8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT Pursuant

to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 24, 2008

Commission File No. 841105-D

BAR HARBOR BANKSHARES

(Exact name of registrant as specified in its charter)

Maine	01-0393663
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
PO Box 400
82 Main Street, Bar Harbor, ME	04609-0400
(Address of principal executive offices)	(Zip Code)

(207) 288-3314

(Registrant's telephone number, including area code)

Inapplicable

(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

____ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

____ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

____ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

____ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 Entry Into a Material Definitive Agreement.

On November 18, 2008, the Board of Directors of Bar Harbor Bankshares (the "Company") approved and entered into amended and restated Change in Control, Confidentiality and Noncompete Agreements with each of the following officers: Marsha Sawyer, Senior Vice President of Human Resources; Cheryl Curtis, Senior Vice President, Marketing and Community Relations; Craig Worcester, Managing Director Bar Harbor Financial Services; Joshua Radel, Chief Investment Officer of Bar Harbor Trust Services; and David Thibault, Senior Vice President Operations and Information Systems. These Change in Control Agreements all contain substantially the same material terms and conditions and have been designed to comply with Section 409A by clarifying that the date of termination is the date of separation from service; providing for a six month delay in payment for certain key employees; and amending the definition of good reason for termination of employment as well as the definition of disability. In addition, for all these officers identified above, the Change in Control Agreements prohibit the payment of any excess parachute payments as that term is defined under Section 280G of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

A copy of each Change in Control Agreement applicable to the above identified officers is attached hereto as Exhibits 10.1 through 10.5 and incorporated herein by reference. The foregoing description of these Change in Control Agreements is qualified in its entirety by reference to the full text of each of the respective agreements.

ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On November 18, 2008, the Board of Directors of Bar Harbor Bankshares (the "Company") adopted and approved amendments and restatements of certain compensatory arrangements applicable to certain of the named executive officers of the Company and its wholly owned banking subsidiary, Bar Harbor Bank and Trust (the "Bank"). In addition, the Company adopted a new Supplemental Executive Retirement Plan applicable to certain executive officers. The primary purpose of the changes to these agreements and adoption of the new Supplemental Executive Retirement Plan is to comply with the documentation requirements of the final regulations promulgated under Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A"), which provides in relevant part for rules regarding deferred compensation arrangements. In particular, the following actions were taken by the Company’s Board of Directors:

Supplemental Executive Retirement Plans:

The Company’s Board of Directors approved and adopted "Amendment No.1" to the Company’s existing Supplemental Executive Retirement Plan previously adopted on January 1, 2003 (the "Existing SERP"). Amendment No. 1 to the Existing SERP provides in material part for the cessation of additional benefit accruals under the Existing SERP and makes the Existing SERP relate solely to deferred compensation that was both earned and vested prior to January 1, 2005, such that the Existing SERP will be treated as a "grandfathered plan" that is exempt from the requirements of Section 409A. No other material amendments were made to the Existing SERP.

A copy of Amendment No. 1 to the Company’s Existing SERP is attached hereto as Exhibit 10.6 and incorporated herein by reference. The foregoing description of Amendment No. 1 is qualified in its entirety by reference to the full text of Amendment No. 1.

The Company’s Board of Directors also adopted a new Supplemental Executive Retirement Plan (the"SERP-409A") to comply with Section 409A. The SERP-409A applies to amounts of deferred compensation that are both earned and vested for periods on or after January 1, 2005. The SERP 409A is a separate plan and contains the following material changes from the Existing SERP: changes the definition of disability to conform to the definition set forth in Section 409A; changes the name of the plan to the "Bar Harbor Bankshares Supplemental Executive Retirement Plan-Code Section 409A"; changes the definition of unforeseeable emergency to comply with Section 409A; delays the payments contingent on separation of service for a period of six (6) months for key employees; clarifies the distribution start date to provide a definitely determinable date as required under Section 409A; and provides that a participant’s benefit will be paid in the event of a failure to satisfy Section 409A to the extent of the amount required to be included in income. Furthermore, the SERP-409A makes changes to payment elections to comply with Section 409A and provides that once benefit payments begin, they cannot be suspended upon reemployment. Finally, the SERP-409A excludes the use of non-US rabbi trusts.

A copy of the SERP-409A is attached hereto as Exhibit 10.7 and incorporated herein by reference. The foregoing description of SERP-409A is qualified in its entirety by reference to the full text of SERP-409A.

Change in Control Agreements.

 The Company maintains Change in Control, Confidentiality and Noncompetition Agreements, all dated as of November 7, 2003 (each an "Existing Change in Control Agreement" and collectively the "Existing Change in Control Agreements") with the following named executive officers: Gerald Shencavitz, Executive Vice President and Chief Financial Officer of the Company; Michael Bonsey, Senior Vice President, Credit Administration of the Bank; Gregory W. Dalton, Senior Vice President, Business Banking for the Bank; and Daniel Hurley III, Senior Vice President of the Bank and President of Bar Harbor Trust Services, the Company’s second tier nondepository trust company. On November 18, 2008 the Board Directors adopted and approved Restated and Amended Change in Control, Confidentiality and Noncompetiition Agreements (each individually referred to as "409A Change in Control Agreement" and collectively referred to as the "409A Change in Control Agreements") that supersede and replace the Existing Change in Control Agreements for each of these executive officers. The 409A Change in Control Agreements contain substantially the same material terms and conditions as the Existing Change in Control Agreements, but have been amended and restated to comply with Section 409A by clarifying that the date of termination is the date of separation from service; providing for a six month delay in payment for certain key employees; and amending the definition of good reason for termination of employment as well as the definition of disability. In addition, the Existing Change in Control Agreements for all executive officers identified above other than Gerald Shencavitz were amended to prohibit the payment of any excess parachute payments as that term is defined under Section 280G of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

Except for the agreement applicable to Gerald Shencavitz, all of the 409A Change in Control Agreements applicable to the other executive officers identified above are substantially identical in form and substance. A specimen copy of the 409A Change in Control Agreement for these executive officers is attached hereto as Exhibit 10.8 and incorporated herein by reference. The foregoing description of the 409A Change in Control Agreements is qualified in its entirety by reference to the full text of specimen 409A Change in Control Agreement. A copy of the 409A Change in Control Agreement applicable to Gerald Shencavitz is attached hereto as Exhibit 10.9 and incorporated herein by reference. The foregoing description of the 409A Change in Control Agreement applicable to Gerald Shencavitz is qualified in its entirety by reference to the full text of the Gerald Shencavitz 409A Change in Control Agreement.

Amendment and Restatement of CEO Employment Agreement

The Company currently has a written employment agreement (the "Original CEO Employment Agreement") dated January 3, 2003 and last amended November 7, 2003, with Joseph M. Murphy, its President and Chief Executive Officer. On November 19, 2008, the Company’s Board of Directors amended and restated Mr. Murphy’s Employment Agreement (the "Amended and Restated CEO Employment Agreement") primarily for the purpose of complying with Section 409A by: making clear that reimbursement of expenses and timing thereof is not subject to liquidation or exchange for another benefit; references to the CEO’s Supplemental Executive Retirement Plan were updated; provided for a six (6) month delay for payment of benefit payments after a separation from service as required by Section 409A; amends definition of "Good Reason," to include separation from service as required by Section 409A; amends the definition of a disability to conform to Section 409A; and removes the change in control provisions applicable to the CEO, as more fully discussed below in this Report under the caption "CEO Change in Control Agreement." The Amended and Restated Employment Agreement supersedes and replaces the Original CEO Employment Agreement.

A copy of the Amended and Restated CEO Employment Agreement is attached hereto as Exhibit 10.10 and incorporated herein by reference. The foregoing description of the Amended and Restated CEO Employment Agreement is qualified in its entirety by reference to the full text of the Amended and Restated CEO Employment Agreement.

CEO Change in Control Agreement

Mr. Murphy’s Original CEO Employment Agreement also provided, with limited exception, for a severance payment to the CEO in the event his employment is terminated within one [1] year prior to or following certain events defined to constitute a change in control of the Company. On November 19, 2008, the Board of Directors of the Company approved a new Change in Control, Confidentiality Agreement and Noncompetition Agreement with Mr. Murphy (the "New CEO Change in Control Agreement"). The New CEO Change in Control Agreement supersedes and replaces the change in control provisions previously contained in Mr. Murphy’s Original CEO Employment Agreement. The New CEO Change in Control Agreement was adopted primarily to comply with Section 409A by: clarifying that the date of termination is the date of separation from service; providing for a six month delay in payments, and amending the definition of good reason for termination of employment and amending the definition of disability.

A copy of the New CEO Change in Control Agreement is attached hereto as Exhibit 10.11 and incorporated herein by reference. The foregoing description of the New CEO Change in Control Agreement is qualified in its entirety by reference to the full text of the New CEO Change in Control Agreement.

ITEM 9.01 Financial Statements and Exhibits.

(d) Exhibits:

10.1 Change in Control Agreement for Marsha Sawyer

10.2 Change in Control Agreement for Cheryl Curtis

10.3 Change in Control Agreement for Craig Worcester

10.4 Change in Control Agreement for Joshua Radel

10.5 Change in Control Agreement for David Thibault

10.6 Amendment No. 1 to Existing SERP

10.7 SERP-409A

10.8 Specimen 409A Change in Control Agreement

10.9 Gerald Shencavitz 409A Change in Control Agreement

10.10 Amended and Restated CEO Employment Agreement

10.11 New CEO Change in Control Agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: November 24, 2008

BAR HARBOR BANKSHARES

 /s/ Joseph M. Murphy

Joseph M. Murphy

President and Chief Executive Officer

EX-10

Exhibit 10.2

CHANGE IN CONTROL, CONFIDENTIALITY,
AND NONCOMPETITION AGREEMENT

THIS CHANGE IN CONTROL, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT is made and entered into this _____ day of December, 2008 by and between BAR HARBOR BANKSHARES, a Maine corporation with its headquarters located in Bar Harbor, Maine (hereinafter, "the Company"), and CHERYL CURTIS, a resident of Bar Harbor, Maine (hereinafter, "the Executive").

W I T N E S S E T H:

WHEREAS, Bar Harbor Banking and Trust Company is a wholly-owned first tier banking subsidiary of Bar Harbor Bankshares, and Bar Harbor Trust Services is a second tier non-depository trust company subsidiary of Bar Harbor Bankshares; and

WHEREAS, the Executive is an employee of the Employer; and

WHEREAS, the Employer wishes to retain the services of the Executive; and

WHEREAS, the Executive and the Company entered into a change in control, confidentiality and noncompetition agreement dated ____________; and

WHEREAS, the Executive and the Company wish to amend and restate such change in control, confidentiality and noncompetition agreement so that the provisions of this Agreement will supersede the change in control, confidentiality and noncompetition agreement dated _____________.

NOW, THEREFORE, the parties hereto do hereby agree as follows:

1.         DEFINTIONS.

1.1.      Bank shall mean Bar Harbor Banking and Trust Company.

1.2.      Base Compensation shall mean the annual base salary payable by the Employer to the Executive, excluding any bonuses, incentive compensation and other forms of additional compensation.

1.3       Cause shall be deemed to exist only in the event the Executive is convicted by a court of competent jurisdiction of a felony involving dishonesty or fraud on the part of the Executive in his or her relationship with the Employer.

1.4.      Change in Control shall mean the occurrence of any one of the following events:

(a)        Any person, including a group (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Bar Harbor Bankshares representing more than fifty percent (50%) of the combined voting power of Bar Harbor Bankshares' then outstanding securities, other than as a result of an issuance of securities initiated by Bar Harbor Bankshares in the ordinary course of its business; or

(b)        Bar Harbor Bankshares is party to a Business Combination (as hereinafter defined) 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 Bar Harbor Bankshares' outstanding voting securities immediately prior to the Business Combination in substantially the same proportions as those existing immediately prior to the Business Combination; or

(c)        The stockholders of Bar Harbor Bankshares approve a plan of complete liquidation of Bar Harbor Bankshares or an agreement for the sale or disposition by Bar Harbor Bankshares of all or substantially all of Bar Harbor Bankshares' assets to another person or entity that is not a wholly owned subsidiary of Bar Harbor Bankshares.

For purposes of this Section 1.4, a Business Combination means any cash tender or exchange offer, merger or other business combination, sale of stock, or sale of all or substantially all of the assets, or any combination of the foregoing transactions.

For purposes of this Section 1.4, a Change in Control shall exclude any internal corporate change, reorganization or other such event, which occurred prior to or may occur following the date of this Agreement.

1.5.      Code shall mean the Internal Revenue Code of 1986, as amended, and as it may be amended from time to time, together with the rules and regulations promulgated under such code.

1.6.      Company shall mean Bar Harbor Bankshares.

1.7.      Date of Termination shall mean:

(a)        If the Executive incurs a separation from service for Disability, thirty (30) days after Notice of Termination for Disability is given by the Employer to the Executive and the Executive shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period;

(b)        If the Executive's service is separated by the Employer for Cause or by the Executive for Good Reason, the date on which the Executive separates from service with the Employer; and

(c)        If the Executive incurs a separation from service for any other reason, the date on which the Executive incurs a separation from service with the Employer.

Whether the Executive has incurred a separation from service is determined based on whether the facts and circumstances indicate that the Employer and the Executive reasonably anticipated that no further services would be performed after a certain date.

1.8.      Disability shall mean a condition:   (a) which causes the Executive to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months; or (b) which results in the Executive receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months, income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer.  Disability shall be deemed to exist only when the disability has been certified to the Board of Directors of the Company by a licensed physician approved by the Board of Directors of the Company.

1.9.      Employer shall mean either the Company, the Bank or Trust Services (whichever entity is the employer of the Executive).

1.10.    Exemption Amount shall mean two times the lesser of:  (a) the Executive’s annualized compensation based on the Executive’s annual rate of pay for the calendar year preceding the calendar year in which the Date of Termination occurs; or (b) the limitation on compensation set forth in Code Section 401(a)(17) for the calendar year in which the Date of Termination occurs.

1.11.    Good Reason shall mean one or more of the following events arising without the consent of the Executive:

(a)        a material diminution in the Executive’s Base Compensation;

(b)        a material diminution in the Executive’s authority, duties or responsibilities;

(c)        a material diminution in the authority, duties or responsibilities of the person to whom the Executive is required to report;

(d)        a material diminution in the budget over which the Executive retains authority;

(e)        a material change in the geographic location at which the Executive must perform his services; or

(f)         any other action or inaction that constitutes a material breach by the Company of the Agreement or any other agreement under which the Executive provides services.

In order for a separation from service to occur for Good Reason, the separation from service must occur within two years following the initial existence of the event constituting Good Reason.

1.12.    Key Employee shall mean an employee who is:   (a) an officer of the Company, the Bank or Trust Services whose earnings from the Company, the Bank and Trust Services exceed $145,000 (as adjusted under Code Section 416(i)(1) for calendar years beginning after December 31, 2007); (b) an owner of more than a five percent (5%) interest in the Company, the Bank or Trust Services; or (c) an owner of more than a one percent (1%) interest in the Company, the Bank or Trust Services whose earnings from the Company, the Bank and Trust Services exceed $150,000.

1.13.    Notice of Termination shall mean the notice provided pursuant to Section 3.

1.14.    Trust Services shall mean Bar Harbor Trust Services.

2.         SEVERANCE BENEFITS.

In the event that: (a) the Employer separates the Executive's service prior to age 65 other than as a result of Disability and other than for Cause, or the Executive separates his or her service prior to age 65 for Good Reason; and (b) the Executive's separation from service occurs in anticipation of or within one year after a Change in Control, then the Employer shall pay the Executive the severance benefits described in this Section 2.  The Executive's separation from service shall be deemed to be in anticipation of a Change in Control if it occurs within the twelve (12) month period prior to the occurrence of the Change in Control.

Notwithstanding the foregoing, if the payment of the severance benefits would result in an excess parachute payment as defined under Code Section 280G, then the amount of the severance benefits to be paid to the Executive shall be reduced to an amount equal to the maximum dollar amount that can be paid to the executive without causing the payment of an excess parachute payment.

The severance benefits described in this Section 2 shall equal the following:

(a)        The Executive shall receive a severance payment equal to 1.0 times the Executive’s Base Compensation, determined as of the Date of Termination.

(i)         Subject to the provisions of Section 2(a)(ii), the Executive’s severance payment shall be paid in twelve equal installments beginning on the first day of the month following the Executive’s Date of Termination.

(ii)        Notwithstanding the provisions of Section 2(a)(i), if the Executive is a Key Employee on the Executive’s Date of Termination, then any portion of the severance payment that would be payable within the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) and that does not exceed the Exemption Amount shall be paid in six equal installments beginning on the first day of the month following the Executive’s Date of Termination.  Any portion of the severance payment that would be payable within the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) and that exceeds the Exemption Amount shall be paid in a lump sum on the first day of the month that is six months after the Executive’s Date of Termination.  Any portion of the severance payment that would be payable after the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) shall be paid in six equal installments beginning on the first day of the month that is six months after the Executive’s Date of Termination.

(b)        The Executive and his or her dependents shall continue to be eligible to receive the same medical, health, dental and life insurance benefits which the Executive is eligible to receive on the Date of Termination. The Executive shall be required to make the same premium contributions that he or she was required to make immediately prior to the Date of Termination. The ability of the Executive and his or her dependents to receive such benefits shall continue until the twelve month anniversary of the Executive’s Date of Termination.

(c)        In the event of a Change in Control, all stock options granted but unexercised under the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan shall become 100% vested immediately prior to such Change in Control.  These grants will remain subject to all of the other terms and conditions in the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan.

The Executive shall not be required to mitigate the amount of any severance benefits described in this Section 2 by seeking other employment.

 3.        NOTICE OF TERMINATION.

Any separation of the Executive's service by the Employer due to Disability or for Cause, or by the Executive due to Good Reason, shall be communicated by written Notice of Termination to the other party.  A Notice of Termination must indicate the specific provisions in this Agreement which are relied upon as the basis for the separation of the Executive's service, and must also set forth in reasonable detail the facts and circumstances claimed to provide the basis for such separation from service under the provisions so indicated.

Notwithstanding the above, in order for the Executive to separate from service with the Employer for Good Reason, the Executive must provide the Notice of Termination to the Employer no later than ninety (90) days after the date of the initial occurrence of the condition or conditions alleged to give rise to Good Reason.  In addition, the Executive must provide the Employer a period of at least thirty (30) days during which the Employer can remedy the condition or conditions alleged to give rise to Good Reason and not be required to pay the amounts described in Section 2. 

4.         LOSS OF SEVERANCE BENEFITS.

If the Employer shall terminate the Executive's service after age 65 or due to Disability or for Cause, or if the Executive shall terminate his or her service after age 65 or other than for Good Reason, or if the Executive shall die, then the Executive shall have no right to receive any severance benefits under this Agreement.

5.         NO OTHER BENEFITS PAYABLE.

(a)        If the Executive is entitled to receive the severance benefits described in Section 2 of this Agreement, he or she shall not be entitled to receive: (i) any severance benefits under the terms of any general severance pay policy or plan of the Employer or any successor company; or (ii) any other compensation, benefits or payments under the terms of any other plan of, or agreement with, the Employer.

(b)        Notwithstanding the above, the Executive shall be entitled to receive any compensation, benefits or payments which are specifically authorized by the terms of any plan of, or agreement with, the Employer to be paid in addition to the severance benefits described in Section 2 of this Agreement.  Moreover, notwithstanding the above, the Executive shall be entitled to receive, in addition to the severance benefits described in Section 2 of this Agreement, any compensation, benefits or payments which the Executive is entitled to receive under: (i) any incentive compensation plan maintained by the Employer which provides for payment to a separated employee of incentive compensation earned by the employee prior to his or her separation from service; or (ii) any payroll plan or policy of the Employer which provides for payment to a separated employee of any unpaid vacation, holiday or sick pay accrued by the employee prior to his or her separation from service.

6.         SUCCESSORS.

(a)        The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Employer would be required to perform them if no such succession had taken place.  Each such successor shall execute a written agreement evidencing its assumption of the Employer's obligations under this Agreement prior to the effective date of any such purchase, merger, consolidation or other transaction.

(b)        The failure of the Employer to obtain from each successor the written agreement described in Section 6(a) shall be deemed to be a material breach of the obligations of the Employer under this Agreement, and shall entitle the Executive to incur a separation from service for Good Reason pursuant to Section 1.11(f).

(c)        As used in this Section 6, the Employer shall include the Company, the Bank, Trust Services and any successor to all or substantially all of the business and/or assets of any of them (whether direct or indirect, by purchase, merger, consolidation or otherwise) which executes and delivers the written agreement described in Section 6(a) or which otherwise becomes bound by all the terms and provisions of this Agreement.

7.         CONFIDENTIAL INFORMATION, NON-COMPETITION OBLIGATIONS, AND NON-SOLICITATION.

(a)        Confidential Information

The Executive recognizes and acknowledges that certain assets of the Employer, the Company, the Bank, Trust Services, or any of their affiliates or subsidiaries constitutes Confidential Information.

For purposes hereof, the term "Confidential Information" means any and all information and compilations of information, in whatever form or medium (including any copies thereof), relating to any part of the business of the Employer, the Company, the Bank, Trust Services or any of their subsidiaries or affiliates, or the business of their customers, provided to the Executive, or which the Executive obtained or compiled or had obtained or compiled on his or her behalf, which information or compilations of information are not a matter of public record or generally known to the public, including without limitation:

(i)         financial information regarding the Employer, the Company, the Bank, Trust Services or any of their subsidiaries or affiliates;

(ii)        personnel data, including compensation arrangements relating to the Executive or any other employees of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(iii)       internal plans, practices, and procedures of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(iv)       the names, portfolio information, investment strategies, requirements, lending or deposit information, or any similar information of any customers, clients, or prospects of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(v)        business methods and marketing strategies of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(vi)       any other information expressly deemed confidential by the officers and directors of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates; and

(vii)      the terms and conditions of the Agreement and any documents or instruments executed in connection herewith that are not of public record.

The Executive shall not, without the prior written consent of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates, use or disclose, or negligently permit any unauthorized person to use, disclose, or gain access to, any Confidential Information.

Upon termination of employment, the Executive hereby agrees to deliver promptly to the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates all memoranda, notes, records, manuals, or other documents, including all copies of such materials, containing Confidential Information, whether made or compiled by the Executive or furnished to him or her from any source by virtue of the Executive’s relationship with the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates.

Regardless of the reason for his or her cessation of employment, the Executive will furnish such information as may be in the Executive’s possession and cooperate with the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates as may reasonably be requested in connection with any claims or legal actions in which the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates are or may become a party.  The Employer will reimburse the Executive for any reasonable out-of-pocket expenses the Executive incurs in order to satisfy his or her obligations under this clause.

(b)        Non-Competition Obligations

In consideration of the covenants of the Employer contained herein, the Executive covenants and agrees with the Employer that, during the "Non-Compete Period" (as hereinafter defined) and within a one hundred fifty (150) "air" mile radius from Bar Harbor, Maine, the Executive shall not without specific approval, directly or indirectly:

(i)         advise any past, present, or future customers of the Employer to withdraw, curtail, or cancel his or her or its business with the Employer; or

(ii)        cause, suggest, or induce others to call on any past, present, or future customers of the Employer.

The "Non-Compete Period" shall commence on the date hereof and terminate one year after the cessation of the Executive’s employment with the Employer and all of its affiliates, regardless of reason, whether or not pursuant to this Agreement.

(c)        Non-Solicitation of Employees

While employed by the Employer, and for one year following cessation of his or her employment with the Employer and all of its affiliates for any reason, the Executive shall not, directly or indirectly, by any means or device whatsoever, for himself or herself or on behalf of, or in conjunction with, any other person, partnership or corporation, solicit, entice, hire, or attempt to hire or employ any employee of the Employer, the Company, the Bank, Trust Services or any of their affiliated entities.

8.         REFORMATION; INJUNCTIVE RELIEF.

(a)        All the parties hereto acknowledge that the parties have carefully considered the nature and scope of this Agreement.  The activities, period and area covered by Section 7 are expressly acknowledged and agreed to be fair, reasonable and necessary.  To the extent that any covenant contained in Section 7 is held to be invalid, illegal or unenforceable because of the extent of activities, duration of such covenant, the geographic area covered thereby, or otherwise, the parties agree that the court making such determination shall reform such covenant to include as much of its nature and scope as will render it enforceable and, in its reduced form, said covenant shall be valid, legal and enforceable to the fullest extent of the law.

The invalidity or unenforceability of any provision of this Agreement, after reformation as provided in this Section 8, shall not affect any other provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

(b)        The Executive acknowledges and agrees that, upon any breach by the Executive of his or her obligations under Section 7 hereof, the Employer will have no adequate remedy at law, and accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief, notwithstanding Section 9 hereof.  Nothing herein shall be construed as prohibiting the Employer from pursuing any other remedies available to it, including the recovery of damages from the Executive.

9.         MEDIATION AND ARBITRATION.

If the Executive and the Employer have any dispute whatsoever relating to the interpretation, validity or performance of this Agreement, or any other dispute arising out of this Agreement, every reasonable attempt will be made to resolve any differences or dispute within thirty (30) days of an issuance of written notice by either party to the other party.

If a successful resolution of any differences or dispute has not been achieved to the satisfaction of both parties at the end of the thirty (30) day period, the following steps will be used:

Except as otherwise expressly provided hereunder, the parties agree that any and all disputes arising out of the Executive’s employment or cessation of employment, including but not limited to any dispute, controversy, or claim arising under any federal, state, or local statute, law, ordinance or regulation or under this Agreement, shall be resolved exclusively by Alternative Dispute Resolution described in this Agreement ("ADR"). The initiation of ADR shall first require mediation, and the parties agree to first try to settle any dispute through mediation.  Mediation shall be initiated by either party by the serving of a written notice of intent to mediate (a "Mediation Notice") by one party upon the other.  If no resolution has been mutually agreed through mediation within ninety (90) days of service of a Mediation Notice, then and only then may the dispute be submitted to arbitration. Arbitration shall be initiated by the serving of a written notice of intent to arbitrate (an "Arbitration Notice") by one party upon the other.  Notwithstanding the foregoing, nothing in this Agreement shall be deemed to preclude the Employer from seeking temporary or permanent injunctive relief and/or damages from a court of competent jurisdiction pursuant to Section 8 of this Agreement with respect to any breach of Section 7 of this Agreement.

(a)        In the event that a party wishes to initiate ADR, a Mediation Notice must be served on the other party within six months from the date on which the claim arose. If the parties cannot mutually agree on a mediator, then a mediator shall be selected in accordance with the Employment Mediation Rules of the American Arbitration Association.

(b)        In the event that mediation is unsuccessful and arbitration is initiated, it shall be conducted under the National Rules of the Resolution of Employment Disputes of the American Arbitration Association. There shall be a single arbitrator to be agreed upon by the parties, provided that, if the parties are unable to agree upon a single arbitrator, each party shall name an arbitrator and the two so named shall name a third arbitrator.  The arbitration proceedings shall be heard by the arbitrator(s) and the decision of the arbitrator, or the majority of the panel if one has been selected, shall be final and binding on the parties. Judgment upon the arbitration award may be entered in any court of competent jurisdiction. An Arbitration Notice must be served on the other party within one year from the date on which the claim arose, and failure to bring such a claim within such one-year period shall constitute a waiver of such claim and an absolute bar to any further proceedings in any forum with respect to it. All mediation and arbitration proceedings shall be conducted in Bangor, Maine, unless the parties otherwise agree in writing.

(c)        The cost of any mediation proceeding under this Section 9 shall be paid entirely by the Employer.  The cost of any arbitration proceeding will be shared equally by the parties to the dispute; provided, however, that, if the dispute is resolved in favor of the Executive, such cost shall be paid in full by the Employer.  Each party shall be responsible for its own cost of representation and counsel.

10.       POST-TERMINATION OBLIGATIONS.

            All payments and benefits due to the Executive under this Agreement shall be subject to the Executive's compliance with this Section 10 for one full year following the Executive's Date of Termination. The Executive shall, upon reasonable notice, furnish such information and assistance to the Employer, the Company, the Bank or Trust Services as may reasonably be required by the Employer, the Company, the Bank or Trust Services in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.

11.       GENERAL PROVISIONS.

(a)        All notices required by this Agreement shall be in writing and shall be sufficiently given if delivered personally or mailed by registered mail or certified mail, return receipt requested, to the parties at their then current addresses. All notices shall be deemed to have been given as of the date so delivered or mailed.

(b)        This Agreement and the plans and agreements described in Section 5(b) contain the entire transaction between the parties, and there are no other representations, warranties, conditions or agreements relating to the subject matter thereof.

(c)        The waiver by any party of any breach or default of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.

(d)        This Agreement may not be changed orally but only by an agreement in writing executed on behalf of the party against which enforcement of any waiver, change, modification, consent or discharge is sought.

(e)        This Agreement shall be binding upon and inure to the benefit of the Employer and the Executive and their respective successors, assigns, heirs and legal representatives (including, but not limited to, any successor of the Employer described in Section 6).

(f)         Each of the parties agrees to execute all further instruments and documents and to take all further action as the other party may reasonably request in order to effectuate the terms and purposes of this Agreement.

(g)        This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.

(h)        This Agreement shall be construed pursuant to and in accordance with the laws of the State of Maine. Actions brought by the Employer under this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts of Maine. Both parties consent to the personal jurisdiction of such courts for such actions, and agree that they may be served with process in accordance with Section 11(a).

(i)         The Executive acknowledges that he has had a full and complete opportunity to review the terms, enforceability and implications of this Agreement, and that the Employer has not made any representations or warranties to the Executive concerning the terms, enforceability and implications of this Agreement other than as are reflected in this Agreement.

(j)         Any provision of this Agreement that is susceptible to more than one interpretation shall be interpreted in a manner that is consistent with this Agreement satisfying the requirements of Code Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Witness:                                                                        COMPANY:

                                                                                    BAR HARBOR BANKSHARES

_________________________                                   By____________________________

                                                                                         Its

Witness:                                                                        EXECUTIVE:

___________________________                               ______________________________

                                                                                    [                                ]

EX-10

Exhibit 10.3

CHANGE IN CONTROL, CONFIDENTIALITY,
AND NONCOMPETITION AGREEMENT

THIS CHANGE IN CONTROL, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT is made and entered into this _____ day of December, 2008 by and between BAR HARBOR BANKSHARES, a Maine corporation with its headquarters located in Bar Harbor, Maine (hereinafter, "the Company"), and CRAIG WORCESTER, a resident of Bangor, Maine (hereinafter, "the Executive").

W I T N E S S E T H:

WHEREAS, Bar Harbor Banking and Trust Company is a wholly-owned first tier banking subsidiary of Bar Harbor Bankshares, and Bar Harbor Trust Services is a second tier non-depository trust company subsidiary of Bar Harbor Bankshares; and

WHEREAS, the Executive is an employee of the Employer; and

WHEREAS, the Employer wishes to retain the services of the Executive; and

WHEREAS, the Executive and the Company entered into a change in control, confidentiality and noncompetition agreement dated ____________; and

WHEREAS, the Executive and the Company wish to amend and restate such change in control, confidentiality and noncompetition agreement so that the provisions of this Agreement will supersede the change in control, confidentiality and noncompetition agreement dated _____________.

NOW, THEREFORE, the parties hereto do hereby agree as follows:

1.         DEFINTIONS.

1.1.      Bank shall mean Bar Harbor Banking and Trust Company.

1.2.      Base Compensation shall mean the annual base salary payable by the Employer to the Executive, excluding any bonuses, incentive compensation and other forms of additional compensation.

1.3       Cause shall be deemed to exist only in the event the Executive is convicted by a court of competent jurisdiction of a felony involving dishonesty or fraud on the part of the Executive in his or her relationship with the Employer.

1.4.      Change in Control shall mean the occurrence of any one of the following events:

(a)        Any person, including a group (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Bar Harbor Bankshares representing more than fifty percent (50%) of the combined voting power of Bar Harbor Bankshares' then outstanding securities, other than as a result of an issuance of securities initiated by Bar Harbor Bankshares in the ordinary course of its business; or

(b)        Bar Harbor Bankshares is party to a Business Combination (as hereinafter defined) 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 Bar Harbor Bankshares' outstanding voting securities immediately prior to the Business Combination in substantially the same proportions as those existing immediately prior to the Business Combination; or

(c)        The stockholders of Bar Harbor Bankshares approve a plan of complete liquidation of Bar Harbor Bankshares or an agreement for the sale or disposition by Bar Harbor Bankshares of all or substantially all of Bar Harbor Bankshares' assets to another person or entity that is not a wholly owned subsidiary of Bar Harbor Bankshares.

For purposes of this Section 1.4, a Business Combination means any cash tender or exchange offer, merger or other business combination, sale of stock, or sale of all or substantially all of the assets, or any combination of the foregoing transactions.

For purposes of this Section 1.4, a Change in Control shall exclude any internal corporate change, reorganization or other such event, which occurred prior to or may occur following the date of this Agreement.

1.5.      Code shall mean the Internal Revenue Code of 1986, as amended, and as it may be amended from time to time, together with the rules and regulations promulgated under such code.

1.6.      Company shall mean Bar Harbor Bankshares.

1.7.      Date of Termination shall mean:

(a)        If the Executive incurs a separation from service for Disability, thirty (30) days after Notice of Termination for Disability is given by the Employer to the Executive and the Executive shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period;

(b)        If the Executive's service is separated by the Employer for Cause or by the Executive for Good Reason, the date on which the Executive separates from service with the Employer; and

(c)        If the Executive incurs a separation from service for any other reason, the date on which the Executive incurs a separation from service with the Employer.

Whether the Executive has incurred a separation from service is determined based on whether the facts and circumstances indicate that the Employer and the Executive reasonably anticipated that no further services would be performed after a certain date.

1.8.      Disability shall mean a condition:   (a) which causes the Executive to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months; or (b) which results in the Executive receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months, income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer.  Disability shall be deemed to exist only when the disability has been certified to the Board of Directors of the Company by a licensed physician approved by the Board of Directors of the Company.

1.9.      Employer shall mean either the Company, the Bank or Trust Services (whichever entity is the employer of the Executive).

1.10.    Exemption Amount shall mean two times the lesser of:  (a) the Executive’s annualized compensation based on the Executive’s annual rate of pay for the calendar year preceding the calendar year in which the Date of Termination occurs; or (b) the limitation on compensation set forth in Code Section 401(a)(17) for the calendar year in which the Date of Termination occurs.

1.11.    Good Reason shall mean one or more of the following events arising without the consent of the Executive:

(a)        a material diminution in the Executive’s Base Compensation;

(b)        a material diminution in the Executive’s authority, duties or responsibilities;

(c)        a material diminution in the authority, duties or responsibilities of the person to whom the Executive is required to report;

(d)        a material diminution in the budget over which the Executive retains authority;

(e)        a material change in the geographic location at which the Executive must perform his services; or

(f)         any other action or inaction that constitutes a material breach by the Company of the Agreement or any other agreement under which the Executive provides services.

In order for a separation from service to occur for Good Reason, the separation from service must occur within two years following the initial existence of the event constituting Good Reason.

1.12.    Key Employee shall mean an employee who is:   (a) an officer of the Company, the Bank or Trust Services whose earnings from the Company, the Bank and Trust Services exceed $145,000 (as adjusted under Code Section 416(i)(1) for calendar years beginning after December 31, 2007); (b) an owner of more than a five percent (5%) interest in the Company, the Bank or Trust Services; or (c) an owner of more than a one percent (1%) interest in the Company, the Bank or Trust Services whose earnings from the Company, the Bank and Trust Services exceed $150,000.

1.13.    Notice of Termination shall mean the notice provided pursuant to Section 3.

1.14.    Trust Services shall mean Bar Harbor Trust Services.

2.         SEVERANCE BENEFITS.

In the event that: (a) the Employer separates the Executive's service prior to age 65 other than as a result of Disability and other than for Cause, or the Executive separates his or her service prior to age 65 for Good Reason; and (b) the Executive's separation from service occurs in anticipation of or within one year after a Change in Control, then the Employer shall pay the Executive the severance benefits described in this Section 2.  The Executive's separation from service shall be deemed to be in anticipation of a Change in Control if it occurs within the twelve (12) month period prior to the occurrence of the Change in Control.   Notwithstanding the foregoing, if the payment of the severance benefits would result in an excess parachute payment as defined under Code Section 280G, then the amount of the severance benefits to be paid to the Executive shall be reduced to an amount equal to the maximum dollar amount that can be paid to the executive without causing the payment of an excess parachute payment.

The severance benefits described in this Section 2 shall equal the following:

(a)        The Executive shall receive a severance payment equal to 1.0 times the Executive’s Base Compensation, determined as of the Date of Termination.

(i)         Subject to the provisions of Section 2(a)(ii), the Executive’s severance payment shall be paid in twelve equal installments beginning on the first day of the month following the Executive’s Date of Termination.

(ii)        Notwithstanding the provisions of Section 2(a)(i), if the Executive is a Key Employee on the Executive’s Date of Termination, then any portion of the severance payment that would be payable within the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) and that does not exceed the Exemption Amount shall be paid in six equal installments beginning on the first day of the month following the Executive’s Date of Termination.  Any portion of the severance payment that would be payable within the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) and that exceeds the Exemption Amount shall be paid in a lump sum on the first day of the month that is six months after the Executive’s Date of Termination.  Any portion of the severance payment that would be payable after the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) shall be paid in six equal installments beginning on the first day of the month that is six months after the Executive’s Date of Termination.

(b)        The Executive and his or her dependents shall continue to be eligible to receive the same medical, health, dental and life insurance benefits which the Executive is eligible to receive on the Date of Termination. The Executive shall be required to make the same premium contributions that he or she was required to make immediately prior to the Date of Termination. The ability of the Executive and his or her dependents to receive such benefits shall continue until the twelve month anniversary of the Executive’s Date of Termination.

(c)        In the event of a Change in Control, all stock options granted but unexercised under the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan shall become 100% vested immediately prior to such Change in Control.  These grants will remain subject to all of the other terms and conditions in the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan.

The Executive shall not be required to mitigate the amount of any severance benefits described in this Section 2 by seeking other employment.

 3.        NOTICE OF TERMINATION.

Any separation of the Executive's service by the Employer due to Disability or for Cause, or by the Executive due to Good Reason, shall be communicated by written Notice of Termination to the other party.  A Notice of Termination must indicate the specific provisions in this Agreement which are relied upon as the basis for the separation of the Executive's service, and must also set forth in reasonable detail the facts and circumstances claimed to provide the basis for such separation from service under the provisions so indicated.

Notwithstanding the above, in order for the Executive to separate from service with the Employer for Good Reason, the Executive must provide the Notice of Termination to the Employer no later than ninety (90) days after the date of the initial occurrence of the condition or conditions alleged to give rise to Good Reason.  In addition, the Executive must provide the Employer a period of at least thirty (30) days during which the Employer can remedy the condition or conditions alleged to give rise to Good Reason and not be required to pay the amounts described in Section 2. 

4.         LOSS OF SEVERANCE BENEFITS.

If the Employer shall terminate the Executive's service after age 65 or due to Disability or for Cause, or if the Executive shall terminate his or her service after age 65 or other than for Good Reason, or if the Executive shall die, then the Executive shall have no right to receive any severance benefits under this Agreement.

5.         NO OTHER BENEFITS PAYABLE.

(a)        If the Executive is entitled to receive the severance benefits described in Section 2 of this Agreement, he or she shall not be entitled to receive: (i) any severance benefits under the terms of any general severance pay policy or plan of the Employer or any successor company; or (ii) any other compensation, benefits or payments under the terms of any other plan of, or agreement with, the Employer.

(b)        Notwithstanding the above, the Executive shall be entitled to receive any compensation, benefits or payments which are specifically authorized by the terms of any plan of, or agreement with, the Employer to be paid in addition to the severance benefits described in Section 2 of this Agreement.  Moreover, notwithstanding the above, the Executive shall be entitled to receive, in addition to the severance benefits described in Section 2 of this Agreement, any compensation, benefits or payments which the Executive is entitled to receive under: (i) any incentive compensation plan maintained by the Employer which provides for payment to a separated employee of incentive compensation earned by the employee prior to his or her separation from service; or (ii) any payroll plan or policy of the Employer which provides for payment to a separated employee of any unpaid vacation, holiday or sick pay accrued by the employee prior to his or her separation from service.

6.         SUCCESSORS.

(a)        The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Employer would be required to perform them if no such succession had taken place.  Each such successor shall execute a written agreement evidencing its assumption of the Employer's obligations under this Agreement prior to the effective date of any such purchase, merger, consolidation or other transaction.

(b)        The failure of the Employer to obtain from each successor the written agreement described in Section 6(a) shall be deemed to be a material breach of the obligations of the Employer under this Agreement, and shall entitle the Executive to incur a separation from service for Good Reason pursuant to Section 1.11(f).

(c)        As used in this Section 6, the Employer shall include the Company, the Bank, Trust Services and any successor to all or substantially all of the business and/or assets of any of them (whether direct or indirect, by purchase, merger, consolidation or otherwise) which executes and delivers the written agreement described in Section 6(a) or which otherwise becomes bound by all the terms and provisions of this Agreement.

7.         CONFIDENTIAL INFORMATION, NON-COMPETITION OBLIGATIONS, AND NON-SOLICITATION.

(a)        Confidential Information

The Executive recognizes and acknowledges that certain assets of the Employer, the Company, the Bank, Trust Services, or any of their affiliates or subsidiaries constitutes Confidential Information.

For purposes hereof, the term "Confidential Information" means any and all information and compilations of information, in whatever form or medium (including any copies thereof), relating to any part of the business of the Employer, the Company, the Bank, Trust Services or any of their subsidiaries or affiliates, or the business of their customers, provided to the Executive, or which the Executive obtained or compiled or had obtained or compiled on his or her behalf, which information or compilations of information are not a matter of public record or generally known to the public, including without limitation:

(i)         financial information regarding the Employer, the Company, the Bank, Trust Services or any of their subsidiaries or affiliates;

(ii)        personnel data, including compensation arrangements relating to the Executive or any other employees of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(iii)       internal plans, practices, and procedures of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(iv)       the names, portfolio information, investment strategies, requirements, lending or deposit information, or any similar information of any customers, clients, or prospects of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(v)        business methods and marketing strategies of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(vi)       any other information expressly deemed confidential by the officers and directors of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates; and

(vii)      the terms and conditions of the Agreement and any documents or instruments executed in connection herewith that are not of public record.

The Executive shall not, without the prior written consent of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates, use or disclose, or negligently permit any unauthorized person to use, disclose, or gain access to, any Confidential Information.

Upon termination of employment, the Executive hereby agrees to deliver promptly to the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates all memoranda, notes, records, manuals, or other documents, including all copies of such materials, containing Confidential Information, whether made or compiled by the Executive or furnished to him or her from any source by virtue of the Executive’s relationship with the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates.

Regardless of the reason for his or her cessation of employment, the Executive will furnish such information as may be in the Executive’s possession and cooperate with the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates as may reasonably be requested in connection with any claims or legal actions in which the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates are or may become a party.  The Employer will reimburse the Executive for any reasonable out-of-pocket expenses the Executive incurs in order to satisfy his or her obligations under this clause.

(b)        Non-Competition Obligations

In consideration of the covenants of the Employer contained herein, the Executive covenants and agrees with the Employer that, during the "Non-Compete Period" (as hereinafter defined) and within a one hundred fifty (150) "air" mile radius from Bar Harbor, Maine, the Executive shall not without specific approval, directly or indirectly:

(i)         advise any past, present, or future customers of the Employer to withdraw, curtail, or cancel his or her or its business with the Employer; or

(ii)        cause, suggest, or induce others to call on any past, present, or future customers of the Employer.

The "Non-Compete Period" shall commence on the date hereof and terminate one year after the cessation of the Executive’s employment with the Employer and all of its affiliates, regardless of reason, whether or not pursuant to this Agreement.

(c)        Non-Solicitation of Employees

While employed by the Employer, and for one year following cessation of his or her employment with the Employer and all of its affiliates for any reason, the Executive shall not, directly or indirectly, by any means or device whatsoever, for himself or herself or on behalf of, or in conjunction with, any other person, partnership or corporation, solicit, entice, hire, or attempt to hire or employ any employee of the Employer, the Company, the Bank, Trust Services or any of their affiliated entities.

8.         REFORMATION; INJUNCTIVE RELIEF.

(a)        All the parties hereto acknowledge that the parties have carefully considered the nature and scope of this Agreement.  The activities, period and area covered by Section 7 are expressly acknowledged and agreed to be fair, reasonable and necessary.  To the extent that any covenant contained in Section 7 is held to be invalid, illegal or unenforceable because of the extent of activities, duration of such covenant, the geographic area covered thereby, or otherwise, the parties agree that the court making such determination shall reform such covenant to include as much of its nature and scope as will render it enforceable and, in its reduced form, said covenant shall be valid, legal and enforceable to the fullest extent of the law.

The invalidity or unenforceability of any provision of this Agreement, after reformation as provided in this Section 8, shall not affect any other provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

(b)        The Executive acknowledges and agrees that, upon any breach by the Executive of his or her obligations under Section 7 hereof, the Employer will have no adequate remedy at law, and accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief, notwithstanding Section 9 hereof.  Nothing herein shall be construed as prohibiting the Employer from pursuing any other remedies available to it, including the recovery of damages from the Executive.

9.         MEDIATION AND ARBITRATION.

If the Executive and the Employer have any dispute whatsoever relating to the interpretation, validity or performance of this Agreement, or any other dispute arising out of this Agreement, every reasonable attempt will be made to resolve any differences or dispute within thirty (30) days of an issuance of written notice by either party to the other party.

If a successful resolution of any differences or dispute has not been achieved to the satisfaction of both parties at the end of the thirty (30) day period, the following steps will be used:

Except as otherwise expressly provided hereunder, the parties agree that any and all disputes arising out of the Executive’s employment or cessation of employment, including but not limited to any dispute, controversy, or claim arising under any federal, state, or local statute, law, ordinance or regulation or under this Agreement, shall be resolved exclusively by Alternative Dispute Resolution described in this Agreement ("ADR"). The initiation of ADR shall first require mediation, and the parties agree to first try to settle any dispute through mediation.  Mediation shall be initiated by either party by the serving of a written notice of intent to mediate (a "Mediation Notice") by one party upon the other.  If no resolution has been mutually agreed through mediation within ninety (90) days of service of a Mediation Notice, then and only then may the dispute be submitted to arbitration. Arbitration shall be initiated by the serving of a written notice of intent to arbitrate (an "Arbitration Notice") by one party upon the other.  Notwithstanding the foregoing, nothing in this Agreement shall be deemed to preclude the Employer from seeking temporary or permanent injunctive relief and/or damages from a court of competent jurisdiction pursuant to Section 8 of this Agreement with respect to any breach of Section 7 of this Agreement.

(a)        In the event that a party wishes to initiate ADR, a Mediation Notice must be served on the other party within six months from the date on which the claim arose. If the parties cannot mutually agree on a mediator, then a mediator shall be selected in accordance with the Employment Mediation Rules of the American Arbitration Association.

(b)        In the event that mediation is unsuccessful and arbitration is initiated, it shall be conducted under the National Rules of the Resolution of Employment Disputes of the American Arbitration Association. There shall be a single arbitrator to be agreed upon by the parties, provided that, if the parties are unable to agree upon a single arbitrator, each party shall name an arbitrator and the two so named shall name a third arbitrator.  The arbitration proceedings shall be heard by the arbitrator(s) and the decision of the arbitrator, or the majority of the panel if one has been selected, shall be final and binding on the parties. Judgment upon the arbitration award may be entered in any court of competent jurisdiction. An Arbitration Notice must be served on the other party within one year from the date on which the claim arose, and failure to bring such a claim within such one-year period shall constitute a waiver of such claim and an absolute bar to any further proceedings in any forum with respect to it. All mediation and arbitration proceedings shall be conducted in Bangor, Maine, unless the parties otherwise agree in writing.

(c)        The cost of any mediation proceeding under this Section 9 shall be paid entirely by the Employer.  The cost of any arbitration proceeding will be shared equally by the parties to the dispute; provided, however, that, if the dispute is resolved in favor of the Executive, such cost shall be paid in full by the Employer.  Each party shall be responsible for its own cost of representation and counsel.

10.       POST-TERMINATION OBLIGATIONS.

            All payments and benefits due to the Executive under this Agreement shall be subject to the Executive's compliance with this Section 10 for one full year following the Executive's Date of Termination. The Executive shall, upon reasonable notice, furnish such information and assistance to the Employer, the Company, the Bank or Trust Services as may reasonably be required by the Employer, the Company, the Bank or Trust Services in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.

11.       GENERAL PROVISIONS.

(a)        All notices required by this Agreement shall be in writing and shall be sufficiently given if delivered personally or mailed by registered mail or certified mail, return receipt requested, to the parties at their then current addresses. All notices shall be deemed to have been given as of the date so delivered or mailed.

(b)        This Agreement and the plans and agreements described in Section 5(b) contain the entire transaction between the parties, and there are no other representations, warranties, conditions or agreements relating to the subject matter thereof.

(c)        The waiver by any party of any breach or default of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.

(d)        This Agreement may not be changed orally but only by an agreement in writing executed on behalf of the party against which enforcement of any waiver, change, modification, consent or discharge is sought.

(e)        This Agreement shall be binding upon and inure to the benefit of the Employer and the Executive and their respective successors, assigns, heirs and legal representatives (including, but not limited to, any successor of the Employer described in Section 6).

(f)         Each of the parties agrees to execute all further instruments and documents and to take all further action as the other party may reasonably request in order to effectuate the terms and purposes of this Agreement.

(g)        This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.

(h)        This Agreement shall be construed pursuant to and in accordance with the laws of the State of Maine. Actions brought by the Employer under this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts of Maine. Both parties consent to the personal jurisdiction of such courts for such actions, and agree that they may be served with process in accordance with Section 11(a).

(i)         The Executive acknowledges that he has had a full and complete opportunity to review the terms, enforceability and implications of this Agreement, and that the Employer has not made any representations or warranties to the Executive concerning the terms, enforceability and implications of this Agreement other than as are reflected in this Agreement.

(j)         Any provision of this Agreement that is susceptible to more than one interpretation shall be interpreted in a manner that is consistent with this Agreement satisfying the requirements of Code Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Witness:                                                                        COMPANY:

                                                                                    BAR HARBOR BANKSHARES

_________________________                                   By____________________________

                                                                                         Its

Witness:                                                                        EXECUTIVE:

___________________________                               ______________________________

                                                                                    [                                ]

EX-10

Exhibit 10.4

CHANGE IN CONTROL, CONFIDENTIALITY,
AND NONCOMPETITION AGREEMENT

THIS CHANGE IN CONTROL, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT is made and entered into this _____ day of December, 2008 by and between BAR HARBOR BANKSHARES, a Maine corporation with its headquarters located in Bar Harbor, Maine (hereinafter, "the Company"), and JOSHUA RADEL, a resident of Surry, Maine (hereinafter, "the Executive").

W I T N E S S E T H:

WHEREAS, Bar Harbor Banking and Trust Company is a wholly-owned first tier banking subsidiary of Bar Harbor Bankshares, and Bar Harbor Trust Services is a second tier non-depository trust company subsidiary of Bar Harbor Bankshares; and

WHEREAS, the Executive is an employee of the Employer; and

WHEREAS, the Employer wishes to retain the services of the Executive; and

WHEREAS, the Executive and the Company entered into a change in control, confidentiality and noncompetition agreement dated ____________; and

WHEREAS, the Executive and the Company wish to amend and restate such change in control, confidentiality and noncompetition agreement so that the provisions of this Agreement will supersede the change in control, confidentiality and noncompetition agreement dated _____________.

NOW, THEREFORE, the parties hereto do hereby agree as follows:

1.         DEFINTIONS.

1.1.      Bank shall mean Bar Harbor Banking and Trust Company.

1.2.      Base Compensation shall mean the annual base salary payable by the Employer to the Executive, excluding any bonuses, incentive compensation and other forms of additional compensation.

1.3       Cause shall be deemed to exist only in the event the Executive is convicted by a court of competent jurisdiction of a felony involving dishonesty or fraud on the part of the Executive in his or her relationship with the Employer.

1.4.      Change in Control shall mean the occurrence of any one of the following events:

(a)        Any person, including a group (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Bar Harbor Bankshares representing more than fifty percent (50%) of the combined voting power of Bar Harbor Bankshares' then outstanding securities, other than as a result of an issuance of securities initiated by Bar Harbor Bankshares in the ordinary course of its business; or

(b)        Bar Harbor Bankshares is party to a Business Combination (as hereinafter defined) 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 Bar Harbor Bankshares' outstanding voting securities immediately prior to the Business Combination in substantially the same proportions as those existing immediately prior to the Business Combination; or

(c)        The stockholders of Bar Harbor Bankshares approve a plan of complete liquidation of Bar Harbor Bankshares or an agreement for the sale or disposition by Bar Harbor Bankshares of all or substantially all of Bar Harbor Bankshares' assets to another person or entity that is not a wholly owned subsidiary of Bar Harbor Bankshares.

For purposes of this Section 1.4, a Business Combination means any cash tender or exchange offer, merger or other business combination, sale of stock, or sale of all or substantially all of the assets, or any combination of the foregoing transactions.

For purposes of this Section 1.4, a Change in Control shall exclude any internal corporate change, reorganization or other such event, which occurred prior to or may occur following the date of this Agreement.

1.5.      Code shall mean the Internal Revenue Code of 1986, as amended, and as it may be amended from time to time, together with the rules and regulations promulgated under such code.

1.6.      Company shall mean Bar Harbor Bankshares.

1.7.      Date of Termination shall mean:

(a)        If the Executive incurs a separation from service for Disability, thirty (30) days after Notice of Termination for Disability is given by the Employer to the Executive and the Executive shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period;

(b)        If the Executive's service is separated by the Employer for Cause or by the Executive for Good Reason, the date on which the Executive separates from service with the Employer; and

(c)        If the Executive incurs a separation from service for any other reason, the date on which the Executive incurs a separation from service with the Employer.

Whether the Executive has incurred a separation from service is determined based on whether the facts and circumstances indicate that the Employer and the Executive reasonably anticipated that no further services would be performed after a certain date.

1.8.      Disability shall mean a condition:   (a) which causes the Executive to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months; or (b) which results in the Executive receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months, income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer.  Disability shall be deemed to exist only when the disability has been certified to the Board of Directors of the Company by a licensed physician approved by the Board of Directors of the Company.

1.9.      Employer shall mean either the Company, the Bank or Trust Services (whichever entity is the employer of the Executive).

1.10.    Exemption Amount shall mean two times the lesser of:  (a) the Executive’s annualized compensation based on the Executive’s annual rate of pay for the calendar year preceding the calendar year in which the Date of Termination occurs; or (b) the limitation on compensation set forth in Code Section 401(a)(17) for the calendar year in which the Date of Termination occurs.

1.11.    Good Reason shall mean one or more of the following events arising without the consent of the Executive:

(a)        a material diminution in the Executive’s Base Compensation;

(b)        a material diminution in the Executive’s authority, duties or responsibilities;

(c)        a material diminution in the authority, duties or responsibilities of the person to whom the Executive is required to report;

(d)        a material diminution in the budget over which the Executive retains authority;

(e)        a material change in the geographic location at which the Executive must perform his services; or

(f)         any other action or inaction that constitutes a material breach by the Company of the Agreement or any other agreement under which the Executive provides services.

In order for a separation from service to occur for Good Reason, the separation from service must occur within two years following the initial existence of the event constituting Good Reason.

1.12.    Key Employee shall mean an employee who is:   (a) an officer of the Company, the Bank or Trust Services whose earnings from the Company, the Bank and Trust Services exceed $145,000 (as adjusted under Code Section 416(i)(1) for calendar years beginning after December 31, 2007); (b) an owner of more than a five percent (5%) interest in the Company, the Bank or Trust Services; or (c) an owner of more than a one percent (1%) interest in the Company, the Bank or Trust Services whose earnings from the Company, the Bank and Trust Services exceed $150,000.

1.13.    Notice of Termination shall mean the notice provided pursuant to Section 3.

1.14.    Trust Services shall mean Bar Harbor Trust Services.

2.         SEVERANCE BENEFITS.

In the event that: (a) the Employer separates the Executive's service prior to age 65 other than as a result of Disability and other than for Cause, or the Executive separates his or her service prior to age 65 for Good Reason; and (b) the Executive's separation from service occurs in anticipation of or within one year after a Change in Control, then the Employer shall pay the Executive the severance benefits described in this Section 2.  The Executive's separation from service shall be deemed to be in anticipation of a Change in Control if it occurs within the twelve (12) month period prior to the occurrence of the Change in Control.   Notwithstanding the foregoing, if the payment of the severance benefits would result in an excess parachute payment as defined under Code Section 280G, then the amount of the severance benefits to be paid to the Executive shall be reduced to an amount equal to the maximum dollar amount that can be paid to the executive without causing the payment of an excess parachute payment.

The severance benefits described in this Section 2 shall equal the following:

(a)        The Executive shall receive a severance payment equal to 1.0 times the Executive’s Base Compensation, determined as of the Date of Termination.

(i)         Subject to the provisions of Section 2(a)(ii), the Executive’s severance payment shall be paid in twelve equal installments beginning on the first day of the month following the Executive’s Date of Termination.

(ii)        Notwithstanding the provisions of Section 2(a)(i), if the Executive is a Key Employee on the Executive’s Date of Termination, then any portion of the severance payment that would be payable within the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) and that does not exceed the Exemption Amount shall be paid in six equal installments beginning on the first day of the month following the Executive’s Date of Termination.  Any portion of the severance payment that would be payable within the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) and that exceeds the Exemption Amount shall be paid in a lump sum on the first day of the month that is six months after the Executive’s Date of Termination.  Any portion of the severance payment that would be payable after the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) shall be paid in six equal installments beginning on the first day of the month that is six months after the Executive’s Date of Termination.

(b)        The Executive and his or her dependents shall continue to be eligible to receive the same medical, health, dental and life insurance benefits which the Executive is eligible to receive on the Date of Termination. The Executive shall be required to make the same premium contributions that he or she was required to make immediately prior to the Date of Termination. The ability of the Executive and his or her dependents to receive such benefits shall continue until the twelve month anniversary of the Executive’s Date of Termination.

(c)        In the event of a Change in Control, all stock options granted but unexercised under the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan shall become 100% vested immediately prior to such Change in Control.  These grants will remain subject to all of the other terms and conditions in the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan.

The Executive shall not be required to mitigate the amount of any severance benefits described in this Section 2 by seeking other employment.

 3.        NOTICE OF TERMINATION.

Any separation of the Executive's service by the Employer due to Disability or for Cause, or by the Executive due to Good Reason, shall be communicated by written Notice of Termination to the other party.  A Notice of Termination must indicate the specific provisions in this Agreement which are relied upon as the basis for the separation of the Executive's service, and must also set forth in reasonable detail the facts and circumstances claimed to provide the basis for such separation from service under the provisions so indicated.

Notwithstanding the above, in order for the Executive to separate from service with the Employer for Good Reason, the Executive must provide the Notice of Termination to the Employer no later than ninety (90) days after the date of the initial occurrence of the condition or conditions alleged to give rise to Good Reason.  In addition, the Executive must provide the Employer a period of at least thirty (30) days during which the Employer can remedy the condition or conditions alleged to give rise to Good Reason and not be required to pay the amounts described in Section 2. 

4.         LOSS OF SEVERANCE BENEFITS.

If the Employer shall terminate the Executive's service after age 65 or due to Disability or for Cause, or if the Executive shall terminate his or her service after age 65 or other than for Good Reason, or if the Executive shall die, then the Executive shall have no right to receive any severance benefits under this Agreement.

5.         NO OTHER BENEFITS PAYABLE.

(a)        If the Executive is entitled to receive the severance benefits described in Section 2 of this Agreement, he or she shall not be entitled to receive: (i) any severance benefits under the terms of any general severance pay policy or plan of the Employer or any successor company; or (ii) any other compensation, benefits or payments under the terms of any other plan of, or agreement with, the Employer.

(b)        Notwithstanding the above, the Executive shall be entitled to receive any compensation, benefits or payments which are specifically authorized by the terms of any plan of, or agreement with, the Employer to be paid in addition to the severance benefits described in Section 2 of this Agreement.  Moreover, notwithstanding the above, the Executive shall be entitled to receive, in addition to the severance benefits described in Section 2 of this Agreement, any compensation, benefits or payments which the Executive is entitled to receive under: (i) any incentive compensation plan maintained by the Employer which provides for payment to a separated employee of incentive compensation earned by the employee prior to his or her separation from service; or (ii) any payroll plan or policy of the Employer which provides for payment to a separated employee of any unpaid vacation, holiday or sick pay accrued by the employee prior to his or her separation from service.

6.         SUCCESSORS.

(a)        The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Employer would be required to perform them if no such succession had taken place.  Each such successor shall execute a written agreement evidencing its assumption of the Employer's obligations under this Agreement prior to the effective date of any such purchase, merger, consolidation or other transaction.

(b)        The failure of the Employer to obtain from each successor the written agreement described in Section 6(a) shall be deemed to be a material breach of the obligations of the Employer under this Agreement, and shall entitle the Executive to incur a separation from service for Good Reason pursuant to Section 1.11(f).

(c)        As used in this Section 6, the Employer shall include the Company, the Bank, Trust Services and any successor to all or substantially all of the business and/or assets of any of them (whether direct or indirect, by purchase, merger, consolidation or otherwise) which executes and delivers the written agreement described in Section 6(a) or which otherwise becomes bound by all the terms and provisions of this Agreement.

7.         CONFIDENTIAL INFORMATION, NON-COMPETITION OBLIGATIONS, AND NON-SOLICITATION.

(a)        Confidential Information

The Executive recognizes and acknowledges that certain assets of the Employer, the Company, the Bank, Trust Services, or any of their affiliates or subsidiaries constitutes Confidential Information.

For purposes hereof, the term "Confidential Information" means any and all information and compilations of information, in whatever form or medium (including any copies thereof), relating to any part of the business of the Employer, the Company, the Bank, Trust Services or any of their subsidiaries or affiliates, or the business of their customers, provided to the Executive, or which the Executive obtained or compiled or had obtained or compiled on his or her behalf, which information or compilations of information are not a matter of public record or generally known to the public, including without limitation:

(i)         financial information regarding the Employer, the Company, the Bank, Trust Services or any of their subsidiaries or affiliates;

(ii)        personnel data, including compensation arrangements relating to the Executive or any other employees of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(iii)       internal plans, practices, and procedures of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(iv)       the names, portfolio information, investment strategies, requirements, lending or deposit information, or any similar information of any customers, clients, or prospects of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(v)        business methods and marketing strategies of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(vi)       any other information expressly deemed confidential by the officers and directors of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates; and

(vii)      the terms and conditions of the Agreement and any documents or instruments executed in connection herewith that are not of public record.

The Executive shall not, without the prior written consent of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates, use or disclose, or negligently permit any unauthorized person to use, disclose, or gain access to, any Confidential Information.

Upon termination of employment, the Executive hereby agrees to deliver promptly to the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates all memoranda, notes, records, manuals, or other documents, including all copies of such materials, containing Confidential Information, whether made or compiled by the Executive or furnished to him or her from any source by virtue of the Executive’s relationship with the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates.

Regardless of the reason for his or her cessation of employment, the Executive will furnish such information as may be in the Executive’s possession and cooperate with the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates as may reasonably be requested in connection with any claims or legal actions in which the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates are or may become a party.  The Employer will reimburse the Executive for any reasonable out-of-pocket expenses the Executive incurs in order to satisfy his or her obligations under this clause.

(b)        Non-Competition Obligations

In consideration of the covenants of the Employer contained herein, the Executive covenants and agrees with the Employer that, during the "Non-Compete Period" (as hereinafter defined) and within a one hundred fifty (150) "air" mile radius from Bar Harbor, Maine, the Executive shall not without specific approval, directly or indirectly:

(i)         advise any past, present, or future customers of the Employer to withdraw, curtail, or cancel his or her or its business with the Employer; or

(ii)        cause, suggest, or induce others to call on any past, present, or future customers of the Employer.

The "Non-Compete Period" shall commence on the date hereof and terminate one year after the cessation of the Executive’s employment with the Employer and all of its affiliates, regardless of reason, whether or not pursuant to this Agreement.

(c)        Non-Solicitation of Employees

While employed by the Employer, and for one year following cessation of his or her employment with the Employer and all of its affiliates for any reason, the Executive shall not, directly or indirectly, by any means or device whatsoever, for himself or herself or on behalf of, or in conjunction with, any other person, partnership or corporation, solicit, entice, hire, or attempt to hire or employ any employee of the Employer, the Company, the Bank, Trust Services or any of their affiliated entities.

8.         REFORMATION; INJUNCTIVE RELIEF.

(a)        All the parties hereto acknowledge that the parties have carefully considered the nature and scope of this Agreement.  The activities, period and area covered by Section 7 are expressly acknowledged and agreed to be fair, reasonable and necessary.  To the extent that any covenant contained in Section 7 is held to be invalid, illegal or unenforceable because of the extent of activities, duration of such covenant, the geographic area covered thereby, or otherwise, the parties agree that the court making such determination shall reform such covenant to include as much of its nature and scope as will render it enforceable and, in its reduced form, said covenant shall be valid, legal and enforceable to the fullest extent of the law.

The invalidity or unenforceability of any provision of this Agreement, after reformation as provided in this Section 8, shall not affect any other provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

(b)        The Executive acknowledges and agrees that, upon any breach by the Executive of his or her obligations under Section 7 hereof, the Employer will have no adequate remedy at law, and accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief, notwithstanding Section 9 hereof.  Nothing herein shall be construed as prohibiting the Employer from pursuing any other remedies available to it, including the recovery of damages from the Executive.

9.         MEDIATION AND ARBITRATION.

If the Executive and the Employer have any dispute whatsoever relating to the interpretation, validity or performance of this Agreement, or any other dispute arising out of this Agreement, every reasonable attempt will be made to resolve any differences or dispute within thirty (30) days of an issuance of written notice by either party to the other party.

If a successful resolution of any differences or dispute has not been achieved to the satisfaction of both parties at the end of the thirty (30) day period, the following steps will be used:

Except as otherwise expressly provided hereunder, the parties agree that any and all disputes arising out of the Executive’s employment or cessation of employment, including but not limited to any dispute, controversy, or claim arising under any federal, state, or local statute, law, ordinance or regulation or under this Agreement, shall be resolved exclusively by Alternative Dispute Resolution described in this Agreement ("ADR"). The initiation of ADR shall first require mediation, and the parties agree to first try to settle any dispute through mediation.  Mediation shall be initiated by either party by the serving of a written notice of intent to mediate (a "Mediation Notice") by one party upon the other.  If no resolution has been mutually agreed through mediation within ninety (90) days of service of a Mediation Notice, then and only then may the dispute be submitted to arbitration. Arbitration shall be initiated by the serving of a written notice of intent to arbitrate (an "Arbitration Notice") by one party upon the other.  Notwithstanding the foregoing, nothing in this Agreement shall be deemed to preclude the Employer from seeking temporary or permanent injunctive relief and/or damages from a court of competent jurisdiction pursuant to Section 8 of this Agreement with respect to any breach of Section 7 of this Agreement.

(a)        In the event that a party wishes to initiate ADR, a Mediation Notice must be served on the other party within six months from the date on which the claim arose. If the parties cannot mutually agree on a mediator, then a mediator shall be selected in accordance with the Employment Mediation Rules of the American Arbitration Association.

(b)        In the event that mediation is unsuccessful and arbitration is initiated, it shall be conducted under the National Rules of the Resolution of Employment Disputes of the American Arbitration Association. There shall be a single arbitrator to be agreed upon by the parties, provided that, if the parties are unable to agree upon a single arbitrator, each party shall name an arbitrator and the two so named shall name a third arbitrator.  The arbitration proceedings shall be heard by the arbitrator(s) and the decision of the arbitrator, or the majority of the panel if one has been selected, shall be final and binding on the parties. Judgment upon the arbitration award may be entered in any court of competent jurisdiction. An Arbitration Notice must be served on the other party within one year from the date on which the claim arose, and failure to bring such a claim within such one-year period shall constitute a waiver of such claim and an absolute bar to any further proceedings in any forum with respect to it. All mediation and arbitration proceedings shall be conducted in Bangor, Maine, unless the parties otherwise agree in writing.

(c)        The cost of any mediation proceeding under this Section 9 shall be paid entirely by the Employer.  The cost of any arbitration proceeding will be shared equally by the parties to the dispute; provided, however, that, if the dispute is resolved in favor of the Executive, such cost shall be paid in full by the Employer.  Each party shall be responsible for its own cost of representation and counsel.

10.       POST-TERMINATION OBLIGATIONS.

            All payments and benefits due to the Executive under this Agreement shall be subject to the Executive's compliance with this Section 10 for one full year following the Executive's Date of Termination. The Executive shall, upon reasonable notice, furnish such information and assistance to the Employer, the Company, the Bank or Trust Services as may reasonably be required by the Employer, the Company, the Bank or Trust Services in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.

11.       GENERAL PROVISIONS.

(a)        All notices required by this Agreement shall be in writing and shall be sufficiently given if delivered personally or mailed by registered mail or certified mail, return receipt requested, to the parties at their then current addresses. All notices shall be deemed to have been given as of the date so delivered or mailed.

(b)        This Agreement and the plans and agreements described in Section 5(b) contain the entire transaction between the parties, and there are no other representations, warranties, conditions or agreements relating to the subject matter thereof.

(c)        The waiver by any party of any breach or default of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.

(d)        This Agreement may not be changed orally but only by an agreement in writing executed on behalf of the party against which enforcement of any waiver, change, modification, consent or discharge is sought.

(e)        This Agreement shall be binding upon and inure to the benefit of the Employer and the Executive and their respective successors, assigns, heirs and legal representatives (including, but not limited to, any successor of the Employer described in Section 6).

(f)         Each of the parties agrees to execute all further instruments and documents and to take all further action as the other party may reasonably request in order to effectuate the terms and purposes of this Agreement.

(g)        This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.

(h)        This Agreement shall be construed pursuant to and in accordance with the laws of the State of Maine. Actions brought by the Employer under this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts of Maine. Both parties consent to the personal jurisdiction of such courts for such actions, and agree that they may be served with process in accordance with Section 11(a).

(i)         The Executive acknowledges that he has had a full and complete opportunity to review the terms, enforceability and implications of this Agreement, and that the Employer has not made any representations or warranties to the Executive concerning the terms, enforceability and implications of this Agreement other than as are reflected in this Agreement.

(j)         Any provision of this Agreement that is susceptible to more than one interpretation shall be interpreted in a manner that is consistent with this Agreement satisfying the requirements of Code Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Witness:                                                                        COMPANY:

                                                                                    BAR HARBOR BANKSHARES

_________________________                                   By____________________________

                                                                                         Its

Witness:                                                                        EXECUTIVE:

___________________________                               ______________________________

                                                                                    [                                ]

EX-10

Exhibit 10.5

CHANGE IN CONTROL, CONFIDENTIALITY,
AND NONCOMPETITION AGREEMENT

THIS CHANGE IN CONTROL, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT is made and entered into this _____ day of December, 2008 by and between BAR HARBOR BANKSHARES, a Maine corporation with its headquarters located in Bar Harbor, Maine (hereinafter, "the Company"), and DAVID THIBAULT, a resident of Ellsworth, Maine (hereinafter, "the Executive").

W I T N E S S E T H:

WHEREAS, Bar Harbor Banking and Trust Company is a wholly-owned first tier banking subsidiary of Bar Harbor Bankshares, and Bar Harbor Trust Services is a second tier non-depository trust company subsidiary of Bar Harbor Bankshares; and

WHEREAS, the Executive is an employee of the Employer; and

WHEREAS, the Employer wishes to retain the services of the Executive; and

WHEREAS, the Executive and the Company entered into a change in control, confidentiality and noncompetition agreement dated ____________; and

WHEREAS, the Executive and the Company wish to amend and restate such change in control, confidentiality and noncompetition agreement so that the provisions of this Agreement will supersede the change in control, confidentiality and noncompetition agreement dated _____________.

NOW, THEREFORE, the parties hereto do hereby agree as follows:

1.         DEFINTIONS.

1.1.      Bank shall mean Bar Harbor Banking and Trust Company.

1.2.      Base Compensation shall mean the annual base salary payable by the Employer to the Executive, excluding any bonuses, incentive compensation and other forms of additional compensation.

1.3       Cause shall be deemed to exist only in the event the Executive is convicted by a court of competent jurisdiction of a felony involving dishonesty or fraud on the part of the Executive in his or her relationship with the Employer.

1.4.      Change in Control shall mean the occurrence of any one of the following events:

(a)        Any person, including a group (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Bar Harbor Bankshares representing more than fifty percent (50%) of the combined voting power of Bar Harbor Bankshares' then outstanding securities, other than as a result of an issuance of securities initiated by Bar Harbor Bankshares in the ordinary course of its business; or

(b)        Bar Harbor Bankshares is party to a Business Combination (as hereinafter defined) 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 Bar Harbor Bankshares' outstanding voting securities immediately prior to the Business Combination in substantially the same proportions as those existing immediately prior to the Business Combination; or

(c)        The stockholders of Bar Harbor Bankshares approve a plan of complete liquidation of Bar Harbor Bankshares or an agreement for the sale or disposition by Bar Harbor Bankshares of all or substantially all of Bar Harbor Bankshares' assets to another person or entity that is not a wholly owned subsidiary of Bar Harbor Bankshares.

For purposes of this Section 1.4, a Business Combination means any cash tender or exchange offer, merger or other business combination, sale of stock, or sale of all or substantially all of the assets, or any combination of the foregoing transactions.

For purposes of this Section 1.4, a Change in Control shall exclude any internal corporate change, reorganization or other such event, which occurred prior to or may occur following the date of this Agreement.

1.5.      Code shall mean the Internal Revenue Code of 1986, as amended, and as it may be amended from time to time, together with the rules and regulations promulgated under such code.

1.6.      Company shall mean Bar Harbor Bankshares.

1.7.      Date of Termination shall mean:

(a)        If the Executive incurs a separation from service for Disability, thirty (30) days after Notice of Termination for Disability is given by the Employer to the Executive and the Executive shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period;

(b)        If the Executive's service is separated by the Employer for Cause or by the Executive for Good Reason, the date on which the Executive separates from service with the Employer; and

(c)        If the Executive incurs a separation from service for any other reason, the date on which the Executive incurs a separation from service with the Employer.

Whether the Executive has incurred a separation from service is determined based on whether the facts and circumstances indicate that the Employer and the Executive reasonably anticipated that no further services would be performed after a certain date.

1.8.      Disability shall mean a condition:   (a) which causes the Executive to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months; or (b) which results in the Executive receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months, income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer.  Disability shall be deemed to exist only when the disability has been certified to the Board of Directors of the Company by a licensed physician approved by the Board of Directors of the Company.

1.9.      Employer shall mean either the Company, the Bank or Trust Services (whichever entity is the employer of the Executive).

1.10.    Exemption Amount shall mean two times the lesser of:  (a) the Executive’s annualized compensation based on the Executive’s annual rate of pay for the calendar year preceding the calendar year in which the Date of Termination occurs; or (b) the limitation on compensation set forth in Code Section 401(a)(17) for the calendar year in which the Date of Termination occurs.

1.11.    Good Reason shall mean one or more of the following events arising without the consent of the Executive:

(a)        a material diminution in the Executive’s Base Compensation;

(b)        a material diminution in the Executive’s authority, duties or responsibilities;

(c)        a material diminution in the authority, duties or responsibilities of the person to whom the Executive is required to report;

(d)        a material diminution in the budget over which the Executive retains authority;

(e)        a material change in the geographic location at which the Executive must perform his services; or

(f)         any other action or inaction that constitutes a material breach by the Company of the Agreement or any other agreement under which the Executive provides services.

In order for a separation from service to occur for Good Reason, the separation from service must occur within two years following the initial existence of the event constituting Good Reason.

1.12.    Key Employee shall mean an employee who is:   (a) an officer of the Company, the Bank or Trust Services whose earnings from the Company, the Bank and Trust Services exceed $145,000 (as adjusted under Code Section 416(i)(1) for calendar years beginning after December 31, 2007); (b) an owner of more than a five percent (5%) interest in the Company, the Bank or Trust Services; or (c) an owner of more than a one percent (1%) interest in the Company, the Bank or Trust Services whose earnings from the Company, the Bank and Trust Services exceed $150,000.

1.13.    Notice of Termination shall mean the notice provided pursuant to Section 3.

1.14.    Trust Services shall mean Bar Harbor Trust Services.

2.         SEVERANCE BENEFITS.

In the event that: (a) the Employer separates the Executive's service prior to age 65 other than as a result of Disability and other than for Cause, or the Executive separates his or her service prior to age 65 for Good Reason; and (b) the Executive's separation from service occurs in anticipation of or within one year after a Change in Control, then the Employer shall pay the Executive the severance benefits described in this Section 2.  The Executive's separation from service shall be deemed to be in anticipation of a Change in Control if it occurs within the twelve (12) month period prior to the occurrence of the Change in Control.

Notwithstanding the foregoing, if the payment of the severance benefits would result in an excess parachute payment as defined under Code Section 280G, then the amount of the severance benefits to be paid to the Executive shall be reduced to an amount equal to the maximum dollar amount that can be paid to the executive without causing the payment of an excess parachute payment.

The severance benefits described in this Section 2 shall equal the following:

(a)        The Executive shall receive a severance payment equal to 1.0 times the Executive’s Base Compensation, determined as of the Date of Termination.

(i)         Subject to the provisions of Section 2(a)(ii), the Executive’s severance payment shall be paid in twelve equal installments beginning on the first day of the month following the Executive’s Date of Termination.

(ii)        Notwithstanding the provisions of Section 2(a)(i), if the Executive is a Key Employee on the Executive’s Date of Termination, then any portion of the severance payment that would be payable within the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) and that does not exceed the Exemption Amount shall be paid in six equal installments beginning on the first day of the month following the Executive’s Date of Termination.  Any portion of the severance payment that would be payable within the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) and that exceeds the Exemption Amount shall be paid in a lump sum on the first day of the month that is six months after the Executive’s Date of Termination.  Any portion of the severance payment that would be payable after the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) shall be paid in six equal installments beginning on the first day of the month that is six months after the Executive’s Date of Termination.

(b)        The Executive and his or her dependents shall continue to be eligible to receive the same medical, health, dental and life insurance benefits which the Executive is eligible to receive on the Date of Termination. The Executive shall be required to make the same premium contributions that he or she was required to make immediately prior to the Date of Termination. The ability of the Executive and his or her dependents to receive such benefits shall continue until the twelve month anniversary of the Executive’s Date of Termination.

(c)        In the event of a Change in Control, all stock options granted but unexercised under the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan shall become 100% vested immediately prior to such Change in Control.  These grants will remain subject to all of the other terms and conditions in the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan.

The Executive shall not be required to mitigate the amount of any severance benefits described in this Section 2 by seeking other employment.

 3.        NOTICE OF TERMINATION.

Any separation of the Executive's service by the Employer due to Disability or for Cause, or by the Executive due to Good Reason, shall be communicated by written Notice of Termination to the other party.  A Notice of Termination must indicate the specific provisions in this Agreement which are relied upon as the basis for the separation of the Executive's service, and must also set forth in reasonable detail the facts and circumstances claimed to provide the basis for such separation from service under the provisions so indicated.

Notwithstanding the above, in order for the Executive to separate from service with the Employer for Good Reason, the Executive must provide the Notice of Termination to the Employer no later than ninety (90) days after the date of the initial occurrence of the condition or conditions alleged to give rise to Good Reason.  In addition, the Executive must provide the Employer a period of at least thirty (30) days during which the Employer can remedy the condition or conditions alleged to give rise to Good Reason and not be required to pay the amounts described in Section 2. 

4.         LOSS OF SEVERANCE BENEFITS.

If the Employer shall terminate the Executive's service after age 65 or due to Disability or for Cause, or if the Executive shall terminate his or her service after age 65 or other than for Good Reason, or if the Executive shall die, then the Executive shall have no right to receive any severance benefits under this Agreement.

5.         NO OTHER BENEFITS PAYABLE.

(a)        If the Executive is entitled to receive the severance benefits described in Section 2 of this Agreement, he or she shall not be entitled to receive: (i) any severance benefits under the terms of any general severance pay policy or plan of the Employer or any successor company; or (ii) any other compensation, benefits or payments under the terms of any other plan of, or agreement with, the Employer.

(b)        Notwithstanding the above, the Executive shall be entitled to receive any compensation, benefits or payments which are specifically authorized by the terms of any plan of, or agreement with, the Employer to be paid in addition to the severance benefits described in Section 2 of this Agreement.  Moreover, notwithstanding the above, the Executive shall be entitled to receive, in addition to the severance benefits described in Section 2 of this Agreement, any compensation, benefits or payments which the Executive is entitled to receive under: (i) any incentive compensation plan maintained by the Employer which provides for payment to a separated employee of incentive compensation earned by the employee prior to his or her separation from service; or (ii) any payroll plan or policy of the Employer which provides for payment to a separated employee of any unpaid vacation, holiday or sick pay accrued by the employee prior to his or her separation from service.

6.         SUCCESSORS.

(a)        The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Employer would be required to perform them if no such succession had taken place.  Each such successor shall execute a written agreement evidencing its assumption of the Employer's obligations under this Agreement prior to the effective date of any such purchase, merger, consolidation or other transaction.

(b)        The failure of the Employer to obtain from each successor the written agreement described in Section 6(a) shall be deemed to be a material breach of the obligations of the Employer under this Agreement, and shall entitle the Executive to incur a separation from service for Good Reason pursuant to Section 1.11(f).

