Document:

exv10w28

 

Exhibit 10.28

BAXTER INTERNATIONAL INC. AND SUBSIDIARIES

DEFERRED COMPENSATION PLAN

(Amended and restated effective January 1, 2007)

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	TABLE OF CONTENTS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE I PURPOSE, EEFECTIVE DATE, EMPLOYER
	 	 	1	 
	 
	 	 	 	 
	1.1 Purpose
	 	 	1	 
	1.2 Effective Date
	 	 	1	 
	1.3 Employer
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	2.1 Accounts
	 	 	2	 
	2.2 Administrative Committee
	 	 	2	 
	2.3 Beneficiary
	 	 	2	 
	2.4 Bonus
	 	 	2	 
	2.5 Bonus Deferral
	 	 	2	 
	2.6 Code
	 	 	2	 
	2.7 Compensation
	 	 	2	 
	2.8 Compensation Committee
	 	 	2	 
	2.9 Deferral Election Form
	 	 	2	 
	2.10 Distribution Election Form
	 	 	2	 
	2.11 Eligible Employee
	 	 	3	 
	2.12 Employer
	 	 	3	 
	2.13 Employer Non-Matching Contribution
	 	 	3	 
	2.14 Excess Matching Contribution
	 	 	3	 
	2.15 Matching Contribution
	 	 	3	 
	2.16 Participant
	 	 	3	 
	2.17 Pay Deferral Contribution
	 	 	4	 
	2.18 Plan Year
	 	 	4	 
	2.19 Section 409A
	 	 	4	 
	2.20 Termination of Employment
	 	 	4	 
	2.21 Unforeseeable Emergency
	 	 	5	 
	2.22 Vesting
	 	 	5	 
	 
	 	 	 	 
	ARTICLE III ELIGIBILITY FOR CONTRIBUTIONS AND DEFERRALS
	 	 	6	 
	 
	 	 	 	 
	3.1 Eligiblity for Excess Matching Contribution
	 	 	6	 
	3.2 Bonus Deferral Elections
	 	 	6	 
	3.3 Pay Deferral Elections
	 	 	6	 
	3.4 Somatogen Acquisition Deferral Election
	 	 	7	 
	3.5 Discretionary Contributions
	 	 	7	 
	3.6 Employer Non-Matching Contribution
	 	 	7	 
	3.7 Contributions Following Military Service
	 	 	8	 
	 
	 	 	 	 
	ARTICLE IV CREDITING OF ACCOUNTS
	 	 	9	 
	 
	 	 	 	 
	4.1 Crediting of Accounts
	 	 	9	 
	4.2 Earnings
	 	 	9	 
	4.3 Account Statements
	 	 	10	 
	4.4 Vesting
	 	 	10	 
	 
	 	 	 	 
	ARTICLE V DISTRIBUTION OF BENEFITS
	 	 	11	 
	 
	 	 	 	 
	5.1 Distribution of Benefits
	 	 	11	 
	5.2 Distribution
	 	 	11	 

 

 

	 	 	 	 	 
	5.3 Effect of Payment
	 	 	13	 
	5.4 Taxation of Plan Benefits
	 	 	14	 
	5.5 Withholding and Payroll Taxes
	 	 	14	 
	5.6 Distribution Due to Unforeseeable Emergency
	 	 	14	 
	5.7 Distribution Due to Inclusion in Taxable Income
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VI BENEFICIARY DESIGNATION
	 	 	15	 
	 
	 	 	 	 
	6.1 Beneficiary Designation
	 	 	15	 
	6.2 Amendments to Beneficiary Designation
	 	 	15	 
	6.3 No Beneficiary Designation
	 	 	15	 
	6.4 Form of Payment to Beneficiary
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VII ADMINISTRATION
	 	 	16	 
	 
	 	 	 	 
	7.1 Administrative Committee
	 	 	16	 
	7.2 Administrative Committee Powers
	 	 	16	 
	7.3 Uniform Application of Rules
	 	 	17	 
	7.4 Claims Procedure
	 	 	17	 
	7.5 Action by Administrative Committee
	 	 	18	 
	7.6 Indemnity
	 	 	18	 
	 
	 	 	 	 
	ARTICLE VIII AMENDMENT AND TERMINATION OF PLAN
	 	 	19	 
	 
	 	 	 	 
	8.1 Amendment
	 	 	19	 
	8.2 Right to Terminate
	 	 	20	 
	8.3 Payment at Termination
	 	 	20	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	21	 
	 
	 	 	 	 
	9.1 Unfunded Plan
	 	 	21	 
	9.2 Unsecured General Creditor
	 	 	21	 
	9.3 Nonassignability
	 	 	21	 
	9.4 Not a Contract of Employment
	 	 	21	 
	9.5 Protective Provisions
	 	 	21	 
	9.6 Governing Law
	 	 	22	 
	9.7 Severability
	 	 	22	 
	9.8 Notice
	 	 	22	 
	9.9 Successors
	 	 	22	 
	9.10 Action by Baxter
	 	 	22	 
	9.11 Effect on Benefit Plans
	 	 	22	 
	9.12 Participant Litigation
	 	 	22	 

2

 

BAXTER INTERNATIONAL INC. AND SUBSIDIARIES DEFERRED

COMPENSATION PLAN

(Amended and Restated Effective January 1, 2007)

ARTICLE I

PURPOSE, EFFECTIVE DATE, EMPLOYER

     1.1 Purpose. The Baxter International Inc. and Subsidiaries Deferred Compensation
Plan (the “Plan”) has been adopted by Baxter International Inc. (“Baxter”). The Plan is
intended to be an unfunded arrangement to provide deferred compensation for the benefit of a select
group of management and highly compensated employees. The Plan is designed to enable eligible
participants to defer compensation and receive matching contributions under the provisions of
the Baxter International Inc. and Subsidiaries Incentive Investment Plan (“IIP”), a
tax-qualified defined contribution plan, in excess of the limitations imposed by the Internal Revenue Code
(“Code”). Baxter amended and restated the Plan effective January 1, 1998, in part to combine
the Plan and the Baxter International Inc. and Subsidiaries Incentive Investment Excess Plan, and
amended and restated the Plan again effective January 1, 2002 and January 1, 2005, to make
certain other changes and to comply with the requirements of Section 409A of the Code. The
Plan is hereby further amended and restated effective January 1, 2007, to make certain other
changes. Capitalized terms not defined in this Plan are deemed to have the meaning given them
in the IIP.

     1.2 Effective Date. The effective date of this restatement is January 1, 2007.

     1.3 Employer. The Plan is adopted for the benefit of a select group of management or
highly compensated employees of Baxter or of any subsidiaries or affiliates of Baxter, as set
forth below. The Plan may be adopted by any subsidiaries or affiliates of Baxter with the consent of
the Administrative Committee. Participating Employers are listed on Appendix A as attached
and updated from time to time.

 

 

ARTICLE II

DEFINITIONS

     2.1 Accounts. Accounts means the sum of the Participant’s Excess Matching
Contribution Account balance, Bonus Deferral Account balance, Pay Deferral Account balance,
and Deferred Compensation Account balance.

     2.2 Administrative Committee. For purposes of the Plan, Administrative Committee
has the same meaning as the Administrative Committee in the IIP.

     2.3 Beneficiary. A Participant’s Beneficiary, as defined in Article VI, is the
Beneficiary designated to receive the Participant’s Accounts, if any, from the Plan, upon
the death of the Participant.

     2.4 Bonus. The term Bonus means those bonuses that are included in the definition of
Compensation in the IIP and also includes any other bonus which is approved by the
Administrative Committee and listed on Attachment A to this Plan. Attachment A may be
updated from time to time to accurately reflect the approved bonuses for purpose of this definition.

     2.5 Bonus Deferral. The Bonus Deferral is the amount of the Participant’s Bonus
which the Participant elected to defer and contribute to the Plan which, but for such
election, would have otherwise been paid to him/her.

     2.6 Code. The Code shall mean the Internal Revenue Code of 1986, as amended.

     2.7 Compensation. For purposes of the Plan, Compensation has the same meaning as
Compensation in the IIP without regard to Section 401(a)(17) of the Code, except that the
Bonuses deferred under the Plan are included in Compensation in the Plan Year in which such
amounts would be paid if they were not deferred and not in the Plan Year in which such amounts
are actually paid.

     2.8 Compensation Committee. The Compensation Committee of the Board of Directors of Baxter.

     2.9 Deferral Election Form. The form which a Participant must complete and return
to the Administrative Committee or its designee, in accordance with the rules and procedures as
may be established by the Administrative Committee, in order to elect to defer a portion of
his or her Bonus into the Plan and to designate his or her Pay Deferral Election.

     2.10 Distribution Election Form. The form which a Participant must complete and
return to the Administrative Committee or its designee, in accordance with the rules and
procedures as may be established by the Administrative Committee. This form is to be used by
both (a) Participants who are not eligible to defer a portion of their Bonus or make a Pay Deferral
Contribution to the Plan; and (b) Participants who are electing distributions with respect to a
Deferred Compensation Account.

2

 

     2.11 Eligible Employee. An Eligible Employee is anyone who:

	 	(a)	 	is a Corporate Officer of Baxter, a member of Baxter’s Senior
Management Team and/or is participant in the Baxter International Inc.
Long Term Incentive Plan for the Plan Year to which deferrals relate;
	 
	 	(b)	 	for Plan Years prior to 2005, was a participant in the IIP
whose Matching Contributions to the IIP for the Plan Year are limited because of the
application of the Code, provided he or she has met the eligibility rules set
forth in Section 3.1 below;
	 
	 	(c)	 	solely for purposes of Section 3.5, is designated by the
Administrative Committee to be a Participant in the Plan and eligible to receive
discretionary benefits under Section 3.5 of the Plan for the Plan Year,
subject to the terms and conditions imposed by the Administrative
Committee in accordance with Section 3.5; or
	 
	 	(d)	 	for Plan Years subsequent to 2006, and solely for purposes of
Section 3.6, is eligible to receive an Employer Non-Matching Contribution into the IIP
for the Plan Year and has Compensation for the Plan Year in excess of the
limitations of Section 401(a)(17) of the Code. An Employee who has
never previously been an Eligible Employee shall be treated as becoming
an Eligible Employee on the last day of the first Plan Year in which he
meets the requirements of this paragraph (d).

     2.12 Employer. The term Employer means Baxter and any entity that is a member of a
controlled group or affiliated service group that includes Baxter, or is otherwise required to be
considered as a single employer with Baxter under Section 414 of the Code. A “Participating
Employer” is an Employer that has adopted the Plan for the benefit of its Eligible Employees
as provided in Section 1.3, and a Non-Participating Employer is an Employer that is not a
Participating Employer.

     2.13 Employer Non-Matching Contribution. The term Employer Non-Matching
Contribution has the same meaning in the Plan as it does in the IIP.

     2.14 Excess Matching Contribution. The Excess Matching Contribution is the
difference between the Matching Contributions allocated to a Participant’s IIP Account during
the Plan Year and the amount that would have been allocated if the limitations of Sections 415,
401(k), 402(g), 401(m) or 401(a)(17) of the Code, were disregarded.

     2.15 Matching Contribution. The term Matching Contribution has the same meaning in the Plan as it does in the IIP.

     2.16 Participant. A Participant is any Eligible Employee who has an Account balance in the Plan.

3

 

     2.17 Pay Deferral Contribution. The term Pay Deferral Contribution has the same
meaning as Pay Deferral Contribution in the IIP. The Pay Deferral Contribution is the amount of
the Participant’s Compensation, which the Participant elected to defer into the Plan which, but
for such election, would have otherwise been paid to him/her.

     2.18 Plan Year. The Plan Year is the calendar year.

     2.19 Section 409A. Section 409A means Section 409A of the Code, as enacted by the
American Jobs Creation Act of 2004 and as interpreted by Treasury Regulations or other
authority issued thereunder.

     2.20 Termination of Employment. For purposes of the Plan, Termination of
Employment has the same meaning as Termination of Employment in the IIP; provided that for
purposes of determining when a Participant’s benefit becomes payable, Termination of
Employment shall not be considered to have occurred until the Participant incurs a separation
from service as defined in Treasury Regulations issued pursuant to Section 409A. The following
rules are intended to implement the requirements of Section 409A, and may be adjusted by the
Administrator as required to comply with final Treasury Regulations or other guidance issued
under Section 409A:

	 	(a)	 	A Participant who is on an approved leave of absence shall not incur a
Termination of Employment unless he fails to return to employment at the end of
such leave of absence; provided that either (i) the leave of absence is of not more
than six months in duration, or (ii) the Participant has a legal or contractual
right
to reemployment at the end of the leave of absence. The Termination of
Employment of such a Participant will occur when he fails to return, except that
solely for purposes of Vesting his or her Termination of Employment will be
treated as occurring on the first day of the leave of absence.
	 
	 	(b)	 	A Participant who is transferred to the employ of a Non-Participating Employer,
shall no longer be an Eligible Employee but shall not have incurred a Termination
of Employment for purposes of distribution of his or her Account until his or her
employment is terminated by all Employers with no expectation of re-employment; provided that a Participant who is employed as a part-time employee
shall be considered to have incurred a Termination of Employment if his or her
annual rate of compensation as a part time employee is not more than 20% of his
or her average annual rate of compensation during his or her last three full years of
full-time employment and the total amount of compensation received by the
Participant during a year as a part time employee is not more than 20% of his or
her average annual compensation during his or her last three full years of full-time
employment.
	 
	 	(c)	 	A Participant who terminates his or her employment with all Employers, but
continues to render services to any Employer in a capacity other than as an
employee, will incur a Termination of Employment only when all arrangements
for the provision of services to all Employers have been terminated with no

4

 

	 	 	 	expectation of renewal or re-employment, unless both the Participant’s annual rate
of compensation for such services is not more than 50% of his or her average annual
rate of compensation during his or her last three full years of full-time employment
and the total amount of compensation received by the Participant for such services
during a year is not more than 50% of his or her average annual compensation during
his or her last three full years of full-time employment.

