CHANGE IN CONTROL
                           SEVERANCE PAYMENT AGREEMENT

         This Agreement,  made and entered into as of the 5th day of July, 2000,
by and between VAIL BANKS,  INC., a Colorado  corporation (the  "Company"),  and
Peter G. Williston (hereinafter called the "Executive"),


                              W I T N E S S E T H:

         WHEREAS,  the  Executive  has been hired by the Company and will render
valuable services to the Company and its subsidiaries; and

         WHEREAS,  the  Company  wishes to  induce  the  Executive  to remain in
employment  during a possible  Change in Control of the  Company  (as defined in
Section 3 below) and believes that the execution of this  Agreement will further
its 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 employment with the Company, the parties hereto agree as follows:

         1.       DUTIES AND STATUS OF EXECUTIVE.
                  ------------------------------

         The Executive shall perform such duties and  responsibilities  as shall
be assigned to him by the Chief  Executive  Officer or the Board of Directors of
the Company.  The  Executive  shall devote his working time and attention to the
discharge  of his duties with the Company and its  subsidiaries.  In addition to
the compensation and other benefits  provided the Executive by the Company,  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 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,
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                                    (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(c), 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 first  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  approval  by the  shareholders  of the  Company  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,  at the time of such approval by shareholders,  to the consent
         of any government or governmental agency, the obtaining of such consent
         (either explicitly or implicitly); or

                  (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


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<PAGE>

         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,  and within
         12  months  of the  date of such  Change  in  Control  the  Executive's
         employment is terminated:

                           (i) by the  Company,  other than for Cause,  death or
                  Disability; or

                           (ii) by the Executive for Good Reason,

         then the Executive shall be entitled to payment  (subject to payment of
         all applicable  taxes) of the Severance  Payment described in (b) below
         within  ten (10)  days  after his  termination  of  employment.  If the
         Executive's  employment  is terminated by the Company for Cause or as a
         result of death or Disability, or by the Executive without Good Reason,
         the  Executive  shall  not be  entitled  to  any  payments  under  this
         Agreement;

                  (b) The Severance  Payment to Executive  under  subsection (a)
         above shall be equal to $390,000.00,  minus the difference  between the
         exercise  price  for the  Shares  for  which  the  option  has not been
         exercised under that certain Stock Option Agreement  ("Option"),  dated
         July 5,  2000,  for 10,000  Shares,  and the Fair  Market  Value of the
         Shares subject to the Option on the date of Executive's  termination of
         employment.  If the Option has been exercised in whole or in part prior
         to Executive's date of termination, the difference between the exercise
         price and the Fair Market  Value of the Shares for which the Option has


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<PAGE>

         been exercised on the date of Executive's termination of employment, or
         if greater,  the Fiar Market Value of the Shares on the date  Executive
         sold any such  Shares,  shall  also be used to reduce any  payment  due
         Executive.  If Executive has  otherwise  received  payment  (whether in
         cash, stock or other property) for the value of the Option prior to his
         termination of Employment,  then the amount received by Executive shall
         be used to reduce any payment due  Executive  under this Section 4. The
         Company  shall have the authority in good faith to determine the amount
         due Executive as a Severance Payment pursuant to this Section 4.

                  (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 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.

                  (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 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 twelve  month period  immediately
         after a Change in Control:

                           (i) A material  adverse  alteration  in the nature or
                  status of  Executive's  responsibilities  from those in effect
                  immediately prior to the Change in Control, or

                           (ii)  A  material  reduction  by the  Company  in the
                  Executive's compensation and benefits as in effect on the date
                  hereof  or as the same  may be  increased  from  time to time,
                  except  in  connection   with  a  reduction   for   executives
                  generally.

                  (f) The Company agrees that, if the Executive's  employment is
         terminated  and he is entitled to benefits under Section 4(a), he shall


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<PAGE>

         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.

         5.  NOTICE OF  TERMINATION.  Any  termination  by the Company or by the
Executive  of the  Executive's  employment  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.

         6.       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  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.

         7.       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


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<PAGE>

         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.

                  (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/ Lisa M. Dillon
                                         Lisa M. Dillon, President and CEO


                                 EXECUTIVE


                                  /s/ Peter G. Williston
                                 Name:  Peter G. Williston