(c)        As used in this Section 6, the Employer shall include the Company, the Bank, Trust Services and any successor to all or substantially all of the business and/or assets of any of them (whether direct or indirect, by purchase, merger, consolidation or otherwise) which executes and delivers the written agreement described in Section 6(a) or which otherwise becomes bound by all the terms and provisions of this Agreement.

7.         CONFIDENTIAL INFORMATION, NON-COMPETITION OBLIGATIONS, AND NON-SOLICITATION.

(a)        Confidential Information

The Executive recognizes and acknowledges that certain assets of the Employer, the Company, the Bank, Trust Services, or any of their affiliates or subsidiaries constitutes Confidential Information.

For purposes hereof, the term "Confidential Information" means any and all information and compilations of information, in whatever form or medium (including any copies thereof), relating to any part of the business of the Employer, the Company, the Bank, Trust Services or any of their subsidiaries or affiliates, or the business of their customers, provided to the Executive, or which the Executive obtained or compiled or had obtained or compiled on his or her behalf, which information or compilations of information are not a matter of public record or generally known to the public, including without limitation:

(i)         financial information regarding the Employer, the Company, the Bank, Trust Services or any of their subsidiaries or affiliates;

(ii)        personnel data, including compensation arrangements relating to the Executive or any other employees of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(iii)       internal plans, practices, and procedures of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(iv)       the names, portfolio information, investment strategies, requirements, lending or deposit information, or any similar information of any customers, clients, or prospects of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(v)        business methods and marketing strategies of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(vi)       any other information expressly deemed confidential by the officers and directors of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates; and

(vii)      the terms and conditions of the Agreement and any documents or instruments executed in connection herewith that are not of public record.

The Executive shall not, without the prior written consent of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates, use or disclose, or negligently permit any unauthorized person to use, disclose, or gain access to, any Confidential Information.

Upon termination of employment, the Executive hereby agrees to deliver promptly to the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates all memoranda, notes, records, manuals, or other documents, including all copies of such materials, containing Confidential Information, whether made or compiled by the Executive or furnished to him or her from any source by virtue of the Executive’s relationship with the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates.

Regardless of the reason for his or her cessation of employment, the Executive will furnish such information as may be in the Executive’s possession and cooperate with the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates as may reasonably be requested in connection with any claims or legal actions in which the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates are or may become a party.  The Employer will reimburse the Executive for any reasonable out-of-pocket expenses the Executive incurs in order to satisfy his or her obligations under this clause.

(b)        Non-Competition Obligations

In consideration of the covenants of the Employer contained herein, the Executive covenants and agrees with the Employer that, during the "Non-Compete Period" (as hereinafter defined) and within a one hundred fifty (150) "air" mile radius from Bar Harbor, Maine, the Executive shall not without specific approval, directly or indirectly:

(i)         advise any past, present, or future customers of the Employer to withdraw, curtail, or cancel his or her or its business with the Employer; or

(ii)        cause, suggest, or induce others to call on any past, present, or future customers of the Employer.

The "Non-Compete Period" shall commence on the date hereof and terminate one year after the cessation of the Executive’s employment with the Employer and all of its affiliates, regardless of reason, whether or not pursuant to this Agreement.

(c)        Non-Solicitation of Employees

While employed by the Employer, and for one year following cessation of his or her employment with the Employer and all of its affiliates for any reason, the Executive shall not, directly or indirectly, by any means or device whatsoever, for himself or herself or on behalf of, or in conjunction with, any other person, partnership or corporation, solicit, entice, hire, or attempt to hire or employ any employee of the Employer, the Company, the Bank, Trust Services or any of their affiliated entities.

8.         REFORMATION; INJUNCTIVE RELIEF.

(a)        All the parties hereto acknowledge that the parties have carefully considered the nature and scope of this Agreement.  The activities, period and area covered by Section 7 are expressly acknowledged and agreed to be fair, reasonable and necessary.  To the extent that any covenant contained in Section 7 is held to be invalid, illegal or unenforceable because of the extent of activities, duration of such covenant, the geographic area covered thereby, or otherwise, the parties agree that the court making such determination shall reform such covenant to include as much of its nature and scope as will render it enforceable and, in its reduced form, said covenant shall be valid, legal and enforceable to the fullest extent of the law.

The invalidity or unenforceability of any provision of this Agreement, after reformation as provided in this Section 8, shall not affect any other provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

(b)        The Executive acknowledges and agrees that, upon any breach by the Executive of his or her obligations under Section 7 hereof, the Employer will have no adequate remedy at law, and accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief, notwithstanding Section 9 hereof.  Nothing herein shall be construed as prohibiting the Employer from pursuing any other remedies available to it, including the recovery of damages from the Executive.

9.         MEDIATION AND ARBITRATION.

If the Executive and the Employer have any dispute whatsoever relating to the interpretation, validity or performance of this Agreement, or any other dispute arising out of this Agreement, every reasonable attempt will be made to resolve any differences or dispute within thirty (30) days of an issuance of written notice by either party to the other party.

If a successful resolution of any differences or dispute has not been achieved to the satisfaction of both parties at the end of the thirty (30) day period, the following steps will be used:

Except as otherwise expressly provided hereunder, the parties agree that any and all disputes arising out of the Executive’s employment or cessation of employment, including but not limited to any dispute, controversy, or claim arising under any federal, state, or local statute, law, ordinance or regulation or under this Agreement, shall be resolved exclusively by Alternative Dispute Resolution described in this Agreement ("ADR"). The initiation of ADR shall first require mediation, and the parties agree to first try to settle any dispute through mediation.  Mediation shall be initiated by either party by the serving of a written notice of intent to mediate (a "Mediation Notice") by one party upon the other.  If no resolution has been mutually agreed through mediation within ninety (90) days of service of a Mediation Notice, then and only then may the dispute be submitted to arbitration. Arbitration shall be initiated by the serving of a written notice of intent to arbitrate (an "Arbitration Notice") by one party upon the other.  Notwithstanding the foregoing, nothing in this Agreement shall be deemed to preclude the Employer from seeking temporary or permanent injunctive relief and/or damages from a court of competent jurisdiction pursuant to Section 8 of this Agreement with respect to any breach of Section 7 of this Agreement.

(a)        In the event that a party wishes to initiate ADR, a Mediation Notice must be served on the other party within six months from the date on which the claim arose. If the parties cannot mutually agree on a mediator, then a mediator shall be selected in accordance with the Employment Mediation Rules of the American Arbitration Association.

(b)        In the event that mediation is unsuccessful and arbitration is initiated, it shall be conducted under the National Rules of the Resolution of Employment Disputes of the American Arbitration Association. There shall be a single arbitrator to be agreed upon by the parties, provided that, if the parties are unable to agree upon a single arbitrator, each party shall name an arbitrator and the two so named shall name a third arbitrator.  The arbitration proceedings shall be heard by the arbitrator(s) and the decision of the arbitrator, or the majority of the panel if one has been selected, shall be final and binding on the parties. Judgment upon the arbitration award may be entered in any court of competent jurisdiction. An Arbitration Notice must be served on the other party within one year from the date on which the claim arose, and failure to bring such a claim within such one-year period shall constitute a waiver of such claim and an absolute bar to any further proceedings in any forum with respect to it. All mediation and arbitration proceedings shall be conducted in Bangor, Maine, unless the parties otherwise agree in writing.

(c)        The cost of any mediation proceeding under this Section 9 shall be paid entirely by the Employer.  The cost of any arbitration proceeding will be shared equally by the parties to the dispute; provided, however, that, if the dispute is resolved in favor of the Executive, such cost shall be paid in full by the Employer.  Each party shall be responsible for its own cost of representation and counsel.

10.       POST-TERMINATION OBLIGATIONS.

            All payments and benefits due to the Executive under this Agreement shall be subject to the Executive's compliance with this Section 10 for one full year following the Executive's Date of Termination. The Executive shall, upon reasonable notice, furnish such information and assistance to the Employer, the Company, the Bank or Trust Services as may reasonably be required by the Employer, the Company, the Bank or Trust Services in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.

11.       GENERAL PROVISIONS.

(a)        All notices required by this Agreement shall be in writing and shall be sufficiently given if delivered personally or mailed by registered mail or certified mail, return receipt requested, to the parties at their then current addresses. All notices shall be deemed to have been given as of the date so delivered or mailed.

(b)        This Agreement and the plans and agreements described in Section 5(b) contain the entire transaction between the parties, and there are no other representations, warranties, conditions or agreements relating to the subject matter thereof.

(c)        The waiver by any party of any breach or default of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.

(d)        This Agreement may not be changed orally but only by an agreement in writing executed on behalf of the party against which enforcement of any waiver, change, modification, consent or discharge is sought.

(e)        This Agreement shall be binding upon and inure to the benefit of the Employer and the Executive and their respective successors, assigns, heirs and legal representatives (including, but not limited to, any successor of the Employer described in Section 6).

(f)         Each of the parties agrees to execute all further instruments and documents and to take all further action as the other party may reasonably request in order to effectuate the terms and purposes of this Agreement.

(g)        This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.

(h)        This Agreement shall be construed pursuant to and in accordance with the laws of the State of Maine. Actions brought by the Employer under this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts of Maine. Both parties consent to the personal jurisdiction of such courts for such actions, and agree that they may be served with process in accordance with Section 11(a).

(i)         The Executive acknowledges that he has had a full and complete opportunity to review the terms, enforceability and implications of this Agreement, and that the Employer has not made any representations or warranties to the Executive concerning the terms, enforceability and implications of this Agreement other than as are reflected in this Agreement.

(j)         Any provision of this Agreement that is susceptible to more than one interpretation shall be interpreted in a manner that is consistent with this Agreement satisfying the requirements of Code Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Witness:                                                                        COMPANY:

                                                                                    BAR HARBOR BANKSHARES

_________________________                                   By____________________________

                                                                                         Its

Witness:                                                                        EXECUTIVE:

___________________________                               ______________________________

                                                                                    [                                ]

EX-10

Exhibit 10.7

BAR HARBOR BANKSHARES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
- - CODE SECTION 409A

As adopted
effective as of January 1, 2005
Amended November, 2008

BAR HARBOR BANKSHARES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
- - CODE SECTION 409A

Table of Contents

ARTICLE 1 DESIGNATION AND PURPOSE

                        1.1 Designation
                        1.2 Purpose
                        1.3 Code Section 409A
                        1.4 Effective Date

ARTICLE 2 DEFINITIONS

ARTICLE 3 ELIGIBILITY

    3.1 Eligibility to Participate
    3.2 Duration of Participation

ARTICLE 4 RETIREMENT BENEFITS

                        4.1 Normal Retirement Benefit
                        4.2 Early Retirement Benefit
                        4.3 Disability Retirement Benefit
                        4.4 Vested Deferred Benefit
                        4.5 Change in Form of Distribution
                        4.6 One-Time Election Opportunity

ARTICLE 5 DEATH BENEFIT

                        5.1 Death Before Benefit Commencement
                        5.2 Death After Benefit Commencement
                        5.3 No Other Death Benefits

ARTICLE 6 UNFORESEEABLE EMERGENCY

                        6.1 Withdrawal for Unforeseeable Emergency

ARTICLE 7 OTHER PLAN PROVISIONS

                        7.1 Funding
                        7.2 Consent to Insurance Procedures
                        7.3 Benefits Not Assignable
                        7.4 Beneficiaries

ARTICLE 8 REEMPLOYMENT AND TERMINATION OF BENEFIT PAYMENTS

                        8.1 Reemployment
                        8.2 Termination of Benefit Payments

ARTICLE 9 ADMINISTRATION

                        9.1 Plan Administrator
                        9.2 Powers of Plan Administrator
                        9.3 Annual Statements
                        9.4 Facility of Payment
                        9.5 Reliance on Professionals
                        9.6 Payment of Expenses

ARTICLE 10 BENEFIT CLAIMS PROCEDURE

                        10.1 Claims Procedure
                        10.2 Mediation and Arbitration

ARTICLE 11 AMENDMENT

                        11.1 Right to Amend

ARTICLE 12 MISCELLANEOUS

                        12.1 Titles are for Reference Only
                        12.2 Construction
                        12.3 Successors
                        12.4 No Contract
                        12.5 Beneficiaries' Rights
                        12.6 Gender and Number
                        12.7 Code Section 409A

ANNEX A Schedule of Benefits

BAR HARBOR BANKSHARES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
- - CODE SECTION 409A

            Pursuant to a resolution of its board of directors, Bar Harbor Bankshares, a Maine corporation, has adopted this supplemental executive retirement plan.

ARTICLE 1
DESIGNATION AND PURPOSE

            1.1 Designation. The Plan is designated the "Bar Harbor Bankshares Supplemental Executive Retirement Plan – Code Section 409A".

            1.2 Purpose. The purpose of the Plan is to provide certain eligible employees of Bar Harbor Bankshares and its affiliated companies with retirement income pursuant to an unfunded, deferred compensation arrangement maintained solely for a select group of management or highly compensated employees.

            1.3 Code Section 409A. Effective as of January 1, 2003, Bar Harbor Bankshares adopted the "Bar Harbor Bankshares Supplemental Executive Retirement Plan" (the "Grandfathered Plan") for the purpose of providing deferred compensation for a select group of management or highly compensated employees. Bar Harbor Bankshares intends that the Grandfathered Plan be treated as a grandfathered plan that is exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") because it relates solely to deferred compensation that was both earned and vested prior January 1, 2005. This Plan shall be deemed to be subject to the requirements of Code Section 409A and shall relate solely to deferred compensation that is either earned or vested on or after January 1, 2005.

            1.4 Effective Date. The effective date of this Plan is January 1, 2005.

ARTICLE 2
DEFINITIONS

            When used herein, each of the words and phrases defined hereinafter shall have the following meaning unless a different meaning is clearly required by the context of the Plan.

            "Accrued Benefit" shall mean the excess of: (a) the monthly retirement benefit which a Participant is entitled to receive if the payment of his or her benefit commences prior to his or her Normal Retirement Date, as set forth in Section A.3 of Annex A; over (b) the monthly retirement benefit which was both earned and vested by the Participant prior to January 1, 2005 under the terms of the Grandfathered Plan.

            "Beneficiary" shall mean the person or persons named by the Participant as his or her beneficiary pursuant to the provisions of Section 7.4.

            "Cause" shall be deemed to exist only in the event the Participant is convicted by a court of competent jurisdiction of a felony involving dishonesty or fraud on the part of the Participant in his or her relationship with the Company.

            "Change in Control" shall mean the occurrence of any one of the following events:

            (a)  Any person, including a group (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Principal Company representing more than fifty percent (50%) of the combined voting power of the Principal Company’s then outstanding securities, other than as a result of an issuance of securities initiated by the Principal Company in the ordinary course of its business; or

            (b)  The Principal Company is party to a Business Combination (as hereinafter defined) 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 Principal Company’s outstanding voting securities immediately prior to the Business Combination in substantially the same proportions as those existing immediately prior to the Business Combination; or

            (c)  The stockholders of the Principal Company approve a plan of complete liquidation of the Principal Company or an agreement for the sale or disposition by the Principal Company of substantially all of the Principal Company’s assets to another person or entity which is not a wholly-owned subsidiary of the Principal Company.

             For purposes of the foregoing, a "Business Combination" means any cash tender or exchange offer, merger or other business combination, sale of stock, or sale of all or substantially all of the assets or any combination of the foregoing transactions.

            No internal reorganization of the board of directors of the Principal Company or any affiliate’s board membership will be deemed to be a Change in Control for purposes of the foregoing.

            "Code" shall mean the Internal Revenue Code of 1986, as amended.

            "Company" shall mean the Principal Company and any other corporation or other entity which has assumed the obligations of the Plan with respect to its employees with the consent of the Principal Company, and any successor thereof.

            "Disabled Participant" shall mean a Participant who has a condition: (a) which causes the Participant to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months; or (b) which results in the Participant receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months, income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. Disability shall be deemed to exist only when a written application has been filed with the Plan Administrator by or on behalf of the Participant and, with respect to a condition described in subparagraph (a), when such disability is certified to the Plan Administrator by a licensed physician approved by the Plan Administrator.

            "Disability Retirement Date" shall mean the date on which the Plan Administrator determines that a Participant is a Disabled Participant.

            "Early Retirement Date" shall mean the date on which a Participant reaches age fifty (50).

            "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.

            "Good Reason" shall mean, unless the Participant consents to such action, a reduction in the Participant’s compensation that does not apply generally to all senior executive officers of the Company, a material reduction in the duties of the Participant, or a change in the principal worksite of the Participant to a location that is more than fifty (50) miles from Bar Harbor, Maine.

            "Grandfathered Plan" shall mean the Bar Harbor Bankshares Supplemental Executive Retirement Plan which is maintained by the Company for the purpose of providing deferred compensation for a select group of management or highly compensated employees, and which is intended to be treated as a grandfathered plan that is exempt from the requirements of Code Section 409A because it relates solely to deferred compensation that was both earned and vested prior January 1, 2005.

            "Key Employee" shall mean an employee of the Company who is a key employee, as defined for purposes of Section 416(i) of the Code. For this purpose, a key employee includes an employee: (a) who is a five percent owner of the Company; (b) who is an officer of the Company and who has annual compensation greater than $130,000 (as adjusted by the Secretary of the Treasury); or (c) who is a one percent owner of the Company and who has annual compensation greater than $150,000 (as adjusted by the Secretary of the Treasury).

            "Normal Retirement Benefit" shall mean the excess of: (a) the monthly retirement benefit which a Participant is entitled to receive if the payment of his or her benefit commences on or after his or her Normal Retirement Date, as set forth in Section A.2 of Annex A; over (b) the monthly retirement benefit which was both earned and vested by the Participant prior to January 1, 2005 under the terms of the Grandfathered Plan.

            "Normal Retirement Date" shall mean the date on which a Participant reaches the age set forth in Section A.1 of Annex A.

            "Participant" shall mean an individual who is designated in Article 3 of the Plan as being eligible to participate in the Plan.

            "Plan" shall mean the Bar Harbor Bankshares Supplemental Executive Retirement Plan – Code Section 409A as of its original effective date, including any amendments thereto.

            "Plan Administrator" shall mean the board of directors of the Principal Company. The Plan Administrator shall be a named fiduciary with respect to the Plan.

            "Plan Year" shall mean the twelve month period ending on December 31 of each year.

            "Present Value" shall mean the lump sum present value of a benefit which a Participant or Beneficiary is entitled to receive under the Plan, determined as of a particular date and calculated using reasonable actuarial assumptions (as determined by the Plan Administrator).

            "Principal Company" shall mean Bar Harbor Bankshares.

            "Retirement Benefit" shall mean a Normal Retirement Benefit, an Early Retirement Benefit, a Disability Retirement Benefit or a Vested Deferred Benefit, each as defined in Article 4.

            "Unforeseeable Emergency" shall mean a severe financial hardship to the Participant resulting from: (a) an illness or accident of the Participant, the Participant's spouse, or a dependent of the Participant (as defined in Section 152 of the Code, without regard to Section 152(b)(1),(b)(2) and (d)(1)(B)); (b) loss of the Participant's property due to casualty; or (c) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The determination of an Unforeseeable Emergency shall be made by the Plan Administrator in its sole discretion, based on such information as the Plan Administrator shall deem to be necessary.

ARTICLE 3
ELIGIBILITY

            3.1 Eligibility to Participate. The following individuals shall be Participants in the Plan:

Joseph M. Murphy
Dean S. Read
Gerald Shencavitz

Notwithstanding the foregoing, however, an individual shall not be a Participant in the Plan unless the individual is a member of a select group of management or highly compensated employees within the meaning of Sections 201, 301 and 401 of ERISA.

            3.2 Duration of Participation. Each individual named in Section 3.1 shall remain a Participant in the Plan for as long as he or she is entitled to any benefits under the Plan.

ARTICLE 4
RETIREMENT BENEFITS

            4.1 Normal Retirement Benefit. A Normal Retirement Benefit shall be payable to an eligible Participant who separates from service on or after his or her Normal Retirement Date (as set forth in Section A.1 of Annex A) in an amount equal to his or her Normal Retirement Benefit. The Normal Retirement Benefit shall commence on the first scheduled pay date of any month (as selected by the Plan Administrator) during the ninety (90) day period beginning on the date on which the Participant separates from service, and shall be paid on the first scheduled pay date of each subsequent month for a period of two hundred forty (240) months certain; provided, however, if the Participant is a Key Employee, the Normal Retirement Benefit shall not commence prior to six months after the date of the Participant’s separation from service.

            4.2 Early Retirement Benefit. An Early Retirement Benefit shall be payable to an eligible Participant who separates from service on or after his or her Early Retirement Date and prior to his or her Normal Retirement Date in an amount equal to his or her Accrued Benefit. The Early Retirement Benefit shall commence on the first scheduled pay date of any month (as selected by the Plan Administrator) during the ninety (90) day period beginning on the date on which the Participant separates from service, and shall be paid on the first scheduled pay date of each subsequent month for a period of two hundred forty (240) months certain; provided, however, if the Participant is a Key Employee, the Early Retirement Benefit shall not commence prior to six months after the date of the Participant’s separation from service.

            Notwithstanding the above, if an eligible Participant separates from service on or after his or her Early Retirement Date and prior to his or her Normal Retirement Date and within three years after a Change in Control, and if the eligible Participant initiates the separation from service for Good Reason or the Company initiates the separation from service without Cause, then the amount of his or her Early Retirement Benefit shall be equal to his or her Normal Retirement Benefit.

            4.3 Disability Retirement Benefit. A Disability Retirement Benefit shall be payable to an eligible Participant who becomes a Disabled Participant prior to his or her Normal Retirement Date and who is employed by the Company at the time he or she becomes a Disabled Participant. The amount of the Disability Retirement Benefit shall be equal to his or her Accrued Benefit. The Disability Retirement Benefit shall commence on the first scheduled pay date of any month (as selected by the Plan Administrator) during the ninety (90) day period beginning on the Participant's Disability Retirement Date, and shall be paid on the first scheduled pay date of each subsequent month for a period of two hundred forty (240) months certain or until the Participant ceases to be a Disabled Participant (whichever occurs first).

            Notwithstanding the above, if an eligible Participant becomes a Disabled Participant prior to his or her Normal Retirement Date, while employed by the Company, and within three years after a Change in Control, then the amount of his or her Disability Retirement Benefit shall be equal to his or her Normal Retirement Benefit.

            If an eligible Participant ceases to be a Disabled Participant, the Participant’s Disability Retirement Benefit shall cease. Thereafter, if the Participant subsequently becomes eligible to receive a Normal Retirement Benefit, an Early Retirement Benefit or a Vested Deferred Benefit, the amount of each monthly payment of such Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit shall be adjusted by the same amount so that the Present Value of the adjusted monthly payments of such Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit shall equal the excess (if any) of: (a) the Present Value of the unadjusted Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit payable under the Plan, reduced by (b) the Present Value of the amounts previously received by the Participant as a Disability Retirement Benefit from the Plan.

            4.4 Vested Deferred Benefit. A Vested Deferred Benefit shall be payable to an eligible Participant who separates from service prior to his or her Early Retirement Date and who is not eligible to receive a Disability Retirement Benefit in an amount equal to his or her Accrued Benefit. The Vested Deferred Benefit shall commence on the first scheduled pay date of any month (as selected by the Plan Administrator) during the ninety (90) day period beginning on the Participant's Early Retirement Date, and shall be paid on the first scheduled pay date of each subsequent month for a period of two hundred forty (240) months certain; provided, however, if the Participant is a Key Employee, the Vested Retirement Benefit shall not commence prior to six months after the date of the Participant’s separation from service.

            Notwithstanding the above, if an eligible Participant separates from service prior to his or her Early Retirement Date and within three years after a Change in Control, and if the eligible Participant initiates the separation from service for Good Reason or the Company initiates the separation from service without Cause, then the amount of his or her Vested Deferred Benefit shall be equal to his or her Normal Retirement Benefit.

            4.5 Change in Form of Distribution. Anything herein to the contrary notwithstanding, a Participant may elect to have his or her Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit paid in a lump sum distribution equal to the Present Value of such benefit rather than in installments, subject to the following requirements:

(a) Any election pursuant to this Section 4.5: (i) cannot become effective until twelve months after the date on which the election is made; and (ii) must delay the date of the lump sum distribution for five years from the date the first installment payment would otherwise have been made.

(b) In no event can an election made pursuant to this Section 4.5 constitute an acceleration for purposes of Code Section 409A.

A Participant may make an election described in this Section 4.5 by submitting an election form to the Plan Administrator.

            4.6 One-Time Election Opportunity.

            (a) In Notice 2006-79, Section 3.02, the Internal Revenue Service stated that, with respect to deferred compensation subject to Code Section 409A, a nonqualified deferred compensation arrangement may be amended to allow a participant to make a new payment election with respect to the form of payment of his or her deferred compensation, and such election will not be treated as a change in the form of payment of the deferred compensation under Code Section 409A(a)(4) or an acceleration of a payment under Code Section 409A(a)(3), provided that: (i) the amendment is adopted and effective on or before December 31, 2007; (ii) the participant makes an election regarding the form of payment of his or her deferred compensation on or before December 31, 2007; (iii) the election applies only to amounts that would not otherwise be payable in 2007 and does not cause an amount to be paid in 2007 that would not otherwise be payable in 2007; and (iv) the election otherwise satisfies the constructive receipt rule and other provisions of the Code and common law doctrines.

            Pursuant to Notice 2006-79, Section 3.02, on or before December 31, 2007, a Participant may elect to have his or her Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit paid in a lump sum distribution equal to the Present Value of such benefit rather than in installments.

ARTICLE 5
DEATH BENEFIT

            5.1 Death Before Benefit Commencement. A death benefit shall be payable to the Beneficiary of an eligible Participant who dies while employed by the Company prior to the commencement of his or her Retirement Benefit. The amount of the death benefit shall be equal to the Participant’s Normal Retirement Benefit; provided, however, that if the Company obtained a life insurance policy on the life of the Participant prior to his or her death but the Company is unable to obtain the death benefit under the life insurance policy for any reason, then the amount of the death benefit payable to the Participant's Beneficiary shall be equal to the Participant's Accrued Benefit as of the date of his or her death. The death benefit shall commence as of the first scheduled pay date of any month (as selected by the Plan Administrator) during the ninety (90) day period beginning on the Participant’s death, and shall be paid on the first scheduled pay date of each subsequent month for a period of two hundred forty (240) months certain.

            5.2 Death After Benefit Commencement. A death benefit shall be payable to the Beneficiary of an eligible Participant who dies after commencing to receive his or her Retirement Benefit in monthly payments and prior to the receipt of two hundred forty (240) monthly payments. The amount of the death benefit shall be at the same level as the monthly Retirement Benefit paid to the Participant during his or her lifetime. The death benefit shall commence as of the first scheduled pay date of any month (as selected by the Plan Administrator) during the ninety (90) day period beginning on the Participant's death, and shall be paid on the first scheduled pay date of each subsequent month for a period equal to the remainder of the two hundred forty (240) months certain.

            5.3 No Other Death Benefits. Except as provided in Section 5.1 and Section 5.2, there shall be no death benefits payable under the Plan.

ARTICLE 6
UNFORESEEABLE EMERGENCY

            6.1 Withdrawal for Unforeseeable Emergency. If the Participant experiences an Unforeseeable Emergency, the Participant may request a lump sum withdrawal of all or a portion of his or her Retirement Benefit; provided, however, that the amount of the withdrawal shall not exceed the lesser of: (a) the Present Value of the Participant's Retirement Benefit; or (b) the amount reasonably necessary to satisfy such Unforeseeable Emergency, plus amounts necessary to pay taxes reasonably anticipated as a result of the withdrawal, after taking into account the extent to which such Unforeseeable Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise, or by the liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship).