     2.21 Unforeseeable Emergency. A severe financial hardship resulting from a sudden or
unexpected illness or accident of the Participant or one of his or her dependents, loss of the
Participant’s property due to casualty or similar extraordinary and unforeseeable
circumstances arising as a result of one or more recent events beyond the control of the Participant, as
determined by the Administrative Committee.

     2.22 Vesting. For purposes of the Plan, Vesting has the same meaning as Vesting in the IIP.

5

 

ARTICLE III

ELIGIBILITY FOR CONTRIBUTIONS AND DEFERRALS

     3.1 Eligibility for Excess Matching Contribution. An Eligible Employee is a
Participant in the Plan and eligible to receive a contribution to his or her Excess Matching
Contribution Account in the Plan for a Plan Year if such Participant’s allocation of Matching
Contributions in the IIP during the Plan Year is less than three percent (3%) of Compensation
because of the application of the Code. Effective January 1, 2005, an Employee who would have
been an Eligible Employee solely by reason of this Section 3.1 shall no longer be an Eligible
Employee. A Participant who was an Eligible Employee solely by reason of this Section 3.1 for
one or more Plan Years prior to 2005 shall continue to be a Participant with respect to his
Excess Matching Contribution Account until it is distributed.

     3.2 Bonus Deferral Elections. An Eligible Employee is a Participant in the Plan if he
or she elects to defer all or a portion of his or her Bonus through the Plan until his or her
Termination of Employment, or such other time as specified on his or her Deferral Election
Form, by completing a Deferral Election Form in accordance with applicable rules and
procedures established by the Administrative Committee. A Participant may elect to defer up to
100% of his or her Bonus, in whole percentages. Beginning January 1 of the year to which the
Deferral Election Form applies, the Deferral Election Form is irrevocable, except as provided
in Section 5.6. The Deferral Election Form must be filed in accordance with the rules established
by the Administrative Committee before January 1 of the Plan Year to which the Deferral
Election Form applies, except that the Administrative Committee may either (i) permit an
employee who first becomes an Eligible Employee during a Plan Year, and who was not
previously a participant in any account balance deferred compensation arrangement sponsored by
any Employer, to make an election to defer his or her Bonus not more than 30 days after
becoming an Eligible Employee, which Bonus Deferral Election shall apply only to the portion of
the Bonus earned after the election is made, or (ii) permit Eligible Employees to make an election
to defer their Bonuses not later than six months prior to the end of the Bonus determination
period, provided that the Administrative Committee determines that the Bonus satisfies the
requirements for performance based compensation under Section 409A of the Code. For
purposes of Bonus Deferral Elections, Eligible Employees are those employees who are
participants in the Long Term Incentive Plan for the Plan Year to which deferrals relate.

     3.3 Pay Deferral Elections. An Eligible Employee is a Participant in the Plan if he or
she elects to defer a portion of his or her Compensation in excess of the annual contribution
limit under Section 401(k) or 402(g) of the Code (as contributed to the IIP) as set forth on his or
her Deferral Election Form, or if he or she has elected to contribute at least 3% of his or her
Compensation to the IIP and his or her Compensation exceeds the annual limit under Section
401(a)(17) of the Code, in accordance with applicable rules and procedures established by the
Administrative Committee. A Pay Deferral Election shall be made by the last day of the Plan
Year preceding the Plan Year to which it relates, and shall thereafter be irrevocable (except as
provided in Section 5.6), except that the Administrative Committee may permit an employee who
first becomes an Eligible Employee during a Plan Year, and who was not previously a
participant in any account balance deferred compensation arrangement sponsored by any Employer, to make
an Pay Deferral Election not more than 30 days after becoming an Eligible Employee, which Pay

6

 

Deferral Election shall apply prospectively only. A Participant may elect to defer up to a total of
50% (20% prior to 2007) of his or her Compensation. In order to make a Pay Deferral election, the
Participant must elect to contribute the same percentage of Compensation under the IIP for the Plan
Year and must first either (i) contribute to the IIP the maximum amount permitted by Sections
401(k) and 402(g) of the Code or (ii) contribute at least 3% of his or her Compensation to the IIP
and have his or her Compensation exceed the annual limit under Section 401(a)(17) of the Code, and
the Participant may not change his/her IIP election for the Plan Year. Notwithstanding the prior
sentence, effective April 1, 2002, a Participant may elect to make an additional annual “catch-up
contribution” to the IIP in accordance with the terms of the IIP, which shall be disregarded for
purposes of the Plan. For purposes of Pay Deferral Elections, Eligible Employees are those
employees who are participants in the Long Term Incentive Plan for the Plan Year to which deferrals
relate. Notwithstanding the foregoing provisions of this Section 3.3, the Administrative Committee,
in its sole discretion, may permit a Participant to defer in excess of 50% of his or her
Compensation to the Plan for any Plan Year (a “Supplemental Pay Deferral”), provided that the
Supplemental Pay Deferral election is made prior to the beginning of the Plan Year to which it
relates and is thereafter irrevocable (except as provided in Section 5.6). To the extent that the
Administrative Committee exercises its discretionary authority under the prior sentence, such
exercise shall be reflected in Appendix B to the Plan which shall identify each Participant
designated as eligible to make Supplemental Pay Deferrals, specify the Plan Year(s) for which
Supplemental Pay Deferrals may be made, and reflect any other conditions and limitations applicable
with respect to such Supplemental Pay Deferrals. In no event shall Supplemental Pay Deferrals be
eligible for Excess Matching Contributions

     3.4 Somatogen Acquisition Deferral Election. Any former employee of Somatogen,
Inc. who is acquired by Baxter International Inc. as of the closing date of the merger
agreement between Baxter and Somatogen and who completed a Special Deferral Enrollment Form shall
have such form recognized as a valid election under the Plan. Deferrals authorized under this
section shall be treated as deferrals authorized under Section 3.2 for purposes of accounting
and distribution.

     3.5 Discretionary Contributions. The Administrative Committee may, in its sole
discretion, specify such additional amounts in the form of employer contributions to be credited
to the Account of a Participant or another employee who is a member of a select group of
management and highly compensated employees, subject to such terms and conditions as the
Administrative Committee may establish. To the extent that the Administrative Committee
exercises its discretionary authority under this Section 3.5, such exercise shall be reflected in
Appendix C to the Plan, which shall identify each Participant credited with such discretionary
employer contributions, specify the Plan Year(s) for which contributions relate, and reflect any
other limitations applicable with respect to such discretionary contributions, including any
applicable Vesting requirements. Discretionary employer contributions authorized under this
section shall be treated as deferrals authorized under Section 3.2 for purposes of accounting
and distribution.

3.6 Employer Non-Matching Contribution. For any Plan Year after 2006, an Eligible
Employee who (i) is eligible to receive an Employer Non-Matching Contribution into the IIP for

7

 

the Plan Year and (ii) has Compensation for the Plan Year in excess of the limitations of Section
401(a)(17) of the Code, shall receive a contribution equal to 3% of the Eligible Employee’s
Compensation in excess of the limitations of Section 401(a)(17) of the Code.

     3.7 Contributions Following Military Service. A Participant who incurs a
Termination of Employment, or a leave of absence, in order to serve in the armed forces of the
United States, who is entitled to re-employment rights under the Uniformed Services Employment and
Reemployment Rights Act (“USERRA”), and who is re-employed during the period in which such
re-employment rights are protected, shall be entitled to increase the percentage of his or her
Compensation subject to a Pay Deferral Election in order to make up the Pay Deferral Contributions
missed during the period of military service, in accordance with rules established by the
Administrative Committee in accordance with USERRA and Section 409A. Such a Participant shall also
be entitled to receive the same amount of Excess Matching Contributions he or she would have
received had the additional Pay Deferral Contributions been made during the period of military
service. A Participant who is otherwise eligible for Employer Non-Matching Contributions shall be
entitled to receive the Employer Non-Matching Contributions he or she would received had he or she
been employed at the same rate of Compensation during the period of military service, which shall
be credited to the Deferred Compensation Account not later than 90 days after re-employment.

8

 

ARTICLE IV

CREDITING OF ACCOUNTS

     4.1 Crediting of Accounts.

          A. Excess Matching Contribution Account. An account equal to the Excess
Matching Contributions, if any, of each Participant made for Plan Years prior to 2002, as
adjusted for investment return under Section 4.2 and distributions under Article V.

          B. Bonus Deferral Account. An account equal to the Bonus Deferrals, if any,
of each Participant made for Plan Years prior to 2002, as adjusted for investment return under
Section 4.2 and distributions under Article V.

          C. Pay Deferral Account. An account equal to the Pay Deferral
Contributions and Supplemental Pay Deferrals, if any, of each Participant made for Plan Years prior
to 2002, as adjusted for investment return under Section 4.2 and distributions under Article V.

          D. Deferred Compensation Account. An account equal to the Excess
Matching Contributions, Pay Deferral Contributions, Bonus Deferrals, Supplemental Pay
Deferrals and Employer Non-Matching Contributions made for the 2002 Plan Year and
thereafter, as adjusted for investment return under Section 4.2 and distributions under Article V.

          Notwithstanding the foregoing provisions of this Section 4.1, if elected by the Participant in
accordance with rules established by the Administrative Committee, the Participant may elect to
have his or her Excess Matching Contributions, Pay Deferral Contributions, Bonus Deferrals and
Supplemental Pay Deferrals made for the 2001 Plan Year, if any, credited to his or her Deferred
Compensation Account under paragraph D, instead of to the Excess Matching Contribution Account,
Bonus Deferral Account and Pay Deferral Account described in paragraphs A, B and C.

          Further, effective January 1, 2002, notwithstanding the forgoing provisions of this Section
4.1, if elected by the Participant in accordance with rules established by the Administrative
Committee, the Participant may make a one-time election to have amounts credited to his or her
Excess Matching Contribution Account, Bonus Deferral Account and Pay Deferral Account (including
Supplemental Pay Deferrals) credited to his or her Deferred Compensation Account under paragraph D,
provided however, that such election is made prior to 2002 and such amounts are not scheduled to be
distributed in 2001

     4-2 Earnings. Each Participant’s Accounts will be adjusted for investment return,
on a daily basis, in accordance with the following provisions of this Section 4.2:

          A. Amounts in a Participant’s Excess Matching Account, Bonus Deferral Account and Pay
Deferral Account will be credited with earnings at a rate determined by the Administrative
Committee from time to time. Until the Administrative Committee determines otherwise, such earnings
will be credited at the same rate as the Stable Income Fund in the IIP.

9

 

          B. Amounts in a Participant’s Deferred Compensation Account shall be adjusted upward or
downward to reflect the investment return that would have been realized had such amounts been
invested in one or more investments selected by the Participant from among the assumed investment
alternatives designated by the Administrative Committee for use under the Plan. Prior to the first
day of each month, or at such other times as the Administrative Committee may permit, Participants
may change the assumed investment alternatives in which their Deferred Compensation Account will be
deemed invested for such Plan Year. Participant elections of assumed investment alternatives shall
be made at the time and in the form determined by the Administrative Committee, and shall be
subject to such other restrictions and limitations as the Administrative Committee shall determine.
In the event that a Participant fails to make an investment election, his or her Deferred
Compensation Account shall be credited with earnings in the same manner as provided in paragraph A
above.

     4.3 Account Statements. Account Statements will be generated effective at such
intervals as the Administrative Committee may determine and transmitted to each Participant as
soon as administratively feasible. Account Statements will reflect all Account activity during
the reporting period, including Account contributions, distributions and earnings credits.

     4.4 Vesting. Subject to Sections 9.1 and 9.2, and any Vesting requirements specified
by the Administrative Committee with respect to Discretionary Contributions, a Participant is
always 100% Vested in his or her Accounts in the Plan at all times; provided, however, that if a
Participant who incurs a Termination of Employment is not 100% Vested in his or her Employer
Non-Matching Contribution Account in the IIP, the portion of his or her Deferred Compensation
Account attributable to Employer Non-Matching Contributions and the earnings thereon shall be
forfeited, and no Participating Employer shall have any obligation to the Participant with
respect to such portion.

10

 

ARTICLE V

DISTRIBUTION OF BENEFITS

     5.1 Distribution of Benefits. Subject to Section 5.2, distribution of a Participant’s
Accounts, if any, will commence in accordance with the Participant’s Distribution Election
Form or Deferral Election Form as soon as administratively feasible after the Participant’s
Termination of Employment. Any spousal consent requirements under the IIP will not apply to distributions
under the Plan.

Anything else in this Plan to the contrary notwithstanding, effective October 22, 2004, (i) in no
event shall the distribution of any Account be accelerated to a time earlier than which it would
otherwise have been paid, whether by amendment of the Plan, exercise of the Administrative
Committee’s discretion, or otherwise, except as permitted by Treasury Regulations issued pursuant
to Section 409A, and (ii) in the event that the Administrative Committee, in its sole discretion,
determines that any time or form of distribution provided for in the Plan, or the existence of a
right to elect a different time or form of distribution, would cause the Plan to fail to meet the
requirements of Section 409A, or otherwise cause Participants to be subject to any adverse federal
income tax consequences, the Administrative Committee shall amend the Plan to modify or remove the
form of distribution or election right. The distribution restrictions under Section 409A shall
apply to Participant’s entire account balances under the Plan, whether deferred before or after
January 1, 2005.

     5.2 Distribution.

          A. Deferral Election Form. A Participant’s Excess Matching Contribution
Account, Bonus Deferral Account and Pay Deferral Account will be paid in accordance with the
form of payment designated in the Participant’s Deferral Election Form. The Deferral Election
Form shall not be used to elect forms of distribution with respect to deferrals for Plan Years
after 2001 (or 2000, with respect to a Participant electing to have his or her deferrals credited to
the Deferred Compensation Account for Plan Year 2000 under Section 4.1).

