BAR HARBOR
BANKSHARES
AND SUBSIDIARIES
EQUITY INCENTIVE PLAN of 2009
Section 1 Purpose . The purpose of this 2009
Equity Incentive Plan (the "Plan"), of Bar Harbor Bankshares and
Subsidiaries (the "Company"), is to advance the interests of the
Company and its stockholders by enhancing the Company’s
ability to attract, retain and motivate certain persons who make
(or are expected to make) important contributions to the Company by
providing such persons with an opportunity to benefit from the
increases in value of the stock of the Company through the grant of
certain Stock Awards and Stock Appreciation Rights, as defined
herein, and thereby better aligning the interests of such persons
with those of the Company’s stockholders.
Section 2 Definitions .
"Affiliate"
means an entity that directly or through one or more intermediaries
controls, is controlled by, or is under common control with the
Company, as determined by the Committee.
"Board"
means the Board of Directors of the Company.
"Cause"
means a conviction by a court of competent jurisdiction of a felony
involving dishonesty or fraud on the part of the Participant in
his/her relationship with the Company or an Affiliate.
"Change
in Control" means 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
Company representing more than fifty percent (50%) of the combined
voting power of the Company’s then outstanding securities,
other than as a result of an issuance of securities initiated by
the Company in the ordinary course of its business; or
(b) The 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 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.
For
purposes of this Plan, 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 Plan, 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
Plan.
"Code"
means the Internal Revenue Code of 1986, as amended.
"Committee"
means the committee of the Board described in Section 3.1 of
the Plan.
"Continuous
Service" means that the Participant’s service with the
Company or an Affiliate, whether as an Employee or Director, is not
interrupted or terminated. A Participant’s Continuous Service
shall not be deemed to have terminated merely because of a change
in capacity in which the Participant renders services to the
Company or an Affiliate. The Committee, in its sole discretion, may
determine whether continuous service shall be considered
interrupted in the case of any approved leave of absence including
sick leave, military leave, or any other personal leave.
"Covered
Employee" means a covered employee as defined in
Section 162(m)(3) of the Code.
"Director"
means a non-Employee member of the Board..
"Disability"
shall mean a Participant (i) is 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 can be expected to last for a continuous period
of not less than twelve (12) months, or (ii) is, by
reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than
three (3) months under an accident and health plan covering
employees of the Company or an Affiliate.
"Employee"
means any person employed by the Company or any Affiliate. Mere
service as a Director shall not constitute employment for purposes
of the Plan.
"Exchange"
means any national securities exchange or automated quotation
system on which the Stock may from time to time be listed, quoted
or traded.
"Fair
Market Value" on any date, means (i) if the Stock is listed on
an Exchange, the closing price of a Share of Stock of the Company
on the Exchange on which Shares of Stock are then trading, if any
(or as reported on any composite index which includes such
principal Exchange), on such date, or if Shares were not traded on
such date, then on the next preceding date on which a trade
occurred, or (ii) if Stock of the Company is not publicly
traded on an Exchange, the value of the Stock of the Company as
determined by the Committee in good faith on the basis of objective
criteria.
"Good
Reason shall mean one or more of the following events arising
without the consent of the Participant:
(a) a material diminution in the
Participant’s annual base salary;
(b) a material diminution in the
Participant’s authority, duties or responsibilities;
(c) a requirement that the
Participant 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 Participant retains authority;
(e) a material change in the
geographic location at which the Participant must perform his
services; or
(f) any other action or inaction
that constitutes a material breach by the Company of any agreement
under which the Participant 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. Further,
the Participant must provide notice 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 Participant 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.
"Grant
Date" means the date a Stock Award or Stock Appreciation Right is
granted by the Committee.
"Incentive
Stock Option" means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.
"Nonstatutory
Stock Option" means an Option not intended to qualify as an
Incentive Stock Option.
"Option"
means an Incentive Stock Option or a Nonstatutory Stock Option
granted pursuant to the Plan.
"Option
Agreement" means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an individual
Option grant. Each Option Agreement shall be subject to the terms
and conditions of the Plan.
"Optionholder"
means a person to whom an Option is granted pursuant to the Plan
or, if applicable, such other person who holds an Option.
