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
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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
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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.
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
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.
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.
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,
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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
<PAGE> 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-
<PAGE> 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.
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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.
<PAGE> 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
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.