          B. Distribution Election Form — Termination of Employment. A Participant’s
Deferred Compensation Account and, if the Participant is not eligible for Pay Deferrals or
Bonus Deferrals, his or her Excess Matching Contribution Account, will be paid after the
Participant’s Termination of Employment, in accordance with the form of payment designated in such
Participant’s Distribution Election Form. Distribution Election Forms shall be filed in
accordance with rules established by the Administrative Committee, subject to the following:

	 	(a)	 	Prior to January 1, 2007, only one Distribution Election
Form could be submitted with respect to distribution of a Participant’s
Deferred Compensation Account following Termination of Employment. Any such
Distribution Election Form filed prior to January 1, 2007, shall remain in
effect shall apply to the Participant’s entire Deferred Compensation Account
(and Excess Matching Contribution Account if applicable) balance at his or her
Termination of Employment.

11

 

	 	(b)	 	Effective January 1, 2007, a Participant may submit a Distribution
Election Form at the time he or she first makes a Bonus Deferral or Pay
Deferral Election pursuant to Section 3.2 or 3.3. Except as otherwise
provided in subparagraph (c) below, only one Distribution Election Form
shall be filed, which shall apply to the Participant’s entire Deferred
Compensation Account balance at his or her Termination of Employment.
A Distribution Election Form must be filed by the end of the period for
making the Participant’s first Bonus Deferral or Pay Deferral Election, and
if the Participant fails to file a Distribution Election Form at such time
his or her entire Deferred Compensation Account balance shall be distributed
in a lump sum at his or her Termination of Employment, or in accordance
with a Distribution Election Form previously filed pursuant to
subparagraph (c) if applicable.
	 
	 	(c)	 	An Employee who first becomes an Eligible Employee pursuant to
Section 3.1, 3.5, or 3.6 on or after January 1, 2007, and who has never previously
been an Eligible Employee under Section 3.2 or 3.3 or otherwise eligible
to participate in any account balance deferred compensation arrangement
sponsored by any Employer, may file a Distribution Election Form not
later than 30 days after his or her first day of eligibility. Except as
provided in the following sentence, only one Distribution Election Form
shall be filed, which shall apply to the Participant’s entire Deferred
Compensation Account balance at his or her Termination of Employment,
and if the Participant fails to file a Distribution Election Form at such
time his or her entire Deferred Compensation Account balance shall be
distributed in a lump sum at his or her Termination of Employment.
Notwithstanding the foregoing, if such a Participant subsequently becomes
eligible to make a Bonus Deferral or Pay Deferral Election, he or she may
file a new Distribution Election Form pursuant to subparagraph (b) above.
In such event, the portion of the Participant’s Deferred Compensation
Account that represents amounts credited to the Deferred Compensation
Account under all provisions of Article HI beginning with the first Plan
Year to which the Bonus Deferral or Pay Deferral Election applies (and all
earnings thereon) shall be distributed in accordance with such Distribution
Election Form, and the remaining portion of the Deferred Compensation
Account shall continue to be governed by this subparagraph (c).

          C. In-Service Distribution of Deferred Compensation Account. Prior to January 1, 2005,
a Participant could elect to receive a distribution of all or a portion of his or her Deferred
Compensation Account at a specified future date, by filing a Distribution Election Form with the
Administrative Committee, specifying the dollar amount of the distribution, at least 24 months
prior to the distribution date. Effective January 1, 2005, such in-service distributions are no
longer permitted. In-service distributions shall be made in accordance with Distribution Election
Forms filed within the 24 month period prior to January 1, 2005, but in no event shall the amount
of any such in-service election exceed the Participant’s total account balance as of December 31,
2004. If the Participant who requested an in-service distribution during the 24

12

 

month period prior to January 1, 2005, has a Termination of Employment prior to the specific date
requested on such Distribution Election Form, such form shall be ignored and the Participant’s
distribution election with respect to Termination of Employment shall be followed.

          D. Forms of Distribution. The forms of distribution are:

	 	(a)	 	a lump sum payment, or
	 
	 	(b)	 	annual installments of at least 2 years, but not to exceed 15 years.

If annual installments are elected, the amount of each installment will be equal to the remaining
balance in the Participant’s Account prior to payment of the installment, divided by the remaining
number of installments to be paid (including the installment being calculated).

Except as provided below, effective January 1, 2007, lump sum payments will be paid, and annual
installments will commence, in the first quarter of the Plan Year as specified in the Participant’s
Deferral Election Form or Distribution Election Form (or, if the Distribution Election Form
provides for payments following a Termination of Employment, in the first quarter of the Plan Year
following the Plan Year in which the Termination of Employment occurs). Subsequent installments
will be paid annually in the first quarter of subsequent Plan Years. In the case of installment
payments which commenced prior to January 1, 2007, the installment that would otherwise have been
paid in the third quarter of 2007 shall be paid in the first quarter, and all installments shall
thereafter be paid in the first quarter of subsequent years.

If a Participant does not elect a form of distribution by the time the Deferral Election Form or
the Distribution Election Form is required to be completed, the Participant’s election will default
to a lump sum payment in the first quarter of the Plan Year following the Plan Year in which the
Participant incurs a Termination of Employment.

Notwithstanding the above, a Participant whose Accounts under the Plan total less than $50,000 as
of the last day of the Plan Year in which he or she incurs a Termination of Employment will receive
lump sum payment of his or her Accounts in the first quarter of the Plan Year following the Plan
Year in which the Participant incurs a Termination of Employment.

Notwithstanding the foregoing, in no event shall any payment of a benefit made in connection with
the Termination of Employment of a “key employee”, as defined in Section 409A, be made until at least six months following such Termination of Employment, and any
amounts that would otherwise have been paid during such six month period shall be accumulated and
paid in a lump sum, without interest, at the expiration of such period. For purposes of this
paragraph, the status of Participants as key employees shall be determined as of December 31 of
each year, and if a Participant is determined to be a key employee on any December 31, the
restriction of clause (ii) shall apply if and only if he incurs a termination of employment at any
time during the twelve month period commencing on the following April 1.

     5.3 Effect of Payment. Payment to the person or trust reasonably and in good
faith determined by the Administrative Committee to be the Participant’s Beneficiary will
completely

13

 

discharge any obligations Baxter or any other Employer may have under the Plan. If a Plan benefit
is payable to a minor or a person declared to be incompetent or to a person the Administrative
Committee in good faith believes to be incompetent or incapable of handling the disposition of
property, the Administrative Committee may direct payment of such Plan benefit to the guardian,
legal representative or person having the care and custody of such minor and such decision by the
Administrative Committee is binding on all parties. The Administrative Committee may initiate
whatever action it deems appropriate to ensure that benefits are properly paid to an appropriate
guardian.

The Administrative Committee may require proof of incompetence, minority, incapacity or
guardianship as it may deem appropriate prior to distribution of the Plan benefit. Such
distribution will completely discharge the Administrative Committee and the Employer from all
liability with respect to such benefit.

     5.4 Taxation of Plan Benefits. It is intended that each Participant will be taxed on
amounts credited to him or her under the Plan at the time such amounts are received, and the
provisions of the Plan will be interpreted consistent with that intention.

     5.5 Withholding and Payroll Taxes. Baxter will withhold from payments made
hereunder any taxes required to be withheld for the payment of taxes to the Federal, or any
state or local government.

     5.6 Distribution Due to Unforeseeable Emergency. Upon written request of a
Participant and the showing of Unforeseeable Emergency, the Administrative Committee may
authorize distribution of all or a portion of the Participant’s Accounts, and or the
acceleration of any installment payments being made from the Plan, but only to the extent reasonably necessary
to relieve the Unforeseeable Emergency. In any event, payment may not be made to the extent
such Unforeseeable Emergency is or may be satisfied through reimbursement by insurance or
otherwise, including, but not limited to, liquidation of the Participant’s assets, to the extent that
such liquidation would not in and of itself cause severe financial hardship. If a Participant
receives a distribution under this Section 5.6, or receives a hardship distribution from the IIP or
any other elective plan of deferred compensation maintained by any Employer, such Participant’s
Pay Deferral Election and Bonus Deferral Election, if any, shall be revoked for the Plan Year in
which the distribution is received, and, if such distribution is received in the last six months of
the Plan Year any Pay Deferral or Bonus Deferral Election for the succeeding Plan Year shall not
take effect until six months after the date of the withdrawal.

     5.7 Distribution Due to Inclusion in Taxable Income. In the event that any portion of
a Participant’s Account is included in his or her taxable income prior to distribution
pursuant to Section 409A, the amount so included shall be distributed to the Participant as soon as
administratively possible.

14

 

ARTICLE VI

BENEFICIARY DESIGNATION

     6.1 Beneficiary Designation. Each Participant has the right to designate one or more
persons or trusts as the Participant’s Beneficiary, primary as well as secondary, to whom benefits
under this Plan will be paid in the event of the Participant’s death prior to complete distribution
to the Participant of the benefits due under the Plan. Each Beneficiary designation will be in
a written form prescribed by the Administrative Committee and will be effective only when filed
with the Administrative Committee during the Participant’s lifetime.

     6.2 Amendments to Beneficiary Designation. Any Beneficiary designation may be
changed by a Participant without the consent of any Beneficiary by the filing of a new
Beneficiary designation with the Administrative Committee. Filing a Beneficiary designation as
to any benefits available under the Plan revokes all prior Beneficiary designations effective as of
the date such Beneficiary designation is received by the Administrative Committee. If a
Participant’s Accounts are community property, any Beneficiary designation will be valid or
effective only as permitted under applicable law.

     6.3 No Beneficiary Designation. In the absence of an effective Beneficiary
designation, or if all Beneficiaries predecease the Participant, the Participant’s estate will be the
Beneficiary. If a Beneficiary dies after the Participant and before payment of benefits under this
Plan has been completed, and no secondary Beneficiary has been designated to receive such
Beneficiary’s share, the remaining benefits will be payable to the Beneficiary’s estate.

     6.4 Form of Payment to Beneficiary. The Account of a Participant who dies prior to
Termination of Employment shall be paid to his or her Beneficiary in a single lump sum as soon
as administratively feasible following the date of death, regardless of the form of payment
elected by the Participant The Account of a Participant who dies after Termination of Employment, but
before his or her Account has been fully distributed, shall be distributed in the same manner
and at the same time as it would have been distributed to the Participant, except that the six
month delay in distributions to a key employee pursuant to the last paragraph of Section 5.2 shall
not apply to the Beneficiary of a key employee who dies during the six month period following his
or her Termination of Employment.

15

 

ARTICLE VII

ADMINISTRATION

     7.1 Administrative Committee. The Plan is administered by the Administrative
Committee, which is the Plan Administrator for purposes of Section 3(16)(A) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”). Baxter has appointed the
members of the Administrative Committee to administer the Plan. Members of the
Administrative Committee may be Participants in the Plan.

     7.2 Administrative Committee Powers. The Administrative Committee has such
powers as may be necessary to discharge its duties hereunder, including, but not by way
of limitation, the following powers, rights and duties:

	 	(a)	 	Interpretation of Plan. The Administrative Committee
has the power, right
and duty to construe, interpret and enforce the Plan provisions and to
determine all questions arising under the Plan including, but not by way of
limitation, questions of Plan participation, eligibility for Plan benefits and
the rights of employees, Participants, Beneficiaries and other persons to
benefits under the Plan and to determine the amount, manner and time of
payment of any benefits hereunder;
	 
	 	(b)	 	Plan Procedures. The Administrative Committee has the
power, right and
duty to adopt procedures, rules, regulations and forms to be followed by
employees, Participants, Beneficiaries and other persons or to be otherwise
utilized in the efficient administration of the Plan which may alter any
procedural provision of the Plan without the necessity of an amendment,
and which procedures may provide for any election or consent to be made
(including without limitation the filing of a Deferral Election Form or
Distribution Election Form) by electronic mail, internet website, voice
response system or other electronic method to the extent permitted by
applicable law;
	 
	 	(c)	 	Benefit Determinations. The Administrative Committee
has the power,
right and duty to make determinations as to the rights of employees,
Participants, Beneficiaries and other persons to benefits under the Plan and
to afford any Participant or Beneficiary dissatisfied with such
determination with rights pursuant to a claims procedure adopted by the
Committee; and
	 
	 	(d)	 	Allocation of Duties. The Administrative Committee is
empowered to
employ agents (who may also be employees of Baxter) and to delegate to
them any of the administrative duties imposed upon the Administrative
Committee or Baxter.

16

 

	 	(e)	 	Plan Amendments. The Administrative Committee is
empowered to amend the Plan as provided in Section 8.1(b).

     7.3 Uniform Application of Rules. The Administrative Committee will apply all
rules, regulations, procedures and decisions uniformly and consistently to all Participants
similarly situated. Any ruling, regulation, procedure or decision of the Administrative
Committee will be conclusive and binding upon all persons affected by it. There will be no
appeal from any ruling by the Administrative Committee which is within its authority, except as
provided in Section 7.4 below. When making a determination or a calculation, the
Administrative Committee will be entitled to rely on information supplied by any Employer,
accountants and other professionals including, but not by way of limitation, legal counsel for
Baxter or any Employer.

     7.4 Claims Procedure. Each person entitled to benefits under the Plan (the
“Applicant”) must submit a written claim for benefits to the Administrative Committee. Such
claim shall be filed not more than one year after the Applicant knows, or with the exercise of
reasonable diligence would know, if the basis for the claim. A formal claim shall not be
required for the distribution of a Participant’s Accounts in the ordinary course of business, but in
any case a claim that relates to a dispute over the amount of a distribution shall be filed not more
than one year after the distribution is paid. The Administrative Committee may, in its sole discretion
(and notwithstanding the first sentence of Section 7.3) accept a claim that is filed late if it
determines that special circumstances warrant acceptance of the claim.

If a claim for benefits by the Applicant is denied, in whole or in part, the Administrative
Committee, or its delegate, shall furnish the Applicant within 90 days after receipt of such claim,
a written notice which specifies the reason for the denial, refers to the pertinent provisions of
the Plan on which the denial is based, describes any additional material or information necessary
for properly completing the claim and explains why such material or information is necessary, and
explains the claim review procedures of this Section 7.4. Such notice will further describe that
the Applicant has a right to bring a civil action under Section 502 of ERISA if his or her claim is
denied after an appeal and review. The 90 day period may be extended by up to an additional 90 days
if special circumstances required, in which event the Applicant shall be notified in writing by the
end of the initial 90 day period of the reason for the extension and an estimate of when the claim
will be processed.

