Document:

Document

Exhibit 10.2

THE 2020 AMENDED AND RESTATED
NONQUALIFIED EXCESS PLAN OF
UNION BANKSHARES, INC.  & SUBSIDIARIES
PLAN DOCUMENT

THE NONQUALIFIED EXCESS PLAN OF UNION BANKSHARES, INC.  & SUBSIDIARIES

Section 1.Purpose & History: 
1.1Purpose.  The Employer has adopted the Plan set forth herein, and in the Adoption Agreement, to provide a means by which certain management Employees or Independent Contractors of the Employer may elect to defer receipt of current Compensation from the Employer in order to provide retirement and other benefits on behalf of such Employees or Independent Contractors of the Employer. The Plan is intended to be a nonqualified deferred compensation plan that complies with the provisions of Section 409A of the Internal Revenue Code (the “Code”). The Plan is also intended to be an unfunded plan maintained primarily for the purpose of providing deferred compensation benefits for a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(l) of the Employee Retirement Income Security Act of 1974 (“ERISA”) and independent contractors. Notwithstanding any other provision of this Plan, this Plan shall be interpreted, operated and administered in a manner consistent with these intentions.
1.2History.  The Plan was adopted with an effective date of December 6, 2006, and was drafted in accordance with the Adoption Agreement, which did not allow the award of Employer Credits.  The Board subsequently determined that Employer Credits may be appropriate in certain limited circumstances and accordingly amended and restated the Plan effective February 1, 2020, primarily for the purpose of allowing for Employer Credits as provided herein.
Section 2.Definitions: 
As used in the Plan, including this Section 2, references to one gender shall include the other, unless otherwise indicated by the context:
2.1“Active Participant” means, with respect to any day or date, a Participant who is in Service on such day or date; provided, that a Participant shall cease to be an Active Participant (i) immediately upon a determination by the Committee that the Participant has ceased to be an Employee or Independent Contractor, or (ii) at the end of the Plan Year that the Committee determines the Participant no longer meets the eligibility requirements of the Plan.
2.2“Adoption Agreement” means the written agreement pursuant to which  the Employer originally adopted the Plan. To the extent not in consistent with this Amended and Restated Plan Document, the Adoption Agreement is a part of the Plan.
2.3“Beneficiary” means the person, persons, entity or entities designated or  determined pursuant to the provisions of Section 13 of the Plan.
2.4“Board” means the Board of Directors of the Company.
2.5“Change in Control Event” means an event described in Section  409A(a)(2)(A)(v) of the Code (or any successor provision thereto) and the regulations thereunder.
2.6“Committee” means the Board Compensation Committee. If the Committee designated in the Adoption Agreement is unable to serve, the Employer shall satisfy the duties of the Committee provided for in Section 9.

2.7“Company” means Union Bankshares, Inc.
2.8“Compensation” shall have the meaning designated in the Adoption Agreement.
2.9“Crediting Date” means the date designated in the Adoption Agreement or, if applicable, the Employer Directive, for crediting the amount of any Participant Deferral Credits or Employer Credits to the Deferred Compensation Account of a Participant.
2.10“Deferred Compensation Account” means the account maintained with respect to each Participant under the Plan. The Deferred Compensation Account shall be credited with Participant Deferral Credits and Employer Credits, credited or debited for deemed investment gains or losses, and adjusted for payments in accordance with the rules and elections in effect under Section 8. The Deferred Compensation Account of a Participant shall include any In-Service, Education or Employer Credit Account of the Participant, as the circumstances require.
2.11“Disabled” means Disabled within the meaning of Section 409A of the Code and the regulations thereunder. Generally, this means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering Employees of the Employer.
2.12“Education Account” is an In-Service Account which will be used by the Participant for educational purposes.
2.13“Effective Date” shall be the date designated in the Adoption Agreement.
2.14“Employee” means an individual in the service of the Employer if the relationship between the individual and the Employer is the legal relationship of employer and employee. An individual shall cease to be an Employee upon the Employee’s Separation from Service.
2.15“Employer” means the Company, as identified in the Adoption Agreement, and any Participating Employer which adopts this Plan. An Employer may be a corporation, a limited liability company, a partnership or sole proprietorship.
2.16“Employer Credits” means the amounts credited to the Participant’s Deferred Compensation Account by the Employer pursuant to the provisions of Section 4.2.
2.17“Employer Directive” means a Board resolution or other formal writing whereby the Board or the Committee identifies a member of the Employer’s senior management team as a Participant who is eligible for Employer Credits, the manner in which the Employer Credits will be calculated, any vesting requirements and such other terms and conditions that the Board determines to be applicable to an award of Employer Credits.
2.18“Employer Credit Account” means the sub-account maintained within a Participant’s Deferred Compensation Account.
2.19“Grandfathered Amounts” means, if applicable, the amounts that were deferred under the Plan and were earned and vested within the meaning of Section 409A of the Code and regulations 

thereunder as of December 31, 2004. Grandfathered Amounts shall be subject to the terms designated in the Adoption Agreement.
2.20“Independent Contractor” means an individual in the Service of the Employer if the relationship between the individual and the Employer is not the legal relationship of employer and employee. An individual shall cease to be an Independent Contractor upon the termination of the Independent Contractor’s Service. An Independent Contractor shall include a director of the Employer who is not an Employee.
2.21“In-Service Account” means a separate account to be kept for each Participant that has elected to take in-service distributions as described in Section 5.4. The In-Service Account shall be adjusted in the same manner and at the same time as the Deferred Compensation Account under Section 8 and in accordance with the rules and elections in effect under Section 8.
2.22“Normal Retirement Age” of a Participant means the age designated in the Adoption Agreement.
2.23“Participant” means with respect to any Plan Year an Employee or Independent Contractor who has been designated by the Committee as a Participant and who has entered the Plan or who has a Deferred Compensation Account under the Plan; provided that if the Participant is an Employee, the individual must be a highly compensated or management employee of the Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
2.24“Participant Deferral Credits” means the amounts credited to the Participant’s Deferred Compensation Account by the Employer pursuant to the provisions of Section 4.1.
2.25“Participating Employer” means any trade or business (whether or not incorporated) which adopts this Plan with the consent of the Company identified in the Adoption Agreement.
2.26“Participation Agreement” means a written agreement entered into between a Participant and the Employer pursuant to the provisions of Section 4.1.
2.27“Performance-Based Compensation” means compensation where the amount of, or entitlement to, the compensation is contingent on the satisfaction of preestablished organizational or individual performance criteria relating to a performance period of at least twelve months. Organizational or individual performance criteria are considered preestablished if established in writing within 90 days after the commencement of the period of service to which the criteria relates, provided that the outcome is substantially uncertain at the time the criteria are established. Performance-based compensation may include payments based upon subjective performance criteria as provided in regulations and administrative guidance promulgated under Section 409A of the Code.
2.28“Plan” means The Nonqualified Excess Plan of Union Bankshares, Inc. & Subsidiaries, as the same may be amended and restated from time to time.
2.29“Plan-Approved Domestic Relations Order” shall mean a judgment, decree, or order (including the approval of a settlement agreement) which is:
1.Issued pursuant to a State’s domestic relations law;
2.Relates to the provision of child support, alimony payments or marital property rights to a Spouse, former Spouse, child or other dependent of the Participant;

