Document:

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                                                                   Exhibit 10.14

March 20, 2000

Peter H.  Heckman
125 Surrey Lane
Lake Forest, IL 60045

Dear Peter:

We are pleased to offer you employment as Executive Vice President, Finance &
Planning effective no later than April 10, 2000 with an initial monthly base
salary of $25,000. Your initial responsibilities will include managing all
financial functions (including Investments, Accounting, Investor Relations,
Treasury, Mergers & Acquisitions, Financial Planning, and Financial &
Operational Analysis); Corporate Marketing/Market Strategy and Corporate
Strategy and Strategic Planning.

You will also be eligible to participate in the officer bonus program which
consists of three elements:

1.   An annual bonus opportunity based on meeting specific corporate and
     divisional measures. Your position provides for a target bonus opportunity
     of 50% of your annual salary but could increase or decrease based on the
     corporate and divisional results (0 to 2 times target percentage). As
     agreed, you will receive a first year employment minimum guarantee of
     target ($150,000) payable on or around March 1, 2001. The payment will not
     be pro-rated based on effective date of hire after January 1, 2000.

2.   Long term incentive bonus opportunity based on specific corporate measures
     over a rolling four (4) year period of time. Your position provides for a
     target bonus payment opportunity of 50% of your annual salary but could
     also increase or decrease based on corporate results (0 to 2 times target
     percentage). As agreed, you will receive a first year employment minimum
     guarantee of target ($150,000) payable on or around March 1, 2001. The
     payment will not be pro-rated based on effective date of hire after January
     1, 2001.

3.   Annual Stock Option grants based on corporate, divisional and individual
     performance results.

You will receive 250,000 option shares, under the HMEC Incentive Stock Plan (the
Plan), with vesting over a five (5) year period (at year end) and an option
price equal to the volume weighted average on your effective date of employment.
With regard to 190,000 of these options shares, those shares are within the
current authorized shares under the Plan and will be granted under the Plan
without contingency. With regard to the remaining 60,000 option shares (the
"Contingent Option Shares), such Option Shares will be granted subject to the
condition that, at the 2000 Annual Meeting of Shareholders, the shareholders
approve an amendment to the Plan authorizing

<PAGE>

Peter H.  Heckman
Page 2
March 6, 2000

sufficient additional shares of Common Stock under the Plan to permit the
Contingent Option Shares to be granted. If such condition is not met, the
Contingent Option Shares shall be converted to stock appreciation rights under
the Plan, with terms and conditions such as to approximate as closely as
possible the economic value of the Contingent Option Shares.

In addition to the change of control agreement, of which you already have a
sample copy, if your employment is terminated within the first five (5) years by
(I) the company without Cause or (ii) by you due to Constructive Termination, we
will provide you with your then current base salary for the next twelve (12)
months plus your target short term and long term payouts. If your employment
terminates without Cause or due to Constructive Termination during the five (5)
year period, you agree to release and forever discharge the Horace Mann
Companies and affiliates from any and all claims, demands, actions and
liabilities. The terms "Cause" and "Constructive Termination" referenced in this
paragraph are as defined in the change of control agreement.

Full relocation benefits and additional agreed upon relocation items will be
provided (see attached) as well as the complete Employee Benefit Program which
includes the eligibility for 1 month (22 work days) vacation.

In order to substantiate your identity and employment eligibility in accordance
with federal law, I would like for you to bring documentation with you on your
first day. Samples of acceptable identification and authorization are enclosed.
As this is a federal law, failure to comply with this regulation would be cause
for us to reconsider our offer of employment.

On your first day, please stop by my office and we will coordinate your
employment orientation. We are truly excited about your joining Horace Mann and
I look forward to working with you.

Sincerely,

/s/ Valerie Chrisman
Valerie A.  Chrisman
Senior Vice President
Customer & Employee
   Services Division

Enclosures
cc: Paul Kardos
    Lou Lower

To confirm your acceptance of this offer, please sign this letter and return it
to me by Thursday, March 9, 2000. The enclosed copy is for your records.