Any Applicant whose claim is denied under the provisions described above, or who has not received
from the Administrative Committee a response to his or her claim within the time periods specified
in the provisions described above may request a review of the denied claim by written request to
the Administrative Committee within 60 days after receiving notice of the denial. If such a request
is made, the Administrative Committee shall make a full and fair review of the denial of the claim
and shall make a decision not later than 60 days after receipt of the request, unless special
circumstances (such as the need to hold a hearing) require an extension of time, in which case a
decision shall be made as soon as possible but not later than 120 days after receipt of the request
for review, and written notice of the reason for the extension and an estimate of when the review
will be complete shall be given to the Applicant before the commencement of the extension. The
decision on review shall be in writing and shall include

17

 

specific reasons for the decision and specific references to the pertinent provisions of the Plan
on which the decision is based. Such notice will further describe that the Applicant has a right to
bring a civil action under Section 502 of ERISA.

No person entitled to benefits under the Plan shall have any right to seek review of a denial of
benefits, or to bring any action to enforce a claim for benefits, in any court or administrative
agency prior to his or her filing a claim for benefits and exhausting all of his or her rights
under this Section 7.4, or more than 180 days after he receives the Administrative Committee’s
decision on review of the denial of his or her claim. Although not required to do so, an Applicant,
or his or her representative, may choose to state the reason or reasons he believes he is entitled
to benefits, and may choose to submit written evidence, during the initial claim process or review
of claim denial process. However, failure to state any such reason or submit such evidence during
the initial claim process or review of claim denial process, shall permanently bar the Applicant,
and his or her successors in interest, from raising such reason or submitting such evidence in any
forum at any later date. An Applicant whose claim is denied initially or on review is entitled to
receive, on request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to such claim for benefits.

     7.5 Action by Administrative Committee. Action by the Administrative Committee
will be subject to the following special rules:

	 	(a)	 	Meetings and Documents. The Administrative Committee
may act by meeting or by document signed without meeting and documents may be
signed through the use of a single document or concurrent documents.
	 
	 	(b)	 	Action by Majority. The Administrative Committee will
act by a majority decision which action will be as effective as if such action had been taken
by all Administrative Committee members, provided that by majority
action one or more Administrative Committee members or other persons
may be authorized to act with respect to particular matters on behalf of all
Administrative Committee members.
	 
	 	(c)	 	Resolving Deadlocks. If there is an equal division
among the Administrative Committee members with respect to any question a
disinterested party may be selected by a majority vote to decide the matter.
Any decision by such disinterested party will be binding.

     7.6 Indemnity. To the extent permitted by applicable law and to the extent that they
are not indemnified or saved harmless under any liability insurance contracts, any present or
former Administrative Committee members, officers, or directors of Baxter, the Employers or
their subsidiaries or affiliates, if any, will be indemnified and saved harmless by the
Employers from and against any and all liabilities or allegations of liability to which they may be
subjected by reason of any act done or omitted to be done in good faith in the administration of the Plan,
including all expenses reasonably incurred in their defense in the event that Baxter fails to
provide such defense after having been requested in writing to do so.

18

 

ARTICLE VIII

AMENDMENT AND TERMINATION OF PLAN

     8.1 Amendment.

	 	(a)	 	The Compensation Committee may amend the Plan at any time, except
that no amendment will decrease or restrict the Accounts of Participants
and Beneficiaries at the time of the amendment. The Company’s authority
to amend the Plan has been delegated to the Administrative Committee to
the extent provided in Section 8.1(b). The authority to amend the Plan in
any respect (whether or not such amendment is within the authority
delegated to the Administrative Committee) may also be exercised by the
Board of Directors, the Compensation Committee or any other person to
whom the Board or Compensation Committee delegates such authority.
	 
	 	(b)	 	The Administrative Committee has been delegated the authority to adopt
any amendments to the Plan as the Administrative Committee may
determine to be necessary or appropriate, except that no amendment shall
be made to any Plan without approval of the Compensation Committee
unless the Administrative Committee determines that such amendment
will not significantly change the overall level of benefits provided by such
Plan; significantly change the requirements for eligibility for participation
in the Plan; or add any material new benefit that would significantly
increase the cost of the Plan. In illustration but not limitation of the
foregoing, the Administrative Committee is authorized to adopt any
amendment to a Plan that it determines to be:

	 	(i)	 	an amendment that provides for the Plan to be adopted by any
business entity acquired by the Company, including providing any special
rules applicable to the employees of such business entity;
	 
	 	(ii)	 	an amendment that the Administrative Committee determines to be
of an administrative, ministerial or technical nature only;
	 
	 	(iii)	 	an amendment that the Administrative Committee determines to be
necessary or appropriate to carry out any amendment approved by, or other
resolution adopted by, the Board;
	 
	 	(iv)	 	an amendment that the Administrative Committee determines to be
necessary or appropriate to comply with any applicable law, or necessary to
conform the terms of the Plan to established administrative practices or
procedures; or

19

 

	 	(v)	 	an amendment that the Administrative Committee determines to be
necessary or appropriate to clarify or to resolve any inconsistency
or ambiguity in the terms of the Plan.
	 
	 	The adoption by the Administrative Committee of any amendment to the Plan shall
constitute conclusive evidence that the Administrative Committee has determined such
amendment to be authorized under the terms of the foregoing resolution, which
determination shall be conclusive and binding on all employees, participants,
beneficiaries and other persons claiming any benefit under the Plan.

     8.2 Right to Terminate. The Compensation Committee may at any time terminate the
Plan. Any Employer may terminate its participation in the Plan by notice to Baxter. The Plan
may also be terminated with respect to a group of Eligible Employees only (including,
effective January 1, 2005, Participants who are Eligible Employees solely by reason of Section 3.1), and
the provisions of Section 8.3 shall apply to such group of Eligible Employees only.

     8.3 Payment at Termination. If the Plan is terminated payment of each affected
Participant’s Accounts to the Participant or Beneficiary for whom they are held will commence
within 60 days of such termination in the form determined under Article 5, provided that such
payment is permitted by Treasury Regulations issued pursuant to Section 409A. To the extent
the Administrative Committee, in its sole discretion, determines that such payment is not
permitted, the Accounts of Participants shall continue to be held until distributed in
accordance with Article V.

20

 

ARTICLE IX

MISCELLANEOUS

     9.1 Unfunded Plan. This Plan is intended to be an unfunded retirement plan
maintained primarily to provide retirement benefits for a select group of management or highly
compensated employees. All credited amounts are unfunded, general obligations of the
appropriate Employer. This Plan is not intended to create an investment contract, but to
provide retirement benefits to eligible employees who participate in the Plan. Eligible employees are
members of a select group of management or are highly compensated employees, who, by virtue
of their position with an Employer, are uniquely informed as to such Employer’s operations and
have the ability to affect materially Employer’s profitability and operations.

     9.2 Unsecured General Creditor. In the event of an Employer’s insolvency,
Participants and their Beneficiaries, heirs, successors and assigns will have no legal or
equitable rights, interest or claims in any property or assets of such Employer, nor will they be
Beneficiaries of, or have any rights, claims or interests in any life insurance policies, annuity
contracts or the proceeds therefrom owned or which may be acquired by such Employer (the
“Policies”) greater than those of any other unsecured general creditors. In that event, any and all
of the Employer’s assets and Policies will be, and remain, the general, unpledged,
unrestricted assets of Employer. Employer’s obligation under the Plan will be merely that of an unfunded
and unsecured promise of Employer to pay money in the future.

     9.3 Nonassignability. Neither a Participant nor any other person will have any right
to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or
any part thereof, which are, and all rights to which are, expressly declared to be nonassignable
and nontransferable. No part of the amounts payable will, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or separate
maintenance owed by a Participant or any other person, nor be transferable by operation of law in
the event of a Participant’s or any other person’s bankruptcy or insolvency. Nothing contained
herein will preclude an Employer from offsetting any amount owed to it by a Participant against
payments to such Participant or his or her Beneficiary.

     9.4 Not a Contract of Employment. The terms and conditions of this Plan will not be
deemed to constitute a contract of employment between a Participant and such Participant’s
Employer, and neither the Participant nor the Participant’s Beneficiary will have any rights
against such Participant’s Employer except as may otherwise be specifically provided herein.
Moreover, nothing in this Plan is deemed to give a Participant the right to be retained in the
service of his or her Employer or to interfere with the right of such Employer to discipline or
discharge him or her at any time.

     9.5 Protective Provisions. A Participant will cooperate with Baxter by furnishing any
and all information requested by Baxter, in order to facilitate the payment of benefits hereunder.

21

 

     9.6 Governing Law. The provisions of this Plan will be construed and interpreted
according to the laws of the State of Illinois, to the extent not preempted by ERISA.

     9.7 Severability. In the event any provision of the Plan is held invalid or illegal for
any reason, any illegality or invalidity will not affect the remaining parts of the Plan, but
the Plan will be construed and enforced as if the illegal or invalid provision had never been inserted,
and Baxter will have the privilege and opportunity to correct and remedy such questions of
illegality or invalidity by amendment as provided in the Plan, including, but not by way of limitation,
the opportunity to construe and enforce the Plan as if such illegal and invalid provision had
never been inserted herein.

     9.8 Notice. Any notice or filing required or permitted to be given to Baxter or the
Administrative Committee under the Plan will be sufficient if in writing and hand delivered,
or sent by registered or certified mail to any member of the Administrative Committee, or to
Baxter’s Chief Financial Officer and, if mailed, will be addressed to the principal executive
offices of Baxter. Notice to a Participant or Beneficiary may be hand delivered or mailed to
the Participant or Beneficiary at his or her most recent address as listed in the employment
records of Baxter. Notices will be deemed given as of the date of delivery or mailing or, if delivery is
made by certified or registered mail, as of the date shown on the receipt for registration or
certification. Any person entitled to notice hereunder may waive such notice.

     9.9 Successors. The provisions of this Plan will bind and inure to the benefit of
Baxter, each Employer, the Participants and Beneficiaries, and their respective successors,
heirs and assigns. The term successors as used herein will include any corporate or other business
entity, which, whether by merger, consolidation, purchase or otherwise acquires all or
substantially all of the business and assets of Baxter, and successors of any such corporation
or other business entity.

     9.10 Action by Baxter. Except as otherwise provided herein, any action required of or
permitted by Baxter under the Plan will be by resolution of the Compensation Committee or any
person or persons authorized by resolution of the Compensation Committee.

     9.11 Effect on Benefit Plans. Amounts paid under this Plan, will not by operation of
this Plan be considered to be compensation for the purposes of any benefit plan maintained by
any Employer. The treatment of such amounts under other employee benefit plans will be
determined pursuant to the provisions of such plans.

     9.12 Participant Litigation. In any action or proceeding regarding the Plan, employees
or former employees of Baxter or an Employer, Participants, Beneficiaries or any other persons
having or claiming to have an interest in this Plan will not be necessary parties and will not
be entitled to any notice or process. Any final judgment which is not appealed or appealable and
may be entered in any such action or proceeding will be binding and conclusive on the parties
hereto and all persons having or claiming to have any interest in this Plan. To the extent
permitted by law, if a legal action is begun against Baxter, an Employer, the Administrative
Committee, or any member of the Administrative Committee by or on behalf of any person and
such action results adversely to such person or if a legal action arises because of
conflicting

22

 

claims to a Participant’s or other person’s benefits, the costs to such person of
defending the action will be charged to the amounts, if any, which were involved in the
action or were payable to the Participant or other person concerned. To the extent
permitted by applicable law, acceptance of participation in this Plan will constitute a
release of Baxter, each Employer, the Administrative Committee and each member thereof,
and their respective agents from any and all liability and obligation not involving
willful misconduct or gross neglect.

*     *     *

     IN WITNESS WHEREOF, the undersigned duly authorized officer has caused this Plan to
be executed this 19th day of December, 2006.

	 	 	 	 	 
	 	BAXTER INTERNATIONAL INC.
 	 
	 	By  		 
	 	 	Jeanne K. Mason 	 
	 	 	Corporate Vice President of Human Resources 	 
	 

23

 

APPENDIX A

PARTICIPATING EMPLOYERS

Participating Employers in the Plan include all participating Employers in the Baxter International
Inc. and Subsidiaries Incentive Investment Plan.

24

 

APPENDIX B

PARTICIPANTS ELIGIBLE FOR SUPPLEMENTAL PAY DEFERRALS

	 	 	 	 	 
	Name	 	Plan Year(s)	 	Terms and Conditions
	 
	 	 	 	 

25exv10w14

 

Exhibit
10.14

Execution
Copy

FIRST AMENDMENT

TO

LOAN AND SUBORDINATED DEBENTURE PURCHASE

AGREEMENT

BETWEEN

LASALLE BANK NATIONAL ASSOCIATION

AND

PRIVATEBANCORP, INC.

First Amendment dated as of December 12, 2006 
Original
Loan Agreement dated as of September 29, 2005

 

 

	 	 	 	 	 	 	 
	 	 	 	 	PAGE
	AMENDMENT PROVISIONS:	 	 	 	 
	 
	A.

	 	Amendment to Recital “A” of the 2005 Loan Agreement
	 	 	1	 
	 
	 	 	 	 	 	 
	B.

	 	Amendment to Recital “C” of the 2005 Loan Agreement
	 	 	2	 
	 
	 	 	 	 	 	 
	C.

	 	Amendment to Section 1.1 of the 2005 Loan Agreement
	 	 	2	 
	 
	 	 	 	 	 	 
	D.

	 	Amendment to Section 4.3.1 of the 2005 Loan Agreement
	 	 	3	 
	 
	 	 	 	 	 	 
	E.

	 	Representations and Warranties
	 	 	3	 
	 
	 	 	 	 	 	 
	F.

