8-K

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 2, 2008

             (Exact name of registrant as specified in its charter)

                             UNION BANKSHARES, INC.

(State or other jurisdiction      (Commission            (IRS Employer
of incorporation)                 File Number)      Identification Number)
Vermont                           001-15985               03-0283552

(Address of principal executive offices)
20 Lower Main St., P.O. Box 667        (Zip Code)
Morrisville, VT                        05661-0667

Registrant's telephone number, including area code: (802) 888-6600

         (Former name or former address, if changed since last report)
                                 Not applicable

Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:

[ ]  Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

[ ]  Soliciting materials pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))


Item 5.02: Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(a)-(d) Not applicable.

(e)     On April 2, 2008, the Union Bankshares, Inc. Board of Directors adopted
        the 2008 Incentive Stock Option Plan of Union Bankshares, Inc. and
        Subsidiary (the "Plan") subject to shareholder approval at the annual
        meeting. The Plan is intended to replace the Company's 1998 Incentive
        Stock Option Plan, which expires at the May 21, 2008 annual shareholder
        meeting. Like the 1998 Plan, the new Plan authorizes the Board of
        directors to grant to key employees of the Company and/or its
        subsidiary or subsidiaries stock options intended to qualify as
        "incentive stock options" under Section 422 A of the Internal Revenue
        Code as amended.

        Subject to antidilution adjustments, 50,000 shares of the Company's
        common stock will be reserved for issuance under the Plan. Option
        grants will be subject to provisions typical for incentive stock
        options, such as a requirement that the option exercise price be at
        least equal to the fair market value of the underlying shares on the
        date of grant. In addition, the Plan requires that the optionee remain
        in the Company's employ for twelve months after the date of grant
        before the option becomes exercisable, subject to early vesting in the
        case of retirement, death or disability. The Plan will be administered
        by a Committee consisting of the non-employee directors.

        No shares have yet been granted under the Plan and it is not expected
        that any shares will be granted unless and until the shareholders
        approve the Plan at the annual meeting. A copy of the new Plan is filed
        as Exhibit 10.1 to this report, and will be attached to the Company's
        annual meeting proxy statement as Appendix A to be mailed to
        shareholders on or about April 18, 2008.

Item 9.01: Financial Statements and Exhibits

        (d) Exhibit 10.1 - 2008 Incentive Stock Option Plan of Union Bankshares,
            Inc. and Subsidiary

                                   SIGNATURES

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


                                        Union Bankshares, Inc.

April 9, 2008                           /s/  Kenneth D. Gibbons
                                        ----------------------------------------
                                        Kenneth D. Gibbons,
                                        President/Chief Executive Officer


April 9, 2008                           /s/ Marsha A. Mongeon
                                        ----------------------------------------
                                        Marsha A. Mongeon
                                        Treasurer/Chief Financial Officer

- --------------------------------------------------------------------------------

                                 EXHIBIT INDEX

10.1  2008 Incentive Stock Option Plan of Union Bankshares, Inc. and Subsidiary.

EX-10

                                                                   Exhibit 10.1

                        2008 INCENTIVE STOCK OPTION PLAN
                    OF UNION BANKSHARES, INC. AND SUBSIDIARY

                                  SECTION ONE
                                  DEFINITIONS

      As used herein:

      (a) "Corporation" means Union Bankshares, Inc.

      (b) "Code" means the Internal Revenue Code, as amended.

      (c) "Committee" means the stock option committee, as described in Section
Three.

      (d) "Effective Date" means the effective date of this Plan, as determined
under Article Eighteen.

      (e) "Eligible Employees" means those officers and other key employees,
including division managers and department heads, employed by the Corporation
or any parent or Subsidiary, who are selected by the Committee from time to
time to receive stock options, as provided in Section Three.

      (f) "Extended Option Period" means the extended period for exercise of
options following termination of the Optionee's employment, as provided in
Section 8, paragraphs (a), (b), (c) or (d) and as applicable in the
circumstances.

