As filed with the Securities and Exchange Commission on November 26, 1997.
File No. 333-____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------------------
MERCHANTS BANCSHARES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 03-0287342
(State or other jurisdiction (I.R.S. Employer
of organization) Identification No.)
164 COLLEGE STREET, BURLINGTON, VERMONT 05401 (802) 658-3400
(Address and telephone number of registrant's principal executive offices)
--------------------------------
JANET P. SPITLER STEPHEN H. FABERMAN, ESQ.
Treasurer BINGHAM DANA LLP
MERCHANTS BANCSHARES, INC. 150 Federal Street
275 Kennedy Drive Boston, MA 02110
South Burlington, VT 05403 (617) 951-8054
(802) 658-3400
(Name, address and telephone number of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [X]
If this Form is filed to register
additional securities for an offering pursuant to Rule 462(b) under the
Securities Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Securities Amount to Offering Price Aggregate Amount of
to be Registered be Registered Per Share* Offering Price* Registration Fee
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Common Stock
Par Value $0.01 per share 144,278 $28.875 $4,166,027 $1,344.00
- ------------------------------------------------------------------------------------------------------
</TABLE>
*Estimated solely for the purpose of determining the registration fee.
Calculated in accordance with Rule 457(c) based on the average of the high
and low prices reported in the consolidated trading system on November 18,
1997.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
<PAGE>
EXPLANATORY NOTE
On December 21, 1995, the Registrant sold to its indirect wholly-owned
subsidiary Merchants Trust Company (the "Trust Company"), as Trustee, in a
private transaction and at the market price of $14.125 per share (the average
of the closing bid ($13.25) and asked ($15.00) prices on December 20, 1995) an
aggregate of 144,278 shares of the Registrant's common stock (the "Shares") in
connection with the amendment and termination (the "Agreements") of certain
obligations of the Registrant to certain of its former officers and directors
(the "Selling Stockholders") under two benefit and compensation plans of the
Registrant. In accordance with the Agreements (as discussed in "Selling
Stockholders"), the Trust Company has, from time to time, distributed a portion
of the Shares to the Selling Stockholders.
This Registration Statement on Form S-3 has been prepared and filed
pursuant to and in accordance with the requirements of Form S-3 for purposes of
(i) effecting the registration under the Securities Act of 1933, as amended
(the "Securities Act") of the 135,110 Shares which are to be transferred in the
future to the Selling Stockholders by the Trust Company pursuant to the
Agreements, and (ii) including a Prospectus prepared in accordance with the
requirements of Part I of Form S-3 (the "Reoffer Prospectus"), which Reoffer
Prospectus may be used by the Selling Stockholders to reoffer for resale the
9,168 Shares registered pursuant to this Registration Statement that have
already been distributed to certain of the Selling Stockholders by the Trust
Company in accordance with the Agreements.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Subject to Completion, Dated November 26, 1997
P R O S P E C T U S
MERCHANTS BANCSHARES, INC.
144,278 Shares of
Common Stock, $0.01 Par Value
-----------
This Prospectus ("Prospectus") of Merchants Bancshares, Inc., a Delaware
corporation (the "Company" or "Merchants"), relates to up to 144,278 shares
(the "Shares") of the Company's common stock, par value $0.01 per share (the
"Common Stock"), which have been issued by the Company to the Company's
indirect wholly-owned subsidiary, Merchants Trust Company (the "Trust
Company"), pursuant to the terms of agreements entered into by the Company with
certain of its past and present key employees and directors (the "Selling
Stockholders") in connection with the termination of the Company's Executive
Salary Continuation Plan and Directors Deferred Compensation Plan (the
"Plans"). See "Selling Stockholders". The Company will not receive any proceeds
from the sale of Shares by the Selling Stockholders. The Common Stock is traded
on the Nasdaq National Market under the symbol "MBVT." On November 18, 1997,
the last reported sale price of the Common Stock on the Nasdaq National Market
was $28.875 per share. The Company will pay all of the expenses estimated to be
$5,000 incident to the registration, offering and sale of the Shares to the
public hereunder (other than commissions, fees and discounts of underwriters,
brokers, dealers and agents).
