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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A


Proxy Statement Pursuant to Section 14(a) of


the Securities Exchange Act of 1934


Filed by the Registrant    x

Filed by a Party other than the Registrant    o

Check the appropriate box:

x Preliminary Proxy Statement

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

o Definitive Proxy Statement

o Definitive Additional Materials

o Soliciting Material under § 240.14a-12


BAR HARBOR BANKSHARES
(Name of Registrant as Specified In Its Charter)


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

Payment of Filing Fee (Check the appropriate box):

x No fee required.

o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
Filed by the Registrantý

Filed by a Party other than the Registranto

Check the appropriate box:

o
​
Preliminary Proxy Statement

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

ý
​
Definitive Proxy Statement

o
​
Definitive Additional Materials

o
​
Soliciting Material under §240.14a-12


BAR HARBOR BANKSHARES
(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

ý
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No fee required.

o
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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:


​(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):


​(4)​Proposed maximum aggregate value of transaction:


​(5)​Total fee paid:


o Fee paid previously with preliminary materials.

o 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)
o
​
Fee paid previously with preliminary materials.

o
​
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:


​(2)​Form, Schedule or Registration Statement No.:


​(3)​Filing Party:


​(4)​Date Filed:


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PROXY STATEMENT

2018

LOGO

April 15, 2019

Dear Shareholders:

I invite you to join me, our Board of Directors, our senior management team and your fellow shareholders at our 2019 Annual Meeting of Shareholders














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April 11, 2018

Dear Shareholder:

The  to2018 Annual Meeting of the Shareholders of Bar Harbor Bankshares will be held at 11:00 a.m. EDT on Tuesday, May 15, 201821, 2019, at theBar Harbor Club located at 111 West Street in Bar Harbor, Maine. Our directors and officers join me in inviting you to attend this meeting and the reception following. The Notice of Annual Meeting, proxy Statementstatement and proxy card are enclosed alongtogether with the Company’s 2017Company's 2018 Summary Annual Report and Annual Report on Form 10-K.

The accompanying Notice of Annual Meeting of Shareholders describes matters to be acted uponaddressed at the Annual Meeting. Please giveYour vote is important and your prompt attention to these materials your prompt attention. In additionis greatly appreciated. Regardless of whether you plan to attend the formal items of business, management will report on the operations and activities of Bar Harbor Bankshares and Bar Harbor Bank & Trust, andannual meeting, we hope you will have an opportunityvote as soon as possible. We encourage you to ask questions.


The Board of Directors has determined that an affirmativecarefully read the proxy statement. You may vote onby telephone or over the matters to be considered at the Annual Meeting is in the best interests of Bar Harbor Banksharesinternet, or by completing, signing, dating and its shareholders, and unanimously recommends a vote “FOR” Proposals 1, 2, 3, 4, and 5. We ask that you complete, sign, date and mail promptlyreturning the enclosed proxy card in the return envelope, or use telephone or internet voting to ensure that your shares are representedinstruction card if you requested and voted at the meeting.received printed proxy materials. Shareholders who attend the Annual Meeting may withdraw their proxy and vote in person if they wish to do so. Your

During the Annual Meeting, shareholders will be asked to elect the entire Board of Directors and to approve the Bar Harbor Bankshares 2019 Equity Plan. We also will be asking shareholders to approve and to ratify the appointment of RSM US LLP as our independent auditor for 2019 and to approve, by an advisory vote, is extremelyour 2018 executive compensation as disclosed in the Proxy Statement for the Annual Meeting. These matters are important, so please act at your earliest convenience.


and we urge you to vote in favor of the election of each of the director nominees, the approval of the Bar Harbor Bankshares 2019 Equity Plan, the ratification of the appointment of our independent auditor and the approval of our 2018 executive compensation.

Following the formal items of business, our senior management team will report on the operations and activities of Bar Harbor Bankshares and Bar Harbor Bank & Trust. A reception for all attendees will be held after the Annual Meeting.

We look forward to seeing you on May 15, 2018.  


Very truly yours,

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Curtis21, 2019.

Sincerely,

LOGO

CURTIS C. Simard

SIMARD
President and

Chief Executive Officer

Enclosures


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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LOGO

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS


TO BE HELD MAY 15, 201821, 2019


Notice is hereby given that the Annual Meeting of the Shareholders of Bar Harbor Bankshares (“the Annual Meeting”) will be held at the Bar Harbor Club at 111 West Street in Bar Harbor, Maine, on Tuesday, May 15, 2018, at 11:00 a.m. EDT to consider and act upon the following proposals:

1.TIME & DATE:Election of thirteen (13) persons to serve as directors for a term of one year;​11:00 a.m., Eastern Time, May 21, 2019

PLACE:
​
Bar Harbor Club, 111 West Street, Bar Harbor, Maine



ITEMS OF BUSINESS:

1.
Election of the following nominees as Directors:
2.​Approval of a non-binding, advisory resolution on the compensation of the Named Executive Officers (“Say on Pay”);

Daina H. Belair​Brendan J. O'Halloran
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;

Matthew L. Caras​Curtis C. Simard
4.​Approval of the Bar Harbor Bankshares 2018 Employee Stock Purchase Plan;
David M. Colter​Kenneth E. Smith
5.​Ratification of the appointment of RSM US LLP as our independent registered public accounting firm for the year ending December 31, 2018; and
Steven H. Dimick​Stephen R. Theroux
6.​Consideration of any other business as may properly come before the Annual Meeting or any adjournment thereof.Martha T. Dudman​Scott G. Toothaker
​Lauri E. Fernald​David B. Woodside

The Board
2.
Approval of Directors has fixedthe Bar Harbor Bankshares 2019 Equity Plan

3.
Ratification of the appointment of RSM US LLP as our independent registered public accounting firm for the year ending December 31, 2019

4.
Approval of a non-binding, advisory resolution on the compensation of the Named Executive Officers ("Say on Pay")

RECORD DATE:

You must be a shareholder of record as of the close of business on March 29, 2018 as the record date for determining the shareholders of the Company entitled25, 2019 to receive notice of,attend and to vote at the Annual Meeting (“of Shareholders and any adjournment thereof. On the Record Date”).  Only shareholdersrecord date, there were approximately 1,604 holders of record of the Company’sour common stock atand 15,523,628 shares of our common stock outstanding, excluding treasury shares.

PROXY VOTING:

You may vote your shares in one of the close of business on the Record Date are entitled to receive notice of, and to votefollowing ways: 1) in person at the Annual Meeting.Meeting; 2) by telephone at 1-800-690-6903; 3) over the internet at WWW.PROXYVOTE.COM; or 4) by mailing your completed proxy to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If your shares are held in "street name" with a broker or similar party, you have a right to direct that organization on how to vote the shares held in your account. You will need to contact your broker to determine whether you will be able to vote using one of these alternative methods.


Your vote is important.  You are urged to sign and return the enclosed proxy in the postage prepaid envelope as promptly as possible whether

Whether or not you plan to attend the meeting in person. You may also deliverAnnual Meeting, we urge you to vote your voteshares by completing and returning the proxy card as promptly as possible, or by voting by telephone or over the internet, by followingprior to the instructions onAnnual Meeting to ensure that your proxy card or voting instructions form.shares will be represented at the Annual Meeting. Submitting a proxy or voting instructionsinstruction will not prevent you from attending the Annual Meeting and voting in person. You may revoke your proxy at any time before the final vote at the Annual Meeting. If you are thea shareholder of record, you may revoke your proxy in any one of the following four ways:

    •
    filing a written revocation of the proxy with our Corporate Clerk;
Clerk
•
entering a new vote over the internet or by telephone;
telephone
•
attending the Annual Meeting and voting in person; or
person
•
submitting another signed proxy bearing a later date.

date

ANNUAL MEETING ADMISSION:

For security reasons, a picture identification will be required if you attend the Annual Meeting. If your shares are not registered in your own name, you will need appropriate documentation from the shareholder of record in order for youis required to vote at the Annual Meeting. Examples of such documentation include a broker’sbroker's statement, letter or other document that will confirmconfirms 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 suchthat party.


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

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 afterfollowing the record date and will remain available for inspection throughthroughout the Annual Meeting or any adjournment thereof.


adjournment.

By Order of the Board of Directors

GRAPHIC

Caitlin Dunston, Corporate Clerk
April 15, 2019


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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, 201821, 2019: This proxy statement and our Annual Report are available free of charge on our websitewww.bhbt.com under the Shareholder Relations section of our website section.

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

TABLE OF CONTENTS

 PagePAGE
PROXY SUMMARY
1
SHAREHOLDERS ENTITLED TO VOTE
2
VOTING PROCEDURES AND METHOD OF COUNTING VOTES
2
ATTENDING THE ANNUAL MEETING
4
ELECTRONIC ACCESS TO PROXY MATERIALS
4
CORPORATE GOVERNANCE
43
GOVERNANCE PROCEDURES AND RELATED MATTERS
8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
910
SECTION 16 (a)16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
1211
PROPOSAL 1 - 1—ELECTION OF DIRECTORS
1312
DIRECTORS ANDDIRECTOR NOMINEES
14
NAMED EXECUTIVE OFFICERS
1420
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
2024
COMPENSATION OF DIRECTORS
25
22
PAGE
COMPENSATION OF NAMED EXECUTIVE OFFICERS
2427
CEO PAY RATIO
4541
PROPOSAL 2 - 2—APPROVAL OF THE BAR HARBOR BANKSHARES 2019 EQUITY PLAN
43
PROPOSAL 3—RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM48
PRINCIPAL ACCOUNTING FEES AND SERVICES49
PROPOSAL 4—NON-BINDING, ADVISORY RESOLUTION ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
4850
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
51
PROPOSAL 5 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
58
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES
58
OTHER MATTERS
6051
APPENDIX A - A—REPORT OF THE AUDIT COMMITTEE
A-1
APPENDIX B— BAR HARBOR BANKSHARES 2019 EQUITY PLANB-1

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Proxy Summary


PROXY STATEMENT
2019 ANNUAL MEETING OF SHAREHOLDERS

This summary highlights certain information contained elsewhere in our proxy statement. This summary does not contain all of the information you should consider. You should read the entire proxy statement carefully before voting.

ANNUAL MEETING OF SHAREHOLDERS

Time and date:​11:00 a.m., Eastern Time, on May 21, 2019

Place:
​
Bar Harbor Club, 111 West Street, Bar Harbor, Maine 04609.

Record date:
​
March 25, 2019

How to vote:
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You may vote in person at the Annual Meeting, by telephone at 1-800-690-6903, over the internet at WWW.PROXYVOTE.COM, or by mail addressed to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717

Votes
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Shareholders as of the record date will be entitled to one vote at the Annual Meeting for each of the outstanding shares of common stock held of record as of the record date.

Common shares
outstanding as
of record date:
​
15,523,628 shares

VOTING MATTERS

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APPENDIX B - 2018 EMPLOYEE STOCK PURCHASE PLAN

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PROXY STATEMENT
2018 Annual Meeting

Table of Shareholders


Contents

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PROXY SUMMARY

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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’sCompany's shareholders on or about April 11, 201815, 2019 to solicit proxies for the Annual Meeting.


In the absence of specific instructions to the contrary, shares represented by properly executed proxies received by the Company, including unmarked proxies, will be voted “"FOR”" each of the director-nominees identified in Proposal 1 and "FOR" Proposals 1, 2, 3, 4 and 5.4. 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 Shareholdersabove 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

SOLICITATION OF PROXIES

The Company will bearbears the entire cost of soliciting proxies from you.proxies. In addition, we will request that banks, brokers and other holders of record send noticethe Notice of the annual meetingAnnual Meeting to the beneficial owners of Bar Harbor Bankshares common stock and secure their voting instructions, if necessary. In addition, theThe Company has engaged Alliance Advisors to assist in the solicitation of the proxies for a fee of $6,500$7,000 plus reimbursement of customary expenses.



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 [________] holders of record of our common stock and [___________] shares of our common stock outstanding.

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.

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, andowns. Specifically, that person has not provided specific voting instructions to the broker or other nominee holder. Brokers who hold their customers’customers' shares in “street name” may,"street name," under the applicable rules of the exchangeNYSE American and other self-regulatory organizations of which the brokers are members, may sign and

submit proxies for suchthese shares and may vote suchthese 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

Votes Required for Election or Approval

Each director will treat abstentions and broker non-votes as shares that arebe elected by a plurality of the votes cast at the Annual Meeting by shareholders present at the meeting or represented by proxy and entitled to vote, for purposeswhere a plurality of determining the presencevotes cast means that individuals who receive the largest number of a quorum."for" votes will be elected as directors. 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 countedcount as “votes”votes cast and will have no effect on the proposals.


Voting Procedures
If you held yourvote. Brokers do not have discretionary authority to vote shares on this proposal without direction from the beneficial owner, and broker non-votes therefore will have no effect on the vote.

The Bar Harbor Bankshares shares directly through our transfer agent, as2019 Equity Plan will be approved by a majority of the record date, you can vote your shares using any of the following methods:


By Mail - shareholders can ensure that their shares are votedvotes cast at the Annual Meeting by completing, signing, datingthe shareholders present at the meeting or represented by proxy and mailingentitled to vote. An abstention will count as a vote cast and therefore will have the enclosed proxy card insame effect as a vote against 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, youproposal. Brokers do not have discretionary authority to mail in your proxy card, but your vote shares on this proposal without direction from the beneficial owner, and broker non-votes therefore will have no effect on the vote.

    Proposal 3: Ratification of 2019 Independent Auditor

The ratification of RSM US LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019 must be receivedapproved by a majority of 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 presentedvotes cast at the Annual Meeting by the shareholders present at the meeting or represented by proxy and entitled to vote. Abstentions will not count as votes cast and will have no effect on the vote. Because this proposal is considered a routine matter, discretionary votes by brokers will be voted with respectcounted.

The advisory vote to any such matterapprove our 2018 executive compensation must be approved by the proxy holders in accordance with the recommendationsa majority of the Board. As of the date of this proxy statement, it is not anticipated that any matters will be presentedvotes cast at the Annual Meeting other than those set forth inby 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.

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 personallyshareholders present at the Annual Meeting priormeeting or represented by proxy and entitled to vote. Abstentions will not count as votes cast and will have no effect on the voting ofvote. Brokers do not have discretionary authority to vote shares on this proposal without direction from 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.


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 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 shareholderand broker non-votes therefore will have no effect on the vote.

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2019 PROXY STATEMENT

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Table of record, you must present both a formContents

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CORPORATE GOVERNANCE

Corporate Governance


Board of official photo IDDirectors

We are committed to objective, independent leadership for our Board and proofeach of ownership consistingits committees. Our Board believes the active, objective, independent oversight of a bank or brokerage account statement.


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

ELECTRONIC ACCESS TO PROXY MATERIALS

This proxy statementeffective Board governance, to serving the best interests of our Company and our 2017 Annual Report on Form 10-K are availablestockholders, and to executing our strategic objectives and creating long-term shareholder value.

Specifically, our Board has adopted rigorous governance practices and procedures focused on our website at www.bhbt.com.


CORPORATE GOVERNANCE

corporate growth. To maintain and enhance its independent oversight, our Board of Directors
Thehas implemented measures to further enrich Board oversees our businesscomposition, leadership and monitors the performance of our management. In accordance witheffectiveness. These measures align our corporate governance procedures, thestructure with achieving our strategic objectives and enables our Board does not involve itself into effectively communicate and oversee our day-to-day operations.culture of compliance and in-depth risk management. 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 discussfrequently discusses business and other matters with key executivesthe senior management team and principal advisors such as our principal external advisors (legallegal counsel, auditors, consultants and financial advisors and other consultants).

advisors.

The Board held a total of 1213 regular meetings, twoone strategic planning meeting, as well as our quarterly measurement against strategic objectives meetings, and one annual meeting during 2017.2018. Each director attended at least 75%91% of the total number of board and applicable committee meetings that he or she was eligible to attend.


Theheld in 2018. We do not have a formal policy requiring Board encourages each directormembers to attend its Annual Meeting.our annual meetings of shareholders, however we strongly encourage them to do so. All of the Board’sBoard members attended the 2017Annual2018 Annual Meeting.

Board Leadership Structure

Currently, the positions

The position of Chairman of the Board and CEO of the Company areis held by separate individuals, with Mr. Woodside serving as Chairman of the Board andWoodside. Mr. Simard servingserves as CEO. The Board believes that thisPresident and Chief Executive Officer. This leadership structure best serves the Company at this time because it allows Mr. Simard to focus on the Company’sCompany operations and business strategy, while Mr. Woodside among other things, can provideprovides independent leadership for the Board settogether with an appropriate level of management oversight, sets the agenda for meetings, and enableenables other directors to raise issues and concerns for Board consideration without immediately involving the CEO or other management.


consideration.

The Board leadership structure of the Company is guided by itsour Governance Committee. The Company’s Governance Committee which nominates individuals to serve as members of the Company’s Board, including any management directors. The Governance Committee is keenly focused on the character, integrity, diversity and qualifications of its members, as well as its leadership structure and composition. The Board has concluded that our current leadership structure is appropriate at this time. However, the Board will continue to periodically review its leadership structure and may make such changes in the future as it deems appropriate.

All director-nominees of the Company are considered “independent directors”"independent directors" under the NYSE American corporate governance standards set outforth in the NYSE American Company Guide (the “NYSE"NYSE American Rules”Rules"), except the CEO of the Company.for Mr. Simard, our President and Chief Executive Officer. The Chairman of the Board is considered an “independent director”. Management directors do"independent director." Mr. Simard does not vote or serve as Chairsa Chair of any Board committees. Thecommittee, nor is he a member of the Governance, Compensation and Human Resources, or Audit Committees. Our Governance Committee nominates persons to serve in the Chairman’sChairman's role for election by the entire Board. The “independent directors”independent directors meet regularly in executive session immediately after Board meetings periodically to ensure that there is adequateboard independence and oversight of Company management and to ensure that there is ample time to assess the Company’s activities separate from management.organizational activities. 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 roleheld 12 executive sessions of Board Chairman segregates the role from that of the CEO and provides a strong and appropriate level of management oversight.


The Company’smeetings during 2018.

Our Audit Committee meets quarterly and receives reports from itsour independent registered public accounting firm, the independent loan review consultants, and the Bank’s internal audit function.function of Bar Harbor Bankshares. The internal


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

Risk Oversight

The

Our Board recognizes the importance of maintaining the trust and confidence of the Company's customers, clients and employees. Specifically, independent of oversight of key risks facing our Company, the Board devotes significant time and attention to data and systems protection, including cybersecurity and information security risks. Our Board monitors and manages risks through the activities of specializedselect Board committees and other committees in conjunction with Company management, internal audit, theour independent registered public accounting firm, and other specialized independent advisors.


One such specialized committee, the Specialized audits include Information Technology and Security, Bank Secrecy Act, Loan Review, and Trust Operations. The Board regularly discusses risk management with senior management during meetings.

Board Risk Committee

The Board Risk Committee is presently composed of directorsthe following directors: Caras, Fernald, O'Halloran, Simard, Smith, Theroux, Toothaker, Simard, Theroux, and Woodside. Mr. Caras serves as Chairman. TheCommittee members are appointed by the Board and provide oversight of the following Company functions: (i) the Company’s1) risk governance structure, (ii) the Company’sstructure; 2) risk management, and risk assessment guidelines, and policies regarding market, credit, operational, liquidity, funding, reputational, compliance, and franchise risk, and suchas well as other risks as necessary to fulfill the Committee’sCommittee's duties and responsibilities, (iii) the Company’sresponsibilities; 3) risk appetite and tolerance,tolerance; and (iv) the Company’s4) capital, liquidity, and funding in coordination with BHBT’sthe Asset/Liability Committee. Management Committee of our subsidiary, Bar Harbor Bank & Trust (the "Bank" or "BHBT").

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The Company’sCompany's risk profile includes, but is not limited to:to, internal controls over financial reporting, credit risk, interest rate risk, liquidity risk, operational risk, cybercybersecurity risk, incentive compensation risk, reputational risk, and compliance risk.

The Board Risk Committee meets at least monthly.


Themonthly and receives regular presentations and reports throughout the year on cybersecurity and information security risk from management. These presentations and reports address a broad range of topics including updates on technology trends, regulatory developments, legal issues, policies and practices, the threat of environment and vulnerability assessments, and specific and ongoing efforts to prevent, detect, and respond to internal and external critical threats.

In addition, the Board Risk Committee also reviews and discusses on a quarterly basis the Bank’sBar Harbor Bank and Trust's bank-wide risk assessments.assessment. The resulting risk assessments areassessment is aggregated, shared and also discussed with the Board at least annually. The risk assessments are supplemented by regularIn addition to monthly Board reports, our Board receives real-time reports from theour Chief Risk Officer regarding emerging risks at monthlyon key developments across the industry, as well as specific information about peers, vendors, and other significant incidents. In 2018, the Committee held a total of 17 meetings. Our information security programs enable us to monitor and promptly respond to threats and incidents, and innovate and adopt new technologies, as appropriate. The Board meetings.Risk Committee shares the Company's goal that each employee be responsible for information security, data security, and proven cybersecurity practices.


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,$5 million, and regularly reviews credit trends, delinquencies, non-performing loans, charged-off loans, and management’smanagement's quarterly assessment of the adequacy of the Loan Loss reserve. The committee,Board Risk Committee, in conjunction with the Audit Committee, reviews reports prepared by an independent loan review firm, andas well as those issued by the Company's Internal Audit function to assist in their on-going assessment of credit risk.


The

Compensation and Human Resources Committee

Our Board manages director and officer compensation, including but not limited to, incentive compensation risk, through its Compensation and Human Resources Committee. The Compensation and Human ResourcesThis Committee has engaged Pearl Meyer as& Partners, LLC ("Pearl Meyer"), an independent compensation consultantsconsultant, 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 committeeCommittee. The Committee reviews compensation matters with the assistance of the Company’sCompany's Board Risk Committee. TheThese results are reviewed by the Board to ensure that incentive plans for senior management officers and others do not encouragediscourage excessive risk-taking.

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CORPORATE GOVERNANCE


Board Committees

Our Board has five standing committees—Executive, Audit, Compensation and Human Resources, Governance, and Board Risk. Charters describing the responsibilities of the Audit, Compensation and Human Resources, and Governance Committees can be found on our website atwww.bhbt.com under the Shareholder Relations section. The Board Risk Committee is discussed on page 3.

Our Board committees regularly make recommendations and report on their activities to the full Board. Each committee may obtain advice from internal or external financial, legal, accounting, or other advisors at their discretion. Our Board, considering the recommendations of our Governance Committee, reviews our committee charters and committee membership at least annually. The duties of our Board committees are summarized below.

​ ​​ ​​
Executive Board
Key Responsibilities

•

Exercises all the powers of the Board relating to the ordinary operations of business when the Board is not in session, subject to any specific vote of the Board

•

Appointed by the Board after the Annual Meeting of Shareholders

Members Caras, Dudman, Fernald, Simard, Smith, Toothaker and Woodside (Chair)

2018 Meetings: 1

​​Audit
Key Responsibilities

•

Oversees qualifications, appointment, performance, compensation, and independence of our independent registered public accounting firm

•

Assists the Board in fulfilling its oversight responsibilities with respect to 1) the financial information to be provided to shareholders and the SEC, 2) the review of quarterly financial statements, 3) the system of financial reporting controls management as established, and 4) the internal audit, external audit, and loan review processes

•

Oversees compliance with legal and regulatory requirements

•

Makes inquiries of management to assess the scope and resources necessary for the corporate audit function to execute its responsibilities

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Independence/Qualifications

•

All committee members are independent under the NYSE American listing requirements and Rule 10A-3(b)(1) under the Exchange Act

•

All committee members are financially literate in accordance with the NYSE American listing standards

•

All committee members are qualified as Audit Committee financial experts under SEC rules



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Members    Belair, Caras, Colter, Ensign*, O'Halloran and Toothaker (Chair).


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2018 Meetings: 4


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* Ensign is not standing for re-election at the Annual Meeting.


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See Appendix A for the Report of the Audit Committee.
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Compensation and Human Resources
Key Responsibilities

•

Oversees establishing, maintaining, and administering all compensation programs and employee benefit plans

•

Approves and recommends the CEO's compensation to the Board for further approval by all independent directors, and reviews and approves all other executive officer compensation

•

Recommends director compensation for Board approval

•

Reviews and approves the terms of any employment agreements, severance agreements, change in control protections and any other compensatory arrangements for the CEO, officers and other senior management

•

Reviews human capital management practices

•

Prepares and reviews its report on executive compensation to be included in our proxy statement or annual report

Independence/Qualifications

•

All committee members are independent under the NYSE American listing standards

•

Heightened independence requirements (same as those applicable to Audit Committee members under SEC rules)

Members Cashman*, Colter, Dimick, Dudman, Fernald, Woodside, and Smith (Chair)

2018 Meetings: 8

Further information regarding the Compensation and Human Resources Committee can be found in this proxy statement beginning under the caption "Role of the Compensation and Human Resources Committee" on page 27.

* Mr. Cashman retired in May, 2018

​​Governance
Key Responsibilities

•

Oversees the Board's governance processes

•

Screens director candidates, recommending nominees to the full Board (including the slate of returning directors) to be elected each year

•

Identifies and reviews the qualifications of potential Board members; recommends nominees for election to the Board

•

Recommends the size and composition of the Board

•

Recommends committee structure and membership

•

Sponsors new director orientation and education

•

Reviews and assesses stockholder input and our stockholder engagement process

Independence/Qualifications

•

All committee members are independent under the NYSE American listing standards

Members Belair, Cashman*, Caras, Dimick, Woodside and Fernald (Chair)

2018 Meetings: 5












* Mr. Cashman retired in May, 2018

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Compensation and Human Resources Committee Interlocks and Insider Participation

No Named Executive Officer ("NEO") serves as a member of a Compensation and Human Resources 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 and Human Resources Committee.


Risk Management Committee

Risk assessment and risk management are the responsibility of the Company’s management.Company's senior management team. The Committee’sRisk Management 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”"ERM") thatand is administered on its behalf andby the Board of Directors by Executive Vice President,Bank's Chief Operating Officer and Chief Risk Officer, Mr. Richard B. Maltz.Officer. As part of the ERM, information from the Bank’sBank's lines of business is regularly collected and analyzed to identify, monitor, track, and report various risks within the organization.Company.


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RISK MANAGEMENT COMMITTEE
Key Responsibilities





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Reviews and recommends for approval risk mitigation strategies, risk acceptance, ongoing assessment of the adequacy and effectiveness of internal controls, and oversight of any risk mitigation plans​​Ensures an appropriate balance between business development objectives, risk tolerances, cost of internal control, operational efficiency, regulatory requirements and customer experience​​Ensures continued development of a comprehensive 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 direction of risk, reviews and monitors corrective action plans and periodically reports results of the Board
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Other Risk Oversight Committees

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 beenthe delegated authority and specific duties specific to execute the execution of the Bank’sCompany'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”"ALCO") is responsible for the management of interest rate risk, liquidity risk, market risk, and capital adequacy levels of the Bank,Company, as well as for developing strategies governing the effective management of the Bank’sCompany's balance sheet and income statement.


The Management Loan Committee (the “MLC”"MLC") is responsible foroversees the management of credit risk related to all aspects of the lending portfolio of the Bank and relatedassociated 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.


or above $5 million.

The Bank’sCompany's Information Technology & Operations Committee (the “ITOC”"ITOC") oversees the developmentis responsible for developing and implementation ofimplementing the technology and operations strategies of the BankCompany and its subsidiaries. The ITOC overseesmanages the implementation of operational risk management practices, including the development of internal policies, & procedures and risk appetite, while providing oversight oftolerance guidelines, assures the quality and performance of the Bank’sBank's project management practices, to ensureand ensures the organization's operational objectives are metachieved in a safe and sound manner


The Company believes that itsmanner.

We believe our risk management activities and proceduresdetailed reports provide sufficientclear and concise information to our senior management team and the Board to assist them in properly and adequately evaluatingevaluate the Company’sCompany's compliance with its risk management programs and policies.  There can be no assurance that the Board’s risk oversight structure has identified

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GOVERNANCE PROCEDURES AND RELATED MATTERS

Governance Procedures and Related Matters


Code of Conduct and addressed every potential material riskBusiness Ethics

Our Code of Conduct and there may be additional risks that could ariseBusiness Ethics ("Code of Conduct") applies to all directors, executive officers, employees, contractors and consultants, and articulates our philosophy regarding ethical conduct in the Company’s business.workplace. This Code of Conduct 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. Also, 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. 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, will be disclosed within four (4) business days by posting such information on our website. In the case of a waiver of our Code of Conduct for any executive officer or director, the required disclosure also will be made available on our website within four (4) business days of the date of such waiver. Both knownthe Code of Conduct and unknown risks could resultthe Code of Ethics for Senior Financial Officers are available on our website athttps://www.bhbt.com/codes-and-charters.

Securities and Insider Trading Policy

We maintain a Securities and Insider Trading Policy that applies to all of our directors, executive officers, employees, contractors and consultants. The policy is designed to prevent insider trading, allegations of insider trading, and to protect our reputation, integrity and ethical conduct. A copy of our Securities and Insider Trading Policy is available on our website athttps://www.bhbt.com/codes-and-charters.

Prohibition on Hedging

Our Insider Trading Policy prohibits directors, executive officers, employees, contractors and consultants from engaging in potentially material financial and/or business losses despiteany hedging activity involving our securities.

Board Independence and Qualifications

Under the Board’s efforts to oversee risk.


Committees
The Board hasNYSE American corporate governance standards, set out in the NYSE American Rules, 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 powersmajority of the Board must be "independent directors" as defined in regardSection 803A of the NYSE American Rules. According to ordinary operationsSection 803A, "independent director" means a person other than an executive officer or employee of our business whenthe Company. In addition, to qualify as an "independent director," the Board ismust affirmatively determine that the director does not have a relationship that would interfere with the exercise of independent judgment in session, subject to any specific votecarrying out the responsibilities 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.

a director. 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 oversightall of the independent registered public accounting firmnamed director-nominees listed in this proxy statement meet the applicable independence standards except for Mr. Simard,

our President 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 CommitteeChief Executive Officer. Mr. Simard 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 eachnot a member of the Audit, Compensation and Human Resources, or Governance Committees.

As noted, 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.

The Governance Committee expects to identifyidentifies 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’scandidate's background, business and professional experience, demonstrated business acumen (including any requisite financial expertise or other special qualifications), ethical character, current employment, the ability to exercise sound business judgment, and a commitment to understand BHB,Bar Harbor Bankshares, its business and the industry in which it operates. They also considerIn addition, the Governance Committee considers a candidates’scandidate's experience at a regulated financial institution. The Committee also considers ifinstitution and whether a candidate has sufficient time to devote to the responsibilities of being a director, their community service or other board service, as well as the racial, ethnic, and gender diversity of the Board as a whole.Board. 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’scandidate's qualifications in light ofwith respect to 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”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"Nominations by Shareholders.”

Compensation Committee
"

The Compensation Committee reviewsDirector Tenure

Each elected director serves until the next succeeding annual meeting and considers recommendationsuntil his or her successor is elected or qualified or until his or her earlier resignation or removal 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.