3.Creates or recognizes the right of a Spouse, former Spouse, child or other dependent of the Participant to receive all or a portion of the Participant’s benefits under the Plan;
4. Requires payment to such person of their interest in the Participant’s benefits in a lump sum payment at a specific time; and
5.Meets such other requirements established by the Committee.
2.30“Plan Year” means the twelve-month period ending on the last day of December; provided that the initial Plan Year may have fewer than twelve months.
2.31“Qualifying Distribution Event” means (i) the Separation from Service of the Participant, (ii) the date the Participant becomes Disabled, (iii) the death of the Participant, (iv) the time specified by the Participant for an In-Service or Education Distribution, or (v) an Unforeseeable Emergency, each to the extent provided in Section 5.
2.32“Seniority Date” shall have the meaning designated in the Adoption Agreement.
2.33“Separation from Service” or “Separates from Service” means a “separation from service” within the meaning of Section 409A of the Code.
2.34“Service” means employment by the Employer as an Employee. For purposes of the Plan, the employment relationship is treated as continuing intact while the Employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Employee’s right to reemployment is provided either by statute or contract. If the Participant is an Independent Contractor, “Service” shall mean the period during which the contractual relationship exists between the Employer and the Participant. The contractual relationship is not terminated if the Participant anticipates a renewal of the contract or becomes an Employee.
2.35“Service Bonus” means any bonus paid to a Participant by the Employer which is not Performance-Based Compensation.
2.36“Specified Employee” means an Employee who meets the requirements for key employee treatment under Section 416(i)(l)(A)(i), (ii) or (iii) of the Code (applied in accordance with the regulations thereunder and without regard to Section 416(i)(5) of the Code) at any time during the twelve month period ending on December 31 of each year (the “identification date”). Unless binding corporate action is taken to establish different rules for determining Specified Employees for all plans of the Company and its controlled group members that are subject to Section 409A of the Code, the foregoing rules and the other default rules under the regulations of Section 409A of the Code shall apply. If the person is a key employee as of any identification date, the person is treated as a Specified Employee for the twelve-month period beginning on the first day of the fourth month following the identification date.
2.37“Spouse” or ‘‘Surviving Spouse” means, except as otherwise provided in the Plan, a person who is the legally married spouse or surviving spouse of a Participant.
2.38“Unforeseeable Emergency” means an “unforeseeable emergency” within the meaning of Section 409A of the Code.
2.39“Years of Service” means each Plan Year of Service completed by the Participant. For vesting purposes, Years of Service shall be calculated from the date designated in the Adoption Agreement and Service shall be based on service with the Company and all Participating Employers.

Section 3.Participation: 
The Committee in its discretion shall designate each Employee or Independent Contractor who is eligible to participate in the Plan. A Participant who Separates from Service with the Employer and who later returns to Service will not be an Active Participant under the Plan except upon satisfaction of such terms and conditions as the Committee shall establish upon the Participant’s return to Service, whether or not the Participant shall have a balance remaining in the Deferred Compensation Account under the Plan on the date of the return to Service.
Section 4.Credits to Deferred Compensation Account: 
4.1Participant Deferral Credits. To the extent provided in the Adoption Agreement, each Active Participant may elect, by entering into a Participation Agreement with the Employer, to defer the receipt of Compensation from the Employer by a dollar amount or percentage specified in the Participation Agreement. The amount of Compensation the Participant elects to defer, the Participant Deferral Credit, shall be credited by the Employer to the Deferred Compensation Account maintained for the Participant pursuant to Section 8. The following special provisions shall apply with respect to the Participant Deferral Credits of a Participant:
4.1.1The Employer shall credit to the Participant’s Deferred Compensation Account on each Crediting Date an amount equal to the total Participant Deferral Credit for the period ending on such Crediting Date.

4.1.2An election pursuant to this Section 4.1 shall be made by the Participant by executing and delivering a Participation Agreement to the Committee. Except as otherwise provided in this Section 4.1, the Participation Agreement shall become effective with respect to such Participant as of the first day of January following the date such Participation Agreement is received by the Committee. A Participant’s election may be changed at any time prior to the last permissible date for making the election as permitted in this Section 4.1, and shall thereafter be irrevocable. The election of a Participant shall continue in effect for subsequent years until modified by the Participant as permitted in this Section 4.1.

4.1.3A Participant may execute and deliver a Participation Agreement to the Committee within 30 days after the date the Participant first becomes eligible to participate in the Plan to be effective as of the first payroll period next following the date the Participation Agreement is fully executed by the Participant. Whether a Participant is treated as newly eligible for participation under this Section shall be determined in accordance with Section 409A of the Code and the regulations thereunder, including (i) rules that treat all elective deferral account balance plans as one plan, and (ii) rules that treat a previously eligible Employee as newly eligible if his benefits had been previously distributed or if he has been ineligible for 24 months. For Compensation that is earned based upon a specified performance period (for example, an annual bonus), where a deferral election is made under this Section but after the beginning of the performance period, the election will only apply to the portion of the Compensation equal to the total amount of the Compensation for the service period multiplied by the ratio of the number of days remaining in the performance period after the election over the total number of days in the performance period.

4.1.4A Participant may unilaterally modify a Participation Agreement (either to terminate, increase or decrease the portion of his future Compensation which is subject to deferral within the percentage limits set forth in Section 4.1 of the Adoption Agreement) by providing a written modification of the Participation Agreement to the Committee. The modification shall become effective as of the first day of January following the date such written modification is received by the Committee.

4.1.5If the Participant performed services continuously from the later of the beginning of the performance period or the date upon which the performance criteria are established through the date upon which the Participant makes an initial deferral election, a Participation Agreement relating to the deferral of Performance-Based Compensation may be executed and delivered to the Committee no later than the date which is 6 months prior to the end of the performance period, provided that in no event may an election to defer Performance-Based Compensation be made after such Compensation has become readily ascertainable.

4.1.6If the Employer has a fiscal year other than the calendar year, Compensation relating to Service in the fiscal year of the Employer (such as a bonus based on the fiscal year of the Employer), of which no amount is paid or payable during the fiscal year, may be deferred at the Participant’s election if the election to defer is made not later than the close of the Employer’s fiscal year next preceding the first fiscal year in which the Participant performs any services for which such Compensation is payable.

4.1.7Compensation payable after the last day of the Participant’s taxable year solely for services provided during the final payroll period containing the last day of the Participant’s taxable year (i.e., December 31) is treated for purposes of this Section 4.1 as Compensation for services performed in the subsequent taxable year.

4.1.8The Committee may from time to time establish policies or rules consistent with the requirements of Section 409A of the Code to govern the manner in which Participant Deferral Credits may be made.

4.1.9If a Participant becomes Disabled all currently effective deferral elections for such Participant shall be cancelled. At the time the participant is no longer Disabled, subsequent elections to defer future compensation will be permitted under this Section 4. 