	 	Conditions
	 	 	4	 
	 
	 	 	 	 	 	 
	G

	 	Additional Terms
	 	 	5	 

Exhibit A — Form of Amended and Restated Revolving Note

Exhibit B — Form of Amended and Restated Subordinated Debenture

Exhibit C — Form of First Amendment to Amended and Restated Pledge Agreement

Exhibit D — Form of First Amendment to Collateral Safekeeping Agreement

Exhibit E — Form of Legal Opinion

 

 

FIRST AMENDMENT TO LOAN AND SUBORDINATED DEBENTURE PURCHASE AGREEMENT

     This FIRST AMENDMENT TO LOAN AND SUBORDINATED DEBENTURE PURCHASE AGREEMENT (“First
Amendment”), dated as of December 12, 2006, is entered into by and between PRIVATEBANCORP, INC., a
Delaware corporation (“Borrower”), and LASALLE BANK NATIONAL ASSOCIATION, a national banking
association (“Lender”).

R
E C I T A L S :

     A. The parties hereto have entered into that certain Loan and Subordinated Debenture
Purchase Agreement, dated as of September 29, 2005, as previously amended, restated,
supplemented or
modified from time to time (the “2005 Loan Agreement”).

     B. The parties hereto desire to amend and modify the 2005 Loan Agreement in accordance
with the terms and subject to the conditions set forth in this First Amendment. As amended and
modified by
this First Amendment, the 2005 Loan Agreement may be referred to as
the “Agreement.”

     C. The parties desire to amend the terms of the 2005 Loan Agreement to (i) extend the
Revolving Loan Maturity Date, (ii) increase the Revolving Loan Amount, (iii) extend the Term
Loan Maturity
Date, (iv) extend the Subordinated Debt Maturity Date, (v) increase and extend the
Subordinated Debt
Amount, (vi) extend the Sub Debt Funding Expiration Date, and (vii) reflect the pending merger
of Borrower
with Piedmont Bancshares, Inc. and the resulting acquisition by Borrower of the outstanding
capital stock of
Piedmont Bank of Georgia. The parties agree to undertake such modifications, and the other
modifications
described in this First Amendment, in accordance with the terms, subject to the conditions,
and in reliance
upon the recitals, representations, warranties and covenants set forth herein, in the
Agreement, and in the
other Loan Documents, irrespective of whether entered into or delivered on or after September
29, 2005.

     D. Capitalized terms used but not otherwise defined in this First Amendment shall have the
meanings respectively ascribed to them in the 2005 Loan Agreement.

     NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants, and
agreements hereinafter set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

A
G R E E M E N
T :

     A. Amendment
to Recital “A” of the 2005 Loan Agreement. Recital “A” to the
2005 Loan Agreement is hereby deleted and replaced in its entirety with the following:

     “A. Borrower is a bank holding company that owns 100% of the issued and
outstanding capital stock of The PrivateBank and Trust Company, an Illinois
state-chartered, non-member bank with its main office located in Chicago,
Illinois (“PrivateBank”), The PrivateBank, a federal savings bank with its
main office located in St. Louis, Missouri (“PrivateBank St.
Louis”), and
The PrivateBank, a Michigan state-chartered, non-member bank with its main
office located in Bloomfield Hills, Michigan (“PrivateBank Michigan").
Subject to the last sentence of this recital, the banks identified in the
immediately preceding sentence may be referred to herein collectively as the
“Subsidiary Banks”and individually as a “Subsidiary Bank.” Subject to the
last sentence of this recital, the issued and outstanding capital stock of
PrivateBank, PrivateBank St. Louis and PrivateBank Michigan may be referred
to as the “Pledged Subsidiary Bank Shares” Borrower is a party to that
certain Agreement and Plan of Merger, dated as of August 2, 2006, with
Piedmont Bancshares, Inc. (as amended, restated, modified or supplemented
from time to time, the “Piedmont Merger

1

 

     Agreement”). Upon consummation of the transactions described in the Piedmont
Merger Agreement (the “Piedmont Merger”), Piedmont Bank of Georgia, a
Georgia state-chartered, non-member bank with its main office located in
Atlanta, Georgia (“Piedmont Bank”), wilt be a wholly-owned subsidiary of
Borrower. Effective upon consummation of the Piedmont Merger, Piedmont Bank
shall be included in the definition “Subsidiary Banks” for all purposes
hereunder, and its issued and outstanding capital stock shall be included in
the definition of “Pledged Subsidiary Bank Shares” for all purposes
hereunder.”

     B. Amendment
to Recital “C of the 2005 Loan Agreement. Recital “C” to the 2005 Loan
Agreement is hereby deleted and replaced in its entirety with the following:

     “C. Borrower has requested that Lender provide it with three credit
facilities in the aggregate principal amount of $115,000,000 consisting of
(a) a term loan (the “Term Loan”) in the principal amount of $250,000 (the
“Term Loan Amount”), (b) a revolving line-of-credit (the “Revolving Loan”)
in the principal amount of up to $64,750,000 (the “Revolving Loan Amount”),
and (c) subordinated debt (the “Subordinated Debt”) in the principal amount
of up to $50,000,000. The Term Loan and the Revolving Loan may be referred
to collectively as the “Senior Loans” and the Senior Loans and the
Subordinated Debt may be referred to collectively as the “Loans.”

     C. Amendments
to Section 1.1 of the 2005 Loan Agreement.

     (i) The term “Indentures” is hereby deleted from Section 1.1 of the
2005 Loan Agreement and replaced in its entirety with the following:

     “Indenture(s)” means, either collectively or individually, as
applicable (a) that certain indenture dated as of December 5, 2005, between
Borrower and Wilmington Trust Company, as indenture trustee, (b) that
certain indenture dated June 20, 2005, between Borrower and Wilmington Trust
Company, and (c) that certain indenture dated May 12, 2004 between Borrower,
as successor to BHB, and Wilmington Trust Company, as trustee.”

     (ii) The term “Junior Subordinated Debentures” is hereby deleted from
Section 1.1 of the 2005 Loan Agreement and replaced in its entirety with the
following:

     “Junior Subordinated Debentures” means, either collectively or
individually, as applicable (a) the fixed/floating rate junior subordinated
debentures, dated December 5, 2005 and due 2035, issued by Borrower, (b) the
fixed/floating rate junior subordinated debentures, dated June 20, 2005 and
due 2035, issued by Borrower, and (c) the floating rate junior subordinated
debentures due 2034 issued by BHB, in each case pursuant to the applicable
Indenture.”

     (iii) The term “Revolving Loan Maturity Date” is hereby deleted from Section
1.1 of the 2005 Loan Agreement and replaced in its entirety with the following:

“Revolving Loan Maturity Date” means December 31, 2007.”

     (iv) The term “Sub Debt Funding Expiration Date” is hereby deleted from
Section 1.1 of the 2005 Loan Agreement and replaced in its entirety with the
following:

     “Sub Debt Funding Expiration Date” means December 31, 2007.”

2

 

     (iv) The term “Subordinated Debt Amount” is hereby deleted from Section
1.1 of the 2005 Loan Agreement and replaced in its entirety with the following:

     “Subordinated Debt Amount” means $50,000,000.”

     (v) The term “Subordinated Debt Maturity Date” is hereby deleted from
Section 1.1 of the 2005 Loan Agreement and replaced in its entirety with the
following:

     “Subordinated Debt Maturity Date” means December 31, 2017.”

     (vi)
The term “Term Loan Maturity Date” is hereby deleted from Section 1.1
of the 2005 Loan Agreement and replaced in its entirety with the following:

     “Term Loan Maturity Date” means December 31, 2017.”

     (vii) The term “Trust(s)” is hereby deleted from Section 1.1 of the 2005
Loan Agreement and replaced in its entirety with the following:

     “Trust(s)” means, collectively or individually, as applicable (a) that
certain Delaware statutory business trust known as “PrivateBancorp Stautory
Trust III,” which is maintained by Borrower in accordance with that certain
Amended and Restated Trust Agreement dated as of December 5, 2005, (b) that
certain Delaware statutory business trust known as “PrivateBancorp Statutory
Trust II,” which is maintained by Borrower in accordance with that certain
Amended and Restated Declaration of Trust dated June 20, 2005, and (c) that
certain Delaware statutory business trust known as “Bloomfield Hills
Statutory Trust I,” which is maintained by Borrower, as successor to BHB, in
accordance with that certain Amended and Restated Declaration of Trust dated
May 12, 2004.”

     (viii) Each of the following provisions is hereby added to Section 1.1, and deemed
placed in the appropriate alphabetical order:

     “Piedmont Bank” has the meaning ascribed to such term in the recitals
hereto.

     “Piedmont Merger” has the meaning ascribed to such term in the
recitals hereto.

     “Piedmont Merger Agreement” has the meaning ascribed to such term in the recitals
hereto.

     D. Amendment
to Section 4.3.1 of the 2005 Loan Agreement.
Section 4.3.1 of the 2005
Loan Agreement is hereby deleted and replaced in its entirety with the following:

“4.3.1 The proceeds of the Loans shall be used by the Borrower to fund the
cash consideration to be paid by Borrower in connection with the
consummation of the Piedmont Merger, for working capital and for general
corporate purposes.”

     E. Representations
and Warranties. The Borrower hereby represents and warrants to the
Lender as follows:

     (i) No Event of Default or Potential Event of Default has occurred and is
continuing (or would result from the amendments contemplated hereby).

     (ii) The execution, delivery and performance by the Borrower of this First
Amendment have been duly authorized by all necessary corporate and other action and do not
and will not

3

 

require any registration with, consent or approval of, or notice to or action by any Person
(including any Governmental Agency) in order to be effective and enforceable.

     (iii) This First Amendment and the other Loan Documents (as amended by this First
Amendment) constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.

     (iv) All representations and warranties of the Borrower in the 2005 Loan Agreement (as
modified by this First Amendment) are true and correct, except, for the purposes of this
First Amendment only, all references in Section 4.4 of the 2005 Loan Agreement to
(x) the term “Financial Statements” shall be deemed to refer to “the consolidated financial
statements as of and for the year ending December, 31, 2005, and as of and for the nine
months ending September 30, 2006, audited in the case of Borrower’s year end financial
statements by the Borrower’s certified public accountants.”

     (v) The Borrower’s obligations under the Agreement and under the other Loan Documents
are not subject to any defense, counterclaim, set-off, right to recoupment, abatement or
other claim.

     (vi) The Piedmont Merger Agreement remains in full force and effect and is identical
to the agreement included as Annex A to the proxy statement/prospectus included as part of
the Form S-4 filed by Borrower with the SEC. Borrower has not breached, and to the best of
Borrower’s knowledge Piedmont has not breached, its obligations under the Piedmont Merger
Agreement. All approvals and consents from Governmental Agencies required to be obtained in
order for the transactions that are contemplated by the Piedmont Merger Agreement to be
consummated have been obtained. The Piedmont Merger is scheduled to be consummated on or
before December 31, 2006.

     F. Conditions. Notwithstanding anything to the contrary contained elsewhere in the
Agreement, the obligation of the Lender to extend the Revolving Loan Maturity Date, Term Loan
Maturity Date and Subordinated Debt Maturity Date; increase the Revolving Loan Amount and
Subordinated Debt Amount, and agree to the other modifications contemplated by this First
Amendment, shall be subject to the performance by the Borrower prior to the date on which this
First Amendment is executed (the “Amendment Closing Date”) of all of its agreements theretofore to
be performed under the Agreement and to the satisfaction of the following conditions precedent.
The obligations to continue to make disbursements of proceeds under the Loans are, and shall
remain, subject to the conditions precedent in the 2005 Loan Agreement and to the receipt by the
Lender of all the following in form and substance satisfactory to the Lender and its counsel, and,
where appropriate, duly executed and dated the Amendment Closing Date:

     (i) an amended and restated Revolving Note, substantially in the form of Exhibit A
attached hereto;

     (ii) an amended and restated Subordinated Debenture, substantially in the form of
Exhibit B attached hereto;

     (iii) an amendment to the Pledge Agreement, substantially in the form of Exhibit C attached hereto;

     (iv) an amendment to the Collateral Safekeeping Agreement, substantially in the form
of Exhibit D attached hereto;

     (v) a certificate of good standing of the Borrower, certified by the appropriate
governmental official in its jurisdiction of incorporation and dated within the five
business days preceding the date hereof;

4

 

     (vi) (a) copies, certified by the Secretary or Assistant Secretary of the
Borrower, of the (I) resolutions duly adopted by the board of directors of the Borrower (or
the appropriate committee thereof) authorizing the execution, delivery and performance of
this First Amendment and the other documents to be delivered by the Borrower pursuant to
this First Amendment (including the First Amendment, the “Amendment-Related Documents”),
and (II) the Bylaws of the Borrower as currently in effect; and (b) a certification by the
Secretary or Assistant Secretary of the Borrower that there has been no amendment to the
articles of incorporation of the Borrower from and after September 29, 2005, and that the
articles of incorporation delivered by the Borrower to the Lender on September 29, 2005,
remain in full force and effect; and

     (vii) a written opinion of Vedder, Price, Kaufman & Kammholz, P.C., counsel to the
Borrower, addressed to the Lender, substantially in the form of Exhibit E attached
hereto.

     G. Additional
Terms.

          (i)
Acknowledgment of Indebtedness under Agreement. The Borrower acknowledges and
confirms that, as of the date hereof, the Borrower is indebted to the Lender, without defense,
setoff, or counterclaim, in the aggregate principal amount of (i) Two Hundred Fifty Thousand and
No/100 Dollars ($250,000) under the Term Loan, (ii) Nineteen Million and 00/100 Dollars
($19,000,000) under the Revolving Loan and (iii) Twenty-One Million and No/100 Dollars
($21,000,000) under the Subordinated Debt.

          (ii)
The Agreement. All references in the 2005 Loan Agreement to the term “Agreement”
shall be deemed to refer to the Agreement referenced in this First Amendment.

          (iii)
First Amendment and 2005 Loan Agreement to be Read Together. This First
Amendment supplements and is hereby made a part of the 2005 Loan Agreement, and the 2005 Loan
Agreement and this First Amendment shall from and after the date hereof be read together and
shall
constitute the Agreement. Except as otherwise set forth herein, the 2005 Loan Agreement shall
remain in full
force and effect. :

          (iv)
Loan Documents. The term “Loan Documents,” as used in the Agreement, shall from
and after the date hereof include the Amendment-Related Documents.

