proxy Statement”), were inconsistent with this treatment. The 2015 Proxy Statement stated that brokers/nominees would not have discretion to vote for approval of the Prior Proposal without instruction, and that the resulting broker non-votes would be counted “against” the proposal.

Our Board, in consultation with counsel, has determined that the description of the authority of brokers and nominees to vote on the Prior Proposal without instruction in the 2015 Proxy Statement may create some uncertainty as to the effect of the vote obtained at the 2015 Annual Meeting and, accordingly, uncertainty regarding the validity of the 2015 Amendment and the Authorized Share Increase. As a result, the Board has determined that it is in the best interests of the Company and our shareholders to ask our shareholders to ratify the 2015 Amendment at this Annual Meeting to eliminate any uncertainty regarding the number of shares of common stock that the Company is authorized to issue.

Proposal to Ratify the 2015 Amendment

At the time of the 2015 Annual Meeting, our Board believed that the proposed increase in the number of authorized shares of common stock was desirable in order to enhance our flexibility in taking possible future actions, such as raising additional equity capital, exchanging equity for debt or other transactions that have similar effect, stock-based acquisitions, stock splits and dividends, equity compensation awards or other corporate purposes. Our Board believes this continues to be the case. In order to confirm that the Authorized Share Increase has occurred, the Board has declared advisable and recommended that our shareholders ratify the 2015 Amendment. The ratification of the 2015 Amendment would confirm that the Company is, and since May 22, 2015 has been, authorized to issue up to 20,000,000 shares of common stock.

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The Prior Proposal stated:

The purpose of the proposed amendment to the Articles of Incorporation is to allow us to have a sufficient number of shares of common stock authorized for issuance in connection with such corporate purposes as may, from time to time, be considered advisable by the Board. The approval of the amendment to increase the number of shares of common stock will give us greater flexibility and avoid potential delay and expense of holding a special meeting of shareholders at a future date, should additional shares be required in connection with a corporate purpose. The corporate purposes for which we may issue common stock could include, without limitation, issuances in connection

with stock splits or stock dividends, issuances in connection with future acquisitions, issuances pursuant to equity awards granted under future equity compensation plans and issuances in connection with equity financing transactions.

There are no commitments or understandings with respect to the issuance of any of the additional shares of common stock that would be authorized by the proposed amendment to the Articles of Incorporation.

Subsequent to the effectiveness of the 2015 Amendment, we have issued additional shares of our common stock, including in connection with the acquisition of Lake Sunapee Bank Group completed on January 13, 2017 following approval by our shareholders at a special meeting held on October 20, 2016 and the three-for-two stock split paid on March 21, 2017 to our shareholders of record at the close of business on March 7, 2017. As of March 29, 2018, we had ~~[__________]~~16,384,353 shares, including treasury shares, issued and outstanding and ~~[__________]~~3,615,647 shares reserved for issuance, for a total 20,000,000 shares.

We do not believe that it is clear that the 2015 Amendment is invalid or ineffective. However, our Board determined that it would be advisable and in the best interests of our shareholders and the Company to ratify the filing and effectiveness of the 2015 Amendment to eliminate any uncertainty that may exist related to its validity or effectiveness and unanimously adopted resolutions to that effect. We therefore seek your vote to approve this Proposal 3 to ratify the 2015 Amendment and thereby eliminate any question as to whether the 2015 Amendment became effective on May 22, 2015.

Consequences if this Proposal is Not Approved

If this proposal to ratify the 2015 Amendment is not approved by the requisite vote of our shareholders, we may be exposed to potential claims that (i) the vote on the 2015 Amendment did not receive requisite shareholder approval and therefore was not validly adopted and (ii) subsequently issued shares of our common stock in excess of the 10,000,000 shares authorized prior to the 2015 Amendment were not authorized. We also would not have sufficient authorized but unissued shares of our common stock to permit future sales and issuances of common stock. Any inability to issue common stock in the future could have a material adverse effect on us. Our Board has no immediate plans to issue shares of common stock, but may do so in the future for business and financial purposes, including to provide appropriate equity incentives for our employees.

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Interests of Directors and Executive Officers

Our directors and executive officers have no substantial interests, directly or indirectly, in the matters set forth in this proposal, except to the extent of their ownership of shares of our common stock and outstanding equity awards or those that may be granted to them under our equity incentive plans in the future.

Vote Required

The ratification of the 2015 Amendment will require that a majority of all the votes entitled to be cast at the Annual Meeting be cast “FOR” this proposal. An abstention shall not constitute a vote cast, and will have no effect on the vote. Broker non-votes, if any, will also have no effect on the vote.

Our Recommendation

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” THIS PROPOSAL.

~~PROPOSAL 4~~

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PROPOSAL 4

APPROVAL OF THE BAR HARBOR BANKSHARES 2018 EMPLOYEE STOCK PURCHASE PLAN

We are asking our shareholders to approve the adoption of the Bar Harbor Bankshares 2018 Employee Stock Purchase Plan (the “2018 ESPP”).

The Board believes that an employee stock purchase plan encourages the Company’s employees to acquire shares of common stock, thereby fostering broad alignment of employees’ interests with the interests of our shareholders; fosters good employee relations; and provides the Company an ability to recruit, retain, and reward employees in an extremely competitive environment. To continue to provide this valuable element of the Company’s compensation program, the Board recommends that the shareholders approve the 2018 ESPP.

Upon the recommendation of the Compensation Committee, the Board adopted the 2018 ESPP on March 20, 2018, subject to and effective as of receipt of shareholder approval of the 2018 ESPP at the Annual Meeting. The Board believes that approval of the 2018 ESPP is in the best interests of the Company and its shareholders.

If the shareholders approve the 2018 ESPP, the 2018 ESPP will become effective as of the date of the Annual Meeting, with the first offering period under the 2018 ESPP to commence on January 1, 2019 and to end on June 28, 2019 (the last trading day of June). If the shareholders do not approve the 2018 ESPP, the 2018 ESPP will not become effective.

Key Features of the 2018 Employee Stock Purchase Plan

As described further below, the 2018 ESPP generally:

Reserves 200,000 shares of common stock for issuance pursuant to the 2018 ESPP;

Unless otherwise determined by the Administrator, permits a participant to contribute a whole percentage up to 10% of his or her eligible compensation each pay period through after-tax payroll deductions or, if permitted by the Administrator, to make cash contributions to the 2018 ESPP to fund the participant’s ability to purchase shares of common stock under the 2018 ESPP;

Unless otherwise determined by the Administrator, establishes six-month offering periods commencing on the first trading day of January and July of each calendar year and ending on the last trading day of June and December, respectively, except that the first offering period under the 2018 ESPP will commence on January 1, 2019 and end on June 28, 2019 (the last trading day of December);

Permits participants to purchase shares of common stock at up to a 15% discount; and

Limits the value of shares that a participant may accrue in a calendar year to $25,000 and, unless otherwise determined by the Administrator, the number of shares that a participant may purchase in an offering period to 400 shares of common stock.

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Summary of Material Provisions of 2018 Employee Stock Purchase Plan

A summary of the material terms of the 2018 ESPP is set forth below. This summary is qualified in its entirety by the detailed provisions of the 2018 ESPP, a copy of which is attached as Appendix B to this proxy statement and which is incorporated by reference into this Proposal 4. We encourage shareholders to read and refer to the complete plan document in Appendix B for a more complete description of the 2018 ESPP.

Interpretation. The 2018 ESPP and the options granted under the 2018 ESPP are intended to satisfy the requirements for an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986 (the “Code”). Notwithstanding the foregoing, the Company is not obligated to, and is not promising that it will, maintain the qualified status of the 2018 ESPP or any options granted thereunder. Options that do not

satisfy the requirements for an “employee stock purchase plan” under Section 423 of the Code may be granted under the 2018 ESPP pursuant to the rules, procedures, or sub-plans adopted by the Administrator for certain eligible employees.

Share Reserve. Subject to adjustment in connection with certain corporate transactions, the maximum number of shares of common stock that may be purchased under the 2018 ESPP, consisting of authorized but unissued shares, treasury shares, or shares purchased on the open market, will be 200,000 shares of common stock.

Administration. The 2018 ESPP will be administered, at the Company’s expense, under the direction of the Board, the Compensation Committee, or any other committee of the Board designated by the Board from time to time (any such entity, the “Administrator”). The Administrator will have the authority to take any actions it deems necessary or advisable for the administration of the 2018 ESPP, including, without limitation, (i) interpreting and construing the 2018 ESPP and options granted thereunder, (ii) prescribing, adopting, amending, waiving, and rescinding rules and regulations it deems appropriate to implement the 2018 ESPP, (iii) correcting any defect or supplying any omission or reconciling any inconsistency in the 2018 ESPP or options granted thereunder, (iv) establishing the timing and length of offering periods and purchase periods, (v) establishing minimum and maximum contribution rates, (vi) establishing new or changing existing limits on the number of shares of common stock a participant may elect to purchase with respect to any offering period, if such limits are announced prior to the first offering period to be affected, (vii) adopting such rules, procedures, or sub-plans as may be deemed advisable or necessary to comply with the laws of countries other than the United States, to allow for tax-preferred treatment of the options or otherwise to provide for the participation by eligible employees who reside outside of the United States, (viii) establishing the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars and permitting payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the processing of properly completed enrollment forms, and (ix) furnishing information to the custodian for the 2018 ESPP as the custodian may require. The Administrator’s determinations will be final, conclusive, and binding upon all persons.

Eligibility. Generally, natural persons who are employees of the Company or any subsidiary of the Company designated by the Administrator from time to time may be eligible to participate in the 2018 ESPP. But, the following employees are ineligible to participate in the 2018 ESPP: (i) employees whose customary employment is 20 hours or less per week; (ii) employees whose customary employment is for not more than five months in any calendar year; (iii) employees who, after exercising their options to purchase common stock under the 2018 ESPP, would own, directly or indirectly, shares of common stock (including shares that may be acquired under any outstanding options under the 2018 ESPP) representing five percent or more of the total combined voting power of all classes of the Company’s stock; and (iv) employees who are citizens or residents of a foreign jurisdiction (without regard to whether such employees are also U.S. citizens or resident aliens), if the grant of an option under the 2018 ESPP or an offering period to such employee is prohibited under the laws of such foreign jurisdiction or compliance with the laws of such foreign jurisdiction would cause the 2018 ESPP or an offering period to violate the requirements of Section 423 of the Code.

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Notwithstanding the foregoing, for purposes of an offering under the 2018 ESPP that is not intended to satisfy the requirements of Section 423 of the Code, the Administrator will have the authority to establish a different definition of eligible employee as it may deem advisable or necessary. In addition, the Administrator may determine that highly compensated employees (within the meaning of Section 414(q) of the Code) will not be eligible to participate in an offering period.