4.1.10If a Participant applies for and receives a distribution on account of an Unforeseeable Emergency, all currently effective deferral elections for such Participant shall be cancelled. Subsequent elections to defer future compensation will be permitted under this Section 4.

4.1.11If a Participant receives a hardship distribution under Section 1.401(k)-1(d)(3) of the Code or any other similar provision, all currently effective deferral elections shall be cancelled. Subsequent elections to defer future compensation under this Section 4 will not be effective until the later of the beginning of the next calendar year or six months after the date of the hardship distribution.

4.2Employer Credits. If designated by the Employer in an Employer Directive, the Employer shall cause the Committee to credit to the Deferred Compensation Account of an Active Participant so designated, the Employer Credit as specified in the applicable Employer Directive.  Except as provided in Section 4.3, a Participant must make distribution elections with respect to any Employer Credits credited to his Deferred Compensation Account by the deadline that would apply under Section 4.1.2 for distribution elections with respect to Participant Deferral Credits.  The distribution elections shall be made on the Employer Credit election form provided by the Committee and shall continue in effect for subsequent years until modified as permitted in this Section 4.2.
4.3Initial Election Employer Credits.  Notwithstanding the general rule contained in Sections 4.1.2 and 4.2 regarding the time for making a distribution election, an Active Participant who 

first becomes eligible for Employer Credits on or after January 1 a Plan Year, may execute and deliver to the Committee an Employer Credit election form within the 30-day period immediately following the effective date of the Employer Directive.
4.4Deferred Compensation Account. All Participant Deferral Credits and Employer Credits shall be credited to the Deferred Compensation Account of the Participant as provided in Section 8.
Section 5.Qualifying Distribution Events: 
5.1Separation from Service. If the Participant Separates from Service with the Employer, the vested balance in the Deferred Compensation Account shall be paid to the Participant by the Employer as provided in Section 7. Notwithstanding the foregoing, no distribution shall be made earlier than six months after the date of Separation from Service (or, if earlier, the date of death) with respect to a Participant who as of the date of Separation from Service is a Specified Employee of a corporation the stock in which is traded on an established securities market or otherwise. Any payments to which such Specified Employee would be entitled during the first six months following the date of Separation from Service shall be accumulated and paid on the first day of the seventh month following the date of Separation from Service, and shall be adjusted for deemed investment gain and loss incurred during the six month period.
5.2Disability. If the Employer designates in the Adoption Agreement that distributions are permitted under the Plan when a Participant becomes Disabled, and the Participant becomes Disabled while in Service, the vested balance in the Deferred Compensation Account shall be paid to the Participant by the Employer as provided in Section 7.
5.3Death. If the Participant dies while in Service, the Employer shall pay a  benefit to the Participant’s Beneficiary in the amount designated in the Adoption Agreement. Payment of such benefit shall be made by the Employer as provided in Section 7.
5.4In-Service or Education Distributions. If the Employer designates in the  Adoption Agreement that in-service or education distributions are permitted under the Plan, a Participant may designate in the Participation Agreement to have a specified amount credited to the Participant’s In-Service or Education Account for in-service or education distributions at the date specified by the Participant. In no event may an in-service or education distribution of an amount be made before the date that is two years after the first day of the year in which any deferral election to such In-Service or Education Account became effective. Notwithstanding the foregoing, if a Participant incurs a Qualifying Distribution Event prior to the date on which the entire balance in the In-Service or Education Account has been distributed, then the balance in the In-Service or Education Account on the date of the Qualifying Distribution Event shall be paid as provided under Section 7.1 for payments on such Qualifying Distribution Event.
5.5Change in Control Event. If the Employer designates in the Adoption Agreement that distributions are permitted under the Plan upon the occurrence of a Change in Control Event, the Participant may designate in the Participation Agreement to have the vested balance in the Deferred Compensation Account paid to the Participant upon a Change in Control Event by the Employer as provided in Section 7.

5.6Unforeseeable Emergency. If the Employer designates in the Adoption Agreement that distributions are permitted under the Plan upon the occurrence of an Unforeseeable Emergency event, a distribution from the Deferred Compensation Account may be made to a Participant in the event of an Unforeseeable Emergency, subject to the following provisions:
5.6.1A Participant may, at any time prior to his Separation from Service for any reason, make application to the Committee to receive a distribution in a lump sum of all or a portion of the vested balance in the Deferred Compensation Account (determined as of the date the distribution, if any, is made under this Section 5.6) because of an Unforeseeable Emergency. A distribution because of an Unforeseeable Emergency shall not exceed the amount required to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of such distribution, after taking into account the extent to which the Unforeseeable Emergency may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship) or by stopping current deferrals under the Plan pursuant to Section 4.1.10.

5.6.2The Participant’s request for a distribution on account of Unforeseeable Emergency must be made in writing to the Committee. The request must specify the nature of the financial hardship, the total amount requested to be distributed from the Deferred Compensation Account, and the total amount of the actual expense incurred or to be incurred on account of the Unforeseeable Emergency.

5.6.3If a distribution under this Section 5.6 is approved by the Committee, such distribution will be made as soon as practicable following the date it is approved. The processing of the request shall be completed as soon as practicable from the date on which the Committee receives the properly completed written request for a distribution on account of an Unforeseeable Emergency. If a Participant’s Separation from Service occurs after a request is approved in accordance with this Section 5.6.3, but prior to distribution of the full amount approved, the approval of the request shall be automatically null and void and the benefits which the Participant is entitled to receive under the Plan shall be distributed in accordance with the applicable distribution provisions of the Plan.

5.6.4The Committee may from time to time adopt additional policies or rules consistent with the requirements of Section 409A of the Code to govern the manner in which such distributions may be made so that the Plan may be conveniently administered.

Section 6.Vesting: 
A Participant shall be fully vested in the portion of his Deferred Compensation Account attributable to Participant Deferral Credits, and all income, gains and losses attributable thereto. A Participant shall become fully vested in the portion of his Deferred Compensation Account attributable to Employer Credits, and income, gains and losses attributable thereto, in accordance with the vesting schedule and provisions designated by the Employer in the Employer Directive. If a Participant’s Deferred Compensation Account is not fully vested upon Separation from Service, the portion of the Deferred Compensation Account that is not fully vested shall thereupon be forfeited.
Section 7.Distribution Rules: 
7.1Payment Options. The Employer shall designate in the Adoption Agreement, or the Employer Directive in the case of an award of Employee Credits, the payment options which may be elected by the Participant (lump sum, annual installments, or a combination of both). Different payment options may be made available for each Qualifying Distribution Event, and different payment options may 

be available for different types of Separations from Service, all as designated in the Adoption Agreement and, when applicable, the Employer Directive. The Participant shall elect in the Participation Agreement the method under which the vested balance in the Deferred Compensation Account that is attributable to the Participant’s Deferral Credits will be distributed from among the designated payment options. The Participant may at such time elect a different method of payment for each Qualifying Distribution Event as specified in the Adoption Agreement. A Participant who has received an award of Employer Credits shall elect on the Employer Credit election form the method under which the vested balance in the Deferred Compensation Account that is attributable to Employer Credits Participant’s will be distributed from among the payment options designated in the Employer Directive.  In any case where the Participant is permitted by the Employer under either the Adoption Agreement or the Employer Directive to elect different payment options and the Participant does not make a valid election, the applicable amount will be distributed as a lump sum.
Notwithstanding the foregoing, if certain Qualifying Distribution Events occur prior to the date on which the vested balance of a Participant’s Deferred Compensation Account is completely paid pursuant to this Section 7.1 following the occurrence of certain initial Qualifying Distribution Events, the following rules apply:
7.1.1.If the initial Qualifying Distribution Event is a Separation from Service or Disability, and the Participant subsequently dies, the remaining unpaid vested balance of a Participant’s Deferred Compensation Account (including any portion of the Deferred Compensation Account that is attributable to Employer Credits) shall be paid as a lump sum .

7.1.2.If the initial Qualifying Distribution Event is a Change in Control Event, and any subsequent Qualifying Distribution Event occurs (except an In-Service or Education Distribution described in Section 2.29(iv)), the remaining unpaid vested balance of a Participant’s Deferred Compensation Account (including any portion of the Deferred Compensation Account that is attributable to Employer Credits) shall be paid as provided under Section 7.1 for payments on such subsequent Qualifying Distribution Event.

7.2Timing of Payments. Payment shall be made in the manner elected by the Participant and shall, except in the case of a Specified Employee, commence as soon as practicable after (but no later than 60 days after) the distribution date elected for the Qualifying Distribution Event. In the event the Participant fails to make a valid election of the payment method, the distribution will be made in a single lump sum payment as soon as practicable after (but no later than 60 days after) the Qualifying Distribution Event. A payment may be further delayed to the extent permitted in accordance with regulations and guidance under Section 409A of the Code.
7.3Installment Payments. If the Participant elects to receive installment  payments upon a Qualifying Distribution Event, the payment of each installment shall be made on the anniversary of the date of the first installment payment, and the amount of the installment shall be adjusted on such anniversary for credits or debits to the  Participant’s account pursuant to Section 8 of the Plan. Such adjustment shall be made by dividing the balance in the Deferred Compensation Account on such date by the number of installments remaining to be paid hereunder; provided that the last installment due under the Plan shall be the entire amount credited to the Participant’s account on the date of payment.

7.4De Minimis Amounts. Notwithstanding any payment election made by  the Participant, if the Employer designates a pre-determined de minimis amount in the Adoption Agreement, the vested balance in the Deferred Compensation Account of the Participant will be distributed in a single lump sum payment if at the time of a permitted Qualifying Distribution Event the vested balance does not exceed such pre-determined de minimis amount; provided, however, that such distribution will be made only where the Qualifying Distribution Event is a Separation from Service, death, Disability (if applicable) or Change in Control Event (if applicable). Such payment shall be made on or before the later of (i) December 31 of the calendar year in which the Qualifying Distribution Event occurs, or (ii) the date that is 2-1/2 months after the Qualifying Distribution Event occurs. In addition, the Employer may distribute a Participant’s vested balance at any time if the balance does not exceed the limit in Section 402(g)(1)(B) of the Code and results in the termination of the Participant’s entire interest in the Plan as provided under Section 409A of the Code.
7.5Subsequent Elections. With the consent of the Committee, a Participant  may delay or change the method of payment of either the portion of the Deferred Compensation Account attributable to Participant Deferral Credit or to Employer Credits subject to the following requirements:
7.5.1The new election may not take effect until at least 12 months after the date on which the new election is made.

7.5.2If the new election relates to a payment for a Qualifying Distribution Event other than the death of the Participant, the Participant becoming Disabled, or an Unforeseeable Emergency, the new election must provide for the deferral of the payment for a period of at least five years from the date the first scheduled payment from such account would otherwise have been made.

7.5.3If the new election relates to a payment from the In-Service or Education Account, the new election must be made at least 12 months prior to the date of the first scheduled payment from such account.

For purposes of this Section 7.5 and Section 7.6, a payment is each separately identified amount to which the Participant is entitled under the Plan; provided, that entitlement to a series of installment payments is treated as the entitlement to a single payment.
7.6Acceleration Prohibited. The acceleration of the time or schedule of any payment due under the Plan is prohibited except as expressly provided in regulations and administrative guidance promulgated under Section 409A of the Code (such as accelerations for domestic relations orders and employment taxes). It is not an acceleration of the time or schedule of payment if the Employer waives or accelerates the vesting requirements applicable to a benefit under the Plan.
Section 8.Accounts; Deemed Investment; Adjustments to Account: 
8.1Accounts. The Committee shall establish a book reserve account, entitled the “Deferred Compensation Account,” on behalf of each Participant. The Committee shall also establish an In-Service, Education or Employee Credit Account(s), as the circumstances require, as a part of the Deferred Compensation Account of each Participant. The amount credited to the Deferred Compensation Account shall be adjusted pursuant to the provisions of Section 8.3.

8.2Deemed Investments. The Deferred Compensation Account of a Participant shall be credited with an investment return determined as if the account were invested in one or more investment funds made available by the Committee. The Participant shall elect the investment funds in which his Deferred Compensation Account shall be deemed to be invested. Such election shall be made in the manner prescribed by the Committee and shall take effect upon the entry of the Participant into the Plan. The investment election of the Participant shall remain in effect until a new election is made by the Participant. In the event the Participant fails for any reason to make an effective election of the investment return to be credited to his account, the investment return shall be determined by the Committee.
8.3Adjustments to Deferred Compensation Account. With respect to each  Participant who has a Deferred Compensation Account under the Plan, the amount credited to such account shall be adjusted by the following debits and credits, at the times and in the order stated:
8.3.1The Deferred Compensation Account shall be debited each business day with the total amount of any payments made from such account since the last preceding business day to him or for his benefit. Unless otherwise specified by the Employer, each deemed investment fund will be debited pro-rata based on the value of the investment funds as of the end of the preceding business day.

8.3.2The Deferred Compensation Account shall be credited on each Crediting Date with the total amount of any Participant Deferral Credits and Employer Credits to such account since the last preceding Crediting Date.

8.3.3The Deferred Compensation Account shall be credited or debited on each day securities are traded on a national stock exchange with the amount of deemed investment gain or loss resulting from the performance of the deemed investment funds elected by the Participant in accordance with Section 8.2. The amount of such deemed investment gain or loss shall be determined by the Committee and such determination shall be final and conclusive upon all concerned.

Section 9.Administration by Committee: 
9.1Membership of Committee. If the Committee consists of individuals appointed by the Board, they will serve at the pleasure of the Board. Any member of the Committee may resign, and his successor, if any, shall be appointed by the Board.
9.2General Administration. The Committee shall be responsible for the operation and administration of the Plan and for carrying out its provisions. The Committee shall have the full authority and discretion to make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and decide or resolve any and all questions, including interpretations of this Plan, as may arise in connection with this Plan. Any such action taken by the Committee shall be final and conclusive on any party. To the extent the Committee has been granted discretionary authority under the Plan, the Committee’s prior exercise of such authority shall not obligate it to exercise its authority in a like fashion thereafter. The Committee shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Employer with respect to the Plan. The Committee may, from time to time, employ agents and delegate to such agents, including Employees of the Employer, such administrative or other duties as it sees fit.

