BIG FOOT FINANCIAL CORP
S-1, 1996-09-16
Previous: INSIGHT PREMIER FUNDS, N-1A EL, 1996-09-16
Next: AMERCO /NV/, 424B2, 1996-09-17



<PAGE>



================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                    FORM S-1
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

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

                            BIG FOOT FINANCIAL CORP.
             (Exact name of registrant as specified in its charter)

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

        Illinois                            6035              Being Applied For
  (State or other jurisdiction        (Primary Standard         (IRS Employer
of incorporation or organization)  Classification Code No.)  Identification No.)

                                    1190 RFD
                           Long Grove, Illinois 60047
                                 (847) 634-2100
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)

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

                                George M. Briody
                                    President
                            Big Foot Financial Corp.
                                    1190 RFD
                           Long Grove, Illinois 60047
                                 (847) 634-2100
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

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

                                 With copies to:

                                                     Daniel C. McKay, II
          V. Gerard Comizio, Esq.                       Vedder, Price,
          Thacher Proffitt & Wood                     Kaufman & Kammholz
            1500 K Street, N.W.                    222 North LaSalle Street
          Washington, D.C.  20005                  Chicago, Illinois 60601
              (202) 347-8400                           (312) 609-7500

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

Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box |_|

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|

If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. |_|

<TABLE>
<CAPTION>
                                                   CALCULATION OF REGISTRATION FEE
=================================================================================================================================
Title of Securities to be  Amount to be Registered(1)  Proposed Maximum Offering        Proposed Maximum            Amount of
       Registered                                          Price Per Share(2)      Aggregate Offering Price(2)   Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                          <C>                       <C>                        <C>   
Common Stock, par value             2,314,375                    $10.00                    $23,143,750                $7,981
    $.01 per share                   shares
=================================================================================================================================
</TABLE>

(1)  Includes the maximum number of shares that may be issued in connection with
     this offering, based on various assumptions relating thereto.

(2)  Estimated solely for the purpose of calculating the registration fee.

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.

================================================================================
<PAGE>


     [To be used in connection with the Syndicated Community Offering only]

PROSPECTUS SUPPLEMENT

                            BIG FOOT FINANCIAL CORP.
                          (PROPOSED HOLDING COMPANY FOR
                        FAIRFIELD SAVINGS BANK, F.S.B.)

                         ________ SHARES OF COMMON STOCK


FOR INFORMATION ON HOW TO SUBSCRIBE FOR THE COMMON STOCK, CALL THE STOCK
INFORMATION CENTER AT (847) XXX-XXXX

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY EACH
PROSPECTIVE INVESTOR, SEE "RISK FACTORS" BEGINNING ON PAGE ___ OF THE
PROSPECTUS.


     Big Foot Financial Corp. (the "Company"), an Illinois corporation, is
offering for sale in a syndicated community offering (the "Syndicated Community
Offering") ____________ shares of its common stock, par value $.01 per share
(the "Common Stock"), at a per share price of $10.00, to be issued upon the
conversion of Fairfield Savings Bank, F.S.B. (the "Bank") from a federally
chartered mutual savings bank to a federally chartered stock savings bank and
the issuance of the Bank's outstanding common stock to the Company pursuant to
an amended and restated plan of conversion (the "Plan of Conversion").  The
remaining ____________ shares of the Common Stock have been subscribed for in
subscription and community offerings (the "Subscription and Community
Offerings") by (1) the Bank's depositors whose deposits in qualifying accounts
totalled $50 or more on December 31, 1994 ("Eligible Account Holders"); (2) the
Bank's tax-qualified stock employee benefit plans ("Employee Plans"), including
the Employee Stock Ownership Plan of Big Foot Financial Corp. and related trust
(the "ESOP"); (3) the Bank's depositors whose deposits in qualifying accounts
totalled $50 or more on September 30, 1996 (other than Eligible Account Holders
or directors or officers of the Bank or their associates); (4) certain other
members of the Bank, consisting of depositors of the Bank as of ____________ __,
1996 and borrowers of the Bank with loans outstanding as of July 1, 1991 which
continue to be outstanding as of _______  __, 1996 ("Other Members"); (5)
employees and officers of the Bank other than those employees and officers who
would otherwise qualify as Eligible Account Holders, Supplemental Eligible
Account Holders or Other Members; and (6) certain members of the general public.
See "The Conversion -- General."  Contained herein is the Prospectus in the form
used in the Subscription and Community Offerings.  The purchase price for all
shares purchased in the Syndicated Community Offering will be the same as the
price paid by subscribers in the Subscription and Community Offerings (the
"Purchase Price").  The Purchase Price of $10.00 per share is the amount to be
paid for each share at the time a purchase order is submitted.  See the cover
page of the Prospectus and the table below for information as to the method by
which the range within which the number of shares offered may vary and the
method of subscribing for shares of the Common Stock.

     Funds submitted to the Bank with purchase orders will earn interest at the
contractual rate of interest from the date of receipt until completion or
termination of the Conversion.  The Syndicated Community Offering will expire no
later than ____________, 1996, unless extended by the Bank and the Company with
the approval of the Office of Thrift Supervision (the "OTS").  Such extensions
may not go beyond ____________, 1998.  If an extension of time has been granted,
all subscribers will be notified of such

<PAGE>

extension, and of their rights to confirm their subscriptions, or to modify or
rescind their subscriptions and have their funds returned promptly with
interest, and of the time period within which the subscriber must notify the
Bank of its intention to confirm, modify or rescind such subscriber's
subscription.  If an affirmative response to any resolicitation is not received
by the  Bank and the Company from a subscriber, such subscriber's order will be
rescinded, and all funds will be returned promptly with interest.  The minimum
number of shares that may be purchased is 25 shares.  Except for the Employee
Plans, including the ESOP, which intends to purchase up to 8% of the total
number of shares of Common Stock issued in the Conversion, no person, together
with associates of and persons acting in concert with such person, may purchase
more than the total number of shares offered in the Community Offering and the
Syndicated Community Offering that could be purchased for $150,000 (15,000
shares) at the Purchase Price and no person, together with associates of and
persons acting in concert with such person, may purchase more than 1.0% of the
total number of shares issued in the Conversion.  See "The Conversion --
Subscription Offering and Subscription Rights" and "-- Limitations on Common
Stock Purchases."  The Company and the Bank reserve the right, in their absolute
discretion, to accept or reject, in whole or in part, any or all subscriptions
in the Syndicated Community Offering.

     The Company and the Bank have engaged Hovde Securities, Inc. ("Hovde") to
assist them in the sale of the Common Stock in the Syndicated Community
Offering.  It is anticipated that Hovde will use the services of other
registered broker-dealers ("Selected Dealers") and that fees to Hovde and such
Selected Dealers will be ________% of the aggregate Purchase Price of the shares
sold in the Syndicated Community Offering.  Neither Hovde nor any Selected
Dealer shall have any obligation to take or purchase any shares of Common Stock
in the Syndicated Community Offering.

     The Common Stock has been approved for quotation upon issuance on the
Nasdaq National Market of The Nasdaq Stock Market under the symbol "BFFC."
Prior to this offering, there has not been a public market for the Common Stock,
and there can be no assurance that an active and liquid trading market for the
Common Stock will develop.  The absence or discontinuance of a market may have
an adverse impact on both the price and liquidity of the stock.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE OFFICE OF THRIFT SUPERVISION, DEPARTMENT OF THE
TREASURY, OR ANY OTHER FEDERAL AGENCY OR ANY STATE SECURITIES COMMISSION, NOR
HAS SUCH COMMISSION, OFFICE, OTHER AGENCY OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.

THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED OR GUARANTEED BY THE SAVINGS ASSOCIATION INSURANCE FUND OR
THE BANK INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR BY ANY
OTHER GOVERNMENT AGENCY.

<PAGE>

<TABLE>
<CAPTION>
                                                                                    ESTIMATED NET
                                                                                     PROCEEDS OF
                                                                  ESTIMATED NET     SUBSCRIPTION,
                                                 ESTIMATED         PROCEEDS OF      COMMUNITY AND
                              SYNDICATED       UNDERWRITING        SYNDICATED        SYNDICATED
                              COMMUNITY       COMMISSIONS AND      COMMUNITY         COMMUNITY
                            OFFERING PRICE   OTHER EXPENSES(1)     OFFERING        OFFERINGS(2)(3)
- ---------------------------------------------------------------------------------------------------
<S>                         <C>              <C>                  <C>              <C>
Minimum Per Share               $10.00            $                   $                  $
Midpoint Per Share              $10.00            $                   $                  $
Maximum Per Share               $10.00            $                   $                  $
Total Minimum(4)                $                 $                   $                  $
Total Midpoint                  $                 $                   $                  $
Total Maximum(4)                $                 $                   $                  $
Total Maximum, As Adjusted(5)

</TABLE>

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

(1)  Consists of a pro rata allocation of estimated expenses of the Bank and
     Company in connection with the Conversion (other than estimated fees to be
     paid to Hovde for services in connection with the Subscription and
     Community Offerings) and estimated compensation of Hovde and Selected
     Dealers in connection with the sale of the remaining shares in the
     Syndicated Community Offering, which fees are estimated to be $____________
     million and $____________ million, respectively, at the minimum and the
     maximum of the estimated price range and may be deemed to be underwriting
     fees.  The information under "Pro Forma Data" in the Prospectus was based
     on the assumptions stated therein, which may differ from the estimates used
     for this table.  See "The Conversion -- Marketing and Underwriting
     Arrangements" for a more detailed discussion of fee arrangements.
(2)  The Company applied to retain up to 50% of the net conversion proceeds.
     The balance of the net proceeds will be transferred to the Bank in exchange
     for all of the capital stock of the Bank to be issued in connection with
     the Conversion.
(3)  The net proceeds of the Subscription and Community Offerings (based upon
     the sale of the ____________ shares subscribed for at a price of $10.00 per
     share and after allocation of a pro rata portion of the estimated relating
     to the Conversion) are estimated to be $____________.
(4)  Based on an estimated price range of $____________ to $____________ at
     $10.00 per share (the "Estimated Price Range").  The Total Minimum reflects
     the sale of ____________ shares at a per share price of $10.00, leaving a
     total of ____________ shares to be sold in the Syndicated Community
     Offering.
(5)  Gives effect to an increase in the number of shares which could occur due
     to an increase in the Estimated Price Range of up to 15% to reflect changes
     in market and financial conditions following commencement of the offerings.
     See "The Conversion -- Stock Pricing."  For a discussion of the
     distribution and allocation of the additional shares, see "The Conversion -
     - Subscription Offering and Subscription Rights" and "-- Limitations on
     Common Stock Purchases."

                             HOVDE SECURITIES, INC.

                      ____________________________________

          The date of this Prospectus Supplement is ____________, 1996.



<PAGE>

PROSPECTUS

                         [Logo] BIG FOOT FINANCIAL CORP.
          (Proposed Holding Company for Fairfield Savings Bank, F.S.B.)

                        2,012,500 Shares of Common Stock
                                $10.00 Per Share

     Big Foot Financial Corp. (the "Company"), an Illinois corporation, is
offering up to 2,012,500 shares of its common stock, par value of $.01 per share
(the "Common Stock"), in connection with the conversion of Fairfield Savings
Bank, F.S.B. (the "Bank") from a federally chartered mutual savings bank to a
federally chartered stock savings bank pursuant to the Bank's amended plan of
conversion (the "Plan" or "Plan of Conversion"). In certain circumstances, the
Company may increase the amount of Common Stock offered hereby to 2,314,375
shares. See footnote 4 to the table below. The simultaneous conversion of the
Bank to stock form, the issuance of the Bank's stock to the Company and the
offer and sale of the Common Stock by the Company are referred to herein as the
"Conversion." Consummation of the Conversion is subject to, among other things,
(i) the approval of the Plan of Conversion by members of the Bank and (ii) the
receipt of subscription orders for at least 1,487,500 shares of the Common
Stock. See "The Conversion."                       (continued on following page)

         FOR INFORMATION ON HOW TO SUBSCRIBE FOR THE COMMON STOCK, CALL
                 THE STOCK INFORMATION CENTER AT (847) XXX-XXXX.

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

     FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY EACH
           PROSPECTIVE INVESTOR, SEE "RISK FACTORS" BEGINNING ON PAGE
                             17 OF THIS PROSPECTUS.

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

    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
     AND EXCHANGE COMMISSION, THE OFFICE OF THRIFT SUPERVISION OR ANY OTHER
         FEDERAL AGENCY OR ANY STATE SECURITIES COMMISSION, NOR HAS SUCH
           COMMISSION, OFFICE OR OTHER AGENCY OR ANY STATE SECURITIES
               COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
                   THIS PROSPECTUS. ANY REPRESENTATION TO THE
                         CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
==========================================================================================
                                                   Estimated Underwriting
                                                   Commissions and Other     Estimated Net
                               Purchase Price(1)        Expenses(2)           Proceeds(3)
- ------------------------------------------------------------------------------------------
<S>                               <C>                    <C>                   <C>        
Minimum Per Share                 $     10.00            $      0.64           $      9.36
- ------------------------------------------------------------------------------------------
Midpoint Per Share                $     10.00            $      0.57           $      9.43
- ------------------------------------------------------------------------------------------
Maximum Per Share                 $     10.00            $      0.51           $      9.49
- ------------------------------------------------------------------------------------------
Total Minimum(1)                  $14,875,000            $   951,000           $13,924,000
- ------------------------------------------------------------------------------------------
Total Midpoint(1)                 $17,500,000            $   993,000           $16,507,000
- ------------------------------------------------------------------------------------------
Total Maximum(1)                  $20,125,000            $ 1,035,000           $19,090,000
- ------------------------------------------------------------------------------------------
Total Maximum, as adjusted(4)     $23,143,750            $ 1,084,000           $22,060,000
==========================================================================================
</TABLE>

(1)  Determined in accordance with an independent appraisal prepared by Capital
     Resources Group, Inc. ("Capital Resources"), dated September 6, 1996, which
     states that the aggregate estimated pro forma market value of the Common
     Stock ranged from $14,875,000 to $20,125,000 with a midpoint of $17,500,000
     (the "Valuation Range"). Capital Resources's independent appraisal is based
     upon estimates and projections that are subject to change, and the
     valuation must not be construed as a recommendation as to the advisability
     of purchasing such shares nor that a purchaser will thereafter be able to
     sell such shares at prices in the range of the foregoing valuation. Based
     on the Valuation Range, the Board of Directors of the Bank established the
     estimated price range of $14,875,000 to $20,125,000 (the "Estimated Price
     Range"), or between 1,487,500 and 2,012,500 shares of Common Stock at the
     $10.00 price per share (the "Purchase Price") to be paid for each share of
     Common Stock subscribed for or purchased in the offerings. See "The
     Conversion -- Stock Pricing" and "-- Number of Shares to be Issued."

(2)  Consists of the estimated costs to the Bank and the Company arising from
     the Conversion, including estimated fixed expenses of approximately
     $750,000 and marketing fees to be paid to Hovde Securities, Inc. ("Hovde")
     in connection with the Subscription and Community Offerings (as defined
     herein), which fees are estimated to be $201,000 and $285,000,
     respectively, at the minimum and the maximum of the Estimated Price Range.
     See "The Conversion -- Marketing and Underwriting Arrangements." Such fees
     may be deemed to be underwriting fees, and Hovde may be deemed to be an
     underwriter. See "Pro Forma Data" for the assumptions used to arrive at
     these estimates. Actual fees and expenses may vary from the estimates.

(3)  Actual net proceeds may vary substantially from estimated amounts depending
     on the number of shares sold in each of the offerings and other factors.
     Includes the purchase of shares of Common Stock by the Employee Stock
     Ownership Plan of Big Foot Financial Corp. and related trust (the "ESOP"),
     funded by a loan which the Company intends to make to the ESOP, which
     initially will be deducted from the Company's stockholders' equity. See
     "Use of Proceeds" and "Pro Forma Data."

(4)  As adjusted to give effect to the sale of up to an additional 15% of the
     shares which may be offered at the Purchase Price, without resolicitation
     of subscribers or any right of cancellation, due to regulatory
     considerations, changes in the market and general financial and economic
     conditions. See "Pro Forma Data" and "The Conversion -- Stock Pricing." For
     a discussion of the distribution and allocation of the additional shares,
     if any, see "The Conversion -- Subscription Offering and Subscription
     Rights," "-- Community Offering" and "-- Limitations on Common Stock
     Purchases."

      THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
     DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE SAVINGS ASSOCIATION
   INSURANCE FUND OR THE BANK INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE
                CORPORATION, OR BY ANY OTHER GOVERNMENT AGENCY.

                         -------------------------------
                             Hovde Securities, Inc.
                         -------------------------------

                The date of this Prospectus is ___________, 1996.

<PAGE>

(continued from previous page)

     Non-transferable rights to subscribe for the Common Stock have been
granted, in order of priority, to each of the Bank's Eligible Account Holders,
to the Bank's tax-qualified stock employee benefit plans (the "Employee Plans"),
to the Bank's Supplemental Eligible Account Holders, to the Bank's Other Members
and to Bank Employees (each as defined herein) in a subscription offering (the
"Subscription Offering"). Subscription rights are nontransferable. Persons found
to be transferring or attempting to transfer subscription rights will be subject
to the forfeiture of such rights and possible further sanctions and penalties
imposed by the Office of Thrift Supervision (the "OTS"). Subject to the prior
rights of holders of subscription rights, the Company expects to offer any
shares of Common Stock not subscribed for in the Subscription Offering for sale
in a community offering (the "Community Offering") to certain members of the
general public, with preference given to natural persons residing in Cook and
Lake counties in Illinois, the counties in which the Bank's offices are located.
The Subscription Offering and the Community Offering are referred to, together,
as the "Subscription and Community Offerings". The Company and the Bank have the
option to reserve up to 25% of the Common Stock offered in the Community
Offering for purchase by certain institutional investors, although no such
institutional investors have been selected. It is anticipated that any shares
not subscribed for in the Subscription and Community Offerings will be offered
to members of the general public in a syndicated community offering (the
"Syndicated Community Offering") (the Subscription and Community Offerings and
the Syndicated Community Offering are referred to, collectively, as the
"Offerings"). If shares of Common Stock are offered by the Company in a
Syndicated Community Offering, the Company will incur additional underwriting
commissions, in accordance with agreements to be entered into at the time of
such offering. See "The Conversion -- Syndicated Community Offering."

     The ESOP, which is an Employee Plan, intends to subscribe for 8% of the
total number of shares of Common Stock issued in the Conversion. The
subscription of the Employee Plans, including the ESOP, will be afforded a
second priority behind the subscription rights of Eligible Account Holders,
except that, in the event of an increase in the amount of Common Stock to be
issued as a result of an increase of up to 15% in the maximum of the Estimated
Price Range, the subscription of the Employee Plans, including the ESOP, will be
afforded a first priority with respect to such increase in shares to the extent
necessary to fill the subscription of the Employee Plans. Except for the
subscription of the Employee Plans, including the ESOP, no other person's or
entity's subscription will have a priority as a result of such an increase. It
is anticipated that the subscription of the Employee Plans, including the ESOP,
will be filled in the Subscription and Community Offerings. Shares purchased by
the ESOP in the Subscription and Community Offerings are anticipated to be
funded by a loan from the Company to be repaid over a period of up to 10 years
at an interest rate of 8%. Although contributions to the ESOP will be
discretionary, the Company and the Bank intend to make annual contributions to
the ESOP in an aggregate amount at least equal to the principal and interest
requirement on the debt. The ESOP may purchase additional shares of Common Stock
in the future, in the open market or otherwise, and may do so either on a
leveraged basis with borrowed funds or with cash dividends, periodic employer
contributions or other cash flow.

     No Eligible Account Holder, Supplemental Eligible Account Holder, Other
Member or Bank Employee may, in their capacity as such, subscribe in the
Subscription Offering for more than $150,000 of the Common Stock offered in the
Conversion; no person, together with associates of and persons acting in concert
with such person, may purchase in the Community Offering and the Syndicated
Community Offering more than $150,000 of the Common Stock offered in the
Conversion; and, except for the Employee Plans, no person, together with
associates of and persons acting in concert with such person, may purchase in
the aggregate more than the overall maximum purchase limitation of 1.0% of the
total number of shares of Common Stock offered in the Conversion; provided,
however, that the overall maximum purchase limitation may be increased and the
amount that may be subscribed for may be increased in the sole discretion of the
Bank or the Company without further approval of the Bank's members. Prior to the
consummation of the Conversion, if such amount is increased, subscribers for the
maximum amount will be, and certain other large subscribers in the sole
discretion of the Bank may be, given the opportunity to increase their
subscriptions up to the then applicable limit. The minimum purchase is 25
shares. The Company and the Bank reserve the right, in their absolute
discretion, to accept or reject, in whole or in part, any or all subscriptions
in the Community Offering and the Syndicated Community Offering, either at the
time of receipt of an order or as soon as practicable following the termination
of such Offerings. If an order is rejected, the funds submitted with such order
will be returned promptly with interest. If the Company rejects a subscription
in part, the subscriber will not have the right to cancel the remainder of his
or her subscription. See "The Conversion -- Subscription Offering and
Subscription Rights," "-- Community Offering" and "-- Limitations on Common
Stock Purchases."


                                        2

<PAGE>

(continued from previous page)

     The Bank has engaged Hovde to consult with and advise the Company and the
Bank in the Offerings, and Hovde has agreed to use its best efforts to assist
the Company with the solicitation of subscriptions and purchase orders for
shares of Common Stock in the Offerings. Hovde is not obligated to take or
purchase any shares of Common Stock in the Offerings. The Company and the Bank
have agreed to indemnify Hovde against certain liabilities arising under the
Securities Act of 1933, as amended. See "The Conversion -- Marketing and
Underwriting Arrangements."

     The Subscription Offering will terminate at 12:00 Noon, Central Time, on
[________, 1996] (the "Expiration Date") unless extended by the Bank and the
Company, with approval of the OTS, if necessary. Subscriptions paid by cash,
check, bank draft or money order will be placed in a segregated account at the
Bank and will earn interest at the Bank's rate of interest on passbook accounts
from the date of receipt until completion or termination of the Conversion.
Payments authorized by withdrawal from deposit accounts at the Bank will
continue to earn interest at the contractual rate until the Conversion is
completed or terminated; these funds otherwise will be unavailable to the
depositor until such time. Upon completion of the Conversion, funds withdrawn
from depositors' accounts for stock purchases will no longer be insured by the
Federal Deposit Insurance Corporation (the "FDIC"). Orders submitted are
irrevocable until the completion of the Conversion; provided, that, if the
Conversion is not completed within 45 days after the close of the Subscription
Offering, unless such period has been extended with the consent of the OTS, if
necessary, all subscribers will have their funds returned promptly with
interest, and all withdrawal authorizations will be cancelled. If an extension
of time has been granted, all subscribers will be notified of such extension, of
any rights to confirm their subscriptions or to modify or rescind their
subscriptions and have their funds returned promptly with interest and of the
time period within which the subscribers must notify the Bank of their intention
to confirm, modify or rescind their subscriptions. Such extensions may not go
beyond [_________], 1998. A resolicitation of subscribers will also be made if
the pro forma market value of the Common Stock is either more than 15% above the
maximum of the Estimated Price Range or less than the minimum of the Estimated
Price Range. If an affirmative response to any resolicitation is not received by
the Bank and the Company from a subscriber, such subscriber's order will be
rescinded, and all funds will be returned promptly with interest. See "The
Conversion -- Subscription Offering and Subscription Rights" and "-- Procedure
for Purchasing Shares in Subscription and Community Offerings."

     The Company has received conditional approval from The Nasdaq Stock Market,
Inc. to have its Common Stock quoted on the Nasdaq National Market of The Nasdaq
Stock Market, Inc. (the "Nasdaq National Market") under the symbol "BFFC" upon
completion of the Conversion. One of the requirements for continued quotation of
the Common Stock on the Nasdaq National Market is that there be at least two
market makers for the Common Stock. The Company will seek to encourage and
assist at least two market makers to make a market in its Common Stock. Hovde
will assist the Company in such efforts but will not be a market maker in the
Common Stock. Prior to this offering there has not been a public market for the
Common Stock, and there can be no assurance that an active and liquid trading
market for the Common Stock will develop or that the Common Stock will trade at
or above the Purchase Price. The absence or discontinuance of a market may have
an adverse impact on both the price and liquidity of the Common Stock. See "Risk
Factors -- Absence of Market for Common Stock and Recent Performance of
Conversion Offerings."

     At a meeting of shareholders to be held no earlier than six months
following the completion of the conversion (which meeting is anticipated to be
held during _________, 1997), the Company may seek shareholder approval of the
Stock Option and Incentive Plan for Employees and the Stock Option Plan for
Outside Directors (the "Stock Option Plans") and certain other stock-based
compensation plans (the "Stock Programs") for implementation prior to the first
anniversary of the Conversion. Assuming such implementation, an amount of shares
of Common Stock equal to 10% of the Common Stock issued in the Conversion is
expected be to be reserved for issuance under the Stock Option Plans, and the
Bank expects to contribute funds to the Stock Programs to enable their related
trusts to acquire, in the aggregate, up to 4% (3% unless OTS approval is
obtained) of the shares of Common Stock issued in the Conversion. See
"Management of the Bank -- Benefits."


                                        3

<PAGE>

                                       MAP


                        [MAP SHOWING OFFICE LOCATIONS OF
                FAIRFIELD SAVINGS BANK, F.S.B. AND COUNTY LINES]


                                        4

<PAGE>

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

                                     SUMMARY

     This summary is qualified in its entirety by the more detailed information
and Financial Statements of the Bank and Notes thereto included elsewhere in
this Prospectus.

Big Foot Financial Corp.

     The Company is an Illinois corporation recently organized by the Bank for
the purpose of acquiring all of the capital stock of the Bank to be issued in
the Conversion. Immediately following the Conversion, the only significant
assets of the Company will be the capital stock of the Bank, the loan that the
Company intends to make to the ESOP and the net conversion proceeds retained by
the Company. The Company will purchase all of the capital stock of the Bank to
be issued upon the Conversion in exchange for 50% of the net proceeds from the
Offerings with the remaining net proceeds to be retained by the Company. Funds
retained by the Company will be used for general business activities, including
the loan that the Company intends to make to the ESOP. The net proceeds from the
Offerings are expected to be invested in federal funds, government and federal
agency mortgage-backed securities, other debt securities, high-grade short-term
marketable securities, deposits of or loans to the Bank or a combination
thereof. See "Use of Proceeds." The business of the Company will initially
consist of overseeing its investment in the Bank. See "Business of the Company,"
"Business of the Bank" and "Regulation -- Regulation of Savings Association
Holding Companies."

Fairfield Savings Bank, F.S.B.

     General

     The Bank was originally founded in 1901 as an Illinois state chartered
mutual savings and loan association. On July 1, 1991, the Bank converted to a
federally chartered savings bank. The Bank is subject to extensive regulation,
supervision and examination by the OTS, its primary regulator, and the FDIC,
which insures its deposits. The Bank is a community-oriented financial
institution providing a variety of financial services to meet the needs of the
communities which it serves. The Bank conducts business from its headquarters in
Long Grove, Illinois and its two branches in Chicago and Norridge, Illinois. The
Bank gathers savings deposits primarily from the communities and neighborhoods
in close proximity to its offices. The Bank's lending area is larger and
includes Cook, DuPage and Lake counties located in Illinois. The majority of the
Bank's mortgage loans are secured by properties located in its lending area. See
"Business of the Bank -- Market Area" and " -- Competition."

     The Bank's principal business consists of gathering savings deposits from
the general public within its market area and investing those savings deposits
primarily in one- to four-family residential mortgage loans, mortgage-backed
securities and obligations of the U.S. Government. To a lesser extent, the Bank
makes multifamily residential loans, commercial real estate loans, land,
construction and development loans, consumer loans (including loans secured by
savings deposits and home improvement loans) and commercial lines of credit.

     At July 31, 1996, the Bank had total assets of $194.6 million, of which
$79.1 million was comprised of loans receivable and $102.4 million was comprised
of mortgage-backed securities. At such date, total savings deposits were $137.2
million, borrowings were $39.9 million and retained earnings were $13.6 million.
At that same date, the Bank's tangible, core and total risk-based capital ratios
were 7.35%, 7.35% and 21.59%, respectively, which exceeded all applicable
regulatory capital requirements. Additionally, the Bank's regulatory capital was
in excess of the amount necessary to be "well-capitalized" under the Federal
Deposit Insurance Corporation Improvement Act of 1991 (the "FDICIA"). See
"Regulatory Capital Compliance," "Capitalization," "Pro Forma Data" and
"Regulation--Regulation of Federal Savings Associations." The Bank's savings
deposits are insured up to the maximum allowable amount by the Savings
Association Insurance Fund (the "SAIF") of the FDIC.

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

                                        5

<PAGE>

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

     The Bank's net income was $226,000, $982,000 and $2.1 million for the
fiscal years ended July 31, 1996, 1995 and 1994, respectively. Each of these
years included certain non-recurring gains and settlements which are not
expected to continue in the future. For the 1994 fiscal year, net income
included an aggregate of $1.2 million ($775,000 net of tax) in gains on sale of
investment securities available-for-sale and gains on sale of real estate held
for sale and development; for the 1995 fiscal year, net income included a
$557,000 gain ($385,000 net of tax) on real estate held for sale and
development; and for the 1996 fiscal year, net income included $184,000 in
income ($121,000 net of tax) related to settlements of litigation. Legal fees
relating to these settlements also were incurred in 1996. See "Selected
Financial and Other Data of the Bank," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business of the Bank."

     The Bank is a member of the Federal Home Loan Bank of Chicago (the "FHLB of
Chicago"), which is one of the 12 regional banks which comprise the Federal Home
Loan Bank system.

     Business Strategy

     Home Lending and Asset Quality. The Bank's strategy has been to maintain
its focus as a traditional consumer-oriented institution serving the markets in
which its offices are located. Historically, the Bank's interest income has been
derived primarily from one- to four-family residential mortgage loans and
mortgage-backed securities. To a lesser extent, the Bank derives interest income
from multifamily residential loans, commercial real estate loans, land,
construction and development loans, consumer loans (including loans secured by
savings deposits, and home improvement loans) and commercial lines of credit.

     The Bank has emphasized, and intends to continue to emphasize, the
origination of one- to four-family residential mortgage loans in its lending
area, which is defined generally as Cook, DuPage and Lake Counties. At July 31,
1996, one- to four-family residential mortgage loans totaled $76.3 million or
95.6% of gross loans, approximately $72.4 million (or 90.6% of gross loans) of
which provided for fixed rates of interest. The remaining 4.4% of gross loans
consisted of multifamily residential loans, land, construction and development
loans, home equity loans and other loans. For the year ended July 31, 1996, the
Bank originated $19.7 million of mortgage loans. See "Business of the Bank --
Lending Activities." The Bank also invests in mortgage-backed securities. The
Bank's holdings of mortgage-backed securities totaled $102.4 million at July 31,
1996, representing 52.6% of total assets. See "Business of the Bank --
Investment Activities."

           The Bank pays particular attention to both the value estimates
applied to the collateral securing loans as well as to the creditworthiness of
its prospective borrowers and employs rigorous underwriting standards to
minimize risk of loss. As a result of this strategy, historically the Bank has
had only minimal loss experience in its lending operations. The Bank's ratio of
non-performing loans to total loans at year end ranged from 0.15% to 5.58%
during the five-year period ended July 31, 1996 and was 0.15% at July 31, 1996.
Non-performing assets to total assets ranged from 0.06% to 2.92% during the
five-year period ended July 31, 1996, and was at 0.06% at July 31, 1996. The
Bank's ratio of allowance for loan losses to non-performing loans ranged from
11.08% to 254.24% over the five years ended July 31, 1996 and was 254.24% at
July 31, 1996. In 1992, at the direction of the Bank's primary federal
regulator, the Bank adversely classified a $4.2 million loan and placed reserves
against it. Subsequently, the Bank reversed such reserves when it became
apparent that the loan would be repaid in full. For the past five fiscal years,
the Bank's ratio of non-performing loans to total loans averaged 0.69% and the
ratio of non-performing assets to total assets averaged 0.33%, without giving
effect to the reserves that were initially placed against the $4.2 million loan
but were subsequently reversed. See "Selected Financial and Other Data of the
Bank" and "Business of the Bank -- Delinquencies and Non-Performing Assets."

     Savings Deposits and Borrowed Money. The Bank's interest expense consists
of the interest paid on savings deposits and borrowed money. The Bank's savings
deposits are derived principally from its primary market area. The Bank's
strategy has been to maintain a high level of stable savings deposits by
providing quality service to its customers without significantly increasing its
cost of funds. The Bank's low-cost deposit base, consisting of passbook
accounts, non-interest-bearing demand accounts, NOW accounts and money market
demand accounts,

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

                                        6

<PAGE>

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

totaled $65.8 million or 48% of total savings deposits and had a weighted
average effective rate of 2.41% at July 31, 1996. For the past three years,
these accounts have consistently accounted for more than 47% of total savings
deposits and had a weighted average effective rate of not more than 2.45%
throughout this period. At July 31, 1996, money market demand accounts totaled
$13.0 million or 9.5% of total savings deposits and had a weighted average
effective rate of 3.12%. The Bank has consistently maintained an overall cost of
funds lower than the National Median Cost of Funds Rate as determined by the
OTS. At July 31, 1996, the Bank's cost of deposits was 4.01% and its cost of
funds (including FHLB borrowings) of 4.74% was _____ basis points below the
National Median Cost of Funds Rate. The Bank has not and does not intend to use
brokered deposits as a source of funds. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources" and "Business of the Bank -- Sources of Funds."

     Market Area

     The Bank serves three distinct geographic markets: the Chicago branch at
1601 North Milwaukee Avenue serves the near northwest side of the City of
Chicago, the Norridge branch at 8301 West Lawrence serves Chicago's near
northwestern suburbs and the Long Grove branch at Old McHenry Road and Route 83
serves northern Cook and southern Lake counties. The Bank's customer base may be
categorized by branch location. In the Chicago branch, the customer base is
largely blue collar workers and young white collar technicians and
professionals. The Chicago market is experiencing new construction and a
refurbishing of its existing aged housing stock and is becoming an active
mortgage as well as a savings market. The Norridge branch serves a customer base
split between blue and white collar workers where the market is mature. The
Norridge market has modest prospects for growth; however, it provides the Bank
with a stable source of deposits. The Long Grove office is situated in an
affluent, high-growth, white collar market. This is a dynamic market which
provides the Bank with significant loan demand and potential for growth
opportunities in savings and lending activities. See "Business of the
Bank--Market Area." Substantially all loans originated by the Bank are secured
by real estate located in Cook, DuPage and Lake counties in Illinois.

The Conversion and the Subscription and Community Offerings

     On May 21, 1996, the Board of Directors of the Bank adopted the Plan of
Conversion (which was amended as of September 17, 1996) pursuant to which the
Bank is converting from a federally chartered mutual savings bank to a federally
chartered stock savings bank, and all of the outstanding capital stock of the
Bank will be acquired by the Company in exchange for 50% of the net proceeds
from the Offerings. The Conversion and the Offerings are subject to OTS
approval, which was received on ______ __, 1996, and approval of the Bank's
members at a special meeting to be held on ______ __, 1996. See "The Conversion
- -- General." The Bank is converting to increase its capital and to structure
itself in a form used by commercial banks and many other business entities and a
growing number of savings institutions. The Conversion will enhance the Bank's
ability to access capital markets, expand its current operations, acquire other
financial institutions or branch offices, provide affordable home financing
opportunities to the communities it serves and diversify into other financial
services to the extent allowable by applicable law and regulation. The holding
company form of organization would provide additional flexibility to diversify
the Bank's business activities through newly-formed subsidiaries or through
acquisitions of or mergers with both mutual and stock institutions, as well as
other companies. Although there are no current arrangements, understandings or
agreements, written or oral, regarding any such opportunities, the Company will
be in a position after the Conversion, subject to regulatory limitations and the
Company's financial position, to take advantage of any such opportunities that
may arise. See "The Conversion -- Purposes of Conversion." The holding company
form of organization also provides certain anti-takeover protections. See "Risk
Factors -- Certain Anti-Takeover Provisions."

     Common Stock will be offered in the Subscription Offering and, to the
extent shares are available, in the Community Offering. To the extent that
shares are available after the expiration of the Community Offering, such shares
may be offered in the Syndicated Community Offering. See "The Conversion --
Syndicated Community

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

                                        7

<PAGE>

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

Offering." Common Stock offered in the Subscription Offering will be offered in
the following order of priority: (1) depositors whose savings deposits in
qualifying accounts in the Bank totaled $50 or more on December 31, 1994
("Eligible Account Holders"); (2) the Employee Plans, including the ESOP; (3)
depositors whose savings deposits in qualifying accounts in the Bank totaled $50
or more on September 30, 1996, other than (i) those depositors who would
otherwise qualify as Eligible Account Holders or (ii) directors or officers of
the Bank or their Associates (as defined herein under "The Conversion --
Limitations on Common Stock Purchases") ("Supplemental Eligible Account
Holders"); (4) members of the Bank, consisting of depositors of the Bank as of
[________ __, 1996,] the voting record date (the "Voting Record Date") for the
special meeting of members to vote on the Conversion, and borrowers from the
Bank as of July 1, 1991 whose loans continue to be outstanding as of the Voting
Record Date, other than those members who otherwise qualify as Eligible Account
Holders or Supplemental Eligible Account Holders ("Other Members"); and (5)
employees and officers of the Bank, other than those employees and officers who
would otherwise qualify as Eligible Account Holders, Supplemental Eligible
Account Holders or Other Members ("Bank Employees"). Subscription rights will
expire if not exercised by, and the Subscription Offering will terminate at,
12:00 Noon, Central Time, on the Expiration Date, unless extended by the Bank
and the Company, with approval of the OTS, if necessary. Subject to the prior
rights of holders of subscription rights, Common Stock not subscribed for in the
Subscription Offering will be subsequently offered in the Community Offering to
certain members of the general public, with preference given to natural persons
residing in Cook and Lake counties, the counties in which the Bank's offices are
located. The Company and the Bank have the option to reserve up to 25% of the
Common Stock offered in the Community Offering for purchase by certain
institutional investors, although no such institutional investors have been
selected. The Company and the Bank reserve the absolute right to reject or
accept any orders in the Community Offering, in whole or in part, either at the
time of receipt of an order or as soon as practicable following the expiration
of the Community Offering. The Community Offering will terminate not later than
45 days after the Expiration Date. The Bank and the Company have retained Hovde
as consultant and advisor in connection with the Offerings and to assist in
soliciting subscriptions and purchase orders in the Offerings. The Bank and the
Company will pay a fee to Hovde which will be based on the aggregate Purchase
Price of the Common Stock sold in the Offerings. See "The Conversion --
Marketing and Underwriting Arrangements."

     In connection with the Conversion, the Company has established, and the
Bank has adopted, the ESOP for eligible employees of the Bank and the Company.
The ESOP intends to subscribe for 8% of the shares of Common Stock issued in the
Conversion. At a meeting of shareholders to be held no earlier than six months
following the completion of the Conversion (which meeting is anticipated to be
held during __________, 1997), the Company may seek shareholder approval of the
Stock Option Plans and the Stock Programs for implementation prior to the first
anniversary of the Conversion, which the Company intends to establish as a
method of providing officers, employees and non-employee directors of the Bank
and the Company with a proprietary interest in the Company in a manner designed
to encourage such persons to remain with the Bank and the Company. For a more
detailed discussion of the Stock Option Plans and Stock Programs and the
benefits expected to be received by officers, employees and directors, see " --
Benefits to Management and Directors," "Risk Factors -- Certain Anti-Takeover
Provisions -- Voting Control of Officers and Directors" and "Management of the
Bank -- Benefits."

Prospectus Delivery and Procedure for Purchasing Shares of Common Stock

     To ensure that each purchaser receives a prospectus at least 48 hours prior
to the respective expiration dates for the Offerings in accordance with Rule
15c2-8 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
no prospectus will be mailed any later than five days prior to any such date or
hand delivered any later than two days prior to any such date. Execution of the
stock order form will confirm receipt of delivery in accordance with Rule
15c2-8. Each stock order form distributed will be accompanied by a prospectus
and certification form. The Company and the Bank are not obligated to accept or
process orders which are submitted on facsimiled or copied stock order forms.
Stock order forms unaccompanied by an executed original certification form will
not be accepted. Payment by check, money order, bank draft, cash or debit
authorization to an existing account at the Bank must accompany the stock order
form and certification form. No wire transfers will be

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

                                        8

<PAGE>

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

accepted. The Bank is prohibited from lending funds to any person or entity for
the purpose of purchasing shares of Common Stock in the Conversion. See "The
Conversion -- Procedure for Purchasing Shares in Subscription and Community
Offerings."

     In order to ensure that Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are properly identified as to their stock
purchase priorities, depositors as of the Eligibility Record Date (December 31,
1994), Supplemental Eligibility Record Date (September 30, 1996) and/or the
Voting Record Date (________ ___, 1996) and borrowers as of the Voting Record
Date (whose loans have been outstanding since July 1, 1991) must list all
accounts on the stock order form, giving all names on each account and the
account numbers. Failure to list all such account numbers may result in the
inability of the Company or the Bank to fill all or part of a subscription
order. See "The Conversion -- Procedure for Purchasing Shares in Subscription
and Community Offerings."

Restrictions on Transfer of Subscription Rights and Shares of Common Stock

     Prior to the completion of the Conversion, no person may transfer or enter
into any agreement or understanding to transfer the legal or beneficial
ownership of the subscription rights issued under the Plan or the shares of
Common Stock to be issued upon their exercise. Each person exercising
subscription rights will be required to certify that any purchase of Common
Stock will be solely for the purchaser's own account and that there is no
agreement or understanding regarding the sale or transfer of any shares
purchased as a result of the exercise. The Company and the Bank will pursue any
and all legal and equitable remedies in the event they become aware of the
transfer of subscription rights and will not honor orders known by them to
involve the transfer of such rights. See "The Conversion -- Restrictions on
Transfer of Subscription Rights and Shares of Common Stock."

Purchase Limitations

     The minimum purchase in the Offerings is 25 shares. The ESOP intends to
subscribe for 8% of the shares of Common Stock issued in the Conversion pursuant
to the subscription rights granted under the Plan. The subscription of the ESOP
will be afforded a second priority behind the subscription rights of Eligible
Account Holders, except that, in the event of an increase in the amount of
Common Stock to be issued as a result of an increase of up to 15% in the maximum
of the Estimated Price Range, the subscriptions of the Employee Plans, including
the ESOP, will be afforded a first priority with respect to such increase in
shares to the extent necessary to fill the subscriptions of the Employee Plans.
No Eligible Account Holder, Supplemental Eligible Account Holder, Other Member
or Bank Employee, in their capacity as such, may subscribe in the Subscription
Offering for more than $150,000 of the Common Stock offered; no person, together
with associates of or persons acting in concert with such person, may purchase
in the Community Offering and the Syndicated Community Offering in the aggregate
more than $150,000 of the Common Stock offered; and, except for the Employee
Plans, no person, together with associates of or persons acting in concert with
such person, may purchase more than the overall maximum purchase limitation of
1.0% of the total number of shares of Common Stock offered in the Offerings. At
any time during the Conversion and without further approval by the Bank's
members, the Company and the Bank may in their sole discretion increase the
overall maximum purchase limitation, and increase the amount that may be
subscribed for in the Offerings, to up to 5% of the shares offered or, if orders
for Common Stock that exceed 5% of the total offering of shares do not, in the
aggregate, exceed 10% of the total shares offered, to up to 9.99% of the total
offering of shares. It is currently anticipated that the overall maximum
purchase limitation may be increased if, after a Community Offering, the Company
has not received subscriptions for a minimum of 1,487,500 shares of Common
Stock. Prior to consummation of the Conversion, if such amount is increased,
subscribers for the maximum amount will be, and certain other large subscribers
in the sole discretion of the Bank may be, given the opportunity to increase
their subscriptions up to the then applicable limit. See "The Conversion --
Limitations on Common Stock Purchases" and "The Conversion -- Community
Offering." In the event of an increase in the total number of shares up to 15%,
the additional shares will be distributed and allocated to fill unfilled orders
in the Subscription and Community Offerings, with priority given to the
subscription of the Employee Plans, including

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

                                        9

<PAGE>

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

the ESOP, without any resolicitation of subscribers, as described in "The
Conversion -- Subscription Offering and Subscription Rights" and "-- Limitations
on Common Stock Purchases."

Stock Pricing and Number of Shares to be Issued in the Conversion

     Federal regulations require that the aggregate purchase price of the Common
Stock to be issued in the Conversion be consistent with an independent appraisal
of the estimated pro forma market value of the Common Stock following the
Conversion. Capital Resources, an independent appraiser, has advised the Bank
that in its opinion, dated September 6, 1996, the aggregate estimated pro forma
market value of the Common Stock ranged from $14,875,000 to $20,125,000, with a
midpoint of $17,500,000. Capital Resources' appraisal is included as an exhibit
to the Company's Registration Statement, of which this Prospectus is a part. See
"Additional Information." The Board of Directors of the Bank has established the
Estimated Price Range of $14,875,000 to $20,125,000, assuming the issuance of
between 1,487,500 and 2,012,500 shares of Common Stock at the Purchase Price of
$10.00 per share. The appraisal of the Common Stock is not intended and should
not be construed as a recommendation of any kind as to the advisability of
purchasing such stock nor can any assurance be given that purchasers of the
Common Stock in the Conversion will be able to sell such shares after the
completion of the Conversion at or above the Purchase Price.

     All shares of Common Stock issued in the Conversion will be sold at the
Purchase Price, as determined by the Bank and approved by the Company. The
actual number of shares to be issued in the Conversion will be determined by the
Company and the Bank based upon the final updated valuation of the estimated pro
forma market value of the Common Stock, giving effect to the Conversion, at the
completion of the Offerings. The number of shares to be issued is expected to
range from a minimum of 1,487,500 shares to a maximum of 2,012,500 shares.
Subject to approval of the OTS, the Estimated Price Range may be increased or
decreased to reflect market and economic conditions prior to the completion of
the Conversion, and under such circumstances the Company may increase or
decrease the number of shares of Common Stock to be issued in the Conversion.
The maximum of the Estimated Price Range may be increased by up to 15% and the
number of shares of Common Stock to be issued in the Conversion may be increased
to 2,314,375 shares due to regulatory considerations, changes in the market and
general financial and economic conditions. No resolicitation of subscribers will
be made and subscribers will not be permitted to modify or cancel their
subscriptions unless the gross proceeds from the sale of the Common Stock are
less than the minimum or more than 15% above the maximum of the current
Estimated Price Range. See "Pro Forma Data," "Risk Factors -- Possible Increase
in Estimated Price Range and Number of Shares Issued" and "The Conversion --
Stock Pricing" and "-- Number of Shares to be Issued."

Use of Proceeds

     Net proceeds from the sale of the Common Stock are estimated to be between
$13.9 million and $19.1 million (or $22.1 million if the Estimated Price Range
is increased by 15%) depending on the number of shares sold and the expenses of
the Conversion. See "Pro Forma Data." The Company will use the net proceeds from
the sale of the Common Stock as follows:

     1. The Company will purchase all of the capital stock of the Bank to be
issued upon Conversion in exchange for 50% of the net proceeds.

     2. The remaining net proceeds will be retained by the Company. Net proceeds
to be retained by the Company after the purchase of the capital stock of the
Bank are estimated to be between $7.0 million and $9.6 million (or $11.0 million
if the Estimated Price Range is increased by 15%). Such net proceeds will be
used for general business activities. The net proceeds retained by the Company
will be invested primarily in federal funds, government and federal agency
mortgage-backed securities, other debt securities, high-grade short-term
marketable securities, deposits of or loans to the Bank, or a combination
thereof. In addition, the Company intends to purchase

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

                                       10

<PAGE>

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

for approximately $262,000 a certain commercial parcel of land from the Bank.
See "Business of the Bank -- Real Estate Investment."

     3. The Company intends to use a portion of the retained net proceeds to
make a loan directly to the ESOP to enable the ESOP to purchase 8% of the shares
to be issued in the Conversion. The amount of the loan to the ESOP is estimated
to be between $1.2 million and $1.6 million (or $1.9 million if the Estimated
Price Range is increased by 15%) to be repaid over a period of up to 10 years at
an interest rate of 8%. See "Management of the Bank -- Benefits -- Employee
Stock Ownership Plan and Trust."

     Upon completion of the Conversion, the Board of Directors will have the
authority to adopt stock repurchase plans, subject to statutory and regulatory
requirements. The Company is subject to the terms of a certification made to and
required by the OTS in connection with the application to the OTS for approval
of the Conversion, which certification prohibits the Company from taking any
actions to further any payments to its shareholders through a return of excess
capital for a period of one year following the Conversion without the prior
written consent of the OTS. The certification expressly does not apply to
taxable dividend payments made by the Company or to dividend payments made by
the Bank to the Company.

     The portion of the net proceeds received by the Bank from the Company's
purchase of the Bank's capital stock, estimated to be between $7.0 million at
the minimum of the Estimated Price Range and $9.6 million at the maximum of the
Estimated Price Range, will be added to the Bank's general funds to be used for
general corporate purposes, including investment in one- to four-family
residential mortgage loans and other loans which will provide affordable home
financing opportunities to the community; investment in federal funds,
short-term, investment grade marketable securities and mortgage-backed
securities; and to fund the Stock Programs. See "Use of Proceeds."

Dividends

     Upon completion of the Conversion, the Board of Directors of the Company
will have the authority to declare dividends on the Common Stock. The Board of
Directors does not presently intend to declare dividends on the Common Stock. In
the future, declarations of dividends, if any, by the Board of Directors will
depend upon a number of factors, including the amount of the net proceeds from
the Offerings retained by the Company, investment opportunities available to the
Company or the Bank, capital requirements, regulatory limitations, the Company's
and the Bank's financial condition and results of operations, tax
considerations, general economic conditions, industry standards and other
factors. As the principal asset of the Company, the Bank will provide the
principal source of funds for payment of dividends by the Company. Assuming the
shares of Common Stock are sold at the maximum of the Estimated Price Range, at
July 31, 1996, after giving pro forma effect to (i) the Conversion and related
expenses, (ii) the deduction from capital of the amount expected to be borrowed
by the ESOP and the cost of shares of Common Stock to be acquired by the Stock
Programs and (iii) the retention by the Bank of 50% of the net proceeds of the
Conversion, the Bank would be permitted to make capital distributions of up to
approximately $_____ million to the Company without prior OTS approval. See
"Dividend Policy."

Benefits to Management and Directors

     The Board of Directors of the Bank received information about various types
of benefit plans typically utilized by public companies in general and
converting thrift institutions in particular. Management reviewed the
anticipated costs of establishing a customary program of benefits and the
anticipated benefits to the Company. Management determined that the benefit
plans helped significantly in providing the ability of a public company to
retain and attract executives of the caliber needed to run a successful public
company, to maintain their attention and loyalty in change of control situations
and to align their interests with those of the Company's shareholders. Finally,
the Board of Directors concluded that the cost of establishing and maintaining
these benefit plans would be justified by these benefits to the Company.

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

                                       11

<PAGE>

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

     Stock Option Plans. Following the Conversion, the Company intends to adopt
the Stock Option Plans. If implemented within one year following the Conversion,
the adoption of the Stock Option Plans will be subject to shareholder approval
obtained at a meeting of shareholders to be held no earlier than six months
after the completion of the Conversion. Assuming such implementation, an amount
of shares of Common Stock equal to 10% of the Common Stock issued in the
Conversion (148,750 shares and 201,250 shares at the minimum and maximum of the
Estimated Price Range, having an aggregate fair market value of $1.5 million and
$2.0 million, respectively, based on a Purchase Price of $10.00 per share) is
expected to be reserved for issuance under the Stock Option Plans. These shares
will be acquired either through open market purchases, subject to OTS approval,
if necessary, or from authorized but unissued Common Stock. See "Risk Factors --
Possible Dilutive Effect of Stock Options and Stock Programs." No conversion
stock will be used to fund the Stock Option Plans. No determinations have been
made by the Company as to the specific terms of the Stock Option Plans or the
amount of awards to be made thereunder. Current OTS regulations provide that no
individual employee may receive more than 25% of the options granted, and that
non-employee directors may not receive more than 5% individually or 30% in the
aggregate of the options granted, under option plans implemented within one year
following the Conversion. See "Management of the Bank -- Benefits -- Stock
Option Plans."

     Stock Programs. Following the Conversion, the Company also intends to adopt
certain Stock Programs for the benefit of officers, employees and non-employee
directors of the Company and the Bank. If implemented within one year following
the Conversion, the adoption of the Stock Programs will be subject to
shareholder approval obtained at a meeting of shareholders to be held no earlier
than six months after the completion of the Conversion. Assuming such
implementation, the Bank expects to contribute funds to the Stock Programs to
enable their related trusts to acquire, in the aggregate, up to 4% (3% unless
OTS approval is obtained) of the shares of Common Stock issued in the
Conversion, or 59,500 shares and 80,500 shares at the minimum and maximum of the
Estimated Price Range, respectively, having an aggregate fair market value of
$595,000 and $805,000, respectively, based on a Purchase Price of $10.00 per
share. These shares will be acquired either through open market purchases,
subject to OTS approval, if necessary, or from authorized but unissued Common
Stock. See "Risk Factors -- Possible Dilutive Effect of Stock Options and Stock
Programs." No determinations have been made by the Company as to the specific
terms of the Stock Programs or the amount of awards to be made thereunder.
Current OTS regulations provide that no individual employee may receive more
than 25% of the shares of any plan, and that non-employee directors may not
receive more than 5% of the shares individually or 30% in the aggregate, in the
case of plans implemented within one year following the Conversion. Under the
anticipated terms of the Stock Programs, recipients would vote any shares
allocated to them, and an independent trustee would vote unallocated shares in
the same proportion as it receives instructions from recipients with respect to
allocated shares which have not been vested and distributed. See "Management of
the Bank -- Benefits -- Stock Programs."

     ESOP. The Bank and the Company have established the ESOP for the benefit of
eligible employees, including officers. The ESOP intends to subscribe for up to
8% of the Common Stock issued in the Conversion (7% unless OTS approval is
obtained) and to finance its subscription with funds anticipated to be borrowed
from the Company for a period of up to 10 years at an interest rate of 8% per
annum. The Bank and the Company intend to make cash contributions to the ESOP as
required for debt service. The Common Stock acquired by the ESOP will initially
be held in a suspense account and will be allocated to eligible employees as the
loan is repaid. See "Management of the Bank -- Benefits -- Employee Stock
Ownership Plan and Trust."

     Profit Sharing and Savings Plan. The Bank has amended its existing Profit
Sharing and Savings Plan to permit participating employees, including officers,
to invest all or any portion of their account balances in Common Stock.
Initially, such Common Stock may be purchased in the Conversion. Subsequent to
the Conversion, purchases may be made in the open market or in private
transactions, or from treasury stock or authorized but unissued shares in
transactions with the Company. See "Management of the Bank -- Benefits -- Profit
Sharing and Savings Plan."

     Employment Arrangements with Senior Management and Key Personnel. The Bank
and the Company intend to enter into employment arrangements ("Employment
Agreements") with certain senior management and key

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

                                       12

<PAGE>

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

employees that will provide for, among other benefits, benefit and cash payments
to be made in the event of their termination of employment following a change of
control of the Bank or the Company. The provisions of these arrangements,
described below, may have the effect of increasing the cost of acquiring the
Company, thereby discouraging future attempts to take over the Company or the
Bank.

     Based on current compensation and benefit costs, cash payments to be made
in the event of a change of control of the Bank or the Company pursuant to the
terms of the Employment Agreements would be approximately $4,220,000, of which
approximately $1,245,000 would be payable to Mr. Briody, $1,180,000 would be
payable to Mr. Opelka, $630,000 would be payable to Mr. McCue, $500,000 would be
payable to Mr. Cahill, $425,000 would be payable to Mr. Jones and $240,000 would
be payable to Mr. Maher. However, the actual amount to be paid under the
Employment Agreements in the event of a change of control of the Bank or the
Company cannot be estimated at this time, because the actual amount is based on
the compensation and benefit costs applicable to these individuals and other
factors existing at the time of the change of control which cannot be determined
at this time. See "Management of the Bank -- Employment Agreements."

     The Bank and the Company also intend to enter into employee retention
agreements ("Retention Agreements"), effective on the Conversion, with certain
other employees ("Contract Employee(s)"). Based on current compensation and
benefit costs applicable to the Contract Employees expected to be covered by the
Retention Agreements, cash payments to be made in the event of a change of
control of the Bank or the Company would be approximately $530,000. However, the
actual amount to be paid under the Retention Agreements in the event of a change
of control of the Bank or the Company cannot be estimated at this time, because
it will be based on the compensation and benefit costs applicable to the
Contract Employees and other factors existing at the time of the change of
control which cannot be determined at this time. See "Management of the Bank --
Employee Retention Agreements."

     Other Change of Control Provisions. The Bank's Employee Severance Pay Plan
provides for benefits and/or cash payments in the event of a change of control
of the Company or the Bank. Based on current salaries, cash payments to be paid
in the event of a change of control (and assuming termination of all
participating employees) pursuant to the terms of the Employee Severance Pay
Plan would be approximately $396,500. However, the actual amount to be paid in
the event of a change of control of the Bank or the Company cannot be estimated
at this time, because it will be based on the compensation and benefits, as
applicable, for each covered individual and other factors existing at the time
of the change of control which cannot be determined at this time. Certain
anticipated provisions of the Stock Option Plans and Stock Programs (which the
Company intends to adopt and which will only become effective prior to the first
anniversary of the Conversion upon shareholder approval obtained at a meeting of
shareholders to be held no earlier than six months after completion of the
Conversion) provide for cash payments and/or accelerated vesting in the event of
a change of control of the Company or the Bank (in the case of plans established
or implemented on or after the first anniversary of the Conversion). The ESOP
provides for accelerated vesting in the event of a change of control. These
provisions may also have the effect of increasing the cost of acquiring the
Company. In addition, the existence of the provisions could result in
shareholders receiving less for their shares of Common Stock than might
otherwise be available in the event of an acquisition of the Company. See
"Restrictions on Acquisition of the Company and the Bank -- Anti-Takeover
Effects of the Company's Articles of Incorporation and Bylaws and Management
Remuneration Plans Adopted in Conversion," "Management of the Bank -- Employee
Severance Compensation Plan," "-- Benefits -- Employee Stock Ownership Plan and
Trust," "-- Benefits -- Stock Option Plans," and "-- Benefits -- Stock
Programs."

     Subscriptions by Executive Officers and Directors. The Bank's executive
officers and directors propose to purchase Common Stock in the Offerings in an
aggregate amount equal to $1,510,000 or 8.3% (based on the minimum of the
Estimated Price Range) or 7.4% (based on the maximum of the Estimated Price
Range) of the shares to be issued in the Offerings. See "Management of the Bank
- -- Subscriptions by Executive Officers and Directors."

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

                                       13

<PAGE>

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

Risk Factors

     See "Risk Factors" for a discussion of certain factors that should be
considered by prospective investors, including: Potential Impact of Changes in
Interest Rates; Impact of the Economy on Operations; Competition;
Recapitalization of the SAIF; SAIF Premiums and Possible Special Assessment;
Recent Tax Legislation Regarding Tax Bad Debt Reserves; Concentration in
Mortgage-backed Securities; Impact of Technological Advances; Residential and
Non-Residential Lending Risks; Certain Anti-Takeover Provisions; Absence of
Market for Common Stock and Recent Performance of Conversion Offerings; Possible
Increase in Estimated Price Range and Number of Shares Issued; Possible Dilutive
Effect of Stock Options and Stock Programs; Possible Adverse Income Tax
Consequences of the Distribution of Subscription Rights; Financial Institution
Regulation and Possible Legislation; and Risk of Delayed Offering.

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

                                       14

<PAGE>

                  SELECTED FINANCIAL AND OTHER DATA OF THE BANK

     The selected financial and other data of the Bank set forth below is
derived in part from, and should be read in conjunction with, the Financial
Statements of the Bank and Notes thereto presented elsewhere in this Prospectus.

<TABLE>
<CAPTION>
                                                                                   At July 31,
                                                               ------------------------------------------------
                                                               1996       1995       1994       1993       1992
                                                               ----       ----       ----       ----       ----
                                                                                  (In thousands)
Selected Financial Condition Data:
<S>                                                          <C>        <C>        <C>        <C>        <C>     
   Total assets ..........................................   $194,624   $200,251   $195,207   $186,997   $188,739
   Loans receivable, net(1) ..............................     79,144     70,984     68,426     80,346     96,030
   Mortgage-backed securities(2) .........................    102,411    111,283    111,987     47,524     46,197
   Investment securities(2) ..............................       --         --         --       14,893     26,512
   Interest earning deposits .............................      2,040      6,956      2,011     30,556      5,902
   Investment in real estate held for sale and development        262        262        919      1,599      2,051
   Savings deposits ......................................    137,177    148,350    141,830    131,504    135,857
   Borrowed money ........................................     39,900     32,300     34,300     36,600     36,600
   Retained earnings, substantially restricted ...........     13,579     14,423     13,441     11,851      9,317

<CAPTION>
                                                                          For the Year Ended July 31,
                                                               1996       1995       1994       1993       1992
                                                               ----       ----       ----       ----       ----
                                                                                  (In thousands)
Selected Operating Data:
   Interest income .......................................   $ 13,154   $ 12,674   $ 13,052    $ 13,995    $ 14,338
   Interest expense ......................................      8,450      7,333      6,923       7,454       9,198
                                                             --------   --------   --------    --------    --------
   Net interest income ...................................      4,704      5,341      6,129       6,541       5,140
   Provision (credit) for loan losses ....................        138       --          (18)       (392)        397
                                                             --------   --------   --------    --------    --------
   Net interest income after provision (credit)
     for loan losses .....................................      4,566      5,341      6,147       6,933       4,743
   Noninterest income ....................................        485        846      1,515         741       3,164
   Noninterest expense ...................................      4,708      4,766      5,097       4,683       5,242
                                                             --------   --------   --------    --------    --------
   Income before income tax expense and cumulative effect
     of change in accounting principle and extraordinary
     item ................................................        343      1,421      2,565       2,991       2,665
   Income tax expense ....................................        117        439        894         978         975
                                                             --------   --------   --------    --------    --------
   Income before cumulative effect of change in accounting
     principle and extraordinary item ....................        226        982      1,671       2,013       1,690
   Cumulative effect of change in accounting for
     income taxes(3) .....................................       --         --          439        --          --
   Extraordinary item-reduction of income taxes arising
     from utilization of net operating loss carryforwards        --         --         --          --           626
                                                             --------   --------   --------    --------    --------
       Net income ........................................   $    226   $    982   $  2,110    $  2,013    $  2,316
                                                             ========   ========   ========    ========    ========
</TABLE>

                                                       (Notes on following page)


                                       15

<PAGE>

<TABLE>
<CAPTION>
                                                                   At or For the Year Ended July 31,
                                                       --------------------------------------------------------
                                                       1996         1995         1994         1993         1992
                                                       ----         ----         ----         ----         ----
                                                                          (Dollars in thousands)
<S>                                                   <C>          <C>          <C>          <C>          <C>  
Selected Financial Ratios(4):
   Performance Ratios:
      Return on average assets .................        0.11%        0.51%        1.09%        1.08%        1.26%
      Return on average equity .................        1.58         6.98        16.93        19.61        25.83
      Average interest rate spread(5) ..........        2.11         2.59         3.10         3.52         2.83
      Net interest margin(6) ...................        2.47         2.89         3.35         3.73         3.00
      Average interest-earning assets to average
        interest-bearing liabilities ...........      108.23       107.77       106.33       105.12       103.34
      Noninterest expense to average assets ....        2.36         2.45         2.63         2.51         2.86

   Capital Ratios(7):
      Average equity to average assets .........        7.18         7.25         6.43         5.51         4.89
      Tangible capital .........................        7.35         7.05         6.50         6.34         4.94
      Core capital .............................        7.35         7.05         6.50         6.34         4.94
      Total risk-based capital .................       21.59        21.28        19.63        16.38        11.79
   Asset Quality Ratios and Other Data(4):
      Non-performing loans(8) ..................   $     118    $     193    $     511    $     912    $   5,390
      Real estate owned, net ...................        --            168         --           --            118
      Non-performing loans to total loans(9) ...        0.15%        0.27%        0.74%        1.13%        5.58%
      Non-performing assets to total assets ....        0.06         0.18         0.26         0.49         2.92
      Net charge-offs to average loans
        outstanding ............................        0.05         --           --           0.24         --
      Allowance for loan losses to:
         Non-performing loans ..................      254.24        86.01        32.49        20.18        11.08
         Total loans ...........................        0.38         0.23         0.24         0.23         0.62
      Full service offices .....................           3            3            3            3            3
</TABLE>

- ----------
(1)  Loans receivable, net, represents gross loans less deferred loan fees,
     allowance for loan losses, loans in process and capitalized interest
     reserve.

(2)  The Bank has classified its securities as "held-to-maturity" or
     "available-for-sale" since July 31, 1993 when it adopted Statement of
     Financial Accounting Standards No. 115, "Accounting for Certain Investments
     in Debt and Equity Securities" ("SFAS No. 115").

(3)  Pursuant to Statement of Financial Accounting Standards No. 109,
     "Accounting for Income Taxes" ("SFAS No. 109"), on August 1, 1993 the Bank
     changed prospectively from the deferred method to the liability method of
     accounting for income taxes. The effect of the adoption of this standard is
     reflected in the financial statements as the cumulative effect of adopting
     a change in accounting principle.

(4)  With the exception of end of period ratios, all ratios are based on average
     monthly balances during the indicated periods and Regulatory Capital Ratios
     and Asset Quality Ratios are end of period ratios.

(5)  The interest rate spread represents the difference between the
     weighted-average yield on interest-earning assets and the weighted-average
     cost of interest-bearing liabilities.

(6)  The net interest margin represents net interest income as a percent of
     average interest-earning assets.

(7)  For definitions and further information relating to the Bank's regulatory
     capital requirements, see "Regulation--Regulation of Federal Savings
     Associations--Capital Requirements." See "Regulatory Capital Compliance"
     for the Bank's pro forma capital levels as a result of the Offering.

(8)  Non-performing loans consists of all non-accrual loans as well as any loans
     that were 90 days or more past due and still accruing interest at any of
     the dates presented.

(9)  Total loans represents loans, net, plus the allowance for loan losses.


                                       16

<PAGE>

                                  RISK FACTORS

     The following risk factors in addition to those discussed elsewhere in this
Prospectus should be considered by investors in deciding whether to purchase the
Common Stock offered hereby.

Potential Impact of Changes in Interest Rates

     The Bank's profitability, like that of most financial institutions, is
dependent to a large extent upon its net interest income, which is the
difference between its interest income on interest-earning assets, such as loans
and securities, and its interest expense on interest-bearing liabilities, such
as savings deposits and borrowed money. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Analysis of Net
Interest Income."

     A substantial portion of the Bank's assets consist of fixed-rate one- to
four-family mortgage loans. At July 31, 1996, an aggregate of $72.4 million, or
90.6%, of gross loans were invested in such assets. In addition, at July 31,
1996, the Bank had an aggregate of $102.4 million in mortgage-backed securities,
all of which provided for fixed rates of interest. The Bank generally accepts
savings deposits for considerably shorter terms than its fixed-rate mortgage
loans. As a consequence of the Bank's interest rate sensitivity, any significant
increase in interest rates could have an adverse effect on the Bank's results of
operations. The Bank has experienced reduced levels of net income and net
interest income in fiscal years ended 1994, 1995 and 1996 as a result of, among
other reasons, the Bank's sensitivity to increases in interest rates. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for a discussion of these results. There can be no assurance that
the Bank will not continue to experience reduced levels of net income and net
interest income during periods of increasing interest rates or until the Bank's
sensitivity to increases in interest rates is reduced.

     As indicated in the table under "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Asset/Liability Management," at
June 30, 1996, a 200 basis point increase in interest rates would cause more
than a 2% decrease in the ratio of the Bank's net portfolio value (as defined
therein) to the economic value of the Bank's assets. Accordingly, while this
level of interest rate risk is within the Bank's current guidelines for
tolerated interest rate risk, the Bank is considered under OTS regulations to
have "above normal" interest rate risk. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Asset/Liability
Management." The Bank performs its interest rate sensitivity analysis, in part,
based upon interest rate sensitivity schedules prepared by the OTS for the Bank
as of the end of each calendar quarter. Management does not believe that there
is a material difference between the Bank's interest rate risk position as of
July 31, 1996 compared with June 30, 1996.

     Under interest rate scenarios other than that which existed on July 31,
1996, the NPV analysis for the Bank's assets and liabilities could differ
substantially based upon different assumptions then existing. However, there can
be no assurance that the Bank's results of operations would not be adversely
affected in a period of rising interest rates. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Management
Strategy."

     Increases in the level of interest rates also may adversely affect the fair
value of the Bank's securities and other interest-earning assets. Generally, the
fair value of fixed-rate instruments fluctuates inversely with changes in
interest rates. As a result, increases in interest rates could result in
decreases in the fair value of interest-earning assets which could adversely
affect the Bank's results of operations if such interest-earning assets are sold
prior to maturity. At July 31, 1996, the Bank had a $1.1 million unrealized loss
on mortgage-backed securities available-for-sale, net of tax. Increases in
interest rates also can affect the type (fixed-rate or adjustable-rate) and
amount of loans originated by the Bank and the average life of loans and
securities, which can adversely impact the yields earned on the Bank's loan and
securities portfolio.


                                       17

<PAGE>

Impact of the Economy on Operations

     Declines in the local economy, national economy or real estate market could
adversely affect the financial condition and results of operations of the Bank,
including decreased demand for loans or increased competition for good loans,
increased non-performing loans and loan losses and resulting additional
provisions for loan losses and for losses on real estate owned. Although
management of the Bank believes that the current allowance for loan losses is
adequate in light of current economic conditions, many factors may require
additions to the allowance for loan losses in future periods above those
reasonably anticipated. These factors include: (i) adverse changes in economic
conditions and changes in interest rates that may affect the ability of
borrowers to make payments on loans, (ii) changes in the financial capacity of
individual borrowers, (iii) changes in the local real estate market and the
value of the Bank's loan collateral and (iv) future review and evaluation of the
Bank's loan portfolio, internally or by regulators. The amount of the allowance
for loan losses at any time represents estimates made by management that are
susceptible to significant changes due to changes in values of collateral,
national and regional economic conditions, prevailing interest rates and other
factors. Future adjustments to the allowance also may be necessary if economic
or other conditions differ substantially from those underlying the assumptions
used in making such estimates.

Competition

     The Bank faces intense and increasing competition both in making loans and
in attracting savings deposits. The Bank's market area has a high density of
financial institutions, many of which have greater financial resources, name
recognition and market presence than the Bank, and all of which are competitors
of the Bank to varying degrees. Particularly intense competition exists for
savings deposits and the origination of all of the loan products emphasized in
the Bank's business plan. The Bank's competition for loans comes principally
from commercial banks, other savings banks, savings and loan associations,
mortgage banking companies, finance companies and credit unions. The Bank's most
direct competition for savings deposits historically has come from other savings
banks, savings and loan associations, commercial banks and credit unions. In
addition, the Bank faces increasing competition for savings deposits from
non-bank institutions such as brokerage firms, insurance companies, money market
mutual funds, other mutual funds (such as corporate and government securities
funds) and annuities. Trends toward the consolidation of the banking industry
and the lifting of interstate banking and branching restrictions may make it
more difficult for smaller institutions, such as the Bank, to compete
effectively with large national and regional banking institutions. See "Business
of the Bank."

Recapitalization of the SAIF; SAIF Premiums and Possible Special Assessment

     Under current law, SAIF-insured institutions pay deposit insurance
assessment rates of $0.23 to $0.31 per $100 of deposits. In contrast,
institutions that are insured by the FDIC's Bank Insurance Fund (the "BIF") and
that are well capitalized and without any significant supervisory concerns pay
the minimum annual assessment of $2,000, and all other BIF-insured institutions
pay deposit insurance assessment rates of $0 to $0.27 per $100 of deposits. See
"Regulation -- Regulation of Federal Savings Associations -- Insurance of
Deposit Accounts."

     As a result of the SAIF/BIF insurance premium disparity, institutions that
are required to pay SAIF assessments, such as the Bank, are likely to be subject
to a competitive disadvantage relative to BIF-insured institutions, subject to
the adoption of legislation to remedy the disparity. The FDIC has recognized
that the assessment disparity may have adverse consequences for SAIF-insured
institutions, including reduced earnings and an impaired ability to raise funds
in capital markets and to attract deposits.

     The proposed Balanced Budget Act of 1995 (the "Budget Act"), which was
approved by the Congress but vetoed by the President, included provisions that
focused on a recapitalization of the SAIF. Under the provisions of the Budget
Act, all SAIF-member institutions would have paid a special assessment to


                                       18

<PAGE>

recapitalize the SAIF, and the assessment base for the payments on the bonds
(the "FICO bonds") issued in the late 1980s by the Financing Corporation to
recapitalize the now defunct Federal Savings and Loan Insurance Corporation
would have been expanded to include the deposits of both BIF- and SAIF-insured
institutions. The amount of the special assessment required to recapitalize the
SAIF was then estimated to be approximately 80 basis points of the
SAIF-assessable deposits. It is the view of the Treasury Department that the
special SAIF assessment is deductible in accordance with the Bank's tax method
of accounting. If the assessment, as proposed, were assessed against the Bank's
deposits as of March 31, 1995, the Bank's special assessment would be
approximately $1.1 million, or $723,000 on an after-tax basis.

     The Budget Act also provided for the merger of the BIF and SAIF on January
1, 1998, with such merger being conditioned upon the prior elimination of the
thrift charter. Congressional leaders had also agreed that Congress should
consider and act upon separate legislation to eliminate the thrift charter as
early as possible in 1996. If adopted, such legislation would require that the
Bank, as a federal savings bank, convert to a bank charter. See "-- Financial
Institution Regulation and Possible Legislation."

     The veto of the Budget Act by the President was not based on the above
described provisions of the Budget Act, and the federal banking regulators
continue to seek a legislative solution for the recapitalization of the SAIF. In
February 1996, representatives of the FDIC, the OTS and the Treasury Department
stated to Congress that, unless Congress adopts legislation to strengthen the
SAIF, the SAIF's current problems could result in an erosion of the SAIF deposit
base, could cause a default on the FICO bonds that are paid from SAIF
assessments and could leave the SAIF unable to meet its obligations to insured
depositors.

     If enacted by Congress, legislation to recapitalize the SAIF as proposed in
the Budget Act would have the effect of reducing the capital of SAIF member
institutions by the after-tax cost of the special SAIF assessment, plus any
related additional tax liabilities. The legislation would also have the effect
of reducing any differential that may otherwise be required in the assessment
rates for the BIF and SAIF.

     Management cannot predict whether the above legislation or any other
legislative proposal will be enacted as described above or, if enacted, the
amount of any special SAIF assessment or whether ongoing SAIF premiums will be
reduced to a level equal to that of BIF premiums. It also cannot predict whether
some other legislative action will be taken to address the BIF/SAIF disparity
and what consequences such action could have for SAIF members. A significant
increase in SAIF insurance premiums, either absolutely or relative to BIF
premiums, or a significant one-time fee to recapitalize the SAIF could have an
adverse effect on the operating expenses and results of operations of the Bank.

Recent Tax Legislation Regarding Tax Bad Debt Reserves

     Prior to the enactment, on August 20, 1996, of the Small Business Job
Protection Act of 1996 (the "1996 Act"), for federal income tax purposes, thrift
institutions such as the Bank, which met certain definitional tests primarily
relating to their assets and the nature of their business, were permitted to
establish tax reserves for bad debts and to make annual additions thereto, which
additions could, within specified limitations, be deducted in arriving at their
taxable income. The Bank's deduction with respect to "qualifying loans," which
are generally loans secured by certain interests in real property, could be
computed using an amount based on a six-year moving average of the Bank's actual
loss experience (the "Experience Method"), or a percentage equal to 8.0% of the
Bank's taxable income (the "PTI Method"), computed without regard to this
deduction and with additional modifications and reduced by the amount of any
permitted addition to the non-qualifying reserve. See "Federal and State
Taxation--Federal Taxation--Tax Bad Debt Reserves."

     Under the 1996 Act, the PTI Method was repealed and the Bank will be
required to use the Experience Method of computing additions to its bad debt
reserve for taxable years beginning with the Bank's taxable year beginning
August 1, 1996. In addition, the Bank will be required to recapture (i.e., take
into income) over a six-year period, beginning with the Bank's taxable year
beginning August 1, 1996, the excess


                                       19

<PAGE>

of the balance of its bad debt reserves (other than the supplemental reserve) as
of July 31, 1996 over the greater of (a) the balance of such reserves as of July
31, 1988 or (b) an amount that would have been the balance of such reserves as
of July 31, 1996 had the Bank always computed the additions to its reserves
using the six-year moving average Experience Method. However, under the 1996
Act, such recapture requirements will be suspended for each of the two
successive taxable years beginning August 1, 1996 in which the Bank originates a
minimum amount of certain residential loans during such years that is not less
than the average of the principal amounts of such loans made by the Bank during
its six taxable years preceding August 1, 1996. This legislation will result in
the Bank's recapture of reserves with the aggregate tax liability of $236,000.
Since the Bank has already provided a deferred income tax liability of this
amount for financial reporting purposes, there will be no adverse impact to the
Bank's financial condition or results of operations from the enactment of this
legislation.

Concentration in Mortgage-backed Securities

     Historically, the Bank has invested a significant amount of its assets in
mortgage-backed securities. These consist of securities that management intends
to hold for the foreseeable future or to maturity and also securities
available-for-sale. The Bank's mortgage-backed securities totaled $102.4
million, $111.3 million and $112.0 million at July 31, 1996, 1995 and 1994,
respectively. These amounts represented 52.6%, 55.6% and 57.4% of total assets,
respectively, at those dates. As a result of the Bank's level of mortgage-backed
securities, interest income from mortgage-backed securities totaled $6.8
million, $6.5 million and $6.0 million, respectively, for the fiscal years ended
July 31, 1996, 1995 and 1994. These amounts represented 52.0%, 51.2% and 46.1%,
respectively, of total interest income for those periods. As a result of the
Bank's level of mortgage-backed securities, the Bank's net interest income and
net interest margin have been adversely affected as the average yield on the
Bank's average balance of mortgage-backed securities has been lower than the
average yield on the average balance of its mortgage loans. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Analysis of Net Interest Income." The Bank expects to invest a portion of the
net Conversion proceeds in mortgage-backed securities. In addition, the Bank
expects that income from mortgage-backed securities will initially represent an
even greater percentage of total interest income after the Conversion than in
prior periods. It is expected that such mortgage-backed securities will earn
interest at rates lower than the interest rates that would generally be earned
on loans. As a result, the Bank intends to begin investing the net Conversion
proceeds in mortgage loans and consumer loans as soon as practicable after
consummation of the Conversion. However, there can be no assurance that the
economy of the counties in the Bank's market area will continue to grow at a
rate that will generate sufficient loan demand or that, even if sufficient loan
demand exists in such market area, the Bank will have the competitive position
to gain an increasing share of the loan demand permitting the redeployment of
the net Conversion proceeds in loan products that meet the Bank's credit quality
standards.

Impact of Technological Advances

     The banking industry is undergoing rapid technological changes with
frequent introductions of new technology-driven products and services. In
addition to improving customer services, the effective use of technology
increases efficiency and enables financial institutions to reduce costs. The
Company's future success will depend, in part, on its ability to address the
needs of its customers by using technology to provide products and services that
will satisfy customer demands for convenience as well as to create additional
efficiencies in the Bank's operations. Many of the Bank's competitors have
substantially greater resources than the Bank to invest in technological
improvements. There can be no assurance that the Bank will be able to
effectively implement new technology-driven products and services or be
successful in marketing such products and services to the public.


                                       20

<PAGE>

Residential and Non-Residential Lending Risks

     The Bank has historically employed an operating strategy which emphasized
the origination of fixed-rate and, to a lesser extent, adjustable-rate one- to
four-family residential mortgage loans in the Chicago metropolitan area. At July
31, 1996, 95.6% of the Bank's gross loans were one- to four-family residential
mortgage loans secured by properties located in such area. See "Business of the
Bank -- Lending Activities." This lack of geographic diversification could have
an adverse impact on the Bank and the Bank's profitability in the event that the
Bank's lending area were to suffer a substantial economic decline or a natural
disaster, such as a flood. In addition, the profitability of the Bank's one- to
four-family residential lending business could be adversely impacted by
competitive market forces and technological advances of its competitors. See "--
Competition" and "-- Impact of Technological Advances."

     The Bank also originates, to a significantly lesser extent, multifamily
residential loans, commercial real estate loans, construction, land, and
development and other loans in its lending area. These loans are generally
considered to involve a higher degree of credit risk than one- to four-family
residential mortgage loans. This greater risk is attributable to several
factors, including the higher concentration of principal in a limited number of
loans and borrowers, the effects of general economic conditions on
income-producing properties and the increased difficulty of evaluating and
monitoring these types of loans. Furthermore, the repayment of loans secured by
multifamily residential and commercial real estate is typically dependent upon
sufficient cash flow from the related real estate project to cover operating
expenses and debt service. If the cash flow from the project is reduced (for
example, if leases are not obtained or renewed), the borrower's ability to repay
the loan may be impaired. Circumstances outside the borrower's control may
adversely affect income from the multifamily or commercial property as well as
its market value. See "Business of the Bank -- Lending Activities."

Certain Anti-Takeover Provisions

     Provisions in the Company's and the Bank's Governing Instruments. Certain
provisions of the Company's Articles of Incorporation and Bylaws, particularly a
provision limiting voting rights, and the Bank's Stock Charter and Bylaws, as
well as certain federal regulations, assist the Company in maintaining its
status as an independent publicly owned corporation. These provisions provide
for, among other things, supermajority voting on certain matters, staggered
boards of directors, noncumulative voting for directors, limits on the calling
of special meetings, certain uniform price provisions for certain business
combinations and limits on voting shares in excess of 10% of the outstanding
shares. Any person owning in excess of 10% of the outstanding shares of voting
stock will be limited to one one-hundredth (1/100) of a vote for each share of
the voting stock owned in excess of the 10% limit. The Bank's Stock Charter also
prohibits, for five years, the acquisition of, or the offer to acquire, directly
or indirectly, the beneficial ownership of more than 10% of the Bank's equity
securities. In the event that holders of revocable proxies for more than 10% of
the shares of Common Stock of the Company, acting as a group or in concert with
other proxy holders, attempt actions which could indirectly result in a change
in control of the Bank, management of the Bank may be able to assert this
provision of the Bank's Charter against such holders if it deems such assertion
to be in the best interests of the Bank, the Company and its shareholders. It is
uncertain, however, if the Bank would be successful in asserting such provisions
against such persons. These provisions in the Bank's and the Company's governing
instruments may discourage potential proxy contests and other potential takeover
attempts, particularly those which have not been negotiated with the Board of
Directors and, thus, generally may serve to perpetuate current management. See
"Restrictions on Acquisition of the Company and the Bank" and "Management of the
Bank -- Employee Severance Compensation Plan."

     Regulatory Restrictions. For three years following the Conversion, OTS
regulations will prohibit any person from acquiring or making an offer to
acquire more than 10% of the stock of the Bank or the Company, subject to
certain exceptions. In the event that any person, directly or indirectly,
violates these regulations, the securities beneficially owned by such person in
excess of 10% shall not be counted as shares entitled to


                                       21

<PAGE>

vote by any person or counted as voting shares in connection with any matters
submitted to a vote of shareholders. See "Restrictions on Acquisition of the
Company and the Bank -- Regulatory Restrictions."

     Evaluation of Offers. As permitted by Section 8.85 of the Illinois Business
Corporation Act ("IBCA"), the Articles of Incorporation of the Company further
provides that the Board of Directors of the Company, when evaluating any offer
of another "Person" (as defined therein) to (i) make a tender or exchange offer
for any outstanding equity security of the Company, (ii) merge or consolidate
the Company with another corporation or entity or (iii) purchase or otherwise
acquire all or substantially all of the properties and assets of the Company,
shall, in connection with the exercise of its judgment in determining what is in
the best interests of the Company and the shareholders of the Company, give due
consideration to all relevant factors, including, without limitation, the
possible effects of acceptance of such offer on the Company's and its
subsidiaries' customers, suppliers, borrowers and employees, and on the
communities in which the Company and its subsidiaries are located. By having
these standards in the Articles of Incorporation of the Company, the Board of
Directors may be in a stronger position to oppose such a transaction if the
Board concludes that the transaction would not be in the best interest of the
Company, even if the price offered is significantly greater than the prevailing
market price of any equity security of the Company. See "Restrictions on
Acquisition of the Company and the Bank."

     Voting Control of Officers and Directors. Directors and executive officers
of the Bank and the Company expect to purchase approximately 8.3% or 7.4% of the
shares of Common Stock to be sold in the Conversion, based upon the minimum and
the maximum of the Estimated Price Range, respectively. In addition, the ESOP
intends to purchase 8% of the Common Stock. As a result, assuming the Stock
Programs and Stock Option Plans are implemented, directors, executive officers
and employees have the potential to control the voting of approximately 29.3% of
the Company's Common Stock (based on the maximum of the Estimated Price Range),
thereby enabling them to prevent or render more difficult the approval of
transactions and other corporate actions requiring a super-majority vote of
shareholders, such as certain business combinations and the amendment of certain
charter provisions. As a result, this potential voting control may preclude
takeover attempts that certain shareholders deem to be in their best interest
and may tend to perpetuate existing management. See "Restrictions on Acquisition
of the Company and the Bank -- Restrictions in the Company's Articles of
Incorporation and Bylaws."


     Provisions in Management Contracts and Benefit Plans. Certain provisions
contained in the proposed Employment Agreements, Retention Agreements, Employee
Severance Pay Plan, the ESOP, the Stock Option Plans and the Stock Programs that
provide for cash payments or the vesting of benefits upon a change of control of
the Company or the Bank may be deemed to have an anti-takeover effect and could
result in shareholders receiving less for their shares of Common Stock than
otherwise might be available in the event of an acquisition of the Company. See
"Management of the Bank -- Employment Agreements," " -- Employee Retention
Agreements" and " -- Employee Severance Compensation Plan" and "Management of
the Bank -- Benefits -- Employee Stock Ownership Plan and Trust," " -- Stock
Option Plans" and " -- Stock Programs."

Absence of Market for Common Stock and Recent Performance of Conversion
Offerings

     The Company and the Bank have not previously issued capital stock (other
than shares issued by the Company upon incorporation), and, consequently, there
is no established market for the Common Stock at this time. The Company has
received conditional approval from the Nasdaq Stock Market to have its Common
Stock approved for quotation on the Nasdaq National Market under the symbol
"BFFC" upon completion of the Conversion. One of the requirements for continued
quotation of the Common Stock on the Nasdaq National Market is that at least two
market makers be a market maker for the Common Stock. The Company will seek to
encourage and assist at least two market makers to make a market in its Common
Stock. Hovde will assist the Company in such efforts but will not be a market
maker in the Common Stock. While


                                       22

<PAGE>

the Company anticipates that there will be other broker-dealers to act as market
maker for the Common Stock, there can be no assurance that there will be two or
more market makers for the Common Stock.

     Making a market in securities involves maintaining bid and asked quotations
and being able, as principal, to effect transactions in reasonable quantities at
those quoted prices, subject to various securities laws and other regulatory
requirements. The development of a public trading market depends upon the
existence of willing buyers and sellers, the presence of which is not within the
control of the Company, the Bank or any market maker. Accordingly, there can be
no assurance that an active and liquid trading market for the Common Stock will
develop, or, once developed, will continue, nor can there be any assurances that
purchasers of the Common Stock will be able to sell their shares at or above the
Purchase Price. The absence or discontinuance of a market for the Common Stock
may have an adverse impact on both the price and liquidity of the Common Stock.
In addition, the market prices of the common stock issued in some recent
conversions of financial institutions from mutual to stock form have decreased
below their initial offering prices. See "Market for the Common Stock."

Possible Increase in Estimated Price Range and Number of Shares Issued

     The number of shares to be sold in the Conversion may be increased as a
result of an increase in the Estimated Price Range of up to 15% to reflect
changes in market and financial conditions following the commencement of the
Subscription and Community Offerings. In the event that the Estimated Price
Range is so increased, it is expected that the Company will issue up to
2,314,375 shares of Common Stock at the Purchase Price for aggregate proceeds of
up to $23,143,750. An increase in the number of shares issued would decrease a
subscriber's pro forma net earnings per share and shareholders' equity per share
but would increase the Company's pro forma consolidated shareholders' equity and
net earnings. Such an increase would also increase the Purchase Price as a
percentage of pro forma stockholders' equity per share and net earnings per
share.

Possible Dilutive Effect of Stock Options and Stock Programs

     An amount equal to 10% of the Common Stock issued in the Conversion has
been reserved for issuance under the Stock Option Plans, the implementation of
which may be subject to the approval of the shareholders of the Company. If all
of the options were to be exercised using authorized but unissued shares of
Common Stock, the voting interests of existing shareholders would be diluted by
approximately 9.09%, and, assuming that all options were granted at the Purchase
Price, the effect on pro forma net earnings per share and stockholders' equity
per share would be as set forth under "Pro Forma Data." Also, following the
Conversion, the Stock Programs, if implemented, will acquire up to 4% of the
shares of Common Stock issued in the Conversion, either through open market
purchases, subject to OTS approval, if necessary, or from the issuance of
authorized but unissued shares. If the Stock Programs are funded by the issuance
of authorized but unissued shares, the interests of existing shareholders would
be diluted by approximately 3.85% (assuming no exercise of any options). See
"Pro Forma Data" for the effect on pro forma net earnings per share and
stockholders' equity per share. If the Stock Programs are funded by open market
purchases, the voting interests of existing shareholders would not be diluted,
and, assuming that the shares were acquired at the Purchase Price, the effect on
pro forma net earnings per share and holders' equity per share would be as set
forth under "Pro Forma Data."

Possible Adverse Income Tax Consequences of the Distribution of Subscription
Rights

     The Bank has received an opinion from Capital Resources that subscription
rights granted to Eligible Account Holders, Supplemental Eligible Account
Holders, Other Members and Bank Employees have no value. However, this opinion
is not binding on the Internal Revenue Service (the "IRS"). If the subscription
rights granted to Eligible Account Holders, Supplemental Eligible Account
Holders, Other Members or Bank Employees are deemed to have an ascertainable
value, such Eligible Account Holders, Supplemental Eligible


                                       23

<PAGE>

Account Holders, Other Members or Bank Employees could be taxed upon the receipt
or exercise of the subscription rights in an amount equal to such value.
Additionally, the Bank could recognize a gain for tax purposes on such
distribution. Whether subscription rights are considered to have ascertainable
value is an inherently factual determination. See "The Conversion -- Effects of
Conversion" and "-- Effects of Conversion -- Tax Aspects."

Financial Institution Regulation and Possible Legislation

     The Bank is subject to extensive regulation and supervision as a federally
chartered savings bank. The regulatory authorities have extensive discretion in
connection with their supervision and enforcement activities and their
examination policies, including the imposition of restrictions on the operation
of a savings institution, the classification of assets by an institution and the
imposition of an increase in a savings institution's allowance for loan losses.
In addition, the Company, as a savings association holding company, will be
subject to extensive regulation and supervision. Any change in the regulatory
structure or the applicable statutes or regulations, whether by the OTS, the
FDIC or the Congress, could have a material impact on the Company, the Bank, its
operations and the Bank's Conversion. See "Regulation."