------------------------------------------------------     --------------------
                   (Signature)                                    (Date)
<PAGE>

                                MOVING ASSISTANCE
                                -----------------

                                   (Section 1)

Payment of full benefits of the Moving Assistance policy will include
reimbursement of the following:

     A.   Cost of moving household goods, including replacement value coverage.

     B.   Cost of packing; also unpacking if desired.

     C.   Normal costs of servicing appliances, including telephone installation
          charge. Deposits which will eventually be refunded are not
          reimbursable.

     D.   Expense of no more than two exploratory trips for both employee and
          spouse from former to new location to locate new housing.

     E.   When an employee is required to report to the new location prior to
          the arrival of his/her dependents, normal living expenses will be
          paid. This period is approved from April through August.

     F.   When an employee has reported to a new location and has not sold
          his/her home in the old location, the company will reimburse the
          expenses of a monthly trip home.

     G.   Expense of transportation of the family to the new location via
          personal car or public transportation including living expenses en
          route. If personal car is used, 27 cents per mile will be paid. All
          toll and parking charges are also reimbursable.

     H.   Temporary living expenses while awaiting occupancy of permanent living
          accommodations at the new location or awaiting for the household goods
          to arrive not to exceed 30 days.

     I.   Miscellaneous Moving Expense Allowance (two month's salary (taxable)
          upon closing on home in Springfield.

     J.   Cost of storing furniture and possessions up to 30 days pending access
          to new home.

Tax Requirements
----------------

The company will reimburse the employee for taxes on the portion of total moving
expense reimbursements which exceed the amount allowed as a deduction under
Section 217 of the Internal Revenue Code. This reimbursement will be determined
by the Corporate Tax Section of the Controllers Department and processed through
the December 15th and 31st pay cycles. The employee will not receive this amount
in cash. It will be credited to withholding tax for the year.

The tax reimbursement will be based on a rate which will reimburse the employee
for federal and state income taxes, and FICA tax on both the moving expense
reimbursement and the tax reimbursement, which is also taxable.
<PAGE>

                               MORTGAGE ASSISTANCE
                               -------------------
                                   (Section 2)

Payment of full benefits of the Mortgage Assistance Policy on the purchase of a
new home will include reimbursement the following:

     A.   Loan Origination and/or Commitment Fees

     B.   Attorney Fees or Escrow Department Closing Fees

     C.   Title Policy (Mortgagee ALTA Form is included)

     D.   Appraisal

     E.   Survey

     F.   Credit Reports

     G.   Revenue Stamps

Tax Requirements
----------------

Refer to Section I
<PAGE>

                                REAL ESTATE PLAN
                                ----------------
                                   (Section 3)

Payment of full benefits of the Real Estate Policy will include reimbursement of
the following:

     A.   Commission at established rate (Listing Contact) - maximum of 7%

     B.   Preparation of Deed

     C.   Penalty Charges for prepayment of present mortgage to a maximum of 3%
          of the existing balance

     D.   Mortgage points or discount charge that is the responsibility of the
          Seller to a maximum of 3 points

     E.   Attorney, recording, filing and Escrow closing fees

     F.   Title Policy (ALTA Form)

     G.   Termite Inspection

     H.   Survey of Property

     I.   Revenue Stamps

Tax Requirements
----------------

Refer to Section I<PAGE>

                                                                     EXHIBIT 4.1
                                                                     -----------

          THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THIS NOTE IS BEING
     OFFERED PURSUANT TO EXEMPTIONS PROVIDED BY SECTION 4(2) OF THE ACT,
     REGULATION D PROMULGATED THEREUNDER, CERTAIN STATE SECURITIES LAWS AND
     CERTAIN RULES AND REGULATIONS PROMULGATED PURSUANT THERETO. THIS NOTE MAY
     NOT BE TRANSFERRED BY THE PURCHASER HEREOF IN THE ABSENCE OF AN EFFECTIVE
     REGISTRATION STATEMENT UNDER THE ACT AND COMPLIANCE WITH ANY APPLICABLE
     STATE SECURITIES LAWS, UNLESS SUCH TRANSFER IS EXEMPT FROM SUCH
     REGISTRATION REQUIREMENTS OR NEITHER SUCH REGISTRATION NOR SUCH AN
     EXEMPTION IS REQUIRED BY LAW.

          THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL
     DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
     INSTRUMENTALITY. THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF GENERAL
     CREDITORS OF PRIVATEBANCORP, INC., IS INELIGIBLE AS COLLATERAL FOR A LOAN
     BY PRIVATEBANCORP, INC. AND IS NOT SECURED. THIS OBLIGATION IS NOT SUBJECT
     TO A TRUST INDENTURE.

          THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT, AND AS
     REQUIRED BY TREASURY REGULATION '1.1275-3(b)(1)(ii), INFORMATION REGARDING
     THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND
     THE YIELD TO MATURITY MAY BE OBTAINED FROM THE CHIEF FINANCIAL OFFICER,
     PRIVATEBANCORP, INC., 10 NORTH DEARBORN, SUITE 900, CHICAGO, IL 60602.

February 11, 2000
                                                   Principal Amount:  $5,000,000

                             PRIVATEBANCORP, INC.
                    Subordinated Note due February 11, 2007

     FOR VALUE RECEIVED, PrivateBancorp, Inc., a Delaware corporation (the
"Corporation"), hereby promises to pay to Johnson International, Inc. the
principal amount of Five Million ($5,000,000) on February 11, 2007 (the "Date of
Maturity") and to pay interest based on a 365-day year, and paid in arrears
quarterly at an interest rate of: (i) from February 11, 2000 through February
10, 2002, the 90-day London Inter-Bank Offered Rate ("LIBOR") rate plus fifty
(50) basis points; (ii) from February 11, 2002 through February 10, 2004, the
90-day LIBOR rate plus two hundred (200) basis points; and (iii) from February
11, 2004 through February 10, 2007, the 90-day LIBOR rate plus three hundred
fifty (350) basis points.  The LIBOR rate for the first Interest Payment Date
shall be the LIBOR rate in effect as of the date of this Note.  For subsequent
periods, the LIBOR rate shall be the LIBOR rate in effect as of the immediately
preceding Interest Payment
<PAGE>

Date. Such interest payments shall be due on February 11, May 11, August 11 and
November 11, with interest payments beginning on May 11, 2000 ("Interest Payment
Date"). All payments on this Note will be applied first to accrued interest and
the balance, if any, to principal.

     This Note is issued pursuant to the Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated as of October 4, 1999 by and among the Corporation,
Johnson International, Inc. and Johnson Bank Illinois (Johnson International,
Inc., and together with any subsequent holders of the Note/Notes from time to
time outstanding, referred to herein individually as a "Holder" and collectively
as the "Holders").  The Note/Notes will be treated as a class and, to the extent
expressly provided herein, the actions of some Holders in certain circumstances
may bind or affect the rights of the Holders of other Notes without their
action.

     1.   Completion and Delivery.
          -----------------------

          (a)  The Note is being issued and delivered in accordance with the
terms and conditions contained in this Note and the Stock Purchase Agreement.
The Corporation will (i) complete the Note; (ii) manually sign the Note by any
one of the officers of the Corporation duly authorized and designated by it for
such purpose; and (iii) deliver the Note to Johnson International, Inc.

          (b)  If the Note has been signed by one of the Corporation's officers
who was duly authorized for such purpose, but who is not so designated at the
time said Note is to be paid, the Corporation will pay the Note notwithstanding
that the authority of said officer has been terminated between the time of
execution and the time of payment.

          (c)  Each Note subsequently issued in exchange for or as the result of
transfer of the Note will bear the original issue date of February 11, 2000,
regardless of the date of issue of any such subsequently issued Note.

     2.   Maintenance of Records.  (a) So long as the Note remains outstanding,
          ----------------------
the Corporation will maintain all records as may be customary, including any
Transfer Certificate (as defined below) for the Note, and will:

               (i)   Keep and maintain at its corporate offices in Chicago,
     Illinois, a register (the "Register") in such form as the Corporation may
     determine and subject to such reasonable regulations as it may prescribe,
     in which it will provide for the registration of the Note and any transfers
     thereof, including, without limitation, the name, address and tax
     identification number of each Holder of the Note from time to time and
     records of each transfer of all or any portion of the Note; and

               (ii)  Maintain records for the Note, showing the original and
     unpaid principal amount, maturity date, interest rate, and all subsequent
     transfers and consolidations.