All or a portion of the Shares may be disposed of by the Selling
Stockholders hereunder from time to time in one or a combination of the
following transactions: (a) transactions (which may involve block transactions)
on the Nasdaq National Market, or otherwise, at market prices prevailing at the
time of sale or at prices related to such prevailing market prices; or (b)
privately negotiated transactions at negotiated prices, including underwritten
offerings. The Selling Stockholders may effect such transactions by selling the
Shares directly to purchasers or by selling the shares to or through
underwriters, brokers or dealers, and such underwriters, brokers or dealers may
receive compensation in the form of discounts, concessions or commissions from
<PAGE>
the Selling Stockholders or the purchasers of the Shares for whom such
underwriters, brokers or dealers may act as agent, or to whom they sell as
principal, or both (which compensation to a particular underwriter, broker or
dealer might be in excess of customary commissions or be changed from time to
time). The Selling Stockholders and the underwriters, brokers, dealers or
agents who participate in a sale of the Shares may be deemed "underwriters"
within the meaning of Section 2(11) of the Securities Act of 1933, as amended
(the "Securities Act") and the commissions paid or discounts allowed to any of
the underwriters, brokers, dealers or agents in addition to any profits
received on resale of the Shares if any of the underwriters, brokers, dealers
or agents should purchase any Shares as a principal may be deemed to be
underwriting discounts or commissions under the Securities Act. See "Plan of
Distribution."
Certain of the underwriters, brokers, dealers or agents may
have other business relationships with the Company and/or its affiliates in the
ordinary course.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus or
any Prospectus Supplement, and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. Neither this Prospectus nor any Prospectus Supplement constitutes an
offer to sell or a solicitation of an offer to buy any of the securities
offered hereby in any jurisdiction to any person to whom it is unlawful to make
such an offer in such jurisdiction. Neither the delivery of this Prospectus or
any Prospectus Supplement nor any sale made thereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or thereof.
- -------------------------------------------------------------------------------
Underwriting Proceeds
Price to Discounts to Selling
Public and Commissions Stockholder
- -------------------------------------------------------------------------------
Per Share (l) (1)(2) (1)(2)
- -------------------------------------------------------------------------------
Total (1) (1)(2) (1)(2)
- -------------------------------------------------------------------------------
(1) The Selling Stockholders may from time to time effect the sale of the
Shares at prices and at terms then prevailing or at prices related to the
then-current market price, or in negotiated transactions. Under the
<PAGE>
securities laws of certain states, the Shares may be sold in such states
only through registered or licensed brokers or dealers. See "Plan of
Distribution" and "Selling Stockholders."
(2) The Company has agreed to prepare and file this Prospectus and the related
Registration Statement and supplements and amendments thereto required by
the Securities Act with the Securities and Exchange Commission, and to
deliver copies of the Prospectus to the Selling Stockholders. The expenses
incurred in connection with the same, estimated at $5,000, will be borne by
the Company. The Selling Stockholders and any broker-dealers, agents or
underwriters who participate in a sale of the Shares may be deemed
"underwriters" within the meaning of the Securities Act, and any
commissions paid or discounts allowed to, and any profits received on
resale of the Shares by, any of them may be deemed to be underwriting
discounts or commissions under the Securities Act. See "Plan of
Distribution." The Company will not be responsible for any discounts,
concessions, commissions or other compensation due to any broker or dealer
in connection with the sale of any of the shares offered hereby, which
expenses will be borne by the Selling Stockholders.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS (AND SELLING GROUP
MEMBERS) MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK
ON NASDAQ IN ACCORDANCE WITH RULE 103 OF REGULATION M. SEE "PLAN OF
DISTRIBUTION."
The date of this Prospectus is November 26, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information concerning the Company may be inspected and copies may be
obtained (at prescribed rates) at public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, New York 10048 and at Northwest Atrium Center,
500 W. Madison Street, Suite 1400, Chicago, Illinois 60661-2511. In addition,
electronically filed documents, including reports, proxy and information
statements and other information regarding the Company, can be obtained from
the Commission's Web site at http://www.sec.gov. The Common Stock is listed on
the Nasdaq National Market, and reports, proxy statements and other information
concerning the Companycan also be inspected the offices of the National
Association of Securities Dealers, Inc. at 1735 K Street, Washington, D.C.
20006.
