EXHIBIT 10.1
 

February 5, 2009

Mr. Kevin M. Killips
PrivateBancorp, Inc.
120 South LaSalle Street
Suite 400
Chicago, Illinois 60603

Dear Kevin:
 
Please find enclosed a term sheet agreement setting forth the terms of your
employment and compensation with PrivateBancorp, Inc. (“PrivateBancorp”).
 
The offer to execute this term sheet agreement will remain open for your
acceptance until 5:00 p.m. (C.S.T.), Sunday, February 8, 2009.  Please signify
your acceptance of this offer by signing as indicated below.  If you do not sign
and return your acceptance of the term sheet agreement by such date and
time.  You may return this offer letter to our the attention of our outside
counsel, Tom Desmond at Vedder Price, at the following confidential fax
312.609.5005 or by e-mail at tdesmond@vedderprice.com.
 
You will be an important member of the PrivateBancorp management team, we are
counting on your efforts during this exciting period for our company.  We look
forward to your contributions and our success together.
 
Sincerely,

PrivateBancorp, Inc.

/s/ Larry D. Richman

Larry D. Richman
President and Chief Executive Officer

Accepted:

/s/ Kevin M. Killips
_______________________________________________       Date: February 6, 2009
Kevin M. Killips
 
 

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KEVIN M. KILLIPS
 
Position
 
 
Chief Financial Officer of PrivateBancorp, Inc. (the “Holding Company”) and The
PrivateBank and Trust Company (the “Bank”), reporting to the Chief Executive
Officer of the Holding Company. You may also be required to serve as an officer
of one or more of our other subsidiaries.  Your employment shall commence on a
mutually agreeable date which is as promptly as practicable after your
acceptance of this letter.  Your appointment as Chief Financial Officer (and
principal financial officer) will not be effective until March 6, 2009, or such
earlier or later date as may be mutually agreed.
     
Base Salary
 
$380,000, subject to increase, but not decrease from time to time (other than
permitted proportionate reductions applicable to all similarly situated senior
executives of the Holding Company or the Bank, unless such reduction occurs
during the two-year period commencing upon the occurrence of a Change of
Control), in the sole discretion of the Holding Company, and any such increased
(or decreased) amount shall mean “Base Salary” for purposes of this term sheet
agreement.
     
Annual Bonus
 
Annual target bonus percentage of 90% of Base Salary.  For 2009, your target
bonus will be based upon your full year’s base salary.
     
Equity Awards; Cash  Signing Bonus
 
Upon your commencement date, you will receive an equity award of stock options
and shares of restricted stock under the PrivateBancorp, Inc. 2007 Incentive
Compensation Plan to compensate you for equity awards you will forfeit upon
leaving your current employer and as going forward long-term incentive
compensation.    You will also receive a cash signing bonus of $50,000, payable
with your first paycheck.
 
The number of stock options and restricted shares shall be determined on the
date of grant such that the 123R value of the restricted stock granted to
compensate you for the forfeited equity awards will equal $500,000 (we will
refer to these restricted shares as your “make-whole award”) and the 123R value
of the incentive award will equal $500,000, split evenly between stock options
and restricted shares.  The awards will be subject to time vesting requirements
only, all as more particularly described on Attachment A hereto.
 
If, prior to the date on which your make-whole award is fully vested, your
employment is terminated due to your death or Disability (as defined in the
award agreement), your employment is involuntarily terminated by the Holding
Company without Cause or voluntarily terminated by you for Good Reason, the

 
 

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unvested portion of the make whole award will become fully vested. Otherwise,
the effect of termination of employment on your awards will be governed by the
standard award agreements applicable to our annual long-term awards.
 
You will become fully vested in any unvested portion of your make-whole award
and incentive award upon the occurrence of a Change of Control.
 
To the extent that the Holding Company has or hereafter enters into a
broker-assisted (FRB Reg. T) cashless exercise program for stock option awards
to employees of the Holding Company or its subsidiaries, the stock option award
will be included in such program.
 
The restricted shares and stock options will be subject to the terms and
conditions of the 2007 Plan provided, however, that with respect to the terms
and conditions described above, if there is a conflict between this term sheet
agreement and the equity incentive plan and/or an award agreement thereunder,
the document that is more favorable to you will control.
 
You will be eligible for future equity awards from time to time, in accordance
with the terms of the Holding Company’s incentive plans as then in effect, in
such amount, if any, as is determined in the sole discretion of the Compensation
Committee.
 
“Cause,” “Good Reason” and “Change of Control” are defined on Attachment B.
 
Benefits; Perquisites
 
You are eligible to participate in the Bank’s various benefit programs as are
currently in effect, subject to the terms of such programs and the Bank’s right
to amend or terminate such programs.  Current benefits include medical and
dental insurance plans, the flexible benefits plan, the PrivateBancorp, Inc.
Savings, Retirement and Employee Stock Ownership Plan, life insurance,
accidental death and dismemberment insurance and long term disability insurance.
 
You will also continue to be furnished with such perquisites which may from time
to time be provided by the Holding Company and the Bank which are suitable to
your position and adequate for the performance of your duties hereunder and
reasonable in the circumstances.  Such perquisites include, but are not limited
to, reimbursement for dues at one approved country club and one approved
luncheon club in the Chicago Metropolitan area.

 
 
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Vacation
 
Standard Bank vacation policy, but not less than 4 weeks per calendar year.
     
Severance Benefits (Termination without Cause or for Good Reason) (prior to, or
more than 2 years after, a Change of Control)
 
Upon an involuntary termination of your employment by the Holding Company
without Cause or voluntary termination of employment by you for Good Reason, you
will receive:
 
(i)  A pro rata bonus based on your prior year’s bonus (if any) and the number
of days elapsed during the year in which the date of termination occurs (or
based on your 2009 target bonus if such termination occurs before 2009 bonus
amounts are determined) (the “Pro Rata Bonus”);
 
(ii)  Severance payments equal to 100% of the sum of (A) your Base Salary
(disregarding any reduction of your Base Salary constituting Good Reason), plus
(B) the average of the sum of the bonus amounts earned by you with respect to
the 3 calendar years (or such fewer number of years as you have been employed)
immediately preceding the calendar year in which your date of termination occurs
(or based on your 2009 target bonus if such termination occurs before the 2009
bonus amounts are determined), payable in substantially equal monthly
installments for a period of 12 months in accordance with the Bank’s regular
payroll practices;
 
(iii)  Continuation for 12 months of your  right to maintain COBRA continuation
coverage under the applicable Bank plans at premium rates on the same
“cost-sharing” percentage basis as the applicable premiums paid for such
coverage by active Bank employees as of your date of termination; and
 
(iv)  Base Salary earned but not paid and vacation accrued and unused through
your termination date, any annual bonus that is earned in a fiscal year
preceding the fiscal year of your termination but not paid as of the termination
date, and such other earned but unpaid amounts under the employee benefit plans
in which you participate as of the termination date that are payable to you in
accordance with the terms thereof, (collectively “Accrued Obligations”).
 
Any payments and benefits to you under this Severance Benefits section of this
term sheet agreement shall not be reduced by the amount of any compensation or
benefits earned as a result of your subsequent employment.

 
 
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Change of Control Severance
 
 
For the period commencing six months prior to a Change of Control and ending on
the second anniversary of such Change of Control that occurs on or before that
date, upon an involuntary termination of your employment by the Holding Company
without Cause or voluntary termination of employment by you for Good Reason at
or after a Change of Control, you will receive:
 
(i)  The Pro Rata Bonus;
 
(ii)  Severance equal to 200% of the sum of (A) your Base Salary (disregarding
any reduction of your Base Salary constituting Good Reason), plus (B) the
greater of (x) your prior year’s bonus (or based on your 2009 target bonus if
such termination occurs before the 2009 bonus amounts are determined) or (y) the
average of the sum of the bonus amounts earned by you with respect to the
3 calendar years (or such fewer number of years as you have been employed)
immediately preceding the calendar year in which your date of termination
occurs, payable in a single lump sum payment within 30 days after the date of
termination, or if your termination of employment occurs within six months prior
to a Change of Control, then within 5 business days after the Change of Control
you will receive a single lump sum payment equal to (p) the amounts due you
under this clause (ii) reduced by (q) the sum of all amounts paid to you under
clause (ii) of Severance Benefits (above in this term sheet agreement), so that
no amount of the lump sum payment under this clause (ii) is duplicative;
 
(iii)  Continuation for 24 months of your right to maintain COBRA continuation
coverage under the applicable Bank plans at premium rates on the same
“cost-sharing” percentage basis as the applicable premiums paid for such
coverage by active Bank employees as of your date of termination;
 
(iv) Outplacement for 12 months; and
 
(v) The Accrued Obligations.
 
Any payments and benefits to you under this Change of Control Severance section
of this term sheet agreement shall not be reduced by the amount of any
compensation or benefits earned as a result of your subsequent employment.

 
 
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TARP
 
Notwithstanding anything in this term sheet agreement or in any compensation
plan, program or arrangement maintained by the Holding Company which covers you
or to which you are a party or in which you participate, or which may become
applicable to you hereafter (collectively, the “Compensation Arrangements”),
each provision of this term sheet and the Compensation Arrangements is amended
and any amounts payable hereunder and thereunder are hereby amended and modified
with respect to you, if and to the extent necessary for the Holding Company to
comply with any requirements of the Emergency Economic Stabilization Act of 2008
(“EESA”) and/or the TARP Capital Purchase Program (“CPP”) (and the guidance or
regulations issued thereunder by the United States Treasury Department at 31 CFR
Part 30, effective October 20, 2008 (the “CPP Guidance”) which may become
applicable to the Holding Company, including, but not limited to, provisions
prohibiting the Holding Company from making any “golden parachute payments,”
providing the Holding Company may recover (“clawback”) bonus and executive
compensation paid to you in certain circumstances, and precluding bonus and
incentive arrangements that encourage unnecessary or excessive risks that
threaten the value of the Holding Company, in each case within the meaning of
EESA and the CPP Guidance and only to the extent applicable to the Holding
Company and you.  For purposes of this paragraph, references to “Holding
Company” means PrivateBancorp, Inc. and any entities treated as a single
employer with PrivateBancorp, Inc. under the CPP Guidance.  You agree to execute
such documents, agreements or waivers as the Holding Company deems necessary or
appropriate to effect such amendments to this term sheet agreement or the
Compensation Arrangements or to facilitate the participation of the Company in
the TARP Capital Purchase Program or any other programs under EESA including any
waivers or acknowledgements applicable to you.
     
Code Section 280G
 
If any payments or benefits constitute “excess parachute payments” (as defined
in Code Section 280G), you will be fully grossed up if such payments and
benefits exceed 330% of your “base amount” (as defined in Code Section
280G).  If such payments and benefits equal 330% or less of your base amount,
payments will be reduced so that you do not receive any excess parachute
payments.

 
 
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Full Satisfaction; Release of Claims
 
Any termination payments made and benefits provided to you under this term sheet
agreement shall be in lieu of any termination or severance payments or benefits
for which you may be eligible under any of the plans, policies or programs of
the Bank or its affiliates.
 
As a condition precedent to the payment of all amounts, benefits and vesting of
equity award as described herein, other than your Accrued Obligations, pursuant
to your involuntary termination of employment without Cause or your voluntary
termination of employment for Good Reason at any time, you shall execute a
waiver and general release of claims, substantially in the form customarily
obtained by the Bank from its terminating executive employees, which waiver and
general release of claims is not revoked during any applicable seven (7) day
revocation period.  For the avoidance of doubt, such waiver and general release
will not adversely affect your ability to enforce the terms of this term sheet
agreement, your indemnification rights under the Bank’s by-laws and this term
sheet agreement, your rights to coverage under the Bank’s directors and officers
liability insurance; your and your covered dependents’ rights to COBRA
continuation coverage, your rights to vested employee benefits, and other rights
that cannot be waived by operation of law.
     
Restrictive Covenants (confidentiality, non-competition, non-solicitation)
 
You will not at any time during or following your employment with the Bank,
directly or indirectly, disclose or use on your behalf or another’s behalf,
publish or communicate, except in the course of your employment and in the
pursuit of the business of the Holding Company and the Bank or any of its
subsidiaries or affiliates, any proprietary information or data of the Holding
Company and the Bank or any of its subsidiaries or affiliates, which is not
generally known to the public or which could not be recreated through public
means and which the Holding Company and the Bank may reasonably regard as
confidential and proprietary.  You recognize and acknowledge that all knowledge
and information which you have or may acquire in the course of your employment,
such as, but not limited to, the business, developments, procedures, techniques,
activities or services of the Holding Company or the Bank or the business
affairs and activities of any customer, prospective customer, individual firm or
entity doing business with the Holding Company or the Bank are their sole
valuable property, and shall be held by you in confidence and in trust for their
sole benefit.  All records of every nature and description which come into
your  possession, whether prepared by you, or otherwise, shall remain the sole
property of the Holding Company or the Bank and upon termination of your

 
 
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employment for any reason, said records shall be left with the Holding Company
or the Bank as part of its property.
 
   
During the period of your employment with the Bank and for a period of 1 year
after termination of your employment for any reason, you will not (except in
your capacity as an employee of the Bank) directly or indirectly, for your own
account, or as an agent, employee, director, owner, partner, or consultant of
any corporation, firm, partnership, joint venture, syndicate, sole
proprietorship or other entity:
 
(i)  engage, directly or indirectly, in any business which has a place of
business (whether as a principal, division, subsidiary, affiliate, related
entity, or otherwise) located within the area encompassed within a 50 mile
radius surrounding your office as of your date of termination that provides
banking products, or that provides non-banking products or services of a type
that accounted for more than 10% of the Holding Company’s gross revenues for the
fiscal year immediately preceding your date of termination, that the Holding
Company or the Bank or any of their subsidiaries or affiliates provide as of
your date of termination;
 
(ii)  solicit or induce, or attempt to solicit or induce any client or customer
of the Holding Company or the Bank or any of their subsidiaries or affiliates
not to do business with the Bank or Holding Company or any of its subsidiaries
or affiliates; or
 
(iii)  solicit or induce, or attempt to solicit or induce, any employee or agent
of the Holding Company or the Bank or any of their subsidiaries or affiliates to
terminate his or her relationship with the Holding Company or the Bank or any of
their subsidiaries or affiliates.
 
The foregoing provisions shall not be deemed to prohibit your ownership, not to
exceed 5% of the outstanding shares, of capital stock of any corporation whose
securities are publicly traded on a national or regional securities exchange or
in the over-the-counter market.
 
You agree that, as the Holding Company’s and the Bank’s sole remedy for any
breach (or threatened breach) of the non-competition covenant at subparagraph
(i) above, respecting your initial restricted stock and stock option award
above:
 
(x) you will immediately forfeit all unexercised stock options (whether then
vested or unvested) then held by you, all shares of stock of the Holding Company
(or any successor) acquired upon

 
 
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the exercise of vested stock options and then held by you, and all shares of
restricted stock (whether vested or unvested, restricted or unrestricted) then
held by you;
 
(y) you will immediately repay to the Holding Company a cash sum in the
principal amount equal to all gross proceeds (before-tax) realized by you upon
the sale or other disposition of shares of stock of the Holding Company (other
than shares relating to open market purchases by you) occurring at any time
during the period commencing on the date that is three years before the date of
termination of your employment and ending on the date that the noncompetition
covenant lapses (“Refund Period”) , together with interest accrued thereon, from
the date of such breach or threatened breach, at the prime rate (compounded
calendar monthly) as published from time to time in The Wall Street Journal,
electronic edition (“Interest”); and
 
(z) you will repay to the Holding Company a cash sum equal to fair market value
of all shares of stock of the Holding Company (other than shares relating to
open market purchases by you) and all stock options transferred by you as gifts
at any time during the Refund Period, together with Interest,  and for which
purpose, “fair market value” per share of stock shall be the closing price of
one share of Holding Company common stock on the date such gift occurs and per
stock option shall be the positive difference, if any, between the fair market
value of a share of stock, above, and the stock option exercise price.
 
