CHANGE IN CONTROL SEVERANCE PAYMENT AGREEMENT

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Exhibit 10.10

CHANGE IN CONTROL
SEVERANCE PAYMENT AGREEMENT

        This Agreement, made and entered into as of the 9 ^th day of July, 2001, by and between Bank WestStar Bank, a state chartered bank (the "Bank") and a wholly owned subsidiary of Vail Banks, Inc., and Paul M. Ferguson (hereinafter called the "Executive"),

W I T N E S S E T H:

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

        WHEREAS, the Bank wishes to induce the Executive to remain in employment during a possible Change in Control of Vail Banks, Inc. (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 Bank, 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 from time to time by the President of the Bank or the Board of Directors of the Bank. The Executive shall devote his working time and attention to the discharge of his duties with the Bank and its subsidiaries. In addition to the compensation and other benefits provided the Executive by the Bank, 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,

        (A)  not later than 90 days before such Extension Date the Bank 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 Vail Banks, Inc. (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 (i) a reorganization, merger, consolidation, complete liquidation or dissolution of the Company, (ii) the sale or disposition of all or substantially all of the assets of the Company or (iii) 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 of Directors of the Company (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