EMPLOYMENT AGREEMENT

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:

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: