CHANGE IN CONTROL

                           SEVERANCE PAYMENT AGREEMENT

         This Agreement, made and entered into as of the 18th day of August,
2004, by and between VAIL BANKS, INC., a Colorado corporation (the "Company"),
WESTSTAR BANK ("WestStar") and RAYMOND E. VERLINDE (hereinafter called the
"Executive"),


                              W I T N E S S E T H:

         WHEREAS, the Executive is currently employed by WestStar, a subsidiary
of the Company, in various capacities and is rendering valuable services to the
Company and WestStar; and

         WHEREAS, the Company and WestStar desire to retain the Executive and
are aware that the possibility of a Change in Control of the Company (as defined
in Section 3) might impede the accomplishment of this end; and

         WHEREAS, the Company believes that the execution of this Agreement will
further its and WestStar's aim in retaining the Executive during an actual or
attempted Change in Control and will tend to assure fair treatment of executives
in the event of a Change in Control;

         NOW, THEREFORE, for and in consideration of the premises and of the
Executive's continuation in his present employment with WestStar, the parties
hereto agree as follows:

         1. DUTIES AND STATUS OF EXECUTIVE.

         The Executive shall continue to perform such duties and
responsibilities for WestStar as shall be assigned to him by Gary S. Judd,
President and Chief Executive Officer, Vail Banks, Inc. The Executive shall
devote his working time and attention to the discharge of his duties with
WestStar and its subsidiaries. In addition to the compensation and other
benefits provided to the Executive by WestStar, the Executive shall have the
additional benefits provided by this Agreement.

         2. TERM.

                  (a) INITIAL TERM. The term of this Agreement shall initially
         be a fixed period of two years that expires on the second anniversary
         of the date of this Agreement and may be extended as provided in
         subsection (b) below.

                  (b) EXTENSION. The term of this Agreement shall be extended
         automatically on the first anniversary and on each subsequent
         anniversary of the date of this Agreement (each such anniversary being
         referred to as an "Extension Date") for an

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         additional one year period so that the Agreement then expires on the
         second anniversary of the applicable Extension Date; provided that

                           (i) the then current term of this Agreement will not
                  be extended on any Extension Date if,

                                    (A) not later than 90 days before such
                           Extension Date the Company gives the Executive
                           written notice that it does not wish to extend the
                           term, or

                                    (B) before such Extension Date the Company
                           terminates the employment of the Executive for Cause
                           (as defined in Section 4(b)) and

                           (ii) whether or not the Company has given notice to
                  the Executive pursuant to clause (i) (A) above that it does
                  not wish to extend the term of this Agreement, if a Change in
                  Control occurs during the initial term of this Agreement, or
                  any extension thereof, the term of this Agreement shall not
                  expire sooner than the third anniversary of the date of such
                  Change in Control.

         3. CHANGE IN CONTROL. For the purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred in the event of:

                  (a) an acquisition by any Person of Beneficial Ownership of
         the Shares of the Company then outstanding (the "Company Common Stock
         Outstanding") or the voting securities of the Company then outstanding
         entitled to vote generally in the election of directors (the "Company
         Voting Securities Outstanding"), if such acquisition of Beneficial
         Ownership results in the Person beneficially owning (within the meaning
         of Rule 13d-3 promulgated under the Exchange Act) twenty-five percent
         (25%) or more of the Company Common Stock Outstanding or twenty-five
         percent (25%) or more of the combined voting power of the Company
         Voting Securities Outstanding; provided, that immediately prior to such
         acquisition such Person was not a direct or indirect Beneficial Owner
         of twenty-five percent (25%) or more of the Company Common Stock
         Outstanding or twenty-five percent (25%) or more of the combined voting
         power of Company Voting Securities Outstanding, as the case may be; or

                  (b) the consummation of a reorganization, merger,
         consolidation, complete liquidation or dissolution of the Company, the
         sale or disposition of all or substantially all of the assets of the
         Company or similar corporate transaction (in each case referred to in
         this Section 3 as a "Corporate Transaction") or, if consummation of
         such Corporate Transaction is subject to the consent of any government
         or governmental agency, the obtaining of such consent (either
         explicitly or implicitly); or

