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                                                                   Exhibit 10.25

                           TAYLOR CAPITAL GROUP, INC.
                          INCENTIVE COMPENSATION PLAN

     1. PURPOSE. The Taylor Capital Group, Inc. Incentive Compensation Plan
(the "Plan"), is intended to provide incentives which will attract and retain
highly competent persons as officers, key employees and directors of Taylor
Capital Group, Inc. ("Taylor Capital") and its designated subsidiaries
(collectively, the "Company"), by providing them opportunities to acquire
shares of Common Stock of Taylor Capital ("Common Stock") or to receive
monetary payments based on the value of such shares pursuant to the Awards
described herein.

     2. PARTICIPANTS. Participants will consist of such officers, key
employees, and directors of the Company as the Compensation Committee of the
Board of Directors of Taylor Capital (the "Committee") in its sole discretion
determines to be significantly responsible for the success and future growth
and profitability of the Company. Designation of a participant in any year
shall not require the Committee to designate such person to receive an Award in
any other year or, once designated, to receive the same type or amount of
Awards as granted to the participant or any other participant in any year. The
Committee shall consider such factors as it deems pertinent in selecting
participants and in determining the amount, type and terms and conditions of
their respective Awards.

     3. TYPES OF AWARDS. Awards under the Plan may be granted in any one or a
combination of (i) incentive stock options ("ISO"), within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), (ii)
nonqualified stock options, (iii) stock appreciation rights, (iv) stock awards,
and (vi) performance awards, each as described below (collectively, "Awards").
Each award shall be made pursuant to a written agreement between the Company
and the Award recipient.

     4. SHARES RESERVED UNDER THE PLAN. There is hereby reserved for issuance
under the Plan an aggregate of Five Hundred Sixty Three Thousand, and Sixty Six
(563,066) shares of Common Stock, which may be authorized but unissued or
treasury shares. If there is a lapse, cancellation, expiration, or termination
of any Award prior to issuance of the shares thereunder, or if shares are
issued under an Award and thereafter are reacquired by the Company pursuant to
rights reserved by the Company upon issuance of such shares, the shares subject
to such Award may thereafter be subjected to new Awards under this Plan.

     5. STOCK OPTIONS. "Stock Options" will consist of awards from the Company,
which will enable the holder to purchase a specific number of shares of Common
Stock, at set terms and at a fixed purchase price. Subject to the terms and
conditions of the Program, the Committee shall designate the employees to whom
Stock Options are to be awarded under the Program and shall determine the
number, type, and terms of the Stock Options to be awarded to each of them,
provided, however, that no ISO shall be granted more than 10 years from the
date of the adoption of the Program by the Board of Directors of Taylor
Capital. Each Stock Option shall be subject to such terms and conditions as the
Committee determines to be appropriate at the time of grant.

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                                              12/8/97 TCG Compensation Committee

          6. STOCK APPRECIATION RIGHTS. "Stock Appreciation Rights" will consist
of awards from the Company, which will entitle the holder to receive the
appreciation in the Fair Market Value of the shares subject thereto up to a
specified date or dates. Payment of such appreciation shall be made in cash or
in Common Stock, or a combination thereof, as set forth in the written award.
Each Stock Appreciation Right shall be subject to such terms and conditions as
the Committee determines to be appropriate at the time of grant.

          7. STOCK AWARDS. "Stock Awards" will consist of Common Stock
transferred to participants without other payment therefor as additional
compensation for services rendered or to be rendered to the Company. Stock
Awards shall be subject to such terms and conditions as the Committee
determines to be appropriate at the time of grant, including, without
limitation, restrictions on the sale or other disposition of such shares and
provisions for the forfeiture of such shares for no consideration upon
termination of the participant's employment within specified periods.

          8. PERFORMANCE AWARDS. "Performance Awards" will consist of awards
from the Company, which will entitle the holder to receive a specific number of
shares of Common Stock or cash at the end of a specified Performance Period.
The Committee shall determine the duration of the period (the "Performance
Period") during which, and the conditions under which, receipt of the shares or
payment of the cash will be deferred. The Committee may condition the grant of
Performance Awards upon the attainment of specified performance goals or such
other terms and conditions as the Committee determines to be appropriate at the
time of grant, including, without limitation, provisions for the forfeiture of
such shares for no consideration upon termination of the participant's
employment prior to the end of the Performance Period.