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act with the Commission with
respect to the Common Stock being offered pursuant to this Prospectus. As
permitted by the rules and regulations of the Commission, this Prospectus omits
certain of the information contained in the Registration Statement. For further
information with respect to the Company and the Common Stock being offered
pursuant to this Prospectus, reference is hereby made to such Registration
Statement, including the exhibits filed as part thereof. Statements contained
in this Prospectus concerning the provisions of certain documents filed with,
or incorporated by reference in, the Registration Statement are not necessarily
complete, each such statement being qualified in all respects by such
reference. Copies of all or any part of the Registration Statement, including
the documents incorporated by reference therein or exhibits thereto, may be
obtained upon payment of the prescribed rates at the offices of the Commission
set forth above.
Upon request, the Company will provide without charge to each person to
whom a copy of this Prospectus has been delivered a copy of any information
that was incorporated by reference in the Prospectus (other than exhibits to
documents, unless such exhibits are specifically incorporated by reference into
the Prospectus). The Company will also provide upon specific request, without
charge to each person to whom a copy of this Prospectus has been delivered, a
copy of all documents filed from time to time by the Company with the
Commission pursuant to the Exchange Act. Requests for such copies should be
directed to Jennifer L. Varin, Secretary of Merchants Bancshares, Inc., 275
Kennedy Drive, South Burlington, Vermont 05401. Telephone requests may be
directed to Ms. Varin at (802) 658-3400.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There is incorporated herein by reference the Annual Report on Form 10-K
of the Company for the fiscal year ended December 31, 1996 and the Quarterly
Reports on Form 10-Q of the Company for the fiscal quarters ended March 31,
1997, June 30, 1997 and September 30, 1997, filed with the Commission pursuant
to Section 13(a) of the Exchange Act, and the description of the Common Stock
contained in the Company's Registration Statement filed with the Commission
under Section 12(g) of the Exchange Act including any amendment or report filed
for the purpose of updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Common Stock shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing such documents. Any statement contained herein or in a
document, all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document or portion thereof which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
CAUTIONARY STATEMENT
The documents incorporated by reference in this Prospectus contain, and
additional statements issued by the Company from time to time in public filings
or press releases or publicly made orally by officers of the Company with
respect to the Company contain or may contain, "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements are subject to certain risks and uncertainties, including
without limitation those discussed in the sections referred to above of the
Company's 1996 Annual Report to Stockholders on Form 10-K. Such forward-looking
statements speak only as of the date on which they are made, and the Company
cautions readers not to place undue reliance on such statements. All
forward-looking information is inherently uncertain and actual results may
differ materially from the assumptions, estimates or expectations reflected or
contained in the forward-looking information.
THE COMPANY
The Company, a bank holding company registered with the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"), was
originally organized as a Vermont business corporation in 1983. The Company is
also subject to examination by, and is required to file reports with, the
Department of Banking, Insurance and Securities of the State of Vermont. The
Company is the bank holding company of Merchants Bank, a Vermont-chartered
<PAGE>
commercial bank, headquartered in Burlington, Vermont (the "Bank"). All of the
capital stock of the Bank is owned directly by the Company. In addition, the
Company owns directly or indirectly through the Bank, all of the outstanding
stock of three active nonbanking subsidiaries, all Vermont corporations: the
Trust Company, Merchants Properties, Inc. and Queneska Capital Corporation. As
of September 30, 1997, the Company had assets of $579 million, liabilities of
$529 million and stockholders' equity of $50.4 million.
The Company engages in one line of business, that of providing a broad
range of financial services, through its banking and nonbanking subsidiaries,
to individuals and small-and medium-sized companies in Vermont including those
located in low-and moderate-income neighborhoods within the Company's defined
Community Reinvestment Act assessment area.
The Bank is a Vermont-chartered commercial bank which, through its
thirty-three full-service branch offices, provides a wide variety of retail and
commercial deposit and loan products and services to consumers and small and
medium-sized businesses primarily in Vermont. The deposits of the Bank are
insured by the Federal Deposit Insurance Corporation ("FDIC"). As of September
30, 1997, the Bank had deposits totaling $505 million and net loans of $381
million.
The Trust Company is a wholly-owned subsidiary of the Bank and was
chartered in 1870 for the purpose of offering fiduciary services such as estate
settlement, testamentary trusts, guardianships, agencies, intervivos trusts,
employee benefit plans and corporate trust services. As of September 30, 1997,
the Trust Company had fiduciary responsibility for assets valued at market in
excess of $317 million.