As of March 20, 2018, approximately 487 employees of the Company and its participating subsidiaries may become eligible to participate in the 2018 ESPP.

Participation Election. An eligible employee may become a participant for an offering period under the 2018 ESPP by completing and submitting an enrollment form to the Company or its designee, in the format and pursuant to the process as prescribed by the Administrator, during the enrollment period prior to the offering period to which it relates. Such enrollment form will authorize the Company to make after-tax payroll

deductions in whole percentages up to 10% of the participant’s eligible compensation on each pay period following enrollment in the offering period under the 2018 ESPP, or if authorized by the Administrator, will indicate the amount of other cash contributions which a participant will make to the 2018 ESPP. The Administrator will credit the deductions or contributions to the participant’s account under the 2018 ESPP.

Subject to certain exceptions, a participant may cease his or her payroll deductions or cash contributions during an offering period, by properly completing and timely submitting a new enrollment form to the Company or its designee, at any time prior to the last day of such offering period (or purchase period). A participant may increase or decrease his or her payroll deductions or cash contributions to take effect for the next offering period, by properly completing and timely submitting a new enrollment form to the Company or its designee.

Once an eligible employee becomes a participant in the 2018 ESPP, the participant will automatically be re-enrolled in the next offering period until such time as the participant ceases his or her employment relationship with the Company or its affiliate for any reason or is no longer eligible to participate in the 2018 ESPP or a specific offering period under the 2018 ESPP. The Administrator may require current participants to submit a new enrollment form at any time it deems necessary or desirable to facilitate administration of the 2018 ESPP or for any other reason.

Offering Periods and Purchase Periods. The Administrator will determine the length and duration of the periods during which payroll deductions or other cash contributions will accumulate to purchase shares of common stock, which period will not exceed 27 months. Each of these periods is known as an “offering period.” The Administrator may, but is not required to, permit periodic purchases of common stock within a single offering period. The periods during which payroll deductions or other cash contributions will accumulate for these purchases are referred to as “purchase periods.” Each offering period will consist of one or more purchase periods, as determined by the Administrator. Unless otherwise established by the Administrator prior to the start of an Offering Period, the 2018 ESPP will have two (2) six-month offering periods commencing on the first trading day of January and July of each calendar year and ending on the last trading day of June and December, respectively, except that the first offering period under the 2018 ESPP will commence on January 1, 2019 and end on June 28, 2019 (the last trading day of June).

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Purchase Price. The Administrator will determine from time to time the purchase price per share of common stock under the 2018 ESPP for an offering period. Unless otherwise determined by the Administrator before the start of an offering period, the purchase price per share of common stock under the 2018 ESPP will be (and may not be less than) 85% of the lesser of the average of the high and low sales price of the common stock on (i) the first trading day of the relevant offering period or (ii) the last trading day of the relevant offering period (or purchase period).

On March 20, 2018, the closing price of the common stock, as reported on the New York Stock Exchange, was $29.71 per share.

Purchase of Shares. On the last trading day of the offering period (or, if an offering period has multiple purchase periods, on the last trading day of the purchase period), unless a participant’s participation in the 2018 ESPP has otherwise been terminated, a participant is deemed to automatically exercise his or her option to purchase the maximum number of whole shares of common stock that may be purchased at the purchase price with the participant’s account balance at that time, adjusted as necessary in accordance with the terms of the 2018 ESPP. The Administrator will cause the amount credited to each participant’s account to be applied to such purchase, and the amount applied to purchase shares of common stock pursuant to an option will be deducted from the applicable participant’s account.

Purchase Limitations. No participant may be granted an option to purchase shares of common stock under the 2018 ESPP and under all other “employee stock purchase plans” of the Company and its subsidiaries which permits the participant’s right to purchase shares to accrue at a rate in excess of $25,000 for each calendar year in which the options are outstanding, determined as of the first trading day of the offering period. In addition, no participant may purchase more than 400 shares of common stock in any one offering period;

provided, however, that prior to the start of an offering period, the Administrator may impose a different limit on the number of shares of common stock a participant may purchase during the offering period. The fair market value for this purpose will be equal to the closing price per share as reported on the New York Stock Exchange.

If the Administrator determines that the total number of shares of common stock remaining available under the 2018 ESPP is insufficient to permit all participants to exercise their options to purchase shares, the Administrator will make a participation adjustment and proportionately and uniformly reduce the number of shares purchasable by all participants. After such adjustment, the Administrator will refund in cash all affected participants’ account balances for such offering period as soon as practicable thereafter.

Termination of Participation. If a participant’s employment relationship terminates for any reason other than death prior to the last trading day of the offering period, then participant’s outstanding options to purchase shares of common stock will automatically terminate, and the Administrator will refund in cash the participant’s account balance as soon as practicable thereafter.

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If a participant’s employment relationship terminates due to the participant’s death while the participant holds outstanding options to purchase shares of common stock under the 2018 ESPP, then the participant’s legal representatives (or, if the Administrator permits a beneficiary designation, the beneficiary or beneficiaries most recently designated by the participant prior to his or her death) may, within three months after the participant’s death (but no later than the last trading day of the offering period (or if an offering period has multiple purchase periods, the last trading day of the then-current purchase period)) by written notice to the Company or its designee, elect one of the following alternatives: (i) reduce the participant’s outstanding options to the number of shares of common stock that may be purchased as of the last day of the offering period (or if an offering period has multiple purchase periods, the last trading day of the then-current purchase period), with the amount then credited to the participant’s account; or (ii) automatically terminate the participant’s options to purchase shares of common stock under the 2018 ESPP and have the Administrator refund in cash, to the participant’s legal representatives, the participant’s account balance as soon as practicable thereafter. If participant’s legal representatives (or, if applicable, beneficiary or beneficiaries) fail to deliver such written notice within the prescribed period, then the participant’s options to purchase shares of common stock will automatically terminate, and the Administrator will refund in cash to the participant’s legal representatives the participant’s account balance as soon as practicable thereafter.

If a participant is no longer eligible to participate in the 2018 ESPP for any reason, the Administrator will refund in cash the affected participant’s account balance as soon as practicable thereafter. Once terminated, participation may not be reinstated for the then-current offering period, but, if otherwise eligible, the eligible employee may elect to participate in a subsequent offering period.

Shareholder Rights. A participant will not be a shareholder or have any rights as a shareholder with respect to shares of common stock subject to the participant’s options under the 2018 ESPP until the shares of common stock are purchased pursuant to the options and such shares of common stock are transferred into the participant’s name on the Company’s books and records. No adjustment will be made for dividends or other rights for which the record date is prior to such time. Following purchase and transfer of shares of common stock into the participant’s name on the Company’s books and records, a participant will become a shareholder with respect to the shares of common stock purchased and will thereupon have all dividend, voting, and other ownership rights incident thereto.

Notwithstanding the foregoing, the Administrator has the right to (i) limit transfer of the shares of common stock until two years from the first trading day of the offering period in which the shares were purchased and until one year from the last trading day of the offering period (or purchase period) in which the shares were purchased (the “holding period”), (ii) require that any sales of common stock during the holding period be performed through a licensed broker acceptable to the Company, and (iii) limit sales or other transfers of shares of common stock for up to two years from the date the participant purchases shares of common stock under the 2018 ESPP.

Transferability. A participant’s options to purchase shares of common stock under the 2018 ESPP may not be sold, pledged, assigned, or transferred in any manner, whether voluntarily, by operation of law, or otherwise. If a Participant sells, pledges, assigns, or transfers his or her options to purchase shares of common stock in violation of the 2018 ESPP, such options will immediately terminate and the participant will immediately receive a refund of the amount then credited to the participant’s account. Any payment of cash or issuance of shares of common stock under the 2018 ESPP may be made only to the participant (or, in the event of the participant’s death, to the participant’s estate or, if the Administrator permits a beneficiary designation, the beneficiary or beneficiaries most recently designated by the participant prior to his or her death). During a participant’s lifetime, only such participant may exercise his or her options to purchase shares of common stock under the 2018 ESPP.

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Corporate Transactions. If the number of outstanding shares of common stock is increased or decreased or the shares of common stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any recapitalization, reclassification, stock split, reverse stock split, spin-off, combination of shares, exchange of shares, stock dividend, or other distribution payable in capital stock, or other increase or decrease in shares of common stock effected without receipt of consideration by the Company after the effective date, the number and kinds of shares of common stock for which options may be made under the 2018 ESPP will be adjusted proportionately and accordingly by the Administrator. In addition, the number and kind of shares for which options are outstanding will be similarly adjusted so that the proportionate interest of a participant immediately following such event will, to the extent practicable, be the same as immediately prior to such event. Any such adjustment in outstanding options shall not change the aggregate purchase price payable by a participant with respect to shares subject to such options but shall include a corresponding proportionate adjustment in the purchase price per share.

Upon any dissolution or liquidation of the Company, upon a merger, consolidation, or reorganization of the Company with one or more other corporations in which the Company is not the surviving corporation, or upon a sale of all or substantially all of the Company’s assets, or upon consummation of any other transaction approved by the Board resulting in any person or entity owning more than 50% of the combined voting power of all classes of the Company’s stock, the 2018 ESPP and all options outstanding thereunder will terminate, except to the extent provision is made in writing in connection with such transaction for the continuation of the 2018 ESPP or the assumption of the options theretofore granted, or for the substitution of the options under the 2018 ESPP with new options covering the stock of the successor corporation, with corresponding appropriate adjustments to the number and kinds of shares and purchase prices. Upon termination of the 2018 ESPP in this circumstance, the offering period will be deemed to end on the last trading day prior to such termination, and the options of each participant then-outstanding will be deemed to be automatically be exercised on such last trading day.

Subject to the foregoing, if the Company is the surviving corporation in any reorganization, merger, or consolidation of the Company with one or more other corporations, all outstanding options under the 2018 ESPP will pertain to and apply to the securities to which a holder of the number of shares of common stock subject to such options would have been entitled immediately following such reorganization, merger, or consolidation, with corresponding appropriate adjustments to the purchase price per share so that the aggregate purchase price will be the same as that of the shares subject to such options immediately before such reorganization, merger, or consolidation.

Term. If approved by the Company’s shareholders at the Annual Meeting, the 2018 ESPP will become effective as of the date of the Annual Meeting. The 2018 ESPP will terminate on the earliest of (i) the day before the 10^th anniversary of the date of adoption of the 2018 ESPP by the Board, (ii) the date on which all shares of common stock reserved for issuance under the 2018 ESPP have been issued, (iii) the date the 2018 ESPP is terminated in connection with certain corporate transactions set forth above, and (iv) the date the Administrator terminates the 2018 ESPP.