"Participant"
means a person to whom a Stock Award or Stock Appreciation Right is
granted pursuant to the Plan or, if applicable, such other person
who holds an outstanding Stock Award or Stock Appreciation
Right.
"Restricted
Stock" means Stock granted to a Participant under Section 7.1
of the Plan.
"Restricted
Stock Award Agreement" means a written agreement between the
Company and a holder of a Restricted Stock grant evidencing the
terms and conditions of an individual Restricted Stock grant. Each
Restricted Stock Award Agreement shall be subject to the terms and
conditions of the Plan.
"Restricted
Stock Unit" means a unit granted under Section 7.4 of the Plan
which represents the right to receive one hypothetical Share of
Stock.
"Restricted
Stock Unit Agreement" means a written agreement between the Company
and a holder of a Restricted Stock Unit grant evidencing the terms
and conditions of an individual Restricted Stock Unit grant. Each
Restricted Stock Unit Agreement shall be subject to the terms and
conditions of the Plan.
"Shares"
means shares of Stock. If there has been an adjustment or
substitution pursuant to Section 11 of the Plan, the term
"Shares" shall also include any shares of stock or other securities
that are substituted for Shares or into which Shares are adjusted
pursuant to Section 11 of the Plan.
"Stock"
means the common stock of the Company, par value $2.00, and such
other securities of the Company as may be substituted for Stock
pursuant to Section 11 of the Plan.
"Stock
Appreciation Right" shall mean a right to receive cash or
Stock.
"Stock
Award" means an Option, a Restricted Stock Unit, and a right to
acquire Restricted Stock.
"Stock
Award Agreement" means a Restricted Stock Award Agreement and a
Restricted Stock Unit Agreement.
"1933
Act" means the Securities Act of 1933, as amended from time to
time.
"1934
Act" means the Securities Exchange Act of 1934, as amended from
time to time.
Section 3 Administration of the Plan.
3.1 Administration Generally . The Plan shall be
administered by a Committee appointed by the Board or, at the
discretion of the Board from time to time, the Plan may be
administered by the Board. It is intended that at least two of the
directors appointed to serve on the Committee shall be
"non-employee directors" (within the meaning of Rule 16b-3
promulgated under the 1934 Act) and "outside directors" (within the
meaning of Code Section 162(m) and the regulations thereunder) and
that any such members of the Committee who do not so qualify shall
abstain from participating in any decision to make or administer
Stock Awards and/or Stock Appreciation Rights that are made to
eligible Participants who, at the time of consideration for such
Stock Award and/or Stock Appreciation Right, (i) are persons
subject to the short-swing profit rules of Section 16 of the
1934 Act, or (ii) are reasonably anticipated to become Covered
Employees during the term of the Stock Award and/or Stock
Appreciation Right. The members of the Committee shall be appointed
by, and may be changed at any time and from time to time in the
discretion of, the Board. The Board may reserve for itself any or
all of the authority and responsibility of the Committee under the
Plan or may act as administrator of the Plan for any and all
purposes. To the extent the Board has reserved any authority and
responsibility or during any time that the Board is acting as
administrator of the Plan, it shall have all the powers of the
Committee hereunder, and any reference herein to the Committee
(other than in this Section 3.1) shall include the Board. To
the extent any action of the Board under the Plan conflicts with
actions taken by the Committee, the actions of the Board shall
control.
3.2 Action and Interpretations by the Committee . For
purposes of administering the Plan, the Committee may from time to
time adopt rules, regulations, guidelines and procedures for
carrying out the provisions and purposes of the Plan and make such
other determinations, not inconsistent with the Plan, as the
Committee may deem appropriate. The Committee’s
interpretation of the Plan, any Stock Awards and/or Stock
Appreciation Rights granted under the Plan, any agreement and all
decisions and determinations by the Committee with respect to the
Plan are final, binding and conclusive on all parties. Each member
of the Committee is entitled to, in good faith, rely or act upon
any report or other information furnished to that member by any
officer or other employee of the Company or any Affiliate, the
Company’s or an Affiliate’s independent certified
public accountants, Company counsel or any executive compensation
consultant or other professional retained by the Company to assist
in the administration of the Plan.