     Congress has considered various proposals to consolidate and reorganize the
regulatory functions of the four federal banking agencies: the OTS, the FDIC,
the Office of the Comptroller of the Currency (the "OCC") and the Board of
Governors of the Federal Reserve System. Legislation has also been introduced
that would limit the activities of unitary savings association holding companies
to those permitted to be engaged in by multiple savings association holding
companies. See "Regulation -- Regulation of Savings Association Holding
Companies." The outcome of efforts to effect regulatory consolidation and
reorganization and to change the permitted activities of holding companies is
uncertain. Therefore, the Bank is unable to determine the extent to which such
legislation, if enacted, would affect its business.

Risk of Delayed Offering

     The successful consummation of the Offerings will depend, in part, upon
market conditions at the time of the Offerings, both generally and with respect
to the Common Stock, and upon the operating results of the Bank. In the event
that following completion of the Subscription and Community Offerings, various
factors (including the market demand for the Common Stock as reflected by the
level of subscriptions received in such Offerings) result in the estimated pro
forma market value of the Common Stock (as determined by Capital Resources)
being outside the Estimated Price Range, a resolicitation of subscribers would
likely be required, which would delay completion of the Conversion. Developments
other than market conditions could also delay the Conversion; however,
management is currently unaware of any such developments.

     OTS regulations require the Conversion to be completed within 45 days after
the completion of the Subscription and Community Offerings. Such 45-day period
may be extended with the approval of the OTS for a period of up to 24 months
after the date of approval of the Plan of Conversion by the Bank's members. In
the event that the Bank and the Company determine that economic conditions
generally, the market for publicly traded thrift institution stocks, the
operating results of the Bank or other factors make a sale of the Common Stock
undesirable, then the Conversion may be delayed until such conditions improve,
subject to any necessary OTS approval. A material delay in the completion of the
Conversion may result in a significant increase in the costs of the Conversion.
In addition, significant changes in the operations and financial condition of
the Bank or the Company, the aggregate market value of the shares to be issued
in the Conversion or general market conditions may occur during any such
material delay.


                                       24

<PAGE>

                            BIG FOOT FINANCIAL CORP.

     The Company was recently organized at the direction of the Board of
Directors of the Bank for the purpose of acquiring all of the capital stock to
be issued by the Bank in the Conversion. The Company has received approval from
the OTS to become a savings association holding company and, as such, will be
subject to regulation by the OTS. See "The Conversion -- General." After
completion of the Conversion, the Company will conduct business initially as a
unitary savings association holding company. See "Regulation -- Regulation of
Savings Association Holding Companies." Upon consummation of the Conversion, the
Company's assets will consist of all of the outstanding shares of the Bank's
capital stock issued to the Company in the Conversion and 50% of the net
proceeds of the Offerings. The Company intends to use part of the retained net
proceeds to make a loan directly to the ESOP to enable the ESOP to purchase 8%
of the Common Stock in the Conversion. The Company will have no significant
liabilities. See "Use of Proceeds." The management of the Company is set forth
under "Management of the Company." Initially, with the exception of a commercial
parcel to be acquired from the Bank (see "Business of the Bank -- Real Estate
Investment"), the Company will neither own nor lease any property but will
instead use the premises and equipment of the Bank. At the present time, the
Company does not intend to employ any persons other than officers but will
utilize the support staff of the Bank from time to time. Additional employees
will be hired as appropriate to the extent the Company expands its business in
the future. See "Business of the Company."

     Management believes that the holding company structure will provide the
Company with additional flexibility to diversify its business activities, should
it decide to do so, through existing or newly-formed subsidiaries, or through
acquisitions of other financial institutions and financial services related
companies. Although there are no current arrangements, understandings or
agreements, written or oral, regarding any such opportunities or transactions,
the Company will be in a position after the Conversion, subject to regulatory
limitations and the Company's financial position, to take advantage of any such
acquisition and expansion opportunities that may arise. The initial activities
of the Company are anticipated to be funded by the Conversion proceeds retained
by the Company and earnings thereon or, alternatively, through dividends from
the Bank.

     The Company's office is located at the main office of the Bank at 1190 RFD
(the intersection of Old McHenry Road and Route 83), Long Grove, Illinois
60047-7304. The Company's telephone number is (847) 634-2100.

                         FAIRFIELD SAVINGS BANK, F.S.B.

     Fairfield Savings Bank, F.S.B. was originally founded in 1901 as an
Illinois state chartered mutual savings and loan association. On July 1, 1991,
the Bank converted to a federally chartered savings bank. The Bank is a
community-oriented financial institution providing a variety of financial
services to meet the needs of the communities which it serves. The Bank conducts
business from its headquarters in Long Grove, Illinois and its two branches in
Chicago and Norridge, Illinois. The Bank gathers savings deposits primarily from
the communities and neighborhoods in close proximity to its offices. The Bank's
lending area is larger, and includes Cook, DuPage and Lake counties located in
Illinois. The majority of the Bank's mortgages are secured by properties located
in its lending area. See "Business of the Bank -- Market Area" and " --
Competition."

     The Bank's principal business consists of gathering savings deposits from
the general public within its market area and investing those savings deposits
primarily in one- to four-family residential mortgage loans, mortgage-backed
securities and obligations of the U.S. Government. To a lesser extent, the Bank
makes multifamily residential loans, commercial real estate loans, land,
construction and development loans, consumer loans (including loans secured by
savings deposits and home improvement loans) and commercial


                                       25

<PAGE>

lines of credit. At July 31, 1996, the Bank had total assets of $194.6 million,
of which $79.1 million was comprised of loans receivable and $102.4 million was
comprised of mortgage-backed securities. At such date, total savings deposits
were $137.2 million, borrowings were $39.9 million and retained earnings were
$13.6 million. The Bank's savings deposits are insured up to the maximum
allowable amount by the SAIF. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business of the Bank."

     The Bank is subject to extensive regulation, supervision and examination by
the OTS, its primary regulator, and the FDIC, which insures its savings
deposits. At July 31, 1996, the Bank exceeded all regulatory capital
requirements with tangible, core and risk-based capital ratios of 7.35%, 7.35%
and 21.59%, respectively. Additionally, the Bank's regulatory capital was in
excess of the amount necessary to be "well-capitalized" under FDICIA. See
"Regulation -- Regulation of Federal Savings Associations." The Bank is a member
of the FHLB of Chicago, which is one of the 12 regional banks which comprise the
Federal Home Loan Bank system.

     The Bank's main office is located at 1190 RFD (the intersection of Old
McHenry Road and Route 83), Long Grove, Illinois 60047-7304. The Bank's
telephone number is (847) 634-2100.


                                       26

<PAGE>

                                 USE OF PROCEEDS

     Although the actual net proceeds from the sale of the Common Stock cannot
be determined until the Conversion is completed, it is presently anticipated
that the net proceeds from the sale of the Common Stock will be between $13.9
million and $19.1 million (or $22.1 million if the Estimated Price Range is
increased by 15%). See "Pro Forma Data" and "The Conversion -- Stock Pricing" as
to the assumptions used to arrive at such amounts. The Company will be unable to
utilize any of the net proceeds of the Offerings until the close of the
Offerings.

     The Company will use the net proceeds from the sale of Common Stock as
follows:

     1. The Company will purchase all of the capital stock of the Bank to be
issued upon Conversion in exchange for 50% of the net proceeds.

     2. The remaining net proceeds will be retained by the Company. Net proceeds
to be retained by the Company after the purchase of the capital stock of the
Bank are estimated to be between $7.0 million and $9.6 million (or $11.0 million
if the Estimated Price Range is increased by 15%). The net proceeds retained by
the Company will initially be invested primarily in federal funds, government
and federal agency mortgage-backed securities, other debt securities, high-grade
short-term marketable securities, deposits of or loans to the Bank, or a
combination thereof, and will be used for general business activities. In
addition, the Company intends to purchase for approximately $262,000 a certain
commercial parcel of land from the Bank. See "Business of the Bank -- Real
Estate Investment."

     3. The Company intends to use a portion of the retained net proceeds to
make a loan directly to the ESOP to enable the ESOP to purchase 8% of the Common
Stock in the Conversion. Based upon the issuance of 1,487,500 shares or
2,012,500 shares at the minimum and maximum of the Estimated Price Range, the
amount of the loan to the ESOP (if the loan is made by the Company and not a
third party) would be $1.2 million or $1.6 million, respectively (or $1.9
million if the Estimated Price Range is increased by 15%), to be repaid over a
period of up to 10 years at an interest rate of 8%. See "Management of the Bank
- -- Benefits -- Employee Stock Ownership Plan and Trust."

     The portion of the net proceeds received by the Bank from the Company's
purchase of the capital stock of the Bank, estimated to be between $7.0 million
at the minimum of the Estimated Price Range and $9.6 million at the maximum of
the Estimated Price Range, will be added to the Bank's general funds to be used
for general corporate purposes, including investment in one- to four-family
residential mortgage loans and other loans which will provide affordable home
financing opportunities to the community; investment in federal funds,
short-term, investment grade marketable securities and mortgage-backed
securities; and to fund the Stock Programs. The Bank may also use such funds for
the expansion of its facilities, and to expand operations through acquisitions
of other financial institutions, branch offices or other financial services
companies. The Bank has no current agreements, arrangements or understanding
regarding any such establishment or acquisition, or any other transaction
related to the possible expansion of its operations.

     The net proceeds retained by the Company may also be used to support the
future expansion of the Bank's operations through branch acquisitions and the
acquisition of other financial institutions or diversification into other
banking related businesses and for other business or investment purposes,
including possibly the payment of dividends and the repurchase of the Company's
Common Stock as permitted by the OTS. See "Dividend Policy" and "Regulation --
Regulation of Federal Savings Associations -- Limitation on Capital
Distributions." The Company has no current arrangements, understandings or
agreements, written or oral, regarding any such transactions. The Company is
subject to the terms of a certification made to and required by the OTS in
connection with the application to the OTS for approval of the Conversion, which
certification prohibits the Company from taking any actions to further any
payments to its shareholders through a return of excess capital for a period of
one year following the Conversion without the prior written


                                       27

<PAGE>

consent of the OTS. The certification expressly does not apply to taxable
dividend payments made by the Company or to dividend payments made by the Bank
to the Company. See "Dividend Policy." The Company, upon completion of the
Conversion, will be a unitary savings association holding company, which under
existing laws generally would not be restricted as to the types of business
activities in which it may engage, so long as the Bank continues to be a
qualified thrift lender ("QTL"). See "Regulation -- Regulation of Savings
Association Holding Companies" for a description of certain regulations
applicable to the Company. In determining the amount of net proceeds to be used
to purchase the capital stock of the Bank, consideration was given to such
factors as the regulatory capital position of the Bank, both before and after
giving effect to the Conversion, and the rules and regulations and policies of
the OTS governing the amount of proceeds which may be retained by the Company.

     Upon completion of the Conversion, the Company's Board of Directors will
have the authority to adopt stock repurchase plans, subject to statutory and
regulatory requirements. Based upon facts and circumstances which may arise
following the Conversion and subject to applicable regulatory requirements, the
Company's Board of Directors may determine to repurchase stock in the future.
Such facts and circumstances may include: (i) market and economic factors such
as the price at which the stock is trading in the market, the volume of trading,
the attractiveness of other investment alternatives in terms of the rate of
return and risk involved in the investment, the ability to increase the book
value and/or earnings per share of the remaining outstanding shares and
improvement in the Company's return on equity; (ii) the avoidance of dilution to
shareholders by not having to issue additional shares to cover the exercise of
stock options or to fund employee stock benefit plans; and (iii) any other
circumstances in which repurchases would be in the best interests of the Company
and its shareholders. In the event the Company determines to repurchase stock,
such repurchases may be made at market prices which may be in excess of the
Purchase Price in the Conversion.

     Any stock repurchases will be subject to the determination of the Company's
Board of Directors that both the Company and the Bank will be capitalized in
excess of all applicable regulatory requirements after any such repurchases and
that such capital will be adequate, taking into account, among other things, the
level of non-performing and other risk assets, the Company's and the Bank's
current and projected results of operations and asset/liability structure, the
economic environment and tax and other considerations. In addition, applicable
OTS regulations generally prohibit the Company from repurchasing its own stock
for a period of one year following the Conversion. Any stock repurchases by the
Company during the two years thereafter are subject to OTS approval and
generally are required to be part of an open market program not involving
greater than 5% of the outstanding Common Stock during any twelve-month period.
However, the OTS Regional Directors have the authority to approve stock
repurchases during the first three years after the Conversion that are in excess
of these limits. See "The Conversion -- Certain Restrictions on Purchase or
Transfer of Shares After Conversion."

     Upon completion of the Conversion, the Company's Board of Directors of the
Company will have the authority to declare dividends on the Common Stock. The
Board of Directors does not presently intend to declare dividends on the Common
Stock but may do so in the future. The payment of dividends or repurchase of
stock, however, would be prohibited if stockholders' equity would be reduced
below the amount required to maintain the Bank's "liquidation account." See
"Dividend Policy," "The Conversion -- Certain Restrictions on Purchase or
Transfer of Shares After Conversion" and "-- Effects of Conversion --
Liquidation Rights."

     Neither the Bank nor the Company has yet determined the approximate amount
of net proceeds to be used for each of the purposes mentioned above.


                                       28

<PAGE>

                                 DIVIDEND POLICY

     Upon completion of the Conversion, the Board of Directors of the Company
will have the authority to declare dividends on the Common Stock. The Board of
Directors does not presently intend to declare dividends on the Common Stock. In
the future, declarations of dividends by the Board of Directors, if any, will
depend upon a number of factors, including the amount of net proceeds retained
by the Company in the Conversion, investment opportunities available to the
Company or the Bank, capital requirements, regulatory limitations, the Company's
and the Bank's financial condition, results of operations, tax considerations,
general economic conditions, industry standards and other factors. No assurances
can be given, however, that any dividends will be paid or, if payment is
commenced, will continue to be paid.

     As the principal asset of the Company, the Bank will provide the principal
source of funds for payment of dividends by the Company. The Bank will not be
permitted to pay dividends on its capital stock if, among other things, its
holders' equity would be reduced below the amount required for the liquidation
account. See "The Conversion -- Effects of Conversion -- Liquidation Rights" and
"Regulation." For information concerning federal regulations which apply to the
Bank in determining the amount of proceeds which may be retained by the Company
and regarding a savings institution's ability to make capital distributions
including payment of dividends to its holding company, see "Regulation --
Regulation of Federal Savings Associations -- Limitation on Capital
Distributions" and "Federal and State Taxation -- Federal Taxation --
Distributions." Assuming the shares of Common Stock are sold at the maximum of
the Estimated Price Range, at July 31, 1996, after giving pro forma effect to
(i) the Conversion and related expenses, (ii) the deduction from capital of the
amount expected to be borrowed by the ESOP and the cost of shares of Common
Stock to be acquired by the Stock Programs and (iii) the retention by the Bank
of 50% of the net proceeds of the Conversion, the Bank would be permitted to
make capital distributions of up to approximately $_____ million to the Company
without prior OTS approval.

     Unlike the Bank, the Company is not subject to OTS regulatory restrictions
on the payment of dividends to its shareholders, although the source of such
dividends will be dependent on the net proceeds retained by the Company and
earnings thereon and may be dependent, in part, upon dividends from the Bank.
The Company is subject, however, to the requirements of Illinois law, which
generally prohibits dividends that would cause the net assets of the Company
(the amount by which total assets exceed total liabilities) to be less than zero
or less than the maximum amount payable at the time of the dividend to
shareholders having preferential rights in liquidation if the corporation were
then to be liquidated.


                                       29

<PAGE>

                           MARKET FOR THE COMMON STOCK

     The Company and the Bank have not previously issued capital stock (other
than shares issued by the Company upon incorporation), and, consequently, there
is currently no established market for the Common Stock. The Company has
received conditional approval from the Nasdaq National Market to have its Common
Stock quoted under the symbol "BFFC" upon completion of the Conversion. One of
the requirements for continued quotation of the Common Stock on the Nasdaq
National Market is that there be at least two market makers for the Common
Stock. The Company will seek to encourage and assist at least two market makers
to make a market in its Common Stock. Making a market involves maintaining bid
and asked quotations and being able, as principal, to effect transactions in
reasonable quantities at those quoted prices, subject to various securities laws
and other regulatory requirements. Hovde will assist the Company in such efforts
but will not be a market maker in the Common Stock. While the Company
anticipates that there will be other broker-dealers to act as market maker for
the Common Stock, there can be no assurance that there will be two or more
market makers for the Common Stock. Additionally, the development of a liquid
public market depends on the existence of willing buyers and sellers, the
presence of which is not within the control of the Company, the Bank or any
market maker. The number of active buyers and sellers of the Common Stock at any
particular time may be limited. Under such circumstances, investors in the
Common Stock could have difficulty disposing of their shares on short notice and
should not view the Common Stock as a short-term investment. There can be no
assurance that an active and liquid trading market for the Common Stock will
develop or that, if developed, it will continue, nor is there any assurance that
persons purchasing shares will be able to sell them at or above the Purchase
Price or that quotations will be available on the Nasdaq National Market as
contemplated.


                                       30

<PAGE>

                          REGULATORY CAPITAL COMPLIANCE

     At July 31, 1996, the Bank exceeded all regulatory capital requirements.
See "Regulation -- Regulation of Federal Savings Associations -- Capital
Requirements." Set forth below is a summary of the Bank's compliance with
regulatory capital standards at July 31, 1996, on a historical and pro forma
basis assuming that the indicated number of shares were sold as of such date and
receipt by the Bank of 50% of net conversion proceeds. For purposes of the table
below, the amount expected to be borrowed by the ESOP and the cost of the shares
expected to be acquired by the Stock Programs are deducted from pro forma
regulatory capital.

<TABLE>
<CAPTION>
                                                                     Pro Forma at July 31, 1996 Based On (1)
                                           -----------------------------------------------------------------------------------------
                                                                                                                  2,314,375 Shares
                                              1,487,500 Shares       1,750,000 Shares       2,012,500 Shares         (15% above
                         Historical at     (Minimum of Estimated  (Midpoint of Estimated  Maximum of Estimated  Maximum of Estimated
                         July 31, 1996          Price Range)          Price Range)(2)         Price Range)        Price Range)(2)
                       ------------------  ---------------------- ---------------------- ---------------------  -------------------
                               Percent of              Percent             Percent of               Percent              Percent of
                       Amount   Assets(3)  Amount    of Assets(3)  Amount   Assets(3)     Amount  of Assets(3)  Amount    Assets(3)
                       ------   ---------  ------    ------------  ------   ---------     ------  ------------  ------    ---------
                                                                   (Dollars in thousands)
                                                                                         
<S>                    <C>       <C>       <C>         <C>         <C>       <C>         <C>         <C>        <C>         <C>   
GAAP Capital (4) ..... $13,579    6.98%    $18,756      9.39%      $19,733    9.83 %     $20,709     10.26%     $21,831     10.76%
                       =======   =====     =======     =====       =======   =====       =======     =====      =======     ===== 
Tangible Capital(4):                                                                                          
   Capital level ..... $14,386    7.35%    $19,563      9.73%      $20,540   10.17%      $21,516     10.61%     $22,638     11.10%
   Requirement .......   2,936    1.50       3,014      1.50         3,028    1.50         3,043      1.50        3,060      1.50
                       -------   -----     -------     -----       -------   -----       -------     -----      -------     ----- 
   Excess ............ $11,450    5.85%    $16,549      8.23%      $17,512    8.67%      $18,473      9.11%     $19,578      9.60%
                       =======   =====     =======     =====       =======   =====       =======     =====      =======     ===== 
Core Capital(4):                                                                                              
   Capital level ..... $14,386    7.35%    $19,563      9.73%      $20,540   10.17%      $21,516     10.61%     $22,638     11.10%
   Requirement .......   5,872    3.00       6,027      3.00         6,057    3.00         6,086      3.00        6,120      3.00
                       -------   -----     -------     -----       -------   -----       -------     -----      -------     ----- 
   Excess ............ $ 8,514    4.35%    $13,536      6.73%      $14,483    7.17%      $15,430      7.61%     $16,518      8.10%
                       =======   =====     =======     =====       =======   =====       =======     =====      =======     ===== 
Risk-Based Capital(4):                                                                                        
   Capital level ..... $14,686   21.59%    $19,863     28.13%      $20,840   29.32%      $21,816     30.48%     $22,938     31.80%
   Requirement(5) ....   5,441    8.00       5,648      8.00         5,687    8.00         5,726      8.00        5,771      8.00
                       -------   -----     -------     -----       -------   -----       -------     -----      -------     ----- 
   Excess ............ $ 9,245   13.59     $14,215     20.13%      $15,153   21.32%      $16,090     22.48%     $17,167     23.80%
                       =======   =====     =======     =====       =======   =====       =======     =====      =======     ===== 
</TABLE>

- ----------
(1)  Pro forma capital levels assume receipt by the Bank of 50% of the net
     proceeds of the Conversion at th e minimum, midpoint, maximum and 15% above
     the maximum of the Estimat ed Price Range. These levels also assume funding
     by the Bank of th e Stock Programs, the ESOP purchase and repayment of the
     Company's l=oan to the ESOP at the minimum, midpoint, maximum and 15% above
     the maximum of the range. No effect has been given to the possible issuance
     of up to 10% of the issued Common Stock at the minimum, midpoint, maximum
     and 15% above the maximum of the range pursuant to the Stock Option Plans,
     which are expected to be adopted by the Company following the Conversion,
     and which, if implemented prior to the first anniversary of the Conversion,
     will require approval at a meeting of shareholders to be held no earlier
     than six months after the completion of the Conversion.
(2)  As adjusted to give effect to an increase in the number of shares which
     could occur due to an increase in the Estimated Price Range of up to 15% to
     reflect changes in market or general financial and economic conditions
     following the commencement of the Subscription and Community Offerings.
(3)  Tangible capital and core capital levels are shown as a percentage of total
     tangible assets. Risk-based capital levels are shown as a percentage of
     risk-weighted assets.
(4)  The difference between capital under generally accepted accounting
     principles ("GAAP") and regulatory tangible and core capital is an
     adjustment to GAAP capital by the amount of the net unrealized gain/loss,
     if any, on available-for-sale securities recognized only for GAAP purposes,
     as well as adjustments related to certain real estate investments.
     Regulatory risk-based capital reflects these adjustments plus the inclusion
     of the allowance for loan losses. See "Regulation -- Regulation of Federal
     Savings Associations -- Capital Requirements."
(5)  The current OTS total risk-based capital requirement is 8.0% of
     risk-weighted assets. Assumes net proceeds are invested in assets that
     carry a 50% risk- weighting.


                                       31

<PAGE>

                                 CAPITALIZATION

     The following table presents the historical capitalization of the Bank at
July 31, 1996, and the pro forma consolidated capitalization of the Company
after giving effect to the Conversion, based upon the sale of the number of
shares indicated in the table and the other assumptions set forth under "Pro
Forma Data."

<TABLE>
<CAPTION>
                                                                                     Company Consolidated Pro Forma
                                                                                Capitalization Based On $10.00 Per Share
                                                                     ---------------------------------------------------------------
                                                                                                                       2,314,375
                                                                      1,487,500        1,750,000       2,012,500        Shares
                                                                        Shares           Shares          Shares        (15% above
                                                                     (Minimum of     (Midpoint of    (Maximum of       Maximum of
                                                         Bank         Estimated        Estimated       Estimated       Estimated
                                                      Historical     Price Range)     Price Range)    Price Range)   Price Range)(1)
                                                      ----------     ------------     ------------    ------------   ---------------
                                                                                    (In thousands)
<S>                                                   <C>             <C>              <C>              <C>              <C>      
Savings deposits(2).................................. $ 137,177       $ 137,177        $ 137,177        $ 137,177      $ 137,177
Borrowed money.......................................    39,900          39,900           39,900           39,900         39,900
                                                      ---------       ---------        ---------        ---------      ---------
Total savings deposits and borrowed money............ $ 177,077       $ 177,077        $ 177,077        $ 177,077      $ 177,077
                                                      =========       =========        =========        =========      =========
Stockholders' equity:                                                                                                 
  Preferred Stock, $.01 par value, 2,000,000                                                                          
    shares authorized; none to be issued............. $      --       $      --        $      --        $      --      $      --
  Common Stock, $.01 par value, 8,000,000                                                                             
    shares authorized; shares to be issued                                                                            
    as reflected.....................................                                                                 
                                                             --              15               18               20             23
  Excess Common Stock, $.01 par value,                                                                                
  7,200,000 shares authorized; none to be issued.....        --              --               --               --             --
  Additional paid-in capital(3)(4)...................        --          13,909           16,489           19,070         22,037
  Retained earnings, substantially restricted(5).....    14,648          14,648           14,648           14,648         14,648
  Unrealized loss on securities available-for-sale,                                                                   
    net of tax.......................................    (1,069)         (1,069)          (1,069)          (1,069)        (1,069)
Less:                                                                                                                 
  Common Stock acquired by the ESOP(6)...............        --          (1,190)          (1,400)          (1,610)        (1,852)
  Common Stock acquired by the Stock                                                                                  
    Programs(7)......................................        --            (595)            (700)            (805)          (926)
                                                      ---------       ---------        ---------        ---------      ---------
Total stockholders' equity........................... $  13,579       $  25,718        $  27,986        $  30,254      $  32,861
                                                      =========       =========        =========      =========      =========
</TABLE>

- ----------
(1)  As adjusted to give effect to an increase in the number of shares which
     could occur due to an increase in the Estimated Price Range of up to 15% to
     reflect changes in market and financial and economic conditions following
     the commencement of the Subscription and Community Offerings.
(2)  Does not reflect withdrawals from savings deposit accounts for the purchase
     of Common Stock in the Conversion. Such withdrawals would reduce pro forma
     savings deposits by the amount withdrawn.
(3)  No effect has been given to the issuance of additional shares of Common
     Stock pursuant to the Company's Stock Option Plans which, if implemented by
     the Company prior to the first anniversary of the Conversion, will be
     presented for approval by shareholders at a meeting of shareholders to be
     held no earlier than six months following the completion of the Conversion.
     If implemented, an amount equal to 10% of the shares of Common Stock issued
     in the Conversion will be reserved for issuance upon the exercise of
     options to be granted under the Stock Option Plans. See "Management of the
     Bank -- Benefits -- Stock Option Plans."
(4)  Amount shown net of expected conversion expenses of approximately $951,000,
     $993,000, $1,035,000, and $1,084,000, respectively, under the issuance of
     1,487,500 shares, 1,750,000 shares, 2,012,500 shares and 2,314,375 shares.
(5)  The retained earnings of the Bank will continue to be substantially
     restricted after the Conversion. See "The Conversion -- Effects of
     Conversion -- Liquidation Rights" and "Regulation -- Regulation of Federal
     Savings Associations -- Limitation on Capital Distributions."
(6)  Assumes that 8% of the shares offered for sale in the Conversion will be
     purchased by the ESOP and that the funds used to acquire such shares will
     be borrowed from the Company. The Common Stock acquired by the ESOP is
     reflected as a reduction of stockholders' equity. See "Management of the
     Bank -- Executive Compensation" and "Management of the Bank -- Benefits --
     Employee Stock Ownership Plan and Trust."
(7)  Assumes that an amount equal to 4% of the shares of the Common Stock issued
     in the Conversion will be purchased by the Stock Programs subsequent to the
     Conversion through open market purchases. The Common Stock purchased by the
     Stock Programs is reflected as a reduction of stockholders' equity.
     Implementation of the Stock Programs prior to the first anniversary of the
     Conversion would be subject to the approval of the Company's shareholders
     to be obtained at a meeting of shareholders to be held no earlier than six
     months following the completion of the Conversion. See "Management of the
     Bank -- Benefits -- Stock Programs" and "Pro Forma Data" regarding the
     dilutive effect of the Stock Programs.


                                       32

<PAGE>

                                 PRO FORMA DATA

     The actual net proceeds from the sale of the Common Stock cannot be
determined until the Conversion is completed. However, net proceeds are
currently estimated to be between $13.9 million and $19.1 million (or $22.1
million in the event the Estimated Price Range is increased by 15%) based upon
the following assumptions: (i) 100% of the shares of Common Stock will be sold
in the Subscription Offering, as follows: (a) 8% will be sold to the ESOP and
220,500 shares will be sold to directors, officers and employees or members of
such persons' immediate families; and (b) the remainder will be sold to Eligible
Account Holders, Supplemental Eligible Account Holders, Other Members and Bank
Employees in the Subscription Offering; (ii) Hovde will receive a fee equal to
1.75% of the aggregate actual purchase price of the shares sold to Eligible
Account Holders, Supplemental Eligible Account Holders and Other Members in the
Subscription Offering, excluding shares purchased by directors, officers,
employees and their families and the ESOP for which there is no fee; (iii) no
shares are sold in the Community Offering or the Syndicated Community Offering;
and (iv) Conversion expenses, excluding the fees paid to Hovde, will be
approximately $750,000. Actual Conversion expenses may vary from these
estimates.

     Pro forma net earnings have been calculated assuming the Common Stock had
been sold at the beginning of the periods and the net proceeds had been invested
at an average yield of 5.80% for the year ended July 31, 1996, the one year
treasury note rate. The pro-forma after-tax yield is assumed to be 3.82% for
this period, based on an effective tax rate of 34.1% for such period. The effect
of withdrawals from savings deposit accounts for the purchase of Common Stock
has not been reflected. Historical and pro forma per share amounts have been
calculated by dividing historical and pro forma amounts by the indicated number
of shares of Common Stock, as adjusted (in the case of pro forma net earnings
per share) to give effect to the purchase of shares by the ESOP. Pro forma
stockholders' equity amounts have been calculated as if the Common Stock had
been sold on July 31, 1996, and, accordingly, no effect has been given to the
assumed earnings effect of the transactions.

     The following pro forma information may not be representative of the
financial effects of the foregoing transactions at the dates on which such
transactions actually occur and should not be taken as indicative of future
results of operations. Pro forma consolidated stockholders' equity represents
the difference between the projected amount of assets and liabilities of the
Company computed in accordance with GAAP. The pro forma stockholders' equity is
not intended to represent the fair market value of the Common Stock and may be
greater than amounts that would be available for distribution to shareholders in
the event of liquidation.

     The following tables summarize historical data of the Bank and pro forma
data of the Company at or for the fiscal year ended July 31, 1996 based on the
assumptions set forth above and in the tables and should not be used as a basis
for projections of market value of the Common Stock following the Conversion.
The tables below give effect to the Stock Programs, which are expected to be
adopted by the Company following the Conversion and which, if implemented prior
to the first anniversary of the Conversion, will be presented to shareholders
for approval at a meeting of shareholders to be held no earlier than six months
after completion of the Conversion. See footnote 3 to the tables. No effect has
been given in the tables to the possible issuance of additional shares reserved
for future issuance pursuant to the Stock Option Plans to be adopted by the
Board of Directors of the Company, nor does book value give any effect to the
liquidation account to be established for the benefit of Eligible Account
Holders and Supplemental Eligible Account Holders or the bad debt reserve in
liquidation. See footnote 4 to the tables below and "The Conversion -- Effects
of Conversion -- Liquidation Rights" and "Management of the Bank -- Benefits --
Stock Option Plans."


                                       33

<PAGE>

<TABLE>
<CAPTION>
                                                                        At or For the Year Ended July 31, 1996
                                                              ------------------------------------------------------------
                                                               1,487,500       1,750,000      2,012,500        2,314,375
                                                              Shares Sold     Shares Sold    Shares Sold      Shares Sold
                                                               at $10.00       at $10.00      at $10.00      at $10.00 Per
                                                               Per Share       Per Share      Per Share       Share (15%
                                                               (Minimum        (Midpoint      (Maximum       above Maximum
                                                               of Range)       of Range)      of Range)      of Range)(1)
                                                               ---------       ---------      ---------      ------------
                                                                   (In thousands, except shares and per share amounts)
<S>                                                           <C>             <C>            <C>             <C>        
Gross proceeds ............................................   $    14,875     $    17,500    $    20,125     $    23,144
Less offering expenses and commissions ....................          (951)           (993)        (1,035)         (1,084)
                                                              -----------     -----------    -----------     -----------
Estimated net proceeds ....................................        13,924          16,507         19,090          22,060
Less:  Common Stock purchased by ESOP (2) .................        (1,190)         (1,400)        (1,610)         (1,852)
       Common Stock purchased by Stock Programs (3) .......          (595)           (700)          (805)           (926)
                                                              -----------     -----------    -----------     -----------
Estimated net proceeds, as adjusted .......................   $    12,139     $    14,407    $    16,675     $    19,282
                                                              ===========     ===========    ===========     ===========
Net earnings:
   Historical .............................................   $       226     $       226    $       226     $       226
   Pro forma net earnings on net proceeds .................           463             550            637             737
   Pro forma ESOP adjustment (2) ..........................           (78)            (92)          (106)           (122)
   Pro forma Stock Programs adjustment (3) ................           (78)            (92)          (106)           (122)
                                                              -----------     -----------    -----------     -----------
      Pro forma net earnings ..............................   $       533     $       592    $       651     $       719
                                                              -----------     -----------    -----------     -----------
Per share net earnings:
   Historical .............................................   $      0.16     $      0.14    $      0.12     $      0.11
   Pro forma net earnings on net proceeds .................          0.34            0.34           0.34            0.34
   Pro forma ESOP adjustment (2) ..........................         (0.06)          (0.06)         (0.06)          (0.06)
   Pro forma Stock Programs adjustment (3) ................         (0.05)          (0.05)         (0.05)          (0.06)
                                                              -----------     -----------    -----------     -----------
   Pro forma net earnings per share (4) ...................   $      0.39     $      0.37    $      0.35     $      0.33
                                                              ===========     ===========    ===========     ===========
   Shares used in calculation (2) .........................     1,380,000       1,624,000      1,868,000       2,148,000
Stockholders' equity:
   Historical .............................................   $    13,579     $    13,579    $    13,579     $    13,579
   Estimated net proceeds .................................        13,924          16,507         19,090          22,060
   Less:  Common Stock acquired by ESOP (2) ...............        (1,190)         (1,400)        (1,610)         (1,852)
          Common Stock acquired by Stock Programs (3) .....          (595)           (700)          (805)           (926)
                                                              -----------     -----------    -----------     -----------
   Pro forma stockholders' equity (2)(3)(4)(5) ............   $    25,718     $    27,986    $    30,254     $    32,861
                                                              ===========     ===========    ===========     ===========
Stockholders' equity per share: (3)
   Historical .............................................   $      9.13     $      7.76    $      6.75     $      5.87
   Estimated net proceeds .................................          9.36            9.43           9.48            9.53
   Less:  Common Stock acquired by ESOP (1) ...............         (0.80)          (0.80)         (0.80)          (0.80)
          Common Stock acquired by Stock Programs (3) .....         (0.40)          (0.40)         (0.40)          (0.40)
                                                              -----------     -----------    -----------     -----------
   Pro forma stockholders' equity per share (1)(2)(3)(4) ..   $     17.29     $     15.99    $     15.03     $     14.20
                                                              ===========     ===========    ===========     ===========
Shares used in calculation (2) ............................     1,487,500       1,750,000      2,012,500       2,314,375
Offering price as percentage of pro forma stockholders'
   equity per share .......................................         57.84%          62.54          66.53%          70.42%
                                                              ===========     ===========    ===========     ===========
Offering price to pro forma net earnings per share ........         25.64x          27.03x         28.57x          30.30x
                                                              ===========     ===========    ===========     ===========
</TABLE>

                                                       (Notes on following page)


                                       34

<PAGE>

(1)  As adjusted to give effect to an increase of up to 15% in the number of
     shares offered to reflect possible changes in market and financial
     conditions following the commencement of the Subscription Offering.

(2)  It is assumed that 8% of the shares of Common Stock offered in the
     Conversion will be purchased by the ESOP. The funds used to acquire such
     shares are expected to be borrowed by the ESOP from the net Conversion
     proceeds retained by the Company. The Bank intends to make contributions to
     the ESOP in amounts at least equal to the principal and interest
     requirement of the debt. The Bank's payment of the ESOP debt is based upon
     equal principal installments plus interest over a 10-year period. Assuming
     the Company makes the ESOP loan, interest income earned by the Company on
     the ESOP debt will offset the interest paid by the Bank. Accordingly, only
     the principal payments on the ESOP debt are recorded as an expense
     (tax-effected) to the Company on a consolidated basis. The amount of ESOP
     debt is reflected as a reduction to stockholders' equity. In the event that
     the ESOP were to receive a loan from an independent third party, both ESOP
     expense and earnings on the proceeds retained by the Company would be
     expected to increase.

     For purposes of these tables the purchase price of $10.00 was utilized to
     calculate ESOP expense. The Bank will account for the ESOP in accordance
     with the American Institute of Certified Public Accountants ("AICPA")
     Accounting Standards Division's Statement of Position No. 93-6. "Employers'
     Accounting for Employee Stock Ownership Plans" ("SOP No. 93-6").
     Accordingly, the Bank will recognize compensation expense equal to the fair
     value of ESOP shares at the time they are committed to be released to
     participants. As a result, to the extent the fair value of the Common Stock
     appreciates over time, compensation expense related to the ESOP will
     increase. SOP No. 93-6 also requires that, for the earnings per share
     computations for leveraged ESOPs, outstanding shares include only such
     shares as have been committed to be released to participants. The table at
     or for the year ended July 31, 1996 assumes that the number of ESOP shares
     are allocated on a straight-line basis over 10 years, and, accordingly, 10%
     of the ESOP shares are assumed to be committed to be released at the
     beginning of the first year following Conversion. See "Management's
     Discussion and Analysis of Financial Condition and Results of Operations --
     Impact of New Accounting Standards" and "Management of the Bank -- Benefits
     -- Employee Stock Ownership Plan and Trust."

(3)  Gives effect to the Stock Programs expected to be adopted by the Company
     following the Conversion and which, if implemented prior to the first
     anniversary of the Conversion, will be presented for approval at a meeting
     of shareholders to be held no earlier than six months after completion of
     the Conversion. If implemented, the Stock Programs intend to acquire an
     amount of Common Stock equal to 4% of the shares of Common Stock issued in
     the Conversion, or 59,500, 70,000, 80,500 and 92,575 shares of Common Stock
     (respectively) at the minimum, midpoint, maximum and 15% above the maximum
     of the range, either through open market purchases, subject to OTS
     approval, if necessary, or from authorized but unissued shares of Common
     Stock or treasury stock of the Company, if any. Funds used by the Stock
     Programs to purchase the shares will be contributed to the Stock Programs
     by the Bank. In calculating the pro forma effect of the Stock Programs, it
     is assumed that any required shareholder approval has been received, that
     the shares were acquired by the Stock Programs at the year ended July 31,
     1996 in open market purchases at the Purchase Price, and that 20% of the
     amount contributed was amortized to expense during the year ended July 31,
     1996. The issuance of authorized but unissued shares of the Company's
     Common Stock to the Stock Programs instead of open market purchases would
     dilute the voting interests of existing shareholders by approximately 3.85%
     during the year ended July 31, 1996, pro forma net earnings per share would
     be $0.37, $0.36, $0.34 and $0.32 at the minimum, midpoint, maximum and 15%
     above the maximum of the Estimated Price Range, respectively, for the year
     ended July 31, 1996; pro forma stockholders' equity per share would be
     $17.01, $15.76, $14.84 and $14.04 at the minimum, midpoint, maximum and 15%
     above the maximum of the Estimated Price Range, respectively, for the year
     ended July 31, 1996. There can be no assurance that the Stock Programs will
     be implemented or that the actual


                                       35

<PAGE>

     purchase price of the shares will be equal to the Purchase Price. See
     "Management of the Bank -- Benefits."

(4)  No effect has been given to the issuance of additional shares of Common
     Stock pursuant to the Stock Option Plan expected to be adopted by the
     Company following the Conversion. If the Company intends to implement the
     Stock Option Plan prior to the first anniversary of the Conversion, it will
     present the Stock Option Plan for approval at a meeting of shareholders to
     be held no earlier than six months after the completion of the Conversion.
     If the Stock Option Plan is approved by shareholders, an amount equal to
     10% of the Common Stock issued in the Conversion, or 148,750, 175,000,
     201,250 and 231,437 shares at the minimum, midpoint, maximum and 15% above
     the maximum of the Estimated Price Range, respectively, will be reserved
     for future issuance upon the exercise of options to be granted under the
     Stock Option Plan. The issuance of Common Stock pursuant to the exercise of
     options under the Stock Option Plan will result in the dilution of existing
     stockholders' interests. Assuming implementation of the Stock Option Plan
     and the exercise of all options at the end of the period at an exercise
     price of $10.00 per share, the pro forma net earnings per share would be
     $0.35, $0.34, $0.32 and $0.30, respectively, at the minimum, midpoint,
     maximum and 15% above the maximum of the Estimated Price Range for the year
     ended July 31, 1996; pro forma stockholders' equity per share would be
     $16.63, $15.46, $14.58 and $13.82, respectively, at the minimum, midpoint,
     maximum and 15% above the maximum of the range for the year ended July 31,
     1996. See "Management of the Bank -- Benefits -- Stock Option Plans."

(5)  The retained earnings of the Bank will continue to be substantially
     restricted after the Conversion. See "Dividend Policy," "The Conversion --
     Effects of Conversion -- Liquidation Rights" and "Regulation -- Regulation
     of Federal Savings Associations -- Limitation on Capital Distributions."


                                       36

<PAGE>

                         FAIRFIELD SAVINGS BANK, F.S.B.
                             STATEMENTS OF EARNINGS

     The following Statements of Earnings of the Bank for each of the years in
the three year period ended July 31, 1996 have been audited by KPMG Peat Marwick
LLP, independent certified public accountants, whose report thereon appears
elsewhere herein. These statements should be read in conjunction with the other
financial statements and notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
                                                                                For the Year Ended July 31,
                                                                        -------------------------------------------
                                                                            1996           1995           1994
                                                                            ----           ----           ----
<S>                                                                     <C>            <C>            <C>         
Interest income:
   Mortgage-backed securities held-to-maturity ......................   $  2,755,626   $  6,493,643   $  6,020,746
   Mortgage-backed securities available-for-sale ....................      4,088,066           --             --
   Loans receivable .................................................      6,026,328      5,663,087      6,086,876
   Interest-earning deposits ........................................        136,222        296,037        332,361
   FHLB of Chicago stock ............................................        147,302        142,609        128,645
   Investment securities available-for-sale and repurchase agreements           --           78,691        482,897
                                                                        ------------   ------------   ------------
       Total interest income ........................................     13,153,544     12,674,067     13,051,525
                                                                        ------------   ------------   ------------
Interest expense:
   Savings deposits .................................................      5,924,074      5,063,988      4,493,680
   Borrowed money ...................................................      2,525,598      2,268,816      2,429,480
                                                                        ------------   ------------   ------------
       Total interest expense .......................................      8,449,672      7,332,804      6,923,160
                                                                        ------------   ------------   ------------
Net interest income before provision (credit) for loan losses .......      4,703,872      5,341,263      6,128,365
Provision (credit) for loan losses ..................................        137,558           --          (18,000)
                                                                        ------------   ------------   ------------
       Net interest income after provision (credit) for loan losses .      4,566,314      5,341,263      6,146,365
                                                                        ------------   ------------   ------------
Noninterest income:
   Gain on sale of investment securities available-for-sale .........           --             --          615,588
   Gain on sale of real estate held for sale and development ........           --          556,880        574,183
   Service fees .....................................................        212,109        225,733        193,781
   Litigation settlements ...........................................        184,415         51,671           --
   Other ............................................................         88,448         11,449        131,526
                                                                        ------------   ------------   ------------
       Total noninterest income .....................................        484,972        845,733      1,515,078
                                                                        ------------   ------------   ------------
Noninterest expense:
   Compensation and benefits ........................................      2,226,288      2,455,579      2,449,494
   Office occupancy .................................................      1,032,676        951,018        922,842
   Federal deposit insurance premiums ...............................        337,220        325,463        330,878
   Real estate held for development .................................        139,847        237,148        510,549
   Professional services ............................................        359,217        197,151        229,579
   Other ............................................................        613,042        600,082        653,703
                                                                        ------------   ------------   ------------
       Total noninterest expense ....................................      4,708,290      4,766,441      5,097,045
                                                                        ------------   ------------   ------------
Income before income taxes and cumulative effect of change in
  accounting principle ..............................................        342,996      1,420,555      2,564,398
Income tax expense ..................................................        117,000        438,400        894,100
                                                                        ------------   ------------   ------------
Income before cumulative effect of change in accounting principle ...        225,996        982,155      1,670,298
Cumulative effect of change in accounting for income taxes ..........           --             --          439,470
                                                                        ------------   ------------   ------------
        Net income ..................................................   $    225,996   $    982,155   $  2,109,768
                                                                        ============   ============   ============
</TABLE>

See accompanying "Notes to Financial Statements" presented elsewhere in this
Prospectus.


                                       37

<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

     The Company has only recently been formed and, accordingly, has no results
of operations. The business of the Bank is that of a financial intermediary
engaged primarily in attracting savings deposits from the general public and
using such deposits to originate one- to four-family residential mortgage and,
to a lesser extent, multifamily residential loans, commercial real estate loans,
land, construction and development loans and consumer loans primarily in its
market area. The Bank maintains an investment portfolio consisting primarily of
mortgage-backed securities. The operations of the Bank are influenced
significantly by general economic conditions and by policies of financial
institution regulatory agencies, including the OTS and the FDIC. The Bank's cost
of funds is influenced by interest rates on competing investments and general
market interest rates. Lending activities are affected by the demand for
financing of real estate and other types of loans, which in turn is affected by
the interest rates at which such financings may be offered.

     The Bank's earnings are primarily dependent on its net interest income,
which is determined by the difference (the "spread") between the yields earned
on its interest-earning assets, such as loans and investments and the rates paid
on its interest-bearing liabilities, primarily savings deposits and borrowings.
Results of operations are also dependent upon the level of the Bank's
noninterest income, including fee income and service charges, and affected by
the level of its noninterest expenses, including its general and administrative
expenses.

Management Strategy

     Home Lending and Asset Quality. The Bank's strategy has been to maintain
its focus as a traditional consumer-oriented institution serving the markets in
which its branches are located. Historically, the Bank's interest income has
been derived primarily from one- to four-family residential mortgage loans and
mortgage-backed securities. To a lesser extent, the Bank derives interest income
from multifamily residential loans, commercial real estate loans, land,
construction and development loans, consumer loans and commercial lines of
credit.

     The Bank has emphasized, and intends to continue to emphasize, the
origination of one- to four-family residential mortgage loans in its lending
area, which is defined generally as Cook, DuPage and Lake Counties. At July 31,
1996, one- to four-family residential mortgage loans totaled $76.3 million or
95.6% of gross loans, approximately $72.4 million (or 90.6% of gross loans) of
which provided for fixed rates of interest. The remaining 4.4% of gross loans
consisted of multifamily mortgage loans, land, construction and development
loans, home equity and other loans. For the year ended July 31, 1996, the Bank
originated $19.7 million of mortgage loans. See "Business of the Bank -- Lending
Activities." The Bank also invests in mortgage-backed securities. The Bank's
holdings of mortgage-backed securities totaled $102.4 million at July 31, 1996,
representing 52.6% of total assets. See "Business of the Bank -- Investment
Activities."

     The Bank pays particular attention to both the value estimates applied to
the collateral securing loans as well as to the creditworthiness of its
prospective borrowers and employs rigorous underwriting standards to minimize
risk of loss. As a result of this strategy, historically the Bank has had only
minimal loss experience in its lending operations. The Bank's ratio of
non-performing loans to total loans at year end ranged from 0.15% to 5.58%
during the five-year period ended July 31, 1996 and was 0.15% at July 31, 1996.
Non-performing assets to total assets ranged from 0.06% to 2.92% during the
five-year period ended July 31, 1996, and was at 0.06% at July 31, 1996. The
Bank's ratio of allowance for loan losses to non-performing loans ranged from
11.08% to 254.24% over the five years ended July 31, 1996 and was 254.24% at
July 31, 1996. In 1992, at the direction of the Bank's primary federal
regulator, the Bank adversely classified a $4.2 million loan and placed reserves
against it. Subsequently, the Bank reversed such


                                       38

<PAGE>

reserves when it became apparent that the loan would be repaid in full. For the
past five fiscal years, the Bank's ratio of non-performing loans to total loans
averaged 0.69% and the ratio of non-performing assets to total assets averaged
0.33%, without giving effect to the reserves that were initially placed against
the $4.2 million loan but were subsequently reversed. See "Selected Financial
and Other Data of the Bank" and "Business of the Bank -- Delinquencies and
Non-Performing Assets."

     Savings Deposits and Borrowed Money. The Bank's interest expense consists
of the interest paid on savings deposits and borrowed money. The Bank's savings
deposits are derived principally from its primary market area. The Bank's
strategy has been to maintain a high level of stable savings deposits by
providing quality service to its customers without significantly increasing its
cost of funds. The Bank's low-cost deposit base, consisting of passbook
accounts, non-interest-bearing demand accounts, NOW accounts and money market
demand accounts, totaled $65.8 million or 48% of total savings deposits and had
a weighted average effective rate of 2.41% at July 31, 1996. For the past three
years, these accounts have consistently accounted for more than 47% of total
savings deposits and had a weighted average effective rate of not more than
2.45% throughout this period. At July 31, 1996, money market demand accounts
totaled $13.0 million or 9.5% of total savings deposits and had a weighted
average effective rate of 3.12%. The Bank has consistently maintained an overall
cost of funds lower than the National Median Cost of Funds Rate as determined by
the OTS. At July 31, 1996, the Bank's cost of deposits was 4.01% and its cost of
funds (including FHLB borrowings) of 4.74% was _____ basis points below the
National Median Cost of Funds Rate. The Bank has not and does not intend to use
brokered deposits as a source of funds. See "-- Liquidity and Capital Resources"
and "Business of the Bank -- Sources of Funds."

Asset/Liability Management

     The principal objectives of the Bank's interest rate risk management
activities are to: (i) evaluate the interest rate risk included in certain
balance sheet accounts; (ii) determine the level of risk appropriate given the
Bank's business focus, operating environment, capital and liquidity requirements
and performance objectives; and (iii) manage the risk consistent with Board
approved guidelines. Through such management, the Bank seeks to reduce the
vulnerability of its operating results to changes in interest rates and to
manage the ratio of interest rate sensitive assets to interest rate sensitive
liabilities within specified maturities or repricing dates. The Bank closely
monitors its interest rate risk as such risk relates to its operating
strategies. The extent of the movement of interest rates, higher or lower, is an
uncertainty that could have a negative impact on the earnings of the Bank. The
Bank's Chief Financial Officer is charged with the responsibility of developing
and implementing an interest rate risk management and reporting system that will
measure the Bank's exposure to interest rate risk and generate the appropriate
quarterly reports to management and the Board of Directors to ensure compliance
with the limits and controls of the policy.

     To the extent consistent with its interest rate spread objectives and
market conditions, the Bank attempts to manage its interest rate risk and has
taken several steps in this regard. First, a majority of the Bank's
mortgage-backed and related securities acquisitions since 1993 have been of
securities having a balloon maturity of five or seven years. At July 31, 1996,
the Bank had $102.4 million of mortgage-backed securities, approximately $75.8
million of which mature in seven years or less. The Bank's portfolio of
securities available-for-sale is marked-to-market monthly and is carried on the
books of the Bank at fair value. Any sale of such securities may result in a
gain or loss to the Bank to the extent the market value at the time of sale
exceeds or is less than the amortized cost.

     Second, a portion of the Bank's deposits consists of passbook accounts,
which are considered by management to be somewhat more resistant to interest
rate changes than most other types of accounts. At July 31, 1996, the Bank had
$41.3 million of passbook accounts. See "Business of the Bank -- Sources of
Funds -- Savings Deposits." Finally, although the Bank makes minimal
adjustable-rate loans due to competitive factors, the Bank's fixed-rate lending
program is focused on loans with terms of 15 years or less. At July 31, 1996,
the Bank had $26.1 million or 32.8% of mortgage loans with original terms of 15
years or less.


                                       39

<PAGE>

     Despite the efforts taken by the Bank to seek to reduce its level of
interest rate risk, and the Bank's intent to continue to seek to reduce its
exposure to interest rate risk, the Bank has remained vulnerable to increases in
interest rates and has experienced reduced levels of net income and net interest
income in the fiscal years ended 1994, 1995 and 1996 as a result of, among other
things, the Bank's level of interest rate risk. There can be no assurance that
the Bank will not continue to experience reduced levels of net income and net
interest income during periods of increasing interest rates, unless the Bank's
sensitivity to increases in interest rates is reduced.

     Net Portfolio Value ("NPV") analysis provides a quantification of interest
rate risk. In essence, this approach calculates the difference between the
present value of liabilities, expected cash flows from assets and cash flows
from off balance sheet contracts. Under OTS regulations, an institution's
"normal" level of interest rate risk in the event of an immediate and sustained
200 basis point change in interest rates is a decrease in the institution's NPV
in an amount not exceeding 2% of the present value of its assets. Most thrift
institutions with greater than "normal" interest rate exposure must take a
deduction from their total capital available to meet their risk-based capital
requirement. The amount of that deduction is one-half of the difference between
(a) the institution's actual calculated exposure to the 200 basis point interest
rate increase or decrease (whichever results in the greater pro forma decrease
in NPV) and (b) its "normal" level of exposure which is 2% of the present value
of its assets. Savings institutions, however, with less than $300 million in
assets and risk-based capital ratios in excess of 12%, will be exempt from this
requirement unless the OTS determines otherwise. The OTS has postponed the date
that the component will first be deducted from an institution's total capital to
provide it with an opportunity to review the interest rate risk proposals
recently issued by the other federal banking agencies.

     Presented below, at June 30, 1996, is an analysis of the Bank's estimated
interest rate risk as measured by changes in NPV for instantaneous and sustained
parallel shifts in interest rates, up and down 400 basis points in 100 point
increments. The NPV is prepared for the Bank by the OTS as of the end of each
calendar quarter. The regulatory focus of A/L Management allows institutions to
perform an in-house estimate of risk as the basis for measuring risk based
capital. The Bank has demonstrated through its past pricing action that passbook
accounts function as relatively fixed rate deposits, and as such, the passbook
accounts are not rate sensitive deposits. Based upon the Bank's historical
experience of its passbook account, the Bank calculates the Core Deposit
Intangible value for that account. This calculation is substituted for the OTS
calculation and then a new set of ratios are computed. Management does not
believe that there is a material difference in the Bank's NPV performance as of
July 31, 1996 as compared with June 30, 1996. The Bank's asset and liability
structure results in a decrease in NPV in a rising interest rate scenario and an
increase in NPV in a declining interest rate scenario. During periods of rising
interest rates, the value of monetary assets declines more rapidly than the
value of monetary liabilities rises. Conversely, during periods of falling
interest rates, the value of monetary assets rises more rapidly than the value
of monetary liabilities declines. However, the amount of change in value of
specific assets and liabilities due to changes in interest rates is not the same
in a rising rate environment as in a falling interest rate environment (i.e.,
the amount of value increase under a specific rate decline may not equal the
amount of value decrease under an identical upward interest rate movement).


                                       40

<PAGE>

                                                        NPV as % of Economic
                         Net Portfolio Value              Value of Assets
     Change in      ------------------------------      --------------------
  Interest Rates
  In Basis Points                 $           %                       %
   (Rate Shock)       Amount    Change      Change      NPV Ratio   Change
   ------------       ------    ------      ------      ---------   ------
                               (Dollars in thousands) 
       400          $ 12,110  $ (12,928)     (52)%         6.28%     (5.74)%
       300            15,474     (9,564)     (38)          7.87      (4.16)
       200            18,842     (6,196)     (25)          9.39      (2.64)
       100            22,124     (2,914)     (12)         10.81      (1.21)
    Static(1)         25,038         --       --          12.02         --
      (100)           26,956      1,918       +8          12.78      +0.76
      (200)           26,390      1,352       +5          12.50      +0.48
      (300)           26,175      1,137       +5          12.37      +0.35
      (400)           24,208       (830)      (3)         11.51      (0.52)

- ----------
(1)  Based on the economic value of the Bank's assets assuming no change in
     interest rates.

     At June 30, 1996, 2.0% of the present value of the Bank's assets was
approximately $4.2 million, which was less than $7.5 million, the decrease in
NPV resulting from a 200 basis point change in interest rates. As a result, if
the rule were in effect and were applicable to the Bank, the Bank would have
been required to make a $1.7 million deduction from total capital in calculating
its risk-based capital requirement, although the Bank's capital would have
remained far in excess of regulatory minimums. See "Regulation -- Regulation of
Federal Savings Associations -- Capital Requirements."

     As noted above, the market value of the Bank's net assets would be
anticipated to decline significantly in the event of certain designated
increases in interest rates. For instance, in the event of a 200 basis point
increase in interest rates, NPV is anticipated to fall by $6.2 million or 25%.
On the other hand, a decrease in interest rates is anticipated to cause an
increase in NPV. The level of interest rate risk in the NPV table set forth
above at June 30, 1996, is within the Bank's current guidelines for tolerated
interest rate risk. See "Risk Factors -- Potential Impact of Changes in Interest
Rates."

     Certain assumptions utilized by the OTS in assessing the interest rate risk
of thrift institutions were employed in preparing the previous table. These
assumptions related to interest rates, loan prepayment rates and the market
value of certain assets under the various interest rate scenarios. However, the
Bank uses its internal assumptions for passbook decay rates based on the Bank's
historical experience. It was also assumed that delinquency rates will not
change as a result of changes in interest rates although there can be no
assurance that this will be the case. In the event that interest rates do not
change in the designated amounts, there can be no assurance that the Bank's
assets and liabilities would perform as set forth above. In addition, a change
in Treasury rates in the designated amounts accompanied by a change in the shape
of the Treasury yield curve would cause significantly different changes to the
NPV than indicated above.

     Certain shortcomings are inherent in the methods of analysis presented in
the computation of NPV. For example, although certain assets and liabilities may
have similar maturities or periods to repricing, they may react in different
degrees to changes in market interest rates. Also, the interest rates on certain
types of assets and liabilities may fluctuate in advance of changes in market
interest rates while interest rates on other types of assets may lag behind
changes in market rates. Additionally, certain assets, such as adjustable-rate
loans, have features which restrict changes in interest rates both on a
short-term basis and over the life of the asset. Further, in the event of a
change in interest rates, prepayment and early withdrawal levels would likely
deviate significantly from those assumed in calculating the table. Finally, the
ability of borrowers to make scheduled payments on their adjustable-rate loans
may decrease in the event of an interest rate increase. As a result, the actual
effect of changing interest rates may differ from that presented in the
foregoing table.


                                       41

<PAGE>

Analysis of Net Interest Income

     Net interest income represents the difference between income on
interest-earning assets and expense on interest-bearing liabilities. Net
interest income depends upon the relative amounts of interest-earning assets and
interest-bearing liabilities and the interest rates earned or paid on them.

     The following table sets forth certain information relating to the Bank's
average balance sheet and reflects the average yield on assets and average cost
of liabilities for the periods indicated and the average yields and rates. Such
yields and costs are derived by dividing income or expense by the average
monthly balance of assets and liabilities, respectively, for the periods
presented. Average balances are derived from month-end balances. Management does
not believe that the use of month-end balances instead of daily balances has
caused any material difference in the information presented. The yields and
costs include fees, which are considered adjustments to yields.

<TABLE>
<CAPTION>
                                                                                   For the Year Ended July 31,
                                                               --------------------------------------------------------------------
                                          At July 31, 1996                   1996                               1995
                                         -------------------   --------------------------------   ---------------------------------
                                                    Weighted                            Average                          Average
                                                     Average    Average                 Yield/     Average                Yield/
                                          Balance    Rate(1)    Balance     Interest     Cost      Balance   Interest     Cost
                                         ---------  --------   ---------    ---------  --------   ---------  ---------  -----------
                                                                           (Dollars in thousands)
<S>                                      <C>            <C>    <C>          <C>            <C>    <C>        <C>               <C>  
Assets:
  Interest-earning assets:
    Mortgage-backed securities(2) ...... $ 102,411      6.32%  $ 110,734    $   6,844      6.18%  $ 107,009  $   6,494         6.07%
    Loans receivable(3) ................    79,444      7.67      75,264        6,027      8.01      69,280      5,663         8.17
    Investment securities(2) ...........      --        --          --           --        --           769         78        10.14
    Interest-earning deposits ..........     2,040      5.19       2,601          136      5.23       5,309        296         5.58
    Stock in FHLB of Chicago ...........     2,045      6.75       2,157          147      6.82       2,241        143         6.38
                                         ---------  --------   ---------    ---------  --------   ---------  ---------  -----------
      Total interest-earning assets ....   185,940      6.89%    190,756    $  13,154      6.90%    184,608  $  12,674         6.87%
                                         ---------  --------   ---------    ---------  --------   ---------  ---------  -----------
    Allowance for loan losses ..........      (300)                 (187)                              (166)
    Noninterest-earning assets .........     8,984                 9,064                              9,760
                                         ---------             ---------                          ---------
      Total assets ..................... $ 194,624             $ 199,633                          $ 194,202
                                         =========             =========                          =========

Liabilities and equity:
  Interest-bearing liabilities:
    NOW accounts ....................... $   7,310      2.02%  $   7,263    $     146      2.01%  $   7,681  $     155         2.02%
    Money market demand accounts .......    13,035      3.12      14,031          437      3.11      15,858        467         2.94
    Passbook/statement savings accounts     41,324      2.50      42,094        1,054      2.50      45,213      1,130         2.50
    Certificates of deposit ............    71,343      5.48      75,064        4,287      5.71      68,858      3,312         4.81
    Borrowed money .....................    39,900      6.75      37,800        2,526      6.68      33,685      2,269         6.74
                                         ---------  --------   ---------    ---------  --------   ---------  ---------  -----------
      Total interest-bearing liabilities   172,912      4.74%    176,252        8,450      4.79%    171,295      7,333         4.28%
                                         ---------  --------   ---------    ---------  --------   ---------  ---------  -----------
  Noninterest-bearing NOW accounts .....     4,165                 4,115                              3,820
  Other noninterest-bearing liabilities      3,968                 4,942                              5,012
                                         ---------             ---------                          ---------
       Total liabilities ...............   181,045               185,309                            180,127
  Equity ...............................    13,579                14,324                             14,075
                                         ---------             ---------                          ---------
       Total liabilities and equity .... $ 194,624             $ 199,633                          $ 194,202
                                         =========             =========                          =========
Net interest income ....................                                    $   4,704                        $   5,341
                                                                            =========                        =========   
Interest rate spread(4) ................                2.15%                              2.11%                               2.59%
                                                    ========                           ========                         ===========

Net interest-earning assets ............ $  13,028             $  14,504                          $  13,313
                                         =========             =========                          =========        
Net interest margin(5) .................                                                   2.47%                               2.89%
                                                                                       ========                         ===========
Ratio of interest-earning assets to
  interest-bearing liabilities .........    107.53%               108.23%                            107.77%
                                         =========             =========                          =========
</TABLE>

                                                       (Notes on following page)


                                       42

<PAGE>

<TABLE>
<CAPTION>
                                                                          For the Year Ended July 31,
                                          ------------------------------------------------------------------------------------------
                                                       1994                          1993                          1992
                                          ------------------------------ ----------------------------- -----------------------------
                                                                 Average                       Average                       Average
                                           Average               Yield/   Average              Yield/   Average              Yield/
                                           Balance     Interest   Cost    Balance    Interest   Cost    Balance    Interest   Cost
                                          ---------    --------  -----   ---------   --------  ------- ---------   --------  -----
                                                                                    (Dollars in thousands)
<S>                                       <C>          <C>        <C>    <C>          <C>       <C>    <C>          <C>       <C>  
Assets:
  Interest-earning assets:
    Mortgage-backed securities(2) ......  $  92,717    $  6,021   6.49%  $  48,212    $ 3,505   7.27%  $  30,315    $ 2,306   7.61%
    Loans receivable(3) ................     72,042       6,087   8.45      89,296      8,647   9.68     102,097      9,577   9.38
    Investment securities(2) ...........      5,728         483   8.43      24,654      1,437   5.83      28,044      1,959   6.99
    Interest-earning deposits ..........     10,564         332   3.14      11,165        302   2.70       8,939        393   4.40
    Stock in FHLB of Chicago ...........      2,163         129   5.96       1,912        104   5.44       1,735        103   5.94
                                          ---------    --------  -----   ---------    -------  -----   ---------    -------  -----
      Total interest-earning assets ....    183,214    $ 13,052   7.12%    175,239    $13,995   7.99%    171,130    $14,338   8.38%
                                          ---------    --------  -----   ---------    -------  -----   ---------    -------  -----
    Allowance for loan losses ..........       (181)                          (443)                         (390)                 
    Noninterest-earning assets .........     10,845                         11,642                        12,682                  
                                          ---------                      ---------                     ---------                  
      Total assets .....................  $ 193,878                      $ 186,438                     $ 183,422                  
                                          =========                      =========                     =========                  

Liabilities and equity:
  Interest-bearing liabilities:
    NOW accounts .......................  $   8,438    $    184   2.18%  $   8,626    $   240   2.78%  $   8,098    $   355   4.38%
    Money market demand accounts .......     19,560         520   2.66      21,076        675   3.20      20,290        927   4.57
    Passbook/statement savings accounts      48,209       1,280   2.66      47,959      1,555   3.24      44,264      2,103   4.75
    Certificates of deposit ............     60,169       2,510   4.17      52,444      2,530   4.82      58,511      3,683   6.29
    Borrowed money .....................     35,938       2,429   6.76      36,600      2,454   6.70      34,440      2,130   6.18
                                          ---------    --------  -----   ---------    -------  -----   ---------    -------  -----
      Total interest-bearing liabilities    172,314       6,923   4.02%    166,705      7,454   4.47%    165,603      9,198   5.55%
                                          ---------    --------  -----   ---------    -------  -----   ---------    -------  -----
  Noninterest-bearing NOW accounts .....      3,384                          2,950                         2,628                  
  Other noninterest-bearing liabilities       5,715                          6,517                         6,223                  
                                          ---------                      ---------                     ---------                  
       Total liabilities ...............    181,413                        176,172                       174,454                  
  Equity ...............................     12,465     `                   10,266                         8,968                  
                                          ---------                      ---------                     ---------                  
       Total liabilities and equity ....  $ 193,878                      $ 186,438                     $ 183,422                  
                                          =========                      =========                     =========                  
Net interest income ....................               $  6,129                       $ 6,541                       $ 5,140       
                                                       ========                       =======                       =======       
Interest rate spread(4) ................                          3.10%                         3.52%                         2.83%
                                                                 =====                         =====                         =====
Net interest-earning assets ............  $  10,900                      $   8,534                     $   5,527                  
                                          =========                      =========                     =========                  
Net interest margin(5) .................                          3.35%                         3.73%                         3.00%
                                                                 =====                         =====                         =====
Ratio of interest-earning assets to
  interest-bearing liabilities .........     106.33%                        105.12%                       103.34%      
                                          =========                      =========                     =========                  
</TABLE>

- ----------
(1)  The weighted average rate represents the coupon associated with each asset
     and liability, weighted by the principal balance associated with each asset
     and liability.
(2)  Includes securities classified as "available-for-sale."
(3)  In computing the average balance of loans receivable, non-accrual loans
     have been included.
(4)  Average interest rate spread represents the difference between the average
     rate earned on interest-earning assets and the average rate paid on
     interest-bearing liabilities.
(5)  Net interest margin represents net interest income as a percentage of
     average interest-earning assets.


                                       43

<PAGE>

Rate/Volume Analysis

     Net interest income can also be analyzed in terms of the impact of changing
interest rates on interest-earning assets and interest-bearing liabilities and
the change in the volume or amount of these assets and liabilities. In general,
increases in the volume or amount of interest-bearing liabilities, as well as
increases in the interest rates paid on interest-bearing liabilities, and
decreases in the volume or amount of interest-earning assets, as well as
decreases in the yields earned on interest-earning assets, have the effect of
reducing the Bank's net interest income. Conversely, increases in the volume or
amount of the Bank's interest-earning assets, as well as increases in the yields
earned on interest-earning assets, and decreases in the volume or amount of
interest-bearing liabilities, as well as decreases in the rates paid on
interest-bearing liabilities, have the effect of increasing the Bank's net
interest income. The following table sets forth certain information regarding
changes in interest income and interest expense for the periods indicated. For
each category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to changes in volume (changes in
volume multiplied by old rate), changes in rates (changes in rates multiplied by
old volume) and changes in rate-volume (changes in rates multiplied by changes
in volume). Changes attributable to the combined impact of volume and rate have
been allocated proportionately to the changes due to volume and the changes due
to rate.

<TABLE>
<CAPTION>
                                       Year Ended July 31, 1996         Year Ended July 31, 1995        Year Ended July 31, 1994
                                        Compared to Year Ended           Compared to Year Ended          Compared to Year Ended
                                             July 31, 1995                    July 31, 1994                   July 31, 1993
                                    ------------------------------   ------------------------------  -------------------------------
                                    Increase/(Decrease)              Increase/(Decrease)             Increase/(Decrease)
                                          Due to                           Due to                          Due to
                                    -------------------              -------------------             -------------------
                                     Volume      Rate       Net       Volume      Rate       Net      Volume       Rate       Net
                                     ------      ----       ---       ------      ----       ---      ------       ----       ---
<S>                                 <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>    
Interest-earning assets:
   Mortgage-backed securities ....  $   230    $   120    $   350    $   814    $  (341)   $   473    $ 2,847    $  (331)   $ 2,516
   Loans receivable ..............      471       (107)       364       (227)      (197)      (424)    (1,545)    (1,015)    (2,560)
   Investment securities .........      (39)       (39)       (78)      (529)       124       (405)    (2,278)     1,324       (954)
   Interest-earning deposits .....     (142)       (18)      (160)        64       (100)       (36)       (15)        45         30
   Stock in FHLB of Chicago ......       (4)         8          4          5          9         14         15         10         25
                                    -------    -------    -------    -------    -------    -------    -------    -------    -------
          Total ..................  $   516    $   (36)   $   480    $   127    $  (505)   $  (378)   $  (976)   $    33    $  (943)
                                    =======    =======    =======    =======    =======    =======    =======    =======    =======
Interest-bearing liabilities:
    NOW accounts .................  $    (8)   $    (1)   $    (9)   $   (16)       (13)   $   (29)   $    (5)   $   (51)   $   (56)
    Money market demand accounts .      (60)        30        (30)      (121)        68        (53)       (47)      (108)      (155)
    Passbook/statement savings 
      accounts ...................      (76)      --          (76)       (76)       (74)      (150)         8       (283)      (275)
    Certificates of deposit ......      317        658        975        389        413        802       (240)       220        (20)
    Borrowed money ...............      277        (20)       257       (153)        (7)      (160)       (50)        25        (25)
                                    -------    -------    -------    -------    -------    -------    -------    -------    -------
          Total ..................  $   450    $   667    $ 1,117    $    23    $   387    $   410    $  (334)   $  (197)   $  (531)
                                    -------    -------    -------    -------    -------    -------    -------    -------    -------
Net change in net interest income   $    66    $  (703)   $  (637)   $   104    $  (892)   $  (788)   $  (642)   $   230    $  (412)
                                    =======    =======    =======    =======    =======    =======    =======    =======    =======
</TABLE>


                                       44

<PAGE>

Comparison of Financial Condition at July 31, 1996 and 1995

     Total assets decreased $5.7 million to $194.6 million at July 31, 1996 from
$200.3 million at July 31, 1995. Total liabilities also declined $4.8 million to
$181.0 million at July 31, 1996 from $185.8 million at July 31, 1995.

     Mortgage-backed securities (including both held-to-maturity and
available-for-sale) decreased $8.9 million to $102.4 million at July 31, 1996
from $111.3 million at July 31, 1995. Loans receivable increased $8.1 to $79.1
million at July 31, 1996 from $71.0 million at July 31, 1995 due to the
origination of new loans for the Bank's portfolio exceeding loan repayment.

     Interest earning deposits were $2.0 million and $7.0 million at July 31,
1996 and 1995, respectively, a decrease of $5.0 million.

     Total savings deposits decreased $11.1 million to $137.2 million at July
31, 1996 from $148.3 million at July 31, 1995 due primarily to a decrease in
certificates of deposit of $7.0 million. FHLB of Chicago advances increased $7.6
million to $39.9 million at July 31, 1996 from $32.3 million at July 31, 1995
due primarily to management's decision to increase the Bank's level of
short-term borrowings to fund mortgage originations and offset savings deposit
net outflows. Total retained earnings decreased $800,000 to $13.6 million at
July 31, 1996 from $14.4 million at July 31, 1995 due to net income of $226,000,
which was offset by an adjustment of securities available for sale to fair
value, net of tax effect, totaling $1.1 million.

Comparison of Operating Results for Fiscal Years Ended July 31, 1996 and 1995

     General. Net income for the fiscal year ended July 31, 1996 was $226,000
compared to $982,000 for the fiscal year ended July 31, 1995. The $756,000, or
77.0%, decrease was primarily attributable to a one-time gain of $557,000 on the
sale of real estate held for development in 1995, with no comparable gain
recorded in 1996. Net income in 1996 was also lower due to a $637,000 decrease
in net interest income before provision for loan losses, which was partially
offset by a $321,000 decrease in income tax expense.

     Net Interest Income. Net interest income before provision for loan losses
decreased $637,000 to $4.7 million for the fiscal year ended July 31, 1996, from
$5.3 million for the fiscal year ended July 31, 1995. Interest income increased
$479,000 to $13.2 million for the fiscal year ended July 31, 1996 from $12.7
million for the fiscal year ended July 31, 1995 due to an increase of $6.1
million, from $184.6 million to $190.8 million, in the average balance of
interest-earning assets. Interest expense increased $1.1 million to $8.4 million
for the fiscal year ended July 31, 1996 from $7.3 million for the fiscal year
ended July 31, 1995. This increase was the result of an increase in the average
balance of interest-bearing liabilities of $5.0 million, from $171.3 million to
$176.3 million, as well as an increase in the average cost of funds of 51 basis
points from 4.28% to 4.79%.

     Interest Income. Interest income totaled $13.2 million for the fiscal year
ended July 31, 1996, compared to $12.7 million for the fiscal year ended July
31, 1995. This increase reflects a $6.1 million increase in total average
interest-earning assets in the 1996 fiscal year compared to the 1995 fiscal
year, while the average yield on such assets increased 3 basis points from 6.87%
to 6.90% over the same period. Interest income on loans receivable increased
$363,000 to $6.0 million for the 1996 fiscal year, reflecting a $6.0 million
increase in the average balance of loans, which was offset by the effect of a 16
basis point decrease in the average yield on loans to 8.01% from 8.17%. Interest
income on mortgage-backed securities increased $350,000 to $6.8 million for the
1996 fiscal year from $6.5 million for the 1995 fiscal year. The increase is due
primarily to a $3.7 million increase in the average balance of mortgage-backed
securities to $110.7 million from $107.0 million and an 11 basis point increase
in the average yield to 6.18% from 6.07%. Interest income on interest-earning
deposits decreased $160,000 to $136,000 for the 1996 fiscal year, due to a $2.7
million decrease in average balance and a 35 basis point decrease in average
yield from 5.58% to 5.23%.


                                       45

<PAGE>

     Interest Expense. Interest expense increased $1.1 million to $8.4 million
for the fiscal year ended July 31, 1996, compared to $7.3 million for the fiscal
year ended July 31, 1995. This increase reflects both an increase in average
interest-bearing liabilities of $5.0 million during the 1996 fiscal year and an
increase in the average rate paid on such liabilities of 51 basis points over
the same period. The increase in average interest-bearing liabilities is
primarily attributable to an increase in the average balance of certificates of
deposit to $75.1 million for the 1996 fiscal year from $68.8 million for the
1995 fiscal year. The net effect was an increase of $975,000 in interest expense
on certificates of deposit. The increase occurred during a generally higher
interest rate environment, which resulted in the average rate paid on savings
deposits increasing 60 basis points to 4.28%. Interest expense on borrowed money
increased $257,000 as the average balance of borrowings from the FHLB of Chicago
increased $4.1 million to $37.8 million for the fiscal year ended July 31, 1996
from $33.7 million for the fiscal year ended July 31, 1995, and the average cost
of such borrowings decreased to 6.68% from 6.74%.

     Provision for Loan Losses. For the fiscal year ended July 31, 1996,
$138,000 was allocated to provision for loan losses. For the fiscal year ended
July 31, 1995, the provision was $0. The 1996 provision increased the allowance
for loan losses from $166,000 at July 31, 1995 to $300,000 at July 31, 1996. At
July 31, 1996, the ratios of the allowance for loan losses to non-performing
loans and to total loans were 254.24% and 0.38%, respectively, which were well
below the Bank's peer group average. Management believes that the provision for
loan losses and the allowance for loan losses are reasonable and adequate to
cover any known losses and any losses reasonably expected in the loan portfolio.
While management estimates loan losses using the best available information, no
assurance can be made that future additions to the allowance will not be
necessary based on changes in economic and real estate market conditions,
further information obtained regarding known problem loans, identification of
additional problem loans and other factors, both within and outside of
management's control. Because of these uncertainties, management considered it
appropriate to increase the allowance for loan losses in 1996 to the upper range
of the formula employed by the Bank to establish the allowance. The directors of
the Bank have reviewed and approved the provision for loan losses and the
allowance for loan losses and the assumptions utilized by management as to their
reasonableness and adequacy.

     Noninterest Income. Noninterest income for the fiscal year ended July 31,
1996 decreased $361,000 to $485,000 from $846,000 for the fiscal year ended July
31, 1995. For the fiscal year ended July 31, 1995, the Bank had gains on the
sale of real estate held for sale and development in the amount of $557,000.
These gains relate to a subdivision called Trails of Olympia Fields. The final
residential lots were sold in fiscal year 1995 in addition to a portion of the
adjoining "Commercial property." There were no sales of these properties in
fiscal year 1996. Noninterest income was also affected by an increase in other
noninterest income of $77,000 for the 1996 fiscal year compared to the 1995
fiscal year. Litigation settlements increased from $51,671 for the fiscal year
ended July 31, 1995 to $184,415 for the fiscal year ended July 31, 1996 due to
the settlement of two claims in connection with the development of the Trails of
Olympia Fields.

     Noninterest Expense. Noninterest expense decreased $58,000 to $4.7 million
for the fiscal year ended July 31, 1996 from $4.8 million for the fiscal year
ended July 31, 1995. The Bank's ratio of noninterest expenses to average assets
decreased to 2.36% in the 1996 fiscal year from 2.45% in the 1995 fiscal year.
Compensation related expenses decreased $229,000. The Senior Management Officer
Bonus program ("SMO") long term award was terminated in 1996, and no annual
award was made in 1996, which resulted in a $144,000 decline in compensation
expense in fiscal year 1996. Real estate held for sale and development expenses
were $140,000 and $237,000 in the fiscal year 1996 and 1995, respectively, or a
decline of $97,000. Occupancy expenses increased $82,000 or 8.6% during the
fiscal year ended July 31, 1996 due primarily to an increase in utility and
depreciation expenses. Professional services expenses increased $162,000 or
82.2% during the fiscal year ended July 31, 1996 as a result of increased legal
fees incurred in connection with claims against a municipality and certain
parties involved in the development of the Trails of Olympia Fields.


                                       46

<PAGE>

     Income Tax Expense. Income tax expense decreased $321,000 or 73.3%, to
$117,000 for the fiscal year ended July 31, 1996 from $439,000 for the fiscal
year ended July 31, 1995. This decrease was due to the decrease of $1.1 million
or 75.9% in pre-tax income.

Comparison of Financial Condition at July 31, 1995 and July 31, 1994

     Total assets increased $5.1 million to $200.3 million at July 31, 1995,
from $195.2 million at July 31, 1994. The asset growth was funded through
deposit inflows. Savings deposits increased $6.5 million to $148.3 million at
July 31, 1995 from $141.8 million at July 31, 1994, due primarily to an increase
in certificates of deposit with original maturities of 13 and 19 months.

     Asset growth was concentrated in loans, which increased $2.6 million to
$71.0 million at July 31, 1995, from $68.4 million at July 31,1994. Loan
originations totaled $12.3 million for the year ended July 31, 1995, compared to
$11.3 million for the year ended July 31, 1994, representing an increase of $1.0
million. The increase was due primarily to an increase in the origination of
one- to four-family residential mortgage loans reflecting increased loan demand
experienced by the Bank.

     Total mortgage-backed securities remained relatively stable at $111.3
million at July 31, 1995, compared to $111.9 million at July 31, 1994. All
securities were held-to-maturity in 1995 and 1994.

     Real estate owned, net, increased to $168,000 in 1995. There was no real
estate owned at July 31, 1994. This increase was the result of a foreclosure of
one single-family residential property.

     The Bank's retained earnings was $14.4 million at July 31, 1995 and $13.4
million at July 31, 1994. The increase was due to net income for the fiscal year
ended July 31, 1995 of $982,000.

Comparison of Operating Results for Fiscal Years Ended July 31, 1995 and 1994

     General. Net income for the fiscal year ended July 31, 1995 was $982,000
compared to $2.1 million for the fiscal year ended July 31, 1994. This decrease
of $1.1 million or 53% was due to a reduction in net interest income after
provision for loan losses of $805,000 for the 1995 fiscal year, as compared to
the 1994 fiscal year, as well as gains on sales of investment securities held
for sale of $616,000 for the 1994 fiscal year, as compared to none in the 1995
fiscal year. These reductions in income were offset, in part, by a reduction in
noninterest expense of $331,000.

     Net Interest Income. Net interest income before provision for loan loss for
the fiscal year ended July 31, 1995 decreased $788,000 or 13% to $5.3 million.
The Bank's average yield earned on interest-earning assets decreased from 7.12%
for the 1994 fiscal year to 6.87% for the 1995 fiscal year, and the Bank's
average rate paid on interest-bearing liabilities increased from 4.02% for the
1994 fiscal year to 4.28% for the 1995 fiscal year. These changes in yields
earned and rates paid resulted in the Bank's average interest rate spread
decreasing by 0.51 basis points to 2.59% and the Bank's net interest margin
decreasing by 46 basis points to 2.89% for the 1995 fiscal year, as compared to
3.10% and 3.35%, respectively, for the 1994 fiscal year.

     Market interest rates were higher in the 1995 fiscal year across the entire
U.S. Treasury yield curve than in the 1994 fiscal year. However, the Bank
generally realized lower yields on its average interest-earning assets (other
than federal funds sold) as a result of the impact of asset repricings that
occurred during the declining interest rate environment in the 1994 fiscal year.
Generally, the Bank's assets have repriced less quickly in the rising interest
rate environment of the 1995 fiscal year than in the declining interest rate
environment of the 1994 fiscal year. During the 1995 fiscal year, the Bank's
interest-bearing liabilities, particularly certificate accounts which had
increasing average balances, repriced more quickly than the Bank's


                                       47

<PAGE>

interest-earning assets. This had a negative impact on the Bank's average
interest rate spread and net interest margin in the 1995 fiscal year compared to
the 1994 fiscal year.

     Interest Income. Interest income totaled $12.7 million for the fiscal year
ended July 31, 1995, compared to $13.1 million for the fiscal year ended July
31, 1994. This decrease reflects a $1.4 million increase in total average
interest-earning assets in the 1995 fiscal year compared to the 1994 fiscal
year, while the average yield on such assets declined 25 basis points over the
same period. Interest income on loans receivable declined $424,000 to $5.7
million for the 1995 fiscal year, reflecting a $2.8 million decrease in the
average balance of loans and the effect of a 28 basis point decrease in the
average yield to 8.17%. Interest income on mortgage-backed securities increased
$473,000 to $6.5 million for the 1995 fiscal year from $6.0 million for the 1994
fiscal year. The increase is due primarily to a $14.3 million increase in the
average balance to $107 million, which was partially offset by a 42 basis point
decline in the average yield to 6.07%. Interest income on interest-earning
deposits decreased from $332,000 to $296,000 for the 1995 fiscal year,
reflecting a $5.3 million decrease in the average balance, which was offset by a
244 basis point increase in the average yield.

     Interest Expense. Interest expense on savings deposits increased $570,000
to $5.1 million for the fiscal year ended July 31, 1995, compared to $4.5
million for the fiscal year ended July 31, 1994. This increase reflects both an
increase in average savings deposits of $1.2 million during the 1995 fiscal year
and an increase in the average rate paid on such liabilities of 39 basis points
over the same period. The decrease of $1.0 million in average interest-bearing
liabilities is primarily attributable to a decrease in the average balance of
$9.7 million for all categories of interest bearing liabilities except for an
increase of $8.7 million in the average balance of certificates of deposit to
$68.9 million for the 1995 fiscal year from $60.2 million for the 1994 fiscal
year, which increase occurred during a generally higher interest rate
environment resulting in the average rate paid on such savings deposits
increasing 64 basis points to 4.81%. The net effect was an increase of $802,000
in interest expense on certificates of deposit. The increase in certificates of
deposit reflects the Bank's general strategy of funding asset growth with
deposit liabilities.

     Provision for Loan Losses. The provision for loan losses was $0 and an
$18,000 credit for the fiscal years ending July 31, 1995 and July 31, 1994,
respectively. At July 31, 1995, the percentage of the allowance for loan losses
to non-performing loans (consisting primarily of loans 90 days or more past due
and accruing interest) was 86.01%. As a percentage of total loans, the allowance
for loan losses was 0.23% at July 31, 1995. The percentage of non-performing
loans to total loans decreased to 0.27% at July 31, 1995, from 0.74% at July 31,
1994. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Management Strategy -- Home Lending and Asset Quality."
Management believes that the provision for loan losses and the allowance for
loan losses are reasonable and adequate to cover any known losses and any losses
reasonably expected in the loan portfolio. While management estimates loan
losses using the best available information, no assurance can be made that
future additions to the allowance will not be necessary based on changes in
economic and real estate market conditions, further information obtained
regarding known problem loans, identification of additional problem loans and
other factors, both within and outside of management's control. The directors of
the Bank have reviewed and approved the provision for loan losses and the
allowance for loan losses and the assumptions utilized by management as to their
reasonableness and adequacy.

     Noninterest Income. Noninterest income for the fiscal year ended July 31,
1995 decreased $669,000 to $846,000 from $1.5 million for the fiscal year ended
July 31, 1994. This decrease was primarily attributable to a net gain of
$616,000 on sales of held-for-sale securities sold in the 1994 fiscal year
compared to no gain on sales of securities for the 1995 fiscal year. The
securities sold in the 1994 fiscal year were limited to held-for-sale
securities. Noninterest income was also affected by a decline in gain on sale of
real estate held for sale and development of $17,000 for the 1995 fiscal year
compared to the 1994 fiscal year, and an increase of $32,000 in service charges
and other fees reflecting decreased loan servicing fee income.


                                       48

<PAGE>

Litigation settlements increased by $52,000 in 1994 due to the settlement of a
lawsuit relating to development of the Trails of Olympia Fields.

     Noninterest Expense. Noninterest expense decreased $331,000 to $4.8 million
for the fiscal year ended July 31, 1995 from $5.1 million for the fiscal year
ended July 31, 1994. The Bank's ratio of noninterest expense to average assets
decreased to 2.45% in the 1995 fiscal year from 2.63% in the 1994 fiscal year.
Compensation and benefits expense increased nominally to $2.5 million for the
1995 fiscal year compared to the same amount for the 1994 fiscal year. Real
estate held for sale and development decreased $274,000 from $511,000 to
$237,000; professional services expenses decreased from $230,000 to $197,000.
Other noninterest expense decreased $54,000 to $600,000 for the 1995 fiscal year
compared to $654,000 for the 1994 fiscal year.

     Income Tax Expense. Income tax expense decreased $455,000, or 51%, to
$439,000 for the fiscal year ended July 31, 1995 from $894,000 for the fiscal
year ended July 31, 1994. This decrease was due to the decrease of $1.1 million
in pre-tax income.

Liquidity and Capital Resources

     The term "liquidity" as used by a savings bank refers to the ability of the
institution to produce sufficient cash to meet withdrawals, fund loan
commitments and pay operating expenses. Cash needed to fund these requirements
is generated by savings deposits, loan repayments, securities sales, FHLB
advances, and other sources of income.

     The Bank's primary sources of funds are savings deposits, principal and
interest payments on loans and securities and borrowings from the FHLB of
Chicago. While maturities and scheduled amortization of loans and securities
provide an indication of the timing of the receipt of funds, changes in interest
rates, economic conditions and competition strongly influence mortgage
prepayment rates and savings deposit flows, reducing the predictability of the
timing of sources of funds. Cash flows from operating activities amounted to
$165,000, $908,000 and $322,000 for the years ended July 31, 1996, 1995 and
1994, respectively.

     The Bank is required to maintain an average daily balance of liquid assets
and short-term liquid assets as a percentage of net withdrawable deposit
accounts plus short-term borrowings as defined by the regulations of the OTS.
The minimum required liquidity and short-term liquidity ratios are currently
5.0% and 1.0%, respectively. At July 31, 1996, 1995 and 1994, the Bank's
liquidity ratios were 42.4%, 27.1% and 22.1%, respectively, and its short-term
liquidity ratios were 2.7%, 10.8% and 3.5%, respectively. The levels of the
Bank's short-term assets are dependent on the Bank's operating, financing and
investing activities during any given period. Management believes it will have
adequate resources to fund all commitments on a short term and long term basis
in accordance with its business strategy.

     The primary investing activities of the Bank are the origination of
mortgage and other loans and the purchase of mortgage-backed and other
securities. During the years ended July 31, 1996, 1995 and 1994, the Bank's
disbursements for loan originations totaled $19.9 million, $12.4 million and
$11.4 million, respectively. These activities were funded primarily by net
deposit inflows and principal repayments on loans, securities and FHLB advances.
Net cash flows used in investing activities amounted to $510,000, $1.6 million
and $37.0 million for the years ended July 31, 1996, 1995 and 1994,
respectively.

     For the fiscal year ended July 31, 1996, the Bank experienced net decreases
in deposits (including the effect of interest credited) of $11.2 million. For
the fiscal years ended July 31, 1995 and 1994 the Bank experienced net increases
in deposits of $6.5 million and $10.3 million, respectively. The increase in the
1995 fiscal year reflects the general increase in market interest rates which
made deposit products (particularly shorter term certificates of deposit) a more
attractive investment alternative for the Bank's customers. The


                                       49

<PAGE>

increase in savings deposits for the 1994 fiscal year reflects a marketing
campaign by the Bank to attract two- to four-year certificates of deposit. See
"Selected Financial and Other Data of the Bank."

     The Bank's most liquid assets are cash and cash equivalents, which consist
of short-term highly liquid investments with original maturities of less than
three months that are readily convertible to known amounts of cash and
interest-bearing savings deposits. The level of these assets is dependent on the
Bank's operating, financing and investing activities during any given period. At
July 31, 1996 and 1995, cash and cash equivalents totaled $4.6 and $9.0 million,
respectively.

     Net cash flows provided by financing activities amounted to $4.5 million
and $7.6 million for the years ended July 31, 1995, and 1994, respectively. Net
cash flows used in financing activities amounted to $4.1 million for the year
ended July 31, 1996.

     See the "Statements of Cash Flows" in the Financial Statements included in
this Prospectus for the sources and uses of cash flows for operating activities,
investing activities and financing activities for each of the years ended July
31, 1996, 1995 and 1994.

     The Bank has other sources of liquidity if a need for additional funds
arises, including the ability to obtain FHLB of Chicago advances of up to $45
million based on the Bank's current investment in FHLB of Chicago stock. At July
31, 1996, the Bank had outstanding $39.9 million in FHLB of Chicago advances.

     At July 31, 1996, the Bank had outstanding mortgage loan origination
commitments of $851,000 and unused lines of consumer credit of $614,000. The
Bank anticipates that it will have sufficient funds available to meet its
current origination and other lending commitments. Certificates of deposit
scheduled to mature in less than one year from July 31, 1996 totalled $53.3
million. Based upon the Bank's most recent experience and pricing strategy,
management believes that a significant portion of such deposits will remain with
the Bank.

     At July 31, 1996, the Bank exceeded all of its regulatory capital
requirements with tangible capital of $14.4 million, or 7.35% of total adjusted
assets, which is above the required level of $2.9 million or 1.5%; core capital
of $14.4 million, or 7.35% of total adjusted assets, which is above the required
level of $5.9 million or 3.0%; and total risk-based capital of $14.7 million, or
21.59% of risk-weighted assets, which is above the required level of $5.4
million, or 8%. See "Regulatory Capital Compliance" and "Regulation --
Regulation of Federal Savings Associations -- Capital Requirements" for a
reconciliation of GAAP capital to regulatory capital.

Impact of Inflation and Changing Prices

     The Bank's Financial Statements and Notes thereto presented herein have
been prepared in accordance with GAAP, which generally require the measurement
of financial position and operating results in terms of historical dollars
without considering the changes in the relative purchasing power of money over
time due to inflation. The impact of inflation is reflected in the increased
cost of the Bank's operations. Unlike industrial companies, nearly all of the
assets and liabilities of the Bank are monetary in nature. As a result, interest
rates have a greater impact on the Bank's performance than do the effects of
general levels of inflation. Interest rates do not necessarily move in the same
direction or to the same extent as the price of goods and services.

Impact of New Accounting Standards

     The Bank will be required to account for the ESOP under Statement of
Position 93-6, "Employers' Accounting for Employee Stock ownership Plans" ("SOP
93-6"). SOP 93-6 measures compensation expense recorded by employers for
leveraged ESOPs using the fair value of ESOP shares. Under SOP 93-6, the


                                       50

<PAGE>

Company will recognize compensation cost equal to the fair value of the ESOP
shares during the periods in which they become committed to be released. To the
extent that the fair value of the Bank's ESOP shares differs from the cost of
such shares, this differential will be charged or credited to equity. Employers
with internally leveraged ESOPs will not report the loan receivable from the
ESOP as an asset and will not report the ESOP debt as a liability. See
"Management of the Bank -- Benefits -- Employee Stock Ownership Plan and Trust."

     In March 1995, the Financial Accounting Standards Board the ("FASB") issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
("SFAS 121"). Various assets are excluded from the scope of SFAS 121, including
financial instruments which constitute most of the Bank's assets. For assets
included in the scope of SFAS 121, such as office property and equipment, an
impairment loss must be recognized when the estimate of total undiscounted
future cash flows attributable to the asset is less than the asset's carrying
value. Measurement of the impairment loss is based on the fair value of the
asset. SFAS 121 is effective for financial statements issued for fiscal years
beginning after December 15, 1995. The Bank adopted SFAS 121 on August 1, 1996,
and it did not have a material impact on the Bank's results of operations or
financial position.

     In May 1995, the FASB issued Statement of Financial Accounting Standards
No. 122, "Accounting for Mortgage Servicing Rights," ("SFAS 122"), which amends
Statement of Financial Accounting Standards no. 65, "Accounting for Certain
Mortgage Banking Activities." SFAS 122 is effective for fiscal years beginning
after December 15, 1995. SFAS 122 requires that entities recognize, as separate
assets, rights to service mortgage loans for others regardless of how those
servicing rights are acquired. Additionally, SFAS 122 requires that the
capitalized mortgage servicing rights be assesses for impairment based on the
fair value of those rights and that the impairment be recognized through a
valuation allowance. These requirements will accelerate the income recognition
associated with mortgage banking activities, increase future operating expense
due to the amortization of servicing rights and will also result in greater
earnings volatility for those institutions involved in mortgage banking
activities. The implementation of SFAS 122 on August 1, 1996 did not have a
material impact on the Bank's financial condition or results of operations,
because the Bank does not currently conduct any material mortgage banking
activities or purchase loan servicing rights.

     In November 1995, the FASB issued Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), This
statement established financial accounting standards for stock-based employee
compensation plans. SFAS 123 permits the Bank to choose either the new fair
value based method, or the current accounting prescribed by Accounting
Principles Board ("APB") Opinion 25, using the intrinsic value based method of
accounting for its stock-based compensation arrangements. SFAS 123 requires pro
forma disclosures of net earnings and earnings per share computed as if the fair
value based method had been applied in APB Opinion 25. SFAS 123 applies to all
stock-based employee compensation plans in which an employer grants shares of
its stock or other equity instruments to employees except for employee stock
ownership plans. SFAS 123 also applies to plans in which the employer incurs
liabilities to employees in amounts based on the price of the employer's stock,
(e.g. stock option plans, stock purchase plans, restricted stock plans and stock
appreciation rights). SFAS 123 also specifies the accounting for transactions in
which a company issues stock options or other equity instruments for services
provided by nonemployees or to acquire goods or services from outside suppliers
or vendors. The recognition provisions of SFAS 123 for companies choosing to
adopt the new fair value based method of accounting for stock-based compensation
arrangements may be adopted immediately and will apply to all transactions
entered into in fiscal years that begin after December 15, 1995. The disclosure
provisions of SFAS 123 are effective for fiscal years beginning after December
15, 1995, however, disclosure of the pro forma net earnings and earnings per
share, as if the fair value method of accounting for stock-based compensation
had been elected, is required for all awards granted in fiscal years beginning
after December 31, 1994. The Company expects to account for its stock-based
compensation arrangements as prescribed in APB Opinion 25 upon the consummation
of the Conversion.


                                       51

<PAGE>

     In June 1996, the FASB issued Statement of Financial Accounting Standards
No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" ("SFAS 125"), which supersedes FASB Statements
No. 76, "Extinguishments of Debt," and No. 77, "Reporting by Transferors for
Transfers of Receivables with Recourse." This statement amends FASB Statement
No. 115, "Accounting for Certain Investments in Debt and Equity Securities," and
amends and extends to all servicing assets and liabilities, the accounting
standards for mortgage servicing rights now set forth in SFAS 65, and supersedes
SFAS 122. SFAS 125 provides accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities. After a
transfer of financial assets, an entity recognizes the financial and servicing
assets it controls and the liabilities it has incurred, derecognizes financial
assets when control has been surrendered and derecognizes liabilities when
extinguished. SFAS 125 provides consistent standards for distinguishing
transfers of financial assets that are sales from transfers that are secured
borrowings. A transfer of financial assets in which the transferor surrenders
control over those assets is accounted for as a sale to the extent that
consideration other than beneficial interests in the transferred assets is
received in exchange.

     SFAS 125 further requires that liabilities and derivatives incurred or
obtained by transferors as part of a transfer of financial assets be initially
measured at fair value, if practicable. It also requires that servicing assets
and other retained interests in the transferred assets be measured by allocating
the previous carrying amount between the assets sold, if any, and retained
interests, if any, based on their relative fair values on the date of the
transfer. SFAS 125 also requires that servicing assets and liabilities be
subsequently measured by (a) amortization in proportion to and over the period
of estimated net servicing income or loss and (b) assessment for asset
impairment or increased obligation based on their fair values. SFAS 125 requires
that debtors reclassify financial assets pledged as collateral and that secured
parties recognize those assets and their obligation to return them to certain
circumstances in which the secured party has taken control of those assets. SFAS
125 requires that a liability be derecognized if and only if either (i) the
debtor pays the creditor and is relieved of its obligation for the liability or
(ii) the debtor is legally released from being the primary obligor under the
liability either judicially or by the creditor. Therefore, a liability is not
considered extinguished by an in-substance defeasance.

     SFAS 125 is effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996, and is to be
applied prospectively. Earlier or retroactive application is not permitted.
Management of the Bank has not evaluated the impact, if any, of the adoption of
SFAS 125 on the Bank's financial condition or results of operations.


                                       52

<PAGE>

                             BUSINESS OF THE COMPANY

General

     The Company was organized as an Illinois corporation on September 10, 1996
at the direction of the Board of Directors of the Bank for the purpose of
becoming a holding company to own all of the outstanding capital stock of the
Bank upon consummation of the Conversion. The Company filed an application with,
and received the approval of, the OTS to become a savings association holding
company and to acquire the Bank. Upon completion of the Conversion, the Company
will be a unitary savings association holding company and, as such, will be
subject to the regulations of the OTS. See "Regulation -- Regulation of Savings
Association Holding Companies."

Business

     The Company is not an operating company. Following the Conversion, in
addition to directing, planning and coordinating the business activities of the
Bank, the Company will initially invest primarily in federal funds, government
and federal agency mortgage-backed securities, other debt securities, high-grade
short-term marketable securities, deposits of or loans to the Bank, or a
combination thereof. In addition, the Company intends to fund the loan to the
ESOP to enable the ESOP to subscribe for up to 8% of the Common Stock in the
Conversion. In the future, the Company may acquire or organize other operating
subsidiaries, including other financial institutions, or it may merge with or
acquire other financial institutions and financial services related companies,
although there are no current arrangements, understandings or agreements,
written or oral, regarding any such expansion. See "Use of Proceeds." Initially,
with the exception of a commercial parcel to be acquired from the Bank (see
"Business of the Bank -- Real Estate Investment"), the Company will neither own
nor lease any property but will instead use the premises, equipment and
furniture of the Bank. At the present time, the Company does not intend to
employ any persons other than certain officers of the Bank who will not be
separately compensated by the Company. The Company may utilize the support staff
of the Bank from time to time, if needed. Additional employees will be hired as
appropriate to the extent the Company expands its business in the future.


                                       53

<PAGE>

                              BUSINESS OF THE BANK

General

     The Bank's principal business consists of gathering savings deposits from
the general public within its market area and investing those savings deposits
primarily in one- to four-family residential mortgage loans, mortgage-backed
securities and obligations of the U.S. Government. To a lesser extent, the Bank
makes multifamily residential loans, commercial real estate loans, land,
construction and development loans, consumer loans and commercial lines of
credit. The Bank's revenues are derived principally from interest on mortgage
loans and mortgage-backed securities. The Bank's primary sources of funds are
savings deposits, proceeds from principal and interest payments on loans,
mortgage-backed and investment securities and FHLB advances.

Market Area

     The Bank serves three distinct geographic markets: the Chicago branch at
1601 North Milwaukee Avenue serves the near northwest side of the City of
Chicago, the Norridge branch at 8301 West Lawrence serves Chicago's near
northwestern suburbs and the Long Grove branch at Old McHenry Road and Route 83
serves northern Cook and southern Lake counties. The Bank's customer base may be
categorized by branch location. In the Chicago branch, the customer base is
largely blue collar workers and young white collar technicians and
professionals. The Chicago market is experiencing new construction and a
refurbishing of its existing aged housing stock and is becoming an active
mortgage as well as a savings market. The Norridge branch serves a customer base
split between blue and white collar workers where the market is mature. The
Norridge market has modest prospects for growth; however, it provides the Bank
with a stable source of deposits. The Long Grove office is situated in an
affluent, high-growth, white collar market. This is a dynamic market which
provides the Bank with significant loan demand and potential for growth
opportunities in savings and lending activities. Substantially all loans
originated by the Bank are secured by real estate located in Cook, DuPage and
Lake counties in Illinois.

Competition

     The Bank is a community-oriented financial institution serving its market
area with a wide selection of residential loans, consumer loans, deposit
products and retail financial services. Management considers the Bank's retail
branch network and reputation for financial strength and quality customer
service as its major competitive advantage in attracting and retaining customers
in its market area. However, the deregulation of the financial services industry
has led to increased competition among savings banks and other financial
institutions for a significant portion of the funds acquisition and lending
activity which had traditionally been the arena of savings banks and savings and
loan associations. The Bank competes for savings deposits with other savings
banks, savings and loan associations, commercial banks, credit unions, money
market mutual funds, insurance companies, brokerage firms and other financial
institutions, many of which are substantially larger in size than the Bank. The
Bank's competition for loans comes principally from savings banks, savings and
loan associations, commercial banks, mortgage bankers, finance companies and
other institutional lenders. The Bank's principal methods of competition include
loan and deposit pricing, advertising and marketing programs and the types of
services provided.

     While the Bank is subject to competition from other financial institutions
which may have much greater financial and marketing resources, the Bank believes
it benefits by its community bank orientation as well as its relatively high
core deposit base. Management believes that the variety, depth and stability of
the communities in which the Bank is located support the service and lending
activities conducted by the Bank. The relative economic stability of the Bank's
lending area is reflected in the small number of mortgage delinquencies
experienced by the Bank.


                                       54

<PAGE>

Lending Activities

     Loan Portfolio Composition. The Bank's loan portfolio consists primarily of
conventional first mortgage loans secured by one- to four-family residences. At
July 31, 1996, the Bank had gross loans receivable outstanding of $79.9 million,
of which $76.3 million, or 95.6%, were one- to four-family residential mortgage
loans. The remainder consisted of $1.0 million of multifamily mortgage loans, or
1.2% of gross loans; $411,000 of commercial real estate mortgage loans, or 0.5%
of gross loans; $404,000 of land, construction and development loans, or 0.5% of
gross loans; $1.4 million of home equity loans, or 1.8% of gross loans; and
$342,000 of other loans, or 0.4% of gross loans.

     The loans that the Bank may originate are subject to federal and state laws
and regulations. Interest rates charged by the Bank on loans are affected by the
demand for such loans, the supply of money available for lending purposes and
the rates offered by competitors. These factors are in turn affected by, among
other things, economic conditions, monetary policies of the federal government,
including the Board of Governors of the Federal Reserve System (the "FRB"), and
legislative tax policies.


                                       55

<PAGE>

     The following table sets forth the composition of the Bank's mortgage and
other loan portfolios in dollar amounts and in percentages at the dates
indicated.

<TABLE>
<CAPTION>
                                                                              At July 31,
                                   -------------------------------------------------------------------------------------------------
                                          1996               1995                 1994               1993                1992
                                   -----------------   -----------------   ------------------  -----------------  ------------------

                                            Percent             Percent              Percent            Percent             Percent
                                   Amount   of Total   Amount   of Total   Amount    of Total  Amount   of Total  Amount    of Total
                                   ------   --------   ------   --------   ------    --------  ------   --------  ------    --------
                                                                           (Dollars in thousands)
<S>                              <C>          <C>     <C>        <C>      <C>        <C>      <C>        <C>     <C>         <C>  
Mortgage loans:
  One- to four-family .......... $ 76,325      95.6%  $ 68,080    94.9%   $ 66,318    94.6%   $ 75,456    92.4%  $ 89,785     89.9%
  Multifamily(1) ...............      979       1.2      1,035     1.4       1,335     1.9       1,415     1.7      1,643      1.7
  Commercial real estate .......      411       0.5        441     0.6         475     0.7         793     1.0        697      0.7
  Land, construction and 
    development ................      404       0.5        166     0.2         146     0.2       1,558     1.9      4,804      4.8
  Home equity ..................    1,421       1.8      1,691     2.4       1,679     2.4       2,280     2.8      2,726      2.7
                                 --------    ------   --------  ------    --------  ------    --------  ------   --------   ------ 
     Total mortgage loans ......   79,540      99.6     71,413    99.5      69,953    99.8      81,502    99.8     99,655     99.8
                                 --------    ------   --------  ------    --------  ------    --------  ------   --------   ------ 

Other loans:                                                                                                     
  Home improvement .............     --        --           15      --          15      --        --        --         21       --
  Commercial credit lines ......      150       0.2        131     0.2        --        --        --        --       --         --
  Loans on savings deposits ....      192       0.2        212     0.3         135     0.2         177     0.2        175      0.2
                                 --------    ------   --------  ------    --------  ------    --------  ------   --------   ------ 
     Total other loans .........      342       0.4        358     0.5         150     0.2         177     0.2        196      0.2%
                                 --------    ------   --------  ------    --------  ------    --------  ------   --------   ------ 
       Loans receivable, gross . $ 79,882    100.00%  $ 71,771  100.00%   $ 70,103  100.00%   $ 81,679  100.00%  $ 99,851   100.00%
                                 ========    ======   ========  ======    ========  ======    ========  ======   ========   ====== 
                                                                                                                 
Less:                                                                                                            

 Loans in process .............  $   --               $    111            $    892            $    263           $  1,695
  Deferred loan fees ...........      438                  510                 573                 816              1,145
  Allowance for loan losses ....      300                  166                 166                 184                597
  Capitalized interest reserve .     --                   --                    46                  70                384
                                 --------             --------            --------            --------           --------
          Loans receivable, net. $ 79,144             $ 70,984            $ 68,426            $ 80,346           $ 96,030
                                 ========             ========            ========            ========           ========
</TABLE>

- ----------
(1)  Multifamily includes participations in Community Investment Corporation
     ("CIC") of $381,000 at July 31, 1996, $321,000 at July 31, 1995 and
     $202,000 at July 31, 1994.


                                       56

<PAGE>

     Mortgage Loans. At July 31, 1996, over 95% of the Bank's $79.5 million
mortgage loan portfolio consisted of mortgage loans secured by one- to
four-family residential real estate. While the Bank offers adjustable rate
mortgage products, the Bank's customer base has historically favored fixed-rate
mortgage loans, which are generally priced off the Federal National Mortgage
Association ("FNMA") delivery rate with adjustments relating to local
competition and the availability of funds. At July 31, 1996, approximately 92.6%
of the Bank's mortgage portfolio was comprised of fixed-rate loans. The balance
of the mortgage loan portfolio is comprised of adjustable rate loans, including
approximately $3.9 million of one- to four-family residential mortgages, the
majority of which are tied to the National Cost of Funds Index and adjust
annually to rates from 2.5% to 2.75% over the Index. These loans carry annual
caps and life-of-the-loan ceilings to protect borrowers against sudden rate
volatility. Generally, adjustable-rate mortgage loans pose credit risks somewhat
greater than the credit risk inherent in fixed-rate loans primarily, because, as
interest rates rise, the underlying payments of the borrowers rise, increasing
the potential for default. It is the Bank's policy to underwrite its
adjustable-rate mortgage loans based on the fully-indexed rate. The Bank
currently has no mortgage loans that are subject to negative amortization. After
the Conversion, management intends to continue to emphasize loans secured by
single family owner-occupied units with 15 year terms. The Bank also makes home
equity loans. At July 31, 1996, the Bank had an aggregate balance of $1.4
million in home equity loans.

     Land, Construction and Development Loans. The Bank offers a residential
construction loan program for custom home buyers and builders, who typically
have a longstanding business relationship with the Bank. The Bank has
established additional guidelines and progress payout procedures for these loans
in recognition of the higher degree of risk involved in making such loans. The
Bank's loss experience in construction lending on single family and multifamily
residences has been extremely favorable. See "-- Delinquencies and
Non-Performing Assets -- Allowance for Loan Losses."

     In addition to financing custom construction of homes, the Bank finances
detached residential subdivision and condominium land acquisition and
development projects. For these loans, the Bank requires feasibility studies and
economic analyses which address a property's proposed gross sale or rental
income, market absorption rate, occupancy estimate and marketing and operating
expenses in order to ascertain the discounted net sales or capitalized rental
value projections. As a general guideline, actual or projected net cash flows
from these types of lending activities should equal or exceed 120% of the debt
service (excluding condominium properties). A builder or developer's experience
in constructing and marketing properties is also evaluated by the Bank. Each
borrower must demonstrate that it has the financial capacity to fund a project's
deficit debt service.

     Multifamily residential and commercial real estate and land loans are
generally considered to involve a higher degree of credit risk than one- to
four-family residential mortgage loans. This greater risk is attributable to
several factors, including the higher concentration of principal in a limited
number of loans and borrowers, the effects of general economic conditions on
income-producing properties and the increased difficulty of evaluating and
monitoring these types of loans. Furthermore, the repayment of loans secured by
multifamily residential and commercial real estate is typically dependent upon
sufficient cash flow from the related real estate project to cover operating
expenses and debt service. If the cash flow from the project is reduced (for
example, if leases are not obtained or renewed), the borrower's ability to repay
the loan may be impaired. Circumstances outside the borrower's control may
adversely affect income from the multifamily or commercial property as well as
its market value. See "Risk Factors--Residential and Non-Residential Lending
Risks."

     Other Loans. The Bank also makes short-term fixed-rate and adjustable-rate
other loans, such as loans secured by savings accounts and commercial lines of
credit. These loans generally have an average life of less than two years. The
shorter terms to maturity and the short-term repricing periods are helpful in
managing the Bank's interest rate risk.


                                       57

<PAGE>

     Origination of Loans. Loan originations come from a number of sources.
Residential loan originations can be attributed to depositors, retail customers,
telephone inquiries, loan officers, and referrals from other borrowers, real
estate brokers and builders.

     All of the Bank's lending is subject to its written, nondiscriminatory
underwriting standards and to loan origination procedures prescribed by the
Bank's Board of Directors that conform to the FNMA standards. Property
valuations by a member of the Bank's appraisal staff or independent appraisers
approved by the Board of Directors are required. Detailed loan applications are
obtained to determine the borrower's ability to repay, and the more significant
items on these applications are verified through the use of credit reports,
financial statements and confirmations. Generally, the Bank will lend against
the appraised value of property up to a maximum loan-to-value ratio of 95%.
Private mortgage insurance is required on all loans with loan-to-value ratios
greater than 80%. All loans are approved by the full Board of Directors.
Mortgage loans originated by the Bank generally include due-on-sale clauses
which provide the Bank with the contractual right to deem the loan immediately
due and payable in the event the borrower transfers ownership of the property
without the Bank's consent. Due-on-sale clauses are an important means of
adjusting the rates of the Bank's fixed-rate mortgage loan portfolio, and the
Bank has generally exercised its rights under these clauses.

     It is the Bank's policy to require title insurance policies certifying or
insuring that the Bank has a valid first lien on the mortgaged real estate.
Borrowers must also obtain hazard insurance policies prior to closing and, where
necessary, flood insurance policies. Borrowers are required to maintain a
non-interest-bearing escrow account or a pledged passbook savings account with
the Bank to cover charges for real estate taxes, hazard insurance premiums and
assessments.

     Under the Financial Institutions Reform, Recovery and Enforcement Act of
1989 ("FIRREA"), the aggregate amount of loans that the Bank is permitted to
make to any one borrower is generally limited to 15% of unimpaired capital and
surplus (25% if the security for such loan has a "readily ascertainable" value
or 30% for certain residential development loans). At July 31, 1996, based on
the above, the Bank's regulatory loans-to-one-borrower limit was approximately
$2.0 million. On the same date, the Bank had no borrowers with outstanding
balances in excess of this amount. At July 31, 1996, the two largest dollar
amounts outstanding to one borrower or group of related borrowers were
approximately $299,000 and $297,000. Both of these loans are secured by one- to
four-family properties located in the Bank's market area and, at July 31, 1996,
were performing in accordance with their terms.


                                       58

<PAGE>

     The following table sets forth the Bank's loan originations, loan sales and
principal repayments for the periods indicated.

                                                 For the Year Ended July 31,
                                               --------------------------------
                                                 1996        1995        1994
                                               --------    --------    --------
                                                       (In thousands)
Loans (gross):
   At beginning of period ..................   $ 71,771    $ 70,103    $ 81,679
                                               --------    --------    --------
Mortgage loans originated:
   One- to four-family .....................     19,617      11,472      10,797
   Multifamily (1) .........................         86         158         203
   Land, construction and development ......         38         290         116
                                               --------    --------    --------
          Total mortgage loans originated ..     19,741      11,920      11,116
Other loans originated:
   Other loans .............................        202         461         248
                                               --------    --------    --------
          Total loans originated ...........     19,943      12,381      11,364
                                               --------    --------    --------
   Additional draws - open-end home equity
     loans .................................        549         803         365
Principal repayments .......................    (12,377)    (11,348)    (22,863)
Loans sold .................................       --          --          (299)
Loans transferred to real estate owned .....       --          (168)       (143)
Charge-off - CIC Participation .............         (4)       --          --
                                               --------    --------    --------
          Loan balances at end of period ...   $ 79,882    $ 71,771    $ 70,103
                                               ========    ========    ========

- ----------
(1)  Includes participations in CIC.

     Income From Lending Activities. The Bank realizes interest income and
servicing fee income from its lending activities. For the most part, interest
rates charged by the Bank on loans are determined by local competition, although
they also reflect general interest rates, demand for loans and availability of
funds.

     The Bank charges service fees, late payment and other miscellaneous service
fees. During the fiscal years ended July 31, 1996, 1995 and 1994, the Bank
earned an aggregate of such fees equal to $20,000, $30,000 and $36,700,
respectively.


                                       59

<PAGE>

     Loan Maturity. The following table shows the contractual maturity of the
Bank's loan portfolio at July 31, 1996. Loans are shown as due based on their
contractual terms to maturity. The table does not include prepayments or
scheduled principal amortization.

<TABLE>
<CAPTION>
                                                                            At July 31, 1996
                                          -----------------------------------------------------------------------------------
                                                                  Mortgage Loans
                                          ---------------------------------------------------------------
                                                                                       Land,
                                           One- to                                 Construction
                                            Four-                     Commercial        and         Home     Other     Total
                                          Family(1)  Multi-family(1)  Real Estate   Development    Equity    Loans     Loans
                                          ---------  ---------------  -----------   -----------    ------    -----     -----
                                                                              (In thousands)
<S>                                        <C>          <C>             <C>          <C>          <C>       <C>       <C>    
Amount due:
   One year or less ....................   $    58      $   --          $  --        $  --        $    69   $   193   $   310

After one year:
   One to three years ..................       562           22            --            404          209       159     1,356
   More than three years to five years .     1,163          117            --           --            631      --       1,911
   More than five years to 10 years ....     6,906          181             146         --            497      --       7,730
   More than 10 years to 15 years ......    25,010           82             106         --             15      --      25,213
   More than 15 years to 20 years ......     2,170          473             159         --           --        --       2,802
   Over 20 years .......................    40,456          104            --           --           --        --      40,560
                                           -------      -------         -------      -------      -------   -------   -------
Total due after one year ...............    76,267          979             411         --          1,352       159    79,572
                                           -------      -------         -------      -------      -------   -------   -------

Total amounts due gross ................   $76,325      $   979         $   411      $   404      $ 1,421   $   342   $79,882
                                           =======      =======         =======      =======      =======   =======   =======
</TABLE>

     The following table sets forth at July 31, 1996, the dollar amount of loans
due after July 31, 1997, and whether such loans have fixed interest rates or
adjustable interest rates.

                                                    Due after July 31, 1997
                                                --------------------------------
                                                Fixed(1)   Adjustable     Total
                                                --------   ----------     -----
                                                         (In thousands)
Mortgage loans:
  One- to four-family ......................     $72,388     $ 3,879     $76,267
  Multifamily(2) ...........................         933          46         979
  Commercial real estate ...................         202         209         411
  Land, construction and development .......        --           404         404
  Home equity ..............................        --         1,352       1,352
                                                 -------     -------     -------
Total mortgage loans .......................      73,523       5,890      79,413
                                                 -------     -------     -------
Other loans ................................         159        --           159
                                                 -------     -------     -------
     Total loans ...........................     $73,682     $ 5,890     $79,572
                                                 =======     =======     =======

- ----------
(1)  FHA/VA loans are included in one- to four-family loans.
(2)  Including participations in CIC.

Delinquencies and Non-Performing Assets

     Delinquency Procedures. When a borrower fails to make a required payment on
a loan, the Bank attempts to cause the deficiency to be cured by contacting the
borrower. Contacts are made after a payment is more than 15 days past due and a
late charge is assessed at that time. In most cases, deficiencies are cured
promptly. If the deficiency exceeds 90 days and is not cured through the Bank's
normal collection procedures, the Bank may institute measures to remedy the
default, including commencing a foreclosure action or accepting from the
mortgagor a voluntary deed of the secured property in lieu of foreclosure. If a
foreclosure action is instituted and the loan is not reinstated, paid in full or
refinanced, the property is sold at a judicial sale. If the Bank acquires the
property at judicial sale or accepts a voluntary deed of the secured property in


                                       60

<PAGE>

lieu of foreclosure, the acquired property is then listed in the Bank's Real
Estate Owned ("REO") account until it is sold. At July 31, 1996, the Bank had no
REO. The Bank is permitted to finance sales from its REO account by "loans to
facilitate," which involve a lower down payment or a longer repayment term or
other more favorable features than generally would be granted under the Bank's
underwriting guidelines. Currently, the Bank has no such "loans to facilitate."

     The following table sets forth information with respect to the Bank's
non-performing assets (which includes loans that are delinquent for 90 days or
more and real estate owned) at the dates indicated. At July 31, 1996, there were
no loans other than those included in the table below with regard to which
management had information about possible credit problems of the borrower that
caused management to seriously doubt the ability of the borrower to comply with
present loan repayment terms.

<TABLE>
<CAPTION>
                                                             At July 31,
                                            ----------------------------------------------
                                             1996      1995      1994      1993      1992
                                             ----      ----      ----      ----      ----
                                                       (Dollars in thousands)
<S>                                         <C>       <C>       <C>       <C>       <C>   
Non-performing loans:
Mortgage loans:
  One- to four-family ...................   $   69    $  193    $  511    $  828    $1,055
  Multifamily ...........................     --        --        --          84        19
  Commercial real estate ................     --        --        --        --        --
  Land, construction and development ....     --        --        --        --       4,296
  Home equity ...........................       49      --        --        --        --
Other loans .............................     --        --        --        --          20
                                            ------    ------    ------    ------    ------
     Total non-performing loans .........      118       193       511       912     5,390
                                            ------    ------    ------    ------    ------
Real estate owned .......................     --         168      --        --         118
                                            ------    ------    ------    ------    ------
     Total non-performing assets ........   $  118    $  361    $  511    $  912    $5,508
                                            ======    ======    ======    ======    ======

Total non-performing loans to total loans     0.15%     0.27%     0.74%     1.13%     5.58%
Total non-performing assets to total
  assets ................................     0.06      0.18%     0.26%     0.49%     2.92%
</TABLE>

     A loan is placed on non-accrual status when it becomes 90 days or more
delinquent and when the collection of principal and/or interest becomes
doubtful. At July 31, 1996 and 1995, the Bank had no non-accruing loans. For the
years ended July 31, 1996, 1995 and 1994, the amount of interest income that
would have been recorded on non-accrual loans was $0, $1,000 and $47,000,
respectively.

     The Bank's non-performing assets at July 31, 1996, consisted of two one- to
four-family residential loans, with an aggregate outstanding principal balance
of $118,303. Both of the properties underlying non-performing loans are located
in the Chicago metropolitan area.

     Classified Assets. OTS regulations require that each savings association
classify its assets on a regular basis and establish prudent valuation
allowances based on such classifications. In addition, in connection with
examinations of savings associations, OTS examiners have authority to identify
problem assets and, if appropriate, require them to be classified. OTS
regulations provide for three adverse classifications for problem assets:
Substandard, Doubtful and Loss. Substandard assets have one or more defined
weaknesses and are characterized by the distinct possibility that the savings
association will sustain some loss if the deficiencies are not corrected.
Doubtful assets have the weaknesses of Substandard assets, with the additional
characteristics that the weaknesses make collection or liquidation in full on
the basis of currently existing facts, conditions and values questionable, and
there is a high probability of loss. An asset classified Loss is considered
uncollectible and of such little value that its continuance as an asset of the
institution is not


                                       61

<PAGE>

warranted. The regulations have also created a Special Mention category,
consisting of assets which do not currently expose a savings association to a
sufficient degree of risk to warrant classifications, but do possess credit
deficiencies or potential weaknesses deserving management's close attention.
Assets classified as Substandard or Doubtful require the Bank to establish
prudent valuation allowances. If an asset or portion thereof is classified as
Loss, the association must either establish specific allowances for loan losses
in the amount of 100% of the portion of the asset classified Loss or charge off
such amount. If an association does not agree with an examiner's classification
of an asset, it may appeal this determination to the District Director of the
OTS. On the basis of management's review of its loans at July 31, 1996, the Bank
had no classified assets and no potential problem loans, which would have been
classified by management as "Special Mention."

     Allowance for Loan Losses. The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the
risks inherent in the Bank's loan portfolio and the general economy. The
allowance for loan losses is maintained at an amount management considers
adequate to cover loan losses which are deemed probable and estimable. The
allowance is based upon a number of factors, including asset classifications,
economic trends, industry experience and trends, industry and geographic
concentrations, estimated collateral values, management's assessment of the
credit risk inherent in the portfolio, historical loan loss experience and the
Bank's underwriting policies. The allowance for loan losses is maintained at an
amount considered adequate to provide for potential losses. Although management
believes it uses the best information available to make determinations with
respect to the allowance for loan losses, future adjustments may be necessary if
economic conditions and the Bank's actual experience differ substantially from
the conditions and experience used in the assumptions upon which the initial
determinations are based. The OTS, in conjunction with the other federal banking
agencies, has adopted an interagency policy statement on the allowance for loan
and lease losses. The policy statement provides guidance for financial
institutions on both the responsibilities of management for the assessment and
establishment of adequate allowances and guidance for banking agency examiners
in determining the adequacy of general valuation guidelines. Generally, the
policy statement recommends that institutions have effective systems and
controls to identify, monitor and address asset quality problems; that
management analyzes all significant factors that affect the collectibility of
the portfolio in a reasonable manner; and that management establishes acceptable
allowance evaluation processes that meet the objectives set forth in the policy
statement.

     While the Bank believes that it has established an adequate allowance for
loan losses, there can be no assurance that regulators, in reviewing the Bank's
loan portfolio as part of a future regulatory examination, will not request the
Bank to materially increase its allowance for loan losses, thereby negatively
affecting the Bank's financial condition and earnings at that time. Moreover, no
assurance can be made that future additions to the allowance will not be
necessary based on changes in economic and real estate market conditions,
further information obtained regarding known problem loans, identification of
additional problem loans and other factors, both within and outside of
management's control. The directors of the Bank and the Company have reviewed
the provision for loan losses and the allowance for loan losses and the
assumptions utilized by management as to their reasonableness and adequacy.
Specific valuation reserves are provided for individual loans which are
contractually past due (including loans classified Substandard or Doubtful) when
ultimate collection is considered questionable by management after reviewing the
current status of such loans and considering the net realizable value of the
security for the loan.


                                       62

<PAGE>

     The following table analyzes activity in the Bank's allowance for loan
losses during the fiscal years indicated.

<TABLE>
<CAPTION>
                                                   At or For the Year Ended July 31,
                                           ---------------------------------------------------
                                             1996      1995       1994        1993      1992
                                             ----      ----       ----        ----      ----
                                                         (Dollars in thousands)

<S>                                        <C>       <C>        <C>         <C>       <C>    
Balance at beginning of year ...........   $   166   $   166    $   184     $   597   $   200
Provision (credit) for loan losses .....       138      --          (18)       (392)      397
Charge-offs:
Mortgage loans:
  One- to four-family ..................      --        --         --          --        --
  Multifamily ..........................        (4)     --         --           (21)     --
  Commercial real estate ...............      --        --         --          --        --
  Land, construction and development ...      --        --         --          --        --
  Home equity ..........................      --        --         --          --        --
Other loans ............................      --        --         --          --        --
                                           -------   -------    -------     -------   -------
     Total charge-offs .................        (4)     --         --           (21)     --
                                           -------   -------    -------     -------   -------
Recoveries .............................      --        --         --          --        --
                                           -------   -------    -------     -------   -------
Balance at end of year .................   $   300   $   166    $   166     $   184   $   597
                                           =======   =======    =======     =======   =======

Allowance for loan losses to total
  gross loans at end of period(1) ......      0.38%     0.23%      0.24%       0.23%     0.60%
Allowance for loan losses to total
  non-performing loans at end of period     254.24     86.01      32.49       20.18     11.08
Allowance for loan losses to total
  non-performing assets at end of period    254.24     45.98      32.49       20.18     10.84
Net charge-offs to average
  loans outstanding ....................      0.05      --         --          0.24      --
</TABLE>

- ----------
(1)  Total loans represent loans, net, plus the allowance for loan losses.


                                       63

<PAGE>

     The following table sets forth the breakdown of the allowance for loan
losses by loan category at the dates indicated. The allocation of the allowance
to each category is not necessarily indicative of future losses and does not
restrict the use of the allowance to absorb losses in any category.

<TABLE>
<CAPTION>
                                                                         At July 31,
                          ---------------------------------------------------------------------------------------------------------
                                        1996                                1995                                 1994
                          ----------------------------------- ---------------------------------- ----------------------------------
                                                 Percent of                         Percent of                         Percent of
                                                Loans in Each                      Loans in Each                      Loans in Each
                          Allowance Percent of   Category to  Allowance Percent of  Category to  Allowance Percent of  Category to
                           Amount    Allowance   Gross Loans   Amount    Allowance  Gross Loans   Amount    Allowance  Gross Loans
                          --------- ----------   -----------  --------- ----------  -----------  --------- ----------  -----------
                                                                   (Dollars in thousands)
<S>                         <C>         <C>         <C>        <C>         <C>        <C>         <C>         <C>         <C>  
Mortgage loans:
  One- to four-family ....  $   85      28.3%       95.6%      $   79      47.6%      94.9%       $   83      50.0%       94.6%
  Multifamily.............       5       1.7         1.2            6       3.6        1.4             6       3.6         1.9
  Commercial real estate..       4       1.3         0.5            4       2.4        0.6             5       3.0         0.7
  Land, construction and
    development...........       2       0.7         0.5            2       1.2        0.2             1       0.6         0.2
  Home equity.............       4       1.3         1.8            5       3.0        2.4             4       2.4         2.4
Other loans...............      --        --         0.4           --        --        0.5            --        --         0.2
Unallocated...............     200      66.7          --           70      42.2         --            67      40.4          --
                            ------    ------      ------       ------    ------     ------        ------    ------      ------
     Total allowance 
       for loan losses....  $  300     100.0%      100.0%      $  166     100.0%     100.0%       $  166     100.0%      100.0%
                            ======    ======      ======       ======    ======     ======        ======    ======      ======
</TABLE>


                                       64

<PAGE>

Investment Activities

     General. The investment policy of the Bank, which is approved by the Board
of Directors, is based upon its asset/liability management goals and is designed
primarily to provide and maintain adequate liquidity, maintain a balance of high
quality, diversified investments, minimize risks to the Bank and complement the
Bank's lending activities. The investment policy is implemented by the Chief
Financial Officer and the President. The policy designates the Chief Financial
Officer as the investment manager authorized to oversee the daily operations of
the investment portfolio. Historically, the Bank has maintained liquid assets at
levels above the minimum requirements imposed by the OTS regulations and above
levels believed adequate to meet the requirements of normal operations,
including potential deposit outflows. At July 31, 1996, the Bank's liquidity
ratio for regulatory purposes was 42.35%. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."

     As required by SFAS 115, securities are classified into three categories:
trading, held-to-maturity and available-for-sale. Securities that are bought and
held principally for the purpose of selling them in the near term are classified
as trading securities and are reported at fair value with unrealized gains and
losses included in trading account activities in the statement of earnings.
Securities that the Bank has the positive intent and ability to hold to maturity
are classified as held-to-maturity and reported at amortized cost. All other
securities not classified as held-to-maturity are classified as
available-for-sale. At July 31, 1996, the Bank had no securities which were
classified as trading. Available-for-sale securities are reported at fair value
with unrealized gains and losses included, on an after-tax basis, as a separate
component of retained earnings. At July 31, 1996, $58.3 million of
mortgage-backed securities were classified as available-for-sale. At July 31,
1996, mortgage-backed securities held-to-maturity totaled $44.1 million and had
a fair value of $42.2 million. In 1995, the FASB issued a special report
allowing the transfer of securities from held-to-maturity to the
available-for-sale classification during the period from November 15, 1995 to
December 31, 1995, with no recognition of any related unrealized gain or loss in
current earnings. On December 31, 1995, the Bank transferred mortgage-backed
securities held-to-maturity with an amortized cost of approximately $56.4
million to the available-for-sale classification. The gross unrealized gain
related to the transferred securities was approximately $609,000.

     Mortgage-Backed Securities. The Bank invests in mortgage-backed securities
and uses such investments to complement its mortgage lending activities and
supplement such activities at times of low mortgage loan demand.

     At July 31, 1996, all securities in the Bank's mortgage-backed securities
portfolio were directly insured or guaranteed by FNMA or FHLMC, thereby
providing the certificate holder a guarantee of timely payments of interest and
scheduled principal payments, whether or not they are collected. The Bank's
mortgage-backed securities portfolio had a weighted average yield of 6.32% at
July 31, 1996.

     Mortgage-backed securities generally yield less than the loans that
underlie such securities because of the cost of payment guarantees or credit
enhancements that reduce credit risk. In addition, mortgage-backed securities
are more liquid than individual mortgage loans and may be used to collateralize
borrowings of the Bank. In general, mortgage-backed securities issued or
guaranteed by GNMA, FNMA and FHLMC and certain AAA-rated mortgage-backed
pass-through securities are weighted at no more than 20% for risk-based capital
purposes, compared to the 50% risk weighing assigned to most non-securitized
residential mortgage loans.

     While mortgage-backed securities carry a reduced credit risk as compared to
whole loans, such securities remain subject to the risk that a fluctuating
interest rate environment, along with other factors such as the geographic
distribution of the underlying mortgage loans, may alter the prepayment rate of
such mortgage loans and so affect both the prepayment speed, and value, of such
securities. See "Risk Factors -- Potential Impact of Changes in Interest Rates"
and "-- Concentration in Mortgage-backed Securities."


                                       65

<PAGE>

     The following table sets forth activity in the Bank's mortgage-backed
securities portfolio for the periods indicated.

                                                For the Year Ended July 31,
                                            ------------------------------------
                                               1996         1995         1994
                                               ----         ----         ----
                                                       (In thousands)
Held-to-maturity: .......................
  Amortized cost at beginning of period .   $ 111,283    $ 111,987    $  47,524
  Purchases/sales, net ..................        --         10,305       83,244
  Transfer (to) from available-for-sale .     (56,447)        --           --
  Principal repayments ..................     (10,484)     (10,817)     (18,828)
  Premium and discount amortization, net         (219)        (192)          47
                                            ---------    ---------    ---------
  Amortized cost at end of period .......   $  44,133    $ 111,283    $ 111,987
                                            =========    =========    =========
Available-for-sale:
  Amortized cost at beginning of period .   $    --      $    --      $    --
  Purchases/sales, net ..................      10,081         --           --
  Transfer (to) from held-to-maturity ...      56,447         --           --
  Principal repayments ..................      (6,622)        --           --
  Premium and discount amortization, net           (8)        --           --
                                            ---------    ---------    ---------
  Amortized cost at end of period .......   $  59,898    $    --      $    --
                                            =========    =========    =========

Total mortgage-backed securities ........   $ 104,031    $ 111,283    $ 111,987
                                            =========    =========    =========

     The following table sets forth certain information regarding the amortized
cost and fair value of the Bank's mortgage-backed securities at the dates
indicated.

<TABLE>
<CAPTION>
                                                        At July 31,
                              ----------------------------------------------------------------
                                      1996                  1995                  1994
                              --------------------  --------------------  --------------------
                              Amortized    Fair     Amortized    Fair     Amortized    Fair
                                Cost       Value      Cost       Value      Cost       Value
                              ---------   --------  ---------   --------  ---------   --------
                                                       (In thousands)
<S>                            <C>        <C>        <C>        <C>        <C>        <C>     
Held-to-maturity:
  FNMA .....................   $ 39,135   $ 37,195   $ 78,831   $ 77,117   $ 81,203   $ 77,926
  FHLMC ....................      4,998      4,960     32,452     32,000     30,784     29,931
                               --------   --------   --------   --------   --------   --------
     Total held-to-maturity    $ 44,133   $ 42,155   $111,283   $109,117   $111,987   $107,857
                               ========   ========   ========   ========   ========   ========
Availables-for-sale:
  FHMA .....................   $ 37,454   $ 36,596   $   --     $   --     $   --     $   --
  FHLMC ....................     22,444     21,682       --         --         --         --
                               --------   --------   --------   --------   --------   --------
    Total available-for-sale   $ 59,898   $ 58,278   $   --     $   --     $   --     $   --
                               ========   ========   ========   ========   ========   ========

    Total mortgage-backed
      securities ...........   $104,031   $100,433   $111,283   $109,117   $111,987   $107,857
                               ========   ========   ========   ========   ========   ========
</TABLE>


                                       66

<PAGE>

     The table below sets forth certain information regarding the amortized
cost, fair value, weighted average yields and stated maturity of the Bank's
mortgage-backed securities at July 31, 1996. No effect has been given to
prepayments or amortization of loans. There were no mortgage-backed securities
(exclusive of obligations of the U.S. Government and any federal agencies)
issued by any one entity with a total carrying value in excess of 10% of
retained earnings at July 31, 1996.

                                                        At July 31, 1996
                                               ---------------------------------
                                                                        Weighted
                                               Amortized      Fair      Average
                                                 Cost         Value     Coupon
                                               ---------      -----     --------
                                                    (Dollars in thousands)
Held-to-maturity:
Due within 1 year .........................     $  1,129     $  1,129    7.00%
Due after 1 year but within 5 years .......       43,004       41,026    6.32
Due after 5 years but within 10 years .....         --           --        --
Due after 10 years ........................         --           --        --
                                                --------     --------    ----
     Total held-to-maturity ...............     $ 44,133     $ 42,155    6.34%
                                                ========     ========    ====
Available-for-sale:
                                                                         ----
Due within 1 year .........................     $   --       $   --       -- %
Due after 1 year but within 5 years .......       22,701       21,767    5.67
Due after 5 years but within 10 years .....        9,098        8,959    7.07
Due after 10 years ........................       28,099       27,552    7.09
                                                --------     --------    ----
     Total available-for-sale .............     $ 59,898     $ 58,278    6.55%
                                                ========     ========    ====
Total:
                                                                         ----
Due within 1 year .........................     $  1,129     $  1,129    7.00%
Due after 1 year but within 5 years .......       65,705       62,793    6.10
Due after 5 years but within 10 years .....        9,098        8,959    7.07
Due after 10 years ........................       28,099       27,552    7.09
                                                --------     --------    ----
     Total mortgage-backed securities .....     $104,031     $100,433    6.46%
                                                ========     ========    ====

     Investment Securities. Federal savings associations have the authority to
invest in various types of liquid assets, including United States Treasury
obligations, securities of various federal agencies, certain certificates of
deposit of insured banks and savings institutions, certain bankers' acceptances,
repurchase agreements and federal funds. Subject to various restrictions,
federal savings associations may also invest their assets in commercial paper,
investment grade corporate debt securities and mutual funds whose assets conform
to the investments that a federal savings association is otherwise authorized to
make directly. The Bank, from time to time, has used investment securities to
supplement loan volume and to provide short- and intermediate-term assets for
asset/liability management purposes. From time to time, the Bank has invested in
high-quality investment securities with various terms to maturity. At July 31,
1996, the Bank had no investments in investment securities.

Real Estate Investment

     The investment in real estate held for sale and development originally
consisted of 158 single family detached home sites and a 15-acre commercial
parcel in a Planned Unit Development named the Trails of Olympia Fields.
However, the Bank has nearly liquidated this investment through sales. At July
31, 1996, only one five acre commercial parcel with a book value of $262,000
remained unsold. Upon consummation of the Conversion, the Company will acquire
this parcel from the Bank. For the fiscal years ended July 31, 1996, 1995, 1994,
1993, and 1992, the investment in the Trails of Olympia Fields was $262,000,
$262,000, $919,000, $1.6 million, and $2.1 million, respectively. Sales during
the three fiscal years ended July 31, 1996, 1995, and 1994 resulted in gross
profits of $0, $557,000, and $574,000, respectively. These gross


                                       67

<PAGE>

profits were offset by development costs of $140,000, $237,000, and $511,000 in
the fiscal years ended July 31, 1996, 1995, and 1994, respectively.

     The Bank is currently the plaintiff in litigation against the Village of
Olympia Field, its trustees, The Home Owners Association of the Trails of
Olympia Fields and individual members of its Home Owners Association over
matters that impeded the orderly development of the Trails of Olympia Field.

Sources of Funds

     General. Savings deposits are the primary source of the Bank's funds for
use in lending and for other general business purposes. In addition to savings
deposits, the Bank derives funds from loan and security repayments and
prepayments, from advances from the FHLB of Chicago, from other borrowings, net
revenues from operations and to a lesser extent from loan sales. Loan and
mortgage-backed and investment securities repayments are a relatively stable
source of funds, while savings inflows and outflows and loan and mortgage-backed
and investment securities prepayments are significantly influenced by general
interest rates and money market conditions. Borrowings, primarily from the FHLB
of Chicago, may be used on a short-term basis to compensate for reductions in
normal sources of funds at less than projected levels. They may also be used on
a longer term basis to support expanded activities.

     Savings Deposits. The Bank offers several types of savings programs to
attract short-term and long-term savings deposits, including passbook, various
NOW accounts, money market deposit accounts and a variety of fixed-rate, money
market certificates. Deposit account terms vary according to the minimum balance
required, the time periods the funds must remain on deposit and the interest
rate, among other factors. The Bank's savings deposits are obtained
predominantly from the areas near its office locations. The Bank relies
primarily on customer service and long-standing relationships with customers to
attract and retain these savings deposits; however, market interest rates and
rates offered by competing financial institutions significantly affect the
Bank's ability to attract and retain savings deposits. Certificate accounts in
excess of $100,000 are not actively solicited by the Bank nor does the Bank use
brokers to obtain savings deposits. At July 31, 1996, the Bank had approximately
$137.2 million outstanding in savings deposits.

     The competitive rates paid on insured savings deposits has allowed the Bank
to be more aggressive in obtaining funds and has given it more flexibility to
minimize net deposit outflows. However, competitive interest rates have also
resulted in a more volatile cost of funds.

     The following table sets forth the distribution of the Bank's deposit
accounts at the dates indicated and the weighted average interest rates on each
category of savings deposits presented. Management does not believe that the use
of year end balances instead of average monthly balances would result in any
material difference in the information presented.

<TABLE>
<CAPTION>
                                                                           At July 31,
                                 ------------------------------------------------------------------------------------------------
                                              1996                            1995                             1994
                                 ------------------------------  -------------------------------   ------------------------------
                                          Percent of  Weighted             Percent of  Weighted             Percent of  Weighted
                                             Total     Average                Total     Average                Total     Average
                                 Amount    Deposits     Rate      Amount    Deposits     Rate       Amount   Deposits     Rate
                                 --------  --------   --------   --------   --------   --------    --------  --------   --------
                                                                     (Dollars in thousands)
<S>                              <C>            <C>              <C>             <C>               <C>            <C>            
Noninterest-bearing NOW accounts $  4,165       3.0%        --%  $  3,799        2.6%        --%   $  3,559       2.5%        --%
Interest-bearing NOW accounts...    7,310       5.3       2.02      7,295        4.9       2.02       8,236       5.8       2.02
Money market demand accounts....   13,035       9.5       3.12     14,717        9.9       3.16      18,039      12.7       2.65
Passbook accounts...............   41,324      30.2       2.50     44,241       29.8       2.50      47,349      33.4       2.50
Certificates of deposit.........   71,343      52.0       5.48     78,298       52.8       5.52      64,647      45.6       4.13
                                 --------  --------   --------   --------   --------   --------    --------  --------   --------
     Totals..................... $137,177     100.0%      4.01%  $148,350      100.0%      4.07%   $141,830     100.0%      3.13%
                                 ========  ========   ========   ========   ========   ========    ========  ========   ========
</TABLE>
                                                     

                                       68

<PAGE>

     The following table presents the savings deposit activity of the Bank for
the periods indicated.

                                                For the Year Ended July 31,
                                            ------------------------------------
                                               1996         1995         1994
                                               ----         ----         ----
                                                       (In thousands)
Deposits ................................   $ 266,028    $ 265,702    $ 246,545
Withdrawals .............................    (282,429)    (263,875)    (240,427)
                                            ---------    ---------    ---------
Deposits in excess of (less than)
  withdrawals ...........................     (16,401)       1,827        6,118
Interest credited .......................       5,228        4,693        4,208
                                            ---------    ---------    ---------
    Total increase (decrease) in savings
       deposits .........................   $ (11,173)   $   6,520    $  10,326
                                            =========    =========    =========

     At July 31, 1996, the Bank had $6.1 million in certificate accounts with a
balance of $100,000 or greater maturing as follows:

                                                                Weighted
                                                   Amount     Average Rate
                                                   ------     ------------
                                                    (Dollars in thousands)
Maturity Period
Within three months ............................   $2,245        5.84%
After three but within six months ..............    1,267        5.28
After six but within 12 months .................      879        5.33
After 12 months ................................    1,752        5.14
                                                   ------        ----
   Total .......................................   $6,143        5.45%
                                                   ======        ====
                                                              
     The following table sets forth the amount of certificates of deposit
outstanding at the dates indicated and the remaining period to maturity of the
certificates of deposit outstanding at July 31, 1996.

<TABLE>
<CAPTION>
                        Period to Maturity at July 31, 1996
                     ------------------------------------------         Total at July 31,
                     Less than    One to     More than Three to   -----------------------------
Interest Rate Range   One Year  Three Years      Five Years         1996      1995      1994
- -------------------   --------  -----------      ----------         ----      ----      ----
                                               (In thousands)
<S>                  <C>         <C>                <C>           <C>        <C>       <C>     
4.00% and below..... $    949    $     19           $   --        $    968   $  2,439  $ 29,898
4.01% to 5.00%......   16,417       1,809               --          18,226     21,235    21,245
5.01% to 6.00%......   20,322      13,269              924          34,515     28,081    12,572
6.01% to 7.00%......   15,608       2,013               13          17,634     26,502       413
7.01% and above.....       --          --               --              --         41       519
                     --------    --------           ------        --------   --------  --------
     Total.......... $ 53,296    $ 17,110           $  937        $ 71,343   $ 78,298  $ 64,647
                     ========    ========           ======        ========   ========  ========
</TABLE>

     Borrowings. Although savings deposits are the primary source of funds for
the Bank's lending and investment activities and for its general business
purposes, the Bank has in the past relied upon advances from the FHLB of Chicago
and, to a lesser extent, reverse repurchase agreements, to supplement its supply
of funds and to meet deposit withdrawal requirements. The Bank may obtain
advances from the FHLB of Chicago on the security of the capital stock of the
FHLB of Chicago it owns and certain of its home mortgage loans and/or
mortgage-backed and investment securities provided certain standards related to
creditworthiness have been met. See "Regulation -- Regulation of Federal Savings
Associations -- Federal Home Loan Bank System." Such advances are made pursuant
to several different credit programs. Each credit program has its own interest
rate and range of maturities, and the FHLB of Chicago prescribes acceptable uses
to which the advances pursuant to each program may be used as well as
limitations on the size of such advances. Depending on the program, such
limitations are based either on a fixed percentage of assets or the Bank's
creditworthiness. The FHLB is required to review its credit limitations and
standards at least once every six months. FHLB advances have from time to time
been used to meet liquidity needs. At July 31, 1996, the Bank


                                       69

<PAGE>

had $39.9 million in FHLB of Chicago borrowings and the capability to borrow
additional funds upon complying with the FHLB of Chicago's collateral
requirements. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources" and "Regulation
- -- Regulation of Federal Savings Associations -- Federal Home Loan Bank System."

     The Bank at times sells securities under agreements to repurchase, which
transactions are treated as financings, and the obligation to repurchase the
securities sold is reflected as a liability in the statements of financial
condition. The dollar amount of securities underlying the agreements remains in
the asset account and are held in safekeeping. During 1994, there was an
agreement for securities sold under agreements to repurchase in the amount of
approximately $20.6 million at a rate of 5.50%. There were no securities sold
under the agreements to repurchase outstanding at July 31, 1996, 1995 and 1994.

     The following table sets forth certain information regarding borrowings at
the dates and for the fiscal years indicated:

                                                          At or For the
                                                       Year Ended July 31,
                                                  ------------------------------
                                                   1996       1995       1994
                                                   ----       ----       ----
                                                     (Dollars in thousands)
FHLB of Chicago advances:
  Maximum amount outstanding at any
    month-end during the period ...............   $43,000    $35,300    $39,600
  Average balance outstanding .................    37,800     33,685     35,938
  Balance outstanding at end of period ........    39,900     32,300     34,300
  Weighted average interest rate during the 
    period ....................................      6.68%      6.74%      6.76%
  Weighted average interest rate at end of 
    period ....................................      6.75%      6.83%      6.50%
Repurchase agreements:
  Maximum amount outstanding at any
month-end during the period ...................   $  --      $  --      $20,611
  Average balance outstanding .................      --         --        1,581
  Balance outstanding at end of period ........      --         --         --


                                       70

<PAGE>

Subsidiary Activities

     As a federally chartered savings bank, the Bank is permitted to invest an
amount equal to 2% of its assets in subsidiaries with an additional investment
of 1% of assets where such investment serves primarily community, inner city and
community development. In addition to investments in service corporations,
federal institutions are permitted to invest an unlimited amount in operating
subsidiaries engaged solely in activities which a federal savings bank may
engage in directly. The Bank maintained a wholly-owned subsidiary, Fairfield
Service Corporation ("FSC"), as a service corporation for the purpose of owning
the Bank's office building in Norridge. FSC was dissolved in the fiscal year
ended July 31, 1996.

Properties

     The Bank conducts its business through its corporate office and two branch
locations, as set forth in the following table.

                                             Date       Lease        Net Book
                                Leased or  Leased or  Expiration     Value at
                                  Owned    Acquired      Date      July 31, 1996
                                  -----    --------      ----      -------------
                                                                  (In thousands)
Main Office:
  Old McHenry Road
  Long Grove, Illinois 60047 ..   Owned      1980         --          $3,676

Branches:
  1601 North Milwaukee Avenue
  Chicago, Illinois 60647 .....   Owned      1941         --             513

  8301 West Lawrence
  Norridge, Illinois 60656 ....      (1)     1976      4/2006(2)          16

- ----------
(1)  Land leased, building owned by the Bank.
(2)  The Bank has two five-year renewal options.

Personnel

     At July 31, 1996, the Bank employed 48 full-time and 17 part-time
employees. At July 31, 1996, 45% of the Bank's employees had been with the Bank
for more than ten years. The employees are not represented by a collective
bargaining unit, and the Bank considers its relationship with its employees to
be good. The Bank seeks to compensate its personnel at a level competitive with
its savings institution peers in order to retain highly qualified employees. See
"Management of the Bank -- Benefits" for a description of certain compensation
and benefit programs offered to the Bank's employees.

Legal Proceedings

     In the ordinary course of its operations, the Bank is a party to routine
litigation involving claims incidental to the savings bank business. Management
believes that no current litigation, threatened or pending, to which the Bank or
its assets is or may become a party poses a substantial likelihood of potential
loss or exposure which would have a material adverse effect on the financial
position of the Bank.


                                       71

<PAGE>

                           FEDERAL AND STATE TAXATION

Federal Taxation

     General. The following is a discussion of material federal income tax
matters and does not purport to be a comprehensive description of the federal
income tax rules applicable to the Bank or the Company. The Bank has not been
audited by the IRS during the last five years. For federal income tax purposes,
after the Conversion, the Company and the Bank may file consolidated income tax
returns and report their income on a fiscal year basis using the accrual method
of accounting and will be subject to federal income taxation in the same manner
as other corporations with some exceptions, including particularly the Bank's
tax reserve for bad debts, discussed below.

     Tax Bad Debt Reserves. The 1996 Act, which was enacted on August 20, 1996,
made significant changes to provisions of the Internal Revenue Code of 1986 (the
"Code") relating to a savings institution's use of bad debt reserves for federal
income tax purposes and requires such institutions to recapture (i.e., take into
income) certain portions of their accumulated bad debt reserves. The effect of
the 1996 Act on the Bank is discussed below. Prior to the enactment of the 1996
Act, the Bank was permitted to establish tax reserves for bad debts and to make
annual additions thereto, which additions, within specified formula limits, were
deducted in arriving at the Bank's taxable income. The Bank's deduction with
respect to "qualifying loans," which are generally loans secured by certain
interests in real property, was permitted to be computed using an amount based
on a six-year moving average of the Bank's charge-offs for actual losses (the
"Experience Method"), or a percentage equal to 8% of the Bank's taxable income
(the "PTI Method"), computed without regard to this deduction and with
additional modifications and reduced by the amount of any permitted addition to
the non-qualifying reserve. The Bank's deduction with respect to non-qualifying
loans was required to be computed under the Experience Method. Each year the
Bank reviewed the most favorable way to calculate the deduction attributable to
an addition to the tax bad debt reserves.

     The 1996 Act. Under the 1996 Act, the PTI Method was repealed for thrifts
and the Bank will be required to use only the Experience Method of computing
additions to its bad debt reserves for the tax year beginning August 1, 1996. In
addition, the Bank will be required to recapture (i.e., take into income) over a
six year period the excess of the balance of its bad debt reserves for losses on
nonqualifying and qualifying loans as of July 31, 1996 over the greater of (a)
the balance of such reserves as of July 31, 1988 or (b) an amount that would
have been the balance of such reserves as of July 31, 1996 had the Bank always
computed the additions to its reserves using the Experience Method. The Bank's
post-July 31, 1988 nonqualifying and qualifying bad debt reserves at July 31,
1996 was approximately $574,000 which will require the Bank to report an
additional tax liability of approximately $236,000. As of July 31, 1996, this
liability has already been provided and will not require an adverse impact to
the Bank's financial condition or results of operations.

     Distributions. Under the 1996 Act, if the Bank makes "non-dividend
distributions" to the Company, such distributions will be considered to have
been made from the Bank's unrecaptured tax bad debt reserves (including the
balance of its reserves as of July 31, 1988) and then from the Bank's
supplemental reserve for losses on loans, to the extent thereof, and an amount
based on the amount distributed (but not in excess of the amount of such
reserves) will be included in the Bank's income. Non-dividend distributions
include distributions in excess of the Bank's current and accumulated earnings
and profits, as calculated for federal income tax purposes, distributions in
redemption of stock, and distributions in partial or complete liquidation.
Dividends paid out of the Bank's current or accumulated earnings and profits
will not be so included in the Bank's income.

     The amount of additional taxable income created from a non-dividend
distribution is an amount that, when reduced by the tax attributable to the
income, is equal to the amount of the distribution. Thus, if, after the
Conversion, the Bank makes a non-dividend distribution to the Company,
approximately one and one-half times the amount of such distribution (but not in
excess of the amount of such reserves) would be includable


                                       72

<PAGE>

in income for federal income tax purposes, assuming a 34% federal corporate
income tax rate. See "Regulation" and "Dividend Policy" for limits on the
payment of dividends by the Bank. The Bank does not intend to pay dividends that
would result in a recapture of any portion of its tax bad debt reserves.

     Corporate Alternative Minimum Tax. The Code imposes a tax ("AMT") on
alternative minimum taxable income ("AMTI") at a rate of 20%. Only 90% of AMTI
can be offset by net operating loss carryovers of which the Bank currently has
none. AMTI is also adjusted by determining the tax treatment of certain items in
a manner that negates the deferral of income resulting from the regular tax
treatment of those items. Thus, the Bank's AMTI is increased by an amount equal
to 75% of the amount by which the Bank's adjusted current earnings exceeds its
AMTI (determined without regard to this adjustment and prior to reduction for
net operating losses). In addition, for taxable years beginning after December
31, 1986 and before January 1, 1996, an environmental tax of 0.12% of the excess
of AMTI (with certain modifications) over $2 million is imposed on corporations,
including the Bank, whether or not an AMT is paid. Under pending legislative
proposals, the environmental tax would be extended to taxable years beginning
before January 1, 2007. The Bank does not expect to be subject to the AMT, but
may be subject to the environmental tax liability.

     Elimination of Dividends; Dividends Received Deduction. The Company may
exclude from its income 100% of dividends received from the Bank as a member of
the same affiliated group of corporations. A 70% dividends received deduction
generally applies with respect to dividends received from domestic corporations
that are not members of such affiliated group, except that an 80% dividends
received deduction applies if the Company and the Bank own more than 20% of the
stock of a corporation paying a dividend. Under pending legislative proposals,
the 70% dividends received deduction would be reduced to 50% with respect to
dividends paid after enactment of such legislation.

State and Local Taxation

     The Bank currently files a separate Illinois income tax return. It may file
a combined Illinois income tax return with the Company. For Illinois income tax
purposes, the Bank is taxed at an effective rate equal to 7.3% of Illinois
Taxable Income. For these purposes, "Illinois Taxable Income" generally means
federal taxable income, subject to certain adjustments (including the addition
of interest income on state and municipal obligations and the exclusion of
interest income on United States Treasury obligations). The exclusion of income
on United States Treasury obligations has the effect of reducing the Illinois
Taxable Income of the Bank. As of July 31, 1996, the Bank has approximately $11
million of Illinois' net loss deduction carryforward that can be utilized to
reduce Illinois taxable income.

     As an Illinois holding company, the Company will pay an annual franchise
tax to the State of Illinois.

     The Company may file a separate Illinois income tax return or it may file a
combined Illinois income tax return with the Bank. The Company will be taxed at
an effective rate equal to 7.3% of Illinois taxable income as defined above.


                                       73

<PAGE>

                                   REGULATION

General

     The Bank is subject to extensive regulation, examination, and supervision
by the OTS, as its chartering agency, and the FDIC, as its deposit insurer. The
Bank's deposit accounts are insured up to applicable limits by the SAIF
administered by the FDIC, and the Bank is a member of the FHLB of Chicago. The
Bank must file reports with the OTS and the FDIC concerning its activities and
financial condition, and it must obtain regulatory approvals prior to entering
into certain transactions, such as mergers with, or acquisitions of, other
depository institutions. The OTS and the FDIC conduct periodic examinations to
assess the Bank's compliance with various regulatory requirements. This
regulation and supervision establishes a comprehensive framework of activities
in which a savings association can engage and is intended primarily for the
protection of the insurance fund and depositors. Assuming that the holding
company form of organization is utilized, the Company, as a savings association
holding company, will also be required to file certain reports with, and
otherwise comply with, the rules and regulations of the OTS and of the
Securities and Exchange Commission (the "SEC") under the federal securities
laws.

     The OTS and the FDIC have significant discretion in connection with their
supervisory and enforcement activities and examination policies, including
policies with respect to the classification of assets and the establishment of
adequate loan loss reserves for regulatory purposes. Any change in such
policies, whether by the OTS, the FDIC or the Congress, could have a material
adverse impact on the Company, the Bank and the operations of both.

     The following discussion is intended to be a summary of the material
statutes and regulations applicable to savings associations and their holding
companies, and it does not purport to be a comprehensive description of all such
statutes and regulations.

Regulation of Federal Savings Associations

     Business Activities. The Bank derives its lending and investment powers
from the Home Owners' Loan Act, as amended (the "HOLA"), and the regulations of
the OTS thereunder. Under these laws and regulations, the Bank may invest in
mortgage loans secured by residential and commercial real estate, commercial and
consumer loans, certain types of debt securities, and certain other assets. The
Bank may also establish service corporations that may engage in activities not
otherwise permissible for the Bank, including certain real estate equity
investments and securities and insurance brokerage. These investment powers are
subject to various limitations, including (a) a prohibition against the
acquisition of any corporate debt security that is not rated in one of the four
highest rating categories; (b) a limit of 400% of an association's capital on
the aggregate amount of loans secured by non-residential real estate property;
(c) a limit of 10% of an association's assets on the aggregate amount of
commercial loans; (d) a limit of 35% of an association's assets on the aggregate
amount of consumer loans and acquisitions of certain debt securities; (e) a
limit of 5% of assets on non-conforming loans (loans in excess of the specific
limitations of the HOLA); and (f) a limit of the greater of 5% of assets or an
association's capital on certain construction loans made for the purpose of
financing what is or is expected to become residential property.

     Loans to One Borrower. Under the HOLA, savings associations are generally
subject to the same limits on loans to one borrower as are imposed on national
banks. Generally, under these limits, a savings association may not make a loan
or extend credit to a single or related group of borrowers in excess of 15% of
the association's unimpaired capital and surplus. Additional amounts may be
lent, not in excess of 10% of unimpaired capital and surplus, if such loans or
extensions of credit are fully secured by readily-marketable collateral. Such
collateral is defined to include certain debt and equity securities and bullion
but generally does not include real estate. At July 31, 1996, the Bank's
regulatory limit on loans to one borrower was $2.0 million. At July 31, 1996,
the Bank's largest aggregate amount of loans to one borrower was $299,328, and


                                       74

<PAGE>

the second largest borrower had an aggregate balance of $297,166. The Bank is in
compliance with all applicable limitations on loans to one borrower.

     QTL Test. The HOLA requires a savings association to meet a qualified
thrift lender, or "QTL" test. Under the QTL test, a savings association is
required to maintain at least 65% of its "portfolio assets" in certain
"qualified thrift investments" in at least nine months of the most recent
12-month period. "Portfolio assets" means, in general, an association's total
assets less the sum of (a) specified liquid assets up to 20% of total assets,
(b) certain intangibles, including goodwill and credit card and purchased
mortgage servicing rights, and (c) the value of property used to conduct the
association's business. "Qualified thrift investments" includes various types of
loans made for residential and housing purposes, investments related to such
purposes, including certain mortgage-backed and related securities, and consumer
loans up to 10% of the association's portfolio assets. At July 31, 1996, the
Bank maintained 98% of its portfolio assets in qualified thrift investments. The
Bank had also met the QTL test in each of the prior 12 months and was,
therefore, a qualified thrift lender.

     A savings association that fails the QTL test must either operate under
certain restrictions on its activities or convert to a bank charter. The initial
restrictions include prohibitions against (a) engaging in any new activity not
permissible for a national bank, (b) paying dividends not permissible under
national bank regulations, (c) obtaining new advances from any Federal Home Loan
Bank and (d) establishing any new branch office in a location not permissible
for a national bank in the association's home state. In addition, within one
year of the date that a savings association ceases to meet the QTL test, any
company controlling the association would have to register under, and become
subject to the requirements of, the Bank Holding Company Act of 1956, as amended
(the "BHC Act"). If the savings association does not requalify under the QTL
test within the three-year period after it failed the QTL test, it would be
required to terminate any activity and to dispose of any investment not
permissible for a national bank and would have to repay as promptly as possible
any outstanding advances from a Federal Home Loan Bank. A savings association
that has failed the QTL test may requalify under the QTL test and be free of
such limitations, but it may do so only once.

     Capital Requirements. The OTS regulations require savings associations to
meet three minimum capital standards: a tangible capital ratio requirement of
1.5% of total assets as adjusted under the OTS regulations, a leverage ratio
requirement of 3% of core capital to such adjusted total assets and a risk-based
capital ratio requirement of 8% of total risk-based capital to total
risk-weighted assets. In determining compliance with the risk-based capital
requirement, a savings association must compute its risk-weighted assets by
multiplying its assets and certain off-balance sheet items by risk-weights,
which range from 0% for cash and obligations issued by the United States
Government or its agencies to 100% for consumer and commercial loans, as
assigned by the OTS capital regulation based on the risks OTS believes are
inherent in the type of asset.

     Tangible capital is defined, generally, as common stockholders' equity
(including retained earnings), certain noncumulative perpetual preferred stock
and related earnings and minority interests in equity accounts of fully
consolidated subsidiaries, less intangibles (other than certain purchased
mortgage servicing rights) and investments in and loans to subsidiaries engaged
in activities not permissible for a national bank. Core capital is defined
similarly to tangible capital, but core capital also includes certain qualifying
supervisory goodwill and certain purchased credit card relationships.
Supplementary capital currently includes cumulative and other perpetual
preferred stock, mandatory convertible securities, subordinated debt and
intermediate preferred stock and the allowance for loan and lease losses. The
allowance for loan and lease losses includable in supplementary capital is
limited to a maximum of 1.25% of risk-weighted assets, and the amount of
supplementary capital that may be included as total capital cannot exceed the
amount of core capital.

     The OTS has promulgated a regulation that requires a savings association
with "above normal" interest rate risk, when determining compliance with its
risk-based capital requirements, to hold additional


                                       75

<PAGE>

capital to account for its "above normal" interest rate risk. Pending resolution
of related regulatory issues, the OTS has deferred enforcement of this
regulation. A savings association's interest rate risk is measured by the
decline in the net portfolio value of its assets (i.e., the difference between
incoming and outgoing discounted cash flows from assets, liabilities and
off-balance sheet contracts) resulting from a hypothetical 2% increase or
decrease in market rates of interest, divided by the estimated economic value of
the association's assets, as calculated in accordance with guidelines set forth
by the OTS. At the times when the 3-month Treasury bond equivalent yield falls
below 4%, an association may compute its interest rate risk on the basis of a
decrease equal to one-half of that Treasury rate rather than on the basis of 2%.
A savings association whose measured interest rate risk exposure exceeds 2%
would be considered to have "above normal" risk. The interest rate risk
component is an amount equal to one-half of the difference between the
association's measured interest rate risk and 2%, multiplied by the estimated
economic value of the association's assets. That dollar amount is deducted from
an association's total capital in calculating compliance with its risk-based
capital requirement. Any required deduction for interest rate risk becomes
effective on the last day of the third quarter following the reporting date of
the association's financial data on which the interest rate risk was computed.

     At July 31, 1996, the Bank met each of its capital requirements. See
"Regulatory Capital Compliance" for a table that sets forth, in terms of dollars
and percentages, the OTS tangible, leverage and risk-based capital requirements
and the Bank's historical amounts and percentages at July 31, 1996, and pro
forma amounts and percentages based upon the issuance of the shares of Common
Stock within the Estimated Price Range and assuming that 50% of the net proceeds
are retained by the Company.

     The table below presents the Bank's regulatory capital as compared to the
OTS regulatory capital requirements at July 31, 1996.

                           Bank         Capital Requirements       Excess
                     -----------------  --------------------  -----------------
                      Amount   Percent   Amount   Percent     Amount    Percent
                     --------  -------  --------  -------     --------  -------
                                      (Dollars in thousands)
Tangible capital...  $ 14,386    7.35%  $  2,936    1.50%     $ 11,450   5.85%
Core capital.......    14,386    7.35      5,872    3.00         8,514   4.35
Risk-based capital.    14,686   21.59      5,441    8.00         9,245  13.59

     A reconciliation between regulatory capital and GAAP capital at July 31,
1996 is presented below.

<TABLE>
<CAPTION>
                                        Tangible Capital  Core Capital    Risk-based Capital
                                        ----------------  ------------    ------------------
                                                         (In thousands)
<S>                                         <C>             <C>               <C>     
GAAP capital...........................     $ 13,579        $ 13,579          $ 13,579
Unrealized loss on mortgage-backed                                            
  securities available-for-sale, net                                          
  of tax...............................        1,069           1,069             1,069
Investment in real estate held for sale                                       
  and development......................         (262)           (262)             (262)
Allowance for loan loss................           --              --               300
                                            --------        --------          --------
Regulatory capital.....................     $ 14,386        $ 14,386          $ 14,686
                                            ========        ========          ========
</TABLE>

     Limitation on Capital Distributions. OTS regulations currently impose
limitations upon capital distributions by savings associations, such as cash
dividends, payments to repurchase or otherwise acquire its shares, payments to
shareholders of another institution in a cash-out merger and other distributions
charged against capital. At least 30-days written notice must be given to the
OTS of a proposed capital distribution by a savings association, and capital
distributions in excess of specified earnings or by certain institutions are
subject to approval by the OTS. An association that has capital in excess of all
fully phased-in regulatory capital requirements before and after a proposed
capital distribution and that is not otherwise restricted in


                                       76

<PAGE>

making capital distributions, may, after prior notice but without the approval
of the OTS, make capital distributions during a calendar year equal to the
greater of (a) 100% of its net earnings to date during the calendar year plus
the amount that would reduce by one-half its "surplus capital ratio" (the excess
capital over its fully phased-in capital requirements) at the beginning of the
calendar year, or (b) 75% of its net earnings for the previous four quarters.
Any additional capital distributions would require prior OTS approval. In
addition, the OTS can prohibit a proposed capital distribution, otherwise
permissible under the regulation, if the OTS has determined that the association
is in need of more than normal supervision or if it determines that a proposed
distribution by an association would constitute an unsafe or unsound practice.
Furthermore, under the OTS prompt corrective action regulations, the Bank would
be prohibited from making any capital distribution if, after the distribution,
the Bank failed to meet its minimum capital requirements, as described above.
See "-- Prompt Corrective Regulatory Action."

     The OTS has proposed regulations that would simplify the existing
procedures governing capital distributions by savings associations. Under the
proposed regulations, the approval of the OTS would be required only for capital
distributions by an association that is deemed to be in troubled condition or
that is undercapitalized or would be undercapitalized after the capital
distribution. A savings association would be able to make a capital distribution
without notice to or approval of the OTS if it is not held by a savings
association holding company, is not deemed to be in troubled condition, has
received either of the two highest composite supervisory ratings and would
continue to be adequately capitalized after such distribution. Notice would have
to be given to the OTS by any association that is held by a savings association
holding company or that had received a composite supervisory rating below the
highest two composite supervisory ratings. An association's capital rating would
be determined under the prompt corrective action regulations. See "-- Prompt
Corrective Regulatory Action."

     Liquidity. The Bank is required to maintain an average daily balance of
liquid assets (cash, certain time deposits, bankers' acceptances, specified
United States Government, state or federal agency obligations, shares of certain
mutual funds and certain corporate debt securities and commercial paper) equal
to a monthly average of not less than a specified percentage of its net
withdrawable deposit accounts plus short-term borrowings. This liquidity
requirement may be changed from time to time by the OTS to any amount within the
range of 4% to 10% depending upon economic conditions and the savings flows of
member institutions, and is currently 5%. OTS regulations also require each
savings association to maintain an average daily balance of short-term liquid
assets at a specified percentage (currently 1%) of the total of its net
withdrawable deposit accounts and borrowings payable in one year or less.
Monetary penalties may be imposed for failure to meet these liquidity
requirements. The Bank's average liquidity ratio for the month ended July 31,
1996 was 42.9% which exceeded the applicable requirements. The Bank has never
been subject to monetary penalties for failure to meet its liquidity
requirements.

     Assessments. Savings associations are required by OTS regulation to pay
assessments to the OTS to fund the operations of the OTS. The general
assessment, paid on a semi-annual basis, is computed upon the savings
association's total assets, including consolidated subsidiaries, as reported in
the association's latest quarterly Thrift Financial Report. During July 1996,
the Bank paid the semiannual assessment of $29,555.

     Branching. Subject to certain limitations, the HOLA and the OTS regulations
permit federally chartered savings associations to establish branches in any
state of the United States. The authority to establish such branches is
available (a) in states that expressly authorize branches of savings
associations located in another state or (b) to an association that qualifies as
a "domestic building and loan association" under the Internal Revenue Code of
1986, which imposes qualification requirements similar to those for a "qualified
thrift lender" under the HOLA. See "-- QTL Test." The authority for a federal
savings association to establish an interstate branch network would facilitate a
geographic diversification of the association's activities. This authority under
the HOLA and the OTS regulations preempts any state law purporting to regulate
branching by federal savings associations.


                                       77

<PAGE>

     Community Reinvestment. Under the Community Reinvestment Act (the "CRA"),
as implemented by OTS regulations, a savings association has a continuing and
affirmative obligation consistent with its safe and sound operation to help meet
the credit needs of its entire community, including low and moderate income
neighborhoods. The CRA does not establish specific lending requirements or
programs for financial institutions nor does it limit an institution's
discretion to develop the types of products and services that it believes are
best suited to its particular community, consistent with the CRA. The CRA
requires the OTS, in connection with its examination of a savings association,
to assess the association's record of meeting the credit needs of its community
and to take such record into account in its evaluation of certain applications
by such association. The CRA also requires all institutions to make public
disclosure of their CRA ratings. The Bank received a "Satisfactory" CRA rating
in its most recent examination.

     In April 1995, the OTS and the other federal banking agencies adopted
amendments revising their CRA regulations. Among other things, the amended CRA
regulations substitute for the prior process-based assessment factors a new
evaluation system that would rate an institution based on its actual performance
in meeting community needs. In particular, the proposed system would focus on
three tests: (a) a lending test, to evaluate the institution's record of making
loans in its assessment areas; (b) an investment test, to evaluate the
institution's record of investing in community development projects, affordable
housing, and programs benefiting low or moderate income individuals and
businesses; and (c) a service test, to evaluate the institution's delivery of
services through its branches, ATMs and other offices. The amended CRA
regulations also clarify how an institution's CRA performance would be
considered in the application process.

     Transactions with Related Parties. The Bank's authority to engage in
transactions with its "affiliates" is limited by the OTS regulations and by
Sections 23A and 23B of the Federal Reserve Act (the "FRA"). In general, an
affiliate of the Bank is any company that controls the Bank or any other company
that is controlled by a company that controls the Bank, excluding the Bank's
subsidiaries other than those that are insured depository institutions. The OTS
regulations prohibit a savings association (a) from lending to any of its
affiliates that is engaged in activities that are not permissible for bank
holding companies under Section 4(c) of the BHC Act and (b) from purchasing the
securities of any affiliate other than a subsidiary. Section 23A limits the
aggregate amount of transactions with any individual affiliate to 10% of the
capital and surplus of the savings association and also limits the aggregate
amount of transactions with all affiliates to 20% of the savings association's
capital and surplus. Extensions of credit to affiliates are required to be
secured by collateral in an amount and of a type described in Section 23A, and
the purchase of low quality assets from affiliates is generally prohibited.
Section 23B provides that certain transactions with affiliates, including loans
and asset purchases, must be on terms and under circumstances, including credit
standards, that are substantially the same or at least as favorable to the
association as those prevailing at the time for comparable transactions with
nonaffiliated companies. In the absence of comparable transactions, such
transactions may only occur under terms and circumstances, including credit
standards, that in good faith would be offered to or would apply to
nonaffiliated companies.

     The Bank's authority to extend credit to its directors, executive officers,
and 10% shareholders, as well as to entities controlled by such persons, is
currently governed by the requirements of Sections 22(g) and 22(h) of the FRA
and Regulation O of the FRB thereunder. Among other things, these provisions
require that extensions of credit to insiders (a) be made on terms that are
substantially the same as, and follow credit underwriting procedures that are
not less stringent than, those prevailing for comparable transactions with
unaffiliated persons and that do not involve more than the normal risk of
repayment or present other unfavorable features and (b) not exceed certain
limitations on the amount of credit extended to such persons, individually and
in the aggregate, which limits are based, in part, on the amount of the
association's capital. In addition, extensions of credit in excess of certain
limits must be approved by the association's board of directors.

     Enforcement. Under the Federal Deposit Insurance Act (the "FDI Act"), the
OTS has primary enforcement responsibility over savings associations and has the
authority to bring enforcement action against


                                       78

<PAGE>

all "institution-affiliated parties," including any controlling stockholder or
any stockholder, attorney, appraiser or accountant who knowingly or recklessly
participates in any violation of applicable law or regulation or breach of
fiduciary duty or certain other wrongful actions that causes or is likely to
cause more than a minimal loss or other significant adverse effect on an insured
savings association. Civil penalties cover a wide range of violations and
actions and range from $5,000 for each day during which violations of law,
regulations, orders, and certain written agreements and conditions continue, up
to $1 million per day for such violations if the person obtained a substantial
pecuniary gain as a result of such violation or knowingly or recklessly caused a
substantial loss to the institution. Criminal penalties for certain financial
institution crimes include fines of up to $1 million and imprisonment for up to
30 years. In addition, regulators have substantial discretion to take
enforcement action against an institution that fails to comply with its
regulatory requirements, particularly with respect to its capital requirements.
Possible enforcement actions range from the imposition of a capital plan and
capital directive to receivership, conservatorship, or the termination of
deposit insurance. Under the FDI Act, the FDIC has the authority to recommend to
the Director of OTS that enforcement action be taken with respect to a
particular savings association. If action is not taken by the Director of the
OTS, the FDIC has authority to take such action under certain circumstances.

     Standards for Safety and Soundness. The FDI Act, as amended by FDICIA and
the Riegle Community Development and Regulatory Improvement Act of 1994 (the
"Community Development Act"), requires the OTS, together with the other federal
bank regulatory agencies, to prescribe standards, by regulations or guidelines,
relating to internal controls, information systems and internal audit systems,
loan documentation, credit underwriting, interest rate risk exposure, asset
growth, asset quality, earnings, stock valuation, and compensation, fees and
benefits and such other operational and managerial standards as the agencies
deem appropriate. The OTS and the federal bank regulatory agencies have adopted,
effective August 9, 1995, a set of guidelines prescribing safety and soundness
standards pursuant to FDICIA, as amended. The guidelines establish general
standards relating to internal controls and information systems, internal audit
systems, loan documentation, credit underwriting, interest rate exposure, asset
growth, and compensation, fees and benefits. In general, the guidelines require,
among other things, appropriate systems and practices to identify and manage the
risks and exposures specified in the guidelines. The guidelines prohibit
excessive compensation as an unsafe and unsound practice and describe
compensation as excessive when the amounts paid are unreasonable or
disproportionate to the services performed by an executive officer, employee,
director or principal stockholder. The OTS and the other agencies determined
that stock valuation standards were not appropriate. In addition, the OTS
adopted regulations that authorize, but do not require, the OTS to order an
institution that has been given notice by the OTS that it is not satisfying any
of such safety and soundness standards to submit a compliance plan. If, after
being so notified, an institution fails to submit an acceptable compliance plan
or fails in any material respect to implement an accepted compliance plan, the
OTS must issue an order directing action to correct the deficiency and may issue
an order directing other actions of the types to which an undercapitalized
association is subject under the "prompt corrective action" provisions of
FDICIA. If an institution fails to comply with such an order, the OTS may seek
to enforce such order in judicial proceedings and to impose civil money
penalties. The OTS and the federal bank regulatory agencies also proposed
guidelines for asset quality and earnings standards.

     Real Estate Lending Standards. The OTS and the other federal banking
agencies adopted regulations to prescribe standards for extensions of credit
that (a) are secured by real estate or (b) are made for the purpose of financing
the construction of improvements on real estate. The OTS regulations require
each savings association to establish and maintain written internal real estate
lending standards that are consistent with safe and sound banking practices and
appropriate to the size of the association and the nature and scope of its real
estate lending activities. The standards also must be consistent with
accompanying OTS guidelines, which include loan-to-value ratios for the
different types of real estate loans. Associations are also permitted to make a
limited amount of loans that do not conform to the proposed loan-to-value
limitations so long as such exceptions are reviewed and justified appropriately.
The guidelines also list a number of lending situations in which exceptions to
the loan-to-value standards are justified.


                                       79

<PAGE>

     Prompt Corrective Regulatory Action. Under the OTS prompt corrective action
regulations, the OTS is required to take certain, and is authorized to take
other, supervisory actions against undercapitalized savings associations. For
this purpose, a savings association would be placed in one of five categories
based on the association's capital. Generally, a savings association is treated
as "well capitalized" if its ratio of total capital to risk-weighted assets is
at least 10.0%, its ratio of core capital to risk-weighted assets is at least
6.0%, its ratio of core capital to total assets is at least 5.0%, and it is not
subject to any order or directive by the OTS to meet a specific capital level. A
savings association will be treated as "adequately capitalized" if its ratio of
total capital to risk-weighted assets is at least 8.0%, its ratio of core
capital to risk-weighted assets is at least 4.0%, and its ratio of core capital
to total assets is at least 4.0% (3.0% if the association receives the highest
rating on the CAMEL financial institutions rating system). A savings association
that has a total risk-based capital of less than 8.0% or a leverage ratio or a
Tier 1 capital ratio that is less than 4.0% (3.0% leverage ratio if the
association receives the highest rating on the CAMEL financial institutions
rating system) is considered to be "undercapitalized." A savings association
that has a total risk-based capital of less than 6.0% or a Tier 1 risk-based
capital ratio or a leverage ratio of less than 3.0% is considered to be
"significantly undercapitalized." A savings association that has a tangible
capital to assets ratio equal to or less than 2% is deemed to be "critically
undercapitalized." The elements of an association's capital for purposes of the
prompt corrective action regulations are defined generally as they are under the
regulations for minimum capital requirements. See "-- Capital Requirements."

     The severity of the action authorized or required to be taken under the
prompt corrective action regulations increases as an association's capital
deteriorates within the three undercapitalized categories. All associations are
prohibited from paying dividends or other capital distributions or paying
management fees to any controlling person if, following such distribution, the
association would be undercapitalized. An undercapitalized association is
required to file a capital restoration plan within 45 days of the date the
association receives notice that it is within any of the three undercapitalized
categories. The OTS is required to monitor closely the condition of an
undercapitalized association and to restrict the asset growth, acquisitions,
branching, and new lines of business of such an association. Significantly
undercapitalized associations are subject to restrictions on compensation of
senior executive officers; such an association may not, without OTS consent, pay
any bonus or provide compensation to any senior executive officer at a rate
exceeding the officer's average rate of compensation (excluding bonuses, stock
options and profit-sharing) during the 12 months preceding the month when the
association became undercapitalized. A significantly undercapitalized
association may also be subject, among other things, to forced changes in the
composition of its board of directors or senior management, additional
restrictions on transactions with affiliates, restrictions on acceptance of
deposits from correspondent associations, further restrictions on asset growth,
restrictions on rates paid on deposits, forced termination or reduction of
activities deemed risky, and any further operational restrictions deemed
necessary by the OTS.

     If one or more grounds exist for appointing a conservator or receiver for
an association, the OTS may require the association to issue additional debt or
stock, sell assets, be acquired by a depository association holding company or
combine with another depository association. The OTS and the FDIC have a broad
range of grounds under which they may appoint a receiver or conservator for an
insured depositary association. Under FDICIA, the OTS is required to appoint a
receiver (or with the concurrence of the FDIC, a conservator) for a critically
undercapitalized association within 90 days after the association becomes
critically undercapitalized or, with the concurrence of the FDIC, to take such
other action that would better achieve the purposes of the prompt corrective
action provisions. Such alternative action can be renewed for successive 90-day
periods. However, if the association continues to be critically undercapitalized
on average during the quarter that begins 270 days after it first became
critically undercapitalized, a receiver must be appointed, unless the OTS makes
certain findings with which the FDIC concurs and the Director of the OTS and the
Chairman of the FDIC certify that the association is viable. In addition, an
association that is critically undercapitalized is subject to more severe
restrictions on its activities, and is prohibited, without prior approval of the
FDIC from, among other things, entering into certain material transactions or
paying interest


                                       80

<PAGE>

on new or renewed liabilities at a rate that would significantly increase the
association's weighted average cost of funds.

     When appropriate, the OTS can require corrective action by a savings
association holding company under the "prompt corrective action" provisions of
FDICIA.

     Insurance of Deposit Accounts. The Bank is a member of the SAIF, and the
Bank pays its deposit insurance assessments to the SAIF. The FDIC also maintains
another insurance fund, the BIF, which primarily insures the deposits of banks
and state chartered savings banks.

     Pursuant to FDICIA, the FDIC established a risk-based assessment system for
determining the deposit insurance assessments to be paid by insured depositary
institutions. Under the assessment system, the FDIC assigns an institution to
one of three capital categories based on the institution's financial information
as of the reporting period ending seven months before the assessment period. The
three capital categories consist of (a) well capitalized, (b) adequately
capitalized or (c) undercapitalized. The FDIC also assigns an institution to one
of three supervisory subcategories within each capital group. The supervisory
subgroup to which an institution is assigned is based on a supervisory
evaluation provided to the FDIC by the institution's primary federal regulator
and information that the FDIC determines to be relevant to the institution's
financial condition and the risk posed to the deposit insurance funds. An
institution's assessment rate depends on the capital category and supervisory
category to which it is assigned. Under the regulation, there are nine
assessment risk classifications (i.e., combinations of capital groups and
supervisory subgroups) to which different assessment rates are applied. The
assessment rates for both the BIF and the SAIF range from 0.23% of deposits for
an institution in the highest category (i.e., well-capitalized and financially
sound, with no more than a few minor weaknesses) to 0.31% of deposits for an
institution in the lowest category (i.e., undercapitalized and substantial
supervisory concern).