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" and "Risk Oversight” on page 4 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.   

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 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.office. 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"), 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 believesdirector. However, our Amended and Restated Bylaws provide that directors will not be nominated for election or re-election after their seventy-second birthday. Notwithstanding, the full Board may nominate candidates over 72 years of age for election or re-election for a single annual term for special circumstances as determined by the Board for the benefit of shareholders. It is widely believed our best interests are served when itthe Board is represented by individuals who have developed, over time, valuable insight into our operations, businesses, as well as a profound understanding of our core values and businesses.goals toward community growth and prosperity.


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Bar Harbor Trust Services and Charter Trust Company Committees

The Company through Bar Harbor Bank and Trust has two additional subsidiaries through its wholly owned bank subsidiary, wholly-owned subsidiaries—Bar Harbor Bank & Trust. Committees withTrust Services and Charter Trust Company. Bar Harbor Trust Services and Charter Trust Company have separate committees. These committees have identical membershipmemberships and are presently composed of directors Dudman, Ensign, Smith, Theroux, Belair, and SimardSimard. Ensign is not standing for re-election at the Annual Meeting. These directors oversee both of these trustsubsidiaries and wealth management subsidiaries. Martha T.Ms. Dudman serves as Chairperson.the Chair for both Committees. 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.


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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

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Table of the Company with any financial reporting requirement under the federal securities laws.


Contents

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

Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The following table sets forth information with respect toregarding the beneficial ownership of our common stock as of March 20, 201825, 2019 by: (i)1) 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)25, 2019; 2) each current director and nominee for election to the Board; (iii)3) our NEOs; and (iv)4) all executive officers and directors as a group. We had 15,456,83115,523,628 shares of common stock, net of treasury shares, outstanding as of March 20, 2018.


BlackRock, Inc. holdings are disclosed based on their ownership as25, 2019. Unless otherwise indicated, the address of December 31, 2017 as filed on Form Schedule 13G on February 1, 2018.

all individuals listed below is 82 Main Street, PO Box 400, Bar Harbor, Maine, 04609.

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.

The number of shares beneficially owned by the persons set forth below 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, 1) voting power, which includes the power to vote or to direct the voting of the shares, or 2) investment power, which includes the power to dispose or direct the disposition of shares.




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%

NAME OF BENEFICIAL OWNERS

​TITLE OF
CLASS		​AMOUNT OF
BENEFICIAL
OWNERSHIP		​FOOTNOTES​PERCENT
OF
CLASS1


5% or more beneficial owners

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BlackRock, Inc.

​ ​​846,263​​​2​​​5.46%​
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DIRECTORS

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Belair, Daina H.

​Common​​3,361​​​ ​​​*​​
​​​ ​​ ​​ ​​ ​

Caras, Matthew L.

​Common​​9,472​​​ ​​​*​​
​ ​​ ​​ ​​ ​​ ​

Colter, David M.

​Common​​3,440​​​ ​​​*​​
​ ​​ ​​ ​​ ​​ ​

Dimick, Steven H.

​Common​​6,061​​​ ​​​*​​
​ ​​ ​​ ​​ ​​ ​

Dudman, Martha T.

​Common​​14,568​​​ ​​​*​​
​ ​​ ​​ ​​ ​​ ​

Ensign, Stephen W.

​Common​​107,500​​​3​​​*​​
​ ​​​​ ​​ ​​​

Fernald, Lauri E.

​Common​​9,078​​​ ​​​*​​
​​​ ​​ ​​ ​​ ​

O'Halloran, Brendan J.

​Common​​2,535​​​ ​​​*​​
​ ​​ ​​ ​​ ​​ ​

Simard, Curtis C.

​Common​​27,985​​​8​​​*​​
​ ​​​​ ​​ ​​​

Smith, Kenneth E.

​Common​​12,556​​​4​​​*​​
​​​ ​​ ​​ ​​ ​

Theroux, Stephen R.

​Common​​93,320​​​5​​​*​​
​ ​​​​ ​​ ​​​

Toothaker, Scott G.

​Common​​24,209​​​6​​​*​​
​​​ ​​ ​​ ​​ ​

Woodside, David B.

​Common​​10,783​​​7​​​*​​
​ ​​​​ ​​ ​​​

NAMED EXECUTIVE OFFICERS

​ ​​ ​​​ ​​​ ​​
​​​ ​​ ​​ ​​ ​

Iannelli, Josephine

​Common​​3,651​​​8​​​*​​
​ ​​​​ ​​ ​​​

Maltz, Richard B.

​Common​​8,243​​​8​​​*​​
​​​ ​​ ​​ ​​ ​

Colombo, Marion

​Common​​1,608​​​8​​​*​​
​ ​​ ​​ ​​ ​​ ​

Mercier, John M.

​Common​​2,632​​​8​​​*​​
​ ​​ ​​ ​​ ​​ ​

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

​ ​​361,763​​​9​​​2.33%​
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

​

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.

​BlackRock, Inc, holdings are disclosed based on their ownership as of December 31, 2018 as filed on Form Schedule 13G on February 7, 2019. The address of BlackRock, Inc is 55 East 52nd Street, New York, NY 10055.

2.3.

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 13,9208,417 shares held within a Supplemental Executive Retirement Plan for Mr. Ensign over which he does not have voting or dispositive powers.

4.

5.
​		Includes 3,3813,520 shares over which voting and dispositive powers are shared jointly with Mr. Smith’sSmith's spouse.

5.

6.
​		Includes 34,86833,621 shares over which voting and dispositive powers are shared jointly with Mr. Theroux’sTheroux's spouse. This number does not include 37,12424,844 shares held within a Supplemental Executive Retirement

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

7.6.

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

7.

8.
​		Includes 2,1422,754 shares over which voting and dispositive powers are shared jointly with Mr. Woodside’sWoodside's spouse. This number does not include 1,500 shares owned by Mr. Woodside’sWoodside's spouse over which he does not have voting or dispositive powers.

8.

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.
11.
​		The table below includes (a) shares the NEOs own directly, (b) shares over which NEOs have voting power of fully vested shares under the Company’sCompany's 401(k) Plan, (c) time-vested and performance shares (disclosed at Target) scheduled to be issued to the executives within 60 days of the March 29, 201825, 2019 record date under the long-term incentive plans. These ownership positions are set forth in the table below:



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
EQUITY
(c)		​

Curtis C. Simard

​​21,231​​​685​​​6,589​​
​ ​​ ​​ ​​ ​

Josephine Iannelli

​​312​​​—​​​3,339​​
​ ​​ ​​ ​​ ​

Richard B. Maltz

​​4,440​​​—​​​3,803​​
​​​ ​​ ​​ ​

Marion Colombo

​​—​​​—​​​1,608​​
​ ​​ ​​ ​​ ​

John M. Mercier

​​1,000​​​—​​​1,632​​
​​​ ​​ ​​ ​



9.

​Total beneficial ownership includes 20,761 (.0013%) shares of common stock held by two trusts, which, for the purpose of voting, are allocated equally among the directors present at the Annual Meeting under the terms of the respective trust instruments. No director has any other beneficial interest in these shares. These trusts are denominated for purposes of this proxy statement as the "Parker Trust "and the "The Fred & Hattie Lynam Private Foundation" formerly known as the Lynam Trust. The Parker Trust was established in 1955 in perpetuity. Bar Harbor Trust Services, the Company's second tier non-depository trust services company located in Ellsworth, Maine, is the sole Trustee, with full powers, of this trust benefiting the Mt. Heights Cemetery in Southwest Harbor, Maine. The Fred & Hattie Lynam Private Foundation, was established in 1942 in perpetuity to benefit Mount Desert Island charities and later expanded to provide scholarships to graduates of Mount Desert Island High School. Bar Harbor Trust Services is the sole Trustee, with full powers, and administers the trust with the assistance of an established Grant and Scholarship Committee made up of members of the Board and community representatives.

12Total beneficial ownership includes20,761 (.0013%) shares of common stock held by two trusts, which, for the purpose of voting, are allocated equally among the directors present at the Annual Meeting under the terms of the respective trust instruments. No director has any other beneficial interest in these shares. These trusts are denominated for purposes of this proxy statement as the “Parker Trust “and the “The Fred & Hattie Lynam Private Foundation" formerly known as the Lynam Trust. The Parker Trust was established in 1955 in perpetuity. Bar Harbor Trust Services, the Company’s second tier non-depository trust services company located in Ellsworth, Maine, is the sole Trustee, with full powers, of this trust benefiting the Mt. Heights Cemetery in Southwest Harbor, Maine. The Fred & Hattie Lynam Private Foundation, was established in 1942 in perpetuity to benefit Mount Desert Island charities and later expanded to provide scholarships to graduates of Mount Desert Island High School. Bar Harbor Trust Services is the sole Trustee, with full powers, and administers the trust with the assistance of an established Grant and Scholarship Committee made up of members of the Board and community representatives.



Section 16(a) Beneficial Ownership Reporting Compliance

SECTION 16 (a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s officers, directors, and persons who own more than 10% of a registered class of the Company’sCompany's equity securities (collectively “Section"Section 16 Persons”Persons") to file initial reports of ownership and reports of changes of ownership with the SECSecurities and Exchange Commission (the "SEC") and the NYSE American. Section 16 Persons are required

by the CommissionSEC regulations to furnish the Company with copies of all Section 16(a) forms they file.


To our knowledge, based solely on review of such reports provided to us and written representations, all reports were filed timely as required except: Mr. Theroux filed a late Form 4 on August 24, 2017 relating to two transactions and a late Form 4 on November 15, 2017 relating to four transactions.timely.

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PROPOSAL 1


ELECTION OF DIRECTORS

Proposal 1
Election of Directors


Directors and Nominees

At the Annual Meeting, stockholders will elect the entire Board of Shareholders, thirteen director-nominees will stand for electionDirectors to serve untilfor the 2019 Annual Meeting of Shareholdersensuing year and until each director’s successor istheir successors are elected and qualified. The Board has designated as nominees for election the 12 persons named below, each of whom currently serves as a director. Each director-nomineedirector nominee has consented to serve, and to the use of his or her namebeing named in this proxy statement. Twelvestatement and to serving as a director if elected.

Listed are each nominee's name, age as of our Annual Meeting date, tenure of Board service, committee memberships, principal occupation, business experience, Board Committee positions, and positions with our subsidiaries consisting of BHBT, Bar Harbor Trust Services ("BHTS") and Charter Trust Company ("CTC"). We also discuss the director-nominees currently serve on thequalifications, attributes, and skills that led our Board and the thirteenth nominee, Brendan O’Halloran, is a new director nominee this year and was nominated by the Board.  Our Amended and Restated Bylaws (the “Bylaws”) provide that directors will not be nominatedto nominate each for election or re-election after their 72nd birthday; however,as a director. The terms of all current directors expire at the Board may nominate candidates over 72 years old for election or re-election for a single annual term for special circumstances as determined by the Board for the benefit2020 Annual Meeting.





NAME

​


AGE		​YEAR FIRST
ELECTED OR
APPOINTED
DIRECTOR		​

POSITIONS WITH
THE COMPANY		​


POSITIONS WITH SUBSIDIARIES

Daina H. Belair

​63​2015​Director​Director, BHBT since 2015

​ ​ ​ ​Director, BHTS since 2015

​ ​ ​ ​Director, CTC since 2017
​​​ ​​ ​​ ​​

Matthew L. Caras

​62​2014​Director​Director, BHBT since 2014
​ ​​ ​​ ​​ ​​

David M. Colter

​51​2016​Director​Director, BHBT since 2016
​ ​​ ​​ ​​​​

Steven H. Dimick

​68​2017​Director​Director, BHBT since 2017
​​​ ​​ ​​ ​​

Martha T. Dudman

​67​2003​Director​Director, BHBT since 2003

​ ​ ​ ​Chairman, BHTS since 2005

​ ​ ​ ​Director, BHTS since 2003

​ ​ ​ ​Chairman, CTC since 2017

​ ​ ​ ​Director, CTC since 2017
​ ​​ ​​ ​​ ​​

Lauri E. Fernald

​57​2005​Director​Director, BHBT since 2005
​ ​​ ​​ ​​​​

Brendan J. O'Halloran

​56​2018​Director​Director, BHBT since 2018
​​​ ​​ ​​ ​​

Curtis C. Simard

​48​2013​Director,​President and CEO of BHBT since 2013

​ ​ ​President and​Director, BHBT since 2013

​ ​ ​CEO​Director, BHTS since 2013

​ ​ ​since August 2013​Director, CTC since 2017
​ ​​ ​​ ​​​​

Kenneth E. Smith

​65​2004​Director​Director, BHBT since 2004

​ ​ ​ ​Director, BHTS from 2004 - 2013 and 2015 to present

​ ​ ​ ​Director, CTC since 2017
​ ​​ ​​ ​​ ​​

Stephen R. Theroux

​69​2017​Director​Director, BHBT since 2017

​ ​ ​ ​Director, CTC since 2017
​ ​​ ​​ ​​ ​​

Scott G. Toothaker

​56​2003​Director​Director, BHBT since 2003
​ ​​ ​​ ​​​​

David B. Woodside

​67​2003​Director​Director, BHBT since 2003

​ ​ ​ ​Chairman of the Board since 2016
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PROPOSAL 1
ELECTION OF DIRECTORS

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The
NUMBER OF BOARD AND COMMITTEE MEETINGS HELD IN 2018
​​​​ ​​​​​​ ​​​​​​
BOARD​
EXECUTIVE		​
AUDIT		​COMPENSATION &
HUMAN RESOURCES		​
GOVERNANCE		​
BOARD RISK
13​1​4​8​5​17
​ ​​ ​​ ​​ ​​ ​​

Note:

​In addition to the number of formal meetings reflected above, from time to time our Board and/or its committees also held educational and/or informational sessions
​

Our Board has determined that all but one of the director-nomineesdirector nominees are “independent directors”"independent directors" in accordance with applicable laws, regulations, and NYSE American LLC (hereinafter “NYSE American”("NYSE American") listing requirements. The exception is director-nomineedirector nominee Curtis C. Simard, who currently serves as our President and Chief Executive Officer (“CEO”) of the Company.Officer. Mr. Simard is not a member of the Audit, Compensation and Human Resources, or Governance Committees. Although Stephen R. Theroux, former President

The Board selected our 12 director nominees based on their satisfaction of the core attributes described starting on page 14, and CEOthe belief that each can make substantial contributions to our Board and Company. Our Board believes our nominees' breadth of Lake Sunapee Bank Group, satisfiesexperience and their mix of attributes strengthen our Board's independent leadership and effective oversight of management relating to our Company's businesses, our industry's operating environment, and our Company's long-term strategy. Our 12 director nominees:

financial services
For additional information on each nominee, please see the section entitled “Directors
•
represent diverse backgrounds and Executive Officers” located elsewhere in this proxy statement.
viewpoints

•
strengthen our Board's oversight capabilities by having varied lengths of tenure that provide historical and new perspectives about our Company

Vote Required


DirectorsOur directors will be elected by a plurality of the votes cast at the Annual Meeting by shareholders present at the holders of shares present,meeting, or represented by proxy and entitled to vote on the election of directors. Plurality means that the individuals who receive the largest number of “"FOR”" votes will be elected as directors. If you do not vote for a nominee, or you indicate “"ABSTAINWITHHOLD”" for any nominee on your proxy card, your vote will not count “"FOR”" or “"AGAINST”" the nominee. You may not vote your shares cumulatively in the election of directors. Brokers do not have discretionary authority to vote shares on this proposal without direction from the beneficial owner.shareholder. Therefore, broker non-votes will have no effect on the vote.


Our Recommendation

THE

OUR BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR”"FOR" THE ELECTION OF THE THIRTEENTWELVE PERSONS NOMINATED AS DIRECTORS IN THE PROXY.

​



DIRECTORS AND EXECUTIVE OFFICERS

Directors and Nominees
As of December 31, 2017, the Board consisted of thirteen members. Leonard R. Cashman, a former LSBG director, will not stand for re-election pursuant to the Bylaws with respect to the maximum age of directors. Brendan O’Halloran has been nominated by the Board to fill the seat vacated by Mr. Cashman. As a result, thirteen director/nominees will stand for election at the May 15, 2018 meeting. The Board has determined that all but one of the director-nominees are “independent directors” in accordance with applicable laws, regulations and NYSE American listing requirements.  The exception is director–nominee Simard who is President and CEO of the Company.  Mr. Simard is NOT a member of the Audit, Compensation, or Governance Committees. Although Stephen R. Theroux, former President and CEO of LSBG, satisfies the definition of independence under the NYSE American regulations, Board has NOT appointed him to the Audit Committee, Compensation Committee, or Governance Committee.

For each director-nominee, the following table sets forth their names, ages as of March 29, 2018 and positions with the Company or its subsidiaries consisting of Bar Harbor Bank & Trust ("BHBT"), Bar Harbor Trust Services (“BHTS”) and Charter Trust Company (“CTC”). The terms of all current directors expire in 2018.

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.

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Appointed by the Board on January 10, 2017, effective upon completion

Table of the merger with LSBG.Contents

​

PROPOSAL 1
ELECTION OF DIRECTORS

Director Nominees


DAINA H. BELAIR​DIRECTOR SINCE: 2015
​

​

AGE:63

COMMITTEE MEMBERSHIPS:

•

AUDIT COMMITTEE

•

GOVERNANCE COMMITTEE

•

BAR HARBOR TRUST SERVICES COMMITTEE

•

CHARTER TRUST COMMITTEE

​

Since 2008, Ms. Belair has been the owner of the Inn at Sunrise Point located in Lincolnville, Maine. She is a retired attorney specializing in the field of banking and financial services. Before relocating to Maine, she was employed as General Counsel and Managing Director of U.S. Trust Corporation, U.S. Trust Company of New York and U.S. Trust Company N.A. from May 2002 through October 2006. Prior to her time at U. S. Trust, she served as Vice President and a senior and division general counsel at Citibank N.A. from 1987 to 2002 including in its Emerging Markets and its Private Banking Division. Ms. Belair resides in Lincolnville, Maine.

Professional and Leadership Highlights:

•

Significant Banking and Wealth Management experience

•

Serves as a Director of Home Counselors Inc., a private not-for-profit organization

•

Served on the Town of Lincolnville Budget Committee

•

Served as Director and Treasurer of the Penobscot Bay Chamber of Commerce

•

Current member of the Lincolnville Business Group

Our Board believes Mrs. Belair's hospitality experience and legal background in the financial services industry will provide valuable guidance to the Board.

MATTHEW L. CARAS, JD​DIRECTOR SINCE: 2014
​

​

AGE:62

COMMITTEE MEMBERSHIPS:

•

EXECUTIVE COMMITTEE

•

AUDIT COMMITTEE

•

GOVERNANCE COMMITTEE

•

BOARD RISK COMMITTEE (CHAIR)

​

An attorney and member of the Maine Bar, Mr. Caras is a founder and principal of Leaders LLC, a mergers and acquisitions advisory services firm representing public, private, and family-owned businesses in a broad range of industries throughout the United States and globally. Mr. Caras is also a mediator and neutral negotiation facilitator who has conducted over 150 mediation sessions and facilitated transactions as a neutral party. Mr. Caras resides in Arrowsic, Maine.

Professional and Leadership Highlights:

•

Former partner, department chair, and member of the executive committee of Verrill Dana LLP, a full-service law firm with over 130 attorneys and offices in Portland, ME; Boston, MA; Westport, CT; and Washington, DC

•

Serves on the Arrowsic, Maine Town's Planning Board

Our Board believes that given Mr. Caras' legal expertise in commercial transactions, as well as his business knowledge of many industries with which we do business, he provides valuable perspective to the Board as we expand our customer service area throughout Northern New England.

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PROPOSAL 1
ELECTION OF DIRECTORS

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DAVID M. COLTER​DIRECTOR SINCE: 2016
​

​

AGE:51

COMMITTEE MEMBERSHIPS:

•

AUDIT COMMITTEE

•

COMPENSATION AND HUMAN RESOURCES COMMITTEE

​

Mr. Colter serves as President and Chief Executive Officer of GAC Chemical Corporation in Searsport, Maine. GAC manufactures and distributes industrial, specialty, and fine inorganic and organic chemicals. Prior to joining GAC and moving to Maine, he worked for Ernst & Young in Ohio in their Financial Institutions Group. Mr. Colter resides in Hampden, Maine.

Professional and Leadership Highlights:

•

Board member, Maine State Chamber of Commerce

•

Treasurer and member of Audit and Executive Committees, University of Maine Pulp and Paper Foundation

•

Holds Certified Public Accountant and a Chartered Global Management Accountant designations

•

Former member of the Board, Executive Committee and Treasurer for the Ronald McDonald House, NW Ohio

•

Former District Chairman, Waldo District, Boy Scouts of America

Mr. Colter's experience as the principal executive officer of a manufacturing company and his educational and professional credentials bring essential qualifications and skills to the Board.

STEVEN H. DIMICK​DIRECTOR SINCE: 2017
​

​

AGE:68

COMMITTEE MEMBERSHIPS:

•

COMPENSATION AND HUMAN RESOURCES COMMITTEE

•

GOVERNANCE COMMITTEE

​

Mr. Dimick joined our Board in January 2017. He previously served as a director of Lake Sunapee Bank since November 2013. His career has included serving as a member of the Randolph National Bank Board of Directors from 1981-2013 and also as a Director/President/CEO at Central Financial Corporation. Mr. Dimick resides in Randolph, Vermont.

Professional and Leadership Highlights:

•

Substantial banking experience in New England, including at the executive and Board levels

•

Served as President of the Vermont Chapter of the Bank Administration Institute

•

Former Vermont board member, Independent Community Bankers of America

•

Served as the Chairman of the Vermont Bankers Association

•

Former Trustee of Gifford Medical Center

Mr. Dimick' s substantial experience as an executive officer and bank director will greatly contribute to our Board's leadership capabilities and strength in overseeing and guiding the Bank.

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PROPOSAL 1
ELECTION OF DIRECTORS

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MARTHA T. DUDMAN​DIRECTOR SINCE: 2003
​

​

AGE:67

COMMITTEE MEMBERSHIPS:

•

EXECUTIVE COMMITTEE

•

COMPENSATION AND HUMAN RESOURCES COMMITTEE

•

BAR HARBOR TRUST SERVICES COMMITTEE (CHAIR)

•

CHARTER TRUST COMMITTEE (CHAIR)

​

Ms. Dudman has served as the President of Dudman Communications Corporation, operating a group of radio stations in Ellsworth and Bangor, Maine. She currently serves as Senior Counsel with Gary Friedmann & Associates since 2011, and held the same position from 1999 to 2006, providing fundraising consulting services to nonprofits throughout the State of Maine. Ms. Dudman is also a published author. Ms. Dudman resides in Northeast Harbor, Maine.

Professional and Leadership Highlights:

•

Former Corporate President, with experience extending to nonprofit relationship building

•

Current Vice President of the Summer Scholarship Endowment Foundation

•

Past President of the Northeast Harbor Library

•

Current member of the Board of Selectmen for the Town of Mount Desert

•

Served on numerous non-profit boards; awarded membership in the Deborah Morton Society, recognizing women of high distinction in their careers and public service and whose leadership in civic, cultural, and social causes has been exceptional

Ms. Dudman's extensive experience in business management, public relations, marketing and sales provide her with a unique insight into our operations and strategic long-term goals.

LAURI E. FERNALD​DIRECTOR SINCE: 2005
​

​

AGE:57

COMMITTEE MEMBERSHIPS:

•

EXECUTIVE COMMITTEE

•

COMPENSATION AND HUMAN RESOURCES COMMITTEE

•

GOVERNANCE COMMITTEE (CHAIR)

•

BOARD RISK COMMITTEE

​

Ms. Fernald is an owner in Jordan-Fernald Funeral Home headquartered in Mount Desert, Maine and is a Certified Funeral Service Practitioner. Ms. Fernald resides in Mount Desert, Maine.

Professional and Leadership Highlights:

•

Currently serves as Managing Partner of L.E. Fernald LLC, and 125 Franklin Street LLC, operating as real estate holding companies and has managed several businesses over her career

•

Served on the finance committee of Hospice Volunteers of Hancock County

•

Current Treasurer, Parish of St. Mary and St. Jude Episcopal Church of Northeast Harbor and Seal Harbor

•

Committee member for the Maine Coast Memorial Hospital Foundation Council

•

Current member of numerous foundations and associations including the Woodbine Cemetery Association of Ellsworth, the Brookside Cemetery Corp. of Mount Desert, and Maine Community Foundation Hancock County Committee

Ms. Fernald's commercial and community service experience brings a depth of knowledge to the Board about the markets we serve.

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PROPOSAL 1
ELECTION OF DIRECTORS

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BRENDAN J. O'HALLORAN​DIRECTOR SINCE: 2018
​

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AGE:56

COMMITTEE MEMBERSHIPS:

•

AUDIT COMMITTEE

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Mr. O'Halloran began his career at The First Boston Corporation in New York City, and was employed by Toronto Dominion Bank Financial Group in varying capacities since 1989. Prior to his retirement in 2015, his most recent position was Vice Chair & Region Head, TD Securities where he oversaw TD Securities investment banking, trading and operational activities in the US through its offices in New York, Chicago, Boston, Houston, and Philadelphia. Mr. O'Halloran resides in Chatham, Massachusetts and Naples Florida.

Professional and Leadership Highlights:

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Holds an A.B. from Princeton University and an M.B.A. from the Harvard Graduate School of Business Administration

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Substantial banking experience including oversight over broad geography and multiple business lines. Demonstrated leadership skills that include strong integration and strategic expansion experience across various credit and capital market cycles

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Served as a trustee for the Institute of International Bankers

Mr. O'Halloran's extensive experience in the financial services industry and specifically with involved regulatory interaction and oversight will be an invaluable asset to our Board.

CURTIS C. SIMARD​DIRECTOR SINCE: 2013
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AGE:48

COMMITTEE MEMBERSHIPS:

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EXECUTIVE COMMITTEE

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BAR HARBOR TRUST SERVICES COMMITTEE

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CHARTER TRUST COMMITTEE

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BOARD RISK COMMITTEE

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Mr. Simard has served as our President and Chief Executive Officer since August 10, 2013. Prior to joining the Bank, he served as Senior Vice President and Managing Director of Corporate Banking for TD Bank from 2002 to 2013. He also was affiliated with First New Hampshire Bank and its successor, Citizens Bank, from 1992 to 2002 working on various business initiatives. Mr. Simard resides in Mount Desert, Maine.

Professional and Leadership Highlights:

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Served as a trustee of the Smithsonian affiliated Abbe Museum

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Serves as a member of the board of directors at the Seal Cove Auto Museum and the Ellsworth Business Development Corporation

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Serves as a member of the board of directors at the Business and Industry Association of NH

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Served on the Insurance Trust Committee and Executive Committee of Maine Bankers Association

Mr. Simard's positions as President and CEO of the Company, long track record of banking throughout New England and his leadership of the Company provide him with extensive knowledge of the Company's opportunities, challenges and operations.

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PROPOSAL 1
ELECTION OF DIRECTORS

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KENNETH E. SMITH​DIRECTOR SINCE: 2004
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AGE:65

COMMITTEE MEMBERSHIPS:

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EXECUTIVE COMMITTEE

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COMPENSATION AND HUMAN RESOURCES COMMITTEE (CHAIR)

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BOARD RISK COMMITTEE

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BAR HARBOR TRUST SERVICES COMMITTEE

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CHARTER TRUST COMMITTEE

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Since 2003, Mr. Smith has been the owner and innkeeper of Manor House Inn and was the former owner of Wonder View Inn, both of which are lodging facilities located in Bar Harbor, Maine. Mr. Smith resides in Bar Harbor, Maine.

Professional and Leadership Highlights:

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40 years plus of experience and expertise in the hospitality and customer service industry

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Former Chairman and long-time member of the Bar Harbor Town Council

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Currently serves as a Commissioner of the Bar Harbor Housing Authority

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Current member of the Town's Cruise Ship Committee

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Current member of Anah Shrine

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Past President and current member of the Bar Harbor Rotary Club

Mr. Smith's expertise in the hospitality industry will be valuable to the Board as it represents a critical segment of the local economy and Bar Harbor Bank Trust's commercial loan portfolio.

STEPHEN R. THEROUX​DIRECTOR SINCE: 2017
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AGE:69

COMMITTEE MEMBERSHIPS:

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CHARTER TRUST COMMITTEE

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Mr. Theroux retired as Vice Chairman, President and CEO of both Lake Sunapee Bank Group (LSBG) and Lake Sunapee Bank in 2017. He served as a director of the LSBG Board, the Lake Sunapee Bank Board, and as Chairman of the Board of Directors of Charter Trust Company. Mr. Theroux resides in New London, New Hampshire.

Professional and Leadership Highlights:

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Held numerous executive positions for LSBG and LSB as Corporate Secretary, Chief Financial Officer, and Chief Operating Officer

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Director of the Federal Home Loan Bank of Boston from 2015 to 2018

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Treasurer for the Town of New London, New Hampshire

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Trustee and Treasurer of Proctor Academy, Andover, New Hampshire

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Serves as a director of the American European Insurance Company, Cherry Hills, N.J.

Mr. Theroux's strong knowledge of day-to-day banking operations and the industry, in addition to his 40 years of experience in various operational and financial management responsibilities in the banking, educational, and insurance industries provide him with the qualifications and skills to serve as a valuable director.

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PROPOSAL 1
ELECTION OF DIRECTORS

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SCOTT G. TOOTHAKER​DIRECTOR SINCE: 2003
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Mr. Toothaker has served as a Managing Principal of Melanson Heath & Co., PC, a certified public accounting firm with 5 offices located in Maine, New Hampshire, and Massachusetts. The firm specializes in professional services to individuals as well as small to medium sized businesses and entrepreneurs throughout New England. Mr. Toothaker resides in Nashua, New Hampshire.

Professional and Leadership Highlights:

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Holds a master of business administration degree from the University of Maine and a master of tax degree from Bentley College

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Experience in navigating financial management and transition across many industries and through various economic cycles

As a practicing CPA, Mr. Toothaker has experience across business and personal financial management that is well suited in his role as a director and as Chair of the Board's Audit Committee.

DAVID B. WOODSIDE​DIRECTOR SINCE: 2003
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CHAIRMAN OF THE BOARD OF DIRECTORS

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EXECUTIVE COMMITTEE (CHAIR)

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COMPENSATION AND HUMAN RESOURCES COMMITTEE

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GOVERNANCE COMMITTEE

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BOARD RISK COMMITTEE

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Mr. Woodside has served as Chief Executive Officer and Director of The Acadia Corporation, a locally owned company operating retail shops, a restaurant, and lodging facility on Mount Desert Island. Mr. Woodside resides in Bar Harbor, Maine.

Professional and Leadership Highlights:

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Received a B.S. degree in Business Administration from the University of Maine

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Served as Vice Chair of the National Park Hospitality Association

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Past member of the Bar Harbor Town Council

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Past president of the Bar Harbor Rotary club and Bar Harbor Chamber of Commerce

Mr. Woodside's in-depth knowledge of the retail and hospitality industries both in Maine and across the country provides significant expertise to the Board in these important segments of the Maine economy.

