-----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, KJzRFVxhME4PaKOh/qkcbn3OP5ZMZs3ET6SoCdj9djUkRh2upGR//N2rdCtm6Yiu eKI+I+z0NnPRRoWrg8UXIQ== 0000910647-99-000308.txt : 19991213 0000910647-99-000308.hdr.sgml : 19991213 ACCESSION NUMBER: 0000910647-99-000308 CONFORMED SUBMISSION TYPE: 8-K12G3 PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19991130 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19991210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION BANKSHARES INC CENTRAL INDEX KEY: 0000706863 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 030283552 STATE OF INCORPORATION: VT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K12G3 SEC ACT: SEC FILE NUMBER: 000-28449 FILM NUMBER: 99772453 BUSINESS ADDRESS: STREET 1: 20 MAIN STREET STREET 2: P O BOX 667 CITY: MORRISVILLE STATE: VT ZIP: 05661-0667 BUSINESS PHONE: 8028886600 MAIL ADDRESS: STREET 1: 20 MAIN STREET STREET 2: P O BOX 667 CITY: MORRISVILLE STATE: VT ZIP: 05661-0667 8-K12G3 1 CURRENT REPORT ON FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/12g-3 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 30, 1999 UNION BANKSHARES, INC. (Exact name of registrant as specified in its charter) Vermont 333-82709 03-0283552 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 20 Main St., P.O. Box 667 Morrisville, Vermont 05661-0667 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (802) 888-6600 Not applicable (Former name or former address, if changed since last report) Item 2. Acquisition or Disposition of Assets The Merger - ---------- On November 30, 1999, Union Bankshares, Inc., Morrisville, Vermont ("Union") and Citizens Savings Bank and Trust Company, St. Johnsbury, Vermont ("Citizens") consummated their previously announced affiliation pursuant to an Affiliation Agreement dated as of February 16, 1999 (the "Affiliation Agreement") and a related Agreement and Plan of Merger dated as of November 19, 1999 (the "Merger Agreement"). The affiliation of the two companies was accomplished through a merger of a newly-organized merger subsidiary of Union with and into Citizens (the "Merger"). The Merger was approved by the shareholders of Citizens at special meetings held on November 19, 1999. Also on that date, the shareholders of Union approved an amendment to Union's amended and restated Articles of Association increasing Union's authorized common stock from 2,400,000 shares to 5,000,000 shares. The increase was necessary to provide sufficient shares to issue in the Merger. In connection with the Merger, each outstanding share of Citizens $1.00 par value common stock (other than shares as to which dissenters' rights were exercised) was converted into 6.5217 shares of Union's $2.00 par value common stock. Union issued 991,089 shares in the Merger. Fractional shares were settled in cash at the rate of $23.00 per share. Union filed a Registration Statement on Form S-4 (No. 333-82709) with the Securities and Exchange Commission in connection with the transaction. After giving effect to the Merger, Union has 3,029,229 shares issued and outstanding. The Merger was accounted for as a pooling of interests and was structured as a tax-free reorganization. Citizens will retain its separate banking charter and banking operations. With this affiliation, Union is now the holding company for both Citizens and Union Bank, based in Morrisville, Vermont. As of November 30, 1999, Union had consolidated unaudited assets of approximately $300 million, deposits of approximately $265 million and shareholders' equity of approximately $32 million. In connection with the Merger, Jerry S. Rowe, President and Director of Citizens, was appointed to the Board of Union, along with two additional Citizens Directors, Franklin G. Hovey, II and William T. Costa. Mr. Rowe was also appointed as a Vice President of Union. Union President and Director, Kenneth D. Gibbons, and Union Vice President and Director, Cynthia D. Borck, were appointed to the Citizens Board. Additional information regarding consummation of the Merger is contained in the press release filed as Exhibit 99 to this Report. Union as Exchange Act Successor to Citizens - ------------------------------------------- Prior to the Merger, Citizens' common stock was registered under Section 12(g) of the Securities Exchange Act of 1934. As a state-chartered nonmember bank, Citizens filed its Exchange Act reports and information with the Federal Deposit Insurance Corporation ("FDIC"). By virtue of the Merger and pursuant to Securities and Exchange Commission ("SEC") rule 12g-3, Union has succeeded to Citizens' reporting and other obligations under Section 12(g) of the Exchange Act, but will file its reports and other information with the SEC, rather than the FDIC. Description of Union's Common Stock - ----------------------------------- Authorized Capital Stock. Union has only one authorized class of capital stock, $2.00 par value common stock. Union has 5,000,000 shares of common stock authorized, of which 3,029,229 were issued and outstanding after giving effect to the Merger, and 59,700 shares of which were reserved for future issuance under the terms of Union's 1998 Incentive Stock Option Plan, or its predecessor plan, Union's 1988 Incentive Stock Option Plan. Union's common stock is not presently traded or quoted on any exchange or in the over-the-counter market and no broker makes a market in the stock. The stock is traded from time to time through brokers or by holders in private transactions, but such trading is sporadic, and bid and ask prices are not publicly reported. Voting Rights. Each outstanding share of Union common stock entitles the holder to one vote on all matters submitted to vote of shareholders, including election of directors. Unless a larger vote is required by law or by Union's Amended and Restated Articles of Association, a matter is deemed to be approved if more votes are cast in favor of the matter than against. Abstentions and broker non-votes are disregarded for purposes of determining whether the requisite vote has been achieved. Directors of Union are elected by a plurality of the shares of common stock voted in the election at a meeting at which a quorum is present. Union's shareholders do not have the right to cumulate their votes for directors. Dividends. Holders of Union's common stock are entitled to such dividends as Union's Board may declare from time to time out of funds legally available for such payment. Because Union has no substantial independent sources of income at the holding company level, payment of dividends by Union to its shareholders depends upon the receipt by it of dividends from its subsidiaries, Union Bank and Citizens. Applicable banking laws could restrict the payment of dividends by Citizens and Union