EXHIBIT 10.1

TRANSITIONAL COMPENSATION AGREEMENT

AGREEMENT by and between AMCORE Financial, Inc., a Nevada corporation (the
“Company”), and Judith C. Sutfin (the “Executive”), dated as of the 6th day of
May, 2008.

The Board of Directors of the Company (the “Board”) has determined that it is in
the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control, to encourage the
Executive’s full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefit arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other similar
corporations. The Board believes that, in connection with such compensation and
benefit arrangements, it is appropriate to provide for a “Gross-Up Payment” to
the Executive to cover certain special taxes which might result from her receipt
of other compensation and benefits.

Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

As a condition to the effectiveness of this Agreement, the Executive has
executed the Confidentiality and Non-Competition Agreement attached hereto as
Exhibit A.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions

(a) The “Effective Date” shall mean the first date during the Change of Control
Period (as defined in paragraph (b), below) on which a Change of Control (as
defined in Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive’s employment
with the Company is terminated or the Executive ceases to be an officer of the
Company prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment or
cessation of status as an officer (i) was at the request of a third party who
has taken

--------------------------------------------------------------------------------

steps reasonably calculated to effect the Change of Control, or (ii) otherwise
arose in connection with or anticipation of the Change of Control and was not
(A) for conduct by the Executive of the type described in Section 4(b), below,
(B) for significant deficiencies in the Executive’s performance of her duties to
the Company (including, but not by way of limitation, significant failure to
cooperate in implementing a decision of the Board), or (C) for some other
specific substantial business reason unrelated to the Change of Control, then
for all purposes of this Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination of employment or cessation of
status as an officer.

(b) The “Change of Control Period” shall mean the period which commenced on
May 6, 2008 and ending on the third anniversary of such date; provided, however,
that on May 6, 2009, and on each annual anniversary of such date (such date and
each annual anniversary thereof being hereinafter referred to as a “Renewal
Date”), this Agreement and the Change of Control Period shall be automatically
extended so as to terminate three (3) years from such Renewal Date, unless at
least sixty (60) days prior to the Renewal Date the Company shall give notice to
the Executive that the Change of Control Period shall not be so extended, in
which case this Agreement shall terminate upon the expiration of the Change of
Control Period or, if an Effective Period (as defined in Section 3) is then in
effect, upon the expiration of the Effective Period.

2. Change of Control. For the purpose of this Agreement, a “Change of Control”
shall mean the occurrence, after the date hereof, of any of the following
events:

(a) The acquisition, other than from the Company, by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) of Company securities
immediately after which such person is the beneficial owner (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of fifteen percent (15%) or
more of either the then outstanding shares of common stock of the Company or the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors, but excluding for this
purpose any such acquisition by the Company or any of its subsidiaries, or any
employee benefit plan (or related trust) of the Company or its subsidiaries, or
any corporation with respect to which, following such acquisition, more than
sixty percent (60%) of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the common stock and voting securities of the Company
immediately prior to such acquisition in substantially the same proportion as
their ownership, immediately prior to such acquisition, of the then

--------------------------------------------------------------------------------

outstanding shares of common stock of the Company or the combined voting power
of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors, as the case may be; or

(b) Individuals who, as of the date hereof, 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 subsequent to the date hereof,
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority 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 such individual whose
initial assumption of office is in connection with an actual or threatened
election contest, including, but not limited to, a consent solicitation,
relating to the election of the directors of the Company (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

(c) There occurs (i) a reorganization, merger or consolidation of the Company or
any direct or indirect subsidiary of the Company, in each case, with respect to
which all or substantially all of the individuals and entities who were the
respective beneficial owners of the common stock and voting securities of the
Company immediately prior to such reorganization, merger or consolidation do
not, following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than sixty percent (60%) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the ultimate parent corporation of any
corporation resulting from such reorganization, merger or consolidation, or
(ii) shareholder approval of a complete liquidation or dissolution of the
Company, or (iii) the sale or other disposition of all or substantially all of
the assets of the Company.

3. Effective Period. This Agreement shall be in effect for the period commencing
on the Effective Date and ending on the third anniversary of such date (the
“Effective Period”).

4. Termination of Employment

(a) Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Effective Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Effective Period (pursuant to the definition of Disability
as set forth below), it may give to the Executive written notice in accordance
with Section 11(b) of this Agreement of its intention to terminate the
Executive’s employment. In such event, the Executive’s employment with the
Company shall terminate effective on the

--------------------------------------------------------------------------------

thirtieth (30th) day after receipt of such notice by the Executive (the
“Disability Effective Date”), provided that, within the thirty (30) days after
such receipt, the Executive shall not have returned to full-time performance of
the Executive’s duties. For purposes of this Agreement, “Disability” shall mean
the absence of the Executive from the Executive’s duties with the Company on a
full-time basis for one hundred and eighty (180) consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative (such
agreement as to acceptability not to be withheld unreasonably).

(b) Cause.