Amendment, Suspension, or Termination. The Administrator may, at any time and from time to time, amend, suspend, or terminate the 2018 ESPP or an offering period under the 2018 ESPP; provided, however, that no

amendment, suspension, or termination will, without the consent of the participant, materially impair any then-vested rights of a participant. The effectiveness of any amendment to the 2018 ESPP shall be contingent on approval of such amendment by the Company’s shareholders to the extent provided by the Board or required by applicable law.

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Summary of U.S. Federal Income Tax Consequences

The following summary of U.S. federal income tax consequences is intended only as a general guide, under current U.S. federal income tax law, of participation in the 2018 ESPP and does not attempt to describe all potential tax consequences. This discussion is intended for the information of our shareholders considering how to vote at the Annual Meeting and not as tax guidance to participants in the 2018 ESPP. The following summary is not intended or written to be used, and cannot be used, for the purposes of avoiding taxpayer penalties. Tax consequences are subject to change, and a taxpayer’s particular situation may be such that some variation in application of the described rules is applicable. Accordingly, participants are advised to consult their own tax advisors with respect to the tax consequences of participating in the 2018 ESPP.

The 2018 ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code, and options to make purchases under the 2018 ESPP are intended to qualify under the provisions of Section 423 of the Code. Amounts withheld from a participant’s earnings under the 2018 ESPP will be taxable income to the participant in the year in which the amounts otherwise would have been received, but the participant will not be required to recognize additional income for U.S. federal income tax purposes either at the time the participant is deemed to have been granted an option to purchase common stock on the grant date or when the option to purchase common stock is exercised on the purchase date. No additional taxable income will be recognized for U.S. federal income tax purposes by a participant until the sale or other disposition of the shares of common stock acquired under the 2018 ESPP. Upon such sale or disposition, the participant will generally be subject to tax in an amount that depends upon the length of time such shares are held by the participant prior to selling or disposing of them.

If a participant holds the shares of common stock purchased under the 2018 ESPP for at least two years after the grant date and for at least one year from the purchase date of the shares of common stock, when the participant sells or disposes of the shares of common stock (a “qualifying disposition”), the participant will recognize as ordinary income an amount equal to the lesser of: (i) the excess of the fair market value of the shares of common stock on the date of such sale or disposition over the purchase price or (ii) the fair market value of the shares of common stock on the grant date multiplied by the discount percentage for stock purchases under the 2018 ESPP. Any additional gain will be treated as long-term capital gain. If the shares are held for the holding periods described above but are sold for a price that is less than the purchase price, there is no ordinary income, and the participant has a long-term capital loss for the difference between the sale price and the purchase price.

If a participant sells or disposes of the shares of common stock purchased under the 2018 ESPP within two years after the grant date or before one year has elapsed since the purchase date (a “disqualifying disposition”), the participant will recognize as ordinary income an amount equal to the excess of the fair market value of the shares on the date the shares are purchased over the purchase price. Any additional gain or loss on such sale or disposition will be long-term or short-term capital gain or loss, depending on how long the shares were held following the date they were purchased by the participant prior to selling or disposing of them.

In connection with a qualifying disposition, the Company will not receive any deduction for U.S. federal income tax purposes with respect to those shares of common stock or the option under which it was purchased. In connection with a disqualifying disposition, the Company will be entitled to a deduction in an amount equal to the amount that is considered ordinary income.

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New Plan Benefits

Because the number of shares of common stock that may be purchased under the 2018 ESPP will depend on each participant’s voluntary election to participate and on the fair market value of the common stock at various

future dates, the actual number of shares that may be purchased by any individual cannot be determined in advance. No shares of common stock have been issued under the 2018 ESPP as of the date of this proxy statement, and no shares of common stock will be issued under the 2018 ESPP prior to approval of the 2018 ESPP by the Company’s shareholders.

Equity Awards Outstanding and Available

The following table sets forth the aggregate information of our equity compensation plans in effect as of December 31, 2017. There are no compensation plans under which equity securities may be issued that have not been approved by our shareholders.


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders	169,921	$	18.95	185,223	169,921	$	18.95	185,223
Equity compensation plans not approved by security holders	—	N/A		—
Equity compensation plans not approved by security olders					—	N/A		—
Total	169,921	$	18.95	185,223	169,921	$	18.95	185,223

Vote Required

The ratification of the 2018 ESPP Plan will require that a majority of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy and entitled to vote be cast “FOR” this proposal. In addition, an abstention shall not constitute a vote cast and will have no effect on the vote. Brokers do not have discretionary authority to vote shares on this proposal without direction from the beneficial owner. Therefore, broker non-votes will have no effect on the vote.

Our Recommendation

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE BAR HARBOR BANKSHARES 2018 EMPLOYEE STOCK PURCHASE PLAN.

~~PROPOSAL 5~~

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PROPOSAL 5

RATIFICATION OF THE APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM – INFORMATION ON INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed RSM US LLP as the Company’s principal independent registered public accounting firm for the fiscal year ending December 31, 2018. We are asking our shareholders to ratify the appointment of RSM US LLP as our independent registered public accounting firm as a matter of good corporate governance. If the Company’s shareholders do not ratify the appointment, the Audit Committee will reconsider whether to retain RSM US LLP. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines such a change would be in the best interest of the Company and its shareholders. Representatives of RSM US LLP are expected to be present at the Annual Meeting. They will be given an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.

Vote Required

The ratification of RSM US LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018 will require that a majority of the votes cast at the Annual Meeting by the holders of shares present in person or represented by proxy and entitled to vote be cast “FOR” this proposal. An abstention shall not constitute a vote cast, and will have no effect on the vote. Broker non-votes, if any, will also have no effect on the vote.

Our Recommendation

THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF RSM US LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2018.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES

The reports of RSM US LLP on the Company’s consolidated financial statements as of December 31, 2017 and 2016 and for the three-year period ending on December 31, 2017, and on internal control over financial reporting as of December 31, 2017, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.

The following table summarizes RSM US LLP’s audit fees from January 1, 2016 through December 31, 2017.

Service	2017 RSM		2016 RSM
Audit Fees	$	438,540	$	332,800
Audit-Related Fees		68,250		26,000
Tax Fees		—		—
All Other Fees				31,200
Total	$	506,790	$	390,000

Service
2017
RSM

2016
RSM
Audit Fees $ 438,540
$ 332,800
Audit-Related Fees 68,250
26,000
Tax Fees —
—
All Other Fees —
31,200
Total $ 506,790
$ 390,000

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Pre-Approval Policies and Procedures

The Audit Committee’s policies and procedures require the Audit Committee Chair to pre-approve all audits and non-audit services and report such pre-approvals to the Audit Committee at its next regularly scheduled meeting.

No services were rendered for financial information systems design and implementation or internal audit.

The Audit Committee has considered the compatibility of the non-audit services furnished by the Company’s auditing firm with the firm’s need to be independent.

The Audit Committee pre-approved 100% of the services performed by RSM US LLP pursuant to the policies outlined above.

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OTHER MATTERS

Nominations by Shareholders and Other Shareholder Proposals

Our Bylaws provide that we will consider nominees for election to the Board recommended by shareholders if made in the same manner provided for under our Bylaws with regard to typical shareholder proposals. These procedures require in part, that to be timely, a shareholder’s notice shall be delivered to the Clerk at our principal executive offices no later than the close of business of the 120^th day (i.e., January 16, 2019) nor earlier than the close of business on the 150^th day (i.e., December 18, 2018) prior to the first anniversary of the preceding year’s Annual Meeting. Such shareholder’s notice shall set forth: (a) as to each person whom the shareholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the shareholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal is made, and the names and addresses of other shareholders known by the shareholder proposing such business to support such proposal, and the class and number of shares of our capital stock beneficially owned by such other shareholders; and (c) as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such shareholder, as they appear on our books, and of such beneficial owner, and (ii) the class and number of shares of our common stock, which are owned beneficially and of record by such shareholder and such beneficial owner. Shareholder proposals submitted pursuant to Rule 14a-8 of the Exchange Act for inclusion in our proxy statement and form of proxy for the 2019 Annual Meeting of Shareholders must be received by us no later than December 18, 2018. Any such proposal must also comply with the requirement as to form and substance established by the SEC for such a proposal to be included in the proxy statement and form of proxy. Notice of a shareholder proposal submitted outside the processes of Rule 14a-8 will be considered untimely unless submitted by February 21, 2019.

Proposals should be addressed to Curtis C. Simard, CEO, Bar Harbor Bankshares, 82 Main Street, Bar Harbor, MEMaine 04609. If the Governance Committee determines that any shareholder proposal (including a nomination for election of a director) was not made in a timely fashion or that information provided in the notice does not fulfill the information requirements set forth above in any material respects, such proposal shall not be presented for action at the Annual Meeting for which it is proposed. If a shareholder should propose a candidate, the Governance Committee would evaluate that candidate on the basis of the criteria noted above.

Communication with Board of Directors

Our shareholders and other interested persons who want to communicate with the Board, any individual director, the non-management directors as a group or any other group of directors, can write to:

Chairman of the Board

Bar Harbor Bankshares

82 Main Street

Bar Harbor, ME 04609

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Written communications addressed to the Board received by us from shareholders will be shared with the full Board no later than the next regularly scheduled Board meeting.

Other Business

As of the date of this proxy statement, the Board knows of no matters that will be presented for consideration at the Annual Meeting other than as described in this proxy statement. If any other business, matter, or proposal shall properly come before the Annual Meeting and be voted upon, the enclosed proxies will be deemed to confer discretionary authority on the individuals named as proxies therein to vote the shares represented by

such proxies as to any such matters. The persons named as proxies intend to vote or not to vote in accordance with the recommendation of the Board.

By Order of the Board of Directors

Marsha C. Sawyer, Corporate Clerk

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APPENDIX A

REPORT OF THE AUDIT COMMITTEE

To the Board of Directors of Bar Harbor Bankshares:

In accordance with the Audit Committee Charter, the Audit Committee reviews the Company’s financial reporting process on behalf of the Board. Management is responsible for preparing the financial statements and for designing and implementing the reporting process, including the system of internal controls, and has represented to the Audit Committee that such financial statements were prepared in accordance with generally accepted accounting principles. The independent registered public accounting firm is responsible for expressing opinions on the conformity of those audited financial statements with U.S. generally accepted accounting principles. The Audit Committee has reviewed and discussed with management and the independent registered public accounting firm, together and separately, the Company’s audited consolidated financial statements contained in the Company’s Annual Report on Form 10-K for 2017.

The Audit Committee discussed with the independent registered public accounting firm the matters required to be discussed by professional standards. In addition, the Audit Committee has discussed with the independent registered public accounting firm the auditors’ independence from the Company and its management, including the matters in the written disclosures and letter which were received by the Audit Committee from the independent registered public accounting firm as required by applicable requirements of the Public Company Accounting Oversight Board ( “PCAOB” ) regarding the independent accountant’s communications with the Audit Committee concerning independence. The Audit Committee also considered whether the independent registered public accounting firm’s provision of non-audit services to the Company is compatible with the auditor’s independence and concluded that the auditors are independent.

The Audit Committee reviewed and discussed with the independent registered public accounting firm any other matters required to be discussed by PCAOB Auditing Standards No 16, Communications with Audit Committees, including without limitation, the auditors’ evaluation of the quality of the Company’s financial reporting, information relating to significant unusual transactions and the business rationale for such transactions, and evaluation of the Company’s ability to continue as a going concern.

During 2017, the Audit Committee performed all its duties and responsibilities under the Audit Committee Charter. In addition, based on the reports and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements of the Company for 2017 be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, for filing with the SEC.

Each of the members of the Audit Committee is independent as defined under the listing standards of NYSE American as of December 31, 2017.

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

Audit Committee of the Board:

~~Scott G. Toothaker, Chair Daina H. Belair~~

~~Matthew L. Caras David M. Colter~~

	Scott G. Toothaker, Chair	Daina H. Belair
	Matthew L. Caras	David M. Colter
	Stephen W. Ensign

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APPENDIX B

BAR HARBOR BANKSHARES

2018 Employee Stock Purchase Plan


1.	Purpose and Interpretation

(a)The purpose of the Plan is to encourage and to enable Eligible Employees of the Company and its Participating Affiliates, through after-tax payroll deductions or periodic cash contributions, to acquire proprietary interests in the Company through the purchase and ownership of shares of Stock. The Plan is intended to benefit the Company and its stockholders (a) by incentivizing Participants to contribute to the success of the Company and to operate and manage the Company’s business in a manner that will provide for the Company’s long-term growth and profitability and that will benefit its stockholders and other important stakeholders and (b) by encouraging Participants to remain in the employ of the Company or its Participating Affiliates.

(b)The Plan and the Options granted under the Plan are intended to satisfy the requirements for an “employee stock purchase plan” under Code Section 423. Notwithstanding the foregoing, the Company makes no undertaking to, nor representation that it will, maintain the qualified status of the Plan or any Options granted under the Plan. In addition, Options that do not satisfy the requirements for an “employee stock purchase plan” under Code Section 423 may be granted under the Plan pursuant to the rules, procedures, or sub-plans adopted by the Administrator, in its sole discretion, for certain Eligible Employees.

2.~~Definitions~~

Definitions

(a)“Account” shall mean a bookkeeping account established and maintained to record the amount of funds accumulated pursuant to the Plan with respect to a Participant for the purpose of purchasing shares of Stock under the Plan.

(b)“Administrator” shall mean the Board, the Compensation Committee of the Board, or any other committee of the Board designated by the Board.

(c)“Board” shall mean the Board of Directors of the Company.

(d)“Code” shall mean the Internal Revenue Code of 1986, as amended, as now in effect or as hereafter amended, and any successor thereto. References in the Plan to any Code Section shall be deemed to include, as applicable, regulations, and guidance promulgated under such Code Section.

(e) �� “Company” shall mean Bar Harbor Bankshares, a Maine corporation, and any successor thereto.

(f)“Custodian” shall mean the third-party administrator designated by the Administrator from time to time.

(g)“Effective Date” shall mean May 15, 2018, subject to approval of the Plan by the Company’s stockholders on such date, the Plan having been adopted by the Board on March 20, 2018.

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(h)“Eligible Compensation” shall mean, unless otherwise established by the Administrator prior to the start of an Offering Period, regular base compensation (including any shift differentials) but excludes any bonus, overtime payment, sales commission, contribution to any Code Section 125 or 401(k) plan, the cost of employee benefits paid for by the Company or a Participating Affiliate, education or tuition reimbursements, imputed income arising under any Company or Participating Affiliate group insurance or benefit program, traveling expense reimbursements, business and moving expense reimbursements, income received in connection with stock options and other equity awards, or other form of extra compensation.

(i)“Eligible Employee” shall mean a natural person who is an employee (including an officer) of the Company or a Participating Affiliate as of an Offering Date, except the following, who shall not be eligible to participate under the Plan:(i) an employee whose customary employment is twenty (20) hours or less per week, (ii) an employee whose customary employment is for not more than five (5) months in any calendar year, (iii) an employee who, after exercising his or her rights to purchase shares of Stock under the Plan, would own (directly or by attribution pursuant to Code Section 424(d)) shares of Stock (including shares that may be acquired under any outstanding Options) representing five percent (5%) or more of the total combined voting power of all classes of stock of the Company, and (iv) an employee who is a citizen or resident of a foreign jurisdiction (without regard to whether such employee is also a U.S. citizen or resident alien), if the grant of an Option under the Plan or an Offering Period to such employee is prohibited under the laws of such foreign jurisdiction or compliance with the laws of such foreign jurisdiction would cause the Plan or an Offering Period to violate the requirements of Code Section 423. Notwithstanding the foregoing, for purposes of a Non-423(b) Offering under the Plan, if any, the Administrator shall have the authority, in its sole discretion, to establish a different definition of Eligible Employee as it may deem advisable or necessary.

(j)“Enrollment Form” shall mean the agreement(s) between the Company and an Eligible Employee, in such written, electronic, or other format and/or pursuant to such written, electronic, or other process as may be established by the Administrator from time to time, pursuant to which an Eligible Employee elects to participate in the Plan or to which a Participant elects to make changes with respect to the Participant’s participation as permitted by the Plan.

(k)“Enrollment Period” shall mean that period of time prescribed by the Administrator, which period shall conclude prior to the Offering Date, during which Eligible Employees may elect to participate in an Offering Period. The duration and timing of Enrollment Periods may be changed or modified by the Administrator from time to time.

(l)“Fair Market Value” shall mean the value of each share of Stock subject to the Plan on a given date determined as follows: (i) if on such date the shares of Stock are listed on an established national or regional stock exchange or are publicly traded on an established securities market, the Fair Market Value of the shares of Stock shall be the closing price of the shares of Stock on such exchange or in such market (the exchange or market selected by the Administrator if there is more than one such exchange or market) on such date or, if such date is not a Trading Day, on the Trading Day immediately preceding such date, or, if no sale of the shares of Stock is reported for such Trading Day, on the next preceding day on which any sale shall have been reported; or (ii) if the shares of Stock are not listed on such an exchange or traded on such a market, the Fair Market Value of the shares of Stock shall be determined by the Board in good faith.

(m)“Holding Period” shall have the meaning set forth in Section 10(c)(i).

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(n)“Non-423(b) Offering” shall mean the rules, procedures, or sub-plans, if any, adopted by the Administrator, in its sole discretion, as a part of the Plan, pursuant to which Options that do not satisfy the requirements for “employee stock purchase plans” that are set forth under Code Section 423 may be granted to Eligible Employees as a separate offering under the Plan.

(o)“Offering Date” shall mean the first day of any Offering Period under the Plan.

(p)“Offering Period” shall mean the period determined by the Administrator pursuant to Section 7, which period shall not exceed twenty-seven (27) months, during which payroll deductions or periodic cash contributions are accumulated for the purpose of purchasing Stock under the Plan.

(q)“Option” shall mean the right granted to Participants to purchase shares of Stock pursuant to an offering under the Plan.

(r)“Outstanding Election” shall mean a Participant’s then-current election to purchase shares of Stock in an Offering Period, or that part of such an election which has not been cancelled (including any

voluntary cancellation under Section 5 and deemed cancellation under Section 11) prior to the close of business on the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the Purchase Period) or such other date as determined by the Administrator.

(s)“Participating Affiliate” shall mean any Subsidiary designated by the Administrator from time to time, in its sole discretion, whose employees may participate in the Plan or in a specific Offering Period under the Plan, if such employees otherwise qualify as Eligible Employees.

(t)“Participant” shall mean an Eligible Employee who has elected to participate in the Plan pursuant to Section 5.

(u)“Plan” shall mean this Bar Harbor Bankshares 2018 Employee Stock Purchase Plan, as it may be amended from time to time.

(v)“Purchase Period” shall mean the period during an Offering Period designated by the Administrator on the last Trading Day of which purchases of Stock are made under the Plan. An Offering Period may have one or more Purchase Periods.

(w)“Purchase Price” shall mean the purchase price of each share of Stock purchased under the Plan; provided, however, that the Purchase Price shall not be less than the lesser of eighty-five percent (85%) of the average of the high and low sales price of the Common Stock on the New York Stock Exchange on the Offering Date or the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, on the last Trading Day of the Purchase Period).

(x)“Stock” shall mean the common stock, par value $2.00 per share, of the Company, or any security into which shares of Stock may be changed or for which shares of Stock may be exchanged as provided in Section 12.

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(y)“Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the Effective Date shall be considered a Subsidiary commencing as of such date.

(z)“Termination of Employment” shall mean, with respect to a Participant, a cessation of the employee-employer relationship between the Participant and the Company or a Participating Affiliate for any reason,

(i)including, without limitation, (A) a termination by resignation, discharge, death, disability, retirement, or the disaffiliation of a Subsidiary, (B) unless otherwise determined or provided by the Administrator, a transfer of employment to a Subsidiary that is not a Participating Affiliate as of the first day immediately following the three (3)-month period following such transfer, and (C) a termination of employment where the individual continues to provide certain services to the Company or a Subsidiary in a non-employee role, but

(ii)excluding (A) such termination of employment where there is a simultaneous reemployment of the Participant by the Company or a Participating Affiliate and (B) any bona fide and Company-approved or Participating Affiliate-approved leave of absence, such as family leave, medical leave, personal leave, and military leave, or such other leave that meets the requirements of Treasury Regulations section 1.421-1(h)(2); provided, however, where the period of leave exceeds three (3) months and the employee’s right to reemployment is not guaranteed either by statute or by contract, the employee-employer relationship will be deemed to have terminated on the first day immediately following such three (3)-month period.

(aa)“Trading Day” shall mean a day on which the New York Stock Exchange is open for trading.

3.~~Shares Subject to the Plan~~

Shares Subject to the Plan

(a)Share Reserve. Subject to adjustment as provided in Section 12, the maximum number of shares of Stock that may be issued pursuant to Options granted under the Plan (including any Non-423(b) Offering established hereunder) is two hundred thousand (200,000) shares. The shares of Stock reserved for issuance under the Plan may be authorized but unissued shares, treasury shares, or shares purchased on the open market.