Bank in some circumstances. Liquidation. In the event of liquidation, dissolution or winding up of Union, the holders of Union's common stock would be entitled to share ratably in all assets remaining after payment of all Union's debts and other liabilities. Non-Assessable Shares. The outstanding shares of Union's common stock are fully paid and non-assessable. No Conversion, Redemption or Preemptive Rights. Holders of Union common stock do not have conversion, sinking fund or redemption rights, nor do they have any preemptive rights to subscribe for additional shares of Union's common stock or other securities, in the event additional shares or other securities are issued in the future. No Preferential Rights. All shares of Union's common stock have equal dividend, distribution, liquidation and other rights and have no preference or special rights over any other shares of Union's common stock. Antitakeover Provisions. Union's Amended and Restated Articles of Association provide that certain business combinations with a substantial shareholder or its affiliates require approval by the affirmative vote of the holders of at least 67% of Union's outstanding common stock. A substantial shareholder is one who together with its affiliates owns 5% or more of Union's outstanding common stock. Union's Board of Directors would have the right to override the 67% vote requirement in any particular transaction. If the Board chose to override the 67% vote, the Board could require only the percentage vote that would otherwise be required under Vermont's business corporation laws, which is ordinarily a majority of the outstanding common stock. The effect of these provisions may be to discourage attempts to acquire control of Union without direct negotiation with Union's Board and to enhance the Board's ability to negotiate the most favorable terms for all of Union's shareholders, or to resist a hostile takeover attempt entirely, as it may deem advisable in the circumstances. The 67% vote requirement in Union's Articles may only be amended by the affirmative vote of at least 67% of Union's outstanding common stock. Limitation of Director Liability. Union's Amended and Restated Articles of Association limit the liability of Union's directors to the fullest extend permitted by law. The Vermont Business Corporation law prohibits exculpation for any of the following: * the amount of any improper financial benefit received by the director; * liability resulting from intentional reckless infliction of harm on the company or its shareholders; * a violation of the director's statutory duty not to authorize or consent to unlawful distributions; or * intentional or reckless criminal acts. Item 7. Financial Statements and Exhibits (a) Financial Statements. (1) The audited consolidated financial statements of Citizens as of December 31, 1998 and 1997 and for each of the years in the three-year period ended December 31, 1998, and the independent auditors' report thereon, previously included in Union's Registration Statement on Form S-4 (No. 333-82709), as amended, are hereby incorporated by reference. (2) The unaudited consolidated interim financial statements of Citizens as of June 30, 1999 and 1998 and for the six month period then ended, previously included in Union's Registration Statement on Form S-4 (No. 333-82709), as amended, are hereby incorporated by reference. (b) Pro Forma Financial Information. (1) The unaudited pro forma condensed combined income statements of Union for the years ended December 31, 1998, 1997 and 1996, giving effect to the Merger under the pooling of interests method of accounting, were set forth on pages 73 and 75-78 of Union's Joint Proxy Statement/Prospectus contained in its Registration Statement on Form S-4 (No. 333-82709), as amended, and are hereby incorporated by reference. (2) The unaudited pro forma condensed combined balance sheet of Union as of June 30, 1999 and the unaudited pro forma condensed combined income statement of Union for the six month period ended June 30, 1999, giving effect to the Merger under the pooling of interest method of accounting, were set forth on pages 72-74 of Union's Joint Proxy Statement/Prospectus contained in its Registration Statement on Form S-4 (No. 333- 82709), as amended, and are incorporated herein by reference. (c) Exhibits. The following exhibits are filed herewith or incorporated by reference as part of this report: 2.1 Affiliation Agreement dated as of February 16, 1999, between Union and Citizens, incorporated by reference to Appendix I to the Joint Proxy Statement/Prospectus contained in the Registration Statement of Union on Form S-4 (No. 333-82709), as amended. 2.2 Agreement and Plan of Merger, dated as of November 19, 1999, between Union Interim Bank and Citizens and joined in by Union, incorporated by reference to Appendix II to the Joint Proxy Statement/Prospectus contained in the Registration Statement of Union on Form S-4 (No. 333-82709), as amended. 3.1 Amended and Restated Articles of Association of Union (as of May 8, 1997). 3.2 Amendment filed May 19, 1998 to Amended and Restated Articles of Association of Union, adding new sections 8 and 9. 3.3 Amendment filed November 24, 1999 to Amended and Restated Articles of Association of Union, amending section 7. 3.4 By-laws of Union, as amended. 23 Consent of A.M. Peisch & Company, independent auditors to Citizens. 99 Press Release dated November 30, 1999. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. UNION BANKSHARES, INC. Date: December 10, 1999 By: /s/ Kenneth D. Gibbons ---------------------------- Kenneth D. Gibbons President and Chief Executive Officer EXHIBIT INDEX 2.1 Affiliation Agreement dated as of February 16, 1999, between Union and Citizens, incorporated by reference to Appendix I to the Joint Proxy Statement/Prospectus contained in the Registration Statement of Union on Form S-4 (No. 333-82709), as amended. 2.2 Agreement and Plan of Merger, dated as of November 19, 1999, between Union Interim Bank and Citizens and joined in by Union, incorporated by reference to Appendix II to the Joint Proxy Statement/Prospectus contained in the Registration Statement of Union on Form S-4 (No. 333- 82709), as amended. 3.1 Amended and Restated Articles of Association of Union (as of May 8, 1997). 3.2 Amendment filed May 19, 1998 to Amended and Restated Articles of Association of Union, adding new sections 8 and 9. 3.3 Amendment filed November 24, 1999 to Amended and Restated Articles of Association of Union, amending section 7. 3.4 By-laws of Union, as amended. 23 Consent of A.M. Peisch & Company, independent auditors to Citizens. 