      (g) "Fair Market Value" means, as of any given date, with respect to a
share of the Corporation's Common Stock, the price per share determined by the
Committee, consistent with Code Section 422 and Treasury Regulations
thereunder. To the extent not inconsistent with Code Section 422 and applicable
regulations, for so long as the Corporation's Common Stock is listed for
trading on a national securities exchange, the per share market value of such
stock on any given date shall be deemed to be the price at which the
Corporation's Common Stock was last sold on such exchange on such date, or, if
there shall be no sale on such date, the next preceding date on which a sale
shall have occurred.

      (h) "Optionee" means an Eligible Employee to whom a stock option has been
awarded under the Plan.

      (i) "Plan" means this 2008 Incentive Stock Option Plan of Union
Bankshares, Inc. and Subsidiary.

      (j) "Retirement" means the Optionee's retirement from employment by the
Corporation or any parent or Subsidiary on or after the Optionee's normal
retirement date or early retirement date, as provided in the Corporation's
defined benefit pension plan, or any successor broad-based retirement plan
designated by the Committee.

                                       1


      (k) "Subsidiary" means Union Bank, and any successor corporation or
entity, and shall also mean and include any other corporation or entity, at
least 50% of the combined voting stock of which is hereafter owned or
controlled by the Corporation, and any successor to such other corporation or
entity.

      (l) "Ten Percent Shareholder" means a person who at the time of a stock
option grant owns in excess of ten percent (10%) of the total combined voting
power of all classes of stock of the Corporation or any parent or Subsidiary of
the Corporation.

      (m) "Termination Date" means the date of the termination of this Plan, as
determined under Article Eighteen.

                                  SECTION TWO
                                    PURPOSES

      The purposes of the Plan are:

      (a) To encourage a sense of proprietorship on the part of designated
officers and other key employees who will have key roles in fostering the
continued growth and success of the Corporation and its Subsidiary;

      (b) To recognize past valuable services of such key employees;

      (c) To furnish such key employees with further incentive to develop and
promote the business and financial success of the Corporation and its
Subsidiary, and thereby to enhance shareholder value; and

      (d) To induce such key employees to continue in the service of the
Corporation and its Subsidiary, by providing a means whereby such key employees
may be given an opportunity to purchase stock in the Corporation.

                                 SECTION THREE
                                 ADMINISTRATION

      (a) The Plan shall be administered by a stock option committee consisting
of all the members of the Board of Directors of the Corporation who are not
eligible to receive options under the Plan and who qualify as "Non-Employee
Directors" under Securities and Exchange Commission Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended. A majority of the
Committee shall constitute a quorum. All determinations of the Committee shall
be made by a majority of its members.

      (b) Subject to the express provisions of the Plan, the Committee shall
have full power and authority, in its discretion, to determine initially and
from time to time those Eligible Employees to whom options are to be granted
and to establish the terms on which options are granted and may be exercised,
not inconsistent with this Plan, including the times when such options shall be
granted or may be exercised and the number of shares to be covered by each
option. The contributions of individuals in furthering the interests of the
Corporation and its Subsidiary shall be the primary guide for the Committee in
apportioning the number of shares to be optioned to key employees, but

                                       2


the Committee may take into consideration such other factors as it may deem
relevant in its discretion, including, without limitation, the position held by
the employee, his or her longevity of service and overall compensation.

      (c) Options granted under the Plan shall be in writing and in the form of
an option agreement or other writing intended to be legally binding and
enforceable on the Corporation, as the Committee may determine in its
discretion from time to time.

      (d) Subject to the express provisions of the Plan, the Committee shall
also have the power and authority to construe and interpret the Plan and any
option agreements entered into hereunder, and to make all other determinations
necessary or advisable for administering the Plan. The determination of the
Committee on all matters referred to in this section shall be final and
conclusive.

                                  SECTION FOUR
                                  ELIGIBILITY

      (a) Options may be granted only to Eligible Employees who are selected
from time to time by the Committee in accordance with Section Three, paragraph
(b).

      (b) Any grant of a stock option to an Eligible Employee who is a Ten
Percent Shareholder shall comply with the special provisions set forth in
Section Six, paragraph (b) and Section Seven, paragraph (b) with respect to the
option exercise price and duration in addition to other applicable provisions
of this Plan.

                                  SECTION FIVE
                             SHARES SUBJECT TO PLAN

      (a) The stock to be issued upon exercise of options granted under this
Plan shall consist of authorized but unissued shares of the Corporation's $2.00
par value Common Stock and/or shares of such Common Stock held in treasury.
Subject to adjustment in accordance with Section Fourteen, the aggregate number
of shares of Common Stock that may be delivered upon exercise of all options
granted under this Plan shall not exceed fifty thousand (50,000) shares. The
Corporation will at all times reserve and keep available such number of shares
of Common Stock as shall be sufficient to satisfy the requirements of the Plan.

      (b) If any option granted under the Plan expires, terminates or is
canceled without having been exercised in full, the number of shares of Common
Stock as to which the option has not been exercised shall become available for
future grants under the Plan.

      (c) All shares issued upon the exercise of an option shall be fully paid
and nonassessable. For so long as the Corporation's Common Stock is traded on a
national securities exchange, the Corporation shall take all appropriate action
for the shares issuable pursuant to this Plan to be approved for listing upon
issuance. Notwithstanding the foregoing, nothing in this Plan shall be deemed
to require the Corporation to continue to list its Common Stock for trading on
any national exchange or other trading facility.

                                       3


      (d) Unless otherwise determined by the Committee, no fractional share of
the Corporation's Common Stock shall be issued or transferred upon exercise of
an option under the Plan.

                                  SECTION SIX
                                  OPTION PRICE

      (a) The purchase price of the shares issuable upon exercise of options
granted under the Plan shall be not less than the Fair Market Value of the
Corporation's Common Stock at the time such option is granted, as determined by
the Committee in accordance with the provisions of this Plan.

      (b) Notwithstanding any other provision of this Plan, if an option is
granted under this Plan to an Eligible Employee who is a Ten Percent
Shareholder at the time of such option grant, the purchase price of the shares
under such option shall be not less than one hundred and ten percent (110%) of
the Fair Market Value of such shares on the date the option is granted.

                                 SECTION SEVEN
                              DURATION OF OPTIONS

      (a) The Committee shall have the authority to establish the time or times
when each option shall become exercisable and the duration of the exercise
period, in conformity with the provisions hereof.

      (b) Unless sooner terminated under Section Eight, options granted
hereunder shall continue for the period specified by the Committee, which
period shall not exceed ten (10) years from the date of grant, or five (5)
years in the case of a grant to an Optionee who is a Ten Percent Shareholder.

                                 SECTION EIGHT
                             TERMINATION OF OPTIONS

      (a) Unless otherwise provided under the terms of an option grant, in the
event of termination of the Optionee's employment with the Corporation or any
parent or Subsidiary of the Corporation for any cause (other than the death,
Retirement or disability of the Optionee, or termination for just cause),
including by reason of voluntary resignation or involuntary lay off, (i) each
vested, unexpired, unexercised option held by such Optionee hereunder shall
continue to be exercisable during the period ending on the earlier of the
option's specified expiration date or three (3) months after the date on which
the Optionee's employment terminated; and (ii) each unvested option shall
terminate upon termination of employment. Any options remaining unexercised
upon expiration of the Extended Exercise Period provided in clause (i) of the
preceding sentence of this paragraph (a) shall terminate upon such expiration.

      (b) Unless otherwise provided under the terms of an option grant, in the
event of the Retirement of the Optionee, (i) each unvested option shall
immediately vest and become exercisable, and (ii) each unexpired, unexercised
option (including options referred to in clause (i)) shall be and remain
exercisable during the period ending on the earlier of the option's specified
expiration date, or three (3) months after the date of the Optionee's
Retirement. Any option remaining unexercised upon expiration of the Extended
Exercise Period provided in this paragraph (b) shall terminate upon such
expiration.

                                       4


      (c) Unless otherwise provided under the terms of an option grant, in the
event of termination of the Optionee's employment with the Corporation or any
parent or Subsidiary of the Corporation, by reason of the Optionee's permanent
disability, (i) each unvested option shall immediately vest and become
exercisable, and (ii) each unexpired, unexercised option (including options
referred to in clause (i)) held by such Optionee shall be and remain
exercisable during the period ending on the earlier of the option's specified
expiration date or twelve (12) months after the date of the Optionee's
termination of employment. Any option remaining unexercised upon expiration of
the Extended Exercise Period provided in this paragraph (c) shall terminate
upon such expiration. An Optionee will be deemed permanently disabled if the
Committee determines he 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 which has lasted or can be expected to last
for a continuous period of not less than twelve (12) months.

      (d) Unless otherwise provided under the terms of an option grant, in the
event of the death of the Optionee, (i) each unvested option shall immediately
vest and become exercisable, and (ii) each unexpired, unexercised option
(including options referred to in clause (i)) held by such Optionee at the time
of his death shall be and remain exercisable until the specified expiration
date of such option. Any option remaining unexercised upon expiration of the
Extended Exercise Period provided in this paragraph (d) shall terminate upon
such expiration. After the death of the Optionee, exercise of his or her stock
options shall be by the legal representative of his or her estate, or by the
person or persons to whom the Optionee's rights under the option or options
shall have passed by will or the laws of descent and distribution, subject to
such documentary requirements as the Committee may reasonably require.

      (e) In the event of termination of the Optionee's employment with the
Corporation or any parent or Subsidiary of the Corporation for just cause, each
unexpired, unexercised option held by such Optionee, whether or not then
vested, shall terminate immediately upon such termination of employment.

                                  SECTION NINE
                              EXERCISE OF OPTIONS

      (a) Subject to the terms and conditions of the Plan, options may be
exercised by written notice to the Corporation at its principal office at
Morrisville, Vermont, and addressed to the attention of the Secretary, in such
form as the Committee may approve from time to time, or as may be provided in
any option agreement(s) relating to such options.

      (b) Subject to Section Eight, paragraphs (b), (c) and (d) and Section
Fourteen, paragraph (b), no option may be exercised unless and until the
Optionee shall have remained in the continuous employ of the Corporation for
twelve (12) months from the date such option was granted.

      (c) An option may be exercised either at one time as to the total number
of shares covered thereby, or from time to time as to any portion thereof in
units of one hundred (100) shares or multiples thereof.

      (d) Upon the exercise of an option, a certificate or certificates
evidencing the shares as to which the option is exercised shall be delivered to
the person exercising the option. The certificate

                                       5


may contain such legends, including restrictive legends, as to matters under
applicable securities laws, as the Committee may determine in its discretion.
Notwithstanding the foregoing, the Committee may in its discretion issue
uncertificated shares in book entry form upon the exercise of an option in lieu
of certificates as to some or all of the shares so issued.

      (e) Until an Optionee has made payment of the option price, has paid or
has had satisfied any applicable withholding taxes, and has had issued to him a
certificate or certificates for the shares so acquired (or evidence of the
issuance of uncertificated shares), the Optionee shall have no rights as a
shareholder of the Corporation with respect to the stock issuable upon exercise
of the option.

                                  SECTION TEN
                                    PAYMENT

      Payment of the purchase price for shares purchased under options granted
under the Plan must be made in full, in cash or in other shares of the
Corporation's Common Stock already owned by the Optionee, or in a combination
of cash and Common Stock, at the time of the exercise of the option. In the
event that payment for the optioned shares is made in whole or in part with
previously owned shares of the Corporation's Common Stock, such shares will be
valued at their Fair Market Value on the date of the exercise of the option, as
determined by the Committee in accordance with the terms of this Plan. The
Committee may adopt such procedures for effectuating payment of the purchase
price through the surrender of previously owned shares as it may deem
appropriate.