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PROPOSAL 1
ELECTION OF DIRECTORS

Named Executive Officers

Set forth below

Below is a list of our NEOs,Named-Executive Officers ("NEOs"), including their ages and positions with us and our subsidiaries BHBT, BHTS and CTC each as of March 21, 2018:25, 2019.

Name Age 
Year First
Elected
Officer
 
Positions with
the Company
 
Positions
with Subsidiaries

NAME

​AGE​NEO
SINCE		​CURRENT POSITION​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.​48​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.​46​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.

​59​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.
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Marion Colombo

​53​2018​N/A​Executive Vice President, Director of Retail Delivery of BHBT since 2018
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John M. Mercier

​55​2018​N/A​Executive Vice President, Chief Lending Officer of BHBT since 2018. Formerly Executive Vice President, Senior Lender NH and VT of BHBT since 2017
​ ​​ ​​ ​​ ​​

1 Mr. McIver has announced his retirement effective as of June 30, 2018.

Our Bylaws provide that our Board elect the executive officers annually. The Bylaws further provide that the President and CEO, Chairman and Vice Chairman, if any, shall serve at the pleasure of the Board andor until their successors have been chosen and qualified.All other officers serve at the pleasure of the Board and the CEO. There are no arrangements or understandingunderstandings between any of the directors, executive officers, or any other persons

pursuant to which the above directors have been selected as directors or any of the above officers have been selected as officers. There are no “family relationships”"family relationships" (as defined by the SEC) between any director, executive officer, or person nominated or chosen by us to become a director or executive officer.


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PROPOSAL 1
ELECTION OF DIRECTORS

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Business Experience    
CURTIS C. SIMARD​NEO SINCE: 2013
The principal occupation and business experience for at least the last five years for each director, nominee, and executive officer is set forth below. None
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AGE:48

​Mr. Simard has served as our President and Chief Executive Officer since August 10, 2013. Prior to joining the Bank, he served as Senior Vice President and Managing Director of Corporate Banking for TD Bank from 2002 to 2013. He also was affiliated with First New Hampshire Bank and its successor, Citizens Bank, from 1992 to 2002 working on various business initiatives. Mr. Simard resides in Mount Desert, Maine.

Professional and Leadership Highlights:

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Served as a trustee of the Smithsonian affiliated Abbe Museum

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Serves as a member of the board of directors at the Seal Cove Auto Museum and the Ellsworth Business Development Corporation

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Serves as a member of the board of directors at the Business and Industry Association of N.H.

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Served on the Insurance Trust Committee and Executive Committee of Maine Bankers Association

Mr. Simard's positions as President and CEO of the Company, long track record of banking throughout New England and his leadership of the Company provide him with extensive knowledge of the Company's opportunities, challenges and operations.


JOSEPHINE IANNELLI​NEO SINCE: 2016
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AGE:46

​Ms. Iannelli joined Bar Harbor Bank & Trust in October 2016 as Executive Vice President, Chief Financial Officer and Treasurer. Prior to joining the organization, Ms. Iannelli served as Senior Executive Vice President, Chief Financial Officer and Treasurer of Berkshire Hills Bancorp in Pittsfield, Massachusetts. She began her career at KPMG and subsequently KeyCorp. She also served in various roles at National City Corporation starting in 2002 up to and including the acquisition and integration into PNC Financial Services Group. Ms. Iannelli resides in Mount Desert, Maine.

Professional and Leadership Highlights:

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Holds a bachelor's degree in Accounting from Baldwin Wallace University

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Owned her own consulting company serving both national and international publicly traded clients

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Serves as a member of the Board of Directors and Chair of the Audit Committee for the Maine Seacoast Mission

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Serves as a member of the Board of Trustees and Chair of the Finance Committee for Camp Beech Cliff

In these varying roles, Ms. Iannelli's experience and expertise encompasses financial leadership in accounting policy, financial planning & analytics, treasury, investor relations, SEC & regulatory reporting, investment management, tax, and mergers and acquisitions.

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Table of the organizations discussed below, except for BHBT, BHTS and CTC are affiliated with us.Contents

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PROPOSAL 1
ELECTION OF DIRECTORS

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RICHARD B. MALTZ​NEO SINCE: 2014
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AGE:59

​Mr. Maltz has served as our Executive Vice President, Chief Operating Officer, and Chief Risk Officer since September 2016, and served as Executive Vice President & Chief Risk Officer since September 1, 2014. Prior to that Mr. Maltz has served in various executive risk, IT, and auditing roles throughout his career. Mr. Maltz resides in Hampden, Maine.

Professional and Leadership Highlights:

•

Received a BS degree in Financial Accounting from the University of New Haven

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Holds the Certified Public Accountant designation

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Current member of the American Institute of Certified Public Accountants

With more than 35 years of banking experience in operations, technology and risk management, Mr. Maltz is well suited in his role leading our overall operational and technology areas, while continually improving process efficiency and risk management culture throughout the organization.


MARION COLOMBO​NEO SINCE: 2018
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AGE:53

​Ms. Colombo joined the Company in February 2018 as Executive Vice President, Director of Retail Delivery. She is responsible for retail strategy and delivery working with teams to ensure that our customer experience is consistent with outstanding service across all locations in Maine, New Hampshire and Vermont. She has demonstrated ability to partner with business lines to advance wallet share beyond the branch environment. Ms. Colombo resides in York, Maine.

Professional and Leadership Highlights:

•

Prior to joining Bar Harbor Bank & Trust, Ms. Colombo served in multiple leadership roles at TD Bank for 30 years. She served as Market President of Retail for TD Bank in Boston, Massachusetts from 2009 to 2018 where she was responsible for the retail strategy for de novos and over 110 branches across Greater Boston and Rhode Island

•

Past recipient of the Abigail Adams award from the Massachusetts Women's Political Caucus, recognizing her as an Outstanding Woman Leader

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Served with the United Way, Boston Partners in Education, and other nonprofits having been recognized for extraordinary support of women in the workplace

Ms. Colombo's in-depth knowledge of retail banking and her strong leadership skills and experience provides significant expertise to the Company in this important segment of the business.

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PROPOSAL 1
ELECTION OF DIRECTORS

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Director Nominees        
JOHN M. MERCIER​NEO SINCE: 2018
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AGE:55

​Mr. Mercier has served as our Executive Vice President and Chief Lending Officer since October 1, 2018. He joined the Company in April 2017 as Executive Vice President, Senior Loan Officer for New Hampshire and Vermont. His banking career spans more than 30 years with significant lending experience in many types of lending, across segments, and through various economic cycles. Prior roles have included various initiatives at Citizens Bank, KeyCorp, TD Bank, and most recently as Executive Vice President, Senior Lender of Primary Bank in Bedford, New Hampshire from October 2015 to April 2017. Mr. Mercier resides in Manchester, NH.

Professional and Leadership Highlights:

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Received a Bachelor's degree in Finance from Bentley College

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Graduate of the New England School of Banking

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Serves as a member of the Board of Trustees and is Treasurer of the Elliot Health System

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Past Chairman and Trustee Emeritus of Southern New Hampshire Health System

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Past Chairman of the Manchester-Boston Regional Airport Authority

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Past Trustee of various nonprofits including the Granite United Way, New Hampshire Institute of Art, and the Manchester Boys & Girls Club

In this role, Mr. Mercier's experience provides for the effective planning, development and implementation of the Bank's long term lending strategies, including initiatives such as portfolio mix, growth strategies and market penetration objectives.

Daina H. Belair. ​

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Mrs. Belair resides in Lincolnville, Maine. She has been the owner​

Table of the Inn at Sunrise Point located in Lincolnville since 2008. She is a retired attorney specializing in the field of banking and financial services. Before relocating to Maine she was employed as General Counsel and Managing Director of U.S. Trust Corporation, U.S. Trust Company of New York and U.S. Trust Company N.A. from May 2002 through October 2006. Prior to her time at U. S. Trust, she served as Vice President and a senior and division general counsel at Citibank N.A. from 1987 to 2002 including in its Emerging Markets and its Private Banking Division. She previously served on the Town of Lincolnville’s Budget Committee, and is presently a Director at Home Counselors Inc., a private not-for-profit; a current member and past Director and Treasurer of the Penobscot Bay Chamber of Commerce; and a member of the Lincolnville Business Group. The Board believes her hospitality experience and legal background in the financial services industry provide valuable guidance to the Board as we continue to grow.Contents


Matthew L. Caras, JD.​  Mr. Caras is a founder and principal of Leaders LLC, a mergers and acquisitions advisory services firm representing public, private, and family-owned businesses in a broad range of industries

throughout the United States and globally. Mr. Caras, who is an attorney and member of the Maine Bar, is also a mediator and neutral negotiation facilitator who has conducted over 150 mediation sessions and facilitated transactions as a neutral. Prior to founding Leaders LLC, Mr. Caras was a partner, department chair, and member of the executive committee of Verrill Dana LLP a full-service law firm with over 130 attorneys and offices in Portland, ME; Boston, MA; Westport, CT; and Washington, DC.  Mr. Caras lives in Arrowsic, Maine, where he serves on the Town’s Planning Board. The Company believes that given his professional background and legal expertise in commercial transactions along with his business knowledge of Cumberland and Sagadahoc counties, he provides valuable perspective to the Board as the Company expands its customer service area in Maine.  

David M. Colter. Mr. Colter resides in Hampden, Maine. He is President and CEO of GAC Chemical Corporation in Searsport, Maine. GAC manufactures and distributes industrial, specialty, and fine inorganic and organic chemicals. Prior to joining GAC and moving to Maine, he worked for Ernst & Young in Ohio where he obtained his CPA license. While in Ohio, he served on the board, Executive Committee and as Treasurer of the Ronald McDonald House of NW Ohio. Community involvement upon moving to Maine included the Boy Scouts of America (District Chairman – Waldo District) and the Bangor Region Leadership Institute. Currently he is active with the Maine State Chamber of Commerce serving as a board member, and the University of Maine Pulp and Paper Foundation, serving as Treasurer and a member of the Audit and Executive Committees. In addition to his CPA certification, he also holds a Chartered Global Management Accountant designation. Mr. Colter’s experience as the principal executive officer of a manufacturing company and his educational credentials bring strong qualifications and skills to the Board.

Steven H. Dimick. Mr. Dimick resides in Randolph, Vermont. He joined the Board in January 2017 in connection with the Company’s acquisition of LSBG, where he served as a director since November 2013. Mr. Dimick served as a member of Randolph National Bank’s board of directors from 1981 to 2013 and Central Financial Corporation’s board of directors from its formation in 1986 until 2013. He served as President and Chief Executive Officer of Central Financial Corporation and Randolph National Bank from 1989 until his retirement in 2013. Mr. Dimick held several positions at Randolph National Bank, since joining in 1974. Prior to joining Randolph National Bank, Mr. Dimick was with First National Bank of Boston. In addition, Mr. Dimick has served as President of the Vermont Chapter of the Bank Administration Institute and was the Vermont board member on the board of the Independent Community Bankers of America. Mr. Dimick has also served as the Chairman of the Vermont Bankers Association, and as a Trustee of Gifford Medical Center. Mr. Dimick’ s substantial experience as an executive officer and bank director provides him with the qualifications and skills to serve as a director.

Martha T. Dudman.  Ms. Dudman resides in Northeast Harbor, Maine. She is a fundraising consultant and published author. She is President of Dudman Communications Corporation and was Corporate President from 1990 to 1999, operating a group of radio stations in Ellsworth and Bangor. She currently serves as Senior Counsel with Gary Friedmann & Associates effective 2011, and held the same position from 1999 to 2006, providing fundraising consulting services to nonprofits throughout the State of Maine. She has been awarded membership in the Deborah Morton Society, recognizing women of high distinction in their careers and public service and whose leadership in civic, cultural, and social causes has been exceptional.  She is Vice President of the Summer Scholarship Endowment Foundation, has served on several non-profit boards, and is Past President of the Northeast Harbor Library. She has served on the Board of Selectmen for the Town of Mount Desert since 2011.  Ms. Dudman’s extensive experience in business management, public relations, marketing and sales provide her with unique insight into the Company’s operations.

Stephen W. Ensign. Mr. Ensign resides in New London, New Hampshire. He joined the Board in January 2017 in connection with the Company’s acquisition of LSBG, where he served as Chairman of the Board since 2002, previously serving as Chief Executive Officer from 1992 to 2012 and Lake Sunapee Bank (“LSB”) President until 2008. He also served as Vice Chairman of the board of directors of Charter Trust Company, a company engaged in the business of trust and investment management and now a subsidiary of Bar Harbor Bankshares. Mr. Ensign is presently in his second term as Chairman of the Board of the New Hampshire Housing Finance Authority. Mr. Ensign previously held various positions with LSBG and LSB, including Vice

Chairman, President, Chief Executive Officer, Chief Operating Officer, Executive Vice President, Senior Vice President and Senior Loan Officer, having joined the Bank in 1971. He has served as an LSBG director beginning in 1989 and an LSB director since 1986. Mr. Ensign continues to serve as Audit Chair for the board of trustees of Proctor Academy in Andover, NH. Mr. Ensign’s experience as an executive officer and bank director provides him with the qualifications and skills to serve as a director.

Lauri E. Fernald.  Ms. Fernald resides in Mount Desert, Maine. She is a Certified Funeral Service Practitioner, President and an owner in Jordan-Fernald headquartered in Mount Desert. She is also Managing Partner of L.E. Fernald LLC, and 125 Franklin Street LLC, operating as real estate holding companies.  She serves on the finance committee of Hospice Volunteers of Hancock County, and is Treasurer of the Parish of St. Mary and St. Jude Episcopal Church of Northeast Harbor and Seal Harbor, and a committee member of the Maine Coast Memorial Hospital Foundation Council.  She is also a member of the Woodbine Cemetery Association of Ellsworth, the Brookside Cemetery Corp. of Mount Desert and Maine Community Foundation Hancock County Committee. Her commercial and community service experience brings a depth of knowledge to the Board about the markets in which the Company operates.  

Brendan O’Halloran.   Mr. O’Halloran is a resident of Chatham, MA and Naples, FL, and is standing as a new nominee to the Board this year.  Mr. O’Halloran began his career at The First Boston Corporation in New York City, and was employed by Toronto Dominion Bank Financial Group in varying capacities since 1989.   Prior to his retirement in 2015,  his most recent position was that of Vice Chair & Region Head, TD Securities, overseeing TD Securities investment banking, trading and operational activities in the US through its offices in New York, Chicago, Boston, Houston, and Philadelphia. Mr. O’Halloran served a trustee for the Institute of International Bankers, and has demonstrated leadership skills and strong integration and strategic planning experience that will be valuable as a member of the Board with his extensive experience with regulatory involvement and oversight. He holds an A.B. from Princeton University and an M.B.A. from the Harvard Graduate School of Business Administration.  
Curtis C. Simard.  Mr. Simard resides in Mount Desert, Maine. He was elected President and CEO of BHBT on June 17, 2013 and assumed the responsibilities of President and CEO of the Company on August 10, 2013 following the retirement of the previous CEO.  Prior to joining the Company, he served as Senior Vice President and Managing Director of Corporate Banking for TD Bank. He was with TD Bank and its predecessor companies starting in 2002. He also was affiliated with First New Hampshire Bank and its successor, Citizens Bank, from 1992 to 2002 working on various business initiatives. He serves as a Trustee of the Smithsonian affiliated Abbe Museum and Maine Coast Memorial Hospital. He is a Corporator of Eastern Maine Health Systems, and member of the board of directors at the Seal Cove Auto Museum and the Ellsworth Business Development Corporation. He also serves on the Insurance Trust Committee of Maine Bankers Association. His positions as President and CEO of the Company, and his leadership of the Company, provide him with extensive knowledge of the Company’s opportunities, challenges and operations, as evidenced by the recent LSBG acquisition.

Kenneth E. Smith.  Mr. Smith resides in Bar Harbor, Maine. He has been owner and innkeeper of Manor House Inn since 2003 and was the former owner of Wonder View Inn, both of which are lodging facilities located in Bar Harbor, Maine. His experience and expertise of over 40 years in the field are highly valued by the Board. He is a former Chairman and long-time member of the Bar Harbor Town Council. He currently serves as a Commissioner of the Bar Harbor Housing Authority, a member of the Town’s Cruise Ship Committee, a member of Anah Shrine, and a long time member and past President of the Bar Harbor Rotary Club. Mr. Smith’s expertise in the hospitality industry is valuable to the Board as it represents a critical segment of the local economy and BHBT’s commercial loan portfolio.

Stephen R. Theroux. Mr. Theroux resides in New London, NH. He joined the Board in January 2017 with the Company acquisition of LSBG, where he retired as Vice Chairman, President and CEO of both LSBG and LSB. He served as a director of the LSBG board since 1989, the LSB Board since 1986, and as Chairman of the board of directors of Charter Trust Company. He previously held positions for LSBG and LSB of Corporate Secretary, Chief Financial Officer, and Chief Operating Officer. Mr. Theroux was elected in 2015 as a Director

of the Federal Home Loan Bank of Boston where he continues to serve. Mr. Theroux is Treasurer for the Town of New London, NH, as well as a Trustee and Treasurer of Proctor Academy in Andover, NH. He also serves as a director of the American European Insurance Company, Cherry Hills, N.J. His strong knowledge of banking day-to-day operations and industry, and his 40 years of experience in various operational and financial management responsibilities in the banking, educational, and insurance industries provide him with the qualifications and skills to serve as a director.

Scott G. Toothaker.  Mr. Toothaker resides in Ellsworth, Maine. He is a shareholder of Melanson Heath & Co., PC, a certified public accounting firm with offices located in Ellsworth, and Nashua, New Hampshire. The firm specializes in professional services to small businesses and entrepreneurs throughout New England. He holds an MBA from the University of Maine and an MST from Bentley College.  A practicing CPA, he is well suited in his role as Chairman of the Company’s Audit Committee.

David B. Woodside.  Mr. Woodside resides in Bar Harbor, Maine. He is CEO and Director of The Acadia Corporation, a locally owned company operating retail shops, a restaurant, and lodging facility on Mount Desert Island. He received his BS degree in Business Administration from the University of Maine in 1974. He has owned several small businesses in the area and has been employed at The Acadia Corporation since 1976. He has also served on numerous local non-profit boards, the Bar Harbor Town Council, and as past President of the Bar Harbor Rotary Club and Bar Harbor Chamber of Commerce. He served for many years as Vice Chair of the National Park Hospitality Association, representing the diverse companies providing visitor hospitality services in National Parks across the country. His in-depth knowledge of the retail and hospitality industries both in Maine and across the country provides significant expertise to the Board in these important segments of the Maine economy.

Executive Officers
Curtis C. Simard.  For a summary of Mr. Simard’s business experience, refer to the “Director Nominees” section immediately above.

Josephine Iannelli. Ms. Iannelli resides in Mount Desert, Maine. Ms. Iannelli joined the Company in October 2016 as Executive Vice President, Chief Financial Officer and Treasurer.  Prior to joining the Company, Ms. Iannelli served as Senior Executive Vice President, Chief Financial Officer and Treasurer of Berkshire Hills Bancorp in Pittsfield, Massachusetts.  Ms. Iannelli holds a bachelor’s degree in Accounting from Baldwin Wallace University and began her career at KPMG, after which she joined KeyCorp.  In 2002, Ms. Iannelli joined National City Corporation where she served in various roles up and through the acquisition and integration into PNC Financial Services Group.  Ms. Iannelli subsequently owned her own consulting company serving both national and international clients.  In these varying roles, Ms. Iannelli’s experience encompasses financial leadership in accounting policy, financial planning & analytics, treasury, investor relations, SEC & regulatory reporting, investment management, tax, mergers and acquisitions, and financial reengineering. Ms. Iannelli serves as a member of the Board of Directors of the Maine Seacoast Mission and the Board of Trustees for Camp Beech Cliff. 

Richard B. Maltz. Mr. Maltz resides in Hampden, Maine. He has served as the Company’s Executive Vice President, Chief Operating Officer, and Chief Risk Officer since September 2016, and as Executive Vice President & Chief Risk Officer since September 1, 2014. He previously served as Executive Vice President & Chief Risk Officer of Bangor Savings Bank in Bangor as well as in other executive capacities at that institution since 1999. Mr. Maltz is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants.

William J. McIver. Mr. McIver resides in Warner, NH. He joined the Company and the Bank in connection with the Company’s acquisition of LSBG in 2017, taking on the role of Executive Vice President, Regional President of NH/VT. Mr. McIver also assumed the management of Charter Trust Company for 2017. At the time of acquisition, he was Senior EVP, Chief Operating Officer and Chief Information Officer for LSBG. Mr. McIver joined LSBG in 1999, also serving as Executive Vice President, Chief Risk Officer, Chief Administration Officer and Director of Retail Banking during his tenure. Prior to 1999, Mr. McIver served as

a Regional President of CFX Bank and as Director of Acquisitions and Integration for CFX Corporation as well as President and Chief Executive Officer of The Valley Bank. Mr. McIver announced his retirement effective June 30, 2018.

Gregory W. Dalton. Mr. Dalton resides in Mount Desert, Maine. He has served as Executive Vice President of Maine Business Banking of BHBT since October 2011.  He was Senior Vice President of BHBT’s Business Banking function from 2000 through October 2011. He is also a minority owner in both the Bar Harbor Jam Co. and its real estate holding companies, Blueberry Partners LLC and Triangle Development LLC, located in Bar Harbor.  He serves as a Board member of Acadia Fire Youth Soccer. He currently serves on the Island Housing Trust and the Genesis Community Loan Fund. He also serves as Chair of the Senior Lender Leadership Committee for Maine Bankers Association. He has also served as Vice Chair of the MDI YMCA and serves in several other local youth focused, non-profit organizations including The Katahdin Area Council of the Boy Scouts of America, and the Neighborhood House in Northeast Harbor.  


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE


Certain Relationships and Related Transactions and Director Independence

Transactions with Management and Others

We administer related party transactions (if any) under our Related Party Transaction Policy, which addresses compliance towith NYSE American Rule 120 and Item 404(a) of Regulation S-K. This policy provides for Audit Committee oversight of related party transactions that exceed ade minimis lifetime income statement impact of $25,000 (except for loan transactions, which for the Company and its subsidiaries are administered pursuantaccording to Federal Regulation O, as described more fully below). Any transactions that qualify under this policy are reviewed by the Audit Committee (or another acceptable Board Committee, or the full Board) for pre-approval. Other than the Somesville Lease described below, and loans offered in the ordinary course of business and approved by the BHBTBank's Board of Directors there arewere no related party transactions.transactions in 2018. The Related Party Transaction Policy is approved annually by the Board and administered by management of BHBT.the Bank.


We have entered into a long-term lease for our BHBTa Bank branch located in Somesville, Maine, effective February 1, 2006 (“("the Somesville Lease”Lease"). The Somesville Lease currently has a ten year lease that runs through 2026. During each subsequent lease year the base rent is increased using a formula tied to certain changes in the consumer price index.index. During 20172018 the lease payments totaled $84,999.$93,192. There were no amounts outstanding for this lease as of December 31, 2017.2018. In addition to base rent, BHBTthe Bank is responsible to pay as “additional rent”"additional rent" certain defined real estate taxes, as well as certain operating expenses, and other costs, charges, and expenses associated with the premises. The “Landlord”"Landlord" under the Somesville Lease is A.C. Fernald Sons Inc., a Maine corporation. Mr. Robert B. Fernald of Mount Desert, Maine, is a shareholder, director, and officer of A. C. Fernald Sons Inc. and is the father of Company director Lauri E. Fernald. Lauri E. Fernald does not own any stock or hold any corporate office or other position with A.C. Fernald Sons Inc. and has no direct or indirect interest in the Somesville Lease other than her familial relationship with Mr. Robert B. Fernald.


Except as set forth above and with regard to “Indebtedness"Indebtedness of Management”Management" described below, none of theour director-nominees or NEOs of the Company or ofnor any of its subsidiaries engaged during 20172018 in any transaction with the Company or any of its subsidiaries, in which the amount involved exceeded $120,000.


Indebtedness of Management and Directors

BHBT offers to its directors, officers, principal shareholders and employees, and to businesses owned and/or controlled by those

persons (collectively “insiders”"insiders"), commercial and consumer loans in the ordinary course of its business.


All loans made by the Companyus and itsour subsidiaries to insiders are regulated by the Company’s federal and state regulators under Regulation O. Regulation O sets forthcovers various practices and reporting requirements for loans to insiders. In addition, the Sarbanes-Oxley Act of 2002 permits banks and bank holding companies to extend credit to their directors and officers provided that such extensions of credit are (a) are:

(1)
made or provided in the ordinary course of the consumer credit business of such issuer; (b) issuer

(2)
of a type that is generally made available to such issuer to the public; and (c) public

(3)
made by such issuer on market terms, or terms that are no more favorable than those offered by the issuer to the public. Further, NYSE American rules provide that related party transactions must be public

(4)
subject to appropriate review and oversight by the Company’sour Audit Committee or a comparable body of the Board.  

Board in accordance with NYSE American Rules for related party transactions

As of December 31, 2017,2018, the outstanding loans by BHBT to our director-nomineesdirector nominees and NEOs amountamounted to an aggregate of approximately $10,489,054$8,694,874 with a maximum availability limit of $12,693,294.$11,082,834. All such loans are offered under the same terms and conditions available for comparable loans to persons not related to BHBT, including but not limited to, interest rates, repayment terms, and the required collateral. The terms and conditions of all loans, including those to insiders, and the process by which such loans are approved, is fully documented in BHBT’sBHBT's written loan policy (the “Loan Policy”"Loan Policy"). The Loan Policy is approved annually by the Board and administered by the management of BHBT. Loans to insiders may not contain a higher level of risk, nor be offered with terms and conditions more favorable, than loans to non-insiders with equivalent financial profiles (except for the favorable pricing programs previously described). We believe that all extensions of credit to our insiders and


executive officers satisfy the foregoing conditions. No extensions of credit to our insiders have involved more than normal risk of collectability or present other unfavorable features.

Director independence disclosures may be found under “Corporate Governance”"Corporate Governance" beginning on page 4.3.


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COMPENSATION OF DIRECTORS


Compensation of Directors

Compensation of independent directors of the Company, BHBT, BHTS and CTC consisted of a combination of fees for meetings attended, quarterly stipends, and an equity award. Members of the Board receivedreceive $500 when joint meetings are held with the Company and the BHBT held joint meetings.BHBT. The fee paid for attendance at the Company’sour Annual Meeting wasof Shareholders is also $500 per member. Audit Committee members receivedreceive $600 for each Audit Committee meeting they attended. The Board Chairman is compensated at one-half of the meeting fee for his attendance at committee meetings of which they werewhere he is not a voting member.member of the committee.


In addition, the Board Chairman receivedreceives a quarterly stipend of $5,000$7,500 and the Chairman of the Audit Committee receives $3,500. Chairman$5,500. The Chairs of Governance, Compensation, and Human Resources and Board Risk Committees, and the Chairman who oversees both BHTS and CTC meetings receive a quarterly stipend of $3,000.$4,250. The following table summarizes the components of director compensation.


  Quarterly Stipend (Annualized) 
November, 2017
Stock Grant
 Meeting Fees
Chairman of the Board $5,000
 Shares up to a market value of $20,000 $500 for Board, Executive, Compensation, Governance and Board Risk. $300 for Audit. $250 for Bar Harbor Trust Services and Charter Trust Company
 (20,000)  
     
Audit Chair 3,500
 
Shares up to a market value of $20,000

  
 (14,000)   
Governance Chair 3,000
 Shares up to a market value of $20,000  
 (12,000)   
Board Risk Chair 3,000
 
Shares up to a market
value of $20,000
  
 (12,000)   
Compensation Chair 3,000
 
Shares up to a market value of $20,000

  
 (12,000)   
Charter and Trust Chair 3,000
 
Shares up to a market value of $20,000

  
 (12,000)   
All other Directors 2,500
 Shares up to a market value of $20,000  
 (10,000)   
Audit Committee Attendance     $600 (no change)
All other meetings and Annual Meeting     $500 (no change)

​QUARTERLY STIPEND
(ANNUALIZED)		​NOVEMBER, 2018
STOCK GRANT		​MEETING FEES

Chairman of the Board

​​
$
7,500
(30,000
)
​		Shares up to a market value of $25,000​$500 for Board, Executive, Compensation and Human Resources, Governance and Board Risk. $300 for Audit. $300 for Bar Harbor Trust Services and Charter Trust Company
​ ​​ ​​ ​​

Audit Chair

​​5,500
(22,000
)
​		Shares up to a market value of $25,000​
​ ​​ ​​ ​​

Governance Chair

​​4,250
(17,000
)
​		Shares up to a market value of $25,000​
​ ​​ ​​ ​​

Board Risk Chair

​​4,250
(17,000
)
​		Shares up to a market value of $25,000​
​ ​​ ​​ ​​

Compensation and Human Resources Chair

​​4,250
(17,000
)
​		Shares up to a market value of $25,000​
​ ​​ ​​ ​​

Charter and Trust Chair

​​4,250
(17,000
)
​		Shares up to a market value of $25,000​
​ ​​ ​​ ​​

All other Directors

​​3,750
(15,000
)
​		Shares up to a market value of $25,000​
​ ​​ ​​ ​​

Audit Committee Attendance

​​​​​$600
​ ​​ ​​ ​​

All other meetings and Annual Meeting

​​​​​$500
​ ​​ ​​ ​​



We review a comparative summary of director compensation annually prepared by Pearl Meyer. Pearl Meyer recommended that the Board consider including equity compensation as part of its compensation mix on an ongoing basis. In November 2017,2018, each independent director was awarded 6671,035 restricted shares of our common stock under the 2015 Equity Plan. This grant was made

in lieu of an increase in the cash portion of their fees and as part of an overall market adjustment in director compensation. These restricted share certificates are fully vested, but may not be sold, transferred or gifted by any director until three (3) months after such director leaves the service of the Board.


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COMPENSATION OF DIRECTORS

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2018 Director Compensation

The following table details the total compensation paid to directors from the Company, BHBT, BHTS and CTC during the 20172018 fiscal year. Directors receive no additional compensation or perquisites for their service other than that set forth in the table below.


