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                                                                    EXHIBIT 10.9


                             AMCORE FINANCIAL, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN















                                 EFFECTIVE AS OF
                                  MAY 20, 1998

























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                                TABLE OF CONTENTS

                                                                       Page
                                                                       ----
                                    ARTICLE I
                                     GENERAL

Section 1.1       Effective Date.......................................1
Section 1.2       Intent...............................................1


                                   ARTICLE II
                              DEFINITIONS AND USAGE

Section 2.1       Definitions..........................................1
Section 2.2       Usage................................................4


                                   ARTICLE III
                          ELIGIBILITY AND PARTICIPATION

Section 3.1       Eligibility..........................................4
Section 3.2       Participation........................................4



                                   ARTICLE IV
                               RETIREMENT BENEFITS

Section 4.1       Normal Retirement Benefit............................4
Section 4.2       Early Retirement Benefit.............................5
Section 4.3       Termination of Employment............................5
Section 4.4       Disability...........................................6
Section 4.5       Death................................................6
Section 4.6       Change in Control....................................6
Section 4.7       Vesting and Forfeiture of Retirement Benefit.........7
Section 4.8       Valuation Method.....................................8
Section 4.9       Payment Procedure....................................8
Section 4.10      Designation of Beneficiary...........................8






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                                    ARTICLE V
                                 ADMINISTRATION

Section 5.1       General..............................................8
Section 5.2       Administrative Rules.................................8
Section 5.3       Duties...............................................8
Section 5.4       Fees.................................................9



                                   ARTICLE VI
                                CLAIMS PROCEDURE

Section 6.1       General..............................................9
Section 6.2       Denials..............................................9
Section 6.3       Notice...............................................9
Section 6.4       Appeals Procedure...................................10
Section 6.5       Review..............................................10



                                   ARTICLE VII
                            MISCELLANEOUS PROVISIONS

Section 7.1       Amendment and Termination...........................10
Section 7.2       No Assignment.......................................10
Section 7.3       Successors and Assigns..............................10
Section 7.4       Governing Law.......................................11
Section 7.5       No Guarantee of Employment..........................11
Section 7.6       Severability........................................11
Section 7.7       Notification of Addresses...........................11
Section 7.8       Participating Employers.............................11
Section 7.9       Bonding.............................................11
Section 7.10      Taxes...............................................11

                                  ARTICLE VIII
                                     FUNDING

Section 8.1       Employer Liability..................................11
Section 8.2       Unfunded Plan.......................................12
Section 8.3       Trust...............................................12




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                             AMCORE FINANCIAL, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                    PREAMBLE

WHEREAS, Amcore Financial, Inc. (the "Company") has established (and may
establish in the future) one or more qualified retirement plans to provide
retirement benefits to its employees under such plan or plans; and

WHEREAS, the Company recognizes the unique qualifications of certain key
management or highly compensated employees and the valuable services they
provide, and desires to provide such employees with a target level of retirement
income payable from contributions by the Company by supplementing, through an
unfunded, nonqualified plan, such retirement benefits; and

WHEREAS, the Company has determined that the implementation of such a plan will
best serve its interest in attracting and retaining key employees;

NOW, THEREFORE, the Company hereby establishes the Amcore Financial, Inc.
Supplemental Executive Retirement Plan as hereinafter provided:


                                    ARTICLE I
                                     GENERAL

                  SECTION 1.1 EFFECTIVE DATE. This Plan shall be effective as
of May 20, 1998. An employee of any Employer who has been terminated prior to
the Effective Date of this Plan shall have no rights pursuant to this Plan. The
rights, if any, of such a terminated employee shall be determined pursuant to
the plan or plans, if any, in effect on the date of such employee's
termination.:

                  SECTION 1.2 INTENT. The Plan is intended to be an unfunded
plan maintained primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees, as such group is
described under Section 201(2), 301(a)(3), and 401(a)(1) of ERISA. Benefits
provided under this Plan shall be funded solely from the general assets of the
Employer and no participant or beneficiary hereunder shall have any interest or
right to such assets.


                                   ARTICLE II
                              DEFINITIONS AND USAGE

                  SECTION 2.1 DEFINITIONS. Wherever used in the Plan, the
following words and phrases shall have the meaning set forth below unless the
context plainly requires a different meaning:



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"Account" means the account established on behalf of the Participant immediately
before any distribution of Retirement Benefits hereunder, as described in
Section 4.7.