9.3Indemnification. To the extent not covered by insurance, the Employer shall indemnify the Committee, each Employee, officer, director, and agent of the Employer, and all persons formerly serving in such capacities, against any and all liabilities or expenses, including all legal fees relating thereto, arising in connection with the exercise of their duties and responsibilities with respect to the Plan, provided however  that the Employer shall not indemnify any person for liabilities or expenses due to that person’s own gross negligence or willful misconduct.
Section 10.Contractual Liability, Trust: 
10.1Contractual Liability. Unless otherwise elected in the Adoption Agreement, the Company shall be obligated to make all payments hereunder. This obligation shall constitute a contractual liability of the Company to the Participants, and such payments shall be made from the general funds of the Company. The Company shall not be required to establish or maintain any special or separate fund, or otherwise to segregate assets to assure that such payments shall be made, and the Participants shall not have any interest in any particular assets of the Company by reason of its obligations hereunder. To the extent that any person acquires a right to receive payment from the Company, such right shall be no greater than the right of an unsecured creditor of the Company.
10.2Trust. The Employer may establish a trust to assist it in meeting its obligations under the Plan. Any such trust shall conform to the requirements of a grantor trust under Revenue Procedures 92-64 and 92-65 and at all times during the continuance of the trust the principal and income of the trust shall be subject to claims of general creditors of the Employer under federal and state law. The establishment of such a trust would not be intended to cause Participants to realize current income on amounts contributed thereto, and the trust would be so interpreted and administered.
Section 11.Allocation of Responsibilities: 
The persons responsible for the Plan and the duties and responsibilities allocated to each are as follows:
11.1Board.
(i)To amend the Plan;
(ii)To appoint and remove members of the Committee; and
(iii)To terminate the Plan as permitted in Section 14.
11.2Committee.
(i)To designate Participants;
(ii)To interpret the provisions of the Plan and to determine the rights of the Participants under the Plan, except to the extent otherwise provided in Section 16 relating to claims procedure;
(iii)To administer the Plan in accordance with its terms, except to the extent powers to administer the Plan are specifically delegated to another person or persons as provided in the Plan;
(iv)To account for the amount credited to the Deferred Compensation Account of a Participant;
(v)To direct the Employer in the payment of benefits;

(vi)To file such reports as may be required with the United States Department of Labor, the Internal Revenue Service and any other government agency to which reports may be required to be submitted from time to time; and
(vii)To administer the claims procedure to the extent provided in Section 16. 

Section 12.Benefits Not Assignable; Facility of Payments: 
12.1Benefits Not Assignable. No portion of any benefit credited or paid under the Plan with respect to any Participant shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the same shall be void, nor shall any portion of such benefit be in any manner payable to any assignee, receiver or any one trustee, or be liable for his debts, contracts, liabilities, engagements or torts.
12.2Plan-Approved Domestic Relations Orders. The Committee shall establish procedures for determining whether an order directed to the Plan is a Plan-Approved Domestic Relations Order. If the Committee determines that an order is a Plan-Approved Domestic Relations Order, the Committee shall cause the payment of amounts pursuant to or segregate a separate account as provided by (and to prevent any payment or act which might be inconsistent with) the Plan-Approved Domestic Relations Order.
12.3Payments to Minors and Others. If any individual entitled to receive a payment under the Plan shall be physically, mentally or legally incapable of receiving or acknowledging receipt of such payment, the Committee, upon the receipt of satisfactory evidence of his incapacity and satisfactory evidence that another person or institution is maintaining him and that no guardian or committee has been appointed for him, may cause any payment otherwise payable to him to be made to such person or institution so maintaining him. Payment to such person or institution shall be in full satisfaction of all claims by or through the Participant to the extent of the amount thereof.
Section 13.Beneficiary: 
The Participant’s beneficiary shall be the person, persons, entity or entities designated by the Participant on the beneficiary designation form provided by and filed with the Committee or its designee. If the Participant does not designate a beneficiary, the beneficiary shall be his Surviving Spouse. If the Participant does not designate a beneficiary and has no Surviving Spouse, the beneficiary shall be the Participant’s estate. The designation of a beneficiary may be changed or revoked only by filing a new beneficiary designation form with the Committee or its designee. If a beneficiary (the “primary beneficiary”) is receiving or is entitled to receive payments under the Plan and dies before receiving all of the payments due him, the balance to which he is entitled shall be paid to the contingent beneficiary, if any, named in the Participant’s current beneficiary designation form. If there is no contingent beneficiary, the balance shall be paid to the estate of the primary beneficiary. Any beneficiary may disclaim all or any part of any benefit to which such beneficiary shall be entitled hereunder by filing a written disclaimer with the Committee before payment of such benefit is to be made. Such a disclaimer shall be made in a form satisfactory to the Committee and shall be irrevocable when filed. Any benefit disclaimed shall be payable 

from the Plan in the same manner as if the beneficiary who filed the disclaimer had predeceased the Participant.
Section 14.Amendment and Termination of Plan: 
The Company may amend any provision of the Plan or terminate the Plan at any time; provided, that in no event shall such amendment or termination reduce the balance in any Participant’s Deferred Compensation Account as of the date of such amendment or termination, nor shall any such amendment affect the terms of the Plan relating to the payment of such Deferred Compensation Account. Notwithstanding the foregoing, the following special provisions shall apply:
14.1Termination in the Discretion of the Employer. Except as otherwise provided in Sections 14.2, the Company in its discretion may terminate the Plan and distribute benefits to Participants subject to the following requirements and any others specified under Section 409A of the Code:
14.1.1All arrangements sponsored by the Employer that would be aggregated with the Plan under Section 1.409A-l(c) of the Treasury Regulations are terminated.

14.1.2No payments other than payments that would be payable under the terms of the Plan if the termination had not occurred are made within 12 months of the termination date.

14.1.3All benefits under the Plan are paid within 24 months of the termination date.

14.1.4The Employer does not adopt a new arrangement that would be aggregated with the Plan under Section 1.409A-1(c) of the Treasury Regulations providing for the deferral of compensation at any time within 3 years following the date of termination of the Plan.

14.1.5The termination does not occur proximate to a downturn in the financial health of the Employer.