            If the Plan Administrator approves the Participant's request for a withdrawal, the withdrawal shall be made on any paydate (as selected by the Plan Administrator) during the ninety (90) day period beginning on the date of such approval.

            If: (a) a Participant receives a withdrawal due to an Unforeseeable Emergency, and (b) the Participant subsequently becomes eligible to receive a Retirement Benefit (or the Participant's Beneficiary subsequently become eligible to receive a death benefit), then the amount of such Retirement Benefit (or death benefit) shall be adjusted so that the Present Value of such adjusted Retirement Benefit (or death benefit) shall equal the excess (if any) of: (i) the Present Value of the unadjusted Retirement Benefit (or death benefit), over (ii) the Present Value of the amount of the withdrawal which the Participant previously received due to an Unforeseeable Emergency.

ARTICLE 7
OTHER PLAN PROVISIONS

            7.1 Funding.

                        (a) It is the intention of the Company, the Participants, their Beneficiaries, and each other party to the Plan that the arrangements hereunder be unfunded for tax purposes and for purposes of Title I of ERISA. The rights of Participants and their Beneficiaries shall be solely those of a general unsecured creditor of the Company. The Plan constitutes a mere promise by the Company to make benefit payments in the future.

                        (b) Prior to the occurrence of a Change in Control, the Company shall not have any obligation to set aside assets to provide the benefits payable under the Plan. However, if the Company determines, prior to a Change in Control, that assets should be set aside to provide the benefits payable under the Plan, it may utilize, singly or in combination, any method which it may deem appropriate, including, but not limited to, a grantor trust or life insurance contracts. Moreover, the terms of any grantor trust which may be created by the Company to assist the Company in meeting its obligations under the Plan shall conform with the language of the model trust agreement set forth in Revenue Procedure 92-64 issued by the Internal Revenue Service (or any successor thereto) relating to trusts established in connection with unfunded deferred compensation arrangements (or, if such trusts are no longer available for use in connection with unfunded deferred compensation arrangements, any other instrument which is designed to provide a similar level of security and to have the same tax results as such trust). All of the assets of such trust shall be located, and shall remain located, within the United States, whether or not such assets are available to satisfy the claims of general creditors. In addition, the trust shall not contain any provision which states that the assets of the trust will be restricted to the provision of benefits under the Plan in the event of a change in the financial health of the Company (or any successor thereof), whether or not such assets are available to satisfy the claims of general creditors.

                        Upon the occurrence of a Change in Control, the Company shall (unless the Company's liabilities under the Plan have been fully discharged) adopt and fully fund a grantor trust, the terms of which shall conform with the language of the model trust agreement set forth in Revenue Procedure 92-64 issued by the Internal Revenue Service (or any successor thereto) and the other requirements of such a trust that are described in the preceding paragraph.

                        (c) The Plan Administrator may direct that payments be made before they would otherwise be due if the Plan fails to meet the requirements of Code Section 409A and the applicable regulations at any time; provided, however, that the amount of such payments may not exceed the amount required to be included in income as a result of the failure of the Plan to comply with the requirements of Code Section 409A and the applicable regulations.

            7.2 Consent to Insurance Procedures. In order to be eligible for benefits hereunder, a Participant must agree that the Company may from time to time apply for and take out in its own name and at its own expense such life, health, accident or other insurance upon the Participant as the Company may deem necessary or advisable to protect its interests hereunder. The Participant must also agree to submit to any medical or other examination necessary for such purpose and to assist and cooperate with the Company in procuring such insurance. The Participant and his or her Beneficiary must also agree that they shall have no right, title or interest in and to such insurance whether presently existing or hereafter procured.

            7.3 Benefits Not Assignable. Except as required by law, the right of any Participant or his or her Beneficiary to any benefit or payment under the Plan: (a) shall not be subject to voluntary or involuntary anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or his or her Beneficiary; (b) shall not be considered an asset of the Participant or his or her Beneficiary in the event of any divorce, insolvency or bankruptcy; and (c) shall not be subject to attachment, execution, garnishment, sequestration or other legal or equitable process. In the event that a Participant or his or her Beneficiary who is receiving or is entitled to receive benefits under the Plan attempts to assign, transfer or dispose of such right, or if an attempt is made to subject said right to such process, such assignment, transfer, disposition or process shall, unless otherwise required by law, be null and void.

              7.4 Beneficiaries. A Participant may designate one or more Beneficiaries and contingent Beneficiaries to receive any benefits payable under the Plan after his or her death by delivering a written designation thereof over his or her signature to the Plan Administrator. A Participant may designate different Beneficiaries at any time by delivering a new written designation over his or her signature to the Plan Administrator. Any such designation shall become effective only upon its receipt by the Plan Administrator. The last effective designation received by the Plan Administrator shall supersede all prior designations. If a Participant fails to designate a Beneficiary, or if no designated Beneficiary survives the Participant, the Participant shall be deemed to have designated the Participant's estate as his or her Beneficiary.

ARTICLE 8
REEMPLOYMENT AND TERMINATION OF BENEFIT PAYMENTS

            8.1 Reemployment. In the event that a Participant commences receiving a Retirement Benefit hereunder and is subsequently re-employed by the Company or any of its affiliates, the payment of his or her Retirement Benefit under the Plan shall continue in the manner required by the Plan, and the Participant shall not be entitled to accrue any additional benefits under the Plan following his or her reemployment.

            8.2 Termination of Benefit Payments. In the event that the Company terminates a Participant's employment for Cause, or in the event that a Participant who is receiving or is entitled to receive benefits hereunder violates any written agreement with the Company or any of its affiliates (including, without limitation, any written agreement relating to noncompetition or the nondisclosure of secret or confidential information or knowledge), then all rights to future benefit payments with respect to such Participant shall be forfeited and terminate.

ARTICLE 9
ADMINISTRATION

            9.1 Plan Administrator. The board of directors of the Principal Company shall have the responsibility for the administration of the Plan.

            9.2 Powers of Plan Administrator. The Plan Administrator shall have such authority and powers as may be necessary to discharge its duties hereunder. The determination of the Plan Administrator as to any question involving the general administration and interpretation of the Plan shall be final, binding and conclusive, unless the Plan Administrator has acted in an arbitrary or capricious manner. Any discretionary actions to be taken under the Plan by the Plan Administrator shall be uniform in their nature and applicable to all persons similarly situated. Without limiting the generality of the foregoing, the Plan Administrator shall have the following powers and duties:

(a) to construe and interpret the Plan, decide all questions of eligibility for and determine the amount and time of payment of any benefits hereunder;

(b) to prescribe procedures to be followed by Participants and their Beneficiaries for filing applications for benefits;

(c) to prepare and distribute information explaining the Plan; and

(d) to appoint or employ individuals to assist in the administration of the Plan and any other agents it deems advisable, including legal counsel (who may be counsel for the Company).

            9.3 Annual Statements. At least once each year, the Plan Administrator shall provide each Participant with a statement setting forth the amount of the Retirement Benefit to which the Participant would be entitled if he or she continued to be employed until his or her Normal Retirement Date, as well as the amount of the Retirement Benefit to which he or she would be entitled if he or she terminated employment immediately.

            9.4 Facility of Payment. Whenever, in the Plan Administrator's opinion, a person entitled to receive any payment of a benefit or installment thereof hereunder is under a legal disability or is incapacitated in any way so as to be unable to manage his or her financial affairs, the Plan Administrator may issue directions that payments shall be made to another person for his or her benefit, or the Plan Administrator may direct that payments be applied for the benefit of such person in such manner as the Plan Administrator considers advisable. Any payment of a benefit or installment thereof in accordance with the provisions of this Section 9.4 shall be a complete discharge of any liability for the making of such payment under the provisions of the Plan.

            9.5 Reliance on Professionals. To the extent permitted by law, the Company and any person to whom it may delegate any duty or power in connection with administering the Plan, and the officers and directors thereof, shall be entitled to rely conclusively upon, and shall be fully protected in any action taken or suffered by them in good faith in reliance upon, any actuary, counsel, accountant, other specialist, or other person selected by the Company, or in reliance upon any tables, valuations, certificates, opinions or reports which shall be furnished by any of them. Further, to the extent permitted by law, neither the Company, nor the officers or directors thereof, shall be liable for any neglect, omission or wrongdoing of any other agent, officer or employee of the Company. Any person claiming under the Plan shall look solely to the Company for redress.

            9.6 Payment of Expenses. All expenses incurred prior to the termination of the Plan that shall arise in connection with the administration of the Plan, including but not limited to administrative expenses, proper charges and disbursements, compensation and other expenses and charges of any actuary, counsel, accountant, specialist or other person who shall be employed by the Company in connection with the administration thereof, shall be paid by the Company.

ARTICLE 10
BENEFIT CLAIMS PROCEDURE

            10.1 Claims Procedure.

            (a) Any claim for benefits under the Plan shall be made in writing to the Plan Administrator. The Plan Administrator shall promptly process each claim for benefits received by it and shall notify the claimant in writing of the action taken regarding the claim for benefits within a reasonable period of time, but not later than ninety (90) days (forty-five (45) days in the case of a claim for disability benefits) following its receipt. This period may be extended by the Plan for up to ninety (90) days (for up to two thirty (30) day periods in the case of a claim for disability benefits), provided that the notice of the extension of time (including an explanation of the circumstances requiring the determination and the date by which a benefit determination is expected) is furnished to the claimant prior to the beginning of the extension period. In the event of an extension of time to consider a claim for disability benefits, the notice of extension shall explain the standards on which entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve issues, and the claimant shall be afforded at least forty-five (45) days within which to provide the requested information.

            (b) In the event of a denial of benefits, the Plan Administrator shall furnish the claimant with a written notification which shall include: (i) the reasons for the denial; (ii) specific references to the Plan provisions on which the denial is based; (iii) a description of any additional material or information necessary for the claimant to perfect the claim for benefits, including an explanation of why such material or information is necessary; and (iv) an explanation of the review procedure set forth in subsections (e), (f), (g) and (h) (including a statement of the claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") within one year following an adverse benefit determination on review). Anything herein to the contrary notwithstanding, for purposes of this Section 10.1, if a claimant has clearly designated an authorized representative to act and receive notices on his or her behalf with respect to an claim for benefits filed by the claimant, the Plan Administrator shall, in the absence of a contrary direction from the claimant, direct all information and notices to which the claimant is otherwise entitled to such authorized representative with respect to such claim for benefits.

            In the event of a denial of a disability benefit claim, the Plan Administrator shall also furnish the claimant a copy of any guideline, protocol or other similar criterion relied upon (or a statement that a copy of the guideline, protocol or other similar criterion will be provided free of charge upon request), and an explanation of the scientific or clinical judgment on which the denial was based (or a statement that the explanation will be provided free of charge upon request).

            (c) Notwithstanding anything herein to the contrary, any claim shall be handled in a manner consistent with applicable Department of Labor regulations. For purposes of this Section 10.1, a benefit is a "disability benefit" if the claimant is required to provide proof of his or her eligibility for a disability benefit as a condition for obtaining the benefit. A benefit is not a disability benefit if a finding of benefit eligibility is determined under another program by an independent party, such as the Social Security Administration.

            (d) In the event that a period of time for review is extended under subsection (a) due to the claimant’s failure to submit information necessary to decide a claim, the period of time for making the benefit determination shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information.

            (e) A claimant who has received a written denial of a claim for benefits and wants to contest the denial must appeal by filing with the Plan Administrator a written request for review. Such request must be made within sixty (60) days (one hundred eighty (180) days in the case of a claim for disability benefits) following the receipt of the written denial. In connection with any request for review, the claimant may at any time review all documents, records, and other information relevant to the claim free of charge, and request a review that takes into account all comments, documents, records and other information submitted without regard to whether such information was submitted or considered in the initial benefit determination.

            In connection with any request for review of a disability benefit claim, the Plan Administrator shall provide for a review that: (i) does not afford deference to the initial adverse benefit determination; (ii) is conducted by an appropriate named fiduciary of the Plan who is neither the individual who made the adverse benefit determination that is the subject of the appeal nor the subordinate of such individual; (iii) in the case of an adverse benefit determination based on a medical judgment, provides that the appropriate named fiduciary shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment; (iv) provides for the identification of medical or vocational experts whose advice was obtained on behalf of the Plan, without regard to whether the advice was relied upon in making the benefit determination; and (v) provides that the health care professional engaged is an individual who is neither the individual who made the adverse benefit determination nor the subordinate of such individual.

            (f)     The Plan Administrator shall notify the claimant of its determination on review within sixty (60) days (forty-five (45) days in the case of a claim for disability benefits) following receipt of the request for review. This period may be extended by the Plan for up to sixty (60) days (forty-five (45) days in the case of a claim for disability benefits), provided that the Plan Administrator determines that special circumstances (such as the need to hold a hearing) require an extension of time for processing the claim. Written notice of the extension shall be furnished to the claimant prior to the beginning of the extension period. The extension notice must indicate the special circumstances requiring the extension and the date as of which the Plan expects to render a decision.

            (g) In the event that a period of time is extended as permitted under subsection (f) due to the claimant’s failure to submit information necessary to decide a claim, the period of time for making the benefit determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information.

            (h) In the event of a denial of an claim for benefits on review, the Plan Administrator shall furnish the claimant with a written notification which shall include: (i) the reason or reasons for the denial; (ii) specific references to the Plan provisions on which the denial is based; (iii) a statement that the claimant may receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information related to the claimant’s claim for benefits; and (iv) a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA within one year following an adverse benefit determination on review. In the event of a denial of a claim for disability benefits on review, in addition to the notification requirements set forth above in this subsection (h), the Plan Administrator shall furnish the claimant a copy of any internal rule, guideline, protocol, or other similar criterion that was relied upon in making the adverse determination (or, in the alternative, a statement that a copy of the rule, guideline, protocol, or other similar criterion will be provided free of charge to the claimant upon request).

            10.2 Mediation and Arbitration. If, after the Plan Administrator's decision following its review of a benefit denial, the Plan Administrator and the claimant continue to dispute the benefit denial based on the meaning and effect of the terms and conditions of the Plan, then the claimant may take the following actions:

            (a)     Within sixty (60) days after the claimant receives notice of the Plan Administrator's decision following its review of the benefit denial, the claimant may submit the dispute to a mediator mutually agreeable to the claimant and the Plan Administrator. The mediator shall review the benefit denial and shall attempt to reach a resolution of the matter that is acceptable to both parties.

            (b)     If a mediator is unable to be named or the mediator is unable to reach a mutually acceptable resolution of the matter within one hundred twenty (120) days after the claimant receives notice of the Plan Administrator's decision following its review of the benefit denial, the claimant may submit the dispute to an arbitrator mutually agreeable to the claimant and the Plan Administrator. The arbitrator shall operate under any generally recognized set of arbitration rules. The parties hereto agree that they and their heirs, personal representatives, successors and assigns shall be bound by the decision of such arbitrator with respect to any controversy properly submitted to the arbitrator for determination.

            (c)       If the parties are unable to agree to the designation of an arbitrator within one hundred eighty (180) days after the claimant receives notice of the Plan Administrator's decision following its review of the benefit denial, the claimant may submit the dispute to a board of arbitration for final arbitration. Said board shall consist of one member selected by the claimant, one member selected by the Plan Administrator and a third member selected by the first two members. The board shall operate under any generally recognized set of arbitration rules. The parties hereto agree that they and their heirs, personal representatives, successors and assigns shall be bound by the decision of such board with respect to any controversy properly submitted to the board for determination.

ARTICLE 11
AMENDMENT

            11.1 Right to Amend. At any time, and from time to time, the board of directors of the Principal Company, by resolutions adopted by it, may amend the Plan or change the designation of eligible Participants under the Plan; provided, however, that no modification or amendment of the Plan may permit any distribution of a Participant’s Retirement Benefit other than in accordance with the provisions of Section 409A of the Code; and provided further, that no amendment to the Plan which adversely affects the Accrued Benefit (or death benefit) of any Participant (or the Beneficiary of a deceased Participant) shall be effective without the prior unanimous written consent of the Participants (or their Beneficiaries); and provided further that, subsequent to a Change in Control, no amendment to the Plan shall be effective without the prior unanimous written consent of the Participants (or their Beneficiaries).

ARTICLE 12
MISCELLANEOUS

            12.1 Titles are for Reference Only. The titles in this Plan are for reference only. In the event of a conflict between a title and the content of a section, the content of the section shall control.

            12.2 Construction. The provisions of the Plan shall be construed according to the law of the State of Maine, except as such law is superseded by federal law.

            12.3 Successors. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or other transaction) of all or substantially all of the business and/or assets of the Company, to expressly assume and agree to perform the Company's obligations under the Plan in the same manner and to the same extent that the Company would be required to perform them if no such succession had taken place. Each such successor shall execute a written agreement evidencing its assumption of the Company's obligations under the Plan prior to the effective date of any such purchase, merger, consolidation or other transaction.

            12.4 No Contract. This Plan shall not be deemed to be a contract of employment with the Participant, nor shall any provision hereof restrict the right of the Company to terminate the Participant's employment.

            12.5 Beneficiaries' Rights. Wherever the rights of a Participant are stated or limited in the Plan, his or her Beneficiaries shall be bound thereby.

            12.6 Gender and Number. Where appearing in the Plan, the masculine gender shall be deemed to include the feminine gender and the singular number shall include the plural, unless the context clearly indicates to the contrary.

            12.7 Code Section 409A. Any provision of the Plan that is susceptible to more than one interpretation shall be interpreted in a manner that is consistent with the Plan satisfying the requirements of Code Section 409A.

            12.8 Compliance With FDI Act. Notwithstanding anything herein contained to the contrary, any payments to a Participant by the Company, whether pursuant to this Plan or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act ("FDI Act"), 12 U.S.C. Section 1828(k), and any regulations promulgated thereunder.

Dated this              day of               , 20     .

Witness:                                                 BAR HARBOR BANKSHARES

______________________                By__________________________
                                                                    Title: Chairperson

ANNEX A

Schedule of Benefits

            A.1 Normal Retirement Date. The Normal Retirement Date of a Participant is the first day of the month coinciding with or next following the date on which he or she reaches the age set forth below:

Name                        Age                 Normal Retirement Date

Joseph M. Murphy        68                 October 1, 2010
Dean S. Read                 65                 July 1, 2012
Gerald Shencavitz 65                 June 1, 2018

            A.2 Normal Retirement Benefit. The monthly Normal Retirement Benefit of a Participant is the following:

Name                     Monthly Normal Retirement Benefit

                    Joseph M. Murphy                         $11,200
                    Dean S. Read                                 $10,458
                    Gerald Shencavitz                         $ 8,583

            A.3 Accrued Benefit. The monthly Accrued Benefit of a Participant is the following:

                Name                      For commencement after            Monthly Accrued Benefit

      Joseph M. Murphy  December 31, 2002                                 $ 684
                                          December 31, 2003                                 $ 1,597
                                          December 31, 2004                                 $ 2,621
                                          December 31, 2005                                 $ 3,764
                                          December 31, 2006                                 $ 5,039
                                          December 31, 2007                                 $ 6,457
                                          December 31, 2008                                 $ 8,030
                                          December 31, 2009                                 $ 9,773
                                          September 30, 2010                                 $11,200

                Dean S. Read            December 31, 2002                                   $ 1,421
                                                    December 31, 2003                                   $ 2,012
                                                    December 31, 2004                                   $ 2,982
                                                    December 31, 2005                                   $ 4,064
                                                    December 31, 2006                                   $ 5,217
                                                    December 31, 2007                                   $ 6,551
                                                    December 31, 2008                                   $ 8,029
                                                    December 31, 2009                                   $ 9,605
                                                    December 31, 2010                                   $ 9,943
                                                    December 31, 2011                                   $10,285
                                                    June 30, 2012                                           $10,458

                Gerald Shencavitz    December 31, 2002                                     $ 302
                                                    December 31, 2003                                     $ 535
                                                    December 31, 2004                                     $ 796
                                                    December 31, 2005                                     $ 1,086
                                                    December 31, 2006                                     $ 1,409
                                                    December 31, 2007                                     $ 1,768
                                                    December 31, 2008                                     $ 2,166
                                                    December 31, 2009                                     $ 2,606

December 31, 2010 $ 3,092

December 31, 2011 $ 3,629

December 31, 2012 $ 4,219

December 31, 2013 $ 4,869

December 31, 2014 $ 5,583

December 31, 2015 $ 6,366

December 31, 2016 $ 7,225

December 31, 2017 $ 8,166

May 31, 2018 $ 8,583

If a Participant’s Early Retirement Benefit, Disability Retirement Benefit or Vested Deferred Benefit commences on a date other than the first scheduled pay date in January, the amount of the Participant’s Accrued Benefit will be interpolated. For example, assume that Mr. Murphy's benefit commences on the first scheduled pay date in March, 2009. The amount of his Accrued Benefit will equal:

$8,030 + 2/12($9,773 - $8,030) = $8,030 + $291 = $8,321

EX-10

Exhibit 10.8

CHANGE IN CONTROL, CONFIDENTIALITY,
AND NONCOMPETITION AGREEMENT

THIS CHANGE IN CONTROL, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT is made and entered into this _____ day of December, 2008 by and between BAR HARBOR BANKSHARES, a Maine corporation with its headquarters located in Bar Harbor, Maine (hereinafter, "the Company"), and NAMED EXECUTIVE, a resident of ___________, Maine (hereinafter, "the Executive").

W I T N E S S E T H:

WHEREAS, Bar Harbor Banking and Trust Company is a wholly-owned first tier banking subsidiary of Bar Harbor Bankshares, and Bar Harbor Trust Services is a second tier non-depository trust company subsidiary of Bar Harbor Bankshares; and

WHEREAS, the Executive is an employee of the Employer; and

WHEREAS, the Employer wishes to retain the services of the Executive; and

WHEREAS, the Executive and the Company entered into a change in control, confidentiality and noncompetition agreement dated ____________; and

WHEREAS, the Executive and the Company wish to amend and restate such change in control, confidentiality and noncompetition agreement so that the provisions of this Agreement will supersede the change in control, confidentiality and noncompetition agreement dated _____________.

NOW, THEREFORE, the parties hereto do hereby agree as follows:

1.         DEFINTIONS.

1.1.      Bank shall mean Bar Harbor Banking and Trust Company.

1.2.      Base Compensation shall mean the annual base salary payable by the Employer to the Executive, excluding any bonuses, incentive compensation and other forms of additional compensation.

1.3       Cause shall be deemed to exist only in the event the Executive is convicted by a court of competent jurisdiction of a felony involving dishonesty or fraud on the part of the Executive in his or her relationship with the Employer.

1.4.      Change in Control shall mean the occurrence of any one of the following events:

(a)        Any person, including a group (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Bar Harbor Bankshares representing more than fifty percent (50%) of the combined voting power of Bar Harbor Bankshares' then outstanding securities, other than as a result of an issuance of securities initiated by Bar Harbor Bankshares in the ordinary course of its business; or

(b)        Bar Harbor Bankshares is party to a Business Combination (as hereinafter defined) 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 Bar Harbor Bankshares' outstanding voting securities immediately prior to the Business Combination in substantially the same proportions as those existing immediately prior to the Business Combination; or

(c)        The stockholders of Bar Harbor Bankshares approve a plan of complete liquidation of Bar Harbor Bankshares or an agreement for the sale or disposition by Bar Harbor Bankshares of all or substantially all of Bar Harbor Bankshares' assets to another person or entity that is not a wholly owned subsidiary of Bar Harbor Bankshares.

For purposes of this Section 1.4, a Business Combination means any cash tender or exchange offer, merger or other business combination, sale of stock, or sale of all or substantially all of the assets, or any combination of the foregoing transactions.

For purposes of this Section 1.4, a Change in Control shall exclude any internal corporate change, reorganization or other such event, which occurred prior to or may occur following the date of this Agreement.

1.5.      Code shall mean the Internal Revenue Code of 1986, as amended, and as it may be amended from time to time, together with the rules and regulations promulgated under such code.

1.6.      Company shall mean Bar Harbor Bankshares.

1.7.      Date of Termination shall mean:

(a)        If the Executive incurs a separation from service for Disability, thirty (30) days after Notice of Termination for Disability is given by the Employer to the Executive and the Executive shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period;

(b)        If the Executive's service is separated by the Employer for Cause or by the Executive for Good Reason, the date on which the Executive separates from service with the Employer; and

(c)        If the Executive incurs a separation from service for any other reason, the date on which the Executive incurs a separation from service with the Employer.

Whether the Executive has incurred a separation from service is determined based on whether the facts and circumstances indicate that the Employer and the Executive reasonably anticipated that no further services would be performed after a certain date.

1.8.      Disability shall mean a condition:   (a) which causes the Executive to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months; or (b) which results in the Executive receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months, income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer.  Disability shall be deemed to exist only when the disability has been certified to the Board of Directors of the Company by a licensed physician approved by the Board of Directors of the Company.

1.9.      Employer shall mean either the Company, the Bank or Trust Services (whichever entity is the employer of the Executive).

1.10.    Exemption Amount shall mean two times the lesser of:  (a) the Executive’s annualized compensation based on the Executive’s annual rate of pay for the calendar year preceding the calendar year in which the Date of Termination occurs; or (b) the limitation on compensation set forth in Code Section 401(a)(17) for the calendar year in which the Date of Termination occurs.

1.11.    Good Reason shall mean one or more of the following events arising without the consent of the Executive:

(a)        a material diminution in the Executive’s Base Compensation;

(b)        a material diminution in the Executive’s authority, duties or responsibilities;

(c)        a material diminution in the authority, duties or responsibilities of the person to whom the Executive is required to report;

(d)        a material diminution in the budget over which the Executive retains authority;

(e)        a material change in the geographic location at which the Executive must perform his services; or

(f)         any other action or inaction that constitutes a material breach by the Company of the Agreement or any other agreement under which the Executive provides services.

In order for a separation from service to occur for Good Reason, the separation from service must occur within two years following the initial existence of the event constituting Good Reason.

1.12.    Key Employee shall mean an employee who is:   (a) an officer of the Company, the Bank or Trust Services whose earnings from the Company, the Bank and Trust Services exceed $145,000 (as adjusted under Code Section 416(i)(1) for calendar years beginning after December 31, 2007); (b) an owner of more than a five percent (5%) interest in the Company, the Bank or Trust Services; or (c) an owner of more than a one percent (1%) interest in the Company, the Bank or Trust Services whose earnings from the Company, the Bank and Trust Services exceed $150,000.

1.13.    Notice of Termination shall mean the notice provided pursuant to Section 3.

1.14.    Trust Services shall mean Bar Harbor Trust Services.

2.         SEVERANCE BENEFITS.

In the event that: (a) the Employer separates the Executive's service prior to age 65 other than as a result of Disability and other than for Cause, or the Executive separates his or her service prior to age 65 for Good Reason; and (b) the Executive's separation from service occurs in anticipation of or within one year after a Change in Control, then the Employer shall pay the Executive the severance benefits described in this Section 2.  The Executive's separation from service shall be deemed to be in anticipation of a Change in Control if it occurs within the twelve (12) month period prior to the occurrence of the Change in Control.

Notwithstanding the foregoing, if the payment of the severance benefits would result in an excess parachute payment as defined under Code Section 280G, then the amount of the severance benefits to be paid to the Executive shall be reduced to an amount equal to the maximum dollar amount that can be paid to the executive without causing the payment of an excess parachute payment.