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                  (c) a change in the composition of the Board such that the
         individuals who, as of the date of this Agreement, constitute the Board
         (such Board shall be hereinafter referred to as the "Incumbent Board")
         cease for any reason to constitute at least a majority of the Board;
         provided, however, for purposes of this Section 3 that any individual
         who becomes a member of the Board subsequent to the date of this
         Agreement whose election, or nomination for election by the Company's
         shareholders, was approved by a vote of at least a majority of those
         individuals who are members of the Board and who were also members of
         the Incumbent Board (or deemed to be such pursuant to this proviso)
         shall be considered as though such individual were a member of the
         Incumbent Board; but, provided, further, that any such individual whose
         initial assumption of office occurs as a result of either an actual or
         threatened election contest (as such terms are used in Rule 14a-11 of
         Regulation 14A promulgated under the Exchange Act, including any
         successor to such Rule), or other actual or threatened solicitation of
         proxies or consents by or on behalf of a Person other than the Board,
         shall not be so considered as a member of the Incumbent Board.

                  (d) Notwithstanding the provisions set forth in subsections
         (a) and (b), the following shall not constitute a Change in Control for
         purposes of this Agreement: (1) any acquisition of Shares by, or
         consummation of a Corporate Transaction with, any Subsidiary or any
         employee benefit plan (or related trust) sponsored or maintained by the
         Company or an affiliate; or (2) any acquisition of Shares, or
         consummation of a Corporate Transaction, following which more than
         fifty percent (50%) of, respectively, the shares then outstanding of
         common stock of the corporation resulting from such acquisition or
         Corporate Transaction and the combined voting power of the voting
         securities then outstanding of such corporation entitled to vote
         generally in the election of directors is then beneficially owned,
         directly or indirectly, by all or substantially all of the individuals
         and entities who were Beneficial Owners, respectively, of the Company
         Common Stock Outstanding and Company Voting Securities Outstanding
         immediately prior to such acquisition or Corporate Transaction in
         substantially the same proportions as their ownership, immediately
         prior to such acquisition or Corporate Transaction, of the Company
         Common Stock Outstanding and Company Voting Securities Outstanding, as
         the case may be.

         4. CHANGE IN CONTROL PAYMENTS AND SEVERANCE PAYMENTS.

                  (a) If a Change in Control of the Company occurs, the Company
         shall pay or provide to Executive (subject to withholding of applicable
         taxes) within ten (10) days after the date of the Change in Control:

                           (i) a lump sum amount equal to the sum of (A) 200% of
                  his full base annual salary at the rate in effect on the date
                  prior to the date of the Change in Control, plus (B) 200% of
                  the incentive payment Executive would have received for the
                  year during which the Change in Control occurs under the

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                  Company's annual incentive plan, assuming the target level of
                  performance had been met for such year;

                           (ii) an amount equal to the product of (aa) the
                  annual incentive bonus that would be paid or payable to the
                  Executive for the year of termination under the Company's
                  annual incentive plan, assuming the target level of
                  performance had been met for such year, multiplied by (bb) a
                  fraction of which the numerator is the number of weeks that
                  have elapsed in the then current year through the date of the
                  Change in Control and the denominator is 52 (and Executive's
                  participation in such annual incentive plan for the year of
                  the Change in Control shall be terminated);

                           (iii) the amount of any annual or long-term bonus
                  with respect to any year that has then ended which has or
                  would have been earned and been paid to the Executive under
                  any annual or long-term bonus plan then in effect but which
                  has not yet been paid to him;

                           (iv) an additional contribution to any deferred
                  compensation or savings plan (whether qualified or
                  non-qualified) in which the Executive is participating, of the
                  maximum amount which the Company is permitted to contribute,
                  based on the payments made pursuant to paragraphs (i), (ii)
                  and (iii) above, provided that if the contributions on the
                  Executive's behalf to the plans covered by this paragraph (iv)
                  are not permitted under the terms of one or more of such
                  plans, the Company shall pay Executive in a lump sum, within
                  10 days, the present value of the benefits that cannot be
                  provided pursuant to such plan; and

                           (v) accelerate to the date of the Change in Control
                  the vesting, exercisability, transferability and payment date
                  of all outstanding stock options, restricted stock and any
                  other share awards held by Executive.

