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
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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
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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
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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.