 
Fees Earned or Paid
in Cash
 
Restricted Stock
Awards1
 Total
Name (a) (b) (c) (h)

NAME

​FEES EARNED
OR PAID
IN CASH1		​RESTRICTED
STOCK
AWARDS2		​TOTAL​
Daina H. Belair $31,200
 $19,983
 $51,183
​​$31,300​​$24,985​​$56,285​
​ ​​​​ ​​ ​
Matthew L. Caras 29,900
 19,983
 49,883
​​34,900​​24,985​​59,885​
Leonard R. Cashman 13,500
 19,983
 33,483
​ ​​​​ ​​ ​

Leonard R. Cashman3

​​8,626​​0​​8,626​
​ ​​​​ ​​ ​
David M. Colter 21,900
 19,983
 41,883
​​26,300​​24,985​​51,285​
Steven H. Dimick2
 20,583
 19,983
 40,566
​ ​​​​ ​​ ​

Steven H. Dimick

​​27,000​​24,985​​51,985​
​ ​​​​ ​​ ​
Martha T. Dudman 33,500
 19,983
 53,483
​​32,000​​24,985​​56,985​
Stephen W. Ensign2
 27,983
 19,983
 47,966
​ ​​​​ ​​ ​

Stephen W. Ensign

​​28,900​​24,985​​53,885​
​ ​​​​ ​​ ​
Lauri E. Fernald 27,000
 19,983
 46,983
​​36,500​​24,985​​61,485​
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
​ ​​​​ ​​ ​

Brendan J. O'Halloran4

​​19,258​​24,985​​44,243​
​ ​​​​ ​​ ​

Kenneth E. Smith5

​​40,000​​24,985​​64,985​
​ ​​​​ ​​ ​

Stephen R. Theroux

​​34,000​​24,985​​58,985​
​ ​​​​ ​​ ​
Scott C. Toothaker 28,900
 19,983
 48,883
​​35,900​​24,985​​60,885​
​ ​​​​ ​​ ​
David B. Woodside 45,750
 19,983
 65,733
​​54,300​​24,985​​79,285​
​ ​​​​ ​​ ​
Totals $370,049
 $239,796
 $609,845
​​$408,984​​$299,820​​$708,804​
​ ​​​​ ​​ ​

1.1

​
Fees earned include all stipends and meeting fees earned in 2018.

2

​Representsthe value of 6671,035 restricted shares granted in November 20172018 to each independent director as part of their compensation calculated at the closing price on the day of the grant.

2.3

Appointed by the Board on January 10, 2017, effective upon completion of the merger with LSBG.
​Mr. Cashman retired in May, 2018

3.4

​Mr. Lewis and Mrs. Shea retired fromO'Halloran joined the Boardboard in May, 2017 due to age restrictions in accordance with the Company’s Bylaws.
2018.

4.5

Kenneth E.​Mr. Smith deferred a portion of his compensation under a Non-Qualified Deferred Compensation arrangement. This deferred arrangement is funded entirely by the director and the funds are invested and remain in the name of the Company until the director withdraws them upon his resignation, retirement, or termination from Board membership. Mr. Smith assumes the investment risk on these funds and holds the status of an unsecured creditor of the Company for the payment of these deferred fees at a future date.
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COMPENSATION OF NAMED EXECUTIVE OFFICERS


Compensation of Named Executive Officers

Compensation and Human Resources Committee Report

The Compensation and Human Resources Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Securities and Exchange Commission Regulation S-K with management. Based upon such this

review and discussion, the Compensation and Human Resources Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.


Compensation Committee Members

Compensation and Human Resources Committee Members

Kenneth E. Smith, Chair

​David M. Colter

Martha T. Dudman

​Lauri E. Fernald

David B. Woodside

​Steven H. Dimick
​ ​​


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

Compensation Discussion and Analysis

This section discusses an overview and analysis of our compensation program and policies, the material compensation decisions made under those programs and policies, with respect to our Named Executive Officers ("NEOs"), and the material factors considered in making those decisions. Later in this proxy statement under the heading “Executive"Executive Compensation Tables”Tables" is a series of tables containing specific information about the compensation earned or paid to the NEOs.


The discussion below is intended to aid in the understanding of the detailed information provideddisclosed in those tables and put that information intoprovide context within the overall compensation program.


Named Executive Officers

For 2017,2018, our NEOs are:are our President and CEO, Curtis C. Simard; Executive Vice President, CFO and CFOTreasurer, Josephine Iannelli; and our three other most highly compensated policy making executive officers. In 2017,2018, these three other NEOs were Executive Vice President, Chief Operating and Chief Risk Officer, Richard B. Maltz; Executive Vice President and Regional PresidentDirector of NH/VT, William J. McIver;Retail Delivery, Marion Colombo; and Executive Vice President Maine Business Banking, Gregory W. Dalton.


and Chief Lending Officer, John M. Mercier.

Objectives of Our Compensation Program

The objective

Our compensation philosophy is to pay for performance over the long-term, as well as on an annual basis. Our performance considerations include both financial and non-financial measures—including the manner in which results are achieved—for the Company, line of business, and the individual. These considerations reinforce and promote responsible growth and maintain alignment with our risk framework. Our executive compensation program provides a mix of salary, incentives, and benefits paid over time to align executive officer and stockholder interests. Our Compensation and Human Resources Committee has the primary responsibility for approving our compensation program is to attract, retain, motivate,strategy and reward NEOsphilosophy and other executives who contributethe compensation programs applicable to our financial and operational success, which ultimately builds value for our shareholders.  Thenamed executive officers

Specifically, the Board believes that, in order to do this effectively, the program must:

levels

•
provide upside opportunities for exceptional individual performance, which can result in differentiated compensation among NEOs based on performance; and
performance

•
closely align the NEOs’NEOs' interests with those of our shareholders by making stock-based incentives an important element of the executive’s compensation.

executive's compensation

Role of the Compensation and Human Resources Committee

The Compensation and Human Resources Committee oversees regulatory compliance for all of our compensation and benefit plans and administers the Company’sour executive compensation programs. The CompensationThis Committee recommends these programs to the Board for approval bythrough its independent board members at least annually and more frequently, if circumstances warrant. These programs are intended to provide a variety of competitive compensation components including base salaries, annual cash incentives, retirement programs, and traditional benefits. In addition, we have sought to align the long-term interests of our executives, including the NEOs, with those of our shareholders by providing share-based incentives in the form of equity awards. The composition of the components may vary from year to yearyear-to-year based on individual performance, our business plan, market conditions or other factors.


The Compensation and Human Resources Committee believes that our compensation policies and procedures are designed to provide a strong link between each NEO’sNEO's compensation and our shortshort- and long-term performance. The objective of our compensation program is to provide compensation which is competitive, variable based on our performance, and aligned with the long-term interests of our shareholders.


Shareholder “Say"Say on Pay”Pay" Advisory Votes

Shareholders are entitled to annually vote on an advisory, non-binding resolution on our compensation policies and procedures. Past shareholder votes have been overwhelmingly in favor of our programs and practices.


​
The May 2017 “Say on Pay” voting results were as follows:

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

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The approval percentages of the "Say on Pay" voting results for the last five years were as follows:

2014​2015​2016​2017​2018
96.6%​95.2%​97.6%​97.0%​95.6%
​ ​​ ​​​​ ​​


The Compensation and Human Resources Committee will continue to consider the outcome of future advisory, non-binding “Say"Say on Pay”Pay" votes when reviewing and planning future executive compensation arrangements.


The Role of Compensation Consultants and the CompensationCommittee’s and Human Resources Committee's Evaluation of Conflicts of Interest

The Compensation and Human Resources Committee has utilized, and expects to utilize in the future, various outside consultants, actuaries and attorneys to assist it in developing and implementing the essential components of our compensation program, including its equity program and incentive compensation arrangements.


The Compensation and Human Resources Committee, under the authority granted by its charter, engages Pearl Meyer to assist in reviewing our executive officer and director compensation packages. Their 20172018 engagement included:

providing on-going guidance on our short-term, annual cash incentive program positions in relationship to competitive plan design and payout opportunities to our strategic and long-term financial plans;
NEOs

•
providing guidance and market comparisons for the long-term incentive program using equity grants to NEOs under the Company’sCompany's approved equity plan;
plan

•
providing a comprehensive review of our compensation program for our directors;
directors

•
recommending an updated, appropriate Compensation Peer Group (defined below) comparison for compensation purposes;
providing guidance on implementation of CEO Pay Ratio; and
providing guidance and market comparisons for benchmark positions for a company-wide review of market salaries due to the expansion into three states and increased size.

purposes

The Compensation and Human Resources Committee has assessed the relationships among Pearl Meyer, the Company, the Compensation Committee, and theits executive officers for independence and conflicts of interest. In this assessment, the Compensation Committee reviewed the criteria set forth in the SEC’sSEC Reg. 240.10C-1(b)(4) (i)-(vi) and such other criteria as it deemed appropriate. Specifically, the Compensation Committee considered the following factors in its evaluation of its relationship with Pearl Meyer:

how muchus

•
the compensation Pearl Meyer has received from us for compensation consulting services, as a percentage to their total revenue;
revenue

•
what policies and procedures have been adopted by Pearl Meyer to prevent a conflict of interest;
interest

•
whether Pearl Meyer has any business or personal relationship with a member of the Compensation Committee;
Committee

•
whether Pearl Meyer owns any of our stock; and
stock

•
whether Pearl Meyer has any personal or business relationship with any of our executive officers.officers

The Compensation and Human Resources Committee did not identify any conflicts of interest with the engagement of Pearl Meyer. Additionally, Pearl Meyer provided us documented assurances that they are confident their relationship with us meets the independence standards and they have identified no conflicts of interest.


interest were identified.

Role of Management in Establishing Compensation

On an annual basis, management provides the Compensation and Human Resources Committee with general information on executive officer compensation, including the NEOs. The Compensation Committee then reviews, discusses and considers this information and any recommendations. CEOMr. Simard and our Human Resources experts assist in the administration of all executive compensation programs, preparesprepare Compensation and Human Resources Committee and Board meeting materials, and performsperform work as requested by the Compensationthis Committee, including working directly with the compensation consultant in preparation ofto prepare the peer analyses for the Compensation Committee’sCommittee's consideration. Mr. Simard, as our CEO, attends portions of the Compensation Committee’sCommittee's meetings and makes recommendations on base salary, annual incentives and equity compensation for only the executive officers who report to the CEO position. The Compensation Committee has the discretion to accept, reject or modify the CEO’sCEO's recommendations. The CEO is not a member of the Compensation and Human Resources Committee and is not present for the executive sessions or for any discussion regarding his own compensation.


Market Benchmarking and Performance Comparisons

The Compensation and Human Resources Committee reviews and recommends to the Board’sBoard's independent members for approval of compensation programs whichfor approval. The Committee also provides an analysis of the recommendations it believes meet our ongoing needs to attract, motivate, and retain talented and qualified executives who have the ability to make a major contributioncontributions to theour leadership and success of the Company.success. The Compensation Committee regularly reviews market information provided by Pearl Meyer. Primary data sources used in the benchmarking for the NEOs are therepresent information publicly disclosed by a peer group of publicly traded banks and published surveys. The Compensation Committee reviews comparative compensation and benefit information contained in the public filings of this peer group which has been established for compensation comparison (“the(the Compensation Peer Group”)Group) using objective selection criteria. The 2017Compensation Peer Group is reviewed annually by the Committee.

The Compensation and Human Resources Committee considers companies primarily in the banking industry that are comparable to our Company based on market capitalization, geographic area and number of employees. The 2018 Compensation Peer Group includes financial institutions that fall within a range of $1.7 billion in assets to $6.7$8.3 billion in assets. All peer banks are located in the Northeast region and New York excluding New York City. The Compensation Committee believes this group provides an appropriate selection

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of publicly traded financial institutions representing the geographical area most probable to be considered for recruitment purposes. Further, the Compensation Committee believes that, as the Compensation Peer Group information discloses compensation programs of similarly situated executives in comparable institutions, and the Compensation Peer Groupanalysis is a useful comparative tool for the Compensation Committee in establishing executive compensation programs

and individual criteria for its executives. FourCompared to 2017 Compensation Peer Group data, one financial institutions wereinstitution was added to the 20172018 Compensation Peer Group and one was omitted due to merger and acquisition activity.



The members of the 20172018 Compensation Peer Group are:

Financial Institution

FINANCIAL INSTITUTION

​StateSTATE​
Ticker
Symbol
TICKER
SYMBOL		​Financial Institution

FINANCIAL INSTITUTION

​StateSTATE​
Ticker
Symbol
TICKER
SYMBOL		​

Arrow Financial Corp.

​​NY​​​AROW​Financial Institutions,​

Enterprise Bancorp, Inc.

​NY​MAFISI​​​EBTC​​
​ ​​ ​​ ​​ ​​ ​​ ​

Bankwell Financial Group, Inc.

​​CT​​​BWFG​First Bancorp,​

Financial Institutions, Inc.

​ME​NYFNLC​​​FISI​​
​ ​​ ​​ ​​ ​​ ​​ ​

Blue Hills Bancorp, Inc.

​​MA​​​BHBK​​

First Connecticut Bancorp, Inc.

​CT​MEFBNK​​​FNLC​​
​ ​​ ​​​​ ​​​​ ​

Boston Private Financial Holdings, Inc.

​​MA​​​BPFH​​

Independent Bank Corp.

​​MA​​​INDB​​
​ ​​ ​​​​ ​​​​ ​

Bridge Bancorp, Inc.

​​NY​​​BDGE​​

Hingham Institution for Savings

​​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​​​ ​​​​ ​

Cambridge Bancorp

​​MA​​​CATC​​

Trust Co Bank Corp NY

​​NY​​​TRST​​
Century Bancorp, Inc.​ ​MA​ ​CNBK​ ​​ ​​ ​​ ​

Camden National Corp.

​​ME​​​CAC​​

United Financial Bancorp, Inc.

​​CT​​​UBNK​​
Chemung Financial Corp.​ ​NY​ ​CHMG​ ​​ ​​ ​​ ​

Century Bancorp, Inc.

​​MA​​​CNBK​​

Washington Trust Bancorp, Inc.

​​RI​​​WASH​​
Enterprise Bancorp, Inc.​ ​MA​ ​EBTC​​​ ​​​​ ​

Chemung Financial Corp.

​​NY​​​CHMG​​

Western New England Bancorp, Inc.

​​MA​​​WNEB​​
​ ​​ ​​ ​​ ​​ ​​ ​



The Compensation Peer Group information is used as a guide in establishing reasonableness in our compensation program. The Compensation Committee did not target the elements of our compensation program at any specific level or percentile within the Compensation Peer Group, but used the information as a whole and the 50th percentile as a way to define our compensation program and assess the competitiveness and reasonableness of our pay practices. Rather than rely on a specific formula-based model, the Compensation Committee believes that retaining discretion to assess the overall performance of NEOs gives the Compensation Committee the ability to more accurately reflect individual contributions that cannot be absolutely quantified. The Compensation Committee also considers the senior incentive program tailored to provide emphasis on incentive compensation for the NEO group as an important component of our overall compensation program.

The Compensation and Human Resources Committee believes our financial results and total shareholder return (disclosed in our Form 10-K for the year ended December 31, 2017)2018) compare favorably with our Compensation Peer Group indicating a solid pay-performance alignment. The Compensation Committee further believes that the compensation established for its CEO and other NEOs provides forprovide an appropriate balance between market compensation and shareholder return.


The Compensation Committee referenced market data including peer group and survey information along with guidance provided by Pearl Meyer in its process to establish and validate the appropriateness of our executive compensation compared to market and performance.


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COMPENSATION OF NAMED EXECUTIVE OFFICERS

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The following table summarizes our 20172018 NEO actual base and total cash compensation, as well as the 25%, 50%, and 75% market percentiles for base salary and total cash compensation at Targettarget bonus levels:


NAME

​BHB 2018
BASE
SALARY1		​PEER GROUP
RANGES OF
BASE
SALARIES2		​BHB 2018
TOTAL CASH
COMPENSATION3		​PEER GROUP
RANGES OF
TOTAL CASH
COMPENSATION4		​

Curtis C. Simard

​​$605,000​​$488,000​​$908,500​​$702,000​​
​​ ​​587,000​​ ​​846,000​​
​​ ​​680,000​​ ​​978,000​​
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
​​390,000​​255,000​​550,000​​334,000​​

​​ ​​297,000​​ ​​389,000​​

​​ ​​361,000​​ ​​473,000​​
​ ​​ ​​​​ ​​ ​
Richard B. Maltz 350,000
 278,000
352,000
434,000
 497,000
 372,000
471,000
580,000
​​390,000​​252,000​​550,000​​331,000​​
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

​​ ​​343,000​​ ​​451,000​​

​​ ​​403,000​​ ​​529,000​​
​ ​​ ​​​​ ​​ ​

Marion Colombo

​​290,000​​183,000​​435,000​​224,000​​

​​ ​​220,000​​ ​​270,000​​

​​ ​​277,000​​ ​​339,000​​
​ ​​ ​​​​ ​​ ​

John M. Mercier

​​290,000​​255,000​​390,000​​330,000​​

​​ ​​294,000​​ ​​380,000​​

​​ ​​316,000​​ ​​409,000​​
​ ​​ ​​​​ ​​ ​
1.1
​Approved base salary figures as of year-end 20172018 have been used for comparison purposes in this table.
Ms. Colombo was hired on 02/12/2018 and her Total Cash Compensation includes a $30,000 sign-on bonus.
2.2
​
Represents, in order, the 25thth, 50thth, and 75thth market percentile of base salaries.
3.3
​Approved base salary figures at the end of 20172018 plus the cash amount paid to each NEO under the 20172018 Annual Incentive Program.
4
4.
​
Represents, in order, the 25thth, 50thth, and 75thth market percentile when measures against peers that includes base salary plus short term incentive cash payments at Targettarget levels.



The Compensation and Human Resources Committee also considers the relative scarcity of senior banking executive candidates in its immediate market area with skills and experience necessary to achieve future strategic goals; andgoals, as well as the difficulties of recruitingchallenge in a very competitive market to recruit out-of-market candidates to work in rural Maine. The Compensation Committee does not use any formal, fixed or indexed criteria for establishing compensation levels for any of our NEOs within market identified ranges. The Compensation Committee believes that the growth in total compensation provided to our executive officers should be weighted towards variable compensation including cash and equity incentives

which tie directly to corporate performance with less emphasis upon growth in base salaries.

Compensation Plan Components

Our executive compensation program applicable to the NEOs is composed of the following primary components: (i)(1) base salaries and benefits; (ii)(2) annual incentive cash compensation programs; (iii)(3) long-term incentives in the form of equity grants; and (iv)(4) retirement benefits including the Company’sCompany's 401(k) plan.


PERFORMANCE YEAR 2018 PAY COMPONENTS
​ ​​​

DESCRIPTION

​HOW IT PAYS

Base

​Salary/wages are paid on a standard, Company-wide schedule of 26 pay periods throughout the year.
​ ​​

Annual Cash Incentive

​Awarded annually, subject to Board-approved formulas for Company-wide, group-specific performance measures, and individual performance measures.
​ ​​

Equity Incentives

​Comprised of time- and performance-based Restricted Stock Units (RSUs) with three and one-year vesting periods (respectively).
​ ​​

401(k) Match

​Up to statutory limits, the Company matches 100% of the first 3% of salary contributed, and 50% of the next 2% for a maximum match of 4%.
​ ​​

Bonus

​Paid as a "sign-on" incentive or for specific achievements.
​ ​​

Other

​The Company offers a wide range of Health & Welfare and other benefit programs to eligible employees, under the concept of a "Total Rewards" package.
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COMPENSATION OF NAMED EXECUTIVE OFFICERS

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Base Salary and Benefits

Our executive compensation program provides base salaries and benefits, which include health, disability and life insurance programs, a 401(k) retirement program and vacation awards to compensate executive officers for the performance of core duties and responsibilities associated with their positions. The Compensation and Human Resources Committee reviews base salaries annually in the context of the comparative industry information, as described above. The Compensation Committee also considers the specific contributions of the individual executive officer’sofficer's leadership skills, contributions to Companyour strategic initiatives, and the officer’s

officer's opportunity for professional growth, as well as market factors when it sets and adjusts base salaries. In addition, the Compensation Committee considers the prevailing economic climate, our overall performance, and our most current business plan.



Upon performance evaluations, including the successful acquisition of LSBG, and the advice and market salary data supplied by Pearl Meyer, the Compensation and Human Resources Committee made performance and market adjustments resulting in the approved base salaries for 20182019 below:


Named Executive Officer 
2017
Base Salary
 
2018
Base Salary

NAMED EXECUTIVE OFFICER

​2018
BASE SALARY		​2019
BASE SALARY		​
Curtis C. Simard $525,000
 $605,000
​​$605,000​​$635,000​​
​ ​​ ​​​
Josephine Iannelli 350,000
 390,000
​​390,000​​405,000​​
​​​ ​​ ​
Richard B. Maltz 350,000
 390,000
​​390,000​​405,000​​
William J. McIver1
 325,000
 325,000
Gregory W. Dalton 230,000
 237,500
​ ​​ ​​​

Marion Colombo

​​290,000​​300,000​​
​​​ ​​ ​

John M. Mercier

​​290,000​​300,000​​
​ ​​ ​​​


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.

Short-term, Annual Incentive Cash Compensation Program

During 2017, eight2018, seven senior managers including the NEOs participated in an annual cash incentive compensation plan developed and reviewed under the guidance of Pearl Meyer. The program is designed to provide meaningful incentives tied to our annual initiatives to optimize profitability, growth, excellence in individual performance, and to promote teamwork among its participants. This plan was approved by the Board for 20172018 and is detailed below.

Program Trigger.    In order for the Annual Incentive Program to initiate, we needed to achieve at least $32,694,000 in Net Income to Common Shareholders for 2018. If we did not meet this level, the plan would not pay out any awards for 2018 regardless of performance on other goals.


Incentive Payout Opportunity.Each participant had a target incentive opportunity based on their role.role in the Company. The target incentive reflected a percentage of base salary determined to be consistent with competitive market practices. Actual awards varied based on achievement of specific goals. The opportunity reflects a range of potential awards. Actual awards ranged from 0% (for not achieving minimal performance) to 150% of target (for exceptional performance). The table below summarizes the potential incentive range.

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

Program Trigger. In order for the Annual Incentive Program to ‘activate’ or turn on, we needed to achieve at least $25,632 in Net Income to Common Shareholders for 2017. If we did not meet this level, the plan would not pay out any awards for the year, regardless of performance on other goals.


Annual Incentive Program MeasuresMeasures..    The Senior Management Teamsenior management team had predefined performance goals to determine their short-term incentive award.awards. Bar Harbor Bankshares common team goals for 20172018 were Net Income, a credit asset quality measure of Non-Performing Loans as a Percentage of Total Loans, successful completion of strategic initiatives, and a well-managed Efficiency Ratio. The specific allocations of goals were weighted to reflect the focus and contribution for each position in the Company.




____________________________
2018 SHORT-TERM INCENTIVE OPPORTUNITIES​
​​​​​​​ ​​​ ​​​ ​

ROLE

​BELOW
THRESHOLD		​THRESHOLD
(50% OF TARGET
PERCENTAGE)		​TARGET
(100%)		​STRETCH
(150% OF TARGET
PERCENTAGE)		​

President and CEO

​​0.00%​​18.00%​​42.00%​​68.00%​
​​​ ​​ ​​​​ ​

EVP & CFO/COO

​​0.00​​​16.00​​​32.00​​​48.00​​
​ ​​ ​​​​ ​​ ​

EVP

​​0.00​​​14.00​​​28.00​​​42.00​​
​ ​​ ​​ ​​​​ ​
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The Board approved the appropriateness

Table of adjusting Net Income as a result of the project expenses resulting from the LSBG merger when calculating 2017 incentive payments for all employees, including the NEO's.Contents


​

COMPENSATION OF NAMED EXECUTIVE OFFICERS

The following tabletables and footnotes shows the specific performance goals for short-term incentive awards at Threshold, Target (budget or improvement over prior year measurements) and Stretch for each of the NEOs during 2017. The Board approved the appropriateness of adjusting Net Income and Efficiency ratio as a result of the project expenses resulting from the LSBG merger when calculating the 2017 payments to NEOs.2018.

Curtis C. Simard              
President and Chief Executive Officer
Eligible Salary $525,000
 Eligible Salary $525,000
 Eligible Salary $525,000
Incentive Threshold    19.00% Incentive Target    38.00% Incentive Stretch    57.00%
Incentive Threshold $99,750
 Incentive Target $199,500
 Incentive Stretch $299,250
           
 Performance Goals         Payment Range
Incentive Measures Threshold Target Stretch Weight Threshold Target Stretch
Strategic Initiatives 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%
Efficiency Ratio 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%
TOTALS       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
Incentive Threshold    14.00% Incentive Target   28.00% Incentive Stretch    42.00%
Incentive Threshold $49,000
 Incentive Target $98,000
 Incentive Stretch $147,000
           
 Performance Goals         Payment Range
Incentive Measures Threshold Target Stretch Weight Threshold Target Stretch
Strategic Initiatives 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%
Efficiency Ratio 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%
TOTALS       100.00%
 14.00%
 28.00%
 42.00%
               

CURTIS C. SIMARD

​

 

​

PRESIDENT AND CHIEF EXECUTIVE OFFICER

​

Eligible Salary

​$605,000​Eligible Salary​$605,000​Eligible Salary​$605,000​

Incentive Threshold

​18.00%​Incentive Target​42.00%​Incentive Stretch​68.00%​

Incentive Threshold

​$108,900​Incentive Target​$254,100​Incentive Stretch​$411,400​
​ ​​ ​​ ​​ ​​ ​​ ​



Richard B. Maltz              
Executive  Vice President Chief Operating Officer and Chief Risk Officer
Eligible Salary $350,000
 Eligible Salary $350,000
 Eligible Salary $350,000
Incentive Threshold    14.00% Incentive Target   28.00% Incentive Stretch    42.00%
Incentive Threshold $49,000
 Incentive Target $98,000
 Incentive Stretch $147,000
           
 Performance Goals         Payment Range
Incentive Measures Threshold Target Stretch Weight Threshold Target Stretch
Strategic Initiatives 93.00%
 100.00% 110.00%
 30.00%
 4.20%
 8.40%
 12.60%
NPL+OREO2 50bps
 49bps
 49bps
 10.00%
 1.40%
 2.80%
 4.20%
Efficiency Ratio 66.30%
 64.30% 64.30
 10.00%
 1.40%
 2.80%
 4.20%
Net  Income ($thousands) $25,632
 $27,561
 $27,561
 50.00%
 7.00%
 14.00%
 21.00%
TOTALS       100.00%
 14.00%
 28.00%
 42.00%
               
William J. McIver              
Executive  Vice President Regional President of NH/VT
Eligible Salary $325,000
 Eligible Salary $325,000
 Eligible Salary $325,000
Incentive Threshold     14.00% Incentive Target   28.00% Incentive Stretch 42.00%
Incentive Threshold $45,500
 Incentive Target $91,000
 Incentive Stretch $136,500
               
 Performance Goals         Payment Range
Incentive Measures Threshold Target Stretch Weight Threshold Target Stretch
Strategic Initiatives 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%
Efficiency Ratio 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%
TOTALS       100.00%
 14.00%
 28.00%
 42.00%
               
Gregory W. Dalton              
Executive Vice President Maine Business Banking
Eligible Salary $230,000
 Eligible Salary $230,000
 Eligible Salary $230,000
Incentive Threshold      12.50% Incentive Target  25.00% Incentive Stretch    37.50%
Incentive Threshold $28,750
 Incentive Target $57,500
 Incentive Stretch $86,250
               
 Performance Goals         Payment Range
Incentive Measures Threshold Target Stretch Weight Threshold Target Stretch
Strategic Initiatives 93.00%
 100.00%
 110.00%
 30.00%
 3.75%
 7.50%
 11.25%
NPL+OREO2 50bps
 49bps
 44bps
 10.00%
 1.25%
 2.50%
 3.75%
Efficiency Ratio 66.30%
 64.30%
 62.30%
 10.00%
 1.25%
 2.50%
 3.75%
Net  Income ($thousands) $25,632
 $27,561
 $30,317
 50.00%
 6.25%
 12.50%
 18.75%
TOTALS       100.00%
 12.50%
 25.00%
 37.50%

PERFORMANCE GOALS

​ ​ ​ ​ ​PAYMENT RANGE​
​​​​ ​​​ ​​ ​​ ​​​​​ ​​​ ​

INCENTIVE MEASURES

​THRESHOLD​TARGET​STRETCH​WEIGHT​THRESHOLD
TARGET
STRETCH​

Strategic Initiatives

​​93.00%​​100.00%​110.00%​30.00%​​5.40%​​12.60%​20.40%​

NPL/Tloans1

​​2.00%​​1.50%​1.25%​10.00%​​1.80%​​4.20%​6.80%​

Efficiency Ratio

​​59.64%​​58.47%​57.30%​10.00%​​1.80%​​4.20%​6.80%​

Net Income ($thousands)

​​$32,694​​$35,155​$38,671​50.00%​​9.00%​​21.00%​34.00%​
​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​

TOTALS

​​ ​​ ​ ​100.00%​​18.00%​​42.00%​68.00%​
​​​ ​​ ​​​​ ​​ ​​ ​​ ​


JOSEPHINE IANNELLI

​

 

​

 EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL OFFICER AND TREASURER

​

Eligible Salary

​$390,000​Eligible Salary​$390,000​Eligible Salary​$390,000​

Incentive Threshold

​16.00%​Incentive Target​32.00%​Incentive Stretch​48.00%​

Incentive Threshold

​$62,400​Incentive Target​$124,800​Incentive Stretch​$187,200​
​ ​​ ​​ ​​ ​​ ​​ ​


PERFORMANCE GOALS

​ ​ ​ ​ ​PAYMENT RANGE​
​​​​ ​​​ ​​ ​​ ​​​​​ ​​​ ​

INCENTIVE MEASURES

​THRESHOLD​TARGET​STRETCH​WEIGHT​THRESHOLD
TARGET
STRETCH​

Strategic Initiatives

​​93.00%​​100.00%​110.00%​30.00%​​4.80%​​9.60%​14.40%​

NPL/Tloans1

​​2.00%​​1.50%​1.25%​10.00%​​1.60%​​3.20%​4.80%​

Efficiency Ratio

​​59.64%​​58.47%​57.30%​10.00%​​1.60%​​3.20%​4.80%​

Net Income ($thousands)

​​$32,694​​$35,155​$38,671​50.00%​​8.00%​​16.00%​24.00%​
​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​

TOTALS

​​ ​​ ​ ​100.00%​​16.00%​​32.00%​48.00%​
​​​ ​​ ​​​​ ​​ ​​ ​​ ​


RICHARD B. MALTZ

​

 

​

 EXECUTIVE VICE PRESIDENT., CHIEF OPERATING OFFICER AND CHIEF RISK OFFICER

​

Eligible Salary

​$390,000​Eligible Salary​$390,000​Eligible Salary​$390,000​

Incentive Threshold

​16.00%​Incentive Target​32.00%​Incentive Stretch​48.00%​

Incentive Threshold

​$62,400​Incentive Target​$124,800​Incentive Stretch​$187,200​
​ ​​ ​​ ​​ ​​ ​​​


PERFORMANCE GOALS

​ ​ ​ ​ ​PAYMENT RANGE​
​​​​ ​​​ ​​ ​​ ​​​​​ ​​​ ​

INCENTIVE MEASURES

​THRESHOLD​TARGET​STRETCH​WEIGHT​THRESHOLD
TARGET
STRETCH​

Strategic Initiatives

​​93.00%​​100.00%​110.00%​30.00%​​4.80%​​9.60%​14.40%​

NPL/Tloans1

​​2.00%​​1.50%​1.25%​10.00%​​1.60%​​3.20%​4.80%​

Efficiency Ratio

​​59.64%​​58.47%​57.3%​10.00%​​1.60%​​3.20%​4.80%​

Net Income ($thousands)

​​$32,694​​$35,155​$38,671​50.00%​​8.00%​​16.00%​24.00%​
​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​

TOTALS

​​ ​​ ​ ​100.00%​​16.00%​​32.00%​48.00%​
​​​ ​​ ​​​​ ​​ ​​ ​​ ​
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COMPENSATION OF NAMED EXECUTIVE OFFICERS

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MARION COLOMBO

​

 

​

EXECUTIVE VICE PRESIDENT DIRECTOR OF RETAIL DELIVERY

​

Eligible Salary

​$290,000​Eligible Salary​$290,000​Eligible Salary​$290,000​

Incentive Threshold

​14.00%​Incentive Target​28.00%​Incentive Stretch​42.00%​

Incentive Threshold

​$40,600​Incentive Target​$81,200​Incentive Stretch​$121,800​
​ ​​ ​​ ​​ ​​ ​​​


PERFORMANCE GOALS

​ ​ ​ ​ ​PAYMENT RANGE​
​​​​ ​​​ ​​ ​​ ​​​​​ ​​​ ​

INCENTIVE MEASURES

​THRESHOLD​TARGET​STRETCH​WEIGHT​THRESHOLD
TARGET
STRETCH​

Strategic Initiatives

​​93.00%​​100.00%​110.00%​30.00%​​4.20%​​8.40%​12.60%​

NPL/Tloans1

​​2.00%​​1.50%​1.25%​10.00%​​1.40%​​2.80%​4.20%​

Efficiency Ratio

​​59.64%​​58.47%​57.30%​10.00%​​1.40%​​2.80%​4.20%​

Net Income ($thousands)

​​$32,694​​$35,155​$38,671​50.00%​​7.00%​​14.00%​21.00%​
​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​

TOTALS

​​ ​​ ​ ​100.00%​​14.00%​​28.00%​42.00%​
​​​ ​​ ​​​​ ​​ ​​ ​​ ​

JOHN M. MERCIER

​

 

​

EXECUTIVE VICE PRESIDENT CHIEF LENDING OFFICER

​

Eligible Salary

​$290,000​Eligible Salary​$290,000​Eligible Salary​$290,000​

Incentive Threshold

​14.00%​Incentive Target​28.00%​Incentive Stretch​42.00%​

Incentive Threshold

​$40,600​Incentive Target​$81,200​Incentive Stretch​$121,800​
​ ​​ ​​ ​​ ​​ ​​​


PERFORMANCE GOALS

​ ​ ​ ​ ​PAYMENT RANGE​
​​​​ ​​​ ​​ ​​ ​​​​​ ​​​ ​

INCENTIVE MEASURES

​THRESHOLD​TARGET​STRETCH​WEIGHT​THRESHOLD
TARGET
STRETCH​

Strategic Initiatives

​​93.00%​​100.00%​110.00%​30.00%​​4.20%​​8.40%​12.60%​

NPL/Tloans1

​​2.00%​​1.50%​1.25%​10.00%​​1.40%​​2.80%​4.20%​

Efficiency Ratio

​​59.64%​​58.47%​57.3%​10.00%​​1.40%​​2.80%​4.20%​

Net Income ($thousands)

​​$32,694​​$35,155​$38,671​50.00%​​7.00%​​14.00%​21.00%​
​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​

TOTALS

​​ ​​ ​ ​100.00%​​14.00%​​28.00%​42.00%​
​​​ ​​ ​​​​ ​​ ​​ ​​ ​
1.1
All Payment Range percentages rounded to two trailing decimals.
​
2.
NPL's areNon Performing Loans (NPL's) include all loans on non-accrual status as of December 31, 20172018 as measured against total loans.