     3.   Registration of Transfer.  (a) Notwithstanding any provision of this
          ------------------------
Note to the contrary, the Corporation shall not be required to register for
transfer or otherwise acknowledge the

                                       2
<PAGE>

purported transfer of the Note that is (i) not accompanied by a fully completed
and duly executed transfer certificate substantially in the form attached hereto
as Exhibit A (each a "Transfer Certificate"), or (ii) not effected in strict
   ---------
compliance with the terms of this Note (including the legend hereon). As a
condition to such transfer, the Corporation may require reasonable evidence that
the transfer does not require registration of the Note under the Act or any
state securities law. Any Note presented or surrendered for registration of
transfer or for exchange must be duly endorsed, be accompanied by a Transfer
Certificate with such evidence of due authorization and guarantee of signature
as may be reasonably required by the Corporation, duly executed by the Holder or
his attorney duly authorized in writing, and with such tax identification number
or other information for each person in whose name the Note is to be issued as
the Corporation may reasonably request to comply with applicable law. No
guarantee of signature shall be required in connection with any transfer made by
any Holder which is an Institutional Investor. "Institutional Investor" means
any bank, trust company, savings and loan association or other financial
institution, any pension plan, any registered investment company, any insurance
company, any broker or dealer, or any other similar financial institution or
entity, regardless of legal form. In the event the Note is to be issued in the
name of a transferee's nominee, such transferee shall provide to the Corporation
the name of the nominee and written instructions as to registration of the Note.

          (b) Upon surrender or presentation of this Note (accompanied by a
complete and duly executed Transfer Certificate) for registration of transfer,
the Corporation will, at its own expense, execute and deliver in exchange
therefor a Note or Notes (as requested by the Holder) in the aggregate amount
equal to the then unpaid principal balance of this Note, and each in a minimum
denomination of $1,000,000 or any amount in excess thereof which is an integral
multiple of $1,000,000 (to the extent feasible) or, if the unpaid principal
balance is then less than $1,000,000, a single Note in such amount, that will
otherwise contain the same terms as this Note and will be registered in the name
of the transferee identified on such Transfer Certificate. No registration of
transfer of this Note will be made on or after the fifteenth day immediately
preceding the Date of Maturity.

          (c) No service charge will be imposed for any registration of transfer
of this Note, but the Corporation may require the payment by the Holder of a sum
sufficient to cover any stamp or other tax or governmental charge that may be
imposed in connection therewith (or presentation of evidence that such tax or
charge has been paid).

          (d) The Corporation may treat the Holder in whose name this Note is
registered in the Register as the absolute owner of this Note for the purpose of
receiving payments of principal of and interest on this Note and for all other
purposes whatsoever, whether or not this Note be overdue, and the Corporation
will not be affected by any notice to the contrary except in accordance with
this Section 3.

          (e) The Corporation acknowledges that Johnson International, Inc.
shall be permitted to transfer the Note to a wholly-owned subsidiary of Johnson
International, Inc. without providing a Transfer Certificate to the Corporation,
provided, however, Johnson International, Inc. shall provide the Corporation
--------  -------
notice, as described in Section 9, of such transfer.  Such transfer shall in no
way adversely affect the rights and privileges of the Corporation hereunder.

                                       3
<PAGE>

     4.   Mutilated Lost, Stolen or Destroyed Notes.  The Corporation will, at
          -----------------------------------------
its own expense, effect the replacement of any Note that is mutilated, lost,
stolen or destroyed, and may require indemnity and a bond from any Holder as a
condition of such replacement, provided, that if such Holder is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
equal to the greater of $20,000,000 or two times the principal amount of such
Note, established, if requested, to the reasonable satisfaction of the
Corporation, such Holder's own unsecured agreement of indemnity shall be deemed
satisfactory.

     5.   Notes Acquired by the Corporation.  If the Corporation acquires any
          ---------------------------------
Note, such acquisition will not operate as a satisfaction of the indebtedness or
rights represented by such Note unless and until the same are recorded as
canceled on the records of the Corporation.