          (v)
Counterparts. This First Amendment may be executed by facsimile and in one or
more counterparts, each of which shall be deemed an original and all of which taken together shall
constitute one and the same document.

          (vi)
Acknowledgments. The Borrower acknowledges that (i) it has been advised by
counsel of its choice with respect to this First Amendment, the Loan Documents and the
transactions contemplated thereby, (ii) each of the waivers set forth herein was knowingly and
voluntarily made, and (iii) the obligations of the Lender hereunder shall be strictly construed
and shall be expressly subject to the Borrower’s compliance in all respects with the terms and
conditions of the Agreement.

          (vii)
Delivery of Outstanding Capital Stock of Piedmont Bank: Change of Name. No later
than one Business Day following the consummation of the Piedmont Merger, Borrower shall deliver to
the Custodian (as defined in the Collateral Safekeeping Agreement) stock certificates issued by
Piedmont Bank to Borrower and evidencing all of the outstanding capital stock of Piedmont Bank,
together with irrevocable stock powers for each such certificate endorsed by Borrower in blank.
Lender acknowledges and agrees that as of (or shortly after) the consummation of the Piedmont
Merger, Piedmont Bank will change its name to “The Private Bank.”

          (viii)
No Novation. The terms and conditions of the 2005 Loan Agreement and the Notes
issued in favor of the Lender thereunder (the “Original Notes”) are amended as set forth in, and
superceded and, with respect to the Revolving Note, and Subordinated Debenture, restated in their
entirety by, the Agreement as modified by this First Amendment and the Revolving Note and

5

 

Subordinated Debenture issued hereunder in favor of the Lender. It is expressly understood and
acknowledged that nothing in this First Amendment shall be deemed to cause or otherwise give rise
to a novation of the Original Notes. Notwithstanding any provision of this First Amendment, any
Amendment-Related Document or any Loan Document to the contrary, the execution and delivery of the
restated Revolving Note and Subordinated Debenture pursuant to this First Amendment in favor of the
Lender shall be in substitution for, but not in payment of, the Revolving Note and Subordinated
Debenture that constitute a part of the Original Notes, respectively.
All “Borrower’s Liabilities” under the 2005 Loan Agreement shall in all respects be continuing and this First Amendment shall
not be deemed to evidence or result in a novation or repayment and re-borrowing of such “Borrower’s
Liabilities.”

[Remainder of Page Intentionally Left Blank]

6

 

     IN WITNESS WHEREOF, the parties have executed this First Amendment as of the date first
written above.

	 	 	 	 	 	 	 
	 	 	PRIVATEBANCORP, INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Dennis Klaeser
 

	 	 
	 

	 	 	 	Name: Dennis Klaeser	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	LASALLE BANK NATIONAL ASSOCIATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Michael A. Tighe	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Michael A. Tighe, Jr.	 	 
	 

	 	 	 	Title: First Vice President	 	 

S-1

 

 

EXHIBIT A

FORM OF AMENDED AND RESTATED REVOLVING NOTE

AMENDED AND RESTATED REVOLVING NOTE

	 	 	 
	$64,750,000.00

	 	Chicago, Illinois
	 

	 	Restatement Date: December                      , 2006
	 

	 	Original Note Date: February 11 , 2000 (as amended)

     FOR VALUE RECEIVED, the undersigned, PRIVATEBANCORP, INC., a Delaware corporation
(“Borrower”), promises to pay to the order of LASALLE BANK NATIONAL ASSOCIATION, a national
banking association, or the holder hereof from time to time
(“Lender”), at such place as may be
designated in writing by Lender, the principal sum of SIXTY-FOUR MILLION SEVEN HUNDRED FIFTY
THOUSAND AND NO/100THS DOLLARS ($64,750,000.00) (or so much thereof that has been advanced and
remains outstanding), with interest thereon as hereinafter provided. It is contemplated that there
will be advances and payments under this note (this
“Note”) from time to time, but no advances or
payments under this Note (including payment in full of the unpaid balance of principal hereof
prior to maturity) shall affect or impair the validity or enforceability of this Note as to future
advances hereunder. This Note is issued pursuant to the terms of an Amended and Restated Loan and
Subordinated Debenture Purchase Agreement of even date herewith by and between Borrower and Lender
(said Amended and Restated Loan and Subordinated Debenture Purchase Agreement together with the
Agreed Upon Terms and Procedures, as each may be amended, restated, supplemented or modified from
time to time, is referred to hereinafter as the “Loan Agreement”). All capitalized terms used but
not defined herein shall have the respective meanings ascribed to them in the Loan Agreement.

     This Note represents a continuation of the indebtedness represented by that certain Revolving
Note dated February 11, 2000 made by Borrower to Lender in the original principal amount of
$18,000,000, as such note has been amended prior to the date hereof (the “Original Revolving
Note”). The Original Revolving Note is amended, restated and replaced by this Note. This Note does
not constitute a novation, discharge or satisfaction of the Original Revolving Note replaced
hereby or of the indebtedness evidenced by said Original Revolving Note.

     Interest shall accrue on all sums as advanced and outstanding from time to time under this
Note and Loan Agreement as set forth in the Loan Agreement. Such interest shall be due and
payable, in arrears (i) for any LIBO Rate Tranche, on the last day of each LIBOR Period, and (ii)
for any Base Rate Tranche, on the last day of each September, December, March and June, beginning
September 30, 2005, and as otherwise set forth in the Loan Agreement.

     The outstanding principal balance of this Note, together with all accrued and unpaid
interest, shall be due and payable on the Revolving Loan Maturity
Date. Additional principal
payments shall be made in accordance with the provisions of the Loan Agreement.

     This Note is issued pursuant to the terms of the Loan Agreement and is secured by and entitled
to the benefits of, among other things, the Collateral Documents. In case an Event of Default shall
occur and be continuing, the principal of this Note together with all accrued interest thereon may,
at the option of the holder hereof, immediately become due and payable on demand; provided,
however, that if any document related to this Note provides for automatic acceleration of payment
of sums owing hereunder, all sums owing hereunder shall be automatically due and payable in
accordance with the terms of that, document.

A-1

 

     Unless otherwise provided in the Loan Agreement, all payments on account of the indebtedness
evidenced by this Note shall be first applied to the payment of costs and expenses of Lender which
are due and payable, then to past-due interest on the unpaid principal balance and the remainder
to principal.

     Provided that no Event of Default then exists, this Note may be prepaid only upon those terms
and conditions set forth in the Loan Agreement.

     If any interest payment required hereunder is not received by Lender on or before the tenth
day following the date it becomes due, Borrower shall pay, at Lender’s option, a late or
collection charge equal to 4% of the amount of such unpaid interest payment.

     From and after the Revolving Loan Maturity Date, or such earlier date as all sums owing on
this Note become due and payable by acceleration or otherwise, or after the occurrence of an Event
of Default, interest shall be computed on all amounts then due and payable under this Note at a
“Default Rate” equal to 2% per annum (based on a 360-day year and charged on the basis of actual
days elapsed) in excess of the interest rate otherwise accruing under this Note.

     If any attorney is engaged by Lender to enforce or defend any provision of this Note or any
of the other Loan Documents, or as a consequence of any Event of Default, with or without the
filing of any legal action or proceeding, then Borrower shall pay to Lender immediately upon
demand all attorneys’ fees and expenses, together with interest thereon from the date of such
demand until paid at the rate of interest applicable to the principal balance owing hereunder as
if such unpaid attorneys’ fees and expenses had been added to the principal.

     No previous waiver and no failure or delay by Lender in acting with respect to the terms of
this Note or any of the other Loan Documents shall constitute a waiver of any breach, default or
failure of condition under this Note, the Loan Agreement or any of the other Loan Documents or the
obligations secured thereby. A waiver of any term of this Note or any of the other Loan Documents
or of any of the obligations secured thereby must be made in writing and shall be limited to the
express written terms of such waiver. In the event of any inconsistencies between the terms of this
Note and the terms of any other document related to the Loan evidenced by this Note, the terms of
this Note shall prevail.

     Except as otherwise provided in the Loan Agreement, Borrower expressly waives presentment,
demand, notice of dishonor, notice of default or delinquency, notice of acceleration, notice of
protest and nonpayment, notice of costs, expenses or losses and interest thereon, notice of late
charges, and diligence in taking any action to collect any sums owing under this Note or in
proceeding against any of the rights or interests in or to properties securing payment of this
Note. In addition, Borrower expressly agrees that this Note and any payment coming due hereunder
may be extended from time to time without in any way affecting the liability of any such party
hereunder.

     Time is of the essence with respect to every provision hereof. This Note shall be construed
and enforced in accordance with the laws of the State of Illinois, except to the extent that
federal laws preempt the laws of the State of Illinois, and all persons and entities in any manner
obligated under this Note consent to the jurisdiction of any Federal or State court within the
State of Illinois having proper venue and also consent to service of process by any means
authorized by Illinois or Federal law. Any reference contained herein to attorneys’ fees and
expenses shall be deemed to be to reasonable fees and expenses and to include all reasonable fees
and expenses of in-house or staff attorneys and the reasonable fees and expenses of any other
experts or consultants.

     All agreements between Borrower and Lender (including, without limitation, this Note and the
Loan Agreement, and any other documents securing all or any part of the indebtedness evidenced
hereby) are expressly limited so that in no event whatsoever shall the amount paid or agreed to be
paid to Lender exceed the highest lawful rate of interest permissible under applicable law. If,
from any circumstances whatsoever, fulfillment of any provision hereof, the Loan Agreement or any
other documents securing all or any part of the indebtedness evidenced hereby at the time
performance of such provisions shall be due, shall involve exceeding the limit of validity
prescribed by law which a court

A-2

 

of
competent jurisdiction may deem applicable hereto, then, ipso
facto, the obligation to be
fulfilled shall be reduced to the highest lawful rate of interest permissible under such applicable
laws, and if, for any reason whatsoever, Lender shall ever receive as interest an amount which
would be deemed unlawful under such applicable law, such interest shall be automatically applied to
the payment of the principal of this Note (whether or not then due and payable) and not to the
payment of interest or refunded to Borrower if such principal has been paid in full.

     Any notice which either party hereto may be required or may desire to give hereunder shall be
governed by the notice provisions of the Loan Agreement.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

A-3

 

BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS NOTE OR ANY OF THE
OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF BORROWER OR LENDER. BORROWER
ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS
WAIVER WITH SUCH LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS
THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER HAS BEEN REVIEWED BY BORROWER AND
BORROWER’S COUNSEL AND IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THE LOAN DOCUMENTS, AND
(iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF THE LOAN DOCUMENTS AS IF FULLY INCORPORATED
THEREIN.

     IN WITNESS WHEREOF, the undersigned has executed this Note or caused this Note to be executed
by its duly authorized representative as of the date first above written.

	 	 	 	 	 	 	 
	 	 	PRIVATEBANCORP, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

A-4

 

EXHIBIT B

FORM OF AMENDED AND RESTATED SUBORDINATED DEBENTURE

AMENDED AND RESTATED SUBORDINATED DEBENTURE

 

     THIS SUBORDINATED DEBENTURE IS NOT A SAVINGS ACCOUNT OR DEPOSIT AND IT IS NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY FEDERAL AGENCY.

      

	 	 	 
	$50,000,000.00

	 	Chicago, Illinois
	 

	 	Restatement Date: December
                     , 2006
	 

	 	Original Debenture Date: September 29, 2005

     FOR VALUE RECEIVED, the undersigned, PRIVATEBANCORP, INC., a Delaware corporation
(“Borrower”), hereby promises to pay to the order of LASALLE BANK NATIONAL ASSOCIATION, a national
banking association, or any holder hereof from time to time
(“Lender”), at such place as may be
designated in writing by Lender, the principal sum of FIFTY MILLION AND NO/100 DOLLARS
($50,000,000.00) (or so much thereof that has been advanced and remains outstanding) with interest
thereon as hereinafter provided. This Subordinated Debenture (this “Subordinated Debenture”) is
issued pursuant to the terms of an Amended and Restated Loan and Subordinated Debenture Purchase
Agreement of even date herewith by and between Borrower and Lender (said Amended and Restated Loan
and Subordinated Debenture Purchase Agreement together with the Agreed Upon Terms and Procedures,
as each may be amended, restated, supplemented or modified from time to time, is referred to
hereinafter as the “Loan Agreement”). All capitalized terms used but not defined herein shall have
the respective meanings ascribed to them in the Loan Agreement.

     This Subordinated Debenture represents a continuation of the indebtedness represented by that
certain Subordinated Debenture dated September 29, 2005 issued by Borrower to Lender in the
original principal amount of $25,000,000 (the “Original Debenture”). The Original Debenture is
amended, restated and replaced by this Subordinated Debenture. This Subordinated Debenture does
not constitute a novation, discharge or satisfaction of the Original Debenture replaced hereby or
of the indebtedness evidenced by said Original Debenture.

     All accrued interest and unpaid principal due and payable under this Subordinated Debenture
shall be paid in full on or before the Subordinated Debenture Maturity Date.

     The unpaid principal amount outstanding under this Subordinated Debenture from time to time
shall bear interest before maturity in accordance with the Loan Agreement, computed on the basis
of a 360-day year and charged for actual days elapsed. Under certain circumstances as provided in
the Loan Agreement, overdue interest payments under this Subordinated Debenture shall bear
interest from the due date thereof until paid at a daily rate equal to the Default Rate of
Interest, computed on the basis of a 360-day year and charged for actual days elapsed, except as
otherwise provided in the Loan Agreement.

     All accrued interest shall be payable at Lender’s principal place of business on a quarterly
basis in arrears on the last day of each September, December, March and June, commencing September
30, 2005. The outstanding unpaid principal balance of this Subordinated Debenture shall be payable
in one installment on the Subordinated Debenture Maturity Date. Whenever any payment to be made
under this Subordinated Debenture shall be due on a day that is not a Business Day, such payment
shall be made

B-1

 

on the next succeeding Business Day, and such extension of time shall be included in the
computation of interest due upon this Subordinated Debenture. There shall be no penalties or other
charges payable by Borrower to Lender hereunder other than those payments described in this
Subordinated Debenture or in the Loan Agreement. Borrower may prepay all or, from time to time,
part of the outstanding unpaid principal balance under this Subordinated Debenture at any time
without penalty.