     The FDI Act requires that the BIF and the SAIF funds each be recapitalized
until reserves are at least 1.25% of the deposits insured by that fund. After a
fund reached the 1.25% reserve ratio, the assessment rates for that fund could
be reduced. The FDIC has reported that the BIF reached the required reserve
ratio during May 1995. As a result of the recapitalization of the BIF, the FDIC
reduced BIF assessment rates. The FDIC reduced the BIF assessment rate for "well
capitalized" institutions without any significant supervisory concerns to the
statutory minimum of $2,000 annually beginning with the first half of 1996, and
the rates for other BIF-insured institutions will range from zero to 0.27% of
deposits.

     The FDIC has reported that, under current law and reasonably optimistic
financial projections, the SAIF is not expected to be recapitalized until 2001.
SAIF reserves have not grown as quickly as the BIF reserves due to a number of
factors, including the fact that a significant portion of SAIF premiums have
been and are currently being used to make payments on bonds (the "FICO bonds")
issued in the late 1980s by the Financing Corporation to recapitalize the now
defunct Federal Savings and Loan Insurance Corporation. Accordingly, the FDIC
has determined that SAIF-insured institutions should continue to pay assessments
at the current SAIF assessment rates, which range from 0.23% of deposits to
0.31% of deposits. The Bank's assessment rate for 1996 is 0.23% of deposits.

     The resulting disparity in deposit insurance assessments rates between the
SAIF members and the BIF members is likely to provide institutions paying only
the BIF assessments with certain competitive advantages in the pricing of loans
and deposits, and in lowered operating costs, pending any legislative action to
remedy the disparity. Congress has considered proposed legislation to address
these issues. See "Risk Factors -- Recapitalization of the SAIF; SAIF Premiums
and Possible Special Assessment."

     Under the FDI Act, insurance of deposits may be terminated by the FDIC upon
a finding that the institution has engaged in unsafe or unsound practices, is in
an unsafe or unsound condition to continue operations or has violated any
applicable law, regulation, rule, order or condition imposed by the FDIC or


                                       81

<PAGE>

the OTS. The management of the Bank does not know of any practice, condition or
violation that might lead to termination of deposit insurance.

     Federal Home Loan Bank System. The Bank is a member of the FHLB of Chicago,
which is one of the regional Federal Home Loan Banks composing the Federal Home
Loan Bank System. Each Federal Home Loan Bank provides a central credit facility
primarily for its member institutions. The Bank, as a member of the FHLB of
Chicago, is required to acquire and hold shares of capital stock in the FHLB of
Chicago in an amount at least equal to the greater of 1% of the aggregate
principal amount of its unpaid residential mortgage loans and similar
obligations at the beginning of each year or 1/20 of its advances (borrowings)
from the FHLB of Chicago. The Bank was in compliance with this requirement with
an investment in the capital stock of the FHLB of Chicago at July 31, 1996, of
$2.0 million. Any advances from a Federal Home Loan Bank must be secured by
specified types of collateral, and all long-term advances may be obtained only
for the purpose of providing funds for residential housing finance.

     The Federal Home Loan Banks are required to provide funds for the
resolution of insolvent thrifts and to contribute funds for affordable housing
programs. These requirements could reduce the amount of earnings that the
Federal Home Loan Banks can pay as dividends to their members and could also
result in the Federal Home Loan Banks imposing a higher rate of interest on
advances to their members. The Bank earned dividends on the FHLB of Chicago
capital stock in amounts equal to $148,000, $143,000 and $129,000 during the
years ended July 31, 1996, 1995 and 1994, respectively. If dividends were
reduced, or interest on future Federal Home Loan Bank advances increased, the
Bank's net interest income would likely also be reduced. Further, there can be
no assurance that the impact of FDICIA and the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 ("FIRREA") on the Federal Home Loan Banks
will not also cause a decrease in the value of the FHLB of Chicago stock held by
the Bank.

     Federal Reserve System. The Bank is subject to provisions of the FRA and
the FRB's regulations pursuant to which depositary institutions may be required
to maintain non-interest-earning reserves against their deposit accounts and
certain other liabilities. Currently, reserves must be maintained against
transaction accounts (primarily NOW and regular checking accounts). The FRB
regulations generally require that reserves be maintained in the amount of 3% of
the aggregate of transaction accounts up to $52.0 million. The amount of
aggregate transaction accounts in excess of $52.0 million are currently subject
to a reserve ratio of 10%, which ratio the FRB may adjust between 8% and 12%.
The FRB regulations currently exempt $4.3 million of otherwise reservable
balances from the reserve requirements, which exemption is adjusted by the FRB
at the end of each year. The Bank is in compliance with the foregoing reserve
requirements. Because required reserves must be maintained in the form of either
vault cash, a non-interest-bearing account at a Federal Reserve Bank, or a
pass-through account as defined by the FRB, the effect of this reserve
requirement is to reduce the Bank's interest-earning assets. The balances
maintained to meet the reserve requirements imposed by the FRB may be used to
satisfy liquidity requirements imposed by the OTS. Federal Home Loan Bank System
members are also authorized to borrow from the Federal Reserve "discount
window," but FRB regulations require such institutions to exhaust all Federal
Home Loan Bank sources before borrowing from a Federal Reserve Bank.

Regulation of Savings Association Holding Companies

     The Company, if utilized, will be a non-diversified unitary savings
association holding company within the meaning of the HOLA, as amended. As such,
the Company will be required to register with the OTS and will be subject to OTS
regulations, examinations, supervision and reporting requirements. In addition,
the OTS has enforcement authority over the Company and its non-savings
association subsidiaries, if any. Among other things, this authority permits the
OTS to restrict or prohibit activities that are determined to be a serious risk
to the financial safety, soundness, or stability of a subsidiary savings
association.


                                       82

<PAGE>

     The HOLA prohibits a savings association holding company, directly or
indirectly, or through one or more subsidiaries, from acquiring another savings
association or holding company thereof, without prior written approval of the
OTS; acquiring or retaining, with certain exceptions, more than 5% of a
non-subsidiary savings association, a non-subsidiary holding company, or a
non-subsidiary company engaged in activities other than those permitted by the
HOLA; or acquiring or retaining control of a depository institution that is not
insured by the FDIC. In evaluating an application by a holding company to
acquire a savings association, the OTS must consider the financial and
managerial resources and future prospects of the company and savings association
involved, the effect of the acquisition on the risk to the insurance funds, the
convenience and needs of the community and competitive factors.

     As a unitary savings association holding company, the Company generally
will not be restricted under existing laws as to the types of business
activities in which it may engage, provided that the Bank continues to satisfy
the QTL test. See "-- Regulation of Federal Savings Associations -- QTL Test"
for a discussion of the QTL requirements. Upon any non-supervisory acquisition
by the Company of another savings association or savings bank that meets the QTL
test and is deemed to be a savings association by the OTS and that will be held
as a separate subsidiary, the Company would become a multiple savings
association holding company and would be subject to limitations on the types of
business activities in which it could engage. The HOLA limits the activities of
a multiple savings association holding company and its non-insured association
subsidiaries primarily to activities permissible for bank holding companies
under Section 4(c)(8) of the BHC Act, subject to the prior approval of the OTS,
and to other activities authorized by OTS regulation.

     The OTS is prohibited from approving any acquisition that would result in a
multiple savings association holding company controlling savings associations in
more than one state, subject to two exceptions: an acquisition of a savings
association in another state (a) in a supervisory transaction or (b) pursuant to
authority under the laws of the state of the association to be acquired that
specifically permit such acquisitions. The conditions imposed upon interstate
acquisitions by those states that have enacted authorizing legislation vary.
Some states impose conditions of reciprocity, which have the effect of requiring
that the laws of both the state in which the acquiring holding company is
located (as determined by the location of its subsidiary savings association)
and the state in which the association to be acquired is located, have each
enacted legislation allowing its savings associations to be acquired by
out-of-state holding companies on the condition that the laws of the other state
authorize such transactions on terms no more restrictive than those imposed on
the acquiror by the state of the target association. Some of these states also
impose regional limitations, which restrict such acquisitions to states within a
defined geographic region. Other states allow full nationwide banking without
any condition of reciprocity. Some states do not authorize interstate
acquisitions of savings associations.

     Transactions between the Bank and the Company and its other subsidiaries
would be subject to various conditions and limitations. See "-- Regulation of
Federal Savings Associations -- Transactions with Related Parties." The Bank
would have to give 30-days written notice to the OTS prior to any declaration of
the payment of any dividends or other capital distributions to the Company. See
"-- Regulation of Federal Savings Associations -- Limitation on Capital
Distributions."

Federal Securities Laws

     The Company has filed with the SEC a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), for the registration
of the Common Stock to be issued pursuant to the Conversion. Upon completion of
the Conversion, the Company's Common Stock will be registered with the SEC under
the Exchange Act. The Company will then be subject to the information, proxy
solicitation, insider trading restrictions and other requirements under the
Exchange Act.

     The registration under the Securities Act of shares of the Common Stock to
be issued in the Conversion does not cover the resale of such shares. Shares of
the Common Stock purchased by persons who


                                       83

<PAGE>

are not affiliates of the Company may be resold without registration. Shares
purchased by an affiliate of the Company will be subject to the resale
restrictions of Rule 144 under the Securities Act. If the Company meets the
current public information requirements of Rule 144 under the Securities Act,
each affiliate of the Company who complies with the other conditions of Rule 144
(including those that require the affiliate's sale to be aggregated with those
of certain other persons) would be able to sell in the public market, without
registration, a number of shares not to exceed, in any three-month period, the
greater of (a) 1% of the outstanding shares of the Company or (b) the average
weekly volume of trading in such shares during the preceding four calendar
weeks. Provision may be made in the future by the Company to permit affiliates
to have their shares registered for sale under the Securities Act under certain
circumstances.

     In the event that the holding company form of organization is not utilized,
the shares of the Bank's common stock to be issued and sold in the Conversion
would be exempt from registration under Section 3(a)(5) of the Securities Act.
Prior to the sale of all shares of its common stock in such a case, the Bank
would register its capital stock under Section 12(g) of the Exchange Act. Upon
such registration, the proxy rules, tender offer rules, insider trading
restrictions, annual and periodic reporting and other requirements of the
Exchange Act would also be applicable to the Bank but under the jurisdiction of
the OTS. The Bank would be required by the OTS to maintain said registration for
a period of at least three years following Conversion. The Bank will, however,
register with and report to the OTS and not to the SEC.


                                       84

<PAGE>

                            MANAGEMENT OF THE COMPANY

     The Board of Directors of the Company is divided into three classes, each
of which contains approximately one-third of the Board. The directors shall be
elected by the shareholders of the Company for staggered three-year terms, or
until their successors are elected and qualified. One class of directors,
consisting of George M. Briody, F. Gregory Opelka and Joseph J. Nimrod, has a
term of office expiring at the first annual meeting of shareholders; a second
class, consisting of Eugene W. Pilawski and Walter E. Powers, M.D. has a term of
office expiring at the second annual meeting of shareholders; and a third class,
consisting of Maurice F. Leahy and William B. O'Connell, has a term of office
expiring at the third annual meeting of shareholders. Biographical information
with respect to each individual is set forth under "Management of the
Bank--Biographical Information."

     The following individuals are executive officers of the Company and hold
the offices set forth below opposite their names.

     Name                            Position Held with the Company
     ----                            ------------------------------
     George M. Briody.............   President
     F. Gregory Opelka............   Executive Vice President
     Timothy L. McCue.............   Vice President and Chief Financial Officer
     Robert Jones.................   Vice President
     Michael Cahill...............   Vice President
     Jerome A. Maher..............   Vice President

     The executive officers of the Company are elected annually and hold office
until their respective successors have been elected and qualified or until
death, resignation or removal by the Board of Directors.

     Since the formation of the Company, none of the executive officers,
directors or other personnel has received remuneration from the Company. It is
currently expected that, unless and until the Company becomes actively involved
in business activities separate from those conducted by the Bank, no separate
compensation will be paid to the directors and employees of the Company.
However, directors of the Company or the Bank who are not employees of the
Company or the Bank or any of their subsidiaries ("Outside Directors") may be
entitled to participate in stock incentive plans established by the Company. See
"Management of the Bank." The Company will also guarantee certain obligations of
the Bank to the Bank's executive officers, employees and directors, as described
below. Information concerning the principal occupations, employment and
compensation of the directors and officers of the Company during the past five
years is set forth under "Management of the Bank -- Biographical Information."


                                       85

<PAGE>

                             MANAGEMENT OF THE BANK

Directors

     The following table sets forth certain information regarding the Board of
Directors of the Bank.

                                   Positions Held With     Director     Term
Name                      Age(1)         the Bank          Since       Expires
- ----                      ------   ----------------------  --------    -------
George M. Briody.......     69     President, Director       1951       1997
F. Gregory Opelka......     68     Executive Vice            1972       1997
                                     President, Director
Maurice F. Leahy.......     66     Director                  1978       1999
Eugene W. Pilawski.....     73     Director                  1990       1998
Joseph J. Nimrod.......     67     Director                  1978       1997
Walter E. Powers, M.D..     68     Director                  1977       1998
William B. O'Connell...     73     Director                  1989       1999

- ----------
(1)  At July 31, 1996.

Executive Officers

     The executive officers of the Bank are Mr. Briody and Mr. Opelka, who are
directors of the Bank, and Mr. McCue, Mr. Cahill, Mr. Jones and Mr. Maher, who
are not directors of the Bank. See "Management of the Company." Each of the
executive officers of the Bank will retain his office in the converted Bank
until the annual meeting of the Board of Directors of the Bank held immediately
after the first annual meeting of shareholders of the Company subsequent to
Conversion and until their successors are elected and qualified or until they
are removed or replaced. Officers are re-elected by the Board of Directors
annually.

Biographical Information

     Positions held by a director or executive officers have been held for at
least the past five years unless stated otherwise.

     Directors

     George M. Briody serves as the President and a director of the Bank. Mr.
Briody has been involved in the financial institutions industry for more than 40
years and has served as President of the Bank since 1966 and as a director since
1951. He also has served as a director of the Chicago Area Council, the Illinois
Savings and Loan League, the FHLB of Chicago, the U.S. League of Savings
Institutions, Inc. and Electronic Funds Transfer Corporations I and II. Mr.
Briody is currently a member of the Central Savings and Loan Group. He is also a
member of the Illinois and Chicago Bar Associations. He is a past president of
the Central Savings and Loan Group and the Illinois Savings and Loan League. Mr.
Briody and Mr. Opelka are brothers-in-law.

     F. Gregory Opelka serves as the Executive Vice President and a director of
the Bank. Mr. Opelka joined the Bank in 1954 and has served as a director since
1972. He is a member of the Appraisal Institute and holds Member, Senior Real
Estate Analyst, and Senior Residential Appraiser designations. He is currently a
director of the Market Data Center and an appraisal consultant authoring
"Appraisal Report," a


                                       86

<PAGE>

quarterly article for the America's Community Banker's member magazine. Mr.
Opelka and Mr. Briody are brothers-in-law.

     Maurice F. Leahy has been a director of the Bank since 1978. Now retired,
he was an account executive for P.M.P. Sales, Inc., a meat and poultry broker.
Previously he owned and operated a meat and poultry retail business for more
than 25 years.

     Eugene W. Pilawski joined the Bank in 1949. Now retired, he had served as
Senior Vice President of the Bank from 1987 to 1992. Prior to this promotion, he
served as Vice President and Senior Loan Officer. He was elected to the Board of
Directors in September, 1990. Mr. Pilawski is a member of the Chicago Bar
Association. Mr. Pilawski and Dr. Powers are brothers.

     Joseph J. Nimrod has been a director of the Bank since 1978. Mr. Nimrod is
the owner of Joseph Nimrod Decorating Inc., a painting and paperhanging
business. He also serves as an officer and a director of the Painters and
Decorators Contractors Association and is Chairman of the Washburn Apprentice
School of Painting.

     Walter E. Powers, M.D. has served as a director of the Bank since 1977. Dr.
Powers, now retired, was a radiologist-flight surgeon for United Airlines, Inc.
from 1973 to 1985. He is a member of the American Medical Association, Illinois
State Medical Society, Chicago Medical Society, American College of Radiology,
Radiology Society of North America and Illinois Radiology Society. Dr. Powers
and Mr. Pilawski are brothers.

     William B. O'Connell has served as a director of the Bank since November,
1989. Immediately prior thereto, Mr. O'Connell served as a Chairman of U.S.
League Management Services, Inc. (the "League"), a coordinating organization for
the special service projects of the U.S. League of Savings Institutions, Inc. He
served as President of the League from 1980 to 1988.

     Executive Officers who are not Directors

     Timothy L. McCue, age 51, has served as the Bank's Vice President, Chief
Financial Officer since December 1984. He is a member of the American Institute
of Certified Public Accountants and the Illinois CPA Society. Mr. McCue is the
Regional District Director for Financial Managers Society.

     Robert Jones, age 53, has served as the Bank's Vice President, Chief
Savings Officer since April 1987.

     Michael Cahill, age 42, has served as Vice President, Controller of the
Bank since 1986.

     Jerome A. Maher, age 61, became the Bank's Vice President and Chief Lending
Officer in September 1996. He served as a Vice President and director of
Covenant Mortgage Corporation from March 1994 to September 1996 and as Senior
Vice President of Hanover Capital Mortgage Corporation from July 1993 to
February 1994. Prior to that, Mr. Maher was an Executive Vice President and
director of Labe Federal Savings and Loan Association.

Committees and Meetings of the Board of Directors of the Company and the Bank

     The Board of Directors of the Bank meets on a monthly basis and may have
additional special meetings from time to time. During the fiscal year ended July
31, 1996, the Board of Directors met 12 times. No current director attended
fewer than 75% of the total number of Board meetings and committee meetings of
which such director was a member.


                                       87

<PAGE>

     The Company and the Bank have established the following committees of each
of their respective Boards of Directors:

     The Management Salary Compensation Committee of both the Company and the
Bank consists of Messrs. Powers, Leahy and Nimrod. Each such committee reviews
and makes recommendations to the Board regarding the compensation for the
Executive Officers.

     The Audit Committee of both the Company and the Bank consists of Messrs.
Nimrod, Powers and O'Connell. The Audit Committee of the Bank meets periodically
with its independent Certified Public Accountants to arrange the Bank's annual
financial statement audit and to review and evaluate recommendations made during
the annual audit. The Audit Committee also reviews the regulatory reports of
examination. It is expected that the Audit Committee of the Company will perform
a similar function.

Directors' Compensation

     Fee Arrangements. Currently, each director of the Bank receives a monthly
fee of $900. The aggregate amount of fees paid to such directors by the Bank for
the year ended July 31, 1996 was approximately $75,600. No additional fees are
paid for attendance at board committee meetings. Directors of the Company will
not be separately compensated for their services as such. It is anticipated that
directors will also be covered by the Stock Option Plans and Stock Programs
expected to be implemented by the Company. See "-- Benefits -- Stock Option
Plans" and "-- Stock Programs."

Executive Compensation

     Compensation Decisions. Decisions regarding the Company's executive
compensation will be made by the Company's Board of Directors, exclusive of
those directors employed by the Company, acting as a compensation committee,
upon the recommendations made by the Management Salary Compensation Committee.
Under this structure, no interlocks exist between members of the compensation
committee and employees of the Company.

     Cash Compensation. The following table sets forth the cash compensation
paid by the Bank for services rendered in all capacities during the fiscal year
ended July 31, 1996, to the Chief Executive Officer and all executive officers
of the Bank who received compensation in excess of $100,000 (the "Named
Executive Officers").

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                                          Long Term Compensation
                                                                              ----------------------------------------------
                                                Annual Compensation(1)              Awards           Payouts
                                          ----------------------------------  -------------------    -------
                                                                    Other     Restricted
                                                                   Annual        Stock                LTIP        All Other
          Name and Principal                                    Compensation    Awards    Options    Payouts    Compensation
               Positions            Year  Salary($)   Bonus($)     ($)(2)       ($)(3)    (#)(3)     ($)(3)          ($)
- ----------------------------------  ----  ---------   --------  ------------  ----------  -------    -------    ------------
<S>                                 <C>    <C>        <C>            <C>           <C>      <C>        <C>           <C>
George M. Briody, President.......  1996   $157,180   $14,550        --            --       --         --            --
F. Gregory Opelka, Executive Vice
   President......................  1996   $103,145   $ 9,240        --            --       --         --            --

</TABLE>

- ----------
(1)  Under Annual Compensation, the column titled "Salary" includes balary,
     director's fees and payroll deductions for health insurance under the
     Bank's health insurance plan.
(2)  For 1996, there were no: (a) perquisites with an aggregate value for any
     named individual in excess of the lesser of $50,000 or 10% of the total of
     the individual's salary and bonus for the year; (b) payments of
     above-market preferential earnings on deferred compensation; (c) payments
     of earnings with respect to long-term incentive plans prior to settlement
     or maturation; or (d) preferential discounts on stock. For 1996, the Bank
     had no restricted stock or stock related plans in existence.
(3)  During the fiscal year ended July 31, 1996, the Bank did not maintain any
     restricted stock, stock options or other long-term incentive plans.


                                       88

<PAGE>

Employment Agreements

     Effective upon the Conversion, the Company and (subject to non-objection by
the OTS) the Bank intend to enter into Employment Agreements with each of
Messrs. Briody, Opelka, McCue, Jones, Cahill and Maher (the "Senior
Executives"). These Employment Agreements establish the respective duties and
compensation of the Senior Executives and are intended to ensure that the Bank
and the Company will be able to maintain a stable and competent management base
after the Conversion. The continued success of the Bank and the Company depends
to a significant degree on the skills and competence of the Senior Executives.

     The Employment Agreements provide for three-year terms. The Bank's
Employment Agreements provide that, commencing on the first anniversary date and
continuing each anniversary date thereafter, the Board of Directors may, with
the Senior Executive's concurrence, extend its Employment Agreements for an
additional year, so that the remaining terms shall be three years, after
conducting a performance evaluation of the Senior Executive. The Company's
Employment Agreements provide for automatic daily extensions such that the
remaining terms of the Employment Agreements shall be three years unless written
notice of non-renewal is given by the Board of Directors or the Senior
Executive. The Employment Agreements provide that the Senior Executive's base
salary will be reviewed annually. It is anticipated that this review will be
performed by the Management Salary Compensation Committee and approved by
non-employee members of the Board, and the Senior Executive's base salary may be
increased on the basis of such officer's job performance and the overall
performance of the Bank. The base salaries for Messrs. Briody, Opelka, McCue,
Jones, Cahill and Maher as of August 1, 1996 were $150,480, $95,945, $84,410,
$53,305, $54,527 and $60,000 respectively. The Employment Agreements also
provide for, among other things, entitlement to participation in stock,
retirement and welfare benefit plans and eligibility for fringe benefits
applicable to executive personnel such as a company car and fees for club and
organization memberships deemed appropriate by the Bank or Company and the
Senior Executive. The Employment Agreements provide for termination by the Bank
or the Company at any time for cause as defined in the Employment Agreements.

     In the event the Bank or the Company chooses to terminate the Senior
Executive's employment for reasons other than for cause, or in the event of the
Senior Executive's resignation from the Bank and the Company for the reasons
specified in the Employment Agreements, the Senior Executive would be entitled
to a lump sum cash payment in an amount equal to the present value of the
remaining cash compensation due to the Senior Executive and the additional
contributions or benefits that would have been earned under any employee benefit
plans of the Bank or the Company during the remaining terms of the Employment
Agreements and payments that would have been made under any incentive
compensation plan during the remaining terms of the Employment Agreements. If
permitted by applicable law, provision will also be made for the cash out of
stock options, appreciation rights or restricted stock as if the Senior
Executive was fully vested. The Bank and the Company would also continue the
Senior Executive's life, health and any disability insurance or other benefit
plan coverage for specified periods. Reasons specified as grounds for
resignation for purposes of the Employment Agreements are: failure to elect or
re-elect the Senior Executive to such officer's offices; failure to vest in the
Senior Executive the functions, duties or authority associated with such
offices; any material breach of contract by the Bank or the Company which is not
cured within 30 days after written notice thereof; and, following a Change of
Control (as defined in the Employment Agreements), include demotion, loss of
title, office or significant authority or responsibility, any reduction in any
element of compensation or benefits, any adverse change of location of the
principal place of employment or working conditions or resignation for any other
reason. In general, for purposes of the Employment Agreements and the plans
maintained by the Company or the Bank, a "change of control" will generally be
deemed to occur when a person or group of persons acting in concert acquires
beneficial ownership of 25% or more of any class of equity security of the
Company or the Bank, upon shareholder approval of a merger or consolidation or a
change of the majority of the Board of Directors of the Company or the Bank or
upon liquidation or sale of substantially all the assets of the Company or the
Bank. Based on current compensation and benefit costs, cash payments to be made
in the event of a change of control of the Bank or the Company pursuant to the


                                       89

<PAGE>

terms of the Employment Agreements would be approximately $4,220,000, of which
approximately $1,245,000 would be payable to Mr. Briody, $1,180,000 would be
payable to Mr. Opelka, $630,000 would be payable to Mr. McCue, $425,000 would be
payable to Mr. Jones, $500,000 would be payable to Mr. Cahill and $240,000 would
be payable to Mr. Maher. However, the actual amount to be paid under the
Employment Agreements in the event of a change of control of the Bank or the
Company cannot be estimated at this time, because the actual amount is based on
the compensation and benefit costs applicable to these individuals and other
factors existing at the time of the change of control which cannot be determined
at this time.

     Payments to the Senior Executives under the Bank's Employment Agreements
will be guaranteed by the Company in the event that payments or benefits are not
paid by the Bank. Payment under the Company's Employment Agreements would be
made by the Company. To the extent that payments under the Company's Employment
Agreements and the Bank's Employment Agreements are duplicative, payments due
under the Company's Employment Agreements would be offset by amounts actually
paid by the Bank. Senior Executives would be entitled to reimbursement of
certain costs incurred in interpreting or enforcing the Employment Agreements.

     Cash and benefits paid to a Senior Executive under the Employment
Agreements together with payments under other benefit plans following a "change
of control" of the Bank or the Company may constitute an "excess parachute"
payment under Section 280G of the Code, resulting in the imposition of a 20%
excise tax on the recipient and the denial of the deduction for such excess
amounts to the Company and the Bank. The Company's Employment Agreements include
a provision indemnifying each Senior Executive on an after-tax basis for any
"golden parachute" excise taxes.

Employee Retention Agreements

     Effective upon the Conversion, the Bank (subject to the non-objection of
the OTS) and the Company intend to enter into Retention Agreements with the
following four employees: Barbara J. Urban, Judy Miller, Bonnie Symon and Jan
Birkeland ("Contract Employee" or "Contract Employees"). The purpose of the
Retention Agreements is to secure the Contract Employees' continued availability
and attention to the Bank's affairs, relieved of distractions arising from the
possibility of a corporate change of control. The Retention Agreements do not
impose an immediate obligation on the Bank to continue the Contract Employees'
employment but provide for a period of assured employment ("Assurance Period")
following a change of control of the Bank or Company. The Retention Agreements
provide for an initial Assurance Period of two years commencing on the date of a
change of control. In general, the applicable Assurance Periods will be
automatically extended on a daily basis under the Retention Agreements until
written notice of non-extension is given by the Bank or the Contract Employee,
in which case an Assurance Period would end on the second anniversary of the
date such notice is given.

     If, upon a change of control, or within 12 months of, and in connection
with, a change of control, a Contract Employee is discharged without "cause" (as
defined in the Retention Agreements) or the Contract Employee voluntarily
resigns within one year following a material adverse change in such employee's
position, duties, salary or due to a material breach of the Retention Agreement
by the Bank or Company, the Contract Employee (or, in the event of such
employee's death, such employee's estate) would be entitled to a lump sum cash
payment equal to the present value of the remaining base salary and bonus
payments due during the Assurance Period plus any additional contributions and
benefits that the Contract Employee would have earned under the Bank's or
Company's employee benefit plans during the Assurance Period. Each Contract
Employee's life, health and disability coverage would also be continued during
the Assurance Period. The total amount of termination benefits payable to each
Contract Employee under the Retention Agreements is limited to two times the
Contract Employee's average total compensation for the prior five calendar
years. Payments to the Contract Employees under their respective Retention
Agreements will be guaranteed by the Company to the extent that the required
payments are not made by the Bank. Based on current compensation


                                       90

<PAGE>

and benefit costs applicable to the Contract Employees expected to be covered by
the Retention Agreements, cash payments to be made in the event of a change of
control of the Bank or the Company would be approximately $530,000. However, the
actual amount to be paid under the Retention Agreements in the event of a change
of control of the Bank or the Company cannot be estimated at this time because
it will be based on the compensation and benefit costs applicable to the
Contract Employees and other factors existing at the time of the change of
control which cannot be determined at this time.

Employee Severance Compensation Plan

     The Bank has adopted, subject to the non-objection of the OTS, an Employee
Severance Pay Plan (the "Severance Plan") which will provide eligible employees
of the Bank with severance benefits in the event of a change of control as
defined in the Severance Plan. Conversion to stock form is not considered a
change of control under the Severance Plan. Management and other personnel with
Employment Agreements or Retention Agreements will not be eligible to
participate in the Severance Plan. The purpose of the Severance Plan is to
recognize the valuable services and contributions of these employees and the
uncertainties relating to continuing employment, reduced employee benefits,
management changes and relocations in the event of a change of control. The Bank
believes that the Severance Plan will assist it in attracting and retaining
highly qualified individuals and reduce the distractions and other adverse
effects on employees' performance in the event of a change of control. Eligible
employees of the Bank with one year of service will automatically participate in
the Severance Plan and will have a contractual right to severance benefits if
they are terminated from or terminate their employment within one year (for
reasons specified under the Severance Plan) following a change of control of the
Bank or the Company. A participating employee who is an officer of the Bank
would be eligible to receive a severance payment upon termination equal to three
weeks' pay for each year of service, up to a maximum of 52 weeks' pay. A
participating employee who is not an officer would be eligible to receive a
severance payment upon an employment termination equal to one weeks' pay for
each of the first five years of service, two additional weeks' pay for each of
the next four years of service and three additional weeks' pay for each year of
service in excess of nine years, with a minimum severance benefit of four weeks'
pay and a maximum severance benefit of 52 weeks' pay. Payments under the
Severance Plan may increase the costs to be incurred in acquiring the Bank or
the Company. Based on current salaries, cash payments to be paid in the event of
a change of control (and assuming termination of all participating employees)
pursuant to the terms of the Employee Severance Pay Plan would be approximately
$396,500. However, the actual amount to be paid in the event of a change of
control of the Bank or the Company cannot be estimated at this time, because it
will be based on the compensation and benefits, as applicable, for each covered
individual and other factors existing at the time of the change of control which
cannot be determined at this time. The Severance Plan may be amended or
terminated by the Board of Directors provided participants are given six months
advance written notice of any adverse change to current or prospective rights.
Payments required to be made by the Bank to participants due under the Severance
Plan may be guaranteed by the Company.

Benefits

     Senior Management Officers Bonus Program. In fiscal year 1995, the Board of
Directors of the Bank adopted a nonqualifying bonus program comprised of an
annual and long-term bonus payable to senior management officers (the "SMO").
Amounts awarded under the SMO are based on the Bank's return on average assets
for the applicable fiscal year(s). The SMO had a total payout for fiscal year
1995 of approximately $68,000. The long-term program was terminated in 1996, and
no annual award was made for fiscal year 1996.

     Pension Plan. The Bank maintains the Fairfield Savings Bank Retirement
Plan, a non-contributory, tax-qualified defined benefit pension plan (the
"Pension Plan") for eligible employees. All employees with more than 1,000 hours
of service per year, except leased employees, who have attained age 21 and
completed one year of service are eligible to participate in the Pension Plan.
The Pension Plan provides a benefit for


                                       91

<PAGE>

each participant, including executive officers named in the Summary Compensation
Table above. The benefit is equal to an amount (A) minus (B) where (A) is an
amount equal to (i) 2% of the participant's final average compensation
multiplied by the participant's projected benefit service, reduced by (ii) the
participant's social security offset allowance, and such result multiplied by
(iii) a fraction, the numerator of which equals the participant's benefit
service and the denominator of which is the participant's projected benefit
service, and (B) is the amount to which the participant is entitled under the
Fairfield Savings and Loan Association Pension Plan (the predecessor of the
Pension Plan). A participant's social security offset allowance shall equal 0.6%
multiplied by the participant's years of projected benefit service not in excess
of 35 years, multiplied by the lesser of the participant's (i) final average
offset compensation or (ii) covered compensation, divided by twelve.

     Final average compensation is the monthly average of a Participant's
compensation over sixty (60) consecutive months of employment out of the
Participant's last 120 month period of employment during which the Participant's
compensation is the highest. A participant is fully vested in his or her pension
after five years of service. The Pension Plan is funded by the Bank on an
actuarial basis, and all assets are held in trust by the Pension Plan trustee.
The following table illustrates the annual benefit payable upon normal
retirement at age 65 in the normal form of benefit under the Pension Plan (a
straight life annuity) at various levels of annual compensation (12 times Final
Average Compensation) and years of service under the Pension Plan. The amounts
in the table are subject to social security benefit offset allowance and further
reduction by the amount to which a participant is entitled under the Fairfield
Savings and Loan Association Pension Plan.

                                Years of Service at Retirement
Annual Average  -------------------------------------------------------------
 Compensation       15         20          25            30             35
- --------------  --------   --------   ---------   -----------    -----------

$   125,000     $ 37,500   $ 50,000   $  62,500   $    75,000    $    87,500
  150,000(1)      45,000     60,000      75,000        90,000        105,000
  175,000(1)      52,500     70,000      87,500       105,000      122,500(2)
  200,000(1)      60,000     80,000     100,000     120,000(2)     140,000(2)

- ----------
(1)  For the Pension Plan year ending July 31, 1996, the annual compensation for
     calculating benefits may not exceed $150,000 (as adjusted for subsequent
     years pursuant to Code provisions).

(2)  For the Pension Plan year ending July 31, 1996, the maximum annual benefit
     under the Pension Plan may not exceed $120,000. The maximum annual benefit
     will be adjusted in subsequent years pursuant to Code provisions.

     The following table sets forth the years of credited service and the final
average compensation (as defined above) determined as of July 31, 1996, the end
of the 1996 plan year, for each of the individuals named in the Summary
Compensation Table. The Average Annual Earnings includes the base salary
component of the figures shown in the salary column of the Summary Compensation
Table.

                  Years of Credited Service      
                  -------------------------      Final Average
                   Years            Months       Compensation
                   -----            ------       ------------
Mr. Briody......    46                1            $ 128,620
Mr. Opelka......    41                8               84,990

     Profit Sharing and Savings Plan. The Bank maintains a Profit Sharing and
Savings Plan. The profit sharing portion of the Plan requires the Bank to
contribute annually an amount equal to 2% of the base annual salary of
participants, and provides for additional discretionary contributions as the
Bank may determine. The savings portion of the Plan permits salaried employees
with at least one year of service to make pretax salary deferrals and after tax
contributions under section 401(k) of the Code. Salary deferrals are made by
election and are limited to 15% of compensation up to $150,000 (for 1996), or to
a limit imposed under the Code ($9,500 for 1996). The Bank makes matching
contributions equal to 25% of the amount of salary


                                       92

<PAGE>

contributions, up to 6% of salary. Employees are fully vested in their salary
deferrals and after tax contributions, and become incrementally vested in the
Bank's contribution after one year and fully vested in the Bank's contributions
after seven years.

     The Bank has amended the Profit Sharing and Savings Plan in connection with
the Conversion to provide for the investment of Plan assets in Common Stock of
the Company. In addition, participating employees may elect to invest all or any
part of their account balances in the Company's Common Stock. Common Stock held
by the Profit Sharing and Savings Plan may be newly issued or treasury shares
acquired from the Company or outstanding shares purchased in the open market or
in privately negotiated transactions. All Common Stock held by the Profit
Sharing and Savings Plan will be held by an independent trustee and allocated to
the accounts of individual participants. Participants will control the exercise
of voting and tender rights relating to the Common Stock held in their accounts.

     Employee Stock Ownership Plan and Trust. The Company has established, and
the Bank has adopted, for the benefit of eligible employees, an ESOP and related
trust to become effective upon completion of the Conversion. Substantially all
employees of the Bank or the Company who have attained age 21 and have completed
one year of service may be eligible to become participants in the ESOP. The ESOP
intends to purchase eight percent (8%) (7% in the absence of OTS approval) of
the Common Stock issued in the Conversion. As part of the Conversion and in
order to fund the ESOP's purchase of the Common Stock to be issued in the
Conversion, the Bank or the Company expects to contribute to the ESOP sufficient
funds to pay the par value of the Common Stock to be purchased, and the ESOP
intends to borrow funds from the Company equal to the balance of the aggregate
purchase price of the Common Stock. Although contributions to the ESOP will be
discretionary, the Company and the Bank intend to make annual contributions to
the ESOP in an aggregate amount at least equal to the principal and interest
requirement on the debt. It is expected that this loan will be for a term of up
to 10 years, will bear interest at the rate of 8% per annum and will call for
level annual payments of principal and interest designed to amortize the loan
over its term. It is anticipated that the loan will also permit optional
pre-payment. The Company and the Bank may make additional annual contributions
to the ESOP to the maximum extent deductible for federal income tax purposes.

     Shares purchased by the ESOP will initially be pledged as collateral for
the loan and will be held in a suspense account until released for allocation
among participants in the ESOP as the loan is repaid. The pledged shares will be
released annually from the suspense account in an amount proportional to the
repayment of the ESOP loan for each plan year. The released shares will be
allocated among the accounts of participants on the basis of the participants'
total taxable compensation for the year of allocation. Benefits generally become
vested at the rate of 20% per year beginning on a participant's third year of
service with 100% vesting after seven years of service (including past service).
Participants also become immediately vested upon termination of employment due
to death, retirement at age 65 or older, permanent disability or upon the
occurrence of a change of control. Forfeitures will be reallocated among
remaining participating employees, in the same proportion as contributions.
Vested benefits may be paid in a single sum or installment payments and are
payable upon death, retirement at age 65 or older, disability or separation from
service.

     In connection with the establishment of the ESOP, a Plan Administrator was
appointed to administer the ESOP (the "Plan Administrator"). An unrelated
corporate trustee for the ESOP will be appointed prior to the Conversion and
will continue thereafter. The Plan Administrator may instruct the trustee
regarding investment of funds contributed to the ESOP. The ESOP trustee, subject
to its fiduciary duty, must vote all allocated shares held in the ESOP in
accordance with the instructions of the participating employees. Under the ESOP,
unallocated shares will be voted in a manner calculated to most accurately
reflect the instructions received from participants regarding the allocated
stock as long as such vote is in accordance with the provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").


                                       93

<PAGE>

     The ESOP may purchase additional shares of Common Stock in the future, in
the open market or otherwise, and may do so either on a leveraged basis with
borrowed funds or with cash dividends, periodic employer contributions or other
cash flow. Whether such purchases will be made and the terms and conditions of
any such purchases will be determined by the ESOP's fiduciaries taking into
account such factors as they consider relevant at the time, including their
judgment as to the attractiveness of the Common Stock as an investment, the
price at which Common Stock may be purchased and, in the case of leveraged
purchases, the terms and conditions on which borrowed funds are available and
the willingness of the Company or the Bank to offer purchase money financing or
guarantee purchase money financing offered by third parties.

     Stock Option Plans. Following the Conversion, the Board of Directors of the
Company intends to adopt the Stock Option and Incentive Plan for Employees (the
"Employees' Option Plan") and the Stock Option Plan for Outside Directors (the
"Directors' Option Plan") (collectively, the "Stock Option Plans"). If
implemented prior to the first anniversary of the Conversion, OTS regulations
require that the adoption of the Stock Option Plans be subject to shareholder
approval obtained at a meeting of shareholders to be held no earlier than six
months after the completion of the Conversion (which meeting is currently
anticipated to be held during _______, 1997). An amount of shares of Common
Stock equal to 10% of the shares of Common Stock to be issued in the Conversion
is expected to be reserved for issuance under the Stock Option Plans. No
determinations have been made by the Board of Directors as to the specific terms
of the Stock Option Plans or the amount of awards thereunder. However, OTS
regulations provide that no individual officer or employee may receive more than
25% of the options granted and that Outside Directors may not receive more than
5% individually or more than 30% in the aggregate of the options granted, under
option plans implemented within one year after the Conversion.

     The purpose of the anticipated adoption of the Employees' Option Plan will
be to attract and retain qualified personnel in key positions, provide officers
and key employees with a proprietary interest in the Company as an incentive to
contribute to the success of the Company and its subsidiaries and reward
officers and key employees for outstanding performance. Although the terms of
the Employees' Option Plan have not yet been determined, it is expected that the
Employees' Option Plan will provide for the grant of: (i) options to purchase
the Company's Common Stock intended to qualify as incentive stock options under
Section 422 of the Code ("Incentive Stock Options"); (ii) options that do not so
qualify ("Non-Statutory Stock Options"); and (iii) Limited Rights (discussed
below) which will be exercisable only upon a change of control of the Bank or
the Company. Unless sooner terminated, any Employees' Option Plan adopted will
be in effect for a period of 10 years.

     Any Employees' Option Plan will be administered by a Committee of the Board
of Directors (the "Stock Option Committee"), and such committee will determine
which officers and employees will be granted options and Limited Rights, whether
such options will be Incentive Stock Options or Non-Statutory Stock Options, the
number of shares subject to each option, the exercise price of each
Non-Statutory Stock Option, whether such options may be exercised by delivering
other shares of Common Stock and when such options become exercisable. It is
expected that any Employees' Option Plan will permit options to be granted for
terms of up to 10 years (5 years in the case of Incentive Stock Options granted
to employees who are 10% shareholders) and at exercise prices no less than the
fair market value at date of grant (110% of fair market value in the case of
Incentive Stock Options granted to employees who are 10% shareholders).

     The Stock Option Plans are expected to provide for the exercisability 
and vesting of options granted thereunder in the manner specified by the 
Stock Option Committee. OTS regulations generally require that options 
granted under plans implemented within one year after the Conversion begin 
vesting no earlier than one year from the date of shareholder approval of the 
plan and thereafter vest at a rate of no more than 20% per year. It is also 
expected that, in the event of death or disability, grants would be 100% 
vested upon termination of employment of an officer or employee, or upon 
termination of service as a director.

                                       94

<PAGE>

     It is anticipated that the Stock Option Plans, to the extent permitted by
OTS regulations, will also provide for Limited Rights which, upon a change of
control, will allow the holder to exercise such Limited Rights and thereby be
entitled to receive a lump sum cash payment equal to the difference between the
exercise price of the related option and the fair market value of the shares of
Common Stock subject to the option on the date of exercise of the right in lieu
of purchasing the stock underlying the option. It is also anticipated that these
Limited Rights could be cancelled by an acquiror in the contract for an
acquisition if such acquiror commits to substitute other consideration
(including substitute options on the acquiror's stock) having equivalent value
to the options being cancelled.

     An employee will not be deemed to have received taxable income upon grant
or exercise of any Incentive Stock Option; provided, that shares received
through the exercise of such option are not disposed of for at least one year
after the date the stock is received in connection with the option exercise and
two years after the date of grant of the option. No compensation deduction may
be taken by the Company as a result of the grant or exercise of Incentive Stock
Options, provided such shares are not disposed of before the expiration of the
period described above (a "disqualifying disposition"). In the case of a
Non-Statutory Stock Option and in the case of a disqualifying disposition of an
Incentive Stock Option, an employee will be deemed to receive ordinary income
upon exercise of the stock option in an amount equal to the amount by which the
exercise price is exceeded by the fair market value of the Common Stock
purchased on the date of exercise. The amount of any ordinary income deemed to
be received by an optionee upon the exercise of a Non-Statutory Stock Option or
due to a disqualifying disposition of an Incentive Stock Option may be a
deductible expense for tax purposes for the Company. In the case of Limited
Rights, upon exercise, the option holder would have to include the amount paid
to him or her upon exercise in his or her gross income for federal income tax
purposes in the year in which the payment is made and the Company may be
entitled to a deduction for federal income tax purposes of the amount paid.

     Under the Directors' Option Plan, it is anticipated that the exercise price
per share of each option granted thereunder will be equal to the fair market
value of the shares of Common Stock on the date the option is granted.

     Stock Programs. Following the Conversion, the Company also intends to
establish Stock Programs as a method of providing officers, employees and
Outside Directors of the Bank and Company with a proprietary interest in the
Company in a manner designed to encourage such persons to remain with the Bank
and the Company. It is anticipated that one Stock Program would cover eligible
officers and employees of the Bank and the Company, and the other would cover
eligible Outside Directors of the Bank and the Company. If implemented prior to
the first anniversary of the Conversion, OTS regulations require that the
adoption of the Stock Programs and awards thereunder be subject to shareholder
approval obtained at a meeting of shareholders held no earlier than six months
after the completion of the Conversion.

     If the Stock Programs are implemented, the Company expects to contribute
funds to the Stock Programs to enable the Stock Programs trusts to acquire, in
the aggregate, an amount up to 4% (3% unless OTS approval is obtained) of the
shares of Common Stock issued in the Conversion. Shares used to fund the Stock
Programs may be acquired through open market purchases, if permitted, or from
authorized but unissued shares. No determinations have been made as to the
specific terms of the Stock Programs or the amount of awards thereunder.
Although no specific award determinations have been made, the Company
anticipates that, if the Stock Programs are implemented, the Company will
provide awards to eligible officers, employees and directors to the extent
permitted by applicable regulations. Current OTS regulations provide that no
individual employee may receive more than 25% of the shares of any plan and that
non-employee directors may not receive more than 5% of the shares individually
or 30% in the aggregate for all directors,in the case of plans implemented
within one year following the Conversion.

     Any Stock Programs adopted shall be administered by a Committee of the
Board of Directors (the "Stock Programs Committee"). Any Stock Programs for the
benefit of Outside Directors are expected to be


                                       95

<PAGE>

self-executing with respect to grants or allocations made thereunder. Under 
the Stock Programs, awards are expected to be granted in the form of shares 
of Common Stock held by the Stock Programs. The Board intends to appoint an 
independent fiduciary to serve as trustee of the trusts to be established 
pursuant to any Stock Programs. The Stock Programs are expected to provide 
for the vesting of awards granted thereunder in the manner specified by the 
Stock Programs Committee and consistent with OTS conversion regulations, 
which currently require that awards under plans implemented within one year 
following the Conversion begin vesting no earlier than one year from the date 
of shareholder approval and thereafter vest at a rate of no more than 20% per 
year. It is also expected that, in the event of death or disability, grants 
would be 100% vested upon termination of employment of an officer or 
employee, or upon termination of service as a director.

     When shares become vested in accordance with the Stock Programs, the
participants will recognize income equal to the fair market value of the Common
Stock at that time. The amount of income recognized by the participants may be a
deductible expense for tax purposes for the Company. When shares become vested
and are actually distributed in accordance with the Stock Programs, the
participants will also receive amounts equal to any accrued dividends with
respect thereto. Prior to vesting, recipients of grants may direct the voting of
the shares awarded to them. Shares not subject to grants will be voted by the
trustee of the Stock Programs in proportion to the directions provided with
respect to shares subject to grants. Vested shares will be distributed to
recipients as soon as practicable following the day on which they are vested.
Any awards to Outside Directors under the Stock Programs implemented prior to
the first anniversary of the Conversion and the material terms and conditions
thereof, will be specified in a plan document approved by shareholders.

     In the event that additional authorized but unissued shares are acquired by
the Stock Programs after the Conversion, the interests of existing shareholders
will be diluted. See "Pro Forma Data."

Transactions with Certain Related Persons

     The FIRREA requires that all loans or extensions of credit to executive
officers and directors must be made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with the general public and must not involve more than the normal
risk of repayment or present other unfavorable features. The Bank has made loans
or extended credit to executive officers and directors and also to certain
persons related to executive officers and directors. All such loans were made by
the Bank in the ordinary course of business and were not made with more
favorable terms nor did they involve more than the normal risk of collectibility
or present unfavorable features. The outstanding principal balance of such loans
to directors, executive officers and their associates totaled $769,836 or 5.67%
of the Bank's retained earnings at July 31, 1996 and 2.54% of the Bank's pro
forma stockholders' equity at July 31, 1996, after giving effect to the
Conversion, and assuming the sale of Common Stock at the maximum of the
Estimated Price Range.

     The Company intends that all transactions in the future between the Company
and its executive officers, directors, holders of 10% or more of the shares of
any class of its common stock and affiliates thereof, will contain terms no less
favorable to the Company than could have been obtained by it in arm's-length
negotiations with unaffiliated persons and will be approved by a majority of
independent outside directors of the Company not having any interest in the
transaction.


                                       96

<PAGE>

Subscriptions by Executive Officers and Directors

     The following table sets forth the number of shares of Common Stock the
Bank's executive officers and directors propose to purchase in the Offerings,
assuming shares of Common Stock are issued at the minimum and maximum of the
Estimated Price Range and that sufficient shares will be available to satisfy
their subscriptions. The table also sets forth the total expected beneficial
ownership of Common Stock as to all directors and executive officers as a group.

<TABLE>
<CAPTION>
                                         At the Minimum             At the Maximum
                                        of the Estimated           of the Estimated
                                         Price Range(1)             Price Range(1)
                                    -----------------------  ------------------------
                                               As a Percent              As a Percent
                                     Number     of Shares      Number     of Shares
      Name                Amount    of Shares    Offered     of Shares    Offered
      ----                ------    ---------  ------------  ---------   ------------
                                                                          
<S>                     <C>           <C>          <C>         <C>          <C> 
George M. Briody .....  $  201,250    14,875       1.0%        20,125       1.0%
F. Gregory Opelka ....     201,250    14,875       1.0         20,125       1.0
Timothy L. McCue .....     200,000    14,875       1.0         20,000       1.0
Robert Jones .........     100,000    10,000       0.7         10,000       0.5
Michael Cahill .......      35,000     3,500       0.2          3,500       0.2
Jerome A. Maher ......      50,000     5,000       0.3          5,000       0.2
Maurice F. Leahy .....      50,000     5,000       0.3          5,000       0.2
Eugene W. Pilawski ...     201,250    14,875       1.0         20,125       1.0
Joseph J. Nimrod .....     201,250    14,875       1.0         20,125       1.0
Walter E. Powers, M.D.     120,000    12,000       0.8         12,000       0.6
William B. O'Connell .     150,000    14,875       1.0         15,000       0.7
                        ----------   -------       ---        -------       --- 
All directors and                                                         
 executive officers                                                       
 as a group ..........  $1,510,000   119,750       8.3%       146,000       7.4%
                        ==========   =======       ===        =======       === 
</TABLE>

- ----------
(1)  The individual maximum purchase limitation is equal to $150,000. The above
     table, however, includes proposed subscriptions by Associates (See "The
     Conversion -- Limitations on Common Stock Purchases"). Does not include
     subscription orders by the ESOP. The ESOP is expected to purchase 8% (7% if
     OTS approval is not obtained) of the shares issued in the Conversion. See
     "-- Benefits -- Employee Stock Ownership Plan and Trust."


                                       97

<PAGE>

                                 THE CONVERSION

     THE BOARD OF DIRECTORS OF THE BANK AND THE OTS HAVE APPROVED THE PLAN OF
CONVERSION, SUBJECT TO APPROVAL BY THE MEMBERS OF THE BANK ENTITLED TO VOTE ON
THE MATTER AND THE SATISFACTION OF CERTAIN OTHER CONDITIONS. SUCH OTS APPROVAL,
HOWEVER, DOES NOT CONSTITUTE A RECOMMENDATION OR ENDORSEMENT OF THE PLAN BY SUCH
AGENCY.

General

     On May 21, 1996, the Bank's Board of Directors unanimously adopted the Plan
of Conversion pursuant to which the Bank will be converted from a federally
chartered mutual savings bank to a federally chartered stock savings bank. The
Plan was amended by the Board of Directors as of September 17, 1996. It is
currently intended that all of the outstanding capital stock issued by the Bank
pursuant to the Plan will be held by the Company, which is incorporated under
Illinois law. The Plan was approved by the OTS, subject to, among other things,
approval of the Plan by the Bank's members. A special meeting of members has
been called for this purpose to be held on [______ __, 1996].

     The Company has received approval from the OTS to become a savings
association holding company and to acquire all of the Common Stock of the Bank
to be issued in the Conversion. The Company plans to retain 50% of the net
proceeds from the sale of the Common Stock and to use the remaining net proceeds
to purchase all of the then to be issued and outstanding capital stock of the
Bank. The Conversion will be effected only upon completion of the sale of all of
the shares of Common Stock of the Company (or of the Bank, if the holding
company form of organization is not utilized) to be issued pursuant to the Plan.

     The Plan provides that the Board of Directors of the Bank may, at any time
prior to the issuance of the Common Stock and for any reason, decide not to use
the holding company form of organization. Such reasons may include possible
delays resulting from overlapping regulatory processing or policies which could
adversely affect the Bank's or the Company's ability to consummate the
Conversion and transact its business as contemplated herein and in accordance
with the Bank's operating policies. In the event such a decision is made, the
Bank will withdraw the Company's registration statement from the SEC and take
steps necessary to complete the Conversion without the Company, including filing
any necessary documents with the OTS. In such event, and provided there is no
regulatory action, directive or other consideration upon which basis the Bank
determines not to complete the Conversion, if permitted by the OTS, the Bank
will issue and sell the common stock of the Bank and subscribers will be
notified of the elimination of a holding company and will be solicited (i.e., be
permitted to affirm their orders, in which case they will need to affirmatively
reconfirm their subscriptions prior to the expiration of the resolicitation
offering or their funds will be promptly refunded with interest at the Bank's
passbook rate of interest; or be permitted to modify or rescind their
subscriptions), and notified of the time period within which the subscriber must
affirmatively notify the Bank of such subscriber's intention to affirm, modify
or rescind such subscriber's subscription. The following description of the Plan
assumes that a holding company form of organization will be used in the
Conversion. In the event that a holding company form of organization is not
used, all other pertinent terms of the Plan as described below will apply to the
conversion of the Bank from the mutual to stock form of organization and the
sale of the Bank's common stock.

     The Plan provides generally that (i) the Bank will convert from a mutual
savings bank to a capital stock savings bank and (ii) the Company will offer
shares of Common Stock for sale in the Subscription Offering in the following
order of priority: the Bank's Eligible Account Holders, the Employee Plans, the
Bank's Supplemental Eligible Account Holders, the Bank's Other Members and Bank
Employees. The Plan also provides that shares not subscribed for in the
Subscription Offering may be offered in a Community Offering to certain members
of the general public, with a preference to be given, in the event of an
oversubscription in the Community Offering, to natural persons residing in Cook
and Lake counties in Illinois,


                                       98

<PAGE>

the counties in which the Bank's offices are located. The Company and the Bank
have an option to reserve 25% of the stock available in the Community Offering
for sale to certain institutional investors. It is anticipated that all shares
not subscribed for in the Subscription and Community Offerings will be offered
for sale by the Company to the general public in a Syndicated Community
Offering. The Company and the Bank have reserved the right to accept or reject,
in whole or in part, any orders to purchase shares of the Common Stock received
in the Community Offering or in the Syndicated Community Offering. See "--
Community Offering" and "-- Syndicated Community Offering."

     The aggregate price of the shares of Common Stock to be issued in the
Conversion within the Estimated Price Range, currently estimated to be between
$14,875,000 and $20,125,000, is based upon an independent appraisal, prepared by
Capital Resources, a consulting firm experienced in the valuation and appraisal
of savings institutions, of the estimated pro forma market value of the Common
Stock of the Company. All shares of Common Stock to be issued and sold in the
Conversion will be sold at the same price. The independent appraisal will be
affirmed or, if necessary, updated at the completion of the Offerings. See "--
Stock Pricing" for additional information as to the determination of the
estimated pro forma market value of the Common Stock.

     The following is a brief summary of pertinent aspects of the Conversion.
The summary is qualified in its entirety by reference to the provisions of the
Plan. A copy of the Plan is available for inspection at the offices of the Bank
and at the Central Region (Chicago, Illinois) and Washington, D.C. offices of
the OTS. The Plan is also filed as an Exhibit to the Registration Statement of
which this Prospectus is a part, copies of which may be obtained from the SEC.
See "Additional Information."

Purposes of Conversion

     The Bank, as a federally chartered mutual savings bank, does not have
shareholders and has no authority to issue capital stock. By converting to the
capital stock form of organization, the Bank will be structured in the form used
by commercial banks, many other business entities and a growing number of
savings institutions. The Conversion will enhance the Bank's ability to access
capital markets, expand its current operations, acquire other financial
institutions or branch offices, provide affordable home financing opportunities
to the communities it serves or diversify into other financial services to the
extent allowable by applicable law and regulation.

     The Board of Directors of the Bank received information about various types
of benefit plans typically utilized by public companies in general and
converting thrift institutions in particular. Management reviewed the
anticipated costs of establishing a customary program of benefits and the
anticipated benefits to the Company. Management determined that the benefit
plans helped significantly in providing the ability of a public company to
retain and attract executives of the caliber needed to run a successful public
company, to maintain their attention and loyalty in change in control situations
and to align their interests with those of the Company's shareholders. Finally,
the Board of Directors concluded that the cost of establishing and maintaining
these benefit plans would be justified by these benefits to the Company. See
"Management of the Bank."

     The holding company form of organization, if used, would provide additional
flexibility to diversify the Bank's business activities through newly-formed
subsidiaries, or through acquisitions of or mergers with both mutual and stock
institutions, as well as other companies. Although there are no current
arrangements, understandings or agreements, written or oral, regarding any such
opportunities, the Company will be in a position after the Conversion, subject
to regulatory limitations and the Company's financial position, to take
advantage of any such opportunities that may arise.

     The potential impact of the Conversion upon the Bank's capital base is
significant. The Bank had equity in accordance with GAAP of $13.6 million, or
6.98% of assets at July 31, 1996. Assuming that $19.1


                                       99

<PAGE>

million of net proceeds are realized from the sale of Common Stock (being the
maximum of the Estimated Price Range established by the Board of Directors based
on the Valuation Range which has been estimated by Capital Resources to be from
a minimum of $14,875,000 to a maximum of $20,125,000 (see "Pro Forma Data" for
the basis of this assumption) and assuming that $9.6 million of the net proceeds
are used by the Company to purchase the capital stock of the Bank, the Bank's
ratio of GAAP capital to assets, on a pro forma basis, will increase to 10.26%
after the Conversion. In the event that the holding company form of organization
is not utilized and all of the net proceeds from the Offerings, at the maximum
of the Estimated Price Range, are retained by the Bank, the Bank's ratios of
tangible and core capital to adjusted assets, on a pro forma basis, each will
increase to 15.87% after Conversion. The investment of the net proceeds from the
sale of the Common Stock will provide the Bank with additional income to further
enhance its capital position. The additional capital may also assist the Bank in
offering new programs and expanded services to its customers.

     After completion of the Conversion, the unissued common and preferred stock
authorized by the Company's Articles of Incorporation will permit the Company,
subject to market conditions and regulatory approval of an offering, to raise
additional equity capital through further sales of securities and to issue
securities in connection with possible acquisitions. At the present time, the
Company has no plans with respect to additional offerings of securities, other
than the issuance of additional shares upon exercise of stock options or the
possible issuance of authorized but unissued shares to the Stock Programs.
Following the Conversion, the Company will also be able to use stock-related
incentive programs to attract and retain executive and other personnel for
itself and its subsidiaries. See "Management of the Bank -- Executive
Compensation."

Effects of Conversion

     General. Each depositor in a mutual savings bank has both a deposit account
in the institution and a pro rata ownership interest in the equity of the
institution based upon the balance in such depositor's account, which interest
may only be realized in the event of a liquidation of the institution. However,
this ownership interest is tied to the depositor's account and has no tangible
market value separate from such deposit account. Any depositor who opens a
deposit account obtains a pro rata ownership interest in the equity of the
institution without any additional payment beyond the amount of the deposit. A
depositor who reduces or closes such depositor's account receives the balance in
the account but receives nothing for such depositor's ownership interest in the
equity of the institution, which is lost to the extent that the balance in the
account is reduced.

     Consequently, mutual savings bank depositors normally have no way to
realize the value of their ownership interest, which has realizable value only
in the unlikely event that the mutual savings bank is liquidated. In such event,
the depositors of record at that time, as owners, would share pro rata in any
residual surplus and reserves after other claims, including claims of depositors
to the amounts of their deposits, are paid.

     When a mutual savings bank converts to stock form, permanent
non-withdrawable capital stock is created to represent the ownership of the
institution's equity and the former pro rata ownership of depositors is
thereafter represented by their liquidation rights. See "-- Liquidation Rights."
Such common stock is separate and apart from deposit accounts and cannot be and
is not insured by the FDIC or any other governmental agency. Certificates are
issued to evidence ownership of the capital stock. The stock certificates are
transferable, and, therefore, the stock may be sold or traded if a purchaser is
available with no effect on any account the seller may hold in the institution.

     Continuity. While the Conversion is being accomplished, and after the
consummation of the Conversion, the normal business of the Bank of accepting
deposits and making loans will continue without interruption. The Bank will
continue to be subject to regulation by the OTS and the FDIC.


                                       100

<PAGE>

     The Directors serving the Bank at the time of Conversion will serve as
Directors of the Bank after the Conversion. The Directors of the Company will
consist of all of the individuals currently serving on the Board of Directors of
the Bank. It is anticipated that all officers of the Bank at the time of
Conversion will retain their positions after the Conversion.

     Deposit Accounts and Loans. Under the Plan, each depositor in the Bank at
the time of Conversion will automatically continue as a depositor after the
Conversion, and each such deposit account will remain the same with respect to
deposit balance, interest rate and other terms, except to the extent affected by
withdrawals made to purchase Common Stock in the Conversion. See "-- Procedure
for Purchasing Shares in Subscription and Community Offerings." Each such
account will be insured by the FDIC to the same extent as before the Conversion
(i.e., up to $100,000 per depositor). Depositors will continue to hold their
existing certificates, passbooks and other evidences of their accounts.

     Furthermore, no loan outstanding from the Bank will be affected by the
Conversion, and the amount, interest rate, maturity and security for each loan
will remain as they were contractually fixed prior to the Conversion.

     Effect on Voting Rights of Members. At present, all depositors of the Bank
are members of, and have voting rights in, the Bank as to all matters requiring
membership action. Upon Conversion, depositors will cease to be members and will
no longer be entitled to vote at meetings of the Bank. Upon Conversion, all
voting rights in the Bank will be vested in the Company as the sole shareholder
of the Bank. Exclusive voting rights with respect to the Company will be vested
in the holders of Common Stock. Depositors of the Bank will not have voting
rights after the Conversion except to the extent that they become shareholders
of the Company through the purchase of Common Stock.

     Liquidation Rights. In the unlikely event of a complete liquidation of the
Bank in its present mutual form, each depositor would receive such depositor's
pro rata share of any assets of the Bank remaining after payment of claims of
all creditors (including the claims of all depositors to the withdrawal value of
their accounts). Each depositor's pro rata share of such remaining assets would
be in the same proportion as the value of such depositor's deposit account was
to the total value of all deposit accounts in the Bank at the time of
liquidation. After the Conversion, each depositor, in the event of a complete
liquidation, would have a claim as a creditor of the same general priority as
the claims of all other general creditors of the Bank. However, except as
described below, such depositor's claim would be solely in the amount of the
balance in such depositor's deposit account plus accrued interest. Such
depositor would not have an interest in the value or assets of the Bank above
that amount.

     The Plan provides for the establishment, upon the completion of the
Conversion, of a special "liquidation account" for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders in an amount equal to
the surplus and reserves of the Bank as of the date of its latest balance sheet
contained in the final Prospectus used in connection with the Conversion. Each
Eligible Account Holder and Supplemental Eligible Account Holder, if such
account holder were to continue to maintain such account holder's deposit
account at the Bank, would be entitled, on a complete liquidation of the Bank
after the Conversion, to an interest in the liquidation account prior to any
payment to the shareholders of the Bank. Each Eligible Account Holder and
Supplemental Eligible Account Holder would have an initial interest in such
liquidation account for each deposit account, including passbook accounts,
transaction accounts such as NOW/Super NOW accounts, money market deposit
accounts and certificates of deposit, with an aggregate balance of $50 or more
held in the Bank on December 31, 1994 (with respect to an Eligible Account
Holder) and September 30, 1996 (with respect to a Supplemental Eligible Account
Holder) (each a "Qualifying Deposit"). Each Eligible Account Holder and
Supplemental Eligible Account Holder will have a pro rata interest in the total
liquidation account for such account holder's deposit accounts based on the
proportion that the aggregate balance of such person's Qualifying Deposits on
the Eligibility Record Date or Supplemental Eligibility Record Date,
respectively, bore to the total amount of all Qualifying Deposits of all
Eligible


                                       101

<PAGE>

Account Holders and Supplemental Eligible Account Holders in the Bank. For
deposit accounts in existence at both dates, separate subaccounts shall be
determined on the basis of the Qualifying Deposits in such deposit accounts on
each such record date.

     If, however, on any annual closing date (i.e., the anniversary of the
Eligibility Record Date or the Supplemental Eligibility Record Date, as
applicable) of the Bank, commencing on or after the effective date of the
Conversion, the amount in any deposit account is less than the amount in such
deposit account on December 31, 1994 (with respect to an Eligible Account
Holder), or September 30, 1996 (with respect to a Supplemental Eligible Account
Holder) or any other annual closing date, then the interest in the liquidation
account relating to such deposit account would be reduced from time to time by
the proportion of any such reduction, and such interest will cease to exist if
such deposit account is closed. In addition, no interest in the liquidation
account would ever be increased despite any subsequent increase in the related
deposit account. Any assets remaining after the above liquidation rights of
Eligible Account Holders and Supplemental Eligible Account Holders are satisfied
would be distributed to the Company as the sole shareholder of the Bank.

     Tax Aspects. Consummation of the Conversion is expressly conditioned upon
the receipt by the Bank of either a favorable ruling from the IRS and Illinois
taxing authorities or opinions of counsel with respect to federal and Illinois
income taxation, to the effect that the Conversion will not be a taxable
transaction to the Company, the Bank, Eligible Account Holders or Supplemental
Eligible Account Holders, except as noted below.

     No private ruling will be received from the IRS with respect to the
proposed Conversion. Instead, the Bank has received an opinion of its counsel,
Thacher Proffitt & Wood, that for federal income tax purposes, among other
matters: (i) the Bank's change in form from mutual to stock ownership will
constitute a reorganization under section 368(a)(1)(F) of the Internal Revenue
Code and neither the Bank nor the Company will recognize any gain or loss as a
result of the Conversion; (ii) no gain or loss will be recognized by the Bank or
the Company upon the purchase of the Bank's capital stock by the Company or by
the Company upon the purchase of its Common Stock in the Conversion; (iii) no
gain or loss will be recognized by Eligible Account Holders or by Supplemental
Eligible Account Holders upon the issuance to them of deposit accounts in the
Bank in its stock form plus their interests in the liquidation account in
exchange for their deposit accounts in the Bank; (iv) the tax basis of the
depositors' deposit accounts in the Bank immediately after the Conversion will
be the same as the basis of their deposit accounts immediately prior to the
Conversion; (v) the tax basis of each Eligible Account Holder's and each
Supplemental Eligible Account Holder's interest in the liquidation account will
be zero; (vi) no gain or loss will be recognized by Eligible Account Holders or
by Supplemental Eligible Account Holders upon the distribution to them of
nontransferable subscription rights to purchase shares of the Common Stock,
provided, that the amount to be paid for the Common Stock is equal to the fair
market value of such stock; and (vii) the tax basis to the shareholders of the
Common Stock of the Company purchased in the Conversion pursuant to the
subscription rights will be the amount paid therefore and the holding period for
the shares of Common Stock purchased by such persons will begin on the date on
which their subscription rights are exercised. The opinion of Thacher Proffitt &
Wood has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part.

     KPMG Peat Marwick LLP has also opined, subject to the limitations and
qualifications in its opinion, that the Conversion will not be a taxable
transaction to the Company or to the Bank for Illinois income tax purposes or to
Eligible Account Holders or to Supplemental Eligible Account Holders for
Illinois income tax purposes. The opinion of KPMG Peat Marwick LLP has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part.

     Unlike private rulings, opinions of counsel are not binding on the IRS or
the Illinois taxing authorities and the IRS or the Illinois taxing authorities
could disagree with conclusions reached therein. In the event of


                                       102

<PAGE>

such disagreement, there can be no assurance that the IRS or the Illinois taxing
authorities would not prevail in a judicial or administrative proceeding.

     Certain portions of both the federal and the state tax opinions are based
upon the opinion of Capital Resources that subscription rights issued in
connection with the Conversion will have no value. In the opinion of Capital
Resources, which opinion is not binding on the IRS or the Illinois taxing
authorities, the subscription rights do not have any value, based on the fact
that such rights are acquired by the recipients without cost, are
nontransferable and of short duration, and afford the recipients the right only
to purchase the Common Stock at a price equal to its estimated fair market
value, which will be the same price as the Purchase Price for the unsubscribed
shares of Common Stock. If the subscription rights granted to Eligible Account
Holders, Supplemental Eligible Account Holders, Other Members or Bank Employees
are deemed to have an ascertainable value, such Eligible Account Holders,
Supplemental Eligible Account Holders, Other Members or Bank Employees could be
taxed upon the receipt or exercise of the subscription rights in an amount equal
to such value, and the Bank could recognize gain on such distribution. Eligible
Account Holders, Supplemental Eligible Account Holders, Other Members and Bank
Employees are encouraged to consult with their own tax advisors as to the tax
consequences in the event that such subscription rights are deemed to have an
ascertainable value.

Stock Pricing

     The Plan of Conversion requires that the purchase price of the Common Stock
must be based on the appraised pro forma market value of the Common Stock, as
determined on the basis of an independent valuation. The Bank and the Company
have retained Capital Resources to make such valuation. For its services in
making such appraisal, Capital Resources will receive a fee of $22,500, plus
out-of-pocket expenses. The Bank and the Company have agreed to indemnify
Capital Resources and its employees and affiliates against certain losses
(including any losses in connection with claims under the federal securities
laws) arising out of its services as appraiser, except where Capital Resources's
liability results from its negligence or bad faith.

     An appraisal has been made by Capital Resources in reliance upon the
information contained in this Prospectus, including the financial statements.
Capital Resources also considered the following factors, among others: the
present and projected operating results and financial condition of the Company
and the Bank, and the economic and demographic conditions in the Bank's existing
market area; certain historical, financial and other information relating to the
Bank; a comparative evaluation of the operating and financial statistics of the
Bank with those of other similarly situated publicly-traded savings associations
and savings institutions located in the Bank's market area and the State of
Illinois; the aggregate size of the offering of the Common Stock; the impact of
Conversion on the Bank's equity and earnings potential; the proposed dividend
policy of the Company and the Bank; and the trading market for securities of
comparable institutions and general conditions in the market for such
securities.

     On the basis of the foregoing, Capital Resources has advised the Company
and the Bank that, in its opinion, dated September 6, 1996, the estimated pro
forma market value of the Common Stock ranged from a minimum of $14,875,000 to a
maximum of $20,125,000 with a midpoint of $17,500,000. The Board of Directors of
the Bank held a meeting to review and discuss the appraisal report prepared by
Capital Resources. A representative of Capital Resources participated in the
meeting to explain the contents of the appraisal report. In connection with its
review of the reasonableness and adequacy of such appraisal consistent with OTS
regulations and policies, the Board of Directors reviewed the methodology that
Capital Resources employed to determine the pro forma market value of the Common
Stock and the appropriateness of the assumptions that Capital Resources used in
determining this value. Based upon the Valuation Range and the Purchase Price of
$10.00 per share for the Common Stock established by the Board of Directors, the
Board of Directors has established the Estimated Price Range of $14,875,000 to
$20,125,000, with a midpoint of $17,500,000 million, and the Company expects to
issue between 1,487,500 and 2,012,500 shares of Common


                                       103

<PAGE>

Stock. The Estimated Price Range may be amended with the approval of the OTS (if
required), if necessitated by subsequent developments in the financial condition
of the Company or the Bank or market conditions generally.

     The valuation prepared by Capital Resources is not intended, and must not
be construed, as a recommendation of any kind as to the advisability of
purchasing such shares. Capital Resources did not independently verify the
financial statements and other information provided by the Bank, nor did Capital
Resources value independently the assets or liabilities of the Bank. The
valuation considers the Bank as a going concern and should not be considered as
an indication of the liquidation value of the Bank. Moreover, because such
valuation is necessarily based upon estimates and projections of a number of
matters, all of which are subject to change from time to time, no assurance can
be given that persons purchasing such shares in the Conversion will thereafter
be able to sell such shares at prices at or above the Purchase Price or in the
range of the foregoing valuation of the pro forma market value thereof.

     Following commencement of the Subscription Offering, the maximum of the
Estimated Price Range may be increased up to 15% and the number of shares of
Common Stock to be issued in the Conversion may be increased to 2,314,375 shares
due to regulatory considerations, changes in the market and general financial
and economic conditions, without the resolicitation of subscribers. See "--
Limitations on Common Stock Purchases" as to the method of distribution and
allocation of additional shares that may be issued in the event of an increase
in the Estimated Price Range to fill unfilled orders in the Subscription and
Community Offerings.

     No sale of shares of Common Stock may be consummated unless, prior to such
consummation, Capital Resources confirms to the Bank and the OTS that, to the
best of its knowledge, nothing of a material nature has occurred which, taking
into account all relevant factors, would cause Capital Resources to conclude
that the value of the Common Stock at the price so determined is incompatible
with its estimate of the pro forma market value of the Common Stock at the
conclusion of the Subscription Offering and, if applicable, the Community
Offering.

     If, based on Capital Resources's estimate, the pro forma market value of
the Common Stock, as of the date that Capital Resources so confirms to the Bank
and the OTS, is not more than 15% above the maximum and not less than the
minimum of the Estimated Price Range then, (1) with the approval of the OTS, the
number of shares of Common Stock to be issued in the Conversion may be increased
or decreased, pro rata to the increase or decrease in value, without
resolicitation of subscriptions, to no more than 2,314,375 shares or no less
than 1,487,500 shares, and (2) all shares purchased in the Subscription and
Community Offerings will be purchased for the Purchase Price of $10.00 per
share. If the number of shares issued in the Conversion is increased due to an
increase of up to 15% in the Estimated Price Range to reflect changes in market
or financial conditions, persons who subscribed for the maximum number of shares
will not be given the opportunity to subscribe for an adjusted maximum number of
shares, except for the Employee Plans which will be able to subscribe for such
adjusted amount up to their 10% subscription. See "-- Limitations on Common
Stock Purchases."

     If the pro forma market value of the Common Stock is either more than 15%
above the maximum of the Estimated Price Range or less than the minimum of the
Estimated Price Range, the Bank and the Company, after consulting with the OTS,
may terminate the Plan and return all funds promptly with interest at the Bank's
passbook rate of interest on payments made by check, draft or money order,
extend or hold new Subscription and Community Offerings, establish a new
Estimated Price Range, commence a resolicitation of subscribers or take such
other actions as permitted by the OTS in order to complete the Conversion. In
the event that a resolicitation is commenced, unless an affirmative response is
received within a reasonable period of time, all funds will be promptly returned
to investors as described above. A resolicitation, if any, following the
conclusion of the Subscription Offering or, if applicable, the Community
Offering would not exceed 45 days unless further extended by the OTS for periods
of up to 90 days not to extend beyond [_________], 1998.


                                       104

<PAGE>

     If all shares of Common Stock are not sold through the Subscription
Offering or the Community Offering, then the Bank and the Company expect to
offer the remaining shares in a Syndicated Community Offering, which would occur
as soon as practicable following the close of the Subscription Offering or the
Community Offering but may commence during the Subscription Offering or the
Community Offering subject to the prior rights of subscribers. All shares of
Common Stock will be sold at the same price per share in the Syndicated
Community Offering as in the Subscription and Community Offerings. See "--
Syndicated Community Offering."

     No sale of shares of Common Stock may be consummated unless, prior to such
consummation, Capital Resources confirms to the Bank, the Company and the OTS
that, to the best of its knowledge, nothing of a material nature has occurred
which, taking into account all relevant factors, including those which would be
involved in a cancellation of the Syndicated Community Offering, would cause
Capital Resources to conclude that the aggregate value of the Common Stock at
the Purchase Price is incompatible with its estimate of the pro forma market
value of the Common Stock of the Company at the time of the Syndicated Community
Offering. Any change which would result in an aggregate purchase price which is
below, or more than 15% above, the Estimated Price Range would be subject to OTS
approval. If such confirmation is not received, the Bank may extend the
Conversion, extend, reopen or commence new Subscription and Community Offerings
or a Syndicated Community Offering, establish a new Estimated Price Range and
commence a resolicitation of all subscribers with the approval of the OTS or
take such other actions as permitted by the OTS in order to complete the
Conversion, or terminate the Plan and cancel the Subscription and Community
Offerings and/or the Syndicated Community Offering. In the event market or
financial conditions change so as to cause the aggregate purchase price of the
shares to be below the minimum of the Estimated Price Range or more than 15%
above the maximum of such range, and the Company and the Bank determine to
continue the Conversion, subscribers will be resolicited (i.e., be permitted to
continue their orders, in which case they will need to affirmatively reconfirm
their subscriptions prior to the expiration of the resolicitation offering or
their subscription funds will be promptly refunded with interest at the Bank's
passbook rate of interest, or be permitted to decrease or cancel their
subscriptions). Any change in the Estimated Price Range must be approved by the
OTS. A resolicitation, if any, following the conclusion of the Subscription
Offering or the Community Offering would not exceed 45 days, or if following the
Syndicated Community Offering, 90 days, unless further extended by the OTS for
periods up to 90 days not to extend beyond [_________], 1998. If such
resolicitation is not effected, the Bank will return with interest all funds
promptly at the Bank's passbook rate of interest on payments made by check,
savings bank draft or money order.

     Copies of the appraisal report of Capital Resources, including any
amendments thereto, and the detailed memorandum of the appraiser setting forth
the method and assumptions for such appraisal are available for inspection at
the offices of the Bank and the other locations specified under "Additional
Information."

Number of Shares to be Issued

     Depending upon market or financial conditions following the commencement of
the Subscription and Community Offerings, the total number of shares to be
issued in the Conversion may be increased or decreased without a resolicitation
of subscribers; provided, that the product of the total number of shares times
the price per share is not below the minimum or more than 15% above the maximum
of the Estimated Price Range, and the total number of shares to be issued in the
Conversion is not less than 1,487,500 or greater than 2,012,500 (or 2,314,375 if
the Estimated Price Range is increased by 15%).

     In the event market or financial conditions change so as to cause the
aggregate purchase price of the shares to be below the minimum of the Estimated
Price Range or more than 15% above the maximum of such range, if the Plan is not
terminated by the Company and the Bank after consultation with the OTS,
purchasers will be resolicited (i.e., permitted to continue their orders, in
which case they will need to affirmatively reconfirm their subscriptions prior
to the expiration of the resolicitation offering or their subscription funds


                                       105

<PAGE>

will be promptly refunded, or be permitted to modify or rescind their
subscriptions). Any change in the Estimated Price Range must be approved by the
OTS. If the number of shares issued in the Conversion is increased due to an
increase of up to 15% in the Estimated Price Range to reflect changes in market
or financial condition, persons who subscribed for the maximum number of shares
will not be given the opportunity to subscribe for an adjusted maximum number of
shares, except for the Employee Plans, which will be able to subscribe for such
adjusted amount up to its 10% subscription. See "-- Limitations on Common Stock
Purchases."

     An increase in the number of shares to be issued in the Conversion as a
result of an increase in the estimated pro forma market value would decrease
both a subscriber's ownership interest and the Company's pro forma net earnings
and stockholders' equity on a per share basis while increasing pro forma net
earnings and stockholders' equity on an aggregate basis. A decrease in the
number of shares to be issued in the Conversion would increase both a
subscriber's ownership interest and the Company's pro forma net earnings and
stockholders' equity on a per share basis while decreasing pro forma net
earnings and stockholder's equity on an aggregate basis. For a presentation of
the effects of such changes see "Pro Forma Data."

Subscription Offering and Subscription Rights

     In accordance with the Plan of Conversion, rights to subscribe for the
purchase of Common Stock have been granted under the Plan of Conversion to the
following persons in the following order of descending priority: (1) depositors
whose deposits in qualifying accounts in the Bank totaled $50 or more as of
December 31, 1994 ("Eligible Account Holders"), (2) the Employee Plans, (3)
depositors whose deposits in qualifying accounts in the Bank totaled $50 or more
as of September 30, 1996, other than (i) those members who would otherwise
qualify as Eligible Account Holders or (ii) directors or officers of the Bank or
their Associates (as defined under "-- Limitations on Common Stock Purchases")
("Supplemental Eligible Account Holders"), (4) members of the Bank, consisting
of depositors of the Bank as of [____ ___, 1996], the Voting Record Date, and
borrowers from the Bank as of July 1, 1991 whose loans continue to be
outstanding as of the Voting Record Date, other than Eligible Account Holders or
Supplemental Eligible Account Holders ("Other Members"), and (5) employees and
officers of the Bank, other than Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members, ("Bank Employees"). All subscriptions
received will be subject to the availability of Common Stock after satisfaction
of all subscriptions of all persons having prior rights in the Subscription
Offering and to the maximum and minimum purchase limitations set forth in the
Plan of Conversion and as described below under "-- Limitations on Common Stock
Purchases."

     Priority 1: Eligible Account Holders. Each Eligible Account Holder will
receive, without payment therefor, first priority, nontransferable subscription
rights to subscribe for in the Subscription Offering up to the greater of (i)
the amount permitted to be purchased in the Community Offering, which amount is
currently $150,000 of the Common Stock offered, (ii) one-tenth of one percent
(0.10%) of the total offering of shares of Common Stock or (iii) fifteen times
the product (rounded down to the next whole number) obtained by multiplying the
total number of shares of Common Stock to be issued by a fraction of which the
numerator is the amount of the Eligible Account Holder's qualifying deposit and
the denominator is the total amount of qualifying deposits of all Eligible
Account Holders, in each case on the Eligibility Record Date, subject to the
overall maximum and minimum purchase limitations and exclusive of an increase in
the number of shares issued pursuant to an increase in the Estimated Price Range
of up to 15%. See "-- Limitations on Common Stock Purchases."

     In the event that Eligible Account Holders exercise subscription rights for
a number of shares in excess of the total number of shares eligible for
subscription, the shares will be allocated so as to permit each subscribing
Eligible Account Holder to purchase a number of shares sufficient to make such
Eligible Account Holder's total allocation equal to the lesser of 100 shares or
the number of shares subscribed for. Thereafter, unallocated shares will be
allocated among the remaining subscribing Eligible Account Holders whose
subscriptions remain unfilled in the proportion that the amounts of their
respective qualifying deposits bear


                                       106

<PAGE>

to the total amount of qualifying deposits of all remaining Eligible Account
Holders whose subscriptions remain unfilled.

     To ensure proper allocation of stock, each Eligible Account Holder must
list on his or her stock order form all accounts in which such Eligible Account
Holder has an ownership interest. Failure to list an account could result in
fewer shares being allocated than if all accounts had been disclosed. The
subscription rights of Eligible Account Holders who are also directors or
executive officers of the Bank or their associates will be subordinated to the
subscription rights of other Eligible Account Holders to the extent attributable
to increased deposits in the one-year period preceding the Eligibility Record
Date.

     Priority 2: The Employee Plans. To the extent that there are sufficient
shares remaining after satisfaction of the subscriptions by Eligible Account
Holders, the Employee Plans, including the ESOP, will receive, without payment
therefor, second priority, nontransferable subscription rights or, in the event
of any increase in the number of shares of Common Stock to be issued in the
Conversion after the date hereof as a result of an increase of up to 15% in the
maximum of the Estimated Price Range, first priority with respect to such
increase to the extent necessary to fill the subscription of the Employee Plans,
nontransferable subscription rights to purchase up to 10% of the Common Stock
issued in the Conversion, subject to the purchase limitations set forth in the
Plan of Conversion and as described below under "-- Limitations on Common Stock
Purchases." As an Employee Plan, the ESOP intends to purchase 8% of the shares
to be issued in the Conversion, or 119,000 shares and 161,000 shares, based on
the issuance of 1,487,500 shares and 2,012,500, respectively. Subscriptions by
the ESOP will not be aggregated with shares of Common Stock purchased directly
by or which are otherwise attributable to any other participants in the
Subscription and Community Offerings, including subscriptions of any of the
Bank's directors, officers, employees or associates thereof. See "Management of
the Bank -- Benefits -- Employee Stock Ownership Plan and Trust."

     Priority 3: Supplemental Eligible Account Holders. Each Supplemental
Eligible Account Holder will receive, without payment therefor, third priority,
nontransferable subscription rights to subscribe for in the Subscription
Offering up to the greater of (i) the amount permitted to be purchased in the
Community Offering, which amount is currently $150,000 of the Common Stock
offered, (ii) one-tenth of one percent (0.10%) of the total offering of shares
of Common Stock or (iii) fifteen times the product (rounded down to the next
whole number) obtained by multiplying the total number of shares of Common Stock
to be issued by a fraction of which the numerator is the amount of the
Supplemental Eligible Account Holder's qualifying deposit and the denominator is
the total amount of qualifying deposits of all Supplemental Eligible Account
Holders, in each case on the Supplemental Eligibility Record Date, subject to
the overall purchase limitation and exclusive of an increase in the shares
issued pursuant to an increase in the Estimated Price Range of up to 15%. See
"-- Limitations on Common Stock Purchases."

     In the event that Supplemental Eligible Account Holders exercise
subscription rights for a number of shares in excess of the total number of
shares eligible for subscription, the shares will be allocated so as to permit
each subscribing Supplemental Eligible Account Holder, to the extent possible,
to purchase a number of shares sufficient to make such Supplemental Eligible
Account Holder's total allocation equal to the lesser of 100 shares or the
number of shares subscribed for. Thereafter, unallocated shares will be
allocated among the remaining subscribing Supplemental Eligible Account Holders
whose subscriptions remain unfilled in the proportion that the amounts of their
respective qualifying deposits bear to the total amount of qualifying deposits
of all remaining Supplemental Eligible Account Holders whose subscriptions
remain unfilled, exclusive of any increase in the shares issued pursuant to an
increase in the Estimated Price Range of up to 15%.

     To ensure proper allocation of stock, each Supplemental Eligible Account
Holder must list on his or her stock order form all accounts in which such
Supplemental Eligible Account Holder has an ownership interest. Failure to list
an account could result in fewer shares being allocated than if all accounts had
been


                                       107

<PAGE>

disclosed. The subscription rights received by Eligible Account Holders will be
applied in partial satisfaction of the subscription rights to be received as a
Supplemental Eligible Account Holder.

     Priority 4: Other Members. To the extent that there are sufficient shares
remaining after satisfaction of subscriptions by the Eligible Account Holders,
the Employee Plans and the Supplemental Eligible Account Holders, each Other
Member will receive, without payment therefor, fourth priority nontransferable
subscription rights to subscribe for Common Stock in the Subscription Offering
up to (i) the greater of the amount permitted to be purchased in the Community
Offering, which amount is currently $150,000 of the Common Stock offered, or
(ii) one-tenth of one percent (0.10%) of the total offering of shares of Common
Stock, subject to the overall purchase limitation and exclusive of an increase
in the shares issued pursuant to an increase in the Estimated Price Range of up
to 15%.

     In the event that Other Members exercise subscription rights for a number
of shares in excess of the total number of shares eligible for subscription, the
shares will be allocated so as to permit each subscribing Other Member, to the
extent possible, to purchase a number of shares sufficient to make such Other
Members' total allocation equal to the lesser of 100 shares or the number of
shares subscribed for. Thereafter, unallocated shares will be allocated among
the remaining subscribing Other Members whose subscriptions remain unfilled on a
100 share per order basis until all such orders have been filled or the
remaining shares have been allocated.

     Priority 5: Bank Employees. To the extent that there are sufficient shares
remaining after satisfaction of subscriptions by the Eligible Account Holders,
the Employee Plans, the Supplemental Eligible Account Holders and Other Members,
each Bank Employee will receive, without payment therefor, fifth priority
nontransferable subscription rights to subscribe for Common Stock in the
Subscription Offering up to (i) the greater of the amount permitted to be
purchased in the Community Offering, which amount is currently $150,000 of the
Common Stock offered, or (ii) one-tenth of one percent (0.10%) of the total
offering of shares of Common Stock, subject to the overall purchase limitation
and exclusive of an increase in the shares issued pursuant to an increase in the
Estimated Price Range of up to 15%.

     In the event that Bank Employees exercise subscription rights for a number
of shares in excess of the total number of shares eligible for subscription, the
shares will be allocated so as to permit each subscribing Bank Employee, to the
extent possible, to purchase a number of shares sufficient to make such Bank
Employee's total allocation equal to the lesser of 100 shares or the number of
shares subscribed for. Thereafter, unallocated shares will be allocated among
the remaining subscribing Bank Employees whose subscriptions remain unfilled on
a 100 share per order basis until all such orders have been filled or the
remaining shares have been allocated.

     Expiration Date for the Subscription Offering. The Subscription Offering
will expire on [ , 1996], unless extended for up to 45 days by the Bank or such
additional periods with the approval of the OTS. Subscription rights which have
not been exercised prior to the Expiration Date will become void.

     The Bank will not execute orders until all shares of Common Stock have been
subscribed for or otherwise sold. If all shares have not been subscribed for or
sold within 45 days after the Subscription Expiration Date, unless such period
is extended with the consent of the OTS, all funds delivered to the Bank
pursuant to the Subscription Offering will be returned with interest promptly to
the subscribers and all withdrawal authorizations will be cancelled. If an
extension beyond the 45-day period following the Subscription Expiration Date is
granted, the Bank will notify subscribers of the extension of time and of any
rights of subscribers to modify or rescind their subscriptions. Such extensions
may not go beyond [_________], 1998.


                                       108

<PAGE>

Community Offering

     To the extent that shares remain available for purchase after satisfaction
of all subscriptions of the Eligible Account Holders, the Employee Plans, the
Supplemental Eligible Account Holders, Other Members, and Bank Employees, the
Bank has determined to offer shares pursuant to the Plan to certain members of
the general public. Any excess of shares available will be available for
purchase by the general public, with natural persons residing in Cook and Lake
counties in Illinois (such natural persons referred to as "Preferred
Subscribers") having first priority, subject to the right of the Company and the
Bank, to accept or reject any such orders, in whole or in part, in its sole
discretion. Such persons, together with associates of and persons acting in
concert with such persons, may purchase up to $150,000 of Common Stock subject
to the maximum purchase limitation. See "-- Limitations on Common Stock
Purchases." This amount may be increased to up to a maximum of 5% or decreased
to less than $150,000 of Common Stock at the discretion of the Company and the
Bank. The opportunity to subscribe for shares of Common Stock in the Community
Offering category is subject to the right of the Bank and the Company, in their
discretion, to accept or reject any such orders in whole or in part either at
the time of receipt of an order or as soon as practicable following the
Expiration Date of the Subscription Offering. If the Company rejects a
subscription in part, the subscriber will not have the right to cancel the
remainder of his or her subscription.