     6.   Payment.  (a) Payment of the principal and interest payable on the
          -------
Date of Maturity will be made by wire transfer in immediately available funds to
a bank account in the United States designated by the Holder in a written notice
received by the Corporation not later than 15 calendar days prior to the Date of
Maturity, without presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Corporation made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, the Holder hereof shall surrender such Note for cancellation,
reasonably promptly (but in no event later than 15 calendar days) after any such
request, to the Corporation at its principal executive office or at such other
place as the Corporation shall designate by notice to the Holder.

          (b) Payments of interest (other than interest payable on the Date of
Maturity) will be made by wire transfer in immediately available funds to a bank
account in the United States designated by the Holder in a written notice
received by the Corporation not later than 15 calendar days prior to the
applicable Interest Payment Date.  Interest payable on any Interest Payment Date
will be payable to the Holder in whose name this Note is registered on the
Register at the close of business on February 11, May 11, August 11 and November
11 of each year as the case may be (whether or not a Business Day (as defined in
Section 15 hereof)), next preceding such Interest Payment Date (such date being
referred to herein as the "Regular Record Date") for such Interest Payment Date,
notwithstanding the subsequent cancellation of this Note prior to or on such
Interest Payment Date, except that interest not so punctually paid, if any, will
be paid to the Holder of this Note at the close of business on a special record
date fixed by the Corporation (a "Special Record Date") notice of which will be
given to the Holder not less than 10 calendar days prior to such Special Record
Date.   (The Regular Record Date and Special Record Date are referred to herein
collectively as "Record Date").  To the extent permitted by applicable law,
interest will accrue, at the rate at which interest accrues on the principal of
this Note, on any amount of principal of or interest on this Note not paid when
due.

          (c) Payments of principal of and interest on this Note will be made in
such coin or currency of the United States of America as at the time of payment
may be legal tender for the payment of public and private debts.

                                       4
<PAGE>

     7.   Redemption;  No Sinking Fund.  (a)  Subject to the provisions of this
          ----------------------------
Section 7, except as otherwise may be specified in this Note, the Corporation
shall have the right to redeem the Notes, in whole or in part, at any time, at a
redemption price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest thereon to the date of such redemption (the
"Redemption Price").  If the Corporation redeems all of the Notes in full by
February 11, 2001, the aggregate Redemption Price shall be reduced by $5,000.
Any redemption pursuant to this Section 7 shall be made upon not less than 30
days nor more than 60 days notice to the Holder of the Notes, at the Redemption
Price. If the Notes are only partially redeemed pursuant to this Section 7, the
Notes shall be redeemed pro rata or by lot or in such other manner as the
Corporation shall deem appropriate and fair in its discretion.  The Redemption
Price shall be paid prior to 12:00 noon, Chicago time, on the date of such
redemption or at such earlier time as the Corporation determines.

          (b) In case the Corporation shall desire to exercise such right to
redeem all or, as the case may be, a portion of the Notes in accordance with the
right reserved so to do, the Corporation shall give notice of such redemption to
holders of the Notes to be redeemed by mailing, first class postage prepaid, a
notice of such redemption not less than 30 days and not more than 60 days before
the date fixed for redemption to such holders at their last addresses as they
shall appear upon the records of the Corporation unless a shorter period is
specified in the Note to be redeemed.  Any notice that is mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the registered Holder receives the notice.  In any case, failure duly to
give such notice to the Holder of any Note designated for redemption in whole or
in part, or any defect in the notice, shall not affect the validity of the
proceedings for the redemption of any other Note.  Each such notice of
redemption shall specify the date fixed for redemption and the Redemption Price
and shall state that payment of the Redemption Price shall be made upon
presentation and surrender of such Note, that interest accrued to the date fixed
for redemption shall be paid as specified in said notice and that from and after
said date interest shall cease to accrue.  If less than all the Notes are to be
redeemed, the notice to the holders of the Notes shall specify the portion of
the principal amount thereof to be redeemed, in minimum denominations of
$1,000,000 or any amount in excess thereof which is an integral multiple of
$1,000,000 (to the extent feasible).  If  the Notes are to be redeemed in part
only, the notice shall also state that on and after the redemption date, upon
surrender of such Notes, a new Note or Notes in principal amount equal to the
unredeemed portion thereof shall be issued.