99 Press Release dated November 30, 1999. EX-3 2 EXHIBIT 3.1 EXHIBIT 3.1 AMENDED AND RESTATED ARTICLES OF ASSOCIATION (as of May 7, 1997) 1. Name. The name of the Corporation shall be Union Bankshares, Inc. 2. Registered Agent and Office. The registered agent of the Corporation shall be W. Arlen Smith, with a registered office at the Union Bank, Morrisville, Vermont. 3. Principal Office. The principal office of the Corporation shall be located at Morrisville, Vermont. 4. Operating Method. The operating period of the Corporation shall be the calendar year ending December 31. 5. Duration. The period duration of the Corporation is perpetual. 6. Purposes. The Corporation is established for the following purposes: to serve as a holding company, including the ownership, management, and control of bank stock; to engage in, directly or indirectly, activities related to banking; and to carry on and conduct any other lawful business or activity for which corporations may be organized under the Vermont Business Corporation Act. 7. Capital Stock. The aggregate number of shares the Corporation shall have the authority to issue shall be two million four hundred thousand shares (2,400,000) having a par value of two dollars ($2.00) per share. Dated at Morrisville, in the county of Lamoille, this 7th day of May, 1997. UNION BANKSHARES, INC. BY: /s/ Kenneth D. Gibbons ------------------------------------ President BY: /s/ Peter M. Haslam ------------------------------------ Secretary EX-3 3 EXHIBIT 3.2 EXHIBIT 3.2 Amendments to Amended and Restated Articles of Association of Union Bankshares, Inc. (filed May 19, 1998) Effective May 19, 1998, the Amended and Restated Articles of Association of Union Bankshares, Inc. were further amended to add the following two new sections: 8. Liability of Directors. A Director of the Corporation shall have no personal liability to the Corporation or to its shareholders for money damages for any action taken, or any failure to take any action, solely as a director, based on a failure to discharge his or her own duties in accordance with Section 8.30 of Title 11A of the Vermont Statutes Annotated, except for (a) the amount of a financial benefit received by the Director to which the Director is not entitled; (b) an intentional reckless infliction of harm on the Corporation or its shareholders; (c) a violation of Section 8.33 of Title 11A of the Vermont Statutes Annotated or (d) an intentional or reckless criminal act. This Section 8 shall not be deemed to eliminate or limit the liability of a Director for any act or omission occurring prior to the date this Section becomes effective. No amendment or repeal of this Section 8 shall apply to or have any effect on the liability or alleged liability of any Director of the Corporation for or with respect to any acts or omissions of such Director occurring prior to such amendment or repeal. 9. Greater Voting Requirements. (i) Except as set forth in part (ii) of this Section 9, the affirmative vote or consent of the holders of 67% of the outstanding shares of all classes of stock of the Corporation entitled to vote for the election of directors, considered for the purposes of this Section as one class, shall be required (a) for the adoption of any agreement for the merger, consolidation or plan of share exchange of the Corporation or any Subsidiary (as defined below) with or into any Other Corporation (as defined below), (b) to authorize any sale, lease, exchange, mortgage, pledge or other disposition of all, or substantially all of the assets of the Corporation or any Subsidiary to any Other Corporation, (c) to authorize the issuance or transfer by the Corporation of any Substantial Amount (as defined below) of securities of the Corporation in exchange for the securities or assets of any Other Corporation, or (d) to engage in any other transaction the effect of which is to combine the assets and business of the Corporation or any Subsidiary with any Other Corporation. Such affirmative vote or consent shall be in addition to the vote or consent of the holders of the stock of the Corporation otherwise required by law, the Articles of Association of the Corporation or any agreement or contract to which the Corporation is a party. (ii) The provisions of part (i) of this Section 9 shall not be applicable to any transaction described therein if such transaction is approved by a resolution of the Board of Directors of the Corporation, provided that the directors voting in favor of such resolution include a majority of the persons who are not affiliated with the Other Corporation involved in such transaction or who were duly elected and acting members of the Board of Directors prior to the time such Other Corporation became a Beneficial Owner (determined as provided below) of 5% or more of the shares of stock of the Corporation entitled to vote for the election of directors. (iii) The Board of Directors shall have the power and duty to determine for the purposes of this Section 9, on the basis of information known to such Board, if and when any Other Corporation is the Beneficial Owner of 5% or more of the outstanding shares of stock of the Corporation entitled to vote for the election of directors. Any such determination, if made in good faith, shall be conclusive and binding for all purposes of this Section 9. An Other Corporation (as defined below) shall be deemed to be the "Beneficial Owner" of any stock beneficially owned by any "affiliate" or "associate" of such Other Corporation, in accordance with the rules of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934. (iv) As used in this Section 9, the following terms shall have the meanings indicated: "Other Corporation" means any person, firm, corporation or other entity, other than a Subsidiary of the Corporation, which is the Beneficial Owner of 5% or more of the shares of stock of the Corporation entitled to vote in the election of directors. "Subsidiary" means any corporation in which the Corporation owns, directly or indirectly, more than 50% of the voting securities. "Substantial Amount" means any securities of the Corporation having a then fair market value of more than 5% of the Corporation's consolidated capital accounts as of the end of the then preceding fiscal year. (v) The provisions of this Section 9 may not be repealed or amended in any respect, and no provision inconsistent herewith may be adopted, unless such repeal, amendment or adoption is approved by the affirmative vote of the holders of not less than 67% of the total voting power of all outstanding shares of stock of this Corporation entitled to vote for the election of directors, voting as a single class. EX-3 4 EXHIBIT 3.3 EXHIBIT 3.3 Amendments to Amended and Restated Articles of Association of Union Bankshares, Inc. (filed November 24, 1999) Effective November 24, 1999, the Amended and Restated Articles of Association of Union