You further agree that a breach (or threatened breach) of the confidentiality
and/or non-solicitation covenants in subparagraphs (ii) and (iii) above will
result in irreparable harm to the business of the Holding Company and the Bank,
a remedy at law in the form of monetary damages for any breach (or threatened
breach) by you of these covenants is inadequate, in addition to any remedy at
law or equity for such breach, the Holding Company and the Bank shall be
entitled to institute and maintain appropriate proceedings in equity, including
a suit for injunction to enforce the specific performance by you of such
obligations and to enjoin you from engaging in any activity in violation
thereof, and the covenants on your part contained above shall be construed as
agreements independent of any other provisions in this term sheet agreement, and
the existence of any claim, setoff or cause of action by you against the Holding
Company or the Bank, whether predicated on this term sheet or otherwise, shall
not constitute a defense or bar to the specific enforcement by the Holding
Company or the Bank of said covenants.
 

 
 
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In the event of a breach or a violation by you of any of the covenants and
provisions above, the running of the non-compete period (but not your
obligations thereunder) shall be tolled during the period of the continuance of
any actual breach or violation.
 
You agree that the covenants above are reasonable with respect to their
duration, geographical area and scope.  If the final judgment of a court of
competent jurisdiction declares that any term or provision above is invalid or
unenforceable, you agree that the court making the determination of invalidity
or unenforceability shall have the power to reduce the scope, duration or area
of the term or provision, to delete specific words or phrases, or to replace an
invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this term sheet agreement shall
be enforceable as so modified after the expiration of the time within which the
judgment may be appealed.
 
Your Representations
 
You represent that except as otherwise previously disclosed in writing to the
Holding Company, you are not a party to any confidentiality, non-competition or
non-solicitation agreement or understanding, whether written or oral, with any
prior employer that would prevent you from entering into an employment
relationship with the Holding Company or Bank, or prevent or restrict your
ability to fulfill your obligations as an employee of the Holding Company or
Bank.  You further represent that you have not and will not take or retain any
confidential information or trade secrets (whether in hard copy or electronic
format) from any previous or current employer prior to assuming your position at
the Holding Company.
     
Indemnification
 
You will be indemnified in accordance with the Holding Company’s bylaws.  You
will also be covered by the Holding Company’s directors and officers liability
insurance coverage as in effect from time to time.
     
Fee Reimbursement
 
You will be reimbursed for up to $5,000 of the professional fees incurred by you
relating to the negotiation and documentation of your employment arrangements.
     
Code Section 409A
 
It is intended that any amounts payable under this term sheet agreement and the
Holding Company’s, the Bank’s and your exercise of authority or discretion
hereunder shall comply with Section 409A of the Code (including the Treasury
regulations and other published guidance relating thereto) so as not to subject
you to the payment of any interest or additional tax imposed under

 
 
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Section 409A of the Code.  To the extent any amount payable under this term
sheet agreement would trigger the additional tax imposed by Code Section 409A,
this term sheet agreement shall be modified to avoid such additional tax.
 
Notwithstanding anything to the contrary set forth herein, any payments and
benefits provided  to you by the Holding Company or Bank that constitute
“deferred compensation” within the meaning of Code Section 409A shall not
commence in connection with your termination of employment unless and until you
have also incurred a “separation from service” (as determined under applicable
regulations under Code Section 409A), unless the Holding Company reasonably
determines that such amounts may be provided to you without causing you to incur
the additional 20% tax under Section 409A.  If you are deemed on the date of
“separation from service” to be a “specified employee” within the meaning of
that term under Code Section 409A(a)(2)(B), then, solely to the extent necessary
to avoid the incurrence of adverse personal tax consequences under Section 409A,
with regard to any payment or the provision of any benefit in connection with
your separation from service which constitutes “deferred compensation”, such
payment or benefit shall be made or provided at the date which is the earlier of
(A) the expiration of the six (6)-month period measured from the date of such
“separation from service,” and (B) the date of your death (the “Delay
Period”).  Upon the expiration of the Delay Period, all payments and benefits
delayed pursuant to this requirement (whether they would have otherwise been
payable in a single sum or in installments in the absence of such delay) shall
be paid or reimbursed to you in a lump sum, and any remaining payments and
benefits due shall be paid or provided in accordance with the normal payment
dates specified for them.
 
Any expense, tax or other reimbursement payment made pursuant to this term sheet
agreement or any plan, program, agreement or arrangement of the Holding Company
or Bank in which you participate shall be made on or before the last day of the
taxable year following the taxable year in which such expense, tax or other
payment to be reimbursed was incurred.
 
Board Approval
 
The Holding Company and the Bank represent and warrant to you that they have
taken all corporate action necessary to authorize and to enter into this term
sheet agreement.

 
 
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Entire Understanding; Amendment
 
This term sheet agreement constitutes the entire understanding between the
Holding Company, the Bank, and you relating to your employment hereunder and
supersedes and cancels all prior written and oral understandings and agreements
with respect to such matters entered into prior to the date of your acceptance
of this term sheet agreement.  This term sheet agreement shall not be amended or
modified except by written instrument executed by the Holding Company or Bank
and you.
     
Binding Agreement
 
This term sheet agreement shall be binding upon and inure to the benefit of the
heirs and representatives of you and the successors and assigns of the Holding
Company and the Bank.
     
Governing Law
 
Illinois.

 
 
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ATTACHMENT A
 
PRIVATEBANCORP, INC. EQUITY AWARD DESIGN
 

 
EQUITY GRANT FEATURE
MAKE-WHOLE RESTRICTED
STOCK AWARD
INCENTIVE AWARD:
RESTRICTED STOCK
INCENTIVE AWARD:
STOCK OPTIONS
 
1.
123R Value at Grant
 
●
$500,000
●
$250,000
●
$250,000
2.
Time Vesting Schedule
●
1/3rd on second payroll date following your start date; 1/3 on the first
anniversary of your start date and 1/3 on second anniversary or your start date
●
25% on each of the first four anniversaries of the start date.
●
25% on each of the first four anniversaries of the start date.

 
 
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ATTACHMENT B
 
DEFINITIONS
 
“Cause” shall mean (A) your willful and continued (for a period of not less than
10 business days after written notice thereof during which you may remedy such
failure if capable of remedy) failure to perform substantially the duties of
your employment (other than as a result of physical or mental incapacity, or
while on vacation or other approved absence) which are within your control (mere
inability to achieve financial or other performance targets or objectives,
alone, shall not constitute such a willful and continued failure); or (B) your
willful engaging in illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Holding Company or the Bank; or (C) your
conviction of a felony involving moral turpitude, but specifically excluding any
conviction based entirely on vicarious liability (with “vicarious liability”
meaning liability based on acts of the Holding Company or the Bank for which you
are charged solely as a result of your offices with the Bank and in which you
were not directly involved and did not have prior knowledge of such actions or
intended actions); provided, however, that no act or failure to act, on your
part, shall be considered “willful” unless it is done, or omitted to be done, by
you in bad faith or without reasonable belief that your action or omission was
in the best interests of the Holding Company or the Bank; and provided further
that no act or omission by you shall constitute Cause hereunder unless you have
been given detailed written notice thereof, and you have failed to remedy such
act or omission.
 
“Good Reason” shall mean the occurrence, other than in connection with a
discharge, of any of the following without your consent:  (A) a reduction in
your Base Salary, target annual bonus opportunity (other than a proportionate
reduction applicable to all executives of the Holding Company, unless such
reduction occurs during the two-year period commencing on the occurrence of a
Change of Control)  and/or the number of shares of restricted stock or number of
stock options to be granted as your make whole or incentive equity award, or
(B) your being required to be based at an office or location which is more than
50 miles from the Holding Company’s current headquarters, or (C) a diminution in
your reporting responsibilities following which you do not report directly to
the Chief Executive Officer or your removal as Chief Financial Officer of the
Holding Company or the failure to appoint you as, or your subsequent removal as,
a member of the most senior management council of the Holding Company (to the
extent such council exists), or (D) the failure of a successor to assume the
obligations of the Holding Company under this term sheet agreement (to the
extent not otherwise assumed by operation of law).  You must provide written
notice to the Holding Company of the existence of Good Reason no later than 90
days after its initial existence, and the Holding Company shall have a period of
30 days following its receipt of such written notice during which it may remedy
in all material respects the Good Reason condition identified in such written
notice.
 
“Change of Control” shall be deemed to have occurred upon the happening of any
of the following events:
 
(i)           Any “person” (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (“Exchange Act”)), other than
(A) a trustee or other fiduciary holding securities under an employee benefit
plan of PrivateBancorp, Inc. (the “Company”) or any of its subsidiaries, or (B)
a corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the
 
 
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Company representing 30%  or more of the total voting power of the then
outstanding shares of capital stock of the Company entitled to vote generally in
the election of directors (the “Voting Stock”), provided, however, that the
following shall not constitute a change in control:  (1) such person becomes a
beneficial owner of 30% or more of the Voting Stock as the result of an
acquisition of such Voting Stock directly from the Company, or (2) such person
becomes a beneficial owner of 30% or more of the Voting Stock as a result of the
decrease in the number of outstanding shares of Voting Stock caused by the
repurchase of shares by the Company; provided, further, that in the event a
person described in clause (1) or (2) shall thereafter increase (other than in
circumstances described in clause (1) or (2)) beneficial ownership of stock
representing more than 1% of the Voting Stock, such person shall be deemed to
become a beneficial owner of 30% or more of the Voting Stock for purposes of
this paragraph (i), provided such person continues to beneficially own 30% or
more of the Voting Stock after such subsequent increase in beneficial ownership,
or
 
(ii)           Individuals who, as of November 1, 2007, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board, provided that any individual becoming a director, whose election
or nomination for election by the Company’s stockholders was approved by a vote
of at least two-thirds (2/3) of the directors then comprising the Incumbent
Board shall be considered as through such individual were a member of the
Incumbent Board, but excluding for this purpose, any individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Company (as such terms
are used in Rule 14a-11 promulgated under the Exchange Act); or
 
(iii)           Consummation of a reorganization, merger or consolidation or the
sale or other disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case, unless (1) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Voting Stock immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the total
voting power represented by the voting securities entitled to vote generally in
the election of directors of the corporation resulting from the Business
Combination (including, without limitation, a corporation which as a result of
the Business Combination owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately prior to the
Business Combination of the Voting Stock of the Company, and (2) at least a
majority of the members of the board of directors of the corporation resulting
from the Business Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or action of the Incumbent Board,
providing for such Business Combination; or
 
(iv)           Approval by the stockholders of the Company of a plan of complete
liquidation or dissolution of the Company; or
 
(v)           (I) a sale or other transfer of the voting securities of the Bank,
whether by stock, merger, joint venture, consolidation or otherwise, such that
following said transaction the Company does not directly, or indirectly through
majority owned subsidiaries, retain more than 50% of the total voting power of
the Bank represented by the voting securities of the Bank entitled to vote
generally in the election of the Bank’s directors; or (II) a sale of all or
substantially all of the assets of the Bank other than to the Company or any
subsidiary of the Company.
 
 
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