Annual Incentive Payment Summary

Below is a summary of the annual incentive awards paid for 20172018 performance:


Named Executive Officer 
Percentage
of Base
 
Total
Payout
 
Net
Income1
 
Efficiency
Ratio2
 
NPL/
TLoans3
 
Strategic Goals4

NAMED EXECUTIVE OFFICER

​PERCENTAGE
OF BASE		​TOTAL
PAYOUT		​NET
INCOME		​EFFICIENCY
RATIO		​NPL/
TLOANS		​STRATEGIC
GOALS		​
Curtis C. Simard 57.00% $299,250
 $149,625
 $29,925
 $29,925
 $89,775
​​50.16%​$303,500​$151,750​​$30,350​​$30,350​​$91,050​​
Josephine Iannelli 42.00
 147,000
 73,500
 14,700
 14,700
 44,100
​​41.03%​160,000​80,000​​16,000​​16,000​​48,000​​
Richard B. Maltz 42.00
 147,000
 73,500
 14,700
 14,700
 44,100
​​41.03%​160,000​80,000​​16,000​​16,000​​48,000​​
William J. McIver 42.00
 136,500
 68,250
 13,650
 13,650
 40,950
Gregory W. Dalton 32.61
 75,000
 43,125
 8,625
 8,625
 14,625

Marion Colombo

​​39.65%​115,000​57,500​​11,500​​11,500​​34,500​​

John M. Mercier

​​34.48%​100,000​50,000​​10,000​​10,000​​30,000​​
​ ​​ ​​ ​​​​ ​​ ​​​
Totals   $804,750
 $408,000
 $81,600
 $81,600
 $233,550
​​ ​​$838,500​$419,250​​$83,850​​$83,850​​$251,550​​
​ ​​ ​​ ​​​​ ​​ ​​​

1.
Net Income adjusted for project expenses exceeded 110% of the approved Target measure and was capped at maximum Stretch ceiling.
2.
Efficiency Ratio adjusted for project expenses exceeded 110% of approved Target measure and was capped at maximum stretch ceiling.
3.
The asset quality measures Non-Performing Loans exceeded the approved Target and payment was capped at the maximum ceiling.
4.
The amount paid for strategic initiatives was primarily based on the successful completion of the acquisition and integration of the LSBG organization during 2017.

Details of the above are disclosed in Threshold, Target and Stretch (maximum) categories in the “Grants"Grants of Plan-Based Awards”Awards" table under the heading “Executive"Executive Compensation Tables”Tables" found elsewhere in this proxy statement.


Long-term Incentives

Equity Plans.    Since adopting the first Stock Option Plan in 2000, we have provided certain officers, including our NEOs, with an equity-based compensation component. This compensation component is used to align the interestinterests of our participating officers and managers, particularly executive officers, with those of shareholders over a long-term horizon, and to serve as a

retention tool. Grants are made for qualified individuals, and from time to time,time-to-time, for special recognition. TheOur Board adopted the 2015 Equity Incentive Plan of("the 2015 (the “2015 Plan”Plan"), which was approved by shareholders at the 2015 Annual Meeting of Shareholders, under which equity grants may currently be issued.issued. Information pertaining to outstanding options and equity awards are disclosed in the “Outstanding"Outstanding Equity Awards at Year-end”Fiscal Year-end" table under the heading “Executive Compensation Tables” found elsewhereon page 38 in this proxy statement.

The

Our Board utilizes a Long-Term Incentive Program for senior management members as part of their total compensation.

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COMPENSATION OF NAMED EXECUTIVE OFFICERS


Pearl Meyer assisted the Compensation and Human Resources Committee with the initial plan design and periodically evaluates appropriate reward levels. The program is designed to be made up of three-year rolling plans utilizing shares made available through the 2009 and 2015 Equity Incentive Plans. Grants may be given in time-vested restricted stock, performance-vested restricted stock, or a combination of both. The purpose of the program is to align executives’executives' interests with shareholder interests, increase executive stock ownership, and ensure sound risk management by providing a balanced view of performance and reward over a longer time horizon, and positionhorizon. The program also positions our total compensation offerings to be competitive with the market to

attract and retain strong talent which is needed to drive our success.


The Board has currently approved Long-Term Incentive Programs covering the 2015-2017, 2016-2018, 2017-2019, 2018-2020, and the 2018-20202019-2021 calendar years. EightSeven current senior managers and two retired senior managers, including the NEOs, participate in these Long-Term Incentive Programs. Target reward opportunities are based on role. Equity awards are calculated as a percentage of base salary to determine the number of shares


available for awards. See the Table Grants of Plan Based Awards (columns f-i) on page 3736 to reference the actual shares awarded under the 2017-20192018-2020 Plan year to each NEO.


The following table shows the performance goals for the long-term incentive awards at Threshold, Target and Stretch for role of the participants within the 2018-2020 Plan:

2017-2019 Long-Term Incentive
Role Grant Below Threshold 
Threshold
Percentage of Salary
 
Target
Percentage of Salary
 
Stretch
Percentage of Salary
President /CEO Time-vested   N/A
 17.50% N/A
  Performance 0% 8.75% 17.50% 26.25%
EVP CFO/COO Time-vested   N/A
 13.75% N/A
  Performance 0% 6.88% 13.75% 20.63%
EVP Time-vested   N/A
 12.50% N/A
  Performance 0% 6.25% 12.50% 18.75%
2018-2020 LONG-TERM INCENTIVE​
​​​​ ​​​ ​​​ ​​​​​​​

ROLE

​GRANT​BELOW
THRESHOLD		​THRESHOLD
PERCENTAGE
OF SALARY		​TARGET
PERCENTAGE
OF SALARY		​STRETCH
PERCENTAGE
OF SALARY		​

President and CEO

​Time-vested​​ ​​​N/A​​​20.00%​​N/A​​

​Performance​​0%​​​10.00%​​20.00%​​30.00%​
​​​ ​​ ​​ ​​ ​​ ​

EVP CFO/COO

​Time-vested​​ ​​​N/A​​​15.00%​​N/A​​

​Performance​​0%​​​8.00%​​15.00%​​22.00%​
​​​ ​​ ​​ ​​ ​​ ​

EVP

​Time-vested​​ ​​​N/A​​​12.50%​​N/A​​

​Performance​​0%​​​6.25%​​12.50%​​18.75%​
​​​ ​​ ​​ ​​ ​​ ​


The Long-Term Incentive Programs consist of both time-vested restricted shares and performance shares. Fifty percent of the grants to each participant are time-vested with a third of the shares vesting in each of the years covered. Grants are contingent upon continued employment with a pro-rated portion vesting in the event of a participant retirement, death, or disability. The time-vested shares also have a post-vesting holding period of one year for shares under the 2015-2017 Long-Term Incentive Program and three years for shares under the 2016-2018, 2017-2019 and 2018-2020 Long-Term Incentive Programs. At the time of vesting, sufficient shares may be withheld to cover the executive’sexecutive's tax liabilities.


The remaining 50% of the shares are performance-vested shares to be awarded at the end of the three-year measurement period and upon attainment of the performance goals. Relative Return on Assets (ROA)("ROA") measured against the SNL $1.5B$1.5 billion to $6B$6 billion Bank Index peer group will determine the performance award for 2017-20192018-2020 Plan. The average of the twelve quarters within the plan measurement year is calculated and measured against peer results for the same period. A result below the 45th percentile of the peer group would fall below Threshold and no payment would be due or paid. Target is calculated at the 50th percentile when measured against the peer group, and the plan Stretch is capped at the 75th percentile. In addition to relative ROA, there is a Total Shareholder Return (TSR)("TSR") modifier to further align shareholder interest. If BHB’sour TSR calculation for the same performance measurement period is negative, a payout cannot exceed Threshold regardless of the relative ROA performance results.


Benefits, Retirement and Post-Termination Compensation Elements

We provide a 401(k) plan for all employees meeting minimum age and service requirements. We also maintain employment agreements with NEOs Simard Iannelli, and McIver,Iannelli, and change in control agreements for NEOs Maltz, Colombo and Dalton.Mercier. These agreements provide for, among other things, the payment of their salary and other specified benefits for a period of 1224 to 2436 months in the event of both a change of control of the Company and subsequent termination (or constructive termination) within set timeframes after a change in control, unless such termination was for cause. These specific payments and timeframes were established under the advice of a compensation consultant and employment attorney as representative of similar type agreements in the industry.


The Compensation and Human Resources Committee feels that these agreements are necessary to provide a competitive total compensation plan to attract and retain the employment of the NEOs who are a party to the agreements.


our current and future NEOs.

Other Compensation and Benefits

In addition, to the foregoing, all our executive officers are entitled tocan participate in certain group health, dental, disability and term life insurance benefits. In accordance with our policy, all such benefits are generally available to our employees including employees of our subsidiaries.

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COMPENSATION OF NAMED EXECUTIVE OFFICERS


Clawback Provision

We have provisions in our incentive programs guidance requiring each current and former executive officer to forfeit any erroneously awarded incentive-based compensation. This incentive-based compensation would have been received by any such officer during the three completed years preceding the dale 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. None of our directors or executives were required to forfeit any such erroneously awarded incentive-based compensation in 2018.

Our provisions further state that 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 its subsidiaries.  



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 "clawback."

All cash and equity awards proposed under the 2019 Equity Plan will be subject to clawback, cancellation, recoupment, rescission, payback, reduction, or similar action in accordance with the terms of any Company clawback or similar policy or any applicable law related to such actions, as may be in effect from time-to-time.

Stock Ownership Guidelines

The

Our Bylaws of the Company require that each director own a minimum of 500 shares no later than one year following their initial election to the Board. In addition, theour Board has implemented a policy requiring each director to own a minimum of five times his or her annual

stipend. Ownership must be attained within five years of a director’sdirector's initial election and may include their 500 qualifying shares.


All current director-nomineesdirector nominees will exceed or will meet during their five year timeline ownership requirement under this policy in place for 2017. Director-nominee, Brendan O’Halloran, if elected, presently owns 500 shares required under the Company Bylaws with sufficient time to acquire shares to meet the longer term ownership requirement.


2018.

While all of the Company’sour executive officers hold Company stock and may be granted shares in the future under the Company’sour equity programs, the Company doeswe do not have specific guidelines regarding stock ownership for itsour NEOs at this time. TheOur Board has implemented retention periods on equity issued under the Company’sour Long Term Incentive Program for its NEOs. However, the Company encouragesWe encourage NEO stock ownership and reviewsreview overall ownership levels on a periodic basis.


Compliance with Code Section 409A
Our compensation plans subject to Section 409A of the Internal Code of 1986 (the “Code”) are operated to comply with the Section 409A tax provisions of the Code.  

Policy on Code Section 162(m)

Section 162(m) of the Code disallows publicly traded companies from receiving a tax deduction on compensation paid to certain executive officers in excess of $1 million unless, among other things, the compensation meets the requirements for performance-based compensation in years 20172018 or prior. In structuring the compensation programs and in determining executive compensation, the Compensation and Human Resources Committee takes into consideration the deductibility limit for compensation and the performance-based requirements of Section 162(m). However, while the Compensation Committee recognizes the importance of tax deductibility and endeavors to formulate its compensation program in a tax-effective manner, it also believes it is critical to balance tax deductibility with ensuring that the Company'sour programs are designed appropriately to recognize and reward executive performance, such thatperformance. Hence, at times current tax deductibility limits may be exceeded.

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COMPENSATION OF NAMED EXECUTIVE OFFICERS

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Executive Compensation Tables

Summary Compensation Table

The following table discloses compensation for the years ended December 31, 2018, 2017 2016 and 20152016 received by the NEOs.

Name and Principal Position Year 
Base Salary
Received1
 Bonus 
Stock
Awards2
 Non-Equity Incentive Plan Compensation 
Change in Pension Value and Nonqualified Deferred Compensation Earnings3
 
All Other Compen-sation4
 
Total
($)
(a) (b) (c) (d) (e) (g) (h) (i) (j)
Curtis C. Simard
President & CEO of
the Company/BHBT

 
2017


 $525,000
 $—
 $350,369
 $299,250
 $—
 $28,415
 $1,203,034
 2016 464,000
 —
 169,853
 222,627
 —
 23,035
 879,515
 2015 438,000
 —
 164,297
 203,775
 —
 22,600
 828,672
                 
Josephine Iannelli 
EVP, CFO and Treasurer of the Company/BHBT 
 2017 350,000
 —
 179,978
 147,000
 —
 41,469
 718,447
 2016 
53,8466

 
130,0007
 139,386
 19,751
 —
 1,731
 344,714
                
                 
Richard B. Maltz 
EVP, Chief Operating Officer and Chief Risk Officer of BHBT 
 2017 350,000
 —
 204,984
 147,000
 —
 23,638
 725,622
 2016 
309,8086

 —
 119,620
 103,459
 —
 14,076
 546,963
 2015 255,000
 —
 82,074
 83,247
 —
 12,922
 433,243
                 
William J. McIver 
EVP, Regional President of NH/VT of BHBT

 2017 
300,0006

 —
 218,532
 136,500
 225,589
 29,377
 939,998
                 
Gregory W. Dalton
EVP, Business Banking of BHBT
 2017 230,000
 —
 62,688
 75,000
 —
 23,316
 391,004
 2016 220,000
 —
 67,152
 51,282
 —
 14,030
 352,464
 2015 203,000
 —
 63,465
 60,551
 —
 11,844
 338,860

  NAME AND PRINCIPAL POSITION

​YEAR​BASE
SALARY
RECEIVED1		​BONUS​STOCK
AWARDS2		​NON-EQUITY
INCENTIVE PLAN
COMPENSATION		​CHANGE IN
PENSION VALUE
AND
NONQUALIFIED
DEFERRED
COMPENSATION
EARNINGS		​ALL OTHER
COMPENSATION3		​TOTAL ($)​

Curtis C. Simard

​​2018​​​$605,000​​$ ​$302,481​​$303,500​​$ ​​$30,235​​$1,241,216​

President & CEO of

​​2017​​​525,000​​—​350,369​​299,250​​—​​28,415​​1,203,034​

the Company/BHBT

​​2016​​​464,000​​—​169,853​​222,627​​—​​23,035​​879,515​
​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​​ ​

Josephine Iannelli

​​2018​​​390,000​​ ​144,261​​160,000​​ ​​28,204​​722,465​

EVP, CFO and Treasurer of

​​2017​​​350,000​​—​179,978​​147,000​​—​​41,469​​718,447​

the Company/BHBT

​​2016​​​53,8464​130,0005139,386​​19,751​​—​​1,731​​344,714​
​ ​​ ​​​​ ​​ ​​ ​​ ​​​​ ​

Richard B. Maltz

​​2018​​​390,000​​ ​144,261​​160,000​​ ​​23,838​​718,099​

EVP, Chief Operating Officer and

​​2017​​​350,000​​—​204,984​​147,000​​—​​23,638​​725,622​

Chief Risk Officer of BHBT

​​2016​​​309,808​​—​119,620​​103,459​​—​​14,076​​546,963​
​ ​​ ​​​​ ​​ ​​ ​​ ​​​​ ​

Marion Colombo

​​2018​​​245,3854​30,0006160,2967​115,000​​—​​28,631​​579,312​

EVP, Director of Retail Delivery

​​ ​​​ ​​ ​ ​​ ​​ ​​ ​​ ​
​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​​ ​

John M. Mercier

​​2018​​​290,000​​—​90,585​​100,000​​—​​29,269​​509,854​

EVP, Chief Lending Officer

​​ ​​​ ​​ ​ ​​ ​​ ​​ ​​ ​
​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​​ ​

1.

1

​Included in salary amounts disclosed in (c) above for each NEO are monies they deferred pursuant to our 401(k) Plan, which allows our employees and employees of our wholly owned subsidiaries to defer monies from their compensation, subject to applicable limitations in Code Section 401(k), and amounts deferred pursuant to our Section 125 Cafeteria Plan providing health, life, and disability insurance benefits. Employees, including NEOs, are paid on a bi-weekly basis.

2

​Amounts in this column represent grants issued to NEOs under the Long Term Incentive Plans computed at the probable level of Stretch performance in accordance with FASB ASC Topic 718. See Note 14 Stock Based Compensation Plans to our financial statements included in our Annual Report Form 10-K filed for the year ending December 31, 2018.

3

​Other Annual Compensation includes match and contribution amounts into our 401(k) plan in the same formula and schedule as available to all other employees and such other items as imputed life insurance amounts on group term insurance in excess of the allowable $50,000, non-taxable IRS limit. Please see the table following these footnotes for further detail.

4

​Base salary for Ms. Iannelli and Ms. Colombo represent pro-rated amounts of their approved annualized base salaries representing the time worked during the identified year.

5

​Ms. Iannelli received a sign on bonus of $100,000 upon joining the Company in October 2016 and an additional discretionary payment of $30,000 in recognition of her strategic contribution to the Company during 2016.

6

​Ms. Colombo received a sign on bonus of $30,000 upon joining the Company in February 2018.

7

​Ms. Colombo was granted a pro rata share of long-term performance stock awards for 2016-2018, 2017-2019, and 2018-2020 upon joining the Company in February 2018.
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Table of our wholly owned subsidiaries to defer monies from their compensation, subject to applicable limitations in Code Section 401(k), and amounts deferred pursuant to our Section 125 Cafeteria Plan providing health, life, and disability insurance benefits.  Employees, including NEOs, are paid on a bi-weekly basis.Contents

2. ​

COMPENSATION OF NAMED EXECUTIVE OFFICERS

Amounts in this column represent grants issued to NEOs under the Long Term Incentive Plans computed at the probable level and in accordance with FASB ASC Topic 718. Amounts payable under the performance grants for the Long-Term Incentive Plan at the stretch (maximum) level to Messrs. Simard, Maltz, McIver, Dalton, and Ms. Iannelli, are $379,791, $220,394, $232,922, $71,893, and $195,387 respectively.​
3. The amounts in this column reflect the increase in value under the tax qualified defined benefit plan, the Salary Continuance Agreement, and the non-qualified SERP for Mr. McIver in accordance with FASB ASC Topic 715, details which are set forth in Footnote 10 to our audited consolidated financial statements contained in our Form 10-K for the year ended December 31, 2017.  
4. Other Annual Compensation includes match and contribution amounts into our 401(k) plan in the same formula and schedule as available to all other employees and such other items as imputed life insurance amounts on group term insurance in excess of the allowable $50,000, non-taxable IRS limit.  Please see the table following for further detail.
6. Base salaries for Ms. Iannelli, Mr. Maltz and Mr. McIver represent pro-rated amounts of their approved annualized base salaries representing the time worked during the identified year.
7. Ms. Iannelli received a sign on bonus of $100,000 upon joining the Company in October 2016 and an additional discretionary payment of $30,000 in recognition of her strategic contribution to the Company during 2016.

The NEOs also participate in certain group life, health and disability insurances and medical reimbursement plans not disclosed in the Summary Compensation Table that are generally available to all employees and do


not discriminate in scope, terms and operation. The table below provides detail on the amounts comprising the column entitled “All"All Other Compensation”Compensation" contained in the Summary Compensation Table for 2017.
2018.


Name 
Employer 401(k)
Contribution Match and Contribution
 
Club
Dues
 Housing Allowance 
Auto-mobile
Allowance
 
Imputed Life
Insurance
 Total

NAME

​EMPLOYER
401(K)
CONTRIBUTION
MATCH		​MEMBERSHIP
DUES		​HOUSING
ALLOWANCE		​AUTOMOBILE
ALLOWANCE		​IMPUTED LIFE
INSURANCE		​TOTAL​
Curtis C. Simard $10,800
 $1,355
 $—
 $15,000
 $1,260
 $28,415
​​$11,000​​$2,975​​$—​​$15,000​​$1,260​​$30,235​
​ ​​ ​​​​ ​​ ​​ ​​ ​
Josephine Iannelli 10,800
 2,475
 17,024
 10,000
 1,170
 41,469
​​11,000​​—​​6,214​​10,000​​990​​28,204​
​ ​​ ​​ ​​ ​​​​ ​​ ​
Richard B. Maltz 10,800
 —
 —
 10,000
 2,838
 23,638
​​11,000​​—​​—​​10,000​​2,838​​23,838​
William J. McIver 10,317
 —
 —
 11,077
 7,983
 29,377
Gregory W. Dalton 10,800
 400
 —
 10,000
 2,116
 23,316
​ ​​ ​​ ​​​​ ​​ ​​​

Marion Colombo

​​9,815​​1,592​​—​​16,154​​1,069​​28,631​
​​​ ​​ ​​​​ ​​ ​​​

John M. Mercier

​​11,000​​7,430​​—​​8,146​​2,693​​29,269​
​​​ ​​ ​​​​ ​​ ​​​

1

​Membership Dues include payment of membership or participation fees to fitness, country club, or similar organizations.

We may provide non-cash perquisites that do not exceed $10,000 in the aggregate for any individual and are not included in the reported figures. Benefits not disclosed in the table above are of with ade minimis value such as incidental service fee waivers on deposit accounts or safe deposit rental fees.



Grants of Plan-Based Awards

The following table sets forth information regarding the 2018-2020 long-term plan-based awards granted to the NEOs during the last fiscal year under the 20172018 Annual Incentive Plan. Amounts disclosed are based on 20172018 eligible salaries received by the participants. The time-vested grants under the 2017-20192018-2020 Long Term Incentive Plan are shown under Target, and the range of the possible performance awards pursuant to the 2017-20192018-2020 Long Term Incentive Plan is also disclosed for each participant.

      
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards1
 
Estimated Future Payouts
Under Equity Incentive
Plan Awards2
 
All other Stock Awards; Number of shares of Stock or units 6
Name Plan Name Grant Date Threshold Target Maximum Threshold Target Maximum 
(a)   (b) (c) (d) (e) (f) (g) (h) (i)
Curtis C.
Simard
 2017 Annual Plan   $99,750
 $199,500
 $299,250
 —
 —
 —
 —
  2017-2019 Long-Term Plan   1/2/2017 —
 —
 —
 1,577
 3,155
 4,731
 3,155
  Acquisition Award 08/03/2017 —
 —
 —
 —
     5,855
Josephine Iannelli 
2017
Annual Plan
   49,000
 98,000
 147,000
 —
 —
 —
 —
  2017-2019 Long-Term Plan 1/1/2017 —
 —
 —
 826
 1,653
 2,478
 1,653
  Acquisition Award 08/03/2017 —
 —
 —
 —
     2,792
Richard B. Maltz 
2017
Annual Plan6
   49,000
 98,000
 147,000
 —
 —
 —
 —
  
2017-2019 Long-Term Plan7
 
01/01/2017

 —
 —
 —
 826
 1,653
 2,478
 1,653
  Acquisition Award 08/03/2017 —
 —
 —
 —
     3,723
William J. McIver4,5
 
2017
Annual Plan
   45,500
 91,000
 136,500
 —
 —
 —
 —
  2017-2019 Long-Term Plan 1/1/2017 —
 —
 —
 1,393
 2,786
 4,179
 2,786
  Acquisition Award 08/03/2017 —
 —
 —
 —
     1,117
Gregory W. Dalton 
2017
Annual Plan
   28,750
 57,500
 86,250
 —
 —
 —
 —
  
2017-2019
Long-Term Plan
 1/1/2017 —
 —
 —
 494
 987
 1,481
 987

​​​ ​Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards1		​Estimated future payouts
under equity incentive
plan awards2		​All other
stock awards:
Number of		​Grant date
fair value of		​
​ ​​ ​​​ ​​​ ​​​ ​​​ ​​ ​​​ ​​​ ​​​ ​​​​ ​​

  Name
  (a)

​Grant Type
(b)		​Grant Date
(c)		​Threshold ($)
(d)

Target ($)
(e)

Stretch ($)
(f)		​Threshold (#)
(g)

Target (#)
(h)

Stretch (#)
(i)		​stock units3(#)
(j)		​stock awards4
(#) (k)		​

Curtis C. Simard

​Short-term​​ ​​​$108,900​​​$254,100​​​$411,400​​​ ​​​ ​​​ ​​​ ​​​ ​​

​Time-vested​​1/2/2018​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​4,481​​​$120,987​​

​Performance​​1/2/2018​​​ ​​​ ​​​ ​​​2,240​​​4,481​​​6,721​​​ ​​​181,494​​
​ ​​ ​​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​​ ​

Josephine Iannelli

​Short-term​​ ​​​62,400​​​124,800​​​187,200​​​ ​​​ ​​​ ​​​ ​​​ ​​

​Time-vested​​1/2/2018​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​2,166​​​58,482​​

​Performance​​1/2/2018​​​ ​​​ ​​​ ​​​1,155​​​2,166​​​3,176​​​ ​​​85,779​​
​ ​​​​ ​​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​

Richard B Maltz

​Short-term​​ ​​​62,400​​​124,800​​​187,200​​​ ​​​ ​​​ ​​​ ​​​ ​​

​Time-vested​​1/2/2018​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​2,166​​​58,482​​

​Performance​​1/2/2018​​​ ​​​ ​​​ ​​​1,155​​​2,166​​​3,176​​​ ​​​85,779​​
​ ​​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​​​​ ​

Marion Colombo5

​Short-term​​ ​​​40,600​​​81,200​​​121,800​​​ ​​​ ​​​ ​​​ ​​​ ​​

​Time-vested​​2/20/2018​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​2,329​​​64,119​​

​Performance​​2/20/2018​​​ ​​​ ​​​ ​​​1,164​​​2,329​​​3,493​​​ ​​​96,177​​
​ ​​ ​​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​​ ​

John M. Mercier

​Short-term​​ ​​​40,600​​​81,200​​​121,800​​​ ​​​ ​​​ ​​​ ​​​ ​​

​Time-vested​​1/2/2018​​​ ​​​ ​​​ ​​​ ​​​ ​​​ ​​​1,342​​​36,234​​

​Performance​​1/2/2018​​​ ​​​ ​​​ ​​​671​​​1,342​​​2,013​​​ ​​​54,381​​
​ ​​​​ ​​ ​​ ​​ ​​​​ ​​ ​​ ​​ ​


1

​The Annual Incentive Program detail in columns (d), (e), and (f) represents the possible payouts ranges based on Stretch performance level for the calendar year ended December 31, 2018.

2

​Amounts in columns (g), (h), and (i) represent the number of performance shares granted under the Long-Term Incentive Plans in 2018.

3

​The first listed amount in column (j) represents the number of time-vested shares granted to NEOs in 2018 under the Long Term Incentive Plans.

4

​Fair values of performance awards in column (k) are determined based on Stretch performance level.

5

​Ms. Colombo was granted a pro rata share of long-term performance stock awards for 2016-2018, 2017-2019, and 2018-2020 upon joining the Company in February 2018.
1 ​

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Page 37

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Table of Contents

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COMPENSATION OF NAMED EXECUTIVE OFFICERS


The Annual Incentive Program detail in columns (c), (d), and (e) represents the possible payouts ranges for the calendar year ended December 31, 2017.

2Amounts in columns (f), (g), and (h) represent the number of performance shares granted under the Long-Term Incentive Plans in 2017.   See the following table for additional detail.  
3 The first listed amount in column (i) represents the number of time-vested shares granted to NEOs in 2017 under the Long Term Incentive Plans.
4 Amounts shown in columns (c), (d), and (e) for Mr. McIver are based on his annualized salary of $325,000 for the entire calendar year although he transitioned from Lakes Sunapee Bank on January 13, 2017.
5 Amounts shown in columns (f), (g), (h) and (i) for Mr. McIver represent grants to him in 2017 and pro-rated for the 2015-2017, 2016-2018 and 2017-2019 plans.
6 The second amount shown in column (i) represents a one-time grant made in 2017 to four NEOs for contributions made during the successful acquisition of LSBG and subsequent system conversions. Shares from this grant vest in three equal annual installments.

Outstanding Equity Awards at Fiscal Year-End-2017Year-End-2018

  Stock Awards
Name 
Number of Shares or Units of Stock That Have Not Vested1
 
Market Value of Shares or Units of Stock That Have Not Vested1
 
Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested2
 
Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested2
(a) (b) (c) (d) (e)
Curtis C. Simard 11,788 $327,706
 9,268 $257,650
Josephine Iannelli 6,401 177,948
 3,829 106,446
Richard B. Maltz5
 7,341 204,080
 5,197 144,477
William J. McIver 3,903 108,503
 2,786 77,451
Gregory W. Dalton 2,182 60,660
 3,376 93,853

 
​
STOCK AWARDS
​
​ ​​ ​​​​​​ ​​​ ​

NAME
(a)

​NUMBER OF SHARES
OR UNITS OF STOCK
THAT HAVE NOT
VESTED1
(b)




MARKET VALUE OF
SHARES OR UNITS OF
STOCK THAT HAVE
NOT VESTED1
(c)




EQUITY INCENTIVE PLAN
AWARDS; NUMBER OF
UNEARNED SHARES,
UNITS OR OTHER RIGHTS
THAT HAVE NOT VESTED2
(d)





EQUITY INCENTIVE PLAN
AWARDS; MARKET OR
PAYOUT VALUE OF
UNEARNED SHARES,
UNITS OR OTHER RIGHTS
THAT HAVE NOT VESTED2
(e)		​

Curtis C. Simard

​​11,318​​​$253,863​​​16,004​​​$358,959​​
​ ​​ ​​ ​​​​ ​

Josephine Iannelli

​​5,780​​​129,645​​​7,851​​​176,098​​
​ ​​ ​​​​ ​​ ​

Richard B. Maltz

​​6,404​​​143,642​​​8,543​​​191,608​​
​ ​​ ​​ ​​​​ ​

Marion Colombo

​​2,329​​​52,239​​​3,494​​​78,359​​
​ ​​ ​​​​ ​​ ​

John M. Mercier

​​2,311​​​51,836​​​4,113​​​92,255​​
​ ​​ ​​ ​​​​ ​

1

​Amounts in column (b) represent time-vested shares payable in 2019, 2020 and 2021. The amount in column (c) represents the total value of those shares at December 31, 2018 at the closing price of $22.43 per share.

2

​Amounts in column (d) represent the performance shares payable in 2019, 2020, and 2021 if paid at Stretch level. The amounts in column (e) represent the total value of those shares at December 31, 2018 at the closing price of $22.43 per share.

1
Amounts in column (b) represent time-vested shares payable in 2018, 2019 and 2020. The amount in column (h) represents the total value of those shares at December 31, 2017 at the closing price of $27.80 per share.

2Amounts in column (d) represent the performance shares payable in 2018, 2019, and 2020 if paid at Stretch. The amounts in column (e) represent the total value of those shares at December 31, 2017 at the closing price of $27.80 per share.


Option Exercises and Stock Vested in 20172018

  
Stock Awards1
Name 
Number of Shares
Acquired on Vesting
 
Value Realized
on Vesting1
(a) (b) (c)
Curtis C. Simard 7,856 $230,606
Josephine Iannelli 480 14,184
Richard B. Maltz 3,231 95,081
William J. McIver N/A N/A
Gregory W. Dalton 3,030 88,953
​​​
STOCK AWARDS1​​
​ ​​​​​ ​

NAME

​NUMBER OF SHARES ACQUIRED ON VESTING
VALUE REALIZED ON VESTING1​

Curtis C. Simard

​​9,263​​​$275,191​​
​ ​​ ​​ ​

Josephine Iannelli

​​3,852​​​114,226​​
​ ​​ ​​​

Richard B. Maltz

​​5,437​​​161,326​​
​​​ ​​ ​

Marion Colombo

​​N/A​​​N/A​​
​ ​​ ​​​

John M. Mercier

​​947​​​28,391​​
​​​ ​​ ​

1This represents the number and dollar value, respectively, of restricted time-vested shares issued in 2017 to NEOs under the 2014-2016, 2015-2017, and 2016-2018 Long Term Incentive Programs and the performance shares issued under the 2014-2016 plan. Depending on the plan period, the time-vested shares must be held for a period of one to three years after issue and performance shares are required to be held for a three year period.

1

​This represents the number and dollar value, respectively, of restricted time-vested shares issued in 2018 to NEOs under the 2014-2016, 2015-2017, and 2016-2018 Long Term Incentive Programs and the performance shares issued under the 2014-2016 plan. Depending on the plan period, the time-vested shares must be held for a period of one to three years after issue and performance shares are required to be held for a three year period.

No NEO held stock options at December 31, 2017.


2018.

No NEOs have Pension Benefits or activity in any Nonqualified Deferred Compensation plan or SERP.


Potential Payments Upon Termination of Employment or Change in Control

Executive Employment Agreements.We have entered into executive employment agreements with Mr. Simard and Ms. Iannelli that provide severance benefits to the executive in connection with termination of employment either by us without "cause" or by the executive for "good reason" (as those terms are defined in the employment agreements). The table below shows at December 31, 2017amount of severance depends, in part, on whether the present valuetermination of accumulatedemployment occurs prior to a change in control ("non-CIC severance"), or in anticipation of, or within 12 months after, a change in control ("CIC severance"). In each case, severance payments are conditioned on the executive providing us with a release of claims. The following briefly summarizes the severance benefits payable to each executive under the agreements:

    •
    Non-CIC severance
      •
      For Mr. Simard, his employment agreement provides for (i) cash severance equal to his base salary for the remainder of the NEOs, includingterm of his employment agreement (currently scheduled to remain in effect through December 31, 2021), payable in a lump sum; (ii) pro-rata annual incentive award for the numberyear of yearstermination; (iii) group health benefits (including medical, vision and dental benefits) for the remainder of service credited to each NEO, under the frozen defined benefit pension planemployment term (currently, through December 31, 2021) or 18 months (if longer); and SERP using interest rate assumptions consistent(iv) full vesting of all outstanding equity awards, with those used in Company financial statements. Additional information regarding the SERP benefits follows the table.assumed target performance for performance-based awards.
​
Name Plan Name Number of Years of Credited Service Present Value of Accumulated Benefits Payments During Last Fiscal Year
(a) (b) (c) 
(d)1
 (e)
Curtis C. Simard N/A —
 $—
 $—
Josephine Iannelli N/A —
 —
 —
Richard B. Maltz N/A —
 —
 —
William J. McIver Defined Benefit Retirement Plan 10
 283,689
 —
 Salary Continuation Agreement 10
 679,801
 —
Gregory W. Dalton N/A —
 —
 —

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​

1.GRAPHIC
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.

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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.

​

​

​

Name 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)
Curtis C. Simard —
 —
 —
 —
 —
Josephine Iannelli —
 —
 —
 —
 —
Richard B. Maltz —
 —
 —
 —
 —
William J. McIver —
 —
 3,768
 (196) 160,047
Gregory W. Dalton —
 —
 —
 —
 —

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1.Page 38
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.

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2019 PROXY STATEMENT

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2.This amount represents annual regulatory account fees.

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Table of Contents

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COMPENSATION OF NAMED EXECUTIVE OFFICERS

​
Potential Payments upon Termination or
•
CIC severance

•
For Mr. Simard, his employment agreement provides for (i) cash severance equal to three times the sum of Mr. Simard's base salary and target annual bonus, payable in a lump sum; (ii) pro-rata annual incentive award for the year of termination; (iii) group health benefits (including medical, vision and dental benefits) for 36 months; and (iv) full vesting of all outstanding equity awards, with assumed target performance for performance-based awards.

•
For Ms. Iannelli, her employment agreement provides for (i) cash severance equal to two years' of base salary, payable in a lump sum; and (ii) a payment equal to 18 months of our share of premium contributions for group health benefits (including medical, vision and dental benefits).

Executive Change in Control

We Severance Plan.The named executive officers other than Mr. Simard and Ms. Iannelli do not have entered intoemployment agreements and do not participate in any arrangements entitling the executive to non-CIC severance. The named executive officers do, however, participate in our Executive Change in Control Severance Plan. The plan provides participating executives with severance benefits in the event that (i) a change in control occurs, and (ii) within 12 months after the change in control, the executive's employment is terminated by us without cause or by the executive for good reason (as those terms are defined in the plan). If a qualifying termination occurs, the executive is eligible for severance benefits equal to a specified number of months of base salary and a specified number of months of COBRA premiums for group health

coverage (to the extent the COBRA premiums exceed active employee premium rates). Mr. Maltz is eligible for 24 months of salary and 18 months of COBRA premiums, and the other named executive officers are eligible for 24 months of salary and 12 months of COBRA premiums.

Equity Awards.Our equity award agreements and maintain certain benefit plans that require us to provide compensation to executive officers in the eventrelated long-term incentive plan program documents address treatment of aequity awards upon termination of employment or change in control. Under these provisions, the awards vest on a prorated basis in case of termination of employment due to death, disability, or retirement (defined as attainment of age 65 or attainment of age 60 with at least 10 years of service), based on actual performance for performance-based awards. None of the named executive officers were eligible for retirement as of the end of the last fiscal year. For any other termination of employment before vesting, the awards forfeit. The award agreements and program documents also provide for full vesting of outstanding equity awards upon the occurrence of a change in control (i.e., without requirement of a subsequent termination of employment), based on target performance in case of performance-based awards.

No Change in Control Excise Taxes.None of these arrangements include payments of excise taxes in case of a change in control. The tables below set forthemployment agreements and Executive Change in Control Severance Plan instead provide for a cutback in any change in control payments to the extent a cutback would result in a greater after-tax payment to the executive.

The following table estimates the amount and types of compensationthat would have been payable to each named executive officer upon voluntaryunder the arrangements described above assuming the applicable employment termination without good reason, involuntary termination without cause, voluntary termination for good reason, termination for cause, death, disability, retirement,event or termination after a change in control. The amounts assume a hypothetical termination of employment effectivecontrol had occurred as of December 31, 2017 and include estimates


the end of the amounts which would be paid tolast fiscal year. The value of equity awards that vest is based on the executives in each specified circumstance. The actual amounts to be paid can only be determinedclosing price of our common stock at the timeend of an executive’s actual separation.the last fiscal year and assumes target performance in case of performance-based awards.


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Page 39

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Table of Contents

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COMPENSATION OF NAMED EXECUTIVE OFFICERS

​

Termination and Change in Control Benefits

Termination Event 
Curtis Simard(1)
 
Josephine Iannelli(2)
 
Richard Maltz(3)
 
William J. 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
 0
Stock Options/SARS(C)
 —
 —
 —
 77,423
 0
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

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
 $—

Termination Event

​Curtis C. Simard​Josephine Iannelli​Richard B Maltz​Marion Colombo​John M. Mercier​

Termination Without Cause or With Good Reason—Not in Connection with Change in Control

​ ​ ​ ​ ​​ ​​

Cash severence

​$1,210,000​$780,000​—​—​​—​​

Pro rata bonus

​303,500​160,000​—​—​​—​​

Benefits

​37,729​26,023​—​—​​—​​

Equity vesting

​493,168​247,044​—​—​​—​​

Total

​$2,044,397​$1,213,067​—​—​​—​​
​ ​​ ​​ ​​ ​​ ​​ ​

Termination Without Cause or With Good Reason—In Connection with Change in Control1

​ ​ ​ ​ ​​ ​​

Cash severence

​$1,210,000​$780,000​—​—​​—​​

Pro rata bonus

​303,500​160,000​—​—​​—​​

Benefits

​37,729​26,023​—​—​​—​​

Equity vesting

​—​—​—​—​​—​​

Total

​$1,551,229​$966,023​—​—​​—​​
​​​ ​​ ​​​​ ​​ ​

Death, Disability or Retirement2

​ ​ ​ ​ ​​ ​​

Cash severence

​—​—​—​—​​—​​

Pro rata bonus

​—​—​—​—​​—​​

Benefits

​—​—​—​—​​—​​

Equity vesting

​329,887​166,326​185,442​58,243​​74,385​​

Total

​$329,887​$166,326​$185,442​$58,243​​$74,385​​
​ ​​ ​​ ​​​​ ​​ ​

Any Other Termination of Employment

​ ​ ​ ​ ​​ ​​

Cash severence

​—​—​—​—​​—​​

Pro rata bonus

​—​—​—​—​​—​​

Benefits

​—​—​—​—​​—​​

Equity vesting

​—​—​—​—​​—​​

Total

​—​—​—​—​​—​​
​​​ ​​ ​​​​ ​​ ​

Closing of Change in Control

​ ​ ​ ​ ​​ ​​

Cash severence

​—​—​—​—​​—​​

Pro rata bonus

​—​—​—​—​​—​​

Benefits

​—​—​—​—​​—​​

Equity vesting

​493,168​247,044​—​—​​—​​

Total

​$493,168​$247,044​—​—​​—​​
​​​ ​​ ​​​​ ​​ ​

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

1

Cash Severance. Severance payable to all executives represents​
The termination of employment is in connection with a payment due upon a hypothetical change in control event on December 31, 2017. Twenty-four months of severance would have been payable toif (i) for Mr. Simard and Ms. Iannelli, if their employment was terminated byit occurs in anticipation of, or within 12 months after, a change in control, and (ii) for the Company for any reason other than cause, death, disability, or retirement as definednamed executive officers, it occurs within 12 months after a change 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.  control.

2

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 valuesNone of the Defined Benefit Retirement Plan, amounts payable undernamed executive officers were eligible for retirement for purposes of the Supplemental Executive Retirement Plan (SERP), and a Salary Continuation Agreementequity award agreements as of the end 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.  
HOther Perquisites.2018.

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

Equity Awards Outstanding and Available

The following table sets forth the eventaggregate information 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 ageour equity compensation plans in effect as of December 31, 2017.2018. There are no compensation plans under which equity securities may be issued that have not been approved by our shareholders.


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.

PLAN CATEGORY

​NUMBER OF SECURTIES
TO BE ISSUED UPON
EXERCISE OF
OUTSTANDING OF
OUTSTANDING
OPTIONS, WARRANTS
AND RIGHTS.		​WEIGHTED-AVERAGE
EXERCISE
PRICES 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

​​240,242​​​5.7871​​​117,1341​

Equity Compensation plans not approved by security holders

​​—​​​N/A​​​500,0002​
​​​ ​​ ​​ ​

Total

​​ ​​​ ​​​ ​​
​ ​​ ​​ ​​ ​

1

​No shares will be granted under the 2015 Equity Plan after May 19, 2019.

2

​Number of shares proposed under the 2019 Equity Plan from Proposal 2.
​
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.

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Table 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.

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.

Contents

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.   
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.
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.

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
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.

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.


CEO PAY RATIO

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”("CEO"):


For 2017, as of the end of 2018, our last completed fiscal year:


The

CEO PAY RATIO

​

CEO Annual Total Compensation

​$1,241,216​
​ ​​​

Median Employee Annual Total Compensation

​$55,330​
​ ​​​

CEO to Median Employee Pay Ratio

​22:1​
​ ​​​


Based on this information, we reasonably estimate that for 2018 our CEO's annual total compensation was approximately 22 times that of 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.

employees.

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”

    •
    We selected, November 16, 2018 which is within the last three months of 2018, 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 15th 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.


•
We identified the "median employee" from our employee population excluding the CEO by including the annualized base salary calculated on their November 16, 2018 compensation rate, overtime, incentives, commissions, matching contributions to participants in our Section 401(k) plan, and the employer subsidy contributions for our health programs.

•
We annualized the compensation of the employees who were hired in 2018, 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 ofidentifying our CEO.


median employee.

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


calculation.

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.

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 Companywe 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 electswe elect not to extend the term of the Employment Agreement by providing Mr. Simard with 90 days’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’sSimard's termination of employment, the geographic scope of which has been expanded to cover a fifty air milesmile radius of any location where the Employeremployer 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’sSimard's employment is terminated by the Employeremployer without “cause”"cause" or he resigns for “good reason”"good reason" (each as defined in the Employment Agreement), Mr. Simard is entitled to receive, in addition to accrued benefits, (i)1) a lump sum payment equal to the base compensation that would have been paid during the remaining unexpired term of the Employment Agreement, (ii)Agreement; 2) insurance continuation for the greater of the remaining unexpired term of the Employment Agreement or the duration of COBRA coverage, (iii)coverage; 3) payment of a pro-rated amount of any incentive compensation earned for the calendar year of termination,termination; and (iv)4) immediate vesting of all time-based equity awards and vesting at target of all performance-based equity awards.

In addition, if Mr. Simard’sSimard's employment is terminated by the Employeremployer 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)1) a lump sum payment equal to three times his base compensation and target bonus in effect during the year of termination, (ii)termination; 2) insurance continuation for three years, (iii)years; 3) payment of a pro-rated amount of any incentive compensation earned for the calendar year of termination,termination; and (iv)4) 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"excess parachute payment”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 EmployerCompany or will be subject to excise taxes.


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CEO PAY RATIO

​

Compensation of the CEO.On an annual basis, the Compensation and Human Resources Committee reviews the existing compensation plan for our CEO. The CompensationThis Committee reviews his compensation plan in the context ofspecific to 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’sCommittee's sole discretion.


As further discussed below, Mr. Simard participated in the structured annual incentive cash compensation plan provided to all executive officers. During 2017,2018, Mr. Simard earned an award amounting to $299,250.  


$303,500.

During 2017,2018, the Compensation and Human Resources Committee granted Mr. Simard restricted time-vested shares and the potential for an issue of restricted performance shares under the 2017-20192018-2020 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. HeBoard and 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 agreementEmployment 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’sIannelli'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 changean Executive Change in control, confidentiality and non-competition agreementsControl Severance Plan with BHBT’sBHBT's Executive Vice Presidents, Richard B. Maltz, Marion Colombo, and Gregory W. DaltonJohn M. Mercier along with foursix other management employees. Their agreements provide for severance of salary for a period of 1224 to 24 months and benefits for 1236 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.


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,2018, Messrs. Simard, Maltz, McIver, Dalton,Mercier, and Ms.Mss. Iannelli and Colombo participated in an annual cash incentive compensation program with team goals representing opportunities for incentive payments. We paid out a total of $804,750$840,500 in February 20182019 to the five NEOs based on the 20172018 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 and Human Resources Committee and the Board Risk Committee both reviewed the plan design to insure it is in line with best practices for risk.


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PROPOSAL 2
APPROVAL OF THE 2019 EQUITY PLAN

Proposal 2
Approval of the 2019 Equity Plan

On April 9, 2019, our Board of Directors approved, subject to stockholder approval, the Bar Harbor Bankshares 2019 Equity Plan (the "2019 Plan"). If the 2019 Plan is approved by our stockholders, it will authorize the issuance of up to 500,000 shares of our common stock for the grant of awards under the Plan.

The 2019 Plan will replace our 2015 Equity Incentive Plan (the "Prior Plan"), and no new awards will be granted under the Prior Plan. Any awards outstanding under the Prior Plan on the date of stockholder approval of the 2019 Plan will remain subject to and be paid under the Prior Plan, and any shares subject to outstanding awards under the Prior Plan that subsequently expire, terminate, or are surrendered or forfeited for any reason without issuance of shares will automatically become available for issuance under the 2019 Plan.

Our Board recommends that stockholders approve the 2019 Plan. The purpose of the 2019 Plan is to:

The 2019 Plan allows us to promote greater ownership by employees, officers, non-employee directors, consultants and advisors in order to align their interests more closely with the interests of our stockholders. Stockholder approval of the 2019 Plan will enable us to grant awards under the 2019 Plan that are designed to qualify for special tax treatment under Section 422 of the Internal Revenue Code.

Key Features

The following features of the 2019 Plan will protect the interests of our stockholders:

Summary of the 2019 Plan

The following principal feature summary of the 2019 Plan does not purport to be a complete description of all of the provisions of the 2019 Plan. It is qualified in its entirety by reference to the complete text of the 2019 Plan which is attached to this proxy statement as Appendix B.

Eligibility

Awards may be granted under the 2019 Plan to officers, employees, contractors and consultants of the Company and its subsidiaries and to non-employee directors of the Company. Incentive stock options may be granted only to employees of the Company or its subsidiaries. As of March 25, 2019, approximately 550 individuals were eligible to receive awards under the 2019 Plan, including six executive officers and twelve non-employee directors.

Administration

The 2019 Plan may be administered by the Compensation and Human Resources Committee. The Committee, in its discretion, selects the individuals to whom awards may be granted, the time or times at which such awards are granted, and the terms of such awards.

Number of Authorized Shares

The number of shares of common stock authorized for issuance under the 2019 Plan is 500,000. This represents 3.0% of the fully diluted common shares outstanding as of March 25, 2015, 2019.

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PROPOSAL 2
APPROVAL OF THE 2019 EQUITY PLAN

​

In addition, as of the date of stockholder approval of the 2019 Plan, any awards then outstanding under the Prior Plan will remain subject to and be paid under the Prior Plan and any shares then subject to outstanding awards under the Prior Plan that subsequently expire, terminate, or are surrendered or forfeited for any reason without issuance of shares will automatically become available for issuance under the 2019 Plan. Up to 500,000 shares may be granted as incentive stock options under Section 422 of the Internal Revenue Code. The shares of common stock issuable under the 2019 Plan will consist of authorized and unissued shares, treasury shares, or shares purchased on the open market or otherwise.

If any award is canceled, terminates, expires or lapses for any reason prior to the issuance of shares or if shares are issued under the 2019 Plan and thereafter are forfeited, the shares subject to awards and the forfeited shares will again be available for grant under the 2019 Plan. In addition, the following items will not count against the aggregate number of shares of common stock available for grant under the 2019 Plan:

Shares tendered or withheld to pay the option exercise price or tax withholding will continue to count against the aggregate number of shares of common stock available for grant under the 2019 Plan.

In addition, the total number of shares covering stock-settled SARs or net-settled options will be counted against the pool of available shares, not just the net shares issued upon exercise. Any shares of common stock repurchased by us with cash proceeds from the exercise of options will not be added back to the pool of shares available for grant under the 2019 Plan.

Adjustments

If changes in the common stock occur by reason of 1) recapitalization, reclassification, stock split, reverse split, combination of shares, exchange of shares, stock dividend or other distribution payable in stock; 2) another increase or decrease in the common stock without receipt of consideration by the Company; or 3) if there occurs any spin-off, split-up, extraordinary cash dividend or other distribution of assets by the Company, the number and kind of securities for which stock options and other stock-based awards may be made under the 2019 Plan will be equitably adjusted.

In addition, if there occurs any spin-off, split-up, extraordinary cash dividend or other distribution of assets by the Company, the number and kind of securities subject to any outstanding awards and the exercise price of any outstanding stock options or SARs will be equitably adjusted.

Types of Awards

The 2019 Plan permits the granting of any or all of the following types of awards:

•
Stock Options.Stock options entitle the holder to purchase a specified number of shares of common stock at
•
Stock Appreciation Rights (SARs).The Compensation and Human Resources Committee may grant SARs, as a right in tandem with the number of shares underlying stock options granted under the 2019 Plan or as a freestanding award. Upon exercise, SARs entitle the holder to receive payment per share in stock or cash, or in a combination of stock and cash, equal to the excess of the share's fair market value on the date of exercise over the grant price of the SAR. The grant price of a tandem SAR is equal to the exercise price of the related stock option and the grant price for a freestanding SAR is determined by the Committee in accordance with the procedures described above for stock options. Exercise of a SAR issued in tandem with a stock option will reduce the number of shares underlying the related stock option to the extent of the SAR exercised. The term of a freestanding SAR cannot exceed ten (10) years, and the term of a tandem SAR cannot exceed the term of the related stock option.

•
Restricted Stock, Restricted Stock Units and Other Stock-Based Awards.The Compensation and Human Resources Committee may grant awards of restricted stock, which are shares of common stock subject to specified restrictions, and restricted stock units, which represent the right to receive shares of the common stock in the future. These awards may be made subject to repurchase, forfeiture or vesting restrictions at the Committee's discretion. The restrictions may be based on continuous service with the Company or the attainment of specified performance goals, as determined by the Committee. Stock units may be paid in stock or cash or a combination of stock and cash, as determined by the Committee. The Committee may also grant other types of equity or equity-based awards subject to the terms of the 2019 Plan and any other terms and conditions determined by the Committee.
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APPROVAL OF THE 2019 EQUITY PLAN

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•
Performance Awards.The Compensation and Human Resources Committee may condition the grant, exercise, vesting, or settlement of any award on such performance conditions as it may specify. We refer to these awards as "performance awards." The Committee may select such business criteria or other performance measures as it may deem appropriate in establishing any performance conditions.

Business criteria include, but are not limited to, any of the following:

No Repricing

Without stockholder approval, the Compensation and Human Resources Committee is not authorized to 1) lower the exercise or grant price of a stock option or SAR after it is granted, except in connection with certain adjustments to our corporate or capital structure permitted by the 2019 Plan, such as stock splits, 2) take any other action that is treated as a repricing under generally accepted accounting principles, or 3) cancel a stock option or SAR at a time when its exercise or grant price exceeds the fair market value of the underlying stock, in exchange for cash, another stock option or SAR, restricted stock, restricted stock units or other equity award unless the cancellation and exchange occur in connection with a change in capitalization or other similar change.

Clawback

All cash and equity awards granted under the 2019 Plan will be subject to clawback, cancellation, recoupment, rescission, payback, reduction, or other similar action in accordance with the terms of any Company clawback or similar policy or any applicable law related to such actions, as may be in effect from time-to-time.

Transferability

Awards are not transferable other than by will or the laws of descent and distribution, except that in certain instances transfers may be made to or for the benefit of designated family members of the participant for no value.

Change in Control

Subject to the terms of the applicable award agreements, vesting of awards will depend on whether the awards are assumed, converted or replaced by the resulting entity in connection with a change in control of the Company.

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"Change in control" is defined under the 2019 Plan and requires consummation of the applicable transaction.

Term, Termination and Amendment of the 2019 Plan

Unless earlier terminated by our Board of Directors, the 2019 Plan will terminate, and no further awards may be granted, ten (10) years after the date on which it is approved by stockholders. Our Board may amend, suspend or terminate the 2019 Plan at any time, except that, if required by applicable law, regulation or stock exchange rule, stockholder approval will be required for any amendment. The amendment, suspension or termination of the 2019 Plan or the amendment of an outstanding award generally may not, without a participant's consent, materially impair the participant's rights under an outstanding award.

New Plan Benefits

A new plan benefits table for the 2019 Plan and the benefits or amounts that would have been received by or allocated to participants for the last completed fiscal year under the 2019 Plan if the 2019 Plan was then in effect, as described in the federal proxy rules, are not provided because all awards made under the 2019 Plan will be made at the Compensation and Human Resources Committee's discretion, subject to the terms of the 2019 Plan. Therefore, the benefits and amounts that will be received or allocated under the 2019 Plan are not determinable at this time. The equity grant program for our non-employee directors is described under the Director Compensation section in this proxy statement.

Federal Income Tax Information

The following is a brief summary of the U.S. federal income tax consequences of the 2019 Plan generally applicable to the Company and to participants in the 2019 Plan who are subject to U.S. federal taxes. The summary is based on the Internal Revenue Code, applicable Treasury Regulations and administrative and judicial interpretations, each as in effect on the date of this proxy statement, and is subject to future changes in the law, possibly with retroactive effect. The summary is general in nature and does not purport to be legal or tax advice. Furthermore, the summary does not address issues relating to any U.S. gift or estate tax consequences or the consequences of any state, local or foreign tax laws.

Nonqualified Stock Options.A participant generally will not recognize taxable income upon the grant or vesting of a nonqualified stock option with an exercise price at least equal to the fair market value of our common stock on the date of grant and no additional deferral feature. Upon the exercise of a nonqualified stock option, a participant generally will recognize

compensation taxable as ordinary income in an amount equal to the difference between the fair market value of the shares underlying the stock option on the date of exercise and the exercise price of the stock option. When a participant sells the shares, the participant will have short-term or long-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received from the sale and the tax basis of the shares sold. The tax basis of the shares generally will be equal to the greater of the fair market value of the shares on the exercise date or the exercise price of the stock option.

Incentive Stock Options.A participant generally will not recognize taxable income upon the grant of an incentive stock option. If a participant exercises an incentive stock option during employment or within three months after employment ends (12 months in the case of permanent and total disability), the participant will not recognize taxable income at the time of exercise for regular U.S. federal income tax purposes (although the participant generally will have taxable income for alternative minimum tax purposes at that time as if the stock option were a nonqualified stock option). If a participant sells or otherwise disposes of the shares acquired upon exercise of an incentive stock option after the later of 1) one year from the date the participant exercised the option; and 2) two years from the grant date of the stock option, the participant generally will recognize long-term capital gain or loss equal to the difference between the amount the participant received in the disposition and the exercise price of the stock option. If a participant sells or otherwise disposes of shares acquired upon exercise of an incentive stock option before these holding period requirements are satisfied, the disposition will constitute a "disqualifying disposition," and the participant generally will recognize taxable ordinary income in the year of disposition equal to the excess of the fair market value of the shares on the date of exercise over the exercise price of the stock option (or, if less, the excess of the amount realized on the disposition of the shares over the exercise price of the stock option). The balance of the participant's gain on a disqualifying disposition, if any, will be taxed as short-term or long-term capital gain, as the case may be.

With respect to both nonqualified stock options and incentive stock options, special rules apply if a participant uses shares of common stock already held by the participant to pay the exercise price or if the shares received upon exercise of the stock option are subject to a substantial risk of forfeiture by the participant.

Stock Appreciation Rights.A participant generally will not recognize taxable income upon the grant or vesting of a SAR with a grant price at least equal to the fair market value of our common stock on the date of grant and no additional deferral feature. Upon the exercise of a SAR, a participant generally will recognize compensation taxable as ordinary income in an amount equal to the difference between the fair market value of the shares underlying the SAR on the date of exercise and the grant price of the SAR.

Restricted Stock Awards, Restricted Stock Units, and Performance Awards.A participant generally will not have taxable income upon the grant of restricted stock, restricted stock units or performance awards. Instead, the participant will recognize ordinary income at the time of vesting or payout equal

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to the fair market value (on the vesting or payout date) of the shares or cash received minus any amount paid. For restricted stock only, a participant may instead elect to be taxed at the time of grant.

Other Stock or Cash-Based Awards.The U.S. federal income tax consequences of other stock or cash-based awards will depend upon the specific terms of each award.

Tax Consequences to the Company.In the foregoing cases, we generally will be entitled to a deduction at the same time, and in the same amount, as a participant recognizes ordinary income, subject to certain limitations imposed under the Internal Revenue Code.

Section 409A.We intend that awards granted under the 2019 Plan comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code, but make no representation or warranty to that effect.

Tax Withholding.We are authorized to deduct or withhold from any award granted or payment due under the 2019 Plan, or require a participant to remit to us, the amount of any withholding taxes due in respect of the award or payment and to take such other action as may be necessary to satisfy all obligations for the payment of applicable withholding taxes. We are not required to issue any shares of common stock or otherwise settle an award under the 2019 Plan until all tax withholding obligations are satisfied.

