Document:

Exhibit 10.2

    
      

    

     

    Exhibit
      10.2

     

    

      CHANGE
        IN CONTROL

      SEVERANCE
        PAYMENT AGREEMENT

      

      This
        Agreement, made and entered into as of the 22nd
        day of
        August, 2005, by and between Vail Banks, Inc. and WestStar Bank (collectively
        referred to as the “Company”), and Brady Burt (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 

       

      WHEREAS,
        the Company desires to retain the Executive during a possible Change in Control
        of the Company (as defined in Section 3) 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
        continuation in his present employment with Company, the parties hereto agree
        as
        follows:

       

      1.         
        Duties
        and Status of Executive.
        

       

      The
        Executive shall perform such duties and responsibilities for the Company
        as
        shall be assigned to him by Raymond E. Verlinde, Senior Executive Vice President
        and Chief Administrative Officer. The Executive shall devote his working
        time
        and attention to the discharge of his duties with the Company. In addition
        to
        the compensation and other benefits provided to 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 one year that
        expires on the first 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; 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 Bank terminates the employment of the Executive for
        Cause (as defined in Section 4(c)), and

       

      (ii)         
        whether
        or not the Bank 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’s Common Stock Outstanding")
        or the
        voting securities of the Company then outstanding entitled to vote generally
        in
        the election of directors (the "Company’s 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’s Common Stock Outstanding or
        twenty-five percent (25%) or more of the combined voting power of the Company’s
        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’s Common Stock Outstanding or
        twenty-five percent (25%) or more of the combined voting power of Company’s
        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

       

      (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 

       

      
        
           

        

        
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      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’s Common Stock Outstanding and Company’s 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’s Common Stock Outstanding and
        Company’s 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 receive (subject to withholding of all applicable
        taxes) the severance payments described in (b) below 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)         
        If
        the
        Executive becomes eligible for benefits under Section 4(a) above, the Bank
        shall
        pay or provide to the Executive a lump sum payment within thirty (30)

       

      
        
           

        

        
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      days
        of
        such termination (subject to withholding of all applicable taxes) (A) an
        amount
        equal to his base annual salary (for purposes of this Agreement, “base annual
        salary” shall mean Executive’s base salary at the highest rate in effect during
        the six months prior to his termination), plus (B) 100% of the incentive
        payment
        Executive would have received for the year during which the Change in Control
        occurs under the Company’s annual incentive plan, assuming the target level of
        performance had been met for such year;  

       

      (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 his 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.
        

      

      (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)         
        An
        adverse diminution in Executive’s job functions, duties or responsibilities, or
        a similar adverse change in Executive’s reporting relationships.

       

      (ii)         
        A
        reduction by the Company 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
        his
        annual salary increases consistent with performance review ratings as compared
        with other employees of the same or similar rank.

       

      
        
           

        

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

       

      (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 the Executive is participating at the time of a Change in Control of
        the
        Company, the taking of any action by the Company 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 the Company 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 of its obligations under this Agreement or any purported
        termination by the Company 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 agrees 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).

       

      5.         
        Notice
        of Termination.
        Any
        termination by the Company or by the Executive of the Executive’s employment
        with the Company 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.

       

      
        
           

        

        
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      6.         
        Litigation
        Expenses; Indemnification and Insurance.
        

       

      (a)         
        If the Company involuntarily terminates Executive other than for Cause, death
        or
        Disability or Executive terminates his employment for Good Reason, then,
        in the
        event Executive incurs legal fees and other expenses in seeking to obtain
        or to
        enforce any rights or benefits provided by this Agreement and is successful
        to a
        significant extent in obtaining or enforcing any such rights or benefits
        through
        settlement, mediation, arbitration or otherwise, the Company shall promptly
        pay
        Executive’s reasonable legal fees and expenses and related costs incurred in
        enforcing this Agreement including, without limitation, attorneys fees and
        expenses, experts fees and expenses, and investigative fees. Except to the
        extent provided in the preceding sentence, each party shall pay its own legal
        fees and other expenses associated with any dispute under this
        Agreement.

       

      (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 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 

       

      
        
           

        

        
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      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.

       

      (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.

       

      
        
           

        

        
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      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 

              
	 	
                 

                Its:
                  President and Chief Executive Officer

                 

              
	 	
                 

                 

                EXECUTIVE

                 

                /s/
                  Brady
                  Burt                         
                  

                Brady
                  Burt

              

      

      
 

       

       

       

       

      8EXHIBIT 10.16

 

Summary of Fiscal Year 2006 Executive Officer Salaries and Performance Bonus Eligibility (Other than the Chief Executive Officer)       

 

           On
August 19, 2005, the Compensation Committee of the Board of Directors of registrant
approved annual salaries and eligibility for performance bonuses based on achievement of
various criteria to the executive officers of registrant listed below as follows: 

 

	 	
Jitendra
N. Doshi, the CFO and COO, receive an annual salary of $200,000 (for fiscal year 2006 and
effective as of April 1, 2005), and be eligible for a performance bonus of up to 30% of
salary based on achievement of various criteria during fiscal year 2006.  

	 	
Robert
Kurkiewicz, the Senior Vice President-Technical receive an annual salary of $152,500 (for
fiscal year 2006 and effective as of April 1, 2005), and be eligible for a performance
bonus of up to 23% of salary based on achievement of various criteria during fiscal year
2006. 

	 	
Gurpartap
Singh Sachdeva, the Vice President – Sales & Marketing, receive an annual salary
of $175,500 (for fiscal year 2006 and effective as of April 1, 2005), and be eligible for
a performance bonus of up to 25% of salary based on achievement of various criteria
during fiscal year 2006. 

 

 

3

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