Document:

BHB 10-K Exhibit 10.24  2009 Incentive

Exhibit 10.24

 

2009 Annual Incentive Plan 

Bar Harbor Bankshare’s ("BHB") Annual Incentive Plan is
designed to recognize and reward executives for their collective contributions to
BHB’s success. Our Plan focuses on rewarding for the achievement of specific goals
that are critical the BHB’s growth and profitability. Individually and collectively,
we believe our executive team has the ability to influence and drive our success. Our Plan
is designed to reward our executives for driving the BHB’s success. This document
summarizes the elements and features of the Plan. 

In short, the objectives of the Incentive Plan are to:

	Focus executive attention on key
    business metrics.

  
	Align pay with organizational and
    individual performance.

  
	Encourage teamwork and
    collaboration across all areas of BHB. Our collective contributions will drive improved
    business results.

  
	Motivate and reward the
    achievement of specific, measurable performance objectives.

  
	Provide competitive total cash
    compensation.

  
	Provide significant reward for
    achieving and exceeding performance results. 

  
	Enable BHB to attract and retain
    the talent needed to drive success. 

  

Eligibility

	Eligibility will be limited to executive positions that have a significant impact on
    the success of the organization. 

	Participants must be employed by October 1st of the plan
    year in order to be eligible for that year’s incentive. New employees will receive
    pro-rated awards based on date of hire.

  
	Participants must be an active employee as of the reward payout date
    to receive an award. 

  
	Participant’s performance must be in good standing for the
    measurement period.

  

Performance Period

The performance period and plan operates on a calendar year basis (January 1st
– December 31st). Actual payout awards are made in cash following year-end
after Bar Harbor’s financial results and performance are known.

Incentive Payout Opportunity

Each participant will have a target incentive opportunity based on his/her role. The
target incentive will reflect a percentage of base salary and be determined consistent
with competitive market practices. Actual awards will vary based on achievement of
specific goals. The opportunity reflects a range of potential awards. Actual awards may
range from 0% of target (for not achieving minimal performance) to 150% of target (for
exceptional performance). The table below summarizes the incentive ranges for the 2009
Plan year. 

	2010 Short-Term Incentive Targets
	Role
	Below

    Threshold
	Threshold

    (50% of

    Target)
	Target

    (100%)
	Stretch

    (150% of 

    Target)

	CEO President	0%
	12.50%
	25.00%
	37.50%

	EVP	0%	10.00%	20.00%	30.00%
	SVP	0%	7.50%	15.00%	22.50%

 Incentive Plan Measures 

Each participant will have predefined performance goals that will
determine his/her annual incentive award.  There are two performance categories:
  BHB and Individual.  BHB performance will be reflected by common goals for all
participants. Individual goals will reflect each participants individual contributions
based on their role. The specific allocation of goals will be weighted to reflect the
focus and contribution for each role/level in the Company. 

The table below provides guidelines for the allocation of
participant’s incentives for each performance component 

	Position
	BHB/Team Performance
	Individual Performance

	CEO/President	75%
	25%

	EVP	65%
	35%

	VP - Line	30%
	70%

	SVP - Staff	50%
	50%

BHB Performance

BHB performance goals for 2009 are Net Income and Efficiency Ratio. The table below
shows the specific performance goal at threshold, budget and stretch for 2009.

	Company Performance
	2009 Performance
    Goals

	Measures	Threshold
	Target 
	Stretch

	Net Income * 	7,691
	7,848
	8,632

	Efficiency Ratio	60.80 
	59.90 
	58.90

*Adjusted to Net Income Available to Common Shareholders.

Individual Performance 

In addition to the BHB’s performance, participants will have 2 - 3
individual goals that will focus on either department or team performance (e.g. loan
growth, deposit growth, asset quality measures) and/or individual performance. The mix of
these goals will vary by role. Where possible, performance targets and ranges for each
measure will be set at the beginning of the plan year. A minimum achievement of threshold
level performance is required for the plan to pay for each component. 

Plan Trigger: In order for the Annual Incentive Plan to
‘activate’ or turn on, Bar Harbor must achieve at least $7,691 in Net Income. If
BHB does not meet this level, the plan will not pay out any awards for the year,
regardless of performance on other goals. (Note: this is an option that allows BHB to
protect from paying incentives if certain hurdles such as Net Income is not achieved.) 