Vote Required

Approval of the 2019 Plan requires a number of "FOR" votes that is a majority of the votes cast by the holders of our shares of common stock represented at the Annual Meeting and entitled to vote on the proposal. An abstention will count as a vote cast and therefore will have the same effect as a vote against the proposal. Brokers do not have discretionary authority to vote shares on this proposal without direction from beneficial owner, and broker non-votes therefore will have no effect on the vote.

OUR BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE 2019 EQUITY PLAN.

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PROPOSAL 3
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM—
INFORMATION ON INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Proposal 3
Ratification of the Appointment of Independent
Registered Public Accounting Firm—Information
on Independent Registered Public Accounting Firm


Our Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent registered public accounting firm, and is involved in the selection of the firm's lead engagement partner. The Committee engages in an annual evaluation of the independent public accounting firm's qualifications, assessing the firm's quality of service, the firm's sufficiency of resources, the quality of the communication and interaction with the firm, and the firm's independence, objectivity, and professional skepticism. The Committee also considers the advisability and potential impact of selecting a different independent public accounting firm.

After assessing the performance and independence of RSM US LLP, our principal independent registered public accounting firm, the Audit Committee believes that retaining RSM is in the best interests of our Company and shareholders. The Committee has appointed RSM as our independent registered public accounting firm to audit the 2019 consolidated financial statements for the Company and its subsidiaries. Although it is not required to do so, our Board is asking stockholders to ratify RSM's appointment. The Committee considers RSM to be well qualified. In the absence of contrary specification, the proxy holders will vote proxies received in response to this solicitation in favor of ratification of the appointment. If our stockholders do not ratify RSM's appointment, the Committee will consider changing our independent registered public accounting firm for 2020.

Whether or not stockholders ratify RSM's appointment, the Committee may appoint a different independent registered public accounting firm at any time if it determines that such a change is appropriate. RSM has advised the Committee that it is an independent accounting firm with respect to our Company and its subsidiaries in accordance with the requirements of the SEC and the Public Company Accounting Oversight Board (PCAOB). Representatives of RSM are expected to be present at our Annual Meeting of Shareholders. They will have an opportunity to make a statement if they choose and are expected to be available to respond to appropriate stockholder questions.

Vote Required

The ratification of RSM US LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2019 will require that a majority of the votes cast at the Annual Meeting of Shareholders by shareholders present at the meeting or represented by proxy and entitled to vote. An abstention shall not constitute a vote cast and will have no effect on the vote. Because this proposal is considered a routine matter, discretionary votes by brokers will be counted.

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, 2019.

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Principal Accounting Fees and Services

Principal Accounting Fees and Services

The reports of RSM US LLP on our consolidated financial statements as of December 31, 2018 and 2017 and for the three-year period ending on December 31, 2018, and on internal control over financial reporting as of December 31, 2018, 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, 2017 through December 31, 2018.

SERVICE

​2017​2018​

Audit Fees

​$438,540​$370,283​
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Audit-Related Fees

​68,250​68,250​
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Tax Fees

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All Other Fees

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Total

​$506,790​$438,533​
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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 our 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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PROPOSAL 4
NON-BINDING, ADVISORY RESOLUTION ON THE
COMPENSATION

OF OUR NAMED EXECUTIVE OFFICERS

Proposal 4
Non-binding, Advisory Resolution on the
Compensation of our Named Executive Officers


Our stockholders have the opportunity at the Annual Meeting to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance with SEC rules. Each year, our Compensation and Human Resources Committee reviews our Named Executive Officers' ("NEOs") performance using a balanced and disciplined approach to determine their base salaries and variable compensation awards. The approach for 2018 included a full-year assessment of financial results, contributions of the executives to the overall performance of the business, and progress delivering on our short- and long-term strategic goals. The Committee considers various factors that collectively indicate successful management of our business, including: 1) overall corporate performance; 2) individual performance, including financial and non-financial measures; 3) the manner in which results are achieved; 4) adherence to risk and compliance policies, as well as the quality of earnings; 5) accountability in driving a strong risk management culture and other core values of our company; 6) our year-over-year performance relative to our established risk metrics; and 7) our performance relative to our peer competitor group. The Committee's evaluation includes a robust review of performance scorecards which were enhanced in 2018 to reinforce the alignment with our corporate strategies and shareholder return.

Section 14A of the Securities Exchange Act of 1934, as amended, (“the ("Exchange Act”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”),NEOs, as disclosed in this proxy statement.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 meeting2018 Annual Meeting of shareholders,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,Marion Colombo and William J. McIver. Mr. McIver has announced his retirement effective June 30, 2018.John M. Mercier. The compensation of our NEOs is disclosed in the “Compensation"Compensation Discussion and Analysis”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, theour Board believes that our executive compensation philosophy, policies, and procedures provide a strong link between each NEO’sNEO'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’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’sCompany's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the “Compensation"Compensation Discussion and Analysis”Analysis" section, compensation tables and narrative discussion, is hereby APPROVED.


This vote is advisory and therefore not binding on us, the Compensation and Human Resources Committee or the Board of Directors. However, the Board and the Compensation and Human Resources Committee value the opinions of our shareholders and to the extent there is any significant vote against the NEO compensation as disclosed in this Proxy Statement, we will consider our shareholders' concerns, and the Compensation and Human Resources Committee will evaluate whether any actions are necessary to address those concerns.

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 of Shareholders by the holders of sharesshareholders present in personat the meeting or represented by proxy and entitled to vote be cast “FOR”"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

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






"FOR" THE ADVISORY RESOLUTION PROPOSAL 3

RATIFICATION OF AN ARTICLES OF AMENMDENT TO OUR ARTICLES OF INCORPORATION, AS AMENDED, FILED WITHAPPROVING THE SECRETARY OF STATE OF THE STATE OF MAINE ON MAY 22, 2015COMPANY'S NAMED EXECUTIVE OFFICER COMPENSATION PLAN

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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.

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 [__________] shares issued and outstanding and [__________] 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.

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

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.
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.

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).

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.

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.

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 10th 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.

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.

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
Equity compensation
plans approved by
security holders
 169,921
 $18.95
 185,223
Equity compensation
plans not approved by security holders
 —
 N/A
 —
Total 169,921
 $18.95
 185,223

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2019 PROXY STATEMENT

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Vote Required

The ratificationTable 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 “Contents

FOR​

OTHER MATTERS

” 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

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

Other Matters



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.


OTHER MATTERS

Nominations by Shareholders and Other Shareholder Proposals

Our Bylaws and Governance Committee charter provide that we will consider nominees for election to the Board recommended by shareholders if those nominations are 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’sshareholder's notice shall be delivered to the Clerk at our principal executive offices no later than the close of business of the 120th day (i.e., January 16, 2019)22, 2020) nor earlier than the close of business on the 150th day (i.e., December 18, 2018)23, 2019) prior to the first anniversary of the preceding year’syear's Annual Meeting. Such shareholder’s

The shareholder's notice shall set forth: (a) as toinclude:


Proposals should be addressed to Curtis C. Simard, CEO, Bar Harbor Bankshares, 82 Main Street, P.O. Box 400, Bar Harbor, ME

Maine 04609. If theour 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 shallwill not be presented for action at the Annual Meeting for which it is proposed. If a shareholder should propose a candidate, theour Governance Committee would evaluate that candidate on the basis of the criteria noted above.


in this proxy statement.

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
​Chairman of the Board
Bar Harbor Bankshares
82 Main Street
P.O. Box 400,
Bar Harbor, ME 04609
82 Main Street
Bar Harbor, ME 04609

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.

Delivery of Documents to Security Holders Sharing an Address

SEC rules permit us to deliver a single copy of our 2018 Annual Report to Stockholders and this Proxy Statement to two or more stockholders who share an address, unless we have received contrary instructions from one or more of the security holders. This delivery method, which is known as "householding," can reduce our expenses for printing and mailing. Any stockholder of record at a shared address to which a single copy of the documents was delivered may request a separate copy of the 2018 Annual Report to Stockholders and this Proxy Statement by (a) calling 1-888-853-7100, (b) sending a letter to us at 82 Main Street, P.O. Box 400, Bar Harbor, Maine 04609, Attn: Investor Relations, or (c) sending us an e-mail at customerservicecenter@barharbor.bank. Stockholders of record who wish to receive separate copies of these documents in the future may also contact us as stated above. Stockholders of record who share an address and are receiving multiple copies of our Annual Reports to Stockholders and Proxy Statements may contact us as stated above to request delivery of a single copy of such documents. Stockholders who hold their shares in "street name" and who wish to obtain copies of these proxy materials should follow the instructions on their voting instruction forms or contact the holders of record.


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OTHER MATTERS

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Other Business

As of the date of this proxy statement, the Board knows of no other 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


mcsa01.jpg

Marsha C. Sawyer,

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Caitlin Dunston, Corporate Clerk

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APPENDIX A



REPORT OF THE AUDIT COMMITTEE REPORT

Appendix A
Audit Committee Report

To the Board of Directors of Bar Harbor Bankshares:


In accordance with the

The Audit Committee Charter,of the Board of Directors consists entirely of members who meet the independence requirements of the listing standards of the New York Stock Exchange and the rules and regulations of the SEC, as determined by the Board of Directors. The Audit Committee reviewsis responsible for providing independent, objective oversight of the Company’s financial reporting process on behalfprocesses and internal controls of Bar Harbor Bankshares. The Audit Committee operates under a written charter approved by the Board of Directors. A copy of the Board.    current charter is available on Bar Harbor Bankshares' website athttps://www.bhbt.com/codes-and-charters.

Management is responsible for preparingBar Harbor Bankshares' system of internal control and financial reporting processes, for the preparation of consolidated financial statements in accordance with U.S. generally accepted accounting principles and for the annual report on Bar Harbor Bankshares' internal control over financial reporting. The independent auditor is responsible for performing an independent audit of Bar Harbor Bankshares' consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board, or PCAOB, and for issuing a report on the financial statements and the effectiveness of Bar Harbor Bankshares' internal control over financial reporting. The Audit Committee's responsibility is to monitor and oversee these processes. Audit Committee members do not serve as professional accountants or auditors for designingBar Harbor Bankshares, and implementingtheir functions are not intended to duplicate or certify the reporting process, including the systemactivities of internal controls,Bar Harbor Bankshares' management or independent auditor.

Consistent with its monitoring and has represented tooversight responsibilities, the Audit Committee met with management and RSM US LLP, or RSM, the independent auditor of Bar Harbor Bankshares, to review and discuss the December 31, 2018 audited consolidated financial statements. Management represented that suchBar Harbor Bankshares had prepared the consolidated 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 managementRSM the matters required by the PCAOB in accordance with Auditing Standard No. 1301, "Communications with Audit Committees."

The Audit Committee received from RSM the written communication that is required by PCAOB Rule 3526, "Communication with Audit Committees Concerning Independence," 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 concerningRSM that firm's independence. The Audit Committee also considered whether the independent registered public accounting firm’sRSM's provision of non-audit services and the audit and non-audit fees paid to the Company isRSM were compatible with maintaining that firm's independence. On the auditor’s independencebasis of these reviews, the Audit Committee determined that RSM has the requisite independence.

Management completed the documentation, testing and concluded thatevaluation of Bar Harbor Bankshares' system of internal control over financial reporting as of December 31, 2018 as required by Section 404 of the auditors are independent.  


Sarbanes-Oxley Act of 2002. The Audit Committee reviewedreceived periodic updates from management and discussedRSM at Audit Committee meetings throughout the year and provided oversight of the process. Prior to filing Bar Harbor Bankshares' Annual Report on Form 10-K for the fiscal year ended December 31, 2018, or the Form 10-K, 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,SEC, the Audit Committee performed allalso reviewed management's report on the effectiveness of Bar Harbor Bankshares' internal control over financial reporting contained in the Form 10-K, as well as the Report of Independent Registered Public Accounting Firm provided by RSM and also included in the Form 10-K. RSM's report included in the Form 10-K related to its dutiesaudit of Bar Harbor Bankshares' consolidated financial statements and responsibilities underthe effectiveness of Bar Harbor Bankshares' internal control over financial reporting.

Based upon the Audit Committee Charter.  In addition, based onCommittee's discussions with management and RSM and the reportsAudit Committee's review of the information provided by, and discussions referred to above,the representations of, management and RSM, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements as of the Company for 2017 be included in the Company’s Annual Report on Form 10-Kand for the year ended December 31, 2017, for filing with2018 be included in the SEC.


Each of the members of theForm 10-K. The Audit Committee isselected RSM as Bar Harbor Bankshares' independent as defined underauditor for the listing standards of NYSE American as offiscal year ending December 31, 2017.

The Board of Directors has determined2019, and recommended that the Company has at least one “audit committee financial expert” serving on its Audit Committee. Mr. Scott G. Toothaker, CPA, meets the criteriaselection be submitted for an “audit committee financial expert” and is “independent” within the meaning of the rules adoptedratification by the NYSE American pursuant to the Sarbanes-Oxley Actstockholders of 2002.Bar Harbor Bankshares.


Audit Committee of the Board:


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


APPENDIX B
BAR HARBOR BANKSHARES
2018 Employee Stock Purchase Plan

1.​Purpose and Interpretation

Scott G. Toothaker, Chair
Matthew L. Caras
Stephen W. Ensign

​Daina H. Belair
David M. Colter
Brendan J. O'Halloran
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APPENDIX B
BAR HARBOR BANKSHARES
2019 EQUITY PLAN

Appendix B
Bar Harbor Bankshares
2019 Equity Plan

1.
Purpose


The purpose of the Plan is intended to encourage and to enable Eligible Employeesenhance the ability of the Company and its Participating Affiliates, through after-tax payroll deductions or periodic cash contributions,affiliates to acquire proprietary interests inattract and retain highly qualified officers, non-employee directors, key employees, consultants and advisors. In addition, the Company through the purchase and ownership of shares of Stock. The Plan is intended to benefitmotivate such officers, non-employee directors, key employees, consultants and advisors to serve the Company and its stockholders (a) by incentivizing Participantsaffiliates and to contributeexpend maximum effort to improve the business results and earnings of the Company. By providing an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company, andthe Plan is designed, among other factors, to operate and manageincrease shareholder value.


To this end, the Company’s business in a manner that will providePlan provides for the Company’s long-term growthgrant of stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other stock-based awards and profitability and that will benefitcash awards. Any of these awards may, but need not, be made as performance incentives to reward attainment of performance goals in accordance with 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 Optionsterms. Stock options granted under the Plan are intended to satisfymay be non-qualified stock options or incentive stock options. Once effective, the requirements for an “employee stock purchase plan”Plan replaces, and no further awards shall be made under Code Section 423. Notwithstanding the foregoing,2015 Equity Plan.

2.
Definitions


For purposes of interpreting the Plan and related documents (including award agreements), the following definitions shall apply:

    "Affiliate" means any company or other trade or business that "controls," is "controlled by" or is "under common control" with the Company makes no undertaking to, nor representation that it will, maintainwithin the qualified statusmeaning of the Plan or any Options grantedRule 405 of Regulation C under the Plan. In addition, Options that do not satisfy the requirements forSecurities Act, including, without limitation, any subsidiary.

    "Award" means a grant of an “employeeoption, stock purchase plan” under Code Section 423 may be granted under the Plan pursuant to the rules, procedures,appreciation right, restricted stock, restricted stock unit, or sub-plans adopted by the Administrator, in its sole discretion, for certain Eligible Employees.


2.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 Stockother stock-based award under the Plan.

"Award Agreement" means a written agreement between the Company and a Grantee, or notice from the Company or an affiliate to a Grantee that evidences and sets forth the terms and conditions of an award.

"Bank" means Bar Harbor Bank & Trust, a subsidiary, and includes any successor or assign.

"Beneficial Owner" means "Beneficial Owner" as defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act; except



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

(d)"“Business CombinationCode" ” means any cash tender or exchange offer, merger or other business combination, sale of stock, or sale of all or substantially all assets, or any combination of the foregoing transactions.

"Change in Control" shall meanhave the meaning set forth in Section 16.

"Code" means the Internal Revenue Code of 1986, as amended,now in effect or as hereafter amended. References to the Code shall include the valid and binding governmental regulations, court decisions and other regulatory and judicial authority issued or rendered thereunder.

"Committee" means the Compensation and Human Resources Committee of the Board or any committee or other person or persons designated by the Board to administer the Plan. The Board will cause the Committee to satisfy the applicable requirements of any stock exchange on which the common stock may then be listed. For purposes of awards to Grantees who are subject to Section 16 of the Exchange Act, Committee means all members of the Committee who are "non-employee directors" within the meaning of Rule 16b-3 adopted under the Exchange Act. All references in the Plan to the Board shall mean such Committee or the Board.

"Company" means Bar Harbor Bankshares, a Maine corporation, or any successor corporation.

"Common Stock"or "Stock"  means a share of common stock of the Company, par value $2.00 per share.

"Corporate Transaction" means a reorganization, merger, statutory share exchange, consolidation, sale of all or substantially all of the Company's assets, or the acquisition of assets or stock of another entity by the Company, or other corporate transaction involving the Company or any of its subsidiaries.

"Effective Date" means May 21, 2019, the date the Plan was approved by the Company's stockholders.

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2019 EQUITY PLAN

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    "Exchange Act" means the Securities Exchange Act of 1934, as now in effect or as hereafter amended,amended.

    "Fair Market Value" of a share of common stock as of a particular date means 1) if the common stock is listed on a national securities exchange, the closing or last price of the common stock on the composite tape or other comparable reporting system for the applicable date, or if the applicable date is not a trading day, the trading day immediately preceding the applicable date, or 2) if the shares of common stock are not then listed on a national securities exchange, the closing or last price of the common stock quoted by an established quotation service for over-the-counter securities, or 3) if the shares of common stock are not then listed on a national securities exchange or quoted by an established quotation service for over-the-counter securities, or the value of such shares is not otherwise determinable, such value as determined by the Board in good faith in its sole discretion.

    "Family Member" means a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of the applicable individual, any person sharing the applicable individual's household (other than a tenant or employee), a trust in which any one or more of these persons have more than fifty percent of the beneficial interest, a foundation in which any one or more of these persons (or the applicable individual) control the management of assets, and any successor thereto. Referencesother entity in which one or more of these persons (or the applicable individual) own more than fifty percent of the voting interests.

    "Grant Date" means, as determined by the Board, the latest to occur of 1) the date as of which the Board approves an award, 2) the date on which the recipient of an award first becomes eligible to receive an award underSection 7 hereof, or 3) such other date as may be specified by the Board in the Plan toaward agreement.

    "Grantee" means a person who receives or holds an award under the Plan.

    "Incentive Stock Option" means an "incentive stock option" within the meaning of Section 422 of the Code, or the corresponding provision of any Code Section shall be deemed to include,subsequently enacted tax statute, 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 Administratoramended from time to time.

(g)"“Incumbent Board" means the individuals who, as of the Effective Date, constitute the Board.

"” shall mean May 15, 2018,Non-Employee Director" means a member of the Board who is not an officer or employee of the Company or any subsidiary.

"Non-qualified Stock Option" means an option that is not an incentive stock option.

"Option" means an option to purchase one or more shares of stock pursuant to the Plan.

    "Option Price" means the exercise price for each share of stock subject to approvalan option.

    "Other Stock-based Awards" means awards consisting of stock units, or other awards, valued in whole or in part by reference to, or otherwise based on, common stock, other than options, stock appreciation rights, restricted stock, and restricted stock units.

    "Performance Award" means an award made subject to the attainment of performance goals (as described inSection 13) over a performance period established by the Committee.

    "Person" means an individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.

    "Plan" means this Bar Harbor Bankshares 2019 Equity Plan, as amended from time to time.

    "Prior Plan" means the Bar Harbor Bankshares and Subsidiaries Equity Incentive Plan of 2015.

    "Purchase Price" means the purchase price for each share of stock pursuant to a grant of restricted stock.

    "Restricted Period" shall have the meaning set forth in Section 11.

    "Restricted Stock" means shares of stock, awarded to a Grantee pursuant toSection 11 hereof.

    "Restricted Stock Unit" means a bookkeeping entry representing the equivalent of shares of stock, awarded to a Grantee pursuant toSection 11 hereof.

    "SAR Exercise Price" means the per share exercise price of a SAR granted to a Grantee underSection 10 hereof.

    "SEC" means the United States Securities and Exchange Commission.

    "Section 409A" means Section 409A of the Code.

    "Securities Act" means the Securities Act of 1933, as now in effect or as hereafter amended.

    "Separation from Service" means a termination of service by the Company’s stockholders on such date, the Plan having been adopteda service provider, as determined by the Board, which determination shall be final, binding and conclusive; provided if any award governed by Section 409A is to be distributed on March 20, 2018.a Separation from Service, then the definition of Separation from Service for such purposes shall comply with the definition provided in Section 409A.


(h)"“ServiceEligible Compensation" ” shall mean, unless otherwise established by the Administrator priormeans service as a service provider to the startCompany or an affiliate. Unless otherwise stated in the applicable award agreement, a Grantee's change in position or duties shall not result in interrupted or terminated service, so long as such Grantee continues to be a service provider to the Company or an affiliate.

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BAR HARBOR BANKSHARES
2019 EQUITY PLAN

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    "Service Provider" means an Offering Period, regular base compensation (includingemployee, officer, non-employee director, consultant or advisor of the Company or an affiliate.

    "Stock Appreciation Right"or"SAR"  means a right granted to a Grantee underSection 10 hereof.

    "Subsidiary" means any shift differentials) but excludes"subsidiary corporation" of the Company within the meaning of Section 424(f) of the Code.

    "Substitute Award" means any bonus, overtime payment, sales commission, contribution to any Code Section 125award granted in assumption of or 401(k) plan, the costin substitution for an award of employee benefits paid fora company or business acquired by the Company or a Participating Affiliate, educationsubsidiary 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) ofwhich the Company or a Participating Affiliate as of an Offering Date, except the following,affiliate combines.

"Ten Percent Stockholder" means an individual 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 notowns 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 fiveten percent (5%(10%) or more of the total combined voting power of all classes of outstanding stock of the Company, its parent or any of its subsidiaries. In determining stock ownership, the attribution rules of Section 424(d) of the Code shall be applied.

"Termination Date" means the date that is ten (10) years after the Effective Date, unless the Plan is earlier terminated by the Board underSection 9 hereof.

3.
Administration of the Plan

        General.


The Board shall have such powers and (iv) an employee who isauthorities related to the administration of the Plan as are consistent with the Company's certificate of incorporation and bylaws and applicable law. The Board shall have the power and authority to delegate its responsibilities hereunder to the Committee, which shall have full authority to act in accordance with its charter, and with respect to the authority of the Board to act hereunder, all references to the Board shall be deemed to include a citizenreference to the Committee, to the extent such power or residentresponsibilities have been delegated. Except as otherwise may be required by applicable law, regulatory requirement or the certificate of a foreign jurisdiction (without regardincorporation or the bylaws of the Company, the Board shall have full power and authority to whether such employee is also a U.S. citizentake all actions and to make all determinations required or resident alien), if the grant of an Optionprovided for under the Plan, any award or any award agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and provisions of the Plan that the Board deems to be necessary or appropriate to the administration of the Plan. The Committee shall administer the Plan; provided that, the Board shall retain the right to exercise the authority of the Committee to the extent consistent with applicable law and the applicable requirements of any securities exchange on which the common stock may then be listed. The interpretation and construction by the Board of any provision of the Plan, any award or any award agreement shall be final, binding and conclusive. Without limitation, the Board shall

    have full and final authority, subject to the other terms and conditions of the Plan, to:

    •
    designate Grantees

    •
    determine the type or types of awards to be made to a Grantee

    •
    determine the number of shares of stock to be subject to an Offering Periodaward

    •
    establish the terms and conditions of each award (including, but not limited to, the price of any option, the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an award or the shares of stock subject thereto, and any terms or conditions that may be necessary to qualify options as incentive stock options)

    •
    prescribe the form of each award agreement

    •
    amend, modify, or supplement the terms of any outstanding award including the authority, in order to effectuate the purposes of the Plan, to modify awards to foreign nationals or individuals who are employed outside the United States to recognize differences in local law, tax policy, or custom.


To the extent permitted by applicable law, the Board may delegate its authority as identified herein to any individual or committee of individuals (who need not be directors), including without limitation the authority to make awards to Grantees who are not subject to Section 16 of the Exchange Act or who are not Covered Employees. To the extent that the Board delegates its authority to make awards as provided by thisSection 3, all references in the Plan to the Board's authority to make awards and determinations with respect thereto shall be deemed to include the Board's delegate. Any such employeedelegate shall serve at the pleasure of and may be removed at any time by the Board.

    No Repricing.  Notwithstanding any provision herein to the contrary, the repricing of options or SARs is prohibited without prior approval of the Company's stockholders. For this purpose, a "repricing" means any of the following (or any other action that has the same effect as any of the following): 1) changing the terms of an option or SAR to lower its option price or SAR exercise price; 2) any other action that is treated as a "repricing" under generally accepted accounting principles; and 3) repurchasing for cash or canceling an option or SAR at a time when its option price or SAR exercise price is greater than the fair market value of the underlying shares in exchange for another award, unless the cancellation and exchange occurs in connection with a change in capitalization or similar change underSection 16. A cancellation and exchange under 3) above would be considered a "repricing" regardless of whether it is treated as a "repricing" under generally accepted accounting principles and regardless of whether it is voluntary on the part of the Grantee.

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APPENDIX B
BAR HARBOR BANKSHARES
2019 EQUITY PLAN

    Clawbacks.  Awards shall be subject to the requirements of 1) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder; 2) similar rules 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) betweenother jurisdiction; 3) any compensation recovery policies adopted by the Company and an Eligible Employee, into implement any such written, electronic,requirements; or 4) any other format and/or pursuant to such written, electronic, or other processcompensation recovery policies as may be established by the Administratoradopted from time to time pursuantby the Company, all to the extent determined by the Committee in its discretion to be applicable to a Grantee.

Deferral Arrangement.  The Board may permit or require the deferral of any award payment into a deferred compensation arrangement, subject to such rules and procedures as it may establish and in accordance with Section 409A, which an Eligible Employee elects to participatemay include provisions for the payment or crediting of interest or dividend equivalents, including converting such credits into deferred stock units.

No Liability.  No member of the Board or the Committee shall be liable for any action or determination made in the Plan or to which a Participant elects to make changesgood faith with respect to the Participant’s participation as permitted by the Plan.Plan, any award or award agreement.


(k)Book Entry.“Enrollment Period” shall mean that period  Notwithstanding any other provision of time prescribed by the Administrator, which period shall conclude priorthis Plan to the Offering Date, during which Eligible Employeescontrary, the Company 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 thesatisfy any requirement under this 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).

(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.

(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 classesdelivery of stock in onecertificates through the use 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.book-entry.


(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

    (a)Authorized Number of Shares.Share Reserve.  Subject to adjustment as provided inunderSection 1215, the maximumtotal number of shares of Stock that maycommon stock authorized to be issued pursuant to Optionsawarded under the Plan shall not exceed 500,000. In addition, shares of common stock underlying any outstanding award granted under the Prior Plan (includingthat, following the effective date, expires, or is terminated, surrendered or forfeited for any Non-423(b) Offering established hereunder) is two hundred thousand (200,000) shares. Thereason without issuance of such shares shall be available for the grant of Stock reserved for issuancenew awards under this Plan. As provided inSection 1, no new awards shall be granted under the Prior Plan following the effective date. Shares issued under the Plan may beconsist in whole or in part of authorized but unissued shares, treasury shares, or shares purchased on the open market.market or otherwise, all as determined by the Company from time-to-time.


4.
(b)Share Counting

    General.Participation Adjustment  Each share of common stock granted in connection with an award shall be counted as a Resultone share against the limit, subject to the provisions of the Share ReservethisSection 4.

    Cash-Settled Awards.  Any award settled in cash shall not be counted as shares of common stock for any purpose under this Plan.

    Expired or Terminated Awards.  If any award under the Administrator determines thatPlan expires, or is terminated, surrendered or forfeited, in whole or

in part, without issuance or delivery of vested shares, the totalunissued or surrendered common stock covered by such award shall again be available for the grant of awards under the Plan.

    Payment of Option Price or Tax Withholding in Shares.  The full number of shares of Stock remainingcommon stock with respect to which an option or SAR is granted shall count against the aggregate number of shares available for grant under the Plan. Accordingly, if in accordance with the terms of the Plan, a Grantee pays the option price for an option by either tendering previously owned shares or having the Company withhold shares, then such shares surrendered to pay the option price shall continue to count against the aggregate number of shares available for grant under the Plan set forth in this Section 4. In addition, if in accordance with the terms of the Plan, a Grantee satisfies any tax withholding requirement with respect to any taxable event arising as a result of this Plan by either tendering previously owned shares or having the Company withhold shares, then such shares surrendered to satisfy such tax withholding requirements shall continue to count against the aggregate number of shares available for grant under the Plan set forth in this Section 4. Any shares of common stock repurchased by the Company with cash proceeds from the exercise of options shall not be added back to the pool of shares available for grant under the Plan set forth in this Section 4.

    Substitute Awards.  In the case of any substitute award, the substitute award shall not be counted against the number of shares reserved under the Plan.

5.
Award Limits

    Incentive Stock Options.  Subject to adjustment underSection 16, 500,000 shares of common stock available for issuance under the Plan shall be available for issuance under incentive stock options.

6.
Effective Date, Duration and Amendments

    Term.  The Plan shall be effective as of the effective date, provided that it has been approved by the Company's stockholders. The Plan shall terminate automatically on the ten (10) year anniversary of the effective date and may be terminated on any earlier date as provided in thisSection 6.

    Amendment and Termination of the Plan.  The Board may, at any time and from time-to-time, amend, suspend, or terminate the Plan as to any awards which have not been made. An amendment shall be contingent on approval of the Company's stockholders to the extent stated by the Board, required by applicable law or required by applicable stock exchange listing requirements. Notwithstanding the foregoing, any amendment toSection 6 shall be contingent upon the approval of the Company's stockholders. No awards shall be made after the termination date. The applicable terms of the Plan, and any terms and conditions

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APPENDIX B
BAR HARBOR BANKSHARES
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    applicable to awards granted prior to the termination date shall survive the termination of the Plan and continue to apply to such awards. No amendment, suspension, or termination of the Plan shall, without the consent of the Grantee, materially impair rights or obligations under any award then awarded.

7.
Award Eligibility and Limitations

    Service Providers.  Subject to thisSection 7, awards may be made to any service provider, including any service provider who is insufficientan officer, non-employee director, consultant or advisor of the Company or of any affiliate, as the Board shall determine and designate from time-to-time in its discretion.

    Successive Awards.  An eligible person may receive more than one award, subject to permitsuch restrictions as are provided herein.

    Stand-Alone, Additional, Tandem, and Substitute Awards.  Awards may, in the discretion of the Board, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other award or any award granted under another plan of the Company, any affiliate, or any business entity to be acquired by the Company or an affiliate, or any other right of a Grantee to receive payment from the Company or any affiliate. Such additional, tandem, and substitute or exchange awards may be granted at any time. If an award is granted in substitution or exchange for another award, the Board shall have the right to require the surrender of such other award in consideration for the grant of the new award. Subject toSection 7, the Board shall have the right, in its discretion, to make awards in substitution or exchange for any other award under another plan of the Company, any affiliate, or any business entity to be acquired by the Company or an affiliate. In addition, awards may be granted in lieu of cash compensation, including in lieu of cash amounts payable under other plans of the Company or any affiliate, in which the value of stock subject to the award is equivalent in value to the cash compensation (for example, restricted stock units or restricted stock).