Merchants Properties, Inc. is a Vermont corporation and wholly-owned
subsidiary of the Company which develops and owns affordable rental housing
units throughout Vermont.
Queneska Capital Corporation is a Vermont corporation and wholly-owned
subsidiary of the Bank, established as a federal licensee under the Small
Business Act to provide loans and/or capital to small businesses.
For the quarter ended September 30, 1997, the Company reported net income
of $2.2 million, or $0.50 per share, compared with net income of $1.6 million,
or $0.37 per share, for the same period of 1996. For the nine months ended
September 30, 1997, net income was $6.1 million, or $1.39 per share, compared
with $4.5 million, or $1.05 per share, for the first three quarters of 1996.
The executive office of the Company is located at 164 College Street,
Burlington, Vermont 05401 (Telephone (802) 658-3400).
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholders.
SELLING STOCKHOLDERS
On December 21, 1995, the Company sold to the Trust Company, as Trustee,
in a private transaction and at the market price of $14.125 per share (the
average of the closing bid ($13.25) and asked ($15.00) prices on December 20,
1995) an aggregate of 144,278 shares of the Common Stock (the "Shares"). The
Shares were issued pursuant to agreements (the "Agreements") that the Bank had
negotiated with the Selling Stockholders, to reduce the Bank's total
liabilities to such Selling Stockholders under the Plans, which were terminated
or amended. Immediately before the Agreements became effective, the Selling
Stockholders were entitled to receive from the Bank payments with an aggregate
value of approximately $3.3 million. The Agreements (and termination or
amendment of the Plans as a result thereof) reduced the Bank's liabilities by
approximately $700,000 and the associated purchase and sale of the Shares
provided capital that the Company was able to use to discharge outstanding
Company debt that matured in June 1996.
Under the terms of the Agreements, the Bank generally is to deliver
shares of the Common Stock to each of the Selling Stockholders in annual
installments, starting following the sixty-fifth birthday of the participant
and continuing for 15 years thereafter. In the event of a "change of control"
of the Company or the Bank, the Bank has a right to amend the terms of the
Agreements to provide that, rather than thereafter being obligated to
distribute a fixed number of shares of the Common Stock to each participant,
the Bank will be obligated, instead, to pay each participant amounts that are
based on the performance of a fund created by selling the Common Stock and
investing and reinvesting the proceeds.
To cover its obligations to make the distributions of the Common Stock
required by the Agreements, the Bank established trusts (the "Trusts") with the
Trust Company, and contributed to the Trusts an amount sufficient to allow the
Trusts to purchase the Shares. Through the Trust Company, the Trusts then
purchased the Shares directly from the Company as described above. Pursuant to
the terms of the Agreements, the Trust Company has begun to make, and will
continue to make, distributions of the Common Stock to the Selling
Stockholders. As of November 18, 1997, the Trust Company had distributed 9,168
of the 144,278 Shares. The Registration Statement, of which this Prospectus
constitutes a part, relates to the registration of the Shares which have been
previously, and will in the future be, distributed to the Selling Stockholders
in accordance with the Agreements.
As of November 18, 1997, there were 4,428,234 shares of the Common Stock
issued and outstanding.
<PAGE>
The following table sets forth the names of the Selling Stockholders, the
number of outstanding shares of the Common Stock beneficially owned by each of
them as of November 18, 1997, and the number of such shares available for
resale hereunder by each of them. Since each of the Selling Stockholders may
sell all or any portion of the shares of the Common Stock available for resale
hereunder by such Selling Stockholder, no estimate can be given as to the
amount of shares of Common Stock that will be held by such Selling Stockholder
upon termination of this offering.
Name Shares Beneficially Number of Shares Available
Owned(1) for Resale(2)
- -------------------------------------------------------------------------------
Merchants Trust Company(3) 135,110 135,110
Kathryn T. Boardman 644 3,099
Peter A. Bouyea(4) 55,167 1,706
Dudley H. Davis(5) 56,855 36,808
Jeffrey Davis(4) 24,932 1,708
Michael G. Furlong(4) 4,525 2,874
Thomas R. Havers(4) 17,992 3,245
Parnell C. Kirby(6) 10,969 1,596
Thomas F. Murphy(4) 22,605 13,309
Leo O'Brien, Jr.(4) 16,639 17,830
Raymond C. Pecor, Jr.(4) 124,569 13,279
Patrick S. Robins(4) 22,617 14,016
Benjamin F. Schweyer(4)(7) 64,072 10,123
Robert A. Skiff, Ph.D.(4) 1,659 13,154
Susan D. Struble 0 11,531
NOTES:
(1) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934,
shares are shown as beneficially owned if the person named in the table has or
shares the power to vote or direct the voting of, or the power to dispose or to
direct the disposition of, such shares. Inclusion of shares in the table does
not necessarily mean that the persons named have any economic beneficial
interest in shares set opposite their respective names.