Bankshares, Inc. were further amended to add the following two new sections: To amend Section 7 of the Amended and Restated Articles of Association of Union Bankshares, Inc. to read in full: * Capital Stock. The aggregate number of shares the Corporation shall have the authority to issue shall be five million (5,000,000) having a par value of two dollars ($2.00) per share. EX-3 5 EXHIBIT 3.4 EXHIBIT 3.4 BY-LAWS OF UNION BANKSHARES, INC. (as amended) ARTICLE I ARTICLES OF ASSOCIATION The name, location of the registered office, the registered agent, and the purposes and powers of the Corporation shall be as set forth in the Articles of Association, and these By-laws; the purposes and powers of the Corporation and of its directors and shareholders, and all matters concerning the conduct and regulation of the business of the Corporation shall be subject to such provisions in regard thereto, if any, as are set forth in the Articles of Association; and the Articles of Association are hereby made a part of these By-laws. All reference in these By-laws to the Articles of Association shall be construed to mean the Articles of Association of the Corporation as from time to time amended. ARTICLE II SHAREHOLDERS Section 1. Annual Meeting. The annual meeting of shareholders commencing with the year 1982 shall be held no sooner than 30 nor more than 90 days after the end of the Corporation's fiscal year, on such date as may be set by the Board of Directors. The annual meeting of shareholders shall be held at the registered office of the corporation in Vermont, 1 or at such other place either within or without the State of Vermont, as shall be stated in the notice of the meetings or in a duly executed waiver thereof. The hour of the meeting shall be such hour as shall be stated in the notice of the meeting, or in a duly executed waiver thereof. The purpose of the annual meeting shall be to elect a Board of Directors and to transact such other business as may properly be brought before the meeting. Election of directors and of the Secretary need not be by written ballot. Purposes for which an annual meeting is to be held, additional to those prescribed by law, by the Articles of Association and by these By-laws, may be specified by the President, the Board of Directors, the Secretary, or the Secretary upon the written request of the holders of not less than one- tenth of all of the shares entitled to vote at the meeting on such additional purposes. Failure to hold the annual meeting at the designated time shall not work a forfeiture or dissolution of the Corporation. If such annual meeting is omitted on the day herein provided therefore, a special meeting may be held in place thereof, and any business transacted or elections held at such meeting shall have the same effect as if transacted or held at the annual meeting. Such special meeting shall be called in the same manner and as provided for in Article II, Section 2 hereof, relating to special meetings of shareholders. Section 2. Special Meetings. Special meetings of the shareholders may be called by the President, the Board of Directors, the Secretary, or the Secretary upon the written request of the holders of not less than one- tenth of all the shares entitled to vote at the meeting, for any purpose. Special meetings shall be held at the registered office of the 2 Corporation in Vermont, or at such other place either within or without the State of Vermont, and on such date and hour as shall be fixed by the President, the Board of Directors, the Secretary, or the Secretary upon written request of the holders of not less than one-tenth of all the shares entitled to vote at the meeting and stated in the notice of the meeting, or in a duly executed waiver thereof. Section 3. Notice of Meeting; Waiver. Written notice of the place, date and hour at which an annual or special meeting is to be held shall be given personally or put in the regular mails to each shareholder entitled to vote thereat, not less than ten (10) nor more than fifty (50) days prior to the meeting by or at the direction of the President, the Secretary, or the other persons calling the meeting. Notice of a special meeting shall state, in addition to the foregoing information, the purpose for which it is called. A written Waiver of Notice of a meeting, signed before or after the meeting by the person or persons entitled to notice, shall be deemed equivalent to notice, provided that such Waiver of Notice is inserted in the corporate minute book. Such a writing need not state the purpose of the meeting for which it waives notice. Section 4. Quorum. A majority of the shares entitled to vote thereat, present in person or represented by proxy, shall be necessary to and shall constitute a quorum for the transaction of business at all meetings of the shareholders. When a quorum is once present, it shall not be broken by the subsequent withdrawal of any shareholders. If the required quorum shall not be present or represented at any meeting of the shareholders, the 3 shareholders present in person or represented by proxy and entitled to vote thereat shall have power to adjourn the meeting from time to time, until a quorum shall be present or represented. At any such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally noticed. Section 5. Voting and Proxies. At any meeting of the shareholders every shareholder having the right to vote shall be entitled to vote in person, or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. Proxies shall be filed with the Secretary of the meeting, or any adjournment thereof, before being voted. Unless otherwise provided therein, no proxy shall be valid after eleven months from the date of its execution. A proxy with respect to shares held in the name of two or more persons shall be valid if executed by one of them unless at or prior to exercise of the proxy the Corporation receives a specific written notice to the contrary from any one of them. A proxy purporting to be executed by or on behalf of a shareholder shall be deemed valid unless challenged at or prior to its exercise. Except as otherwise provided by law, or by the Articles of Association, each shareholder of record on the record date for the meeting shall be entitled to one vote for every share standing in his name on the books of the Corporation. All elections of directors shall be determined by a plurality vote, and, except as otherwise provided by the laws of Vermont, the Articles of Association, or by the By-laws, all other 4 matters shall be determined by vote of a majority of the shares present or represented at such meeting and voting on such questions. Section 6. Notice and Record Date of Adjourned Meetings. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, except that if the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice in the standard form shall be given to each shareholder of record entitled to vote at the adjourned meeting. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting, unless the Board of Directors fixes a new record date for the adjourned meeting. Section 7. Record of Shareholders; Lists. In order that the Corporation may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may fix a record date, which shall be not more than fifty (50) nor less than ten (10) days before the date of such meeting. If no record date is fixed for such purposes, the record date shall be the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, or, if notice of a meeting is waived, at the close of business on the day next preceding the day on which the 5 meeting is held. The Secretary of the Corporation, or his delegate, shall prepare and make, at least ten (10) days before every meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder at the registered office of the Corporation, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any shareholder who is present. Section 8. Stock Ledger. The stock ledger of the Corporation shall be the only evidence as to who are the shareholders entitled to examine the stock ledger, the list required by Section 7 of Article II of these By- laws, the books of the Corporation, or to vote in person or by proxy at any meeting of shareholders. Section 9. Shareholders' Right of Inspection. Any shareholder, in person or by attorney or other agent, shall upon written demand under oath stating the purposes thereof, have the right during the usual hours of business to inspect for any proper purpose the Corporation's stock ledger, a list of its shareholders and its other books and records, and to make extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person's interest as shareholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied 6 by a power of attorney or such other writing which authorized the attorney or other agent to so act on behalf of the shareholder. The demand under oath shall be directed to the Corporation at its registered office. As used in this Section, "Shareholder" means a shareholder of record. Section 10. Action Without a Meeting. Any action required to be taken at a meeting of the shareholders of the Corporation, or any action that may be taken at a meeting of the shareholders may be taken without a meeting, if a consent in writing setting forth the action so taken shall be signed by all of the shareholders entitled to vote with respect to the subject matter thereof, provided that such waiver of notice is inserted in the Corporate minute book. Such consent shall have the same force and effect as an unanimous vote of shareholders and may be stated as such in any articles or documents filed with the Secretary of State. ARTICLE III DIRECTORS Section 1. Board of Directors; Number, Terms and Quorum. The number of directors which shall constitute the Board of Directors shall be no less than three, the exact number to be determined by the shareholders at each annual meeting prior to the election of Directors. Directors need not be residents of the State of Vermont or shareholders. The Board of Directors shall be elected annually by the shareholders at the annual meeting thereof. Each Director shall hold office until his successor is elected and qualified or until his earlier resignation or removal. 7 Section 2. Quorum and Voting. A majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors except as these By-laws shall otherwise require. Section 3. Resignation. Any director may resign at any time upon delivery of his resignation in writing to the President, the Treasurer or the Secretary or to the Board of Directors. Such resignation shall be effective at the date set forth in the notice, and if there is none, then upon receipt. Section 4. Committees. The Board of Directors may by resolution passed by majority of the whole board, designate one or more committees, including an executive committee from among the members of the whole board. The board may designate one or more directors as alternate members of any such committee who may replace any absent or disqualified member at any meeting of the committee. If no such alternate members have been designated for such a committee, the members thereof present at any meeting and not disqualified from voting whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any such committee, to the extent provided in the resolution of the whole board which establishes it and permitted by Vermont law, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to any papers 8 which may require it. Any director may be a member of more than one committee. The procedures to be followed by such committees with respect to quorum, voting and other such matters shall be the same as those specified for meetings of directors. Section 5. Telephone Meetings and Written Consents. Any action required or permitted to be taken at any meeting of the Board of Directors or committees thereof may be taken by telephone conference call, between at least a majority of the directors, or may also be taken without a meeting if all members of the board or committee, as the case may be, consent to such action in writing and the writing or writings are filed in the minute book of the board or committee. Section 6. Vacancies and Newly-Created Directorships. If any vacancies occur on the Board of Directors by reason of the death, immediately effective resignation, retirement or removal from office of any director, or increase in the number of directors, all the directors then in office, although less than a quorum, may by a majority vote choose a successor or successors. Unless sooner displaced, the directors so chosen shall hold office until the election of their successors at the next annual meeting of shareholders. If the directors remaining in office after the occurrence of a vacancy shall be unable by majority vote to fill such vacancy within thirty (30) days of the occurrence thereof, the President or Secretary of the Corporation may call a special meeting of the shareholders at which such vacancy shall be filled. In the event that one or more directors tenders a resignation from the board effective at a future date, the prospective vacancy or vacancies shall be filled by vote of a 9 majority of the directors then in office, although less than a quorum, including those who have so resigned. Such vote shall take effect when such resignation or resignations shall become effective and each director so chosen shall, unless sooner displaced, hold office until the due election and qualification of his successor. Section 7. Place, Time and Notice of Meetings. The directors may hold their meeting in such place or