8.
Award Agreement

    Each award shall be evidenced by an award agreement, in such form or forms as the Board shall from time-to-time determine, consistent with the terms of the Plan. Without limiting the foregoing, an award agreement may be provided in the form of a notice which provides that acceptance of the award constitutes acceptance of all terms of the Plan and the notice. Award agreements granted from time-to-time or at the same time need not contain similar provisions but shall be consistent with the terms of the Plan. Each award agreement evidencing an award of options shall specify whether such options are intended to be non-qualified stock options or incentive stock options, and in the absence of such specification such options shall be deemed non-qualified stock options.

9.
Terms and Conditions of Options

    Option Price.  The option price of each option shall be fixed by the Board and stated in the related award agreement. The option price of each option (except those that constitute substitute awards) shall be at least the fair market value on the grant date of a share of stock;provided,however, that in the event that a Grantee is a ten percent stockholder as of the grant date, the option price of an option granted to such Grantee that is intended to be an incentive stock option shall be not less than 110 percent of the fair market value of a share of stock on the grant date. In no case shall the option price of any option be less than the par value of a share of stock.

    Vesting.  Subject toSection 9 hereof, each option shall become exercisable at such times and under such conditions (including, without limitation, performance requirements) as shall be determined by the Board and stated in the award agreement.

    Term.  Each option shall terminate, and all rights to purchase shares of stock thereunder shall cease, upon the expiration of ten (10) years from the grant date, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Board and stated in the related award agreement;provided,however, that in the event that the Grantee is a ten percent stockholder, an option granted to such Grantee that is intended to be an incentive stock option at the grant date shall not be exercisable after the expiration of five (5) years from its grant date.

    Limitations on Exercise of Option.  Notwithstanding any other provision of the Plan, in no event may any option be exercised, in whole or in part, 1) prior to the date the Plan is approved by the stockholders of the Company as provided herein, or 2) after the occurrence of an event which results in termination of the option.

    Method of Exercise.  An option that is exercisable may be exercised by the Grantee's delivery of a notice of exercise to the Company, setting forth the number of shares of Stockstock with respect to which the option is to be purchasedexercised, accompanied by all Participants onfull payment for the last Trading Dayshares. To be effective, notice 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 shallexercise must 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.


(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 issuedmade 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

(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;Company from time-to-time.

(vi)Rights of Holders of Options.Establishing  Unless otherwise stated in the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars and permitting payroll withholding in excessrelated award agreement, an individual holding or exercising an option shall have none 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.

(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

(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

(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 failurerights 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.

(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 havestockholder (for example, 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 hisreceive cash or her payroll deductionsdividend payments 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 Affiliatedistributions attributable to the Participant during such leavesubject shares of absencestock or disability and to undertake to make additional cash payments todirect 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

(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 Dayvoting 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.

(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

(a)Grant of Option. On each Offering Date, each Participant in such Offering Period shall automatically be granted an Option to purchase as many wholesubject 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

(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.

(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

(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 Planstock) until the shares of Stockstock covered thereby are purchased pursuantfully paid and issued to her/him. Except as provided inSection 16 hereof or the Options and such shares of Stock are transferred into the Participant’s name on the Company’s books and records. Norelated award agreement, no adjustment willshall be made for dividends, distributions or other rights for which the record date is prior to the date of such time. Following purchaseissuance.

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    Delivery of Stock Certificates.  Promptly after the exercise of an option by a Grantee and the payment in full of the option price, such Grantee shall be entitled, subject to any transaction fees, as required, to the issuance of a stock certificate or certificates evidencing his or her ownership of the shares of stock subject to the option.

    Limitations on Incentive Stock Options.  An option shall constitute an incentive stock sption only 1) if the Grantee of such option is an employee of the Company or any subsidiary of the Company; 2) to the extent specifically provided in the related award agreement; and 3) to the extent that the aggregate fair market value (determined at the time the option is granted) of the shares of stock with respect to which all incentive stock options held by such Grantee become exercisable for the first time during any calendar year (under the Plan and all other plans of the Grantee's employer and its affiliates) does not exceed $100,000. This limitation shall be applied by taking options into account in the order in which they were granted.

10.
Terms and Conditions of Stock Appreciation Rights

    Right to Payment.  A SAR shall confer on the Grantee a right to receive, upon exercise thereof, the excess of 1) the fair market value of one share of stock on the date of exercise over 2) the SAR exercise price, as determined by the Board. The award agreement for a SAR (except those that constitute substitute awards) shall specify the SAR exercise price, which shall be fixed on the grant date as not less than the fair market value of a share of stock on that date. SARs may be granted alone or in conjunction with all or part of an option or at any subsequent time during the term of such option or in conjunction with all or part of any other award. A SAR granted in tandem with an outstanding option following the grant date of such option shall have a grant price that is equal to the option price;provided,however, that the SAR's grant price may not be less than the fair market value of a share of stock on the grant date of the SAR to the extent required by Section 409A.

    Other Terms.  The Board shall determine at the grant date, the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the time or times at which SARs shall cease to be or become exercisable following Separation from Service or upon other conditions, the method of exercise, whether or not a SAR shall be in tandem or in combination with any other award, and any other terms and conditions of any SAR.

    Term of SARs.  The term of a SAR granted under the Plan shall be determined by the Board, in its sole discretion;provided,however, that such term shall not exceed ten (10) years.

    Payment of SAR Amount.  Upon exercise of a SAR, a Grantee shall be entitled to receive payment from the

    Company (in cash or stock, as determined by the Board) in an amount determined by multiplying:

      1)    the difference between the fair market value of a share of stock on the date of exercise over the SAR exercise price; by

      2)    the number of shares of stock with respect to which the SAR is exercised

11.
Terms and Conditions of Restricted Stock and Restricted Stock Units

    Restrictions.  At the time of grant, the Board may, in its sole discretion, establish a period of time ("restricted period") and any additional restrictions including the satisfaction of corporate or individual performance objectives applicable to an award of restricted stock or restricted stock units in accordance with thisSection 11. Each award of restricted stock or restricted stock units may be subject to a different restricted period and additional restrictions. Neither restricted stock nor restricted stock units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of any other applicable restrictions.

    Restricted Stock Certificates.  The Company shall issue stock, in the name of each Grantee to whom restricted stock has been granted, stock certificates or other evidence of ownership representing the total number of shares of restricted stock granted to the Grantee, as soon as reasonably practicable after the grant date. The Board may provide in an award agreement that either 1) the Secretary of the Company shall hold such certificates for the Grantee's benefit until such time as the restricted rtock is forfeited to the Company or the restrictions lapse, or 2) such certificates shall be delivered to the Grantee;provided,however, that such certificates shall bear a legend or legends that comply with the applicable securities laws and regulations and make appropriate reference to the restrictions imposed under the Plan and transferthe award agreement.

    Rights of Holders of Restricted Stock.  Unless the Board otherwise provides in an award agreement and subject to thisSection 11, holders of restricted stock shall have rights as stockholders of the Company, including voting and dividend rights.

    Rights of Holders of Restricted Stock Units.

    Settlement of Restricted Stock Units.  Restricted stock units may be settled in cash or stock, as determined by the Board and set forth in the award agreement. The award agreement shall also set forth whether the restricted rtock units shall be settled 1) within the time period specified for "short term deferrals" under Section 409A, or 2) otherwise within the requirements of Section 409A, in which case the award agreement shall specify upon which events such restricted stock units shall be settled.

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    Voting and Dividend Rights.  Unless otherwise stated in the applicable award agreement and subject to thisSection 11, holders of restricted stock units shall not have rights as stockholders of the Company, including no voting or dividend or dividend equivalents rights.

    Creditor's Rights.  A holder of restricted stock units shall have no rights other than those of a general creditor of the Company. Restricted stock units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable award agreement.

    Purchase of Restricted Stock.  The Grantee shall be required, to the extent required by applicable law, to purchase the restricted stock from the Company at a purchase price equal to the greater of 1) the aggregate par value of the shares of stock represented by such restricted stock, or 2) the purchase price, if any, specified in the related award agreement. If specified in the award agreement, the purchase price may be deemed paid by services already rendered. The purchase price shall be payable in a form described inSection 12 or, in the discretion of the Board, in consideration for past services rendered.

    Delivery of Stock.  Upon the expiration or termination of any restricted period and the satisfaction of any other conditions prescribed by the Board, the restrictions applicable to shares of restricted stock or restricted stock units settled in stock shall lapse, and, unless otherwise provided in the award agreement, a stock certificate for such shares shall be delivered, free of all such restrictions, to the Grantee or the Grantee's beneficiary or estate, as the case may be.

12.
Form of Payment for Options and Restricted Stock

    General Rule.  Payment of the option price for the shares purchased pursuant to the exercise of an option or the purchase price for restricted stock shall be made in cash or in cash equivalents acceptable to the Company, except as provided in thisSection 12.

    Surrender of Stock.  To the extent the award agreement so provides, payment of the option price for shares purchased pursuant to the exercise of an option or the purchase price for restricted stock may be made all or in part through the tender to the Company of shares of stock, which shares shall be valued, for purposes of determining the extent to which the option price or purchase price for restricted stock has been paid thereby, at their fair market value on the date of exercise or surrender. Notwithstanding the foregoing, in the case of an incentive stock sption, the right to make payment in the form of already owned shares of stock may be authorized only at the time of grant.

    Cashless Exercise.  With respect to an option only (and not with respect to restricted stock), to the extent permitted by law and to the extent the award agreement so provides,

    payment of the option price may be made all or in part by delivery (on a form acceptable to the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of stock and to deliver all or part of the sales proceeds to the Company in payment of the option price and any withholding taxes described inSection 17.

    Other Forms of Payment.  To the extent the award agreement so provides, payment of the option price or the purchase price for restricted stock may be made in any other form that is consistent with applicable laws, regulations and rules, including, but not limited to, the Company's withholding of shares of stock otherwise due to the exercising Grantee.

13.
Terms and Conditions of Performance Awards

    Performance Conditions.  The right of a Grantee to exercise or receive a grant or settlement of any award, and the timing thereof, may be subject to such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions. Such awards are referred to as "performance awards."

    Performance Goals Generally.  The performance goals for performance awards shall consist of one or more business or other criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with thisSection 13. The Committee may determine that such performance awards shall be granted, exercised and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a condition to grant, exercise and/or settlement of such performance awards. Performance goals may, in the discretion of the Committee, be established on a Company-wide basis, or with respect to one or more business units, divisions, subsidiaries or business segments, as applicable. Performance goals may be absolute or relative (to the performance of one or more comparable companies or indices). The Committee may determine the extent to which measurement of performance goals may exclude the impact of charges for restructuring, discontinued operations, extraordinary items, debt redemption or retirement, asset write downs, litigation or claim judgments or settlements, acquisitions or divestitures, foreign exchange gains and losses, and other unusual non-recurring items, and the cumulative effects of tax or accounting changes (each as defined by generally accepted accounting principles and as identified in the Company's financial statements or other SEC filings). Performance goals may differ for performance awards granted to any one Grantee or to different Grantees.

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APPENDIX B
BAR HARBOR BANKSHARES
2019 EQUITY PLAN

    Business Criteria.  For purposes of performance awards, the Committee may select any business criteria for the Company, on a consolidated basis, and/or specified subsidiaries or business units of the Company (except with respect to the total stockholder return and earnings per share criteria), including any of the following: 1) net earnings or net income; 2) operating earnings; 3) pretax earnings; 4) earnings per share; 5) share price, including growth measures and total shareholder return; 6) earnings before interest and taxes; 7) earnings before interest, taxes, depreciation, and/or amortization; 8) earnings before interest, taxes, depreciation, and/or amortization as adjusted to exclude any one or more of the following: (a) stock-based compensation expense, (b) income from discontinued operations, (c) gain on cancellation of debt, (d) debt extinguishment and related costs, (e) restructuring, separation, and/or integration charges and costs, (f) reorganization and/or recapitalization charges and costs, (g) impairment charges, (h) merger-related events, (i) gain or less related to investments, (j) sales and use tax settlement, and (k) gain on non-monetary transactions; 9) sales or revenue growth or targets, whether in general or by type of product, service, or customer; 10) gross or operating margins; 11) return measures, including return on assets, capital, investment, equity, sales, or revenue; 12) cash flow, including (a) operating cash flow, (b) free cash flow, defined as earnings before interest, taxes, depreciation, and/or amortization (as adjusted to exclude any one or more of the items that may be excluded pursuant to the performance measure specified in clause (8) above) less capital expenditures, (c) levered free cash flow, defined as free cash flow less interest expense, (d) cash flow return on equity, and (e) cash flow return on investment; 13) productivity ratios; 14) costs, reductions in cost, and cost control measures; 15) expense targets; 16) market or market segment share or penetration; 17) financial ratios as provided in credit agreements of the Company and its Affiliates; 18) working capital targets; 19) completion of acquisitions or divestitures of businesses, companies, or assets; and 20) any combination of the foregoing;provided,however, that such business criteria shall include any derivations of business criteria listed above (e.g., income shall include pre-tax income, net income, operating income, etc.).

14.
Other Stock-based Awards

    Grant of Other Stock-based Awards.  Other stock-based awards may be granted either alone or in addition to or in conjunction with other awards under the Plan. Other stock-based awards may be granted in lieu of other cash or other compensation to which a service provider is entitled from the Company or may be used in the settlement of amounts payable in shares of common stock under any other compensation plan or arrangement of the Company. Subject to the provisions of the Plan, the Committee shall have the sole and complete authority to determine the persons to whom and the time or times at which such awards shall be made, the number of shares of common stock to be granted pursuant to such awards, and all other conditions of such

    awards. Unless the Committee determines otherwise, any such award shall be confirmed by an award agreement, which shall contain such provisions as the Committee determines to be necessary or appropriate to carry out the intent of this Plan with respect to such award.

    Terms of Other Stock-based Awards.  Any common stock subject to awards made under thisSection 14 may not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses.

15.
Requirements of Law

    General.  The Company shall not be required to sell or issue any shares of stock under any award if the sale or issuance of such shares would constitute a violation by the Grantee, any other individual exercising an option, or the Company of Stock intoany provision of any law or regulation of any governmental authority, including without limitation any federal or state securities laws or regulations. If at any time the Participant’s name onCompany shall determine, in its discretion, that the Company’s bookslisting, registration or qualification of any shares subject to an award upon any securities exchange or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance or purchase of shares hereunder, no shares of stock may be issued or sold to the Grantee or any other individual exercising an option pursuant to such award unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company, and records,any delay caused thereby shall in no way affect the date of termination of the award. Specifically, in connection with the Securities Act, upon the exercise of any option or the delivery of any shares of stock underlying an award, unless a Participant shall become a stockholderregistration statement under such Act is in effect with respect to the shares of Stock purchased duringstock covered by such Offering Period (or, if applicable, Purchase Period) and, except as otherwise provided in Section 10(c),award, the Company shall thereupon have all dividend, voting, andnot be required to sell or issue such shares unless the Board has received evidence satisfactory to it that the Grantee or any other ownership rights incident thereto.


(c)Sales of Plan Shares. The Administrator shall have the rightindividual exercising an option may acquire such shares pursuant to require any or all of the following with respect to shares of Stock purchasedan exemption from registration under the Plan:
(i)that a ParticipantSecurities Act. Any determination in this connection by the Board shall be final, binding, and conclusive. The Company may, not request that all or part of the shares of Stockbut shall in no event be reissued in the Participant’s own name and shares be deliveredobligated to, register any securities covered hereby pursuant to the Participant until two (2) years (or such shorter periodSecurities Act. The Company shall not be obligated to take any affirmative action in order to cause the exercise of time asan option or 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”);
(ii)that all salesissuance 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 purchasedstock pursuant to the Plan for a period lasting up to two (2) years fromcomply with any law or regulation of any governmental authority. As to any jurisdiction that expressly imposes the daterequirement that an option shall not be exercisable until the shares of Stock were purchased pursuantstock covered by such option are registered or are exempt from registration, the exercise of such option (under circumstances in which the laws of such jurisdiction apply) shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption.

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    Rule 16b-3.  During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intent of the Company that awards and the exercise of options granted to officers and directors hereunder will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action by the Board or Committee does not comply with the requirements of Rule 16b-3, it shall be deemed inoperative to the Plan.


11.Deemed Cancellation or Termination of Participation

(a)Termination of Employment Other than Death. Inextent permitted by law and deemed advisable by the event a Participant who holds outstanding Options to purchase shares of Stock underBoard and shall not affect the Plan experiences a Termination of Employment for any reason other than death prior to the last Trading Dayvalidity of the Offering Period,Plan. If Rule 16b-3 is revised or replaced, the Participant’s outstanding OptionsBoard may exercise its discretion to purchase sharesmodify this Plan in any respect necessary to satisfy the requirements 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 eventor to take advantage of any features of, the deathrevised exemption or its replacement.

16.
Effect 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

    (a)Changes in StockStock..  If 1) the number of outstanding shares of Stockstock is increased or decreased or the shares of Stockstock are changed into or exchanged for a different number or kind of shares or other securities of the Company by reasonon account 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, or 2) there occurs any spin-off, split-up, extraordinary cash dividend or other distribution of assets by the Company, the number and kinds of shares thatfor which grants of awards may be purchasedmade under the Plan (including the per-Grantee maximums set forth inSection 3) shall be equitably adjusted proportionately and accordingly by the Company.Company; provided that any such adjustment shall comply with Section 409A. In addition, in the event of any such increase or decease in the number of outstanding shares or other transaction described in clause 2) above, the number and kind of shares for which Optionsawards are outstanding and the option price per share of outstanding options and SAR exercise price per share of outstanding SARs shall be similarly adjusted soequitably adjusted; provided that the proportionate interestany such adjustment shall comply with Section 409A.

    Effect of a Participant immediately following such event shall,Certain Transactions.  Except as otherwise provided in an award agreement and subject 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,provisions of thisSection 16, in the event of a spin-offcorporate transaction, the Plan and the awards issued hereunder shall continue in effect in accordance with their respective terms, except that results in no changefollowing a corporate transaction either 1) each outstanding award shall be treated as provided for in the number of outstanding shares of Stock,agreement entered into in connection with the Company may,corporate transaction, or 2) if not so provided in such manner asagreement, each Grantee shall be entitled to receive in respect of each share of common stock subject to any outstanding awards, upon exercise or payment or transfer in respect of any award, the Company deems appropriate, adjust (i) thesame number and kind of shares for which Options are outstanding understock, securities, cash, property or other consideration that each holder of a share of common stock was entitled to receive in the Plan and (ii) the Purchase Price per share.


(b)corporate transaction in respect of a share of common stock;Reorganization in Which the Company Is the Surviving Corporationprovided. Subject to,Section 12(c)however, ifthat, unless otherwise determined by the CompanyCommittee, such

    stock, securities, cash, property or other consideration shall be the surviving corporation in any reorganization, merger, or consolidationremain subject to all of the Company with one or more other corporations, all outstanding Options under the Plan shall pertain toconditions, restrictions and applyperformance criteria which were applicable 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 immediatelyawards prior to such reorganization, merger,corporate transaction. Without limiting the generality of the foregoing, the treatment of outstanding options and SARs pursuant to thisSection 16 in connection with a corporate transaction in which the consideration paid or consolidation.distributed to the Company's stockholders is not entirely shares of common stock of the acquiring or resulting corporation may include the cancellation of outstanding options and SARs upon consummation of the corporate transaction as long as, at the election of the Committee, 1) the holders of affected options and SARs have been given a period of at least fifteen days prior to the date of the consummation of the corporate transaction to exercise the options or SARs (to the extent otherwise exercisable), or 2) the holders of the affected options and SARs are paid (in cash or cash equivalents) in respect of each share covered by the option or SAR being canceled an amount equal to the excess, if any, of the per share price paid or distributed to stockholders in the corporate transaction (the value of any non-cash consideration to be determined by the Committee in its sole discretion) over the option price or SAR exercise price, as applicable. For avoidance of doubt, 1) the cancellation of options and SARs pursuant to clause 2) of the preceding sentence may be effected notwithstanding anything to the contrary contained in this Plan or any award agreement, and 2) if the amount determined pursuant to clause 2) of the preceding sentence is zero or less, the affected option or SAR may be cancelled without any payment therefore. The treatment of any award as provided in thisSection 16 shall be conclusively presumed to be appropriate for purposes ofSection 16.

    Change in Control.

    Consequences of a Change in Control.  For awards granted to non-employee directors, upon a change in control all outstanding awards that may be exercised shall become fully exercisable, all restrictions with respect to outstanding awards shall lapse and become vested and non-forfeitable, and any specified performance goals with respect to outstanding awards shall be deemed to be satisfied at target.

    For awards granted to any other service providers, either of the following provisions shall apply, depending on whether, and the extent to which, awards are assumed, converted or replaced by the resulting entity in a change in control:

        1)  To the extent such awards are not assumed, converted or replaced by the resulting entity in the change in control, then upon the change in control such outstanding awards that may be exercised shall become fully exercisable, all restrictions with respect to such outstanding awards, other than for performance awards, shall lapse and become vested and non-forfeitable, and for any outstanding performance awards the target payout opportunities attainable


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APPENDIX B
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2019 EQUITY PLAN

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      under such awards shall be deemed to have been fully earned as of the change in Whichcontrol based upon the greater of: 1) an assumed achievement of all relevant performance goals at the "target" level, or 2) the actual level of achievement of all relevant performance goals against target as of the Company's fiscal quarter end preceding the change in control.

        2)  To the extent such awards are assumed, converted or replaced by the resulting entity in the change in control, if, within one year after the date of the change in control, the service provider has a Separation from Service either 1) by the Company Is Notother than for "cause" or 2) by the Surviving Corporation, Saleservice provider for "good reason" (each as defined in the applicable award agreement), then such outstanding awards that may be exercised shall become fully exercisable, all restrictions with respect to such outstanding awards, other than for performance awards, shall lapse and become vested and non-forfeitable, and for any outstanding performance awards the target payout opportunities attainable under such awards shall be deemed to have been fully earned as of Assetsthe Separation from Service based upon the greater of: 1) an assumed achievement of all relevant performance goals at the "target" level, or Stock, and Other Corporate Transactions2) the actual level of achievement of all relevant performance goals against target as of the Company's fiscal quarter end preceding the change in control.

    Change in Control Defined.. Upon  Except as may otherwise be defined in an award agreement, a "change in control" shall mean the occurrence of any dissolutionof the following events:

        1)  any person, including a group, as such term is used in Section 13(d) of the Exchange Act, becomes the beneficial owner, directly or liquidationindirectly, of securities 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 owningBank representing more than fifty percent (50%) of the combined voting power of all classesthe Company's or the Bank's then outstanding securities, other than as a result of stockan issuance of securities initiated by the Company or the Bank in the ordinary course of its business

        2)  the Incumbent Board members cease for any reason to constitute at least a majority of the Board; provided, however, that any individual who becomes a member of the Board subsequent to the effective date and whose election, or whose nomination for election by the Company's stockholders, to the Board was either 1) approved by a vote of at least a majority of Incumbent Board members, or 2) recommended by a corporate governance committee comprised entirely of Incumbent Board members shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest, other actual or threatened solicitation of proxies or consents or an actual or threatened tender offer

        3)  the Company or the Bank is party to a business combination that is consummated unless, following consummation of the business combination, more than fifty percent (50%) of the outstanding voting securities of the resulting entity are beneficially owned, directly or indirectly, by the holders of the Company's or the Bank's outstanding voting securities immediately prior to the business combination in substantially the same proportions as those existing immediately prior to the business combination

        4)  the stockholders of the Company or the Plan andBank approve a plan of complete liquidation of the Company or the Bank or an agreement for the sale or disposition by the Company or the Bank of all Options outstandingor substantially all of the Company's or the Bank's assets to another person or entity that is not a wholly-owned subsidiary of the Company or the Bank


Notwithstanding the foregoing, if it is determined that an award hereunder shall terminate, exceptis subject to the extent provision is maderequirements of Section 409A and payable upon a change in writing in connection with such transaction forcontrol, 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 shallCompany will not be deemed to have ended onundergone a change in control unless the last Trading Day prior to such termination, and in accordance with Section 9, the Options of each Participant then outstanding shall beCompany is deemed to be automatically exercised

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

definition of such term in Section 409A.

(e)

17.
No Limitations on Company.


The grantmaking of an Optionawards 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.


18.
13.Term; Amendment, Suspension, and Termination ofTerms Applicable Generally to Awards Granted Under the Plan


(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 impairin any rights of a Participant that have vested at the time of such amendment, suspension, or termination. The effectiveness of any amendment to the Planaward agreement shall be contingent on approval of such amendment byconstrued to confer upon any individual the Company’s stockholdersright to the extent provided by the Board or required by applicable law.

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,remain in the eventemploy or service 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 restrictaffiliate, or to interfere in any way with any contractual or other right or authority of the Company either to increase or decrease the compensation or other payments to any individual at any time, or to terminate any employment or other relationship between any individual and the Company. In addition, notwithstanding anything contained in the Plan to the contrary, unless otherwise stated in the applicable award agreement, no award granted under the Plan shall be affected by any change of duties or position of the Grantee, so long as such Grantee continues to be a service provider. The obligation of the Company to pay any

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BAR HARBOR BANKSHARES
2019 EQUITY PLAN

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(d)No Interest on Payments. No interest shallCompany may require such obligations (up to maximum statutory rates) to be paid on sums withheld from a Participant’s paysatisfied, in whole or otherwise contributed forin part, 1) by causing the purchaseCompany or the affiliate to withhold the number of shares of Stock under the Plan unlessstock otherwise determined necessary by the Administrator.

(e)Governmental Regulation. The Company’s obligation to issue, sell, and deliver shares of Stock pursuantissuable to the Plan is subject to such approval of any governmental authority and any national securities exchange or other market quotation systemGrantee as may be requirednecessary to satisfy such withholding obligation, or 2) by delivering to the Company or the affiliate shares of stock already owned by the Grantee. The shares of stock delivered or withheld shall have an aggregate fair market value equal to such withholding obligations (up to maximum statutory rates). The fair market value of the shares of stock used to satisfy such withholding obligation shall be determined by the Company or the affiliate as of the date that the amount of tax to be withheld is to be determined. A Grantee who has made an election pursuant to thisSection 18 may satisfy his or her withholding obligation only with shares of stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.

Captions.  The use of captions in connectionthis Plan or any award agreement is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or any award agreement.

Other Provisions.  Each award agreement may contain such other terms and conditions not inconsistent with the authorization, issuance, or salePlan as may be determined by the Board, in its sole discretion. In the


any conflict between the terms of an employment agreement and the Plan, the terms of the employment agreement govern.

(f)Number and Gender.Rule 16b-3. Transactions under  With respect to words used in 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,singular form shall include the plural form, the masculine gender shall include the feminine gender, etc., as amended.the context requires.

Severability.  If any provision of the Plan or action by the Administrator fails to so comply, itany award agreement 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-3determined to be statedillegal or unenforceable by any court of law in any jurisdiction, the Plan, such provision (other than one relating to eligibility requirements or the priceremaining provisions hereof and amount of awards)thereof shall be deemed automatically to be incorporated by reference into the Plan.severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.


(g)Governing Law.Payment of  The 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 anyDelaware without giving effect to the principles of conflicts or choice of law, rule or principle that might otherwise refer construction or interpretation ofand applicable Federal law.

Section 409A.  The Plan is intended to comply with Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to comply therewith. Any payments described in the Options granted underPlan that are due within the "short-term deferral period" as defined in Section 409A shall not be treated as deferred compensation unless applicable laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the substantiveextent required to avoid accelerated taxation and tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the Grantee's Separation from Service shall instead be paid on the first payroll date after the six-month anniversary of the Grantee's Separation from Service (or the Grantee's death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Grantee under Section 409A and neither the Company nor the Committee will have any liability to any Grantee for such tax or penalty.

Separation from Service.  The Board shall determine the effect of a Separation from Service upon awards, and such effect shall be set forth in the appropriate award agreement. Without limiting the foregoing, the Board may provide in the award agreements at the time of grant, or any time thereafter with the conseangent of the Grantee, the actions that will be taken upon the occurrence of a Separation from Service, including, but not limited to, accelerated vesting or termination, depending upon the circumstances surrounding the Separation from Service.

Transferability of Awards.

Transfers in General.  Except as provided inSection 18, no award shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of any other jurisdiction), except todescent and distribution, and, during the extent superseded by applicable U.S. federal laws.


*    *    *

To record adoptionlifetime 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.Grantee, only

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The Plan was adopted by the Board of Directors on April 9, 2019 and was approved by the stockholders
of the Company on May 21, 2019.

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VIEW MATERIALS & VOTE w SCAN TO BROADRIDGE FINANCIAL SOLUTIONS, INC. 51 MERCEDES WAY EDGEWOOD, NY 11717 VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 16, 2019 for shares held in a Plan. Follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 16, 2019 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E76552-P22670 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. BAR HARBOR BANKSHARES The Board of Directors recommends you vote FOR the following: 1. ELECTION OF THE FOLLOWING NOMINEES AS DIRECTORS: Nominees: For Against Withhold The Board of Directors recommends you vote FOR proposals 2, 3 and 4. ! ! ! ! ! ! ! ! ! ! ! ! Yes ! ! ! ! ! ! ! ! ! ! ! ! ! No ! ! ! ! ! ! ! ! ! ! ! ! ! For Against Abstain 1a. Daina H. Belair ! ! ! ! ! ! 1b. Matthew L. Caras 2. APPROVAL OF THE BAR HARBOR BANKSHARES 2019 EQUITY PLAN 1c. David M. Colter 3. RATIFICATION OF THE APPOINTMENT OF RSM US LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2019 1d. Steven H. Dimick 4. APPROVAL OF NON-BINDING, ADVISORY RESOLUTION ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS ! ! ! 1e. Martha T. Dudman 1f. Lauri E. Fernald NOTE: Such other business as may properly come before the meeting or any adjournment thereof. 1g. Brendan O’Halloran 1h. Curtis C. Simard 1i. Kenneth E. Smith 1j. Stephen R. Theroux 1k. Scott G. Toothaker ! For address changes and/or comments, please check this box and write them on the back where indicated. 1l. David B. Woodside Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. HOUSEHOLDING ELECTION - please indicate if you consent to receive certain future investor communications in a single package per household. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement, Form 10-K, Annual Report and RSVP Card are available at www.proxyvote.com. E76553-P22670 Bar Harbor Bankshares Annual Meeting of Shareholders May 21, 2019 11:00 AM, EDT This proxy is solicited by the Board of Directors The shareholder(s) hereby appoint(s) Martha T. Dudman, Kenneth E. Smith and David B. Woodside, or any of them, as proxies, each with the power to appoint his/her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Bar Harbor Bankshares that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 11:00 AM, EDT on May 21, 2019, at the Bar Harbor Club at 111 West Street in Bar Harbor, Maine, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side Address Changes/Comments: