Exhibit 10.1


    
      
        

      

    

     

    Exhibit
      10.1

     

    

      NOTICE

      


      This
        Restricted Stock Award Agreement (“Agreement”) will be valid only if the Grantee
        executes and delivers this Agreement and the attached Stock Power of Attorney
        to
        Vail Banks, Inc., Attn: Lisa M. Dillon on or before November
        1, 2005.

       

      


      RESTRICTED
        STOCK AWARD AGREEMENT

      under
        the

      VAIL
        BANKS, INC. 

      AMENDED
        AND RESTATED STOCK INCENTIVE PLAN

      


       

      THIS
        AGREEMENT, made and entered into as of the 24th day of October 2005, by and
        between Vail Banks, Inc. (“the “Company”) and Dan E. Godec (“Grantee”).


       

      WITNESSETH
        THAT:

       

      WHEREAS,
        the Company maintains the Vail Banks, Inc. Amended and Restated Stock Incentive
        Plan (the “Plan”), and the Grantee has been selected by the Committee to receive
        a Restricted Stock Award under the Plan; 

       

      NOW,
        THEREFORE, IT IS AGREED, by and between the Company and the Grantee, as follows:
        

       

      


      
        	 	
                1.

              	
                Award
                  of Restricted Stock

              


      

       

      1.1   The
        Company hereby grants to the Grantee an award of 2,000 Shares of restricted
        stock (“Restricted Stock”), subject to, and in accordance with, the
        restrictions, terms and conditions set forth in this Agreement. The grant
        date
        of this award of Restricted Stock is October 24, 2005(“Grant Date”).


       

      1.2   This
        Agreement shall be construed in accordance and consistent with, and subject
        to,
        the provisions of the Plan (the provisions of which are incorporated herein
        by
        reference) and, except as otherwise expressly set forth herein, the capitalized
        terms used in this Agreement shall have the same definitions as set forth
        in the
        Plan. 

       

      
        	 	
                2.

              	
                Restrictions

              


      

       

      2.1    Subject
        to Sections 2.2, 2.3, and 2.4 below, if the Grantee remains employed by the
        Company, the Grantee shall become vested in the Restricted Stock as follows:
        10%
        of the Shares of Restricted Stock (rounded down to the next whole share)
        shall
        vest on each anniversary (each such date shall be a “Vesting Date”) of the Grant
        Date, such that on October 25, 2015 (“Final Vesting Date”) all of the Shares of
        Restricted Stock shall be fully vested. On each Vesting Date, Grantee shall
        own
        the Vested Shares of Restricted Stock free and clear of all restrictions
        imposed
        by this Agreement (except those imposed by Section 3.4 below). For purposes
        of
        this Agreement, employment with any Subsidiary of the Company, or service
        as a
        Director of the Company or any Subsidiary of the Company, shall be considered
        employment with the Company.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      2.2    In
        the
        event, prior to the Final Vesting Date, (i) Grantee dies while actively employed
        by the Company, (ii) Grantee’s employment is terminated by reason of Disability,
        (iii) Grantee’s employment is terminated by the Company other than for Cause (as
        defined in Section 2(e) of the Plan),or (iv) Grantee terminates Grantee’s
        employment for Good Reason (as defined in Section 2.5 below), the Restricted
        Stock shall become fully vested and nonforfeitable as of the date of Grantee’s
        death, Disability or termination of employment. The Company shall deliver
        certificate(s) for the Restricted Stock, free and clear of any restrictions
        imposed by this Agreement (except for Section 3.4) to Grantee (or, in the
        event
        of death, his surviving spouse or, if none, to his estate) as soon as practical
        after Grantee’s date of death or termination for Disability, termination without
        Cause, or termination for Good Reason. If Grantee terminates Grantee’s
        employment without Good Reason or if the Company terminates Grantee for Cause,
        the Restricted Stock shall cease to vest further and Grantee shall only be
        entitled to the Restricted Stock that is vested as of his date of
        termination.

       

      2.3    Notwithstanding
        the other provisions of this Agreement, in the event of a Change in Control
        prior to Grantee’s Final Vesting Date, the Restricted Stock shall become fully
        vested and nonforfeitable as of the date of the Change in Control. On the
        date
        of the Change in Control, the Company shall deliver to Grantee a certificate(s)
        for the Restricted Stock, free and clear of any restrictions imposed by this
        Agreement. 

       

      2.4    The
        Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
        encumbered prior to the date Grantee becomes vested in the Restricted Stock.
        

