--------------------------------------------------------------------------------

 
July 7, 2008

Mr. Norman R. Bobins
179 E. Lake Shore Drive
Apt. 21E
Chicago, IL  60611

Dear Norm:
 
It is our pleasure to extend to you an offer to become a member of the Board of
Directors of PrivateBancorp, Inc. and to become Chairman and a member of the
Board of Directors of The PrivateBank and Trust Company.  As more fully set
forth in the attached term sheet agreement, you will also be a member of various
Board committees.  As discussed, your compensation includes significant equity
awards consistent with our belief that your leadership will help deliver
significant long term value for our shareholders.  We are very excited about the
prospect of having you join our team, and we would like you to start serving on
the Boards as soon as possible.
 
Please signify your acceptance of this offer by signing as indicated below.  You
may return this offer letter to the following confidential fax 312.683.1888.
 

 
Sincerely,                                                                                     Sincerely,

/s/ Ralph B.
Mandell                                                                 /s/
James M. Guyette

Ralph B.
Mandell                                                                       James
M. Guyette
Chairman                                                                                     Chairman,
Compensation Committee

Accepted:
 
/s/ Norman R.
Bobins                                                                                                Date:
July 7, 2008
Norman R. Bobins

 
 

--------------------------------------------------------------------------------

 

Term Sheet
for
Bank Chairman

Positions
Chairman and a member of the Board of Directors of
The PrivateBank and Trust Company (“Bank”)
Member of the Board of Directors of PrivateBancorp, Inc. (“Holding Company”)
(each a “Board” and collectively the “Boards”)
Shall serve on such committees of the Holding Company and/or the Bank as
mutually agreed by the parties and as determined by the applicable nominating
and governance committee.
 
 
Duties
The Chairman will preside at the meetings of the Board of Directors of the Bank,
and he will be actively involved with the work of the committees for which he
will be a member.  Subject to the requirements of certain obligations with his
prior employer, and his other business, civic and charitable commitments, the
Chairman will be significantly involved in activities to promote the interests
of the Bank.
 
Term
It is the expectation of the Chairman and the Bank that he will undertake these
positions and duties for a minimum of three years.
 
Annual Retainer
The Chairman will receive the same cash retainer and regular equity awards as do
other directors.  In addition, the Chairman will receive such additional cash
payments as may be required for the Chairman’s annual compensation (cash plus
regular director equity) to be $150,000.
 
Stock Options
100,000 options to be granted on the date the Chairman commences Board
membership.  One-half of the options (50,000) will be time vested (33 1/3% on
each of December 31, 2008, December 31, 2009 and December 31, 2010).  One-half
of the options (50,000) will vest on the attainment of the same EPS performance
objectives under the 2007 inducement option awards to senior executives.  See
Exhibit A for further description of the stock option performance vesting
provisions.
 
Chairman will not sell any shares (net of taxes) acquired from these awards
while serving as Chairman.
 
Voluntary Termination:  Upon the Chairman’s voluntary termination from both
Boards, (i) he will become vested in a pro rata portion of the time-vesting
stock options then outstanding equal to the number of completed months during
the vesting period divided by the number of full months necessary to achieve
full vesting of such option, and (ii) if such voluntary termination occurs on or
after January 1, 2009, the Chairman will continue to vest through December 31,
2012 in the unvested portion of the performance stock options and such
previously unvested performance stock options will become exercisable if the
performance vesting conditions relating to the awards are satisfied on any
applicable  performance vesting date that follows the Chairman’s date of
termination; provided, the Chairman will be vested in a minimum number of
performance stock options as equals the product of (“Minimum Vesting”) (x) 5%
multiplied by (y) the number of whole or partial years of service as a member of
the Board  from January 1, 2008 through the date of termination, to the extent
the Chairman had not previously become vested in at least such number of shares
of performance stock options.  If the Chairman voluntarily terminates from both
Boards prior to January 1, 2009, he will forfeit the performance stock options.
 
Good Leaver Termination:  Upon the Chairman’s Good Leaver termination from both
Boards, he will become vested in all time-vesting stock options and will
continue to vest through December 31, 2012 in the unvested portion of the
performance stock options and such previously unvested performance stock options
will become exercisable if the performance vesting conditions relating to the
awards are satisfied on any applicable  performance vesting date that follows
the Chairman’s date of termination; provided, the performance stock options will
be subject to Minimum Vesting.
 