(i) The Company may terminate the Executive’s employment during the Effective
Period for Cause and may suspend the Executive from her duties with full pay and
benefits if the Executive is indicted for a felony involving moral turpitude;
provided, however, that the Executive will repay all amounts paid by the Company
from the date of such suspension if the Executive is convicted of such felony.
For purposes of this Agreement, “Cause” shall mean (A) the willful and continued
failure by the Executive to substantially perform the Executive’s duties with
the Company (other than any such failure resulting from the Executive’s
incapacity due to physical or mental illness or any such actual or anticipated
failure after the issuance of a Notice of Termination for Good Reason by the
Executive pursuant to Section 4(d) hereof) after a written demand for
substantial performance is delivered to the Executive by the Board, which demand
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive’s duties, or (B) the
willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (A) and (B) of this definition, (x) no act,
or failure to act, on the Executive’s part shall be deemed “willful” unless
done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive’s act, or failure to act, was in the best
interest of the Company and (y) in the event of a dispute concerning the
application of this provision, no claim by the Company that Cause exists shall
be given effect unless the Company establishes to the Board by clear and
convincing evidence that Cause exists, and the Board adopts a finding to that
effect.

(ii) A Notice of Termination for Cause must include a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters ( 3/4) of the
entire membership of the Board at a meeting of the Board which was called and
held for the purpose of considering such termination (after reasonable notice to
the Executive and an opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Executive was guilty of conduct set forth in
clause (A) or (B) of the definition of Cause herein, and specifying the
particulars thereof in detail.

--------------------------------------------------------------------------------

(c) Good Reason

The Executive’s employment may be terminated during the Effective Period by the
Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean:

(i) The assignment to the Executive of any duties inconsistent in any material
respect with the Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as in effect
immediately prior to the Effective Date, or any other action by the Company
which results in a diminution in such position, authority, duties or
responsibilities, including, without limitation, if the Executive was,
immediately prior to the Effective Date, an executive officer of a public
company, the Executive ceasing to be an executive officer of a public company,
but excluding for this purpose an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company within thirty
(30) days after receipt of notice thereof given by the Executive;

(ii) Any reduction by the Company in Executive’s compensation or benefits as in
effect immediately prior to the Effective Date, other than an isolated,
insubstantial and inadvertent reduction not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

(iii) The Company’s requiring the Executive to be based at any office or
location more than twenty (20) miles from that in effect immediately prior to
the Effective Date;

(iv) Any purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement;

(v) Any failure by the Company to comply with and satisfy Section 10(c) of this
Agreement, provided that such successor has received at least ten (10) days
prior written notice from the Company or the Executive of the requirements of
Section 10(c) of this Agreement; or

For purposes of this Section 4(c), any good faith determination of “Good Reason”
made by the Executive shall be conclusive.

(d) Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by a Notice of Termination to
the other party given in accordance with Section 11(b) of this

--------------------------------------------------------------------------------

Agreement. For purposes of this Agreement, a “Notice of Termination” means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive’s employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than
fifteen (15) days after the giving of such notice). The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing
the Executive’s or the Company’s rights hereunder.

(e) Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive’s employment is
terminated by the Company other than for Cause or Disability or by the Executive
other than for Good Reason, the Date of Termination shall be the date on which
the terminating party notifies the other party of such termination, and (iii) if
the Executive’s employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be.

(f) Separation From Service. “Separation From Service” means a termination of
employment that meets the “separation from service” requirements under section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) and section
1.409A-1(h) of the regulations thereunder (as may be amended from time to time
and including any successor thereto).

5. Obligations of the Company upon Termination

(a) By Company Other Than for Cause or Disability or By Executive for Good
Reason. If, during the Effective Period, the Company shall terminate the
Executive’s employment other than for Cause or Disability, or the Executive
shall terminate employment for Good Reason:

(i) The Company shall pay to the Executive in a lump sum the following amounts,
payments to be made at the times described below:

(A) The sum of

--------------------------------------------------------------------------------

(1) the Executive’s then current annual base salary through the Date of
Termination to the extent not theretofore paid, which amount shall be paid in
cash within 30 days after the Date of Termination;

(2) the product of (x) Executive’s Recent Average Bonus (as defined below) and
(y) a fraction, the numerator of which is the number of days in the then current
fiscal year through the Date of Termination, and the denominator of which is
three hundred and sixty-five (365). This amount shall be paid during the 30-day
period commencing six months subsequent to Executive’s Separation From Service,
and, in order to compensate for the delay, the amounts to be paid shall be
increased by six-months interest, computed at the prime rate as reported in the
Wall Street Journal on the nearest date preceding the Separation From Service
(the “Prime Rate”);

(3) any compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon and as adjusted to reflect any other
appreciation or depreciation in value). This amount shall be paid in cash within
30 days after the Separation From Service; provided that, the payment described
in this section 5(a)(i)(A)(3) shall only be paid as an immediate lump sum if
(x) a lump sum payment had previously been elected by the Executive in
accordance with section 409A or (y) the Separation From Service is within two
years following the Change in Control and the Change in Control would also
qualify as a Change in Control under section 409A and the regulations
thereunder; and

(4) any accrued vacation pay; in each case to the extent not theretofore paid,
which amounts shall be paid in cash within 30 days after the Date of Termination
(the sum of the amounts described in parts (1), (2), (3) and (4), above, being
hereinafter referred to as the “Accrued Obligations”).

