Merchants Bancshares, Inc. (NASDAQ:MBVT) Files An 8-K Completion of Acquisition or Disposition of Assets

Item 2.01.

On May 12, 2017, to the terms and conditions of the Agreement and
Plan of Merger, dated as of October 22, 2016 (the Merger
Agreement), by and between Community Bank System, Inc. (Community
Bank System) and Merchants Bancshares, Inc. (Merchants), the
merger of Community Bank System and Merchants (the Merger), in
which Merchants merged with and into Community Bank System, with
Community Bank System as the surviving corporation, became
effective.

Under the terms of the Merger Agreement, Merchants stockholders
were entitled to elect the form of merger consideration to be
received in the transaction. Each stockholder who submitted a
completed Letter of Election and Transmittal prior to the
election deadline of May 9, 2017 had the ability to elect to
receive, for each share of Merchants common stock, par value
$0.01 per share (Merchants Common Stock), either (i) $40.00 in
cash (the Cash Consideration), (ii) 0.9630 shares of Community
Bank System common stock, par value $1.00 per share (Community
Common Stock), and cash in lieu of fractional shares, if any (the
Stock Consideration), or (iii) a combination of $12.00 in cash
and 0.6741 shares of Community Common Stock, and cash in lieu of
fractional shares, if any (the Mixed Election Consideration, and
together with the Cash Consideration and the Stock Consideration,
the Merger Consideration). Those stockholders that did not select
an election preference or submit a properly completed election
form within the required timeframe will receive the Mixed
Election Consideration for each share of Merchants Common Stock
they own. All elections were subject to certain allocation
procedures to ensure that the aggregate amount of cash paid and
shares of Community Common Stock issued in the merger as a whole
are equal to the total amount of cash and number of shares of
Community Common Stock that would have been paid and issued if
all Merchants stockholders elected to receive the Mixed Election
Consideration.

Immediately following the Merger, Merchants Bank, a wholly owned
subsidiary of Merchants, merged with and into Community Bank,
N.A. (Community Bank), a wholly owned subsidiary of Community
Bank System, with Community Bank continuing as the surviving
bank.

The foregoing description of the Merger and the Merger Agreement
does not purport to be complete and is qualified in its entirety
by reference to the Merger Agreement, which is attached as
Exhibit 2.1 to this report and is incorporated herein by
reference.

Trading in shares of Merchants Common Stock on the NASDAQ Global
Select Market has been halted. As a consequence of the Merger, on
May 12, 2017 Merchants requested that a Form 25 be filed with the
SEC, to request the removal of the Merchants Common Stock from
listing and registration on the NASDAQ Global Select Market and
from registration under Section 12(b) of the Securities Exchange
Act of 1934 (the Exchange Act). Merchants intends to file with
the SEC a certification on Form 15 under the Exchange Act
requesting the termination of the registration of Merchants
Common Stock under Section 12(g) of the Exchange Act and the
suspension of Merchants reporting obligations under Sections 13
and 15(d) of the Exchange Act. The disclosure set forth in Item
2.01 is incorporated herein by reference.

At the effective time of the Merger, shareholders of Merchants
immediately prior to the completion of the Merger ceased to have
any rights as shareholders of Merchants other than the right to
receive the Merger Consideration in accordance with the Merger
Agreement. The disclosure set forth in Item 2.01, Item 3.01 and
Item 5.03 is incorporated herein by reference.

The disclosure set forth in Item 2.01 and Item 5.02 is
incorporated herein by reference.

As of the effective time of the Merger, Merchants directors and
executive officers ceased serving as directors and executive
officers of Merchants.

As of the effective time of the Merger, Merchants amended
certificate of incorporation and Merchants amended and restated
bylaws ceased to be in effect by operation of law. Community Bank
Systems certificate of incorporation and bylaws in effect
immediately prior to the Effective Time are the certificate of
incorporation and bylaws of Community Bank System (as the
surviving corporation in the Merger).

The disclosure set forth in Item 2.01 is incorporated herein by
reference.

The following exhibit is included with this report:

to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunder duly authorized.

About Merchants Bancshares, Inc. (NASDAQ:MBVT)

Merchants Bancshares, Inc. is a bank holding company. The Company’s subsidiary, Merchants Bank (the Bank), is a commercial bank. The Bank offers a range of deposit, loan, cash management and trust services to meet the financial needs of individual consumers, businesses and municipalities. Merchants Bank’s trust division offers investment management, financial planning and trustee services. The Bank offers commercial, financial and agricultural loans, municipal loans, residential real estate loans, commercial real estate loans, construction real estate loans and consumer installment loans for various personal needs, including vehicle and boat financing. The Bank’s deposits include demand; savings and interest bearing checking and money market accounts, and time deposits.

Merchants Bancshares, Inc. (NASDAQ:MBVT) Recent Trading Information

Merchants Bancshares, Inc. (NASDAQ:MBVT) closed its last trading session at 49.80 with 49,265 shares trading hands.