                                 SECTION ELEVEN
                         NONTRANSFERABILITY OF OPTIONS

      An option granted under the Plan may not be transferred except by will or
the laws of descent and distribution and, during the lifetime of the Optionee,
may be exercised only by him.

                                 SECTION TWELVE
                      AGREEMENT TO CONTINUE IN EMPLOYMENT

      (a) Each Eligible Employee to whom an option is granted shall, in
consideration of the granting of such option to him, agree that he will remain
in the continuous service of the Corporation, at the pleasure of the
Corporation, as an officer or employee for a period of at least one (1) year
from the date of the granting of the option, except for termination of
employment by reason of death, disability, or Retirement.

      (b) Nothing in this Plan or in any option granted hereunder shall be
deemed to confer on any individual any right to continue in the employ of the
Corporation or to interfere in any way with the right of the Corporation to
terminate his employment at any time.

                                SECTION THIRTEEN
                            LIMITATION OF LIABILITY

      Neither the Corporation, any Subsidiary, nor the Committee or any member
thereof shall be liable to any Optionee or other person as to (i) the
non-issuance or sale of shares of Common Stock upon exercise of an option as to
which the Corporation, after the exercise in good faith of its

                                       6


reasonable best efforts, has been unable to obtain from any regulatory body
having jurisdiction the authorization deemed by Corporation's counsel to be
necessary to the lawful issuance and sale of any shares hereunder; and (ii) any
tax consequences expected, but not realized, by any Optionee or other person
relating to the exercise of any option granted under this Plan.

                                SECTION FOURTEEN
                              ADJUSTMENT OF SHARES

      (a) In the event of a merger, consolidation, plan of share exchange,
reorganization, recapitalization, reclassification of stock, stock dividend,
split-up, or other change in the corporate structure or capitalization of the
Corporation affecting the Corporation's Common Stock as presently constituted,
appropriate adjustments shall be made by the Committee to preserve the economic
benefits or potential benefits of option awards under this Plan, including,
without limitation, adjustments in the aggregate number and kind of shares
subject to the Plan, the maximum number and kind of shares for which options
may be granted in any calendar year, the maximum number and kind of shares for
which options may be granted to any one employee, and the number and kind of
shares and the price per share subject to outstanding options.

      (b) Upon consummation of a merger, consolidation, plan of share exchange
or other form of reorganization of the Corporation with or into another
corporation (other than a merger, consolidation, or other form of
reorganization in which the Corporation is the surviving corporation), a sale
or transfer of all or substantially all of the assets of the Corporation or a
tender or exchange offer for the Corporation's Common Stock made by any other
corporation, person or entity resulting in a change in control of the
Corporation, all options held by any Optionee shall thereupon be deemed fully
vested and exercisable by the Optionee for the remainder of the exercise period
specified in such option; provided, however, that such options shall be subject
to adjustment under paragraph (a) of this Section Fourteen as the Committee may
deem appropriate.

                                SECTION FIFTEEN
                              COMPLIANCE WITH LAW

      (a) The stock options issued under this Plan are intended to qualify as
"incentive stock options" within the meaning of Section 422 of the Code. The
provisions of this Plan and of any option granted hereunder shall be
interpreted and administered in a manner consistent with the requirements for
incentive stock options under Section 422.

      (b) The Committee may require that each Optionee and each other person
who shall exercise an option shall represent and warrant at the time of
exercise that all shares purchased pursuant to such option are being purchased
for investment and not with a view to the distribution or resale thereof,
within the meaning of federal and state securities laws.

      (c) If, at any time, the Committee shall determine in its discretion that
the registration or qualification of some or all of the shares covered by this
Plan under any state or federal law is necessary or desirable as a condition of
or in connection with the delivery of such shares on the exercise of any option
granted hereunder, the delivery of such shares shall be deferred until such
registration or qualification shall have been effected. In the event the
Committee determines that registration or qualification of shares covered by
any option granted hereunder is necessary or

                                       7


desirable, the Corporation shall, at its expense, take such action as may be
required to effect such registration or qualification.

      (d) It is intended that this Plan shall meet the exemption requirements
for incentive stock option plans under Section 409A of the Code. Accordingly,
this Plan and the option grants made hereunder shall be interpreted and
administered in a manner consistent with preserving the exemption from Section
409A. Notwithstanding any provision of the Plan to the contrary, in the event
that the Committee determines that this Plan or any option granted hereunder
may be subject to Section 409A, the Committee may adopt such amendments to the
Plan, the terms of the option and any related option agreement, or adopt other
policies and procedures (including amendments, policies and procedures with
retroactive effect), or take any other actions, that the Committee determines
are necessary or appropriate to (i) exempt this Plan or the option from Section
409A and/or preserve the intended tax treatment of the benefits provided with
respect to the option(s), or (ii) comply with the requirements of Section 409A.

                                SECTION SIXTEEN
                      TIME LIMITATION ON GRANT OF OPTIONS

      No option shall be granted pursuant to this Plan later than ten (10)
years following the date of the adoption of the Plan by resolution of the Board
of Directors.

                               SECTION SEVENTEEN
                 SUSPENSION, AMENDMENT, OR TERMINATION OF PLAN

      Unless the Plan shall have been earlier terminated by the Corporation's
Board of Directors, the Plan shall terminate ten (10) years following the date
upon which the Plan was adopted by resolution of the Board of Directors. The
Board of Directors shall have the right, at any time, to suspend, amend, or
terminate the Plan; provided, however, that, unless duly approved by vote of
the holders of the Corporation's Common Stock at any annual or special meeting,
no amendment shall increase the total number of shares that shall be the
subject of the Plan or change the formula for determining the purchase price
for the optioned shares, or change the group of employees entitled to receive
options; and provided further that no termination or expiration of the Plan,
nor any action by the Board of Directors in amending or suspending the Plan,
shall affect or impair the rights of an Optionee under any option previously
granted under the Plan, without the written consent of such Optionee. No option
may be granted during any suspension or after termination or expiration of the
Plan.

                                SECTION EIGHTEEN
                        EFFECTIVE DATE AND TERM OF PLAN

      (a) This Plan shall become effective upon its ratification by the
shareholders of the Corporation, following its adoption and approval by the
Board of Directors. Unless this Plan shall have been approved by vote of the
shareholders of the Corporation at an annual or special meeting of such
shareholders within twelve (12) months following the date upon which this Plan
is adopted by the Board of Directors, the Plan shall be of no further force and
effect and any option granted hereunder shall be null and void.

                                       8


      (b) Unless sooner terminated by the Corporation's Board of Directors,
this Plan shall continue in effect from the Effective Date until the day before
the tenth anniversary of the approval of the Plan by the Board of Directors
(the "Termination Date"). Options granted prior to the Termination Date shall
remain in effect until their exercise, surrender, cancellation, expiration or
termination in accordance with the terms of this Plan and the option grant.

                                SECTION NINETEEN
                                 GOVERNING LAW

      This Plan shall be governed by the laws of the State of Vermont without
regard to the principles of conflict of laws. In the event any one or more of
the provisions contained herein are for any reason deemed to be invalid,
illegal or unenforceable, such illegality, invalidity or unenforceability shall
not effect the validity, legality or enforceability of any other provision of
this Plan.

                                 SECTION TWENTY
                                SUCCESSORS BOUND

      The provisions of this Plan and the terms of any outstanding option
grants hereunder shall be binding upon any successor or assignee of the
Corporation.




Adopted by Board of Directors:  April 2, 2008
Approved by Shareholders:  May __, 2008