     Subject to the foregoing, if the amount of stock remaining is insufficient
to fill the orders of Preferred Subscribers after completion of the Subscription
and Community Offerings, such stock will be allocated first to each Preferred
Subscriber whose order is accepted by the Bank, in an amount equal to the lesser
of 100 shares or the number of shares subscribed for by each such Preferred
Subscriber, if possible. Thereafter, unallocated shares will be allocated among
the Preferred Subscribers whose order remains unsatisfied on a 100 shares per
order basis until all such orders have been filled or the remaining shares have
been allocated. To the extent that there are shares remaining after all
subscriptions by Preferred Subscribers have been filled, shares will be
allocated, applying the same allocation as described above for Preferred
Subscribers, to natural persons maintaining an office or a residence in the
State of Illinois. Thereafter, if there are any shares remaining, shares will be
allocated to other persons of the general public who purchase in the Community
Offering applying the same allocation described above for Preferred Subscribers.

     In offering the unsubscribed-for shares to the public in the Community
Offering, a number of shares equal to the lesser of (i) 25% of the Common Stock
offered in the Conversion or (ii) the Common Stock not subscribed for in the
Subscription Offering, at the option of the Company and the Bank, may be
initially reserved for certain institutional investors, although no such
institutional investors have been selected.

     Persons in Non-qualified States or Foreign Countries. The Company and the
Bank will make reasonable efforts to comply with the securities laws of all
states in the United States in which persons entitled to subscribe for stock
pursuant to the Plan reside. However, the Bank and the Company are not required
to offer stock in the Subscription Offering to any person who resides in a
foreign country or resides in a state of the United States with respect to which
the Company or the Bank determines that compliance with the securities laws of
such state would be impracticable for reasons of cost or otherwise, including
but not limited to, a request that the Company and the Bank or their officers,
directors or trustees register as a broker, dealer, salesman or selling agent,
under the securities laws of such state, or a request to register or otherwise
qualify the subscription rights or Common Stock for sale or submit any filing
with respect thereto in such state. Where the number of persons eligible to
subscribe for shares in one state is small, the Bank and the Company will base
their decision as to whether or not to offer the Common Stock in such state on a
number of factors, including the size of accounts held by account holders in the
state, the cost of registering or qualifying the shares or the need to register
the Company, its officers, directors or employees as brokers, dealers or
salesmen.


                                       109

<PAGE>

Marketing and Underwriting Arrangements

     The Bank and the Company have engaged Hovde as a financial and marketing
advisor in connection with the offering of the Common Stock and Hovde has agreed
to use its best efforts to assist the Company with the solicitation of
subscriptions and purchase orders for shares of Common Stock in the Offerings.
Based upon negotiations between the Bank and the Company, Hovde has received a
management fee of $37,500 and will receive a fee for services provided in
connection with the Offerings equal to 1.75% of the aggregate Purchase Price of
Common Stock sold in the Subscription Offering to Eligible Account Holders and
other current depositors of the Bank and 3.00% of the aggregate Purchase Price
of the Common Stock sold in the Community Offering and in the Syndicated
Community Offering. No fees will be paid to Hovde with respect to any shares of
Common Stock purchased by any director, executive officer or employee of the
Bank or the Company or members of their immediate families or the ESOP. In the
event of a Syndicated Community Offering, Hovde will negotiate with the Company
for the receipt of an additional fee to be remitted to selected dealers under
one or more selected dealer agreements to be entered into by Hovde with certain
dealers; provided, however, that the aggregate fees payable to Hovde and any
selected dealers in connection with any Syndicated Community Offering will not
exceed 7% of the aggregate Purchase Price of the Common Stock sold in the
Syndicated Community Offering. Fees to Hovde and to any other broker-dealer may
be deemed to be underwriting fees and Hovde and such broker-dealers may be
deemed to be underwriters. Hovde will also be reimbursed for its reasonable
out-of-pocket expenses, including legal fees, in an amount not to exceed
$45,000. Notwithstanding the foregoing, in the event the Offerings are not
consummated or Hovde ceases, under certain circumstances after the subscription
solicitation activities are commenced, to provide assistance to the Company,
Hovde will be entitled to reimbursement for its reasonable out-of-pocket
expenses as described above. The Company and the Bank have agreed to indemnify
Hovde for costs and expenses in connection with certain claims or liabilities
related to or arising out of the services to be provided by Hovde pursuant to
its engagement by the Bank and the Company as financial advisor in connection
with the Conversion, including certain liabilities under the Securities Act.
Total marketing fees to Hovde are estimated to be $201,000 and $285,000 at the
minimum and the maximum of the Estimated Price Range, respectively. See "Pro
Forma Data" for the assumptions used to arrive at these estimates.

     The Bank also has engaged Crowe Chizek and Company, LLP ("Crowe Chizek") as
its conversion agent. Pursuant to such engagement, Crowe Chizek will perform
conversion and records management services for the Bank in the Conversion and
will receive a fee for this service of $12,500, plus reimbursement of reasonable
out-of-pocket expenses, to be billed to the Bank, and indemnification against
certain liabilities.

     Directors and executive officers of the Company and the Bank may
participate in the solicitation of offers to purchase Common Stock. Questions of
prospective purchasers will be directed to executive officers or registered
representatives. Other employees of the Bank may participate in the Offerings in
ministerial capacities or providing clerical work in effecting a sales
transaction. Such other employees have been instructed not to solicit offers to
purchase Common Stock or provide advice regarding the purchase of Common Stock.
The Company will rely on Rule 3a4-1 under the Exchange Act, and sales of Common
Stock will be conducted within the requirements of Rule 3a4-1, so as to permit
officers, directors and employees to participate in the sale of Common Stock. No
officer, director or employee of the Company or the Bank will be compensated in
connection with his or her participation by the payment of commissions or other
remuneration based either directly or indirectly on the transactions in the
Common Stock.

Procedure for Purchasing Shares in Subscription and Community Offerings

     To ensure that each purchaser receives a Prospectus at least 48 hours prior
to the respective expiration dates for the Offerings, in accordance with Rule
15c2-8 of the Exchange Act, no Prospectus will be mailed any later than five
days prior to such date or hand delivered any later than two days prior to such
date. Execution of the stock order form will confirm receipt or delivery in
accordance with Rule 15c2-8. Stock


                                       110

<PAGE>

order forms will only be distributed with a Prospectus and a certification form
requiring each prospective investor to acknowledge, among other things, that the
shares of Common Stock are not insured by the Bank, the FDIC or any other
governmental agency and that such prospective investor has received a copy of
this Prospectus, which, among other things, describes the risks involved in the
investment of the Common Stock.

     To purchase shares in the Subscription and Community Offerings, an executed
order form with the required payment for each share subscribed for, or with
appropriate authorization for withdrawal from the Bank's deposit account (which
may be given by completing the appropriate blanks in the stock order form), must
be received by the Bank at its office by 12:00 Noon, Central Time, on the
Expiration Date. Stock order forms which are not received by such time or are
executed defectively or are received without full payment (or appropriate
withdrawal instructions) are not required to be accepted. In addition, the
Company and Bank are not obligated to accept orders submitted on photocopied or
facsimiled order forms and will not accept order forms unaccompanied by an
executed certification form. The Company and the Bank have the right to waive or
permit the correction of incomplete or improperly executed forms, but do not
represent that they will do so. Once received, an executed order form may not be
modified, amended or rescinded without the consent of the Bank unless the
Conversion has not been completed within 45 days after the end of the
Subscription and Community Offerings, unless such period has been extended.

     In order to ensure that Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are properly identified as to their stock
purchase priorities, depositors as of the Eligibility Record Date (December 31,
1994) and/or the Supplemental Eligibility Record Date (September 30, 1996)
and/or the Voting Record Date (__________, 1996) and borrowers as of the Voting
Record Date whose loans have been outstanding since July 1, 1991 must list all
accounts on the stock order form giving all names in each account and the
account numbers.

     Payment for subscriptions may be made (i) in cash if delivered in person to
the office of the Bank, (ii) by check, bank draft or money order, or (iii) by
authorization of withdrawal from deposit accounts maintained with the Bank. No
wire transfers will be accepted. Interest will be paid on payments made by cash,
check, savings bank draft or money order at the Bank's passbook rate of interest
from the date payment is received until the completion or termination of the
Conversion. If payment is made by authorization of withdrawal from deposit
accounts, the funds authorized to be withdrawn from a deposit account will
continue to accrue interest at the contractual rates until completion or
termination of the Conversion, but a hold will be placed on such funds, thereby
making them unavailable to the depositor until completion or termination of the
Conversion. Notwithstanding the foregoing, the Company shall have the right, in
its sole discretion, to permit institutional investors to submit irrevocable
orders together with a legally binding commitment for payment and to thereafter
pay for the shares of Common Stock for which they subscribe in the Community
Offering at any time prior to 48 hours before the completion of the Conversion.

     If a subscriber authorizes the Bank to withdraw the amount of the purchase
price from such subscriber's deposit account, the Bank will do so as of the
effective date of the Conversion. The Bank will waive any applicable penalties
for early withdrawal from certificate accounts. If the remaining balance in a
certificate account is reduced below the applicable minimum balance requirement
at the time that the funds actually are transferred under the authorization, the
certificate will be cancelled at the time of the withdrawal, without penalty,
and the remaining balance will be converted into a passbook account and will
earn interest at the passbook rate. Upon completion of the Conversion, funds
withdrawn from depositors' accounts for stock purchases will no longer be
insured by the FDIC.

     The ESOP will not be required to pay for the shares subscribed for at the
time it subscribes but, rather, may pay for such shares of Common Stock
subscribed for at the Purchase Price upon consummation of the Offerings;
provided, that there is in force from the time of its subscription until such
time, a loan commitment acceptable to the Company from an unrelated financial
institution or the Company to lend to the


                                       111

<PAGE>

ESOP, at such time, the aggregate Purchase Price of the shares for which it
subscribed. The Company intends to provide such a loan to the ESOP.

     Owners of self-directed Individual Retirement Accounts ("IRAs") may use the
assets of such IRAs to purchase shares of Common Stock in the Subscription and
Community Offerings, provided that such IRAs are not maintained at the Bank.
Persons with IRAs maintained at the Bank must have their accounts transferred to
an unaffiliated institution or broker to purchase shares of Common Stock in the
Subscription and Community Offerings. In addition, the provisions of ERISA and
IRS regulations require that officers, directors and ten percent shareholders
who use self-directed IRA funds to purchase shares of Common Stock in the
Subscription and Community Offerings make such purchases for the exclusive
benefit of the IRAs.

     Certificates representing shares of Common Stock purchased will be mailed
to purchasers at the last address of such persons appearing on the records of
the Bank, or to such other address as may be specified in properly completed
order forms, as soon as practicable following consummation of the sale of all
shares of Common Stock. Any certificates returned as undeliverable will be
disposed of in accordance with applicable law.

Restrictions on Transfer of Subscription Rights and Shares of Common Stock

     Prior to the completion of the Conversion, the OTS conversion regulations
prohibit any person with subscription rights, including the Eligible Account
Holders, the Employee Plans, the Supplemental Eligible Account Holders, Other
Members and Bank Employees, from transferring or entering into any agreement or
understanding to transfer the legal or beneficial ownership of the subscription
rights issued under the Plan or the shares of Common Stock to be issued upon
their exercise. Such rights may be exercised only by the person to whom they are
granted and only for such person's account. Each person exercising such
subscription rights will be required to certify that such person is purchasing
shares solely for such person's own account and that such person has no
agreement or understanding regarding the sale or transfer of such shares. The
regulations also prohibit any person from offering or making an announcement of
an offer or an intent to make an offer to purchase such subscription rights or
shares of Common Stock prior to the completion of the Conversion.

     The Bank and the Company will pursue any and all legal and equitable
remedies (including forfeiture) in the event they become aware of the transfer
of subscription rights and will not honor orders known by them to involve the
transfer of such rights.

Syndicated Community Offering

     As a final step in the Conversion, the Plan provides that, if feasible, all
shares of Common Stock not purchased in the Subscription Offering or the
Community Offering, if any, will be offered for sale to the general public in a
Syndicated Community Offering through a syndicate of registered broker-dealers
to be formed and managed by Hovde acting as agent of the Company. There are no
known agreements between Hovde and any broker-dealer in connection with a
possible Syndicated Community Offering. As an alternative to a Syndicated
Community Offering, the Company and the Bank may instead elect to offer for sale
such remaining shares to or through underwriters in a public offering, as
described under "-- Public Offering Alternative." The Company and the Bank have
reserved the right to reject orders in whole or in part in their sole discretion
in the Syndicated Community Offering. If the Company or the Bank rejects an
order in part, the subscriber will not have the right to cancel the remainder of
his or her subscription. Neither Hovde nor any registered broker-dealer shall
have any obligation to take or purchase any shares of the Common Stock in the
Syndicated Community Offering; however, Hovde has agreed to use its best efforts
in the sale of shares in the Syndicated Community Offering.

     The price at which Common Stock is sold in the Syndicated Community
Offering will be determined as described above under "-- Stock Pricing." Subject
to overall purchase limitations, no person, together with


                                       112

<PAGE>

any associate or group of persons acting in concert, will be permitted to
subscribe in the Syndicated Community Offering for more than $150,000 of the
Common Stock offered in the Conversion; provided, however, that shares of Common
Stock purchased in the Community Offering by any persons, together with
associates of or persons acting in concert with such persons, will be aggregated
with purchases in the Syndicated Community Offering and be subject to a maximum
purchase limitation of $150,000 of the Common Stock offered.

     Payments made in the form of a check, bank draft, money order or in cash
will earn interest at the Bank's passbook rate of interest from the date such
payment is actually received by the Bank until completion or termination of the
Conversion.

     In addition to the foregoing, if a syndicate of broker-dealers ("selected
dealers") is formed to assist in the Syndicated Community Offering, a purchaser
may pay for his or her shares with funds held by or deposited with a selected
dealer. If an order form is executed and forwarded to the selected dealer or if
the selected dealer is authorized to execute the order form on behalf of a
purchaser, the selected dealer is required to forward the order form and funds
to the Bank for deposit in a segregated account on or before noon of the
business day following receipt of the order form or execution of the order form
by the selected dealer. Alternatively, selected dealers may solicit indications
of interest from their customers to place orders for shares. Such selected
dealers shall subsequently contact their customers who indicated an interest and
seek their confirmation as to their intent to purchase. Those indicating an
intent to purchase shall execute order forms and forward them to their selected
dealer or authorize the selected dealer to execute such forms. The selected
dealer will acknowledge receipt of the order to its customer in writing on the
following business day and will debit such customer's account on the third
business day after the customer has confirmed his or her intent to purchase (the
"debit date") and on or before noon of the next business day following the debit
date, will send order forms and funds to the Bank for deposit in a segregated
account. Although purchasers' funds are not required to be in their accounts
with selected dealers until the debit date, in the event that such alternative
procedure is employed once a confirmation of an intent to purchase has been
received by the selected dealer, the purchaser has no right to rescind his or
her order.

     Certificates representing shares of Common Stock purchased, together with
any refund due, will be mailed to purchasers at the address specified in the
order form, as soon as practicable following consummation of the sale of the
Common Stock. Any certificates returned as undeliverable will be disposed of in
accordance with applicable law.

     The Syndicated Community Offering will terminate no more than 45 days
following the Subscription Expiration Date, unless extended by the Company with
the approval of the OTS. Such extensions may not be beyond [ ], 1998. See "--
Stock Pricing" above for a discussion of rights of subscribers, if any, in the
event an extension is granted.

Public Offering Alternative

     The Company anticipates that the shares of Common Stock will be sold in the
Subscription Offering and, if necessary, in the Community Offering. However,
shares of Common Stock not sold in the Subscription Offering or the Community
Offering may, as an alternative to a Syndicated Community Offering as described
above, be offered for sale by the Company to or through underwriters (the
"Public Offering"). Certain provisions restricting the purchase and transfer of
Common Stock shall not be applicable to sales to underwriters for purposes of
such Public Offering. Any such underwriter shall agree to purchase such shares
from the Company with a view to reoffering them to the general public, use their
best efforts to sell, for the account of the Company, such shares to the general
public or a combination of the preceding two provisions, subject to certain
terms and conditions described in the Plan. If the Public Offering is utilized,
then the Company will amend the Registration Statement, of which this Prospectus
is a part, to reflect the specific


                                       113

<PAGE>

terms of such Public Offering alternative, including, without limitation, the
terms of any underwriting agreements, commission structure and plan of
distribution.

Limitations on Common Stock Purchases

     The Plan includes the following limitations on the number of shares of
Common Stock which may be purchased during the Conversion:

          (1) No subscription for fewer than 25 shares will be accepted;

          (2) Each Eligible Account Holder may subscribe for and purchase Common
     Stock in the Subscription Offering in an amount up to the greater of (a)
     the amount permitted to be purchased in the Community Offering, currently
     $150,000 of the Common Stock offered, (b) one-tenth of one percent (0.10%)
     of the total offering of shares of Common Stock or (c) 15 times the product
     (rounded down to the net whole number) obtained by multiplying the total
     number of shares of Common Stock to be issued in the Conversion by a
     fraction of which the numerator is the amount of the qualifying deposit of
     the Eligible Account Holder and the denominator is the total amount of
     qualifying deposits of all Eligible Account Holders in each case on the
     Eligibility Record Date subject to the overall limitation in (9) below and
     exclusive of an increase in the total number of shares issued due to an
     increase in the Estimated Price Range of up to 15%;

          (3) The Employee Plans are permitted to purchase up to 10% of the
     shares of Common Stock issued in the Conversion, including shares issued in
     the event of an increase in the Estimated Price Range of up to 15% and as
     an Employee Plan, the ESOP intends to purchase 8% of the shares of Common
     Stock issued in the Conversion;

          (4) Each Supplemental Eligible Account Holder may subscribe for and
     purchase in the Subscription Offering in an amount up to the greater of (a)
     the amount permitted to be purchased in the Community Offering, currently
     $150,000 of the Common Stock Offered, (b) one-tenth of one percent (0.10%)
     of the total offering of shares of Common Stock or (c) 15 times the product
     (rounded down to the net whole number) obtained by multiplying the total
     number of shares of Common Stock to be issued by a fraction of which the
     numerator is the amount of the qualifying deposit of the Supplemental
     Eligible Account Holder and the denominator is the total amount of
     qualifying deposits of all Supplemental Eligible Account Holders in each
     case on the Supplemental Eligibility Record Date subject to the overall
     limitation in (9) below and exclusive of an increase in the total number of
     shares issued due to an increase in the Estimated Price Range of up to 15%;
     provided, that the subscription rights received as an Eligible Account
     Holder will be applied in partial satisfaction of the subscription rights
     to be received as a Supplemental Eligible Account Holder;

          (5) Each Other Member may subscribe for and purchase Common Stock in
     the Subscription Offering in an amount up to the greater of the amount
     permitted to be purchased in the Community Offering, currently $150,000 of
     the Common Stock offered, or one-tenth of one percent (0.10%) of the total
     offering of shares of Common Stock subject to the overall limitation in (9)
     below and exclusive of an increase in the total number of shares issued due
     to an increase in the Estimated Price Range of up to 15%;

          (6) Each Bank Employee may subscribe for and purchase Common Stock in
     the Subscription Offering in an amount up to the greater of the amount
     permitted to be purchased in the Community Offering, currently $150,000 of
     the Common Stock offered, or one-tenth of one percent (0.10%) of the total
     offering of shares of Common Stock subject to the overall limitation in (9)
     below and exclusive of an increase in the total number of shares issued due
     to an increase in the Estimated Price Range of up to 15%;


                                       114

<PAGE>

          (7) Persons purchasing shares of Common Stock in the Community
     Offering, together with associates of and groups of persons acting in
     concert with such persons, may purchase Common Stock in the Community
     Offering in an amount up to $150,000 of the Common Stock offered in the
     Conversion subject to the overall limitation in (9) below;

          (8) Persons purchasing shares of Common Stock in the Syndicated
     Community Offering, or the Public Offering alternative (exclusive of
     underwriters), together with associates of and persons acting in concert
     with such persons, may purchase Common Stock in the Syndicated Offering in
     an amount up to $150,000 of the shares of Common Stock offered in the
     Conversion subject to the overall limitation in (9) below; provided, that
     shares of Common Stock purchased in the Community Offering by any persons,
     together with associates of and persons acting in concert with such
     persons, will be aggregated with purchases by such persons in the
     Syndicated Community Offering in applying $150,000 purchase limitation;

          (9) Eligible Account Holders, Supplemental Eligible Account Holders,
     Other Members, Bank Employees and certain members of the general public may
     purchase stock in the Community Offering and Syndicated Community Offering
     or Public Offering Alternative subject to the purchase limitations
     described in (7) and (8) above; provided, that, except for the Employee
     Plans, the maximum number of shares of Common Stock subscribed for or
     purchased in all categories of the Conversion by any person, together with
     associates of and groups of persons acting in concert with such persons,
     shall not exceed 1.0% of the shares of Common Stock offered in the
     Conversion; and

          (10) The directors and officers of the Bank and their associates in
     the aggregate, excluding purchases by the Employee Plans, may purchase up
     to the maximum number of shares offered for sale in the Conversion as
     provided by Section 563b.3(c)(8) of the OTS Regulations. Based on the
     Bank's total assets of $194.6 million at July 31, 1996, such aggregate
     purchase limitation is approximately 31.8% of the shares of Common Stock
     offered in the Conversion.

     Subject to any required regulatory approval and the requirements of
applicable laws and regulations, but without further approval of the members of
the Bank, both the individual amount permitted to be subscribed for and the
overall maximum purchase limitation may be increased to up to a maximum of 5% of
the shares offered in the Offering at the sole discretion of the Company and the
Bank. It is currently anticipated that the overall maximum purchase limitation
may be increased if, after a Community Offering, the Company has not received
subscriptions for a minimum of 1,487,500 shares of Common Stock. If such amount
is increased, subscribers for the maximum amount will be, and certain other
large subscribers in the sole discretion of the Company and the Bank may be,
given the opportunity to increase their subscriptions up to the then applicable
limit. In addition, the Boards of Directors of the Company and the Bank may, in
their sole discretion, increase the maximum purchase limitation referred to
above up to 9.99% of the shares offered in the Offering; provided, that, orders
for shares exceeding 5% of the shares being offered in the Subscription and
Community Offerings shall not exceed, in the aggregate, 10% of the shares being
offered in the Subscription and Community Offerings. Requests to purchase
additional shares of Common Stock under this provision will be determined by the
Boards of Directors and, if approved, allocated on a pro rata basis giving
priority in accordance with the priority rights set forth in the Plan and
described herein.

     The overall maximum purchase limitation may not be reduced to less than
1.0%, and the individual amount permitted to be subscribed for in the Offerings
may not be reduced by the Bank to less than $150,000 of the Common Stock
offered. An individual Eligible Account Holder, Supplemental Eligible Account
Holder, Other Member or Bank Employee may not purchase individually in the
Subscription Offering the overall maximum purchase limit of 1.0% of the shares
offered, but may make such purchase, together with associates of and persons
acting in concert with such person, by also purchasing in other available
categories of the Conversion, subject to availability of shares and the maximum
overall purchase limit for purchases in the Conversion.


                                       115

<PAGE>

     In the event of an increase in the total number of shares offered in the
Conversion due to an increase in the Estimated Price Range of up to 15% (the
"Adjusted Maximum"), the additional shares will be allocated in the following
order or priority in accordance with the Plan: (i) to fill the Employee Plans'
subscription of up to 10% of the Adjusted Maximum number of shares; (ii) in the
event that there is an oversubscription by Eligible Account Holders, to fill
unfulfilled subscriptions of Eligible Account Holders exclusive of the Adjusted
Maximum; (iii) in the event that there is an oversubscription by Supplemental
Eligible Account Holders, to fill unfulfilled subscriptions of Supplemental
Eligible Account Holders, exclusive of the Adjusted Maximum; (iv) in the event
that there is an oversubscription by Other Members, to fill unfulfilled
subscriptions of Other Members exclusive of the Adjusted Maximum; (v) in the
event that there is an oversubscription by Bank Employees, to fill unfulfilled
subscriptions of Bank Employees, exclusive of the Adjusted Maximum; and (vi) to
fill unfulfilled subscriptions in the Community Offering to the extent possible,
exclusive of the Adjusted Maximum, with preference to Preferred Subscribers.

     The term "Associate" of a person is defined to mean: (i) any corporation or
organization (other than the Company, the Bank or a majority-owned subsidiary of
the Bank) of which such person is an officer, partner or is directly or
indirectly, either alone or with one or more members of his or her immediate
family, the beneficial owner of 10% or more of any class of equity securities;
(ii) any trust or other estate in which such person has a substantial beneficial
interest or as to which such person serves as trustee or in a similar fiduciary
capacity, except that the term "Associate" does not include any employee stock
benefit plan maintained by the Company or the Bank in which a person has a
substantial beneficial interest or serves as a trustee or in a similar fiduciary
capacity, and except that, for purposes of aggregating total shares that may be
acquired or held by officers and directors and their Associates, the term
"Associate" does not include any tax-qualified employee stock benefit plan; and
(iii) any relative or spouse of such person, or any relative of such spouse, who
has the same home as such person or who is a director or officer of the Company
or the Bank. Directors and officers are not treated as associates of each other
solely by virtue of holding such positions. For a further discussion of
limitations on purchases of a converting institution's stock at the time of
Conversion and subsequent to Conversion, see "-- Certain Restrictions on
Purchase or Transfer of Shares After Conversion," "Management of the Bank --
Subscriptions by Executive Officers and Directors" and "Restrictions on
Acquisition of the Company and the Bank."

Certain Restrictions on Purchase or Transfer of Shares After Conversion

     All shares of Common Stock purchased in connection with the Conversion by a
director or an executive officer of the Bank will be subject to a restriction
that the shares not be sold for a period of one year following the Conversion,
except in the event of the death of such director or executive officer. Each
certificate for restricted shares will bear a legend giving notice of this
restriction on transfer, and instructions will be issued to the effect that any
transfer within such time period of any certificate or record ownership of such
shares other than as provided above is a violation of the restriction. Any
shares of Common Stock issued at a later date as a stock dividend, stock split,
or otherwise, with respect to such restricted stock will be subject to the same
restrictions. The directors and executive officers of the Bank will also be
subject to the insider trading rules promulgated pursuant to the Exchange Act
and any other applicable requirements of the federal securities laws.

     Purchases of outstanding shares of Common Stock of the Company by
directors, executive officers (or any person who was an executive officer or
director of the Bank after adoption of the Plan of Conversion) and their
associates during the three-year period following Conversion may be made only
through a broker or dealer registered with the SEC, except with the prior
written approval of the OTS. This restriction does not apply, however, to
negotiated transactions involving more than 1.0% of the Company's outstanding
Common Stock or to the purchase of stock pursuant to the Stock Option Plans to
be established after the Conversion.


                                       116

<PAGE>

     Pursuant to OTS regulations, the Company will be prohibited from
repurchasing any shares of the Common Stock for three years except (i) for an
offer to all shareholders on a pro rata basis or (ii) for the repurchase of
qualifying shares of a director, unless the Company receives the prior approval
of the OTS. Notwithstanding the foregoing, beginning one year following
completion of the Conversion the Company may repurchase its Common Stock so long
as (i) the repurchases within the following two years are part of an open-market
program not involving greater than 5% of its outstanding capital stock during a
twelve-month period; (ii) the repurchases do not cause the Company to become
undercapitalized; and (iii) the Company provides to the Regional Director of the
OTS no later than 10 days prior to the commencement of a repurchase program
written notice containing a full description of the program to be undertaken and
such program is not disapproved by the Regional Director. However, the OTS
Regional Directors have the authority to approve stock repurchases during the
first three years after the Conversion that are in excess of these limits.


                                       117

<PAGE>

                   RESTRICTIONS ON ACQUISITION OF THE COMPANY
                                  AND THE BANK

General

     The Bank's Plan of Conversion provides for the Conversion of the Bank from
the mutual to the stock form of organization and, in connection therewith, a new
Federal Stock Charter and Bylaws to be adopted by members of the Bank. The Plan
also provides for the concurrent formation of a holding company, which form of
organization may or may not be utilized at the option of the Board of Directors
of the Bank. See "The Conversion -- General." In the event that the holding
company form of organization is utilized, as described below, certain provisions
in the Company's Articles of Incorporation and Bylaws and in its management
remuneration plans and agreements entered into in connection with the
Conversion, together with provisions of Illinois corporate law, may have
anti-takeover effects. In the event that the holding company form of
organization is not utilized, the Bank's Federal Stock Charter and Bylaws and
management remuneration plans and agreements entered into in connection with the
Conversion may have anti-takeover effects as described below. In addition,
regulatory restrictions may make it difficult for persons or companies to
acquire control of either the Company or the Bank.

Restrictions in the Company's Articles of Incorporation and Bylaws

     The following discussion is a general summary of certain provisions of the
Company's Articles of Incorporation and Bylaws and certain other statutory and
regulatory provisions relating to stock ownership and transfers, the Board of
Directors and business combinations, that might have a potential "anti-takeover"
effect. The Articles of Incorporation and Bylaws of the Company are filed as
exhibits to the Registration Statement, of which this Prospectus is a part, and
the descriptions herein of such documents are qualified in their entirety by
reference to such documents. A number of provisions of the Company's Articles of
Incorporation and Bylaws deal with matters of corporate governance and certain
rights of shareholders. These provisions might have the effect of discouraging
future takeover attempts which are not approved by the Board of Directors but
which individual Company shareholders may deem to be in their best interests or
in which shareholders may receive substantial premiums for their shares over
then current market prices. As a result, shareholders who might desire to
participate in such transactions may not have an opportunity to do so. Such
provisions will also render the removal of the current Board of Directors or
management of the Company more difficult. The following description of certain
of the provisions of the Articles of Incorporation and Bylaws of the Company is
necessarily general and reference should be made in each case to such Articles
of Incorporation and Bylaws, which are incorporated herein by reference. See
"Additional Information" as to how to obtain a copy of these documents.

     Limitation on Voting Rights. The Articles of Incorporation of the Company
provides that shares of Common Stock that are beneficially owned, directly or
indirectly, by a person who beneficially owns in excess of 10% of the then
outstanding shares of Common Stock (the "Limit") shall be automatically
converted into shares of Excess Common Stock. Shares of Excess Common Stock are
identical to shares of Common Stock except that they are permitted only one
one-hundredth (1/100) of a vote per share. Beneficial ownership of shares
includes shares beneficially owned by such person or any of his or her
affiliates, shares which such person or his or her affiliates have the right to
acquire upon the exercise of conversion rights or options and shares as to which
such person and his or her affiliates have or share investment or voting power,
but shall not include shares beneficially owned by the ESOP or shares that are
subject to a revocable proxy and that are not otherwise beneficially owned or
deemed by the Company to be beneficially owned by such person and his or her
affiliates. The Articles of Incorporation further provides that this provision
may only be amended upon the approval of the Board of Directors or the vote of
two-thirds of the votes eligible to be cast by holders of all outstanding shares
of voting stock (after giving effect to the limitation on voting rights).


                                       118

<PAGE>

     Board of Directors. The Board of Directors of the Company is divided into
three classes, each of which shall contain approximately one-third of the whole
number of members of the Board. Each class shall serve a staggered term, with
approximately one-third of the total number of directors being elected each
year. The Company's Articles of Incorporation and Bylaws provide that the size
of the Board shall be determined by a majority of the directors but shall not be
less than five nor more than 15. The Bylaws provide that any vacancy occurring
in the Board, including a vacancy created by an increase in the number of
directors or resulting from death, resignation, retirement, disqualification,
removal from office or other cause, shall be filled until the next meeting of
shareholders by a majority vote of the directors then in office. The classified
Board is intended to provide for continuity of the Board of Directors and to
make it more difficult and time consuming for a shareholder group to fully use
its voting power to gain control of the Board of Directors without the consent
of the incumbent Board of Directors of the Company. The Articles of
Incorporation of the Company provides that a director may be removed from the
Board of Directors prior to the expiration of such director's term only for
cause, upon the vote of a majority of the outstanding shares of voting stock. In
the absence of these provisions, the vote of the holders of a majority of the
shares could remove the entire Board, with or without cause, and replace it with
persons of such holders' choice.

     Cumulative Voting, Special Meetings and Action by Written Consent. The
Articles of Incorporation does not provide for cumulative voting for directors.
Moreover, special meetings of shareholders of the Company may be called only by
at least three-fourths of the Board of Directors, the Chairman of the Board or
by the President of the Company. The Articles of Incorporation also provides
that any action required or permitted to be taken by the shareholders of the
Company may be taken only at an annual or special meeting and prohibits
shareholder action by written consent in lieu of a meeting.

     Authorized Shares. The Articles of Incorporation authorizes the issuance of
seventeen million two hundred thousand (17,200,000) shares of capital stock,
consisting of eight million (8,000,000) shares of Common Stock, two million
(2,000,000) shares of preferred stock (the "Preferred Stock") and seven million
two hundred thousand (7,200,000) shares of Excess Common Stock. The shares of
Common Stock and Preferred Stock were authorized in an amount greater than that
to be issued in the Conversion to provide the Company's Board of Directors with
as much flexibility as possible to effect, among other transactions, financings,
acquisitions, stock dividends, stock splits and employee stock options. However,
these additional authorized shares may also be used by the Board of Directors
consistent with its fiduciary duty to deter future attempts to gain control of
the Company. The Board of Directors also has sole authority to determine the
terms of any one or more series of Preferred Stock, including voting rights,
conversion rates, and liquidation preferences. As a result of the ability to fix
voting rights for a series of Preferred Stock, the Board has the power, to the
extent consistent with its fiduciary duty, to issue a series of Preferred Stock
to persons friendly to management in order to attempt to block a post-tender
offer merger or other transaction by which a third party seeks control, and
thereby assist management to retain its position. The Company's Board of
Directors currently has no plans for the issuance of additional shares, other
than the issuance of additional shares pursuant to the terms of the Stock
Programs and upon exercise of stock options to be issued pursuant to the terms
of the Stock Option Plans, all of which, if implemented prior to the first
anniversary of the Conversion, will be presented to shareholders for approval at
a meeting of shareholders to be held no earlier than six months after completion
of the Conversion.

     Shareholder Vote Required to Approve Business Combinations with Principal
Shareholders. The Articles of Incorporation requires the approval of the holders
of at least 80% of the Company's outstanding shares of voting stock, together
with the affirmative vote of at least 50% of the Company's outstanding shares of
voting stock not beneficially owned by an Interested Shareholder (as defined
below) to approve certain "Business Combinations," as defined therein, and
related transactions. Under Illinois law, absent this provision, Business
Combinations, including mergers, consolidations and sales of all or
substantially all of the assets of a corporation must, subject to certain
exceptions, be approved by the vote of the holders of only two-thirds of the
outstanding shares of Common Stock of the Company and any other affected class
of stock. Under the Articles of Incorporation, at least 80% approval of
shareholders is required in connection with any


                                       119

<PAGE>

transaction involving an Interested Shareholder except (i) in cases where the
proposed transaction has been approved in advance by a majority of those members
of the Company's Board of Directors who are unaffiliated with the Interested
Shareholder and were directors prior to the time when the Interested Shareholder
became an Interested Shareholder or (ii) if the proposed transaction meets
certain conditions set forth therein which are designed to afford the
shareholders a fair price in consideration for their shares in which case, if a
shareholder vote is required, approval of only a majority of the outstanding
shares of voting stock would be sufficient. The term "Interested Shareholder" is
defined to include any individual, corporation, partnership or other entity
(other than the Company or its subsidiary or any employee benefit plan
maintained by the Company or its subsidiary) which owns beneficially or
controls, directly or indirectly, 10% or more of the outstanding shares of
voting stock of the Company. This provision of the Articles of Incorporation
applies to any "Business Combination," which is defined to include (i) any
merger or consolidation of the Company or any of its subsidiaries with or into
any Interested Shareholder or Affiliate (as defined in the Articles of
Incorporation) of an Interested Shareholder; (ii) any sale, lease, exchange,
mortgage, pledge, transfer, or other disposition to or with any Interested
Shareholder or Affiliate of 5% or more of the assets of the Company or combined
assets of the Company and its subsidiary; (iii) the issuance or transfer to any
Interested Shareholder or its Affiliate by the Company (or any subsidiary) of
any securities of the Company other than on a pro rata basis to all
shareholders; (iv) the adoption of any plan for the liquidation or dissolution
of the Company proposed by or on behalf of any Interested Shareholder or
Affiliate thereof; (v) any reclassification of securities, recapitalization,
merger or consolidation of the Company which has the effect of increasing the
proportionate share of Common Stock or any class of equity or convertible
securities of the Company owned directly or indirectly by an Interested
Shareholder or Affiliate thereof; and (vi) the acquisition by the Company or its
subsidiary of any securities of an Interested Shareholder or its Affiliates or
Associates.

     The directors and executive officers of the Bank are purchasing in the
aggregate approximately 7.4% of the shares of the Common Stock at the maximum of
the Estimated Price Range. In addition, the ESOP intends to purchase 8% of the
Common Stock sold in the Conversion. Additionally, if the proposed Stock
Programs and Stock Options Plans are implemented, the Company expects to acquire
4% of the Common Stock issued in the Conversion on behalf of the Stock Programs
and expects to issue an amount equal to 10% of the Common Stock issued in the
Conversion under the Stock Option Plans to directors and executive officers. As
a result, assuming the Stock Programs and Stock Option Plans are implemented,
the directors, executive officers and employees have the potential to control
the voting of approximately 29.3% of the Company's Common Stock, thereby
enabling them to prevent the approval of the transactions requiring the approval
of at least 80% of the Company's outstanding shares of voting stock described
hereinabove.

     Evaluation of Offers. As permitted by Section 8.85 of the IBCA, the
Articles of Incorporation of the Company further provides that the Board of
Directors of the Company, when evaluating any offer to the Company from another
party to (i) make a tender or exchange offer for any outstanding equity security
of the Company, (ii) merge or consolidate the Company with another corporation
or entity or (iii) purchase or otherwise acquire all or substantially all of the
properties and assets of the Company, shall, in connection with the exercise of
its judgment in determining what is in the best interest of the Company and the
shareholders of the Company, give due consideration to the extent permitted by
law to all relevant factors, including, without limitation, the financial and
managerial resources and future prospects of the other party, the possible
effects on the business of the Company and its subsidiaries and on the
employees, customers, suppliers and creditors of the Company and its
subsidiaries, and the effects on the communities in which the Company's and its
subsidiaries' facilities are located. By having these standards in the Articles
of Incorporation of the Company, the Board of Directors may be in a stronger
position to oppose such a transaction if the Board concludes that the
transaction would not be in the best interests of the Company, even if the price
or other consideration offered is significantly greater than the then market
price of any equity security of the Company.


                                       120

<PAGE>

     Amendment of Articles of Incorporation and Bylaws. The Articles of
Incorporation provides that certain provisions of the Articles of Incorporation
may not be altered, amended, repealed or rescinded without the affirmative vote
of either (1) not less than a majority of the authorized number of directors
and, if one or more Interested Shareholders exist, by not less than a majority
of the Disinterested Directors (as defined in the Articles of Incorporation) or
(2) the holders of not less than two-thirds of the total votes eligible to be
cast by the holders of all outstanding shares of the capital stock of the
Company entitled to vote thereon and, if the alteration, amendment, repeal, or
rescission is proposed by or on behalf of an Interested Shareholder or a
director who is an Affiliate or Associate of an Interested Shareholder, by the
affirmative vote of the holders of not less than a majority of the total votes
eligible to be cast by holders of all outstanding shares entitled to vote
thereon not beneficially owned by an Interested Shareholder or an Affiliate or
Associate thereof. Amendment of the provision relating to business combinations
must also be approved by either (i) a majority of the Disinterested Directors,
or (ii) the affirmative vote of not less than two-thirds of the total number of
votes eligible to be cast by the holders of all outstanding shares of the Voting
Stock, voting together as a single class, if the change is proposed by or on
behalf of an Interested Shareholder or a director who is an affiliate of an
Interested Shareholder, by the affirmative vote of not less than fifty percent
(50%) of the total number of votes eligible to be cast by the holders of all
outstanding shares of the Voting Stock entitled to vote thereon not beneficially
owned by an Interested Shareholder or Affiliate or Associate thereof, voting
together as a single class. Furthermore, the Company's Articles of Incorporation
provides that provisions of the Bylaws that contain supermajority voting
requirements may not be altered, amended, repealed or rescinded without a vote
of the Board or holders of capital stock entitled to vote thereon that is not
less than the supermajority specified in such provision. Absent these
provisions, the Illinois Business Corporation Act (the "IBCA") provides that a
corporation's articles of incorporation may be amended by the holders of
two-thirds of the corporation's outstanding capital stock. The Articles of
Incorporation also provides that the Board of Directors is authorized to make,
alter, amend, rescind or repeal any of the Company's Bylaws in accordance with
the terms thereof, regardless of whether the Bylaw was initially adopted by the
shareholders. However, this authorization neither divests the shareholders of
their right, nor limits their power to adopt, amend, rescind or repeal any Bylaw
under the IBCA. These provisions could have the effect of discouraging a tender
offer or other takeover attempt where the ability to make fundamental changes
through Bylaw amendments is an important element of the takeover strategy of the
acquiror.

     Certain Bylaw Provisions. The Bylaws of the Company also require a
shareholder who intends to nominate a candidate for election to the Board of
Directors, or to raise new business at a shareholder meeting to give
approximately 60 days advance notice to the Secretary of the Company. The notice
provision requires a shareholder who desires to raise new business to provide
certain information to the Company concerning the nature of the new business,
the shareholder and the shareholder's interest in the business matter.
Similarly, a shareholder wishing to nominate any person for election as a
director must provide the Company with certain information concerning the
nominee and the proposing shareholder.

Anti-Takeover Effects of the Company's Articles of Incorporation and Bylaws and
Management Remuneration Plans Adopted in Conversion

     The provisions described above are intended to reduce the Company's
vulnerability to takeover attempts and certain other transactions which have not
been negotiated with and approved by members of its Board of Directors. The
provisions of the employment agreements with officers, the Stock Programs and
the Stock Option Plans to be established may also discourage takeover attempts
by increasing the costs to be incurred by the Bank and the Company in the event
of a takeover. See "Management of the Bank -- Employment Agreements," and "--
Benefits -- Stock Option Plans."

     The Company's Board of Directors believes that the provisions of the
Articles of Incorporation, Bylaws and management remuneration plans to be
established are in the best interests of the Company and its shareholders. An
unsolicited non-negotiated proposal can seriously disrupt the business and
management of a corporation and cause it great expense. Accordingly, the Board
of Directors believes it is in the best


                                       121

<PAGE>

interests of the Company and its shareholders to encourage potential acquirors
to negotiate directly with management and that these provisions will encourage
such negotiations and discourage non-negotiated takeover attempts. It is also
the Board of Directors' view that these provisions should not discourage persons
from proposing a merger or other transaction at a price that reflects the true
value of the Company and that otherwise is in the best interests of all
shareholders.

Illinois Corporate Law

     The State of Illinois has a statute designed to provide Illinois
corporations with additional protection against hostile takeovers. The takeover
statute, which is codified in Section 11.75 of the IBCA ("Section 11.75"), is
intended to discourage certain takeover practices by impeding the ability of a
hostile acquiror to engage in certain transactions with the target company.

     In general, Section 11.75 provides that a "Person" (as defined therein) who
owns 15% or more of the outstanding voting stock of a Illinois corporation (an
"IBCA Interested Shareholder") may not consummate a merger or other business
combination transaction with such corporation at any time during the three-year
period following the date such "Person" became an IBCA Interested Shareholder.
The term "business combination" is defined broadly to cover a wide range of
corporate transactions including mergers, sales of assets, issuances of stock,
transactions with subsidiaries and the receipt of disproportionate financial
benefits.

     The statute exempts the following transactions from the requirements of
Section 11.75: (i) any business combination if, prior to the date a person
became an IBCA Interested Shareholder, the board of directors approved either
the business combination or the transaction which resulted in the shareholder
becoming an IBCA Interested Shareholder; (ii) any business combination involving
a person who acquired at least 85% of the outstanding voting stock in the
transaction in which he became an IBCA Interested Shareholder, with the number
of shares outstanding calculated without regard to those shares owned by the
corporation's directors who are also officers and by certain employee stock
plans; and (iii) any business combination with an IBCA Interested Shareholder
that is approved by the board of directors and by a two-thirds vote of the
outstanding voting stock not owned by the IBCA Interested Shareholder. A
corporation may exempt itself from the requirement of the statute by adopting an
amendment to its Articles of Incorporation or Bylaws electing not to be governed
by Section 11.75 of the IBCA. At the present time, the Board of Directors does
not intend to propose any such amendment.

Restrictions in the Bank's New Charter and Bylaws

     Although the Board of Directors of the Bank is not aware of any effort that
might be made to obtain control of the Bank after the Conversion, the Board of
Directors believes that it is appropriate to adopt certain provisions permitted
by federal regulations to protect the interests of the converted Bank and its
shareholders from any hostile takeover. Such provisions may, indirectly, inhibit
a change in control of the Company, as the Bank's sole stockholder. See "Risk
Factors -- Certain Anti-Takeover Provisions."

     The Bank's Federal Stock Charter will contain a provision whereby the
acquisition of or offer to acquire beneficial ownership of more than 10% of the
issued and outstanding shares of any class of equity securities of the Bank by
any person (i.e., any individual, corporation, group acting in concert, trust,
partnership, joint stock company or similar organization), either directly or
indirectly, will be prohibited for a period of five years following the date of
completion of the Conversion. Any stock in excess of 10% acquired in violation
of the Federal Stock Charter provision will not be counted as outstanding for
voting purposes. This limitation shall not apply to any transaction in which the
Bank forms a holding company without a change in the respective beneficial
ownership interests of its shareholders other than pursuant to the exercise of
any dissenter or appraisal rights, the purchase of shares by underwriters in
connection with a public offering or the purchase of shares by a tax qualified
employee stock benefit plan which is exempt from certain approval requirements
set forth in the OTS regulations. In the event that holders of revocable proxies


                                       122

<PAGE>

for more than 10% of the shares of the Common Stock of the Company seek, among
other things, to elect one-third or more of the Company's Board of Directors, to
cause the Company's shareholders to approve the acquisition or corporate
reorganization of the Company or to exert a continuing influence on a material
aspect of the business operations of the Company, which actions could indirectly
result in a change in control of the Bank, the Board of Directors of the Bank
will be able to assert this provision of the Bank's Federal Stock Charter
against such holders. Although the Board of Directors of the Bank is not
currently able to determine when and if it would assert this provision of the
Bank's Federal Stock Charter, the Board of Directors, in exercising its
fiduciary duty, may assert this provision if it were deemed to be in the best
interests of the Bank, the Company and its shareholders. It is unclear, however,
whether this provision, if asserted, would be successful against such persons in
a proxy contest which could result in a change in control of the Bank indirectly
through a change in control of the Company. Finally, for five years,
shareholders will not be permitted to call a special meeting of shareholders
relating to a change of control of the Bank or a charter amendment. Furthermore,
the staggered terms of the Board of Directors could have an anti-takeover effect
by making it more difficult for a majority of shares to force an immediate
change in the Board of Directors since only one-third of the Board is elected
each year. The purpose of these provisions is to assure stability and continuity
of management of the Bank in the years immediately following the Conversion.

     Although the Bank has no arrangements, understandings or plans at the
present time, the Board of Directors believes that the availability of unissued
shares of Preferred Stock will provide the Bank with increased flexibility in
structuring possible future financings and acquisitions and in meeting other
corporate needs which may arise. In the event of a proposed merger, tender offer
or other attempt to gain control of the Bank of which management does not
approve, it might be possible for the Board of Directors to authorize the
issuance of one or more series of Preferred Stock with rights and preferences
which could impede the completion of such a transaction. An effect of the
possible issuance of such Preferred Stock, therefore, may be to deter a future
takeover attempt. The Board of Directors does not intend to issue any Preferred
Stock except on terms which the Board deems to be in the best interests of the
Bank and its then existing shareholders.

Regulatory Restrictions

     The Plan of Conversion prohibits any person, prior to the completion of the
Conversion, from transferring, or from entering into any agreement or
understanding to transfer, to the account of another, legal or beneficial
ownership of the subscription rights issued under the Plan or the Common Stock
to be issued upon their exercise. The Plan also prohibits any person, prior to
the completion of the Conversion, from offering, or making an announcement of an
offer or intent to make an offer, to purchase such subscription rights or Common
Stock.

     For three years following the Conversion, OTS regulations prohibit any
person from acquiring or making an offer to acquire more than 10% of the stock
of any converted savings institution, except for: (i) offers that, if
consummated, would not result in the acquisition by such person during the
preceding 12-month period of more than 1% of such stock; (ii) offers for up to
25% in the aggregate by the ESOP or other tax qualified plans of the Bank or the
Company; or (iii) offers which are not opposed by the Board of Directors of the
Bank and which receive the prior approval of the OTS. Such prohibition is also
applicable to the acquisition of the stock of the Company. Such acquisition may
be disapproved by OTS if it is found, among other things, that the proposed
acquisition (a) would frustrate the purposes of the provisions of the
regulations regarding conversions, (b) would be manipulative or deceptive, (c)
would subvert the fairness of the conversion, (d) would be likely to result in
injury to the savings institution, (e) would not be consistent with economical
home financing, (f) would otherwise violate law or regulation, or (g) would not
contribute to the prudent deployment of the savings institution's conversion
proceeds. In the event that any person, directly or indirectly, violates this
regulation, the securities beneficially owned by such person in excess of 10%
shall not be counted as shares entitled to vote and shall not be voted by any
person or counted as voting shares in connection with any matters submitted to a
vote of shareholders. The definition of beneficial ownership for


                                       123

<PAGE>

this regulation extends to persons holding revocable or irrevocable proxies for
the Company's stock under circumstances that give rise to a conclusive or
rebuttable determination of control under the OTS regulations.

     In addition, any proposal to acquire 10% of any class of equity security of
the Company generally would be subject to approval by the OTS under the Change
in Bank Control Act. The OTS requires all persons seeking control of a savings
institution, directly or indirectly through control of its holding company, to
obtain regulatory approval prior to offering to obtain control. Federal law
generally provides that no "person," acting directly or indirectly or through or
in concert with one or more other persons, may acquire "control," as that term
is defined in OTS regulations, of a federally-insured savings institution
without giving at least 60 days written notice to the OTS and providing the OTS
an opportunity to disapprove the proposed acquisition. Such acquisitions of
control may be disapproved by the OTS if it is determined, among other things,
that (i) the acquisition would substantially lessen competition; (ii) the
financial condition of the acquiring person might jeopardize the financial
stability of the savings institution or prejudice the interests of its
depositors; or (iii) the competency, experience or integrity of the acquiring
person or the proposed management personnel indicates that it would not be in
the interest of the depositors or the public to permit the acquisition of
control by such person. Such change in control restrictions on the acquisition
of holding company stock are not limited to three years after conversion but
will apply for as long as the regulations are in effect. Persons holding
revocable or irrevocable proxies may be deemed to be beneficial owners of such
securities under OTS regulations and therefore prohibited from voting all or the
portion of such proxies in excess of the 10% aggregate beneficial ownership
limit. Such regulatory restrictions may prevent or inhibit proxy contests for
control of the Company or the Bank which have not received prior regulatory
approval.

                   DESCRIPTION OF CAPITAL STOCK OF THE COMPANY

General

     The Company is authorized to issue eight million (8,000,000) shares of
Common Stock having a par value of $.01 per share, two million (2,000,000)
shares of Preferred Stock having a par value of $.01 per share and seven million
two hundred thousand (7,200,000) shares of Excess Common Stock having a par
value of $.01 per share. The Company currently expects to issue 2,012,500 shares
of Common Stock (or 2,314,375 in the event of an increase of 15% in the
Estimated Price Range) and does not expect to issue any shares of Preferred
Stock. Except as discussed above in "Restrictions on Acquisition of the Company
and the Bank," each share of the Company's Common Stock will have the same
relative rights as, and will be identical in all respects with, each other share
of Common Stock. Upon payment of the Purchase Price for the common stock, in
accordance with the Plan, all such stock will be duly authorized, fully paid and
nonassessable. The Common Stock of the Company will represent non-withdrawable
capital, will not be an account of an insurable type, and will not be insured by
the FDIC.

Common Stock

     Dividends. The Company can pay dividends out of statutory surplus or from
certain net profits if, as and when declared by its Board of Directors. The
payment of dividends by the Company is subject to limitations which are imposed
by law and applicable regulation. See "Dividend Policy" and "Regulation." The
holders of Common Stock of the Company will be entitled to receive and share
equally in such dividends as may be declared by the Board of Directors of the
Company out of funds legally available therefor. If the Company issues Preferred
Stock, the holders thereof may have a priority over the holders of the Common
Stock with respect to dividends.

     Voting Rights. Upon Conversion, the holders of Common Stock of the Company
will possess exclusive voting rights in the Company. They will elect the
Company's Board of Directors and act on such other matters as are required to be
presented to them under Illinois law or the Company's Articles of Incorporation
or as


                                       124

<PAGE>

are otherwise presented to them by the Board of Directors. Except as discussed
in "Restrictions on Acquisition of the Company and the Bank," each holder of
Common Stock will be entitled to one vote per share and will not have any right
to cumulate votes in the election of directors. If the Company issues Preferred
Stock, holders of the Preferred Stock may also possess voting rights. Certain
matters require an 80% or two-thirds shareholder vote. See "Restrictions on
Acquisition of the Company and the Bank."

     As a federal mutual savings bank, corporate powers and control of the Bank
are vested in its Board of Directors, who elect the officers of the Bank and who
fill any vacancies on the Board of Directors as it exists upon Conversion.
Subsequent to Conversion, voting rights will be vested exclusively in the owners
of the shares of capital stock of the Bank, which owner will be the Company, and
voted at the direction of the Company's Board of Directors. Consequently, the
holders of the Common Stock will not have direct control of the Bank.

     Liquidation. In the event of any liquidation, dissolution or winding up of
the Bank, the Company, as holder of the Bank's capital stock, would be entitled
to receive, after payment or provision for payment of all debts and liabilities
of the Bank (including all deposit accounts and accrued interest thereon) and
after distribution of the balance in the special liquidation account to Eligible
Account Holders and Supplemental Eligible Account Holders (see "The Conversion
- -- Effects of Conversion -- Liquidation Rights"), all assets of the Bank
available for distribution. In the event of liquidation, dissolution or winding
up of the Company, the holders of its Common Stock would be entitled to receive,
after payment or provision for payment of all its debts and liabilities, all of
the assets of the Company available for distribution. If Preferred Stock is
issued, the holders thereof may have a priority over the holders of the Common
Stock in the event of the liquidation or dissolution of the Company.

     Preemptive Rights. Holders of the Common Stock of the Company will not be
entitled to preemptive rights with respect to any shares which may be issued.
The Common Stock is not subject to redemption.

Preferred Stock

     None of the shares of the Company's authorized Preferred Stock will be
issued in the Conversion. Such stock may be issued with such preferences and
designations as the Board of Directors may from time to time determine. The
Board of Directors can, without shareholder approval, issue preferred stock with
voting, dividend, liquidation and conversion rights which could dilute the
voting strength of the holders of the Common Stock and may assist management in
impeding an unsolicited takeover or attempted change in control.

Excess Common Stock

     The shares of Excess Common Stock are identical in all respects to the
shares of Common Stock, except that they are permitted only one one-hundredth
(1/100) of a vote per share.

                    DESCRIPTION OF CAPITAL STOCK OF THE BANK

General

     The Federal Stock Charter of the Bank, to be effective upon the Conversion,
authorizes the issuance of capital stock consisting of 20,000,000 (twenty
million) shares of common stock, par value $1.00 per share, and 5,000,000 (five
million) shares of preferred stock, par value $1.00 per share, which Preferred
Stock may be issued in series and classes having such rights, preferences,
privileges and restrictions as the Board of Directors may determine. Each share
of common stock of the Bank will have the same relative rights as, and will be
identical in all respects with, each other share of common stock. After the
Conversion, the Board of


                                       125

<PAGE>

Directors will be authorized to approve the issuance of Common Stock up to the
amount authorized by the Federal Stock Charter without the approval of the
Bank's shareholders, except to the extent that such approval is required by
governing law. All of the issued and outstanding common stock of the Bank (which
is currently expected to be 1,000 shares) will be held by the Company as the
Bank's sole shareholder. The capital stock of the Bank will represent
non-withdrawable capital, will not be an account of an insurable type, and will
not be insured by the FDIC.

Common Stock

     Dividends. The holders of the Bank's common stock will be entitled to
receive and to share equally in such dividends as may be declared by the Board
of Directors of the Bank out of funds legally available therefor. See "Dividend
Policy" for certain restrictions on the payment of dividends and "Federal and
State Taxation -- Federal Taxation" for a discussion of the consequences of the
payment of cash dividends from income appropriated to bad debt reserves.

     Voting Rights. Immediately after the Conversion, the holders of the Bank's
common stock will possess exclusive voting rights in the Bank. Each holder of
shares of common stock will be entitled to one vote for each share held.
Cumulation of votes will not be permitted. See "Restrictions on Acquisition of
the Company and the Bank -- Anti-Takeover Effects of the Company's Articles of
Incorporation and Bylaws and Management Remuneration Plans Adopted in
Conversion."

     Liquidation. In the event of any liquidation, dissolution, or winding up of
the Bank, the holders of its common stock will be entitled to receive, after
payment of all debts and liabilities of the Bank (including all deposit accounts
and accrued interest thereon), and distribution of the balance in the special
liquidation account to Eligible Account Holders and Supplemental Eligible
Account Holders, all assets of the Bank available for distribution in cash or in
kind. If additional preferred stock is issued subsequent to the Conversion, the
holders thereof may also have priority over the holders of common stock in the
event of liquidation or dissolution.

     Preemptive Rights and Redemption. Holders of the common stock of the Bank
will not be entitled to preemptive rights with respect to any shares of the Bank
which may be issued. The common stock will not be subject to redemption. Upon
receipt by the Bank of the full specified purchase price therefor, the common
stock will be fully paid and nonassessable.

Preferred Stock

     None of the shares of the Bank's authorized preferred stock will be issued
in the Conversion. Such stock may be issued with such preferences and
designations as the Board of Directors may from time to time determine. The
Board of Directors can, without shareholder approval, issue preferred stock with
voting, dividend, liquidation and conversion rights.

                          TRANSFER AGENT AND REGISTRAR

     The transfer agent and registrar for the Company's Common Stock is [_____].

                                     EXPERTS

     The financial statements of the Bank as of July 31, 1996 and 1995 and for
each of the years in the three-year period ended July 31, 1996, have been
included herein in reliance upon the report of KPMG Peat


                                       126

<PAGE>

Marwick LLP, independent certified public accountants, whose report is included
herein and upon such firm as experts in accounting and auditing.

     Capital Resources, LC. has consented to the publication herein of the
summary of its report to the Bank and Company setting forth its opinion as to
the estimated pro forma market value of the Common Stock upon Conversion and its
opinion with respect to subscription rights.

                             LEGAL AND TAX OPINIONS

     The legality of the Common Stock and the federal income tax of the
Conversion will be passed upon for the Bank and the Company by Thacher Proffitt
& Wood, New York, New York, special counsel to the Bank and the Company. Thacher
Proffitt & Wood will rely as to certain matters of Illinois law on the opinion
of Gomberg, Sharfman, Gold and Ostler, P.C., Chicago, Illinois. The Illinois
State tax consequences of the Conversion will be passed upon for the Bank by
KPMG Peat Marwick LLP, independent public accountants. Certain legal matters
will be passed upon for Hovde by Vedder, Price, Kaufman & Kammholz, Chicago,
Illinois.

                             ADDITIONAL INFORMATION

     The Company has filed with the SEC the Registration Statement under the
Securities Act with respect to the Common Stock offered hereby. As permitted by
the rules and regulations of the SEC, this Prospectus does not contain all the
information set forth in the Registration Statement. Such information, including
the Conversion Valuation Appraisal Report which is an exhibit to the
Registration Statement, can be examined without charge at the public reference
facilities of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549,
and copies of such material can be obtained from the SEC at prescribed rates.
Such information is also available on the SEC's Electronic Data Gathering
Analysis and Retrieval ("EDGAR") System.

     The Bank has filed an application for conversion with the OTS with respect
to the Conversion. Pursuant to the rules and regulations of the OTS, this
Prospectus omits certain information contained in that application. The
application may be examined at the principal office of the OTS, 1700 G Street,
N.W., Washington, D.C. 20552 and at the Office of the Regional Director of the
OTS located at 200 West Madison Street, Suite 1300, Chicago, Illinois 60606.

     In connection with the Conversion, the Company will register its Common
Stock with the SEC under Section 12(g) of the Exchange Act, and, upon such
registration, the Company and the holders of its stock will become subject to
the proxy solicitation rules, reporting requirements and restrictions on stock
purchases and sales by directors, officers and greater than 10% shareholders,
the annual and periodic reporting and certain other requirements of the Exchange
Act. Under the Plan of Conversion, the Company has undertaken that it will not
terminate such registration for a period of at least three years following the
Conversion. In the event that the Bank amends the Plan to eliminate the
concurrent formation of the Company as part of the Conversion, the Bank will
register its stock with the OTS under Section 12(g) of the Exchange Act and,
upon such registration, the Bank and the holders of its stock will become
subject to the same obligations and restrictions.

     Copies of the Articles of Incorporation and the Bylaws of the Company and
the Federal Stock Charter and Bylaws of the Bank are available without charge
from the Bank upon written or oral request.


                                       127

<PAGE>

                          INDEX TO FINANCIAL STATEMENTS

                         FAIRFIELD SAVINGS BANK, F.S.B.

                                                                            PAGE
                                                                            ----
Independent Auditors' Report ............................................... F-2

Financial Statements:
  Balance Sheets as of July 31, 1996 and 1995 .............................. F-3
  Statements of Earnings for the years ended July 31, 1996, 1995 and 1994 ..  37
  Statements of Retained Earnings for the years ended July 31, 1996, 1995 
    and 1994 ............................................................... F-4
  Statements of Cash Flows for the years ended July 31, 1996, 1995 and 1994. F-5

Notes to Financial Statements .............................................. F-6

     All schedules are omitted, because they are not required or applicable, or
the required information is shown in the financial statements or notes thereto.

     The financial statements of Big Foot Financial Corp. have been omitted,
because Big Foot Financial Corp. has not yet issued any stock, has no assets and
no liabilities and has not conducted any business other than of an
organizational nature.


                                       F-1

<PAGE>

[Letterhead of KPMG Peat Marwick LLP]

                          Independent Auditors' Report

The Board of Directors
Fairfield Savings Bank, F.S.B.
Long Grove, Illinois:

We have audited the accompanying statements of financial condition of Fairfield
Savings Bank, F.S.B. (Savings Bank) as of July 31, 1996 and 1995, and the
related statements of earnings, retained earnings, and cash flows for each of
the years in the three-year period ended July 31, 1996. These financial
statements are the responsibility of the Savings Bank's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

As discussed in notes 1 and 8 to the financial statements, the Savings Bank
adopted the provisions of the Financial Accounting Standards Board's Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes," in
1994.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fairfield Savings Bank, F.S.B.
as of July 31, 1996 and 1995, and the results of its operations and its cash
flows for each of the years in the three-year period ended July 31, 1996, in
conformity with generally accepted accounting principles.

                                         KPMG Peat Marwick LLP


August 16, 1996
Chicago, Illinois


                                       F-2

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B

Statement of Financial Condition

July 31, 1996 and 1995

================================================================================
                                Assets                    1996          1995
- --------------------------------------------------------------------------------
Cash and due from banks                              $   2,568,612     2,088,202
Interest-earning deposits                                2,040,308     6,956,242
Mortgage-backed securities held-to-maturity (note 2     44,133,079   111,282,775
Mortgage-backed securities available-for-sale, 
  at fair value (note 2)                                58,277,886          --
Loans receivable, net (note 3)                          79,143,572    70,984,459
Accrued interest receivable (note 4)                       963,823       943,126
Investment in real estate held for sale and 
  development                                              262,259       262,259
Real estate owned                                             --         167,802
Stock in Federal Home Loan Bank of Chicago, at cost      2,045,000     2,264,300
Office properties and equipment, net (note 5)            4,801,007     4,993,182
Prepaid expenses and other assets                          388,891       308,757
- --------------------------------------------------------------------------------
Total assets                                         $ 194,624,437   200,251,104
================================================================================
                       Liabilities and Retained Earnings
- --------------------------------------------------------------------------------
Savings deposits (note 6)                              137,176,770   148,349,978
Borrowed money (note 7)                                 39,900,000    32,300,000
Advance payments by borrowers for taxes and 
  insurance                                              1,800,216     2,317,015
Accrued interest payable and other liabilities           2,167,964     2,861,318
- --------------------------------------------------------------------------------
Total liabilities                                      181,044,950   185,828,311

Retained earnings - substantially restricted            14,648,789    14,422,793
Unrealized loss on mortgage-backed securities
    available-for-sale, net of tax                      (1,069,302)       --
- --------------------------------------------------------------------------------
Total retained earnings                                 13,579,487    14,422,793
- --------------------------------------------------------------------------------
Total liabilities and retained earnings              $ 194,624,437   200,251,104
================================================================================

See accompanying notes to financial statements.


                                      F-3
<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Statements of Retained Earnings

Years ended July 31, 1996, 1995, and 1994

<TABLE>
<CAPTION>
===============================================================================================
                                                            Unrealized gain (loss)
                                                                on securities
                                               Retained       available-for-sale,
                                               earnings           net of tax           Total
- -----------------------------------------------------------------------------------------------
<S>                                            <C>                 <C>               <C>       
Balance at July 31, 1993                       $11,330,870         519,957           11,850,827
                                                                                    
Net income                                       2,109,768            --              2,109,768
                                                                                    
Change in unrealized loss on securities                                             
  available-for-sale, net of tax of $233,600          --          (519,957)            (519,957)
- -----------------------------------------------------------------------------------------------
Balance at July 31, 1994                        13,440,638            --             13,440,638
                                                                                    
Net income                                         982,155            --                982,155
- -----------------------------------------------------------------------------------------------
Balance at July 31, 1995                        14,422,793            --             14,422,793
                                                                                    
Net income                                         225,996            --                225,996
                                                                                    
Change in unrealized loss on securities                                             
  available-for-sale, net of tax of                                                 
  $550,819                                            --        (1,069,302)          (1,069,302)
- -----------------------------------------------------------------------------------------------
Balance at July 31, 1996                       $14,648,789      (1,069,302)          13,579,487
===============================================================================================
</TABLE>
        
See accompanying notes to financial statements.


                                      F-4
<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Statements of Cash Flows Years ended July 31, 1996, 1995 and 1994

<TABLE>
<CAPTION>
=======================================================================================================================
                                                                           1996             1995              1994
- -----------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                   <C>            <C>      
Cash flows from operating activities:
    Net income                                                         $    225,996          982,155        2,109,768
    Adjustments to reconcile net income to net cash provided by
       operating activities:
         Depreciation                                                       404,019          407,599          388,916
         (Benefit) provision for deferred income taxes                      (65,595)          90,263         (126,784)
         Gain on sale of real estate held for sale and development             --           (556,880)        (574,183)
         Gain on sale of investment securities available-for-sale              --               --           (615,588)
         Gain on sale of real estate owned                                  (35,448)            --             (8,491)
         Net amortization of deferred loan fees                              (1,705)        (116,429)        (359,407)
         Net amortization of discounts and premiums                         228,490          195,038          331,338
         Provision (credit) for loan losses                                 137,558             --            (18,000)
         (Increase) decrease in prepaid expenses and other assets           (80,134)         411,417           22,746
         (Increase) decrease in accrued interest receivable                 (20,697)          90,339          278,904
         Decrease in accrued interest payable and other liabilities        (627,759)        (595,430)      (1,106,838)
- -----------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                   164,725          908,072          322,381
- -----------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
    Net (increase) decrease in loans receivable, net                     (8,296,671)      (2,866,170)      12,241,669
    Purchases of mortgage-backed securities held-to-maturity                   --        (10,305,299)     (83,244,345)
    Purchases of mortgage-backed securities available-for-sale          (10,081,249)            --               --
    Principal repayments on mortgage-backed securities
       held-to-maturity                                                  10,482,665       10,817,987       18,827,663
    Principal repayments on mortgage-backed securities
       available-for-sale                                                 7,174,307             --               --
    Proceeds from sales of investment securities available-for-sale            --               --         14,371,004
    Proceeds from sale of real estate owned                                 203,250             --            151,000
    Purchase of stock in Federal Home Loan Bank of Chicago                 (100,000)         (34,300)        (300,100)
    Proceeds from sale of stock in Federal Home Loan Bank of Chicago        319,300             --               --
    Proceeds from sales of investment in real estate held for sale
       and development                                                         --          1,213,570        1,254,225
    Purchase of office properties and equipment                            (211,844)        (467,537)        (344,434)
- -----------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                      (510,242)      (1,641,749)     (37,043,318)
- -----------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
    Net increase (decrease) in savings deposits                         (11,173,208)       6,520,009       10,326,113
    Net increase (decrease) in borrowed money                             7,600,000       (2,000,000)      (2,300,000)
    Increase (decrease) in advance payments by borrowers for
       taxes and insurance                                                 (516,799)           1,752         (412,936)
- -----------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities                      (4,090,007)       4,521,761        7,613,177
- -----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents                     (4,435,524)       3,788,084      (29,107,760)

Cash and cash equivalents at beginning of year                            9,044,444        5,256,360       34,364,120
- -----------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year                               $  4,608,920        9,044,444        5,256,360
=======================================================================================================================
Supplemental disclosures of cash flow information:
    Cash paid during the year for:
       Interest                                                        $  8,391,152        7,352,599        6,852,178
       Income taxes                                                         133,000          485,000          911,877
    Noncash investing activities -
       Transfer of loans to real estate owned                                  --            167,802          142,509
       Transfer of securities to available-for-sale                      56,446,621             --               --
=======================================================================================================================
</TABLE>

See accompanying notes to financial statements.


                                      F-5

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

July 31, 1996, 1995, and 1994

================================================================================

(1)  Summary of Significant Accounting Policies

     Fairfield Savings Bank, F.S.B. (Savings Bank) prepares its financial
     statements on the basis of generally accepted accounting principles. The
     following is a description of the more significant of those policies which
     the Savings Bank follows in preparing and presenting its financial
     statements.

          Use of Estimates

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the amounts reported in the financial statements
     and accompanying notes. Actual results could differ from these estimates.

          Dissolution of Subsidiary


     Effective July 31, 1996, Fairfield Service Corporation was dissolved and
     its operations were transferred to the Savings Bank.

          Mortgage-backed Securities

     Mortgage-backed securities which the Savings Bank has the positive intent
     and ability to hold to maturity are carried at amortized cost. All other
     mortgage-backed securities are designated as available-for-sale, and are
     carried at fair value. The difference between amortized cost and fair value
     is reflected as a separate component of retained earnings, net of related
     tax effects. Unearned premiums and discounts are amortized over the
     estimated life of the security using the interest method. Gains and losses
     on the sale of mortgage-backed securities are determined using the specific
     identification method.

          Investment Securities Available-for-sale

     Investment securities available-for-sale are securities which management
     may sell in the future. Investment securities available-for-sale are
     recorded at fair value. The difference between amortized cost and fair
     value is reflected as a separate component of retained earnings, net of
     related tax effects. Gains and losses on the sale of securities
     available-for-sale are determined using the specific identification method.

          Loans Receivable

     Loans receivable are stated at unpaid principal balances less loans in
     process, deferred loan fees and allowance for loan losses. The Savings Bank
     defers all loan origination fees and certain direct costs associated with
     loan originations. Net deferred fees are amortized as yield adjustments
     over the contractual life of the related loans using the interest method.

     It is the policy of the Savings Bank to provide valuation allowances for
     estimated losses on loans when any significant and permanent decline in
     value is identified. Periodic reviews are made to identify potential
     problems. In addition to specific allowances, the Savings Bank maintains a
     general allowance for losses on loans. Additions to the allowance for
     losses on loans are charged to

                                                                     (Continued)

                                       F-6


<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

     operations. Also, various regulatory agencies, as an integral part of their
     examination process, periodically review the Savings Bank's allowance for
     losses on loans. Such agencies may require the Savings Bank to recognize
     additions to the allowance based on their judgments using information
     available to them at the time of their examination. In the opinion of
     management, the allowance, when taken as a whole, is adequate to absorb
     foreseeable losses.

     The accrual of interest income is suspended and previously accrued interest
     income is reversed when a loan is contractually delinquent for 90 days or
     more and where collection of interest is doubtful. Accrual is resumed when
     the loan becomes less than 90 days contractually delinquent and collection
     of interest is probable.

     The Savings Bank adopted Statement of Financial Accounting Standards No.
     114, "Accounting By Creditors for Impairment of a Loan," (Statement 114)
     and No. 118, "Accounting by Creditors for Impairment of a Loan - Income
     Recognition Disclosures," (Statement 118), effective August 1, 1995.
     Statement 114 requires that impaired loans be measured at the present value
     of expected future cash flows discounted at the loan's effective interest
     rate, or, as a practical expedient, at the loan's observable market price
     or the fair value of the collateral if the loan is collateral dependent.
     Statement 118 eliminates the provisions in Statement 114 that describe how
     a creditor should report interest income on an impaired loan and allows a
     creditor to use existing methods to recognize and measure interest income
     on an impaired loan. Homogeneous loans that are collectively evaluated for
     impairment, including real estate loans and consumer loans, are excluded
     from the provisions of Statement 114. 

          Depreciation and Amortization

     Depreciation of office properties and equipment and amortization of
     leasehold improvements are recorded using the straight-line method over the
     estimated useful lives of the related assets. Estimated useful lives range
     between 3 and 40 years.

          Deferred Income Taxes

     The Savings Bank adopted Statement of Financial Accounting Standards No.
     109, "Accounting for Income Taxes" (Statement 109), effective August 1,
     1993 on a prospective basis. The effect of adopting Statement 109 increased
     earnings by $439,470 and is presented as the cumulative effect of change in
     accounting for income taxes in the 1994 statement of earnings. The adoption
     of Statement 109 required a change from the deferred method under
     Accounting Principles Board Opinion 11 (APB 11) to the asset and liability
     method of accounting for income taxes. Under the asset and liability method
     of Statement 109, deferred income taxes are recognized for the future tax
     consequences attributable to differences between the financial statement
     carrying amounts of existing assets and liabilities and their respective
     tax bases. Deferred tax assets and liabilities are measured using enacted
     tax rates expected to apply to taxable income in the years in which those
     temporary differences are expected to be recovered or settled. Under
     Statement 109, the effect on deferred taxes of a change in tax rates is
     recognized in income in the period that includes the enactment date.


                                                                     (Continued)

                                       F-7


<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

          Cash and Cash Equivalents

     For purposes of reporting cash flows, the Savings Bank considers all highly
     liquid debt instruments with an original maturity of three months or less
     to be cash equivalents. Cash and cash equivalents also include cash on hand
     and due from banks.

(2)  Mortgage-backed Securities

     The amortized cost and estimated fair value of mortgage-backed securities
     held-to-maturity and available-for-sale at July 31 are summarized as
     follows:

<TABLE>
<CAPTION>
==============================================================================================
                                                                 1996
                                          --------------------------------------------------
                                                          Gross        Gross       Estimated
                                           Amortized     unrealized  unrealized      fair
             Description                     cost          gains       losses        value
- ----------------------------------------------------------------------------------------------
<S>                                       <C>              <C>        <C>          <C>       
Held-to-maturity:
  Federal National Mortgage Association   $39,135,520        --       1,940,789    37,194,731
  Federal Home Loan Mortgage
   Corporation                              4,997,559          48        37,641     4,959,966
- ----------------------------------------------------------------------------------------------
Total held-to-maturity                    $44,133,079          48     1,978,430    42,154,697
==============================================================================================
Available-for-sale:
  Federal National Mortgage Association   $37,454,501       7,504       865,986    36,596,019
  Federal Home Loan Mortgage
   Corporation                             22,443,506       2,788       764,427    21,681,867
- ----------------------------------------------------------------------------------------------
Total available-for-sale                  $59,898,007      10,292     1,630,413    58,277,886
==============================================================================================
<CAPTION>
                                                                 1995
                                          --------------------------------------------------
                                                          Gross        Gross       Estimated
                                           Amortized     unrealized  unrealized      fair
             Description                     cost          gains       losses        value
- ----------------------------------------------------------------------------------------------
<S>                                       <C>             <C>         <C>          <C>       
Held-to-maturity:
Federal National Mortgage Association     $ 78,831,004    309,275     2,023,108     77,117,171
Federal Home Loan Mortgage             
   Corporation                              32,451,771     39,955       491,959     31,999,767
- ----------------------------------------------------------------------------------------------
                                          $111,282,775    349,230     2,515,067    109,116,938
==============================================================================================
</TABLE>

     There were no sales of mortgage-backed securities during 1996, 1995, and
     1994.


                                                                     (Continued)

                                       F-8

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

     In 1995, the Financial Accounting Standards Board (FASB) issued a special
     report allowing the transfer of securities from held-to-maturity to the
     available-for-sale classification during the period from November 15, 1995
     to December 31, 1995, with no recognition of any related unrealized gain or
     loss in current earnings. On December 31, 1995 mortgage-backed securities
     held to maturity with an amortized cost of approximately $56,447,000 were
     transferred to the available-for-sale classification. The gross unrealized
     gain related to the transferred securities was approximately $609,000.

     Mortgage-backed securities with an amortized cost of approximately $423,000
     and $640,000, have been pledged to secure certain savings deposits of local
     municipal agencies as of July 31, 1996 and 1995, respectively.

(3)  Loans Receivable

     Loans receivable at July 31 are summarized as follows:

================================================================================
                                                       1996            1995
- --------------------------------------------------------------------------------
Real estate loans:
   Mortgage loans:
      One to four family residential               $ 76,324,314      68,080,553
      Multi-family                                      978,572       1,034,773
      Commercial                                        410,951         440,825
      Land, construction, and development loans         403,743         166,000
      Home equity                                     1,271,114       1,560,285
- --------------------------------------------------------------------------------
                                                     79,388,694      71,282,436

Commercial credit lines                                 150,356         131,261
Consumer loans                                          342,563         357,944
- --------------------------------------------------------------------------------
Gross loans receivable                               79,881,613      71,771,641

Less:
   Loans in process                                        --          (110,936)
   Deferred loan fees                                  (438,041)       (510,246)
   Allowance for loan losses                           (300,000)       (166,000)
- --------------------------------------------------------------------------------
                                                   $ 79,143,572      70,984,459
================================================================================


                                                                     (Continued)

                                       F-9

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================
     Activity in the allowance for loan losses is summarized as follows for the
     years ended July 31:

================================================================================
                                              1996          1995          1994
- --------------------------------------------------------------------------------
Balance at beginning of year               $ 166,000       166,000       184,000
Provision (credit) for loan losses           137,558                   - (18,000
Charge-offs                                   (3,588)         --            --
- --------------------------------------------------------------------------------
Balance at end of year                     $ 300,000       166,000       166,000
================================================================================

Loans receivable delinquent three months or more at July 31 are as follows:

================================================================================

                                          Number                   Percentage
                                            of                      of gross
                                          loans     Amount      loans receivable
- --------------------------------------------------------------------------------
1996                                        2     $  118,303          .15%
1995                                        1        193,209          .27
1994                                        4        510,872          .74
================================================================================

     The Savings Bank discontinues recognizing interest on loans 90 days and
     greater delinquent where collection of interest is doubtful. The reduction
     in interest income associated with loans 90 days and greater delinquent
     where collection of interest is doubtful was approximately $1,000 and
     $47,000 for the years ended July 31, 1995 and 1994, respectively. There was
     no reduction in interest income associated with loans 90 days and greater
     delinquent where collection of interest is doubtful for the year ended July
     31, 1996. Both loans 90 days and greater delinquent at July 31, 1996
     continue to accrue interest.

     The Savings Bank adopted Statement 114 and Statement 118 on August 1, 1995.
     These statements establish procedures for determining the appropriate
     allowance required for loans deemed impaired. The calculation of allowance
     levels is based upon the discounted present value of expected future cash
     flows received from the debtor or the fair value of the collateral if the
     loan is collateral dependent. No loans were identified as impaired by the
     Savings Bank at July 31, 1996. Additionally, no loans were considered
     impaired during the year ended July 31, 1996.

     The Savings Bank serviced loans for others with principal balances
     approximating $2,021,000, $2,556,000, and $3,452,000 at July 31, 1996,
     1995, and 1994, respectively. As part of the loan sale agreements to the
     Federal National Mortgage Association, the Savings Bank is required to
     repurchase loans which become contractually delinquent. The Savings Bank
     was not required to repurchase loans during 1996, 1995, and 1994.

     Real estate mortgage loans, aggregating approximately $4,538,000,
     $6,043,000, and $3,837,000 at July 31, 1996, 1995, and 1994, respectively,
     have interest rates which adjust based on the movement of various economic
     indices.


                                                                     (Continued)

                                      F-10

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================
(4)  Accrued Interest Receivable

     Accrued interest receivable at July 31 is summarized as follows:

================================================================================
                                                           1996         1995
- --------------------------------------------------------------------------------
Loans receivable                                       $   555,626     341,612
Mortgage-backed securities                                 396,569     589,824
Federal Home Loan Bank of Chicago stock                     11,628      11,690
- --------------------------------------------------------------------------------
                                                       $   963,823     943,126
================================================================================

(5)  Office Properties and Equipment

     A comparative summary of office properties and equipment at July 31 at
     cost, less accumulated depreciation and amortization, is as follows:

================================================================================
                                                           1996         1995
- --------------------------------------------------------------------------------
Land                                                   $   888,394     810,806
Buildings                                                5,975,757   5,884,990
Furniture, fixtures, and equipment                       4,369,816   4,338,289
- --------------------------------------------------------------------------------
                                                        11,233,967  11,034,085
Less accumulated depreciation and amortization           6,432,960   6,040,903
- --------------------------------------------------------------------------------
                                                       $ 4,801,007   4,993,182
================================================================================

     Depreciation and amortization expense was $404,019, $407,599, and $388,916
     for the years ended July 31, 1996, 1995, and 1994, respectively.


                                                                     (Continued)

                                      F-11

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements
================================================================================

(6)  Savings Deposits

     Savings deposits at July 31 are summarized as follows:

<TABLE>
<CAPTION>
==================================================================================================
                                                              1996                   1995
                               Stated or weighted       ------------------     ------------------
                              average interest rate     Amount     Percent     Amount     Percent
===================================================================================================
                                     1996     1995
                                     ----     ----
<S>                                 <C>       <C>    <C>           <C>      <C>           <C> 
Noninterest-bearing NOW accounts      - %      - %   $ 4,165,325     3.0%   $  3,799,372    2.6%
NOW accounts                         2.02     2.02     7,310,099     5.3       7,294,210    4.9
Money market demand accounts         3.12     3.16    13,034,800     9.5      14,717,201    9.9
Passbook accounts                    2.50     2.50    41,323,998    30.2      44,241,199   29.8

                                                      65,834,222    48.0      70,051,982   47.2
- ---------------------------------------------------------------------------------------------------
Certificate accounts                 5.48     5.52    71,342,548    52.0      78,297,996   52.8
- ---------------------------------------------------------------------------------------------------
                                     4.01%    4.07%  $137,176,770  100.0%   $148,349,978  100.0%
===================================================================================================

<CAPTION>
                                                            1996                    1995
                                                      ------------------      ------------------
                                                      Amount     Percent      Amount     Percent
- ---------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>       <C>           <C>  
Contractual maturity of certificate
  accounts:
    Under 12 months                               $  53,295,390    74.7%    $ 47,545,652   60.7%
    12 to 36 months                                  17,110,166    24.0       28,897,616   36.9
    Over 36 months                                      936,992     1.3        1,854,728    2.4
- ---------------------------------------------------------------------------------------------------
                                                  $  71,342,548   100.0%    $ 78,297,996  100.0%
===================================================================================================

     The aggregate amount of certificate accounts with a balance of $100,000 or
     greater was approximately $6,143,000 and $6,401,000 at July 31, 1996 and
     1995, respectively.

     Interest expense on savings deposits is summarized as follows for the years
     ended July 31:

<CAPTION>
===================================================================================================

                                                           1996          1995          1994
- ---------------------------------------------------------------------------------------------------
<S>                                                    <C>             <C>           <C>    
NOW accounts                                           $   146,390       155,549       183,614
Money market demand accounts                               437,098       467,172       519,951
Passbook accounts                                        1,054,003     1,129,942     1,279,945
Certificate accounts                                     4,286,583     3,311,325     2,510,170
- ---------------------------------------------------------------------------------------------------
                                                       $ 5,924,074     5,063,988     4,493,680
===================================================================================================
</TABLE>

                                                                     (Continued)

                                      F-12

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

(7)  Borrowed Money

     Borrowed money at July 31 consisted of the following:

<TABLE>
<CAPTION>
============================================================================================
                                                       Interest
                                                        rate at
                                           Due date     July 31        1996         1995
- --------------------------------------------------------------------------------------------
<S>                                        <C>           <C>       <C>            <C>      
      Advances from the Federal Home
        Loan Bank of Chicago:
                                                 -       6.70%     $ 12,600,000         --
                                            7/31/96      6.60              --      3,000,000
                                            1/16/96      6.50              --      2,000,000
                                            2/20/96      6.85              --      3,000,000
                                            7/26/96      4.96              --      1,000,000
                                            8/20/96      7.05          1,300,000   1,300,000
                                           10/25/96      6.79          4,300,000   4,300,000
                                           11/20/96      5.65          4,000,000        --
                                            2/20/97      7.15          7,000,000   7,000,000
                                            7/26/97      5.38          1,000,000   1,000,000
                                            2/20/98      7.30          7,700,000   7,700,000
                                            7/26/98      5.63          1,000,000   1,000,000
                                            7/19/99      6.64          1,000,000   1,000,000
- --------------------------------------------------------------------------------------------
                                                                   $  39,900,000  32,300,000
============================================================================================

      Weighted average interest rate                                     6.75%       6.83%
============================================================================================
</TABLE>

     The $12,600,000 represents borrowings on an open line of credit which has a
     floating rate of interest, and for which there is no stated due date. The
     unused portion on the open line of credit was approximately $6,015,000 at
     July 31, 1996.

     The Savings Bank has a collateral pledge agreement whereby the Savings Bank
     has agreed to keep on hand at all times, free of all other pledges, liens,
     and encumbrances, home mortgages with unpaid principal balances aggregating
     no less than 167% of the outstanding advances from the Federal Home Loan
     Bank of Chicago. At July 31, 1996 and 1995, all stock in the Federal Home
     Loan Bank of Chicago was also pledged as collateral for advances from that
     bank.

     The Savings Bank at times sells securities under agreements to repurchase
     which are treated as financings, and the obligation to repurchase
     securities sold is reflected as a liability in the statements of financial
     condition. The dollar amount of securities underlying the agreements
     remains in the asset account and are held in safekeeping. During 1994 there
     was an agreement for securities sold under agreements to repurchase in the
     amount of approximately $20,600,000 at a rate of 5.50%. There were no
     securities sold under agreements to repurchase outstanding at July 31, 1996
     and 1995.


                                                                     (Continued)

                                      F-13

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

(8)  Income Taxes

     Income tax expense (benefit) is summarized as follows for the years ended
     July 31:

================================================================================
                                           1996        1995        1994
- --------------------------------------------------------------------------------
Current:                       
   Federal                             $  182,595    393,137     1,020,884
   State                                     --      (45,000)        --
- --------------------------------------------------------------------------------
                                          182,595    348,137     1,020,884
- --------------------------------------------------------------------------------
Deferred:                      
   Federal                                (65,595)    90,263      (126,784)
   State                                     --         --            --
- --------------------------------------------------------------------------------
                                          (65,595)    90,263      (126,784)
- --------------------------------------------------------------------------------
Total income tax expense               $  117,000    438,400       894,100
================================================================================

     Income tax expense amounted to $117,000, $438,400 and $894,100 in 1996,
     1995, and 1994, an effective tax rate of 34.1%, 30.9%, and 34.9%,
     respectively. The reasons for the difference between the effective income
     tax rate and the corporate Federal income tax rate of 34% are as follows:

================================================================================
                                           1996        1995        1994
- --------------------------------------------------------------------------------
     Federal income tax rate of 34%        34.0%       34.0        34.0
     Other                                   .1        (3.1)         .9

     Effective income tax rate             34.1%       30.9        34.9
================================================================================

     Effective August 1, 1993 the Savings Bank adopted the provisions of
     Statement 109 prospectively. The cumulative effect of the change in method
     of accounting for income taxes increased earnings by $439,470 for the year
     ended July 31, 1994, and is reported separately in the 1994 statement of
     earnings.

                                                                     (Continued)

                                      F-14


<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

     The tax effects of temporary differences that give rise to significant
     portions of the deferred tax assets and deferred tax liabilities at July
     31, 1996 and 1995 are presented below:

================================================================================

                                                            1996        1995
- --------------------------------------------------------------------------------
Deferred tax assets:
   Depreciation                                          $   20,172      45,888
   General loan loss allowance                              138,159      68,359
   Accrued bonus                                               --        15,662
   Deferred loss on intercompany sales of real estate       143,822     153,151
   Capitalized interest                                      19,174      19,174
   Illinois net operating loss carryforwards                810,960     888,313
   Unrealized loss on securities available-for-sale         550,819        --
   Other                                                       --         4,991
- --------------------------------------------------------------------------------
                                                          1,683,106   1,195,538
   Less valuation allowance                                 747,228     810,757
- --------------------------------------------------------------------------------
Total deferred tax assets, net of valuation allowance       935,878     384,781
- --------------------------------------------------------------------------------
Deferred tax liabilities:
   Excess of tax bad debt reserve over base year amount     236,361     189,578
   Federal Home Loan Bank stock dividends not currently
     taxable                                                115,227     134,143
   Deferred loan fees                                       329,102     422,020
   Other                                                      6,035       6,301
- --------------------------------------------------------------------------------
Total gross deferred tax liabilities                        686,725     752,042
- --------------------------------------------------------------------------------
Net deferred tax asset (liability)                       $  249,153    (367,261)
================================================================================

     The Savings Bank has Illinois net operating loss carryforwards in the
     amount of $11,295,000, which will expire in varying amounts beginning July
     31, 1997 through July 31, 2011.

     The valuation allowance for deferred tax assets was $747,228 and $810,757
     as of July 31, 1996 and 1995, respectively, resulting in a decrease of
     $63,529 for the year ended July 31, 1996. The valuation allowance relates
     to state net operating loss carryforwards and certain deductible temporary
     differences which may not generate future state tax benefits.

     Retained earnings at July 31, 1996 and 1995 include $6,149,000 for which no
     provision for Federal income tax has been made. These amounts represent
     allocations of income to bad debt deductions for tax purposes only.
     Reduction of amounts so allocated for purposes other than tax bad debt
     losses will create income for tax purposes only, which will be subject to
     the then-current federal and state corporate income tax rates.


                                                                     (Continued)

                                      F-15

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

(9)  Employee Benefit Plans

     The Savings Bank has a qualified noncontributory pension plan covering
     substantially all of its full-time employees over 21 years of age,
     including part-time employees working over 1,000 hours per year. The
     Savings Bank's policy is to fund pension costs accrued.