"Administrator" means the Company, acting through its Board, or such other
person or persons as designated by the Board.

"Board" means the Board of Directors of the Company.

"Change in Control" means a change in the control of the Company, as defined in
Section 4.6.

"Code" means the Internal Revenue Code of 1986, as amended from time to time.
Any reference to a particular Code section shall include any provision which
modifies, replaces or supersedes it.

"Company" means Amcore Financial, Inc. and any successor entity.

"Disability" or "Disabled" means a physical or mental condition of a Participant
resulting from a bodily injury, disease, or mental disorder that renders him
incapable of continuing in the employment of the Employer for a period of 180
continuous days. Such Disability shall be determined by the Administrator based
upon appropriate medical advice and examination, and taking into account the
ability of the Participant to continue in his same, or similar, position with
the Employer.

"Early Retirement Date" means any date on or after the date on which the
Participant has attained age 62 and prior to the date on which the Participant
attains age 65.

"Employer" means the Company and any other entity related to the Company in a
manner described in Code Sections 414(b), (c), (m) or (o) that adopts the Plan
with the Company's consent pursuant to Section 7.8.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time. Any reference to a particular ERISA section shall include any
provision which modifies, replaces, or supersedes it.

"Final Base Salary" means, with respect to any Participant, his regular annual
base salary (excluding bonuses and other variable payments) paid or payable in
the calendar month immediately preceding his or her retirement or termination of
employment.

"Normal Retirement Date" means the date on which a Participant attains age sixty
five (65).

"Office of the President" means those individuals who hold any one of the
following positions with the Company: Chief Financial Officer, Chief Operating
Officer, Chief Administrative Officer, Chief Executive Officer, or as otherwise
determined by the Board.

"Offsets" means (i) fifty percent (50%) of a Participant's Social Security
Benefit; (ii) vested amounts paid or payable to or in respect of a Participant
attributable to the Employer's contributions



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to the Company's Financial Security Plan (or any successor plan thereto) and
earnings associated with such contributions; and (iii) vested amounts paid or
payable to or in respect of the Participant attributable to the Employer's
contributions to the Amcore Financial, Inc. Top Hat Plan (or any successor plan
thereto) and earnings associated with such contributions.

"Participant" means an eligible employee of an Employer who is participating in
the Plan in accordance with Section 3.2.

"Plan" means The Amcore Financial, Inc. Supplemental Executive Retirement Plan,
as set forth herein and as it may be amended from time to time.

"Plan Year" means the calendar year.

"Retirement Benefit" means the benefit payable under this Plan, as determined
under Article IV.

"Social Security Benefit" means the annual benefit payable under the Social
Security Act, relating to Old-Age and Disability benefits, as of the
Participant's Normal Retirement Date, or upon actual retirement if later.

"Termination for Cause" means the termination of a Participant's employment due
to, in the Administrator's discretion, (i) serious, willful failure to perform
the duties of his employment, which continues after notice of deficiency from
the Employer, (ii) conviction of a felony, (iii) willful failure to comply with
applicable laws with respect to the execution of the Employer's business
operations, or (iv) theft, fraud, embezzlement, dishonesty or other conduct
which has resulted or is likely to result in material economic damage to the
Company or any Employer; provided, however, that following a Change in Control
"Termination for Cause" shall not include clauses (i) - (iii) above.

"Valuation Date" means December 31 of each calendar year.

"Years of Service" means the total number of years (measured in full and partial
years, in increments of one-twelfth years) of active employment with the
Employer during which services were rendered as an employee, commencing on the
date the Participant was first employed by the Employer and ending on the date
he ceases to perform services of the Employer (including employment before the
effective date of the Plan specified in Section 1.1 hereof), provided, however,
that in no event shall less than fifteen (15) years be credited to any
Participant regardless of his actual period of service with the Employer. At the
discretion of the Board, Participants may be granted additional Years of Service
that relate to employment with another employer for purposes of determining
Retirement Benefits under this Plan, upon such terms and conditions as the Board
may require (which conditions may include, but not be limited to, completion of
a period of future service with the Company and reducing the Participant's
Retirement Benefit hereunder by the pension benefits provided by such other
employer). At the discretion of the Board, Participants may also be granted
additional Years of Service in the event of Disability, up to the number of
Years of Service that are reasonably expected to have been earned absent the
Participant's disability.



