MERCHANTS BANCSHARES, INC.
Amended and Restated 1996 STOCK OPTION PLAN
1. Purpose .
The purpose of the Merchants Bancshares, Inc. 1996 Stock Option Plan (the "Plan") is to provide an
incentive to certain employees of Merchants Bancshares, Inc. a Delaware corporation (the "Company"),
or affiliates thereof, by granting to such employees: (i) incentive stock options ("ISOs"), within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and (ii) options not
constituting ISOs ("NQSOs"), in either case to acquire common stock, ($.01) par value of the Company
("Stock"). Options granted under this Plan may be either ISO's or NQSO's, as determined at the
discretion of the Board and as reflected in the terms of the written option agreements.
2. Effective Date and Term of the Plan .
The Plan is effective as of the date executed as indicated below (the "Effective Date"). Unless sooner
terminated, the Plan shall continue in effect from the Effective Date until the day before the tenth
anniversary of the Effective Date (the "Termination Date"). In no event shall an ISO or NQSO
(collectively "Options") be granted after the Termination Date. Options granted prior to the Termination
Date shall remain in effect until their exercise, surrender, cancellation or expiration in accordance with the
terms of the written option agreement.
3. Stock Subject to the Plan .
(a) Subject to adjustment as provided in Section 10 below, the aggregate number of shares of
Stock ("Shares") to be delivered upon exercise of all Options granted under the Plan shall not exceed
(b) If any Option granted under the Plan expires, terminates or is canceled without having been
exercised in full, the number of Shares as to which the Option has not been exercised shall become
available for further grants under the Plan, except that if any Option is canceled on account of the exercise
of a related