                  (b) If a Change in Control of the Company occurs and,
         subsequently on or before the third anniversary of such Change in
         Control, the Executive's employment with the Company is terminated (i)
         by the Company for any reason whatsoever other than for Cause (as
         defined in subsection (c) below) or the Executive's death or Disability
         (as defined in subsection (d) below), or (ii) by the Executive for Good
         Reason (as defined in subsection (e) below), the Company shall:

                                    (A) pay to the Executive within 30 days
                           after the date of termination, an amount equal to the
                           sum of:

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                                            (I) his full base salary through the
                                    date of termination at the rate in effect at
                                    the time notice of termination (as provided
                                    for in Section 5 below) is given, plus

                                             (II) an amount equal to the product
                                    of (aa) the number of unused personal days
                                    accrued by the Executive through the date of
                                    termination multiplied by (bb) a fraction
                                    the numerator of which is the Executive's
                                    base salary and the denominator of which is
                                    250;

                                     (B) maintain in full force and effect for
                           the benefit of the Executive and his dependents for a
                           period of two years from the date of termination (or,
                           if shorter, the period until Executive obtains other
                           employment and becomes actually covered by a plan
                           providing the specific benefit hereinafter described)
                           all employee life, medical, dental, and vision
                           coverages in which the Executive is participating at
                           the time of the Executive's termination; provided,
                           that if the Executive's continued participation is
                           not permitted under the general terms of such plans,
                           the Company shall arrange to provide him with
                           substantially similar benefits and the Company shall
                           pay the cost of such benefits; provided further,
                           Executive will be required to pay the "employee
                           portion" of any costs of such coverages in the same
                           amount as required for active executive employees of
                           the Company;

                  (c) For the purposes of this Section 4, "Cause" means:

                           (i) the conviction of the Executive of, or a plea of
                  guilty or nolo contendere by the Executive to, any felony
                  involving conduct on the part of the Executive that renders
                  him unfit for the performance of his duties to the Company, or
                  its subsidiaries and affiliates, or

                           (ii) any willful misconduct on the part of the
                  Executive in the performance of his duties that is materially
                  harmful to the Company or its subsidiaries or affiliates,
                  monetarily or otherwise.

                  For the purpose of this subsection (c), no act, or failure to
         act, on the Executive's part shall be considered "willful" unless done,
         or omitted to be done, by him not in good faith and without reasonable
         belief that his action or omission was in the best interest of the
         Company and its subsidiaries and affiliates. Notwithstanding the
         foregoing, the Executive shall not be deemed to have been terminated
         for Cause unless and until there shall have been delivered to him a
         copy of a resolution duly adopted by the affirmative vote of not less
         than three quarters of the entire membership of the Board of Directors
         of the Company at a meeting of the Board called and held for

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<PAGE>

         the purpose (after reasonable notice to him and an opportunity for him,
         together with his counsel, to be heard before the Board), finding that
         in the good faith opinion of the Board he was guilty of conduct set
         forth above in clauses (i) or (ii) above and specifying the particulars
         thereof in detail.

                  (d) For the purpose of this Section 4, "Disability" shall be
         deemed to exist if, as a result of the Executive's incapacity due to
         physical or mental illness, he shall have been absent from his duties
         with the Company and WestStar on a full-time basis for 150 consecutive
         calendar days and within 30 days after he has received notice of
         termination pursuant to Section 5 he has not returned to the
         performance of his duties on a full-time basis.

                  (e) For the purposes of this Section 4, "Good Reason" shall be
         deemed to exist under any of the following circumstances, but only to
         the extent that they occur within the thirty-six month period
         immediately after a Change in Control:

                           (i) The assignment to the Executive of any duties
                  inconsistent with his positions, duties, responsibilities and
                  status with WestStar and the Company, its subsidiaries and
                  affiliates immediately prior to a Change in Control, or a
                  change in his reporting responsibilities, titles or offices
                  which were in effect immediately prior to a Change in Control,
                  or any removal of him from or any failure to re-elect him to
                  any of such positions, except in connection with the
                  termination of his employment by the Company and WestStar for
                  Cause or as a result of his death or Disability or termination
                  by him other than for Good Reason.

                           (ii) A reduction by WestStar in the Executive's base
                  salary as in effect on the date hereof or as the same may be
                  increased from time to time, or failure to give him annual
                  salary increases consistent with performance review ratings as
                  compared with other employees of the same or similar rank.

                           (iii) A failure by WestStar to continue giving the
                  Executive bonuses comparable to the amount of bonuses given to
                  him prior to the Change in Control.

                           (iv) The Company's or WestStar's requiring that the
                  Executive be based anywhere other than the Company's or
                  WestStar's offices in the Eagle County, Colorado area, except
                  for required travel on Company or WestStar business to an
                  extent substantially consistent with his present business
                  travel obligations, or in the event that the Executive
                  consents to any such relocations, the failure by the Company
                  or WestStar to pay (or reimburse him for) all reasonable
                  moving expenses incurred by him.

