X0306 4 2017-05-12 1 0000726517 MERCHANTS BANCSHARES INC MBVT 0001247473 CHASE DONALD R C/O MERCHANTS BANK, 275 KENNEDY DR S. BURLINGTON VT 05403 1 0 0 0 Common Stock 2017-05-12 4 D 0 29648 D 0 D Disposed of pursuant to the Agreement and Plan of Merger, dated as of October 22, 2016 (the "Merger Agreement"), between Merchants Bancshares, Inc. ("Merchants") and Community Bank System, Inc. ("Community Bank System"). Pursuant to the Merger Agreement, in exchange for each share of Merchants common stock the reporting person could elect to receive (i) $40.00 per share in cash without interest, (ii) 0.9630 shares of Community Bank System common stock, or (iii) a combination of $12.00 per share in cash without interest and 0.6741 shares of Community Bank System common stock. Any election by the reporting person is subject to proration procedures that are designed to ensure that the total amount of cash paid, and the total number of shares of Community Bank System common stock issued, in the merger will equal as nearly as practicable the total amount of cash and number of shares that would have been paid and issued if all of the Merchants stockholders received a combination of $12.00 per share in cash without interest and 0.6741 shares of Community Bank System common stock. /s/ Jamie Oberle, attorney-in-fact for Donald R. Chase 2017-05-16