     The following table sets forth the plan's funded status at July 31, 1996
     and 1995:

================================================================================
                                                           1996         1995
- --------------------------------------------------------------------------------
Actuarial present value of accumulated benefit
   obligations, including vested benefits of $482,990
   in 1996 and $391,206 in 1995                          $ 533,599      432,893
================================================================================
Plan assets at fair value (consisting primarily of 
  common stock)                                            611,916      478,061
Less projected benefit obligation for services
   rendered to date                                        644,879      530,610
- --------------------------------------------------------------------------------
Projected benefit obligation in excess of plan assets      (32,963)     (52,549)

Unrecognized net transition asset at August 1, 1991
   being recognized over 11.65 years                      (109,340)    (126,425)
Unrecognized net loss                                       80,972       70,750
- --------------------------------------------------------------------------------
Accrued pension cost                                     $ (61,331)    (108,224)
================================================================================

     Net pension expense for the year ended July 31, 1996, 1995, and 1994
     includes the following:

================================================================================

                                                   1996        1995      1994
- --------------------------------------------------------------------------------
Service cost-benefits earned during the period   $ 48,802      43,201    38,289
Interest cost on projected benefit obligation      41,757      34,046    27,576
Actuarial return on plan assets                   (54,552)    (67,827)  (10,100)
Net amortization and deferral                       1,294      29,759   (25,248)
- --------------------------------------------------------------------------------
Net periodic pension expense                     $ 37,301      39,179    30,517
================================================================================

     The rate of increase in future compensation levels used is determined by
     the age of the participants. The discount rate used in determining the
     actuarial present value of the projected benefit obligation was 7.50% at
     July 31, 1996, 1995, and 1994. The expected long-term rate of return was
     8.00% at July 31, 1996, 1995, and 1994.


                                                                     (Continued)

                                      F-16
<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

     The Savings Bank also has a contributory profit-sharing plan covering
     substantially all full-time employees. The Savings Bank makes annual
     contributions to the plan equal to a percentage of each participant's
     compensation for the plan year. The contribution was 15% in 1996, 1995, and
     1994. Profit-sharing expense was approximately $110,000, $114,000 and
     $124,000 for the years ended July 31, 1996, 1995, and 1994, respectively.

(10) Management Bonus Program

     The Board of Directors of the Savings Bank adopted an annual and a
     long-term management bonus program for Senior Management Officers (SMO)
     during 1995 on a retrospective basis. The individual amounts to be awarded
     under both the annual and long-term bonus programs were based on the
     Savings Bank's return on average assets for that year. The retrospective
     award of approximately $253,000 was accrued for at July 31, 1994 and was
     distributed during 1995. The accrual for the annual and long-term bonus as
     of July 31, 1995 was approximately $106,000. During 1996, the long-term SMO
     was terminated. No accrual was made for the annual bonus at July 31, 1996
     as the minimum benchmarks established were not achieved.

(11) Regulatory Capital Compliance

     The Savings Bank is subject to regulatory capital requirements administered
     by Federal regulatory agencies. Failure to meet minimum capital
     requirements can initiate certain mandatory and possibly additional
     discretionary actions by regulators that, if undertaken, could have a
     direct material effect on the Savings Bank's financial statements. Under
     capital adequacy guidelines and the regulatory framework for prompt
     corrective action, the Savings Bank must meet specific capital guidelines
     that involve quantitative measures of the Savings Bank's assets,
     liabilities and certain off-balance sheet items as calculated under
     regulatory accounting practices. The Savings Bank's capital amounts and
     classification are also subject to qualitative judgments by the regulators
     about components, risk weightings, and other factors.

     Quantitative measures established by regulation to ensure adequacy require
     the Savings Bank to maintain minimum amounts and ratios as set forth below.
     Management believes, as of July 31, 1996, that the Savings Bank meets all
     capital adequacy requirements to which it is subject.

     As of July 31, 1996, the most recent notification from the Office of Thrift
     Supervision categorized the Savings Bank as well capitalized under the
     regulatory framework for prompt corrective action. There are no conditions
     or events since that notification that management believes have changed the
     institution's category.


                                                                     (Continued)

                                      F-17

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

     The Savings Bank's actual capital amounts and ratios are as follows as of
     July 31, 1996:

================================================================================
                                      Actual             For Capital Adequacy
                                ------------------       --------------------
                                Amount       Ratio        Amount        Ratio
- --------------------------------------------------------------------------------
Tangible capital             $ 14,386,000     7.35%    $ 2,936,000      1.50%
Core capital                   14,386,000     7.35       5,872,000      3.00
Risk-based capital             14,686,000    21.59       5,441,000      8.00
================================================================================

(12) Credit Concentration and Financial Instruments with Off-Balance Sheet Risk

     The Savings Bank is a party to financial instruments with off-balance sheet
     risk in the normal course of its business. These instruments are
     commitments to originate loans and involve credit and interest rate risk in
     excess of the amount recognized in the statements of financial condition.

     The majority of the Savings Bank's loans are secured by residential real
     estate in the Chicago metropolitan area. Management believes the Savings
     Bank has a diversified loan portfolio and the concentration of lending
     activities in these local communities does not result in an acute
     dependency upon economic conditions of the lending region.

     Commitments to originate mortgage loans of approximately $851,000 at July
     31, 1996 represent amounts which the Savings Bank plans to fund within the
     normal commitment period. Commitments to fund available home equity lines
     of credit of approximately $614,000 at July 31, 1996 represent amounts
     which the Savings Bank has committed to fund if requested by the borrower
     within the normal commitment period. Because the creditworthiness of each
     customer is reviewed prior to extension of credit, the Savings Bank
     adequately controls its credit risk on these commitments as it does for
     loans recorded on the statements of financial condition.

(13) Commitments and Contingencies

     The Savings Bank is involved in various legal proceedings incidental to the
     normal course of business. Although the outcome of such litigation cannot
     be predicted with any certainty, management is of the opinion, based on the
     advice of legal counsel, that final disposition of any litigation should
     not have a material effect on the financial statements of the Savings Bank.

     In connection with the development of the Trails of Olympia Fields (a
     planned unit development of homesites and commercial land developed by
     Fairfield and its subsidiary in prior years), the Bank initiated action
     against a municipality and certain parties involved in the development and
     for the years ended July 31, 1996 and 1995, the Bank settled two of these
     claims and received $184,415 and $51,671, respectively.


                                                                     (Continued)

                                      F-18

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

(14) Fair Values of Financial Instruments

     Statement of Financial Accounting Standards No. 107, "Disclosure about Fair
     Value of Financial Instruments" (Statement 107), requires the disclosure of
     estimated fair values of all asset, liability, and off-balance sheet
     financial instruments. Statement 107 defines fair value as the amount at
     which the instrument could be exchanged in a current transaction between
     willing parties. Fair value estimates, methods, and assumptions are set
     forth below for the Savings Bank's financial instruments at July 31.

<TABLE>
<CAPTION>
==========================================================================================
                                              1996                         1995
                                    -----------------------      -----------------------
                                    Carrying      Estimated      Carrying      Estimated
                                     amount      fair value       amount      fair value
- ------------------------------------------------------------------------------------------
<S>                              <C>             <C>            <C>            <C>        
Financial assets:
   Cash and due from banks       $  2,568,612      2,568,612      2,088,202      2,088,202
   Interest-earning deposits        2,040,308      2,040,308      6,956,242      6,956,242
   Mortgage-backed securities     102,410,965    100,432,583    111,872,599    109,706,762
   Loans receivable, net           79,143,572     78,182,029     70,984,459     71,499,742
   Accrued interest receivable        963,823        963,823        943,126        943,126
   Federal Home Loan Bank
     of Chicago stock               2,045,000      2,045,000      2,264,300      2,264,300
- ------------------------------------------------------------------------------------------
Total financial assets           $189,172,280    186,232,355    195,450,540    193,458,374
==========================================================================================

<CAPTION>
                                              1996                         1995
                                    -----------------------      -----------------------
                                    Carrying      Estimated      Carrying      Estimated
                                     amount      fair value       amount      fair value
- ------------------------------------------------------------------------------------------
Financial liabilities:
   Nonmaturing savings deposits  $ 65,834,222     65,834,222     70,051,982     70,051,982
   Savings deposits with
     stated maturities             71,342,548     71,306,373     78,297,996     78,409,575
   Borrowed money                  39,900,000     40,065,320     32,300,000     32,300,000
   Accrued interest payable           351,693        351,693        193,161        193,161

- ------------------------------------------------------------------------------------------
Total financial liabilities      $177,428,463    177,557,608    180,843,139    180,954,718
==========================================================================================
</TABLE>

          Cash and Due from Banks and Interest-Earning Deposits

     The carrying value of cash and due from banks and interest-earning deposits
     approximates fair value due to the short period of time between origination
     of the instruments and their expected realization.

          Mortgage-Backed Securities

     The fair value of mortgage-backed securities is estimated based on quoted
     market prices.


                                                                     (Continued)

                                      F-19

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

          Loans Receivable

     Fair values are estimated for portfolios of loans with similar financial
     characteristics. Loans are segregated by type and then further segmented
     into fixed and variable rate interest terms and by performing and
     nonperforming categories. The fair value of performing fixed rate loans is
     calculated by discounting contractual cash flows adjusted for prepayment
     estimates using discount rates based on new loan rates adjusted to reflect
     differences in servicing and credit costs. For variable rate loans, fair
     value is estimated to be book value as these loans reprice frequently or
     have a relatively short term to maturity and there has been little or no
     change in credit quality since origination. Fair value for nonperforming
     loans is calculated by discounting estimated future cash flows using a
     C-rated bond yield with principal and interest assumed paid in 18 months.

          Accrued Interest Receivable

     The carrying amount of accrued interest receivable approximates its fair
     value due to the relatively short period of time between accrual and
     expected realization.

          Federal Home Loan Bank of Chicago Stock

     The fair value of this stock is based on its redemption value.

          Savings Deposits

     Under Statement 107, the fair value of savings deposits with no stated
     maturity, such as noninterest-bearing demand deposits, NOW accounts, money
     market accounts, and passbook accounts, is equal to the amount payable on
     demand as of July 31, 1996 and 1995. The fair value of certificates of
     deposit is based on the discounted value of contractual cash flows. The
     fair value estimates do not include the benefit that results from the
     low-cost funding provided by the deposit liabilities compared to the cost
     of borrowing funds in the market.

          Borrowed Money

     The fair value of advances from the Federal Home Loan Bank of Chicago is
     equal to the amount payable on demand as of July 31, 1996 and 1995, due to
     the variable interest rate on the debt.

          Accrued Interest Payable

     The carrying amount of accrued interest payable approximates its fair value
     due to the relatively short period of time between accrual and expected
     realization.

          Limitations

     The fair value estimates are made at a specific point in time based on
     relevant market information and information about the financial instrument.
     Because no market exists for a significant portion of the Savings Bank's
     financial instruments, fair value estimates are subjective in nature and
     involve uncertainties and matters of significant judgment and therefore
     cannot be determined with precision. Changes in assumptions could
     significantly affect the estimates.


                                                                     (Continued)

                                      F-20

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

     In addition, the fair value estimates are based on existing on- and
     off-balance sheet financial instruments without attempting to estimate the
     value of anticipated future business and the value of assets and
     liabilities that are not considered financial instruments. Significant
     assets and liabilities that are not considered financial assets or
     liabilities include the mortgage origination operation, deferred taxes, and
     property, plant, and equipment. In addition, the tax ramifications related
     to the realization of unrealized gains and losses can have a significant
     effect on fair value estimates and have not been considered in any of the
     estimates.

(15) Conversion to Stock Form of Ownership

     On May 21, 1996, the Board of Directors adopted a Plan of Conversion (Plan)
     whereby the Savings Bank will convert from a federally chartered mutual
     savings bank to a federally chartered stock savings bank. The Plan is
     subject to approval of regulatory authorities and members at a special
     meeting. The stock of the Savings Bank will be issued to a holding company
     formed in connection with the conversion. Pursuant to the Plan, shares of
     capital stock of the holding company are expected to be offered initially
     for subscription by eligible members of the Savings Bank and certain other
     persons as of specified dates subject to various subscription priorities as
     provided in the Plan. The capital stock will be offered at a price to be
     determined by the Board of Directors based upon an appraisal to be made by
     an independent appraisal firm. The exact number of shares to be offered
     will be determined by the Board of Directors in conjunction with the
     determination of the price at which the shares will be sold. At least the
     minimum number of shares offered in the conversion must be sold. Any stock
     not purchased in the subscription offering will be sold in a community
     offering.

     The Plan provides that when the conversion is completed, a "Liquidation
     Account" will be established in an amount equal to the retained earnings of
     the Savings Bank as of the date of the most recent financial statements
     contained in the final conversion prospectus. The Liquidation Account is
     established to provide a limited priority claim on the assets of the
     Savings Bank to qualifying depositors (Eligible Account Holders) who
     continue to maintain deposits in the Savings Bank after conversion. In the
     unlikely event of a complete liquidation of the Savings Bank, and only in
     such an event, each Eligible Account Holder would receive from the
     Liquidation Account a liquidation distribution based on his proportionate
     share of the then total remaining qualifying deposits.

     Current regulations allow the Savings Bank to pay dividends on its stock
     after the conversion if its regulatory capital would not thereby be reduced
     below the amount then required for the aforementioned Liquidation Account.
     Also, capital distribution regulations limit the Savings Bank's ability to
     make capital distributions which include dividends, stock redemptions or
     repurchases, cash-out mergers, interest payments on certain convertible
     debt and other transactions charged to the capital account based on their
     capital level and supervisory condition. Federal regulations also preclude
     any repurchase of the stock of the Savings Bank or its holding company for
     three years after conversion except for repurchases of qualifying shares of
     a director and repurchases pursuant to an offer made on a pro rata basis to
     all stockholders and with prior approval of the Office of


                                                                     (Continued)

                                      F-21

<PAGE>

FAIRFIELD SAVINGS BANK, F.S.B.

Notes to Financial Statements

================================================================================

     Thrift Supervision; or pursuant to an open-market stock repurchase program
     that complies with certain regulatory criteria. The Savings Bank has
     retained the services of both an underwriting firm and legal counsel for
     the specific purpose of implementing the Savings Bank's plan of conversion.
     At July 31, 1996, the Savings Bank had incurred approximately $113,000 in
     costs relating to these services. These costs have been deferred and, upon
     conversion, such costs and any additional costs will be charged against the
     proceeds from the sale of stock. If the conversion is not completed, these
     deferred costs will be charged to operations.


                                      F-22

<PAGE>

================================================================================

No dealer, salesperson or any other person has been authorized to give any
information or to make any representation other than as contained in this
Prospectus in connection with the offering made hereby, and, if given or made,
such other information or representation must not be relied upon as having been
authorized by Big Foot Financial Corp., Fairfield Savings Bank, F.S.B. or Hovde
Securities, Inc. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities offered hereby to any
person in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so, or to any person to whom it is unlawful to make such offer or solicitation
in such jurisdiction. Neither the delivery of this Prospectus nor any sale
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of Big Foot Financial Corp. or Fairfield Savings
Bank, F.S.B. since any of the dates as of which information is furnished herein
or since the date hereof.

                                   ----------

                                TABLE OF CONTENTS

                                   ----------
                                                                    Page
                                                                    ----
Summary ......................................................        5
Selected Financial and Other Data of the Bank ................       15
Risk Factors .................................................       17
Big Foot Financial Corp. .....................................       25
Fairfield Savings Bank, F.S.B ................................       25
Use of Proceeds ..............................................       27
Dividend Policy ..............................................       29
Market for the Common Stock ..................................       30
Regulatory Capital Compliance ................................       31
Capitalization ...............................................       32
Pro Forma Data ...............................................       33
Fairfield Savings Bank, F.S.B. Statements of Earnings ........       37
Management's Discussion and Analysis
  of Financial Condition and Results of Operations ...........       38
Business of the Company ......................................       53
Business of the Bank .........................................       54
Federal and State Taxation ...................................       72
Regulation ...................................................       74
Management of the Company ....................................       85
Management of the Bank .......................................       86
The Conversion ...............................................       98
Restrictions on Acquisition of the Company
  and the Bank ...............................................      118
Description of Capital Stock of the Company ..................      124
Description of Capital Stock of the Bank .....................      125
Transfer Agent and Registrar .................................      126
Experts ......................................................      126
Legal and Tax Opinions .......................................      127
Additional Information .......................................      127
Index to Financial Statements ................................      F-1

Until the later of ____________, 1996, or 25 days after the commencement of the
Community Offering, if any, all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.

================================================================================

================================================================================

                                2,012,500 Shares

                                     [LOGO]
                            Big Foot Financial Corp.

                          (Proposed Holding Company for
                         Fairfield Savings Bank, F.S.B.)

                                  Common Stock

                                   ----------
                                   PROSPECTUS

                                   ----------

                             Hovde Securities, Inc.

                              ____________, 1996.

================================================================================

<PAGE>

                                     PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.    Other Expenses of Issuance and Distribution.

OTS application fee.......................................    $   8,400
SEC registration fee(1)...................................        7,981
NASD filing fee(1)........................................        2,814
Nasdaq National Market Listing Fee(1).....................       16,572
Printing, postage and mailing.............................      200,000
Legal fees and expenses...................................      165,000
Financial advisor management fee and expenses.............       82,500
Accounting fees and expenses..............................      105,000
Appraiser's fees and expenses (including business plan)...       37,500
Transfer agent and registrar fees and expenses............        7,500
Conversion agent fees and expenses........................       12,500
Certificate printing......................................        7,500
Telephone, temporary help and other equipment.............       25,000
Blue Sky fees and expenses (including fees of counsel)....       15,000
Miscellaneous.............................................       56,733
                                                              ---------
TOTAL.....................................................    $ 750,000
                                                              =========

- ----------
(1)  Actual expenses based upon the registration of 2,314,375 shares at $10.00
     per share. All other expenses are estimated.

Item 14. Indemnification of Directors and Officers.

     Section 8.75(a) of the Illinois Business Corporation Act ("IBCA") empowers
an Illinois corporation to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee,
or agent of the corporation or is serving at the request of the corporation as a
director, officer, employee or agent of another partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.

     Similar indemnity is authorized under Section 8.75(b) of the IBCA for such
persons against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of any such threatened,
pending or completed action or suit by or in the right of the corporation if
such person acted in good faith and in a manner he or she reasonably believed to
be in, or not opposed to, the best interests of the corporation, and provided
further that (unless a court of competent jurisdiction otherwise provides) such
person shall not have been adjudged liable to the corporation.


                                      II-1

<PAGE>

     Whether or not the proceeding is by or in the right of the corporation, to
the extent that a director, officer, employee or agent of a corporation has been
successful, on the merits or otherwise, in the defense of any action, suit or
proceeding, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith. Any indemnification described above (unless ordered by a court) may
be made only as authorized in each specific case upon a determination by the
stockholders or disinterested directors or by independent legal counsel in a
written opinion that indemnification is proper because the indemnitee has met
the applicable standard of conduct.

     Section 8.75(g) of the IBCA authorizes a corporation to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
enterprise, against any liability asserted against him or her, and incurred by
him or her in any such capacity, or arising out of his or her status as such,
whether or not the corporation would otherwise have the power to indemnify such
person under Section 8.75.

     The IBCA also provides that expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid in advance of the final
disposition of the proceeding if the director, officer, employee or agent
provides the corporation with an undertaking to repay the advance if it is
ultimately determined that he or she is not entitled to indemnification.
Additionally, the indemnification statute provides that advances of expenses and
indemnification under Section 8.75 are not exclusive of any other rights to
which those seeking indemnification may be entitled under any by-law, agreement,
vote of shareholders or disinterested directors, or otherwise.

     Article IX of the Articles of Incorporation of Big Foot Financial Corp.
(the "Company") provides that a director shall not be personally liable to the
Company or its stockholders for damages for breach of his or her fiduciary duty
as a director, except to the extent such exemption from liability or limitation
thereof is expressly prohibited by the IBCA. The affirmative vote of the holders
of not less than eighty percent (80%) of the total number of votes eligible to
be cast by the holders of all outstanding shares of capital stock are required
to amend, alter, rescind or repeal any provision of Article IX.

     Article X of the Company's Articles of Incorporation requires the Company,
among other things, to indemnify to the fullest extent permitted by the IBCA,
any person who is or was or has agreed to become a director or officer of the
Company, who was or is made a party to, or is threatened to be made a party to,
or has become a witness in, any threatened, pending or completed action, suit or
proceeding, including actions or suits by or in the right of the Company, by
reason of such agreement or service or the fact that such person is, was or has
agreed to serve as a director, officer, employee or agent of another corporation
or organization at the request of the Company. The Articles of Incorporation
apply the same standards of good faith and reasonableness to persons seeking
indemnification as IBCA Section 8.75. With respect to suits brought by or in the
right of the Company, the Articles of Incorporation apply the same rule as IBCA
Section 8.75 that the party seeking indemnification not have been adjudged to be
liable to the Company. Additionally, under the Articles of Incorporation, the
Company is not obligated to indemnify any director or officer in connection with
an action, suit or proceeding initiated by such person against the Company
unless such suit or proceeding was authorized or consented to by the Board of
Directors.

     Article X empowers the Company to purchase and maintain insurance to
protect itself and its directors and officers, and those who were or have agreed
to become directors or officers, against any liability, regardless of whether or
not the Company would have the power to indemnify those persons against such
liability under the law or the provisions set forth in the Articles of
Incorporation. The Company is also authorized by its Articles of Incorporation
to enter into individual indemnification contracts with directors and officers.


                                      II-2

<PAGE>

     Like IBCA Section 8.75, Article X of the Articles of Incorporation requires
that any indemnification (unless ordered by a court) be approved by
stockholders, disinterested directors or independent legal counsel in a written
opinion. Also, the Articles of Incorporation grant persons seeking indemnity
from the Company a right, as in IBCA ss. 8.75, to receive advance payments for
their expenses in exchange for a repayment undertaking.

     Article X sets forth a procedure for persons seeking indemnification
whereby the director, officer, employee or agent makes a written request for
indemnification, and a determination is made within sixty (60) days (except
determination by shareholders, in which case the determination is made at the
next annual meeting of shareholders). If no disposition is reached within the
allotted time period, the person seeking indemnification can pursue his or her
rights in a court of competent jurisdiction in the State of Illinois. To the
extent that such person is successful in establishing his or her right to
indemnification, the costs incurred in establishing those rights are also
indemnified by the Company.

     With regard to settlement offers, Article X provides that the Company shall
not be obligated to reimburse any costs, charges or expenses of any settlement
to which it has not agreed. Also, where the person to be indemnified
unreasonably fails to enter into a settlement offer, the indemnification
obligation of the Company is limited by the total amount of the settlement offer
and the expenses incurred by the indemnitee prior to the time such settlement
could reasonably have been effected.

     Article X also provides that if the IBCA is amended to expand further the
indemnification permitted to directors and officers of the Company, then the
Company shall indemnify such persons to the fullest extent permitted by the
IBCA.

     Fairfield Savings Bank, F.S.B. currently maintains, and the Company expects
to purchase, directors' and officers' liability insurance consistent with the
provisions of the Articles of Incorporation as soon as practicable.

     The Company expects to enter into employment agreements with certain
executive officers, which agreements are expected to require that the Company
will obtain a directors' and officers' liability policy for the benefits of such
officers or that the Company will indemnify such officers to the fullest extent
provided by law.

     The Articles of Incorporation of the Company are filed as Exhibit 3.1.

Item 15. Recent Sales of Unregistered Securities.

         Not Applicable.


                                      II-3

<PAGE>

Item 16. Exhibits and Financial Statement Schedules.

     The exhibits filed as a part of this Registration Statement are as follows:

     (a). List of Exhibits. (Filed herewith unless otherwise noted.)

Exhibit No.                       Description
- -----------                       -----------
   1.1       Engagement Letter, dated February 15, 1996, between Fairfield
             Savings Bank, F.S.B and Hovde Securities, Inc.

   1.2       Form of Agency Agreement between Fairfield Savings Bank, F.S.B.,
             Big Foot Financial Corp. and Hovde Securities, Inc.

   2.1       Amended and Restated Plan of Conversion of Fairfield Savings Bank,
             F.S.B.

   3.1       Articles of Incorporation of Big Foot Financial Corp.

   3.2       Bylaws of Big Foot Financial Corp.

   3.3       Federal Stock Charter and Bylaws of Fairfield Savings Bank, F.S.B.
             (See Exhibits I and II to Exhibit 2.1)

   4.1       Articles of Incorporation of Big Foot Financial Corp. (See Exhibit
             3.1)

   4.2       Bylaws of Big Foot Financial Corp. (See Exhibit 3.2)

   4.3       Form of Stock Certificate of Big Foot Financial Corp.

   5.1       Form of Opinion of Thacher Proffitt & Wood regarding legality

   5.2       Opinion of Gomberg, Sharfman, Gold & Ostler, P.C. regarding
             Illinois law (see attachment to Exhibit 5.1)*

   8.1       Form of Opinion of Thacher Proffitt & Wood regarding federal
             taxation

   8.2       Form of Opinion of KPMG Peat Marwick LLP regarding State of
             Illinois taxation

   8.3       Opinion of Capital Resources Group, Inc. regarding Subscription
             Rights

  10.1       Big Foot Financial Corp. Employee Stock Ownership Plan and ESOP
             Trust Agreement

  10.2       Form of ESOP Loan Documents

  10.3       Form of Executive Employment Agreement between Big Foot Financial
             Corp. and certain executive officers

  10.4       Form of Employment Agreement between Fairfield Savings Bank, F.S.B.
             and certain executive officers


                                      II-4

<PAGE>

Exhibit No.                       Description
- -----------                       -----------
  10.5       Form of Employee Retention Agreement between Big Foot Financial
             Corp., Fairfield Savings Bank, F.S.B. and certain officers

  10.6       Severance Pay Plan of Fairfield Savings Bank, F.S.B.

  10.7       Amended Fairfield Savings Bank, F.S.B. Profit Sharing and Savings
             Plan*

  10.8       Engagement Letter, dated March 27, 1996, between Fairfield Savings
             Bank, F.S.B. and Capital Resources Group, Inc. for conversion
             appraisal services and for services related to the preparation of
             the business plan

  10.9       Engagement Letter, dated June 17, 1996, between Fairfield Savings
             Bank, F.S.B. and Crowe Chizek and Company LLP for conversion agent
             services

  10.10      Lease Agreement between Fairfield Savings Bank, F.S.B. for Norridge
             branch office, dated April 29, 1976*

  21.1       Subsidiaries of the Registrant

  23.1       Consent of KPMG Peat Marwick LLP

  23.2       Consent of Thacher Proffitt & Wood

  23.3       Consent of Gomberg, Sharfman, Gold & Ostler, P.C.*

  23.4       Consent of Capital Resources Group, Inc.

  24.1       Powers of Attorney (Included in Signature Page of the Registration
             Statement)

  27.1       Financial Data Schedule (Submitted only with filing in electronic
             format)

  99.1       Appraisal Report of Capital Resources Group, Inc, dated September
             6, 1996*

  99.2       Form of Marketing Materials to be used in connection with the
             Offerings

- ----------
*    To be filed by amendment

     (b). Financial Statement Schedules.

     All schedules have been omitted as not applicable or not required under the
     rules of Regulation S-X.

Item 17. Undertakings.

     The undersigned Registrant hereby undertakes:

          (1)  To file, during any period in which offers or sales are being
               made, a post-effective amendment to this Registration Statement:


                                      II-5

<PAGE>

               (i)  To include any Prospectus required by Section 10(a)(3) of
                    the Securities Act of 1933;

               (ii) To reflect in the Prospectus any facts or events arising
                    after the effective date of the Registration Statement (or
                    the most recent post-effective amendment thereof) which,
                    individually or in the aggregate, represent a fundamental
                    change in the information set forth in the Registration
                    Statement. Notwithstanding the foregoing, any increase or
                    decrease in volume of securities offered (if the total
                    dollar value of securities offered would not exceed that
                    which was registered) and any deviation from the low or high
                    end of the estimated maximum offering range may be reflected
                    in the form of prospectus filed with the Commission pursuant
                    to Rule 424(b) if, in the aggregate, the changes in volume
                    and price represent no more than a 20% change in the maximum
                    aggregate offering price set forth in the "Calculation of
                    Registration Fee" table in the effective Registration
                    Statement;

               (iii) To include any material information with respect to the
                    plan of distribution not previously disclosed in the
                    Registration Statement or any material change to such
                    information in the Registration Statement;

          (2)  That, for the purpose of determining any liability under the
               Securities Act of 1933, each such post-effective amendment shall
               be deemed to be a new Registration Statement relating to the
               securities offered therein, and the offering of such securities
               at that time shall be deemed to be the initial bona fide offering
               thereof.

          (3)  To remove from registration by means of a post-effective
               amendment any of the securities being registered which remain
               unsold at the termination of the Offering.

     The undersigned Registrant hereby undertakes to provide to the agent at the
closing specified in the Agency Agreement, certificates in such denominations
and registered in such names as required by the agent to permit prompt delivery
to each purchaser.

     Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

     The undersigned Registrant hereby undertakes that:

          (1)  For purposes of determining any liability under the Securities
               Act of 1933, the information omitted from the form of prospectus
               filed as part of this Registration Statement in reliance upon
               Rule 430A and contained in a form of prospectus filed by the
               Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
               Securities Act


                                      II-6

<PAGE>

               shall be deemed to be part of this Registration Statement as of
               the time it was declared effective.

          (2)  For the purpose of determining any liability under the Securities
               Act of 1933, each post-effective amendment that contains a form
               of prospectus shall be deemed to be a new registration statement
               relating to the securities offered therein, and the offering of
               such securities at that time shall be deemed to be the initial
               bona fide offering thereof.


                                      II-7

<PAGE>

                                  SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the County of Lake, State of Illinois
on September 13, 1996.

                                       Big Foot Financial Corp.


                                       By: /s/ George M. Briody
                                           -----------------------------
                                           George M. Briody
                                           President

                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of George M. Briody and Timothy L. McCue as
the true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities to sign the Form S-1 Registration Statement and any and
all amendments thereto, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the U.S. Securities and Exchange
Commission, granting unto each said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

            Name                  Title                             Date
            ----                  -----                             ----


/s/ George M. Briody          Director and President          September 13, 1996
- ------------------------      (Principal executive officer)
George M. Briody              

/s/ Timothy L. McCue          Vice President and Chief        September 13, 1996
- ------------------------      Financial Officer
Timothy L. McCue              (Principal financial officer)

/s/ F. Gregory Opelka         Director and Executive          September 13, 1996
- ------------------------      Vice President
F. Gregory Opelka             

/s/ Maurice F. Leahy          Director                        September 13, 1996
- ------------------------
Maurice F. Leahy

/s/ Eugene W. Pilawski        Director                        September 13, 1996
- ------------------------
Eugene W. Pilawski

/s/ Joseph J. Nimrod          Director                        September 13, 1996
- ------------------------
Joseph J. Nimrod

/s/ Walter E. Powers          Director                        September 13, 1996
- ------------------------
Walter E. Powers, M.D.

/s/ William B. O'Connell      Director                        September 13, 1996
- ------------------------
William B. O'Connell

<PAGE>

                               TABLE OF EXHIBITS

   1.1       Engagement Letter, dated February 15, 1996, between Fairfield
             Savings Bank, F.S.B and Hovde Securities, Inc.

   1.2       Form of Agency Agreement between Fairfield Savings Bank, F.S.B.,
             Big Foot Financial Corp. and Hovde Securities, Inc.

   2.1       Amended and Restated Plan of Conversion of Fairfield Savings Bank,
             F.S.B.

   3.1       Articles of Incorporation of Big Foot Financial Corp.

   3.2       Bylaws of Big Foot Financial Corp.

   3.3       Federal Stock Charter and Bylaws of Fairfield Savings Bank, F.S.B.
             (See Exhibits I and II to Exhibit 2.1)

   4.1       Articles of Incorporation of Big Foot Financial Corp. (See Exhibit
             3.1)

   4.2       Bylaws of Big Foot Financial Corp. (See Exhibit 3.2)

   4.3       Form of Stock Certificate of Big Foot Financial Corp.

   5.1       Form of Opinion of Thacher Proffitt & Wood regarding legality

   5.2       Opinion of Gomberg, Sharfman, Gold & Ostler, P.C. regarding
             Illinois law (see attachment to Exhibit 5.1)*

   8.1       Form of Opinion of Thacher Proffitt & Wood regarding federal
             taxation

   8.2       Form of Opinion of KPMG Peat Marwick LLP regarding State of
             Illinois taxation

   8.3       Opinion of Capital Resources Group, Inc. regarding Subscription
             Rights

  10.1       Big Foot Financial Corp. Employee Stock Ownership Plan and ESOP
             Trust Agreement

  10.2       Form of ESOP Loan Documents

  10.3       Form of Executive Employment Agreement between Big Foot Financial
             Corp. and certain executive officers

  10.4       Form of Employment Agreement between Fairfield Savings Bank, F.S.B.
             and certain executive officers


<PAGE>

  10.5       Form of Employee Retention Agreement between Big Foot Financial
             Corp., Fairfield Savings Bank, F.S.B. and certain officers

  10.6       Severance Pay Plan of Fairfield Savings Bank, F.S.B.

  10.7       Amended Fairfield Savings Bank, F.S.B. Profit Sharing and Savings
             Plan*

  10.8       Engagement Letter, dated March 27, 1996, between Fairfield Savings
             Bank, F.S.B. and Capital Resources Group, Inc. for conversion
             appraisal services and for services related to the preparation of
             the business plan

  10.9       Engagement Letter, dated June 17, 1996, between Fairfield Savings
             Bank, F.S.B. and Crowe Chizek and Company LLP for conversion agent
             services

  10.10      Lease Agreement between Fairfield Savings Bank, F.S.B. for Norridge
             branch office, dated April 29, 1976*

  21.1       Subsidiaries of the Registrant

  23.1       Consent of KPMG Peat Marwick LLP

  23.2       Consent of Thacher Proffitt & Wood

  23.3       Consent of Gomberg, Sharfman, Gold & Ostler, P.C.*

  23.4       Consent of Capital Resources Group, Inc.

  24.1       Powers of Attorney (Included in Signature Page of the Registration
             Statement)

  27.1       Financial Data Schedule (Submitted only with filing in electronic
             format)

  99.1       Appraisal Report of Capital Resources Group, Inc, dated September
             6, 1996*

  99.2       Form of Marketing Materials to be used in connection with the
             Offerings

- ----------
*    To be filed by amendment


<PAGE>

                                                                    EXHIBIT 1.1

PERSONAL AND CONFIDENTIAL
                                  February 15, 1996


Board of Directors
Fairfield Savings Bank, F.S.B..
1190  RFD
Long Grove, IL  60047

Attn:  Mr. George M. Briody
       President and Chief Executive Officer

Members of the Board:

       We understand that Fairfield Savings Bank, F.S.B. ("the Bank") will be
forming a holding company (the "Holding Company") that intends to offer newly
issued shares of its common stock in connection with the conversion of the Bank
from a federal mutual savings bank to a federal stock savings bank ("the
Conversion").  This letter confirms an agreement whereby the Holding Company and
the Bank (collectively, the "Company") have retained Hovde Securities, Inc.
("Hovde") to serve as its investment banker in connection with this offering. 
This confirmation is made pursuant to the following terms, conditions and fees:

       1.     CONVERSION  SERVICES.  As the Company's investment banker, Hovde
will provide the Bank with a comprehensive program of conversion services
designed to ensure an orderly, efficient, cost-effective and long-term stock
distribution.  These  services will include, but not be limited to, those
services set forth more fully in Exhibit A to this letter.

       2.     PREPARATION OF OFFERING DOCUMENTS.  The Company and its counsel
will draft the Registration Statement and Application for Conversion to be used
in connection with the Conversion.  Hovde will attend meetings to review these
documents and advise the Company on their form and content.  Hovde and its
counsel will draft the Agency Agreement and other offering materials.

       3.     DUE DILIGENCE REVIEW.  Prior to filing the Registration
Statement, Application for Conversion or any offering documents naming Hovde as
the Company's investment banker, Hovde and its representatives will undertake
substantial investigations to learn about the Company's business and operations
("due diligence review") in order to confirm information previously provided to
us and to evaluate factual information to be contained in the Company's offering
documents.  The Company agrees that it will make available to Hovde all relevant
information, whether or not publicly available, which Hovde reasonably requests,
and will permit Hovde to discuss with management personnel the operations and
prospects of the Company.  Hovde will treat all non-public information as
confidential.  The Company acknowledges that Hovde will rely upon the accuracy
and completeness of all information received from the Company, its officers,
directors, employees, agents, representatives, accountants and counsel.  This
letter agreement under which Hovde is to serve as the Company's 


<PAGE>


Board of Directors
Fairfield Savings Bank, F.S.B.
February 15, 1996
Page 2


investment banker is subject to the satisfactory completion of such
investigation and inquiries as Hovde may deem appropriate under the
circumstances and is subject to the determination by Hovde that no unanticipated
material adverse information is discovered during the due diligence review.

       4.     REGULATORY FILINGS.  If and when the Company deems appropriate,
the Company will cause appropriate offering documents to be filed with the
Office of Thrift Supervision ("OTS"), the Securities and Exchange Commission
("SEC") and such state securities commissioners as may be jointly determined by
Hovde and the Company.  All fillings with the OTS, the SEC and state securities
commissioners naming Hovde as the Company's investment banker will be subject to
the prior consent of Hovde, which consent shall not be unreasonably withheld.

       5.     AGENCY AGREEMENT.  This letter is a binding agreement between the
Company and Hovde.  However, the specific terms of certain services contemplated
in this letter shall be set forth in an Agency Agreement between the Company and
Hovde to be executed on or about the date the Offering is to commence.  The
Agency Agreement will be in form and substance acceptable to the Company and
Hovde and will provide for customary representations and warranties by the
Company and for the Company and Hovde to indemnify one another and their
controlling persons against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, subject to Section 8 hereof.

       6.     FEES.  For the investment banking services hereunder, the Bank
shall pay Hovde the following amounts in the following manner:  a management fee
of $37,500, of which $18,750 shall be due upon execution of this agreement and
$18,750 shall be paid upon initial filing of the application for conversion; and
sales commissions equal to (i) 1.75% of the aggregate purchase price of the
common stock in the Subscription Offering, excluding shares sold to the
Company's directors, executive officers and employees, employees' spouses and
children and any employee stock ownership plan ("ESOP") created by the Company,
and (ii) 3.0% of the aggregate purchase price of the common stock sold in the
Direct Community Offering.  The sales commissions due Hovde shall be paid upon
closing of the Conversion.  The Bank will also be responsible for the
commissions, fees and other compensation payable to any NASD member firm other
than Hovde which the Bank allows to participate in the Conversion as a selected
dealer, assisting broker or other similar role.

       7.     EXPENSES.  The Bank will bear those expenses of the proposed
offering customarily borne by issuers, including OTS, SEC, "Blue Sky", and NASD
filing and registration fees; the fees of the Bank's accountants, attorneys,
transfer agent and registrant; printing expenses association with the
Conversion; the fees set forth in Section 6; and fees for "Blue Sky" legal work,
which will be performed by either the Company's counsel or Hovde's counsel (at
the expense of the Company.)  In addition, the Bank hereby agrees to reimburse 


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
February 15, 1996
Page 3


Hovde, from time to time upon Hovde's requests, for its reasonable and
documented out-of-pocket expenses, including legal fees of its underwriter's
counsel, provided that in no event will such expenses in the aggregate exceed
$45,000 without prior approval of the Bank.

       8.     INDEMNIFICATION AND CONTRIBUTION.  Both the Holding Company and
the Bank agree to indemnify and hold Hovde, its affiliates, directors, officers,
agents and employees, and each other person, if any, controlling Hovde or any of
its affiliates within the meaning of Section 15 of the Securities Act of 1933 or
Section 20(a) of the Securities Exchange Act of 1934, harmless from and against
any losses, claims, damages, expenses (including reasonable  counsel fees), or
liabilities (collectively, "Losses") and will further promptly reimburse such
persons for any legal or other expenses reasonably incurred in investigating,
preparing to defend or defending against any such action, proceeding or claim
(whether commenced or threatened) arising out of or based upon the Conversion or
the engagement of Hovde hereunder unless it is determined by final judgment of a
court having jurisdiction over the matter that such Losses are primarily as a
result of the indemnified party's bad faith, willful misconduct or gross
negligence.  If the foregoing indemnification were for any reason not to be
available, the Holding Company agrees to  contribute to the Losses involved in
proportion that the Company's  financial interest in the  Conversion bears to
the indemnified party's financial interest in the Conversion.

       9.     CONDITIONS.  Hovde's obligations hereunder shall be subject to,
among other things, there being in Hovde's opinion, which shall have been formed
in good faith by Hovde after reasonable determination and consideration of all
relevant factors:  (a) satisfactory disclosure of all relevant financial
information in the disclosure documents and a determination that the sale of
stock is reasonable given such disclosures; (b) no material adverse change in
the condition or operations of the Bank subsequent to Hovde's due diligence
review; (c) the absence of market conditions which might render the sale of the
shares by the Company inadvisable; (d) agreement that the price established by
the independent appraiser is reasonable and equitable in the then prevailing
market conditions; and (e) no material adverse change in the regulation of the
Company.

       10.    TERM OF AGREEMENT.  This agreement shall commence upon execution
of this letter agreement by the Bank and will remain in effect for a period of
one year from the date of such execution.

       11.    ADVERTISEMENT.  The Company agrees that Hovde may, at its own
expense and subject to the Bank's consent (which will not be unreasonably
withheld), publish an advertisement announcing the completion of this
transaction and Hovde's role therein.

       12.    ADDRESSES FOR NOTICES.  All notices, requests, demands and other
communications requested or permitted to be given hereunder shall be in writing
and shall be deemed to have 


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
February 15, 1996
Page 4


been duly given when personally delivered or mailed by first-class certified
mail, return receipt request, to the applicable party at its address indicated
below:

       IF TO HOVDE:

         Hovde Securities, Inc.
         1119 Lake Cook Road
         Suite 165
         Buffalo Grove, IL  60089
         Attn:  Steven D. Hovde


       IF TO THE COMPANY:

         c/o Fairfield Savings Bank, F.S.B.
         1190 RFD
         Long Grove, IL    60047
         Attn.:  Mr. George M. Briody

or, as to each party, at such address as shall be designated in a written notice
given to the other party.

       13.    HEADINGS.  The section headings in this Agreement are for
convenience only and do not define, limit or construe the contents of such
sections.  References made in this Agreement to numbered sections shall refer to
numbered sections of this Agreement unless otherwise  indicated.

       14.    FORCE MAJEURE.  If any provisions of this Agreement or any
application to any party or circumstances shall be determined by any court of
competent jurisdiction to be invalid and unenforceable to any extent, the
remainder of this Agreement or the application of such provision to such person
or circumstances other than those as to which it is so determined invalid or
unenforceable to any extent, shall not be affected thereby, and each provision
hereof shall be valid and shall be enforced to the fullest extent permitted by
law.

       15.  GOVERNING LAW.  The laws of the State of Illinois shall govern the
validity, performance and enforcement of this Agreement.

<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
February 15, 1996
Page 5


       If the foregoing correctly sets forth our mutual understanding, please
so indicate by signing and returning the original copy of the letter to the
undersigned with a check in the amount of $18,750 payable to Hovde Securities,
Inc.

                                  With warmest regards,

                                  HOVDE SECURITIES, INC.

                                  /s/ Steven D. Hovde

                                  Steven D. Hovde
                                  Executive Vice President

SDH/ag


Agreed to:

FAIRFIELD SAVINGS BANK, F.S.B.



By:  /s/ George M. Briody
     ----------------------------
       George M. Briody
       President and Chief Executive Officer



<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
February 15, 1996
Page 6



                                      EXHIBIT  A
                                 CONVERSION SERVICES


Hovde Securities, Inc. ("Hovde") provides thrift institutions converting from
the mutual-to-stock form of ownership with a comprehensive program of conversion
services designed to ensure an orderly, efficient, cost-effective and long-term
stock distribution.  The following list is representative of the conversion
services we are prepared to perform on behalf of the Bank.

GENERAL SERVICES

Counsel and train the Bank's directors, senior managers and staff members with
regard to their individual responsibilities during the conversion process.

Solicit, analyze and make recommendations on bids from appraisal, business plan
preparation, printing, conversion agent, and transfer agent firms.

Supervise appraisal, printing, conversion agent and transfer agent firms.

Assist officers and directors in obtaining loans to purchase stock.

Assist the Bank in obtaining a loan for the Employee Stock Ownership Plan.

Assist in drafting and distribution of press releases as required and
appropriate.

CONVERSION STRATEGY SERVICES

Representatives of Hovde will conduct a thorough due diligence review of the
Bank; assess the individual and corporate objectives of senior management and
the Board of Directors; and evaluate market conditions for the Bank's conversion
offering.  Hovde will then recommend a conversion strategy that address the
legal form of the issuer, valuation, dividend policy, anti-takeover strategies,
insider benefits, a comprehensive marketing strategy for the Bank's stock
offering, and post-conversion shareholder value enhancement strategies.

SUBSCRIPTION AND COMMUNITY OFFERING SERVICES

Establish and manage Conversion Center at the Bank.  The Conversion Center will
be staffed by several of the Bank's clerical employees and/or temporary clerical
personnel who will be recruited by Hovde and hired by the Bank.  Hovde will
train Conversion Center personnel to solicit and process proxies; track
prospective investors; record stock orders; mail order 


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
February 15, 1996
Page 7


confirmations; provide the Bank's senior management with daily reports
concerning proxy totals, stock orders and funds received; handle routine
customer and investor inquiries; and handle special situations as they arise.

Assign Hovde personnel to be at the Bank throughout the Subscription and
Community Offerings to manage the Conversion Center, meet with prospective
shareholders at individual and community information meetings, solicit local
investor interest through a telemarketing campaign, answer inquiries, and
otherwise assist in the sale of stock in the Subscription and Community
Offerings.

Create target investors list based upon review of the Bank's customer base and
input from the Bank's directors, officers and other employees.

Provide intensive financial and marketing input for drafting of offering
circular.

Prepare other marketing materials, including prospecting letters, brochures and
media advertisements.

Arrange logistics of community information meeting(s) as required.

Prepare audio-video presentation by senior management at community information
meeting(s).

Prepare script for presentation by senior management at community information
meeting(s).

Prepare management for question-and-answer period at community information
meeting(s).

Attend and address community information meeting(s) and be available to answer
questions.

BROKER-ASSISTED AND SYNDICATED COMMUNITY OFFERING SERVICES

Hovde will advise the Bank as to whether to utilize a broker-assisted or
syndicated community offering.  If brokers are allowed to participate in the
community offering, Hovde will advise the Bank as to the most cost-effective
form of such participation, as well as provide the following additional
services:

Arrange logistics of broker information meeting(s) as required.

Prepare audio-video presentation for broker information meeting(s).

Prepare script for presentation by senior management at broker information
meeting(s).


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
February 15, 1996
Page 8


Prepare management for question-and-answer period at broker information
meeting(s).

Encourage and facilitate the attendance of brokers at the broker information
meeting(s).

Attend and address broker information meeting(s) and be available to answer
questions.

Produce confidential broker memorandum to assist participating brokers in
selling the Bank's common stock.

Take all other necessary and appropriate steps to encourage and facilitate
broker participation in the Bank's broker-assisted or syndicated community
offering.

STANDBY UNDERWRITING SERVICES

Hovde will advise the Bank as to whether the Bank should retain one or more
investment banking firms ("standby underwriters") to manage an underwritten
public offering of any shares which have not been subscribed for the Bank's
Subscription and Community Offerings.  If one or more standby underwriters are
to be retained, Hovde will assist the Bank in selecting the most qualified
firm(s), negotiating a favorable standby underwriting agreement, and supervising
the standby underwriters(s) to insure the completion of the Bank's conversion
offering.

TRADING AND RESEARCH SERVICES

Hovde will assist the Bank in securing commitments from two or more market
makers to maintain a market in the Bank's common stock after Conversion is
completed.  Hovde will also assist the Bank in obtaining research coverage from
investment analysts.

POST-CONVERSION ADVISORY SERVICES

For a period of one year subsequent to the consummation of the Bank's
conversion, Hovde will provide the Bank and the Holding Company with advice of a
general nature pertaining to anti-takeover defenses, mergers and acquisitions,
dividend policy, stock repurchases and other relevant matters.  Hovde will
render this advice for no fee for a period of one year subsequent to the
consummation of the Bank's Conversion.  Thereafter, the Bank and/or the Holding
Company may retain Hovde to provide general financial advisory services subject
to an agreement setting forth fees, terms and conditions for such engagement to
be negotiated at the time such agreement is executed.

Hovde will have no obligation to provide financial advisory services with regard
to any specific transaction involving the Bank and/or the Holding Company. 
However, the Bank and/or the Holding Company may retain Hovde as its financial
advisor with regard to such transaction 


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
February 15, 1996
Page 9


under an agreement setting forth fees, terms and conditions for such engagement
to be negotiated at the time such agreement is executed.


<PAGE>

                                     EX-1.2
                            Form of Agency Agreement


                           BIG FOOT FINANCIAL CORP.

                               2,012,500 SHARES
                             (anticipated maximum)

                    (subject to increase to up to 2,314,375
                  shares in the event of an oversubscription)

                                 COMMON STOCK

                               ($.01 Par Value)

                               AGENCY AGREEMENT

                             ____________ ___, 1996


Hovde Securities, Inc.
1826 Jefferson Place, N.
Washington, D.C.  20036

     Big Foot Financial Corp., an Illinois corporation (the "Company"), and
Fairfield Savings Bank, F.S.B., a federally chartered mutual savings bank (the
"Bank"), hereby confirm their agreement with Hovde Securities, Inc. ("Hovde"),
and Hovde hereby confirms its obligations with respect to the sale of up to
2,012,500 shares (the "Shares") of common stock, par value $.01 per share, of
the Company (the "Common Stock"), as follows:

     1. Introduction. On May 21, 1996 the Board of Directors of the Bank adopted
a plan of conversion (as amended and restated on September ______, 1996, the
"Plan of Conversion"), which provides for the conversion of the Bank from a
federal mutual savings bank to a federal stock savings bank and the issuance of
all of the Bank's outstanding stock to the Company (the "Conversion"). The
Conversion will be accomplished through the adoption by the Bank of a new
federal stock charter which authorizes the issuance of capital stock. The Bank
will issue all of its outstanding stock to the Company and will thereby become a
wholly owned subsidiary of the Company.

     The Bank has filed an application for conversion on Form AC, including a
proxy statement, prospectus, exhibits, and all amendments and supplements
required to be filed with respect thereto to the date hereof (as so amended and
supplemented, the "Form AC"), with the Office of Thrift Supervision (the "OTS")
for approval of the Conversion. The Form AC includes, among other things, the
Bank's Plan of Conversion and the Bank's proxy statement for the Special Meeting
of the Bank's members to approve the Plan of Conversion to be held on
___________ __, 1996 (the "Proxy Statement") and the Prospectus (defined below).
Pursuant to the terms and provisions of the Plan of Conversion, nontransferable
rights to

<PAGE>

subscribe ("Subscription Rights") for an aggregate of up to 2,012,500 shares
(subject to increase to up to 2,314,375 shares in the event of an
oversubscription) of the Common Stock (the "Subscription Offering") have been
granted, in the following priority, to: (i) the depositors of the Bank with
aggregate account balances of $50 or more as of December 31, 1994 ("Eligible
Account Holders" and "Eligibility Record Date", respectively); (ii) the
tax-qualified stock employee benefit plans of the Company (the "Employer
Plans"), including the Employee Stock Ownership Plan of the Company (the
"ESOP"); (iii) the depositors of the Bank with aggregate account balances of $50
or more as of September 30, 1996 (other than depositors who otherwise qualify as
Eligible Account Holders or depositors who are directors or officers of the Bank
or their Associates, as defined in the Prospectus (as hereinafter defined))
("Supplemental Eligible Account Holders" and "Supplemental Eligibility Record
Date," respectively); (iv) members of the Bank, consisting of depositors of the
Bank as of __________ __, 1996, other than Eligible Account Holders and
Supplemental Eligible Account Holders, and borrowers of the Bank as of
__________ __, 1996 ("Other Members" and "Voting Record Date," respectively)
and (v) bank employees ("Bank Employees"). Shares of Common Stock not subscribed
for in the Subscription Offering may be offered in a direct community offering
to members of the general public, with a first preference to natural persons
residing in Cook and Lake counties in Illinois (the "Local Community") on the
Voting Record Date (the "Community Offering," and together with the Subscription
Offering, as each may be extended or reopened from time to time, the
"Subscription and Community Offering"). Any Shares not subscribed for in the
Subscription and Community Offering may be offered, subject to Section 3 hereof,
to the general public in a syndicated community offering (the "Syndicated
Community Offering"). It is acknowledged that the number of Shares to be sold in
the Conversion may be increased or decreased as described in the Prospectus (as
hereinafter defined); that the purchase of Shares in the Subscription and
Community Offering is subject to maximum and minimum purchase limitations as
described in the Prospectus; and that the Company and Bank may reject, in whole
or in part, any subscription received in the Community Offering. If the number
of Shares is increased or decreased in accordance with the Plan of Conversion,
the term "Shares" shall mean such greater or lesser number where applicable.

     Concurrently with the execution of this Agreement, the Company is
delivering to Hovde copies of the Prospectus dated _________ ___, 1996 of the
Company to be used in the Subscription Offering and Community Offering (if any),
and, if necessary, will deliver copies of the Prospectus or prospectus
supplement for use in a Syndicated Community Offering and/or Public Offering, as
defined in the Prospectus (as hereinafter defined).

     2. Representations and Warranties of the Company and the Bank. The Company
and the Bank hereby jointly and severally represent and warrant to Hovde that:

          (a) The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement, including exhibits, and
pre-effective amendments thereto, on Form S-1 (No. 333-______ ), including a
prospectus, for the registration of the Shares under the Securities Act of 1933,
as amended (the "1933 Act"), in the form heretofore delivered to Hovde; such
registration statement has become effective under the 1933 Act; and


                                      2
<PAGE>

no order has been issued by the Commission or any applicable state regulatory
authority preventing or suspending the use of the Prospectus with respect
thereto and no proceedings regarding same have been initiated or, to the best
knowledge of the Company, threatened. Except as the context may otherwise
require, such registration statement, as amended, on file with the Commission at
the time the registration statement became effective, including the prospectus,
financial statements, schedules, exhibits and all other documents filed as part
thereof, is herein called the "Registration Statement," and the prospectus on
file with the Commission at the time the Registration Statement became effective
is herein called the "Prospectus," except that if any prospectus filed by the
Company with the Commission in a post-effective amendment or pursuant to Rule
424(b) of the rules and regulations of the Commission promulgated under the 1933
Act (the "Regulations") differs from the prospectus on file at the time the
Registration Statement became effective, the term "Prospectus" shall refer to
the Rule 424(b) prospectus from and after the time it is filed with or mailed
for filing to the Commission and shall include any amendments or supplements
thereto from and after their dates of effectiveness or use, respectively.
Following completion of the Subscription and Community Offering, in the event of
a Syndicated Community Offering, the Company: (i) will promptly file with the
Commission a post-effective amendment to such Registration Statement relating to
the results of the Subscription and Community Offering, any additional
information with respect to the proposed plan of distribution and any revised
pricing information; or (ii) if no such post-effective amendment is required,
will file with, or mail for filing to, the Commission a prospectus or prospectus
supplement containing information relating to the results of the Subscription
and Community Offering and pricing information pursuant to Rule 424(c) of the
Regulations, in either case in a form acceptable to Hovde.

          (b) The Company has filed with the OTS an application for approval of
the acquisition of the Bank by the Company on Form H-(e)1-S (the "Holding
Company Application") promulgated under the savings and loan holding company
provisions of the Home Owner's Loan Act, as amended, and the regulations
promulgated thereunder by the OTS (the Home Owner's Loan Act, as amended,
together with the regulations promulgated thereunder by the OTS, shall
hereinafter be referred to as the "HOLA"). The Holding Company Application has
been approved by the OTS as of ____________ ____, 1996. The Prospectus has been
approved for use by the OTS as of ___________ ____, 1996. No order has been
issued by the OTS preventing or suspending the use of the Prospectus and no
action by or before the OTS to revoke such approvals or authorizations is
pending or, to the best knowledge of the Company or Bank, threatened.

          (c) As of the date of the Prospectus and at all times subsequent
thereto through and including the Closing Date: (i) the Registration Statement
and the Prospectus (as amended or supplemented, if amended or supplemented)
complied and will comply in all material respects with the 1933 Act and the
Regulations; (ii) the Registration Statement (as amended or supplemented, if
amended or supplemented) did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (iii) the Prospectus (as amended or
supplemented, if amended or supplemented) did


                                      3
<PAGE>

not and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, provided, however, that none of the representations and
warranties in this subsection shall apply to statements in or omissions from the
Prospectus, the Registration Statement or any amendment or supplement thereto
made in reliance upon and in conformity with written information furnished to
the Company or the Bank by Hovde expressly regarding Hovde for use under the
caption "The Conversion -- Marketing and Underwriting Arrangements"; and (iv)
any Application (as defined in Section 8) (as amended or supplemented, if
amended or supplemented), other than the Holding Company Application and the
Form AC, did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

          (d) At the date of the Holding Company Application and at all times
subsequent thereto through and including the Closing Date: (i) the Holding
Company Application (as amended or supplemented, if amended or supplemented)
complied and will comply in all material respects with the HOLA; and (ii) the
Holding Company Application (as amended or supplemented, if amended or
supplemented) did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.

          (e) The Bank has filed the Form AC with the OTS in the form heretofore
delivered to Hovde. The Form AC has been approved by the OTS as of ___________
___, 1996. The Proxy Statement has been approved by the OTS as of ____________
___, 1996. The form of stock charter of the Bank has been approved by the OTS as
part of the Form AC. No order has been issued by the Federal Deposit Insurance
Corporation (the "FDIC"), the OTS or any applicable state regulatory authority
preventing or suspending the use of the Proxy Statement and no action by or
before any such governmental entity to revoke any approvals or authorizations is
pending or, to the best knowledge of the Company and the Bank, threatened.

          (f) As of the date of their approval by the OTS and at all times
subsequent thereto, through and including the Closing Date: (i) the Form AC and
the Proxy Statement complied and will comply in all material respects with Title
12, Part 563b of the Code of Federal Regulations (the "Conversion Regulations");
(ii) the Form AC did not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; (iii) the Proxy Statement did not and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; and (iv)
as of the date of the special meeting of the Bank's members with respect to
which the Proxy Statement is being distributed, the Proxy Statement will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated


                                      4
<PAGE>

therein or necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading.

          (g) Except as disclosed in the Registration Statement and the
Prospectus, there is no suit, proceeding, charge, investigation or action
(including, but not limited to, any action related to expressions of
dissatisfaction with the Conversion by any member of the Bank) before or by any
court, regulatory authority or governmental agency or body pending or, to the
best knowledge of the Bank and the Company, threatened against the Bank or the
Company which might materially and adversely affect the Conversion, the
performance by the Bank or the Company of this Agreement or the consummation of
the transactions contemplated by the Plan of Conversion or which might result in
any material adverse change in the condition (financial or otherwise), business,
properties or results of operations of the Bank and the Company, taken as a
whole.

          (h) The execution, delivery and performance of this Agreement and the
issuance and sale of the Shares and the consummation of the transactions
contemplated by this Agreement and the Plan of Conversion have been duly
authorized by all necessary action on the part of the Company and the Bank. The
Plan of Conversion has been duly adopted by the Board of Directors of the Bank,
and the consummation of the transactions contemplated by the Plan of Conversion
has been duly authorized by all necessary action on the part of the Bank. The
Plan of Conversion has not been amended since ___________ ___, 1996, or
terminated and remains in full force and effect. This Agreement has been duly
executed and delivered by the Company and the Bank and is the legal, valid and
binding agreement of the Company and the Bank, enforceable in accordance with
its terms, except as enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the
enforceability of creditors' rights generally or the rights of creditors of
federally chartered savings banks, the accounts of which are insured by the
FDIC, or by general equity principles regardless of whether such enforceability
is considered in a proceeding in equity or at law.

          (i) The Company and the Bank have all such power and authority as may
be required to enter into this Agreement and to carry out the provisions and
conditions hereof. All consents, approvals, authorizations or orders necessary
to permit the issuance and sale of the Shares as provided herein (other than
approvals under the securities or Blue Sky laws of certain states, as to which
no representation is made) contemplated by the Plan of Conversion and this
Agreement, including, but not limited to, the approval of the OTS required to be
received as of the date hereof, have been received, and all transactions
contemplated by the Plan of Conversion will, as of the Closing Date, have been
duly consummated in accordance with all material terms of the Plan of
Conversion, and all regulatory consents, approvals, authorizations and orders,
including, but not limited to, the approval of the OTS (except with respect to
the filing of certain post-sale, post-Conversion reports and documents in
compliance with the OTS's resolutions or letters of approval and approvals under
the securities or Blue Sky laws of certain states, as to which no representation
is made), and any and all applicable waiting periods have expired, or will have
expired by the Closing Date, and all such regulatory consents, approvals,


                                      5
<PAGE>

authorizations and orders, including, but not limited to, the approval of the
OTS, will, as of the Closing Date, be in full force and effect.

          (j) The Company has been duly organized as a an Illinois corporation,
and the Bank has been duly organized as a federally chartered mutual savings
bank, and each of them is validly existing and in good standing under the laws
of the jurisdiction of its organization with full corporate power and authority
to own its property and conduct its business as described in the Registration
Statement and the Prospectus. Each of the Company and the Bank is duly qualified
to transact business and is in good standing in each other jurisdiction in which
the failure to so qualify would have a material adverse effect on the condition
(financial or otherwise) or the business, properties or results of operations of
the Company or the Bank. The Bank does not own equity securities of or an equity
interest in any other business enterprise except as described in the Prospectus.
The Company and the Bank have obtained all material licenses, permits and other
governmental authorizations required for the conduct of their respective
businesses; all such licenses, permits and governmental authorizations are in
full force and effect, and the Company and the Bank are in compliance in all
material respects with all laws, rules, regulations and orders applicable to the
operation of their respective businesses. On the Closing Date, upon amendment of
the Bank's charter and bylaws as provided in the rules and regulations of the
OTS and completion of the sale by the Company of the Shares as contemplated by
the Prospectus: (i) the Bank will be converted pursuant to the Plan of
Conversion to a federally chartered stock savings bank with full power and
authority to own its property and conduct its business as described in the
Prospectus; (ii) all of the outstanding capital stock of the Bank will be owned
of record and beneficially by the Company; and (iii) the Company will have no
direct subsidiaries other than the Bank. At the Closing Date, the Conversion
will have been effected in accordance with all applicable statutes, regulations,
decisions and orders; and, except with respect to the filing of certain
post-sale, post-Conversion reports and documents in compliance with the OTS's
resolutions or letters of approval, all of the terms, conditions, requirements
and provisions of and to the Conversion imposed on the Bank by the OTS will have
been complied with by the Bank in all material respects or appropriate waivers
will have been obtained.

          (k) Each of the Company and the Bank has good and marketable title to,
or valid and enforceable leasehold estates in, all items of real and personal
property which are stated in the Prospectus to be owned or leased by them, in
each case free and clear of all liens, encumbrances, claims, security interests
and defects, other than (i) the lien of the Federal Home Loan Bank of Chicago;
(ii) those referred to in the Prospectus; or (iii) those which individually or
in the aggregate would not have a material adverse effect upon the operations of
the Company or the Bank, taken as a whole, and all of the leases and subleases
material to the business of the Company and Bank under which either of them hold
properties, including those described in the Prospectus, are valid, subsisting
and enforceable leases.

          (l) All contracts and other documents required to be filed as exhibits
to the Registration Statement, the Form AC or the Holding Company Application
have been filed with the Commission or the OTS, as the case may be.


                                      6
<PAGE>

          (m) The financial statements and schedules which are included in the
Registration Statement and Prospectus present fairly the financial condition,
results of operations, retained earnings and cash flows of the Bank at the dates
thereof and for the periods covered thereby and comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act,
the Regulations and the Conversion Regulations. Such financial statements have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, and such financial
statements are consistent with the most recent financial statements and other
reports filed by the Company or the Bank with supervisory and regulatory
authorities, except that the accounting principles employed in such filings
conform to the requirements of such authorities and not necessarily to generally
accepted accounting principles. The tables and other financial, statistical, and
pro forma information and related notes included in the Prospectus that relate
to the Company or the Bank or both of them present fairly in all material
respects the information purported to be shown thereby at the respective dates
thereof for the respective periods covered thereby.

          (n) Subsequent to the respective dates as of which information is
given in the Prospectus, except as may otherwise be disclosed therein, there has
not been: (i) any material adverse change in, or any adverse development that
materially affects, and neither the Company nor the Bank is aware of any
prospective change or development (other than prospective changes or
developments affecting the savings institution industry generally) which
reasonably could be expected to have a material adverse effect on, the condition
(financial or otherwise), business, properties, or results of operations of the
Company and the Bank taken as a whole; (ii) any change in the capital stock, or
material increase in the long-term debt of the Company or the Bank; (iii) the
issuance of any securities or incurrence of any liability or obligation, direct
or contingent, for borrowing other than in the ordinary course of business by
the Company or the Bank; or (iv) any material transactions entered into by the
Company or the Bank other than in the ordinary course of business. The
capitalization, liabilities, assets, properties and business of the Bank conform
in all material respects to the descriptions thereof contained in the Prospectus
and the Registration Statement. The Bank has no material liability of any kind,
contingent or otherwise, except as set forth in the Prospectus.

          (o) No default exists, and no event has occurred which with notice or
passage of time, or both, would constitute a default on the part of the Company
or the Bank in the due performance and observance of any term, covenant or
condition of any contract, lease, indenture, mortgage, deed of trust, note, loan
or credit agreement or any other instrument or agreement to which the Company or
the Bank is a party or by which either of them or any of their respective
properties may be bound or affected in any respect which, in any such case,
would have a material adverse effect on the condition (financial or otherwise),
business, properties or results of operations of the Company or the Bank; such
agreements are in full force and effect; and no other party to any such
agreements has instituted or, to the best knowledge of the Company or the Bank,
threatened, any action or proceeding wherein the Company or the Bank is alleged
to be in default thereunder. As of the date hereof, neither the Company nor the
Bank is, and as of the Closing Date, neither the Company nor the Bank will be:
(i) in breach of any term or provision of its respective articles of
incorporation or charter or bylaws (and the


                                      7
<PAGE>

Bank will not be in violation of its charter or bylaws in stock from upon
consummation of the Conversion); (ii) in violation of any authorization,
approval, judgment, decree or order; or (iii) in violation of any statute, rule
or regulation that individually or in the aggregate would have a material
adverse effect on the Company or the Bank, taken as a whole.

          (p) The execution, delivery and performance of this Agreement and the
Plan of Conversion, the consummation of the transactions contemplated by this
Agreement and the Plan of Conversion, and compliance with the terms and
provisions hereof and thereof will not: (i) conflict with, or result in a
material breach of, any of the terms, provisions or conditions of, or constitute
a default (or an event which with notice or passage of time, or both, would
constitute a default) under, the certificate of incorporation or charter or
bylaws of the Company or the Bank; (ii) conflict with, or result in a material
breach of, any of the terms, provisions or conditions of or constitute a default
(or any event which with notice or passage of time, or both, would constitute a
default) under any material contract, lease, agreement, indenture, mortgage,
deed of trust, note or any other instrument or agreement to which the Company or
the Bank is a party or by which either of them or their respective properties is
bound; (iii) violate any authorization, approval, judgment, decree, order,
statute, rule or regulation applicable to the Company or the Bank or any of
their properties; or (iv) with the exception of the liquidation account
established in the Conversion, result in the creation of any lien, charge or
encumbrance upon any of the assets of the Company or the Bank.

          (q) The Conversion, when consummated in accordance with the terms of
the Plan of Conversion, will conform in all material respects to the description
thereof contained in the Prospectus and the Proxy Statement. The issuance and
sale of the capital stock of the Bank to the Company have been duly authorized
by all necessary action of the Bank, the Company and appropriate regulatory
authorities and such capital stock, when issued and paid for in accordance with
the terms of the Plan of Conversion, will be fully paid and non-assessable, will
conform in all material respects to the description thereof contained in the
Prospectus and the Form AC and will not be subject to any preemptive rights.
There are no options, agreements, contracts or other rights to purchase or
acquire any shares of Common Stock or shares of the Bank's common stock (other
than Subscription Rights, the purchase of the Bank common stock by the Company
pursuant to the Conversion, rights to purchase or acquire Common Stock pursuant
to benefit plans of the Company as expressly described in the Prospectus and any
other rights expressly described in the Plan of Conversion). The issuance and
sale of the Shares by the Company have been duly authorized: (i) by all
necessary action of the Company; and (ii) subject to the receipt of OTS
approvals prior to the Closing Date, by the OTS. The Shares, when issued and
paid for in accordance with the terms of the Plan of Conversion, will be duly
and validly issued and fully paid and non-assessable, will conform in all
material respects to the description thereof contained in the Prospectus and
will not be subject to any preemptive rights. The purchasers of the Shares from
the Company, upon issuance thereof against payment therefor, will acquire such
Shares free and clear of all claims, encumbrances, security interests and liens
whatsoever created or suffered to be created by the Company. The certificates
representing the Shares will conform with the requirements of applicable laws
and regulations. Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of


                                      8
<PAGE>

the Company will be within the range that is set forth in the Prospectus under
the caption "Capitalization," based on the assumptions stated therein.

          (r) No approval of any regulatory or supervisory or other public
authority is required in connection with the execution and delivery of this
Agreement or the issuance of the Shares, except for the declaration of
effectiveness of the Registration Statement and any required post-effective
amendment to the Registration Statement by the Commission, approval of the Form
AC and Proxy Statement and other marketing materials by the OTS, the issuance of
the Bank's federal stock charter and bylaws by the OTS, the approval of the
holding Company Application by the OTS and any necessary qualification or
registration under the securities or Blue Sky laws of the various states in
which the Shares are to be offered and as may be required under the regulations
of The Nasdaq National Market.

          (s) KPMG Peat Marwick LLP, the firm which has certified the financial
statements of the Bank included in the Prospectus, are independent certified
public accountants, as required by the 1933 Act, the Regulations and the
Conversion Regulations.

          (t) Capital Resources Group, Inc., which has prepared the Bank's
conversion valuation appraisal report dated as of September _____, 1996 and
updated as of __________ ___, 1996 (the "Appraisal"), which Appraisal (as
amended or supplemented, if amended or supplemented) is referred to in the
Prospectus, is independent with respect to the Company and the Bank within the
meaning of the Conversion Regulations and is believed by the Company and the
Bank to be experienced and expert in rendering corporate appraisals of thrift
institutions.

          (u) The Company and the Bank have filed all federal income and state
and local franchise tax returns required to be filed (or have timely filed
extensions therefor) and have made timely payments of all taxes due and payable
in respect of such returns, and no deficiency has been asserted with respect
thereto by any taxing authority.

          (v) Neither the Company nor the Bank or, to the best knowledge of the
Company or the Bank, any employee of the Company or the Bank has made any
payment of funds of the Company or the Bank which would be prohibited by law,
and no funds of the Company or the Bank have been set aside to be used for any
payment so prohibited by law. Neither the Company nor the Bank, or, to the best
knowledge of the Company and Bank, any employee of the Company or the Bank has
made any payment of funds of the Company or the Bank as a loan for the purchase
of Shares. The Company and the Bank are in compliance with the applicable
financial record-keeping and reporting requirements of the Currency and Foreign
Transaction Reporting Act of 1970, as amended, and the regulations and rules
thereunder.

          (w) The Company has received approval, subject to notice of issuance,
to have the Shares quoted on The Nasdaq National Market effective on the Closing
Date.

          (x) The Company is a savings and loan holding company duly registered
with the OTS. The deposit accounts of the Bank are insured by the Savings Bank
Insurance Fund of the FDIC up to the maximum amount allowed under law, and no
proceeding for the termination


                                      9
<PAGE>

or revocation of such insurance is pending or, to the best knowledge of the
Company and the Bank, threatened. The Bank is a member in good standing of the
Federal Home Loan Bank of Chicago. Neither the Company nor the Bank is in
violation of any directive, order, agreement or understanding from the FDIC, the
OTS or any other agency to make any material change in the method of conducting
its business so as to comply in all material respects with all applicable
statutes and regulations (including, without limitation, regulations, decisions,
directives and orders of the FDIC and the OTS).

          (y) Neither the Company nor the Bank has relied upon Hovde or Hovde's
legal counsel for any legal, tax or accounting advice in connection with the
Conversion.

          (z) Neither the Company nor the Bank is required to be registered
under the Investment Company Act of 1940, as amended.

          (aa) There are no contracts, agreements or understandings between the
Company or the Bank and any person granting such person the right to require the
Company or the Bank to file a registration statement under the 1933 Act with
respect to any securities of the Company or the Bank owned or to be owned by
such person or to require the Company or the Bank to include such securities in
the Registration Statement or in any other registration statement filed by the
Company or the Bank under the 1933 Act.

          (ab) Neither the Company nor the Bank has: (i) issued any securities
within the last 18 months (except for notes to evidence other bank loans and
reverse repurchase agreements or other liabilities and the issuance of the
minimum number of shares of Common Stock by the Company necessary to conduct
business as a corporation in Illinois); (ii) had any material dealings with
respect to sales of its securities within the 12 months prior to the date hereof
with any member of the National Association of Securities Dealers, Inc. (the
"NASD"), or any person related to or associated with such member, other than
discussions and meetings with Hovde relating to the Conversion; (iii) entered
into a financial or management consulting agreement with any member of the NASD
with respect to its securities or any person related to or associated with such
member, except as contemplated hereunder and except in connection with the
Conversion as described in the Prospectus under the caption "The Conversion
Marketing and Underwriting Arrangements"; or (iv) engaged any intermediary
between Hovde and the Company in connection with the offering of the Shares, and
no person is being compensated in any manner for such service.

     3. Appointment of Hovde; Sale and Delivery of the Shares. Subject to the
terms and conditions herein set forth, the Company and the Bank hereby appoint
Hovde as their agent to consult with and advise the Company and the Bank, and to
solicit subscriptions and purchase orders for Shares on behalf of the Company
and the Bank on a best efforts basis, in connection with the Company's sale of
the Shares in the Subscription Offering, the Community Offering, if any, and the
Syndicated Community Offering, if any. On the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, Hovde accepts such appointment and agrees to provide, consult with and
advise the Company and the


                                      10
<PAGE>

Bank as to the Conversion services set forth as Exhibit A to the letter
agreement between Hovde and the Bank dated as of February 15, 1996, which
Exhibit A is incorporated by reference herein; provided, however, that Hovde
shall not be obligated to take any action which is inconsistent with any
applicable laws, regulations, decisions or orders and, provided further, that
Hovde shall not be responsible for obtaining subscriptions or purchase orders
for any specific number of Shares and shall not be required to purchase any
Shares. The appointment of Hovde hereunder shall terminate upon consummation of
the Conversion. Except where specifically incorporated by reference herein, this
Agreement supersedes all other letter agreements, engagement letters or other
agreements previously entered into between Hovde and the Company and/or the
Bank.

     In connection with the solicitation of offers to buy Shares in the
Syndicated Community Offering, if any, Hovde may use the services of other
brokers or dealers ("Selected Dealers") acceptable to the Company in its
reasonable discretion and, in that connection, it may invite (if requested to do
so by the Company) any Selected Dealer to become a "Sponsoring Dealer," that is,
a Selected Dealer who will solicit offers which result in sales on behalf of the
Company of at least the number of Shares specified by Hovde. Each Selected
Dealer, including each Sponsoring Dealer, shall enter into a Selected Dealer
Agreement substantially in the form attached hereto as Exhibit A.

     In the event the Company is unable to sell all of the minimum number of
Shares within the period provided in the Plan of Conversion and the Conversion
Regulations, and as described in the Prospectus, this Agreement shall terminate
and the Company shall refund to any persons who have subscribed for any of the
Shares the full amount which it may have received from them, together with
interest as provided in the Prospectus, and no party to this Agreement shall
have any obligation to the others hereunder, except for payment by the Company
as set forth in Sections 6, 8(a) and 8(d) hereof and payment by Hovde as
provided in Sections 8(b) and 8(d). Appropriate arrangements for placing the
funds received from subscriptions for Shares or other offers to purchase Shares
in special interest-bearing accounts with the Bank pending consummation or
termination of the Subscription Offering, Community Offering (if any) and
Syndicated Community Offering (if any) were made prior to the commencement of
the Subscription and Community Offering, with provision for refund to the
purchasers as set forth above, or for delivery to the Company if all of the
Shares are sold.

     If all of the minimum number of Shares are sold and all other conditions
precedent to the consummation of the Conversion are satisfied, the Company
agrees to issue or have issued the Shares sold and to release for delivery
certificates for such Shares on the Closing Date against payment therefor by
release of funds from the special interest-bearing accounts referred to above
and from a special account which the Company agrees to establish prior to the
retention of any Selected Dealer. The closing shall be held at the offices of
Thacher Proffitt & Wood, Two World Trade Center, New York, New York 10048 at
9:00 a.m., local time, or at such other place and time as shall be agreed upon
by the parties hereto, on a business day to be agreed upon by the parties
hereto. The Company shall notify Hovde by telephone, confirmed in writing, when
funds shall have been received for all of the Shares. Certificates for Shares
shall


                                      11
<PAGE>

be delivered directly to the purchasers thereof or in accordance with the
Company's directions. Notwithstanding the foregoing, certificates for Shares
purchased through Selected Dealers shall be made available to Hovde for checking
at least 24 hours prior to the Closing Date at such office as Hovde and the
Company shall mutually designate. The hour and date upon which the Company shall
release for delivery all of the Shares, in accordance with the terms hereof, are
herein called the "Closing Date."

     The Company and the Bank (or their respective agents) shall advise Hovde,
whenever an allocation of the Shares does not strictly correspond to all
subscriptions for Shares, as to the allocation of the Shares. Hovde shall have
no liability to any party for the records or other information provided by the
Company and the Bank (or their respective agents) to Hovde for use in allocating
the Shares. The Company and the Bank shall indemnify and hold harmless Hovde for
any liability arising out of the allocation of the Shares in accordance with the
Plan of Conversion generally and the records or other information provided to
Hovde by the Company and the Bank (or their respective agents).

     The Company will pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares.

     In addition to the expenses specified in Section 6 hereof, Hovde has
received or will receive the following compensation from the Company for Hovde's
services hereunder:

          (a) A management fee of $37,500 has been paid to Hovde.

          (b) For services rendered by Hovde in connection with the sale of
Shares in the Subscription Offering, the Community Offering (if any) and the
Syndicated Community Offering (if any), a fee equal to one and three quarters
percent (1.75%) of the aggregate purchase price of Shares sold in the
Subscription Offering, excluding Shares sold to the Company's directors,
officers and employees (or members of their immediate families) and the ESOP,
and three percent (3%) of the aggregate purchase price of shares sold in the
Direct Community Offering. The sales commissions due Hovde shall be paid to
Hovde at Closing.

          (c) In connection with the solicitation of offers to buy Shares in the
Syndicated Community Offering (if any), Hovde and the Company agree to negotiate
an additional fee in an amount up to seven percent (7%) of the aggregate
purchase price of Shares sold in the Syndicated Community Offering, which fee
shall be paid to Hovde at Closing for allocation by Hovde in accordance with the
Selected Dealers Agreement.

     The fees specified in clauses (b) and (c) above shall be payable to Hovde
by wire transfer of immediately available funds or a check in next-day funds, as
agreed to by the parties hereto, at the time so indicated above.

     Notwithstanding anything to the contrary contained in this Agreement (but
subject to Section 10 hereof) Hovde reserves the right to renegotiate the amount
of fees (but only in those


                                      12
<PAGE>

circumstances where the conduct of the Company or the Bank triggers the need for
renegotiation pursuant to this paragraph) and expenses payable or reimbursable,
as the case may be, by the Company and the Bank in the event that (i) the
Company and/or the Bank are required to resolicit subscribers for Shares in the
Subscription and Community Offering, or (ii) the regulations governing the
Conversion are changed in a manner that Materially affects the ability of Hovde
to perform its duties as set forth in this Agreement. Until any renegotiation
called for by this paragraph is completed, Hovde shall not accrue expenses
relating to any resolicitation or change in regulations in an amount that would
cause the total expenses incurred by Hovde, that are reimbursable by the Bank
pursuant to Section 6 hereof, to be greater than $ ______, without the prior
written consent of the Company or the Bank, which consent shall not be
unreasonably withheld.

     4. Offering. The Company is offering up to 2,012,500 Shares (which number
may be increased to up to 2,314,375 shares in the event of an oversubscription
or decreased as described in the Prospectus) in the Subscription Offering and
Community Offering, if any, and, if any Shares remain unsubscribed at the
conclusion of the Subscription Offering and Community Offering, if any, in the
Syndicated Community Offering.

     5. Covenants of the Company and the Bank. The Company and the Bank jointly
and severally covenant and agree with Hovde that:

          (a) The Company shall immediately upon the receipt of any information
concerning the events listed below notify Hovde and promptly confirm the notice
in writing: (i) when any post-effective amendment to the Registration Statement
or any supplement to the Prospectus has been filed; (ii) of the issuance by the
Commission of any order or other action suspending the use of the Prospectus or
of the initiation or the threat of any such action; (iii) of the receipt of any
notice with respect to the suspension of the qualification of the Shares for
offering or sale in any jurisdiction; and (iv) of the receipt of any comments or
requests for additional information or any amendment or supplement from the
staff of the Commission relating to the Registration Statement. The Company will
use its reasonable, good faith and diligent efforts to prevent the issuance by
the Commission or any other governmental authority of any such order and, if any
such order shall at any time be issued, to obtain the lifting, termination or
withdrawal thereof at the earliest possible time.

          (b) During the time when a prospectus is required to be delivered
under the 1933 Act, the Company will comply with all requirements imposed upon
it by the 1933 Act, as now in effect and hereafter amended, and by the
Regulations, as from time to time in force, so far as necessary to permit the
continuance of offers and sales of or dealings in the Shares in accordance with
the provisions hereof and the Prospectus. If, at any time when the Prospectus is
required to be delivered under the 1933 Act, any event shall have occurred as a
result of which, in the opinion of counsel for the Company or counsel for Hovde,
the Prospectus as then amended or supplemented includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at


                                      13
<PAGE>

any time to amend or supplement the Prospectus to comply with the 1933 Act, the
Company shall promptly notify Hovde in writing and prepare and file with the
Commission an appropriate amendment or supplement. The Company shall provide
Hovde and Hovde's counsel notice of the Company's intention to file any
amendment or supplement to the Registration Statement or the Prospectus and
shall not file or use any amendment or supplement to the Registration Statement
or the Prospectus of which Hovde has not first been furnished a copy and given a
reasonable amount of time to review such copy or to which Hovde shall reasonably
object. For the purposes of and during the time frame contemplated by this
subsection (b), each of the Company and the Bank shall timely furnish such
information with respect to itself as Hovde may from time to time reasonably
request. The Bank shall not amend, without Hovde's prior written consent (which
consent shall not be unreasonably withheld), the Plan of Conversion in any
manner that, in the reasonable opinion of Hovde, would materially and adversely
affect the sale of the Shares or the terms of this Agreement. Prior to the
Closing Date, neither the Company nor the Bank shall issue any press release or
other public communication with respect to the Company or the Bank or the
Conversion without first providing to Hovde a copy of such release or other
communication and allowing Hovde a reasonable amount of time to review such
copy. Except as otherwise required by law, neither the Company nor the Bank
shall issue any release or other communication prior to the Closing Date to
which Hovde shall reasonably object.

          (c) The Bank shall not file any amendment or supplement to the Form
AC, including the Bank's Proxy Statement and Prospectus contained therein,
without notifying Hovde and without providing Hovde and Hovde's counsel an
opportunity to review such amendment. The Bank shall not file any amendment or
supplement to the Form AC to which Hovde shall reasonably object. Hovde shall
have a reasonable amount of time to review any amendment or supplement to the
Form AC.

          (d) The Company or the Bank shall immediately upon receipt of any
information concerning the events listed below notify Hovde and promptly confirm
the notice in writing: (i) of the request by the OTS, or any other governmental
entity, for any amendment or supplement to the Form AC or for additional
information relating to the Form AC or the holding Company Application; or (ii)
of the issuance by the OTS, or any other governmental entity, of any order or
other action suspending the use of the Prospectus, Proxy Statement or any other
filing of the Bank under the HOLA or other applicable law or regulations, or the
initiation or threat of any such action. The Company and the Bank will each use
its reasonable, good faith and diligent efforts to prevent the issuance by the
OTS, or any other governmental entity, of any such order and, if any such order
shall at any time be issued, to obtain the lifting, termination or withdrawal
thereof at the earliest possible time.

          (e) During the time when the Proxy Statement is required to be
delivered under the Conversion Regulations, the Bank will comply with all
requirements imposed upon it by the Conversion Regulations. If, at any time
prior to the date of the Special Meeting (as defined in the Prospectus) of the
Bank's members with respect to which the Proxy Statement is delivered, any event
shall have occurred as a result of which, in the opinion of counsel for the Bank
or counsel for Hovde, the Proxy Statement includes an untrue statement of a
material fact


                                      14
<PAGE>

or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or supplement
the Proxy Statement to comply with the Conversion Regulations, the Bank shall
notify Hovde in writing and prepare and file with the OTS, at the Bank's
expense, an appropriate amendment or supplement. The Bank shall not file or use
any amendment or supplement to the Proxy Statement of which Hovde has not first
been furnished a copy or to which Hovde shall reasonably object. For the purpose
of and during the time frame contemplated by this subsection (e), the Bank shall
timely furnish such information with respect to itself as Hovde may from time to
time reasonably request.

          (f) The Company and the Bank shall deliver to Hovde, without charge,
such number of copies of the Registration Statement (including all exhibits),
the Holding Company Application (including all exhibits) and the Form AC
(including all exhibits) as originally filed and each amendment, including,
without limitation, any post-effective amendment, thereto as Hovde may
reasonably request. The Company will furnish to Hovde, from time to time during
such period as the Prospectus is required by law to be delivered in connection
with offers and sales of the Shares, such number of copies of the Prospectus (as
amended or supplemented, if amended or supplemented) as Hovde may reasonably
request. The Company authorizes Hovde, all members of any selling group which
may be formed in connection with the distribution of the Shares, and all dealers
to whom any of the Shares may be sold by members of the selling group, to use
the Prospectus (as amended or supplemented, if amended or supplemented) in
connection with the sale of the Shares.

          (g) The Company and the Bank have taken or shall take all necessary
action, in cooperation with Hovde, to qualify or register the Shares for offer
and sale by the Company under the securities or "Blue Sky" laws of such
jurisdictions in which the Shares are required by the Conversion Regulations to
be offered or as Hovde and the Company shall reasonably agree to designate;
provided, however, that neither the Company nor the Bank shall be obligated to
qualify as a foreign corporation to do business under the laws of any such
jurisdiction or to file any general consent to service of process.

          (h) The Company shall make generally available to its security holders
as soon as practicable, but not later than the first day of the 15th full
calendar month following the effective date of the Registration Statement, an
earnings statement of the Company and its consolidated subsidiaries (which need
not be certified by independent certified public accountants unless required by
the 1933 Act or the Regulations, but which shall satisfy the provisions of Rule
158 under the 1933 Act) covering a period of at least 12 months beginning after
the effective date of the Registration Statement.

          (i) Title Company shall file a registration statement for the Common
Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to completion of the stock offering pursuant to the
Plan of Conversion and will request that such registration statement be
effective upon completion of the Conversion. The Company will maintain the
effectiveness of such registration for not less than three years. The Company
will


                                      15
<PAGE>

use its reasonable, good faith and diligent efforts to obtain approval for and
maintain quotation of the Shares on The Nasdaq National Market effective on or
prior to the Closing Date. The Company will not sell or issue, contract to sell
or otherwise dispose of, for a period of 90 days after the Closing Date, without
Hovde's prior written consent, which consent shall not be unreasonably withheld,
any shares of Common Stock other than in connection with any plan or arrangement
described in the Prospectus (and the Company shall notify Hovde of any such
sale, issuance, contract or disposition pursuant to such plan or arrangement).

          (j) During the period of three years hereafter, the Company shall
furnish: (i) to its security holders and to Hovde, as soon as practicable after
the end of each fiscal year of the Company, an audited balance sheet and
statements of operations, stockholders' equity and changes in financial position
as at the end of and for such year; (ii) to Hovde, as soon as practicable after
the end of each of the first three quarters of each fiscal year, a balance sheet
and statement of operations of the Company (which need not be audited) as at the
end of and for such quarter and the year to date and as at the end of and for
the corresponding periods of the preceding fiscal year; (iii) to Hovde, as soon
as available, a copy of each other report of the Company mailed to its
stockholders or filed with the Commission pursuant to the Exchange Act or
otherwise (including, without limitation, reports on Forms 10-K, 10-Q and 8-K,
and all proxy statements and annual reports to stockholders), or the OTS or any
other supervisory or regulatory authority or any national securities exchange or
system on which any class of securities of the Company is listed or quoted,
including, but not limited to, the Nasdaq National Market, other than on a
confidential basis; (iv) to Hovde, each press release and material news item and
article released by the Company or the Bank; and (v) such additional publicly
available documents and information with respect to and issued or prepared by
the Company and the Bank as Hovde may reasonably request. During any period when
the Company has an active subsidiary or subsidiaries, such financial statements
will be on a consolidated basis to the extent the accounts of the Company and
its subsidiary or subsidiaries are consolidated.

          (k) The Company shall furnish to Hovde as early as practicable prior
to the Closing Date, but no later than two full business days prior thereto, a
copy of the latest available unaudited interim financial statements of the Bank
which have been read by KPMG Peat Marwick LLP, as stated in their letters to be
furnished pursuant to subsections (g) and (h) of Section 7 hereof.

          (l) The Company and the Bank shall take such actions and furnish such
information as are reasonably requested by Hovde in order for Hovde to ensure
compliance with the NASD's "Interpretation Relating to Free-Riding and
Withholding."

          (m) The Company shall not deliver the Shares until the Company and the
Bank each have satisfied or caused to be satisfied each condition set forth in
Section 7 hereof unless such condition is waived. The Company and the Bank shall
use their reasonable, good faith and diligent efforts to comply with or cause to
be complied with the conditions precedent to the obligations of Hovde as
specified in Section 7 hereof.



                                      16
<PAGE>

          (n) Prior to the Closing Date, the Company and the Bank shall conduct
their respective businesses in compliance with, in all material respects, all
applicable federal and state laws, rules, regulations, decisions, directives and
orders, including all decisions, directives and orders of the FDIC and the OTS
and consistent with prior business practices of the Company and the Bank.

          (o) The Company and the Bank shall comply with any and all terms,
conditions, requirements and provisions with respect to the Conversion and the
transactions contemplated thereby imposed by the OTS, the HOLA, the Commission,
the 1933 Act, the Regulations (including, without limitation, the filing of
reports on Form SR pursuant to Rule 463 of the Regulations or any successor
provision), the Exchange Act and the regulations promulgated by the Commission
pursuant to the Exchange Act to be complied with subsequent to the Closing Date.
The Company will comply with all provisions of all undertakings contained in the
Registration Statement. The liquidation account for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders (as defined in the
Prospectus) of the Bank shall be duly established and maintained in accordance
with the requirements of the OTS.

          (p) The Company shall apply the proceeds from the sale of the Shares
in the manner set forth in the Prospectus under the caption "Use of Proceeds."

     6. Payment of Expenses. Whether or not the sale of the Shares by the
Company is consummated, the Bank shall pay all expenses incident to the
performance of the obligations of the Company and the Bank under this Agreement,
including but not limited to the following: (a) the preparation, printing,
issuance and delivery of certificates for the Common Stock; (b) the fees and
disbursements of the Company's and the Bank's counsel, accountants and other
advisors; (c) the printing and delivery to Hovde in such quantities as Hovde
shall reasonably request of copies of the Registration Statement, the
Prospectus, the Proxy Statement, the Form AC and the Holding Company Application
as originally filed and as amended or supplemented and all other documents in
connection with the Conversion and this Agreement; (d) the fees for listing the
Shares on The Nasdaq National Market; (e) fees and expenses relating to the
preparation of the independent appraisal and all updates thereof; (f) fees and
expenses relating to advertising expenses, temporary personnel expenses and
conversion center expenses, investor meeting expenses, and other miscellaneous
expenses relating to the marketing of the Common Stock; (g) the fees and charges
of any transfer agent, registrar and other agents; (h) the preparation,
printing, filing, delivery and shipping of the Prospectus (including the
financial statements contained therein), and any amendments or supplements
thereto, this Agreement and related agreements and communications and related
documents; (i) filing fees and expenses in connection with the qualification or
registration of the Shares for offer and sale by the Company under the
securities or "Blue Sky" laws, including reasonable fees and expenses of counsel
in connection with such qualification or registration and all "Blue Sky"
memoranda; and (j) filing fees paid or incurred by Hovde in connection with the
filings with the NASD. In the event Hovde incurs any of the fees or expenses
enumerated above in connection with the Subscription Offering, the Community
Offering or the Syndicated Community Offering, the Bank will reimburse Hovde for
such fees and expenses; provided, however, that Hovde shall not incur any


                                      17
<PAGE>

substantial expenses on behalf of the Bank or the Company without the prior
written consent of the Bank or the Company. In addition, the Bank shall
reimburse Hovde for out-of-pocket expenses incurred by Hovde relating to the
offering of the Shares (including, without limitation, legal fees and
out-of-pocket disbursements of Hovde's legal counsel); provided, however,
subject to Section 3 hereof, that such out-of-pocket expenses of Hovde shall not
exceed $45,000 without the prior written consent of the Company or the Bank.

     7. Conditions of Obligations of Hovde. The Company, the Bank and Hovde
agree that all obligations of Hovde provided herein shall be subject to the
accuracy of the representations and warranties contained herein as of the date
hereof and as of the Closing Date, to the accuracy of the statements of officers
and directors of the Company and the Bank made pursuant to the provisions
hereof, to the performance by each of the Company and the Bank of its
obligations hereunder to be performed at or prior to the Closing Date, and to
the following conditions:

          (a) At the Closing Date, Hovde shall receive the favorable opinion of
Thacher Profit & Wood, counsel for the Company and the Bank, dated the Closing
Date, addressed to Hovde, in form and substance satisfactory to counsel for
Hovde and to the effect that:

               (i) The Company has been duly incorporated and is validly
     existing as a corporation in good standing under the laws of the State of
     Illinois and has full corporate power and authority to own its properties
     and conduct its business as described in the Prospectus; and the Company is
     duly qualified to transact business and is in good standing in each other
     jurisdiction in which the failure to so qualify would have a material
     adverse effect on the condition (financial or otherwise), or the business,
     properties or results of operations of the Company;

               (ii) The Bank has, prior to the Closing Date, been duly organized
     and is validly existing as a federally chartered mutual savings bank under
     the laws of the United States with full corporate power and authority to
     own its properties and to conduct its business as described in the
     Prospectus and, as of the Closing Date, the Bank will become duly organized
     and validly existing as a federally chartered capital stock savings bank in
     good standing under the laws of the United States with full corporate power
     and authority to own its properties and to conduct its business as
     described in the Prospectus; and the Bank is duly qualified to transact
     business in each jurisdiction in which the failure to so qualify with have
     a material adverse effect on the condition (financial or otherwise), or the
     business, properties or results of operations of the Bank. The Bank is a
     member of the Federal Home Loan Bank of Chicago, and the deposit accounts
     of the Bank are insured by the Savings Bank Insurance Fund of the FDIC up
     to the maximum amount allowed under law;

               (iii) The activities of the Bank described in the Prospectus are
     permitted under federal law (and not expressly prohibited under the
     Illinois Business Corporation Act) to subsidiaries of a savings bank
     holding company that is a Illinois business


                                      18
<PAGE>

     corporation. To the best of such counsel's knowledge, each of the Company
     and the Bank has obtained all licenses, permits, and other governmental
     authorizations that are material for the conduct of its business, and all
     such licenses, permits and other governmental authorization are in full
     force and effect, and to the best of such counsel's knowledge the Company
     and the Bank are complying therewith in all material respects;

               (iv) The Plan of Conversion complies with, and to the best of
     such counsel's knowledge the Conversion has been effected in all material
     respects in accordance with, all applicable laws, rules, regulations,
     decisions and orders; and to the best of such counsel's knowledge all of
     the terms, conditions, requirements and provisions with respect to the Plan
     of Conversion and the Conversion (including those with respect to the
     Subscription and Community Offering and the Syndicated Community Offering)
     imposed by the OTS in writing or orally communicated to such counsel, the
     Company or the Bank have been complied with by the Company and the Bank in
     all material respects or appropriate waivers have been obtained;

               (v) As of the Closing Date, the Company has authorized Common
     Stock as set forth in the Registration Statement and the Prospectus and the
     description of such Common Stock in the Registration Statement and the
     Prospectus is accurate and complete in all material respects. Other than as
     expressly disclosed in the Prospectus or in the certificate of
     incorporation, charter, bylaws or minute books of the Company, to the best
     of such counsel's knowledge, there is no commitment, plan or arrangement to
     issue, and no outstanding option, warrant or other right calling for the
     issuance or sale of, any shares of capital stock of the Company or the Bank
     or any security or other instrument which by its terms is convertible into,
     exercisable for or exchangeable for capital stock of the Company or of the
     Bank. To the best of such counsel's knowledge, there are no options,
     agreements, contracts or other rights in existence to purchase or acquire
     from the Company any issued and outstanding shares of the common stock of
     the Bank;

               (vi) The issuance and sale of the Shares have been duly and
     validly authorized by all necessary action on the part of the Company and
     have received all necessary regulatory approvals; the Shares, when issued
     and paid for in accordance with the terms of the Plan of Conversion and
     this Agreement, will be duly and validly issued and fully paid and
     nonassessable and not subject to any preemptive rights, and the purchasers
     of the Shares from the Company, upon issuance thereof against payment
     therefor, will acquire such Shares free and clear of all claims,
     encumbrances, security interests and liens whatsoever created or suffered
     to be created by the Company (other than encumbrances created by statute or
     regulation);

               (vii) The issuance and sale of the capital stock of the Bank to
     the Company, the Plan of Conversion and the Conversion have been duly
     authorized by all necessary action of the Bank and have received the
     approval of the OTS and such capital stock, when issued and paid for in
     accordance with the terms of the Plan of Conversion,


                                      19
<PAGE>

     will be validly issued, fully paid and non-assessable and owned
     beneficially and of record by the Company;

               (viii) The certificates for the Shares comply with applicable
     requirements of Illinois law;

               (ix) The execution, delivery and performance of this Agreement
     and the consummation of the transactions contemplated hereby have been duly
     and validly authorized by all necessary action on the part of the Company
     and the Bank, and this Agreement constitutes the legal, valid and binding
     agreement of the Company and the Bank, enforceable in accordance with its
     terms (except as the enforceability thereof may be limited by bankruptcy,
     insolvency, moratorium, reorganization or similar laws affecting the
     enforceability of creditors' rights generally or the rights of creditors of
     federally chartered savings banks, the accounts of which are insured by the
     FDIC or by general equity principles, regardless of whether such
     enforceability is considered in a proceeding in equity or at law);

               (x) Except as set forth in the Prospectus, there are no material
     legal or governmental proceedings pending or, to the best of such counsel's
     knowledge, threatened against, or involving the properties of, the Company
     or the Bank required to be disclosed in the Prospectus that have not been
     disclosed therein; provided that for this purpose, any litigation or
     governmental proceeding is not considered to be "threatened" unless the
     potential litigant or governmental authority has manifested to the
     management of the Company or the Bank, or to such counsel, a present
     intention to initiate such litigation or proceeding;

               (xi) The statements in the Prospectus under the captions "Market
     for the Common Stock," "Dividend Policy," "Regulation," "Restrictions on
     Acquisition of the Company and the Bank," "Description of Capital Stock of
     the Company" and "Description of Capital Stock of the Bank," insofar as
     they constitute statements of law or legal conclusions, are correct in all
     material respects;

               (xii) The Holding Company Application, the Form AC (including the
     Prospectus, the Plan of Conversion and the Proxy Statement), the form of
     stock charter and the Proxy Statement have been approved by the OTS; the
     stock charter when issued to the Bank will be in full force and effect; the
     Registration Statement has been declared effective by the Commission; the
     OTS has issued its order of approval under the savings and loan holding
     company provisions of the HOLA, and, subject to the satisfaction of the
     conditions of the OTS's approval of the Conversion, no further approval of
     any other governmental authority is required for the Conversion and the
     issuance and sale of the Shares except any necessary qualifications or
     registration under the securities or "Blue Sky" laws of the various
     jurisdictions in which the Shares are offered (as to which no opinion need
     be rendered) and any approvals of the NASD and The Nasdaq National Market;
     and no action has been taken or is pending or, to the best of such
     counsel's


                                      20
<PAGE>

     knowledge, threatened or contemplated, to revoke such approvals or to
     suspend the use of the Prospectus or the Proxy Statement;

               (xiii) The execution, delivery and performance of this Agreement
     and the issuance and sale of the Shares will not result, and the
     consummation of the transactions contemplated by the Plan of Conversion has
     not resulted and will not result, in a breach or violation of any of the
     terms and provisions of, or constitute a default under or, with exception
     of the liquidation account established in the Conversion, as described in
     the Plan of Conversion and the Prospectus, result in the creation or
     imposition of any lien, charge or other encumbrance upon (A) any of the
     properties or assets of the Company or the Bank that individually or in the
     aggregate would have a material adverse effect on the Company or the Bank,
     taken as a whole, (B) the certificate of incorporation, charter or bylaws
     of the Company or the Bank (in mutual or stock form), or (C) any order,
     statute, rule, regulation of any governmental agency or body or any court
     having jurisdiction over the Company or the Bank or any of their
     properties, except for violations of any such statute, rule or regulation
     that do not, either individually or in the aggregate, have a material
     adverse effect on the Company or the Bank, taken as a whole, or (D) any
     material agreement or instrument to which the Company or the Bank is a
     party or by which the Company or the Bank is bound or to which any of the
     properties of the Company or the Bank are subject;

               (xiv) To the best of such counsel's knowledge, based upon the
     conferences and other investigations referred to in subsection 7(b) below,
     the Company and the Bank have good and marketable title to, or valid and
     enforceable leasehold estates in, the items of real and personal property
     stated in the Prospectus to be owned or leased by them and are material to
     their business, in each case free and clear of all liens, encumbrances,
     claims, security interests and defects, other than (i) the lien of the
     Federal Home Loan Bank of Chicago, (ii) those referred to in the Prospectus
     and (iii) those which individually or in the aggregate would not have a
     material effect upon the operations of the Company or the Bank, taken as a
     whole.

               (xv) To the best of such counsel's knowledge, neither the Company
     nor the Bank is presently: (i) in breach of, or in default (nor has an
     event occurred which with notice or passage of time or both would
     constitute a material default) under, any material indenture, mortgage,
     deed of trust, note, loan or credit agreement or any other instrument or
     agreement to which the Company or the Bank is party or by which either of
     them or any of their respective properties may be bound or affected, which
     contravention would be material to the business of the Company or the Bank
     taken as a whole; or (ii) in violation of any term or provision of its
     articles of incorporation, charter or bylaws;

               (xvi) The Registration Statement and the Prospectus (in each case
     as amended or supplemented, if so amended or supplemented) comply as to
     form in all material respects with the requirements of the 1933 Act and the
     rules, regulations, and


                                      21
<PAGE>

     all written decisions and orders of the Commission (including, without
     limitation, the Regulations) (except as to financial statements, notes to
     financial statements, financial tables, the appraisal and other financial
     and statistical data included therein as to which no opinion need be
     expressed) and the Form AC (including the Proxy Statement) (as amended or
     supplemented, if so amended or supplemented) (except as to financial
     statements, notes to financial statements, financial tables, the appraisal,
     business plan and other financial and statistical data included therein as
     to which no opinion need be expressed) complies as to form in all material
     respects with the requirements of the Conversion Regulations and any other
     applicable federal laws or regulations, decisions or orders of the OTS; and

               (xvii) To the best of such counsel's knowledge, neither the
     Company nor the Bank is in violation of any directive, order, agreement or
     understanding from or with the FDIC, the OTS or any applicable state
     regulatory agency to make any material change in he method of conducting
     its business.

     In rendering such opinion, such counsel may rely as to matters of fact on
certificates of officers, trustees and directors of the Company and the Bank and
certificates of public officials, and as to matters of law other than federal
law, on opinions of other counsel admitted to practice the applicable law
reasonably acceptable to counsel for Hovde; provided, however, that such counsel
shall provide a letter addressed to Hovde which states that with respect to the
opinion of such other counsel, nothing has come to such counsel's attention that
would lead it to believe that it and Hovde are not reasonably justified in
relying upon such opinion. In addition, such other counsel shall address its
opinion letter to Hovde or expressly state in its opinion letter or in a
separate letter addressed to Hovde that Hovde and Hovde's counsel are entitled
to rely upon such opinion. Such counsel may assume that any agreement is the
valid and binding obligation of any party to such agreement other than the
Company or the Bank.

          (a-1) At the Closing Date, Hovde shall receive the favorable opinion
of Gomberg, Sharfman, Gold and Ostler, P.C., dated the Closing Date and
addressed to Hovde, in form and substance satisfactory to counsel for Hovde and
Hovde to the effect that to the best of such counsel's knowledge, the Company
and the Bank have conducted and are conducting their businesses so as to comply
in all material respects with all applicable statutes and regulations
(including, without limitation, regulations, decisions, directives and orders of
the OTS, the FDIC and applicable state regulatory agencies).

          (b) At the Closing Date, Hovde shall receive the letter of Thacher
Proffitt & Wood, counsel for the Company and the Bank, addressed to Hovde, dated
the Closing Date, in form and substance satisfactory to Hovde's counsel to the
following effect: During the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto, such counsel participated
in conferences with management of and the independent public accountants for the
Company and the Bank. Based upon such conferences and a review of corporate
records of the Company and the Bank as such counsel conducted in connection with
the preparation of the Registration Statement and the Prospectus, such counsel


                                      22
<PAGE>

has no knowledge that would lead them to believe that the Registration
Statement, as amended or supplemented, if amended or supplemented (except as to
financial statements, notes to financial statements, financial tables and other
financial and statistical data contained therein with respect to which no
opinion need be expressed), at the time it became effective and at the time any
post-effective amendment thereto became effective, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading, or that the Prospectus,
as amended or supplemented, if amended or supplemented (except as to financial
statements, notes to financial statements, financial tables, the appraisal and
other financial and statistical data included therein as to which no opinion
need be expressed), at the time the Registration Statement became effective or
at the time any amendment or supplement to the Prospectus was filed with the
Commission or transmitted to the Commission for filing or on such Closing Date,
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.

          (c) At the Closing Date, Hovde shall receive the letter of Thacher
Proffitt & Wood, counsel for the Company and the Bank, addressed to Hovde, dated
the Closing Date, in form and substance satisfactory to Hovde's counsel to the
effect that: nothing has come to their attention that would lead them to believe
that the Form AC and the Proxy Statement, as amended or supplemented, if amended
or supplemented (except as to financial statements, notes to financial
statements, financial tables, the business plan and the appraisal and other
financial and statistical data contained therein with respect to which no
opinion need be expressed), at the time it was approved by the OTS, contained
any untrue statement of material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading, or
that the Form AC and the Proxy Statement, as amended or supplemented, if amended
or supplemented (except as to financial statements, notes to financial
statements, financial tables, the business plan and the appraisal and other
financial and statistical data included therein as to which no opinion need be
expressed), at the time the form AC and the Proxy Statement was approved by the
OTS or at the time the Proxy Statement was distributed to the Bank's members,
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.

          (d) At the Closing Date, Hovde shall receive the favorable opinion of
Vedder, Price, Kaufman & Kammholz, counsel for Hovde, dated the Closing Date and
addressed to Hovde, with respect to such matters as Hovde reasonably may
require. In rendering such opinion, such counsel may rely as to matters of fact
upon certificates of officers and directors of the Company and the Bank
delivered pursuant hereto and as to matters of law relating to other
jurisdictions upon any opinion of local counsel.

          (e) Prior to and at the closing Date: (i) in the reasonable opinion of
Hovde, there shall have been no material adverse change in the condition
(financial or otherwise) or the business, properties or results of operations of
the company or the Bank, from the latest dates


                                      23
<PAGE>

as of which such condition is set forth in the Registration Statement and the
Prospectus except as referred to therein; (ii) there shall have been no material
transaction entered into by the company or the Bank without the prior written
consent of Hovde (which consent shall not be unreasonably withheld) from the
latest date as of which the financial condition of the Company or the Bank is
set forth in the Registration Statement and Prospectus, other than transactions
referred to or contemplated therein or transactions in the ordinary course of
business; (iii) except as disclosed in the Registration Statement and the
Prospectus, neither the Company nor the Bank shall have received from the OTS
any direction (oral or written) to make any material change in the method of
conducting its business with which it has not complied (which direction, if any,
shall have been disclosed to Hovde) or which materially and adversely would
affect the condition (financial or otherwise), or the business, properties or
results of operations of the Company or the Bank; (iv) neither the company nor
the Bank shall have been in material default (nor shall an event have occurred
which, with notice or passage of time or both, would constitute a material
default) under any provision of any agreement or instrument relating to any
outstanding indebtedness; (v) no action, suit or proceeding, at law or in equity
or before or by any federal or state commission, board or other administrative
agency, shall be pending or, to the best knowledge of the Company or the Bank,
threatened against the Company or the Bank, or affecting any of their properties
wherein an unfavorable decision, ruling or finding would have a material adverse
effect on the condition (financial or otherwise), or the business, properties or
results of operations of the Company and the Bank, taken as a whole; (vi) the
shares shall have been qualified or registered for offering and sale under the
securities or "Blue Sky" laws of the designated jurisdictions; (vii) there shall
have been no suspension or limitation in trading in securities generally on the
Nasdaq National Market or the New York Stock Exchange ("NYSE"), or the fixing of
minimum or maximum prices or the requiring of maximum ranges for prices for
securities on or by the NYSE or on or by The Nasdaq National Market; (viii)
there shall have been no domestic or international event, act or occurrence
which has materially disrupted the offering, sale or delivery of the shares on
the terms and in the manner contemplated in the Registration Statement, the Form
AC and the Prospectus; and (ix) there shall have been no material decline in the
price of equity or debt securities traded on the NYSE or The Nasdaq National
Market if the effect of such a decline, in Hovde's good faith opinion, would
make it impracticable or inadvisable to proceed with the offering, sale or
delivery of the shares on the terms and in the manner contemplated in the
Registration Statement, the Form AC and the Prospectus.

          (f) At the Closing Date, Hovde shall receive a certificate of the
chief executive officer and of the principal financial or accounting officer of
each of the Company and the Bank, dated the Closing Date, to the effect that:
(i) since the date as of which information is given in the Prospectus, the Proxy
Statement and the Registration Statement, there has been no material adverse
change in the condition (financial or otherwise), the business, properties or
results of operations of the Company or the Bank, whether or not arising in the
ordinary course of business, except as disclosed in the Prospectus, the Proxy
Statement and the Registration Statement; (ii) the representations and
warranties of the Company and the Bank in Section 2 hereof are true and correct
with the same force and effect as though expressly made at and as of the Closing
Date; (iii) the Company has complied in all material respects with all
agreements


                                      24
<PAGE>

and satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Date under the Plan of Conversion; (iv) no order revoking
the approval of the Holding Company Application, the Form AC, the Proxy
Statement or the effectiveness of the Registration Statement or the Prospectus
has been initiated or threatened by the Commission, the OTS, the FDIC or any
applicable state authority; and (v) the conditions set Forth in clauses (ii)
through (v) of subsection (e) of this Section 7 have been satisfied.

          (g) Concurrently with the execution of this Agreement, Hovde shall
receive a letter from KPMG Peat Marwick LLP dated the date hereof and addressed
to Hovde: (i) confirming that KPMG Peat Marwick LLP is a firm of independent
public accountants within the meaning of the code of Ethics of the American
Institute of Certified Public Accountants, the Regulations and the HOLA, and
that no information concerning its relationship with or interest in the Company
or the Bank is required by Item 509 of Regulation S-K promulgated under the 1993
Act; (ii) stating in effect that in their opinion the financial statements of
the Company and the Bank included in the Registration Statement and the
Prospectus and covered by their opinion included therein comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act, the Regulations and applicable OTS regulations; (iii) stating in effect
that, on the basis of certain agreed upon procedures (but not an audit in
accordance with generally accepted auditing standards) consisting of a reading
of the latest available unaudited interim financial statements of the Bank
prepared by the Bank and consultations with officers of the Company and the Bank
responsible for financial and accounting matters, and any other procedures which
may be specified by such firm, nothing came to their attention which caused them
to believe that: (A) any unaudited financial statements included in the
Registration Statement or the Prospectus fail to comply as to form in any
material respect with the applicable requirements of the 1933 Act, the
Regulations or the HOLA; (B) such unaudited financial statements are not in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement and the Prospectus; (C) during the period from the
date of the latest audited financial statements (or unaudited financial
statements, if any later statements are included) included in the Registration
Statement or the Prospectus to a specified date not more than three business
days prior to the date of such letter, there was any material increase in
borrowings (other than as disclosed in the Prospectus or in the ordinary course
of business) by the company or the Bank; (D) at a specified date not more than
three business days prior to the date of such letter there was any decrease in
excess of 2% in consolidated net assets of the Company or the Bank as compared
with amounts shown in the latest statement of condition (or unaudited statement
of condition if a later statement is included) included in the Registration
Statement of the Prospectus other than as disclosed in the Prospectus; or (E)
during the period from the date of the latest audited statement of earnings (or
unaudited statement of earnings if a later statement is included) included in
the Registration Statement or the Prospectus to a specified date not more than
three business days prior to the date of such letter there was any decrease in
net income or the Bank as compared with the comparable period in the prior year,
except in all instances as set forth in or contemplated by the Registration
Statement and the Prospectus or in such letter; and (iv) stating that, in
addition to the examination referred to in their opinion included in the
Registration Statement and the Prospectus and the performance of the procedures
referred to in


                                      25
<PAGE>

clause (iii) of this subsection (g), they have compared with the general
accounting records of the Company or the Bank which are subject to the internal
controls of the accounting system of the Company or the Bank, as appropriate,
and other data prepared by the Company or the Bank directly from such accounting
records, to the extent specified in such letter, such amounts and/or percentages
set forth in the Registration Statement and the Prospectus as Hovde may
reasonably request; and they have found such amounts and percentages to be in
agreement therewith (subject to rounding).

          (h) At the Closing Date, Hovde shall receive a letter from KPMG Peat
Marwick LLP dated the closing Date and addressed to Hovde confirming the
statements made by them in the letter delivered by them pursuant to subsection
(g) of this Section 7, the "specified date" referred to in clauses (iii)(C), (D)
and (E) thereof to be a date specified in such letter, which shall be not more
than five business days prior to the Closing Date.

          (i) At the Closing Date, the Company and the Bank will have received
favorable opinions of: Thacher Proffitt & Wood, counsel to the Company and the
Bank, with respect to the federal tax consequences of the Conversion; and KPMG
Peat Marwick LLP with respect to the Illinois tax consequences of the
Conversion.

          (j) No order suspending the sale to the Shares in any designated
jurisdiction shall have been issued on or prior to the Closing Date, and no
proceedings for that purpose shall have been instituted or, to the knowledge of
Hovde or the Company, shall be contemplated.

     All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to Hovde and of counsel for Hovde. Any certificates signed
by an officer of the Company or the Bank and delivered to Hovde or to counsel
for Hovde shall be deemed a representation and warranty by the Company or the
Bank, as the case may be, to Hovde as to the statements made herein. If any
condition to Hovde's obligations hereunder to be fulfilled prior to or at the
Closing Date is not fulfilled, Hovde may terminate this Agreement (provided that
if this Agreement is so terminated but the sale of Shares is nevertheless
consummated, Hovde shall be entitled to the compensation provided for in Section
3 hereof) or, if Hovde so elects, may waive any such conditions which have not
been fulfilled or may extend the time of their fulfillment.

     8. Indemnification and Contribution.

          (a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless Hovde, its affiliates, directors, officers, agents and
employees and each person, if any, who controls Hovde or any of its affiliates
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the
Exchange Act against any and all losses, liabilities, claims, damages and
expenses (including, without limitation, reasonable attorneys' fees) whatsoever
and shall further promptly reimburse such persons for any legal or other
expenses reasonably incurred by each or any of them in investigating, preparing
to defend or defending against any such action, proceeding or claim (whether
commenced or threatened) arising out of or based upon (A) any


                                      26
<PAGE>

untrue or alleged untrue statement of a material fact or the omission or alleged
omission of a material fact required to be stated in or necessary to make not
misleading any statements contained in (i) the Registration Statement, the
Prospectus, the Proxy Statement or the Form AC (as from time to time amended and
supplemented) or (ii) any application to regulatory authorities or other
document, advertisement or communication (in this Section 8, collectively called
"Application") prepared or executed by or on behalf of the Company or the Bank
with its consent or based upon information furnished by or on behalf of the
Company or the Bank, whether or not filed in any jurisdiction in order to
qualify the Shares under the securities laws thereof or with the OTS or the
Commission, unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company or the Bank with
respect to Hovde by or on behalf of Hovde expressly for use in the Registration
Statement, the Prospectus, the Proxy Statement, the Form NC or any amendment or
supplement thereof or in any Application, as the case may be; or (B) the
participation by Hovde in the Conversion in accordance with the terms of this
Agreement. This indemnity shall be in addition to any liability the Company or
the Bank may otherwise have to Hovde; provided, however, that, with respect to
the Bank, such indemnification shall be to the full extent permitted by the OTS,
the FDIC and the Board of governors of the Federal Reserve System. If any action
is brought against Hovde or any other person the Company and the Bank are
obligated hereby to indemnify (an "Indemnified Party"), then such Indemnified
Party shall promptly notify in writing the party or parties against whom
indemnification is to be sought of such action. The Company and the Bank agree
to promptly notify Hovde of the commencement of any litigation or proceeding
against the Company or the Bank or any of their officers or directors in
connection with sale of the Shares or in connection with the Registration
Statement, the Prospectus, the Proxy Statement, the Form AC or any amendment or
supplement thereto or any Application. In any and each such instance, Hovde
shall be entitled to counsel of its own choice.

          (b) Hovde agrees to indemnify and hold harmless the Company and the
Bank and their directors, officers, agents and employees and each person, if
any, who controls the Company or the Bank within the meaning of Section 15 of
the 1933 Act or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Bank to Hovde, but only with
respect to statements or omissions, if any, made in the Registration Statement,
the Prospectus, the Proxy Statement or any amendment or supplement thereto or in
any Application in reliance upon, and in conformity with, written information
furnished to the Company or the Bank with respect to Hovde by or on behalf of
Hovde expressly for use in the Registration Statement, the Prospectus, the Proxy
Statement or any amendment or supplement thereto or in any Application. In case
any action shall be brought against the Company or the Bank or any person so
indemnified based on the Registration Statement, the Prospectus, the Proxy
Statement or any amendment or supplement thereto or in any Application, and in
respect of which indemnity may be sought against Hovde, Hovde shall have the
rights and duties given to the Company and the Bank and each person so
indemnified shall have the rights and duties given to Hovde by the provisions of
subsection (a) above.

          (c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in


                                      27
<PAGE>

respect thereof is to be made by the indemnified party against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it From any liability which it
may have under this Section 8). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by one of the indemnifying parties in connection with the defense of
such action, (ii) the indemnifying parties shall not have employed counsel to
have charge of the defense of such action within a reasonable time after notice
of commencement of the action or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct and defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying parties. Anything in this subsection to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent; provided, however,
that such consent was not unreasonably withheld.

          (d) If the indemnification provided for in subsection (a) or (b), as
the case may be, is unavailable or insufficient to hold harmless Hovde, an
Indemnified Party or the Company and the Bank, as the case may be, in respect of
any losses, claims, damages or liabilities or actions in respect thereof)
referred to therein, then the Company and the Bank or Hovde, as the case may be,
in lieu of indemnifying such Indemnified Party thereunder, shall contribute to
the amount paid or payable for such losses, claims, damages or liabilities (or
actions in respect thereof): (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Bank on the one hand and
Hovde on the other from the offering of the Shares; or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company or the Bank on
the one hand and of Hovde on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Bank on
the one hand and Hovde on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Shares (before deducting
expenses) received by the Company and the Bank bear to the total compensation
received by Hovde. The relative fault of the Company and the Bank on the one
hand, and of Hovde on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Company
or the Bank on


                                      28
<PAGE>

the one hand or by Hovde on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

     The Company, the Bank and Hovde agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party or the Company and
the Bank, as the case may be, as a result of the losses, claims, damages and
liabilities (or action in respect thereof) referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party or the Company and the Bank, as the case may be, in connection with
investigating or defending any such action or claim. Notwithstanding anything to
the contrary contained in this Agreement, Hovde shall not be required to
contribute any amount in excess of the amount by which the total compensation
received by Hovde pursuant to this Agreement exceeds the amount of any damages
which Hovde has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.

     9. Survival of Agreements, Representations and Indemnities. The respective
indemnities of the company, the Bank and Hovde and the representations and
warranties of the Company and the Bank set forth in or made pursuant to this
Agreement shall remain in full force and effect, regardless of any termination
or cancellation of this Agreement or any investigation made by or on behalf of
Hovde, the Company and the Bank or any controlling person referred to in Section
8 hereof, and shall survive any termination of this Agreement and/or issuance of
the Shares, and any successor or assign of Hovde, the Company, the Bank or any
such controlling person or any legal representative of such controlling person
shall be entitled to the benefit of the respective indemnities, agreements,
warranties and representations.

     10. Termination.

          (a) Hovde shall have the right to terminate this Agreement at any time
prior to the Closing Date: (i) if the United States, having become involved in a
war or major hostilities, has materially disrupted or in Hovde's good faith
opinion will in the immediate future materially disrupt, or any domestic or
international event or act or occurrence has materially disrupted, or in Hovde's
good faith opinion will in the immediate future materially disrupt, the
offering, sale or delivery to the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus; (ii) if trading
in securities generally on the Nasdaq National Market or the NYSE shall have
been suspended, or minimum or maximum prices for trading shall have been fixed,
or maximum ranges of prices for securities shall have been required, on or by
the NYSE, on or by The Nasdaq National Market or by the order of the Commission
or any other governmental authority having jurisdiction; (iii) if a banking
moratorium has been declared by an Illinois, or federal authority or any other
state authority


                                      29
<PAGE>

having an adverse impact on the national banking community; (iv) if the Company
or the Bank shall have sustained a loss material to the Company and the Bank,
taken as a whole, by fire, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act, whether or not covered by
insurance, which in Hovde's good faith opinion would make it inadvisable to
proceed with the offering, sale or delivery of the Shares; (v) if there shall
have been such material adverse change or any development involving a
prospective material adverse change, in the condition (financial or otherwise),
business, properties or results of operations of the Company or the Bank taken
as a whole or the prospective market for the Company's securities as in Hovde's
good faith opinion would make it inadvisable to proceed with the offering, sale
or delivery of the Shares; (vi) if there is material decline in the price of
equity or debt securities traded on the NYSE or the Nasdaq National Market if
the effect of such decline, in Hovde's good faith judgement, makes it
impracticable or inadvisable to proceed with the offering, sale or delivery of
the Shares on the terms and in the manner contemplated in the Registration
Statement, the Form AC and the Prospectus; and (vii) if the Company fails to
receive orders for all of the minimum number of Shares within the period of time
specified by, and in accordance with, the provisions of the Plan of Conversion
and the Conversion Regulations.

          (b) If Hovde elects to terminate this Agreement as provided in this
Section 10, the Company shall be notified promptly by Hovde by telephone or
telegram, confirmed by letter. A Termination pursuant to this Section 10 shall
not prevent the sale or delivery of the Shares by the Company or the Conversion,
but such sale, delivery or consummation of the Conversion shall in no way limit
Hovde's legal rights, if any, against the Bank or the Company hereunder.

          (c) Notwithstanding anything contained herein to the contrary, if the
Conversion is not consummated as a result of the termination of this Agreement
pursuant to Section 10(a) hereof or because the Plan of Conversion is terminated
or the period prescribed by regulations (including all extensions) in which the
conversion must be completed expires prior to the completion of the Conversion,
Hovde shall be entitled to retain any fees paid to Hovde through the date of
termination, and thereafter the sole liability of the Company and the Bank to
Hovde will be to reimburse Hovde pursuant to Section 6 and for obligations
assumed by the Company and the Bank pursuant to subsections (a) and (c) of
Section 8 hereof. Upon demand and receipt of proper invoices for expenses, the
Company and the Bank will pay Hovde the full amount so owing. To the extent that
Hovde has received any amounts in excess of those to which it is entitled
hereunder it shall repay them to the Company and the Bank.

     11. Notices. All communications hereunder, except as herein otherwise
specifically provided, shall be in writing and if sent to Hovde shall be mailed,
delivered or telegraphed and confirmed to Hovde Securities, Inc., 1826 Jefferson
Place, N.W., Washington, D.C. 20036, attention: Eugene S. Weil, Esq., General
Counsel (with a copy, in the case of communications under Section 8 hereof, to
Vedder, Price, Kaufman & Kammholz, 222 North LaSalle Street, Suite 2600,
Chicago, Illinois 60601, Attention: Daniel C. McKay II, Esq.); if sent to the
Company or the Bank shall be mailed, delivered or telegraphed and confirmed to
Fairfield Savings Bank, F.S.B., 1190 FRD, Long Grove, Illinois 60047-7304,
attention: Mr.__________


                                      30
<PAGE>

_______________, President (with a copy in the case of communications under
Section 8 hereof to Thacher Proffitt & Wood, 1500 K Street, N.W., Suite 200,
Washington, D.C. 20005, attention:
V. Gerard Comizio, Esq.).

     12. Parties. This Agreement shall inure solely to the benefit of, and shall
be binding upon, Hovde, the Company, the Bank and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.

     13. Construction. This Agreement shall be construed in accordance with the
laws of the State of Illinois.

     14. Severability. ln the event that any term, provision or covenant herein
or the application thereof to any circumstance or situation shall be invalid or
unenforceable, in whole or in part, the remainder hereof and the application of
said term, provision or covenant to any other circumstance or situation shall
not be affected thereby, and each term, provision or covenant herein shall be
valid and enforceable to the full extent permitted by law.

     15. Counterparts. This Agreement may be executed in separate counterparts,
each of which so executed and delivered shall be an original, but all of which
together shall constitute but one and the same instrument.

                     [SIGNATURE PAGE FOLLOWS IMMEDIATELY]


                                      31
<PAGE>

      If the foregoing correctly sets forth the understanding between Hovde and
the Company and the Bank, please so indicate in the space provided below for the
purpose, whereupon this letter shall constitute a binding agreement between us.


                                          Yours very truly,


                                          BIG FOOT FINANCIAL CORP.


                                          By:__________________________________
                                              George M. Briody
                                              President


                                          FAIRFIELD SAVINGS BANK F.S.B.


                                          By:__________________________________
                                              George M. Briody
                                              President


Accepted as of the date first 
above written.


HOVDE SECURITIES, INC.


By:_______________________________
      Stephen E. Nelson
      Associate


                                      32

<PAGE>

                                                                       EXHIBIT A

                            BIG FOOT FINANCIAL CORP.

                                2,012,500 SHARES
                              (anticipated maximum)

                     (subject to increase to up to 2,314,375
                   shares in the event of an oversubscription)

                                  COMMON STOCK
                           (par Value $.01 Per Share)

                           SELECTED DEALER'S AGREEMENT


                                                           _______________, 1996

     We have agreed to assist Big Foot Financial Corp., an Illinois corporation
(the "Company") in connection with the offer and sale of shares (the "Shares")
of Common Stock par value $.01 per share of the Company to be issued in
connection with the conversion of Fairfield Savings Bank, F.S.B., a federally
chartered savings bank (the "Bank") from mutual to stock form.  The Company in
connection with this plan to effect such conversion offered 2,012,500 Shares for
subscription by certain of the Bank's depositors and borrowers in a subscription
offering and to certain members of the general public in a direct community
offering.  The Shares which were not subscribed for pursuant to such
subscription and direct community offerings are being offered to the public in a
syndicated community offering (the "Syndicated Community Offering") in
accordance with the rules of the Office of Thrift Supervision Department of the
Treasury.  The Shares, the bases on which the number of Shares to be issued may
change and certain of the terms on which they are being offered are more fully
described in the enclosed Prospectus (the "Prospectus").

     We are offering to Selected Dealers (of which you are one) the opportunity
to participate in the solicitation of offers to buy the Shares in the Syndicated
Community Offering and we will pay you a fee in the amount of ________ percent
(___%) of the dollar amount of the Shares sold on behalf of the Company by you.
The number of Shares sold by you shall be determined based on the authorized
designation of your firm on the order form or forms for such Shares accompanying
the funds transmitted for payment therefor (whether in the form of a check
payable to the Bank or a withdrawal from an existing account at the Bank) to the
special account established by the Company for the purpose of holding such
funds.  It is understood, of course, that payment of your fee will be made only
out of compensation received by us for the Shares sold on behalf of the Company
by you as evidenced in accordance with the preceding sentence.  The Company has
requested us to invite you to become a "Sponsoring Dealer," that is a Selected
Dealer who solicits offers which result in the sale on behalf of the Company of
at least ________


<PAGE>

_______Shares.  You may become a Sponsoring Dealer (subject to your fulfillment
of the requirement in the preceding sentence) by checking the box on the
confirmation at the end of this letter.  If you become a Sponsoring Dealer you
shall be entitled to an additional fee in the amount of __________ percent
(___%) of the dollar amount of the Shares sold on behalf of the Company by you
as evidenced in the manner set forth above.

     Each order form for the purchase of Shares must set forth the identity,
address and tax identification number of each person ordering Shares regardless
of whether the Shares will be registered in a street name or in the purchaser's
name.  Such order form should clearly identify your firm.

     As soon as practicable after all the Shares are sold, we will remit to you,
out of our compensation as provided above, the fees to which you are entitled
hereunder, including your Sponsoring Dealer fee.

     This offer is made subject to the terms and conditions herein set forth and
is made only to Selected Dealers which are:  (i) members in good standing of the
National Association of Securities Dealers, Inc. (the "NASD") which agree to
comply with all applicable rules of the NASD, including, without limitation, the
Interpretation of the NASD Board of Governors with respect to "Free-Riding and
Withholding" (IM-2110-1) and Conduct Rule 2740 of the NASD's Conduct Rules; or
(ii) foreign dealers not eligible for membership in the NASD which agree (A) not
to sell any Shares within the United States, its territories or possessions or
to person who are citizens thereof or resident therein and (B) in making other
sales to comply with the above mentioned NASD Interpretation and Conduct
Rules 2730, 2740 and 2750 as if they were NASD members and Conduct Rule 2420 as
it applies to non-member brokers or dealers in a foreign country.

     Orders for Shares will be strictly subject to confirmation and we, acting
on behalf to the Company, reserve the right in our absolute discretion to reject
any order in whole or in part, to accept or reject orders in the order of their
receipt or otherwise, and to allot.  Neither you or any other person is
authorized by the Company, the Bank or us to give any formation or make any
representations other than those contained in the Prospectus in connection with
the sale of any of the Shares.  No Selected Dealer is authorized to act as agent
for us when soliciting offers to buy the Shares from the public or otherwise.
No Selected Dealer shall engage in any stabilizing (as defined in Rule 10b-7
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) with respect to the Company's Common Stock during the offering.

     We and each Selected Dealer assisting in selling Shares pursuant hereto
agree to comply with the applicable requirements of the Exchange Act and
applicable rules and regulations issued by the Office of Thrift Supervision.  In
addition, we and each Selected Dealer confirm that the Securities and Exchange
Commission interprets Rule 15c2-8 promulgated under the Exchange Act as
requiring that a prospectus be supplied to each person who is expected to
receive a confirmation of sale 48 hours prior to delivery of such person's order
form.


                                        2
<PAGE>

     We and each Selected Dealer further agree to the extent that our customers
desire to pay for Shares with funds held by or to be deposited with us, in
accordance with the interpretation of the Securities and Exchange Commission of
Rule 15c2-4 promulgated under the Exchange Act either:  (a) upon receipt of an
executed order form or direction to execute an order form on behalf of a
customer, to forward the Syndicated Community Offering price for the Shares
ordered or before 12:00 p.m. on the business day following receipt or execution
of any order form by us to the Bank for deposit in a segregated account; or
(b) to solicit indications of interest in which event (i) we will subsequently
contact any customer indicating interest to confirm the interest and give
instructions to execute and return an order form or to receive authorization to
execute an order form on their behalf, (ii) we will mail acknowledgement of
receipt of order to each customer confirming interest on the business day
following such confirmation, (iii) we will debit accounts of such customers on
the fifth business day (the "debit late") following receipt of the confirmation
referred to in clause (i) above, and (iv) we will forward completed order forms
together with such funds to the Bank on or before 12:00 p.m. on the next
business day following the debit date for deposit in a segregated account.  We
acknowledge that if the procedure in (b) is adopted, our customers' funds are
not required to be in their accounts until the debit date.  We and each Selected
Dealer further acknowledge that, in order to use the foregoing "sweep
arrangements," we comply with the net capital requirements for broker/dealers
under Rule 15c3-1(a)(1) of the Exchange Act.

     Unless earlier terminated by us, this Agreement shall terminate forty-five
(45) full business days after the date hereof, but may be extended by us for an
additional period or periods not exceeding thirty (30) full business days in the
aggregate.  We may terminate this Agreement or any provisions hereof at any time
by written or telegraphic notice to you.  The obligations hereunder are subject
to the successful completion of the offering, including the sale of all of the
Shares.

     You agree that at any time or times prior to the termination of this
Agreement you will, upon our request, report to us the number of Shares sold on
behalf of the Company by you under this Agreement.

     We shall have full authority to take such actions as we may deem advisable
in respect of all matters pertaining to the offering.  We shall be under no
liability to you except for lack of good faith and for obligations expressly
assumed by us in this Agreement.

     Upon application to us, we will inform you as to the states in which we
believe the Shares have been qualified for sale under, or are exempt from the
requirements of, the respective "Blue Sky" laws of such states, but we assume no
responsibility or obligation as to your rights to sell Shares in any state.

     Additional copies of the Prospectus and any supplements thereto will be
supplied in reasonable quantities upon request.


                                        3
<PAGE>

     Any notice from us to you shall be deemed to have been duly given if
mailed, telephoned or telegraphed to you at the address to which this Agreement
is mailed.

     This Agreement shall be construed in accordance with the laws of the State
of Illinois.

     Please confirm your agreement hereto by signing and returning the
confirmation accompanying this letter at once to us at Hovde Securities, Inc.,
1826 Jefferson Place, N.W. Washington, D.C.  20036.  The enclosed duplicate copy
will evidence the agreement between us.

                                                          Very truly yours,

                                                          HOVDE SECURITIES, INC.


                                                          By:
                                                             -------------------
                                                             Steven D. Hovde
                                                             Managing Director


                                        4
<PAGE>

Hovde Securities, Inc.
1826 Jefferson Place, N.W.
Washington, D.C.  20036

     Re:  Big Foot Financial Corp.
          ------------------------

     We hereby confirm our agreement to all the terms and conditions stated in
the foregoing letter.  We acknowledge receipt of the Prospectus relating to the
Shares and we further state that in agreeing thereto we have relied upon the
Prospectus and no other statement whatsoever, written or oral.  We confirm that
we are (i) a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD"), which agrees to comply with all applicable rules of
the NASD, including, without limitation, the Interpretation of the NASD Board of
Governors with respect to "Free-Riding and Withholding" (IM-2110-1) and Conduct
Rule 2740 of the NASD's Conduct Rules, or (ii) a foreign dealer not eligible for
membership in the NASD which agrees (A) not to sell any Shares within the United
States, its territories or possessions or to person who are citizens thereof or
resident therein and (B) in making other sales to comply with the
above-mentioned NASD Interpretation and Conduct Rule 2730, 2740 and 2750 as if
we were NASD members and Conduct Rules 2420 as it applies to a non-member broker
or dealer in a foreign country.

                                        We wish to become a "Sponsoring Dealer."


                                        ----------------------------------------
                                        (Please print or type name of firm)



                                        ----------------------------------------
                                        (Authorized Representative)


Dated:
      -----------------------


                                        5



<PAGE>

                                    EX-2.1
                              Plan Of Conversion



================================================================================


                              PLAN OF CONVERSION


                                      OF


                        FAIRFIELD SAVINGS BANK, F.S.B.



           As Adopted by the Board of Directors on May 21, 1996 and
                 Amended and Restated as of September 17, 1996


================================================================================
<PAGE>

                                                                           Page
                                                                           ----


                                   ARTICLE I

                                  DEFINITIONS


                                  ARTICLE II

                     PROCEDURE FOR APPROVAL OF CONVERSION

Section 2.01  Application and Notice........................................  7
Section 2.02  Approval of Plan by Members; the Special Meeting..............  8

                                   ARTICLE III

                              SALE OF COMMON STOCK

Section 3.01  In General....................................................  8
Section 3.02  Reorganization as Subsidiary of Holding Company...............  9
Section 3.03  Pricing and Number of Shares of Common Stock;
                the Independent Appraiser................................... 10
Section 3.04  Subscription Rights........................................... 12
Section 3.05  Community Offering............................................ 16
Section 3.06  Subscription Offering and Community
                Offering Procedures; Order Forms............................ 18
Section 3.07  Payment for Common Stock...................................... 19
Section 3.08  Syndicated Community Offering................................. 21
Section 3.09  Public Offering Alternative................................... 22
Section 3.10  Restrictions on Purchase and Transfer of Common Stock......... 23
Section 3.11  Time Limits for Sale of Shares; Effect of Inability to Sell... 24
Section 3.12  Enforcement of Terms and Conditions........................... 24

                                   ARTICLE IV

                              CERTAIN RESTRICTIONS

Section 4.01  Sale of Shares Purchased by Directors or Officers............. 25
Section 4.02  Subsequent Purchases of Shares by Officers and Directors...... 26
Section 4.03  Acquisition of Control........................................ 26


                                    -i-
<PAGE>

                                                                           Page
                                                                           ----

                                   ARTICLE V

             EFFECT OF CONVERSION; CERTAIN COVENANTS AND AGREEMENTS

Section 5.01  Restated Charter and Adoption of New Bylaws;
                Name of Converted Bank...................................... 27
Section 5.02  Effect of Conversion and Reorganization....................... 28
Section 5.03  Liquidation Account........................................... 28
Section 5.04  Voting Rights................................................. 29
Section 5.05  Issuance of Stock............................................. 29
Section 5.06  Directors of Converted Bank................................... 30
Section 5.07  Employment Agreements......................................... 30
Section 5.08  Market for the Common Stock................................... 30
Section 5.09  Payment of Dividends and Repurchase of Stock.................. 30
                                                                        
                                   ARTICLE VI
                                                                        
              CONDITIONS TO CONVERSION; AMENDMENT AND TERMINATION;
                                  MISCELLANEOUS
                                                                        
Section 6.01  Conditions to Conversion...................................... 31
Section 6.02  Termination of Reorganization................................. 31
Section 6.03  Amendment or Termination of the Plan.......................... 31
Section 6.04  Completion Date............................................... 32
Section 6.05  Expenses of the Conversion.................................... 32
Section 6.06  Interpretation................................................ 32
Section 6.07  Severability.................................................. 32
Section 6.08  Miscellaneous................................................. 32
                                                                      

                                      -ii-
<PAGE>

                              PLAN OF CONVERSION

                                      OF

                        FAIRFIELD SAVINGS BANK, F.S.B.

                            INTRODUCTORY STATEMENT

     This Plan of Conversion (the "Plan") provides for the conversion of
Fairfield Savings Bank, F.S.B., Long Grove, Illinois (the "Bank") into a federal
capital stock savings bank. The Bank is currently a mutual savings bank duly
organized and validly existing under the laws of the United States. The
principal office of the Bank is located at 1190 RFD, Long Grove, State of
Illinois.

     The purpose of this conversion is to increase the Bank's equity capital
base and facilitate future access to capital markets. The conversion also will
provide a more flexible operating structure, which will enable the Bank to
compete more effectively with other financial institutions. The larger capital
base resulting from the conversion will enhance the Bank's ability to pursue
lending and investment opportunities as well as opportunities for growth and
expansion.

     The Board of Directors of the Bank currently contemplates that all of the
stock of the Bank shall be held by a business corporation (the "Holding
Company") organized under the laws of the State of Illinois and that the Holding
Company will issue and sell its capital stock pursuant to this Plan. The use of
the Holding Company, if so utilized, would provide greater organizational
flexibility.

     This Plan has been unanimously approved by the Board of Directors of the
Bank. This Plan must also be approved by the affirmative vote of a majority of
the total number of votes entitled to be cast by Voting Members of the Bank at a
special meeting to be called for that purpose. Prior to the submission of this
Plan to the Voting Members for consideration, the Plan must be approved by the
Office of Thrift Supervision (the "OTS").

     Upon conversion, each Person having a Savings Account at the Bank prior to
the conversion will continue to have a Savings Account, without payment
therefor, in the same amount and subject to the same terms and conditions
(except for voting and liquidation rights) as in effect prior to conversion.
After conversion, the Bank will succeed to all the rights, interests, duties and
obligations of the Bank before conversion, including, but not limited to, all
rights and interests of the Bank in and to its assets and properties, whether
real, personal or mixed. The Bank will continue to be a member of the Federal
Home Loan Bank System, and all of its insured Savings Accounts will continue to
be insured by the Savings Association Insurance Fund of the Federal Deposit
Insurance Corporation to the extent provided by applicable law.
<PAGE>

                                       -2-


                                    ARTICLE I

                                   DEFINITIONS

     As used in this Plan of Conversion, the following terms shall have the
following meanings, unless the context indicates otherwise:

     "Account Holder" shall mean any Person holding a Savings Account in the
Bank.

     "Acting in Concert" shall mean (i) knowing participation in a joint
activity or interdependent conscious parallel action towards a common goal
whether or not pursuant to an express agreement or understanding; or (ii) a
combination or pooling of voting or other interests in the securities of an
issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or otherwise. A
Person or company which acts in concert with another Person ("other party")
shall also be deemed to be acting in concert with any Person who is also acting
in concert with that other party, except that any Tax-Qualified Employee Stock
Benefit Plan will not be deemed to be acting in concert with its trustee or a
Person who serves in a similar capacity solely for the purpose of determining
whether stock held by the trustee and stock held by the plan will be aggregated,
and participants or beneficiaries of any such Tax-Qualified Employee Stock
Benefit Plan will not be deemed to be acting in concert solely as a result of
their common interests as participants or beneficiaries.

     "Actual Subscription Price" shall mean the price per share at which the
Common Stock is ultimately sold in accordance with the terms hereof.

     "Affiliate" shall mean a Person who, directly or indirectly, through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified.

     "Associate," when used to indicate a relationship with any Person, shall
mean (a) any corporation or organization (other than the Holding Company, the
Bank or a majority-owned subsidiary of the Bank) of which such Person is an
officer or partner or is, directly or indirectly, either alone or with one or
more members of his or her immediate family, the beneficial owner of 10% or more
of any class of equity securities; (b) any trust or other estate in which such
Person has a substantial beneficial interest or as to which such Person serves
as trustee or in a similar fiduciary capacity, except that for the purposes of
Sections 3.04(a) and 3.10, the term "Associate" does not include any
Tax-Qualified Employee Stock Benefit Plan or any Non-Tax-Qualified Employee
Stock Benefit Plan in which a Person has a substantial beneficial interest or
serves as a trustee or in a similar fiduciary capacity, and except that, for
purposes of aggregating total shares that may be acquired or held by Officers
and Directors and their Associates, the term "Associate" does not include any
Tax-Qualified Employee Stock Benefit Plan; and (c) any relative or spouse of
such Person, or any relative of such spouse, who has the
<PAGE>

                                    -3-


same home as such Person or who is a Director or Officer of the Holding Company,
the Bank or any of the Bank's subsidiaries.

     "Bank" shall mean Fairfield Savings Bank, F.S.B., in its mutual form, or
Fairfield Savings Bank, F.S.B., in its stock form, as the context of the
reference requires.

     "Bank Employee" shall mean any employee or officer of the Bank, other than
one who otherwise qualifies as an Eligible Account Holder, a Supplemental
Eligible Account Holder or an Other Member.

     "Benefit Plan" shall mean any Tax-Qualified Employee Stock Benefit Plan or
any Non-Tax-Qualified Employee Stock Benefit Plan.

     "Common Stock" shall mean all of the shares of common stock, par value $.01
per share, offered and issued pursuant to this Plan by the Holding Company or of
the common stock, par value $1.00 per share, offered and issued pursuant to this
Plan by the Bank if the Holding Company is not utilized. The Common Stock will
not be insured by the Federal Deposit Insurance Corporation.

     "Community Offering" shall mean the offering for sale to certain members of
the general public directly by the Bank or the Holding Company, if utilized, of
any shares of the Common Stock not subscribed for in the Subscription Offering
in accordance with Section 3.05.

     "Control" (including the terms "controlling," "controlled by" and "under
common control with") with respect to a Person shall mean the possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether by contract, through the ownership of voting
securities of such Person, through the ownership of voting securities of any
company that possesses such power, or otherwise.

     "Conversion" shall mean (a) the restatement of the Bank's charter to
authorize the issuance of capital stock in accordance with the Conversion
Regulations and to otherwise conform to the requirements applicable to a federal
stock savings bank and (b) the issuance and sale of the common stock of the Bank
in accordance with this Plan.

     "Conversion Regulations" shall mean Part 563b of the Rules and Regulations
of the OTS.

     "Director" shall mean a member of the Board of Directors of the Bank or of
the Holding Company.

     "Effective Date" shall mean the effective date of the Conversion and shall
be the date on which all of the Common Stock is issued and sold.
<PAGE>

                                    -4-


     "Eligible Account Holder" shall mean any depositor of the Bank who held a
Qualifying Deposit in one or more deposit accounts with the Bank on the
Eligibility Record Date.

     "Eligibility Record Date" shall mean the date established by the Board of
Directors of the Bank as the date for determining Eligible Account Holders. The
Eligibility Record Date has been established as December 31, 1994.

     "Estimated Price Range" shall mean the range of the minimum and maximum
aggregate values determined by the Board of Directors of the Bank within which
the aggregate offering price of Common Stock sold in the Conversion will fall.
The Estimated Price Range will be within the estimated aggregate pro forma
market value of the Common Stock, as determined by the Independent Appraiser in
accordance with Section 3.04.

     "Holders of Subscription Rights" shall mean the Tax-Qualified Employee
Stock Benefit Plans, Eligible Account Holders, Supplemental Eligible Account
Holders, Other Members and Bank Employees who have Subscription Rights under
Section 3.04.

     "Holding Company" shall mean, a corporation to be organized under the laws
of the State of Illinois.

     "Independent Appraiser" shall mean the independent Person retained by the
Bank to prepare an appraisal of the estimated pro forma market value of the
Common Stock. Such Person shall be experienced and expert in the area of
corporate appraisal and acceptable to the OTS.

     "Maximum Subscription Price" shall mean the price per share to be remitted
by subscribers for shares of Common Stock in the Subscription Offering and the
Community Offering.

     "Member" shall mean any Person who qualifies as a member of the Bank
pursuant to the Bank's charter and bylaws.

     "Minimum Subscription Price" shall mean the minimum price per share
established in accordance with the Estimated Price Range.

     "Non-Tax-Qualified Employee Stock Benefit Plan" shall mean any stock
option, bonus stock or restricted stock plan or other employee benefit plan that
is not a "Tax-Qualified Employee Stock Benefit Plan" and that is maintained by
the Holding Company or the Bank for the benefit of officers, employees or
directors of the Holding Company, the Bank or any Affiliate of either of them
and that, by its terms, is authorized or required to purchase Common Stock.
<PAGE>

                                    -5-


     "Officer" shall mean an executive officer of the Bank, which includes the
chairman of the board, chief executive officer, president, any vice president in
charge of a principal business function or functions or who otherwise has a
policy-making function, secretary, treasurer or principal financial officer,
controller or principal accounting officer, and any person performing functions
similar to those performed by the foregoing persons with respect to any
incorporated or unincorporated organization.

     "Order Form" shall mean the form provided by the Holding Company or the
Bank that subscribers must use to order Common Stock in the Subscription
Offering and Community Offering.

     "Other Member" shall mean any Person, including any Benefit Plan, who is a
Member as of the Voting Record Date and who is either (i) a holder of a Savings
Account at the Bank or (ii) a borrower from the Bank with one or more loans
outstanding as of July 1, 1991 that continue to be outstanding as of the Voting
Record Date, but is not an Eligible Account Holder or Supplemental Eligible
Account Holder.

     "OTS" shall mean the Office of Thrift Supervision of the Department of the
Treasury.

     "Overallotment Option" shall mean the option, which may be granted to the
Underwriters in any Public Offering, to purchase, on the same terms as other
shares are purchased in the Public Offering, up to an additional 15% of the
shares of the Common Stock offered in the Subscription Offering.

     "Oversubscription Provision" shall mean the increase in the number of
shares of Common Stock that may be offered to subscribers in the Subscription
Offering and Community Offering pursuant to Section 3.03(b) or in the Syndicated
Community Offering pursuant to Section 3.08.

     "Person" shall mean a natural person, a corporation, a partnership, an
association, a trust (including trusts or custodial arrangements under an
Individual Retirement Account or a qualified retirement plan), an unincorporated
organization, a joint-stock company, a government or political subdivision
thereof, or any other entity.

     "Plan" shall mean this Plan of Conversion as it exists on the date hereof
and as it may be hereafter amended pursuant to Section 6.03.

     "Proxy Statement" shall mean the document to be used to solicit proxies
from Members to vote at the Special Meeting.

     "Public Offering" shall mean the offering, if any, of certain shares of
Common Stock in accordance with Section 3.09.
<PAGE>

                                       -6-


     "Public Offering Price" shall mean the price at which the shares of Common
Stock are offered in any Public Offering.

     "Qualifying Deposit" shall mean the Savings Accounts of a Person in the
Bank at the close of business on the Eligibility Record Date having an aggregate
balance of at least fifty dollars ($50). If the aggregate balance of a Persons's
Savings Accounts in the Bank is less than fifty dollars ($50), the Savings
Accounts shall not constitute a Qualifying Deposit.

     "Reorganization" shall mean the issuance and sale of the Common Stock and
the purchase by the Holding Company of all of the capital stock to be issued by
the Bank in connection with the Conversion.

     "Savings Account" shall have the same meaning as in Section 561.42 of the
Rules and Regulations of the OTS, and it shall include time deposits and
certificates of deposit.

     "Special Meeting" shall mean the Special Meeting of Members, and any
adjournments thereof, to be called and held for the purpose of submitting the
Plan to the Members for their approval.

     "Subaccount Balance" shall mean, with respect to each Eligible Account
Holder and Supplemental Eligible Account Holder, the portion of the liquidation
account that such Eligible Account Holder or Supplemental Eligible Account
Holder would be entitled to receive pursuant to the Conversion Regulations in
the event of a complete liquidation of the Bank subsequent to the Conversion.
The initial Subaccount Balance of each Eligible Account Holder and Supplemental
Eligible Account Holder shall be determined in accordance with Section 563b.3(f)
of the Conversion Regulations.

     "Subscription Offering" shall mean the offering of the Common Stock to the
Holders of Subscription Rights in accordance with Section 3.04.

     "Subscription Prospectus" shall mean the Subscription Prospectus to be used
in offering the Common Stock in the Subscription Offering, the Community
Offering and any Syndicated Community Offering or Public Offering.

     "Subscription Rights" shall mean the rights described in Section 3.04.

     "Supplemental Eligibility Record Date" shall mean the supplemental record
date for determining Supplemental Eligible Account Holders. The Supplemental
Eligibility Record Date shall be the last day of the calendar quarter preceding
the OTS's approval of the Application for Conversion.

     "Supplemental Eligible Account Holder" shall mean any person (other than an
Eligible Account Holder) holding a Qualifying Deposit, except Officers,
Directors and their Associates, as of the Supplemental Eligibility Record Date.
<PAGE>

                                    -7-


     "Syndicated Community Offering" shall mean the offering of Common Stock
following the Subscription and Community Offerings through a syndicate of
broker-dealers.

     "Syndicated Community Offering Price" shall mean the per share price
submitted with orders for shares of Common Stock in the Syndicated Community
Offering.

     "Tax-Qualified Employee Stock Benefit Plan" shall mean any defined benefit
plan or defined contribution plan, such as an employee stock ownership plan,
stock bonus plan, profit-sharing plan or other plan, that is maintained by the
Holding Company or the Bank for the benefit of the officers or employees of the
Holding Company, the Bank, or any Affiliate of either of them; that, by its
terms, is authorized or required to purchase Common Stock; and that, with its
related trust, meets the requirements to be "qualified" under Section 401 of the
Internal Revenue Code. The Bank may make scheduled discretionary contributions
to a tax-qualified employee stock benefit plan provided, among other things,
such contributions do not cause the Bank to fail to meet its regulatory capital
requirements.

     "Underwriter" shall mean any investment banking firm or firms purchasing or
distributing the Common Stock to be offered in a Public Offering, if any.

     "Underwriting Agreement" shall mean the agreement between the Holding
Company and an Underwriter pursuant to which the Underwriter agrees to purchase
or distribute certain shares of the Common Stock for offering in any Public
Offering.

     "Voting Members" shall mean those Persons qualifying as voting members of
the Bank pursuant to its charter and bylaws.

     "Voting Record Date" shall mean the date fixed by the Directors in
accordance with the OTS regulations for determining eligibility to vote at the
Special Meeting.

                                  ARTICLE II

                     PROCEDURE FOR APPROVAL OF CONVERSION

     Section 2.01 Application and Notice. This Plan, having been duly adopted by
the Board of Directors of the Bank and the Board of Directors of the Holding
Company, will be submitted, together with an Application for Conversion in the
form required by the Conversion Regulations, to the OTS for approval. The Bank
will cause notice of the adoption of the Plan and of its intention to convert to
stock form and to reorganize into holding company form to be given by
publication in a newspaper having general circulation in each community in which
an office of the Bank is located. Copies of the Plan will be made available at
each office of the Bank for inspection by the Members. Upon the filing of the
Application for Conversion, the Bank will cause notice of the adoption of the
Plan to be conspicuously posted
<PAGE>

                                    -8-


at its offices. The Bank also will cause to be published a notice of the filing
with the OTS of an application to convert in accordance with the provisions of
the Plan and OTS regulations. The Bank may issue a press release containing all
material terms of the proposed Conversion and Reorganization.

     Section 2.02 Approval of Plan by Members; the Special Meeting. Following
approval by the OTS of the Bank's Application for Conversion, the Bank shall
submit the Plan for approval of the Bank's Members at the Special Meeting. The
Bank shall mail to each Member, at the Member's last known address appearing on
the records of the Bank, a Notice of Special Meeting and a Proxy Statement. The
Notice of Special Meeting will be conspicuously posted at each office of the
Bank. The Proxy Statement will contain a detailed description of the Conversion
and the Reorganization and information relating to the Subscription Offering, in
the form required by the Conversion Regulations. Each Member will also be given
the opportunity to request a copy of the Plan and the proposed Charter of the
Bank and proposed Bylaws of the Bank. The Special Meeting shall be held upon
written notice given not less than 20 days nor more than 45 days from the last
date on which such notice is mailed to Members. At the Special Meeting, each
Voting Member who qualifies as such by virtue of being a depositor shall be
entitled to cast one vote in person or by proxy for every one hundred dollars
($100), or fraction thereof, such Voting Member had on deposit with the Bank as
of the Voting Record Date, and each Voting Member who qualifies as such by
virtue of being a borrower from the Bank as of July 1, 1991 whose loan(s)
continued to be outstanding as of the Voting Record Date shall be entitled to
cast one vote in person or by proxy in addition to any vote such Voting Member
is entitled to cast as a depositor; provided however, that no Voting Member may
cast more than one thousand votes under any circumstance.

     The OTS shall be notified of the results of the Special Meeting within five
days after the conclusion of the Special Meeting. If the Plan is approved by the
affirmative vote of at least a majority of the total outstanding votes of the
Voting Members, the Bank will take all other necessary steps to effect the
Conversion subject to the terms and conditions of this Plan. If the Plan is not
so approved upon conclusion of the Special Meeting and any adjournment or
adjournments thereof, the Plan shall not be implemented without further vote,
all funds submitted in the Subscription Offering and Community Offering will be
returned to subscribers, with interest as provided herein, and all withdrawal
authorizations will be canceled.

                                  ARTICLE III

                             SALE OF COMMON STOCK

     Section 3.01 In General. As soon as practicable, the Holding Company shall
register the offering of the Common Stock under the Securities Act of 1933, as
amended, and any applicable state laws. After registration of the Common Stock
and receipt of all required regulatory approvals, the Common Stock will be
offered for sale in a Subscription Offering to
<PAGE>

                                    -9-


the Holders of Subscription Rights in the respective priorities set forth in
Section 3.04. No offer for sale of the Common Stock shall be made prior to the
mailing to Members of the Proxy Statement for the Special Meeting. The
Subscription Offering may be commenced as early as the mailing of the Proxy
Statement for the Special Meeting of Members and must be commenced in time to
complete the Conversion within the time period specified in Section 6.04.

     Any shares of Common Stock not subscribed for in the Subscription Offering
will be offered for sale in a Community Offering. Any Common Stock remaining
unsold upon completion of the Subscription Offering and Community Offering may
be offered for sale in a Syndicated Community Offering or a Public Offering or
in some other manner as determined by the Board of Directors of the Bank and the
Board of Directors of the Holding Company with the approval of the OTS. Any such
Syndicated Community or Public Offering shall be conducted in a manner that is
intended to achieve the widest distribution of the Common Stock.

     The Community Offering may be commenced concurrently with the Subscription
Offering. In such case, any orders received in the Community Offering shall be
subject to availability of shares upon conclusion of the Subscription Offering.
The offer and sale of Common Stock prior to the Special Meeting of Members
shall, however, be conditioned upon approval of the Plan by the Voting Members.
The sale of all Common Stock subscribed for in the Subscription and Community
Offerings will be consummated simultaneously on the date the sale of Common
Stock in any Syndicated Community or Public Offering is consummated and only if
all Common Stock is sold.

     The sales price per share of the Common Stock shall be a uniform price
determined in accordance with the Conversion Regulations and Section 3.03,
except that the price to be paid by or through the Underwriters in connection
with a Public Offering may be less a negotiated Underwriters' commission or
discount. The Bank may also elect to offer to pay fees on a per share basis to
qualifying brokers, as determined by the Bank in its sole discretion, who assist
Persons in determining to purchase shares in the Subscription and Community
Offerings.

     Section 3.02 Reorganization as Subsidiary of Holding Company. The Board of
Directors of the Bank intends to take all necessary steps to form the Holding
Company. The Bank will be a wholly-owned subsidiary of the Holding Company
unless the Holding Company is eliminated in the Conversion.

     If the Holding Company is utilized, upon Conversion the Bank will issue its
capital stock to the Holding Company, and the Holding Company will issue and
sell the Common Stock in accordance with this Plan. The Holding Company will
make timely applications for any requisite regulatory approvals, including an
Application to be filed with the OTS on Form H-(e)1 or on Form H-(e)1-S, if
available to the Holding Company, and a Registration Statement on Form S-1 to be
filed with the SEC.
<PAGE>

                                      -10-


     Upon the issuance of the Common Stock, the Holding Company will purchase
from the Bank all of the capital stock of the Bank to be issued by the Bank in
the Conversion in exchange for the Conversion proceeds that are not permitted to
be retained by the Holding Company. The Holding Company will apply to the OTS to
retain 50% of the net proceeds of the sale of the Common Stock. A lesser
percentage may be retained in the discretion of the Boards of Directors of the
Bank and the Holding Company. The Bank believes that the Conversion proceeds
will provide economic strength to the Holding Company and the Bank for the
future in a highly competitive and regulated environment and would facilitate
possible expansion through acquisitions of financial service organizations,
possible diversification into other related businesses and for other business
and investment purposes, including the possible payment of dividends and
possible future repurchases of the Common Stock as permitted by the OTS. The
above activities may also be engaged in by the Bank if the Holding Company is
eliminated.

     The Board of Directors of the Bank may determine for any reason at any time
prior to the issuance of the Common Stock not to utilize a holding company form
of organization in the Conversion. If the Board of Directors of the Bank
determines not to complete the Conversion utilizing a holding company form of
organization, the capital stock of the Bank will be issued and sold in
accordance with the Plan. In such case, the Holding Company's registration
statement on Form S-l will be withdrawn from the SEC, the Bank will take all
steps necessary to complete the Conversion from the mutual to the stock form of
organization, including filing any necessary documents with the OTS, and will
issue and sell the Common Stock in accordance with this Plan. In such event, any
subscriptions or orders received for Common Stock of the Holding Company shall
be deemed to be subscriptions or orders for Common Stock of the Bank, and the
Bank shall take such steps as permitted or required by the OTS or the SEC.

     Any reference to the Holding Company in this Plan shall mean the Bank if
the Holding Company is eliminated in the Conversion.

      Section 3.03  Pricing and Number of Shares of Common Stock;
                    the Independent Appraiser.

     (a) All shares sold in the Conversion will be sold at a uniform price per
share. The aggregate price at which the Common Stock shall be sold shall not be
inconsistent with the estimated pro forma market value of such Common Stock,
based upon an independent valuation as provided for in this Section 3.03. The
Bank shall cause the Independent Appraiser to prepare a pro forma valuation of
the aggregate market value of the Common Stock, which shall be submitted to the
OTS as part of the Bank's Application for Conversion. The valuation shall be
prepared in accordance with Section 563b.7 of the Conversion Regulations. Prior
to the commencement of the Subscription and Community Offering, the Estimated
Price Range will be established, the maximum of which shall be no more than 15%
above the average of the minimum and maximum of such price range and the minimum
of which shall be no more than 15% below such average. From time to time, as
appropriate or as required by the Conversion
<PAGE>

                                    -11-


Regulations or the OTS, the Bank shall cause the Independent Appraiser to review
developments subsequent to its valuation to determine whether the Estimated
Price Range should be revised.

     (b) Based on the valuation by the Independent Appraiser pursuant to this
Section 3.04(a), the Board of Directors of the Bank and the Board of Directors
of the Holding Company shall fix the Maximum Subscription Price and the number
of shares of Common Stock to be offered. The total number of shares of Common
Stock offered and the purchase price per share shall be subject to increase or
decrease at any time prior to any Syndicated Community Offering or Public
Offering or other method of sale to reflect changes in market and financial
conditions. In the event that the aggregate purchase price of the Common Stock
is below the minimum of the Estimated Price Range, or materially above the
maximum of the Estimated Price Range, resolicitation of purchasers may be
required; provided, that up to a 15% increase above the maximum of the Estimated
Price Range will not be deemed material so as to require a resolicitation. Up to
a 15% increase in the number of shares to be issued which is supported by an
appropriate change in the estimated pro forma market value of the Common Stock
will not be deemed to be material so as to require a resolicitation of
subscriptions. In the event that the aggregate purchase price of the Common
Stock is below the minimum of the Estimated Price Range or in excess of 15%
above the maximum of the Estimated Price Range, and a resolicitation is
required, such resolicitation shall be effected in such manner and within such
time as the Holding Company or the Bank shall establish, with the approval of
the OTS, if required. The total number of shares of Common Stock offered will
also be subject to increase in connection with the exercise of any Overallotment
Option; provided, that any additional number of shares of Common Stock issued
for this purpose shall not exceed 15% of the total number of shares of the
Common Stock offered in the Subscription and Community Offerings.

     If the number of shares of Common Stock to be sold in the Conversion,
excluding any number of shares to be issued in connection with any Overallotment
Option or the Oversubscription Provision, is increased after commencement of the
Subscription Offering, any Person who subscribed for the maximum number of
shares of Common Stock shall be permitted to subscribe for an additional number
of shares such that such Person shall be permitted to subscribe for the then
maximum number of shares permitted to be subscribed for by such Person as
adjusted taking into account the increase in the number of shares to be sold,
subject to the rights and preferences of any Person who has priority
Subscription Rights. If either the individual purchase limitations set forth in
Sections 3.04, 3.05 and 3.10 hereof or the number of shares of Common Stock,
excluding any number of shares to be issued in connection with any Overallotment
Option or the Oversubscription Provision, is decreased after commencement of the
Subscription Offering, the order of any Person who subscribed for the maximum
number of shares of Common Stock shall be decreased by the minimum amount
necessary so that such Person shall be in compliance with the then maximum
number of shares permitted to be subscribed for by such Person. The Holding
Company shall not otherwise be required to offer subscribers the right to modify
or rescind their subscriptions as a result of any increase or decrease in the
number of shares of Common Stock offered, unless otherwise required by this
Plan, by the OTS or by applicable law.
<PAGE>

                                      -12-


     (c) If all of the shares of Common Stock are subscribed for in the
Subscription Offering and the Community Offering, or are sold in some manner
other than a Public Offering, the Board of Directors of the Bank and the Board
of Directors of the Holding Company, in consultation with the Independent
Appraiser, shall determine the Actual Subscription Price, subject to approval by
the OTS. If all shares of the Common Stock are not subscribed for and there is a
Public Offering, the Board of Directors of the Bank and the Board of Directors
of the Holding Company, in consultation with the Underwriters and the
Independent Appraiser, shall determine the Public Offering Price, subject to the
approval of the OTS. If there is a Public Offering, the Public Offering Price
will determine the Actual Subscription Price. Except for the purchase price of
shares sold upon the exercise of any Overallotment Option or the
Oversubscription Provision, the aggregate purchase price of the Common Stock
shall be within the Estimated Price Range, unless subscribers are offered the
right to modify or rescind their subscriptions.

     (d) The Holding Company shall not consummate any sale unless the
Independent Appraiser shall have confirmed to the Holding Company, the Bank, and
the OTS that nothing of a material nature shall have occurred that would cause
the Independent Appraiser to conclude that the aggregate purchase price of the
shares of Common Stock sold in the Conversion, exclusive of the aggregate
purchase price of shares sold upon the exercise of the Overallotment Option or
the Oversubscription Provision, is incompatible with its estimate of the pro
forma market value of the Bank at the time of such sale. If the Independent
Appraiser is unable to so confirm, the offering may be canceled or the Bank and
the Holding Company may extend the Conversion, establish a new Estimated Price
Range, Maximum Subscription Price or Actual Subscription Price, extend, reopen
or hold a new Subscription Offering and Community Offering, Syndicated Community
Offering or Public Offering or take such other action as the Board of Directors
of the Bank and the Board of Directors of the Holding Company shall determine
and the OTS shall approve.

     (e) The Common Stock to be issued pursuant to this Plan shall upon issuance
be fully paid and nonassessable.

     Section 3.04 Subscription Rights.

     (a) Each Eligible Account Holder shall receive, as first priority and
without payment, nontransferable subscription rights to subscribe for shares of
Common Stock equal to an amount up to the greater of (i) the amount permitted to
be subscribed for in the Community Offering, which amount is currently equal to
$150,000 of the Common Stock offered in connection with the Conversion, as
specified in Section 3.05(e), and may be increased to 5% of the Common Stock
offered in the Conversion or decreased to less than $150,000, (ii) one-tenth of
one percent of the total offering of shares of Common Stock, or (iii) fifteen
times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Common Stock to be issued by a
fraction of which the numerator is the amount of the Qualifying Deposit of the
Eligible Account Holder and the denominator is the total amount of Qualifying
Deposits of all Eligible Account Holders, in each case on the Eligibility Record
<PAGE>

                                    -13-


Date. Such subscription is subject to the maximum purchase limitation specified
in Section 3.10(a) and the minimum purchase limitation in Section 3.10(c) and
exclusive of an increase in the total number of shares issued due to an increase
in the Estimated Price Range of up to 15%.

     If Eligible Account Holders subscribe for a number of shares of Common
Stock that exceeds the total number of shares of Common Stock being issued, the
Common Stock shall be allocated among subscribing Eligible Account Holders as
follows:

          (i) first, to the extent possible, each Eligible Account Holder shall
     be entitled to subscribe for the entire amount of his or her order, up to
     100 shares;

          (ii) second, each Eligible Account Holder subscribing for in excess of
     100 shares shall be entitled, with respect to such excess, to subscribe for
     the same percentage of the total remaining shares to be issued as the value
     of his or her Qualifying Deposits represents to the aggregate value of the
     Qualifying Deposits of all remaining Eligible Account Holders whose
     subscriptions remain unsatisfied; provided, however, that no fractional
     shares shall be issued; and

          (iii) third, any shares then remaining shall be reallocated (one or
     more times if necessary) among those Eligible Account Holders whose
     subscriptions are not filled pursuant to subparagraphs (i) or (ii) above,
     on the basis otherwise set forth in (ii) above until all available shares
     have been allocated or all subscriptions satisfied.

     Subscription Rights to purchase Common Stock received by Directors and
Officers of the Bank, and their Associates, as Eligible Account Holders that are
based on their increased Savings Accounts in the Bank in the one year period
preceding the Eligibility Record Date shall be subordinated to the Subscription
Rights of all other Eligible Account Holders granted pursuant to the Conversion
Regulations and this Plan.

     (b) The Tax-Qualified Employee Stock Benefit Plans shall receive, without
payment, as a second priority after the filling of subscriptions of Eligible
Account Holders, non-transferable Subscription Rights to purchase Common Stock
up to a maximum of ten percent (10.0%) of the Common Stock. If, after the
filling of subscriptions of Eligible Account Holders, a sufficient number of
shares is not available to fill the subscriptions by such plan, the subscription
by such plan shall be filled to the maximum extent possible; provided, however,
that in the event of an increase in the total number of shares issued due to an
increase in the Estimated Price Range of up to 15%, the additional shares may be
sold to the Tax-Qualified Employee Stock Benefit Plans, subject to the purchase
limitations set forth above and in Section 3.10(a). A Tax-Qualified Employee
Stock Benefit Plan shall not be deemed to be an Associate or Affiliate of, or a
Person Acting in Concert with, any Director or Officer of the Holding Company or
the Bank. Notwithstanding any provision contained herein to the contrary, the
Bank may make scheduled discretionary contributions to a Tax-Qualified Employee
Stock Benefit Plan; provided, among other things, that such contributions do not
cause the Bank to fail to meet its regulatory capital requirements.
<PAGE>

                                    -14-


     (c) Each Supplemental Eligible Account Holder shall receive, as third
priority and without payment, nontransferable subscription rights to subscribe
for shares of Common Stock equal to an amount up to the greater of (i) the
amount permitted to be subscribed for in the Community Offering, which amount is
currently equal to $150,000 of the Common Stock offered in the Conversion, as
specified in Section 3.05(e), and may be increased to 5% of the Common Stock
offered in the Conversion or decreased to less than $150,000 (ii) one-tenth of
one percent of the total offering of shares of Common Stock, or (iii) fifteen
times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Common Stock to be issued by a
fraction of which the numerator is the amount of the Qualifying Deposit of the
Supplemental Eligible Account Holder and the denominator is the total amount of
Qualifying Deposits of all Supplemental Eligible Account Holders, in each case
on the Supplemental Eligibility Record Date. Such subscription is subject to the
maximum purchase limitation specified in Section 3.10(a) and the minimum
purchase limitation in Section 3.10(c) and exclusive of an increase in the total
number of shares issued due to an increase in the Estimated Price Range of up to
15%.

     If Supplemental Eligible Account Holders subscribe for a number of shares
of Common Stock that exceeds the total number of shares of Common Stock being
issued and available after purchases by Eligible Account Holders and
Tax-Qualified Employee Stock Benefit Plans, the Common Stock shall be allocated
among subscribing Supplemental Eligible Account Holders as follows:

          (i) first, to the extent possible, each Supplemental Eligible Account
     Holder shall be entitled to subscribe for the entire amount of his or her
     order, up to 100 shares;

          (ii) second, each Supplemental Eligible Account Holder subscribing for
     in excess of 100 shares shall be entitled, with respect to such excess, to
     subscribe for the same percentage of the total remaining shares to be
     issued as the value of his or her Qualifying Deposits represents to the
     aggregate value of the Qualifying Deposits of all remaining Supplemental
     Eligible Account Holders whose subscriptions remain unsatisfied; provided,
     however, that no fractional shares shall be issued; and

          (iii) third, any shares then remaining shall be reallocated (one or
     more times if necessary) among those Supplemental Eligible Account Holders
     whose subscriptions are not filled pursuant to subparagraphs (i) or (ii)
     above, on the basis otherwise set forth in (ii) above until all available
     shares have been allocated or all subscriptions satisfied.

     Subscription Rights received by an Eligible Account Holder pursuant to
Section 3.04(a) shall be applied in partial satisfaction of the Subscription
Rights received as a Supplemental Eligible Account Holder pursuant to this
Section 3.04(c).

     (d) Each Other Member shall receive, as a fourth priority without payment,
nontransferable Subscription Rights to subscribe for shares of Common Stock
equal to an amount up to the greater of (i) the amount permitted to be
subscribed for in the Community Offering,
<PAGE>

                                    -15-


which amount is currently equal to $150,000 of the Common Stock offered in the
Conversion, as specified in Section 3.05(e), and may be increased to 5% of the
Common Stock offered in the Conversion or decreased to less than $150,000, or
(ii) one-tenth of one percent of the total offering of shares of Common Stock,
subject to the maximum purchase limitation specified in Section 3.10(a) and the
minimum purchase limitation specified in Section 3.10(c) and exclusive of an
increase in the total number of shares issued due to an increase in the
Estimated Price Range of up to 15%.

     If such Other Members subscribe for a number of shares of Common Stock
that, when added to the shares of Common Stock subscribed for by the Eligible
Account Holders, the Tax-Qualified Employee Stock Benefit Plans and the
Supplemental Eligible Account Holders, exceeds the total number of shares of
Common Stock being issued, the subscriptions of such Other Members will be
allocated as follows:

          (i) first, to the extent possible, each Other Member shall be entitled
     to subscribe for the entire amount of his or her order, up to 100 shares;
     and

          (ii) second, remaining shares will be allocated to each Other Member
     whose subscription remains unsatisfied on a 100 share per order basis until
     all such orders have been filled or the remaining shares have been
     allocated.

     (d-1) Each Bank Employee shall receive, as a fifth priority without
payment, nontransferable Subscription Rights to subscribe for shares of Common
Stock equal to an amount up to the greater of (i) the amount permitted to be
subscribed for in the Community Offering, which amount is currently equal to
$150,000 of the Common Stock offered in the Conversion, as specified in Section
3.05(e), and may be increased to 5% of the Common Stock offered in the
Conversion or decreased to less than $150,000, or (ii) one-tenth of one percent
of the total offering of shares of Common Stock, subject to the maximum purchase
limitation specified in Section 3.10(a) and the minimum purchase limitation
specified in Section 3.10(c) and exclusive of an increase in the total number of
shares issued due to an increase in the Estimated Price Range of up to 15%.

     If such Bank Employees subscribe for a number of shares of Common Stock
that, when added to the shares of Common Stock subscribed for by the Eligible
Account Holders, the Tax-Qualified Employee Stock Benefit Plans, the
Supplemental Eligible Account Holders and the Other Members, exceeds the total
number of shares of Common Stock being issued, the subscriptions of such Bank
Employees will be allocated as follows:

          (i) first, to the extent possible, each Bank Employee shall be
     entitled to subscribe for the entire amount of his or her order, up to 100
     shares; and

          (ii) second, remaining shares will be allocated to each Bank Employee
     whose subscription remains unsatisfied on a 100 share per order basis until
     all such orders have been filled or the remaining shares have been
     allocated.
<PAGE>

                                    -16-


     (e) Subscription Rights are non-transferable and may not be exercised by or
on behalf of any Person other than the Holder of Subscription Rights. Prior to
the Effective Date, no Person shall offer to transfer, enter into any agreement
or understanding to transfer, or transfer the legal or beneficial ownership of
any shares of Common Stock, except pursuant to or as contemplated by this Plan.

     (f) Notwithstanding the foregoing, no Person will be offered or sold any
Common Stock in the Subscription Offering if such Person resides either in a
foreign jurisdiction or in a state or other jurisdiction of the United States
with respect to which both of the following apply:

          (i) a small number of Persons otherwise eligible to subscribe for
     shares of Common Stock under the Plan reside in such jurisdiction; and

          (ii) the granting of the Subscription Rights or the offer or sale of
     shares of Common Stock to such Persons would require the Bank, the Holding
     Company or their employees, officers or directors to register under the
     securities laws or other laws of similar import of such jurisdiction as a
     broker, dealer, salesman or selling agent (as defined in the laws or
     regulations of such jurisdiction) or to register or otherwise qualify the
     Common Stock for sale in such jurisdiction, and such registration or
     qualification would be impracticable in the judgment of the Bank or the
     Holding Company for reasons of cost or otherwise.

No payment will be made in lieu of the granting of Subscription Rights to any
such Person.

     (g) In the Subscription Offering, preference may be given to Eligible
Account Holders, Supplemental Eligible Account Holders and Other Members
residing in the counties in which the Bank has offices.

     Section 3.05 Community Offering. Shares of Common Stock not subscribed for
in the Subscription Offering may be offered in a Community Offering, commencing
concurrently with or subsequent to the commencement of the Subscription
Offering, subject to the following terms and conditions:

          (a) The Community Offering shall be made to the following:

          (i) customers, employees, officers, and directors of the Bank and
     their immediate families;

          (ii) Persons whose primary residence is in the State of Illinois;

          (iii) a trust or custodial arrangement forming part of an Individual
     Retirement Account established pursuant to Section 408 of the Internal
     Revenue Code of 1986, or
<PAGE>

                                    -17-


      part of a qualified retirement plan established pursuant to Section 401(a)
      of the Internal Revenue Code of 1986 and maintained for the benefit of a
      natural person described in subparagraphs (ii) or (iii) above;

          (iv) certain other Persons to whom the Subscription Prospectus may be
     delivered by the Holding Company; and

          (v) certain institutional investors.

     (b) The Community Offering shall be completed no later than 45 days
following the termination of the Subscription Offering, unless extended with the
approval of the OTS.

     (c) The Community Offering shall be by means of a direct marketing program.
The Bank or the Holding Company may, if the Board of Directors of the Bank and
the Board of Directors of the Holding Company deem it advisable, engage the
services of a registered broker-dealer, consultant or investment banking firm,
experienced and expert in the sale of savings institution securities, to assist
the Holding Company in the direct marketing program. The Holding Company and the
Bank shall make distribution of the Common Stock to be sold in the Community
Offering in such a manner as to promote the widest distribution of Common Stock.

     (d) In offering the unsubscribed for shares to the public in the Community
Offering, a number of shares equal to the lesser of 25% of the Common Stock
offered in the Conversion or the Common Stock not subscribed for in the
Subscription Offering, at the option of the Bank and the Holding Company, may be
initially reserved for institutional investors who need not be residents of the
counties in which the Bank has offices.

     (e) Any Person subscribing for Common Stock pursuant to the provisions of
this Section 3.05 shall be required to purchase a minimum of 25 shares to the
extent such shares are available for purchase. The maximum amount that any
Person, together with any Associate or group of Persons Acting in Concert, may
subscribe for in the Community Offering shall be $150,000 of the Common Stock
offered in the Conversion; provided, however, that the amount permitted to be
purchased in the Community Offering may be increased to 5% of the Common Stock
offered in the Conversion or decreased to less than $150,000 without the further
approval of members or resolicitation of subscribers. If there are not
sufficient shares available to fill all subscription requests, the total number
of shares available in the Community Offering shall be allocated as follows:

          (i) first, to each subscriber whose order is accepted and who is a
     natural person maintaining his or her primary residence in a county in
     which the Bank has an office (or a trust maintained for the benefit of such
     person), the shares available to them will be allocated in the manner which
     permits each such person, to the extent possible, to purchase the number of
     shares necessary to make his total allocation of Common Stock
<PAGE>

                                    -18-


     equal to the lesser of 100 shares or the number of shares subscribed for by
     such persons, thereafter, unallocated shares will be allocated among such
     persons whose subscriptions remain unsatisfied on a 100 shares per order
     basis until all such orders have been filled or the remaining shares have
     been allocated;

          (ii) second, to the extent that there are shares remaining after all
     subscriptions by Persons described in (i) above, to each subscriber whose
     order is accepted and who is a natural person maintaining an office or a
     residence in the State of Illinois (or a trust maintained for the benefit
     of such person), the shares available to them will be allocated in the same
     manner as set forth in (i) above; and

          (iii) third, to the extent that there are shares remaining after all
     subscriptions by persons described in (i) and (ii) above, to each other
     subscriber whose order is accepted, the shares available to them will be
     allocated in the same manner as set forth in (i) above.

     (f) Notwithstanding the foregoing:

          (i) no Person will be offered or sold any shares of Common Stock in
     the Community Offering if such Person resides either in a foreign
     jurisdiction or in a state or other jurisdiction of the United States in
     which the offer or sale of shares of Common Stock would require the Holding
     Company or the Bank or their employees, officers or directors to register
     under the securities laws or other laws of similar import of such
     jurisdiction as a broker, dealer, salesman or selling agent (as defined in
     the laws of such jurisdiction) or to register or otherwise qualify the
     Common Stock for sale in such jurisdiction and such registration or
     qualification would be impracticable in the judgment of the Holding Company
     or the Bank for reasons of cost or otherwise; and

          (ii) the Holding Company reserves the absolute right to accept or
     reject any or all orders in the Community Offering in whole or in part.

     Section 3.06 Subscription Offering and Community Offering Procedures; Order
Forms.

     (a) After the registration statement for the Common Stock has been declared
effective and all other required regulatory approvals have been obtained, the
Holding Company shall distribute or make available the Subscription Prospectus,
together with Order Forms for the purchase of Common Stock, to the Holders of
Subscription Rights for the purpose of enabling them to exercise their
respective Subscription Rights. Notwithstanding the foregoing, the Holding
Company may elect to send Order Forms only to those persons who request them
after such notice has been given as is approved by the OTS and is adequate to
apprise all Holders of Subscription Rights of the pendency of the Subscription
Offering. Such notice may be included with the Proxy Statement for the Special
Meeting and may also be included in a notice of the pendency of the Conversion
and the Special Meeting sent to all Eligible Account
<PAGE>

                                    -19-


Holders and Supplemental Eligible Account Holders in accordance with the
regulations of the OTS. Each Order Form must be preceded or accompanied by the
Subscription Prospectus describing the Holding Company, the Bank, the Common
Stock and the Subscription Offering and the Community Offering. Each Order Form
will contain such information as may be required by the Rules and Regulations of
the OTS.

     (b) The Holders of Subscription Rights shall have a period of time within
which to complete and deliver an Order Form to the Holding Company. The exact
date and time by which completed Order Forms must be received by the Holding
Company shall be set forth on the Order Form; provided, that if the Holders of
Subscription Rights are required to return a postage-paid request card to
receive a Subscription Prospectus and Order Form, the Subscription Offering
shall not terminate until the expiration of 30 days from such mailing of the
postage-paid communication, unless a shorter period of time is approved by the
OTS. Failure of any Holder of Subscription Rights to deliver a properly executed
Order Form to the Holding Company, together with full payment (or authorization
for payment by withdrawal from a time or savings account with the Bank) for the
shares of Common Stock subscribed for, within the time limits prescribed shall
be deemed a waiver and release by such Person of any Subscription Rights.