places, within and without the State of Vermont, as the Board of Directors may determine from time to time. The Board of Directors shall meet each year immediately after the annual meeting of shareholders, for the purpose of organization, election of officers, and consideration of any other business that may properly come before the meeting. No notice of any kind to either old or new members of the Board of Directors for this annual meeting shall be necessary. Other meetings of the directors shall be held at the call of the President or of the Secretary or of any one director. Notice of the date, time and place of directors' meetings except the annual organization meeting shall be given to each director entitled thereto by letter, telegram, cable or radiogram, delivered for transmission not later than during the third day immediately preceding the day of the meeting, or by word of mouth, telephone or radiophone received not later than during the second day immediately preceding the day of the meeting. Such notice may be waived by a director in a writing signed either before or after the meeting for which such notice was required to be given, provided that such waiver of notice is inserted in the minute book, and shall be deemed waived by any director who attends the meeting for which such notice was 10 required to be given, unless such attendance is for the express purpose of objecting to the holding of the meeting. Notice of a later meeting need not be given to any director who attended a prior meeting at which such latter meeting was duly called and the time, date and place thereof noticed. Section 8. Chairman of the Meeting. The President of the Corporation, if present and acting, shall preside at all meetings; otherwise, a director chosen by a majority of the board at the meeting shall preside. Section 9. Removal of Directors. Any and all directors may be removed with cause by a vote of a majority of the shares issued and outstanding and entitled to vote at any annual meeting or special meeting called for such purposes. Notice of such meeting shall state the name or names of the director or directors whose removal is proposed and the cause or causes assigned for his removal and a concise statement in defense of the director or directors prepared by or on behalf of him or them shall accompany or precede any solicitation of proxies seeking authority to vote for or against the removal of such director or directors; otherwise, such proxies may not be voted. The director or directors to be removed must, in addition to being given sufficient notice to prepare his or their concise statement of defense as aforementioned, be given an opportunity to present evidence and arguments on his or their own behalf at the meeting at which his or their removal is considered. 11 ARTICLE IV OFFICERS Section 1. Officers. The officers of the Corporation shall consist of a President, a Treasurer, a Vice-President and a Secretary and such other officers, including, without limitation, a Chairman of the Board of Directors, one or more Vice-Presidents, Assistant Treasurers and Assistant Secretaries as the directors at their annual meeting or thereafter from time to time may elect or appoint. The President, Vice-President, Secretary and Treasurer shall be elected annually by the directors at their annual meeting following the annual meeting of the shareholders. Other officers may be chosen by the directors at such meeting or at any other time. Each officer shall hold his office until his successor is elected and qualified or until his earlier death, resignation or removal. Any officer may resign at any time upon delivering his resignation in writing to the President, the Treasurer or the Secretary or to a meeting of the directors. Such resignation shall be effective upon receipt unless specified to be effective at some other time. Any officer elected by the Board of Directors may be removed at any time for cause or without cause by majority vote of the whole Board of Directors taken at a meeting duly called and held. Neither notice nor a hearing need be given to any officer proposed to be so removed. Any vacancy occurring in any office of the Corporation by reason of death, resignation, removal of an officer or otherwise, shall be filled by the Board of Directors in the same manner as provided for ordinary elections of officers by directors, and an officer so chosen shall hold office until the next regular election 12 for that office, or until earlier death, resignation or removal. The salaries of all officers shall be fixed from time to time by the Board of Directors. Section 2. President. It shall be the duty of the President to preside at all meetings of the shareholders and all meetings of the Board of Directors and to have general authority over the ordinary course of the business of the Corporation. Section 3. Vice-President. The Vice-President, or Vice-Presidents, shall have such powers and duties as shall be assigned to them by the Board of Directors or the President. Section 4. Treasurer and Assistant Treasurers. The Treasurer shall, subject to the direction and under the supervision of the directors, have general charge of the financial concerns of the Corporation; care and custody of the funds and valuable papers of the Corporation, except his own bond; authority to endorse for deposit or collection all notes, checks, drafts and other obligations for the payment of money payable to the Corporation or its orders, and to accept drafts on behalf of the Corporation; authority to pay or cause to be paid all dividends voted by the Board of Directors; and shall keep, or cause to be kept, accurate books of account, which shall be the property of the Corporation. If required by the Board of Directors, he shall give bond for the faithful performance of his duty in such form, in such sum, and with such sureties as the directors shall require. Any Assistant Treasurer shall have such powers and duties as the directors or the President may delegate to him. Section 5. Secretary. The Secretary shall, in addition to any duties imposed upon him by virtue of his office pursuant to Vermont law, the Articles of Association or these By- 13 laws, keep an attested copy of the Articles of Association and amendments thereto, and of these By-laws with a reference on the margin of said By- laws to all amendments thereof, all of which documents and books shall be kept at the registered office of the Corporation or at the office of the Secretary. Unless a transfer agent is appointed, the Secretary shall keep or cause to be kept, at the registered office of the Corporation or at his office, the stock and transfer records of the Corporation, in which shall be contained the names of all shareholders, their record addresses, the