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<PAGE>

                           (v) The failure by WestStar to continue in full force
                  and effect any benefit, retirement, savings or compensation
                  plan or any employee life, accident, disability, medical,
                  dental, vision or other employee welfare benefit plan in which
                  the Executive is participating at the time of a Change in
                  Control of the Company, the taking of any action by WestStar
                  which would adversely affect his participation in or
                  materially reduce his benefits under any of such plans or
                  deprive him of any material fringe benefit or perquisite
                  enjoyed by him at the time of the Change in Control, or the
                  failure by WestStar to provide him with the number of paid
                  personal days to which he is then entitled in accordance with
                  the normal personal day policy in effect on the date hereof.

                           (vi) Any breach by the Company or WestStar of its
                  obligations under this Agreement or any purported termination
                  by WestStar of his employment which is not effected pursuant
                  to a notice of termination satisfying the requirements of
                  Section 5 (and if applicable Section 4(c)); and for purposes
                  of this Agreement, no such purported termination shall be
                  effective.

                  (f) The Company and WestStar agree that if the Executive's
         employment is terminated and he is entitled to benefits under Section
         4(a) and/or Section 4(b), he shall not be required to mitigate damages
         by seeking other employment, nor shall any amount he earns after his
         termination of employment reduce the amount payable by the Company
         under this Agreement (except as provided in paragraph (B) above
         relating to benefit changes upon subsequent employment).

                  (g) (i) Anything in this Agreement to the contrary
                  notwithstanding, in the event it shall be determined (as
                  hereafter provided) that any payment or distribution to or for
                  the Executive, whether paid or payable or distributed or
                  distributable pursuant to the terms of this Agreement or
                  pursuant to or by reason of any other agreement, policy, plan,
                  program or arrangement (including, without limitation, any
                  employment agreement, stock plan or salary continuation
                  agreement), or similar right (a "Payment"), would be subject
                  to the excise tax imposed by Section 4999 of the Code (or any
                  successor provisions thereto), or any interest or penalties
                  with respect to such excise tax (such excise tax, together
                  with any such interest and penalties, are hereafter
                  collectively referred to as the "Excise Tax"), then the
                  Executive shall be entitled to receive an additional payment
                  or payments (a "Gross-Up Payment") from the Company. The total
                  amount of the Gross-Up Payment shall

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<PAGE>

                  be an amount such that, after payment by (or on behalf of) the
                  Executive of any Excise Tax and all federal, state and other
                  taxes (including any interest or penalties imposed with
                  respect to such taxes) imposed upon the Gross-Up Payment, the
                  remaining amount of the Gross-Up Payment is equal to the
                  Excise Tax imposed upon the Payments. For purposes of clarity,
                  the amount of the Gross-Up Payment shall be that amount
                  necessary to pay the Excise Tax in full and all taxes assessed
                  upon the Gross-Up Payment.

                           (ii) An initial determination as to whether a
                  Gross-Up Payment is required pursuant to this subsection (g)
                  and the amount of such Gross-Up Payment shall be made by an
                  accounting firm selected by the Company and reasonably
                  acceptable to the Executive (the "Accounting Firm"). The
                  Accounting Firm shall provide its determination (the
                  "Determination"), together with detailed supporting
                  calculations and documentation to the Company and the
                  Executive as promptly as practicable after such calculation is
                  requested by the Company or by the Executive, and if the
                  Accounting Firm determines that no Excise Tax is payable by
                  the Executive with respect to a Payment or Payments, it shall
                  furnish the Executive with an opinion reasonably acceptable to
                  the Executive that no Excise Tax will be imposed with respect
                  to any such Payment or Payments. Within fifteen (15) days of
                  the delivery of the Determination to the Executive, the
                  Executive shall have the right to dispute the Determination
                  (the "Dispute"). The Gross-Up Payment, if any, as determined
                  pursuant to this Section 4 shall be paid by the Company to the
                  Executive within fifteen (15) days of the receipt of the
                  Accounting Firm's Determination. The existence of the Dispute
                  shall not in any way affect the right of the Executive to
                  receive the Gross-Up Payment in accordance with the
                  Determination. If there is no Dispute, the Determination shall
                  be binding, final and conclusive upon the Company and the
                  Executive subject to the application of subsection (iii)
                  below.