(2) Consists of Shares distributed or to be distributed pursuant to the
Agreements. See "Selling Stockholders".
(3) All of the Shares beneficially owned by Merchants Trust Company will be
distributed to the Selling Stockholders in accordance with the Agreements.
(4) Designates a current director of the Company.
<PAGE>
(5) Mr. Davis is the former Chairman of the Board of Directors of the Company
and served as a director of the Company until 1997. Of the 36,808 shares
available for resale, 7,928 have already been issued to Mr. Davis pursuant to
the Agreements.
(6) Of the 1,596 shares available for resale, 228 have already been issued to
Mr. Kirby pursuant to the Agreements.
(7) Of the 10,123 shares available for resale, 1,012 have already been issued
to Mr. Schweyer pursuant to the Agreements.
<PAGE>
PLAN OF DISTRIBUTION
The sale or distribution of the Shares may be effected directly to
purchasers by the Selling Stockholders as a principal or through one or more
underwriters, brokers, dealers or agents from time to time in one or more
transactions (which may involve crosses or block transactions) (i) on any
exchange or in the over-the-counter market, (ii) in transactions otherwise than
in the over-the-counter market or (iii) through the writing of options (whether
such options are listed on an options exchange or otherwise) on, or settlement
of short sales of, the Shares. Any of such transactions may be effected at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at varying prices determined at the time of sale or
at negotiated or fixed prices, in each case as determined by the Selling
Stockholders or by agreement between the Selling Stockholders and underwriters,
brokers, dealers or agents, or purchasers. The Selling Stockholders may effect
such transactions by selling the Shares directly to purchasers or by selling
shares to or through underwriters, brokers or dealers and such underwriters,
brokers or dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders or the purchasers of
the Shares for whom such underwriters, brokers or dealers may act as agent, or
to whom they sell as principal, or both (which compensation to a particular
underwriter, broker or dealer might be in excess of customary commissions or be
changed from time to time). The Selling Stockholders and any underwriters,
brokers, dealers or agents who participate in a sale of the Shares may be
deemed "underwriters" within the meaning of Section 2(11) of the Securities Act
and the commissions paid or discounts allowed to any of such underwriters,
brokers, dealers or agents in addition to any profits received on resale of the
Shares if any of such underwriters, brokers, dealers or agents should purchase
any Shares as a principal may be deemed to be underwriting discounts or
commissions under the Securities Act.
Certain of any such underwriters, dealers, brokers or agents may have
other business relationships with the Company and/or its affiliates in the
ordinary course.
Under the securities laws of certain states, the Shares may be sold in
such states only through registered or licensed brokers or dealers.
The Company will pay all of the expenses incident to the registration,
offering and sale of the Shares to the public hereunder other than commissions,
fees and discounts of underwriters, brokers, dealers and agents. The Company
will not receive any of the proceeds from the sale of any of the Shares by the
Selling Stockholders.
If all or a portion of the Shares are offered through an underwritten
offering, the terms of such underwritten offering, including the initial public
offering price, the names of the underwriters and the compensation, if any, of
such underwriters, will be set forth in an accompanying Prospectus Supplement.
<PAGE>
Until the distribution of the Shares is completed, rules of the
Commission may limit the ability of any underwriters and any other person
participating in the distribution of the Shares to bid for and purchase the
Common Stock. As an exception to these rules, underwriters are permitted to
engage in certain transactions that stabilize the price of the Common Stock.