     This Subordinated Debenture is not secured by any assets of Borrower.

     So long as any portion of the unpaid principal of this Subordinated Debenture is deemed to be
Tier 2 Capital of Borrower in accordance with the rules and regulations of the FRB applicable to
the capital status of the subordinated debt of bank holding companies, the rights of Lender to the
principal sum hereunder or any part hereof and to any accrued interest thereon shall remain
subject and subordinate (in accordance with SR 92-37 issued by the FRB on October 15, 1992) to the
claims of creditors of Borrower with respect to the following (“Senior Claims”) (a) borrowed and
purchased money, (b) similar obligations arising from off-balance-sheet guaranties and
direct-credit substitutes, and (c) obligations associated with derivative products such as
interest-rate and foreign exchange-rate contracts, commodity contracts, and similar arrangements
(clauses (a), (b) and (c) expressly exclude Trust Preferred Indebtedness, as defined below, with
respect to which, accordingly, the rights of Lender are not subordinate). Upon dissolution or
liquidation of Borrower, no payment of principal, interest or premium (including post-default
interest) shall be due and payable under the terms of this Subordinated Debenture until all Senior
Claims (which expressly exclude Trust Preferred Indebtedness) shall have been paid in full. If
this Subordinated Debenture ceases to be deemed to be Tier 2 Capital of Borrower in accordance
with the rules and regulations of the FRB applicable to the capital status of the subordinated
debt of bank holding companies, other than due to the limitations imposed by the second sentence
of 12 C.F.R §250.166(e), which limits the capital treatment of subordinated debt during the five
years immediately preceding the maturity date of the subordinated debt, Borrower shall:
immediately notify Lender; and immediately upon request of Lender execute and deliver all such
agreements (including without limitation pledge agreements and replacement notes) as Lender may
request in order to restructure the obligation evidenced hereby as a senior secured obligation of
Borrower. If Borrower fails to execute such agreements as required by Lender within 30 days of
Lender’s request, such failure shall be deemed to be an Event of Default as provided in
Section 8.1.1 of the Loan Agreement.

     As used herein, “Trust Preferred Indebtedness” shall mean indebtedness incurred in connection
with, or relating to, any trust preferred securities caused to be issued by, or reflected in the
consolidated financial statements of, Borrower, including the subordinated indebtedness evidenced
by the Junior Subordinated Debentures.

     If an Event of Default shall occur, Lender shall have the rights set forth in Section
8.6 of the Loan Agreement.

     If any attorney is engaged by Lender to enforce or defend any provision of this Subordinated
Debenture or any of the other Loan Documents, or as a consequence of any Event of Default, with or
without the filing of any legal action or proceeding, then Borrower shall pay to Lender
immediately upon demand all attorneys’ fees and expenses, together with interest thereon from the
date of such demand until paid at the rate of interest applicable to the principal balance owing
hereunder as if such unpaid attorneys’ fees and expenses had been added to the principal.

     No previous waiver and no failure or delay by Lender in acting with respect to the terms of
this Subordinated Debenture or any of the other Loan Documents shall constitute a waiver of any
breach, default or failure of condition under this Subordinated Debenture, the Loan Agreement or
any of the other Loan Documents or the obligations secured thereby. A waiver of any term of this
Subordinated Debenture or any of the other Loan Documents or of any of the obligations secured
thereby must be made in writing and shall be limited to the express written terms of such waiver.
In the event of any inconsistencies between the terms of this Subordinated Debenture and the terms
of any other document related to the Loan evidenced by this Subordinated Debenture, the terms of
this Subordinated Debenture shall prevail.

B-2

 

     Except as otherwise provided in the Loan Agreement, Borrower expressly waives presentment,
demand, notice of dishonor, notice of default or delinquency, notice of acceleration, notice of
protest and nonpayment, notice of costs, expenses or losses and interest thereon, notice of late
charges, and diligence in taking any action to collect any sums owing under this Subordinated
Debenture. In addition, Borrower expressly agrees that this Subordinated Debenture and any payment
coming due hereunder may be extended from time to time without in any way affecting the liability
of any such party hereunder.

     Time is of the essence with respect to every provision hereof. This Subordinated Debenture
shall be construed and enforced in accordance with the laws of the State of Illinois, except to
the extent that federal laws preempt the laws of the State of Illinois, and all persons and
entities in any manner obligated under this Subordinated Debenture consent to the jurisdiction of
any federal or State court within the State of Illinois having proper venue and also consent to
service of process by any means authorized by Illinois or Federal law. Any reference contained
herein to attorneys’ fees and expenses shall be deemed to be to reasonable fees and expenses and
to include all reasonable fees and expenses of in-house or staff attorneys and the reasonable fees
and expenses of any other experts or consultants.

     All agreements between Borrower and Lender, (including, without limitation, this Subordinated
Debenture and the Loan Agreement, and any other documents securing all or any part of the
indebtedness evidenced hereby) are expressly limited so that in no event whatsoever shall the
amount paid or agreed to be paid to Lender exceed the highest lawful rate of interest permissible
under applicable law. If, from any circumstances whatsoever, fulfillment of any provision hereof,
the Loan Agreement or any other documents securing all or any part of the indebtedness evidenced
hereby at the time performance of such provisions shall be due, shall involve exceeding the limit
of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto,
then, ipso facto, the obligation to be fulfilled shall be reduced to the highest lawful rate of
interest permissible under such applicable laws, and if, for any reason whatsoever, Lender shall
ever receive as interest an amount which would be deemed unlawful under such applicable law, such
interest shall be automatically applied to the payment of the principal of this Subordinated
Debenture (whether or not then due and payable) and not to the payment of interest or refunded to
Borrower if such principal has been paid in full.

     Lender may sell, assign, pledge or otherwise transfer or encumber any or all of its interest
under this Subordinated Debenture at any time and from time to time. In the event of a transfer,
all terms and conditions of this Subordinated Debenture shall be binding upon and inure to the
benefit of the transferee after such transfer.

     Upon receipt of notice from Lender advising Borrower of the loss, theft, destruction or
mutilation of this Subordinated Debenture, Borrower shall, execute and deliver in lieu thereof a
new debenture in principal amount equal to the unpaid principal amount of such lost, stolen,
destroyed or mutilated debenture, dated the date to which interest has been paid on such lost,
stolen, destroyed or mutilated Subordinated Debenture.

     Unless otherwise provided in the Loan Agreement, all payments on account of the indebtedness
evidenced by this Subordinated Debenture shall be first applied to the payment of costs and
expenses of Lender which are due and payable, then to past-due interest on the unpaid principal
balance and the remainder to principal.

     Any notice which either party hereto may be required or may desire to give hereunder shall be
governed by the notice provisions of the Loan Agreement.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

B-3

 

BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS SUBORDINATED DEBENTURE
OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF BORROWER OR LENDER.
BORROWER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS SUBORDINATED DEBENTURE
AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND
THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (i)
IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER HAS
BEEN REVIEWED BY BORROWER AND BORROWER’S COUNSEL AND IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER
INTO THE LOAN DOCUMENTS, AND (iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF THE LOAN DOCUMENTS
AS IF FULLY INCORPORATED THEREIN.

     IN WITNESS WHEREOF, the undersigned has executed this Subordinated Debenture or caused this
Subordinated Debenture to be executed by its duly authorized representative as of the date first
above written.

	 	 	 	 	 	 	 
	 	 	PRIVATEBANCORP, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

 

 

EXHIBIT C

FORM OF FIRST AMENDMENT TO AMENDED AND RESTATED PLEDGE AGREEMENT

     This FIRST AMENDMENT TO AMENDED AND RESTATED PLEDGE AGREEMENT (“First
Amendment”), dated as of December
     , 2006, is entered into by and between PRIVATE BANCORP,
INC., a Delaware corporation (“Pledgor”), and LASALLE BANK NATIONAL ASSOCIATION, a national banking
association (“Lender”).

R
E C I T A L S :

     A. The parties hereto have entered into that certain Amended and Restated Pledge
Agreement, dated as of September 29, 2005, as previously amended, restated, supplemented or
modified
from time to time (the “2005 Pledge Agreement”).

     B. The parties hereto desire to amend and modify the 2005 Pledge Agreement in
accordance with the terms and subject to the conditions set forth in this First Amendment. As
amended and
modified by this First Amendment, the 2005 Pledge Agreement may be referred to as the “Pledge
Agreement.”

     C. The parties desire to amend the terms of the 2005 Pledge Agreement to grant Lender a
security interest in Pledgor’s rights under the Piedmont Merger Agreement (as defined in the
Loan
Agreement). Upon the consummation of the merger described in the Piedmont Merger Agreement,
Piedmont Bank will be a wholly owned subsidiary of Pledgor and, accordingly, its outstanding
capital stock
will be owned by Pledgor. Such capital stock, as proceeds of the Lender’s security interest in
Pledgor’s rights
under the Piedmont Merger Agreement, will be subject to the pledge by Pledgor hereunder. The
parties
agree to undertake such modifications in accordance with the terms, subject to the conditions,
and in reliance
upon the recitals, representations, warranties, and covenants set forth herein, in the Pledge
Agreement, and
in the other Loan Documents, irrespective of whether entered into or delivered on or after
September 29,
2005.

     D. Capitalized terms used but not otherwise defined in this First Amendment shall have the
meanings respectively ascribed to them in the 2005 Pledge Agreement.

     NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants, and
agreements hereinafter set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

A
G R E E M E N
T :

     A. Amendment to Recitals “A” and “B” of the 2005 Pledge Agreement. Recitals “A” and
“B” to the 2005 Pledge Agreement are hereby deleted and replaced in their entirety with the
following:

     “A. Borrower is a bank holding company that owns 100% of the issued and
outstanding capital stock of Private Bank and Trust Company, an Illinois
state-chartered, non-member bank with its main office located in Chicago, Illinois
(“Private Bank”), The Private Bank, a federal savings bank with its main office
located in St. Louis, Missouri (“Private Bank St. Louis”), and The Private Bank, a
Michigan state-chartered, non-member bank with its main office located in Bloomfield
Hills, Michigan (“Private Bank Michigan”). Effective upon the consummation of the
Piedmont Merger (as defined in the Loan Agreement), Borrower will own 100% of the
issued and outstanding capital stock of Piedmont Bank of Georgia, a Georgia
state-chartered, non-member bank with its main office located in Atlanta, Georgia
(“Piedmont Bank”). The issued and outstanding capital stock of Private Bank, Private
Bank St. Louis, Private Bank Michigan, and, effective only upon consummation of the
Piedmont Merger, Piedmont Bank may be referred to as the “Pledged

C-1

 

Subsidiary Bank Shares.” Private Bank, Private Bank St. Louis, Private Bank
Michigan and, effective only upon consummation of the Piedmont Merger, Piedmont
Bank may be referred to herein collectively as the “Bank Subsidiaries” and
individually as a “Bank Subsidiary.

     B. Borrower has requested that Lender provide it with three credit facilities
in the aggregate principal amount of $115,000,000 consisting of a Term Loan in the
principal amount of $250,000, a Revolving Loan in the principal amount of
$64,750,000 and Subordinated Debt in the principal amount of $50,000,000.”

     B. Amendment to Schedule A of the 2003 Pledge Agreement. Effective upon
consummation of the Piedmont Merger, Schedule A attached to the 2005 Pledge Agreement
is hereby
deleted and replaced in its entirety with Schedule A attached to this First Amendment, which
attached
schedule may be completed by hand following completion of the Piedmont Merger.

     C. Amendment to Definition of “Pledged Stock” in Section 1.1 of the 2005 Pledge
Agreement. The definition of “Pledged Stock” is hereby deleted and replaced in its entirety
with the
following:

     “Pledged Stock” means: (i) the shares of capital stock of the Bank
Subsidiaries as described on the attached Schedule A hereto and any and all
other shares of capital stock issued by any Bank Subsidiary previously or hereafter
acquired by Pledgor, whether directly from a Bank Subsidiary or otherwise and
whether such other shares are now or hereafter in the possession of Pledgor, Lender
or other holder; (ii) all stock and other securities or property which are issued
pursuant to conversion, redemption, exercise of rights, stock split,
recapitalization, reorganization, stock dividends or other corporate act which are
referable to the shares referenced in clause (i) or this clause (ii) (collectively,
the “Additional Pledged Securities”); (iii) all distributions, whether cash or
otherwise, in the nature of a partial or complete liquidation, dissolution or
winding up which are referable to the shares referenced in clause (i) or clause (ii)
(such distributions are hereinafter referred to as “Liquidating Distributions”);
(iv) all right, title and interest of Pledgor in, to and under the Piedmont Merger
Agreement (as defined in the Loan Agreement); and (v) all substitutions for any of
the foregoing, proceeds of and from any of the foregoing (including, without
limitation, upon consummation of the Piedmont Merger, the outstanding capital stock
of Piedmont Bank) and all interest, cash dividends or other payments in respect of
any of the foregoing.”