                           (iii) As a result of the uncertainty in the
                  application of Sections 4999 and 280G of the Code, it is
                  possible that a Gross-Up Payment (or a portion thereof) will
                  be paid which should not have been paid (an "Excess Payment")
                  or a Gross-Up Payment (or a portion thereof) which should have
                  been paid will not have been paid (an "Underpayment"). An
                  Underpayment shall be deemed to have occurred upon the
                  earliest to occur of the following events: (1) upon notice
                  (formal or informal) to the Executive from any governmental
                  taxing authority that the tax liability of the Executive
                  (whether in respect of the then current taxable year of the
                  Executive or in respect of any prior taxable year of the
                  Executive) may be increased by reason of the imposition of the
                  Excise Tax on a Payment or Payments with respect to which the
                  Company has failed to make a sufficient Gross-Up Payment, (2)
                  upon a determination by a court, (3) by reason of a
                  determination by the Company (which shall include the position
                  taken by the Company, or its consolidated group, on its
                  federal income tax return), or (4) upon the resolution to the
                  satisfaction of the Executive of the Dispute. If any
                  Underpayment occurs, the Executive shall promptly notify the
                  Company and the Company shall pay to the Executive within
                  fifteen (15) days

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                  of the date the Underpayment is deemed to have occurred under
                  (1), (2), (3) or (4) above, but in no event less than five
                  days prior to the date on which the applicable government
                  taxing authority has requested payment, an additional Gross-Up
                  Payment equal to the amount of the Underpayment plus any
                  interest and penalties imposed on the Underpayment.

                           An Excess Payment shall be deemed to have occurred
                  upon a "Final Determination" (as hereinafter defined) that the
                  Excise Tax shall not be imposed upon a Payment or Payments (or
                  portion of a Payment) with respect to which the Executive had
                  previously received a Gross-Up Payment. A Final Determination
                  shall be deemed to have occurred when the Executive has
                  received from the applicable government taxing authority a
                  refund of taxes or other reduction in his tax liability by
                  reason of the Excess Payment and upon either (1) the date a
                  determination is made by, or an agreement is entered into
                  with, the applicable governmental taxable authority which
                  finally and conclusively binds the Executive and such taxing
                  authority, or in the event that a claim is brought before a
                  court of competent jurisdiction, the date upon which a final
                  determination has been made by such court and either all
                  appeals have been taken and finally resolved or the time for
                  all appeals has expired, or (2) the statute of limitations
                  with respect to the Executive's applicable tax return has
                  expired. If an Excess Payment is determined to have been made,
                  the amount of the Excess Payment shall be treated as a loan by
                  the Company to the Executive and the Executive shall pay to
                  the Company within 15 days following demand (but not less than
                  30 days after the determination of such Excess Payment) the
                  amount of the Excess Payment plus interest at an annual rate
                  equal to the rate provided for in Section 1274(b)(2)(B) of the
                  Code from the date the Gross-Up Payment (to which the Excess
                  Payment relates) was paid to the Executive until the date of
                  repayment to the Company.

                           (iv) Notwithstanding anything contained in this
                  Agreement to the contrary, in the event that, according to the
                  Determination, an Excise Tax will be imposed on any Payment or
                  Payments, the Company shall pay to the applicable government
                  taxing authorities as Excise Tax withholding, the amount of
                  any Excise Tax that the Company has actually withheld from the
                  Payment or Payments; provided that the Company's payment of
                  withheld Excise Tax shall not change the Company's obligation
                  to pay the Gross-Up Payment required under this subsection
                  (g).

                           (v) The Executive and the Company shall each provide
                  the Accounting Firm access to and copies of any books, records
                  and documents in the possession of the Company or the
                  Executive, as the case may be, reasonably requested by the
                  Accounting Firm, and otherwise cooperate with the Accounting
                  Firm in connection with the

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                  preparation and issuance of the Determination contemplated by
                  subsection (ii) hereof.

                           (vi) The fees and expenses of the Accounting Firm for
                  its services in connection with the determinations and
                  calculations contemplated by subsection (ii) shall be paid by
                  the Company.

         5. NOTICE OF TERMINATION. Any termination by the Company or WestStar or
by the Executive of the Executive's employment by the Company or WestStar shall
be communicated by a written notice of termination to the other party, and shall
specify the provision of this Agreement relied upon and shall set forth in
reasonable detail the circumstances claimed to provide a basis for termination.
The date of termination shall be the date on which the notice of termination is
delivered if by the Executive or 30 days after the date of the notice of
termination if given by the Company or WestStar.

         6. LITIGATION EXPENSES; INDEMNIFICATION AND INSURANCE.

                  (a) The Company shall pay all reasonable legal fees and
         expenses incurred by the Executive as a result of his seeking to obtain
         or enforce any right or benefit provided by this Agreement, promptly
         and from time to time at his request as such fees and expenses are
         incurred, regardless of whether such rights are pursued through
         settlement discussions, mediation, arbitration, litigation or
         otherwise.

                  (b) Unless the Executive is terminated for Cause, at all times
         after a Change of Control, the Company shall continue to provide for
         Executive the indemnification provisions contained in the Company's
         by-laws and shall continue to maintain for the benefit of the Executive
         such policies of liability insurance, providing protection to him as an
         officer, director, agent or employee of the Company and its
         subsidiaries, as may from time to time be purchased by the Company for
         officers and directors generally as authorized by or in furtherance of
         the indemnification provisions contained in the Company's by-laws.
         Unless the Executive is terminated for Cause, neither the insurance nor
         the Executive's right to indemnification thereunder may be canceled by
         the Company without his permission for a period of five years following
         the date of termination under this Agreement; provided, however, that
         the Company may obtain a substitute insurance policy as long as the
         rights of indemnity to the Executive are at least equivalent to the
         most favorable rights provided under the policies in effect immediately
         prior to the date of a Change of Control.

         7. ASSIGNMENT; SUCCESSORS IN INTEREST.

                  (a) GENERAL. Except with the prior written consent of the
         Executive, no assignment by operation of law or otherwise by the
         Company of any of its rights and obligations under this Agreement may
         be made other than to an entity which is a

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         successor to all or a substantial portion of the business of the
         Company (but then only if such entity assumes by operation of law or by
         specific assumption executed by the transferee and delivered to the
         Executive all obligations and liabilities of the Company under this
         Agreement); no transfer by operation of law or otherwise by the Company
         of all or a substantial part of its business or assets shall be made
         unless the obligations and liabilities of the Company under this
         Agreement are assumed in connection with such transfer either by
         operation of law or by specific assumption executed by the transferee.
         In such event, the Company shall remain liable for the performance of
         all of its obligations under this Agreement (which liability shall be a
         primary obligation for full and prompt performance rather than a
         secondary guarantee of collectibility of damages). Except for any
         transfer or assignment of rights under this Agreement, in whole or in
         part, upon the death of the Executive to his heirs, devisees, legatees
         or beneficiaries or except with the prior written consent of the
         Company, no assignment or transfer by operation of law or otherwise may
         be made by the Executive of any of his rights under this Agreement.

                  (b) BINDING NATURE. This Agreement shall be binding upon the
         parties to this Agreement and their respective legal representatives,
         heirs, devisees, legatees, beneficiaries and successors and assigns;
         shall inure to the benefit of the parties to this Agreement and their
         respective permitted legal representatives, heirs, devisees, legatees,
         beneficiaries and other permitted successors and assigns (and to or for
         the benefit of no other person or entity, whether an employee or
         otherwise, whatsoever); and any reference to a party to this Agreement
         shall also be a reference to a permitted successor or assign.

         8. MISCELLANEOUS.

                  (a) The failure of any party to this Agreement at any time or
         times to require performance of any provision of this Agreement shall
         in no manner affect the right to enforce the same. No waiver by any
         party to this Agreement of any provision (or of a breach of any
         provision) of this Agreement, whether by conduct or otherwise, in any
         one or more instances shall be deemed or construed either as a further
         or continuing waiver of any such provision or breach or as a waiver of
         any other provision (or of a breach of any other provision) of this
         Agreement.

                  (b) Wherever possible each provision of this Agreement shall
         be interpreted in such manner as to be effective and valid but if any
         one or more of the provisions of this Agreement shall be invalid,
         illegal or unenforceable in any respect for any reason, the validity,
         legality or enforceability of any such provisions in every other
         respect and of the remaining provisions of this Agreement shall not be
         impaired.

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                  (c) This Agreement shall be governed by and interpreted in
         accordance with the laws of the State of Colorado (without giving
         effect to any choice of law provisions).

                  (d) This Agreement may only be amended by a written instrument
         signed by the parties hereto which makes specific reference to the
         Agreement.

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has executed this
Agreement as of the date and year first written above.

                                        VAIL BANKS, INC.

                                        By: /s/ Gary S. Judd
                                           ---------------------------------
                                                Gary S. Judd, President & CEO


                                        WESTSTAR BANK

                                        By: /s/ Lisa M. Dillon
                                           ----------------------------------
                                                Lisa M. Dillon, Vice Chairman


                                        EXECUTIVE


                                        /s/ Raymond E. Verlinde
                                        -------------------------------------
                                        RAYMOND E. VERLINDE



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