-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nq3Rwfy4GFp5w6Vvls12MWhXG0XoWAQWqD/HGkDu5Fu4bc5VRf5r3iMT+e/QNmbv dRmZP8yiwngHJQuNyh/2ng== 0000743367-98-000009.txt : 19980914 0000743367-98-000009.hdr.sgml : 19980914 ACCESSION NUMBER: 0000743367-98-000009 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980911 FILED AS OF DATE: 19980911 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAR HARBOR BANKSHARES CENTRAL INDEX KEY: 0000743367 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 010393663 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 001-13349 FILM NUMBER: 98708050 BUSINESS ADDRESS: STREET 1: 82 MAIN ST STREET 2: P O BOX 400 CITY: BAR HARBOR STATE: ME ZIP: 04609-0400 BUSINESS PHONE: 2072883314 MAIL ADDRESS: STREET 1: 82 MAIN ST STREET 2: P O BOX 400 CITY: BAR HARBOR STATE: ME ZIP: 04609-0400 DEF 14A 1 PROXY 19 BAR HARBOR BANKSHARES 82 Main Street Bar Harbor, ME 04609 September 10, 1998 Dear Stockholder: The 1998 Annual Meeting of Bar Harbor Bankshares will be held at 11:00 a.m. on Tuesday, October 6, 1998 in the Atlantic Oakes Conference Center, located next to the Bay Ferries Terminal on Route 3 in Bar Harbor, Maine. The Directors and Officers join me in inviting you to attend this meeting and the reception which will follow. Enclosed are the Clerk's official Notice of Annual Meeting, a Proxy Statement and the Form of Proxy. Please sign the Form of Proxy and return it in the envelope provided so that your shares will be voted at the Annual Meeting if you are unable to attend. Please also complete the reception postcard and mail it separately from the Form of Proxy if you will be attending the reception. We look forward to seeing you on October 6th. Please join us for the reception even if you are unable to attend the business meeting. Very truly yours, Sheldon F. Goldthwait, Jr. President and Chief Executive Officer Enclosures IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY Each stockholder is urged to fill in, date and sign the enclosed form of proxy and mail it in the self- addressed envelope provided. If you attend the meeting, you may, if you wish, revoke your proxy and vote your shares in person. BAR HARBOR BANKSHARES NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD OCTOBER 6, 1998 Notice is hereby given that the Annual Meeting of the Stockholders of Bar Harbor Bankshares will be held at the Atlantic Oakes Conference Center on Route 3 in Bar Harbor, Maine on October 6, 1998 at 11:00 a.m. to consider and act upon the following proposals. 1. To elect five persons to serve as Directors for a term of three years. 2. To set the number of Directors for the ensuing year at 19. 3. To ratify the Board of Directors' selection of Berry, Dunn, McNeil & Parker as independent auditors of the Company and of the Bank for the ensuing year. 4. To transact such other business as may properly come before the meeting or any adjournment thereof. Stockholders of record as of the close of business on August 18, 1998 will be entitled to a notice of and to vote at the meeting. By Order of the Board of Directors Marsha C. Sawyer, Clerk BAR HARBOR BANKSHARES 82 Main Street Bar Harbor, ME 04609 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD TUESDAY, OCTOBER 6, 1998 PROXY STATEMENT This Proxy Statement is furnished to the stockholders of Bar Harbor Bankshares (the Company) in connection with the solicitation of proxies on behalf of the Board of Directors for use at the Annual Meeting of Stockholders (the Meeting). The Meeting will be held on Tuesday, October 6, 1998 at 11:00 a.m. at the Atlantic Oakes Conference Center on Route 3 in Bar Harbor, Maine. The official Notice of the Annual Meeting of Stockholders accompanies this Statement. A Form of Proxy for use at the Meeting and a return envelope for the proxy are enclosed. A stockholder who executes the proxy may, prior to its use, revoke it by written instrument, by a subsequently executed proxy or, if attending the Meeting, by notifying the Clerk or by giving notice at the Meeting. This Proxy Statement and the enclosed Form of Proxy will be mailed to the stockholders of the Company on or about September 8, 1998. Proxies are being solicited by the Board of Directors (the Board) of the Company principally through the mail. The Board of Directors and Management of the Company may also solicit proxies personally or by telephone. The entire expense of solicitation, including costs of preparing, assembling and mailing the proxy material will be borne by the Company. These expenses are not expected to exceed the amount normally expended for an annual meeting at which directors will be elected. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF As of August 18, 1998, the Company had outstanding 1,721,807 shares of its common stock (the Common Stock), par value $2 per share, each of which is entitled to one vote upon each matter presented at the Meeting. Only stockholders of record at the close of business on August 18, 1998 are entitled to vote at the Meeting. The presence at the Meeting, either in person or by proxy, of the holders of one-third of the shares of Common Stock will constitute a quorum. Assuming a quorum is present, action may be taken on any matter considered by the holders of a majority of the shares present and voting. Abstentions and shares otherwise not voting will not be deemed present and voting. Stockholders who are present will have an opportunity to vote on each matter brought before the meeting. As of August 18, 1998, to the knowledge of the Company there was no beneficial owner of more than 5% of the Company's Common Stock. The following table lists, as of August 18, 1998, the number of shares of Common Stock and the percentage of the Common Stock represented thereby, beneficially owned by each director and by all principal officers and directors of the Company as a group.
Amount Amount Direct of Indirec of Benefic Direct t Indirec Percen Director ial Benefic Benefic t t (1) Ownersh ial ial Benefic of ip Ownersh Ownersh ial Class ip ip Ownersh ip Frederick F. Brown Direct 11,970 Indirec 600 * t Robert C. Carter Direct 950 Indirec 100 * t Thomas A. Colwell Direct 2,700 * Bernard K. Cough Direct 64,415 Indirec 19,370 4.866% t Peter Dodge Direct 2,130 Indirec 300 * t Dwight L. Eaton Direct 4 327 * Ruth S. Foster Direct 1,675 * Cooper F. Friend Direct 1,600 * Robert L. Gilfillan Direct 26,550 Indirec 13,415 2.322% t Sheldon F. Direct 13,055 Indirec 2,228 * Goldthwait, Jr. t H. Lee Judd Direct 700 Indirec 2,750 * t James C. MacLeod Direct 10,150 Indirec 10,150 1.179% t John P. McCurdy Direct 3,250 Indirec 50 * t Jarvis W. Newman Direct 11,550 Indirec 3,500 * t Robert M. Phillips Direct 600 Indirec 50 * t John P. Reeves Direct 7,049 Indirec 5,685 * t Lynda Z. Tyson Direct 625 Indirec 75 * t Total Ownership of all 167,887 58,273 13.135 Directors and Executive % Officers of Company as a group (21 persons). *less than 1%
(1) For purposes of the foregoing table, beneficial ownership has been determined in accordance with the provisions of Rule 13d- 3 promulgated under the Securities Exchange Act of 1934, as amended, under which, in general, a person is deemed to be the beneficial owner of a security if he or she has or shares the power to vote or to direct the voting of the security, or if he or she had the right to acquire beneficial ownership of the security within 60 days. Beneficial ownership does not include, in the case of each director, 48,680 shares (2.83%) of the Common Stock held by two trusts which, for purposes of voting, are allocated equally among the directors of the Bank under the terms of the respective trust instruments. No director has any other beneficial interest in such shares. Ownership figures for directors and nominees include directors' qualifying shares owned by each person named. Management is not aware of any arrangement which could, at a subsequent date, result in a change in control of the Company. Directors, Officers and owners of 10% or more of the Common Stock of the Company are required to file periodic reports with the Securities and Exchange Commission with respect to their beneficial ownership of the Common Stock. Based upon a review of appropriate forms furnished to and retained by the Company, the Company is not aware of any officer, director or owner of 10% or more of the Common Stock who has failed to file any such report. MANAGEMENT OF THE COMPANY Directors Management recommends that the number of directors for the coming year be set at 19. The Bylaws of the Company provide for not fewer than 9 nor more than 27 directors, with directors serving staggered terms of three years. The Board of Directors has nominated