SEC FORM 5

SEC Form 5

FORM 5

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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OMB Number:			3235-0362
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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

Form 3 Holdings Reported.

Form 4 Transactions Reported.

1. Name and Address of Reporting Person^*

DAVIS JEFFREY L

(Last)

(First)

(Middle)

275 KENNEDY DRIVE

(Street)

SOUTH BURLINGTON

05403

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
MERCHANTS BANCSHARES INC [ mbvt ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	10% Owner
	Officer (give title below)	Other (specify below)

3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year)
12/31/2006

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)	4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	11/23/2004		J4⁽¹⁾	46,640	A	$29.4	46,640	I	By Family Estate
Common Stock	11/17/2002		J4⁽²⁾	1,365.2	A	$23.26	1,365.2	I	By Trust
Common Stock	11/29/2004		J4⁽³⁾	6,000	A	$30	7,365.2	I	By Trust
Common Stock							20,549	D
Common Stock							5,626.965	I	By Custodian for Child
Common Stock							478.522	I	By Minor Child
Common Stock							1,260	I	By Spouse

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)	5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)

Explanation of Responses:

1. Upon his appointment on November 23, 2004 as the trustee of a family estate, the reporting person was deemed to beneficially own the shares of the issuer's common stock held by such estate. The reporting person inadvertently omitted these shares from his Section 16 reports filed after November 23, 2004, and disclaims beneficial ownership of these shares except to the extent of his pecuniary interests therein.

2. Upon his appointment on November 17, 2002 as the trustee of a family trust, the reporting person was deemed to beneficially own the shares of the issuer's common stock held by such trust. The reporting person inadvertently omitted these shares from his Section 16 reports filed after November 17, 2002, and disclaims beneficial ownership of these shares except to the extent of his pecuniary interests therein.

3. Upon his acquisition, on November 29, 2004, of voting and investment rights to shares of the issuer's common stock held in a family trust, the reporting person was deemed to beneficially own such shares held by such trust. The reporting person inadvertently omitted these shares from his Section 16 reports filed after November 29, 2004, and disclaims beneficial ownership of these shares except to the extent of his pecuniary interests therein.

	Lisa A. Razo, P.O.A. for Jeffrey L. Davis	03/22/2007
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.