For purposes of this Agreement, Executive’s Recent Average Bonus shall be the
average annualized (for any fiscal year consisting of less than twelve (12) full
months or with respect to which the Executive has been employed by the Company
for less than twelve (12) full months) bonus paid or payable, before taking into
account any deferral, to the Executive by the Company and its affiliated
companies in respect of the three fiscal years immediately preceding the fiscal
year in which the termination of Executive’s employment occurs (if Executive was
not employed by the Company in a given fiscal year, that year will be excluded
from the calculation of Recent Average Bonus); and

(B) The amount (such amount being hereinafter referred to as the “Severance
Amount”) equal to the product of multiplying by three (3) the sum of (1) the
Executive’s then current annual base salary (without, in the event of a
termination of the Executive’s employment pursuant to Section 4(c)(ii) hereof,
giving effect to any

--------------------------------------------------------------------------------

reduction in the Executive’s base salary) and (2) Executive’s Recent Average
Bonus; provided, however, that such amount shall be reduced by the present value
(determined as provided in Section 280G(d)(4) of the Code) of any other amount
of severance relating to salary or bonus continuation to be received by the
Executive, upon such termination of employment, under any other severance plan,
policy or arrangement of the Company. One-third of the Severance Amount (the
“Non-Compete Payment”) shall be deemed to be allocable to the performance of the
covenants applicable to Executive pursuant to the Confidentiality and
Non-Competition Agreement attached hereto as Exhibit A. This amount shall be
paid during the 30-day period commencing six months subsequent to Executive’s
Separation From Service, and, in order to compensate for the delay, the amounts
to be paid shall be increased by six-months interest at the Prime Rate; and

(ii) (A) At the Date of Termination, stock options, restricted stock, and other
awards relating to stock under equity incentive plans or programs of the Company
and its affiliates which would have become vested (non-forfeitable) if
Executive’s employment had continued for thirty-six (36) months thereafter,
excluding awards that require performance goals to be achieved in addition to
passage of time and continued employment, will be immediately vested and
exercisable, and any such stock options and other outstanding stock options
already vested at or before the Date of Termination shall remain outstanding and
exercisable for a period that is the greater of one year after the Date of
Termination (but in no event after the stated expiration date of such option) or
such longer period as may be provided under the applicable plan or program, and
any such awards subject to settlement at a date later than the vesting date
shall be immediately settled; and

(B) At the Date of Termination, any then outstanding award opportunity under a
long- or intermediate-term incentive plan or program of the Company and its
affiliates which requires performance goals to be achieved (in addition to
passage of time and continued employment requirements) in order for Executive to
earn cash or equity compensation will be terminated and settled by payment to
Executive of an award, in cash unless otherwise specified by the plan or
program, based on the assumed achievement of target performance for the entire
specified performance period, pro rated based on the portion of the total
performance period completed as of the Date of Termination (and without regard
to any requirement as to passage of time or continued employment relating to the
award). If the applicable plan or program would not permit the payment to
Executive of an award as specified in this subparagraph (ii)(B). This amount
shall be paid during the 30-day period commencing six months subsequent to
Executive’s Separation From Service, and, in order to compensate for the delay,
the amounts to be paid shall be increased by six-months interest, computed at
the Prime Rate;

(iii) The Company shall pay to the Executive a lump sum equal to X, which amount
shall be paid during the 30-day period commencing six

--------------------------------------------------------------------------------

months subsequent to Executive’s Separation From Service. For the purpose of the
preceding sentence, X equals the value of the benefits that would have been
provided to Executive and/or the Executive’s family during the 36 month period
immediately following the Date of Termination, if the Executive’s employment had
not been terminated, in accordance with (A) the welfare benefit plans,
practices, programs or policies of the Company and its affiliated companies as
in effect and applicable generally to other peer executives and their families
or, if more favorable, applicable to the Executive and her family, during the
ninety (90)-day period immediately preceding the Effective Date or (B) if more
favorable to the Executive, those in effect generally from time to time
thereafter with respect to other peer executives of the Company and its
affiliated companies and their families. For the purpose of computing X with
respect to benefits where the Company pays insurance premiums, the cost of
benefits shall equal the insurance premiums that would have been paid over such
three-year period that provides benefits to the Executive, based on the
insurance premiums in effect on the Date of Termination. For purposes of
determining eligibility of the Executive for retiree benefits pursuant to such
plans, practices, programs and policies, the Executive shall be considered to
have remained employed during the thirty-six (36) month period immediately
following the Date of Termination and to have retired on the last day of such
period (and, to the extent Executive is eligible to receive retiree benefits
that duplicate the benefits that would otherwise be taken into account in
computing X, X shall be reduced); and