number of shares held by each, the time when they respectively acquired the shares and the time of any transfers thereof. The Secretary shall also keep a record of the meetings of the directors. The Secretary shall give or cause to be given such notice as may be required of all meetings of shareholders and all meetings of the Board of Directors, and shall keep the seal of the Corporation in safe custody and affix it to any instrument when such action is incident to his office or is authorized by the Board of Directors. Any Assistant Secretary shall have such powers and duties as the directors or the President shall delegate to him. Section 6. Other Powers and Duties. Subject to these By-laws, each officer shall have in addition to the duties and powers specifically set forth in these By-laws, such duties and powers as the directors or the President may from time to time delegate to him. 14 ARTICLE V SHARES OF STOCK Section 1. Amount Authorized. The amount of the authorized capital stock and the par value, if any, of the shares authorized shall be fixed in the Articles of Association, as amended from time to time. Section 2. Stock Certificates. Each shareholder shall be entitled to a certificate representing the shares of the Corporation owned by him, under the corporate seal or a facsimile thereof, in such form as may be prescribed from time to time by the directors. The certificates shall be signed by the President or a Vice-President, and by the Treasurer or the Secretary but when a certificate is countersigned by a transfer agent or a registrar, other than the Corporation itself or an employee thereof, such signature may be facsimiles, engraved or printed. In case any officer who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the time of its issue. Every certificate representing the Corporation's shares which are subject to any restriction on transfer pursuant to the Articles of Association, the By-laws or any agreement to which the Corporation is a party, shall have the restriction noted conspicuously on the certificate and shall also set forth on the face or back thereof either the full text of the restriction or a statement of the existence of such restriction and a statement that the 15 Corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge. Every certificate representing the Corporation's shares issued when the Corporation is authorized to issue more than one class or series of shares shall set forth on its face or back either the full text of the preferences, voting powers, qualifications and special and relative rights of the shares of each class and series authorized to be issued or a statement of the existence of such preferences, powers, qualifications, and rights, and a statement that the Corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge. Section 3. Transfer. Subject to the restrictions, if any, stated or noted on the certificates, shares may be transferred on the books of the Corporation by the surrender to the Corporation or its transfer agent of the certificate therefor properly endorsed by the registered holder or by his duly authorized attorney pursuant to a written power of attorney properly executed, and with such proof of the authenticity of signature as the Secretary of the Corporation or its transfer agent may reasonably require, if the Corporation has no notice of any adverse claim. Except as may be otherwise required by law, by the Articles of Association or by these By-laws, the Corporation shall be entitled to treat the record holder of shares as shown on its books as the owner of such shares for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer, pledge, or other disposition of such shares, until the shares have been transferred on the 16 books of the Corporation in accordance with the requirements of these By- laws. It shall be the duty of each shareholder to notify the Corporation of his mailing address. Section 4. Lost or Destroyed Certificates. The Corporation shall issue a new certificate in the place of any certificate theretofore issued where the holder of record of the certificate satisfies the following requirements: * Claim. Makes proof in affidavit form that it has been lost, destroyed, or wrongfully taken; * Timely Request. Requests the issue of a new certificate before the Corporation has notice that the certificate has been acquired by a purchaser for value in good faith and without notice of any adverse claims; * Bond. Gives a bond in such form, and with such surety or sureties, with fixed or open penalty, as the Corporation may direct, to indemnify the Corporation against any claims that may be made on account of the alleged loss, destruction or theft of the certificates; * Other Requirements. Satisfies any other reasonable requirements imposed by the Corporation. When a certificate has been lost, apparently destroyed, or wrongfully taken and the holder of record fails to notify the Corporation within a reasonable time after he has notice of it, and the Corporation registers a transfer of the shares represented by this certificate before receiving such notification, the holder of record is precluded from making any claim against the Corporation for the transfer or for a new certificate. Section 5. Fractional Shares. Certificates representing fractional shares may be issued by the Corporation. No holder of any fractional share shall be entitled to any vote 17 with respect thereto unless, and to the extent that, the holder or holders of fractional shares aggregating one or more full shares unite for the purpose of voting at any such meeting, in which case such holder or holders shall be entitled to one vote at such meeting for each full shares represented by the aggregate of such fractional shares held by such holder or holders. Section 6. Payment for Shares. The consideration for the issuance of shares may be paid, in whole or in part, in money, in other property, tangible or intangible, or in labor or services actually performed for the Corporation. When payment of the consideration for which shares are to be issued shall have been received by the Corporation such shares shall be deemed to be fully paid and nonassessable. Neither promissory notes nor future services shall constitute payment or part payment for the issuance of shares of the Corporation. In the absence of fraud in the transaction, the judgment of the Board of Directors as to the value of the consideration received for shares shall be conclusive. No certificate shall be issued for any shares until the share is fully paid. ARTICLE VI MISCELLANEOUS PROVISIONS Section 1. Fiscal Year. Except as from time to time determined by the directors, the fiscal year of the Corporation shall end on the last day of December in each year. Section 2. Seal. The seal of the Corporation shall, subject to alteration by the directors, consist of a flathead, circular die with the words "Vermont", "Union Bankshares, Inc." and "1982" cut or engraved thereon. 