Payouts

Payouts will be made in cash as soon as possible after the closing of
BHB’s financials each year. Awards are calculated based on actual performance
relative to target. Achieving threshold performance will pay out at 50% of target
incentive, target performance will pay out 100% of target, and stretch performance will
pay out at 150% of target incentive. Performance below threshold will be zero. Payouts are
assessed by component such that one goal may achieve stretch and another may achieve only
threshold. Actual payouts for each performance goal will be pro-rated between
threshold, target and stretch levels to reward incremental improvement. 

Below is an illustration of a simple plan design for a SVP (Tier 3) with a base salary
of $100,000 and an incentive target of 15% of base salary ($15,000). Goals are for
illustration purposes only.

	Participant Goals
	Performance and
    Payout

	Performance Measure
	Performance 

    Goal threshold/target/

    stretch
	Weight
	$
	Actual

    Performance
	Payout

    Allocation

    (0% - 150%)
	Payout ($)

	Net Income
	TBD
	30%
	$4,500
	Target
	100%
	$4,500

	Efficiency Ratio
	TBD
	30%
	$4,500
	Threshold
	50%
	$2,250

	Individual performance goal #1
	TBD
	20%
	$3,000
	Stretch
	150%
	$4,500

	Individual performance goal #2
	TBD
	10%
	$1,500
	Below Threshold
	0%
	$0

	Individual performance goal #3
	TBD
	10%
	$1,500
	Target
	100%
	$1,500

	TOTAL
		100%
	$15,000
	85% payout
	$12,750

This participant’s payout of $12,750 is 85% of target. The payout reflects
BHB’s Net Income performance at "Target", Efficiency Ratio at Threshold,
one Individual goal at stretch, another that was not achieved, and another at Target. 

Terms and Conditions

Effective Date

This Program is effective January 1, 2009 to reflect plan year January
1, 2009 to December 31, 2009. The Plan will be reviewed annually by the BHB’s
Compensation Committee and Executive Management to ensure proper alignment with BHB’s
business objectives. BHB retains the rights as described below to amend, modify or
discontinue the Plan at any time during the specified period. The Incentive Plan will
remain in effect until December 31, 2009. 

Program Administration

The Plan is authorized by the Compensation Committee and voted by the
Board of Directors. The Compensation Committee has the sole authority to interpret the
Plan and to make or nullify any rules and procedures, as necessary, for proper
administration. Any determination by the Committee will be final and binding on all
participants. 

Program Changes or Discontinuance

BHB has developed the plan based on existing business, market and
economic conditions. If substantial changes occur that affect these conditions, BHB may
add to, amend, modify or discontinue any of the terms or conditions of the plan at any
time. The Compensation Committee may, at its sole discretion, waive, change or amend the
Plan as it deems appropriate.

 

Incentive Award Payments

Awards will be paid as a cash bonus before the end of the first quarter
following the Plan year (within 75 days to avoid potential 409A trigger). Awards will be
paid out as a percentage of a participant’s base salary earned during the year as of
December 31st for a given calendar year. Incentive awards will be considered
taxable income to participants in the year paid and will be subject to withholding for
required income and other applicable taxes. 

Any rights accruing to a participant or his/her beneficiary under the
Plan shall be solely those of an unsecured general creditor of BHB. Nothing contained in
the Plan, and no action taken pursuant to the provisions hereof, will create or be
construed to create a trust of any kind, or a pledge, or a fiduciary relationship between
BHB or the CEO and the participant or any other person. Nothing herein will be construed
to require BHB or the CEO to maintain any fund or to segregate any amount for a
participant’s benefit.

New Hires, Promotions, and Transfers

Participants who are not employed by BHB at the beginning of the Plan
year will receive a pro rata incentive award based on their length of employment during a
given year. 

A participant whose work schedule changes during the year will be
eligible for prorated treatment that reflects his/her time in the different schedules.

If a participant changes his/her role or is promoted during the Plan
year, he/she will be eligible for the new role’s target incentive award on a pro rata
basis (i.e. the award will be prorated based on the number of months employed in the
respective positions.)

Termination of Employment

If a participant is terminated by the BHB, no incentive award will be
paid. If a participant voluntarily leaves BHB before the award is paid, s/he will not
receive payment unless their resignation is due to a hardship or family situation. The
Compensation Committee reserves the right to make a decision on whether or not to pay a
pro-rated share of any incentive earned for the calendar year in question. To encourage
employees to remain in the employment of BHB, a participant must be an active employee of
BHB on the last day of the measurement period (see exceptions for disability, death, or
retirement).

Disability, Death, or Retirement 

If a participant is disabled by an accident or illness, and is disabled
long enough to be placed on long-term disability, his/her incentive award for the Plan
period shall be prorated so that no award will be earned during the period of long-term
disability.

In the event of death, BHB will pay to the participant’s estate
the pro rata portion of the award that had been earned by the participant.

In the event of retirement, BHB will pay to the participant a pro rata
portion of the award that had been earned by the participant.

Ethics and Interpretation

If there is any ambiguity as to the meaning of any terms or provisions
of this plan or any questions as to the correct interpretation of any information
contained therein, BHB’s interpretation expressed by the Board of Directors will be
final and binding.

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

Participants who have willfully engaged in any activity, injurious to
the BHB, will upon termination of employment, death, or retirement, forfeit any incentive
award earned during the award period in which the termination occurred.

Miscellaneous

The Plan will not be deemed to give any participant the right to be
retained in the employ of BHB, nor will the Plan interfere with the right of BHB to
discharge any participant at any time.

In the absence of an authorized, written employment contract, the
relationship between employees and BHB is one of at-will employment. The Plan does not
alter the relationship.

This incentive plan and the transactions and payments hereunder shall,
in all respect, be governed by, and construed and enforced in accordance with the laws of
the State of Maine.

Each provision in this Plan is severable, and if any provision is held
to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not, in any way, be affected or impaired thereby. 

This plan is proprietary and confidential to BHB and its employees and
should not be shared outside the organization except as authorized by the Compensation
Committee for public disclosure documents.BHB 10-K 2009 Ex 10.25 2010 Incentive Plan

Exhibit 10.25

 

2010 Annual Incentive Plan 

Bar Harbor Bankshare’s ("BHB") Annual Incentive Plan is
designed to recognize and reward executives for their collective contributions to
BHB’s success. Our Plan focuses on rewarding for the achievement of specific goals
that are critical the BHB’s growth and profitability. Individually and collectively,
we believe our executive team has the ability to influence and drive our success. Our Plan
is designed to reward our executives for driving the BHB’s success. This document
summarizes the elements and features of the Plan. 

In short, the objectives of the Incentive Plan are to:

	Focus executive attention on key
    business metrics.

  
	Align pay with organizational and
    individual performance.

  
	Encourage teamwork and
    collaboration across all areas of BHB. Our collective contributions will drive improved
    business results.

  
	Motivate and reward the
    achievement of specific, measurable performance objectives.

  
	Provide competitive total cash
    compensation.

  
	Provide significant reward for
    achieving and exceeding performance results. 

  
	Enable BHB to attract and retain
    the talent needed to drive success. 

  

Eligibility

	Eligibility will be limited to executive positions that have a significant impact on
    the success of the organization. 

	Participants must be employed by October 1st of the plan
    year in order to be eligible for that year’s incentive. New employees will receive
    pro-rated awards based on date of hire.

  
	Participants must be an active employee as of the reward payout date
    to receive an award. 

  
	Participant’s performance must be in good standing for the
    measurement period.

  

 

Performance Period

The performance period and plan operates on a calendar year basis (January 1st
– December 31st). Actual payout awards are made in cash following year-end
after Bar Harbor’s financial results and performance are known.

 

Incentive Payout Opportunity

Each participant will have a target incentive opportunity based on his/her role. The
target incentive will reflect a percentage of base salary and be determined consistent
with competitive market practices. Actual awards will vary based on achievement of
specific goals. The opportunity reflects a range of potential awards. Actual awards may
range from 0% of target (for not achieving minimal performance) to 150% of target (for
exceptional performance). The table below summarizes the incentive ranges for the 2010
Plan year. 

	2010 Short-Term Incentive Targets
	Role
	Below

    Threshold
	Threshold

    (50% of

    Target)
	Target

    (100%)
	Stretch

    (150% of 

    Target)

	CEO
    President	0%
	12.50%
	25.00%
	37.50%

	EVP	0%	10.00%	20.00%	30.00%
	SVP	0%	7.50%	15.00%	22.50%

Incentive Plan Measures 

Each participant will have predefined performance goals that will
determine his/her annual incentive award.  There are two performance categories:
  BHB and Individual.  BHB performance will be reflected by common goals for all
participants. Individual goals will reflect each participants individual contributions
based on their role. The specific allocation of goals will be weighted to reflect the
focus and contribution for each role/level in the Company. 

The table below provides guidelines for the allocation of
participant’s incentives for each performance component 

	Position
	BHB/Team Performance
	Individual Performance

	CEO/President	75%
	25%

	EVP	65%
	35%

	SVP - Line	30%
	70%

	SVP - Staff	50%
	50%

BHB Performance

BHB performance goals for 2010 are Net Income and Efficiency Ratio. The table below
shows the specific performance goal at threshold, budget and stretch for 2010.

	Company Performance
	2010 Performance
    Goals

	Measures	Threshold
	Target 
	Stretch

	Net Income* 	8,370
	9,000
	9,900

	Efficiency Ratio	56.3 
	55.2 
	49.7

*To be further adjusted to Net Income Available to Common Shareholders.

Individual Performance 

In addition to the BHB’s performance, participants will have 2 - 3
individual goals that will focus on either department or team performance (e.g. loan
growth, deposit growth, asset quality measures) and/or individual performance. The mix of
these goals will vary by role. Where possible, performance targets and ranges for each
measure will be set at the beginning of the plan year. A minimum achievement of threshold
level performance is required for the plan to pay for each component. 

Plan Trigger: In order for the Annual Incentive Plan to
‘activate’ or turn on, Bar Harbor must achieve at least $8,370 in Net Income. If
BHB does not meet this level, the plan will not pay out any awards for the year,
regardless of performance on other goals. (Note: this is an option that allows BHB to
protect from paying incentives if certain hurdles such as Net Income is not achieved.) 

Payouts

Payouts will be made in cash as soon as possible after the closing of
BHB’s financials each year. Awards are calculated based on actual performance
relative to target. Achieving threshold performance will pay out at 50% of target
incentive, target performance will pay out 100% of target, and stretch performance will
pay out at 150% of target incentive. Performance below threshold will be zero. Payouts are
assessed by component such that one goal may achieve stretch and another may achieve only
threshold. Actual payouts for each performance goal will be pro-rated between
threshold, target and stretch levels to reward incremental improvement. 

Below is an illustration of a simple plan design for a SVP (Tier 3) with a base salary
of $100,000 and an incentive target of 15% of base salary ($15,000). Goals are for
illustration purposes only.

	Participant Goals
	Performance and Payout

	Performance Measure
	Performance 

    Goal threshold/target/

    stretch
	Weight
	$
	Actual Performance
	Payout Allocation (0% - 150%)
	Payout ($)

	Net Income
	TBD
	30%
	$4,500
	Target
	100%
	$4,500

	Efficiency Ratio
	TBD
	30%
	$4,500
	Threshold
	50%
	$2,250

	Individual performance

    goal #1
	TBD
	20%
	$3,000
	Stretch
	150%
	$4,500

	Individual performance 

    goal #2
	TBD
	10%
	$1,500
	Below Threshold
	0%
	$0

	Individual performance 

    goal #3
	TBD
	10%
	$1,500
	Target
	100%
	$1,500

	TOTAL
		100%
	$15,000
	85% payout
	$12,750

This participant’s payout of $12,750 is 85% of target. The payout reflects
BHB’s Net Income performance at "Target", Efficiency Ratio at Threshold,
one Individual goal at stretch, another that was not achieved, and another at Target. 