for re-election five incumbent directors whose terms expire in 1998. Frederick F. Brown, Robert C. Carter, Dwight L. Eaton, Sheldon F. Goldthwait, Jr., and Robert M. Phillips have been nominated for re-election to three year terms. Each of these persons has consented to be named as a nominee and to serve if elected. A vacancy in the Board of Directors exists as a result of the death of Abner L. Sargent and it is the recommendation of management that this vacancy remain unfilled at the Meeting. Pursuant to the terms of the Company's Bylaws, the Board may at any time appoint an additional director to fill this vacancy until the next Annual Meeting. The following table sets forth the names, occupations, ages and terms of service of all directors:
Principal Occupation Age Year Now and for as of First Name past 5 Years 8/18/9 Elected 8 Directo r Term expires in 1998 Frederick F. Brown Proprietor and owner of F. 72 1984 T. Brown Co., (hardware store), Mt. Desert, ME Robert C. Carter Owner of Machias Motor Inn, 54 1996 Machias, Maine Dwight L. Eaton Senior Vice President and 63 1988 Trust Officer of the Bank; Vice President of the Company since 1987 Sheldon F. President and Chief 60 1988 Goldthwait, Jr. Executive Officer of the Company and the Bank since January 1, 1995. Formerly Executive Vice President of the Company and the Bank since December, 1989 Robert M. Phillips Officer of International 56 1993 Foods Network (exporter of a variety of food products), Sullivan, Maine; and serves as a full-time consultant on special projects for Oxford Frozen Foods. Terms expire in 1999: Peter Dodge President and Insurance 54 1987 Agent with Merle B. Grindle Agency (insurance and real estate), Blue Hill, Maine Ruth S. Foster Former State Senator and 69 1986 owner of Ruth Foster's (retail clothing), Ellsworth, Maine
Year Principal Occupation Age First Now and for as of Elected Name past 5 Years 8/18/9 Directo 8 r Terms expire in 1999, Continued: James C. MacLeod Retired; formerly Vice 74 1984 President of the Bank and the Company Jarvis W. Newman Self-employed yacht broker 63 1984 Southwest Harbor, Maine John P. Reeves Retired; formerly President 64 1984 and Chief Executive Officer of the Company and the Bank, Bar Harbor, Maine Lynda Z. Tyson Chief Operating Officer and 43 1993 Marketing Director of Tyson & Partners, Marketing Consultants, Bar Harbor, Maine. Formerly Chief Executive Officer of Bar Harbor Chamber of Commerce. Term expires in 2000 Thomas A. Colwell President of Colwell Bros., 54 1991 Inc. (lobster pounding) of Stonington, ME Bernard K. Cough Treasurer of Atlantic 71 1985 Oakes, Inc., Atlantic Eyrie and several other resort motels, Bar Harbor, Maine Cooper F. Friend President, Friend and 44 1997 Friend, Inc. a recreational motorsports dealership. Partner in U- Store-It and Friend and Friend Realty
Year Principal Occupation Age First Now and for as of Elected Name past 5 Years 8/18/9 Directo 8 r Terms expire in 2000, Continued: Robert L. Owner and President of West 71 1984 Gilfillan End Drug Co., (retail pharmacy), Bar Harbor, Maine H. Lee Judd President of Hinckley 53 1997 Insurance Group and Hinckley Real Estate John P. McCurdy Retired; formerly owner and 67 1984 operator of McCurdy Fish Company (fish processor), Lubec, Maine
Nominees for election to the Board are selected by the Full Board. The Company does not have a nominating committee. The Board will consider nominees recommended by stockholders if submitted in writing to Marsha C. Sawyer, Clerk, Bar Harbor Bankshares, 82 Main Street, Bar Harbor, Maine 04609, not less than three months in advance of the date of the Annual Meeting. The Board of Directors of the Company held seven meetings in 1997. The Bylaws of the Company provide for quarterly meetings. Each director, with the exception of Mr. Sargent, attended at least 75% of the total number of meetings held by the Board of Directors in 1997. The Board of Directors of the Bank met monthly during 1997. Each director, with the exception of Mr. Sargent, attended at least 75% of the total number of Bank directors' meetings and committee meetings of which he or she was a member. Executive Officers Each executive officer of the Company is identified in the following table which also sets forth the respective office, age, and period served in that office for each person listed.