(b)Participation Adjustment as a Result of the Share Reserve. If the Administrator determines that the total number of shares of Stock remaining available under the Plan is insufficient to permit the number of shares of Stock to be purchased by all Participants on the last Trading Day of an Offering Period (or if an Offering Period has multiple Purchase Periods, on the last Trading Day of the Purchase Period) pursuant to Section 9, the Administrator shall make a participation adjustment, where the number of shares of Stock purchasable by all Participants shall be reduced proportionately in as uniform and equitable a manner as is reasonably practicable, as determined in the Administrator’s sole discretion. After such adjustment, the Administrator shall refund in cash all affected Participants’ Account balances for such Offering Period as soon as practicable thereafter.

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(c)Applicable Law Limitations on the Share Reserve. If the Administrator determines that some or all of the shares of Stock to be purchased by Participants on the last Trading Day of an Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the Purchase Period) would not be issued in accordance with applicable laws or any approval by any regulatory body as may be required or the shares of Stock would not be issued pursuant to an effective Form S-8 registration statement or that the issuance of some or all of such shares of Stock pursuant to a Form S-8 registration statement is not advisable due to the risk that such issuance will violate applicable laws, the Administrator may, without Participants’ consent, terminate any outstanding Offering Period and the Options granted thereunder and refund in cash all affected Participants’ Account balances for such Offering Period as soon as practicable thereafter.

4.~~Administration~~

Administration

(a)Generally. The Plan shall be administered under the direction of the Administrator. Subject to the express provisions of the Plan, the Administrator shall have full authority, in its sole discretion, to take any actions it deems necessary or advisable for the administration of the Plan, including, without limitation:

(i)Interpreting and construing the Plan and Options granted under the Plan; prescribing, adopting, amending, waiving, and rescinding rules and regulations it deems appropriate to implement the Plan, including amending any outstanding Option, as it may deem advisable or necessary to comply with applicable laws; correcting any defect or supplying any omission or reconciling any inconsistency in the Plan or Options granted under the Plan; and making all other decisions relating to the operation of the Plan;

(ii)Establishing the timing and length of Offering Periods and Purchase Periods;

(iii)Establishing minimum and maximum contribution rates;

(iv)Establishing new or changing existing limits on the number of shares of Stock a Participant may elect to purchase with respect to any Offering Period, if such limits are announced prior to the first Offering Period to be affected;

(v)Adopting such rules, procedures, or sub-plans as may be deemed advisable or necessary to comply with the laws of countries other than the United States, to allow for tax-preferred treatment of the Options or otherwise to provide for the participation by Eligible Employees who reside outside of the United States, including determining which Eligible Employees are eligible to participate in the Non-423(b) Offering or other sub-plans established by the Administrator;

(vi)Establishing the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars and permitting payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the processing of properly completed Enrollment Forms; and

(vii)Furnishing to the Custodian such information as the Custodian may require.

The Administrator’s determinations under the Plan shall be final, binding, and conclusive upon all persons.

(b)Custodian. If the Administrator designates a Custodian for the Plan, the Custodian shall act as custodian under the Plan and shall perform such duties as requested by the Administrator in accordance with any agreement between the Company and the Custodian. The Custodian shall establish and maintain, as agent for each Participant, an Account and any subaccounts as may be necessary or desirable for the administration of the Plan.

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(c)No Liability. Neither the Board, the Compensation Committee of the Board, any other committee of the Board, or the Custodian, nor any of their respective agents or designees, shall be liable to any person (i) for any act, failure to act, or determination made in good faith with respect to the Plan or Options granted under the Plan or (ii) for any tax (including any interest and penalties) by reason of the failure of the Plan, an Option, or an Offering Period to satisfy the requirements of Code Section 423, the failure of the Participant to satisfy the requirements of Code Section 423, or otherwise asserted with respect to the Plan, Options granted under the Plan, or shares of Stock purchased or deemed purchased under the Plan.

5.~~Participation in the Plan and in an Offering Period~~

Participation in the Plan and in an Offering Period

(a)Generally. An Eligible Employee may become a Participant for an Offering Period under the Plan by completing the prescribed Enrollment Form and submitting such Enrollment Form to the Company (or the Company’s designee), in the format and pursuant to the process as prescribed by the Administrator, during the Enrollment Period prior to the commencement of the Offering Period to which it relates. If properly completed and timely submitted, the Enrollment Form will become effective for the first Offering Period following submission of the Enrollment Form and all subsequent Offering Periods as provided by Section 5(b) until (i) it is terminated in accordance with Section 11, (ii) it is modified by filing another Enrollment Form in accordance with this Section 5(a) (including an election is made to cease payroll deductions or periodic cash contributions in accordance with Section 6(c)), or (iii) the Participant is otherwise ineligible to participate in the Plan or in a subsequent Offering Period.

(b)Automatic Re-Enrollment. Following the end of each Offering Period, each Participant shall automatically be re-enrolled in the next Offering Period at the applicable rate of payroll deductions or periodic cash contributions in effect on the last Trading Day of the prior Offering Period or otherwise as provided under Section 6, unless (i) the Participant has experienced a Termination of Employment, or (ii) the Participant is otherwise ineligible to participate in the Plan or in the next Offering Period. Notwithstanding the foregoing, the Administrator may require current Participants to complete and submit a new Enrollment Form at any time it deems necessary or desirable to facilitate Plan administration or for any other reason.

6.~~Payroll Deductions or Periodic Cash Contributions~~

Payroll Deductions or Periodic Cash Contributions

(a)Generally. Each Participant’s Enrollment Form shall contain a payroll deduction authorization pursuant to which he or she shall elect, unless otherwise established by the Administrator prior to the start of an Offering Period, to have a designated whole percentage of Eligible Compensation between one percent (1%) and ten percent (10%) deducted, on an after-tax basis, on each payday during the Offering Period and credited to the Participant’s Account for the purchase of shares of Stock pursuant to the offering. The Administrator shall also have the authority, but not the obligation, to permit a Participant to elect to make periodic cash contributions, in lieu of payroll deductions, for the purchase of shares of Stock pursuant to the offering. Notwithstanding the foregoing, if local law prohibits payroll deductions, a Participant may elect to participate in an Offering Period through contributions to his or her Account in a format and pursuant to a process acceptable to the Administrator. In such event, any such Participant shall be deemed to participate in a separate offering under the Plan, unless the Administrator otherwise expressly provides.

(b)Insufficiency of Contributions. Subject to Section 6(e), if in any payroll period a Participant has no pay or his or her pay is insufficient (after other authorized deductions) to permit deduction of the full amount of his or her payroll deduction election, then (i) the payroll deduction election for such payroll period shall be reduced to the amount of pay remaining, if any, after all other authorized deductions, and (ii) the

percentage or dollar amount of Eligible Compensation shall be deemed to have been reduced by the amount of the reduction in the payroll deduction election for such payroll period. Deductions of the full amount originally elected by the Participant will recommence as soon as his or her pay is sufficient to permit such payroll deductions; provided, however, no additional amounts shall be deducted to satisfy the Outstanding Election. If the Administrator authorizes a Participant to elect to make periodic cash contributions in lieu of payroll deductions, the failure of a Participant to make any such contributions shall reduce, to the extent of the deficiency in such payments, the number of shares purchasable under the Plan by the Participant.

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(c)Cessation after Offering Date. A Participant may cease his or her payroll deductions or periodic cash contributions during an Offering Period by properly completing and timely submitting a new Enrollment Form to the Company (or the Company’s designee), in the format and pursuant to the process as prescribed by the Administrator, at any time prior to the last day of such Offering Period (or if an Offering Period has multiple Purchase Periods, the last day of such Purchase Period). Any such cessation in payroll deductions or periodic cash contributions shall be effective as soon as administratively practicable thereafter and shall remain in effect for successive Offering Periods as provided in Section 5(b) unless the Participant submits a new Enrollment Form for a later Offering Period in accordance with Section 5(a). A Participant may only increase his or her rate of payroll deductions or periodic cash contributions in accordance with Section 6(d).

(d)Modification Prior to Offering Date. A Participant may increase or decrease his or her rate of payroll deductions or periodic cash contributions, to take effect on the Offering Date of the Offering Period following submission of the Enrollment Form, by properly completing and timely submitting a new Enrollment Form in accordance with Section 5(a).

(e)Authorized Leave or Disability after Offering Date. Subject to Section 11, if a Participant is absent from work due to an authorized leave of absence or disability (and has not experienced a Termination of Employment), such Participant shall have the right to elect (i) to remain a Participant in the Plan for the then-current Offering Period (or if an Offering Period has multiple Purchase Periods, the then-current Purchase Period) but to cease his or her payroll deductions or periodic cash contributions in accordance with Section 6(c), or (ii) to remain a Participant in the Plan for the then-current Offering Period (or if an Offering Period has multiple Purchase Periods, the then-current Purchase Period) but to authorize payroll deductions to be made from payments made by the Company or a Participating Affiliate to the Participant during such leave of absence or disability and to undertake to make additional cash payments to the Plan at the end of each payroll period during the Offering Period to the extent that the payroll deductions from payments made by the Company or a Participating Affiliate to such Participant are insufficient to meet such Participant’s Outstanding Election. Neither the Company nor a Participating Affiliate shall advance funds to a Participant if the Participant’s payroll deductions and additional cash payments during the Participant’s leave of absence or disability are insufficient to fund the Participant’s Account at his or her Outstanding Election.

7.~~Offering Periods and Purchase Periods; Purchase Price~~

Offering Periods and Purchase Periods; Purchase Price

(a)The Administrator shall determine from time to time, in its sole discretion, the Offering Periods and Purchase Periods under the Plan. Each Offering Period shall consist of one or more Purchase Periods, as determined by the Administrator. Unless otherwise established by the Administrator prior to the start of an Offering Period, the Plan shall have two (2) Offering Periods (with concurrent Purchase Periods) that commence each calendar year, and each Offering Period shall be of approximately six (6) months’ duration, with the first such Offering Period beginning on the first Trading Day of January and ending on the last Trading Day of the immediately following June, and the second such Offering Period beginning on the first Trading Day of July and ending on the last Trading Day of the immediately following December; provided, however, that the first Offering Period under the Plan shall commence on the first Trading Day of January following the Effective Date and shall end on the last Trading Day of the immediately following June.

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(b)The Administrator shall determine from time to time, in its sole discretion, the Purchase Price of each share of Stock for an Offering Period. Unless otherwise established by the Administrator prior

to the start of an Offering Period, the Purchase Price shall be the lesser of eighty-five percent (85%) of the average of the high and low sales price of the Common Stock on the New York Stock Exchange on the Offering Date or the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, on the last Trading Day of the Purchase Period).

8.~~Grant of Option~~

Grant of Option

(a)Grant of Option. On each Offering Date, each Participant in such Offering Period shall automatically be granted an Option to purchase as many whole shares of Stock as the Participant will be able to purchase with the payroll deductions or periodic cash contributions credited to the Participant’s Account during the applicable Offering Period.