Such transactions consist of bids or purchases for the purpose of pegging,
fixing or maintaining the price of the Common Stock. If any underwriters create
a short position in the Shares in connection with the offering, selling more
Shares than are set forth on the cover page of this Prospectus, the
underwriters may reduce that short position by purchasing shares of Common
Stock in the open market. Purchases of the Common Stock for the purpose of
stabilization or to reduce a short position could cause the price of the Common
Stock to be higher than it might be in the absence of such purchases. In
addition, rules of the Commission may limit the timing of purchases and sales
of shares of Common Stock by the Selling Stockholders and any other such
person. All of the foregoing may limit the marketability of the Shares and the
ability of any underwriter, broker, dealer or agent to engage in market making
activities.
CERTAIN LEGAL MATTERS
The validity of the offered Common Stock will be passed upon for the
Company by Bingham Dana LLP, counsel to the Company.
EXPERTS
The consolidated financial statements of the Company included in its
Annual Report on Form 10-K for the year ended December 31, 1996, and
incorporated by reference in this Prospectus and elsewhere in the Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report, with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said report.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the issuance and distribution
of the securities being registered, other than underwriting compensation, are:
SEC Registration Fee....................... $1,344.00
Transfer Agent and Registrar Fees and Expenses $0
Legal Fees and Expenses.................... $2,000.00
Accounting Fees and Expenses............... $1,000.00
Nasdaq National Market Fee................. $0
Miscellaneous.............................. $656.00
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Total...................................... $5,000.00
-------------------
* Estimates
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law empowers a Delaware
corporation to indemnify its officers and directors and certain other persons
to the extent and under the circumstances set forth therein.
The Registrant's Certificate of Incorporation and Amended By-Laws provide
that the Registrant shall, to the fullest extent legally permissible, indemnify
each person who is or was a director, officer, employee or other agent of the
Registrant and each person who is or was serving at the request of the
Registrant as such of another corporation or of any partnership, joint venture,
trust, employee benefit plan or other enterprise or organization, against all
liabilities, costs and expenses, including but not limited to amounts paid in
satisfaction of judgments, in settlement or as fines and penalties, and counsel
fees and disbursements, reasonably incurred by him or her in connection with
the defense or disposition of or otherwise in connection with or resulting from
any action, suit or other proceeding, whether civil, criminal, administrative
or investigative, before any court or administrative or legislative or
investigative body, in which he or she may be or may have been involved as a
party or otherwise or with which he or she may be or may have been threatened,
while in office or thereafter, by reason of his or her being or having been
such a director, officer, employee, agent or trustee, or by reason of any
action taken or not taken in any such capacity. Under Delaware law and the
Certificate of Incorporation, no indemnification may be provided for any person
with respect to any matter as to which he or she shall have been adjudicated in
any proceeding not to have acted in good faith in the reasonable belief that
his or her action was in the best interest of the Registrant or other entity
<PAGE>
served or, to the extent that such matter relates to service with respect to an
employee benefit plan, in the best interest of the participants or
beneficiaries of such employee benefit plan.
If, in an action, suit or proceeding brought by or in the name of the
Registrant, a director of the Registrant is held not liable for monetary
damages, whether because that director is relieved of personal liability under
the provisions of the Certificate of Incorporation, or otherwise, that director
shall be deemed to have met the standard of conduct set forth above and to be
entitled to indemnification for expenses reasonably incurred in the defense of
such action, suit or proceeding.
As to any matter disposed of by settlement pursuant to a consent decree
or otherwise, no indemnification either for the amount of such settlement or
for any other expenses shall be provided unless such settlement shall be
approved as in the best interests of the Registrant, after notice that it
involves such indemnification, (a) by vote of a majority of the disinterested
directors then in office (even though the disinterested directors be less than
a quorum), (b) by any disinterested person or persons to whom the question may
be referred by vote of a majority of such disinterested directors, or (c) by
vote of the holders of a majority of the outstanding stock at the time entitled
to vote for directors, voting as a single class, exclusive of any stock owned
by any interested person, or (d) by any disinterested person or persons to whom
the question may be referred by vote of the holders or a majority of such
stock. No such approval shall prevent the recovery from any such officer,
director, employee, agent or trustee of any amounts paid to him or her or on
his or her behalf as indemnification in accordance with the preceding sentence
if such person is subsequently adjudicated by a court of competent jurisdiction
not to have acted in good faith in the reasonable belief that his or her action
was in the best interests of the Registrant.
