<PAGE>
 
                                                                    EXHIBIT 10.2
 
                         AVONDALE FEDERAL SAVINGS BANK
 
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
 
 
                         EFFECTIVE AS OF JUNE 10, 1996
 
<PAGE>
 
                         AVONDALE FEDERAL SAVINGS BANK
 
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
 SECTION                                                                    PAGE
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 <C>     <S>                                                                <C>
 ARTICLE I--PURPOSE; EFFECTIVE DATE........................................   4
 ARTICLE II--DEFINITIONS
    2.1  "Accrued Benefit"................................................    4
    2.2  "Beneficiary"....................................................    4
    2.3  "Board"..........................................................    4
    2.4  "Change in Control"..............................................    4
    2.5  "Committee:......................................................    5
    2.6  "Company"........................................................    5
    2.7  "Disability" or "Disabled".......................................    5
    2.8  "Early Retirement Date"..........................................    5
    2.9  "Employee".......................................................    5
    2.10 "Employer".......................................................    5
    2.11 "Normal Retirement Date".........................................    5
    2.12 "Participant"....................................................    5
    2.13 "Participation Agreement"........................................    5
    2.14 "Plan Administrator".............................................    5
    2.15 "Spouse".........................................................    5
    2.16 "Supplemental Retirement Benefit"................................    5
    2.17 "Voting Securities"..............................................    5
 ARTICLE III--PARTICIPATION AND VESTING
    3.1  Eligibility......................................................    5
    3.2  Vesting..........................................................    6
 ARTICLE IV--SUPPLEMENTAL RETIREMENT BENEFITS
    4.1  Normal Retirement Benefit........................................    6
    4.2  Early Retirement Benefit.........................................    6
    4.3  Disability Retirement Benefit....................................    6
    4.4  Death Prior to Termination of Employment.........................    6
 ARTICLE V--FORM OF PAYMENT
    5.1  Generally........................................................    6
    5.2  Withholding; Taxes...............................................    7
    5.3  Payment to Guardian..............................................    7
 ARTICLE VI--BENEFICIARY DESIGNATION
    6.1  Beneficiary Designation..........................................    7
    6.2  Amendments.......................................................    7
    6.3  No Participant Beneficiary Designation...........................    7
 ARTICLE VII--ADMINISTRATION
    7.1  Committee Duties.................................................    8
    7.2  Plan Administrator...............................................    8
    7.3  Agents...........................................................    8
    7.4  Binding Effect on Decisions......................................    8
    7.5  Indemnity of Committee...........................................    8
</TABLE>
 
 
                                     10-2-2
<PAGE>
 
<TABLE>
<CAPTION>
 SECTION                                                                    PAGE
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 <C>      <S>                                                               <C>
 ARTICLE VIII--CLAIMS PROCEDURE
    8.1   Claim...........................................................    8
    8.2   Denial of Claim.................................................    8
    8.3   Review of Claim.................................................    8
    8.4   Final Decision..................................................    8
 ARTICLE IX--TERMINATION, SUSPENSION OR AMENDMENT
    9.1   Termination, Suspension or Amendment of Plan....................    9
 ARTICLE X--FORFEITURE AND OFFSET
    10.1  Forfeitures of Benefits.........................................    9
    10.2  Offset..........................................................    9
 ARTICLE XI--MISCELLANEOUS
    11.1  Funding.........................................................    9
    11.2  Unsecured General Creditor......................................   10
    11.3  Nonassignability................................................   10
    11.4  Not a Contract of Employment....................................   10
    11.5  Protective Provisions...........................................   10
    11.6  Terms...........................................................   10
    11.7  Captions........................................................   10
    11.8  Governing Law...................................................   10
    11.9  Validity........................................................   10
    11.10 Notice..........................................................   10
    11.11 Successors......................................................   10
</TABLE>
 
                                     10-2-3
<PAGE>
 
                         AVONDALE FEDERAL SAVINGS BANK
 
                    SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
 
                                   ARTICLE I
 
                            PURPOSE; EFFECTIVE DATE
 
  The purpose of this Supplemental Executive Retirement Plan (hereinafter
referred to as the "Plan") is to provide retirement, death and disability
benefits for designated key employees of Avondale Federal Savings Bank or its
parent company, Avondale Financial Corp. This Plan is effective as of June 10,
1996.
 