(b)5% Owner Limit. Notwithstanding any provisions of the Plan to the contrary, no Participant shall be granted an Option to purchase shares of Stock under the Plan if such Participant (or any other person whose Stock would be attributed to such Participant pursuant to Code Section 424(d)), immediately after such Option is granted, would own or hold Options to purchase shares of Stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any of its Subsidiaries.

(c)Other Limitation. The Administrator may determine, as to any Offering Period, that the offering shall not be extended to “highly compensated employees” within the meaning of Code Section 414(q).

9.~~Purchase of Shares of Stock; Purchase Limitations~~

Purchase of Shares of Stock; Purchase Limitations

(a)Purchase. Unless the Participant’s participation in the Plan has otherwise been terminated as provided in Section 11, such Participant will be deemed to have automatically exercised his or her Option to purchase Stock on the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the Purchase Period) for the maximum number of shares of Stock that may be purchased at the Purchase Price with the Participant’s Account balance at that time; provided, however, the number of shares of Stock purchased is subject to adjustment by Section 3, this Section 9, and Section 12. The Administrator shall cause the amount credited to each Participant’s Account to be applied to such purchase, and the amount applied to purchase shares of Stock pursuant to an Option shall be deducted from the applicable Participant’s Account.

(b)Limit on Number of Shares Purchased. Notwithstanding Section 8(a) or Section 9(a), in no event may a Participant purchase more than four hundred (400) shares of Stock in any one Offering Period; provided, however, that the Administrator may, in its sole discretion, prior to the start of an Offering Period, set a different limit on the number of shares of Stock a Participant may purchase during such Offering Period.

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(c)Limit on Value of Shares Purchased. Notwithstanding any provisions of the Plan to the contrary, excluding Options granted pursuant to any Non-423(b) Offering, no Participant shall be granted an Option to purchase shares of Stock under the Plan which permits the Participant’s rights to purchase shares under all “employee stock purchase plans” (described in Code Section 423) of the Company and its Subsidiaries to accrue at a rate which exceeds twenty-five thousand dollars ($25,000) of the Fair Market Value of such shares of Stock (determined at the time such Options are granted) for each calendar year in which such Options are outstanding at any time.

(d)No Fractional Shares. Notwithstanding any provisions of the Plan to the contrary, no Participant may exercise an Option to purchase a fractional share of Stock, and any Option to purchase a fractional share of Stock shall be automatically terminated on the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the Purchase Period). Unless the Participant’s participation in the Plan has otherwise been terminated as provided in Section 11, the portion of a Participant’s Account balance remaining as a result of a Participant’s inability to exercise an Option to purchase a fractional share of Stock shall be transferred to the Participant’s brokerage account.

~~10.Stock Issuance; Stockholder Rights; and Sales of Plan Shares~~

10.

Stock Issuance; Stockholder Rights; and Sales of Plan Shares

(a)Stock Issuance and Account Statements. Shares of Stock purchased under the Plan will be held by the Custodian. The Custodian may hold the shares of Stock purchased under the Plan by book entry or in the form of stock certificates in nominee names and may commingle shares held in its custody in a single account without identification as to individual Participants. The Company shall cause the Custodian to deliver to each Participant a statement for each Offering Period during which the Participant purchases Stock under the Plan, which statement shall reflect, for each such Participant, (i) the amount of payroll deductions withheld or periodic cash contributions made during the Offering Period, (ii) the number of shares of Stock purchased, (iii) the Purchase Price of the shares of Stock purchased, and (iv) the total number of shares of Stock held by the Custodian for the Participant as of the end of the Offering Period.

(b)Stockholder Rights. A Participant shall not be a stockholder or have any rights as a stockholder with respect to shares of Stock subject to the Participant’s Options under the Plan until the shares of Stock are purchased pursuant to the Options and such shares of Stock are transferred into the Participant’s name on the Company’s books and records. No adjustment will be made for dividends or other rights for which the record date is prior to such time. Following purchase of shares of Stock under the Plan and transfer of such shares of Stock into the Participant’s name on the Company’s books and records, a Participant shall become a stockholder with respect to the shares of Stock purchased during such Offering Period (or, if applicable, Purchase Period) and, except as otherwise provided in Section 10(c), shall thereupon have all dividend, voting, and other ownership rights incident thereto.

(c)Sales of Plan Shares. The Administrator shall have the right to require any or all of the following with respect to shares of Stock purchased under the Plan:

(i)that a Participant may not request that all or part of the shares of Stock be reissued in the Participant’s own name and shares be delivered to the Participant until two (2) years (or such shorter period of time as the Administrator may designate) have elapsed since the Offering Date of the Offering Period in which the shares were purchased and one (1) year has elapsed since the day the shares were purchased (the “Holding Period”);

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(ii)that all sales of shares of Stock during the Holding Period applicable to such purchased shares be performed through a licensed broker acceptable to the Company; and

(iii)that Participants abstain from selling or otherwise transferring shares of Stock purchased pursuant to the Plan for a period lasting up to two (2) years from the date the shares of Stock were purchased pursuant to the Plan.

~~11.Deemed Cancellation or Termination of Participation~~

11.

Deemed Cancellation or Termination of Participation

(a)Termination of Employment Other than Death. In the event a Participant who holds outstanding Options to purchase shares of Stock under the Plan experiences a Termination of Employment for any reason other than death prior to the last Trading Day of the Offering Period, the Participant’s outstanding Options to purchase shares of Stock under the Plan shall automatically terminate, and the Administrator shall refund in cash the Participant’s Account balance as soon as practicable thereafter.

(b)Death. In the event of the death of a Participant while the Participant holds outstanding Options to purchase shares of Stock under the Plan, the legal representatives of such Participant’s estate (or, if the Administrator permits a beneficiary designation, the beneficiary or beneficiaries most recently designated by the Participant prior to his or her death) may, within three (3) months after the Participant’s death (but no later than the last Trading Day of the Offering Period (or if an Offering Period has multiple Purchase Periods, the last Trading Day of the then-current Purchase Period)) by written notice to the Company (or the Company’s designee), elect one of the following alternatives. In the event the Participant’s legal representatives (or, if applicable, beneficiary or beneficiaries) fail to deliver such written notice to the Company (or the Company’s designee) within the prescribed period, the alternative in Section 11(b)(ii) shall apply.

(i)The Participant’s outstanding Options shall be reduced to the number of shares of Stock that may be purchased, as of the last day of the Offering Period (or if an Offering Period has multiple

Purchase Periods, the last Trading Day of the then-current Purchase Period), with the amount then credited to the Participant’s Account; or

(ii)The Participant’s Options to purchase shares of Stock under the Plan shall automatically terminate, and the Administrator shall refund in cash, to the Participant’s legal representatives, the Participant’s Account balance as soon as practicable thereafter.

(c)Other Termination of Participation. If a Participant ceases to be eligible to participate in the Plan for any reason, the Administrator shall refund in cash the affected Participant’s Account balance as soon as practicable thereafter. Once terminated, participation may not be reinstated for the then-current Offering Period, but, if otherwise eligible, the Eligible Employee may elect to participate in a subsequent Offering Period in accordance with Section 5.

~~12.Changes in Capitalization~~

12.

Changes in Capitalization

(a)Changes in Stock. If the number of outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any recapitalization, reclassification, stock split, reverse stock split, spin-off, combination of shares, exchange of shares, stock dividend, or other distribution payable in capital stock, or other increase or decrease in such shares effected without receipt of consideration by the Company occurring after the Effective Date, the number and kinds of shares that may be purchased under the Plan shall be adjusted proportionately and accordingly by the Company. In addition, the number and kind of shares for which Options are outstanding shall be similarly adjusted so that the proportionate interest of a Participant immediately following such event shall, to the extent practicable, be the same as immediately prior to such event. Any such adjustment in outstanding Options shall not change the aggregate Purchase Price payable by a Participant with respect to shares subject to such Options but shall include a corresponding proportionate adjustment in the Purchase Price per share. Notwithstanding the foregoing, in the event of a spin-off that results in no change in the number of outstanding shares of Stock, the Company may, in such manner as the Company deems appropriate, adjust (i) the number and kind of shares for which Options are outstanding under the Plan and (ii) the Purchase Price per share.

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(b)Reorganization in Which the Company Is the Surviving Corporation. Subject to Section 12(c), if the Company shall be the surviving corporation in any reorganization, merger, or consolidation of the Company with one or more other corporations, all outstanding Options under the Plan shall pertain to and apply to the securities to which a holder of the number of shares of Stock subject to such Options would have been entitled immediately following such reorganization, merger, or consolidation, with a corresponding proportionate adjustment of the Purchase Price per share so that the aggregate Purchase Price thereafter shall be the same as the aggregate Purchase Price of the shares subject to such Options immediately prior to such reorganization, merger, or consolidation.

(c)Reorganization in Which the Company Is Not the Surviving Corporation, Sale of Assets or Stock, and Other Corporate Transactions. Upon any dissolution or liquidation of the Company, or upon a merger, consolidation, or reorganization of the Company with one or more other corporations in which the Company is not the surviving corporation, or upon a sale of all or substantially all of the assets of the Company to another corporation, or upon any transaction (including, without limitation, a merger, consolidation, or reorganization in which the Company is the surviving corporation) approved by the Board that results in any person or entity owning more than fifty percent (50%) of the combined voting power of all classes of stock of the Company, the Plan and all Options outstanding hereunder shall terminate, except to the extent provision is made in writing in connection with such transaction for the continuation of the Plan and/or the assumption of the Options theretofore granted, or for the substitution for such Option of new rights covering the stock of a successor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kinds of shares and purchase prices, in which event the Plan and rights theretofore granted shall continue in the manner and under the terms so provided. In the event of any such termination of the Plan, the Offering Period shall be deemed to have ended on the last Trading Day prior to such termination, and in accordance with Section 9, the Options of each Participant then outstanding shall be deemed to be automatically exercised

on such last Trading Day. The Administrator shall send written notice of an event that will result in such a termination to all Participants at least five (5) days prior to the date upon which the Plan will be terminated.

(d)Adjustments. Adjustments under this Section 12 related to stock or securities of the Company shall be made by the Administrator, whose determination in that respect shall be final, binding, and conclusive.

(e)No Limitations on Company. The grant of an Option pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve or liquidate, or to sell or transfer all or any part of its business or assets.

~~13.~~76~~Term; Amendment, Suspension, and Termination~~

Table of ~~the Plan~~Contents

13.

Term; Amendment, Suspension, and Termination of the Plan

(a)Term. The Plan shall be effective as of the Effective Date. The Plan shall terminate on the first to occur of (i) the day before the tenth (10^th) anniversary of the date of adoption of the Plan by the Board, (ii) the date on which all shares of Stock reserved for issuance under the Plan pursuant to Section 3 have been issued, (iii) the date determined in accordance with Section 12, and (iv) the date determined in accordance with Section 13(b).