14.2Termination Upon Change in Control Event. If the Company terminates the Plan within thirty days preceding or twelve months following a Change in Control Event, the Deferred Compensation Account of each Participant shall become fully vested and payable to the Participant in a lump sum within twelve months following the date of termination, subject to the requirements of Section 409A of the Code.
Section 15.Communication to Participants: 
The Employer shall make a copy of the Plan available for inspection by Participants and their beneficiaries during reasonable hours at the principal office of the Employer.
Section 16.Claims Procedure: 
The following claims procedure shall apply with respect to the Plan:
16.1Filing of a Claim for Benefits. If a Participant or Beneficiary (the “claimant”) believes that he is entitled to benefits under the Plan which are not being paid to him or which are not being accrued for his benefit, he shall file a written claim therefore with the Committee.
16.2Notification to Claimant of Decision. Within 90 days after receipt of a claim by the Committee (or within 180 days if special circumstances require an extension of time), the Committee shall notify the claimant of the decision with regard to the claim. In the event of such special circumstances requiring an extension of time, there shall be furnished to the claimant prior to expiration of the initial 90-

day period written notice of the extension, which notice shall set forth the special circumstances and the date by which the decision shall be furnished. If such claim shall be wholly or partially denied, notice thereof shall be in writing and worded in a manner calculated to be understood by the claimant, and shall set forth: (i) the specific reason or reasons for the denial; (ii) specific reference to pertinent provisions of the Plan on which the denial is based; (iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (iv) an explanation of the procedure for review of the denial and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under ERISA following an adverse benefit determination on review. Notwithstanding the foregoing, if the claim relates to a disability determination, the Committee shall notify the claimant of the decision within 45 days (which may be extended for an additional 30 days if required by special circumstances).
16.3Procedure for Review. Within 60 days following receipt by the claimant of notice denying his claim, in whole or in part, or, if such notice shall not be given, within 60 days following the latest date on which such notice could have been timely given, the claimant may appeal denial of the claim by filing a written application for review with the Committee. Following such request for review, the Committee shall fully and fairly review the decision denying the claim. Prior to the decision of the Committee, the claimant shall be given an opportunity to review pertinent documents and to submit issues and comments in writing.
16.4Decision on Review. The decision on review of a claim denied in whole or in part by the Committee shall be made in the following manner:
16.4.1Within 60 days following receipt by the Committee of the request for review (or within 120 days if special circumstances require an extension of time), the Committee shall notify the claimant in writing of its decision with regard to the claim. In the event of such special circumstances requiring an extension of time, written notice of the extension shall be furnished to the claimant prior to the commencement of the extension. Notwithstanding the foregoing, if the claim relates to a disability determination, the Committee shall notify the claimant of the decision within 45 days (which may be extended for an additional 45 days if required by special circumstances).

16.4.2With respect to a claim that is denied in whole or in part, the decision on review shall set forth specific reasons for the decision, shall be written in a manner calculated to be understood by the claimant, and shall set forth:
(i)the specific reason or reasons for the adverse determination;

(ii)specific reference to pertinent Plan provisions on which the adverse determination is based;

(iii)a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits; and

(iv)a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to obtain the information about such procedures, as well as a statement of the claimant’s right to bring an action under ERISA section 502(a).

16.4.3The decision of the Committee shall be final and conclusive.

16.5Action by Authorized Representative of Claimant. All actions set forth in this Section 16 to be taken by the claimant may likewise be taken by a representative of the claimant duly authorized by him to act in his behalf on such matters. The Committee may require such evidence as either may reasonably deem necessary or advisable of the authority to act of any such representative.
Section 17.Miscellaneous Provisions: 
17.1Set off. The Employer may at any time offset a Participant’s Deferral Compensation Account by an amount up to $5,000 to collect the amount of any loan, cash advance, extension of other credit or other obligation of the Participant to the Employer that is then due and payable in accordance with the requirements of Section 409A of the Code.
17.2Notices. Each Participant who is not in Service and each Beneficiary shall be responsible for furnishing the Committee or its designee with his current address for the mailing of notices and benefit payments. Any notice required or permitted to be given to such Participant or Beneficiary shall be deemed given if directed to such address and mailed by regular United States mail, first class, postage prepaid. If any check mailed to such address is returned as undeliverable to the addressee, mailing of checks will be suspended until the Participant or Beneficiary furnishes the proper address. This provision shall not be construed as requiring the mailing of any notice or notification otherwise permitted to be given by posting or by other publication.
17.3Lost Distributees. A benefit shall be deemed forfeited if the Committee is unable to locate the Participant or Beneficiary to whom payment is due by the fifth anniversary of the date payment is to be made or commence; provided, that the deemed investment rate of return pursuant to Section 8.2 shall cease to be applied to the Participant’s account following the first anniversary of such date; provided further, however, that such benefit shall be reinstated if a valid claim is made by or on behalf of the Participant or Beneficiary for all or part of the forfeited benefit.
17.4Reliance on Data. The Employer and the Committee shall have the right to rely on any data provided by the Participant or by any Beneficiary. Representations of such data shall be binding upon any party seeking to claim a benefit through a Participant, and the Employer and the Committee shall have no obligation to inquire into the accuracy of any representation made at any time by a Participant or Beneficiary.
17.5Headings. The headings and subheadings of the Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof.
17.6Continuation of Employment. The establishment of the Plan shall not be construed as conferring any legal or other rights upon any Employee or any persons for continuation of employment, nor shall it interfere with the right of the Employer to discharge any Employee or to deal with him without regard to the effect thereof under the Plan.
17.7Merger or Consolidation; Assumption of Plan. No Employer shall consolidate or merge into or with another corporation or entity, or transfer all or substantially all of its assets to another corporation, partnership, trust or other entity (a “Successor Entity”) unless such Successor Entity shall assume the rights, obligations and liabilities of the Employer under the Plan and upon such assumption, the Successor Entity shall become obligated to perform the terms and conditions of the Plan. Nothing 

herein shall prohibit the assumption of the obligations and liabilities of the Employer under the Plan by any Successor Entity.
17.8Construction. The Employer shall designate in the Adoption Agreement the state according to whose laws the provisions of the Plan shall be construed and enforced, except to the extent that such laws are superseded by ERISA and the applicable requirements of the Code.
17.9Taxes. The Employer or other payor may withhold a benefit payment under the Plan or a Participant’s wages, or the Employer may reduce a Participant’s Account balance, in order to meet any federal, state, or local or employment tax withholding obligations with respect to Plan benefits, as permitted under Section 409A of the Code. The Employer or other payor shall report Plan payments and other Plan-related information to the appropriate governmental agencies as required under applicable laws.
Section 18.Transition Rules: 
This Section 18 does not apply to plans newly established on or after January 1, 2009.
18.12005 Election Termination. Notwithstanding Section 4.1.4, at any time during 2005, a Participant may terminate a Participation Agreement, or modify a Participation Agreement to reduce the amount of Compensation subject to the deferral election, so long as the Compensation subject to the terminated or modified Participation Agreement is includible in the income of the Participant in 2005 or, if later, in the taxable year in which the amounts are earned and vested.
18.22005 Deferral Election. The requirements of Section 4.1.2 relating to the timing of the Participation Agreement shall not apply to any deferral elections made on or before March 15, 2005, provided that (a) the amounts to which the deferral election relate have not been paid or become payable at the time of the election, (b) the Plan was in existence on or before December 31, 2004, (c) the election to defer compensation is made in accordance with the terms of the Plan as in effect on December 31, 2005 (other than a requirement to make a deferral election after March 15, 2005), and (d) the Plan is otherwise operated in accordance with the requirements of Section 409A of the Code.
18.32005 Termination of Participation; Distribution. Notwithstanding anything in this Plan to the contrary, at any time during 2005, a Participant may terminate his or her participation in the Plan and receive a distribution of his Deferred Compensation Account balance on account of that termination, so long as the full amount of such distribution is includible in the Participant’s income in 2005 or, if later, in the taxable year of the Participant in which the amount is earned and vested.
18.4Payment Elections. Notwithstanding the provisions of Sections 7.1 or 7.5 of the Plan, a Participant may elect on or before December 31, 2008, the time or form of payment of amounts subject to Section 409A of the Code provided that such election applies only to amounts that would not otherwise be payable in the year of the election and does not cause an amount to paid in the year of the election that would not otherwise be payable in such year.Document