          9. SHAREHOLDER RIGHTS. The recipient of a Stock Option, Stock
Appreciation Right, or Performance Awards shall not be deemed for any purpose
to be a stockholder of the Company with respect to any of the shares subject
thereto except to the extent that a certificate shall have been issued and
delivered to the participant.

         10. ADJUSTMENT PROVISIONS. If Taylor Capital shall at any time change
the number of issued shares of Common Stock without new consideration to Taylor
Capital (such as by stock dividend, stock split, recapitalization,
reorganization, exchange of shares, or other change in corporate structure
affecting the Common Stock), the total number of shares reserved for Awards
under this Plan shall be appropriately adjusted. The Committee may provide for
equitable adjustments in the terms of any Awards granted hereunder after
changes in the Common Stock resulting from any merger, consolidation, sale of
assets, acquisition of property or stock, recapitalization, reorganization or
similar occurrence upon such terms and conditions as it may, in its sole
discretion, deem equitable and appropriate.
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                                              12/8/97 TCG Compensation Committee

     11. NONTRANSFERABILITY.  Each Award granted under the Plan to a
participant shall, unless otherwise set forth in the written Award, not be
transferable otherwise than by will or the laws of descent and distribution,
and shall be exercisable, during the participant's lifetime, only by the
participant.

     12. OTHER PROVISIONS.  Awards under the Plan may also be subject to such
other provisions (whether or not applicable to the Award granted to any other
participant) as the Committee determines appropriate.

     13. FAIR MARKET VALUE. Except as otherwise expressly provided in a written
Award, for purposes of this Plan and any Awards hereunder, the "Fair Market
Value" of a share of Common Stock shall mean (i) prior to the date of the
registration of the Common Stock under the Securities Act of 1933 and readily
tradable on a national securities exchange ("Readily Tradable"), the amount
equal to the price of a share of Common Stock as reflected by the most recently
preceding valuation of the shares of Common Stock under the Taylor Capital
Group, Inc. 401(k)/Profit Sharing and Employee Stock Ownership Plan, after
adjusting for a nonmarketable, minority interest discount; and (ii) on an after
the date that the Common Stock is Readily Tradable, the closing price of the
Common Stock on the relevant date as reported on the national securities
exchange.

     14. TENURE. A participant's right, if any, to continue to serve the Company
as an officer, employee, or otherwise, shall not be enlarged or otherwise
affected by his or her designation as a participant under the Plan, nor shall
this Plan in any way interfere with the right of the Company, subject to the
terms of any separate employment agreement to the contrary, at any time to
terminate such employment or to increase or decrease the compensation of the
participant from the rate in existence at the time of the grant of an Award.

     15. ADMINISTRATION.  The Plan will be administered by the Compensation
Committee. The Committee is authorized, subject to the provisions of the Plan,
to establish such rules and regulations as it deems necessary for the proper
administration of the Plan and to make such determinations and interpretations
and to take such action in connection with the Plan and any Awards granted
hereunder as it deems necessary or advisable. All determinations and
interpretations made by the Committee shall be binding and conclusive on all
participants and their legal representatives. No member of the Board, no member
of the Committee and no employee of the Company shall be liable for any act or
failure to act hereunder, by any other member or employee or by any agent to
whom duties in connection with the administration of this Plan have been
delegated or, except in circumstances involving his or her bad faith, gross
negligence or fraud, for any act or failure to act by such member of the Board
or employee.

     16. AMENDMENT AND TERMINATION.  The Board of Directors may amend the Plan
from time to time or terminate the Plan at any time. However, no action
authorized by this paragraph shall change the terms and conditions of any
existing Award without the participant's consent.

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                                              12/8/97 TCG Compensation Committee

          17.  GOVERNING LAW. This Plan and actions taken in connection
herewith shall be governed and construed in accordance with the laws of the
State of Illinois (regardless of the law that might otherwise govern under
applicable Illinois principles of conflict of laws).

