TAYLOR CAPITAL GROUP, INC. AND COLE TAYLOR BANK EXECUTIVE SEVERANCE PLAN

EXHIBIT 10.29

TAYLOR CAPITAL GROUP, INC.

AND

COLE TAYLOR BANK

EXECUTIVE SEVERANCE PLAN

(As Amended and Restated Effective December 31, 2008)

McDermott Will & Emery LLP

Chicago

TABLE OF CONTENTS

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TABLE OF CONTENTS

(continued)

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TAYLOR CAPITAL GROUP, INC.

AND

COLE TAYLOR BANK

EXECUTIVE SEVERANCE PLAN

(As Amended and Restated Effective as of December 31, 2008)

SECTION 1

Introduction and Purpose

Taylor Capital Group, Inc. (the “Company”) has established the Taylor Capital Group, Inc. and Cole Taylor Executive Severance Plan (the “Plan”) to enable the Company to provide severance benefits to eligible Employees of the Company and of its subsidiaries that adopt the Plan in accordance with subsection 2.12 below, whose employment with the Company and such subsidiaries is involuntarily terminated under described circumstances. The Plan asset forth herein is an amendment and complete restatement of the Taylor Capital Group, Inc. and Cole Taylor Bank Severance Plan as in effect immediately prior to the Effective Date, with respect to the groups of eligible Employees described in Section 3 below. Severance benefits for eligible Employees shall be determined exclusively under the Plan.

It is the intent of the Company that the Plan, as set forth herein, constitutes an “employee welfare benefit plan” within the meaning of Section 3(1) of ERISA and complies with the applicable requirements of ERISA. Notwithstanding anything in this plan to the contrary, the Company further intends that to the extent the Plan is subject to Section 409A of the Code, each provision in this Plan shall be interpreted to permit the deferral of compensation in accordance with Section 409A of the Code and any provision that would conflict with such requirements shall not be valid or enforceable.

It is also the intent of the Company that the Plan, as set forth herein, shall comply with Section 111(b) of the Economic Emergency Stabilization Act of 2008 and the related regulatory guidance (“EESA”) as long as said Section applies to the Company and this Plan. For that purpose, if any participant in this Plan is or becomes a “senior executive officer” as defined in said Section, then to the extent that any payment to such Participant under this Plan would constitute part of a “golden parachute payment” that is prohibited under EESA, the benefit payable to the Participant under this Plan shall be reduced to the extent necessary (before any other benefit or payment under any other employee benefit plan or individual agreement) to comply with EESA and preclude any benefit payment prohibited thereunder.

Further, if the Compensation Committee of the Board determines, in its sole and absolute discretion, that a Participant who has received a Severance Pay Benefit or is entitled to any other benefit under the Plan, either committed any action during the Participant’s period of employment with the Employers which would have constituted Cause, or violates any condition or covenant in the Release (as defined below) executed by the Participant in connection with the receipt of benefits under the Plan, then the Company may take whatever actions it deems necessary or desirable in order to rescind any benefits not yet provided and/or to recover the amount paid from the Plan to the Participant, with interest.

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SECTION 2

Definitions

The term “Bank” means Cole Taylor Bank, which is a subsidiary of the Company, a Controlled Group Member, and an Employer under the Plan.

The term “Base Pay” shall mean a Participant’s base rate of pay on the date of the termination of such Participant’s employment. Overtime pay, shift differential, commissions, bonuses, and other premium pay, and all other allowances and reimbursements, shall not be considered when determining a Participant’s benefits under the Plan.

The term “Board” means the Board of Directors of the Company

The term “Cause” means an Employee’s (i) misconduct as defined in the Human Resources Policy and Procedure Manual, or (ii) failure to comply with established Company policies or the Company’s Code of Conduct.

The term “COBRA” means the federal consolidated Omnibus Budget Reconciliation Act of 1985, as amended.

The term “Code” means the federal Internal Revenue Code of 1986, as amended.

The term “Company” means Taylor Capital Group, Inc.

The term “Controlled Group Member” means:

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The term “Effective Date means December 31, 2008, the effective date of this amendment and complete restatement of the Plan.

The term “Eligible Termination” has the meaning defined within the first sentence of subsection 4.1 of the Plan as described in Section 1.

The term “Employee” means an individual treated by an Employer as its employee for purposes of employment taxes and wage withholding for federal income taxes, regardless of any subsequent reclarification by the Employer or by any governmental agency or court.

The term “Employer” means the Company and any other Controlled Group Member which has adopted the Plan for the benefit of its eligible employees with the Company’s consent, all in accordance with the procedures described in subsection 8.7.

The term “Employment Termination Date” means the day following completion of a Participant’s Notification Period (if any), on which the Participant’s employment with the Employers is terminated as an Eligible Termination.

The term “ERISA” means the federal Employee Retirement Income Security Act of 1974, as amended.

The term “Notification Period” with respect to any Participant means the period beginning on the day after the Participant is notified by the Company or his Employer that his or her position has been eliminated, or that his or her employment has been terminated in connection with a reduction in force, facility closing, or an event as designated by the Company as a

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reorganization. There shall be no Notification Period with respect to a Participant’s termination of employment by an Employer due to unsatisfactory job performance (as determined by the appropriate Human Resources manager), unless a Notification Period is authorized with respect to that Participant by a Senior Human Resources Officer.

The minimum Notification Period is four weeks. During the Notification Period, the Company (acting through a Senior Human Resources Officer) has the right to expand the Notification Period (and thus delay the Participant’s Employment Termination Date), with respect to any Participant, in the Company’s discretion, in a manner not inconsistent with applicable law. During the Notification Period, the Participant remains employed with the Employers and continues to be paid his or her current Base Pay (subject to normal withholding for taxes and other deductions) as in effect immediately prior to the Notification Period, but will not receive any merit increases or Success bonuses.

During the Notification Period, the Employer will notify the Participant if he or she is required to report to work. If a Participant resigns during the Notification Period, the Company may, in its discretion, consider the resignation as a voluntary termination rather than an Eligible Termination, and the Participant will not be eligible for benefits under the Plan, unless provision of said benefits is approved in writing by a Senior Human Resources Officer.

During the Notification Period, the Participant must continue to behave in accordance with his or her Employer’s Code of Conduct and comply with other Employer policies.

The term “Participant” means an Employee who has satisfied all of the requirements of Section 3 of the Plan.

The term “Plan” means this Taylor Capital Group, Inc. and Cole Taylor Bank Severance Plan, as amended and restated effective as of December 31, 2008, as described in Section 1, and as it may thereafter be further amended.

The term “Plan Year” means the calendar year. The Plan is administered on the basis of the Plan Year.

The term “Release,” with respect to any Employee, means a form of release provided to the Employee by, and satisfactory to, the Company or his or her Employer in connection with the Employee’s involuntary termination of employment and eligibility for benefits under the Plan.

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The term “Severance Pay Benefits” means the benefits payable to the Participant pursuant to subsection 4.2 of the Plan.

The term “Temporary Employee” means an Employee designated as such under the Human Resources Policy and Procedures Manual.

The term “Years of Service” means a Participant’s number of whole years of employment with the Employers while a Participant, during the period beginning on the first date on which becomes a Participant in accordance with Section 3 of the Plan (as modified by Section 7 in the case of reemployment) and ending on his Employment Termination Date (excluding periods between those two dates during which he did not satisfy the requirements of said Sec