Year Age First Principal Occupation Now and as of Electe Name for 8/18/98 d past 5 Years Office r Robert L. Chairman of the Board of the 71 1984 Gilfillan Bank and the Company since February, 1994 Sheldon F. President and Chief Executive 60 1984 Goldthwait, Jr. Officer of the Company and the Bank since January 1, 1995. Formerly Executive Vice President of the Company since December, 1989 Dwight L. Eaton Senior Vice President and Trust 63 1987 Officer of the Bank; Vice President of the Company since 1987; formerly Vice President and Trust Officer of the Bank Lewis H. Payne Executive Vice President of the 48 1995 Company and Bank since 1995. Formerly Senior Vice President of Bank since 1990 Virginia M. Treasurer and Chief Financial 48 1991 Vendrell Officer since December, 1992; formerly Treasurer of the Bank since December, 1989 and Treasurer of the Company since October, 1990. Marsha C. Clerk of the Company since 45 1986 Sawyer July, 1986; Clerk and Vice President of the Bank since 1986; formerly Assistant Vice President of the Bank
The Bylaws of the Company provide that the executive officers be elected annually by the Board of Directors and that the President, Chairman of the Board, Treasurer and Clerk shall serve at the pleasure of the Board and until their successors have been chosen and qualified. All other officers serve at the pleasure of the Chief Executive Officer. Committees The Bylaws of the Company provide that after each Annual Meeting of Directors, the Board designates from among its members an Executive Committee which has the authority to exercise all the powers of the Board of Directors in regard to ordinary operations of the business of the Company when the Board is not in session, subject to any specific vote of the Board. The present Executive Committee includes Messrs. Brown, Gilfillan, Goldthwait, MacLeod, Newman and Reeves. The Executive Committee did not meet in 1997. The Bylaws provide that the Board may elect or appoint such other committees as it may deem necessary or convenient to the operations of the Company. The Company itself has no other committees although the Bank Board has appointed an Audit Committee as well as a Compensation Committee. The Audit Committee has responsibility for overseeing the auditing program. The members of the Audit Committee in 1997 were Messrs. Carter, Colwell, Phillips, Dodge, Gilfillan, Friend, Judd and Sargent. The Audit Committee met six times during 1997 The Compensation Committee has responsibility for setting compensation for all Bank employees, including executive officers. The Compensation Committee for 1997 included Messrs. Dodge, Gilfillan, Goldthwait, McCurdy, Phillips and Reeves. The Compensation Committee met three times during 1997. Family Relationships and Other Arrangements There are no family relationships among any director, executive officer, or person nominated by the Company to become a director or executive officer. There are also no arrangements or understandings between any nominee, director, executive officer, or associates of any of the foregoing and any other person pursuant to which the nominee was or is to be elected as a director or an executive officer. No person or entity listed above as the employer of an officer or director, other than the Bank, is an affiliate of the Company. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth all annual compensation received during each of the Company's last three fiscal years by John P. Reeves, Sheldon F. Goldthwait, Jr., Lewis H. Payne, and Dwight L. Eaton who are the only executive officers for whom compensation exceeded $100,000 in any year. Compensation for all officers is paid by the Bank. SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION Other Annual Year Salary Incenti Compensation ($) ve ($) ($) Sheldon F. Goldthwait, 1995 130,00 23,108 0 Jr. 0 President and 1996 135,99 27,428 0 0 Chief Executive Officer 1997 155,00 19,737 0 0 Dwight L. Eaton 1995 17,637 0 94,000 Senior Vice President and 1996 19,460 0 95,992 Trust Officer 1997 12,984 0 98,000 Lewis H. Payne 1995 N/A N/A 0 Executive Vice President 1996 88,594 17,634 0 1997 93,500 12,237 0
LONG TERM COMPENSATION AWARDS PAYOUT Restric LTIP ted Optional Payout Year Stock SARs (#) s Awards ($) ($) Sheldon F. Goldthwait, 1995 0 0 0 Jr. 1996 0 0 0 1997 0 0 0 Dwight L. Eaton 1995 0 0 0 1996 0 0 0 1997 0 0 0 Lewis H. Payne 1995 0 0 0 1996 0 0 0 1997 0 0 0