     D. Amendment
to Section 2 of the 2005 Pledge Agreement. Section 2 of the 2005
Pledge Agreement is hereby deleted and replaced in its entirety with the following:

     “2. PLEDGE AND GRANT OF SECURITY INTERESTS. Pledgor hereby pledges,
collaterally assigns, hypothecates and transfers to Lender all Pledged Stock,
together with appropriate undated assignments separate from the Certificates duly
executed in blank, and hereby grants to and creates in favor of Lender liens and
security interests in the Pledged Stock as collateral security for (a) the due and
punctual payment when due (whether at maturity, by acceleration or otherwise) in
full of all amounts due under the Senior Notes (as the same may be amended,
restated, supplemented, modified, extended or replaced from time to time) in the
aggregate face amount as of the date hereof of Sixty-Five Million Dollars
($65,000,000) executed and delivered by Pledgor to Lender pursuant to the Loan
Agreement; (b) the due and punctual performance and observance by Pledgor of all
other Borrower’s Liabilities; (c) the due and punctual performance and observance by
Pledgor of all of its agreements, obligations, liabilities and duties under this
Pledge Agreement, the Loan Agreement and the other Loan Documents; (d) all amounts
due to the Lender under the Senior Notes, including any and all modifications,
extensions, renewals or refinancings thereof and including, without limitation, all
principal, interest and other amounts due under the Senior Notes; (e) all sums
advanced by, or on behalf of, the Lender in connection with, or relating to, the
Loan Agreement, the Senior Notes or the Pledged Stock

C-2

 

including, without limitation, any and all sums advanced to preserve the
Pledged Stock, or to perfect the Lender’s security interest in the Pledged Stock;
(f) in the event of any proceeding to enforce the satisfaction of the obligations,
or any of them, or to preserve and protect their rights under the Loan Agreement,
the Senior Notes, this Pledge Agreement or any other agreement, document or
instalment relating to the transactions contemplated in the Loan Agreement, the
reasonable expenses of retaking, holding, preparing for sale, selling or otherwise
disposing of or realizing on the Pledged Stock, or of any exercise by the Lender of
its rights, together with reasonable attorneys’ fees, expenses and court costs; (g)
any indebtedness, obligation or liability of the Pledgor to the Lender, whether
direct or indirect, joint or several, absolute or contingent, now or hereafter
existing, however created or arising and however evidenced; (h) any indebtedness,
obligation or liability of the Pledgor under or in connection with any Interest Rate
Protection Agreement; and (i) all costs incurred by Lender to obtain, perfect,
preserve and enforce the liens and security interests granted by this Pledge
Agreement, the Loan Agreement and the other Loan Documents, to collect the
Obligations Secured Hereby (as hereinafter defined) and to maintain and preserve the
Pledged Stock, with such costs including, without limitation, expenditures made by
Lender for attorneys’ fees and other legal expenses and expenses of collection,
possession and sale of the Pledged Stock, together with interest on all such costs
at the Default Rate (the foregoing subsections (a) through (i) are collectively
referred to herein as the “Obligations Secured Hereby”). Notwithstanding anything
above in this Section 2 to the contrary, (i) the Pledged Stock shall not be
collateral security for amounts outstanding under the Subordinated Debenture that
are deemed to be Tier 2 Capital of Pledgor in accordance with the rules and
regulations of the FRB applicable to the capital status of the subordinated debt of
bank holding companies, without giving effect to the limitation imposed by the
second sentence of 12 C.F.R. §250.166(e), which limits the capital treatment of
subordinated debt during the five years immediately preceding the maturity date of
the subordinated debt, and (ii) the pledge, collateral assignment, hypothecation,
transfer, grant and creation to and in favor of Lender contemplated in the first
sentence of this Section 2 with respect to the outstanding capital stock of
Piedmont Bank shall be of no force and effect until the consummation of the Piedmont
Merger.”

     E. Representations and Warranties. Pledgor hereby represents and warrants to Lender
as
follows:

     (i) No Event of Default or event which, with the giving of notice, the passage of
time, or both would constitute an Event of Default has occurred and is continuing (or would
result from the amendments contemplated hereby).

     (ii) The execution, delivery and performance by Pledgor of this First Amendment have
been duly authorized by all necessary corporate and other action and do not and will not
require any registration with, consent or approval of, or notice to or action by any
Person (including any Governmental Agency) in order to be effective and enforceable.

     (iii) This First Amendment and the Pledge Agreement (as amended by this First
Amendment) constitute the legal, valid and binding obligations of Pledgor, enforceable
against Pledgor in accordance with their respective terms.

     (iv) All representations and warranties of the Pledgor in the 2005 Pledge Agreement
(as modified by this First Amendment) are true and correct.

     (v) Pledgor’s obligations under the Pledge Agreement are not subject to any defense,
counterclaim, set-off, right to recoupment, abatement or other claim, and the Pledge
Agreement and the pledge contemplated thereby continues to secure the Obligations Secured
Hereby.

     F. Conditions. Notwithstanding anything to the contrary contained elsewhere in the
Pledge
Agreement, the obligation of Lender to release the pledge of Pledgor’s shares of capital stock
of Lafayette

C-3

 

Bank shall be subject to the performance by Pledgor prior to the date on which this First
Amendment is executed of all of its agreements theretofore to be performed under the Agreement and
to the closing on the date hereof under that certain First Amendment to Loan and Subordinated
Debenture Agreement between Pledgor and Lender.

     G. Additional Terms.

     (i) The Pledge Agreement. All references in the 2005 Pledge Agreement to the
term “Pledge Agreement” shall be deemed to refer to the Pledge Agreement referenced in this
First Amendment.

     (ii) First Amendment and 2005 Pledge Agreement to be Read Together. This First
Amendment supplements and is hereby made a part of the 2005 Pledge Agreement, and the 2005
Pledge Agreement and this First Amendment shall from and after the date hereof be read
together and shall constitute the Pledge Agreement. Except as otherwise set forth herein,
the 2005 Pledge Agreement shall remain in full force and effect.

     (iii) Counterparts. This First Amendment may be executed by facsimile and in
one or more counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same document.

     (iv) Acknowledgments. Pledgor acknowledges that (i) it has been advised by
counsel of its choice with respect to this First Amendment and the transactions
contemplated thereby, (ii) each of the waivers set forth herein was knowingly and
voluntarily made, and (iii) the obligations of Lender hereunder shall be strictly construed
and shall be expressly subject to Pledgor’s compliance in all respects with the terms and
conditions of the Pledge Agreement.

     (v) Amendment to Financing Statement. Without limitation of the obligations of
Pledgor pursuant to Section 6.4 of the Pledge Agreement, Pledgor hereby authorizes Lender
to file an amendment to the UCC-1 financing statement currently on file with respect to the
Pledged Stock to reflect the inclusion of the rights of Pledgor under the Piedmont Merger
Agreement in the description of collateral in such financing statement.

     (vi) Delivery of Acknowledgment of Piedmont Bank. Upon consummation of the
Piedmont Merger, Pledgor shall promptly (A) deliver the certificates evidencing the
outstanding capital stock of Piedmont Bank to the custodian under and in accordance with the
Collateral Safekeeping Agreement, (B) cause to be executed and delivered to Lender the
Acknowledgment of Piedmont Bank in the form of Schedule B to this First Amendment,
and (C) be deemed to have consented to the update of Schedule A to this First
Amendment that reflects the appropriate information regarding the pledged shares issued by
Piedmont Bank.

[Remainder of Page Intentionally Left Blank]

C-4

 

     IN WITNESS WHEREOF, the parties have executed this First Amendment as of the date first
written above.

	 	 	 	 	 	 	 
	 	 	PRIVATEBANCORP, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	LASALLE BANK NATIONAL ASSOCIATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Michael A.Tighe, Jr.	 	 
	 

	 	 	 	Title: First Vice President	 	 

S-1

 

EXHIBIT D

FORM OF FIRST AMENDMENT TO COLLATERAL SAFEKEEPING AGREEMENT

     This
FIRST AMENDMENT TO COLLATERAL SAFEKEEPING AGREEMENT
 (“First
Amendment”), dated as of                     , 2006, is entered into by and between PRIVATEBANCORP,
INC., a Delaware corporation (“Pledgor”), LASALLE BANK NATIONAL ASSOCIATION, a national banking
association (“Lender”) and LASALLE BANK MIDWEST, N.A., a national banking association (the
“Custodian”).

R
E C I T A L S:

     A. The parties hereto have entered into that certain Collateral Safekeeping Agreement,
dated
as of October 13, 2005, as previously amended, restated, supplemented or modified from time to
time (the
“2005 Agreement’).

     B. The parties hereto desire to amend and modify the 2005 Agreement in accordance with the
terms and subject to the conditions set forth in this First Amendment. As amended and modified
by this First
Amendment, the 2005 Agreement may be referred to as the “Agreement.”

     C. The parties desire to amend the terms of the 2005 Agreement to reflect the inclusion of the
outstanding capital stock of Piedmont Bank of Georgia (“Piedmont Bank”) within the definition
of Subsidiary
Bank Shares upon the consummation of the merger of Piedmont Banshares, Inc., being the parent
of Piedmont Bank, with and into Pledgor (the “Piedmont Merger”). The Lender has a security
interest in
Pledgor’s rights under the agreement governing the Piedmont Merger, and the capital stock of
Piedmont
Bank will be proceeds of such collateral interest upon consummation of the Piedmont Merger.
The parties
agree to undertake such modifications in accordance with the terms, subject to the conditions,
and in reliance
upon the recitals, representations, warranties, and covenants set forth herein, in the
Agreement, and in the
other Loan Documents, irrespective of whether entered into or delivered on or after October
13, 2005.

     D. Capitalized terms used but not otherwise defined in this First Amendment shall have the
meanings respectively ascribed to them in the Agreement.

     NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants, and
agreements hereinafter set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

A
G R E E M E N T:

     A. Amendment
to Recitals “A” and “B” of the 2005 Agreement. Recitals “A” and
“B” to the 2005 Agreement are hereby deleted and replaced in their entirety with the following:

     “A. The Lender and the Borrower have entered into that certain Amended and
Restated Loan and Subordinated Debenture Purchase Agreement dated as of September
29, 2005 (as amended, restated, supplemented or modified from time to time, the
“Loan Agreement”), and a related Amended and Restated Pledge Agreement, dated as of
September 29, 2005 (as amended, restated, supplemented or modified from time to
time, the “Pledge Agreement”), in connection with the credit facilities contemplated
in the Loan Agreement in the aggregate principal amount of up to $115,000,000
(collectively, and as the same may be amended, restated, supplemented, modified,
extended or replaced from time to time, the “Loans”).

D-1

 

     B. The Loan evidenced by a $50,000,000 Subordinated Debenture is
unsecured. The remaining two Loans are secured by, among other things: (i)
88,450 shares (100%) of the common stock, $20.00 par value per share, of The
PrivateBank and Trust Company, an Illinois state-chartered, non-member bank with
its main office located in Chicago, Illinois, and a wholly owned subsidiary of
the Borrower (the “PrivateBank Shares”); (ii) 40,000 shares (100%) of the common
stock, $100.00 par value per share, of The PrivateBank, a federal savings bank
with its main office located in St. Louis, Missouri (the “PrivateBank St. Louis
Shares”); (iii) 50,000 shares (100%) of the common stock, $10.00 par value per
share, of The PrivateBank, a Michigan state-chartered, non-member bank with its
main office located in Bloomfield Hills, Michigan, and a wholly owned subsidiary
of the Borrower (the “PrivateBank Michigan Shares”); and (iv) all right, title
and interest of Pledgor in, to and under that certain Agreement and Plan of
Merger, dated as of August 2, 2006, with Piedmont Bancshares, Inc. (as amended,
restated, modified or supplemented from time to time, the “Piedmont Merger
Agreement”). Effective upon the consummation of the merger of Piedmont
Banshares, Inc. with and into Pledgor pursuant to the Piedmont Merger Agreement
(the “Piedmont Merger”), Pledgor will own 1,050,666 shares (100%) of the common
stock, $5.00 par value per share, and 260,870 shares (100%) of the Preferred
Stock, $1.00 par value per share of Piedmont Bank of Georgia, a Georgia
state-chartered, non member bank with its main office located in Atlanta,
Georgia (together, the “Piedmont Bank Shares”). The PrivateBank Shares,
PrivateBank St. Louis Shares, PrivateBank Michigan Shares and, effective upon
consummation of the Piedmont Merger, the Piedmont Bank Shares may be referred to
herein collectively as, the “Subsidiary Bank Shares”).”

     B. Amendment to Section 1.2 of the 2005 Agreement. Section 1.2 of the 2005
Agreement is
hereby deleted and replaced in its entirety with the following:

     “1.2. The Collateral that has not previously been delivered to the Custodian is
concurrently herewith being delivered to the Custodian for safekeeping; provided, however,
that Pledgor shall have no obligation to deliver the Subsidiary Bank Shares relating to
Piedmont Bank of Georgia until the business day following the consummation of the Piedmont
Merger.”

     C. Representations and Warranties. Pledgor hereby represents and warrants to
Lender as
follows:

     (i) The execution, delivery and performance by Pledgor of this First
Amendment have
been duly authorized by all necessary corporate and other action and do
not and will not require any registration with, consent or approval of, or notice to or action by any Person
(including any Governmental Agency) in order to be effective and enforceable.

     (ii) This First Amendment and the Agreement (as amended by this First Amendment)
constitute the legal, valid and binding obligations of Pledgor, enforceable against
Pledgor in accordance with their respective terms.

     (iii) Pledgor’s obligations under the Agreement are not subject to any defense,
counterclaim, set-off, right to recoupment, abatement or other claim, between Pledgor
and Lender.

     D. Additional Terms.

     (i) The Pledge Agreement. All references in the 2005 Agreement to the
term “Agreement” shall be deemed to refer to the Agreement referenced in this First
Amendment.

     (ii) First Amendment and 2005 Agreement to be Read Together. This First
Amendment supplements and is hereby made a part of the 2005 Agreement, and the 2005
Agreement and this First Amendment shall from and after the date hereof be read
together and shall

D-2

 

constitute the Agreement. Except as otherwise set forth herein, the 2005 Agreement
shall remain in full force and effect.

     (iii) Counterparts. This First Amendment may be executed by facsimile and in one or
more counterparts, each of which shall be deemed an original and all of which taken together shall
constitute one and the same document.

[Remainder of Page Intentionally Left Blank]

D-3

 

     IN WITNESS WHEREOF, the parties have executed this First Amendment as of the
date first written above.

	 	 	 	 	 	 	 
	 	 	LASALLE BANK NATIONAL ASSOCIATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael A. Tighe, Jr.

Title: First Vice President
	 	 
	 
	 	 	 	 	 	 
	 	 	PRIVATEBANCORP, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	LASALLE BANK MIDWEST, N.A.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

S-1

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