(iv) The Company shall pay to the Executive a lump sum equal to Y, which amount
shall be paid during the 30-day period commencing six months subsequent to
Executive’s Separation From Service. For the purpose of the preceding sentence,
Y equals the value of the benefits that would have been provided to Executive
during the thirty-six (36) month period immediately following the Date of
Termination if the Company had continued to provide the Executive and her family
with the benefits and perquisites at least equal to those which would have been
provided to them if the Executive’s employment had not been terminated, in
accordance with the terms generally applicable with respect to the provision of
such benefits and perquisites during the ninety (90) day period immediately
preceding the Effective Date, or, if more favorable to the Executive, in effect
generally from time to time thereafter during such thirty-six (36) month period
with respect to other peer executives of the Company and its affiliated
companies and their families. These benefits shall include (but shall not be
limited to) the following: employer contributions to the AMCORE Financial
Security Plan, employer contributions to the AMCORE Deferred Compensation Plan,
or any other defined contribution retirement plan, club membership fees,
financial planning allowance and car allowance. In computing Y, the Company
shall determine the amount of the benefit annually provided by the Company by
(A) assuming that the Executive’s base pay would have remained in effect at the
rate in effect on the Date of Termination and the Executive would have received
annual bonuses equal to the Recent Average Bonus, and (B) assuming in the case
of club membership fees, financial planning, car allowance, and

--------------------------------------------------------------------------------

similar benefits, that the Executive would receive such benefits during the
three years following the Date of Termination at the same rate that she received
such benefits during the 12 months ending on the last day of the calendar
quarter preceding the Date of Termination.

(b) Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Effective Period, this Agreement shall terminate
without further obligations to the Executive’s legal representatives under this
Agreement, other than for (i) payment of the Accrued Obligations (which payments
shall, notwithstanding the language of 5(a)(i)(A) above be paid to the
Executive’s estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination, and shall not include the interest factor
described in 5(a)(i)(A) above) and (ii) the payment of the benefits described in
section 5(a)(III) and (iv) (which payments shall, notwithstanding the language
of 5(a)(iii) and (iv) above, be paid to the Executive’s estate or beneficiary,
as applicable, in a lump sum in cash within 30 days of the Date of Termination).

(c) Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability during the Effective Period, this Agreement shall
terminate without further obligations to the Executive, other than for
(i) payment of the Accrued Obligations and (ii) the timely payment of the
benefits described in section 5(a)(iii) and (iv), but for this purpose only
computing the amount of such benefits that would have been payable during the 12
month period immediately following the Date of Termination. Notwithstanding the
language of section 5(a)(i)(A), (iii), and (iv), to the extent permitted under
Section 409A, the payment of the obligations described in this subsection
(c) shall be paid within 30 days of the Date of Termination (and the interest
factor described in section 5(a)(i)(A) shall not apply) if the Disability
constitutes a disability within the meaning of section 409A of the Code and the
regulations thereunder.

(d) Cause; Other than for Good Reason. If, during the Effective Period, the
Executive’s employment shall be terminated by the Company for Cause or the
Executive terminates employment not for Good Reason:

(i) The Company may elect to have the Confidentiality and Non-Competition
Agreement attached hereto as Exhibit A become effective and remain in effect in
accordance with the terms of that Agreement, by giving notice of such election
to the Executive, not later than five business days after the effectiveness of
the Executive’s termination of employment. If the Company makes such election,
the Company will be obligated to pay to the Executive, in equal installments
payable on the dates salary would have been paid had the Executive’s employment
not terminated, during the one-year period following such termination, an amount
equal to one-third of the Severance Amount (the “Non-Compete Payment”)
determined in accordance with Section 5(a)(i)(B) hereof. The commencement of the
payments

--------------------------------------------------------------------------------

described in the preceding sentence shall be delayed until the 30-day period
commencing six months subsequent to Executive’s Separation From Service and the
first payment shall consist of seven monthly installments, plus interest at the
Prime Rate. The Non-Compete Payment shall represent payment for the performance
of the covenants applicable to Executive pursuant to the Confidentiality and
Non-Competition Agreement.

(ii) If the Executive’s employment was terminated by the Company for Cause, the
Company shall pay the Executive’s then current annual base salary through the
Date of Termination, plus the amount of any compensation previously deferred by
the Executive (together with any accrued interest or earnings thereon and as
adjusted to reflect any other appreciation or depreciation in value) and any
accrued vacation pay; in each case to the extent theretofore unpaid; provided
that the payment of previously deferred compensation, as adjusted, shall only be
paid as an immediate lump sum if (x) a lump sum payment had been previously
elected by the Executive or (y) the Separation From Service is within two years
following the Change in Control and the Change in Control would also qualify as
a Change in Control under Section 409A and the regulations thereunder.

(iii) If the Executive terminates her employment other than for Good Reason, the
Company shall pay to the Executive the Accrued Obligations. In such case, all
Accrued Obligations shall be paid to the Executive in a lump sum at the times
set forth in section 5(a)(i)(A) above.

(iv) Upon payment by the Company of the applicable amounts under this
Section 5(d), the Agreement shall terminate without further obligations to the
Executive.

6. Certain Additional Payments by the Company. The Company agrees that:

(a) Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the Company to or for
the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 6) (a “Payment”) would be subject to the excise tax imposed by
Section 4999 of the Code or if any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, being hereinafter collectively referred to as the
“Excise Tax”), then the Executive shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income and employment taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the

--------------------------------------------------------------------------------

Gross-Up Payment, and, after taking into account the phase out of the itemized
deductions and personal exemptions attributable to the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payment.