ALL OTHER COMPENSATION ($) Year Other Compensation Sheldon F. Goldthwait, 1995 3,522 Jr. 1996 24,035 1997 30,027 Dwight L. Eaton 1995 3,439 1996 36,175 1997 41,654 Lewis H. Payne 1995 N/A 1996 1,752 1997 1,848
Pursuant to a Deferred Compensation Agreement Mr. Goldthwait deferred a portion of his 1995, 1996 and 1997 salary, and Mr. Payne deferred portions of his 1996 and 1997 salaries. Compensation Committee The Bank Board has appointed a six- member Compensation Committee which includes both directors and a member of management. The Compensation Committee meets several times each year and makes compensation recommendations for the ensuing year to the Board of Directors. The recommendations of the Committee are then considered and voted upon by the Full Board. During 1997, Mr. Goldthwait was a member of the Compensation Committee and also a director. He abstained from participating in discussion, recommendations, or voting regarding his own compensation. Mr. Reeves, who chairs the Compensation Committee, is a former President of the Company and the Bank. Report of the Compensation Committee on Executive Compensation The Board of Directors of the Bank has no formal compensation policy applicable to compensation decisions with respect to its executive officers. While there are no objective criteria which specifically relate corporate performance to compensation determinations, in formulating its recommendation with respect to compensation of Messrs. Goldthwait, Eaton, Payne and Ms. Vendrell during the last fiscal year, the Board of Directors considered, among other factors, years of service and salary surveys of executive officers at comparable financial institutions in Maine and New England. In reaching its determination as to compensation of Messrs. Goldthwait, Eaton, Payne and Ms. Vendrell, the Board of Directors did not use any objective measure of the Bank's performance but considered in general, the performance of the Bank in relationship to that of other similarly situated banks in Maine. The foregoing report to stockholders regarding compensation has been submitted by the Compensation Committee, including Messrs. Gilfillan, Reeves, Dodge, McCurdy and Phillips. Compensation of Directors Each of the directors of the Company is a director of the Bank and as such receives a fee of $300 for each Full Board meeting of the Bank attended and $250 for each committee meeting attended. The fee paid for the attendance at the Annual Meeting is $500.00 per member of the Board of Directors. The Chairman of the Board receives an annual retainer of $3,000 in addition to meeting fees. Meetings of the Board of Directors of the Bank are held monthly. No directors' fees are paid to directors of the Company as such. Those directors of the Bank who are also officers do not receive directors' fees. EMPLOYEE BENEFIT PLANS The Company has two non-qualified supplemental retirement plans for certain officers. The agreements provide supplemental retirement benefits payable in installments over a period of years upon retirement or death. The Company recognizes the cost associated with the agreements over the service lives of the participating officers. For 1997, 1996, and 1995, the expense of these supplemental plans was $127,600, $118,000, and $110,000, respectively. 401(k) Plan The Bank has a defined contribution 401(k) plan available to employees meeting eligibility requirements. Employees may contribute between 1% and 15% of their compensation, to which the Bank will match 25% of the first 6% contributed. For the years ended December 31, 1997, 1996, and 1995, the Bank contributed $49,500, $52,000, and $46,600, respectively. The Bank has a defined contribution plan in lieu of a defined benefit plan. In 1997, 1996 and 1995, the Board of Directors voted to credit each eligible participant's 401(k) account with 3% of salary. The total contributions made for the defined contribution plan was $122,800, $128,000 and $122,500 for the years ended December 31, 1997,1996, and 1995, respectively. Restricted Stock Purchase Plan In 1997, 1996, and 1995, the Bank provided a restricted stock purchase plan through which each employee may purchase up to 100 shares of Bar Harbor Bankshares stock at the current fair market price as of a date determined by the Board of