The severance benefits described in this Section 2 shall equal the following:

(a)        The Executive shall receive a severance payment equal to 1.0 times the Executive’s Base Compensation, determined as of the Date of Termination.

(i)         Subject to the provisions of Section 2(a)(ii), the Executive’s severance payment shall be paid in twelve equal installments beginning on the first day of the month following the Executive’s Date of Termination.

(ii)        Notwithstanding the provisions of Section 2(a)(i), if the Executive is a Key Employee on the Executive’s Date of Termination, then any portion of the severance payment that would be payable within the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) and that does not exceed the Exemption Amount shall be paid in six equal installments beginning on the first day of the month following the Executive’s Date of Termination.  Any portion of the severance payment that would be payable within the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) and that exceeds the Exemption Amount shall be paid in a lump sum on the first day of the month that is six months after the Executive’s Date of Termination.  Any portion of the severance payment that would be payable after the first six months following the Executive’s Date of Termination without regard to this Section 2(a)(ii) shall be paid in six equal installments beginning on the first day of the month that is six months after the Executive’s Date of Termination.

(b)        The Executive and his or her dependents shall continue to be eligible to receive the same medical, health, dental and life insurance benefits which the Executive is eligible to receive on the Date of Termination. The Executive shall be required to make the same premium contributions that he or she was required to make immediately prior to the Date of Termination. The ability of the Executive and his or her dependents to receive such benefits shall continue until the twelve month anniversary of the Executive’s Date of Termination.

(c)        In the event of a Change in Control, all stock options granted but unexercised under the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan shall become 100% vested immediately prior to such Change in Control.  These grants will remain subject to all of the other terms and conditions in the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan.

The Executive shall not be required to mitigate the amount of any severance benefits described in this Section 2 by seeking other employment.

 3.        NOTICE OF TERMINATION.

Any separation of the Executive's service by the Employer due to Disability or for Cause, or by the Executive due to Good Reason, shall be communicated by written Notice of Termination to the other party.  A Notice of Termination must indicate the specific provisions in this Agreement which are relied upon as the basis for the separation of the Executive's service, and must also set forth in reasonable detail the facts and circumstances claimed to provide the basis for such separation from service under the provisions so indicated.

Notwithstanding the above, in order for the Executive to separate from service with the Employer for Good Reason, the Executive must provide the Notice of Termination to the Employer no later than ninety (90) days after the date of the initial occurrence of the condition or conditions alleged to give rise to Good Reason.  In addition, the Executive must provide the Employer a period of at least thirty (30) days during which the Employer can remedy the condition or conditions alleged to give rise to Good Reason and not be required to pay the amounts described in Section 2. 

4.         LOSS OF SEVERANCE BENEFITS.

If the Employer shall terminate the Executive's service after age 65 or due to Disability or for Cause, or if the Executive shall terminate his or her service after age 65 or other than for Good Reason, or if the Executive shall die, then the Executive shall have no right to receive any severance benefits under this Agreement.

5.         NO OTHER BENEFITS PAYABLE.

(a)        If the Executive is entitled to receive the severance benefits described in Section 2 of this Agreement, he or she shall not be entitled to receive: (i) any severance benefits under the terms of any general severance pay policy or plan of the Employer or any successor company; or (ii) any other compensation, benefits or payments under the terms of any other plan of, or agreement with, the Employer.

(b)        Notwithstanding the above, the Executive shall be entitled to receive any compensation, benefits or payments which are specifically authorized by the terms of any plan of, or agreement with, the Employer to be paid in addition to the severance benefits described in Section 2 of this Agreement.  Moreover, notwithstanding the above, the Executive shall be entitled to receive, in addition to the severance benefits described in Section 2 of this Agreement, any compensation, benefits or payments which the Executive is entitled to receive under: (i) any incentive compensation plan maintained by the Employer which provides for payment to a separated employee of incentive compensation earned by the employee prior to his or her separation from service; or (ii) any payroll plan or policy of the Employer which provides for payment to a separated employee of any unpaid vacation, holiday or sick pay accrued by the employee prior to his or her separation from service.

6.         SUCCESSORS.

(a)        The Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Employer to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Employer would be required to perform them if no such succession had taken place.  Each such successor shall execute a written agreement evidencing its assumption of the Employer's obligations under this Agreement prior to the effective date of any such purchase, merger, consolidation or other transaction.

(b)        The failure of the Employer to obtain from each successor the written agreement described in Section 6(a) shall be deemed to be a material breach of the obligations of the Employer under this Agreement, and shall entitle the Executive to incur a separation from service for Good Reason pursuant to Section 1.11(f).

(c)        As used in this Section 6, the Employer shall include the Company, the Bank, Trust Services and any successor to all or substantially all of the business and/or assets of any of them (whether direct or indirect, by purchase, merger, consolidation or otherwise) which executes and delivers the written agreement described in Section 6(a) or which otherwise becomes bound by all the terms and provisions of this Agreement.

7.         CONFIDENTIAL INFORMATION, NON-COMPETITION OBLIGATIONS, AND NON-SOLICITATION.

(a)        Confidential Information

The Executive recognizes and acknowledges that certain assets of the Employer, the Company, the Bank, Trust Services, or any of their affiliates or subsidiaries constitutes Confidential Information.

For purposes hereof, the term "Confidential Information" means any and all information and compilations of information, in whatever form or medium (including any copies thereof), relating to any part of the business of the Employer, the Company, the Bank, Trust Services or any of their subsidiaries or affiliates, or the business of their customers, provided to the Executive, or which the Executive obtained or compiled or had obtained or compiled on his or her behalf, which information or compilations of information are not a matter of public record or generally known to the public, including without limitation:

(i)         financial information regarding the Employer, the Company, the Bank, Trust Services or any of their subsidiaries or affiliates;

(ii)        personnel data, including compensation arrangements relating to the Executive or any other employees of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(iii)       internal plans, practices, and procedures of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(iv)       the names, portfolio information, investment strategies, requirements, lending or deposit information, or any similar information of any customers, clients, or prospects of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(v)        business methods and marketing strategies of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates;

(vi)       any other information expressly deemed confidential by the officers and directors of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates; and

(vii)      the terms and conditions of the Agreement and any documents or instruments executed in connection herewith that are not of public record.

The Executive shall not, without the prior written consent of the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates, use or disclose, or negligently permit any unauthorized person to use, disclose, or gain access to, any Confidential Information.

Upon termination of employment, the Executive hereby agrees to deliver promptly to the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates all memoranda, notes, records, manuals, or other documents, including all copies of such materials, containing Confidential Information, whether made or compiled by the Executive or furnished to him or her from any source by virtue of the Executive’s relationship with the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates.

Regardless of the reason for his or her cessation of employment, the Executive will furnish such information as may be in the Executive’s possession and cooperate with the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates as may reasonably be requested in connection with any claims or legal actions in which the Employer, the Company, the Bank, Trust Services, or any of their subsidiaries or affiliates are or may become a party.  The Employer will reimburse the Executive for any reasonable out-of-pocket expenses the Executive incurs in order to satisfy his or her obligations under this clause.

(b)        Non-Competition Obligations

In consideration of the covenants of the Employer contained herein, the Executive covenants and agrees with the Employer that, during the "Non-Compete Period" (as hereinafter defined) and within a one hundred fifty (150) "air" mile radius from Bar Harbor, Maine, the Executive shall not without specific approval, directly or indirectly:

(i)         advise any past, present, or future customers of the Employer to withdraw, curtail, or cancel his or her or its business with the Employer; or

(ii)        cause, suggest, or induce others to call on any past, present, or future customers of the Employer.

The "Non-Compete Period" shall commence on the date hereof and terminate one year after the cessation of the Executive’s employment with the Employer and all of its affiliates, regardless of reason, whether or not pursuant to this Agreement.

(c)        Non-Solicitation of Employees

While employed by the Employer, and for one year following cessation of his or her employment with the Employer and all of its affiliates for any reason, the Executive shall not, directly or indirectly, by any means or device whatsoever, for himself or herself or on behalf of, or in conjunction with, any other person, partnership or corporation, solicit, entice, hire, or attempt to hire or employ any employee of the Employer, the Company, the Bank, Trust Services or any of their affiliated entities.

8.         REFORMATION; INJUNCTIVE RELIEF.

(a)        All the parties hereto acknowledge that the parties have carefully considered the nature and scope of this Agreement.  The activities, period and area covered by Section 7 are expressly acknowledged and agreed to be fair, reasonable and necessary.  To the extent that any covenant contained in Section 7 is held to be invalid, illegal or unenforceable because of the extent of activities, duration of such covenant, the geographic area covered thereby, or otherwise, the parties agree that the court making such determination shall reform such covenant to include as much of its nature and scope as will render it enforceable and, in its reduced form, said covenant shall be valid, legal and enforceable to the fullest extent of the law.

The invalidity or unenforceability of any provision of this Agreement, after reformation as provided in this Section 8, shall not affect any other provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

(b)        The Executive acknowledges and agrees that, upon any breach by the Executive of his or her obligations under Section 7 hereof, the Employer will have no adequate remedy at law, and accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief, notwithstanding Section 9 hereof.  Nothing herein shall be construed as prohibiting the Employer from pursuing any other remedies available to it, including the recovery of damages from the Executive.

9.         MEDIATION AND ARBITRATION.

If the Executive and the Employer have any dispute whatsoever relating to the interpretation, validity or performance of this Agreement, or any other dispute arising out of this Agreement, every reasonable attempt will be made to resolve any differences or dispute within thirty (30) days of an issuance of written notice by either party to the other party.

If a successful resolution of any differences or dispute has not been achieved to the satisfaction of both parties at the end of the thirty (30) day period, the following steps will be used:

Except as otherwise expressly provided hereunder, the parties agree that any and all disputes arising out of the Executive’s employment or cessation of employment, including but not limited to any dispute, controversy, or claim arising under any federal, state, or local statute, law, ordinance or regulation or under this Agreement, shall be resolved exclusively by Alternative Dispute Resolution described in this Agreement ("ADR"). The initiation of ADR shall first require mediation, and the parties agree to first try to settle any dispute through mediation.  Mediation shall be initiated by either party by the serving of a written notice of intent to mediate (a "Mediation Notice") by one party upon the other.  If no resolution has been mutually agreed through mediation within ninety (90) days of service of a Mediation Notice, then and only then may the dispute be submitted to arbitration. Arbitration shall be initiated by the serving of a written notice of intent to arbitrate (an "Arbitration Notice") by one party upon the other.  Notwithstanding the foregoing, nothing in this Agreement shall be deemed to preclude the Employer from seeking temporary or permanent injunctive relief and/or damages from a court of competent jurisdiction pursuant to Section 8 of this Agreement with respect to any breach of Section 7 of this Agreement.

(a)        In the event that a party wishes to initiate ADR, a Mediation Notice must be served on the other party within six months from the date on which the claim arose. If the parties cannot mutually agree on a mediator, then a mediator shall be selected in accordance with the Employment Mediation Rules of the American Arbitration Association.

(b)        In the event that mediation is unsuccessful and arbitration is initiated, it shall be conducted under the National Rules of the Resolution of Employment Disputes of the American Arbitration Association. There shall be a single arbitrator to be agreed upon by the parties, provided that, if the parties are unable to agree upon a single arbitrator, each party shall name an arbitrator and the two so named shall name a third arbitrator.  The arbitration proceedings shall be heard by the arbitrator(s) and the decision of the arbitrator, or the majority of the panel if one has been selected, shall be final and binding on the parties. Judgment upon the arbitration award may be entered in any court of competent jurisdiction. An Arbitration Notice must be served on the other party within one year from the date on which the claim arose, and failure to bring such a claim within such one-year period shall constitute a waiver of such claim and an absolute bar to any further proceedings in any forum with respect to it. All mediation and arbitration proceedings shall be conducted in Bangor, Maine, unless the parties otherwise agree in writing.

(c)        The cost of any mediation proceeding under this Section 9 shall be paid entirely by the Employer.  The cost of any arbitration proceeding will be shared equally by the parties to the dispute; provided, however, that, if the dispute is resolved in favor of the Executive, such cost shall be paid in full by the Employer.  Each party shall be responsible for its own cost of representation and counsel.

10.       POST-TERMINATION OBLIGATIONS.

            All payments and benefits due to the Executive under this Agreement shall be subject to the Executive's compliance with this Section 10 for one full year following the Executive's Date of Termination. The Executive shall, upon reasonable notice, furnish such information and assistance to the Employer, the Company, the Bank or Trust Services as may reasonably be required by the Employer, the Company, the Bank or Trust Services in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.

11.       GENERAL PROVISIONS.

(a)        All notices required by this Agreement shall be in writing and shall be sufficiently given if delivered personally or mailed by registered mail or certified mail, return receipt requested, to the parties at their then current addresses. All notices shall be deemed to have been given as of the date so delivered or mailed.

(b)        This Agreement and the plans and agreements described in Section 5(b) contain the entire transaction between the parties, and there are no other representations, warranties, conditions or agreements relating to the subject matter thereof.

(c)        The waiver by any party of any breach or default of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.

(d)        This Agreement may not be changed orally but only by an agreement in writing executed on behalf of the party against which enforcement of any waiver, change, modification, consent or discharge is sought.

(e)        This Agreement shall be binding upon and inure to the benefit of the Employer and the Executive and their respective successors, assigns, heirs and legal representatives (including, but not limited to, any successor of the Employer described in Section 6).

(f)         Each of the parties agrees to execute all further instruments and documents and to take all further action as the other party may reasonably request in order to effectuate the terms and purposes of this Agreement.

(g)        This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.

(h)        This Agreement shall be construed pursuant to and in accordance with the laws of the State of Maine. Actions brought by the Employer under this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts of Maine. Both parties consent to the personal jurisdiction of such courts for such actions, and agree that they may be served with process in accordance with Section 11(a).

(i)         The Executive acknowledges that he has had a full and complete opportunity to review the terms, enforceability and implications of this Agreement, and that the Employer has not made any representations or warranties to the Executive concerning the terms, enforceability and implications of this Agreement other than as are reflected in this Agreement.

(j)         Any provision of this Agreement that is susceptible to more than one interpretation shall be interpreted in a manner that is consistent with this Agreement satisfying the requirements of Code Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Witness:                                                                        COMPANY:

                                                                                    BAR HARBOR BANKSHARES

_________________________                                   By____________________________

                                                                                         Its

Witness:                                                                        EXECUTIVE:

___________________________                               ______________________________

                                                                                    [                                ]

EX-10

Exhibit 10.9

CHANGE IN CONTROL, CONFIDENTIALITY

AND NONCOMPETITION AGREEMENT

THIS CHANGE IN CONTROL, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT is made and entered into this _____ day of December, 2008, by and between BAR HARBOR BANKSHARES, a Maine corporation with its headquarters located in Bar Harbor, Maine (hereinafter "the Company"), and GERALD SHENCAVITZ, a resident of Mount Desert, Maine (hereinafter "the Executive").

W I T N E S S E T H:

WHEREAS, Bar Harbor Banking and Trust Company is a wholly-owned subsidiary of Bar Harbor Bankshares; and

WHEREAS, the Executive is an employee of the Company; and

WHEREAS, the Company wishes to retain the services of the Executive; and

WHEREAS, the Executive and the Company entered into a change in control, confidentiality and noncompetition agreement dated November 7, 2003; and

WHEREAS, the Executive and the Company wish to amend and restate such change in control, confidentiality and noncompetition agreement so that the provisions of this Agreement will supersede the change in control, confidentiality and noncompetition agreement dated November 7, 2003.

NOW, THEREFORE, the parties hereto do hereby agree as follows:

1. DEFINITIONS.

1.1. Bank shall mean Bar Harbor Banking and Trust Company.

1.2. Base Compensation shall mean the annual base salary payable by the Company to the Executive, excluding any bonuses, incentive compensation and other forms of additional compensation.

1.3. Cause shall be deemed to exist only in the event the Executive is convicted by a court of competent jurisdiction of a felony involving dishonesty or fraud on the part of the Executive in his relationship with the Company or the Bank.

1.4. Change in Control shall mean the occurrence of any one of the following events:

(a) Any person, including a group (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Bar Harbor Bankshares representing more than fifty percent (50%) of the combined voting power of Bar Harbor Bankshares' then outstanding securities, other than as a result of an issuance of securities initiated by Bar Harbor Bankshares in the ordinary course of its business; or

(b) Bar Harbor Bankshares is party to a Business Combination (as hereinafter defined) 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 Bar Harbor Bankshares' outstanding voting securities immediately prior to the Business Combination in substantially the same proportions as those existing immediately prior to the Business Combination; or

(c) The stockholders of Bar Harbor Bankshares approve a plan of complete liquidation of Bar Harbor Bankshares or an agreement for the sale or disposition by Bar Harbor Bankshares of all or substantially all of Bar Harbor Bankshares' assets to another person or entity that is not a wholly owned subsidiary of Bar Harbor Bankshares.

For purposes of this Section 1.4, a Business Combination means any cash tender or exchange offer, merger or other business combination, sale of stock, or sale of all or substantially all of the assets, or any combination of the foregoing transactions.

For purposes of this Section 1.4, a Change in Control shall exclude any internal corporate change, reorganization or other such event, which occurred prior to or may occur following the date of this Agreement.

1.5. Code shall mean the Internal Revenue Code of 1986, as amended, and as it may be amended from time to time, together with the rules and regulations promulgated under such code.

1.6. Company shall mean Bar Harbor Bankshares.

1.7. Date of Termination shall mean:

(a) If the Executive incurs a separation from service for Disability, thirty (30) days after Notice of Termination for Disability is given by the Company to the Executive and the Executive shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period;

(b) If the Executive's service is separated by the Company for Cause or by the Executive for Good Reason, the date on which the Executive separates from service with the Company; and

(c) If the Executive incurs a separation from service for any other reason, the date on which the Executive separates from service with the Company.

Whether the Executive has incurred a separation from service is determined based on whether the facts and circumstances indicate that the Company and the Executive reasonably anticipated that no further services would be performed after a certain date.

1.8. Disability shall mean a condition: (a) which causes the Executive to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months; or (b) which results in his receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months, income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. Disability shall be deemed to exist only when the disability has been certified to the Board of Directors of the Company by a licensed physician approved by the Board of Directors of the Company.

1.9. Good Reason shall mean one or more of the following events arising without the consent of the Executive:

(a)   a material diminution in the Executive’s Base Compensation;

(b) a material diminution in the Executive’s authority, duties or responsibilities;

(c) a material diminution in the authority, duties or responsibilities of the person to whom the Executive is required to report;

(d) a material diminution in the budget over which the Executive retains authority;

(e) a material change in the geographic location at which the Executive must perform his services; or

(f) any other action or inaction that constitutes a material breach by the Company of the Agreement or any other agreement under which the Executive provides services.

In order for a separation from service to occur for Good Reason, the separation from service must occur within two years following the initial existence of the event constituting Good Reason.

1.10. Notice of Termination shall mean the notice provided pursuant to Section 3.

2. SEVERANCE BENEFITS.

In the event that: (a) the Company separates the Executive's service other than as a result of Disability and other than for Cause, or the Executive separates his service for Good Reason; and (b) the Executive's separation from service occurs in anticipation of or after a Change in Control, then the Company shall pay the Executive the severance benefits described in this Section 2. The Executive's separation from service shall be deemed to be in anticipation of a Change in Control if it occurs within the twelve (12) month period prior to the occurrence of the Change in Control.

The severance benefits described in this Section 2 shall equal the following:

(a) The Executive shall receive a lump sum severance payment equal to 1.5 times the Executive's Base Compensation, determined as of the Date of Termination. The lump sum severance payment shall be paid on the fifth business day following the Executive’s Date of Termination.

(b) The Executive and his dependents shall continue to be eligible to receive the same medical, health, dental and life insurance benefits which the Executive is eligible to receive on the Date of Termination. The Executive shall be required to make the same premium contributions that he was required to make immediately prior to the Date of Termination. The ability of the Executive and his dependents to receive such benefits shall continue for the period during which the Executive would be entitled to continue coverage under the Company’s group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA").

(c) In the event of a Change in Control, all stock options granted but unexercised under the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan shall become 100% vested immediately prior to such Change of Control. These grants will remain subject to all of the other terms and conditions of the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan.

The Executive shall not be required to mitigate the amount of any severance benefits described in this Section 2 by seeking other employment.

3. NOTICE OF TERMINATION.

Any separation of the Executive's service by the Company due to Disability or for Cause, or by the Executive due to Good Reason, shall be communicated by written Notice of Termination to the other party. A Notice of Termination must indicate the specific provisions in this Agreement which are relied upon as the basis for the separation of the Executive's service, and must also set forth in reasonable detail the facts and circumstances claimed to provide the basis for such separation from service under the provisions so indicated.

Notwithstanding the above, in order for the Executive to separate from service with the Company for Good Reason, the Executive must provide the Notice of Termination to the Company no later than ninety (90) days after the date of the initial occurrence of the condition or conditions alleged to give rise to Good Reason. In addition, the Executive must provide the Company a period of at least thirty (30) days during which the Company can remedy the condition or conditions alleged to give rise to Good Reason and not be required to pay the amounts described in Section 2.

4. LOSS OF SEVERANCE BENEFITS.

If the Company shall separate the Executive's service due to Disability or for Cause, or if the Executive shall separate his service other than for Good Reason, or if the Executive shall die, then the Executive shall have no right to receive any severance benefits under this Agreement.

5. NO OTHER BENEFITS PAYABLE.

(a) If the Executive is entitled to receive the severance benefits described in Section 2 of this Agreement, he shall not be entitled to receive: (i) any severance benefits under the terms of any general severance pay policy or plan of the Company or the Bank; or (ii) any other compensation, benefits or payments under the terms of any other plan of, or agreement with, the Company or the Bank.

(b) Notwithstanding the above, the Executive shall be entitled to receive any compensation, benefits or payments which are specifically authorized by the terms of any plan of, or agreement with, the Company or the Bank to be paid in addition to the severance benefits described in Section 2 of this Agreement. Moreover, notwithstanding the above, the Executive shall be entitled to receive, in addition to the severance benefits described in Section 2 of this Agreement, any compensation, benefits or payments which the Executive is entitled to receive under: (i) the Bar Harbor Bankshares Supplemental Executive Retirement Plan or the Bar Harbor Bankshares Supplemental Executive Retirement Plan – Code Section 409A; (ii) any incentive compensation plan maintained by the Company or the Bank which provides for payment to a separated employee of incentive compensation earned by the employee prior to his or her separation from service; or (iii) any payroll plan or policy of the Company or the Bank which provides for payment to a separated employee of any unpaid vacation, holiday or sick pay accrued by the employee prior to his or her separation from service.

6. CERTAIN ADDITIONAL PAYMENTS BY THE EMPLOYER.

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution made at any time by the Company or to or for the benefit of the Executive (whether paid or payable, or distributed or distributable, pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment"). The Gross-Up Payment shall equal such an amount that, after payment by the Executive of all taxes (including, without limitation, any federal, state or local income taxes, Social Security taxes and Medicare taxes, and any interest or penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

Notwithstanding the foregoing provisions of this Section 6(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the greatest amount (the "Reduced Amount") that could be paid to the Executive such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the Executive and the Payments, in the aggregate, shall be reduced to the Reduced Amount.

(b) Subject to the provisions of Section 6(d), all determinations required to be made under this Section 6 (including, without limitation, whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, and the assumptions to be utilized in arriving at such determination) shall be made by KPMG Peat Marwick or such other certified public accounting firm as may be designated by the Executive (the "Accounting Firm"). The Accounting Firm shall provide detailed supporting calculations both to the Company and to the Executive within fifteen (15) business days after the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by the Company to the Executive within five (5) business days after the Company’s receipt of the Accounting Firm's determination, but in no event later than the end of the calendar year following the calendar year in which the Executive remits the Excise Tax to the appropriate taxing authority. Any determination by the Accounting Firm shall be binding upon the Company and the Executive.

(c) As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 6(d) and the Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred. The Company shall thereafter remit such Underpayment to the Executive promptly, but in no event later than the end of the calendar year following the calendar year in which the Executive remits the Excise Tax to the appropriate taxing authority.

(d) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service or any other taxing authority that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than ten (10) business days after the Executive is informed in writing of such claim. The notification shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim;

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

(iii) cooperate with the Company in good faith in order effectively to contest such claim; and

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or other taxes (including interest and penalties with respect thereto) imposed as a result of such representation and the payment of any costs and expenses. Without limitation on the foregoing provisions of this Section 6(d), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim, and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner. The Executive agrees to prosecute any such contest to a determination before any administrative tribunal, in a court of initial jurisdiction, and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive on an interest-free basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or other taxes (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided, that any extension of the statute of limitations relating to the payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(e) If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 6(d), the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 6(d)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon, after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 6(d), a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid, and the amount of such advance shall offset, to the extent thereof, the amount of the Gross-Up Payment required to be paid.

7. SUCCESSORS.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform them if no such succession had taken place. Each such successor shall execute a written agreement evidencing its assumption of the Company's obligations under this Agreement prior to the effective date of any such purchase, merger, consolidation or other transaction.

(b) The failure of the Company to obtain from each successor the written agreement described in Section 7(a) shall be deemed to be a material breach of the obligations of the Company under this Agreement, and shall entitle the Executive to incur a separation from service for Good Reason pursuant to Section 1.09(f).

(c) As used in this Section 7, the Company shall include the Company, the Bank, and any successor to all or substantially all of the business and/or assets of any of them (whether direct or indirect, by purchase, merger, consolidation or otherwise) which executes and delivers the written agreement described in Section 7(a) or which otherwise becomes bound by all the terms and provisions of this Agreement.

8. CONFIDENTIAL INFORMATION, NON-COMPETITION OBLIGATIONS, AND NON-SOLICITATION.

(a) Confidential Information

The Executive recognizes and acknowledges that certain assets of the Company, the Bank, or any of their affiliates or subsidiaries constitutes Confidential Information.

For purposes hereof, the term "Confidential Information" means any and all information and compilations of information, in whatever form or medium (including any copies thereof), relating to any part of the business of the Company, the Bank or any of their subsidiaries or affiliates, or the business of their customers, provided to the Executive, or which the Executive obtained or compiled or had obtained or compiled on his behalf, which information or compilations of information are not a matter of public record or generally known to the public, including without limitation:

(i) financial information regarding the Company, the Bank, or any of their subsidiaries or affiliates;

(ii) personnel data, including compensation arrangements relating to the Executive or any other employees of the Company, the Bank, or any of their subsidiaries or affiliates;

(iii) internal plans, practices, and procedures of the Company, the Bank or any of their subsidiaries or affiliates;

(iv) the names, portfolio information, investment strategies, requirements, lending or deposit information, or any similar information of any customers, clients, or prospects of the Company, the Bank, or any of their subsidiaries or affiliates;

(v) business methods and marketing strategies of the Company, the Bank, or any of their subsidiaries or affiliates;

(vi) any other information expressly deemed confidential by the officers and directors of the Company, the Bank, or any of their subsidiaries or affiliates; and

(viii) the terms and conditions of the Agreement and any documents or instruments executed in connection herewith that are not of public record.

The Executive shall not, without the prior written consent of the Company, the Bank, or any of their subsidiaries or affiliates, use or disclose, or negligently permit any unauthorized person to use, disclose, or gain access to, any Confidential Information.