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                  SECTION 2.2 USAGE. Except where otherwise indicated by the
context, any masculine terminology used herein shall also include the feminine
and vice versa, and the definition of any term herein in the singular shall also
include the plural and vice versa.


                                   ARTICLE III
                           ELIGIBILITY AND PARTICIPANT

                  SECTION 3.1 ELIGIBILITY. An employee of an Employer shall be
eligible to participate in the Plan only to the extent, and for the period, that
on or after the Effective Date of the Plan, said employee is a member of the
Office of the President or otherwise is designated by the Board as a member of a
select group of management or highly compensated employees (consistent with the
terms of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA). The Board shall
make all determinations of eligibility in its sole and absolute discretion.

                  SECTION 3.2 PARTICIPATION. An employee who is eligible to
participate in the Plan pursuant to Section 3.1 shall become a Participant on
the first day of the month immediately following the date the employee becomes a
member of the Officer of the President or is otherwise determined to be eligible
to participate in the Plan.


                                   ARTICLE IV
                               RETIREMENT BENEFITS

                  SECTION 4.1 NORMAL RETIREMENT BENEFIT.

                  (a) Amount. The Retirement Benefit for a Participant who
retires on or after his Normal Retirement Date shall be an annual Retirement
Benefit in an amount equal to (1) multiplied by (2) and reduced by the Offsets
as of the Valuation Date:

                        (1)   three percent (3%) of such Participant's Final
                              Base Salary;

                        (2)   Participant's Years of Service;

                  The Retirement Benefit paid at Normal Retirement Age shall not
exceed seventy (70%) percent of a Participant's Final Base Salary and shall be
no less than forty five (45%) percent of a Participant's Final Base Salary.


                  (b) Time and Form of Payment. A Participant who retires under
this Plan on or after his Normal Retirement Date shall receive a Retirement
Benefit, determined in accordance with Section 4.1(a), which shall commence to
be paid not later than sixty (60) days after the Participant's retirement from
the Employer becomes effective.

                  The Retirement Benefit shall be payable in the form of an
installment payment for the remainder of the Participant's life, but in no event
less than ten years, with payment



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continuing to the Participant's beneficiary designated in accordance with
Section 4.9 for the remaining period of such ten years certain in the event of
the Participant's death after payments have commenced but prior to the
expiration of such ten-year period.

                  SECTION 4.2   EARLY RETIREMENT BENEFIT.

                  (a) Amount. The Retirement Benefit for a Participant who
retires on or after his Early Retirement Date (but before his Normal Retirement
Date) shall be equal to the Retirement Benefit determined under Section 4.1(a)
hereof and payable within 60 days after termination for early retirement, using
an assumed interest rate and other assumptions that are reasonable and
appropriate in the Administrator's sole discretion in light of commercial
practices.

                  (b) Time and Form of Payment. A Participant who retires under
this Plan on or after his early Retirement Date (but before his Normal
Retirement Date) shall receive a Retire-ment Benefit, determined in accordance
with Section 4.2(a), which shall commence to be paid not later than sixty (60)
days after the Participant's retirement from the Employer becomes effec-tive,
subject to reduction in accordance with Section 4.2(a) for payment before the
Participant's Normal Retirement Date.

                  The Retirement Benefit shall be payable in the form of an
installment payment for the re-mainder of the Participant's life, but in no
event less than ten years, with payment continuing to the Participant's
beneficiary designated in accordance with Section 4.9 for the remaining period
of such ten years certain in the event of the Participant's death after payments
have commenced but prior to the expiration of such ten-year period.

                  SECTION 4.3   TERMINATION OF EMPLOYMENT.

                  (a) Amount. If a Participant incurs a termination of
employment with the Employer for reasons other than Termination for Cause before
the attainment of his Early Retirement Date or his Normal Retirement Date, he
shall receive a Retirement Benefit equal to the actuarial present value of the
Retirement Benefit determined under Section 4.1(a) hereof, using an assumed
interest rate and other assumptions that are reasonable and appropriate in the
Administrator's sole discretion, in light of commercial practices. No Retirement
Benefit shall be payable hereunder if a Participant incurs a Termination for
Cause.