Directors. These shares may be purchased through direct purchase or through the employee's 401(k) accounts. The program was discontinued with the plan year ending December 31, 1997. At December 31, 1997, employees exercised their right to purchase 1,224 shares at $60.00 per share, with the actual purchase transpiring in January of 1998. At December 31, 1996, employees exercised their right to purchase 2,346 shares at $38.25 per share, with the actual purchase transpiring in January of 1997. The Bank has entered into agreements with Messrs. Reeves, Goldthwait, and Eaton whereby those individuals, or their beneficiaries, will receive upon death or retirement, an annual supplemental pension benefit over a period of 10 years in the amount of $15,000 per annum (in the case of Mr. Reeves), and in the amount of $10,000 per annum (in the case of Messrs. Goldthwait and Eaton). This plan is unfunded and benefits will be paid out of Bank earnings. Because Mr. Reeves chose early retirement, he began drawing his annual installment of $5,300 pursuant to this deferred compensation arrangement as of January 1, 1995. In 1993, the Company established a non- qualified supplemental retirement plan for Messrs. Reeves, Eaton, Goldthwait, and MacDonald. The agreements provide supplemental retirement benefits payable in installments over twenty years upon retirement or death. The Company recognizes the costs associated with the agreements over the service lives of the participating officers. The cost relative to the supplemental plan was $115,700, $106,500, and $98,300 for 1997, 1996, and 1995 respectively. The agreements with Messrs. Reeves, Eaton, Goldthwait, and MacDonald are in the amounts of $49,020,$22,600, $37,400 and $7,700 respectively. Mr. Reeves began drawing his annual installment of $49,020 as of January 1, 1995. Officers of the Bank are entitled to participate in certain group insurance benefits. In accordance with Bank policy, all such benefits are available generally to employees of the Bank. TRANSACTIONS WITH DIRECTORS, OFFICERS AND PRINCIPAL STOCKHOLDERS The Bank retains the firm of Tyson & Partners to assist with its marketing program. Lynda Z. Tyson, who serves as a director of the Company, serves as that firm's Chief Operating Officer as well as Director of Marketing. The Bank has had, and expects to have in the future, banking transactions in the ordinary course of its business with other directors, officers, principal stockholders, and their associates. All such transactions have been and will be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others. No such transactions have involved more than normal risk of collectability or presented other unfavorable features, and no loans outstanding to directors, officers, principal stockholders, or their associates in an amount in excess of $60,000 are non- accruing or past due or are otherwise considered to be potential problem loans. 7 PERFORMANCE GRAPH Federal regulations require that a graph be included in this proxy statement providing a comparison of total shareholder return on the common stock of the Company with that of comparable issuers. The following graph illustrates the estimated yearly percentage change in the Company's cumulative total shareholder return on its common stock for each of the last five years. For purposes of comparison, the graph also illustrates comparable shareholder return of AMEX Market Index, and the AMEX Bank Stock Index. The graph assumes a $100 investment on December 31, 1992 in the common stock of the Company, and in the two AMEX indices and measures the amount by which the market value of each, assuming reinvestment of dividends, has increased as of December 31 of each calendar year since the base measurement point of December 31, 1992. The following information is presented in a line graph in the printed proxy:
Bar Harbor AMEX Bank AMEX Year Banking and Stock Index Market Trust Company Index 1992 $100.00 $100.00 $100.00 1993 $118.06 $136.34 $118.81 1994 $133.13 $132.81 $104.95 1995 $230.21 $175.48 $135.28 1996 $315.43 $200.52 $142.74 1997 $485.51 $324.68 $171.76