(b)Amendment, Suspension, and Termination of the Plan. The Administrator may, at any time and from time to time, amend, suspend, or terminate the Plan or an Offering Period under the Plan; provided, however, that no amendment, suspension, or termination shall, without the consent of the Participant, materially impair any rights of a Participant that have vested at the time of such amendment, suspension, or termination. The effectiveness of any amendment to the Plan shall be contingent on approval of such amendment by the Company’s stockholders to the extent provided by the Board or required by applicable law.

~~14.General Provisions~~

14.

General Provisions

(a)Withholding of Taxes. To the extent that a Participant recognizes ordinary income in connection with a sale or other transfer of any shares of Stock purchased under the Plan, the Company may withhold amounts needed to cover such taxes from any payments otherwise due and owing to the Participant or from shares that would otherwise be issued to the Participant under the Plan. Any Participant who sells or otherwise transfers shares of Stock purchased under the Plan within two (2) years after the beginning of the Offering Period in which the shares were purchased or within one (1) year from the date the shares of Stock were purchased must, within ten (10) days of such transfer, notify the Company in writing of such transfer.

(b)Options Not Transferable or Assignable. A Participant’s Options under the Plan may not be sold, pledged, assigned, or transferred in any manner, whether voluntarily, by operation of law, or otherwise. If a Participant sells, pledges, assigns, or transfers his or her Options in violation of this Section 14(b), such Options shall immediately terminate, and the Participant shall immediately receive a refund of the amount then credited to the Participant’s Account. Any payment of cash or issuance of shares of Stock under the Plan may be made only to the Participant (or, in the event of the Participant’s death, to the Participant’s estate or, if the Administrator permits a beneficiary designation, the beneficiary or beneficiaries most recently designated by the Participant prior to his or her death). During a Participant’s lifetime, only such Participant may exercise his or her Options under the Plan.

(c)No Right to Continued Employment. Neither the Plan nor any Option to purchase Stock under the Plan confers upon any Eligible Employee or Participant any right to continued employment with the Company or any of its Subsidiaries, nor will a Participant’s participation in the Plan restrict or interfere in any way with the right of the Company or any of its Subsidiaries to terminate the Participant’s employment at any time.

(d)No Interest on Payments. No interest shall be paid on sums withheld from a Participant’s pay or otherwise contributed for the purchase of shares of Stock under the Plan unless otherwise determined necessary by the Administrator.

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(e)Governmental Regulation. The Company’s obligation to issue, sell, and deliver shares of Stock pursuant to the Plan is subject to such approval of any governmental authority and any national securities exchange or other market quotation system as may be required in connection with the authorization, issuance, or sale of such shares.

(f)Rule 16b-3. Transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or any successor provision under the Securities Exchange Act of 1934, as amended. If any provision of the Plan or action by the Administrator fails to so comply, it shall be deemed null and void to the extent permitted by applicable law and deemed advisable by the Board. Moreover, in the event the Plan does not include a provision required by Rule 16b-3 to be stated in the Plan, such provision (other than one relating to eligibility requirements or the price and amount of awards) shall be deemed automatically to be incorporated by reference into the Plan.

(g)Payment of Plan Expenses. The Company shall bear all costs of administering and carrying out the Plan.

(h)Application of Funds. All funds received or held by the Company under the Plan may be used for any corporate purpose until applied to the purchase of Stock and/or refunded to Participants.

(i)Governing Law. The validity and construction of the Plan and the Options granted hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of Maine (other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan and the Options granted under the Plan to the substantive laws of any other jurisdiction), except to the extent superseded by applicable U.S. federal laws.

* * *

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To record adoption of the Plan by the Board as of March 20, 2018 and approval of the Plan by the Company’s stockholders as of May 15, 2018, the Company has caused its authorized officer to execute the Plan.




BAR HARBOR BANKSHARES

By:
Name:
Title:

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☒	No fee required.

☐	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1)	Title of each class of securities to which transaction applies:


☐	Fee paid previously with preliminary materials.
☐	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1)	Amount Previously Paid:

Name	Direct (a)	401(k) Plan (b)	Long Term Incentive Equity¹¹(c)
Curtis C. Simard	21,116	670	6,169
Josephine Iannelli	312	—	2,617
Richard Maltz	4,214	—	3,530
William J. McIver	1,861	4,288	1,856
Gregory W. Dalton	4,515	9,532	2,315



Name	Direct (a)	401(k) Plan (b)	Long Term Incentive Equity¹¹(c)
Curtis C. Simard	21,116	670	6,169
Josephine Iannelli	312	—	2,617
Richard Maltz	4,214	—	3,530
William J. McIver	1,861	4,288	1,856
Gregory W. Dalton	4,515	9,532	2,315


	Quarterly Stipend (Annualized)			November, 2017 Stock Grant		Meeting Fees		Quarterly Stipend (Annualized)		November, 2017 Stock Grant		Meeting Fees
Chairman of the Board	$	5,000		Shares up to a market value of td0,000		$500 for Board, Executive, Compensation, Governance and Board Risk. $300 for Audit. td50 for Bar Harbor Trust Services and Charter Trust Company		$	5,000	Shares up to a market value of td0,000		$500 for Board, Executive, Compensation, Governance and Board Risk. $300 for Audit. td50 for Bar Harbor Trust Services and Charter Trust Company
	(20,000		)				(20,000		)

Audit Chair	3,500				Shares up to a market value of td0,000				3,500		Shares up to a market value of td0,000
	(14,000		)				(14,000		)
Governance Chair	3,000			Shares up to a market value of td0,000					3,000		Shares up to a market value of td0,000
	(12,000		)				(12,000		)
Board Risk Chair	3,000				Shares up to a market value of td0,000				3,000		Shares up to a market value of td0,000
	(12,000		)				(12,000		)
Compensation Chair	3,000			Shares up to a market value of td0,000					3,000		Shares up to a market value of td0,000
	(12,000		)				(12,000		)
Charter and Trust Chair	3,000				Shares up to a market value of td0,000				3,000		Shares up to a market value of td0,000
	(12,000		)				(12,000		)
All other Directors	2,500			Shares up to a market value of td0,000					2,500		Shares up to a market value of td0,000
	(10,000		)				(10,000		)
Audit Committee Attendance						$600 (no change)						$600 (no change)
All other meetings and Annual Meeting						$500 (no change)						$500 (no change)


	(2)	Aggregate number of securities to which transaction applies:


	(3)	~~Per unit price or other underlying value of transaction computed pursuant to~~ Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):


1.	Election of thirteen (13) persons to serve as directors for a term of one year;


2.	Approval of a non-binding, advisory resolution on the compensation of the Named Executive Officers (“Say on Pay”);


3.	Ratification of the filing and effectiveness of an Articles of Amendment to our Articles of Incorporation, as amended, filed with the Secretary of State of the State of Maine on May 22, 2015;


5.	Ratification of the appointment of RSM US LLP as our independent registered public accounting firm for the year ending December 31, 2018; and


6.	Consideration of any other business as may properly come before the Annual Meeting or any adjournment thereof.


^8.	Includes 2,142 shares over which voting and dispositive powers are shared jointly with Mr. Woodside’s spouse. This number does not include 1,500 shares owned by Mr. Woodside’s spouse over which he does not have voting or dispositive powers.


^9.	Ownership figures for directors include 500 director-qualifying shares owned by each director indicated.


^10.	This number does not include 5,044 shares held within a Supplemental Executive Retirement Plan for Mr. McIver over which he does not have voting or dispositive powers.


	(4)	Proposed maximum aggregate value of transaction:


	(3)	Filing Party:


	(4)	Date Filed:

Name	Age	Year First Elected or Appointed Director	Positions with the Company	Positions with Subsidiaries
Daina H. Belair	62	2015	Director	Director, BHBT since 2015. Director, BHTS since 2015. Director, CTC since 2017.
Matthew L. Caras	61	2014	Director	Director, BHBT since 2014.
David M. Colter	50	2016	Director	Director, BHBT since 2016.
Steven H. Dimick¹	67	2017	Director	Director, BHBT since 2017.
Martha T. Dudman	66	2003	Director	Director, BHBT since 2003. Chairman, BHTS since 2005. Director, BHTS since 2003. Chairman, CTC since 2017.
Stephen W. Ensign¹	70	2017	Director	Director, BHTS since 2017. Director, CTC since 2017.
Lauri E. Fernald	56	2005	Director	Director, BHBT since 2005.
Brendan O’Halloran	55	Nominee	Nominee	Nominee for BHBT.
Curtis C. Simard	47	2013	Director, President and CEO since August 2013	President and CEO of BHBT since June 2013. Director, BHBT since June 2013. Director, BHTS since June 2013. Director, CTC since 2017.
Kenneth E. Smith	64	2004	Director	Director, BHBT since 2004. Director, BHTS from 2004 - 2013 and 2015 to present. Director, CTC since 2017.
Stephen R. Theroux¹	68	2017	Director	Director, BHBT since 2017. Director, CTC since 2017.
Scott G. Toothaker	55	2003	Director	Director, BHBT since 2003.
David B. Woodside	66	2003	Director	Director, BHBT since 2003. Chairman of the Board since 2016.



Name	Age	Year First Elected or Appointed Director	Positions with the Company	Positions with Subsidiaries
Daina H. Belair	62	2015	Director	Director, BHBT since 2015. Director, BHTS since 2015. Director, CTC since 2017.
Matthew L. Caras	61	2014	Director	Director, BHBT since 2014.
David M. Colter	50	2016	Director	Director, BHBT since 2016.
Steven H. Dimick¹	67	2017	Director	Director, BHBT since 2017.
Martha T. Dudman	66	2003	Director	Director, BHBT since 2003. Chairman, BHTS since 2005. Director, BHTS since 2003. Chairman, CTC since 2017.
Stephen W. Ensign¹	70	2017	Director	Director, BHTS since 2017. Director, CTC since 2017.
Lauri E. Fernald	56	2005	Director	Director, BHBT since 2005.
Brendan O’Halloran	55	Nominee	Nominee	Nominee for BHBT.
Curtis C. Simard	47	2013	Director, President and CEO since August 2013	President and CEO of BHBT since June 2013. Director, BHBT since June 2013. Director, BHTS since June 2013. Director, CTC since 2017.
Kenneth E. Smith	64	2004	Director	Director, BHBT since 2004. Director, BHTS from 2004 - 2013 and 2015 to present. Director, CTC since 2017.
Stephen R. Theroux¹	68	2017	Director	Director, BHBT since 2017. Director, CTC since 2017.
Scott G. Toothaker	55	2003	Director	Director, BHBT since 2003.
David B. Woodside	66	2003	Director	Director, BHBT since 2003. Chairman of the Board since 2016.