18 Section 3. Registered Office and Registered Agent. The address of the registered agent shall be as set forth in the Articles of Association. The books of the Corporation including its stock ledger, books of account, and minute books, shall be kept at the registered office of the Corporation or its Secretary. Section 4. Agents. The Board of Directors may appoint agents of the Corporation possessing authority as broad as is not inconsistent with these By-laws or applicable law. Section 5. Voting of Shares in Other Corporations. Except as the directors may otherwise designate, the President or Treasurer may waive notice of, and appoint any person or persons to act as proxy or attorney in fact for this Corporation (with or without power of substitution), at any meeting of shareholders of any other corporation or organization, the securities of which may be held by this Corporation. Section 6. Amendments. These By-laws may at any time be repealed, altered or amended by vote of the directors. ARTICLE VII NOTES, CHECKS, DRAFTS AND CONTRACTS Section 1. The Notes, Checks and Drafts. The notes, checks and drafts of the corporation shall be signed by such person or persons as the Board of Directors may from time to time designate and in the absence of such designation by the Treasurer. Manual signature or signatures shall be required on all notes and drafts of the Corporation. In the 19 case of checks of the Corporation, either manual or facsimile signature or signatures may be used. Section 2. Contracts. Contracts of the Corporation shall be executed by such person or persons as may be generally designated by the Board of Directors and, in the absence of such designation, by the President, a Vice-President or the Treasurer. ARTICLE VIII INDEMNIFICATION AND INSURANCE Section 1. Indemnification Policy. The Corporation shall indemnify its directors, and, by affirmative vote of a majority of its directors, may indemnify its officers, employees and agents, against any liability incurred by any of them in their capacity as such, to the full extent permitted by the laws of Vermont, in accordance with the following provisions. Section 2. Third Party Suits. The Corporation shall indemnify any director and may indemnify any other person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than by action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding 20 if he acted in good faith and in a manner he reasonable believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a pleas of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 3. Derivative Actions. The Corporation shall indemnify any director and may indemnify any other person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorney's fees) judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; provided, however, that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for gross negligence or willful misconduct 21 in the performance of his duty to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. Section 4. Payment in Advance. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this Article VIII. Section 5. Non-exclusivity. The indemnification provided by this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall insure to the benefit of the heirs, executors and administrators of such person. Section 6. Insurance. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, partnership, joint venture, trust or other enterprise against any liability asserted 22 against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article VIII. 23 EX-23 6 EXHIBIT 23 EXHIBIT 23 INDEPENDENT AUDITOR'S CONSENT We consent to the incorporation by reference in this report on Form 8-K/12g-3 of Union Bankshares, Inc. of our report dated January 12, 1999, relating to the financial statements as of December 31, 1998 and December 31, 1997 of Citizens Savings Bank and Trust Company contained in the Registration Statement on Form S-4 of Union Bankshares, Inc., as amended by Amendment No. 1 and Amendment No. 2 (Reg. No. 333-82709). /s/ A.M. Peisch & Company A.M. Peisch & Company December 10, 1999 White River Junction, Vermont VT Reg. No. 92-0000102 EX-99 7 EXHIBIT 99 Exhibit 99 FOR IMMEDIATE RELEASE November 30, 1999 Contact: Union Bankshares, Inc. Citizens Savings Bank and Trust Company Mr. Kenneth Gibbons Mr. Jerry Rowe (802) 888-6600 (802) 748-3131 Affiliation of Citizens Savings Bank and Trust Company with Union Bankshares, Inc. Completed Morrisville, VT, November 30, 1999 -- Citizens Savings Bank and Trust Company ("Citizens"), St. Johnsbury, VT, joins Union Bank as wholly owned subsidiaries of Union Bankshares, Inc. ("Union'), Morrisville, VT, at the close of business today. Citizens shareholders will receive 6.52 shares of Union Common Stock for each share of Citizens Common Stock. Union will issue approximately 991,000 shares in the transaction, with fractional shares settled in cash. The transaction is treated as a pooling of interests and as a tax-free exchange. Citizens retains its state bank charter and will continue to do business as Citizens Saving Bank and Trust Company at all its business locations with the same management and employee team but as a wholly owned Union subsidiary. Union president Ken Gibbons stated, "We are very pleased with the addition of Citizens as a sister bank. We plan to utilize their expertise in trust services to better serve our customers in the Lamoille Valley. Citizens customers will see no change in their day-to-day banking with any consolidations directed only to certain behind the scenes support functions at both banks. This is a classic example of two small banks affiliating to take advantage of each others strengths and is very important in this era of continuing changes in the financial services arena." Jerry Rowe, who continues as president of Citizens, stated, "The mission of Citizens Bank will be greatly enhanced by our affiliation with Union Bank. The new combination of management talent and capital will enable us to diversify our products and create new ways to deliver service. Everyone at Citizens is excited about the future." Three Directors from Citizens, including Jerry Rowe, President of Citizens, were appointed to Union Bankshares, Inc. Board. Two Directors of Union, including Kenneth Gibbons, President of Union, were appointed to the Citizens Board. With the completion of the acquisition, Union now has consolidated assets of over $300 million and deposits in excess of $265 million, with 12 full service banking offices and 22 ATMs serving Lamoille, Caledonia and Orleans counties. -----END PRIVACY-ENHANCED MESSAGE-----