                  (b) Time and Form of Payment. A participant who is entitled to
a Retirement Benefit under Section 4.3(a) shall receive a Retirement Benefit,
determined in accordance with Section 4.1(a), which shall be paid in a lump sum
not later than sixty (60) days after termination of employment.



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                  SECTION 4.4   DISABILITY.

                  (a) Amount. If a Participant becomes Disabled while in the
employment of the Employer, he or his beneficiary or beneficiaries shall receive
a Retirement Benefit determined under Section 4.1(a), but any such payment shall
be reduced by the actuarial present value of any disability benefit payable to
or on behalf of such Participant pursuant to any disability benefit programs
sponsored by the Employer.

                  (b) Time and Form of Payment. A participant who is entitled to
a Retirement Benefit under Section 4.4(a) shall receive a Retirement Benefit,
determined in accordance with Section 4.4(a), which shall be paid in a lump sum
not later than sixty (60) days after termination of employment for Disability.
The amount of such lump sum payment shall be the present value of the Retirement
Benefit determined under Section 4.1(a) hereof, using an assumed interest rate
and other assumptions that are reasonable and appropriate, in the
Administrator's sole discretion, in light of commercial practices.

                  SECTION 4.5 DEATH. If a Participant dies while in the
employment of the Employer but prior to his Early Retirement Date, his
beneficiary or beneficiaries shall not be entitled to, and shall not receive,
payment of any Retirement Benefit under any provision of this Plan. If a
Participant dies after his employment has terminated or on or after his Early
Retirement Date, the remaining Retirement Benefit otherwise payable with respect
to the Participant shall be paid or continue to be paid to the beneficiary or
beneficiaries designated in accordance with Section 4.9 for a period of ten
years certain.

                  SECTION 4.6 CHANGE IN CONTROL.

                  (a) Amount. In the event that there is a Change in Control
involving a Participant's Employer, each Participant employed by such Employer
shall be entitled to receive his benefit, calculated under Section 4.1(a) as of
his Normal Retirement Date.

                  (b) Time and Form of Payment. Any Retirement Benefit payable
under this Section 4.6 shall be paid in the form of an immediate lump sum
distribution within sixty (60) days of his termination of employment (other than
a Termination for Cause) following the Change in Control. The amount of such
lump sum payment shall be the present value of the Retirement Benefit determined
under Section 4.6(a) hereof, using an assumed interest rate and other
assumptions that are reasonable and appropriate, in the Administrator's sole
discretion, in light of commercial practices.

                  (c) "Change in Control" Defined. For purposes of this
subsection, a "Change in Control" shall mean a change in control of any Employer
of a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934, whether or not such Employer is then subject to such reporting
requirement; provided that, without limitation, such a Change in Control shall
be deemed to have occurred upon the occurrence of any of the following:



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                        (i)   any "Person" (as such term is used in Sections
                              13(d) and 14(d) of the Securities Exchange Act of
                              1934, as amended (the "Exchange Act")), other than
                              a trustee or other fiduciary holding securities
                              under an employee benefit plan of the Company is
                              or becomes the "beneficial owner" (as defined in
                              Rule 13d-3 under the Exchange Act), directly or
                              indirectly, of securities of the Company
                              representing 30% or more of the combined voting
                              power of the Company's then outstanding securities
                              regardless of whether or not the Board of
                              Directors (the "Board") shall have approved such
                              Change in Control;

                        (ii)  during any period of two consecutive years,
                              individuals who at the beginning of such period
                              constitute the Board and any new director (other
                              than a director designated by a person who shall
                              have entered into an agreement with the Company to
                              effect a transaction described in clauses (A)
                              above or (C) below) whose election by the Board of
                              nomination for election by the Company's
                              stockholders was approved by a vote of at least
                              two-thirds of the directors then still in office
                              who either were directors at the beginning of the
                              period or whose election or nomination for
                              election was previously so approved, cease for any
                              reason to constitute a majority thereof; or

                        (iii) the shareholders of the Company approve (1) a
                              merger or consolidation of the Company with any
                              other corporation regardless of which entity is
                              the surviving company, other than a merger or
                              consolidation which would result in the voting
                              securities of the Company outstanding immediately
                              prior thereto continuing to represent (either by
                              remaining outstanding or by being converted into
                              voting securities of the surviving entity) at
                              least 66 2/3% of the combined voting power of the
                              voting securities of the Company or such merger or
                              consolidation, or (2) a plan of complete
                              liquidation of the Company or an agreement for the
                              sale or disposition by the Company of all or
                              substantially all the Company's assets.

                  SECTION 4.7   VESTING AND FORFEITURE OF RETIREMENT BENEFIT.

                  (a) Vested Benefits . Except as provided in subsection (b)
below, a Participant who is in the active employ of an Employer shall be fully
vested in his Account for each year of service and every year thereafter, but in
any event not less than fifteen years.




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                  (b) Forfeiture. Notwithstanding subsection (a), upon the
occurrence of a Termination for Cause a Participant's Retirement Benefit
hereunder shall be forfeited, and no such benefit shall be payable hereunder.

                  SECTION 4.8 VALUATION METHOD. The valuation method used by the
Company shall be Financial Accounting Statement Number 87 or any other
appropriate methodology that systematically recognizes the annual accrued
liability of the Employer to the Participant.

                  SECTION 4.9 PAYMENT PROCEDURE. Immediately before any
distribution hereunder, the Employer shall establish and maintain an Account for
each Participant and beneficiary receiving Retirement Benefits under the Plan,
and shall credit the amount of such distribution to such Account and then
immediately distribute the amount so credited to the Participant, or as
applicable, to his beneficiary. Neither the Participant nor his beneficiary(s)
shall have any interest or right in any such Account at any time. All amounts
credited to the Accounts established under the Plan shall be credited solely for
the purpose of effecting distributions hereunder and shall remain assets of the
Employer subject to the claims of such Employer's general creditors.

                  SECTION 4.10 DESIGNATION OF BENEFICIARY. A Participant may,
by written instruction delivered to the Administrator during the Participant's
lifetime, designate one or more primary and contingent beneficiaries to receive
the Retirement Benefit which may be payable hereunder following the
Participant's death, and may designate the proportions in which such
beneficiaries are to receive such payments. A Participant may change such
designations from time to time, and the last written designation filed with the
Administrator prior to the Participant's death shall control. If a Participant
fails to specifically designate a beneficiary, or if no designated beneficiary
survives the Participant, payment shall be made by the Administrator in the
following order of priority:

                        (i)   to the Participant's surviving spouse; or if none,
                        (ii)  to the Participant's children; or if none,
                        (iii) to the Participant's estate.


                                    ARTICLE V
                                 ADMINISTRATION

                  SECTION 5.1 GENERAL. Except as otherwise specifically
provided in the Plan, the Administrator shall be responsible for administration
of the Plan. The Administrator shall be the "named fiduciary" within the meaning
of Section 402(c)(2) of ERISA.

                  SECTION 5.2 ADMINISTRATIVE RULES. The Administrator may adopt
such rules of procedure as it deems desirable for the conduct of its affairs,
except to the extent that such rules conflict with the provisions of the Plan.

                  SECTION 5.3 DUTIES. The Administrator shall have the
following rights, powers and duties:



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                  (a) The decision of the Administrator in matters within its
jurisdiction shall be final, binding and conclusive upon the Employers and upon
any person affected by such decision subject to the claims procedure hereinafter
set forth.

                  (b) The Administrator shall have the duty and authority to
interpret and construe the provisions of the Plan, to determine eligibility for
Retirement Benefits and the appropriate amount of any Retirement Benefits, to
decide any question which may arise regarding the rights of employees and to
exercise such powers as the Administrator may deem necessary for the
administration of the Plan, and to exercise any other rights, powers or
privileges granted to the Administrator by the terms of the Plan.

                  (c) The Administrator shall maintain full and complete records
of its decisions. Its records shall contain all relevant data pertaining to the
Participant and his rights and duties under the Plan. The Administrator shall
have the duty to main Account records of all Participants.

                  (d) The Administrator shall cause the principal provisions of
the Plan to be communicated to the Participants, and a copy of the Plan and
other documents shall be available at the principal office of the Employers for
inspection by the Participants at reasonable times determined by the
Administrator.

                  (e) The Administrator shall periodically report to the Board
with respect to the status of the Plan.

                  SECTION 5.4 FEES. No fee or compensation shall be paid to any
person for services as the Administrator.


                                   ARTICLE VI
                                CLAIMS PROCEDURE

                  SECTION 6.1 GENERAL. Any claim for Retirement Benefits under
the Plan shall be filed by the Participant or beneficiary ("claimant") in the
manner prescribed by the Administrator.

                  SECTION 6.2 DENIALS. If a claim for Retirement Benefits under
the Plan is wholly or partially denied, notice of the decision shall be
furnished to the claimant by the Administrator within a reasonable period of
time after receipt of the claim by the Administrator.

                  SECTION 6.3 NOTICE. Any claimant who is denied a claim for
Retirement Benefits shall be furnished written notice setting forth:

                        (i)   the specific reason or reasons for the denial;
                        (ii)  specific reference to the pertinent provision of
                              the Plan upon which the denial is based;
                        (iii) a description of any additional material or
                              information necessary of the claimant to perfect
                              the claim; and



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                        (iv)  an explanation of the claim review procedure under
                              the Plan.

                  SECTION 6.4 APPEALS PROCEDURE. In order that a claimant may
appeal a denial of a claim, the claimant or the claimant's duly authorized
representative may:

                  (a) request a review by written application to the
Administrator, or its designate, no later than 60 days after receipt by the
claimant of written notification of denial of a claim;

                  (b)   review pertinent documents; and

                  (c)   submit issues and comments in writing.

                  SECTION 6.5 REVIEW. A decision on review of a denied claim
shall be made not later than 60 days after receipt of a request for review,
unless special circumstances require an extension of time for processing, in
which case a decision shall be rendered within a reasonable period of time, but
not later than one hundred twenty (120) days after receipt of a request for a
review. The decision on review shall be in writing and shall include the
specific reason(s) for the decision and the specific reference(s) to the
pertinent provisions of the Plan on which the decision is based.


                                   ARTICLE VII
                            MISCELLANEOUS PROVISIONS

                  SECTION 7.1 AMENDMENT AND TERMINATION. The Company reserves
the right to amend or terminate the Plan in any manner that it deems advisable,
by a resolution of the Company's Board. Notwithstanding the preceding, no
amendment or termination of the Plan shall, without a Participant's consent,
reduce the Retirement Benefit of any Participant determined as of the day
immediately preceding the effective date of such amendment or termination.

                  SECTION 7.2 NO ASSIGNMENT. The Participant shall not have the
power to pledge, transfer, assign, anticipate, mortgage or otherwise encumber or
dispose of in advance any interest in amounts payable hereunder of any of the
payments provided for herein, nor shall any interest in amounts payable
hereunder or in any payments be subject to seizure for payments of any debts,
judgments, alimony or separate maintenance, or be reached or transferred by
operation of law in the event of bankruptcy, insolvency or otherwise.

                  SECTION 7.3 SUCCESSORS AND ASSIGNS. The provisions of the
Plan are binding upon and inure to the Retirement Benefit of each Employer, its
successors and assigns, and the Participant, his beneficiaries, heirs and legal
representatives.




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                  SECTION 7.4 GOVERNING LAW. The Plan shall be subject to and
construed in accordance with the laws of the State of Illinois to the extent not
preempted by the provisions of ERISA.

                  SECTION 7.5 NO GUARANTEE OF EMPLOYMENT. Nothing contained in
the Plan shall be construed as a contract of employment or deemed to give any
Participant the right to be retained in the employ of an Employer or any equity
or other interest in the assets, business or affairs of an Employer. No
Participant hereunder shall have a security interest in assets of an Employer
used to make contributions or pay Retirement Benefits.

                  SECTION 7.6 SEVERABILITY. If any provision of the Plan shall
be held illegal or invalid for any reason, such illegality or invalidity shall
not affect the remaining provisions of the Plan, but the Plan shall be construed
and enforced as if such illegal or invalid provision had never been included
herein.