          (c) If the giving of notice of redemption shall have been completed as
above provided, the Notes or portions of Notes to be redeemed specified in such
notice shall become due and payable on the date and at the place stated in such
notice at the applicable Redemption Price, and interest on such Notes or
portions of Notes shall cease to accrue on and after the date fixed for
redemption, unless the Corporation shall default in the payment of such
Redemption Price with respect to any such Note or portion thereof.  On
presentation and surrender of such Note on or after the date fixed for
redemption at the place of payment specified in the notice, said Note shall be
paid and redeemed at the Redemption Price (but if the date fixed for redemption
is an interest payment date, the interest installment payable on such date shall
be payable to the registered Holder at the close of business on the applicable
record date).

                                       5
<PAGE>

          (d) Upon presentation of any Note that is to be redeemed in part only,
the Corporation shall execute, authenticate and deliver to the Holder thereof,
at the expense of the Corporation, a new Note of authorized denomination in
principal amount equal to the unredeemed portion of the Note so presented.

          (e) This Note is not subject to redemption at any time at the election
of the Holder prior to the Date of Maturity, and is not subject to any sinking
fund.

     8.   Subordination.  The payment of principal and interest on this Note is
          -------------
and will be subordinate to any and all current and future indebtedness of the
Corporation (including indebtedness of others guaranteed by the Corporation)
except for any other subordinated indebtedness of the Corporation that is
intended to qualify as "Tier 2" capital for holding company regulatory purposes,
with which this Note will rank on a parity, and any current or future
indebtedness of the Corporation that by its terms is ranked junior to this Note.
In the event of any bankruptcy or insolvency proceedings, receivership,
conservatorship, reorganization, readjustment of debt, marshaling of assets and
liabilities or similar proceedings or any liquidation or winding up of or
relating to the Corporation, whether voluntary or involuntary, all obligations
of the Corporation (except for indebtedness junior to or on a parity with this
Note) will be entitled to be paid in full before any payment will be made on
account of the principal of, or interest on, this Note.  In the event of any
such proceedings, after payment in full of all sums owing with respect to such
obligations, the Holder of this Note, together with the holders of any other
obligations of the Corporation ranking on a parity with this Note, will be
entitled to be paid from the remaining assets of the Corporation the unpaid
principal and interest before any payment or other distribution, whether in
cash, property, or otherwise, will be made on account of any capital stock or
any obligations of the Corporation ranking junior to this Note.  Advances from
or obligations owed to any affiliate or subsidiary of the Corporation will rank
senior to this Note unless the note or instrument evidencing such obligation
states that it ranks on a parity with or is junior to this Note.

     9.   Notices.  Notices and other communications to the Corporation in
          -------
connection with this Note are required to be in writing and sent by U.S.
Certified Mail or recognized overnight delivery service (with charges prepaid)
and must be addressed as follows, or to such other address as the Corporation
may specify from time to time.

          If to the Corporation:

               PrivateBancorp, Inc.
               Ten North Dearborn
               Chicago, Illinois  60602
               Attention:  Ralph B. Mandell

          With a copy to:

               Vedder, Price, Kaufman & Kammholz
               222 North LaSalle Street
               Chicago, Illinois  60601-1003

                                       6
<PAGE>

               Attention:  Daniel O'Rourke

All notices to the Holder will be in writing and sent by first-class mail or
recognized overnight delivery service (charges prepaid) to the Holder at its
address specified to the Corporation in writing.

     10.  Default; Acceleration.  (a) The term "Event of Default," as used in
          ---------------------
this Note, means any of the following events (whatever the reason for such event
and whether it may be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
governmental agency or authority):

               (i)   the entry of a decree or order for relief by a court having
     jurisdiction in the premises in respect of the Corporation in an
     involuntary bankruptcy or reorganization case or proceeding under Chapter 7
     (Liquidation) or Chapter 11 (Reorganization) of the U.S. Bankruptcy Code,
     as amended, 11 U.S.C. et seq., and the continuance of any such decree or
     order unstayed and in effect for a period of 90 days; or

               (ii)  the commencement by the Corporation of a voluntary
     bankruptcy or reorganization case or proceeding under Chapter 7
     (Liquidation) or Chapter 11 (Reorganization) of the U.S. Bankruptcy Code,
     as amended, 11 U.S.C. et seq.