Terms and Conditions

Effective Date

This Program is effective January 1, 2010 to reflect plan year January
1, 2010 to December 31, 2010. The Plan will be reviewed annually by the BHB’s
Compensation Committee and Executive Management to ensure proper alignment with BHB’s
business objectives. BHB retains the rights as described below to amend, modify or
discontinue the Plan at any time during the specified period. The Incentive Plan will
remain in effect until December 31, 2010. 

Program Administration

The Plan is authorized by the Compensation Committee and voted by the
Board of Directors. The Compensation Committee has the sole authority to interpret the
Plan and to make or nullify any rules and procedures, as necessary, for proper
administration. Any determination by the Committee will be final and binding on all
participants. 

Program Changes or Discontinuance

BHB has developed the plan based on existing business, market and
economic conditions. If substantial changes occur that affect these conditions, BHB may
add to, amend, modify or discontinue any of the terms or conditions of the plan at any
time. The Compensation Committee may, at its sole discretion, waive, change or amend the
Plan as it deems appropriate.

Incentive Award Payments

Awards will be paid as a cash bonus before the end of the first quarter
following the Plan year (within 75 days to avoid potential 409A trigger). Awards will be
paid out as a percentage of a participant’s base salary earned during the year as of
December 31st for a given calendar year. Incentive awards will be considered
taxable income to participants in the year paid and will be subject to withholding for
required income and other applicable taxes. 

Any rights accruing to a participant or his/her beneficiary under the
Plan shall be solely those of an unsecured general creditor of BHB. Nothing contained in
the Plan, and no action taken pursuant to the provisions hereof, will create or be
construed to create a trust of any kind, or a pledge, or a fiduciary relationship between
BHB or the CEO and the participant or any other person. Nothing herein will be construed
to require BHB or the CEO to maintain any fund or to segregate any amount for a
participant’s benefit.

New Hires, Promotions, and Transfers

Participants who are not employed by BHB at the beginning of the Plan
year will receive a pro rata incentive award based on their length of employment during a
given year. 

A participant whose work schedule changes during the year will be
eligible for prorated treatment that reflects his/her time in the different schedules.

If a participant changes his/her role or is promoted during the Plan
year, he/she will be eligible for the new role’s target incentive award on a pro rata
basis (i.e. the award will be prorated based on the number of months employed in the
respective positions.)

Termination of Employment

If a participant is terminated by the BHB, no incentive award will be
paid. If a participant voluntarily leaves BHB before the award is paid, s/he will not
receive payment unless their resignation is due to a hardship or family situation. The
Compensation Committee reserves the right to make a decision on whether or not to pay a
pro-rated share of any incentive earned for the calendar year in question. To encourage
employees to remain in the employment of BHB, a participant must be an active employee of
BHB on the last day of the measurement period (see exceptions for disability, death, or
retirement).

Disability, Death, or Retirement 

If a participant is disabled by an accident or illness, and is disabled
long enough to be placed on long-term disability, his/her incentive award for the Plan
period shall be prorated so that no award will be earned during the period of long-term
disability.

In the event of death, BHB will pay to the participant’s estate
the pro rata portion of the award that had been earned by the participant.

In the event of retirement, BHB will pay to the participant a pro rata
portion of the award that had been earned by the participant.

Ethics and Interpretation

If there is any ambiguity as to the meaning of any terms or provisions
of this plan or any questions as to the correct interpretation of any information
contained therein, BHB’s interpretation expressed by the Board of Directors will be
final and binding.

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

Participants who have willfully engaged in any activity, injurious to
the BHB, will upon termination of employment, death, or retirement, forfeit any incentive
award earned during the award period in which the termination occurred.

Miscellaneous

The Plan will not be deemed to give any participant the right to be
retained in the employ of BHB, nor will the Plan interfere with the right of BHB to
discharge any participant at any time.

In the absence of an authorized, written employment contract, the
relationship between employees and BHB is one of at-will employment. The Plan does not
alter the relationship.

This incentive plan and the transactions and payments hereunder shall,
in all respect, be governed by, and construed and enforced in accordance with the laws of
the State of Maine.

Each provision in this Plan is severable, and if any provision is held
to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not, in any way, be affected or impaired thereby. 

This plan is proprietary and confidential to BHB and its employees and
should not be shared outside the organization except as authorized by the Compensation
Committee for public disclosure documents.

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