Upon termination of employment, the Executive hereby agrees to deliver promptly to the Company, the Bank, or any of their subsidiaries or affiliates all memoranda, notes, records, manuals, or other documents, including all copies of such materials, containing Confidential Information, whether made or compiled by the Executive or furnished to him from any source by virtue of the Executive's relationship with the Company, the Bank, or any of their subsidiaries or affiliates.

Regardless of the reason for his cessation of employment, the Executive will furnish such information as may be in the Executive's possession and cooperate with the Company, the Bank, or any of their affiliates or subsidiaries as may reasonably be requested in connection with any claims or legal actions in which the Company, the Bank, or any of their subsidiaries or affiliates are or may become a party. The Company will reimburse the Executive for any reasonable out-of-pocket expenses the Executive incurs in order to satisfy his obligations under this clause.

(b) Non-Competition Obligations

In consideration of the covenants of the Company contained herein, the Executive covenants and agrees with the Company that, during the " Non-Compete Period" (as hereinafter defined) and within a one hundred fifty (150) "air" mile radius from Bar Harbor, Maine, the Executive shall not without specific written approval, directly or indirectly:

(i) engage in any insurance, brokerage, trust, banking, or other financial services as an owner, employee, consultant, representative, or in any other capacity;

(ii) directly or indirectly request or advise any past, present, or future customers of the Company, the Bank or any of their subsidiaries or affiliates to withdraw, curtail, or cancel his or her or its business with the Company, the Bank, or any of their subsidiaries or affiliates;

(iii) directly or indirectly cause, suggest, or induce others to call on any past, present, or future customers of the Company, the Bank or any of their affiliated entities; or

(iv) canvas, solicit, or accept any business on behalf of any other bank, insurance agency, trust, or other financial services business, other than the Company, the Bank or any of their affiliated entities, from any past or present customer of the Company, the Bank or any of their affiliated entities.

The "Non-Compete Period" shall commence on the date hereof and terminate one year after the cessation of the Executive's employment with the Company and all of its affiliates, regardless of reason, whether or not pursuant to this Agreement.

(c) Non-Solicitation of Employees

While employed by the Company, and for one year following cessation of his employment with the Company and all of its affiliates for any reason, the Executive shall not, directly or indirectly, by any means or device whatsoever, for himself or on behalf of, or in conjunction with, any other person, partnership or corporation, solicit, entice, hire, or attempt to hire or employ any employee of the Company, the Bank or any of their affiliated entities.

During this Agreement, the Executive shall not interview or negotiate employment with, or accept employment from, a competitor in the market area described in Section 8(b) above except with the written consent of the Company.

9. REFORMATION; INJUNCTIVE RELIEF.

(a) All the parties hereto acknowledge that the parties have carefully considered the nature and scope of this Agreement. The activities, period and area covered by Section 8 are expressly acknowledged and agreed to be fair, reasonable and necessary. To the extent that any covenant contained in Section 8 is held to be invalid, illegal or unenforceable because of the extent of activities, duration of such covenant, the geographic area covered thereby, or otherwise, the parties agree that the court making such determination shall reform such covenant to include as much of its nature and scope as will render it enforceable and, in its reduced form, said covenant shall be valid, legal and enforceable to the fullest extent of the law.

The invalidity or unenforceability of any provision of this Agreement, after reformation as provided in this Section 9, shall not affect any other provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

(b) The Executive acknowledges and agrees that, upon any breach by the Executive of his obligations under Section 8 hereof, the Company will have no adequate remedy at law, and accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief, notwithstanding Section 10 hereof. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it, including the recovery of damages from the Executive.

10. MEDIATION AND ARBITRATION.

If the Executive and the Company have any dispute whatsoever relating to the interpretation, validity or performance of this Agreement, or any other dispute arising out of this Agreement, every reasonable attempt will be made to resolve any differences or dispute within thirty (30) days of an issuance of written notice by either party to the other party.

If a successful resolution of any differences or dispute has not been achieved to the satisfaction of both parties at the end of the thirty (30) day period, the following steps will be used:

Except as otherwise expressly provided hereunder, the parties agree that any and all disputes arising out of the Executive's employment or cessation of employment, including but not limited to any dispute, controversy, or claim arising under any federal, state, or local statute, law, ordinance or regulation or under this Agreement, shall be resolved exclusively by Alternative Dispute Resolution described in this Agreement ("ADR"). The initiation of ADR shall first require mediation, and the parties agree to first try to settle any dispute through mediation. Mediation shall be initiated by either party by the serving of a written notice of intent to mediate (a "Mediation Notice") by one party upon the other. If no resolution has been mutually agreed through mediation within ninety (90) days of service of a Mediation Notice, then and only then may the dispute be submitted to arbitration. Arbitration shall be initiated by the serving of a written notice of intent to arbitrate (an "Arbitration Notice") by one party upon the other. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to preclude the Company from seeking temporary or permanent injunctive relief and/or damages from a court of competent jurisdiction pursuant to Section 9 of this Agreement with respect to any breach of Section 8 of this Agreement.

(a) In the event that a party wishes to initiate ADR, a Mediation Notice must be served on the other party within six months from the date on which the claim arose. If the parties cannot mutually agree on a mediator, then a mediator shall be selected in accordance with the Employment Mediation Rules of the American Arbitration Association.

(b) In the event that mediation is unsuccessful and arbitration is initiated, it shall be conducted under the National Rules of the Resolution of Employment Disputes of the American Arbitration Association. There shall be a single arbitrator to be agreed upon by the parties, provided that, if the parties are unable to agree upon a single arbitrator, each party shall name an arbitrator and the two so named shall name a third arbitrator. The arbitration proceedings shall be heard by the arbitrator(s) and the decision of the arbitrator, or the majority of the panel if one has been selected, shall be final and binding on the parties. Judgment upon the arbitration award may be entered in any court of competent jurisdiction. An Arbitration Notice must be served on the other party within one year from the date on which the claim arose, and failure to bring such a claim within such one-year period shall constitute a waiver of such claim and an absolute bar to any further proceedings in any forum with respect to it. All mediation and arbitration proceedings shall be conducted in Bangor, Maine, unless the parties otherwise agree in writing.

(c) The cost of any mediation proceeding under this Section 10 will be paid entirely by the Company. The cost of any arbitration proceeding will be shared equally by the parties to the dispute; provided, however, that, if the dispute is resolved in favor of the Executive, such cost shall be paid in full by the Company. Each party shall be responsible for its own cost of representation and counsel.

11. POST-TERMINATION OBLIGATIONS.

All payments and benefits due to the Executive under this Agreement shall be subject to the Executive's compliance with this Section 11 for one full year following the Executive's Date of Termination. The Executive shall, upon reasonable notice, furnish such information and assistance to the Company and the Bank as may reasonably be required by the Company or the Bank in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.

12. GENERAL PROVISIONS.

(a) All notices required by this Agreement shall be in writing and shall be sufficiently given if delivered personally or mailed by registered mail or certified mail, return receipt requested, to the parties at their then current addresses. All notices shall be deemed to have been given as of the date so delivered or mailed.

(b) This Agreement and the plans and agreements described in Section 5(b) contain the entire transaction between the parties, and there are no other representations, warranties, conditions or agreements relating to the subject matter thereof.

(c) The waiver by any party of any breach or default of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.

(d) This Agreement may not be changed orally but only by an agreement in writing executed on behalf of the party against which enforcement of any waiver, change, modification, consent or discharge is sought.

(e) This Agreement shall be binding upon and inure to the benefit of the Company and the Executive and their respective successors, assigns, heirs and legal representatives (including, but not limited to, any successor of the Company described in Section 7).

(f) Each of the parties agrees to execute all further instruments and documents and to take all further action as the other party may reasonably request in order to effectuate the terms and purposes of this Agreement.

(g) This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.

(h) This Agreement shall be construed pursuant to and in accordance with the laws of the State of Maine. Actions brought by the Company under this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts of Maine. Both parties consent to the personal jurisdiction of such courts for such actions, and agree that they may be served with process in accordance with Section 12(a).

(i) The Executive acknowledges that he has had a full and complete opportunity to review the terms, enforceability and implications of this Agreement, and that the Company has not made any representations or warranties to the Executive concerning the terms, enforceability and implications of this Agreement other than as are reflected in this Agreement.

(j) Any provision of this Agreement that is susceptible to more than one interpretation shall be interpreted in a manner that is consistent with this Agreement satisfying the requirements of Code Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Witness:                                                                          COMPANY:
                                                                                        BAR HARBOR BANKSHARES

_________________________                                      By____________________________
                                                                                        Its Chairperson

Witness:                                                                          EXECUTIVE:

___________________________                              ______________________________
                                                                                    Gerald Shencavitz

EX-10

Exhibit 10.11

CHANGE IN CONTROL, CONFIDENTIALITY

AND NONCOMPETITION AGREEMENT

THIS CHANGE IN CONTROL, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT is made and entered into this _____ day of December, 2008, by and between BAR HARBOR BANKSHARES, a Maine corporation with its headquarters located in Bar Harbor, Maine (hereinafter "the Company"), and JOSEPH M. MURPHY, a resident of Mount Desert, Maine (hereinafter "the President").

W I T N E S S E T H:

WHEREAS, Bar Harbor Banking and Trust Company is a wholly-owned subsidiary of Bar Harbor Bankshares; and

WHEREAS, the President is an employee of the Company; and

WHEREAS, the Company wishes to retain the services of the President; and

WHEREAS, the President and the Company entered into a change in control, confidentiality and noncompetition agreement dated November 7, 2003; and

WHEREAS, the President and the Company wish to amend and restate such change in control, confidentiality and noncompetition agreement so that the provisions of this Agreement will supersede the change in control, confidentiality and noncompetition agreement dated November 7, 2003.

NOW, THEREFORE, the parties hereto do hereby agree as follows:

1. DEFINITIONS.

1.1. Bank shall mean Bar Harbor Banking and Trust Company.

1.2. Base Compensation shall mean the annual base salary payable by the Company to the President, excluding any bonuses, incentive compensation and other forms of additional compensation.

1.3. Cause shall be deemed to exist only in the event the President is convicted by a court of competent jurisdiction of a felony involving dishonesty or fraud on the part of the President in his relationship with the Company or the Bank.

1.4. Change in Control shall mean the occurrence of any one of the following events:

(a) Any person, including a group (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), becomes the beneficial owner (as determined pursuant to Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Bar Harbor Bankshares representing more than fifty percent (50%) of the combined voting power of Bar Harbor Bankshares' then outstanding securities, other than as a result of an issuance of securities initiated by Bar Harbor Bankshares in the ordinary course of its business; or

(b) Bar Harbor Bankshares is party to a Business Combination (as hereinafter defined) 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 Bar Harbor Bankshares' outstanding voting securities immediately prior to the Business Combination in substantially the same proportions as those existing immediately prior to the Business Combination; or

(c) The stockholders of Bar Harbor Bankshares approve a plan of complete liquidation of Bar Harbor Bankshares or an agreement for the sale or disposition by Bar Harbor Bankshares of all or substantially all of Bar Harbor Bankshares' assets to another person or entity that is not a wholly owned subsidiary of Bar Harbor Bankshares.

For purposes of this Section 1.4, a Business Combination means any cash tender or exchange offer, merger or other business combination, sale of stock, or sale of all or substantially all of the assets, or any combination of the foregoing transactions.

For purposes of this Section 1.4, a Change in Control shall exclude any internal corporate change, reorganization or other such event, which occurred prior to or may occur following the date of this Agreement.

1.5. Code shall mean the Internal Revenue Code of 1986, as amended, and as it may be amended from time to time, together with the rules and regulations promulgated under such code.

1.6. Company shall mean Bar Harbor Bankshares.

1.7. Date of Termination shall mean:

(a) If the President's incurs a separation from service for Disability, thirty (30) days after Notice of Termination for Disability is given by the Company to the President and the President shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period;

(b) If the President's service is separated by the Company for Cause or by the President for Good Reason, the date on which the President separates from service with the Company; and

(c) If the President incurs a separation from service for any other reason, the date on which the President separates from service with the Company.

Whether the President has incurred a separation from service is determined based on whether the facts and circumstances indicate that the Company and the President reasonably anticipated that no further services would be performed after a certain date.

1.8. Disability shall mean a condition: (a) which causes the President to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months; or (b) which results in his receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months, income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. Disability shall be deemed to exist only when the disability has been certified to the Board of Directors of the Company by a licensed physician approved by the Board of Directors of the Company.

1.9. Employment Agreement shall mean the employment agreement between the President and the Company dated of even date herewith.

1.10. Good Reason shall mean one or more of the following events arising without the consent of the President:

(a)   a material diminution in the President’s Base Compensation;

(b) a material diminution in the President’s authority, duties or responsibilities;

(c) a requirement that the President report to a corporate officer or employee instead of reporting directly to the board of directors of the Company;

(d) a material diminution in the budget over which the President retains authority;

(e) a material change in the geographic location at which the President must perform his services; or

(f) any other action or inaction that constitutes a material breach by the Company of the Agreement or any other agreement under which the President provides services.

In order for a separation from service to occur for Good Reason, the separation from service must occur within two years following the initial existence of the event constituting Good Reason.

1.11. Notice of Termination shall mean the notice provided pursuant to Section 3.

2. SEVERANCE BENEFITS.

In the event that: (a) the Company separates the President's service other than as a result of Disability and other than for Cause, or the President separates his service for Good Reason; and (b) the President's separation from service occurs in anticipation of or after a Change in Control, then the Company shall pay the President the severance benefits described in this Section 2. The President's separation from service shall be deemed to be in anticipation of a Change in Control if it occurs within the twelve (12) month period prior to the occurrence of the Change in Control.

The severance benefits described in this Section 2 shall equal the following:

(a) The President shall receive a lump sum severance payment equal to 2.0 times the President's Base Compensation, determined as of the Date of Termination. The lump sum severance payment shall be paid on the fifth business day following the President’s Date of Termination.

(b) The President and his dependents shall continue to be eligible to receive the same medical, health, dental and life insurance benefits which the President is eligible to receive on the Date of Termination. The President shall be required to make the same premium contributions that he was required to make immediately prior to the Date of Termination. The ability of the President and his dependents to receive such benefits shall continue for the period during which the President would be entitled to continue coverage under the Company’s group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). In the event the COBRA period is greater than 24 months, the President shall be responsible for payment of 100% of the premiums due for all periods in excess of 24 months.

In the event the COBRA period is less than 24 months, the President and his dependents shall continue to be eligible to receive the same medical, health, dental and life insurance benefits which the President is eligible to receive on the Date of Termination for a total period not to exceed 24 months, taking into account the COBRA period. The President shall be required to make the same premium contributions that he was required to make immediately prior to the Date of Termination and the Company shall pay the balance by making payment directly to the insurer on a monthly basis during the balance of the 24 month period, if any.

(c) In the event of a Change in Control, all stock options granted but unexercised under the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan shall become 100% vested immediately prior to such Change in Control. These grants will remain subject to all of the other terms and conditions of the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 or any other equity plan.

The President shall not be required to mitigate the amount of any severance benefits described in this Section 2 by seeking other employment.

3. NOTICE OF TERMINATION.

Any separation of the President's service by the Company due to Disability or for Cause, or by the President due to Good Reason, shall be communicated by written Notice of Termination to the other party. A Notice of Termination must indicate the specific provisions in this Agreement which are relied upon as the basis for the separation of the President's service, and must also set forth in reasonable detail the facts and circumstances claimed to provide the basis for such separation from service under the provisions so indicated.

Notwithstanding the above, in order for the President to separate from service with the Company for Good Reason, the President must provide the Notice of Termination to the Company no later than ninety (90) days after the date of the initial occurrence of the condition or conditions alleged to give rise to Good Reason. In addition, the President must provide the Company a period of at least thirty (30) days during which the Company can remedy the condition or conditions alleged to give rise to Good Reason and not be required to pay the amounts described in Section 2.

4. LOSS OF SEVERANCE BENEFITS.

If the Company shall separate the President's service due to Disability or for Cause, or if the President shall separate his service other than for Good Reason, or if the President shall die, then the President shall have no right to receive any severance benefits under this Agreement.

5. NO OTHER BENEFITS PAYABLE.

(a) If the President is entitled to receive the severance benefits described in Section 2 of this Agreement, he shall not be entitled to receive: (i) any severance benefits under the terms of any general severance pay policy or plan of the Company or the Bank; or (ii) any other compensation, benefits or payments under the terms of any other plan of, or agreement with, the Company or the Bank, including but not limited to the Employment Agreementbetween the Company and the President dated of even date herewith.

(b) Notwithstanding the above, the President shall be entitled to receive any compensation, benefits or payments which are specifically authorized by the terms of any plan of, or agreement with, the Company or the Bank to be paid in addition to the severance benefits described in Section 2 of this Agreement. Moreover, notwithstanding the above, the President shall be entitled to receive, in addition to the severance benefits described in Section 2 of this Agreement, any compensation, benefits or payments which the President is entitled to receive under: (i) the Bar Harbor Bankshares Supplemental Executive Retirement Plan or the Bar Harbor Bankshares Supplemental Executive Retirement Plan – Code Section 409A; (iii) any incentive compensation plan maintained by the Company or the Bank which provides for payment to a separated employee of incentive compensation earned by the employee prior to his or her separation from service; or (iv) any payroll plan or policy of the Company or the Bank which provides for payment to a separated employee of any unpaid vacation, holiday or sick pay accrued by the employee prior to his or her separation from service.

6. CERTAIN ADDITIONAL PAYMENTS BY THE EMPLOYER.

(a) Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution made at any time by the Company or to or for the benefit of the President (whether paid or payable, or distributed or distributable, pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by the President with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the President shall be entitled to receive an additional payment (a "Gross-Up Payment"). The Gross-Up Payment shall equal such an amount that, after payment by the President of all taxes (including, without limitation, any federal, state or local income taxes, Social Security taxes and Medicare taxes, and any interest or penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the President retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

Notwithstanding the foregoing provisions of this Section 6(a), if it shall be determined that the President is entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the greatest amount (the "Reduced Amount") that could be paid to the President such that the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to the President and the Payments, in the aggregate, shall be reduced to the Reduced Amount.

(b) Subject to the provisions of Section 6(d), all determinations required to be made under this Section 6 (including, without limitation, whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment, and the assumptions to be utilized in arriving at such determination) shall be made by KPMG Peat Marwick or such other certified public accounting firm as may be designated by the President (the "Accounting Firm"). The Accounting Firm shall provide detailed supporting calculations both to the Company and to the President within fifteen (15) business days after the receipt of notice from the President that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the President shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by the Company to the President within five (5) business days after the Company’s receipt of the Accounting Firm's determination, but in no event later than the end of the calendar year following the calendar year in which the President remits the Excise Tax to the appropriate taxing authority. Any determination by the Accounting Firm shall be binding upon the Company and the President.

(c) As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 6(d) and the President thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred. The Company shall thereafter remit such Underpayment to the President promptly, but in no event later than the end of the calendar year following the calendar year in which the President remits the Excise Tax to the appropriate taxing authority.

(d) The President shall notify the Company in writing of any claim by the Internal Revenue Service or any other taxing authority that, if successful, would require the payment by the Company of a Gross-Up Payment. Such notification shall be given as soon as practicable, but no later than ten (10) business days after the President is informed in writing of such claim. The notification shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The President shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the President in writing prior to the expiration of such period that it desires to contest such claim, the President shall:

(i) give the Company any information reasonably requested by the Company relating to such claim;

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

(iii) cooperate with the Company in good faith in order effectively to contest such claim; and

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest, and shall indemnify and hold the President harmless, on an after-tax basis, for any Excise Tax or other taxes (including interest and penalties with respect thereto) imposed as a result of such representation and the payment of any costs and expenses. Without limitation on the foregoing provisions of this Section 6(d), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim, and may, at its sole option, either direct the President to pay the tax claimed and sue for a refund or contest the claim in any permissible manner. The President agrees to prosecute any such contest to a determination before any administrative tribunal, in a court of initial jurisdiction, and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the President to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the President on an interest-free basis, and shall indemnify and hold the President harmless, on an after-tax basis, from any Excise Tax or other taxes (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided, that any extension of the statute of limitations relating to the payment of taxes for the taxable year of the President with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and the President shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(e) If, after the receipt by the President of an amount advanced by the Company pursuant to Section 6(d), the President becomes entitled to receive any refund with respect to such claim, the President shall (subject to the Company's complying with the requirements of Section 6(d)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon, after taxes applicable thereto). If, after the receipt by the President of an amount advanced by the Company pursuant to Section 6(d), a determination is made that the President shall not be entitled to any refund with respect to such claim and the Company does not notify the President in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid, and the amount of such advance shall offset, to the extent thereof, the amount of the Gross-Up Payment required to be paid.

7. SUCCESSORS.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform its obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform them if no such succession had taken place. Each such successor shall execute a written agreement evidencing its assumption of the Company's obligations under this Agreement prior to the effective date of any such purchase, merger, consolidation or other transaction.

(b) The failure of the Company to obtain from each successor the written agreement described in Section 7(a) shall be deemed to be a material breach of the obligations of the Company under this Agreement, and shall entitle the President to incur a separation from service for Good Reason pursuant to Section 1.10(f).

(c) As used in this Section 7, the Company shall include the Company, the Bank, and any successor to all or substantially all of the business and/or assets of any of them (whether direct or indirect, by purchase, merger, consolidation or otherwise) which executes and delivers the written agreement described in Section 7(a) or which otherwise becomes bound by all the terms and provisions of this Agreement.

8. CONFIDENTIAL INFORMATION, NON-COMPETITION OBLIGATIONS, AND NON-SOLICITATION.

(a) Confidential Information

The President recognizes and acknowledges that certain assets of the Company, the Bank, or any of their affiliates or subsidiaries constitutes Confidential Information.

For purposes hereof, the term "Confidential Information" means any and all information and compilations of information, in whatever form or medium (including any copies thereof), relating to any part of the business of the Company, the Bank or any of their subsidiaries or affiliates, or the business of their customers, provided to the President, or which the President obtained or compiled or had obtained or compiled on his behalf, which information or compilations of information are not a matter of public record or generally known to the public, including without limitation:

(i) financial information regarding the Company, the Bank, or any of their subsidiaries or affiliates;

(ii) personnel data, including compensation arrangements relating to the President or any other employees of the Company, the Bank, or any of their subsidiaries or affiliates;

(iii) internal plans, practices, and procedures of the Company, the Bank or any of their subsidiaries or affiliates;

(iv) the names, portfolio information, investment strategies, requirements, lending or deposit information, or any similar information of any customers, clients, or prospects of the Company, the Bank, or any of their subsidiaries or affiliates;

(v) business methods and marketing strategies of the Company, the Bank, or any of their subsidiaries or affiliates;

(vi) any other information expressly deemed confidential by the officers and directors of the Company, the Bank, or any of their subsidiaries or affiliates; and

(viii) the terms and conditions of the Agreement and any documents or instruments executed in connection herewith that are not of public record.

The President shall not, without the prior written consent of the Company, the Bank, or any of their subsidiaries or affiliates, use or disclose, or negligently permit any unauthorized person to use, disclose, or gain access to, any Confidential Information.

Upon termination of employment, the President hereby agrees to deliver promptly to the Company, the Bank, or any of their subsidiaries or affiliates all memoranda, notes, records, manuals, or other documents, including all copies of such materials, containing Confidential Information, whether made or compiled by the President or furnished to him from any source by virtue of the President's relationship with the Company, the Bank, or any of their subsidiaries or affiliates.

Regardless of the reason for his cessation of employment, the President will furnish such information as may be in the President's possession and cooperate with the Company, the Bank, or any of their affiliates or subsidiaries as may reasonably be requested in connection with any claims or legal actions in which the Company, the Bank, or any of their subsidiaries or affiliates are or may become a party. The Company will reimburse the President for any reasonable out-of-pocket expenses the President incurs in order to satisfy his obligations under this clause.

(b) Non-Competition Obligations

In consideration of the covenants of the Company contained herein, the President covenants and agrees with the Company that, during the "Non-Compete Period" (as hereinafter defined) and within a one hundred fifty (150) "air" mile radius from Bar Harbor, Maine, the President shall not without specific written approval, directly or indirectly:

(i) engage in any insurance, brokerage, trust, banking, or other financial services as an owner, employee, consultant, representative, or in any other capacity;

(ii) directly or indirectly request or advise any past, present, or future customers of the Company, the Bank or any of their subsidiaries or affiliates to withdraw, curtail, or cancel his or her or its business with the Company, the Bank, or any of their subsidiaries or affiliates;

(iii) directly or indirectly cause, suggest, or induce others to call on any past, present, or future customers of the Company, the Bank or any of their affiliated entities; or

(iv) canvas, solicit, or accept any business on behalf of any other bank, insurance agency, trust, or other financial services business, other than the Company, the Bank or any of their affiliated entities, from any past or present customer of the Company, the Bank or any of their affiliated entities.

The "Non-Compete Period" shall commence on the date hereof and terminate one year after the cessation of the President's employment with the Company and all of its affiliates, regardless of reason, whether or not pursuant to this Agreement.

(c) Non-Solicitation of Employees

While employed by the Company, and for one year following cessation of his employment with the Company and all of its affiliates for any reason, the President shall not, directly or indirectly, by any means or device whatsoever, for himself or on behalf of, or in conjunction with, any other person, partnership or corporation, solicit, entice, hire, or attempt to hire or employ any employee of the Company, the Bank or any of their affiliated entities.

During this Agreement, the President shall not interview or negotiate employment with, or accept employment from, a competitor in the market area described in Section 8(b) above except with the written consent of the Company.

9. REFORMATION; INJUNCTIVE RELIEF.

(a) All the parties hereto acknowledge that the parties have carefully considered the nature and scope of this Agreement. The activities, period and area covered by Section 8 are expressly acknowledged and agreed to be fair, reasonable and necessary. To the extent that any covenant contained in Section 8 is held to be invalid, illegal or unenforceable because of the extent of activities, duration of such covenant, the geographic area covered thereby, or otherwise, the parties agree that the court making such determination shall reform such covenant to include as much of its nature and scope as will render it enforceable and, in its reduced form, said covenant shall be valid, legal and enforceable to the fullest extent of the law.

The invalidity or unenforceability of any provision of this Agreement, after reformation as provided in this Section 9, shall not affect any other provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

(b) The President acknowledges and agrees that, upon any breach by the President of his obligations under Section 8 hereof, the Company will have no adequate remedy at law, and accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief, notwithstanding Section 10 hereof. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it, including the recovery of damages from the President.

10. MEDIATION AND ARBITRATION.

If the President and the Company have any dispute whatsoever relating to the interpretation, validity or performance of this Agreement, or any other dispute arising out of this Agreement, every reasonable attempt will be made to resolve any differences or dispute within thirty (30) days of an issuance of written notice by either party to the other party.

If a successful resolution of any differences or dispute has not been achieved to the satisfaction of both parties at the end of the thirty (30) day period, the following steps will be used:

Except as otherwise expressly provided hereunder, the parties agree that any and all disputes arising out of the President's employment or cessation of employment, including but not limited to any dispute, controversy, or claim arising under any federal, state, or local statute, law, ordinance or regulation or under this Agreement, shall be resolved exclusively by Alternative Dispute Resolution described in this Agreement ("ADR"). The initiation of ADR shall first require mediation, and the parties agree to first try to settle any dispute through mediation. Mediation shall be initiated by either party by the serving of a written notice of intent to mediate (a "Mediation Notice") by one party upon the other. If no resolution has been mutually agreed through mediation within ninety (90) days of service of a Mediation Notice, then and only then may the dispute be submitted to arbitration. Arbitration shall be initiated by the serving of a written notice of intent to arbitrate (an "Arbitration Notice") by one party upon the other. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to preclude the Company from seeking temporary or permanent injunctive relief and/or damages from a court of competent jurisdiction pursuant to Section 9 of this Agreement with respect to any breach of Section 8 of this Agreement.

