ADOPTION AGREEMENT

Equity Incentive Plan Agreement

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UNION BANKSHARES INC

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Title: ADOPTION AGREEMENT
Governing Law: Vermont Date: 3/31/2009
Industry: Regional Banks Sector: Financial

Exhibit 10.3

ADOPTION AGREEMENT

THIS ADOPTION AGREEMENT is the adoption by Union Bankshares, Inc. ("Bankshares"), or "Employer" and Union Bank ("Bank") of the 2008 Amended and Restated Nonqualified Deferred Compensation Plan of Union Bankshares, Inc. ("Plan").

WITNESSETH

WHEREAS, in 1990 Bankshares and its subsidiary, Bank, adopted that certain Union Bankshares, Inc. Morrisville, Vermont Deferred Compensation Plan and Agreement, an unfunded, nonqualified deferred compensation plan (the "1990 Plan");

WHEREAS, in October 2004, Section 409A of the Internal Revenue Code was enacted into law, the result of which was to effect sweeping changes to the way in which nonqualified deferred compensation plans were taxed, which by its terms generally applies to any nonqualified deferred compensation plan (within the meaning of Section 409A) with respect to which there are amounts deferred in taxable years beginning after December 31, 2004, and with respect to amounts deferred in taxable years before January 1, 2005, if the plan under which the deferral is made is materially modified after October 3, 2004;

WHEREAS, following the enactment of Section 409A, the 1990 Plan was "frozen," and since the effective date of Section 409A there have been no deferrals into the 1990 Plan;

WHEREAS, for the purposes of complying with Section 409A of the Internal Revenue Code, Bankshares, Bank, and the participants desire to amend and restate the 1990 Plan as set forth in the Plan by adopting the Plan in accordance with the terms and conditions set forth in this Adoption Agreement;

WHEREAS, the amendments to the 1990 Plan set forth in the Plan shall be applicable to each participant of the 1990 Plan only after each such participant has executed an instrument agreeing, among other things, to the amendments substantially in the form attached as Exhibit B to this Adoption Agreement (the "Participant Acceptance Form");

WHEREAS, the Participants participated in the Plan by reason of rendering services to the Employer in one or more of the following capacities: (i) rendering services to Bank as an employee of the Bank and/or (ii) rendering services to Bankshares or the Bank in the capacity of an independent contractor as a member of the board of directors (hereinafter any such person rendering services in more than one capacity referred to as a "dual status provider");

WHEREAS, pursuant to Treas. Reg. §1.409A-1(c)(2)(ii), in any case where a dual service provider participates in a director arrangement which is substantially similar to the arrangements provided to services providers providing services only as directors, the

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director arrangements and the employee arrangements are not aggregated and may be treated as separate plans (the "Non-Aggregation Rule");

WHEREAS, the Employer wishes to treat the director arrangements and the employee arrangements under the Plan as separate plans pursuant to the Non-Aggregation Rule;

WHEREAS, for purposes of determining whether a Participant has Separated from Service under the Plan, pursuant to Treas. Reg. §1.409A-l(h)(5) the services of a dual status provider as a director shall not be taken into account in determining whether the Participant has Separated from Service as an employee for purposes of the Non-Aggregation Rule;

NOW, THEREFORE, the Employer, with the consent of the Bank as a Participating Employer; hereby adopts the Plan in accordance with the terms and conditions set forth in this Adoption Agreement:

ARTICLE I

Terms used in this Adoption Agreement shall have the same meaning as in the Plan, unless some other meaning is expressly herein set forth. The Employer hereby represents and warrants that the Plan has been adopted by the Employer upon proper authorization and the Employer hereby elects to adopt the Plan for the benefit of its Participants as referred to in the Plan. By the execution of this Adoption Agreement, the Employer hereby agrees to be bound by the terms of the Plan.

ARTICLE II

The Employer hereby makes the following designations or elections for the purpose of the Plan:

2.6

Committee: The duties of the Committee set forth in the Plan shall be satisfied by:

___

(a)

Company

___

(b)

The administrative committee appointed by the Board to serve at the pleasure of the Board.

___

(b)

Board.

(c)

Other (specify): Compensation Committee .

2.7

Company: The Company means Union Bankshares, Inc. and/or Union Bank

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2.8

Compensation: The "Compensation" of a Participant shall mean all of a Participant's:

___

(a)

Base salary.

___

(b)

Service Bonus.

___

(c)

Performance-Based Compensation earned in a period of 12 months or more.

___

(d)

Commissions.

___

(e)

Compensation received as an Independent Contractor reportable on
Form 1099.

(f)

Other: The deferred compensation account balances and additional amounts accrued under the Plan on the Effective Date as set forth on Exhibit A ("Deferred Compensation Amount" column) reflected in the Deferred Compensation Account plus, if applicable to the Participant, the "Additional Amount Accrued" specified on Exhibit A of this Adoption Agreement.

2.9

Crediting Date: The Deferred Compensation Account of a Participant shall be credited with the amount of any Participant Deferral Credits to such account at the time designated below:

___

(a)

The last business day of each Plan Year.

___

(b)

The last business day of each calendar quarter during the Plan Year.

___

(c)

The last business day of each month during the Plan Year.

___

(d)

The last business day of each payroll period during the Plan Year.

___

(e)

Each pay day as reported by the Employer

___

(f)

Any business day on which Participant Deferrals are received by the administrative recordkeeper.

(g)

Other: Effective as of the Effective Date, assuming that by no later than December 26, 2008 , the applicable Participant has executed a Participant Acceptance Form (as defined above) confirming the balance of his or her Deferred Compensation Account (in conformity with the amount listed for such Participant on Exhibit A ) and agreeing to the amendments to the 1990 Plan, the Deferred

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Compensation Account of each such Participant shall be credited with the amount listed in the "Deferred Compensation Account" column of
Exhibit A for such Participant. The Deferred Compensation Account of the Participants shall be further credited with the amount of the "Additional Amount Accrued" (as specified on Exhibit A ), if any, applicable to the Participant. If a participant in the 1990 Plan does not execute a Participant Acceptance Form as contemplated above, such participant shall not be a Participant in the amended and restated Plan and shall instead retain the benefits provided under the 1990 Plan.

2.13

Effective Date:

___

(a)

This is a newly-established Plan, and the Effective Date of the Plan
is ________________.

(b)

This is an amendment and restatement of a plan named "Union Bankshares, Inc. Morrisville, Vermont Deferred Compensation Plan and Agreement" dated 1990. The Effective Date of this amended and restated Plan shall be November 19, 2008.

2.15

Employer: The Employer is Union Bankshares, Inc. and Union Bank.

2.17

Grandfathered Amounts:

(a)

Grandfathered Amounts shall be treated in the same manner as all other amounts deferred under the Plan.

___

(b)

Other Special Treatment: ________________________.

2.19

In-Service Account:

(a)

Yes, the Plan provides for In-Service Accounts.

___

(b)

No, the plan does not provide for In-Service Accounts.

2.20

Normal Retirement Age: The Normal retirement Age of a Participant shall be:

(a)

Age 53 .

___

(b)

The later of age 53 or the 5th anniversary of the participation commencement date. The participation commencement date is the first day of the first Plan Year in which the Participant commenced participation in the Plan.

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___

(c)

Other: ___________________________________.

2.23

Participating Employer(s): As of the Effective Date, the following Participating Employer(s) are parties to the Plan:


Name of Employer	Address	Telephone No.	EIN
Union Bankshares, Inc.	20 Lower Main St.	(802) 888-6600	03-0283552
	P.O. Box 667
	Morrisville, VT 05661

Union Bank	20 Lower Main St.	(802) 888-6600	03-0286322
	P.O. Box 667
	Morrisville, VT 05661

2.26

Plan: The name of the Plan as applied to the Employer is 2008 Amended and Restated Nonqualified Deferred Compensation Plan of Union Bankshares, Inc.

2.28

Plan Year: The Plan Year shall end each year on the last day of the month of December.

2.30

Seniority Date: The date on which the Participant has:

___

(a)

Attained age ____.

___

(b)

Completed ____ Years of Service from First Date of Service.

___

(c)

Attained age ____ and completed ____ Years of Service from First Date of Service.

___

(d)

Attained an age as elected by the Participant.

(e)

Not applicable - distribution elections for Separation from Service are not based on Seniority Date.

2.35

Trust:

___

(a)

The Employer does desire to establish a "rabbi" trust for the purpose of setting aside assets of the Employer contributed thereto for the payment of benefits under the Plan.

___

(b)

The Employer does not desire to establish a "rabbi" trust for the purpose of setting aside assets of the Employer contributed thereto for the payment of benefits under the Plan.

(c)

The Employer desires to establish a "rabbi" trust for the purpose of setting aside assets of the Employer contributed thereto for the

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payment of benefits under the Plan upon the occurrence of a Change in Control.

2.37

Years of Service: For purposes of determining the vesting of the Additional Amount Accrued specified on Exhibit A, the Additional Amount Accrued specified on Exhibit A shall vest as specified in Exhibit A (assuming that by no later than December 26, 2008 , the applicable Participant has executed a Participant Acceptance Form confirming the balance of his or her Deferred Compensation Account and agreeing to the amendments to the 1990 Plan).

Participation: By this Adoption Agreement the Committee is deemed to designate all of the individuals listed on Exhibit A as eligible to participate in the Plan.

4.1

Participant Deferral Credits: Subject to the limitations in Section 4.1 of the Plan, a Participant may elect to have his Compensation (as selected in Section 2.8 of this Adoption Agreement) deferred within the annual limits below by the following percentage or amount as designated in writing to the Committee:

___

(a)

Base salary: