Document:

exv10w10

 

EXHIBIT 10.10

November 14, 2007

Mr. Dennis L. Klaeser

PrivateBancorp, Inc.

70 West Madison

Suite 200

Chicago, Illinois 60602

Dear Dennis:

     Please find enclosed a term sheet agreement setting forth the terms of your employment and
going forward compensation with PrivateBancorp, Inc. (“PrivateBancorp”). This term sheet agreement
will replace your existing employment agreement with PrivateBancorp, dated October 1, 2003, upon
your acceptance by signature below. As we discussed, your future compensation includes a
significant equity award.

     The offer to execute this term sheet agreement will remain open for your acceptance until 5:00
p.m. (C.S.T.) December 14, 2007. Please signify your acceptance of this offer by signing as
indicated below. If you do not sign and return your acceptance of the term sheet agreement by such
date and time, the special performance share award that was granted on November 1, 2007 will be
forfeited, and you will not receive the enhanced vesting protections with respect to the options
that were granted as of that date. You may return this offer letter to the following confidential
fax 312.683.1493.

     You are an important member of the PrivateBancorp management team, and we are counting on your
continued efforts during this exciting period for our company. Thank you for your past efforts on
behalf of PrivateBancorp, and we look forward to our continued success together.

Sincerely,

/s/ Ralph B. Mandell

Ralph B. Mandell

Chairman of the Board

Accepted:

	 	 	 	 	 	 	 
	/s/ Dennis L. Klaeser

	 	Date:
	 	December 12, 2007	 	 
	 

Dennis L. Klaeser

	 	 	 	 
 	 	 

 

 

DENNIS L. KLAESER

	 	 	 
	Position

	 	Chief Financial Officer of PrivateBancorp,
Inc. (the “Holding Company”), reporting to
the Chief Executive Officer of the Holding
Company.
	 
	 	 
	Base Salary

	 	Current annual base salary, subject to
increase, but not decrease from time to
time (other than permitted proportionate
reductions applicable to all similarly
situated senior executives of the Holding
Company or The PrivateBank and Trust
Company (the “Bank”), unless such reduction
occurs during the two-year period
commencing upon the occurrence of a Change
of Control), in the sole discretion of the
Bank, and any such increased (or decreased)
amount shall mean “Base Salary” for
purposes of this term sheet agreement.
	 
	 	 
	Annual Bonus

	 	Current target bonus percentage.
The Compensation Committee does not intend
to propose a 2008 annual bonus plan that
will limit the bonus payable to the target
amount.
	 
	 	 
	Special Equity Award

	 	On November 1, 2007 you received a special
equity award of 62,500 stock options and
25,000 shares of restricted stock under the
PrivateBancorp, Inc. 2007 Incentive
Compensation Plan. The stock options have
a 10-year term. The award of restricted
stock and one-half of the stock options
(“performance stock options”) are subject
to performance vesting requirements and
continued service during the performance
period generally applicable to such awards,
and the other one-half of the stock options
(“time-vesting stock options”) are subject
to time vesting requirements only, all as
more particularly described on Attachment A
hereto.
If, prior to the date on which your special
equity award is fully vested, your
employment is terminated due to your death
or Disability (as defined in the award
agreement), your employment is
involuntarily terminated by the Bank
without Cause or voluntarily terminated by
you for Good Reason, (i) the unvested
portion of the time-vesting stock options
will become fully vested and exercisable
and (ii) you will continue to vest through
December 31 of the fiscal year of your
termination in the unvested portion of the
restricted stock and performance stock
options and such previously unvested
performance stock options will become
exercisable if the performance vesting
conditions relating to the award are
satisfied on the performance vesting date
that next follows your date of termination;
provided, you will be vested in a minimum
number of each of shares of restricted
stock and performance stock options as
equals the product of (x) 5%

 

 

	 	 	 
	 

	 	multiplied by
(y) the number of whole or partial years of
employment with the Bank from January 1,
2008 through the date of termination, to
the extent you had not previously become
vested in at least such number of shares of
restricted stock and performance stock
options, respectively. Upon such
termination of employment, vested
time-vesting stock options (including
time-vesting stock options that become
vested on the date of termination) and
then-vested performance stock options will
be exercisable for 1 year after your date
of termination (but not beyond the last day
of the stock option term). Upon such
termination of employment, performance
stock options that become vested upon
attainment of the performance objective for
the year of termination will be exercisable
for 1 year after the performance vesting
date that next follows your date of
termination (but not beyond the last day of
the stock option term).
	 
	 	 
	 

	 	You will become fully vested in your
special equity award upon the occurrence of
a Change of Control.

To the extent that the Bank has or
hereafter enters into a broker-assisted
(FRB Reg. T) cashless exercise program for
stock option awards to employees of the
Bank, the initial stock option award will
be included in such program.
	 
	 	 
	 

	 	The restricted shares and stock options
will be subject to the terms and conditions
of an equity incentive plan and award
agreements to be adopted by the Board of
Directors of the Holding Company; provided,
however, that with respect to the terms and
conditions described above, if there is a
conflict between this term sheet agreement
and the equity incentive plan and/or an
award agreement thereunder, the document
that is more favorable to you will control.

You will be eligible for future equity
awards from time to time, in accordance
with the terms of the Holding Company’s
incentive plans as then in effect, in such
amount, if any, as is determined in the
sole discretion of the Compensation
Committee.
	 
	 	 
	 

	 	“Cause,” “Good Reason” and “Change of
Control” are defined on Attachment B.

2

 

	 	 	 
	Benefits; Perquisites

	 	You are eligible to continue your
participation in the Bank’s various benefit
programs as are currently in effect,
subject to the terms of such programs and
the Bank’s right to amend or terminate such
programs. Current benefits include medical
and dental insurance plans, the flexible
benefits plan, the PrivateBancorp, Inc.
Savings, Retirement and Employee Stock
Ownership Plan, life insurance, accidental
death and dismemberment insurance and long
term disability insurance.
	 
	 	 
	 

	 	You will also continue to be furnished with
such perquisites which may from time to
time be provided by the Holding Company and
the Bank which are suitable to your
position and adequate for the performance
of your duties hereunder and reasonable in
the circumstances. Such perquisites
include, but are not limited to,
reimbursement for dues at one approved
country club and one approved luncheon club
in the Chicago Metropolitan area.
	 
	 	 
	Vacation

	 	Standard Bank vacation policy, but not less
than 4 weeks per calendar year.
	 
	 	 
	Severance Benefits

(Termination without Cause 

or for Good
Reason) (prior to, or more

	 	Upon an involuntary termination of your
employment by the Bank without Cause or
voluntary termination of employment by you
for Good Reason, you will receive:
	than 2 years after, a Change
of Control)

	 	(i) A pro rata bonus based on your prior
year’s bonus (if any) and the number of
days elapsed during the year in which the
date of termination occurs (the “Pro Rata
Bonus”);
	 
	 	 
	 

	 	(ii) Severance payments equal to 100% of
the sum of (A) your Base Salary
(disregarding any reduction of your Base
Salary constituting Good Reason), plus (B)
the average of the sum of the bonus amounts
earned by you with respect to the 3
calendar years (or such fewer number of
years as you have been employed)
immediately preceding the calendar year in
which your date of termination occurs,
payable in substantially equal monthly
installments for a period of 12 months in
accordance with the Bank’s regular payroll
practices;
	 
	 	 
	 

	 	(iii) Continuation for 12 months of your
right to maintain COBRA continuation
coverage under the applicable Bank plans at
premium rates on the same “cost-sharing”
percentage basis as the applicable premiums
paid for such coverage by active Bank
employees as of your date of termination;
and
	 
	 	 
	 

	 	(iv) Base Salary earned but not paid and
vacation accrued and unused through your
termination date, any annual bonus that is
earned in a fiscal year preceding the
fiscal year of your

3

 

	 	 	 
	 

	 	termination but not
paid as of the termination date, and such
other earned but unpaid amounts under the
employee benefit plans in which you
participate as of the termination date that
are payable to you in accordance with the
terms thereof, (collectively “Accrued
Obligations”).
	 
	 	 
	 

	 	Any payments and benefits to you under this
Severance Benefits section of this term
sheet agreement shall not be reduced by the
amount of any compensation or benefits
earned as a result of your subsequent
employment.
	 
	 

	 	If you are a “specified employee” of the
Holding Company and its affiliates (as
defined in Treasury Regulation Section
1.409A-1(i)), then you shall receive
payments during the 6 month period
immediately following your date of
termination equal to the lesser of (x) the
amount payable under this severance
provision or (y) two (2) times the
compensation limit in effect under Code
Section 401(a)(17) for the calendar year in
which your date of termination occurs (with
any amounts that otherwise would have been
payable under this severance provision
during such 6 month period being paid on
the first regular payroll date following
the 6 month anniversary of the date of
termination).
	 
	 	 
	Change of Control Severance

	 	For the period commencing six months prior
to a Change of Control and ending on the
second anniversary of such Change of
Control that occurs on or before that date,
upon an involuntary termination of your
employment by the Bank without Cause or
voluntary termination of employment by you
for Good Reason at or after a Change of
Control, you will receive:
	 
	 	 
	 

	 	(i) The Pro Rata Bonus;
	 
	 	 
	 

	 	(ii) Severance equal to 200% of the sum of
(A) your Base Salary (disregarding any
reduction of your Base Salary constituting
Good Reason), plus (B) the greater of (x)
your prior year’s bonus or (y) the average
of the sum of the bonus amounts earned by
you with respect to the 3 calendar years
(or such fewer number of years as you have
been employed) immediately preceding the
calendar year in which your date of
termination occurs, payable in a single
lump sum payment within 30 days after the
date of termination, or if your termination
of employment occurs within six months
prior to a Change of Control, then within 5
business days after the Change of Control
you will receive a single lump sum payment
equal to (p) the amounts due you under this
clause (ii) reduced by (q) the sum of all
amounts paid to you under clause (ii) of
Severance Benefits (above in this term
sheet agreement), so that no amount of the
lump sum payment under this clause (ii) is
duplicative;

4

 

	 	 	 
	 

	 	(iii) Continuation for 24 months of your
right to maintain COBRA continuation
coverage under the applicable Bank plans at
premium rates on the same “cost-sharing”
percentage basis as the applicable premiums
paid for such coverage by active Bank
employees as of your date of termination;
	 
	 	 
	 

	 	(iv) Outplacement for 12 months; and
	 
	 	 
	 

	 	(v) The Accrued Obligations.
	 
	 	 
	 

	 	Any payments and benefits to you under this
Change of Control Severance section of this
term sheet agreement shall not be reduced
by the amount of any compensation or
benefits earned as a result of your
subsequent employment.
	 
	 	 
	Code Section 280G

	 	If any payments or benefits constitute
“excess parachute payments” (as defined in
Code Section 280G), you will be fully
grossed up if such payments and benefits
exceed 330% of your “base amount” (as
defined in Code Section 280G). If such
payments and benefits equal 330% or less of
your base amount, payments will be reduced
so that you do not receive any excess
parachute payments.
	 
	 	 
	Full Satisfaction; Release
of Claims

	 	Any termination payments made and benefits
provided to you under this term sheet
agreement shall be in lieu of any
termination or severance payments or
benefits for which you may be eligible
under any of the plans, policies or
programs of the Bank or its affiliates.
	 
	 	 
	 

	 	As a condition precedent to the payment of
all amounts, benefits and vesting of your
special equity award, other than your
Accrued Obligations, pursuant to your
involuntary termination of employment
without Cause or your voluntary termination
of employment for Good Reason at any time,
you shall execute a waiver and general
release of claims, substantially in the
form customarily obtained by the Bank from
its terminating executive employees, which
waiver and general release of claims is not
revoked during any applicable seven (7) day
revocation period. For the avoidance of
doubt, such waiver and general release will
not adversely affect your ability to
enforce the terms of this term sheet
agreement, your indemnification rights
under the Bank’s by-laws and this term
sheet agreement, your rights to coverage
under the Bank’s directors and officers
liability insurance; your and your covered
dependents’ rights to COBRA continuation
coverage, your rights to vested employee
benefits, and other rights that cannot be
waived by operation of law.

5

 

	 	 	 
	Restrictive Covenants

(confidentiality, 

non-competition, 

non-solicitation)

	 	You will not at any time during or
following your employment with the Bank,
directly or indirectly, disclose or use on
your behalf or another’s behalf, publish or
communicate, except in the course of your
employment and in the pursuit of the
business of the Holding Company and the
Bank or any of its subsidiaries or
affiliates, any proprietary information or
data of the Holding Company and the Bank or
any of its subsidiaries or affiliates,
which is not generally known to the public
or which could not be recreated through
public means and which the Holding Company
and the Bank may reasonably regard as
confidential and proprietary. You
recognize and acknowledge that all
knowledge and information which you have or
may acquire in the course of your
employment, such as, but not limited to,
the business, developments, procedures,
techniques, activities or services of the
Holding Company or the Bank or the business
affairs and activities of any customer,
prospective customer, individual firm or
entity doing business with the Holding
Company or the Bank are their sole valuable
property, and shall be held by you in
confidence and in trust for their sole
benefit. All records of every nature and
description which come into your
possession, whether prepared by you, or
otherwise, shall remain the sole property
of the Holding Company or the Bank and upon
termination of your employment for any
reason, said records shall be left with the
Holding Company or the Bank as part of its
property.
	 
	 	 
	 

	 	During the period of your employment with
the Bank and for a period of 1 year after
termination of your employment for any
reason, you will not (except in your
capacity as an employee of the Bank)
directly or indirectly, for your own
account, or as an agent, employee,
director, owner, partner, or consultant of
any corporation, firm, partnership, joint
venture, syndicate, sole proprietorship or
other entity:
	 
	 	 
	 

	 	(i) engage, directly or indirectly, in any
business which has a place of business
(whether as a principal, division,
subsidiary, affiliate, related entity, or
otherwise) located within the area
encompassed within a 50 mile radius
surrounding your office as of your date of
termination that provides banking products,
or that provides non-banking products or
services of a type that accounted for more
than 10% of the Holding Company’s gross
revenues for the fiscal year immediately
preceding your date of termination, that
the Holding Company or the Bank or any of
their subsidiaries or affiliates provide as
of your date of termination;
	 
	 	 
	 

	 	(ii) solicit or induce, or attempt to
solicit or induce any client or customer of
the Holding Company or the Bank or any of
their subsidiaries or affiliates not to do
business with the Bank or Holding Company
or any of its subsidiaries or affiliates;
or

6

 

	 	 	 
	 

	 	(iii) solicit or induce, or attempt to
solicit or induce, any employee or agent of
the Holding Company or the Bank or any of
their subsidiaries or affiliates to
terminate his or her relationship with the
Holding Company or the Bank or any of their
subsidiaries or affiliates.
	 
	 	 
	 

	 	The foregoing provisions shall not be
deemed to prohibit your ownership, not to
exceed 5% of the outstanding shares, of
capital stock of any corporation whose
securities are publicly traded on a
national or regional securities exchange or
in the over-the-counter market.
	 
	 	 
	 

	 	You agree that, as the Holding Company’s
and the Bank’s sole remedy for any breach
(or threatened breach) of the
non-competition covenant at subparagraph
(i) above, respecting your initial
restricted stock and stock option award
above:
	 
	 	 
	 

	 	(x) you will immediately forfeit all
unexercised stock options (whether then
vested or unvested) then held by you, all
shares of stock of the Holding Company (or
any successor) acquired upon the exercise
of vested stock options and then held by
you, and all shares of restricted stock
(whether vested or unvested, restricted or
unrestricted) then held by you;
	 
	 	 
	 

	 	(y) you will immediately repay to the
Holding Company a cash sum in the principal
amount equal to all gross proceeds
(before-tax) realized by you upon the sale
or other disposition of shares of stock of
the Holding Company (other than shares
relating to open market purchases by you)
occurring at any time during the period
commencing on the date that is three years
before the date of termination of your
employment and ending on the date that the
noncompetition covenant lapses (“Refund
Period”) , together with interest accrued
thereon, from the date of such breach or
threatened breach, at the prime rate
(compounded calendar monthly) as published
from time to time in The Wall Street
Journal, electronic edition (“Interest”);
and
	 
	 	 
	 

	 	(z) you will repay to the Holding Company a
cash sum equal to fair market value of all
shares of stock of the Holding Company
(other than shares relating to open market
purchases by you) and all stock options
transferred by you as gifts at any time
during the Refund Period, together with
Interest, and for which purpose, “fair
market value” per share of stock shall be
the closing price of one share of Holding
Company common stock on the date such gift
occurs and per stock option shall be the
positive difference, if any, between the
fair market value of a share of stock,
above, and the stock option exercise price.

7

 

	 	 	 
	 

	 	You further agree that a breach (or
threatened breach) of the confidentiality
and/or non-solicitation covenants in
subparagraphs (ii) and (iii) above will
result in irreparable harm to the business
of the Holding Company and the Bank, a
remedy at law in the form of monetary
damages for any breach (or threatened
breach) by you of these covenants is
inadequate, in addition to any remedy at
law or equity for such breach, the Holding
Company and the Bank shall be entitled to
institute and maintain appropriate
proceedings in equity, including a suit for
injunction to enforce the specific
performance by you of such obligations and
to enjoin you from engaging in any activity
in violation thereof, and the covenants on
your part contained above shall be
construed as agreements independent of any
other provisions in this term sheet
agreement, and the existence of any claim,
setoff or cause of action by you against
the Holding Company or the Bank, whether
predicated on this term sheet or otherwise,
shall not constitute a defense or bar to
the specific enforcement by the Holding
Company or the Bank of said covenants.
	 
	 	 
	 

	 	In the event of a breach or a violation by
you of any of the covenants and provisions
above, the running of the non-compete
period (but not your obligations
thereunder) shall be tolled during the
period of the continuance of any actual
breach or violation.
	 
	 	 
	 

	 	You agree that the covenants above are
reasonable with respect to their duration,
geographical area and scope. If the final
judgment of a court of competent
jurisdiction declares that any term or
provision above is invalid or
unenforceable, you agree that the court
making the determination of invalidity or
unenforceability shall have the power to
reduce the scope, duration or area of the
term or provision, to delete specific words
or phrases, or to replace an invalid or
unenforceable term or provision with a term
or provision that is valid and enforceable
and that comes closest to expressing the
intention of the invalid or unenforceable
term or provision, and this term sheet
agreement shall be enforceable as so
modified after the expiration of the time
within which the judgment may be appealed.
	 
	 	 
	Indemnification

	 	You will be indemnified in accordance with
the Holding Company’s bylaws. You will
also be covered by the Holding Company’s
directors and officers liability insurance
coverage as in effect from time to time.

8

 

	 	 	 
	Fee Reimbursement

	 	You will be reimbursed for up to $5,000 of
the professional fees incurred by you
relating to the negotiation and
documentation of your employment
arrangements.
	 
	 	 
	Code Section 409A

	 	It is intended that any amounts payable
under this term sheet agreement and the
Holding Company’s, the Bank’s and your
exercise of authority or discretion
hereunder shall comply with Section 409A of
the Code (including the Treasury
regulations and other published guidance
relating thereto) so as not to subject you
to the payment of any interest or
additional tax imposed under Section 409A
of the Code. To the extent any amount
payable under this term sheet agreement
would trigger the additional tax imposed by
Code Section 409A, this term sheet
agreement shall be modified to avoid such
additional tax.
	 
	 	 
	Board Approval

	 	The Holding Company and the Bank represent
and warrant to you that they have taken all
corporate action necessary to authorize and
to enter into this term sheet agreement.
	 
	 	 
	Entire Understanding;
Amendment

	 	This term sheet agreement constitutes the
entire understanding between the Holding
Company, the Bank, and you relating to your
employment hereunder and supersedes and
cancels all prior written and oral
understandings and agreements with respect
to such matters entered into prior to the
date of your acceptance of this term sheet
agreement, including, for the avoidance of
doubt, your current employment agreement
with the Holding Company dated October 1,
2003, and except for the terms and
provisions of any employee benefit or other
compensation plans (or any agreements or
awards thereunder), referred to in this
Agreement or as otherwise expressly
contemplated by this Agreement. This term
sheet agreement shall not be amended or
modified except by written instrument
executed by the Holding Company or Bank and
you.
	 
	 	 
	Binding Agreement

	 	This term sheet agreement shall be binding
upon and inure to the benefit of the heirs
and representatives of you and the
successors and assigns of the Holding
Company and the Bank.
	 
	 	 
	Governing Law

	 	Illinois.

9

 

ATTACHMENT A

PRIVATEBANCORP, INC. SPECIAL EQUITY AWARD DESIGN

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	TIME-VESTING	 
	 	 	EQUITY GRANT FEATURE	 	PERFORMANCE SHARES	 	PERFORMANCE STOCK OPTIONS	 	STOCK OPTIONS	 
	1.
	 	Allocation of Total Award	 	 •     50% of value of the Awards.
	 	  •     25% of value of the Awards. 
	 	  •     25% of value of the Awards.

	 
	2.
	 	Time Vesting	 	  •   N/A 
	 	  •      N/A
	 	  •     20% per fiscal year of
service, 1/1/2008-12/31/2012.

	 
	3.
	 	Performance Vesting	 	  •      Based on stock price performance
objectives: 20% compound annual stock price
growth 2008-2012.
	 	  •     Based on EPS performance objectives:
20% compound annual EPS growth 2008 - 2012.
	 	  •     None

	 
	 	 	 	 	  •     Stock price base is $27.91.
	 	  •     Earnings base is $1.65. 
	 	 	 	 
	 
	 	 	 	 	  •     20% of the Award vests per year,
based on attainment of stock price objective
for that year. Objective must be met for 20
consecutive trading days during that fiscal
year to vest.
	 	  •     20% of the Award vests per year,
based on 

      attainment of EPS objective for
that year.
	 	 	 	 
	 
	 	 	 	 	  •     Employed on 12/31 of performance
year. 
	 	  •     Employed on 12/31 of
performance year.
	 	 	 	 
	 
	 
	 	 	 	  •     If the PIPE (or other investment)
does not close by 3/31/08 for at least $150
million capital gross proceeds, the
performance restrictions will lapse as to
25% of the Performance Shares and such
shares shall be time-vested restricted stock
vesting at the rate of 20% per fiscal year
of service. 
   	 	 	 	 	 	 	 	 
	 
	4.	 	“Catch-Up” Performance

Vesting	 	  •     As of 12/31 each year: To extent not
vested, Award will vest for prior years if later year stock price objective is attained.
	 	  •     As of 12/31/2012: To extent not
vested, Award will vest:
	 	  •     N/A
	 
	 
	 
	 	 	 	 

	 	Cum. Cmpd.	 	Vested % of	 	 	 	 
	 
	 	 	 	 	 	Growth	 	Award	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	•     Must be employed on 12/31 of year objective is attained.
	 	      15.0% ($12.80)	 	50%	 	 	 	 
	 
	 	 	 	 	 	      17.5% ($13.75)	 	75%	 	 	 	 
	 
	 	 	 	 	 	      20.0% ($14.74)	 	100%	 	 	 	 
	 
	 	 	 	 	 	 	 •   Must be employed on 12/31/2012.
	 	 	 	 

10

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	EQUITY GRANT FEATURE	 	PERFORMANCE SHARES	 	PERFORMANCE STOCK OPTIONS	 	TIME-VESTING STOCK OPTIONS	 
	5.	 	Minimum 25% Vesting	 	 •     As of 12/31/2012: To the extent less
is vested, 25% of total Award will be vested
(including previously vested shares).
	 	 •     As of 12/31/2012: To the extent less
is vested, 25% of total Award will be vested
(including previously vested options).
	 	 •     N/A
	 
	 
	 	 	 	 	 •     Must be employed on 12/31/2012.
	 	 •     Must be employed on 12/31/2012.
	 	 	 	 
	 
	6.
	 	“Good Leaver” Treatment	 	 •     Continued vesting until 12/31 of
termination year based on performance.
 
	 	 •    
  Continued vesting until 12/31 of
termination year based on performance.

	 	 •    
  Full accelerated vesting.

	 
	 	 	 	 	 •   
  Minimum vesting of whole Award of 5%
x whole or partial years employed 1/1/08 to
12/31 of termination year. 
	 	
•    
  Minimum vesting of whole Award of 5%
x whole or partial years employed 1/1/08 to
12/31 of termination year.
	 	
•      1 year to exercise from
date of termination.

	 
	 
	 	 	 	 	 	 •    
  1 year to exercise vested options from 12/31 of termination year. 
	 	 	 	 

11

 

ATTACHMENT B

DEFINITIONS

     “Cause” shall mean (A) your willful and continued (for a period of not less than 10 business
days after written notice thereof during which you may remedy such failure if capable of remedy)
failure to perform substantially the duties of your employment (other than as a result of physical
or mental incapacity, or while on vacation or other approved absence) which are within your control
(mere inability to achieve financial or other performance targets or objectives, alone, shall not
constitute such a willful and continued failure); or (B) your willful engaging in illegal conduct
or gross misconduct which is materially and demonstrably injurious to the Holding Company or the
Bank; or (C) your conviction of a felony involving moral turpitude, but specifically excluding any
conviction based entirely on vicarious liability (with “vicarious liability” meaning liability
based on acts of the Holding Company or the Bank for which you are charged solely as a result of
your offices with the Bank and in which you were not directly involved and did not have prior
knowledge of such actions or intended actions); provided, however, that no act or failure to act,
on your part, shall be considered “willful” unless it is done, or omitted to be done, by you in bad
faith or without reasonable belief that your action or omission was in the best interests of the
Holding Company or the Bank; and provided further that no act or omission by you shall constitute
Cause hereunder unless you have been given detailed written notice thereof, and you have failed to
remedy such act or omission.

     “Good Reason” shall mean the occurrence, other than in connection with a discharge, of any of
the following without your consent: (A) a reduction in your Base Salary, target annual bonus
opportunity (other than a proportionate reduction applicable to all executives of the Bank, unless
such reduction occurs during the two-year period commencing on the occurrence of a Change of
Control) and/or the number of shares of restricted stock or number of stock options granted as
your special equity award, or (B) your being required to be based at an office or location which is
more than 50 miles from your then current office, or (C) your removal as a member of the most
senior management council of the Bank (to the extent such council exists), or (D) the failure of a
successor to assume the obligations of the Bank under this term sheet agreement (to the extent not
otherwise assumed by operation of law); provided, however, the hiring of any executives in
connection with Project Midwest and any effect such executive hires may have on your employment
shall not constitute grounds for Good Reason. You must provide written notice to the Bank of the
existence of Good Reason no later than 90 days after its initial existence, and the Bank shall have
a period of 30 days following its receipt of such written notice during which it may remedy in all
material respects the Good Reason condition identified in such written notice.

     “Change of Control” shall be deemed to have occurred upon the happening of any of the
following events:

     (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (“Exchange Act”)), other than (A) a trustee or other fiduciary holding
securities under an employee benefit plan of PrivateBancorp, Inc. (the “Company”) or any of its
subsidiaries, or (B) a corporation owned directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the Company, is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 30% or more of the total voting power of the then outstanding shares
of capital

12

 

stock of the Company entitled to vote generally in the election of directors (the “Voting
Stock”), provided, however, that the following shall not constitute a change in control: (1) such
person becomes a beneficial owner of 30% or more of the Voting Stock as the result of an
acquisition of such Voting Stock directly from the Company, or (2) such person becomes a beneficial
owner of 30% or more of the Voting Stock as a result of the decrease in the number of outstanding
shares of Voting Stock caused by the repurchase of shares by the Company; provided, further, that
in the event a person described in clause (1) or (2) shall thereafter increase (other than in
circumstances described in clause (1) or (2)) beneficial ownership of stock representing more than
1% of the Voting Stock, such person shall be deemed to become a beneficial owner of 30% or more of
the Voting Stock for purposes of this paragraph (i), provided such person continues to beneficially
own 30% or more of the Voting Stock after such subsequent increase in beneficial ownership, or

     (ii) Individuals who, as of November 1, 2007, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board, provided that any individual
becoming a director, whose election or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then comprising the Incumbent
Board shall be considered as through such individual were a member of the Incumbent Board, but
excluding for this purpose, any individual whose initial assumption of office is in connection with
an actual or threatened election contest relating to the election of the directors of the Company
(as such terms are used in Rule 14a-11 promulgated under the Exchange Act); or

     (iii) Consummation of a reorganization, merger or consolidation or the sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”), in
each case, unless (1) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Voting Stock immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the total voting power represented by
the voting securities entitled to vote generally in the election of directors of the corporation
resulting from the Business Combination (including, without limitation, a corporation which as a
result of the Business Combination owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the same proportions
as their ownership immediately prior to the Business Combination of the Voting Stock of the
Company, and (2) at least a majority of the members of the board of directors of the corporation
resulting from the Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or action of the Incumbent Board, providing for such Business
Combination; or

     (iv) Approval by the stockholders of the Company of a plan of complete liquidation or
dissolution of the Company; or

     (v) (I) a sale or other transfer of the voting securities of the Bank, whether by stock,
merger, joint venture, consolidation or otherwise, such that following said transaction the Company
does not directly, or indirectly through majority owned subsidiaries, retain more than 50% of the
total voting power of the Bank represented by the voting securities of the Bank entitled to vote
generally in the election of the Bank’s directors; or (II) a sale of all or substantially all of
the assets of the Bank other than to the Company or any subsidiary of the Company.

13exv10w11

 

EXHIBIT 10.11

               October 24, 2007

Mr. Bruce Lubin

5217 R.F.D.

Briarcrest

Long Grove, IL 60047

Dear Mr. Lubin:

     It is my pleasure to extend to you an offer of employment as President of Illinois Commercial
Banking of The PrivateBank and Trust Company upon the terms set forth in the attached term sheet
agreement. As we discussed, your compensation includes a significant equity award in order to
induce you to join the bank and forego other employment opportunities. We are very excited about
the prospect of having you join our team. We would like you to start as soon as possible, but in
no event later than October 31, 2007.

     To the extent that we enter into employment arrangements with another president of the Bank
having terms and conditions (other than base salary, target bonus, any buy-out of forfeitures, and
benefits and perquisites directly relating to the level of your compensation) that are more
favorable than the terms and conditions in this term sheet agreement, we will update your term
sheet agreement to reflect those more favorable terms. In this regard, Joan Schellhorn, our Chief
Human Resources Officer, will follow-up with you as appropriate.

     This offer will remain open for your acceptance until 5:00 p.m. (C.D.T.) October 25, 2007.
Please signify your acceptance of this offer by signing as indicated below. You may return this
offer letter to the following confidential fax 312.683.1493.

Sincerely,

/s/ Ralph B. Mandell

Ralph B. Mandell

Chairman of the Board

President and Chief Executive Officer

Accepted:

	 	 	 
	
   /s/ Bruce Lubin
        
     
         
        
         
        
       
         
        
             

	 	Date:  October 25, 2007
        
             
	Bruce Lubin
	 	 

 

 

EXECUTION VERSION

BRUCE LUBIN

	 	 	 
	Position

	 	President of Illinois Commercial Banking of
The PrivateBank and Trust Company (the
“Bank”), reporting to the Chief Executive
Officer. You will be a member of the most
senior management council of the Bank and
the senior loan committee, if such council
or committee are established by the Chief
Executive Officer (in his sole discretion)
and while such council or committee (or
both) is in existence.
	 
	 	 
	Base Salary

	 	$385,000 per year subject to increase, but
not decrease from time to time (other than
permitted proportionate reductions
applicable to all similarly situated senior
executives of the Bank, unless such
reduction occurs during the two-year period
commencing upon the occurrence of a Change
of Control), in the sole discretion of the
Bank, and any such increased (or decreased)
amount shall mean “Base Salary” for
purposes of this term sheet agreement.
Your initial Base Salary reflects your base
salary with your current employer of
$375,000, plus $10,000 to reflect that the
Bank does not provide cars or car
allowances to its employees.
	 
	 	 
	Annual Bonus

	 	90% of Base Salary at target.
	 
	 	 
	 

	 	The Compensation Committee does not intend
to propose a 2008 annual bonus plan that
will limit the bonus payable to the target
amount.
	 
	 	 
	Inducement Equity Award

	 	As a material inducement for you to join
the Bank, you will receive an initial
equity award of 125,000 stock options and
50,000 shares of restricted stock with an
estimated combined value of $3,050,000
(based on the FAS 123R value assigned to
such award by PrivateBancorp, Inc. (the
“Holding Company”)) that is expected to be
granted during November 2007, but in no
event later than December 31, 2007. The
stock options will have a 10-year term.
The award of restricted stock and one-half
of the stock options (“performance stock
options”) will be subject to performance
vesting requirements and continued service
during the performance period generally
applicable to such awards, and the other
one-half of the stock options
(“time-vesting stock options”) will be
subject to time vesting requirements only,
all as more particularly described on
Attachment A hereto.
	 
	 	 
	 

	 	If, prior to the date on which your initial
equity award is fully vested, your
employment is terminated due to your death
or Disability (as defined in the award
agreement), your employment is
involuntarily terminated by the Bank
without Cause or voluntarily terminated by
you for Good Reason, (i) the unvested

 

 

	 	 	 
	 

	 	portion of the time-vesting stock options
will become fully vested and exercisable
and (ii) you will continue to vest through
December 31 of the fiscal year of your
termination in the unvested portion of the
restricted stock and performance stock
options and such previously unvested performance stock options will become
exercisable if the performance vesting
conditions relating to the award are
satisfied on the performance vesting date
that next follows your date of termination;
provided, you will be vested in a minimum
number of each of shares of restricted
stock and performance stock options as
equals the product of (x) 5% multiplied by
(y) the number of whole or partial years of
employment with the Bank from January 1,
2008 through the date of termination, to
the extent you had not previously become
vested in at least such number of shares of
restricted stock and performance stock
options, respectively. Upon such
termination of employment, vested
time-vesting stock options (including
time-vesting stock options that become
vested on the date of termination) and
then-vested performance stock options will
be exercisable for 1 year after your date
of termination (but not beyond the last day
of the stock option term). Upon such
termination of employment, performance
stock options that become vested upon
attainment of the performance objective for
the year of termination will be exercisable
for 1 year after the performance vesting
date that next follows your date of
termination (but not beyond the last day of
the stock option term).
	 
	 	 
	 

	 	You will become fully vested in your
initial equity award upon the occurrence of
a Change of Control.
	 
	 	 
	 

	 	To the extent that the Bank has or
hereafter enters into a broker-assisted
(FRB Reg. T) cashless exercise program for
stock option awards to employees of the
Bank, the initial stock option award will
be included in such program.
	 
	 	 
	 

	 	The restricted shares and stock options
will be subject to the terms and conditions
of an equity incentive plan and award
agreements to be adopted by the Board of
Directors of the Holding Company; provided,
however, that with respect to the terms and
conditions described above, if there is a
conflict between this term sheet agreement
and the equity incentive plan and/or an
award agreement thereunder, the document
that is more favorable to you will control.
	 
	 	 
	 

	 	You will be eligible for future equity
awards from time to time, in accordance
with the terms of the Holding Company’s
incentive plans as then in effect, in such
amount, if any, as is determined in the
sole discretion of the Compensation
Committee.
	 
	 	 
	 

	 	“Cause,” “Good Reason” and “Change of
Control” are defined on Attachment B.

2

 

	 	 	 
	Buy-Out

	 	You will receive appropriate cash amounts
to compensate you for any forfeited
compensation that otherwise would have been
earned as of December 31, 2007, at your
current employer, including the loss of
accrued bonus, LTIP and equity awards:
	 
	 

	 	Bonus: Full (i.e., non-pro rated) 2007
bonus will be paid to you in the amount of
150% of the target amount, payable under
your current employer annual bonus award,
on the Bank’s first payroll date in January
2008.
	 
	 	 
	 

	 	Retention Bonus: You will receive a make
whole payment for the second one-half of
your retention bonus on or about
February 15, 2008. Any forfeiture of the
first one-half of your retention bonus will
be made whole on or about November 5, 2007
or, if later, commencement of employment.
	 
	 	 
	 

	 	LTIP: The 2005-2007, 2006-2008 and
2007-2009 open LTIP cycles will be paid to
you at the rate of $200 per LTIP unit, as
follows:
	 
	 	 
	 

	 	(i) the full amount of the 2005-2007 cycle
if you remain employed until December 31,
2007 (payable in January 2008), (ii) the
full amount of the 2006-2008 cycle if you
remain employed until December 31, 2008
(payable in January 2009), and (iii) the
full amount of the 2007-2009 cycle if you
remain employed until December 31, 2009
(payable in January 2010). If, prior to
the end of a particular cycle, your
employment is terminated due to your death
or Disability (as defined in the Inducement
Equity Award agreement), your employment is
involuntarily terminated by the Bank
without Cause or voluntarily terminated by
you for Good Reason, you will receive a pro
rata portion of the payout relating to such
cycle equal to the full amount payable
under such cycle multiplied by a fraction,
the numerator of which is the number of
days you were employed by your prior
employer and then by the Bank during such
cycle and the denominator of which is 1095.
If your employment is terminated for any
other reason prior to the last day of a
particular cycle, you will forfeit any
amounts relating to that cycle.

	 
	 

	 	
Equity: Cash payment consistent with the
treatment by your prior employer’s parent
company of outstanding equity awards for
individuals who remain employed by your
prior employer on December 31, 2007. Your
outstanding equity awards are listed on
Exhibit C attached hereto.
	 
	 	 
	 

	 	All of the above Buy-Out amounts actually
paid to you by the Bank will be reduced (if
not paid), or offset by future cash
compensation (if paid), by the amount of
any payment received from your prior
employer, so as to avoid any duplication of
payment of those amounts.

3

 

	 	 	 
	Benefits; Perquisites

	 	On the first of the month after your start
date, you are eligible to participate in
the Bank’s medical and dental insurance
plans as well as participate in the
flexible benefits plan and the
PrivateBancorp, Inc. Savings, Retirement
and Employee Stock Ownership Plan (KSOP).
Our KSOP currently provides the additional
benefit after a year of service of a
company match of $.50 on the dollar on your
elected contributions of up to the first 6%
of compensation. Life insurance and
accidental death and dismemberment
insurance (both at two times your Base
Salary, subject to applicable maximum
coverage provisions) are provided by the
Bank. The long term disability insurance
is also provided by the Bank.
	 
	 	 
	 

	 	You will also be furnished with such
perquisites which may from time to time be
provided by the Holding Company and the
Bank which are suitable to your position
and adequate for the performance of your
duties hereunder and reasonable in the
circumstances. Such perquisites include,
but are not limited to, reimbursement for
dues at one approved country club and one
approved luncheon club in the Chicago
Metropolitan area.
	 
	 	 
	Vacation

	 	Standard Bank vacation policy, but not less
than 4 weeks per calendar year.
	 
	 	 
	Severance Benefits
(Termination without Cause
or for Good Reason) (prior
to, or more than 2 years
after, a Change of Control)

	 	Upon an involuntary termination of your
employment by the Bank without Cause or
voluntary termination of employment by you
for Good Reason, you will receive:

(i) A pro rata bonus based on your prior
year’s bonus (if any) (assumed to be the
target bonus until the 2008 bonus, if any,
is payable) and the number of days elapsed
during the year in which the date of
termination occurs (the “Pro Rata Bonus”);
	 
	 	 
	 

	 	(ii) Severance payments equal to 100% of
the sum of (A) your Base Salary
(disregarding any reduction of your Base
Salary constituting Good Reason), plus
(B) the average of the sum of the bonus
amounts earned by you with respect to the
3 calendar years (or such fewer number of
years as you have been employed – assuming
target bonus until the 2008 bonus, if any,
is payable) immediately preceding the
calendar year in which your date of
termination occurs, payable in
substantially equal monthly installments
for a period of 12 months in accordance
with the Bank’s regular payroll practices;
	 
	 	 
	 

	 	(iii) Continuation for 12 months of your
right to maintain COBRA continuation
coverage under the applicable Bank plans

4

 

	 	 	 
	 

	 	at
premium rates on the same “cost-sharing”
percentage basis as the applicable premiums
paid for such coverage by active Bank
employees as of your date of termination;
	 
	 	 
	 

	 	(iv) Payment of all Buy-Out amounts, in the
manner and at the time provided in this
term sheet agreement, that remain unpaid as
of your termination date; and
	 
	 	 
	 

	 	(v) Base Salary earned but not paid and
vacation accrued and unused through your
termination date, any annual bonus that is
earned in a fiscal year preceding the
fiscal year of your termination but not
paid as of the termination date, and such
other earned but unpaid amounts under the
employee benefit plans in which you
participate as of the termination date that
are payable to you in accordance with the
terms thereof, (collectively “Accrued
Obligations”).
	 
