Stock-Based Compensation Plans

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation Plans [Abstract]

Stock-Based Compensation Plans

Note 11: Stock-Based Compensation Plans:

On October 3, 2000, the shareholders of the Company approved the Bar Harbor Bankshares and Subsidiaries Incentive Stock Option Plan of 2000 ("ISOP") for its officers and employees, which provided for the issuance of up to 450,000 shares of common stock. The purchase price of the stock covered by each option must be at least 100% of the trading value on the date such option was granted. Vesting terms ranged from three to seven years. No option shall be granted after October 3, 2010, ten years after the effective date of the ISOP.

In May, 2009, the shareholders of the Company approved the adoption of the 2009 Bar Harbor Bankshares and Subsidiaries Equity Incentive Plan (the "2009 Plan") for employees and directors of the Company and its subsidiaries. Subject to adjustment for stock splits, stock dividends, and similar events, the total number of shares of common stock that can be issued under the 2009 Plan over the 10 year period in which the plan will be in place is 175,000 shares of common stock, provided that no more than 75,000 shares of such stock can be awarded in the form of restricted stock or restricted stock units, as further described in the 2009 Plan. The 2009 Plan is to be administered by the Company's Compensation Committee. All employees and directors of the Company and it subsidiaries are eligible to participate in the 2009 Plan, subject to the discretion of the Administrator and the terms of the 2009 Plan. The maximum stock award granted to one individual may not exceed 20,000 shares of common stock (subject to adjustment for stock splits, and similar events) for any calendar year.

In 2011 and 2010, the Company recognized $99 and $217, respectively, of share-based compensation in salaries and employee benefits expense.

For the years ended December 31, 2011, 2010, and 2009, the total anti-dilutive stock options amounted to 117, 157, and 135 thousand shares, respectively.

The fair value of options was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions for stock option grants during the years ended December 31:

	2011			2010			2009
Risk free interest rate		2.04	%		2.61	%		2.94	%
Expected market volatility factor for the Company's stock		26.28	%		25.50	%		22.69	%
Dividend yield		3.79	%		3.79	%		3.85	%
Expected life of the options (years)		7.0			6.9			7.0
Options granted		30,500			38,648			11,500
Estimated fair value of options granted	$	4.99		$	5.12		$	4.25

The expected market price volatility for the grants during 2011 was determined by using the Company's historical stock price volatility on a daily basis during the three to seven year periods ending December 31, 2011, consistent with the expected life of the 2011 options.

Stock Option Activity: A summary combined status of the ISOP and the 2009 Plan as of December 31, 2011, and changes during the year then ended is presented below:

	Number of Stock Options Outstanding		Exercise Price Range				Weighted Average Exercise Price		Intrinsic Value		Aggregate Intrinsic Value
				From		To
Outstanding at January 1, 2011	238,370		$	15.40	$	34.65	$	24.73
Granted	30,500		$	28.12	$	29.85	$	28.56
Exercised	(78,035	)	$	15.40	$	27.75	$	17.46
Cancelled	(21,647	)	$	26.48	$	31.16	$	29.30
Outstanding at December 31, 2011	169,188		$	18.25	$	34.65	$	28.18	$	5.26	$	401
Ending vested and expected to vest
December 31, 2011	153,040		$	18.25	$	34.65	$	28.12	$	5.26	$	373
Exercisable at December 31, 2011	92,579		$	18.25	$	34.65	$	27.84	$	5.38	$	273

The intrinsic value of the options exercised and cash received by the Company for options exercised for the years ended December 31, 2011, 2010, and 2009, was approximately $996 and $1,363, $659 and $922, and $287 and $430, respectively.

The tax benefit received related to the exercise of options in 2011, 2010 and 2009, was $248, $161 and $52, respectively.

As of December 31, 2011, there was approximately $176 of unrecognized compensation cost related to unvested stock option awards, net of estimated forfeitures. This amount is expected to be recognized as expense over the next seven years, with a weighted average recognition period of 3.2 years.

Stock Options Outstanding: The following table summarizes stock options outstanding and exercisable by exercise price range at December 31, 2011:

	Options Outstanding			Options Exercisable
Range of Exercise Prices	Number Outstanding As of 12/31/11	Weighted Average Remaining Contractual Term (years)	Weighted Average Exercise Price	Number Exercisable As of 12/31/11	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term
							$	18.25	$34.65	169,188	5.75	$	28.18	92,579	$	27.84	3.92