SELECTION OF AUDITORS Stockholder approval of the selection of auditors is not required, but the Board is of the view that an expression of opinion by the stockholders as to the appropriateness of this selection is desirable. The Board recommends that its selection of Berry, Dunn, McNeil & Parker be ratified. If the Board selection is not ratified, the Board will take action to appoint a different auditor for the Company and for the Bank. It is not anticipated that a representative of Berry, Dunn, McNeil & Parker will be present at the Meeting to respond to appropriate questions or to make a statement. OTHER MATTERS Management knows of no other matters to be presented for action at the Meeting. If any other matters properly come before the Meeting, the shares represented by the proxies will be voted with respect thereto in accordance with the judgment of the person(s) voting the proxies. FINANCIAL STATEMENTS Upon written request, the company will furnish any stockholder with a copy of the annual report by the company to the securities and exchange commission on form 10-k, including financial statements and financial statement schedules for the last fiscal year. In accordance with federal deposit insurance corporation regulations, upon written request, stockholders may also obtain the bank's most recent annual disclosure statement which contains financial information covering the last two years. Any request for a copy of either the Form 10-K or the Annual Disclosure Statement must contain a representation that the person making the request was a beneficial owner of Common Stock on August 18, 1998, which is the record date for this proxy solicitation. Requests should be addressed to: Marsha C. Sawyer, Clerk, Bar Harbor Bankshares, 82 Main Street, Bar Harbor, ME 04609. Financial statements of the Company contained in the Company's Annual Report To Stockholders for the fiscal year 1997 are not to be considered a part of this soliciting material. STOCKHOLDER PROPOSALS Stockholders may submit proposals for consideration at the 1999 Annual Meeting, which is presently scheduled for October 5, 1999. In order to be included in the Company's Proxy Statement and Form of Proxy relating to that meeting, such proposals must be received by the Company no later than May 1, 1999, which is 120 days in advance of the proposed mailing date of the 1999 proxy materials. Proposals should be addressed to Marsha C. Sawyer, Clerk, Bar Harbor Bankshares, 82 Main Street, Bar Harbor, ME 04609. By Order of the Board of Directors Marsha C. Sawyer, Clerk BAR HARBOR BANKSHARES 82 Main Street Bar Harbor, ME 04609 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Ruth S. Foster, Jarvis W. Newman, and Lynda Z. Tyson as Proxies, each with power to appoint a substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side, all of the shares of Common Stock of the Company held of record by the undersigned as of close of business on August 18, 1998 at the Annual Meeting of Stockholders to be held on October 6, 1998 or at any adjournment thereof. (To be signed on the Reverse Side) X PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE 1. Election of Directors Nominees for three year terms: Frederick F. Brown, Robert C. Carter, Dwight L. Eaton, Sheldon F. Goldthwait, Jr. and Robert M. Phillips ____ FOR the nominees listed at right ____ WITHHOLD AUTHORITY to vote for nominees listed at right For all nominees, except as indicated ___________________________ 2. To set the number of Directors at 19. ____ FOR ____ AGAINST ____ ABSTAIN 3. To ratify the Board of Directors' selection of Berry, Dunn, McNeil & Parker as independent auditors of the Company and the Bank for the ensuing year. ____ FOR ____ AGAINST ____ ABSTAIN 4. To transact such other business as may properly come before the meeting or any adjournment thereof. This proxy, when properly executed, will be voted on behalf of the undersigned stockholder in the manner directed herein. If no direction is given, this proxy will be voted in favor of Items 1 and 3, for the nominees listed in Item 2 and in the discretion of management with respect to any other matters which may come before the Meeting. PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENVELOPE PROVIDED. SIGNATURE ________________________ DATE____________ SIGNATURE _________________________ DATE __________ NOTE: Please sign exactly as name appears above. Only one joint tenant need sign. When signing as attorney, executor, administrator, trustee or guardian or in any representative capacity, please give full title. -----END PRIVACY-ENHANCED MESSAGE-----