Exhibit 10.12
UNION BANKSHARES, INC. 
2014 EQUITY INCENTIVE PLAN 
AWARD CERTIFICATE

															
		Participant:			
		Type of Award:		Restricted Stock Units	
		Aggregate Number of RSUs Granted:			
		Aggregate Number of Underlying Shares:			
		Grant Date:			

1.Grant of Restricted Stock Units. This Award Certificate (this “Award Certificate” or “Certificate”) evidences the grant to you on February 17, 2021 by the Compensation Committee (the “Committee” or the “Compensation Committee”) and the Board of Directors (the “Board”) of Union Bankshares, Inc. (the “Company”) under the Company’s 2014 Equity Incentive Plan (the “Plan”) of the number of restricted stock units (“RSUs”) shown above and on the attached Exhibit A, on the terms and subject to the conditions set forth in this Award Certificate, the Plan and the 2020 Equity Award Summary (the “Summary”) (the “Award”).  This Award of RSUs represents the right to receive the aggregate number of shares of the Company’s Common Stock, par value $2.00 per share (the “Common Stock”) set forth above and on Exhibit A upon the specified vesting dates of the RSU Tranches (as defined), subject to satisfaction of applicable terms and conditions.  Each Tranche of PBRSUs and TBRSUs included in this Award is intended to be treated as a separate award for purposes of Internal Revenue Code Section 409A and the implementing regulations thereunder (“Code Section 409A”). For purposes of this Award, “Tranche” means, with respect to the PBRSUs and TBRSUs granted hereby, each separate portion of such PBRSUs award or TBRSUs award differentiated by specified vesting date, as shown on Exhibit A. The Plan and the Summary are incorporated herein by reference and made a part of this Award Certificate. Copies of the Plan and the Summary were previously delivered to you and additional copies are available from the Company’s Human Resources Department upon request. You should review the terms of this Award Certificate, the Plan and the Summary carefully. The capitalized terms used and not defined in this Award Certificate are defined in the Plan.

2.Certain Definitions.  Capitalized terms used in this Award Certificate and not defined in this Section 2 or elsewhere in this Notice have the definitions given to such terms in the Summary or the Plan.  Notwithstanding anything in the Plan to the contrary, the following definitions apply for purposes of this Award Certificate:

(a)“Code Section 409A” means, collectively, Section 409A of the Internal Revenue Code, as amended, and the implementing regulations thereunder.

(b)The following terms have the definitions ascribed to them in the Summary and are intended to conform to the definitions of such terms or concepts under Code Section 409A and shall be interpreted in a manner consistent with such intent:

(i)“Change in Control”
(ii)“Disability”
(iii)“Separation from Service” and
(iv)“Specified Employee”.

(c) “Qualified Retirement” means your voluntary Separation from Service from Union after attainment of at least age 55 and at least five years of continuous service with Union, provided, however, that, on the date of such Separation from Service, (i) your combined age and years of service with Union total at least 70, disregarding any partial years of age or service; and (ii) you are an employee of Union in good standing at the time of such Separation from Service.

(d)“Qualified Retirement Eligibility Date” means the first date upon which you satisfy the combined age and service requirements for a Qualified Retirement, whether or not you elect to retire on or as of such date.

(e)“Tranche” means, with respect to PBRSU’s and TBRSU’s granted in this Award, a separate portion of such PBRSUs award or TBRSUs award differentiated by specified vesting date.  Each Tranche of PBRSUs and TBRSUs is intended to be treated as a separate award for purposes of Code Section 409A.
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(f)“Union” refers to the Company and its subsidiary, Union Bank, and future subsidiaries of the Company (if any).

3.Vesting of Award.

(a)Except as otherwise expressly provided in Section 3(b), vesting of the Tranche(s) of this Award will occur on the applicable vesting date of such Tranche(s) specified in this Award Certificate (the “Vesting Date”), provided you maintain continuous employment with Union through such Vesting Date, and any unvested Tranche(s) of an Award will be forfeited upon your termination of employment prior to the applicable Vesting Date(s) of such Tranche(s).  The scheduled Vesting Date(s) of the Tranches of this Award are specified on the attached Exhibit A.

(b)If prior to the scheduled Vesting Date(s) of any Tranche(s) of this Award any of the Permitted Acceleration Events (as defined) occurs, any unvested Tranches of an Award will not be forfeited, and the Vesting Date(s) of such Tranche(s) will be accelerated to the date of such Permitted Termination (the “Accelerated Vesting Date”).  For this purpose, a “Permitted Acceleration Event” means any of the following events: (i) your death, (ii) your Disability or (iii) if your award is not a Short-Term Deferral Award, your Separation from Service from Union due to your Qualified Retirement.

(c)For the avoidance of doubt, a Tranche of RSUs granted in this Award will vest on the earliest to occur of (i) the applicable scheduled Vesting Date for such Tranche specified in this Award, but only if you have remained in Union’s continuous employ through such Vesting Date; or (ii) your death; (iii) your Disability; or (iv) your Separation from Service from Union due to your Qualified Retirement.

4.Status of Awards under Code Section 409A; Settlement and Issuance of Shares Following Vesting.

(a)If no Tranche of an Award is scheduled to vest on a Vesting Date that is on or after your Qualified Retirement Eligibility Date, such Award is intended to constitute a short-term deferral exempt from Code Section 409A (a “Short-Term Deferral Award”) and each Tranche of the Award will be settled by issuance of shares of Common Stock as soon as administratively practicable following the applicable Vesting Date, and in all events no later than March 15 of the calendar year following the calendar year in which such vesting occurs.

(b)Any Award that is not a Short-Term Deferral Award or that is not otherwise exempt from Code Section 409A is intended to comply with the requirements of Code Section 409A applicable to deferred compensation in a manner designed to avoid any additional taxes or penalties under Code Section 409A.  Settlement of any Tranche of such an award will occur as soon as administratively practicable following the scheduled Vesting Date, or the Accelerated Vesting Date, as the case may be, of such Tranche but in no event later than ninety (90) days following such date; subject, however, to any delay required under Section 7, if applicable.

(c)Any RSUs granted in this Award will be settled solely in shares of Company Common Stock, with one share issued for each vested RSU.  The shares of Common Stock issuable upon settlement of any Tranche of an Award will be issued during your lifetime only to you, or after your death to your designated beneficiary, or, in the absence of such beneficiary, to your duly qualified personal representative.

5.Effect of Change In Control. In connection with a Change in Control of the Company or Union Bank, your rights under this Award will be determined in accordance with the provisions of the Summary and Article 10, Sections 10.7 and 10.8 of the Plan and (if applicable) any change in control agreement you may have with the Company and/or Union Bank.