                                  ARTICLE II
 
                                  DEFINITIONS
 
  For purposes of this Plan, the following terms shall have the meanings
indicated, unless the context clearly indicates otherwise:
 
  2.1 "Accrued Benefit" means, as of any date, the annual amount of
Supplemental Retirement Benefit that would be payable to a Participant in the
normal form of payment described in Section 5.1 of the Plan, commencing at his
or her Normal Retirement Date, determined on the basis of the Participant's
employment as of such date and, for an individual still employed by an
Employer, as if the Participant's employment with all Employers terminated as
of such date, subject to all the conditions and limitations set forth in the
Participant's Participation Agreement.
 
  2.2 "Beneficiary" means the person, persons or entity entitled under Article
VI to receive any Plan benefits payable after a Participant's death.
 
  2.3 "Board" means the Board of Directors of the Company.
 
  2.4 "Change in Control" means:
 
    (a) During any period of two consecutive years, individuals who at the
  beginning of such period constitute the Board of Directors of Avondale
  Financial Corp. (any new director whose election by the Board or whose
  nomination for election by the stockholders of Avondale Financial Corp. was
  approved by a vote of at least 2/3rds of the directors then still in office
  who either were directors at the beginning of such period or whose election
  or nomination for election was previously so approved) cease for any reason
  to constitute a majority thereof; or
 
    (b) Any "person" or "group" (within the meaning of Section 13(d) and
  14(d)(2) of the Securities Exchange Act of 1934, as amended (the Act)
  becomes the "beneficial owner" (as defined in Rule 13-d under the Act) of
  more than 25 percent of the then outstanding Voting Securities of the
  Company or Avondale Financial Corp.; or
 
    (c) The stockholders of the Company or Avondale Financial Corp. approve a
  merger or consolidation of the Company or Avondale Financial Corp. with any
  other corporation, other than a merger or consolidation which would result
  in the Voting Securities of the Company or Avondale Financial Corp.
  outstanding immediately prior thereto continuing to represent (either by
  remaining outstanding or by being converted into Voting Securities of the
  surviving entity) at least 50 percent of the total voting power represented
  by the Voting Securities of the Company or Avondale Financial Corp. or such
  surviving entity outstanding immediately after such merger or
  consolidation, or the stockholders of the Company or Avondale Financial
  Corp. approve a plan of complete liquidation of the Company or Avondale
  Financial Corp. or an agreement for the sale or disposition by (in one
  transaction or a series of transactions) of all or substantially all the
  Company's or Avondale Financial Corp.'s assets.
 
                                    10-2-4
<PAGE>
 
  2.5 "Committee" means the Compensation Policy Committee of the Board.
 
  2.6 "Company" means Avondale Federal Savings Bank, and its successors and
assigns.
 
  2.7 "Disability" or "Disabled" means a physical or mental condition which,
in the opinion of the Committee, permanently prevents an employee from
satisfactorily performing employee's usual duties for the Employer. The
Committee's decision as to Disability will be based upon medical reports
and/or other evidence satisfactory to the Committee. In no event shall a
Disability be deemed to occur or to continue after a Participant's Normal
Retirement Date.
 
  2.8 "Early Retirement Date" means the earliest date prior to the
Participant's Normal Retirement Date as of which payment of a Supplement
Retirement Benefit may begin, to the extent so provided in the Participant's
Participation Agreement.
 
  2.9 "Employee" means an individual who is employed by an Employer.
 
  2.10 "Employer" means the Company, or any affiliated or subsidiary
corporations designated by the Board.
 
  2.11 "Normal Retirement Date" means the earliest date as of which a
Participant is entitled to receive payment of a Supplemental Retirement
Benefit that is not reduced for early commencement, to the extent so provided
in the Participant's Participation Agreement.
 
  2.12 "Participant" means any individual who is participating or has
participated in this Plan as provided in Article III.
 
  2.13 "Participation Agreement" means the agreement between the Committee and
the Participant that sets forth the specific terms, conditions, limitations
and restrictions of the Participant's Supplemental Retirement Benefit under
the Plan.
 
  2.14 "Plan Administrator" means an individual or individuals designated by
the Committee.
 
  2.15 "Spouse" means a Participant's wife or husband who is lawfully married
to the Participant at the time of the Participant's death.
 
  2.16 "Supplemental Retirement Benefit" means the benefit payable to a
Participant under the terms of the Plan.
 
  2.17 "Voting Securities" means the securities entitled to vote to elect
members of the Board of Directors of an entity.
 
                                  ARTICLE III
 
                           PARTICIPATION AND VESTING
 
  3.1 Eligibility. The Committee shall have the sole and exclusive discretion
to designate Employees eligible to participate in the Plan. An Employee who is
designated by the Committee to be a Participant shall commence participation
as of the date determined by the Committee and as reflected in the
Participant's Participation Agreement. An Employee shall no longer be a
Participant after all benefits under this Plan have been paid to the Employee.
The Committee may determine that a Participant shall no longer be eligible to
accrue a Supplemental Retirement Benefit under the Plan. In that event, the
Participant shall be entitled to receive a Supplemental Retirement Benefit
based on the Participant's Accrued Benefit calculated as of the date that the
Committee makes such determination, or such later date specified by the
Committee, to the extent so provided in the Participant's Participation
Agreement.
 
                                    10-2-5
<PAGE>
 
  3.2 Vesting. A Participant shall become vested in his or her Supplemental
Retirement Benefit under the Plan according to the vesting schedule applicable
to the Participant, to the extent so provided in the Participant's
Participation Agreement, and as described in Article IV. Notwithstanding any
provision of this Plan to the contrary, a Participant shall become fully
vested in his or her Accrued Benefit if a Change in Control occurs.
 
                                  ARTICLE IV
 
                       SUPPLEMENTAL RETIREMENT BENEFITS
 
  4.1 Normal Retirement Benefit. If a Participant terminates employment with
all Employers on or after his or her Normal Retirement Date and the
Participant has earned an Accrued Benefit, he or she shall become fully vested
in such Accrued Benefit, and the Participant's Employer shall pay to the
Participant a Supplemental Retirement Benefit determined pursuant to the terms
of this Plan and the Participant's Participation Agreement. Such Supplemental
Retirement Benefit shall commence as of the first day of the month following
the date that such employment terminates.
 
  4.2 Early Retirement Benefit. If a Participant terminates employment with
all Employers prior to his or her Normal Retirement Date (other than under
circumstances described in Section 4.3) and the Participant has earned an
otherwise vested Accrued Benefit, the Participant's Employer shall pay to the
Participant a Supplemental Retirement Benefit determined pursuant to the terms
of this Plan and the Participant's Participation Agreement. Such Supplemental
Retirement Benefit shall commence as of the later of the date that such
employment terminates or the Participant's Early Retirement Date, to the
extent so provided in the Participant's Participation Agreement.
 
  4.3 Disability Retirement Benefit. If a Participant terminates employment
with all Employers prior to his or her Normal Retirement Date as a result of
Disability, and the Participant has earned an Accrued Benefit, he or she shall
become fully vested in such Accrued Benefit, and the Participant's Employer
shall pay to the Participant a Supplemental Retirement Benefit determined
pursuant to the terms of this Plan and the Participant's Participation
Agreement. Such Supplemental Retirement Benefit shall commence as of the
Participant's Normal Retirement Date. If the Participant ceases to be Disabled
(as determined by the Committee) prior to his commencement of receipt of a
Supplemental Retirement Benefit and the Participant does not return to work
for an Employer, the Participant will be entitled to a Supplemental Retirement
Benefit under Section 4.2.
 
  4.4 Death Prior to Termination of Employment. If a Participant dies while
employed by an Employer or during a period of Disability and the Participant
has earned an Accrued Benefit, he or she will become fully vested in such
Accrued Benefit, and the Participant's Employer shall pay a survivor benefit
to the Participant's Beneficiary, to the extent so provided in the
Participant's Participation Agreement.
 
                                   ARTICLE V
 
                                FORM OF PAYMENT
 
  5.1 Generally. A Participant's Supplemental Retirement Benefit shall be paid
in the normal form set forth below unless the Participant elects otherwise or
a different normal form is specified in the Participant's Participation
Agreement. To elect an optional form of benefit, the Participant must submit a
written request to the Committee on a form prescribed by the Committee. If the
Participant elects to receive a lump sum payment, the Committee must consent
to such form of payment.
 
    (a) Normal Form of Payment. The normal form of payment will be single
  life annuity unless the Participant elects one of the optional forms set
  forth in subparagraph (b), below. Benefit payments will be made in level
  monthly installments.
 
                                    10-2-6
<PAGE>
 
    (b) Optional Forms of Payment. In lieu of payment in the normal form, a
  Participant may elect to receive the Supplemental Retirement Benefit in one
  of the following optional forms.
 
      (i) Ten Year Certain and Life Annuity. This form will provide level
    monthly installments to the Participant during his or her lifetime and,
    if he or she dies within a period of 10 years after the commencement of
    payments, the same monthly amount will be paid to his or her
    Beneficiary for the remainder of such ten-year period.
 