3.3 Authority of Committee . Except as
provided below, the Committee has the exclusive power, authority
and discretion to:
(a) Determine which of the persons
eligible under the Plan shall be granted Stock Awards and/or Stock
Appreciation Rights; how and when each Stock Award and/or Stock
Appreciation Right shall be granted; what type or combination of
types of Stock Awards and/or Stock Appreciation Rights shall be
granted; the provisions of each Stock Award and/or Stock
Appreciation Right granted (which need not be identical), including
the time or times when a person shall be permitted to receive
Company Stock pursuant to a Stock Award or cash or Stock pursuant
to a Stock Appreciation Right; and the number of Shares of Stock
with respect to which a Stock Award shall be granted to each
person;
(b) Construe and interpret the
Plan and the Stock Awards and/or Stock Appreciation Rights granted
under it, and to establish, amend and revoke rules and regulations
for its administration. The Committee, in the exercise of this
power, may correct any defect, omission, or inconsistency in the
Plan or in any Stock Award Agreement or Stock Appreciation Right
agreement, in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective;
(c) Amend the Plan or a Stock
Award or a Stock Appreciation Right as provided in
Section 12;
(d) Terminate or suspend the Plan
as provided in Section 13; and
(e) Exercise such powers and to
perform such acts as the Board deems necessary or expedient to
promote the best interests of the Company which are not in conflict
with the provisions of the Plan.
3.4 Award Agreements . Each Stock Award shall be
evidenced by an agreement. Each agreement shall include such
provisions, not inconsistent with the Plan, as may be specified by
the Committee.
Section 4 Shares Subject to the Plan. Subject to
the provisions in Section 11 relating to adjustments upon changes
in the Stock of the Company, the Stock of the Company that may be
issued pursuant to Stock Awards and Stock Appreciation Rights shall
not exceed in the aggregate 175,000 Shares of Stock, of which no
more than 75,000 Shares of Stock can be awarded as Restricted Stock
and/or Restricted Stock Units. If any Stock Award shall for any
reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, the Shares of Stock not acquired
under such Stock Award shall revert to and again become available
for issuance under the Plan. The maximum number of Shares of Stock
that can be granted to an Employee or a Director during a calendar
year is 20,000.
Section 5 Eligibility for Specific Stock Awards
. Incentive Stock Options may only be granted to Employees of the
Company or an Affiliate. Stock Awards other than Incentive Stock
Options may be granted to Employees and Directors.
Section 6 Option Provisions . Each Option shall
be in such form and shall contain such terms and conditions as the
Committee shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at
the Grant Date, and, if certificates are issued, a separate
certificate or certificates will be issued for the Shares of Stock
purchased on exercise of each type of Option. The provisions of
separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in
the Option or otherwise) the substance of each of the following
provisions:
(a) Term. No Option shall
be exercisable after the expiration of ten (10) years from the date
it was granted.
(b) Exercise Price of an
Incentive Stock Option. The exercise price of each Incentive
Stock Option shall not be less than 100% of the Fair Market Value
of the Stock subject to the Option on the Option Grant Date.
(c) Exercise Price of a
Nonstatutory Stock Option . The exercise price of each
Nonstatutory Stock Option shall not be less than 100% of the Fair
Market Value of the Shares of Stock subject to the Option on the
Grant Date.
(d) Consideration. The
purchase price of the Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the Option is
exercised, or (ii) at the discretion of the Board at the time
of the grant of the Option (or subsequently in the case of a
Nonstatutory Stock Option), by delivery to the Board of other Stock
of the Company, or according to a deferred payment arrangement with
the Optionholder, which arrangement shall charge an adequate rate
of interest based on the applicable federal rate.
(e) Transferability of an
Incentive Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. Notwithstanding the
forgoing, the Optionholder may, by delivering written notice to the
Company, in a form satisfactory to the Committee, designate a third
party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option
(f) Transferability of a
Nonstatutory Stock Option. A Nonstatutory Stock Option shall
not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the
Optionholder only by the Optionholder. Notwithstanding the
forgoing, the Optionholder may, by delivering written notice to the
Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.
(g) Vesting Generally . The
total number of Shares subject to an Option may, but need not, vest
and therefore become exercisable in periodic installments that may,
but need not, be equal. The Option may be subject to such other
terms and conditions on the time or times when it may be exercised
(which may be based on performance or other c