6.Nature of Award. This Award Certificate represents an award of RSUs, as defined in the Plan. Until vested in accordance with the provisions of the Summary and this Award Certificate, the unvested Tranches constitute only the Company’s unfunded and unsecured promise to issue shares of Common Stock to you on a future date, subject to satisfaction of applicable vesting conditions.

7.Six Month Delay in Settlement Due to Separation from Service.  Notwithstanding anything to the contrary in this Award Certificate or in the Summary, if (i) the RSUs granted under any Tranche(s) of an Award constitute deferred compensation under Code Section 409A, as contemplated in Section 4(b), (ii) settlement of such Award is made due to your Separation from Service,  and (iii) you are a Specified Employee on the date of your Separation from Service, settlement and distribution to you of shares of Common Stock upon the settlement of any vested Tranche(s) of an Award following such Separation from Service will be delayed for a period of six (6) months following your Separation from Service.  If settlement of any Tranche(s) of the Award is delayed in accordance with the preceding sentence, such settlement will be made as soon as administratively practicable following expiration of the six-month delay period. You will not be allowed to defer the distribution of your shares of Common Stock to a later date, nor to receive such shares at an earlier date, except that in the case of your death during the six month delay period, the six-month delay requirement will no longer apply and the vested RSUs will be settled and 
2

the Common Stock issued to your designated beneficiary, legal representative, heirs or legatees, as applicable, as soon as administratively practicable after the date of death.

8.No Rights as a Shareholder; No Dividend Equivalents. Prior to the vesting of the shares of Common Stock underlying a Tranche, you will not have any of the rights of a shareholder with respect to such unvested shares. Without limiting the foregoing, prior to vesting of a Tranche and issuance of the underlying shares, you will have no right to receive dividends or other distributions, if any, as may be declared on such shares of Common Stock from time to time, nor will you have the right to vote (in person or by proxy) such shares at any meeting of shareholders of the Company. No “Dividend Equivalents” (as that term is defined in the Plan) shall be accrued or paid with respect to any of the shares of Common Stock underlying any Tranche.

9.Rights of the Company and Subsidiaries. This Award Certificate does not limit or otherwise affect the right of the Company or its subsidiary to take any corporate action whatsoever, including without limitation its right to recapitalize, reorganize or make other changes in its capital structure or business, merge or consolidate, to issue bonds, notes, shares of Common Stock or other securities, including preferred stock, or stock options, or dissolve or liquidate, or sell or transfer any part of its assets or business.

10.No Effect on Employment Status.  This Award Certificate does not confer on you any right to continued employment with the Company or its subsidiary during the vesting period or otherwise, and does not limit or otherwise affect the right of the Company or its subsidiary to terminate your employment at any time.

11.Restrictions on Issuance of Shares. If at any time the Company reasonably determines that, under federal or state securities laws or other applicable laws, the listing, registration or qualification of the shares of Common Stock to be issued upon vesting of any Tranche is necessary in order to avoid violation of any such laws, the Company may delay such issuance; provided, however, that the Company shall issue such shares as soon as reasonably practicable following the first date on which the Company reasonably expects that such issuance will not cause a violation of applicable securities or other laws.

12.Holding Period Requirement.  In accordance with the terms of the Summary, you shall be required to retain ownership of 25% of the shares of Common Stock issued to you upon vesting of any Tranche, throughout the term of your employment with the Company or Union Bank.  The Company shall retain custody of the certificates(s) representing such retained shares, or place appropriate stop orders with the transfer agent if such shares are issued in book entry.

13.Tax Withholdings. You are responsible for payment of all federal, state and local tax liabilities applicable to you upon vesting of any Tranche, up to an amount based on your maximum individual tax rate (and not any greater amount).  You may pay your federal and state tax withholding obligations up to the amount permitted under the Plan (the “Withholding Amount”) (i) in cash with your own funds; or (ii) by having the Company withhold or deduct from your vested Tranche a number of whole shares of Company Common Stock having a Fair Market Value (as defined in the Plan) on the date of withholding equal to the Withholding Amount (“Shares for Withholdings”), or (iii) by a combination of cash payment and Shares for Withholdings.  The Human Resources Department of the Company or Union Bank may adopt procedures to implement this provision, including without limitation requirements for receipt of written notice from you in advance of vesting regarding your selected method of paying the Withholding Amount, and provisions for share rounding in calculating the number of whole shares of common stock required to implement any Shares for Withholdings that you may elect.

14.Nonassignability. Neither your rights under this Award Certificate nor the unvested shares of Common Stock underlying any Tranche may be sold, assigned, transferred, pledged, hypothecated, margined or otherwise encumbered in any way, in whole or in part, prior to the vesting of such Tranche(s), whether by operation of law or otherwise, except by will or the laws of descent and distribution. After vesting of a Tranche, the sale or other transfer of the shares of Common Stock issued upon such vesting shall be subject to applicable federal and state laws and regulations, in addition to satisfaction of the holding period requirement in Section 12 with respect to 25% of vested Awards.

15.Compliance with Code Section 409A.   The terms of this Award Certificate are intended to be administered and interpreted in a manner consistent with the requirements for avoiding additional taxes or penalties under Code Section 409A. Notwithstanding the foregoing, neither the Company nor Union Bank makes any representations or warranties that the payments and benefits provided under this Award will comply with Code Section 409A and in no event shall the Company or Union Bank be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by you on account of any non-compliance with Code Section 409A.

16.Amendments. Except as otherwise provided by the Plan, the Company may alter, amend or terminate this Award Certificate without your consent in any respect deemed by the Committee or the Company’s Board of Directors to be necessary in order to preserve compliance with Code Section 409A or the terms of the Plan and Summary, or otherwise to comply with applicable law.
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17.Plan and Summary Control. This Award Certificate is subject to all of the provisions of the Plan, including provisions governing antidilution adjustments, and the Summary, which are hereby incorporated by reference, and is further subject to all the interpretations, amendments, rules and regulations that may from time to time be promulgated and adopted by the Committee or Board pursuant to the Plan and Summary.

18.Governing Law. This Award Certificate shall be governed by and construed in accordance with the laws of the State of Vermont, except as superseded by applicable federal law, without giving effect to its conflicts of law provisions. 
ACKNOWLEDGEMENT 
The undersigned grantee acknowledges receipt of, and understands and agrees to be bound by, this Award Certificate, the Plan and the Summary (including any modifications thereof adopted by the Committee or Board). The undersigned further acknowledges that this Award Certificate, the Plan and the Summary set forth the entire understanding between him or her and the Company regarding all Tranches of the RSU award represented by this Award Certificate and that this Award Certificate, the Plan and the Summary supersede all prior oral and written understandings or agreements on that subject, including any nonbinding Contingent Award Notice.

									
	GRANTEE:		
			
		Dated:	
	Signature		

4

EXHIBIT A

RSU VESTING SCHEDULE

Aggregate number of shares of Common Stock underlying the following Award of TBRSUs* and PBRSUs**: ___________

															
		TBRSUs*			
		Number of Shares		Vesting Date	
					
					
					

															
		PBRSUs**			
		Number of Shares		Vesting Date	
					
					

*Time-Based Restricted Stock Units

**Performance-Based Restricted Stock Units (also subject to time-based vesting conditions)
5

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