(b) Subject to the provisions of paragraph (c), below, all determinations
required to be made under this Section 6, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by KPMG Peat,
Marwick (or another accounting firm designated by the Company) (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the Company
and the Executive within fifteen (15) business days of the receipt of notice
from the Executive that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Executive shall appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 6, shall be paid by the Company to the
Executive within five (5) days of the receipt of the Accounting Firm’s
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall furnish the Executive with a written opinion that
failure to report the Excise Tax on the Executive’s applicable federal income
tax return would not result in the imposition of a negligence or similar
penalty. Any good faith determination by the Accounting Firm shall be binding
upon the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to paragraph (c), below, and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.

(c) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of a Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than fifteen (15) business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the thirty
(30)-day period following the date on which Executive gives such notice to the
Company (or such shorter period ending on

--------------------------------------------------------------------------------

the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:

(i) Give the Company any information reasonably requested by the Company
relating to such claim,

(ii) Take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company,

(iii) Cooperate with the Company in good faith in order effectively to contest
such claim, and

(iv) Permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limiting the foregoing
provisions of this paragraph (c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole option,
either direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner; and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company’s control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

--------------------------------------------------------------------------------

(d) If, after the receipt by the Executive of an amount advanced by the Company
pursuant to paragraph (c), above, the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company’s
complying with the requirements of said paragraph (c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon, after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to said paragraph (c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of the Gross-Up Payment required
to be paid.

(e) In order to comply with section 409A, all payments due under this section
shall (i) not be made earlier than six months following the Executive’s
Separation From Service and (ii), if otherwise due, shall be made no later than
the last date for payment provided by Treasury Regulations section 1.409A
3(i)(iv), or successor regulations

7. Non-exclusivity of Rights. Except as explicitly provided in this Agreement,
nothing in this Agreement shall prevent or limit the Executive’s continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies and for which the Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Executive may have under applicable law or under any other contract or agreement
with the Company or any of its affiliated companies. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any other
plan, policy, practice or program of, or any other contract or agreement with,
the Company or any of its affiliated companies at, or subsequent to, the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.

8. Full Settlement; Resolution of Disputes

(a) The Company’s obligation to make the payments provided for in this Agreement
and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others (except as specifically
provided with respect to the Non-Compete Payment). In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as provided in Section 5(a)(iii) of
this Agreement, such amounts shall not be reduced whether or not the Executive
obtains other employment.

--------------------------------------------------------------------------------

The Company agrees to pay promptly upon receipt of proper invoices, to the
fullest extent permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any contest by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest initiated by the Executive about the amount of any payment due
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable federal rate provided for in Section 7872(f)(2)(A) of the
Code; provided, however, that in the event that it is finally judicially
determined that the Executive was terminated for Cause, then the Executive shall
be obligated to repay to the Company the full amount of all such legal fees and
expenses paid for the Executive by the Company in connection with that contest,
plus interest at the rate described above.

(b) If there shall be any dispute between the Company and the Executive (i) in
the event of any termination of the Executive’s employment by the Company,
whether such termination was for Cause, or (ii) in the event of any termination
of employment by the Executive, whether Good Reason existed, then, unless and
until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive’s family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to
Section 5(a) hereof as though such termination were by the Company without Cause
or by the Executive with Good Reason; provided, however, that the Company shall
not be required to pay any disputed amounts pursuant to this paragraph except
upon receipt of an undertaking by or on behalf of the Executive and/or the other
recipient(s), as the case may be, to repay all such amounts to which the
Executive or other recipient, as the case may be, is ultimately adjudged by such
court not to be entitled.

9. Confidential Information. The Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential information, knowledge
or data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive’s employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive’s employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it. However, in no event shall an asserted violation of the
provisions of this Section 9 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.

--------------------------------------------------------------------------------

10. Successors

(a) This Agreement is personal to the Executive and, without the prior written
consent of the Company, no obligations or rights hereunder shall be assignable
by the Executive otherwise than by will or the laws of descent or distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive’s legal representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.

(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement, by operation of law or otherwise.

11. Miscellaneous

(a) This Agreement shall be governed by and construed in accordance with the
laws of the State of Illinois, without reference to principles of choice of law.
The captions of this Agreement are for convenience only and are not part of the
provisions hereof and shall have no force or effect. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.

(b) All notices and other communications hereunder shall be in writing and shall
be given to the other party by hand delivery or commercial messenger delivery or
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

If to the Executive:

Judith C. Sutfin

[Home Address]

--------------------------------------------------------------------------------

If to the Company:

AMCORE Financial, Inc.

501 Seventh Street

P.O. Box 1537

Rockford, Illinois 61110-0037

Attention: Mr. William R. McManaman

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.

(e) The Executive’s or the Company’s failure to insist upon strict compliance
with any provision hereof or the failure to assert any right that the Executive
or the Company may have hereunder, including, without limitation, the right of
the Executive to terminate employment for Good Reason pursuant to Section 4(c)
of this Agreement, shall not be deemed to be a waiver of such provision or right
or of any other provision of or right under this Agreement.

(f) The Executive and the Company acknowledge that this Agreement is not a
contract of employment and that, except as may otherwise be provided under any
other written agreement between the Executive and the Company, the employment of
the Executive by the Company is, and shall remain during the Effective Period,
“at will” and may, subject to Section 5, above, be terminated by either the
Executive or the Company at any time. Moreover, subject to Section 1, above, if
prior to the Effective Date (i) the Executive’s employment with the Company and
all affiliates terminates or (ii) the Executive ceases to be an officer of the
Company and of all affiliates, then the Executive shall have no further rights
under this Agreement.

(g) This Agreement embodies the entire agreement and understanding between the
Company and the Executive and supersedes all prior agreements and understandings
between the Company and Executive relating to the subject matter hereof.

--------------------------------------------------------------------------------

(h) The provisions of this Agreement are intended to comply with section 409A as
it applies to an individual who is a “specified employee” as defined in section
409A. To the extent any provision is inconsistent with section 409A, it shall be
deemed modified so that the modified provision is consistent with section 409A.

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization of its Board of Directors, the Company has caused
these presents to be executed in its name on its behalf, all as of the day and
year first above written.

 

AMCORE FINANCIAL, INC. By:  

/s/ William R. McManaman

  William R. McManaman Its:   Chairman and CEO  

/s/ Judith C. Sutfin

  Judith C. Sutfin   (“Executive”)

--------------------------------------------------------------------------------

EXHIBIT A

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

CONFIDENTIALITY AND NON-COMPETITION AGREEMENT, dated as of May 6, 2008, by and
between AMCORE Financial, Inc. (the “Company”) and Judith C. Sutfin
(“Executive”).

Section 1. Non-Competition; Non-Solicitation.

(a) During the period beginning on the “Effective Date,” as that term is defined
in the Transitional Compensation Agreement of even date herewith, and continuing
while Executive is serving as an executive officer of the Company and for one
year following the termination of Executive’s employment with the Company, any
successor thereto, and its or their subsidiaries (the “Noncompetition Period”),
if such termination of employment occurs within one year after the Effective
Date and Executive becomes entitled to receive the “Non-Compete Payment” as
defined in Section 5 of the Transitional Compensation Agreement, Executive will
not, within fifty (50) miles of the Company’s headquarters in Rockford, Illinois
or within twenty-five (25) miles of any office or branch location in which the
Company was conducting business as of the Effective Date, engage in
“Competition” with the Company. For purposes of this Confidentiality and
Non-Competition Agreement, Competition by Executive shall mean Executive’s:

(i) engaging in, including without limitation consulting or start-up activities
for Executive’s own account or any third party, the business of commercial
banking (including trust and asset management and mortgage banking); or

(ii) becoming interested in, or otherwise directly or indirectly being employed
by or acting as a consultant or lender to, or render any services to, or being a
director, officer, employee, principal, agent, stockholder, manager, member,
owner or partner of, employer of, or permitting her name to be used in
connection with the activities of any other business or organization (a
“Competing Business”) which engages in, or is preparing to engage in, the
business of commercial banking (including trust and asset management and
mortgage banking); provided, however, that, notwithstanding the foregoing, it
shall not be a violation of this Section 2(a) for Executive to become the
registered or beneficial owner of up to two (2%) percent of any class of the
capital stock of a Competing Business registered under the Securities Exchange
Act of 1934, as amended, provided that Executive does not otherwise participate
in the business of such corporation.

(b) during the Noncompetition Period, Executive will not in any manner, directly
or indirectly:

(i) solicit (or cause, or authorize, to be solicited), divert or otherwise
attempt to obtain the business of any person who is, or

--------------------------------------------------------------------------------

has at any time within three years prior to the date of such action been, a
customer, supplier, licensee or business relation of the Company for any purpose
which is competitive with the Company’s business;

(ii) intentionally disturb or attempt to disturb in any adverse respect any
business relationship between any person and the Company;

(iii) solicit from any customer of the Company, or from any known potential
customer of the Company, business which has been the subject of a known written
or oral bid, offer or proposal by the Company, or of substantial preparation
with a view to making such a bid, proposal or offer, in any case, during the
two-year period immediately preceding the termination for any reason whatsoever
of her service with the Company;

(iv) seek or attempt to persuade, induce or encourage any director, officer,
employee, consultant, advisor or other agent of the Company to discontinue her
or her status or employment therewith or to become employed or otherwise engaged
in a Competing Business; and

(v) solicit or employ, or otherwise hire or engage as an employee, independent
contractor, consultant, advisor or otherwise, any person at any time within 12
months following the date of cessation of employment of such person or the
termination of such person’s other status, as the case may be, with the Company.

Section 2. Confidentiality; Intellectual Property; Disclosure.

(a) Except as otherwise provided in this Confidentiality and Non-Competition
Agreement, at all times hereafter, Executive shall keep secret and retain in
strictest confidence, any and all Confidential Information (as hereinafter
defined) relating to the Company, and shall use such Confidential Information
only in furtherance of the performance by him of her duties as an executive
officer of the Company and not for personal benefit or the benefit of any
interest adverse to the interests of the Company. For purposes of this
Confidentiality and Non-Competition Agreement, “Confidential Information” shall
mean any confidential or proprietary information including, without limitation,
plans, specifications, models, samples, data, customer lists and customer
information, computer programs and documentation, and other technical and/or
business information, in whatever form, tangible or intangible, printed,
electronic or magnetic, that can be communicated by whatever means available at
such time, that relates to the Company’s current business or future business
contemplated during the period Executive serves as an executive officer of the
Company, products, services and/or developments, or information received from
others that the Company is obligated to treat as confidential or proprietary,
and Executive shall not disclose such Confidential Information to any person
other than the Company, except as may be required by law or court or
administrative order (in which event Executive shall so notify the Company as
promptly as practicable). Upon the termination of Executive’s position as an
executive officer of the Company for any reason, Executive shall promptly return
to the Company or destroy all copies,

 

A-2

--------------------------------------------------------------------------------

reproductions and summaries of Confidential Information in her possession or
control and erase the same from all media in her possession or control, and, if
the Company so requests, shall certify in writing that she has done so. All
Confidential Information is and shall remain the property of the Company, or in
the case of information that the Company receives from a third party which it is
obligated to treat as confidential, then the property of such third party.

(b) All Intellectual Property (as hereinafter defined) created, developed,
co-developed, obtained or conceived of by Executive during the period Executive
is serves as an executive officer of the Company, and all business opportunities
presented to Executive during the period Executive serves as an executive
officer of the Company, shall be owned by and belong exclusively to the Company,
provided that they reasonably relate to any of the business of the Company on
the date of such creation, development, obtaining or conception, and Executive
shall (i) promptly disclose any such Intellectual Property or business
opportunity to the Company, and (ii) promptly execute and deliver to the
Company, without additional compensation, such instruments as the Company may
require from time to time to evidence its ownership of any such Intellectual
Property or business opportunity (the “Intellectual Property Documents”). If the
Company is unable because of Executive’s mental or physical incapacity or for
any other reason to secure Executive’s signature for any Intellectual Property
Document, then Executive hereby irrevocably designates and appoints the Company
and its duly authorized officers and agents as her agent and attorney in fact,
to act for and in her behalf and stead to execute and file any Intellectual
Property Document and to do all other lawfully permitted acts to evidence or
perfect the Company’s ownership and rights of and to any Intellectual Property
or business opportunity with the same legal force and effect as if executed by
Executive. For purposes of this Confidentiality and Non-Competition Agreement,
the term “Intellectual Property” means any and all of the following and all
statutory and/or common law rights throughout the world in, arising out of, or
associated therewith: (i) all patents and applications therefor, including
docketed patent disclosures awaiting filing, reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part thereof;
(ii) all inventions (whether patentable or not), inventions disclosures and
improvements, all trade secrets, confidential business information (including
ideas, research and development, know-how, compositions, designs,
specifications, pricing and cost information and business and market plans and
proposals), proprietary information, manufacturing, engineering and technical
drawings and specifications, processes, designs and technology; (iii) all works
of authorship, “moral rights,” copyrights (including derivative works thereof),
mask works, copyright and mask work registrations and applications therefor;
(iv) all trade names, trade dress, logos, product names, collective marks,
collective membership marks, trademarks certification marks and service marks,
trademark and service mark registrations and applications together with the
goodwill of the business symbolized by the names and the marks; (v) all data and
related documents, object code, databases, passwords, encryption technology,
firmware, development tools, files, records and data, and all media on which any
of the foregoing is recorded; (vi) any similar, corresponding or equivalent
rights to any of the foregoing; (vii) all documentation related to any of the
foregoing; and (viii) all goodwill associated with any of the foregoing.

 

A-3

--------------------------------------------------------------------------------

Section 3. Non-Disparagement.

Executive shall not, at any time from and after the Effective Date, make
statements or representations, or otherwise communicate, directly or indirectly,
in writing, orally, or otherwise, or take any action which may, directly or
indirectly, disparage or be damaging to the Company, its successors,
subsidiaries or affiliates or their respective officers, directors, employees,
advisors, businesses or reputations, and the Company, its successors,
subsidiaries and affiliates and their respective officers, employees, and agents
shall not make any such statements or representations regarding Executive.
Notwithstanding the foregoing, nothing in this Agreement shall preclude
Executive or any other person from making truthful statements that are required
by applicable law, regulation or legal process.

Section 4. Cooperation With Regard to Litigation Executive agrees to cooperate
with the Company, at any time from and after the Effective Date (including
following Executive’s termination of employment), by making herself available to
testify on behalf of the Company or any successor, subsidiary or affiliate of
the Company, in any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, and to assist the Company, or any successor,
subsidiary or affiliate of the Company, in any such action, suit, or proceeding,
by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company, or any
subsidiary or affiliate of the Company, as may be reasonably requested and after
taking into account Executive’s responsibilities and obligations to third
parties. The Company agrees to reimburse Executive, on an after-tax basis, for
all expenses actually incurred in connection with her provision of testimony or
assistance hereunder.

Section 5. Covenants Reasonable.

Executive hereby acknowledges that the business of the Company is highly
competitive. Executive further acknowledges that this Confidentiality and
Non-Competition Agreement is being entered into in connection with the
Transitional Compensation Agreement, that her service to the Company will be of
a special and unique character, and that she will continue to be identified
personally with the Company. Executive also acknowledges that service as an
executive officer of the Company will require that she have access to some of
the Company’s most highly confidential business information, trade secrets and
proprietary information. The parties therefore acknowledge that the restrictions
contained in Sections 1 and 2 hereof are a reasonable and necessary protection
of the immediate interests of the Company, and any violation of these
restrictions would cause substantial injury to the Company and that the Company
would not have entered into the Transitional Compensation Agreement and this
Confidentiality and Non-Competition Agreement without receiving the additional
consideration offered by Executive in binding herself to any of these
restrictions.