      (ii) Joint and 50 Percent Survivor Annuity. This form will provide
    reduced level monthly installments to the Participant for his or her
    life, with a survivor annuity providing level monthly installments
    equal to 50% of the installments received by the Participant payable to
    the Participant's Beneficiary (if he or she survives the Participant)
    for the life of the Beneficiary.
 
      (iii) Lump Sum. This form will provide for a single payment to the
    Participant.
 
    Optional forms of payment shall be the actuarial equivalent of payment in
  the normal form according to assumptions established by the Committee or
  set forth in the Participant's Participation Agreement.
 
    (c) Commencement of Benefit Payments. The Supplemental Retirement
  Benefits payable to a Participant under the Plan shall commence no earlier
  than 30 days after the date as of which they commence, as described in
  Article IV.
 
  5.2 Withholding; Taxes. The Employer shall withhold from payments made
hereunder any taxes required to be withheld from a Participant's wages for the
federal or any state or local government.
 
  5.3 Payment to Guardian. If a Plan benefit is payable to a minor or a person
declared incompetent or to a person incapable of handling the disposition of
his property, the Plan Administrator may direct payment of such Plan benefit
to the guardian, legal representative or person having the care and custody of
such minor, incompetent or person. The Plan Administrator may require proof of
incompetency, minority, incapacity or guardianship as it may deem appropriate
prior to distribution of the Plan benefit. Such distribution shall completely
discharge the Employer from all liability with respect to such benefit.
 
                                  ARTICLE VI
 
                            BENEFICIARY DESIGNATION
 
  6.1 Beneficiary Designation. The Participant shall designate any persons or
entity as his or her Beneficiary (including a secondary Beneficiary in the
case of amounts payable without regard to whether a Beneficiary survives the
Participant) to whom benefits under this Plan will be paid in the event of the
Participant's death. Each Beneficiary designation shall be in a written form
prescribed by the Plan Administrator, and will be effective only when filed
with the Plan Administrator during the Participant's lifetime.
 
  6.2 Amendment. Any Beneficiary designation may be changed by a Participant
without the consent of any designated Beneficiary by the filing of a new
Beneficiary designation with the Plan Administrator. The filing of a new
Beneficiary designation form will cancel all Beneficiary designations
previously filed.
 
  6.3 No Participant Beneficiary Designation. In the absence of an effective
Beneficiary designation, then the Participant's designated Beneficiary shall
be deemed to be the person or persons surviving the Participant in the first
of the following classes in which there is a survivor:
 
    (a) The surviving Spouse;
 
    (b) The Participant's children, except that if any of the children
  predecease the Participant but leave issue surviving, then such issue shall
  take by right of representation the share their parent would have taken if
  living;
 
    (c) The Participant's estate.
 
                                    10-2-7
<PAGE>
 
                                  ARTICLE VII
 
                                ADMINISTRATION
 
  7.1 Committee Duties. This Plan shall be supervised by the Committee. The
Committee shall have the full power and authority in its discretion to make,
amend, interpret, and enforce all appropriate rules and regulations for the
administration of this Plan and decide or resolve any and all questions,
including interpretation of this Plan, as may arise in connection with the
Plan. A majority vote of the Committee members shall control any decision.
Members of the Committee may be Participants under this Plan.
 
  7.2 Plan Administrator. The Plan Administrator shall direct the day-to-day
administration of the Plan and shall act as agent of the Committee in the
operation of the Plan.
 
  7.3 Agents. The Committee may, from time to time, employ other agents and
delegate to them such administrative duties as it sees fit, and may from time
to time consult with counsel who may be counsel to an Employer.
 
  7.4. Binding Effect on Decisions. The decision or action of the Committee in
respect of any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final and conclusive and binding
upon all persons having any interest in the Plan.
 
  7.5 Indemnity of Committee. The Employers shall indemnify and hold harmless
the members of the Committee and the Plan Administrator against any and all
claims, loss, damage, expense or liability arising from any action or failure
to act with respect to this Plan, except in the case of gross negligence or
willful misconduct.
 
                                 ARTICLE VIII
 
                               CLAIMS PROCEDURE
 
  8.1 Claim. Any person claiming a benefit, requesting an interpretation of
ruling under the Plan, or requesting information under the Plan shall present
the request in writing to the Plan Administrator, which shall respond in
writing within 30 days.
 
  8.2 Denial of Claim. If the claim or request is denied, the written notice
of denial shall state:
 
    (a) The reason for denial, with specific reference to the Plan provisions
  on which the denial is based.
 
