SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  SCHEDULE 13G

                    Under the Securities Exchange Act of 1934

                               (Amendment No. 14)


                           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 Owed:

      As of December 31, 2006 498,925.000 shares were owned by The Merchants
      Bank 401(k) Employee Stock Ownership Plan.

b.    Percent of Class:

      8.052%

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.

          February 15, 2007
          ......................................................................
          Date

          /s/ Janet P. Spitler
          ......................................................................
          Signature

          Janet P. Spitler, Chief Financial Officer, 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

David J. Bosworth                                Trust Investment Officer,
                                                 Merchants Trust Company

Andrew T. Kloeckner                              VP & Deposit Compliance Officer