          18.  APPROVAL. The Plan was adopted by the Board of Directors of
Taylor Capital on        , 1997.<PAGE>

                                                                   EXHIBIT 10.26

                           TAYLOR CAPITAL GROUP, INC.
                           NON-QUALIFIED STOCK OPTION

        THIS OPTION is granted this 30th day of September, 1997, by Taylor
Capital Group, Inc., a Delaware corporation ("Company") to (the "Employee");

        WHEREAS, the Board of Directors of the Company is of the opinion that
the interests of the Company and its subsidiaries and affiliates will be
advanced by encouraging and enabling those officers, key employees and directors
of the Company, upon whose judgment, initiative and efforts the Company is
largely dependent for the successful conduct of the business of the Company to
acquire a proprietary interest in the Company or increase their proprietary
interest in the Company, and thus providing them with a more direct stake in the
Company's welfare and assuring a closer identification of their interests with
those of the Company during their association with the Company; and

        WHEREAS, the Board believes that the acquisition of such an interest in
the Company will stimulate the efforts of such officers and key employees during
their association with the Company;

        NOW, THEREFORE, in consideration of the premises and of the services
required under Section 2 in order to receive benefits hereunder, the Company
hereby grants this option to the Employee on the terms hereinafter expressed:
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        1. OPTION GRANT. The Company hereby grants to the Employee a
non-qualified stock option to purchase a total of _____ shares of common stock
of Taylor Capital Group, Inc. ("Common Stock") at the option price of $22.00 per
share. This option is not intended to qualify as an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code.

        2. TIME OF EXERCISE. This option may be exercised (in the manner
provided in Section 3 hereof) in whole or in part, from time to time after the
date hereof, subject to the following limitations:

        (a) This option may not be exercised during the first year from June 30,
1997. Thereafter, this option may be exercised to the maximum cumulative extent
of 20% of the total shares covered by this option on and after June 30, 1998;
40% of the total shares on and after June 30, 1999; 60% of the total shares on
and after June 30, 2000; 80% of the total shares on and after June 30, 2001; and
100% of the total shares on and after June 30, 2002. Notwithstanding the
foregoing, no option may be exercised for fractional shares.

        (b) Notwithstanding Section 2(a) hereof, in the event of the Optionee's
termination of employment with the Company due to retirement at age 65 or older,
permanent disability (as defined below), death, at any time following the date
of grant hereof, this option shall immediately become exercisable as to a
maximum cumulative extent of 100% of the total shares covered by this option on
the date of the Optionee's retirement, permanent disability or death. For
purposes of this option, the Employee will be considered permanently disabled if
Employee is unable to perform his or her stated duties with the Company by
reason of illness, accident or other incapacity and does not engage in any
occupation or employment for wage or

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profit for which Employee is reasonably qualified by education, training, or
experience, as determined by the Company in its sole discretion.

        (c) This option may not be exercised (and shall then forever lapse) upon
the first to occur of the following:

        (i) upon the effective date of the termination of the Employee's
    employment by the Company for "cause", which for purposes of this option
    means termination because of (1) an act of fraud, embezzlement or theft in
    connection with the Employee's duties or in the course of the Employee's
    employment, (2) unreasonable neglect or refusal by the Employee to perform
    his duties (other than any such failure resulting from the Employee's
    incapacity due to disability), (3) the engaging by the Employee in willful,
    reckless, or grossly negligent misconduct which is or may be materially
    injurious to the Company, or (4) the Employee's conviction of or plea of
    guilty or nolo contendere to a felony;

        (ii) more than 90 days following the termination of the Employee's
    employment for any reason other than death, disability or "cause" (and then
    only to the extent the Employee could have exercised this option on the date
    of such termination);

        (iii) more than one year following the termination of the Employee's
    employment due to death or permanent disability; or

        (iv) more than ten (10) years from the date hereof.

        (d) This option shall not be affected by leaves of absence approved in
writing by the Company or by any change of employment so long as the Employee
continues to be an employee of the Company or one of its subsidiaries or
affiliates. Nothing in this option shall confer on the Employee any right to
continue in the employ of the Company or to interfere with

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the right of the Company, subject to the terms of any separate employment
contract to the contrary, to terminate Employee's employment at any time.

        3. EXERCISE OF OPTION.

        (a) This option may be exercised only by appropriate notice in writing
delivered to the Secretary of the Company at its corporate headquarters, and
accompanied by:

        (i) The full purchase price of the shares purchased payable by (1) a
    certified or cashier's check payable to the order of the Company, (2) a
    promissory note, with the shares purchased as collateral, payable in the
    three equal annual installments, and/or (3) certificates of Common Stock
    (which have been held by the Employee for at least six months) equal in
    value (based upon their Fair Market Value as defined in the Stock Transfer
    Agreement attached hereto as Exhibit A) on the date of surrender) to such
    purchase price, or the portion thereof so paid;

        (ii) An executed Stock Transfer Agreement between the Company and the
    Employee or his successor in interest, whether determined by will or the
    laws of descent and distribution or otherwise, in the form attached hereto
    as Exhibit A; and

        (iii) Such other documents or representations (including without
    limitation representations as to the intention of the Employee or his
    successor, or other purchaser under Section 6, to acquire the shares for
    investment) as the Company may reasonably request in order to comply with
    securities, tax or other laws then applicable to the exercise of the option.

        (b) The exercise of this option is conditioned upon the Employee making
arrangements satisfactory to the Company relating to any required withholding
taxes attributable

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to such exercise. The Company may, in its sole discretion and subject to such
rules as it may adopt, permit the Employee to satisfy any tax withholding
obligation, in whole or in part, by electing to have the Company withhold shares
of Common Stock received in connection with the option having a Fair Market
Value equal to the amount required to be withheld.

        4. CHANGE OF CONTROL.

        (a) Notwithstanding Section 2(a) above, this option shall become fully
and immediately exercisable upon the occurrence of a Change of Control, as
defined below. In the event of a Change of Control of the Company, the Board
may, by providing written notice to the Employee, elect to (i) cancel this
option, unless theretofore exercised, 30 days after the effective date of the
Change of Control and/or (ii) require that in lieu of the exercise of this
option, that the Employee be provided with a cash payment as set forth in
Section 4(c) hereof.

        (b) For purposes of this option, a "Change of Control" shall occur:

        (i) upon the vote of the shareholders of the Company approving a merger
    or consolidation in which the Company's shareholders immediately prior to
    the effective time of the merger or consolidation will beneficially own
    immediately after the effective time of the merger or consolidation
    securities of the surviving or new corporation having less than 50% of the
    "voting power" of the surviving or new corporation, including "voting power"
    exercisable on a contingent or deferred basis as well as immediately
    exercisable "voting power"; provided, however, that no such merger or
    consolidation shall constitute a "change of control" in the event that
    following such transaction the Taylor Family (as defined below) owns,
    directly or indirectly, 30% or more of the

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    combined "voting power" of the surviving or new corporation's outstanding
    securities, excluding "voting power" exercisable on a contingent or deferred
    basis.

        (ii) upon the consummation of a sale, lease, exchange or other transfer
    or disposition by the Company of all or substantially all of the assets of
    the Company on a consolidated basis, provided, however, that the mortgage,
    pledge or hypothecation of all or substantially all of the assets of the
    Company on a consolidated basis, in connection with a bona fide financing
    shall not constitute a Sale of the Company; or

        (iii) when any "person" (as such term is used in Sections 13(d) and
    14(d) of the Securities Exchange Act of 1934) is or becomes the "beneficial
    owner" (as defined in Rule 13d-3 of the Securities Exchange Act as in effect
    on date hereof, but excluding (a) any Company sponsored employee benefit
    plan and (b) any member of the Taylor Family), directly or indirectly, of
    shares of Company stock such that the Taylor Family owns less than 30% of
    the combined "voting power" of the Company's then outstanding securities,
    excluding "voting power" exercisable on a contingent or deferred basis.

For purposes of this Agreement, the Taylor Family means (i) Sidney J. Taylor and
Iris Taylor, (ii) a descendant of Sidney J. Taylor and Iris Taylor, (iii) any
estate, trust, guardianship or custodianship for the primary benefit of any
individual described in (i) or (ii) above, or (iv) a proprietorship,
partnership, limited liability company, or corporation controlled by and
substantially all the interest in which are owned, directly or indirectly, by
one or more individuals or entities described in (i), (ii), or (iii) above.