    (b) A description of any additional material or information required and
  an explanation of why it is necessary.
 
    (c) An explanation of the Plan's claim review procedure.
 
  8.3 Review of Claim. Any person whose claim or request is denied or who has
not received a response within 30 days may request review by notice given in
writing to the Committee. The claim or request shall be reviewed by the
Committee who may, but shall not be required to, grant the claimant a hearing.
On review, the claimant may have representation, examine pertinent documents,
and submit issues and comments in writing.
 
  8.4 Final Decision. The decision on review shall normally be made within 60
days. If an extension of time is required for a hearing or other special
circumstances, the claimant shall be notified and the time limit shall be 120
days. The decision shall be in writing and shall state the reason and the
relevant plan provisions. All decisions on review shall be final and bind all
parties concerned.
 
                                    10-2-8
<PAGE>
 
                                  ARTICLE IX
 
                     TERMINATION, SUSPENSION OR AMENDMENT
 
  9.1 Termination, Suspension or Amendment of Plan. The Board may, in its sole
discretion, terminate or suspend this Plan at any time or from time to time,
in whole or in part. The Board may amend this Plan at any time, or from time
to time. Any amendment may provide different benefits or amounts of benefits
from those herein set forth. However, no such termination, suspension or
amendment shall reduce the amount of any Participant's Accrued Benefit and/or
his or her vested interest therein, as of the effective date thereof. In
addition, and subject to the applicable Participation Agreement, a
Participant's service with an Employer shall continue to be considered for
purposes of vesting in his or her Accrued Benefit for periods of employment
with an Employer after the Plan terminates if the Employee was an Employee on
the date that the Plan terminated.
 
                                   ARTICLE X
 
                             FORFEITURE AND OFFSET
 
10.1 Forfeitures of Benefits. Notwithstanding any other provision of the Plan,
future payment of a Supplemental Retirement Benefit hereunder to a Participant
or Beneficiary may, to the extent so provided in the Participant's
Participation Agreement, be discontinued and forfeited, and no Employer will
have any further obligation hereunder to such Participant or Beneficiary.
Events which may result in forfeiture include, but are not limited to, the
following:
 
    (a) The Participant is discharged from employment with an Employer for
  cause;
 
    (b) The Participant engages in competition with the Employer within a
  certain period of years (to the extent so provided in the Participant's
  Participation Agreement) after his or her employment with all Employers
  terminates; or
 
    (c) The Participant performs acts of willful malfeasance or gross
  negligence in a matter of material importance to an Employer, and such acts
  are discovered at any time prior to the date of death of the Participant.
 
  A Participant's Participation Agreement may include additional forfeiture
events.
 
  10.2 Offset. If the Participant receives any other retirement-type benefits
funded by an Employer, regardless of the source, including, but not limited to
Social Security benefits and payments from a tax-qualified retirement plan
sponsored by an Employer, the Plan Administrator shall offset such payments
against any Supplemental Retirement Benefit otherwise payable under the Plan,
to the extent so provided in the Participant's Participation Agreement.
 
                                  ARTICLE XI
 
                                 MISCELLANEOUS
 
  11.1 Funding. The Plan at all times shall be entirely unfunded and no
provision shall at any time be made with respect to segregating any assets of
an Employer for payment of any benefits hereunder. In addition, this Plan is
intended to be an "unfunded plan" for purposes of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and the Internal Revenue
Code of 1986, as amended, and maintained primarily to provide deferred
compensation benefits for a select group of management or highly compensated
employees for purposes of ERISA. No Participant, Beneficiary or any other
person shall have any interest in any particular assets of an Employer by
reason of the right to receive a benefit under the Plan.
 
                                    10-2-9
<PAGE>
 
  11.2 Unsecured General Creditor. In the event of an Employer's insolvency,
Participants and their Beneficiaries, heirs, successors and assigns shall have
no legal or equitable rights, interest or claims in any property or assets of
the Employer, nor shall they be Beneficiaries of, or have any rights, claims
or interests in any life insurance policies, annuity contracts or the proceeds
therefrom owned or which may be acquired by the Employer. In that event, any
and all of the Employer's assets and policies shall be, and remain, the
general, unpledged, unrestricted assets of the Employer. An Employer's
obligation under the Plan shall be that of an unfunded and unsecured promise
of the Employer to pay money in the future.
 