          (b)  If an Event of Default occurs and continues, the Holder may, at
its option, by written notice to the Corporation, declare this Note to be, and
upon receipt of such declaration by the Corporation, unless all Events of
Default have been cured by the Corporation within five Business Days (as
hereinafter defined in Section 15) after receipt by the Corporation of such
declaration, this Note will become immediately due and payable in its principal
amount, together with accrued and unpaid interest thereon to the date of payment
without presentment, demand, protest or further notice, all of which are hereby
waived. Failure of the Corporation to pay principal or interest when due will
not entitle the Holder to declare due any principal amount of this Note not
otherwise due.

          (c)  At any time after the delivery to the Corporation of a
declaration of an acceleration pursuant to the provisions of this Note, the
Holders of not less than 66-2/3% of the principal amount of the Notes then
outstanding may, on behalf of all Holders of the Notes then outstanding, by
notice to the Corporation, rescind and annul such declaration and its
consequences if:

               (i)   The Corporation will have paid to each Holder the aggregate
     amount of overdue interest and any additional amounts due on all of the
     Notes then held by such Holder;

               (ii)  all such Events of Default will have been cured or waived;
     and

               (iii) no judgment or decree has been entered for the payment of
     any monies due pursuant to the Notes.

                                       7
<PAGE>

No such rescission will affect any subsequent default or impair any right
relating to such subsequent default.

          (d) The Holders of not less than 66-2/3% in principal amount of the
Notes then outstanding may, on behalf of the Holders of all Notes then
outstanding, by notice to the Corporation, waive any past Event of Default and
its consequences. No such waiver will affect any subsequent Event of Default or
impair any right relating to such subsequent default.

          (e) The Corporation will promptly notify the Holders of the Notes then
outstanding, upon the occurrence of an Event of Default, the curing or waiving
of any Event of Default, the declaration of acceleration of any Note, and the
rescission and annulment of any declaration of acceleration.

     11.  Non-payment.  If the Corporation fails to pay any interest on this
          -----------
Note within 30 days after the same is due and payable pursuant hereto, or fails
to pay the entire unpaid principal and interest at the Date of Maturity, the
Corporation will, upon demand of the Holder, pay to the Holder the whole amount
then due and payable on this Note (without acceleration), with interest on the
overdue amount at the rate borne by this Note accrued to the date of payment, to
the extent permitted by applicable law.  If the Corporation fails to pay such
amount upon such demand, the Holder may, among other things, institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Corporation and collect the moneys adjudged or decreed to be payable
in the manner provided by law out of the property of the Corporation.

     12.  Consolidation, Merger or Sale of Assets.  The Corporation will not
          ---------------------------------------
consolidate with or merge into any other person, or transfer or lease its assets
substantially as an entirety to any person, unless (a)(i) the person formed by
such consolidation or into which the Corporation is merged, or the person which
acquires by transfer or which leases substantially all the assets of the
Corporation, will be a corporation duly organized and validly existing under the
laws of the United States of America, any State thereof or the District of
Columbia and will expressly assume in writing the Corporation's obligations on
this Note and the Holders shall receive an opinion of independent counsel
satisfactory to them to the effect that such assumption is enforceable in
accordance with its terms; or (ii) the person formed by such consolidation or
into which the Corporation is merged, or the person which acquires by transfer
or which leases substantially all of the assets of the Corporation, will be
deemed to have assumed such obligation by operation of law; and (b) after giving
effect to such transaction, no Event of Default and no event which, after notice
or lapse of time, or both, would become such an Event of Default, will have
occurred and be continuing.