Name	Age	Year First Elected Officer	Positions with the Company	Positions with Subsidiaries
Curtis C. Simard	47	2013	Director, President and CEO	President and CEO of BHBT since June 2013. Director of BHBT since June 2013. Director, BHTS since June 2013. Director of CTC since 2017.
Josephine Iannelli	45	2016	Executive Vice President, Chief Financial Officer and Treasurer	Executive Vice President, Chief Financial Officer, and Treasurer of BHBT and BHTS since 2016. Chief Financial Officer and Treasurer of CTC since 2017.
Richard B. Maltz	58	2014	N/A	Executive Vice President, Chief Operating Officer, and Chief Risk Officer of BHBT since 2016. Formerly Executive Vice President and Chief Risk Officer of BHBT since 2014.
Gregory W. Dalton	58	2001	N/A	Executive Vice President of BHBT since 2011 and Senior Vice President of BHBT since 2000.
William J. McIver¹	66	2017	N/A	Executive Vice President. Regional President of NH/VT of BHBT since 2017.

	Fees Earned or Paid in Cash		Restricted Stock Awards¹		Total
Name (a)	(b)		(c)		(h)
Daina H. Belair	$	31,200	$	19,983	$	51,183
Matthew L. Caras	29,900		19,983		49,883
Leonard R. Cashman	13,500			19,983	33,483
David M. Colter	21,900		19,983		41,883
Steven H. Dimick²	20,583		19,983		40,566
Martha T. Dudman	33,500		19,983		53,483
Stephen W. Ensign²	27,983		19,983		47,966
Lauri E. Fernald	27,000		19,983		46,983
Clyde S. Lewis³	10,000		—		10,000
Constance C. Shea³	8,250		—		8,250
Kenneth E. Smith⁴	39,500		19,983		59,483
Stephen R. Theroux²	32,083		19,983		52,066
Scott C. Toothaker	28,900		19,983		48,883
David B. Woodside	45,750		19,983		65,733
Totals	$	370,049	$	239,796	$	609,845



	Fees Earned or Paid in Cash		Restricted Stock Awards¹		Total
Name (a)	(b)		(c)		(h)
Daina H. Belair	$	31,200	$	19,983	$	51,183
Matthew L. Caras	29,900		19,983		49,883
Leonard R. Cashman	13,500		19,983		33,483
David M. Colter	21,900		19,983		41,883
Steven H. Dimick²	20,583		19,983		40,566
Martha T. Dudman	33,500		19,983		53,483
Stephen W. Ensign²	27,983		19,983		47,966
Lauri E. Fernald	27,000		19,983		46,983
Clyde S. Lewis³	10,000		—		10,000
Constance C. Shea³	8,250		—		8,250
Kenneth E. Smith⁴	39,500		19,983		59,483
Stephen R. Theroux²	32,083		19,983		52,066
Scott C. Toothaker	28,900		19,983		48,883
David B. Woodside	45,750		19,983		65,733
Totals	$	370,049	$	239,796	$	609,845


^1.	Representsthe value of 667 restricted shares granted in November 2017 to each independent director as part of their compensation calculated at the closing price on the day of the grant.


^2.	Appointed by the Board on January 10, 2017, effective upon completion of the merger with LSBG.


^3.	Mr. Lewis and Mrs. Shea retired from the Board in May 2017 due to age restrictions in accordance with the Company’s Bylaws.

	Compensation Committee Members

	Kenneth E. Smith, Chair	David M. Colter
	Martha Dudman	Lauri E. Fernald
	David B. Woodside	Steven H. Dimick
	Leonard R. Cashman

For		Against		Abstain		Broker Non-Vote
6,346,073		199,051		135,292		1,840,047



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Arrow Financial Corp.	NY	AROW	Financial Institutions, Inc.	NY	FISI
Bankwell Financial Group, Inc.	CT	BWFG	First Bancorp, Inc.	ME	FNLC
Blue Hills Bancorp, Inc.	MA	BHBK	First Connecticut Bancorp, Inc.	CT	FBNK
Bridge Bancorp, Inc.	NY	BDGE	Hingham Institution	MA	HIFS
Brookline Bancorp, Inc.	MA	BRKL	Meridian Bancorp, Inc.	MA	EBSB
BSB Bancorp, Inc.	MA	BLMT	Tompkins Financial Corporation	NY	TMP
Camden National Corp.	ME	CAC	Trust Co Bank Corp NY	NY	TRST
Century Bancorp, Inc.	MA	CNBK	United Financial Bancorp, Inc.	CT	UBNK
Chemung Financial Corp.	NY	CHMG	Washington Trust Bancorp, Inc.	RI	WASH
Enterprise Bancorp, Inc.	MA	EBTC	Western New England Bancorp, Inc.	MA	WNEB

Name	BHB 2017 Base Salary¹		Peer Group Ranges of Base Salaries²		BHB 2017 Total Cash Compensation³		Peer Group Ranges of Total Cash Compensation⁴
Curtis C. Simard	$	525,000	$	475,000	$	824,250	$	683,000
			566,000 645,000				815,000 929,000
Josephine Iannelli	350,000		252,000 283,000 335,000		497,000		326,000 366,000 433,000
Richard B. Maltz	350,000		278,000 352,000 434,000		497,000		372,000 471,000 580,000
William J. McIver	325,000		219,000 255,000 307,000		436,500		266,000 310,000 373,000
Gregory W. Dalton	230,000		233,000 265,000 295,000		305,000		294,000 335,000 373,000


^1.	Approved base salary figures as of year-end 2017 have been used for comparison purposes in this table.


^2.	Represents the 25^th, 50^th, and 75^th market percentile of base salaries.


^3.	Approved base salary figures at the end of 2017 plus the cash amount paid to each NEO under the 2017 Annual Incentive Program.

Named Executive Officer	2017 Base Salary		2018 Base Salary
Curtis C. Simard	$	525,000	$	605,000
Josephine Iannelli	350,000		390,000
Richard B. Maltz	350,000		390,000
William J. McIver¹	325,000		325,000
Gregory W. Dalton	230,000		237,500


^1.	Mr. McIver joined the Company in January 13, 2017 and his salary has been annualized for comparison purposes. He has announced his retirement effective as of June 30, 2018.

2017 Short-Term Incentive Opportunities
Role	Below Threshold		Threshold (50% of Target Percentage)		Target (100%)		Stretch (150% of Target Percentage)
President /CEO	0.00	%	19.00	%	38.00	%	57.00	%
EVP & CFO/COO and EVP/Regional President	0.00		14.00		28.00		42.00
EVP	0.00		12.50		25.00		37.50



2017 Short-Term Incentive Opportunities
Role	Below Threshold		Threshold (50% of Target Percentage)		Target (100%)		Stretch (150% of Target Percentage)
President /CEO	0.00	%	19.00	%	38.00	%	57.00	%
EVP & CFO/COO and EVP/Regional President	0.00		14.00		28.00		42.00
EVP	0.00		12.50		25.00		37.50


Curtis C. Simard
President and Chief Executive Officer
Eligible Salary	$	525,000		Eligible Salary						$	525,000		Eligible Salary				$	525,000		$	525,000		Eligible Salary						$	525,000		Eligible Salary				$	525,000
Incentive Threshold	19.00%			Incentive Target						38.00%			Incentive Stretch				57.00%			19.00		%	Incentive Target						38.00		%	Incentive Stretch				57.00		%
Incentive Threshold	$	99,750		Incentive Target						$	199,500		Incentive Stretch				$	299,250		$	99,750		Incentive Target						$	199,500		Incentive Stretch				$	299,250

Performance Goals													Payment Range																			Payment Range
Incentive Measures	Threshold			Target			Stretch			Weight			Threshold		Target		Stretch			Threshold			Target			Stretch			Weight			Threshold		Target		Stretch
Strategic Initiatives	93.00		%	100.00		%	110.00		%	30.00		%	5.70	%	11.40	%	17.10		%	93.00		%	100.00		%	110.00		%	30.00		%	5.70	%	11.40	%	17.10		%
NPL+OREO2	50bps			49bps			44bps			10.00		%	1.90	%	3.80	%	5.70		%	50bps			49bps			44bps			10.00		%	1.90	%	3.80	%	5.70		%
Efficiency Ratio	66.30		%	64.30		%	62.30		%	10.00		%	1.90	%	3.80	%	5.70		%	66.30		%	64.30		%	62.30		%	10.00		%	1.90	%	3.80	%	5.70		%
Net Income ($thousands)	$	25,632		$	27,561		$	30,317		50.00		%	9.50	%	19.00	%	28.50		%	$	25,632		$	27,561		$	30,317		50.00		%	9.50	%	19.00	%	28.50		%
TOTALS										100.00		%	19.00	%	38.00	%	57.00		%										100.00		%	19.00	%	38.00	%	57.00		%

Josephine Iannelli
Executive Vice President and Chief Financial Officer
Eligible Salary	$	350,000		Eligible Salary						$	350,000		Eligible Salary				$	350,000		$	350,000		Eligible Salary						$	350,000		Eligible Salary				$	350,000
Incentive Threshold	14.00%			Incentive Target						28.00%			Incentive Stretch				42.00%			14.00		%	Incentive Target						28.00		%	Incentive Stretch				42.00		%
Incentive Threshold	$	49,000		Incentive Target						$	98,000		Incentive Stretch				$	147,000		$	49,000		Incentive Target						$	98,000		Incentive Stretch				$	147,000

Performance Goals													Payment Range																			Payment Range
Incentive Measures	Threshold			Target			Stretch			Weight			Threshold		Target		Stretch			Threshold			Target			Stretch			Weight			Threshold		Target		Stretch
Strategic Initiatives	93.00%			100.00%			110.00%			30.00%			4.20%		8.40%		12.60%			93.00		%	100.00		%	110.00		%	30.00		%	4.20	%	8.40	%	12.60		%
NPL+OREO2	50bps			49bps			44bps			10.00%			1.40%		2.80%		4.20%			50bps			49bps			44bps			10.00		%	1.40	%	2.80	%	4.20		%
Efficiency Ratio	66.30%			64.30%			62.30%			10.00%			1.40%		2.80%		4.20%			66.30		%	64.30		%	62.30		%	10.00		%	1.40	%	2.80	%	4.20		%
Net Income ($thousands)	$	25,632		$	27,561		$	30,317		50.00%			7.00%		14.00%		21.00%			$	25,632		$	27,561		$	30,317		50.00		%	7.00	%	14.00	%	21.00		%
TOTALS										100.00%			14.00%		28.00%		42.00%												100.00		%	14.00	%	28.00	%	42.00		%