        (c) Pursuant to Section 4(a) hereof, in the event of a Change of Control
of the Company, the Company may, at its option, elect to pay in cash an amount
equal to the excess, if

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any, of (i) the Fair Market Value of the shares of Common Stock subject to the
option on the date of exercise over (ii) the exercise price as provided herein,
multiplied by the number of shares for which the option is exercised, less any
required withholding taxes. In the event of such election, the Company will make
a payment to the Employee, his estate, the person to whom the option passes by
will or by the laws of descent or distribution or the Employee's legal
representative or guardian, not more than 30 days after the date of exercise and
the Company shall have no further liability of any kind to Employee.

        5. NONTRANSFERABILITY OF OPTION. This option is not transferable by the
Employee otherwise than by will or the laws of descent and distribution, and is
exercisable, during the Employee's lifetime, only by him or her.

        6. DEATH OR DISABILITY OF EMPLOYEE. If the Employee dies or becomes
disabled while in the employ of the Company, this option may be exercised in
whole or in part and from time to time, in the manner described in Section 3
hereof, in the case of death by his estate or the person to whom the option
passes by will or the laws of descent and distribution or in the case of
disability by the person's legal representative or guardian, but only to the
extent that the Employee could have exercised it on the date of his death or
disability, and only within a period of (a) twelve months next succeeding the
Employee's death or disability, or (b) ten years from the date hereof, whichever
period is shorter.

        7. DELIVERY OF CERTIFICATES. If at any time during the option period the
Company shall be advised by its counsel that shares deliverable upon exercise of
the option are required to be registered under the federal Securities Act of
1933, as amended (the "1933 Act"), or that delivery of the shares must be
accompanied or preceded by a prospectus meeting the

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requirements of the 1933 Act, the Company, at its election, will use its best
efforts to effect such registration or provide such prospectus not later than a
reasonable time following each exercise of this option, but delivery of shares
by the Company may be deferred until registration is effected or a prospectus is
available. The Employee shall have no interest in shares covered by this option
until certificates for the shares are issued. Notwithstanding anything to the
contrary in this option, in lieu of affecting the registration statement
described in the preceding sentence, the Company may, in the alternative,
provide Employee with a cash payment in consideration of the shares subject to
such exercise in the manner described in Section 4(c) above, and the Company
shall have no further liability of any kind to Employee.

        8. ADJUSTMENT PROVISIONS.

        (a) If the Company shall at any time change the number of shares of its
Common Stock without new consideration to the Company (such as by stock
dividends or stock splits), the total number of shares then remaining subject to
purchase hereunder shall be changed in proportion to such change in issued
shares and the option price per share shall be adjusted so that the total
consideration payable to the Company upon the purchase of all shares not
theretofore purchased shall not be changed.

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        (b) In the case of any merger, consolidation or combination of the
Company with or into another corporation, other than a merger, consolidation or
combination in which the Company is the continuing corporation and which does
not result in the outstanding Common Stock being converted into or exchanged for
different securities, cash or other property, or any combination thereof (an
"Acquisition"), the Optionee shall have the right (subject to Section 4 hereof
and any other limitation applicable to this option) thereafter and during the
term of this option, to receive upon exercise hereof the Acquisition
Consideration (as defined below) receivable upon such Acquisition by a holder of
the number of shares of Common Stock which might have been obtained upon
exercise of this option or portion hereof, as the case may be, immediately prior
to such Acquisition. The term "Acquisition Consideration" shall mean the kind
and amount of shares of the surviving or new corporation, cash, securities,
evidence of indebtedness, other property or any combination thereof receivable
in respect of one share of Common Stock of the Company upon consummation of an
Acquisition.

        9. APPLICABLE PLAN. This option is granted under and is subject to the
terms and conditions of the Taylor Capital Group, Inc. 1997 Incentive
Compensation Plan (the "Plan"). Any capitalized terms not defined herein shall
be subject to the definitions set forth in the Plan.

                            [SIGNATURE PAGE FOLLOWS]

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        IN WITNESS WHEREOF, the Company has caused this option to be executed on
the date first above written.

TAYLOR CAPITAL GROUP, INC.

By:
   ---------------------------------
    Its: President

ACCEPTED:

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