q308exhibit103.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    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.