SECURITIES AND EXCHANGE COMMISSION

                           Washington, D.C.  20549

                                SCHEDULE 13G

                  Under the Securities Exchange Act of 1934

                             (Amendment No. 10)


                         Merchants Bancshares, Inc.

                                Common Stock

                           Cusip Number 588448100


Item 1

a.    Name of Issuer:

      Merchants Bancshares, Inc.

b.    Address of Issuer's Principal Executive offices:

          275 Kennedy Drive
          S. Burlington, VT  05403

Item 2

a.    Name of Person Filing:

          The Merchants Bank 401(k) ESOP
          Administration Committee
          Tax I.D.  #03-0284573

b.    Address of Principal Business Office or, if none, Residence:

          275 Kennedy Drive
          S. Burlington, VT  05403

c.    Citizenship:

      U.S.A

d.    Title of Class of Securities:

      Common Stock

e.    CUSIP Number

      588448100

Item 3

      Person Filing is a:

f.    Employee Benefit Plan (401(k) Employee Stock Ownership Plan)

Item 4    Ownership

a.    Amount Beneficially Owned:

      As of December 31, 2002, 535,038.000 shares were owned by The
      Merchants Bank 401(k) Employee Stock Ownership Plan.

b.    Percent of Class:

      8.66%

c.    Number of shares as to which such person has:

      i.    Sole power to vote or to direct the vote *

      ii.   Shared power to vote or to direct the vote *

      iii.  Sole power to dispose or to direct the disposition of *

      iv.   Shared power to dispose or to direct the disposition
            of *

            The Merchants Bank 401(k) ESOP holds shares of Merchants
            Bancshares, Inc. for the benefit of the employee
            participants.  If employee participants do not vote their
            shares, the 401(k) ESOP Administration Committee will
            vote their shares in accordance with the standard
            provisions of Section 404 of the Employee Retirement
            Income Security Act of 1974.

Item 5      Ownership of Five Percent or Less of a Class:

            N/A

Item 6      Ownership of More than Five Percent on Behalf of Another
            Person:

            The Merchants Bank 401(k) Employee Stock Ownership Plan
            is composed of employee participants who receive all
            dividends from, and the proceeds from the sale of said
            securities.

Item 7      Identification and Classification of the Subsidiary Which
            Acquired the Security Being Reported on by the Parent
            Holding Company:

            N/A

Item 8      Identification and Classification of Members of the
            Group:

            See Exhibit 1

Item 9      Notice of Dissolution of Group:

            N/A

Item 10     Certification

            By signing below I certify that, to the best of my
            knowledge and belief, the securities referred to above
            were acquired in the ordinary course of business and were
            not acquired for the purpose of and do not have the
            effect of changing or influencing the control of the
            issuer of such securities and were not acquired in
            connection with or as a participant in any transaction
            having such purposes or effect.


            Signature.

            After reasonable inquiry and to the best of my knowledge
            and belief, I certify that the information set forth in
            this statement is true, complete and correct.

            2/4/03
            ---------------------------
            Date

            /s/ Michael W. Breen
            ---------------------------
            Signature

            Michael Breen, Vice President and member of Retirement
            Plan Administration Committee.


                                  Exhibit 1

                         Position with        Position
     Name             Merchants Bancshares    with Bank

Michael W. Breen                              VP & Corporate Banking Officer

Thomas R. Havers                              SVP & Senior Operations &
                                              Information System Officer

Janet P. Spitler            Treasurer         VP & CFO