(a) In the event that a party wishes to initiate ADR, a Mediation Notice must be served on the other party within six months from the date on which the claim arose. If the parties cannot mutually agree on a mediator, then a mediator shall be selected in accordance with the Employment Mediation Rules of the American Arbitration Association.

(b) In the event that mediation is unsuccessful and arbitration is initiated, it shall be conducted under the National Rules of the Resolution of Employment Disputes of the American Arbitration Association. There shall be a single arbitrator to be agreed upon by the parties, provided that, if the parties are unable to agree upon a single arbitrator, each party shall name an arbitrator and the two so named shall name a third arbitrator. The arbitration proceedings shall be heard by the arbitrator(s) and the decision of the arbitrator, or the majority of the panel if one has been selected, shall be final and binding on the parties. Judgment upon the arbitration award may be entered in any court of competent jurisdiction. An Arbitration Notice must be served on the other party within one year from the date on which the claim arose, and failure to bring such a claim within such one-year period shall constitute a waiver of such claim and an absolute bar to any further proceedings in any forum with respect to it. All mediation and arbitration proceedings shall be conducted in Bangor, Maine, unless the parties otherwise agree in writing.

(c) The cost of any mediation proceeding under this Section 10 will be paid entirely by the Company. The cost of any arbitration proceeding will be shared equally by the parties to the dispute; provided, however, that, if the dispute is resolved in favor of the President, such cost shall be paid in full by the Company. Each party shall be responsible for its own cost of representation and counsel.

11. POST-TERMINATION OBLIGATIONS.

All payments and benefits due to the President under this Agreement shall be subject to the President's compliance with this Section 11 for one full year following the President's Date of Termination. The President shall, upon reasonable notice, furnish such information and assistance to the Company and the Bank as may reasonably be required by the Company or the Bank in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party.

12. COMPLIANCE WITH FDI ACT.

Notwithstanding anything herein contained to the contrary, any payments to the President by the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act ("FDI Act"), 12 U.S.C. Section 1828(k), and any regulations promulgated thereunder.

13. GENERAL PROVISIONS.

(a) All notices required by this Agreement shall be in writing and shall be sufficiently given if delivered personally or mailed by registered mail or certified mail, return receipt requested, to the parties at their then current addresses. All notices shall be deemed to have been given as of the date so delivered or mailed.

(b) This Agreement, the Employment Agreement between the Company and the President dated of even date herewith, and the plans and agreements described in Section 5(b) contain the entire transaction between the parties, and there are no other representations, warranties, conditions or agreements relating to the subject matter thereof.

(c) The waiver by any party of any breach or default of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.

(d) This Agreement may not be changed orally but only by an agreement in writing executed on behalf of the party against which enforcement of any waiver, change, modification, consent or discharge is sought.

(e) This Agreement shall be binding upon and inure to the benefit of the Company and the President and their respective successors, assigns, heirs and legal representatives (including, but not limited to, any successor of the Company described in Section 7).

(f) Each of the parties agrees to execute all further instruments and documents and to take all further action as the other party may reasonably request in order to effectuate the terms and purposes of this Agreement.

(g) This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument.

(h) This Agreement shall be construed pursuant to and in accordance with the laws of the State of Maine. Actions brought by the Company under this Agreement shall be subject to the exclusive jurisdiction of the state and federal courts of Maine. Both parties consent to the personal jurisdiction of such courts for such actions, and agree that they may be served with process in accordance with Section 12(a).

(i) The President acknowledges that he has had a full and complete opportunity to review the terms, enforceability and implications of this Agreement, and that the Company has not made any representations or warranties to the President concerning the terms, enforceability and implications of this Agreement other than as are reflected in this Agreement.

(j) Any provision of this Agreement that is susceptible to more than one interpretation shall be interpreted in a manner that is consistent with this Agreement satisfying the requirements of Code Section 409A.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Witness:                                                                  COMPANY:
                                                                              BAR HARBOR BANKSHARES

_________________________                          By _______________________________
                                                                                Its

Witness:                                                                  PRESIDENT:

_________________________                          __________________________________
                                                                            Joseph M. Murphy

EX-10

Exhibit 10.6

AMENDMENT NO. 1
TO THE
BAR HARBOR BANKSHARES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

            WHEREAS, effective as of January 1, 2003, Bar Harbor Bankshares adopted the Bar Harbor Bankshares Supplemental Executive Retirement Plan (the "Grandfathered Plan") for the purpose of providing deferred compensation for a select group of management or highly compensated employees; and

            WHEREAS, it is desirable that Bar Harbor Bankshares amend the Grandfathered Plan to cease additional benefit accruals under the Grandfathered Plan and to make the Grandfathered Plan relate solely to deferred compensation that was both earned and vested prior to January 1, 2005, so that the Grandfathered Plan will be treated as a grandfathered plan that is exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended.

            NOW, THEREFORE, the Grandfathered Plan is amended as follows

            (1) Effective as of January 1, 2005, Section 2.1 of the Grandfathered Plan is amended to read as follows:

            2.1 "Accrued Benefit" shall mean the monthly retirement benefit which a Participant is entitled to receive under the Plan if the payment of his or her benefit commences prior to his or her Normal Retirement Date, as set forth in Section A.3 of Annex A; provided, however, that Accrued Benefit shall not exceed the monthly retirement benefit which was both earned and vested by the Participant prior to January 1, 2005 under the terms of the Plan.

            (2) Effective as of January 1, 2005, Section 2.12 of the Grandfathered Plan is amended to read as follows:

            2.12 "Normal Retirement Benefit" shall mean the monthly retirement benefit which a Participant is entitled to receive if the payment of his or her benefit commences on or after his or her Normal Retirement Date, as set forth in Section A.2 of Annex A; provided, however, that Normal Retirement Benefit shall not exceed the monthly retirement benefit which was both earned and vested by the Participant prior to January 1, 2005 under the terms of the Plan.

            (3) Effective as of January 1, 2005, the last paragraph of Section 4.3 of the Grandfathered Plan is amended to read as follows:

            If an eligible Participant ceases to be a Disabled Participant, the Participant’s Disability Retirement Benefit shall cease. Thereafter, if the Participant subsequently becomes eligible to receive a Normal Retirement Benefit, an Early Retirement Benefit or a Vested Deferred Benefit, then the number of months during which such Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit is payable shall be reduced so that the Present Value of such adjusted Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit shall equal the excess (if any) of: (a) the Present Value of the unadjusted Normal Retirement Benefit, Early Retirement Benefit or Vested Deferred Benefit payable under the Plan; reduced by (b) the Present Value of the amounts previously received by the Participant as a Disability Retirement Benefit from the Plan.

            (4) Effective as of January 1, 2005, a new Section 12.7 is hereby added to the Grandfathered Plan to read as follows:

            12.7 Compliance With FDI Act.

            Notwithstanding anything herein contained to the contrary, any payments to a Participant by the Company, whether pursuant to this Plan or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act ("FDI Act"), 12 U.S.C. Section 1828(k), and any regulations promulgated thereunder.

Dated this             day of            , 20    .

Witness:                                     BAR HARBOR BANKSHARES

_______________________    By__________________________
                                                        Title: Chairperson

            Pursuant to Section 11.1 of the Grandfathered Plan, the participants in the Grandfathered Plan hereby unanimously consent to the adoption of this Amendment No. 1 to the Grandfathered Plan.

________________________        Date:   _______________
Joseph M. Murphy

________________________         Date: _______________
Dean S. Read

 ________________________         Date: _______________
Gerald Shencavitz

EX-10

Exhibit 10.10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT is made and entered into this _____ day of December , 2008, by and between BAR HARBOR BANKSHARES, a Maine corporation with its headquarters located in Bar Harbor, Maine (hereinafter "the Company"), and JOSEPH M. MURPHY, a resident of Mount Desert, Maine (hereinafter "the President").

W I T N E S S E T H:

WHEREAS, Bar Harbor Banking and Trust Company is a wholly-owned subsidiary of Bar Harbor Bankshares; and

WHEREAS, the President is an employee of the Company; and

WHEREAS, the Company wishes to retain the services of the President; and

WHEREAS, the President and the Company entered into an employment agreement dated January 3, 2003 that was amended by an agreement dated November 7, 2003; and

WHEREAS, the President and the Company wish to amend and restate such employment agreement so that the provisions of this Agreement will supersede the employment agreement dated January 3, 2003 and the amendment to the employment agreement dated November 7, 2003.

NOW, THEREFORE, the parties hereto do hereby agree as follows:

1. EMPLOYMENT.

The Company hereby employs the President, and the President hereby accepts employment by the Company, as the President and Chief Executive Officer of Bar Harbor Bankshares on the terms and conditions specified herein.

        2. TERM.

The President’s employment shall be for a term of two (2) years commencing as of January 3, 2007 and ending January 3, 2009, unless sooner terminated. The Company agrees to notify the President not less than one hundred and eighty (180) days prior to January 3, 2009 if it does not intend to extend the President’s employment.

                In the absence of notice of intent not to extend this Agreement by the Company, the Agreement shall be deemed automatically extended in additional one-year terms. After the initial extension, the Company agrees to a like notice period and subsequent extensions of this Agreement until and unless the Company and the President shall mutually agree to modify the terms of this Agreement. During any extension of this Agreement, as provided herein, all other provisions of this Agreement shall remain in effect.

Upon expiration of this Agreement, pursuant to a notice of intention not to extend, the President’s employment by the Company shall cease and no severance payments such as those set forth in Section 6 shall be due.

Either the Board of Directors of the Company or the President may terminate the President’s employment at any time for any reason, subject to the provisions of Section 6 of this Agreement.

        3. RESPONSIBILITIES AND OTHER ACTIVITIES.

The President shall be employed as the President and Chief Executive Officer of Bar Harbor Bankshares, and shall undertake the overall management, responsibilities, and duties related to this position as defined by the Board of Directors of the Company and summarized in the job description attached as Exhibit A. The President shall faithfully perform the duties of his position as described herein, shall devote substantially all of his business time and energies to the business and affairs of the Company, and shall use his best efforts, skills and abilities to promote the Company’s interests. The President may not engage in any business activities or render any services of a business, commercial, or professional nature (whether or not for compensation) that would affect adversely the President’s performance of his responsibilities and duties hereunder or conflict with the business of the Company for the benefit of any person or entity, unless the President receives the prior written consent of the Company.

4. COMPENSATION.

The Company shall pay the President a base salary of not less than Two hundred seventy three thousand nine hundred forty six dollars and no cents ($273,946.00) per year. The base salary shall be paid in substantially equal installments in accordance with the Company’s compensation policies and procedures on the pay dates established by the Company for its senior executive officers. The base salary shall be reviewed annually by the Compensation Committee of the Company’s Board of Directors beginning as of the first week of January, 2008, and shall be adjusted at the Company’s sole discretion. The President shall also participate in any performance compensation plans agreed upon by the parties during the term of this Agreement in concert with the Company’s evolving goals and objectives.

5. BENEFITS.

            (a) The President shall be eligible to participate in such medical, dental, disability, retirement, life insurance and other employee benefits on the same basis as may be provided to other similarly-situated employees of the Company. The President shall be entitled to participate in the Bar Harbor Bankshares Supplemental Executive Retirement Plan and the Bar Harbor Bankshares Supplemental Executive Retirement Plan – Code Section 409A (collectively, the "SERPs") to the extent permitted by the terms thereof. As to all other benefits to which the President may be entitled in parity with all other employees, such benefits may be created, changed, or terminated from time to time in the Company’s sole discretion. In addition, the President shall be entitled to reasonable paid vacations consistent with the Company’s vacation policy.

            (b) The Company shall reimburse the President for all ordinary and necessary business expenses described in Section 62(a)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code") which are incurred by the President in the performance of his duties hereunder and which are subject to reimbursement in accordance with the Company’s policies; provided, however, that: (i) such expenses shall be reimbursed no later than the end of the calendar year following the calendar year in which the expenses were incurred; (ii) the amount of such expenses eligible for reimbursement in one calendar year cannot affect the amount of such expenses eligible for reimbursement in another calendar year; and (iii) the right to reimbursement is not subject to liquidation or exchange for another benefit.

6. TERMINATION.

            (a) Termination by the Company.

The Company may elect to terminate this Agreement and separate the President from his service at any time by giving the President thirty (30) days’ prior written notice of separation from service. The President’s separation from service shall occur on the date specified in such written notice.

In the event of separation from service pursuant to this Section 6(a), the President shall be entitled to receive the following:

(i) If the President has any base salary that is earned but unpaid on the date of the President’s separation from service, the Company shall pay the President such earned but unpaid base salary in accordance with the Company’s compensation policies and procedures.

(ii) If the President has any vacation time that is earned but unused on the date of the President’s separation from service, the Company shall pay the President such earned but unused vacation time in accordance with the Company’s vacation pay policy.

(iii) During the period from the date of the President’s receipt of written notice of separation from service through the date of his separation from service, the Company shall continue to provide the President the base salary and benefits described in Section 4 and Section 5.

(iv) The Company shall pay the President severance pay equal to two times the President’s base salary as in effect on the date of the President’s receipt of written notice of separation from service. The severance pay shall be paid in substantially equal installments for a period of twenty-four (24) months, shall commence on the first pay date following the President’s separation from service, and shall continue on each subsequent pay date during such twenty-four (24) month period. If the President shall die prior to the receipt of all of such payments, the remainder of such payments shall be paid to his surviving spouse or, if he has no surviving spouse, to his estate.

(v) The President shall receive all rights and benefits (if any) to which he is entitled due to his separation from service under the employee benefit plans and programs of the Company in existence as of the date of the President’s separation from service. Such rights and benefits shall be determined in accordance with the terms of such plans and programs.

Notwithstanding the above, the amounts described in Section 6(a)(iv) that are payable subsequent to the President’s separation from service shall not be paid or commence to be paid to the President prior to the first pay date that is six months after the date on which the President incurs a separation from service with the Company, but only to the extent that such amounts exceed two times the lesser of: (A) the President’s annualized compensation based on the President’s annual rate of pay for the calendar year preceding the calendar year in which the President incurs a separation from service; or (B) the limitation on compensation set forth in Code Section 401(a)(17) for the calendar year in which the President incurs a separation from service (the "Exemption Amount"). Any amount described in Section 6(a)(iv) that would be payable within the first six months following the President’s separation from service without regard to this paragraph and that is not applied against the Exemption Amount shall be paid in a lump sum on the first pay date that is six months after the date of the President’s separation from service.

Except as provided in this Section 6(a), all obligations of the parties under this Agreement shall cease upon the Company’s termination of this Agreement and the President’s separation from service pursuant to this Section 6(a).

(b) Resignation.

The President may elect to terminate this Agreement and voluntarily resign his employment at any time for any reason by giving the Company not less than thirty (30) days’ prior written notice of separation from service. The President’s separation from service shall occur on the date specified in such written notice, unless the Company elects to terminate the President’s service as of a date prior thereto.

In the event of separation from service pursuant to this Section 6(b), the President shall be entitled to receive the following:

(i) If the President has any base salary that is earned but unpaid on the date of the President’s separation from service, the Company shall pay the President such earned but unpaid base salary in accordance with the Company’s compensation policies and procedures.

(ii) If the President has any vacation time that is earned but unused on the date of the President’s separation from service, the Company shall pay the President such earned but unused vacation time in accordance with the Company’s vacation pay policy.

(iii) During the period from the date of the Company’s receipt of written notice of separation from service through the date of the President’s separation from service, the Company shall continue to provide the President the base salary and benefits described in Section 4 and Section 5. If the Company elects to terminate the President’s service within the thirty (30) day period beginning on the Company’s receipt of written notice of separation from service, then the Company shall pay the President the base salary and benefits that he would have received if he had remained employed through the end of such thirty (30) day period. Such base salary shall be paid in a lump sum on the first pay date following the President’s separation from service.

(iv) The President shall receive all rights and benefits (if any) to which he is entitled due to his separation from service under the employee benefit plans and programs of the Company in existence as of the date of the President’s separation from service. Such rights and benefits shall be determined in accordance with the terms of such plans and programs.

Except as provided in this Section 6(b), all obligations of the parties under this Agreement shall cease upon the President’s termination of this Agreement and the President’s separation from service pursuant to this Section 6(b).

(c) Good Reason.

In the case of a separation from service for "Good Reason" as defined herein, the President may consider that this Agreement has been terminated and that his employment has been constructively terminated by the Company. In such an event, the President shall be entitled to receive the amounts described in Section 6(a).

For purposes of this Agreement, the President’s separation from service shall be deemed to be for "Good Reason" if his separation from service occurs within two years following the initial existence of one or more of the following conditions arising without the consent of the President:

(i)   a material diminution in the President’s base compensation;

(ii) a material diminution in the President’s authority, duties or responsibilities;

(iii) a requirement that the President report to a corporate officer or employee instead of reporting directly to the board of directors of the Company;

(iv) a material diminution in the budget over which the President retains authority;

(v) a material change in the geographic location at which the President must perform his services; or

(vi) any other action or inaction that constitutes a material breach by the Company of the Agreement or any other agreement under which the President provides services.

Before the President can separate from service with the Company for "Good Reason", the President must provide the Company with written notice that describes the existence of one or more of the conditions described above. The President must provide the notice to the Company no later than ninety (90) days after the date of the initial occurrence of such condition or conditions. In addition, the President must provide the Company a period of at least thirty (30) days during which the Company can remedy the condition or conditions and not be required to pay the amounts described in Section 6(a).

(d) Termination Due to Death.

In the event of the death of the President, this Agreement shall terminate and the estate or other legal representatives of the President shall be entitled to receive the following:

(i) If the President has any base salary that is earned but unpaid on the date of the President’s death, the Company shall pay the President’s estate or other legal representative such earned but unpaid base salary in accordance with the Company’s compensation policies and procedures.

(ii) The estate or legal representatives of the President shall be entitled to receive the incentive compensation payments (if any) that the President would have earned for the fiscal year of the Company in which his death occurs, which amount shall be pro rated based on the portion of the fiscal year prior to the President’s death. The Company shall pay such incentive compensation payments to the President’s estate or legal representatives in a single lump sum on the first day of March following the end of the fiscal year in which the President’s death occurs.

(iii) The President’s beneficiary, estate or legal representatives shall receive all rights and benefits (if any) to which they are entitled due to the President’s death under the employee benefit plans and programs of the Company in existence as of the date of the President’s death. Such rights and benefits shall be determined in accordance with the terms of such plans and programs.

Except as provided in this Section 6(d), all obligations of the parties under this Agreement shall cease upon the date of the President’s death pursuant to this Section 6(d).

(e) Disability.

The President shall be deemed to be disabled if he has a condition: (i) which causes him to be unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months; or (ii) which results in his receiving, by reason of any medically determinable physical or mental impairment which can be expected to result in death or which can be expected to last for a continuous period of not less than twelve months, income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company. Disability shall be deemed to exist only when the disability has been certified to the Board of Directors by a licensed physician approved by the Board of Directors.

In the event of the President’s disability pursuant to this Section 6(e), this Agreement shall terminate and the President shall be entitled to receive the following:

(i) If the President has any base salary that is earned but unpaid on the date of the President’s disability, the Company shall pay the President such earned but unpaid base salary in accordance with the Company’s compensation policies and procedures.

(ii) If the President has any vacation time that is earned but unused on the date of the President’s disability, the Company shall pay the President such earned but unused vacation time in accordance with the Company’s vacation pay policy.

(iii) The President shall be entitled to receive the incentive compensation payments (if any) that the President would have earned for the fiscal year of the Company in which his disability occurs, which amount shall be pro rated based on the portion of the fiscal year prior to the President’s disability. The Company shall pay such incentive compensation payments to the President in a single lump sum on the first day of March following the end of the fiscal year in which the President’s disability occurs.

(iv) The President shall receive all rights and benefits (if any) to which he is entitled due to his disability under the employee benefit plans and programs of the Company in existence as of the date of the President’s disability. Such rights and benefits shall be determined in accordance with the terms of such plans and programs.

Except as provided in this Section 6(e), all obligations of the parties under this Agreement shall cease upon the date of the President’s disability pursuant to this Section 6(e).

(f) Cause.

The Company may terminate this Agreement and immediately remove the President from his employment for "Cause". For purposes of this Section 6(f), "Cause" shall be deemed to exist only in the event the President is convicted by a court of competent jurisdiction of a felony involving dishonesty or fraud on the part of the President in his relationship with the Company.

In the event of the President’s separation from service for "Cause" pursuant to this Section 6(f), this Agreement shall terminate and the President shall be entitled to receive the following:

(i) If the President has any base salary that is earned but unpaid on the date of the President’s separation from service, the Company shall pay the President such earned but unpaid base salary in accordance with the Company’s compensation policies and procedures.

(ii) The President shall receive all rights and benefits (if any) to which he is entitled due to his separation from service under the employee benefit plans and programs of the Company in existence as of the date of the President’s separation from service. Such rights and benefits shall be determined in accordance with the terms of such plans and programs.

Except as provided in this Section 6(f), all obligations of the parties under this Agreement shall cease upon the date of the President’s separation from service pursuant to this Section 6(f).

7. BINDING OBLIGATION OF COMPANY AND ANY SUCCESSOR IN INTEREST.

The Company expressly agrees that it shall not merge or consolidate into or with another financial services holding company, bank, firm or person until such financial services holding company, bank, firm, or person expressly agrees, in writing, to assume and discharge the duties and obligations of the Company under this Agreement. The Company agrees to provide written notice of the existence of this Agreement and its contents to any potential successor as part of negotiations leading to a successor in interest. This Agreement shall be binding upon the parties hereto, their successors, beneficiaries, heirs, and personal representatives.

8. ASSIGNMENTS, SUCCESSORS AND ASSIGNS.

The rights and obligations of the President hereunder are not assignable or delegable, and any prohibited assignment or delegation will be null and void. The Company may assign its rights and delegate its obligations under this Agreement. The provisions hereof shall inure to the benefit of and be binding upon the permitted successors and assigns of the parties hereto.

9. GOVERNING LAW.

This Agreement shall be interpreted under, subject to and governed by the substantive laws of the State of Maine, without giving effect to provisions thereof regarding conflict of laws.

10. COUNTERPARTS.

This Agreement may be executed simultaneously in any number of counterparts, each of which will be deemed an original but all of which will together constitute one and the same instrument.

11. INVALIDITY.

The invalidity or unenforceability of any provision of this Agreement shall not affect any other provision hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. Furthermore, in lieu of such illegal, invalid, or unenforceable provision there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable.

12. EXCLUSIVENESS.

This Agreement and the Change in Control, Confidentiality and Noncompetition Agreement between the Company and the President dated of even date herewith constitute the entire understanding and agreement between the parties with respect to the Company’s employment of the President, and supersede and revoke any and all other agreements, oral or written, between the parties (including but not limited to the employment agreement between the Company and the President dated January 3, 2003, the amendment to the employment agreement dated November 7, 2003, and the change in control, confidentiality and noncompetition agreement dated November 7, 2003).

13. MODIFICATION WAIVER.

This Agreement may not be modified or amended except in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived unless waived in writing by the party charged with waiver. A waiver shall operate only as to the specific term or condition waived and will not constitute a waiver of any other term or condition of this Agreement or as to any subsequent occurrence of the term or condition.

14. MEDIATION AND ARBITRATION.

Except as otherwise expressly provided hereunder, the parties agree that any and all disputes arising out of the President’s employment, or cessation of employment, including but not limited to any dispute, controversy, or claim arising under any federal, state, or local statute, law, ordinance or regulation or under this Agreement, shall be resolved exclusively by Alternative Dispute Resolution described in this Agreement ("ADR"). The initiation of ADR shall first require mediation and the parties agree to first try to settle any dispute through mediation. Mediation shall be initiated by either party by the serving of a written notice of intent to mediate (a "Mediation Notice") by one party upon the other. If no resolution has been mutually agreed through mediation within ninety (90) days of service of a Mediation Notice, then and only then may the dispute be submitted to arbitration. Arbitration shall be initiated by the serving of a written notice of intent to arbitrate (an "Arbitration Notice") by one party upon the other.

(a) In the event that a party wishes to initiate ADR, a Mediation Notice must be served on the other party within six months from the date on which the claim arose. If the parties cannot mutually agree on a mediator, then a mediator shall be selected in accordance with the Employment Mediation Rules of the American Arbitration Association.

(b) In the event that mediation is unsuccessful and arbitration is initiated, it shall be conducted under the National Rules for the Resolution of Employment Disputes of the American Arbitration Association. There shall be a single arbitrator to be agreed upon by the parties, provided that, if the parties are unable to agree upon a single arbitrator, each party shall name an arbitrator and the two so named shall name a third arbitrator. The arbitration proceedings shall be heard by the arbitrator(s) and the decision of the arbitrator, or of a majority of the panel if one has been selected, shall be final and binding on the parties. Judgment upon the arbitration award may be entered in any court of competent jurisdiction. An Arbitration Notice must be served on the other party within one year from the date on which the claim arose, and failure to bring such a claim within such one-year period shall constitute a waiver of such claim and an absolute bar to any further proceedings in any forum with respect to it. All mediation and arbitration proceedings shall be conducted in Bangor, Maine, unless the parties otherwise agree in writing.

(c) The cost of any mediation proceeding under this Section 14 will be paid entirely by the Company. The cost of any arbitration proceeding shall be shared equally by the parties to the dispute; provided, however, that if the dispute is resolved in favor of the President, such cost shall be paid in full by the Company. Each party shall be responsible for its own cost of representation and counsel.

  15. NOTICES.

All notices, requests, demands, waivers, and other communications required or permitted to be given under this Agreement will be in writing and will be deemed to have been duly given: (a) if delivered personally or sent by facsimile or electronic mail, on the date received; (b) if delivered by overnight courier, on the day after mailing; and (c) if mailed, five days after mailing with postage prepaid. Any such notice will be sent as follows:

To the President:

Joseph M. Murphy
At current home address of record

To the Company:

Bar Harbor Bankshares
Attn: Human Resources Department
82 Main Street
P.O. Box 400
Bar Harbor, ME 04609

Fax Number: (207) 288-2811

E-mail: m sawyer@bhbt.com

With copies to:

Daniel G. McKay, Esquire

Eaton Peabody

80 Exchange Street

PO Box 1210

Bangor, ME 04402-1210

Fax Number: (207) 942-3040

Email: dmckay@eatonpeabody.com

16. SURVIVAL.

The provisions of Section 14 and all payment and other obligations of the parties which by their terms are to be performed subsequent to termination shall survive the termination of this Agreement and shall remain fully enforceable.

17. CODE SECTION 409A.

Any provision of this Agreement that is susceptible to more than one interpretation shall be interpreted in a manner that is consistent with this Agreement satisfying the requirements of Code Section 409A.

18. COMPLIANCE WITH FDI ACT.

Notwithstanding anything herein contained to the contrary, any payments to the President by the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act ("FDI Act"), 12 U.S.C. Section 1828(k), and any regulations promulgated thereunder.

  IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Witness:                                                                           COMPANY:

BAR HARBOR BANKSHARES

_________________________________                         By _______________________________
                                                                                                Its

Witness:                                                                              PRESIDENT:

_________________________________                         _____________________________________
                                                                                            Joseph M. Murphy

EXHIBIT A

JOB DESCRIPTION