  11.3 Nonassignability. No Participant, Beneficiary or any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate or convey in advance of
actual receipt of the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are, expressly declared to be unassignable
and non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any debts,
judgment, alimony or separate maintenance owed by a Participant, Beneficiary
or any other person, nor be transferable by operation of law in the event of a
Participant's Beneficiary's or any other person's bankruptcy or insolvency.
 
  11.4 Not a Contract of Employment. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between an Employer
and the Participant, and the Participant (or his Beneficiary) shall have no
rights against the Employer except as may otherwise be specifically provided
herein. Moreover, nothing in this Plan shall be deemed to give a Participant
the right to be retained in the service of the Employer or to interfere with
the right of the Employer to discipline or discharge him at any time.
 
  11.5 Protective Provisions. A Participant will cooperate with an Employer by
furnishing any and all information requested by the Employer, in order to
facilitate the payment of benefits hereunder, and by taking such physical
examinations as the Employer may deem necessary and taking such other action
as may be requested by the Employer.
 
  11.6 Terms. Whenever any words are used herein the masculine, they shall be
construed as though they were used in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or in
the plural, they shall be construed as though they were used in the plural or
the singular, as the case may be, in all cases where they would so apply.
 
  11.7 Captions. The captions of the articles, sections and paragraphs of this
Plan are for convenience only and shall not control or affect the meaning or
construction of any of its provisions.
 
  11.8 Governing Law. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of Illinois.
 
  11.9 Validity. In case any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if
such illegal and invalid provision had never been inserted herein.
 
  11.10 Notice. Any notice or filing required or permitted to be given to the
Committee under the Plan shall be sufficient if in writing and hand delivered,
or sent by registered or certified mail to any member of the Committee, the
Plan Administrator or the Secretary of the Company. Such notice shall be
deemed given as of the date of delivery or, if delivery is made by mail, as of
the date shown on the postmark on the receipt for registration or
certification.
 
  11.11 Successors. The provisions of this Plan shall bind and inure to the
benefit of the Employers and their successors and assigns. The term successors
as used herein shall include any corporate or other business entity which
shall, whether by merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of an Employer, and successors of
any such corporation or other business entity.
 
                                    10-2-10
<PAGE>
 
  In Witness Whereof, and pursuant to resolution of the Board of Directors of
Avondale Federal Savings Bank, this instrument has been executed by its duly
authorized officers effective as of June 10, 1996.
 
                                          AVONDALE FEDERAL SAVINGS BANK
 
                                          By: _________________________________
                                                  Chairman of the Board
 
                                          By: _________________________________
                                                        Secretary
 
                                          Dated: ______________________________
 
                                    10-2-11
<PAGE>
 
                         AVONDALE FEDERAL SAVINGS BANK
 
                    SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
 
Plan Concept               The Plan will provide a Supplemental Executive
                           Retirement ("SERP") benefit, at normal retirement
                           age, if service requirements are met with Avondale
                           Federal Savings Bank ("AFSB" or "the Company").
 
Participation              Discretionary. Initially, only the CEO will be a
                           participant. Additional participants will be
                           determined by the Board of Directors.
 
Annual Benefit Payments    Annual benefit payment is equal to $225,000.
 
Benefit Payment Start      Benefit payments will begin immediately following
Date                       the Participant's retirement from the Company.
 
Benefit Payment End Date   Benefit payments will end at the later of the
                           Participant's death or the survivor's death (if the
                           survivorship payment option is chosen).
 
Normal Retirement Age      Normal retirement age is 62.
 
Early Retirement           The Participant may retire prior to age 62 with an
                           actuarial reduction in vested benefits to account
                           for the increased period of payments. The reduction
                           will be .5% per full month.
 
Effective Date(s)          The Plan is effective as of June 10, 1996 (the date
                           of Board approval).
 
Plan Funding               The Plan is unfunded.
 
Administration             Board of Directors (or Board Compensation Policy
                           Committee) shall be responsible for administration
                           and operation of the Plan.
 
Offset                     There is no benefit reduction for any qualified
                           plan distributions.
 
Vesting                    Each Participant will vest in Plan benefits over a
                           four year period as follows:
 
<TABLE>
<CAPTION>
                                                    INCREMENTAL         CUMULATIVE
                 YEAR                            VESTING PERCENTAGE VESTING PERCENTAGE
                 ----                            ------------------ ------------------
                 <S>                             <C>                <C>
                 1996...........................         10%                10%
                 1997...........................         20%                30%
                 1998...........................         30%                60%
                 1999...........................         40%               100%
</TABLE>
 
                                    10-2-12