The right of indemnification provided in the Registrant's Certificate of
Incorporation shall not be exclusive of or affect any other rights to which any
director, officer, employee, agent or trustee may be entitled or which may
lawfully be granted to him or her. Indemnification of a "director", "officer",
"employee", "agent", and "trustee" includes their respective executors,
administrators and other legal representatives. An "interested" person is one
against whom the action, suit or other proceeding in question or another
action, suit or other proceeding on the same or similar grounds is then or had
been pending or threatened, and a "disinterested" person is a person against
whom no such action, suit or other proceeding is then or had been pending or
threatened.
<PAGE>
Item 16. Exhibits.
2.1 The Merchants Bank Amended and Restated Deferred Compensation
Plan for Directors (filed as Exhibit 10.15 to the Registrant's
Annual Report on Form 10-K for the year ended December 31,
1996).
2.1.1 Trust Under The Merchants Bank Amended and Restated Deferred
Compensation Plan for Directors (filed as Exhibit 10.15.1 to
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996).
2.2 Agreement among The Merchants Bank and Kathryn T. Boardman,
Thomas R. Havers and Susan D. Struble dated as of December 20,
1995 (filed as Exhibit 10.16 to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1996).
2.2.1 Trust Under the Agreement among The Merchants Bank and Kathryn
T. Boardman, Thomas R. Havers and Susan D. Struble dated as of
December 20, 1995 (filed as Exhibit 10.16.1 to the Registrant's
Annual Report on Form 10-K for the year ended December 31,
1996).
2.3 Agreement between The Merchants Bank and Dudley H. Davis dated
as of December 20, 1995 (filed as Exhibit 10.17 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996).
2.3.1 Trust Under the Agreement between The Merchants Bank and Dudley
H. Davis dated as of December 20, 1995 (filed as Exhibit
10.17.1 to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996).
5 Opinion of Bingham Dana LLP.
13.1 Annual Report on Form 10-K of the Registrant for the fiscal
year ended December 31, 1996.
13.2 Quarterly Report on Form 10-Q of the Registrant for the fiscal
quarter ended March 31, 1997.
13.3 Quarterly Report on Form 10-Q of the Registrant for the fiscal
quarter ended June 30, 1997.
13.4 Quarterly Report on Form 10-Q of the Registrant for the fiscal
quarter ended September 30, 1997.
23.1 Consent of Bingham Dana LLP (included in Exhibit 5).
<PAGE>
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included on signature page).
Item 17. Undertakings.
(A) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(B) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(C) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
(D) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Burlington and the State of Vermont as of
November 20, 1997.
Merchants Bancshares, Inc.
By: /s/ Joseph L. Boutin
Joseph L. Boutin
President and Chief Executive
Officer
<PAGE>
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated. By so signing, each of the undersigned, in his or her capacity
as a director or officer, or both, as the case may be, of the Registrant, does
hereby appoint Joseph L. Boutin and Janet P. Spitler, and each of them
severally, or if more than one acts, a majority of them, his or her true and
lawful attorneys or attorney to execute in his or her name, place and stead, in
his or her capacity as a director or officer or both, as the case may be, of
the Registrant, the Registration Statement on Form S-3 and with respect to the
shares of Merchants Common Stock issued in connection with this offering and
any and all amendments to said Registration Statement and all instruments
necessary or incidental in connection therewith, and to file the same with the
Securities and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform in the name and on behalf of each of the
undersigned, in any and all capacities, every act whatsoever requisite or
necessary to be done in the premises as fully and to all intents and purposes
as each of the undersigned might or could do in person, hereby ratifying and
approving the acts of said attorneys and each of them.
Signature Title Date
President and
Chief Executive
Officer (Principal Executive Officer)
/s/ Joseph L. Boutin and Director November 20, 1997
(Joesph L. Boutin)
Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer
and Principal Accounting
/s/ Janet P. Spitler Officer) November 20, 1997
(Janet P. Spitler)
_______________________ Chairman of the Board November 20, 1997
(Raymond C. Pecor, Jr.)
/s/ Peter Bouyea Director November 20, 1997
(Peter Bouyea)
<PAGE>
_______________________ Director November 20, 1997
(Charles A. Davis)
/s/ Jeffrey L. Davis Director November 20, 1997
(Jeffrey L. Davis)
/s/ Michael G. Furlong Director November 20, 1997
(Michael G. Furlong)
/s/ Leo O'Brien, Jr. Director November 20, 1997
(Leo O'Brien, Jr.)