Exercise Period:  Upon a voluntary termination or Good Leaver termination,
vested time-vesting stock options (including time-vesting stock options that
become vested on the date of termination) and then-vested performance stock
options will be exercisable until the later of December 31, 2012 or 1 year after
the Chairman’s date of termination (but not beyond the last day of the stock
option term).  Upon such termination of service, performance stock options that
subsequently become vested upon attainment of the applicable performance
objective will be exercisable until the later of December 31, 2012 or 1 year
after such options become vested (but not beyond the last day of the stock
option term).
 
Restricted Shares
 
$600,000 of fully vested shares of common stock of the Holding Company, granted
and valued (rounded to the next highest 5 whole shares) on the date the Chairman
commences Board membership.
 
Provided he continues to serve as Chairman for 2009 and 2010, the Chairman will
be granted restricted stock awards of $600,000, which will be granted and valued
(rounded up to the next highest 5 whole shares) on the anniversary dates of the
Chairman’s commencement of Board membership if he is a member of the Board on
such dates.  Such grants will vest on the attainment of the same performance
objectives under the 2007 inducement restricted stock awards to executives.  See
Exhibit A for further description of the performance share award vesting
provisions.
 
Chairman will not sell any shares (net of taxes) acquired from these awards
while serving as Chairman.
 
Except as provided in the last sentence of this paragraph, upon the Chairman’s
termination from both Boards (other than termination for Cause), he will
continue to vest through December 31, 2012 in the unvested portion of the
performance restricted stock if the performance vesting conditions relating to
the awards are satisfied on any applicable performance vesting date that follows
the Chairman’s date of termination; provided, the performance shares will be
subject to Minimum Vesting.  Notwithstanding anything in the foregoing to the
contrary, if the Chairman voluntarily terminates his service with both Boards on
or before December 31 of the year in which performance restricted shares are
granted, he will forfeit the performance restricted shares granted in that year.
 
Staff/Clubs
Upon the expiration of his existing arrangements with his prior employer, the
Bank shall cover, until July 7, 2011, the Chairman’s expenses as agreed for an
automobile and driver, payment of certain annual club dues and annual operating
surcharges (but not including special assessments relating to capital items),
office space that is mutually agreeable between the parties, and secretarial
support.  The secretarial support shall be selected by the Chairman and shall
consist of a full-time administrative assistant, a part-time administrative
assistant, and an assistant to provide staff support for his role at the Chicago
Board of Education and similar civic activities.
 
If the Chairman resigns as Chairman or as a director, the staff and club expense
obligations shall cease upon such resignation.  In the event the Chairman is not
re-elected Chairman of the Bank, he shall nevertheless continue to receive the
staff and club reimbursement as provided above until the third anniversary of
his initial election as Chairman, if applicable.
 
Indemnification
The Chairman shall be provided with indemnification on a basis consistent with
the other directors of the Bank and the Holding Company.  In addition, the
Chairman has disclosed certain non-solicitation obligations with respect to his
prior employer, together with his commitment to comply with those
obligations.  He will be indemnified for any claims that might be brought by his
prior employer (or any successor and/or any affiliate thereof) relating to his
acceptance of the Chairman position with the Bank and the Holding Company or the
performance of his duties for the Bank Board or the Holding Company Board.

 
 

--------------------------------------------------------------------------------

 
 

 
EQUITY GRANT FEATURE
PERFORMANCE SHARES
PERFORMANCE STOCK OPTIONS
TIME-VESTING STOCK OPTIONS
1.
Allocation of Total Award
 
· $600,000 in face value in 2009 and 2010.
 
 
· 50,000 options (value of approximately $550,000).
 
 
· 50,000 shares (value of approximately $600,000)
 
2.
Time Vesting
 
· N/A
 
 
· N/A
 
 
· 33 1/3% per year on December 31, 2008, December 31, 2009 and December 31,
2010.
 
3.
Performance Vesting
    Year           Stock Price            EPS
2008             $33.49                   $1.98
2009             $40.19                   $2.38
2010             $48.23                   $2.85
2011             $57.87                   $3.42
2012             $69.45                   $4.11
 
 
 
· Based on stock price performance objectives: 20% compound annual stock price
growth 2008-2012.
 
 
· Stock price base is $27.91.
 
 
· 20% of the Award vests per year, based on attainment of stock price objective
for that year. Objective must be met for 20 consecutive trading days during that
fiscal year to vest.
 
 
· Determined as of 12/31 of performance year.
 
 
· Based on EPS performance objectives: 20% compound annual EPS growth 2008 -
2012.
 
 
· Earnings base is $1.65.
 
 
· 20% of the Award vests per year, based on attainment of EPS objective for that
year.
 
 
· Determined as of 12/31 of performance year.
 
 
· None
 
4.
“Catch-Up” Performance Vesting
 
· As of 12/31 each year: To extent not vested, Award will vest for prior years
if later year stock price objective is attained.
 
 
· As of 12/31/2012: To extent not vested, Award will vest:
 
Cum. Cmpd. Growth                        Vested % of Award
15.0% ($12.80)                                    50%
17.5% ($13.75)                                    75%
20.0% ($14.74)                                    100%
 
 
· N/A
 
5.
Minimum 25% Vesting
 
· As of 12/31/2012: To the extent less is vested, 25% of total Award will be
vested (including previously vested shares).
 
 
· Must be a Board member on 12/31/2012.
 
 
· As of 12/31/2012: To the extent less is vested, 25% of total Award will be
vested (including previously vested options).
 
 
· Must be a Board member on 12/31/2012.
 
 
· N/A
 
6.
Voluntary Termination
 
· Forfeit award if voluntary terminate on or before 12/31 of the year of grant.
 
 
· If voluntary terminate after the year of grant, continued vesting through
12/31/2012 based on performance.
 
 
· Minimum vesting of whole Award of 5% x whole or partial years as a Board
member 1/1/2008 to 12/31 of termination year.
 
 
· Forfeit award if voluntary terminate on or before 12/31/2008.
 
 
· Continue to vest based on performance if voluntary terminate on or after
1/1/2009.
 
 
· Minimum vesting of whole Award of 5% x whole or partial years as a Board
member 1/1/2008 to 12/31 of termination year.
 
 
· Vested options at termination exercisable until later of 12/31/2012 or 1 year
after date of termination (but not beyond the end of the option term).
 
 
· Options that vest in the future remain exercisable until the later of
12/31/2012 or 1 year after such options become vested (but not beyond the end of
the option term).
 
 
· Monthly pro rata vest.
 
 
· Vested options exercisable until later of 12/31/2012 or 1 year after
termination (but not beyond the end of the option term).
 
7.
“Good Leaver” Treatment
 
· Continued vesting until 12/31/2012 based on performance.
 
 
· Minimum vesting of whole Award of 5% x whole or partial years as a Board
member 1/1/2008 to 12/31 of termination year.
 
 
· Continued vesting until 12/31/2012 based on performance.
 
 
· Minimum vesting of whole Award of 5% x whole or partial years employed
1/1/2008 to 12/31 of termination year.
 
 
· Vested options at termination exercisable until later of 12/31/2012 or 1 year
after date of termination (but not beyond the end of the option term).
 
 
· Options that vest in the future remain exercisable until the later of
12/31/2012 or 1 year after such options become vested (but not beyond the end of
the option term).
 
 
· Full accelerated vesting.
 
 
· Vested options exercisable until later of 12/31/2012 or 1 year after
termination (but not beyond the end of the option term).
 

 
 

--------------------------------------------------------------------------------

 

DEFINITIONS
 
“Good Leaver” means (i) your termination of service from both Boards due to your
removal from or a failure to nominate and elect you to both Boards other than
due to Cause, (ii) your resignation from the Boards for Good Reason, (iii) your
resignation from the Boards due to your Disability, or (iv) your death.
 
“Cause” shall mean your willful engaging in illegal conduct or gross misconduct
which is materially and demonstrably injurious to the Holding Company or the
Bank.
 
“Disability” means your inability to carry on your duties as a member of both
Boards, after receipt of medical advice, as a result of a physical or mental
injury or illness or other such incapacity.
 
“Good Reason” shall mean the occurrence of a material breach of this term sheet
agreement by the Holding Company that is not remedied within a reasonable time
after notice by you to the Holding Company of such breach.
 

 
 

--------------------------------------------------------------------------------