	 	 
	 

	 	Any payments and benefits to you under this
Severance Benefits section of this term
sheet agreement shall not be reduced by the
amount of any compensation or benefits
earned as a result of your subsequent
employment.
	 
	 

	 	If you are a “specified employee” of the
Holding Company and its affiliates (as
defined in Treasury Regulation Section
1.409A-1(i)), then you shall receive
payments during the 6 month period
immediately following your date of
termination equal to the lesser of (x) the
amount payable under this severance
provision or (y) two (2) times the
compensation limit in effect under Code
Section 401(a)(17) for the calendar year in
which your date of termination occurs (with
any amounts that otherwise would have been
payable under this severance provision
during such 6 month period being paid on
the first regular payroll date following
the 6 month anniversary of the date of
termination).
	 
	 	 
	Change of Control Severance

	 	For the period commencing six months prior
to a Change of Control and ending on the
second anniversary of such Change of
Control that occurs on or before that date,
upon an involuntary termination of your
employment by the Bank without Cause or
voluntary termination of employment by you
for Good Reason at or after a Change of
Control, you will receive:
	 
	 	 
	 

	 	(i) The Pro Rata Bonus;
	 
	 	 
	 

	 	(ii) Severance equal to 200% of the sum of
(A) your Base Salary (disregarding any
reduction of your Base Salary constituting
Good Reason), plus (B) the greater of (x)
your prior year’s bonus or (y) the average
of the sum of the bonus amounts earned by
you

5

 

	 	 	 
	 

	 	with respect to the 3 calendar years
(or such fewer number of years as you have
been employed – assuming target bonus until
your first annual bonus has been paid)
immediately preceding the calendar year in
which your date of termination occurs,
payable in a single lump sum payment within
30 days after the date of termination, or
if your termination of employment occurs
within six months prior to a Change of
Control, then within 5 business days after
the Change of Control you will receive a
single lump sum payment equal to (p) the
amounts due you under this clause (ii)
reduced by (q) the sum of all amounts paid
to you under clause (ii) of Severance
Benefits (above in this term sheet
agreement), so that no amount of the lump
sum payment under this clause (ii) is
duplicative;
	 
	 	 
	 

	 	(iii) Continuation for 24 months of your
right to maintain COBRA continuation
coverage under the applicable Bank plans at
premium rates on the same “cost-sharing”
percentage basis as the applicable premiums
paid for such coverage by active Bank
employees as of your date of termination;
	 
	 	 
	 

	 	(iv) Payment of all Buy-Out amounts in a
single lump sum within 30 days after the
date of termination and otherwise in the
manner provided in this term sheet
agreement, that remain unpaid as of your
termination date;
	 
	 	 
	 

	 	(v) Outplacement for 12 months; and
	 
	 	 
	 

	 	(vi) The Accrued Obligations.
	 
	 	 
	 

	 	Any payments and benefits to you under this
Change of Control Severance section of this
term sheet agreement shall not be reduced
by the amount of any compensation or
benefits earned as a result of your
subsequent employment.
	 
	 	 
	Code Section 280G

	 	If any payments or benefits constitute
“excess parachute payments” (as defined in
Code Section 280G), you will be fully
grossed up if such payments and benefits
exceed 330% of your “base amount” (as
defined in Code Section 280G). If such
payments and benefits equal 330% or less of
your base amount, payments will be reduced
so that you do not receive any excess
parachute payments.
	 
	Full Satisfaction; Release
of Claims

	 	Any termination payments made and benefits
provided to you under this term sheet
agreement shall be in lieu of any
termination or severance payments or
benefits for which you may be eligible
under any of the plans, policies or
programs of the Bank or its affiliates.

6

 

	 	 	 
	 

	 	As a condition precedent to the payment of
all amounts, benefits and vesting of your
initial equity award, other than your
Accrued Obligations, pursuant to your
involuntary termination of employment
without Cause or your voluntary termination
of employment for Good Reason at any time,
you shall execute a waiver and general
release of claims, substantially in the
form customarily obtained by the Bank from
its terminating executive employees, which
waiver and general release of claims is not
revoked during any applicable seven (7) day
revocation period. For the avoidance of
doubt, such waiver and general release will
not adversely affect your ability to
enforce the terms of this term sheet
agreement, your indemnification rights
under the Bank’s by-laws and this term
sheet agreement, your rights to coverage
under the Bank’s directors and officers
liability insurance; your and your covered
dependents’ rights to COBRA continuation
coverage, your rights to vested employee
benefits, and other rights that cannot be
waived by operation of law.
	 
	Restrictive Covenants

(confidentiality, 

non-competition, 

non-solicitation)

	 	You will not at any time during or
following your employment with the Bank,
directly or indirectly, disclose or use on
your behalf or another’s behalf, publish or
communicate, except in the course of your
employment and in the pursuit of the
business of the Holding Company and the
Bank or any of its subsidiaries or
affiliates, any proprietary information or
data of the Holding Company and the Bank or
any of its subsidiaries or affiliates,
which is not generally known to the public
or which could not be recreated through
public means and which the Holding Company
and the Bank may reasonably regard as
confidential and proprietary. You
recognize and acknowledge that all
knowledge and information which you have or
may acquire in the course of your
employment, such as, but not limited to,
the business, developments, procedures,
techniques, activities or services of the
Holding Company or the Bank or the business
affairs and activities of any customer,
prospective customer, individual firm or
entity doing business with the Holding
Company or the Bank are their sole valuable
property, and shall be held by you in
confidence and in trust for their sole
benefit. All records of every nature and
description which come into your
possession, whether prepared by you, or
otherwise, shall remain the sole property
of the Holding Company or the Bank and upon
termination of your employment for any
reason, said records shall be left with the
Holding Company or the Bank as part of its
property.
	 
	 	 
	 

	 	During the period of your employment with
the Bank and for a period of 1 year after
termination of your employment for any
reason, you will not (except in your
capacity as an employee of

7

 

	 	 	 
	 

	 	the Bank)
directly or indirectly, for your own
account, or as an agent, employee,
director, owner, partner, or consultant of
any corporation, firm, partnership, joint
venture, syndicate, sole proprietorship or
other entity:
	 
	 	 
	 

	 	(i) engage, directly or indirectly, in any
business which has a place of business
(whether as a principal, division,
subsidiary, affiliate, related entity, or
otherwise) located within the area
encompassed within a 50 mile radius
surrounding your office as of your date of
termination that provides banking products,
or that provides non-banking products or
services of a type that accounted for more
than 10% of the Holding Company’s gross
revenues for the fiscal year immediately
preceding your date of termination, that
the Holding Company or the Bank or any of
their subsidiaries or affiliates provide as
of your date of termination, provided that
this subsection (i) shall not become
applicable unless you are employed by the
Bank at any time on December 31, 2008;
	 
	 	 
	 

	 	(ii) solicit or induce, or attempt to
solicit or induce any client or customer of
the Holding Company or the Bank or any of
their subsidiaries or affiliates not to do
business with the Bank or Holding Company
or any of its subsidiaries or affiliates;
provided that, respecting any such client
or customer of the Holding Company or the
Bank that was a client or customer of your
immediate prior employer on the date
hereof, and for which you or one of your
direct or indirect reports were the primary
relationship manager, this subsection (ii)
shall not become applicable unless you are
employed by the Bank at any time on
December 31, 2008; or
	 
	 	 
	 

	 	(iii) solicit or induce, or attempt to
solicit or induce, any employee or agent of
the Holding Company or the Bank or any of
their subsidiaries or affiliates to
terminate his or her relationship with the
Holding Company or the Bank or any of their
subsidiaries or affiliates.
	 
	 	 
	 

	 	The foregoing provisions shall not be
deemed to prohibit your ownership, not to
exceed 5% of the outstanding shares, of
capital stock of any corporation whose
securities are publicly traded on a
national or regional securities exchange or
in the over-the-counter market.
	 
	 	 
	 

	 	You agree that, as the Holding Company’s
and the Bank’s sole remedy for any breach
(or threatened breach) of the
non-competition covenant at subparagraph
(i) above, respecting your

8

 

	 	 	 
	 

	 	initial
restricted stock and stock option award
above:
	 
	 	 
	 

	 	(x) you will immediately forfeit all
unexercised stock options (whether then
vested or unvested) then held by you, all
shares of stock of the Holding Company (or
any successor) acquired upon the exercise
of vested stock options and then held by
you, and all shares of restricted stock
(whether vested or unvested, restricted or
unrestricted) then held by you;
	 
	 	 
	 

	 	(y) you will immediately repay to the
Holding Company a cash sum in the principal
amount equal to all gross proceeds
(before-tax) realized by you upon the sale
or other disposition of shares of stock of
the Holding Company (other than shares
relating to open market purchases by you)
occurring at any time during the period
commencing on the date that is three years
before the date of termination of your
employment and ending on the date that the
noncompetition covenant lapses (“Refund
Period”) , together with interest accrued
thereon, from the date of such breach or
threatened breach, at the prime rate
(compounded calendar monthly) as published
from time to time in The Wall Street
Journal, electronic edition (“Interest”);
and
	 
	 	 
	 

	 	(z) you will repay to the Holding Company a
cash sum equal to fair market value of all
shares of stock of the Holding Company
(other than shares relating to open market
purchases by you) and all stock options
transferred by you as gifts at any time
during the Refund Period, together with
Interest, and for which purpose, “fair
market value” per share of stock shall be
the closing price of one share of Holding
Company common stock on the date such gift
occurs and per stock option shall be the
positive difference, if any, between the
fair market value of a share of stock,
above, and the stock option exercise price.
	 
	 	 
	 

	 	You further agree that a breach (or
threatened breach) of the confidentiality
and/or non-solicitation covenants in
subparagraphs (ii) and (iii) above will
result in irreparable harm to the business
of the Holding Company and the Bank, a
remedy at law in the form of monetary
damages for any breach (or threatened
breach) by you of these covenants is
inadequate, in addition to any remedy at
law or equity for such breach, the Holding
Company and the Bank shall be entitled to
institute and maintain appropriate
proceedings in equity, including a suit for
injunction to enforce the specific
performance by you of such obligations and
to enjoin you from engaging in any activity
in violation thereof, and the covenants on
your part contained above shall be
construed as agreements independent of any
other provisions in this term sheet
agreement, and the existence of any

9

 

	 	 	 
	 

	 	claim,
setoff or cause of action by you against
the Holding Company or the Bank, whether
predicated on this term sheet or otherwise,
shall not constitute a defense or bar to
the specific enforcement by the Holding
Company or the Bank of said covenants.
	 
	 	 
	 

	 	In the event of a breach or a violation by
you of any of the covenants and provisions
above, the running of the non-compete
period (but not your obligations
thereunder) shall be tolled during the
period of the continuance of any actual
breach or violation.
	 
	 	 
	 

	 	You agree that the covenants above are
reasonable with respect to their duration,
geographical area and scope. If the final
judgment of a court of competent
jurisdiction declares that any term or
provision above is invalid or
unenforceable, you agree that the court
making the determination of invalidity or
unenforceability shall have the power to
reduce the scope, duration or area of the
term or provision, to delete specific words
or phrases, or to replace an invalid or
unenforceable term or provision with a term
or provision that is valid and enforceable
and that comes closest to expressing the
intention of the invalid or unenforceable
term or provision, and this term sheet
agreement shall be enforceable as so
modified after the expiration of the time
within which the judgment may be appealed.
	 
	 	 
	Your Representations

	 	You represent that except as otherwise
previously disclosed in writing to the
Bank, you are not a party to any
confidentiality, non-competition or
non-solicitation agreement or
understanding, whether written or oral,
with any prior employer that would prevent
you from entering into an employment
relationship with the Bank, or prevent or
restrict your ability to fulfill your
obligations as an employee of the Bank.
You further represent that you have not and
will not take or retain any confidential
information or trade secrets (whether in
hard copy or electronic format) from any
previous or current employer prior to
assuming your position at the Bank.
	 
	 	 
	Indemnification

	 	You will be indemnified in accordance with
the Bank’s bylaws. You will be indemnified
for any claims that might be brought by
your prior employer (or any successor
and/or any affiliate thereof) relating to
your negotiation or acceptance of
employment with the Bank (including any
alleged conflict of interest created by
such negotiation or acceptance) or the
performance of your duties for the Bank.
You will also be covered by the Bank’s
directors and officers liability insurance
coverage as in effect from time to time.

10

 

	 	 	 
	Fee Reimbursement

	 	You will be reimbursed for up to $10,000 of
the professional fees incurred by you
relating to the negotiation and
documentation of your employment
arrangements.
	 
	 	 
	Code Section 409A

	 	It is intended that any amounts payable
under this term sheet agreement and the
Holding Company’s, the Bank’s and your
exercise of authority or discretion
hereunder shall comply with Section 409A of
the Code (including the Treasury
regulations and other published guidance
relating thereto) so as not to subject you
to the payment of any interest or
additional tax imposed under Section 409A
of the Code. To the extent any amount
payable under this term sheet agreement
would trigger the additional tax imposed by
Code Section 409A, this term sheet
agreement shall be modified to avoid such
additional tax.
	 
	 	 
	Board Approval

	 	The Holding Company and the Bank represent
and warrant to you that they have taken all
corporate action necessary to authorize and
to enter into this term sheet agreement.
	 
	 	 
	Amendment

	 	This term sheet agreement shall not be
amended or modified except by written
instrument executed by the Bank and you.
	 
	 	 
	Binding Agreement

	 	This term sheet agreement shall be binding
upon and inure to the benefit of the heirs
and representatives of you and the
successors and assigns of the Holding
Company and the Bank.
	 
	 	 
	Governing Law

	 	Illinois.

11

 

ATTACHMENT A

PRIVATEBANCORP, INC. INDUCEMENT EQUITY DESIGN PROPOSAL

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	TIME-VESTING
	 	 	EQUITY GRANT FEATURE	 	PERFORMANCE SHARES	 	PERFORMANCE STOCK OPTIONS	 	STOCK OPTIONS
	1.	 	Allocation of Total Award	 	·     50% of value of the Awards.
	 	·     25% of value of the Awards.
	 	·     25% of value of the
Awards.

	 
	 	 	 	 	 	 	 	 	 	 
	2.	 	Time Vesting	 	·     N/A
	 	·     N/A
	 	·     20% per fiscal year of
service, 1/1/2008-12/31/2012.

	 
	 	 	 	 	 	 	 	 	 	 
	3.	 	Performance Vesting	 	·     Based on stock price performance
objectives: 20% compound annual stock price
growth 2008-2012.
	 	·     Based on EPS performance objectives:
20% compound annual EPS growth 2008 - 2012.
	 	·     None

	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	·     Stock price base is 10-day average
price prior to date of Award.
	 	·     Earnings base is the sum of EPS for
4 quarters 12/06 – 9/07.
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	·     20% of the Award vests per year,
based on attainment of stock price objective
for that year. Objective must be met for 20
consecutive trading days during that fiscal
year to vest.
	 	·     20% of the Award vests per year,
based on attainment of EPS objective for
that year.

·     Employed on 12/31 of performance
year.
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	·     Employed on 12/31 of performance year.
	 	 	 	 	 	 