     13.  Modification of Rights.
          ----------------------

          (a) The Corporation may modify the rights of the Holder of this Note
without the consent of the Holder of this Note (i) subject to compliance with
the terms of Section 12, to evidence the succession of another person to the
Corporation and the assumption by any such successor of the covenants and
agreements of the Corporation herein and in the Notes; or (ii) to add further
covenants, restrictions or conditions for the protection of the Holders of the
Notes.

                                       8
<PAGE>

          (b) The Corporation may also, with the consent of the Holders of not
less than 66-2/3% in principal amount of the Notes then outstanding, add any
provisions to or change or eliminate any of the provisions of the Notes or
modify the rights of the Holders of the Notes then outstanding, except that the
consent of the Holder of each Note then outstanding altered thereby is required
in order to change the Date of Maturity of any Note then outstanding, to extend
the time of payment on any overdue principal amount, to change the coin or
currency in which any Note then outstanding or the interest thereon is payable,
to change the definition of Interest Payment Date, to reduce the principal
amount of or rate of interest on the Notes then outstanding, to change the
method of payment to other than wire transfer in immediately available funds, to
impair the rights of the Holders of such Notes then outstanding, to institute
suit for the enforcement of any payment of principal of or interest or other
amounts on such Notes, to modify the subordination provisions of the Notes in
any manner adverse to the Holders of such Notes then outstanding, or to reduce
the percentage in principal amount of any Note then outstanding the consent of
which is required to rescind or waive certain Events of Default.

          (c) The Corporation will provide each Holder (irrespective of the
amount of Notes then owned by it), not less than 10 days in advance of the date
a decision is required, with information the Corporation reasonably believes is
sufficient to enable such Holder to make an informed and considered decision
with respect to any proposed amendment, waiver or consent in respect of any of
the provisions of the Notes. The Corporation will deliver executed replacement
Notes reflecting each amendment effected pursuant to the provisions of this
Section 13 to each Holder promptly following the date on which any such
amendment receives the consent or approval of the requisite Holders upon
surrender of the Note to be replaced.

          (d) The Corporation will not directly or indirectly pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security, to any Holder as consideration for or
as an inducement to the entering into by any Holder of any waiver or amendment
of any of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same terms,
ratably to each Holder then outstanding even if such Holder did not consent to
such waiver or amendment.

          (e) Solely for the purposes of determining whether the Holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under the
Notes, or have directed the taking of any action provided in the Notes to be
taken upon the direction of the Holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Corporation or any of its subsidiaries or other
affiliates shall be deemed not to be outstanding.

          (f) Any consent or waiver by the Holder of this Note will be
conclusive and binding upon such Holder and upon any and all future Holders of
this Note, whether or not notation of such consent or waiver is made upon this
Note.

     14.  No Implied Waiver.  No failure or delay on the part of the Holder in
          -----------------
exercising any right under this Note will operate as a waiver of, or impair, any
such rights.  No waiver of any such right will be effective unless in writing.

                                       9
<PAGE>

     15.  Payments and Actions on Non-Business Days.  If any date on which any
          -----------------------------------------
payment of principal or interest, notice or other action due and payable on or
required by, as the case may be, this Note falls on other than a Business Day,
then that action or payment need not be taken or made on such date, but may be
taken or made on the next succeeding Business Day with the same force and effect
as if made on the date for payment of such principal or interest, and no
interest will accrue in respect of such payment for the period after such day.
The term "Business Day" means any day that is not a Saturday or Sunday and that
is not a day on which any bank in the city of Chicago, Illinois is generally
authorized or required by law or executive order to be closed.

     16.  Governing Law.  THIS NOTE WILL BE GOVERNED BY AND CONSTRUED AND
          -------------
INTERPRETED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS OF SUCH STATE.

                            *          *         *

                                       10
<PAGE>

     IN WITNESS WHEREOF, the Corporation has caused this Note to be duly
executed as of the date first written above.

                              PRIVATEBANCORP, INC.

                              By:  /s/ Ralph B. Mandell
                                 -----------------------------------------------
                                   Name:  Ralph B. Mandell
                                   Title:  President and Chief Executive Officer

                              By: /s/ Donald A. Roubitchek
                                 -----------------------------------------------
                                   Name:  Donald A. Roubitchek
                                   Title:  Chief Financial Officer

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