 

A-4

--------------------------------------------------------------------------------

Section 6. Governing Law; Consent to Jurisdiction; Injunctive Relief.

This Confidentiality and Non-Competition Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Illinois,
without regard to its conflict of laws provisions. In the event of a breach or
threatened breach by Executive of any of these restrictions, the Company shall
be entitled to apply to any court of competent jurisdiction for an injunction
restraining Executive from such breach or threatened breach; provided, however,
that the right to apply for an injunction shall not be construed as prohibiting
the Company from pursuing any other available remedies for such breach or
threatened breach.

Section 7. Notices.

Unless otherwise provided herein, any notice, exercise of rights or other
communication required or permitted to be given hereunder shall be in writing
and shall be given by overnight delivery service such as Federal Express,
telecopy (or like transmission) or personal delivery against receipt, or mailed
by registered or certified mail (return receipt requested), to the party to whom
it is given at such party’s address set forth below such party’s name on the
signature page or such other address as such party may hereafter specify by
notice to the other party hereto. Any notice or other communication shall be
deemed to have been given as of the date so personally delivered or transmitted
by telecopy or like transmission or on the next business day when sent by
overnight delivery service.

Section 8. Amendment.

This Confidentiality and Non-Competition Agreement may be amended, modified,
superseded or canceled, and the terms and covenants hereof may be waived, only
by a written instrument executed by both of the parties hereto, or in the case
of a waiver, by the party waiving compliance. The failure of either party at any
time or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same.

Section 9. Binding Effect.

This Confidentiality and Non-Competition Agreement is not assignable by
Executive. This Confidentiality and Non-Competition Agreement shall be binding
upon and inure to the benefit of the Company and any successor organizations
which shall succeed to the Company by merger or consolidation or operation of
law or otherwise, or by acquisition of all or substantially all of the assets of
the Company.

Section 10. Severability.

Executive acknowledges and agrees that the restrictive covenants and agreements
contained herein (the “Restrictive Covenants”) are reasonable and valid in
geographic and temporal scope and in all other respects, and do not impose
limitations greater than that are necessary to protect the goodwill, the
confidential information and any other business interests of the Company, or any
of its successors or assigns. If, however, any court subsequently determines
that any of such covenants or agreements, or any part thereof, is invalid or
unenforceable, the remainder of such covenants and agreements shall not thereby
be affected and shall be given full effect without regard to

 

A-5

--------------------------------------------------------------------------------

the invalid portions thereof. In addition, if any court construes any of the
Restrictive Covenants, or any part thereof, to be unenforceable because of the
duration of such provision or the area covered thereby, such court shall have
the power to reduce the duration or area of such provision and, in its reduced
form, such provision shall then be enforceable and shall be enforced.

Section 11. Execution in Counterparts.

This Confidentiality and Non-Competition Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original and all of
which shall constitute one and the same instrument.

Section 12. Entire Agreement.

This Confidentiality and Non-Competition Agreement (together with applicable
provisions of the Transitional Compensation Agreement) sets forth the entire
agreement, and supersedes all prior agreements and any other agreement between
the parties and understandings, both written and oral, between the parties with
respect to the subject matter hereof as applicable to any period after the
Effective Date (except for other agreements relating to confidentiality,
proprietary information and intellectual property as may be entered into by
Executive and the Company or any subsidiary or affiliate).

Section 13. Titles and Headings.

Titles and headings to Sections herein are for purposes of reference only, and
shall in no way limit, define or otherwise affect the meaning or interpretation
of any of the provisions of this Confidentiality and Non-Competition Agreement.

Section 14. Conflicts of Interest; Representations and Warranties.

Executive specifically covenants, warrants and represents to the Company that
she has the full, complete and entire right and authority to enter into this
Confidentiality and Non-Competition Agreement, that she has no agreement, duty,
commitment or responsibility or obligation of any kind or nature whatsoever with
any corporation, partnership, firm, company, joint venture or other person which
would conflict in any manner whatsoever with any of her duties, obligations or
responsibilities to the Company pursuant to this Confidentiality and
Non-Competition Agreement or which could interfere with Executive’s performance
under this Confidentiality and Non-Competition Agreement, that she is not in
possession of any document or other tangible property of any other person of a
confidential or proprietary nature which would conflict in any manner whatsoever
with any of her duties, obligations or responsibilities to the Company pursuant
to this Confidentiality and Non-Competition Agreement and Executive’s
performance of her obligations to the Company will not breach any agreement by
which Executive is bound not to disclose any proprietary information, and that
she is fully ready, willing and able to perform each and all of her duties,
obligations and responsibilities pursuant to this Confidentiality and
Non-Competition Agreement.

 

A-6

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned have executed this Confidentiality and
Non-Competition Agreement.

 

 

/s/ Judith C. Sutfin

Name:   Judith C. Sutfin Address:   AMCORE FINANCIAL, INC. By:  

/s/ William R. McManaman

Name:   William R. McManaman Title:   Chairman and CEO Address:   AMCORE
Financial, Inc.   501 Seventh Street   Rockford, Illinois 61104

 

A-7