       

      2.5    For
        purposes of this Section 2, “Good Reason” shall mean 

       

      (i)    the
        assignment to Grantee of any duties inconsistent with Grantee’s positions,
        duties, responsibilities and status with the Company, its subsidiaries and
        affiliates as of the date hereof, or a change in Grantee’s reporting
        responsibilities, titles or offices which were in effect as of the date hereof,
        or any removal of Grantee from, or any failure to re-elect Grantee to, any
        of
        such positions, except in connection with the termination of Grantee’s
        employment by the Company for Cause or as a result of Grantee’s death or
        Disability or termination by Grantee other than for Good Reason;

       

      (ii)    a
        reduction by the Company in Grantee’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
        Grantee annual salary increases consistent with performance review ratings
        as
        compared with other employees of the same or similar rank;

       

      (iii)    a
        failure
        by the Company to continue to cover Grantee under an annual bonus program
        comparable to the annual bonus program provided to Grantee as of the date
        hereof;

       

      (iv)    the
        Company’s requiring that Grantee be based anywhere other than the Company’s
        offices in the Telluride, Colorado area, except for required travel on Company
        business to an extent substantially consistent with Grantee’s present business
        travel obligations, or in the event that Grantee consents to any such
        relocations, the failure by the Company to pay (or reimburse Grantee for)
        all
        reasonable moving expenses incurred by Grantee; or

       


      
        
          
          

        

        
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        (v)    the
          failure by the Company 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 Grantee is participating at the date hereof, the taking of any action
          by
          the Company which would adversely affect Grantee’s participation in or
          materially reduce Grantee’s benefits under any of such plans or deprive Grantee
          of any material fringe benefit or perquisite enjoyed by Grantee at the
          date
          hereof, or the failure by the Company to provide Grantee with the number
          of paid
          personal days to which Grantee is then entitled in accordance with the
          policies
          in effect on the date hereof. 

        


      

      
        	 	
                3.

              	
                Stock;
                  Dividends; Voting

              


      

       

      3.1    Upon
        delivery to the Company of the executed Stock Powers attached hereto, the
        Company shall register on the Company books stock certificate(s) evidencing
        the
        shares of Restricted Stock in the name of the Grantee. Physical possession
        or
        custody of such stock certificate(s) shall be retained by the Company until
        such
        time as the shares of Restricted Stock are fully vested in accordance with
        Section 2. While in its possession, the Company reserves the right to place
        a
        legend on the stock certificate(s) restricting the transferability of such
        certificates and referring to the terms and conditions (including forfeiture)
        of
        this Agreement and the Plan. Upon forfeiture of all or a portion of the shares
        of Restricted Stock, the stock certificate(s) held on behalf of the Grantee
        shall be transferred to the Company pursuant to the executed Stock Power
        described above.

       

      3.2    During
        the period the Restricted Stock is not vested, the Grantee shall be entitled
        to
        receive dividends and/or other distributions declared on such Restricted
        Stock
        and Grantee shall be entitled to vote such Restricted Stock. 

       

      3.3    In
        the
        event of a change in capitalization, the number and class of shares of
        Restricted Stock or other securities that Grantee shall be entitled to, and
        shall hold, pursuant to this Agreement shall be appropriately adjusted or
        changed to reflect the change in capitalization, provided that any such
        additional shares of Restricted Stock or additional or different shares or
        securities shall remain subject to the restrictions in this Agreement. If
        additional shares of common stock of the Company or another corporation,
        or
        other consideration is issued in connection with the Restricted Stock at
        a time
        at which the restrictions specified in this Agreement have not lapsed, the
        Grantee shall execute and deliver to the Committee additional Stock Power(s)
        of
        Attorney with respect to any such shares of stock, deliver to the Committee
        the
        stock certificates representing such shares, and forward to the Committee
        any
        such other consideration. Such stock certificates and/or other consideration
        shall be retained by the Company and shall be credited to the account of
        the
        Grantee and shall be distributed to the Grantee, subject to forfeiture and
        the
        other terms and conditions of this Agreement and the Plan, at the same time
        as
        the shares of Restricted Stock are to be distributed free of all
        restrictions.

       

      3.4    The
        Grantee represents and warrants that Grantee is acquiring the Restricted
        Stock
        for investment purposes only, and not with a view to distribution thereof.
        The
        Grantee is aware that the Restricted Stock may not be registered under the
        federal or any state securities laws and that, in addition to the other
        restrictions on the Restricted Stock, the shares will not be able to be
        transferred unless an exemption from registration is available. By making
        this
        award of Restricted Stock, the Company is not undertaking any obligation
        to
        register the Restricted Stock under any federal or state securities
        laws.

       


      
        
          
          

        

        
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              	4.	
                No
                  Right to Continued
                  Employment

              


      

       

      Nothing
        in this Agreement or the Plan shall be interpreted or construed to confer
        upon
        the Grantee any right with respect to continuance of employment by the Company
        or a subsidiary, nor shall this Agreement or the Plan interfere in any way
        with
        the right of the Company or a Subsidiary to terminate the Grantee’s employment
        at any time, subject to Grantee’s rights under this Agreement. 

       

      
        	 	
                5.

              	
                Taxes
                  and Withholding

              


      

       

      The
        Grantee shall be responsible for all federal, state and local income taxes
        payable with respect to this award of Restricted Stock and any employment
        taxes
        payable by Grantee as an employee. The Grantee shall have the right to make
        such
        elections under the Internal Revenue Code of 1986, as amended, as are available
        in connection with this award of Restricted Stock, including a Section 83(b)
        election. The Company and Grantee agree to report the value of the Restricted
        Stock in a consistent manner for federal income tax purposes. The Company
        shall
        have the right to retain and withhold from any payment of Restricted Stock
        the
        amount of taxes required by any government to be withheld or otherwise deducted
        and paid with respect to such payment. At its discretion, the Company may
        require Grantee to reimburse the Company for any such taxes required to be
        withheld and may withhold any distribution in whole or in part until the
        Company
        is so reimbursed. In lieu thereof, the Company shall have the right to withhold
        from any other cash amounts due to Grantee an amount equal to such taxes
        required to be withheld or withhold and cancel (in whole or in part) a number
        of
        shares of Restricted Stock having a market value not less than the amount
        of
        such taxes. 

       

      
        	 	
                6.

              	
                Grantee
                  Bound By The Plan

              


      

       

      The
        Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be
        bound
        by all the terms and provisions thereof. 

       

      
        	 	
                7.

              	
                Modification
                  of Agreement

              


      

       

      This
        Agreement may be modified, amended, suspended or terminated, and any terms
        or
        conditions may be waived, but only by a written instrument executed by the
        parties hereto. 

       

      
        	 	
                8.

              	
                Severability

              


      

       

      Should
        any provision of this Agreement be held by a court of competent jurisdiction
        to
        be unenforceable or invalid for any reason, the remaining provisions of this
        Agreement shall not be affected by such holding and shall continue in full
        force
        in accordance with their terms. 

       

      
        	 	
                9.

              	
                Governing
                  Law 

              


      

       

      The
        validity, interpretation, construction and performance of this Agreement
        shall
        be governed by the laws of the State of Colorado without giving effect to
        the
        conflicts of laws principles thereof. 

       


      
        
          
          

        

        
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              	10.	
                Successors
                  in Interest

              


      

       

      This
        Agreement shall inure to the benefit of, and be binding upon, the Company
        and
        its successors and assigns, and upon any person acquiring, whether by merger,
        consolidation, reorganization, purchase of stock or assets, or otherwise,
        all or
        substantially all of the Company’s assets and business. This Agreement shall
        inure to the benefit of the Grantee’s legal representatives. All obligations
        imposed upon the Grantee and all rights granted to the Company under this
        Agreement shall be final, binding and conclusive upon the Grantee’s heirs,
        executors, administrators and successors. 

       

      
        	 	
                11.

              	
                Resolution
                  of Disputes 

              


      

       

      Any
        dispute or disagreement which may arise under, or as a result of, or in any
        way
        relate to the interpretation, construction or application of this Agreement
        shall be determined by the Committee. Any determination made hereunder shall
        be
        final, binding and conclusive on the Grantee and the Company for all
        purposes.

       

      IN
        WITNESS WHEREOF, the parties have executed this Agreement as of the date
        first
        above written. 

       

      
        	 	
                VAIL
                  BANKS, INC. 

                 

                 

                 

                By:   
                  /s/ Gary S.
                  Judd                                  
                  

                      
                  Gary S. Judd, President

                 

              
	 	
                GRANTEE:

                 

                 

                 

                 /s/
                  Dan
                  E.Godec                                           
                  

                Dan
                  E. Godec

              


      

      



      
        
          
          

        

        
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      STOCK
        POWER

      


      FOR
        VALUE
        RECEIVED, the undersigned does hereby assign and transfer to
        ____________________________________ _______________________________ (_____)
        shares of the common stock of Vail Banks, Inc. (the “Company”) registered on the
        books of the Company in the name of the undersigned (whether a certificate
        has
        been issued or not), and does hereby irrevocably constitute and appoint
        _________________________________ attorney to transfer said stock on the
        books
        of the Company, with full power of substitution in the premises.

      


      


      DATED:
        ______________________

       

      


       

       

      
        	 	
                  /s/ Dan E.
                  Godec                                             
                  

                Name: Dan E.
                  Godec

              


      

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

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