/s/ Patrick S. Robins Director November 20, 1997
(Patrick S. Robins)
/s/ Benjamin F. Schweyer Director November 20, 1997
(Benjamin F. Schweyer)
_______________________ Director November 20, 1997
(Robert A. Skiff)
<PAGE>
EXHIBIT INDEX
Exhibit Description
2.1 The Merchants Bank Amended and Restated Deferred Compensation
Plan for Directors (filed as Exhibit 10.15 to the Registrant's
Annual Report on Form 10-K for the year ended December 31,
1996).
2.1.1 Trust Under The Merchants Bank Amended and Restated Deferred
Compensation Plan for Directors (filed as Exhibit 10.15.1 to
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996).
2.2 Agreement among The Merchants Bank and Kathryn T. Boardman,
Thomas R. Havers and Susan D. Struble dated as of December 20,
1995 (filed as Exhibit 10.16 to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1996).
2.2.1 Trust Under the Agreement among The Merchants Bank and Kathryn
T. Boardman, Thomas R. Havers and Susan D. Struble dated as of
December 20, 1995 (filed as Exhibit 10.16.1 to the Registrant's
Annual Report on Form 10-K for the year ended December
31, 1996).
2.3 Agreement between The Merchants Bank and Dudley H. Davis dated
as of December 20, 1995 (filed as Exhibit 10.17 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996).
2.3.1 Trust Under the Agreement between The Merchants Bank and Dudley
H. Davis dated as of December 20, 1995 (filed as Exhibit
10.17.1 to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996).
5 Opinion of Bingham Dana LLP.
13.1 Annual Report on Form 10-K of the Registrant for the fiscal
year ended December 31, 1996.
13.2 Quarterly Report on Form 10-Q of the Registrant for the fiscal
quarter ended March 31, 1997.
13.3 Quarterly Report on Form 10-Q of the Registrant for the fiscal
quarter ended June 30, 1997.
<PAGE>
13.4 Quarterly Report on Form 10-Q of the Registrant for the fiscal
quarter ended September 30, 1997.
23.1 Consent of Bingham Dana LLP (included in Exhibit 5).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included on signature page).
EXHIBIT 5
[Bingham Dana Letterhead]
November 26, 1997
Merchants Bancshares, Inc.
275 Kennedy Drive
South Burlington, VT 05403
Re: Registration Statement on Form S-3
Under the Securities Act of 1933, as Amended
Ladies and Gentlemen:
We have acted as counsel to Merchants Bancshares, Inc., a Delaware
corporation (the "Company"), in connection with the Company's Registration
Statement on Form S-3 proposed to be filed with the Securities and Exchange
Commission on or about November 26, 1997 (the "Registration Statement"). The
Registration Statement relates to the registration of 144,278 shares of common
stock, $0.01 par value per share, of the Company (the "Shares"), all of which
Shares were issued, as unregistered shares, on December 21, 1995, pursuant to
the terms of certain agreements (the "Agreements") with certain former and
current officers and directors of the Company in connection with the
termination or amendment of the Company's Executive Salary Continuation Plan
and Directors Deferred Compensation Plan (the "Plan").
We have reviewed the corporate proceedings taken by the Company with
respect to the authorization of the Agreements and the issuance of the Shares
thereunder. We have also examined and relied upon originals or copies of such
agreements, instruments, corporate records, certificates, and other documents
as we have deemed necessary or appropriate to enable us to express the opinions
rendered hereby. In our examination, we have assumed the genuineness of all
signatures, the conformity to the originals of all documents reviewed by us as
copies, the authenticity and completeness of all original documents reviewed by
us in original or copy form, and the legal competence of each individual
executing any document.
Subject to the limitations set forth below, we have made such examination
of law as we have deemed necessary for the purposes of this opinion. This
opinion is limited solely to the Delaware General Corporation Law as applied by
courts located in Delaware, to the extent that it may apply to or govern the
transactions that are the subject of this opinion.
<PAGE>
Based upon and subject to the foregoing, we are of the opinion that the
Shares have been duly authorized and are validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement.
Very truly yours,
Bingham Dana LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Merchants Bancshares, Inc.,
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement of our report dated
January 16, 1997 incorporated by reference in the Form 10-K of Merchants
Bancshares, Inc. for the year ended December 31, 1996 and to all references
to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
November 21, 1997