                  SECTION 7.7 NOTIFICATION OF ADDRESSES. Each Participant and
each beneficiary shall file with the Administrator, from time to time, in
writing, the post office address of the Participant, the post office address of
each beneficiary, and each change of post office address. Any communication,
statement or notice addressed to the last post office address filed with the
Administrator (or if no such address was filed with the Administrator, then to
the last post office address of the Participant or beneficiary as shown on the
Employer's records) shall be binding on the Participant and each beneficiary for
all purposes of the Plan and neither the Administrator nor the Employer shall be
obliged to search for or ascertain the whereabouts of any Participant or
beneficiary.

                  SECTION 7.8 PARTICIPATING EMPLOYERS. Any other entity that is
affiliated with the Company in a manner described in Code Sections 414(b), (c),
(m) or (o) may become an Employer under the Plan by adopting the Plan, effective
as of the date specified in such adoption, and by the Company's execution of a
written consent evidencing the Company's consent to said adoption.

                  SECTION 7.9 BONDING. The Administrator and all agents and
advisors employed by it shall not be required to be bonded, except as otherwise
required by ERISA.

                  SECTION 7.10 TAXES. The Company shall have the right to
withhold from any cash or other amounts due or to become due from the Company to
a Participant (including by reducing the amount of any Retirement Benefit
payable in the future) the amount of any federal, state and local taxes required
to be withheld or otherwise deducted and paid by the Company with respect to the
vesting or payment of any Retirement Benefit hereunder.


                                  ARTICLE VIII
                                     FUNDING

                  SECTION 8.1 EMPLOYER LIABILITY. The entire cost of this Plan
shall be paid from the general assets of the Employer. No liability for the
payment of Retirement Benefits under the Plan shall be imposed upon any officer,
trustee, employee, or agent of an Employer.



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<PAGE>   15



                  SECTION 8.2 UNFUNDED PLAN. Notwithstanding the remaining
sections in this Article, the Plan, at all times, shall be entirely unfunded and
shall constitute merely the unsecured promise of the Employer to make the
payments as provided for herein. No Participant nor any beneficiary nor any
other person shall have, by reason of this Plan, any rights, title or interest
of any kind in or to any property of the Employer, all of which shall be subject
to the claims of general creditors of the Employer, nor any beneficial interest
in any trust which may be established by the Employer in connection with this
Plan nor any guarantee that assets of the Employer will be sufficient to pay
Retirement Benefits under the Plan. If the Employer transfers any property to a
trust in connection with this Plan such trust shall not be held for the
exclusive benefit of Participants and any assets held in such trust shall be
subject to the claims of the Employer's general creditors in the event of the
Employer's insolvency.

                  SECTION 8.3 TRUST. A trust may be established by the
execution of a Trust Agreement with one or more trustees, to be known as The
Amcore Financial, Inc. Trust (the "Trust"). If a Trust is established, the
following provisions shall be applicable:

                  (a) The Trust shall be maintained as a "grantor trust" under
Section 677 of the Code, with the assets of the Trust being held, invested and
disposed of by the trustee, in accordance with the terms of the Trust, for the
exclusive purpose of providing Retirement Benefits for Participants.
Notwithstanding any provision of the Plan or the Trust to the contrary, all
assets held in the Trust shall at all times be subject to the claims of the
Employer's general creditors in the event of insolvency or bankruptcy.

                  (b) The Employer, in its sole discretion, and from time to
time, may make contributions (which may consist of either cash or assets in
kind) to the Trust. All Retirement Benefits under the Plan and expenses
chargeable to the Plan, to the extent not paid directly by the Employer, shall
be paid from the Trust.

                  (c) The powers, duties and responsibilities of the trustee
shall be as set forth in the Trust Agreement and nothing contained in the Plan,
either expressly or by implication, shall impose any additional powers, duties
or responsibilities upon the trustee.

                  (d) The Employer shall have no beneficial interest in the
Trust and no part of the Trust shall ever revert or be repaid to the Employer,
directly or indirectly, except as otherwise provided in subsection (a) above or
in the Trust Agreement.






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<PAGE>   16





                                    EXECUTION

         The undersigned, pursuant to the approval of the Board on May 20, 1998,
 does herewith execute this Amcore Financial, Inc. Supplemental Executive
 Retirement Plan.


                                             Amcore Financial, Inc.


                                             By:
                                                   -----------------------------

                                             Title:
                                                   -----------------------------




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