	 
	 	 	 		 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	·     If the PIPE (or other
 investment) does not close by 3/31/08 for at least $150 million capital gross proceeds,
the performance restrictions will lapse as to 25% of the Performance Shares
and such shares shall be time-vested restricted stock vesting at the rate of 20% per fiscal year of service.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	4.	 	“Catch-Up” Performance

Vesting	 	·     As of 12/31 each year: To extent not
vested, Award will vest for prior years if
later year stock price objective is
attained.
	 	·     As of 12/31/2012: To extent not
vested, Award will vest:
	 	·     N/A

	 
	 	 	 	 	 	Cum. Cmpd.	 	Vested % of	 	 
	 
	 	 	 	·     Must be employed on 12/31 of 
	 	Growth*	 	Award	 	 
	 
	 	 	 	year objective is attained.
	 	5.0% ($12.87)	 	50%	 	 
	 
	 	 	 	 	 	17.5% ($13.82)	 	75%	 	 
	 
	 	 	 	 	 	20.0% ($14.82)	 	100%	 	 
	 	 	 	 	 	 	* Estimated EPS targets·	 	 
	 	 	 	 	 	 	·     Must be employed on 12/31/2012.
	 	 

12

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	TIME-VESTING
	 	 	EQUITY GRANT FEATURE	 	PERFORMANCE SHARES	 	PERFORMANCE STOCK OPTIONS	 	STOCK OPTIONS
	5.	 	Minimum 25% Vesting	 	·     As of 12/31/2012: To the extent less
is vested, 25% of total Award will be vested
(including previously vested shares).
	 	·     As of 12/31/2012: To the extent less
is vested, 25% of total Award will be vested
(including previously vested options).
	 	·     N/A

	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	·     Must be employed on 12/31/2012.
	 	·     Must be employed on 12/31/2012.
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	6.	 	“Good Leaver” Treatment	 	·     Continued vesting until 12/31 of
termination year based on performance.
	 	·     Continued vesting until 12/31 of
termination year based on performance.
	 	·     Full accelerated vesting.

	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	·     Minimum vesting of whole Award of 5%
x whole or partial years employed 1/1/08 to
12/31 of termination year.
	 	·     Minimum vesting of whole Award of 5%
x whole or partial years employed 1/1/08 to
12/31 of termination year.
	 	·     1 year to exercise from date of termination.

	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	·     1 year to exercise vested options
from 12/31 of termination year.
	 	 

13

 

ATTACHMENT B

DEFINITIONS

     “Cause” shall mean (A) your willful and continued (for a period of not less than 10 business
days after written notice thereof during which you may remedy such failure if capable of remedy)
failure to perform substantially the duties of your employment (other than as a result of physical
or mental incapacity, or while on vacation or other approved absence) which are within your control
(mere inability to achieve financial or other performance targets or objectives, alone, shall not
constitute such a willful and continued failure); or (B) your willful engaging in illegal conduct
or gross misconduct which is materially and demonstrably injurious to the Holding Company or the
Bank; or (C) your conviction of a felony involving moral turpitude, but specifically excluding any
conviction based entirely on vicarious liability (with “vicarious liability” meaning liability
based on acts of the Holding Company or the Bank for which you are charged solely as a result of
your offices with the Bank and in which you were not directly involved and did not have prior
knowledge of such actions or intended actions); provided, however, that no act or failure to act,
on your part, shall be considered “willful” unless it is done, or omitted to be done, by you in bad
faith or without reasonable belief that your action or omission was in the best interests of the
Holding Company or the Bank; and provided further that no act or omission by you shall constitute
Cause hereunder unless you have been given detailed written notice thereof, and you have failed to
remedy such act or omission.

     “Good Reason” shall mean the occurrence, other than in connection with a discharge, of any of
the following without your consent: (A) a reduction in your Base Salary, target annual bonus
opportunity (other than a proportionate reduction applicable to all executives of the Bank, unless
such reduction occurs during the two-year period commencing on the occurrence of a Change of
Control) and/or the number of shares of restricted stock or number of stock options granted as
your initial equity award, or (B) your being required to be based at an office or location which is
more than 50 miles from your then current office, or (C) a diminution in your reporting
responsibilities following which you do not report directly to the Chief Executive Officer or your
removal as President of Illinois Commercial Banking or your removal as a member of the most senior
management council or the senior loan committee of the Bank (to the extent such council and loan
committee, respectively, exist) or (D) the failure of a successor to assume the obligations of the
Bank under this term sheet agreement (to the extent not otherwise assumed by operation of law).
You must provide written notice to the Bank of the existence of Good Reason no later than 90 days
after its initial existence, and the Bank shall have a period of 30 days following its receipt of
such written notice during which it may remedy in all material respects the Good Reason condition
identified in such written notice.

     “Change of Control”1 shall be deemed to have occurred upon the happening of any of
the following events:

     (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (“Exchange Act”)), other than (A) a trustee or other fiduciary

 

			
	1	 	This definition is based on the existing stock
incentive plan’s definition. It remains subject to review and approval by the
Board.

14

 

holding securities under an employee benefit plan of PrivateBancorp, Inc. (the “Company”) or
any of its subsidiaries, or (B) a corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of stock of the Company, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or indirectly,
of securities of the Company representing 30% or more of the total voting power of the then
outstanding shares of capital stock of the Company entitled to vote generally in the election of
directors (the “Voting Stock”), provided, however, that the following shall not constitute a change
in control: (1) such person becomes a beneficial owner of 30% or more of the Voting Stock as the
result of an acquisition of such Voting Stock directly from the Company, or (2) such person becomes
a beneficial owner of 30% or more of the Voting Stock as a result of the decrease in the number of
outstanding shares of Voting Stock caused by the repurchase of shares by the Company; provided,
further, that in the event a person described in clause (1) or (2) shall thereafter increase (other
than in circumstances described in clause (1) or (2)) beneficial ownership of stock representing
more than 1% of the Voting Stock, such person shall be deemed to become a beneficial owner of 30%
or more of the Voting Stock for purposes of this paragraph (i), provided such person continues to
beneficially own 30% or more of the Voting Stock after such subsequent increase in beneficial
ownership, or

     (ii) Individuals who, as of the [date of the award], constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board, provided that any
individual becoming a director, whose election or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of the directors then comprising
the Incumbent Board shall be considered as through such individual were a member of the Incumbent
Board, but excluding for this purpose, any individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the election of the directors
of the Company (as such terms are used in Rule 14a-11 promulgated under the Exchange Act); or

     (iii) Consummation of a reorganization, merger or consolidation or the sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”), in
each case, unless (1) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Voting Stock immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the total voting power represented by
the voting securities entitled to vote generally in the election of directors of the corporation
resulting from the Business Combination (including, without limitation, a corporation which as a
result of the Business Combination owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the same proportions
as their ownership immediately prior to the Business Combination of the Voting Stock of the
Company, and (2) at least a majority of the members of the board of directors of the corporation
resulting from the Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or action of the Incumbent Board, providing for such Business
Combination; or

     (iv) Approval by the stockholders of the Company of a plan of complete liquidation or
dissolution of the Company; or

     (v) (I) a sale or other transfer of the voting securities of the Bank, whether by stock,
merger, joint venture, consolidation or otherwise, such that following said transaction the Company
does not directly, or indirectly through majority owned subsidiaries, retain more than 50% of the
total voting power of the Bank represented by the voting securities of the Bank entitled to vote
generally in

15

 

the election of the Bank’s directors; or (II) a sale of all or substantially all of the assets
of the Bank other than to the Company or any subsidiary of the Company.

16

 

ATTACHMENT C

CURRENT EQUITY

	 	 	 
	Plan	 	Award
	2007 SIMP (Share Investment and Matching Plan)
	 	1,862 Deferred Shares
	 
	 	(March 12, 2010, match on a share-for-share basis)
	 
	 	 
	2007 LTI (Restricted Share Plan)
	 	4,000 Restricted Shares
	 
	 	 
	2007 Combined Performance Share
	 	4,000 Phantom Shares (2007-2010 cycle)
	and Restricted Share Plan Award
	 	 
	 
	 	 
	2006 Phantom Equity Plan
	 	10,000 Phantom Shares (2005-2008 cycle)
	 
	 	 
	2006 Combined Performance Share
	 	4,000 Restricted Shares (2006-2008 cycle)
	and Restricted Share Plan Award
	 	 
	 
	 	 
	2004 Key Staff Global Stock Options
	 	7,300 Options

17

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