EXHIBIT 10.20
FORM OF PRIVATEBANCORP, INC.
NONQUALIFIED INDUCEMENT PERFORMANCE STOCK OPTION
AGREEMENT
As an inducement to the undersigned
Optionee (“ Optionee ”) to accept an offer of
employment with the Company, this Nonqualified Inducement Stock
Option Agreement (this “ Agreement ”) is made as
of the date set forth on the signature page hereof by and between
PrivateBancorp, Inc., a Delaware corporation (the “
Company ”), and the Optionee. Except as otherwise
indicated or defined in Section 1 hereof, all words with
initial capitals shall have the same meaning as ascribed to them in
the PrivateBancorp, Inc. Strategic Long-Term Incentive Compensation
Plan (the “ Plan ”). Optionee acknowledges
receipt of a copy of the Plan.
WHEREAS, the Company desires to grant
to Optionee an option (“ Option ”) to buy shares
of the Company’s Common Stock, pursuant to the Plan and this
Agreement;
NOW, THEREFORE, the parties hereto
agree as follows:
1. Definitions . For the
purposes of this Agreement:
(a)
“ 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 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 Section 1(a)(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 though 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) (1) 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 (2) a sale of all or substantially
all of the assets of the Bank other than to the Company or any
Subsidiary.
(b)
“ Disability ” means a termination of
Optionee’s employment due to his permanent disability (as
determined by the Committee) in accordance with either
Section 23(e)(3) of the Code, after receipt of medical advice,
or as entitles Optionee to payments of benefits under a long-term
disability benefit plan of the Company or a Subsidiary in which he
participates.
(c)
“ Resignation ” means Optionee’s voluntary
relinquishment of employment with the Company and all
Subsidiaries.
(d)
“ Termination ” means a termination of the
employment of Optionee (i) by the Company and all of its
Subsidiaries for any reason, other than a Termination For Cause, or
(ii) due to Optionee’s death or Disability.
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(e)
“ Termination Date ” means the date on which a
Resignation, Termination, Termination For Cause or Termination For
Good Reason occurs.
(f)
“ Termination For Cause ” means a termination of
the employment of Optionee by the Company or any Subsidiary for any
of the following reasons:
(i) In the case in which Optionee has
entered into an employment agreement (including, but not limited
to, a term sheet agreement) with the Company or a Subsidiary as in
effect on the date hereof, or Optionee otherwise is at any time
participating in a severance plan for executives of the Company or
a Subsidiary, which provides for an involuntary termination of
Optionee’s employment for any reason set forth as
constituting “Cause” under such of Optionee’s
employment agreement or severance plan for executives (as the case
may be).
(ii) In the case in which there is no
employment agreement (including, but not limited to, a term sheet
agreement) in effect between Optionee and the Company or any
Subsidiary or severance plan for executives in which Optionee is at
any applicable time participating, any of the following
reasons:
(1) The commission by Optionee, as
reasonably determined by the Committee, of any theft, embezzlement
or felony against the Company or any Subsidiaries;
(2) The commission of an unlawful or
criminal act by Optionee resulting in material injury to the
business or property of the Company or Subsidiaries or of an act
generally considered to involve moral turpitude, all as reasonably
determined by the Committee;
(3) The commission of an intentional
act by Optionee in the performance of Optionee’s duties as an
employee of the Company or any Subsidiary amounting to gross
negligence or misconduct or resulting in material injury to the
business or property of the Company or Subsidiaries, all as
reasonably determined by the Committee; or
(4) The habitual drunkenness or drug
addiction of Optionee, as reasonably determined by the
Committee.
(g)
“ Termination For Good Reason ” means, in the
case in which Optionee has entered into an employment agreement
(including, but not limited to, a term sheet agreement) with the
Company or a Subsidiary as in effect on the date hereof, or
Optionee otherwise is at any time participating in a severance plan
for executives of the Company or a Subsidiary, which provides for a
voluntary termination of Optionee’s employment for
“Good Reason” (or comparable term) thereunder, a
Resignation of Optionee for any reason set forth as constituting
“Good Reason” (or such comparable term) under such of
Optionee’s employment agreement or severance plan for
executives (as the case may be).
2. Grant and Designation of
Option . Upon the execution and delivery of this Agreement and
the related Stock Option Certificate of even date herewith, and
subject to the
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Plan
(the terms and provisions of which are incorporated herein and
expressly made a part hereof, including, but not limited to,
adjustments required pursuant to Section 11 thereof), the
Company hereby grants to Optionee the Option to purchase the
aggregate number of shares of Common Stock set forth on the Stock
Option Certificate at the price per share (“ Option
Price ”) set forth on such Certificate.
3. Term of Option; Vesting
and Exercisability . Subject to earlier termination or
cancellation of the Option as provided herein, the term of the
Option shall be for the period set forth on the Stock Option
Certificate. Subject to the provisions of this Agreement (including
the Stock Option Certificate), the Option shall be “
vested ” and exercisable at such times and as to such
number of shares for which Optionee has been continuously employed
with the Company or a Subsidiary and the Performance Objectives (or
other conditions) have been satisfied in accordance with the terms
of the Stock Option Certificate (subject to the applicability of
Section 6 hereof), and upon such satisfaction the vested
portion of the Option shall thereupon become exercisable. The
foregoing to the contrary notwithstanding, to the extent not
previously terminated or canceled, upon and after the occurrence of
a Change of Control, the Option shall be 100% vested and thereupon
Optionee shall be entitled to exercise the Option in whole or in
part with respect to all of the shares covered thereby, provided
Optionee has been continuously employed by the Company or a
Subsidiary from the date hereof until the occurrence of such Change
of Control.
4. Method of Exercise
.
(a) Subject
to the terms and conditions of this Agreement, the Option may be
exercised by written notice to the Company (the “ Exercise
Notice ”) at its offices at 70 West Madison Street,
Suite 900, Chicago, Illinois 60602 (or such other offices of
the Company which are hereinafter designated by the Company) to the
attention of the Secretary of the Company. The Exercise Notice
(i) shall state (A) the election to exercise the Option
and (B) the total number of full shares of Common Stock in
respect to which it is being exercised, and (ii) shall be
signed by the person or persons exercising the Option.
(b) Optionee
shall pay the total amount due resulting from such exercise in any
of the following forms: (i) by certified or cashier’s
check for the full amount of the purchase price of such shares;
(ii) by delivery of certificates for shares of
Previously-Acquired Shares (or deemed delivery based on attestation
to the ownership of Previously-Acquired Shares) having a Fair
Market Value equal to the total payment due from Optionee;
(iii) through a simultaneous exercise of Optionee’s
Option and sale of the shares of Common Stock hereby acquired
pursuant to a brokerage arrangement approved in advance by the
Committee to assure its conformity with the terms and conditions of
the Plan; or (iv) by a combination of the methods described in
(i), (ii) and (iii) above. To the extent applicable, Optionee
shall also pay the amount, in cash, of any federal, state and local
income, Social Security and Medicare taxes required to be withheld
as a result of the exercise, unless Optionee delivers
Previously-Acquired Sha
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