     (c) The Holding Company shall also distribute or make available the
Subscription Prospectus, together with Order Forms for the purchase of Common
Stock, to certain other Persons, as described in Section 3.05. A subscriber in
the Community Offering shall have a period of time within which to complete and
deliver an Order Form to the Holding Company, which period of time shall end at
the same time that the Subscription Offering terminates, unless extended
pursuant to Section 3.05(b). The exact date and time by which completed Order
Forms must be received by the Holding Company shall be set forth on the Order
Form.

     (d) The Holding Company may, subject to the provisions of this Plan and any
required approval of the OTS, extend the period during which an Order Form must
be completed and delivered to the Holding Company. Any such extension shall be
for a period that the Board of Directors of the Bank and the Board of Directors
of the Holding Company determine is appropriate. The Holding Company may, but
will not be required to, waive any irregularity on any Order Form, or require
the submission of corrected Order Forms or the remittance of full payment for
subscribed shares of Common Stock by such date as the Holding Company may
specify. The interpretation by the Holding Company of the terms and conditions
of the Order Forms will be final and binding on all subscribers.

     Section 3.07 Payment for Common Stock.

     (a) Payment for shares of Common Stock subscribed for in the Subscription
Offering and in any Community, Syndicated Community, or Public Offerings shall
be equal to the Maximum Subscription Price multiplied by the number of shares
that are being subscribed
<PAGE>

                                    -20-


for. Such payment must, in general, be made at the time the Order Form is
delivered to the Holding Company and may be made:

          (i) in cash, if delivered in person, or by check, bank draft, or money
     order,

     or

          (ii) if the subscriber has a Savings Account in the Bank, the
     subscriber may authorize the Bank to withdraw from such Savings Account an
     amount equal to the aggregate Maximum Subscription Price of the shares for
     which the Person subscribed.

If the subscriber is a Benefit Plan, the subscribing Benefit Plan may pay for
the shares of Common Stock at the Actual Subscription Price on or prior to the
Effective Date. If the subscribing Benefit Plan is an employee stock ownership
plan, it may pay on or prior to the Effective Date only if it has received a
loan commitment from the Holding Company or a source of funding acceptable to
the Holding Company, committing to advance to the Benefit Plan on or before the
Effective Date the aggregated Maximum Subscription Price of the shares for which
the Benefit Plan subscribed.

     Notwithstanding the foregoing, the Bank and the Holding Company shall have
the right, in their sole discretion, to permit institutional investors to submit
contractually irrevocable orders in the Community Offering and to thereafter
submit payment for the Common Stock for which they are subscribing in the
Community Offering at any time prior to 48 hours before the completion of the
Conversion, unless such 48 hour period is waived by the Bank and the Holding
Company, in their sole discretion.

     (b) If the Actual Subscription Price is less than the Maximum Subscription
Price, the difference will either be promptly refunded to all subscribers (or
withdrawal authorizations from time or savings accounts shall be reduced) or, if
the subscriber has so elected on a space that may be provided on the Order Form,
the difference (excluding accrued interest) will be applied to the purchase of
additional whole shares of Common Stock to the extent available, and any
remaining difference will be promptly refunded to all subscribers (or withdrawal
authorizations from time or savings accounts shall be reduced).

     (c) If a subscriber authorizes a withdrawal of the amount of the Maximum
Subscription Price from a time or savings account with the Bank as payment for
the shares subscribed for, the Bank will have the right upon receipt of the
Order Form by the Holding Company to make such withdrawal immediately or to
place a hold on such account equal to the aggregate Maximum Subscription Price.
The Bank will allow withdrawal from certificates of deposit for such payment
without the assessment of penalties; however, if the withdrawal results in the
certificate failing to meet any applicable minimum balance requirement, the
certificate evidencing the account may be canceled and the remaining balance
transferred to a statement savings account that will earn interest at the
regular passbook rate. Where any applicable required minimum balance is
maintained in such certificate account, the rate of return on the balance of the
certificate account will remain the same as prior to such early withdrawal. If
the
<PAGE>

                                    -21-


Bank withdraws funds from a subscriber's time account, or places a hold on such
account, in accordance with this Section 3.06, and the time account matures
prior to the date the Conversion is completed or terminated, the funds so
withdrawn or placed under a hold shall be transferred upon maturity of the time
account to a statement savings account that will earn interest at the regular
passbook rate.

     (d) The Bank will pay interest, at not less than the passbook rate, for all
amounts paid in cash, by check, bank draft, or money order to purchase shares of
the Common Stock in the Subscription Offering or Community Offering from the
date payment is received until the date the Conversion is completed or
terminated. If any withdrawal from a time or savings account made pursuant to
paragraph (c) above is made at any time prior to the date the Conversion is
completed or terminated, the Bank shall pay interest to the Eligible Account
Holder on the amount withdrawn as if such amount had remained in the account
from which it was withdrawn until the date the Conversion is completed or
terminated.

     (e) The Bank will not knowingly loan funds or otherwise extend credit to
any Person for the purpose of purchasing shares of the Common Stock.

     Section 3.08 Syndicated Community Offering.

     (a) Shares of Common Stock not sold in the Subscription Offering or the
Community Offering may be offered for sale in a Syndicated Community Offering,
subject to such terms, conditions, and procedures as may be determined by the
Bank, in a manner that is intended to achieve the widest distribution of the
Common Stock subject to the right of the Bank to accept or reject in whole or in
part all subscriptions in the Syndicated Community Offering.

     (b) In the Syndicated Community Offering, any Person together with any
Associate or group of Persons Acting in Concert may purchase up to an amount
equal to $150,000 of the Common Stock offered in the Conversion subject to the
maximum purchase limitation specified in Section 3.10(a) and the minimum
purchase limitation specified in Section 3.10(c) and exclusive of an increase in
the total number of shares issued due to an increase in the Estimated Price
Range of up to 15%. However, the shares purchased in the Community Offering by
any Person together with an Associate or group of Persons Acting in Concert
pursuant to Section 3.06 shall be counted toward meeting the maximum purchase
limitation found in this Section 3.08.

     (c) Provided that the Subscription Offering has commenced, the Bank may
commence the Syndicated Community Offering at any time after the mailing to the
Members of the Proxy Statement to be used in connection with the Special Meeting
of Members, provided that the completion of the offer and sale of the Common
Stock shall be conditioned upon the approval of this Plan by the Voting Members.
If the Syndicated Community Offering is not sooner commenced pursuant to the
provisions of the preceding sentence, the Syndicated Community Offering will be
commenced as soon as practicable following the date upon which the Subscription
and Community Offerings terminate.
<PAGE>

                                    -22-


     Section 3.09 Public Offering Alternative.

     (a) Shares of Common Stock not sold in the Subscription Offering or the
Community Offering may, as an alternative to a Syndicated Community Offering
pursuant to Section 3.08, be offered for sale by the Holding Company to or
through Underwriters. The provisions of Section 3.10 shall not be applicable to
sales to underwriters for purposes of such a Public Offering. Any such
Underwriter shall agree to (a) purchase such shares from the Holding Company
with a view to reoffering them to the general public; (b) use their best efforts
to sell, for the account of the Holding Company, such shares to the general
public; or (c) a combination of (a) and (b), subject to the following terms and
conditions:

     (b) Any Underwriting Agreement shall provide that the Underwriters shall
agree to purchase all shares of the Common Stock not sold in the Subscription
Offering or the Community Offering, if any such shares are purchased.

     (c) The price paid to the Holding Company by or through the Underwriters
for the Common Stock shall be the aggregate Public Offering Price for the shares
of Common Stock so offered, less discounts and commissions as negotiated between
the Bank, the Holding Company, and the Underwriters and approved by the OTS and
the National Association of Securities Dealers, Inc.

     (d) The Underwriting Agreement shall be subject to the following conditions
and such other conditions as may be acceptable to the Bank, the Holding Company
and the OTS:

          (i) purchases in the Public Offering shall be subject to the
     limitations of Section 3.10; and

          (ii) the Holding Company and its Underwriters shall use reasonable
     efforts to assure that the stock to be offered and sold in the Public
     Offering shall be offered and sold in a manner that, to the extent
     practicable, will achieve the widest distribution of such stock.

     (e) If for any reason a Syndicated Community Offering or a Public Offering
of shares of Common Stock not sold in the Subscription and Community Offerings
cannot be effected, or if any insignificant residue of shares of Common Stock is
not sold in the Subscription and Community Offerings or in the Syndicated
Community or Public Offering, other arrangements will be made for the
disposition of unsubscribed shares by the Bank, if possible. Such other purchase
arrangements will be subject to the approval of the OTS.
<PAGE>

                                    -23-


     Section 3.10 Restrictions on Purchase and Transfer of Common Stock. The
following limitations shall apply to all purchases of Common Stock:

     (a) No Person, acting alone, acting together with any other Person, or
Acting in Concert with any group of Persons, shall be entitled to purchase more
than 1.0% of the Common Stock offered, except for certain Eligible Account
Holders and Supplemental Eligible Account Holders which may subscribe for or
purchase shares in accordance with Section 3.04(a) and (c), respectively;
provided, however, that in the event the maximum purchase limitations set forth
in this Section 3.10(a) is increased pursuant to Section 3.10(e) below to more
than 1.0% of the shares of Common Stock offered, orders for Common Stock in the
Community Offering and in the Syndicated Community Offering (or the Public
Offering), if any, shall, as determined by the Bank and the Holding Company,
first be filled to a maximum of 1.0% of the total number of shares of Common
Stock offered and thereafter remaining shares shall be allocated on an equal
number of shares per order basis until all orders have been filled. For purposes
of applying this purchase limitation, the purchases of any Tax-Qualified
Employee Stock Benefit Plan shall not be subject to such purchase limitation,
and the purchases of any Benefit Plan shall not be aggregated with those of any
other Benefit Plan or other Person; provided, however, that any one or more
Tax-Qualified Employee Stock Benefit Plans may subscribe for up to and including
10% of the Common Stock issued.

     (b) The Officers and Directors of the Bank and the Holding Company and
their Associates, collectively, shall be entitled to purchase the maximum number
of shares of Common Stock issued in connection with the Conversion as permitted
by Section 563b.3(c)(8) of the Conversion Regulations. In applying this
limitation, Common Stock purchased by any one or more Tax-Qualified Employee
Stock Benefit Plan shall not be counted.

     (c) Any Person exercising subscription rights to purchase Common Stock
shall be required to purchase a minimum of 25 shares to the extent such shares
are available for purchase. However, in the event the minimum number of shares
of Common Stock that must be purchased times the price per share exceeds five
hundred dollars ($500), then the minimum purchase requirement shall be reduced
to such number of shares that, when multiplied by the price per share, the
aggregate price for any such minimum purchase of shares of Common Stock shall
not exceed five hundred dollars ($500).

     (d) Shares of Common Stock subscribed for in the Subscription Offering, the
Community Offering, and any Syndicated or Public Offering or purchased in some
other manner shall be aggregated for purposes of determining if the limitations
of this Section 3.10(a) and (b) have been violated.

     (e) Depending upon market or financial conditions, the Board of Directors
of the Bank and the Holding Company, without further approval of the Members,
may decrease or increase the purchase limitations in this Plan, provided that
the maximum purchase limitations may not be increased to a percentage in excess
of 5%. Notwithstanding the foregoing, the maximum purchase limitation set forth
in Section 3.10(a) above may be increased up to 9.99%
<PAGE>

                                    -24-


provided that orders for Common Stock exceeding 5% of the shares being offered
shall not exceed, in the aggregate, 10% of the total offering. If the Bank and
the Holding Company increase the maximum purchase limitations, the Bank and the
Holding Company are only required to resolicit Persons who subscribed for the
maximum purchase amount and may, in the sole discretion of the Bank and the
Holding Company, resolicit certain other large subscribers.

     In the event shares of Common Stock are sold in excess of the maximum of
the Estimated Price Range (the "Adjusted Maximum"), such shares will be
allocated in the following order of priority: (i) to fill the Tax-Qualified
Employee Stock Benefit Plans' subscription to the Adjusted Maximum; (ii) in the
event that there is an oversubscription at the Eligible Account Holder level, to
fill unfulfilled subscriptions of Eligible Account Holders exclusive of the
Adjusted Maximum in accordance with Section 3.04(a); (iii) in the event there is
an oversubscription at the Supplemental Eligible Account Holder level, to fill
unfulfilled subscriptions of Supplemental Eligible Account Holders exclusive of
the Adjusted Maximum in accordance with Section 3.04(c); (iv) in the event that
there is an oversubscription at the Other Member level, to fill unfulfilled
subscriptions of Other Members exclusive of the Adjusted Maximum in accordance
with Section 3.04(d); (v) in the event that there is an oversubscription at the
Bank Employee level, to fill unfulfilled subscriptions of Bank Employees
exclusive of the Adjusted Maximum in accordance with Section 3.04(d-1); and (vi)
to fill unfulfilled Subscriptions in the Community Offering exclusive of the
Adjusted Maximum in accordance with Section 3.05.

     Each Person purchasing Common Stock in the Conversion shall be deemed to
confirm that such purchase does not conflict with the purchase limitations set
forth in this Plan.

     (f) As used in this Section 3.10, the Officers and Directors of both the
Bank and the Holding Company shall not be deemed to be Associates or a group
affiliated with each other or otherwise Acting in Concert solely as a result of
their being Officers or Directors of the Bank or the Holding Company.

     Section 3.11 Time Limits for Sale of Shares; Effect of Inability to Sell.
All shares of Common Stock not subscribed for at the completion of the
Subscription Offering shall be sold within 45 days after completion of the
Subscription Offering, or such longer period as the OTS may approve. If all
shares are not sold as provided for herein, the Bank and the Holding Company
will consult with the OTS to determine an alternative method of sale. In such
event and if required by the OTS or the Securities and Exchange Commission, a
resolicitation of those Persons who have subscribed for shares will be made. If
such an alternative method is not agreed upon, the Conversion and the
Reorganization will not be effected, the Bank will remain in mutual form, all
funds submitted to the Bank and the Holding Company as payment for shares of the
Common Stock will be returned to subscribers, with interest as provided herein,
and all withdrawal authorizations will be canceled.

     Section 3.12 Enforcement of Terms and Conditions. The Bank and the Holding
Company shall have the right to take all such action as they may, in their sole
discretion, deem
<PAGE>

                                    -25-


necessary, appropriate, or advisable in order to monitor and enforce the terms,
conditions, limitations, and restrictions contained in this Article III and
elsewhere in this Plan and the terms, conditions, and representations contained
in the Order Forms, including, but not limited to, the right to require any
subscriber or purchaser to provide evidence, in a form satisfactory to the Bank,
of such Person's eligibility to subscribe for or purchase shares of the Common
Stock under the terms of this Plan and the absolute right (subject only to any
necessary regulatory approvals or concurrence) to reject, limit, or revoke
acceptance of any subscription or order and to delay, terminate, or refuse to
consummate any sale of Common Stock that they believe might violate, or is
designed to, or is any part of a plan to evade or circumvent such terms,
conditions, limitations, restrictions, and representations. Any such action
shall be final, conclusive, and binding on all Persons, and the Bank and the
Holding Company and their respective Boards of Directors shall be free from any
liability to any Person on account of any such action.

                                  ARTICLE IV

                             CERTAIN RESTRICTIONS

     Section 4.01 Sale of Shares Purchased by Directors or Officers. All shares
of the Common Stock purchased or acquired (either directly or indirectly) by the
Directors or Officers of the Bank or of the Holding Company on original issue in
the Conversion either directly from the Holding Company (by subscription or
otherwise) or from the Underwriters (or otherwise beneficially owned by such
Directors or Officers immediately after such original issuance) shall be subject
to the restriction that the shares shall not be sold for a period of one year
following the date of purchase. Such restriction shall not apply to the shares
of any such Director or Officer in the event of the death of such Person. In
addition, such restriction shall not apply to shares held by any Tax-Qualified
Employee Stock Benefit Plan. In connection with the shares of the Common Stock
that are subject to this restriction on resale:

          (a) Each certificate for such shares shall bear a legend giving
     appropriate notice of such restriction.

          (b) Appropriate instructions shall be issued to the transfer agent for
     the Common Stock with respect to applicable restrictions on transfer of any
     such restricted stock.

          (c) Any shares issued as a stock dividend, stock split, or otherwise
     with respect to any such restricted stock shall be subject to the same
     restrictions as applicable to such originally restricted stock until the
     restrictions respecting such originally restricted stock are terminated,
     and any certificate for such shares shall bear a legend advising of such
     restrictions.
<PAGE>

                                    -26-


     Section 4.02 Subsequent Purchases of Shares by Officers and Directors. For
a period of three years following the Effective Date, no Officer or Director of
the Bank or the Holding Company (or any person who was an Officer or Director of
the Bank or the Holding Company at any time after the date on which the Board of
Directors of the Bank adopts this Plan), or Associate of any of them, shall,
without the prior written approval of the OTS, purchase or acquire direct or
indirect beneficial ownership of any shares of the capital stock of the Holding
Company, except through a registered broker or dealer. This restriction shall
not apply to any purchase or acquisition effected pursuant to any Benefit Plan,
nor to negotiated transactions involving more than one percent (1%) of the
outstanding shares of common stock of the Holding Company. As used herein, the
term "negotiated transaction" means a transaction in which the securities are
offered and the terms and arrangements relating to any sale are arrived at
through direct communications between the seller or any person acting on its
behalf and the purchaser or his investment representative (a professional
investment advisor acting as agent for the purchaser and independent of the
seller and not acting on behalf of the seller in connection with the
transaction).

     Section 4.03 Acquisition of Control.

     (a) In accordance with OTS regulations, for a period of not less than three
years (or such longer period as may be subsequently authorized under the
Conversion Regulations for savings associations converting to stock form)
following the Effective Date, no Person or group of Persons Acting in Concert
shall, directly or indirectly, offer to acquire or acquire the beneficial
ownership of more than ten percent (10%) of any class of any equity security of
the Holding Company or the Bank without the prior consent of the OTS. For
purposes of this Section 4.03, the term "Person" shall not include the Holding
Company or any majority-owned subsidiary thereof, or any Tax-Qualified Employee
Stock Benefit Plan or any trust or custodial arrangement established in
connection with any such plan; provided, that the plan or plans do not have
beneficial ownership in the aggregate of more than twenty-five percent (25%) of
any class of equity security of the Bank or the Holding Company.

     (b) The charter of the Bank will contain a provision stipulating that, for
a period of five years following the Effective Date, no Person or group of
Persons Acting in Concert, except the Holding Company (if a holding company form
of organization is utilized), shall directly or indirectly offer to acquire or
acquire the beneficial ownership of more than ten percent (10%) of any class of
an equity security of the Bank, without the prior written approval of the OTS.
In addition, such charter may also provide that for a period of five years
following conversion shares beneficially owned in violation of the
above-described charter provision shall not be entitled to vote and shall not be
voted by any Person or counted as voting stock in connection with any matter
submitted to stockholders for a vote. In addition, the charter will contain
provisions providing that special meetings of the stockholders relating to
changes in control or amendment of the charter may only be called by the Board
of Directors and that shareholders shall not be permitted to cumulate their
votes for the election of directors.
<PAGE>

                                    -27-


     (c) The Articles of Incorporation of the Holding Company contains a
provision that provides that shares of common stock that are beneficially owned,
directly or indirectly, by a person who beneficially owns in excess of 10% of
the voting stock of the Holding Company shall automatically be converted into
shares of excess common stock of the Holding Company. Shares of excess common
stock are identical to shares of common stock except that they are limited to
one one-hundredth (1/100) of one vote per share. In addition, the Articles of
Incorporation and Bylaws of the Holding Company contain provisions for staggered
terms of the directors, noncumulative voting for directors, limitations on the
calling of special meetings, a fair price provision for certain business
combinations and certain notice requirements.

     (d) For the purposes of this Section 4.03:

          (i) The term "Person" includes an individual, a group Acting in
     Concert, a corporation, a partnership, an association, a joint stock
     company, a trust, an unincorporated organization or similar company, a
     syndicate, or any other group formed for the purpose of acquiring, holding,
     or disposing of securities of an insured institution;

          (ii) The term "offer" includes every offer to buy or acquire,
     solicitation of an offer to sell, tender offer for, or request or
     invitation for tenders of, a security or interest in a security for value;

          (iii) The term "acquire" includes every type of acquisition, whether
     effected by purchase, exchange, operation of law, or otherwise; and

          (iv) The term "security" includes non-transferable subscription rights
     issued pursuant to a plan of conversion as well as a "security" as defined
     in 15 U.S.C. ss.8c(a)(10).

                                   ARTICLE V

            EFFECT OF CONVERSION; CERTAIN COVENANTS AND AGREEMENTS

     Section 5.01 Restated Charter and Adoption of New Bylaws; Name of Converted
Bank. The Bank shall take all appropriate steps to amend and restate its Charter
to read in the form of a charter for a federal stock savings bank as specified
in the Rules and Regulations of the OTS and approved by the Board of Directors
of the Bank. The Bank shall also take all appropriate steps to adopt Bylaws
sufficient for a federal stock savings bank. The name of the converted Bank
shall be Fairfield Savings Bank, F.S.B. By voting to adopt this Plan, Members of
the Bank will be voting to adopt a Federal Stock Charter and Bylaws for a
Federal Stock Savings Bank attached as Exhibits I and II to this Plan. The
effective date of the Bank's stock charter and bylaws shall be the Effective
Date.
<PAGE>

                                    -28-


     Section 5.02 Effect of Conversion and Reorganization. On the Effective
Date, the Bank shall cease to be a mutual institution and shall simultaneously
become a stock institution. All of the property, rights, powers, franchises,
debts, liabilities, obligations, and duties of the mutual institution shall
continue as such in the stock institution, and all deposits in the mutual
institution shall remain as deposits of equal character and value in the stock
institution. The corporate existence of the Bank shall not terminate, and the
converted Bank shall be a continuation of the mutual institution that existed
immediately before the filing of the Federal Stock Charter. The Holding Company
shall purchase the common stock of the Bank with such amount from the net
proceeds received by the Holding Company from the sale of the Common Stock as
shall be determined by the Board of Directors of the Bank and the Board of
Directors of the Holding Company and as shall be approved by the OTS, with the
result that the Bank will become a wholly-owned subsidiary of the Holding
Company.

     Section 5.03 Liquidation Account. The Bank shall establish at the time of
the Conversion a liquidation account (the "Liquidation Account") for the benefit
of Eligible Account Holders and Supplemental Eligible Account Holders who
continue to maintain a Savings Account in the Bank. Each Eligible Account Holder
and Supplemental Eligible Account Holder shall, with respect to his or her
Savings Account, hold a related inchoate interest in a portion of the
liquidation account balance, in relation to his or her Savings Account balance
at the Eligibility Record Date or Supplemental Eligibility Record Date, as
applicable, or to such balance as it may be subsequently reduced, as hereinafter
provided.

     The initial Liquidation Account balance shall be equal to the net worth of
the Bank (adjusted to reflect generally accepted accounting principles) as of
the latest practicable date prior to the Conversion. The initial Liquidation
Account balance shall not be increased, and shall be subject to downward
adjustment to the extent of any downward adjustment to the Subaccount Balance of
any Eligible Account Holder or Supplemental Eligible Account Holder in
accordance with Section 563b.3(f)(5) of the Conversion Regulations.

     The initial Subaccount Balance for a Savings Account held by an Eligible
Account Holder or Supplemental Eligible Account Holder shall be determined by
multiplying the opening balance in the Liquidation Account by a fraction, the
numerator of which is the amount of such Eligible Account Holder's or
Supplemental Eligible Account Holder's Qualifying Deposit and the denominator of
which is the total amount of all Qualifying Deposits of all Eligible Account
Holders and Supplemental Eligible Account Holders in the Bank.

     Such initial Subaccount Balance shall not be increased, but shall be
subject to downward adjustment as follows. If, at the close of business on any
annual closing date, commencing on or after the Effective Date, the deposit
balance in the Savings Account of an Eligible Account Holder or Supplemental
Eligible Account Holder is less than the lesser of (i) the balance in the
Savings Account at the close of business on any other annual closing date
subsequent to the Eligibility Record Date or Supplemental Eligibility Record
Date, as applicable, or (ii) the amount of the Qualifying Deposit in such
Savings Account, the Subaccount Balance for such Savings Account shall be
adjusted by reducing such Subaccount Balance in an amount
<PAGE>

                                    -29-


proportionate to the reduction in such deposit balance. In the event of such
downward adjustment, the Subaccount Balance shall not be subsequently increased,
notwithstanding any subsequent increase in the deposit balance of the related
Savings Account. If any such Savings Account is closed, the related Subaccount
shall be reduced to zero.

     A distribution of each Subaccount Balance may be made only in the event of
a complete liquidation of the Bank. Following all payments to creditors
(including those to Account Holders to the extent of their Savings Accounts),
each Eligible Account Holder and Supplemental Eligible Account Holder shall be
entitled to receive a liquidating distribution from the Liquidation Account in
the amount of the then adjusted Subaccount Balance for his or her Savings
Account then held. Liquidating distributions will be made to such Eligible
Account Holders and Supplemental Eligible Account Holders before any liquidation
distribution may be made to any holders of the Bank's capital stock. No merger,
consolidation, purchase of bulk assets with assumption of Savings Accounts and
other liabilities, or similar transactions with an FDIC-insured institution, in
which the Bank is not the surviving institution, shall be deemed to be a
complete liquidation for this purpose. In such a transaction, the liquidation
account shall be assumed by the surviving institution.

     The Bank shall not be required to set aside funds for the purpose of
establishing the liquidation account and, except as provided in this Section
5.03, the existence of such account shall not operate to restrict the use or
application of any of the net worth or shareholders' equity accounts of the Bank
subsequent to the Conversion.

     Section 5.04 Voting Rights. Except as may be provided in the Federal Stock
Charter of the Bank pursuant to any amendment thereto subsequent to the
Effective Date, the holders of the common stock of the Bank shall have exclusive
voting rights upon the Effective Date. Except as may be provided in the Articles
of Incorporation of the Holding Company pursuant to any amendment thereto
subsequent to the Effective Date, the holders of the common stock and excess
common stock of the Holding Company shall have exclusive voting rights upon the
Effective Date.

     Section 5.05 Issuance of Stock. Subsequent to the Effective Date, the Board
of Directors of the Bank, subject to the provisions of the Federal Stock Charter
and the Bylaws of the Bank, shall have the authority to issue any of the
authorized, unissued, and unreserved shares of common and preferred stock and to
fix the relative rights, preferences, and limitations of such preferred stock.
Except as may be required by the Conversion Regulations or otherwise, the Board
of Directors of the Bank shall have sole discretion in the decision to issue
such shares, and no shareholder approval will be required for the issuance of
such shares.

     Subsequent to the Effective Date, the Board of Directors of the Holding
Company, subject to the provisions of the Articles of Incorporation and the
Bylaws of the Holding Company, shall have the authority to issue any of the
authorized, unissued, and unreserved shares of common and preferred stock and to
fix the relative designations, powers, preferences, rights, qualifications,
limitations, and restrictions of such preferred stock. Except as may be
<PAGE>

                                    -30-


required by the Illinois Business Corporation Act of 1983 or otherwise, the
Board of Directors of the Holding Company shall have sole discretion in the
decision to issue such shares, and no shareholder approval will be required for
the issuance of such shares.

     Section 5.06 Directors of Converted Bank. Following the Conversion, the
business and affairs of the Bank shall be managed by a Board of Directors. Upon
the Effective Date, the Board of Directors of the Bank shall be divided into
three classes with respect to term of office, each class to contain, as near as
may be possible, one-third of the entire Board of Directors of the Bank. Each
person serving as a Director of the Bank on the Effective Date shall be
appointed by the Board of Directors to one of the three classes and shall serve
as a director until the expiration of his or her term and until his or her
successor is elected and qualified. One class of directors shall have a term of
office expiring at the first annual meeting of shareholders, the second class
shall have a term of office expiring at the second annual meeting of
shareholders, and the third class shall have a term of office expiring at the
third annual meeting of shareholders. Directors elected at each annual meeting
of shareholders (other than directors elected to fill vacancies) shall be
elected to serve for a term of three years and until their successors are
elected and qualified.

     Section 5.07 Employment Agreements. The Bank and the Holding Company may
enter into employment agreements with such officers and employees and upon such
terms and conditions as the Board of Directors of the Bank and the Board of
Directors of the Holding Company shall determine.

     Section 5.08 Market for the Common Stock. Upon the Effective Date, or as
soon thereafter as practicable within the time period required by applicable
laws and regulations, the Common Stock shall be registered pursuant to the
Securities Exchange Act of 1934, as amended, and shall not be deregistered for a
period of three years following the Effective Date. The requirement of
maintenance of registration for three years may be fulfilled by any successor to
the Bank or any holding company of the Bank. In addition, the Holding Company
shall use its best efforts to list the Common Stock on a national or regional
securities exchange or on the National Association of Securities Dealers
Automated Quotation System and to encourage and assist one or more market makers
to establish and maintain a market for the Common Stock.

     Section 5.09 Payment of Dividends and Repurchase of Stock. The Bank shall
not declare or pay a cash dividend on, or repurchase any of, its capital stock
if the effect thereof would cause its regulatory capital to be reduced below (i)
the amount required for the Liquidation Account or (ii) the federal regulatory
capital requirement in Section 567.2 of the Rules and Regulations of the OTS.
Otherwise, the Bank may declare dividends, make capital distributions or
repurchase its stock in accordance with applicable law and regulations.
<PAGE>

                                    -31-


                                  ARTICLE VI

             CONDITIONS TO CONVERSION; AMENDMENT AND TERMINATION;
                                 MISCELLANEOUS


     Section 6.01 Conditions to Conversion. The conversion of the Bank pursuant
to this Plan is expressly conditioned upon the following:

          (a) Prior receipt by the Bank of rulings of the United States Internal
     Revenue Service and the State of Illinois taxing authorities, or opinions
     of counsel, substantially to the effect that the Conversion will not result
     in any adverse federal or state tax consequences to Eligible Account
     Holders or to the Bank and the Holding Company before or after the
     Conversion;

          (b) The sale of all of the Common Stock offered in the Conversion; and

          (c) The completion of the Conversion within the time period specified
     in Section 6.04.

     Section 6.02 Termination of Reorganization. If the proposed Reorganization
may result in tax consequences which, in the judgment of the Board of Directors
of the Bank, are materially adverse to the Holding Company, the Bank, or the
Members, or, if for any other reason, the Board of Directors determines that the
Reorganization is not in the best interests of the Bank or its members, then the
Board of Directors of the Bank may, in its discretion, elect not to proceed with
the Reorganization and substitute the common stock of the Bank for the Common
Stock; in such event, all subscriptions received in the Subscription Offering,
the Community Offering, and any Public Offering will be deemed to be
subscriptions to purchase the common stock of the Bank, all of the provisions of
this Plan relating to the Common Stock will be deemed to pertain to the common
stock of the Bank on the same terms and conditions that such provisions pertain
to the Common Stock, and all of the references in this Plan to the Holding
Company shall be deemed to refer to the Bank or shall have no effect, as the
context of the reference requires.

     Section 6.03 Amendment or Termination of the Plan. If deemed necessary or
desirable by the Board of Directors of the Bank and the Board of Directors of
the Holding Company, this Plan may be substantively amended as a result of
comments from regulatory authorities, as a result of any provision contained in
this Plan being held invalid, void or unenforceable by a court or regulatory
authority of competent jurisdiction, or for any other reason, at any time prior
to solicitation of proxies from Members to vote on the Plan and at any time
thereafter with the concurrence of the OTS. Any amendment to this Plan made
after approval by the Members with the approval of the OTS shall not necessitate
further approval by the Members unless otherwise required by the OTS. This Plan
may be terminated by the Board
<PAGE>

                                    -32-


of Directors of the Bank at any time prior to the Special Meeting and at any
time thereafter with the concurrence of the OTS.

     By adoption of the Plan, the Members of the Bank authorize the Board of
Directors to amend or terminate the Plan under the circumstances set forth in
this Section.

     Section 6.04 Completion Date. The Conversion must be completed within 24
months of the approval of the Plan by the Voting Members, unless a longer time
period is permitted by governing laws and regulations. The Conversion shall be
deemed to take place and be effective upon the completion of all requisite
organizational procedures for obtaining a Federal Stock Savings Bank Charter for
the Bank and sale of all Common Stock.

     Section 6.05 Expenses of the Conversion. The Bank shall use its best
efforts to assure that expenses incurred by it in connection with the Conversion
shall be reasonable.

     Section 6.06 Interpretation. Subject to applicable law as set forth in
Section 6.08, all interpretations of this Plan and all applications of the
provisions of this Plan to particular circumstances by a majority of the Board
of Directors of the Bank shall be final, subject to the authority of the OTS.

     Section 6.07 Severability. If any term, provision, covenant or restriction
contained in this Plan is held by a court or a federal or state regulatory
agency of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions contained in this
Plan shall remain in full force and effect, and shall in no way be affected,
impaired or invalidated.

     Section 6.08 Miscellaneous. This Plan is to be governed by and construed in
accordance with the laws of the United States and of the State of Illinois. None
of the cover page, the table of contents, or the article or section headings are
to be considered a part of this Plan, but are included solely for convenience of
reference and shall in no way define, limit, extend, or describe the scope or
intent of any of the provisions hereof. Words in the singular include the
plural, and words in the plural include the singular. Except for such rights as
are set forth herein for Members, this Plan shall create no rights in any
Person.

<PAGE>

                                                                       EXHIBIT I

                              FEDERAL STOCK CHARTER

                                       OF

                         FAIRFIELD SAVINGS BANK, F.S.B.



          SECTION 1.  CORPORATE TITLE.  The full corporate title of the savings
bank is FAIRFIELD SAVINGS BANK, F.S.B. (the "Savings Bank").

          SECTION 2.  OFFICE.  The home office of the Savings Bank shall be
located in Long Grove, Illinois.

          SECTION 3.  DURATION.  The duration of the Savings Bank is perpetual.

          SECTION 4.  PURPOSE AND POWERS.  The purpose of the Savings Bank is to
pursue any or all of the lawful objectives of a Federal savings bank chartered
under Section 5 of the Home Owners' Loan Act and to exercise all of the express,
implied, and incidental powers conferred thereby and by all acts amendatory
thereof and supplemental thereto, subject to the Constitution and laws of the
United States as they are now in effect, or as they may hereafter be amended,
and subject to all lawful and applicable rules, regulations, and orders of the
Office of Thrift Supervision (the "Office").

          SECTION 5.  CAPITAL STOCK.  The total number of shares of all classes
of the capital stock which the Savings Bank has the authority to issue is
twenty-five million (25,000,000), of which twenty million (20,000,000) shall be
common stock of par value of one dollar ($1.00) per share and of which five
million (5,000,000) shall be preferred stock, par value of one dollar ($1.00)
per share.  The shares may be issued from time to time as authorized by the
board of directors without the approval of the Savings Bank's shareholders,
except as otherwise provided in this Section 5 or to the extent that such
approval is required by governing law, rule, or regulation.  The consideration
for the issuance of the shares shall be paid in full before their issuance and
shall not be less than the par value.  Neither promissory notes nor future
services shall constitute payment or part payment for the issuance of shares of
the Savings Bank.  The consideration for the shares shall be cash, tangible or
intangible property (to the extent direct investment in such property would be
permitted to the Savings Bank), labor or services actually performed for the
Savings Bank, or any combination of the foregoing.  In the absence of actual
fraud in the transaction, the value of such property, labor or services, as
determined by the board of directors of the Savings Bank, shall be conclusive. 
Upon payment of such consideration, such shares shall be deemed to be fully paid
and nonassessable.  In the case of a stock dividend, that part of the surplus of
the Savings Bank which is transferred to stated capital upon the issuance of
shares as a share dividend shall be deemed to be the consideration for their
issuance.

          Except for shares issuable in connection with the conversion of the
Savings Bank from the mutual to stock form of capitalization, no shares of
capital stock (including shares issuable upon conversion, exchange, or exercise
of other securities) shall be issued, directly or 

<PAGE>

                                       -2-

indirectly, to officers, directors, or controlling persons of the Savings Bank
other than as part of a general public offering or as qualifying shares to a
director, unless the issuance or the plan under which they would be issued has
been approved by a majority of the total votes eligible to be cast at a legal
meeting.

          Nothing contained in this Section 5 (or in any supplementary sections
hereto) shall entitle the holders of any class or series of capital stock to
vote as a separate class or series or to more than one vote per share; PROVIDED,
that this restriction on voting separately by class or series shall not apply:

          (i)  To any provision which would authorize the holders of preferred
               stock, voting as a class or series, to elect some members of the
               board of directors, less than a majority thereof, in the event of
               default in the payment of dividends on any class or series of
               preferred stock;

          (ii) To any provision which would require the holders of preferred
               stock, voting as a class or series, to approve the merger or
               consolidation of the Savings Bank with another corporation or the
               sale, lease, or conveyance (other than by mortgage or pledge) of
               properties or business in exchange for securities of a
               corporation other than the Savings Bank if the preferred stock is
               exchanged for securities of such other corporation; PROVIDED,
               that no provision may require such approval for transactions
               undertaken with the assistance or pursuant to the direction of
               the Office or the Federal Deposit Insurance Corporation;

          (iii)     To any amendment which would adversely change the specific
                    terms of any class or series of capital stock as set forth
                    in this Section 5 (or in any supplementary sections hereto),
                    including any amendment which would create or enlarge any
                    class or series ranking prior thereto in rights and
                    preferences.  An amendment which increases the number of
                    authorized shares of any class or series of capital stock,
                    or substitutes the surviving association in a merger or
                    consolidation for the Savings Bank, shall not be considered
                    to be such an adverse change.

          A description of the different classes and series (if any) of the
Savings Bank's capital stock and a statement of the designations, and the
relative rights, preferences, and limitations of the shares of each class of and
series (if any) of capital stock are as follows:

          A.   COMMON STOCK.  Except as provided in this Section 5 (or in any
               supplementary sections thereto) the holders of the common stock
               shall exclusively possess all voting power.  Each holder of
               shares of common stock shall be entitled to one vote for each
               share held by such holder.

               Whenever there shall have been paid, or declared and set aside
               for payment, to the holders of the outstanding shares of any
               class of stock having preference over the common stock as to the
               payment of dividends, the full amount of dividends and of sinking
               fund, retirement fund, or other retirement payments, if any, to
               which such holders are respectively entitled in preference to the
               common stock, then dividends may be paid 

<PAGE>

                                       -3-

               on the common stock and on any class or series of stock entitled
               to participate therewith as to dividends out of any assets
               legally available for the payment of dividends.

               In the event of any liquidation, dissolution, or winding up of
               the Savings Bank, the holders of the common stock (and the
               holders of any class or series of stock entitled to participate
               with the common stock in the distribution of assets) shall be
               entitled to receive, in cash or in kind, the assets of the
               Savings Bank available for distribution remaining after:  (i)
               payment or provision for payment of the Savings Bank's debts and
               liabilities; (ii) distributions or provision for distributions in
               settlement of its liquidation account; and (iii) distributions or
               provision for distributions to holders of any class or series of
               stock having preference over the common stock in the liquidation,
               dissolution, or winding up of the Savings Bank.  Each share of
               common stock shall have the same relative rights as and be
               identical in all respects with all the other shares of common
               stock.

          B.   PREFERRED STOCK.  The Savings Bank may provide in supplementary
               sections to its charter for one or more classes of preferred
               stock, which shall be separately identified.  The shares of any
               class may be divided into and issued in series, with each series
               separately designated so as to distinguish the shares thereof
               from the shares of all other series and classes.  The terms of
               each series shall be set forth in a supplementary section to the
               charter.  All shares of the same class shall be identical except
               as to the following relative rights and preferences, as to which
               there may be variations between different series:

               (a)  the distinctive serial designation and the number of shares
                    constituting such series;

               (b)  The dividend rate or the amount of dividends to be paid on
                    the shares of such series, whether dividends shall be
                    cumulative and, if so, from which date(s), the payment
                    date(s) for dividends, and the participating or other
                    special rights, if any, with respect to dividends;

               (c)  The voting powers, full or limited, if any, of the shares of
                    such series;

               (d)  Whether the shares of such series shall be redeemable and,
                    if so, the price(s) at which, and the terms and conditions
                    on which, such shares may be redeemed;

               (e)  The amount(s) payable upon the shares of such series in the
                    event of voluntary or involuntary liquidation, dissolution,
                    or winding up of the Savings Bank;

<PAGE>

                                       -4-

               (f)  Whether the shares of such series shall be entitled to the
                    benefit of a sinking or retirement fund to be applied to the
                    purchase or redemption of such shares, and, if so entitled,
                    the amount of such fund and the manner of its application,
                    including the price(s) at which such shares may be redeemed
                    or purchased through the application of such fund;

               (g)  Whether the shares of such series shall be convertible into,
                    or exchangeable for, shares of any other class or classes of
                    stock of the Savings Bank and, if so, the conversion
                    price(s) or the rate(s) of exchange, and the adjustments
                    thereof, if any, at which such conversion or exchange may be
                    made, and any other terms and conditions of such conversion
                    or exchange;

               (h)  The price or other consideration for which the shares of
                    such series shall be issued; and

               (i)  Whether the shares of such series which are redeemed or
                    converted shall have the status of authorized but unissued
                    shares of serial preferred stock and whether such shares may
                    be reissued as shares of the same or any other series of
                    serial preferred stock.

          Each share of each series of serial preferred stock shall have the
same relative rights as and be identical in all respects with all the other
shares of the same series.

          The board of directors shall have authority to divide, by the adoption
of supplementary charter sections, any authorized class of preferred stock into
series, and, within the limitations set forth in this section and the remainder
of this charter, fix and determine the relative rights and preferences of the
shares of any series so established.

          Prior to the issuance of any preferred shares of a series established
by a supplementary charter section adopted by the board of directors, the
Savings Bank shall file with the Secretary to the Office a dated copy of that
supplementary section of this charter establishing and designating the series
and fixing and determining the relative rights and preferences thereof.

          SECTION 6.  PREEMPTIVE RIGHTS.  Holders of the capital stock of the
Savings Bank shall not be entitled to preemptive rights with respect to any
shares of the Savings Bank which may be issued.

          SECTION 7.  DIRECTORS.  The Savings Bank shall be under the direction
of a board of directors.  The authorized number of directors, as stated in the
Savings Bank's bylaws, shall not be fewer than five nor more than 15 except when
a greater number is approved by the Director of the Office.

          SECTION 8.  CERTAIN PROVISIONS APPLICABLE FOR FIVE YEARS. 
Notwithstanding anything contained in the Saving Bank's charter or bylaws to the
contrary, for a period of five 

<PAGE>

                                       -5-

years from the date of completion of the conversion of the Savings Bank from
mutual to stock form, the following provisions shall apply:

          A.   BENEFICIAL OWNERSHIP LIMITATION.  No person shall directly or
               indirectly offer to acquire or acquire the beneficial ownership
               of more than 10 percent of any class of an equity security of the
               Savings Bank.  This limitation shall not apply to a transaction
               in which the Savings Bank forms a holding company without change
               in the respective beneficial ownership interests of its
               shareholders other than pursuant to the exercise of any dissenter
               and appraisal rights, the purchase of shares by underwriters in
               connection with a public offering, or the purchase of shares by a
               tax-qualified employee stock benefit plan which is exempt from
               the approval requirements under Section 574.3(c)(1)(vi) of the
               Office's regulations.

               In the event shares are acquired in violation of this Section 8,
               all shares beneficially owned by any person in excess of 10%
               shall be considered "excess shares" and shall not be counted as
               shares entitled to vote and shall not be voted by any person or
               counted as voting shares in connection with any matters submitted
               to the shareholders for a vote.

               For purposes of this Section 8, the following definitions apply:

               (1)  The term "PERSON" includes an individual, a group acting in
                    concert, a corporation, a partnership, an association, a
                    joint stock company, a trust, an unincorporated organization
                    or similar company, a syndicate or any other group formed
                    for the purpose of acquiring, holding or disposing of the
                    equity securities of the Savings Bank.

               (2)  The term "OFFER" includes every offer to buy or otherwise
                    acquire, solicitation of an offer to sell, tender offer for,
                    or request or invitation for tenders of, a security or
                    interest in a security for value.

               (3)  The term "ACQUIRE" includes every type of acquisition,
                    whether effected by purchase, exchange, operation of law or
                    otherwise.

               (4)  The term "ACTING IN CONCERT" means (a) knowing participation
                    in a joint activity or conscious parallel action towards a
                    common goal whether or not pursuant to an express agreement,
                    or (b) a combination or pooling of voting or other interests
                    in the securities of an issuer for a common purpose pursuant
                    to any contract, understanding, relationship, agreement or
                    other arrangements, whether written or otherwise.

          B.   CALL FOR SPECIAL MEETINGS.  Special meetings of shareholders
               relating to changes in control of the Savings Bank or amendments
               to its charter shall 

<PAGE>

                                       -6-

               be called only upon direction of the board of directors.

          SECTION 9. NO CUMULATIVE VOTING.  Shareholders shall not be permitted
to cumulate their votes for election of directors.

          SECTION 10. AMENDMENT OF CHARTER.  Except as provided in Section 5, no
amendment, addition, alteration, change or repeal of this charter shall be made,
unless such is first proposed by the board of directors of the Savings Bank,
then preliminarily approved by the Office, which preliminary approval may be
granted by the Office pursuant to regulations specifying preapproved charter
amendments, and thereafter approved by the shareholders by a majority of the
total votes eligible to be cast at a legal meeting.  Any amendment, addition,
alteration, change or repeal so acted upon shall be effective upon filing with
the Office in accordance with regulatory procedures or on such other date as the
Office may specify in its preliminary approval.

          SECTION 11.  LIQUIDATION ACCOUNT.  Pursuant to the requirements of
Office's regulations (12 CFR subchapter D) the Savings Bank shall establish and
maintain a liquidation account for the benefit of its savings account holders as
of December 31, 1994 and September 30, 1996, as applicable, depending on whether
such savings account holders qualify as Eligible Account Holders or Supplemental
Eligible Account Holders, as defined in the Plan of Conversion, adopted by the
Board of Directors of the Savings Bank as of May 21, 1996 and amended and
restated as of September 17, 1996 ("eligible savers").  In the event of a
complete liquidation of the Savings Bank, it shall comply with such regulations
with respect to the amount and the priorities on liquidation of each of the
Savings Bank's eligible savers' inchoate interest in the liquidation account, to
the extent it is still in existence; PROVIDED, that an eligible saver's inchoate
interest in the liquidation account shall not entitle such eligible saver to any
voting rights at meetings of the Savings Bank's shareholders.

<PAGE>

                                       -7-

     As adopted by the Savings Bank's members on ____________, 1996 to be
effective on the date the Savings Bank converts from mutual to stock form of
organization.


                                   FAIRFIELD SAVINGS BANK, FSB



Attest:_____________________________   By: _____________________________________
       Secretary of the Savings Bank       President and Chief Executive Officer
                                           of the Savings Bank




                                   OFFICE OF THRIFT SUPERVISION



Attest:____________________________    By:______________________________________
       Secretary of the Office of      
        Thrift Supervision


Declared effective on the
[     ] day of [          ], 1996.

                               
<PAGE>

                                                                      EXHIBIT II
                                     BYLAWS

                                       OF

                         FAIRFIELD SAVINGS BANK, F.S.B.


                                    ARTICLE I

                                   HOME OFFICE

          The home office of Fairfield Savings Bank, F.S.B. (the "Savings Bank")
shall be at 1190 RFD, Long Grove, in the state of Illinois.


                                   ARTICLE II

                                  SHAREHOLDERS

          SECTION 1.     PLACE OF MEETINGS.  All annual and special meetings of
shareholders shall be held at the home office of the Savings Bank or at such
other place in the State in which the principal place of business of the Savings
Bank is located as the board of directors (the "Board") may determine.

          SECTION 2.     ANNUAL MEETING.  A meeting of the shareholders of the
Savings Bank for the election of directors and for the transaction of any other
business of the Savings Bank shall be held annually within 120 days after the
end of the Savings Bank's fiscal year at such date and time within such 120-day
period as the Board may determine.

          SECTION 3.     SPECIAL MEETINGS.  For a period of five years from the
date of the completion of the conversion of the Savings Bank from mutual to
stock form, special meetings of the shareholders relating to a change in control
of the Savings Bank or to an amendment of the charter of the Savings Bank may be
called only by the Board.  Subject to the immediately preceding sentence,
special meetings of the shareholders for any purpose or purposes, unless
otherwise prescribed by the regulations of the Office of Thrift Supervision (the
"Office"), may be called at any time by the Chairman of the Board, the President
or a resolution of at least three-fourths of the entire Board, and shall be
called by the Chairman of the Board, the President or the Secretary upon the
written request of the holders of not less than 10% of all of the outstanding
capital stock of the Savings Bank entitled to vote at the meeting.  Such written
request shall state the purpose or purposes of the meeting and shall be
delivered to the home office of the Savings Bank addressed to the Chairman of
the Board, the President or the Secretary.  Special meetings shall be held on
the date and at the time and place as may be designated by the Board.  At a
special meeting, no business shall be transacted and no corporate action shall
be taken other than that stated in the notice of meeting.

          SECTION 4.     CONDUCT OF MEETINGS.  The Chairman of the Board shall
serve as chairman at all meetings of the shareholders or, if the Chairman of the
Board is absent or otherwise unable to so serve, the President shall serve as
chairman.  If both the Chairman of the


<PAGE>

                                       -2-

Board and the President are absent or otherwise unable to so serve, such other
person as shall be appointed by a majority of the entire Board of Directors
shall serve as chairman at any meeting of shareholders held in such absence.
The Secretary or, in his or her absence, such other person as the chairman of
the meeting shall appoint, shall serve as secretary of the meeting.  The
chairman of the meeting shall conduct all meetings of the shareholders in
accordance with the best interests of the Savings Bank and shall have the
authority and discretion to establish reasonable procedural rules for the
conduct of such meetings, including such regulation of the manner of voting and
the conduct of discussion as he or she shall deem appropriate.

          SECTION 5.     NOTICE OF MEETINGS.  Written notice stating the place,
day and hour of the meeting and the purpose(s) for which the meeting is called
shall be delivered not fewer than 20 nor more than 50 days before the date of
the meeting, either personally or by mail, by or at the direction of the
Chairman of the Board, the President, the Secretary or the directors calling the
meeting, to each shareholder of record entitled to vote at such meeting.  If
mailed, such notice shall be deemed to be delivered when deposited in the mail
addressed to the shareholder at the address as it appears on the stock transfer
books or records of the Savings Bank as of the record date prescribed in Section
6 of this Article II with postage prepaid.  When any shareholders' meeting,
either annual or special, is adjourned for 30 days or more, notice of the
adjourned meeting shall be given as in the case of an original meeting.  It
shall not be necessary to give any notice of the time and place of any meeting
adjourned for less than 30 days or of the business to be transacted at the
meeting, other than an announcement at the meeting at which such adjournment is
taken.

          SECTION 6.     FIXING OF RECORD DATE.  For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment, or shareholders entitled to receive payment of any dividend, or
in order to make a determination of shareholders for any other proper purpose,
the Board shall fix in advance a date as the record date for any such
determination of shareholders.  Such date in any case shall be not more than 60
days and, in case of a meeting of shareholders, not fewer than 10 days prior to
the date on which the particular action, requiring such determination of
shareholders, is to be taken.  When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this Section,
such determination shall apply to any adjournment.

          SECTION 7.     VOTING LISTS.  At least 20 days before each meeting of
the shareholders, the officer or agent having charge of the stock transfer books
for shares of the Savings Bank shall make a complete list of the shareholders
entitled to vote at such meeting, or any adjournment, arranged in alphabetical
order, with the address and the number of shares held by each.  This list of
shareholders shall be kept on file at the home office of the Savings Bank and
shall be subject to inspection by any shareholder at any time during usual
business hours for a period of 20 days prior to such meeting.  Such list shall
also be produced and kept open at the time and place of the meeting and shall be
subject to inspection by any shareholder during the entire time of the meeting.
The original stock transfer books shall constitute PRIMA FACIE evidence of the
shareholders entitled to examine such list or transfer books or to vote at any
meeting of shareholders.


<PAGE>

                                       -3-

          In lieu of making the shareholder list available for inspection by
shareholders as provided in the preceding paragraph, the Board may elect to
follow the procedures prescribed in Section 552.6(d) of the Office's regulations
as now or hereafter in effect.

          SECTION 8.     QUORUM.  A majority of the outstanding shares of the
Savings Bank entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders.  If less than a majority of
the outstanding shares is represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the meeting as
originally notified.  The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to constitute less than a quorum.

          SECTION 9.     PROXIES.  At all meetings of shareholders, a
shareholder may vote by proxy executed in writing by the shareholder or by his
or her duly authorized attorney in fact and filed with the Secretary of the
Savings Bank before being voted.  Proxies solicited on behalf of the management
shall be voted as directed by the shareholder or, in the absence of such
direction, as determined by a majority of the Board.  No proxy shall be valid
more than eleven months from the date of its execution except for a proxy
coupled with an interest.  The Savings Bank may treat any duly executed proxy as
not revoked and in full force and effect until it receives a duly executed
instrument revoking it, or a duly executed proxy bearing a later date.

          SECTION 10.    VOTING OF SHARES IN THE NAME OF TWO OR MORE PERSONS.
When ownership stands in the name of two or more persons, in the absence of
written directions to the Savings Bank to the contrary, at any meeting of the
shareholders of the Savings Bank any one or more of such shareholders may cast,
in person or by proxy, all votes to which such ownership is entitled.  In the
event an attempt is made to cast conflicting votes, in person or by proxy, by
the several persons in whose names shares of stock stand, the vote or votes to
which those persons are entitled shall be cast as directed by a majority of
those holding such and present in person or by proxy at such meeting, but no
votes shall be cast for such stock if a majority cannot agree.

          SECTION 11.    VOTING OF SHARES BY CERTAIN HOLDERS.  Shares standing
in the name of another corporation may be voted by any officer, agent or proxy
as the bylaws of such corporation may prescribe, or, in the absence of such
provision, as the board of directors of such corporation may determine.  Shares
held by an administrator, executor, guardian or conservator may be voted by him
or her, either in person or by proxy, without a transfer of such shares into his
or her name.  Shares standing in the name of a trustee may be voted by him or
her, either in person or by proxy, but no trustee shall be entitled to vote
shares held by him or her without a transfer of such shares into his or her
name.  Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer into his or her name if authority to do so is
contained in an appropriate order of the court or other public authority by
which such receiver was appointed.


<PAGE>

                                       -4-

          A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

          Neither treasury shares of its own stock held by the Savings Bank nor
shares held by another corporation, if a majority of the shares entitled to vote
for the election of directors of such other corporation are held by the Savings
Bank, shall be voted at any meeting or counted in determining the total number
of outstanding shares at any given time for purposes of any meeting.

          SECTION 12.    NO CUMULATIVE VOTING.  Shareholders shall not be
permitted to cumulate their votes for the election of directors.

          SECTION 13.    INSPECTORS OF ELECTION.  In advance of any meeting of
shareholders, the Board may appoint any persons other than nominees for office
as inspectors of election to act at such meeting or any adjournment.  The number
of inspectors shall be either one or three.  Any such appointment shall not be
altered at the meeting.  If inspectors of election are not so appointed, the
Chairman of the Board, or the President may, or on the request of not fewer than
10 percent of the votes represented at the meeting shall, make such appointment
at the meeting.  If appointed at the meeting, the majority of the votes present
shall determine whether one or three inspectors are to be appointed.  In case
any person appointed as inspector fails to appear or fails or refuses to act,
the vacancy may be filled by appointment by the Board in advance of the meeting
or at the meeting by the Chairman of the Board or the President.

          Unless otherwise prescribed by regulations of the Office, the duties
of such inspectors shall include: determining the number of shares and the
voting power of each share, the shares represented at the meeting, the existence
of a quorum and the authenticity, validity and effect of proxies; receiving
votes, ballots or consents; hearing and determining all challenges and questions
in any way arising in connection with the rights to vote; counting and
tabulating all votes or consents; determining the result; and such acts as may
be proper to conduct the election or vote with fairness to all shareholders.

          SECTION 14.    NOMINATING COMMITTEE.  The Nominating Committee of the
Board shall select the management nominees for election as directors.  Except in
the case of a nominee substituted as a result of the withdrawal, death or other
incapacity of a management nominee, the Nominating Committee shall deliver
written nominations to the Secretary at least 20 days prior to the date of the
annual meeting.  Upon delivery, such nominations shall be posted in a
conspicuous place in each office of the Savings Bank.  No nominations for
directors except those made by the Nominating Committee shall be voted upon at
the annual meeting unless other nominations by shareholders are made in writing
and delivered to the Secretary of the Savings Bank at least five days prior to
the date of the annual meeting.  In the event that a person is validly
designated as a nominee in accordance with this Section 14 and shall thereafter
become unwilling or unable to stand for election to the Board, the Board may
designate a substitute nominee upon delivery, not fewer than five days prior to
the date of the meeting for the election of such nominee, of a written notice to
the Secretary of the Savings Bank.  Upon delivery, any such nomination by the
shareholders or by the Board shall be posted in a conspicuous place in each
office of the Savings Bank.  Ballots bearing the names of all persons nominated
by the


<PAGE>

                                       -5-

Nominating Committee and by shareholders shall be provided for use at the annual
meeting.  However, if the Nominating Committee shall fail or refuse to act at
least 20 days prior to the annual meeting, nominations for directors may be made
at the annual meeting by any shareholder entitled to vote and shall be voted
upon.

          SECTION 15.    NEW BUSINESS.  Any new business to be taken up at the
annual meeting shall be stated in writing and filed with the Secretary of the
Savings Bank at least five days before the date of the annual meeting, and all
business so stated, proposed and filed shall be considered at the annual
meeting; but no other proposal shall be acted upon at the annual meeting.  Any
shareholder may make any other proposal at the annual meeting and the same may
be discussed and considered, but unless stated in writing and filed with the
Secretary at least five days before the meeting, such proposal shall be laid
over for action at an adjourned, special or annual meeting of the shareholders
taking place 30 days or more thereafter.  This provision shall not prevent the
consideration and approval or disapproval at the annual meeting of reports of
officers, directors and committees; but in connection with such reports no new
business shall be acted upon at such annual meeting unless stated and filed as
herein provided.

          SECTION 16.    INFORMAL ACTION BY SHAREHOLDERS.  Any action required
to be taken at a meeting of the shareholders, or any other action that may be
taken at a meeting of shareholders, may be taken without a meeting if consent in
writing, setting forth the action so taken, shall be given by all of the
shareholders entitled to vote with respect to the subject matter.


                                   ARTICLE III

                               BOARD OF DIRECTORS

          SECTION 1.     GENERAL POWERS.  The business and affairs of the
Savings Bank shall be under the direction of its Board.

          SECTION 2.     NUMBER AND TERM.  The Board shall consist of seven (7)
members and shall be divided into three classes as nearly equal in number as
possible.  The members of each class shall be elected for a term of three years
and until their successors are elected and qualified, except when a nominee is
elected (a) for a shorter term to equalize the size of the classes or (b) by the
Board to fill a vacancy on the board, in which case a director so elected shall
serve until the next election of directors by the shareholders.  One class shall
be elected by ballot annually.  The Board may by a two-thirds vote of the full
Board increase or decrease the number of directors of the Savings Bank to not
fewer than five nor more than 15, except when a greater number is approved by
the Director of the Office.

          SECTION 3.     REGULAR MEETINGS.  A regular meeting of the Board shall
be held without other notice than this bylaw immediately after, and at the same
place as, the annual meeting of shareholders.  The Board may provide, by
resolution, the time and place, within the Savings Bank's normal lending
territory, for the holding of additional regular meetings without other notice
than such resolution.


<PAGE>

                                       -6-

          SECTION 4.     QUALIFICATION.  Each director shall at all times be the
beneficial owner of not less than 100 shares of capital stock of the Savings
Bank unless the Savings Bank is a wholly owned subsidiary of a holding company.

          SECTION 5.     SPECIAL MEETINGS.  Special meetings of the Board may be
called by or at the request of the Chairman of the Board, the President or at
least sixty percent (60%) of the directors then in office.  The persons
authorized to call special meetings of the Board may fix any place, within the
Savings Bank's normal lending territory, as the place for holding any special
meeting of the Board called by such persons.

          SECTION 6.     NOTICE.  Written notice of any special meeting shall be
given to each director at least twenty-four (24) hours prior thereto when
delivered personally or by overnight courier, telegram, electronic transmission
or fax or at least five days prior thereto when delivered by mail.  Such notice
shall be sent to the address at which the director is most likely to be reached.
Such notice shall be deemed to be delivered when deposited in the mail so
addressed, with postage prepaid, when delivered to the telegraph company if sent
by telegram, when transmission is made if sent by electronic transmission or by
fax or when delivered to the recipient if sent by overnight courier.  Any
director may waive notice of any meeting by a writing filed with the Secretary.
The attendance of a director at a meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened.  Neither the business to be transacted at, nor the
purpose of, any meeting of the Board need be specified in the notice or waiver
of notice of such meeting.

          SECTION 7.     QUORUM.  A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the Board; but if less than such majority is present
at a meeting, a majority of the directors present may adjourn the meeting from
time to time.  Notice of any adjourned meeting shall be given in the same manner
as prescribed by Section 5 of this Article III.

          SECTION 8.     MANNER OF ACTING.  The act of the majority of the Board
present at a meeting at which a quorum is present shall be the act of the Board,
unless a greater number is prescribed by regulation of the Office or by these
bylaws.

          SECTION 9.     CONDUCT OF MEETINGS; ATTENDANCE AT MEETINGS BY
CONFERENCE TELEPHONE.  Meetings of the Board shall be presided over by the
Chairman of the Board or such other director or officer as the Chairman of the
Board shall designate, and in the absence or incapacity of the Chairman of the
Board, by the President or such other director or officer as the President shall
designate.  If both the Chairman of the Board and the President are absent from
any meeting of the Board, the presiding officer shall be the then senior member
of the Board in terms of length of service on the Board (which length of service
shall include length of service on the Board of Directors of any predecessors to
the Savings Bank).  The Secretary or, in his or her absence, a person appointed
by the Chairman of the Board (or other presiding person), shall act as secretary
of the meeting.  The Chairman of the Board (or other person presiding) shall
conduct all meetings of the Board in accordance with the best interests of the
Savings Bank and shall have the authority and discretion to establish reasonable
procedural rules for the conduct of Board meetings.  Any one or more directors
may participate in a meeting of


<PAGE>

                                       -7-

the Board or a committee of the Board by means of a conference telephone or
similar communications equipment allowing all persons participating in the
meeting to hear each other at the same time.  Participation by such means shall
constitute presence in person at any such meeting.

          SECTION 10.    ACTION WITHOUT A MEETING.  Any action required or
permitted to be taken by the Board, or by any committee thereof, at a meeting
may be taken without a meeting if a consent in writing, setting forth the action
so taken, shall be signed by all of the members of the Board or of the
committee, as the case may be.

          SECTION 11.    RESIGNATION.  Any director may resign at any time by
sending a written notice of such resignation to the home office of the Savings
Bank addressed to the Chairman of the Board, the President or the Secretary.
Unless otherwise specified, such resignation shall take effect upon receipt by
the Chairman of the Board, the President or the Secretary.  More than three
consecutive absences from regular meetings of the Board, unless excused by
resolution of the Board, shall automatically constitute a resignation, effective
when such resignation is accepted by the Board.

          SECTION 12.    VACANCIES.  Any vacancy occurring on the Board may be
filled by the affirmative vote of a majority of the remaining directors although
less than a quorum of the Board.  A director elected to fill a vacancy shall be
elected to serve until the next election of directors by the shareholders.  Any
directorship to be filled by reason of an increase in the number of directors
may be filled by election by the Board for a term of office continuing only
until the next election of directors by the shareholders.

          SECTION 13.    COMPENSATION.  Directors, as such, may receive a stated
salary for their services.  By resolution of the Board, a reasonable fixed sum,
and reasonable expenses of attendance, if any, may be allowed for actual
attendance at each regular or special meeting of the Board.  Members of either
standing or special committees may be allowed such compensation for actual
attendance at committee meetings as the Board may determine.

          SECTION 14.    PRESUMPTION OF ASSENT.  A director of the Savings Bank
who is present at a meeting of the Board at which action on any Bank matter is
taken shall be presumed to have assented to the action taken unless his or her
dissent or abstention shall be entered in the minutes of the meeting or unless
he or she shall file a written dissent to such action with the person acting as
the secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the Secretary of the Savings Bank within five
days after the date a copy of the minutes of the meeting is received. Such right
to dissent shall not apply to a director who voted in favor of such action.

          SECTION 15.    REMOVAL OF DIRECTORS.  At a meeting of shareholders
called expressly for that purpose, any director may be removed for cause by a
vote of the holders of a majority of the shares then entitled to vote at an
election of directors.  Whenever the holders of the shares of any class are
entitled to elect one or more directors by the provisions of the Savings Bank's
charter or supplemental sections thereto, the provisions of this section shall
apply, in respect to the removal of a director or directors so elected, to the
vote of the holders of the outstanding shares of that class and not to the vote
of the outstanding shares as a whole.


<PAGE>

                                       -8-

          SECTION 16.    DIRECTOR EMERITUS.  Each director who has served as a
member of the Board who voluntarily resigns or retires as a director shall be
eligible to be elected to the honorary position of director emeritus by vote of
the Board at any meeting and will be privileged to attend all meetings of the
Board but shall not be eligible to vote on any matter.


                                   ARTICLE IV

                         EXECUTIVE AND OTHER COMMITTEES

          SECTION 1.     APPOINTMENT. The board of directors, by resolution
adopted by a majority of the full board, may designate the chief executive
officer and two or more of the other directors to constitute an executive
committee. The designation of any committee pursuant to this Article IV and the
delegation of authority shall not operate to relieve the board of directors, or
any director, of any responsibility imposed by law or regulation.

          SECTION 2.     AUTHORITY. The executive committee, when the board of
directors is not in session, shall have and may exercise all of the authority of
the board of directors except to the extent, if any, that such authority shall
be limited by the resolution appointing the executive committee; and except also
that the executive committee shall not have the authority of the board of
directors with reference to: the declaration of dividends; the amendment of the
charter or bylaws of the Savings Bank or recommending to the stockholders a plan
of merger, consolidation, or conversion; the sale, lease, or other disposition
of all or substantially all of the property and assets of the Savings Bank
otherwise than in the usual and regular course of its business; a voluntary
dissolution of the Savings Bank; a revocation of any of the foregoing; or the
approval of a transaction in which any member of the executive committee,
directly or indirectly, has any material beneficial interest.

          SECTION 3.     TENURE. Subject to the provisions of Section 8 of this
Article IV, each member of the executive committee shall hold office until the
next regular annual meeting of the board of directors following his or her
designation and until a successor is designated as a member of the executive
committee.

          SECTION 4.     MEETINGS. Regular meetings of the executive committee
may be held without notice at such times and places as the executive committee
may fix from time to time by resolution. Special meetings of the executive
committee may be called by any member thereof upon not less than one day's
notice stating the place, date, and hour of the meeting, which notice may be
written or oral. Any member of the executive committee may waive notice of any
meeting and no notice of any meeting need be given to any member thereof who
attends in person. The notice of a meeting of the executive committee need not
state the business proposed to be transacted at the meeting.

          SECTION 5.     QUORUM. A majority of the members of the executive
committee shall constitute a quorum for the transaction of business at any
meeting thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.


<PAGE>

                                       -9-

          SECTION 6.     ACTION WITHOUT A MEETING. Any action required or
permitted to be taken by the executive committee at a meeting may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the members of the executive committee.

          SECTION 7.     VACANCIES. Any vacancy in the executive committee may
be filled by a resolution adopted by a majority of the full board of directors.

          SECTION 8.     RESIGNATIONS AND REMOVAL. Any member of the executive
committee may be removed at any time with or without cause by resolution adopted
by a majority of the full board of directors. Any member of the executive
committee may resign from the executive committee at any time by giving written
notice to the president or secretary of the Savings Bank. Unless otherwise
specified, such resignation shall take effect upon its receipt; the acceptance
of such resignation shall not be necessary to make it effective.

          SECTION 9.     PROCEDURE. The executive committee shall elect a
presiding officer from its members and may fix its own rules of procedure which
shall not be inconsistent with these bylaws. It shall keep regular minutes of
its proceedings and report the same to the board of directors for its
information at the meeting held next after the proceedings shall have occurred.

          SECTION 10.    OTHER COMMITTEES. The board of directors may by
resolution establish an audit, loan, or other committee composed of directors as
they may determine to be necessary or appropriate for the conduct of the
business of the Savings Bank and may prescribe the duties, constitution, and
procedures thereof.

                                    ARTICLE V

                                    OFFICERS

          SECTION 1.     POSITIONS. The officers of the Savings Bank shall be a
president, one or more vice presidents, a secretary, and a treasurer, each of
whom shall be elected by the board of directors. The board of directors may also
designate the chairman of the board as an officer. The president shall be the
chief executive officer, unless the board of directors designates the chairman
of the board as chief executive officer. The president shall be a director of
the Savings Bank. The offices of the secretary and treasurer may be held by the
same person and a vice president may also be either the secretary or the
treasurer. The board of directors may designate one or more vice presidents as
executive vice president or senior vice president. The board of directors may
also elect or authorize the appointment of such other officers as the business
of the Savings Bank may require. The officers shall have such authority and
perform such duties as the board of directors may from time to time authorize or
determine. In the absence of action by the board of directors, the officers
shall have such powers and duties as generally pertain to their respective
offices.

          SECTION 2.     ELECTION AND TERM OF OFFICE. The officers of the
Savings Bank shall be elected annually at the first meeting of the board of
directors held after each annual meeting of the stockholders. If the election of
officers is not held at such meeting, such election


<PAGE>

                                      -10-

shall be held as soon thereafter as possible. Each officer shall hold office
until a successor has been duly elected and qualified or until the officer's
death, resignation, or removal in the manner hereinafter provided. Election or
appointment of an officer, employee, or agent shall not of itself create
contractual rights. The board of directors may authorize the Savings Bank to
enter into an employment contract with any officer in accordance with
regulations of the Office; but no such contract shall impair the right of the
board of directors to remove any officer at any time in accordance with Section
3 of this Article V.

          SECTION 3.     REMOVAL. Any officer may be removed by the board of
directors whenever in its judgment the best interests of the Savings Bank will
be served thereby, but such removal, other than for cause, shall be without
prejudice to the contractual rights, if any, of the person so removed.

          SECTION 4.     VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise may be filled by the board
of directors for the unexpired portion of the term.

          SECTION 5.     REMUNERATION. The remuneration of the officers shall be
fixed from time to time by the board of directors.


                                   ARTICLE VI

                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

          SECTION 1.     CONTRACTS.  To the extent permitted by regulations of
the Office, and except as otherwise prescribed by these bylaws with respect to
certificates for shares, the Board may authorize any officer, employee or agent
of the Savings Bank to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Savings Bank. Such authority may
be general or confined to specific instances.

          SECTION 2.     LOANS.  No loans shall be contracted on behalf of the
Savings Bank and no evidence of indebtedness shall be issued in its name unless
authorized by the Board.  Such authority may be general or confined to specific
instances.

          SECTION 3.     CHECKS, DRAFTS, ETC.  All checks, drafts or other
orders for the payment or money, notes or other evidences of indebtedness issued
in the name of the Savings Bank shall be signed by one or more officers,
employees or agents of the Savings Bank in such manner as shall from time to
time be determined by the Board.

          SECTION 4.     DEPOSITS.  All funds of the Savings Bank not otherwise
employed shall be deposited from time to time to the credit of the Savings Bank
in any duly authorized depositories as the Board may select.


<PAGE>

                                      -11-

                                   ARTICLE VII

                   CERTIFICATES FOR SHARES AND THEIR TRANSFER

          SECTION 1.     CERTIFICATES FOR SHARES.  Certificates representing
shares of capital stock of the Savings Bank shall be in such form as shall be
determined by the Board and approved by the Office.  Such certificates shall be
signed by the chief executive officer or by any other officer of the Savings
Bank authorized by the Board, attested by the Secretary or an assistant
secretary and sealed with the corporate seal or a facsimile thereof.  The
signatures of such officers upon a certificate may be facsimiles if the
certificate is manually signed on behalf of a transfer agent or a registrar
other than the Savings Bank itself or one of its employees.  Each certificate
for shares of capital stock shall be consecutively numbered or otherwise
identified.  The name and address of the person to whom the shares are issued,
with the number of shares and date of issue shall be entered on the stock
transfer books of the Savings Bank.  All certificates surrendered to the Savings
Bank for transfer shall be canceled, and no new certificate shall be issued
until the former certificate for a like number of shares has been surrendered
and canceled, except that in the case of a lost or destroyed certificate, a new
certificate may be issued upon such terms and indemnity to the Savings Bank as
the Board may prescribe.

          SECTION 2.     TRANSFER OF SHARES.  Transfer of shares of capital
stock of the Savings Bank shall be made only on its stock transfer books.
Authority for such transfer shall be given only by the holder of record or by
his or her legal representative, who shall furnish proper evidence of such
authority, or by his or her attorney authorized by a duly executed power of
attorney and filed with the Savings Bank.  Such transfer shall be made only on
surrender for cancellation of the certificate for such shares.  The person in
whose name shares of capital stock stand on the books of the Savings Bank shall
be deemed by the Savings Bank to be the owner for all purposes.


                                  ARTICLE VIII

                            FISCAL YEAR; ANNUAL AUDIT

          The fiscal year of the Savings Bank shall end on the 30th day of June
of each year.  The Savings Bank shall be subject to an annual audit as of the
end of its fiscal year by independent public accountants appointed by and
responsible to the Board.  The appointment of such accountants shall be subject
to annual ratification by the shareholders.


                                   ARTICLE IX

                                    DIVIDENDS

          Subject to the terms of the Savings Bank's charter and the regulations
and orders of the Office, the Board may, from time to time, declare, and the
Savings Bank may pay, dividends on its outstanding shares of capital stock.


<PAGE>

                                      -12-

                                    ARTICLE X

                                 CORPORATE SEAL

          The Board shall provide a Bank seal, which shall be two concentric
circles between which shall be the name of the Savings Bank.  The year of
incorporation or an emblem may appear in the center.


                                   ARTICLE XI

                                   AMENDMENTS

          These bylaws may be amended in a manner consistent with regulations of
the Office at any time by a majority vote of the full Board or by a majority
vote of the votes cast by the shareholders of the Savings Bank at any legal
meeting.


                                   ARTICLE XII

                          INDEMNIFICATION AND INSURANCE

          The Savings Bank shall indemnify its directors, officers and employees
in accordance with the following requirements:

          SECTION 1.     DEFINITIONS AND RULES OF CONSTRUCTION.  (a)  The
following definitions apply for purposes of this Article XII:

          (i)  ACTION.  The term "action" means any judicial or administrative
     proceeding, or threatened proceeding, whether civil, criminal or otherwise,
     including any appeal or other proceeding for review;

          (ii) COURT.  The term "court" includes, without limitation, any court
     to which or in which any appeal or any proceeding for review is brought.

          (iii)     FINAL JUDGMENT.  The term "final judgment" means a judgment,
     decree or order that is not appealable or as to which the period for appeal
     has expired with no appeal taken.

          (iv) SETTLEMENT.  The term "settlement" includes entry of a judgment
     by consent or confession or a plea of guilty or NOLO CONTENDERE.

          (b)  References in this Article XII to any individual or other person,
including any savings bank, shall include legal representatives, successors and
assigns thereof.

          SECTION 2.     INDEMNIFICATION.  Subject to Sections 3 and 7 of this
Article XII, the Savings Bank shall indemnify any person against whom an action
is brought or threatened because that person is or was a director, officer or
employee of the Savings Bank for:


<PAGE>

                                      -13-

          (a)  Any amount for which that person becomes liable under a judgment
     in such action; and

          (b)  Reasonable costs and expenses, including reasonable attorney's
     fees, actually paid or incurred by that person in defending or settling
     such action, or in enforcing his or her rights under this Article XII if he
     or she attains a favorable judgment in such action.

          SECTION 3.     REQUIREMENTS FOR INDEMNIFICATION.  Indemnification
shall be made to such person under Section 2 of this Article XII only if:

          (a)  Final judgment on the merits is in his or her favor; or

          (b)  In case of:

               (i)  settlement;

               (ii) final judgment against him or her; or

               (iii)     final judgment in his or her favor, other than on the
          merits,

          if a majority of the disinterested directors of the Savings Bank
          determines that he or she was acting in good faith within the scope of
          his or her employment or authority as he or she could have reasonably
          perceived it under the circumstances and for a purpose he or she could
          reasonably have believed under the circumstances was in the best
          interests of the Savings Bank or its shareholders.

However, no indemnification shall be made unless the Savings Bank gives the
Office at least 60 days notice of its intention to make such indemnification.
Such notice shall state the facts on which the action arose, the terms of any
settlement and any disposition of the matter by a court.  Such notice, a copy
thereof and a certified copy of the resolution containing the required
determination by the Board shall be sent to the District Director of the Office,
who shall promptly acknowledge receipt thereof.  The notice period shall run
from the date of such receipt.  No such indemnification shall be made if the
Director of the Office advises the Savings Bank in writing, within such notice
period, of his or her objection thereto.

          SECTION 4.     INSURANCE.  The Savings Bank may obtain insurance to
protect it and its directors, officers and employees from potential losses
arising from claims against any of them for alleged wrongful acts, or wrongful
acts committed in their capacity as directors, officers or employees.  However,
the Savings Bank may not obtain insurance that provides for payment of losses of
any person incurred as a consequence of his or her willful or criminal
misconduct.

          SECTION 5.     PAYMENT OF EXPENSES.  If a majority of the directors of
the Savings Bank concludes that, in connection with an action, any person
ultimately may become entitled to indemnification under this Article XII, the
directors may authorize payment of reasonable costs and expenses, including
reasonable attorneys' fees, arising from the defense or settlement of such
action.  Nothing in this Section 5 shall prevent the directors of the Savings
Bank from


<PAGE>

                                      -14-

imposing such conditions on a payment of expenses as they deem warranted and in
the interests of the Savings Bank.  Before making advance payment of expenses
under this Section 5, the Savings Bank shall obtain an agreement that the
Savings Bank will be repaid if the person on whose behalf payment is made is
later determined not to be entitled to such indemnification.

          SECTION 6.     EXCLUSIVENESS OF PROVISIONS.  The Savings Bank shall
not indemnify any person referred to in Section 2 of this Article XII or obtain
insurance referred to in Section 4 of this Article XII other than in accordance
with this Article XII.

          SECTION 7.     STATUTORY LIMITATION.  The indemnification provided for
in Section 2 of this Article XII is subject to and qualified by 12 U.S.C.
Section 1821(k).

          SECTION 8.  SUBSEQUENT LEGISLATION OR REGULATION.  If law and
regulations thereunder applicable to federal stock savings banks are amended to
expand the indemnification permitted to directors and officers of the Savings
Bank, then the Savings Bank shall indemnify such persons to the extent permitted
by such applicable law and regulations, as so amended.



<PAGE>
                                      EX-3.1
                 Articles of Incorporation of Big Foot Financial


================================================================================


                            ARTICLES OF INCORPORATION

                                       OF

                            BIG FOOT FINANCIAL CORP.

                              UNDER SECTION 2.10 OF

                          THE BUSINESS CORPORATION ACT

                            OF THE STATE OF ILLINOIS


================================================================================

<PAGE>

                                TABLE OF CONTENTS

                                                                          Page
                                                                          ----

                                    ARTICLE I

                                     NAME ...............................    1

                                   ARTICLE II

                          REGISTERED OFFICE AND AGENT ...................    1

                                   ARTICLE III

                                    PURPOSE .............................     1

                                   ARTICLE IV

                                  CAPITAL STOCK

Section 1.  Shares, Classes and Series Authorized.........................   1
Section 2.  Designations, Powers, Preferences, Rights, 
       Qualifications, Limitations and Restrictions Relating 
       to the Capital Stock...............................................   2

                                    ARTICLE V

                   LIMITATION ON BENEFICIAL OWNERSHIP OF STOCK

Section 1.  Applicability of Article......................................   4
Section 2.  Prohibitions Relating to Beneficial Ownership of 
              Voting Stock ...............................................   4
Section 3.  Excess Common Stock...........................................   4
Section 4.  Powers of the Board of Directors..............................   5
Section 5.  Severability..................................................   5
Section 6.  Exclusions....................................................   6

                                  ARTICLE VI

                              BOARD OF DIRECTORS

Section 1.  Number of Directors...........................................   6
Section 2.  Classification of Board.......................................   6
Section 3.  Removal of Directors..........................................   7
Section 4.  Directors Elected by Preferred Shareholders...................   7
Section 5.  Evaluation of Acquisition Proposals...........................   7
Section 6.  Power to Call Special Meeting of Shareholders.................   8


                                        i

<PAGE>

                                                                          Page
                                                                          ----

                                  ARTICLE VII

                   ACTION BY SHAREHOLDERS WITHOUT A MEETING..................8


                                 ARTICLE VIII

                         CERTAIN BUSINESS COMBINATIONS

Section 1.  Higher Vote Required for Certain Business Combinations  8
Section 2.  When Higher Vote is Not Required..............................   9
Section 3.  Definitions...................................................  11
Section 4.  Powers of the Disinterested Directors.........................  15
Section 5.  Effect on Fiduciary Obligations of Interested Shareholders ...  16
Section 6.  Amendment, Repeal, Etc........................................  16

                                  ARTICLE IX

                       LIMITATION OF DIRECTOR LIABILITY.................... 16

                                   ARTICLE X

                                INDEMNIFICATION

Section 1.  Actions, Suits or Proceedings Other than by or in the 
       Right of the Corporation...........................................  17
Section 2.  Actions or Suits by or in the Right of the Corporation .......  17
Section 3.  Indemnification for Costs, Charges and Expenses of a 
       Successful Party...................................................  18
Section 4.  Indemnification for Expenses of a Witness.....................  18
Section 5.  Determination of Right to Indemnification.....................  19
Section 6.  Advancement of Costs, Charges and Expenses....................  19
Section 7.  Procedure for Indemnification.................................  19
Section 8.  Settlement....................................................  20
Section 9.  Other Rights; Continuation of Right to Indemnification; 
       Individual Contracts...............................................  20
Section 10.  Savings Clause...............................................  21
Section 11.  Insurance....................................................  21
Section 12.  Definitions..................................................  21
Section 13.  Subsequent Amendment and Subsequent Legislation..............  22


                                       ii

<PAGE>

                                                                          Page
                                                                          ----

                                   ARTICLE XI

                                   AMENDMENTS

Section 1.  Amendments of Articles of Incorporation.......................  23
Section 2.  Amendments of Bylaws..........................................  23

                                   ARTICLE XII

                                   NOTICES ...............................  25


                                       iii

<PAGE>

                            ARTICLES OF INCORPORATION

                                       OF

                            BIG FOOT FINANCIAL CORP.

     THE UNDERSIGNED, for the purpose of forming a corporation pursuant to
Section 2.10 of the Business Corporation Act of the State of Illinois, does
hereby certify that this Articles of Incorporation of Big Foot Financial Corp.
was duly adopted in accordance with the provisions of Section 1.10 of the
Business Corporation Act of the State of Illinois, and further certifies as
follows:

                                    ARTICLE I

                                      NAME

     The name of the corporation is Big Foot Financial Corp. (the
"Corporation").

                                   ARTICLE II

                           REGISTERED OFFICE AND AGENT

     The address of the registered office of the Corporation in the State of
Illinois is CT Corporation System, 208 South LaSalle Street, in the City of
Chicago, County of Cook. The name of the registered agent at such address is CT
Corporation System.

                                   ARTICLE III

                                     PURPOSE

     The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the Business Corporation Act of
the State of Illinois.

                                   ARTICLE IV

                                  CAPITAL STOCK

     Section 1. Shares, Classes and Series Authorized. The total number of
shares of all classes of capital stock which the Corporation shall have
authority to issue is seventeen million two hundred thousand (17,200,000)
shares, of which two million (2,000,000) shares shall be preferred stock, with a
par value of $.01 per share (the "Preferred Stock"), eight million

<PAGE>

                                       -2-


(8,000,000) shares shall be common stock, with a par value of $.01 per share
(the "Common Stock") and seven million two hundred thousand (7,200,000) shall be
excess common stock, with a par value of $.01 per share (the "Excess Common
Stock"). The Preferred Stock, Common Stock and Excess Common Stock are sometimes
hereinafter, collectively, referred to as the "Capital Stock."

     Section 2. Designations, Powers, Preferences, Rights, Qualifications,
Limitations and Restrictions Relating to the Capital Stock. The following is a
statement of the designations, powers, preferences and rights in respect of the
classes of the Capital Stock, and the qualifications, limitations or
restrictions thereof, and of the authority with respect thereto expressly vested
in the Board of Directors of the Corporation (the "Board of Directors"):

     (a) Preferred Stock. The Preferred Stock may be issued from time to time in
one or more series, the number of shares and any designation of each series and
the powers, preferences and rights of the shares of each series, and the
qualifications, limitations or restrictions thereof, to be as stated and
expressed in a resolution or resolutions providing for the issue of such series
adopted by the Board of Directors, subject to the limitations prescribed by law.
The Board of Directors in any such resolution or resolutions is expressly
authorized to state for each such series:

          (i) the voting powers, if any, of the holders of stock of such series
     in addition to any voting rights affirmatively required by law;

          (ii) the rights of shareholders in respect of dividends, including,
     without limitation, the rate or rates per annum and the time or times at
     which (or the formula or other method pursuant to which such rate or rates
     and such time or times may be determined) and conditions upon which the
     holders of stock of such series shall be entitled to receive dividends and
     other distributions, and whether any such dividends shall be cumulative or
     non-cumulative and, if cumulative, the terms upon which such dividends
     shall be cumulative;

          (iii) whether the stock of each such series shall be redeemable by the
     Corporation at the option of the Corporation or the holder thereof and, if
     redeemable, the terms and conditions upon which the stock of such series
     may be redeemed and whether or not there shall be any sinking fund and, if
     so, the terms thereof;

          (iv) the amount payable and the rights or preferences to which the
     holders of the stock of such series shall be entitled upon any voluntary or
     involuntary liquidation, dissolution or winding up of the Corporation;

          (v) the terms, if any, upon which shares of stock of such series shall
     be convertible into, or exchangeable for, shares of stock of any other
     class or classes or of any other series of the same or any other class or
     classes, including the price or prices or the rate or rates of conversion
     or exchange and the terms of adjustment, if any; and

<PAGE>

                                       -3-


          (vi) any other powers, designations, preferences and relative,
     participating, optional or other special rights, and qualifications,
     limitations or restrictions thereof, so far as they are not inconsistent
     with the provisions of this Articles of Incorporation and to the full
     extent now or hereafter permitted by the laws of the State of Illinois.

     Subject to any limitations or restrictions stated in the resolution or
resolutions of the Board of Directors originally fixing the number of shares
constituting a series, the Board of Directors may by resolution or resolutions
likewise adopted increase (but not above the total number of authorized shares
of Preferred Stock) or decrease (but not below the number of shares of the
series then outstanding) the number of shares of the series subsequent to the
issue of shares of that series; and, in case the number of shares of any series
shall be so decreased, the shares constituting the decrease shall resume that
status that they had prior to the adoption of the resolution originally fixing
the number of shares constituting such series.

     (b) Common Stock and Excess Common Stock. (i) Except as set forth in
subparagraph (ii) of this paragraph (b), all shares of Common Stock and Excess
Common Stock shall be identical to each other in every respect. The shares of
Common Stock shall entitle the holders thereof to one vote for each share on all
matters on which shareholders have the right to vote. The holders of Common
Stock shall not be permitted to cumulate their votes for the election of
Directors.

     (ii) Each share of Excess Common Stock shall entitle the holder thereof to
one one-hundredth (1/100) of a vote on all matters on which shareholders have
the right to vote.

     (iii) Subject to the preferences, privileges and powers with respect to
each class or series of Preferred Stock having any priority over the Common
Stock and the Excess Common Stock, and the qualifications, limitations or
restrictions thereof, the holders of the Common Stock and the Excess Common
Stock shall have and possess all rights pertaining to the Capital Stock.

     Section 3. Shares to be issued Without Report to Secretary of State. The
number and class of shares which the corporation proposes to issue without
further report to the Secretary of State shall be one share of Common Stock for
consideration of One Thousand Dollars ($1,000).

<PAGE>

                                       -4-


                                    ARTICLE V

                   LIMITATION ON BENEFICIAL OWNERSHIP OF STOCK

     Section 1. Applicability of Article. The provisions of this Article V shall
become effective upon (i) the consummation of the conversion of Fairfield
Savings Bank, F.S.B., a savings bank organized under the laws of the United
States (the "Bank"), from a mutual to a stock savings bank and (ii) the
concurrent acquisition by the Corporation of all of the outstanding capital
stock of the Bank (the "Effective Date"). All terms used in this Article V and
not otherwise defined herein shall have the meanings ascribed to such terms in
Section 3 of Article VIII, below.

     Section 2. Prohibitions Relating to Beneficial Ownership of Voting Stock.
No Person (other than the Corporation, any Subsidiary or any pension,
profit-sharing, stock bonus or other compensation plan maintained by the
Corporation or by a member of a controlled group of corporations or trades or
businesses of which the Corporation is a member for the benefit of the employees
of the Corporation and/or any Subsidiary, or any trust or custodial arrangement
established in connection with any such plan) shall directly or indirectly
acquire or hold the beneficial ownership of more than ten percent (10%) of the
issued and outstanding shares of Voting Stock of the Corporation. Any Person so
prohibited who directly or indirectly acquires or holds the beneficial ownership
of more than ten percent (10%) of the issued and outstanding shares of Voting
Stock in violation of this Section 2 shall be subject to the provisions of
Sections 3 and 4 of this Article V, below. The Corporation is authorized to
refuse to recognize a transfer or attempted transfer of any shares of Voting
Stock to any Person who beneficially owns, or who the Corporation believes would
become by virtue of such transfer the beneficial owner of, more than ten percent
(10%) of shares of the Voting Stock.

     Section 3. Excess Common Stock. If, notwithstanding the foregoing
prohibition, a Person within the meaning of Article V Section 2 above, shall,
voluntarily or involuntarily, become or attempt to become the purported
beneficial owner (the "Purported Owner") of shares of Voting Stock in excess of
ten percent (10%) of the issued and outstanding shares of Voting Stock, the
number of shares in excess of ten percent (10%) shall automatically, and without
any action on the part of the holder thereof, be converted into shares of
"Excess Common Stock," each share of which shall entitle the holder thereof to
one one-hundredth (1/100) of a vote on all matters on which shareholders have
the right to vote. If, subsequent to any such conversion, shares of Excess
Common Stock are then held by a Person that is not in violation of the
prohibitions relating to beneficial ownership of Voting Stock set forth in
Article V Section 2, such shares of Excess Common shall automatically, and
without any action on the part of the holder thereof, be converted into the type
of shares of Voting Stock such shares were prior to their conversion into shares
of Excess Common Stock.

     The restrictions set forth in this Article V shall be noted conspicuously
on all certificates evidencing ownership of shares of Voting Stock.

<PAGE>

                                       -5-


     Section 4. Powers of the Board of Directors.

     (a) The Board of Directors may, to the extent permitted by law, from time
to time establish, modify, amend or rescind, by Bylaw or otherwise, regulations
and procedures not inconsistent with the express provisions of this Article V
for the orderly application, administration and implementation of the provisions
of this Article V. Such procedures and regulations shall be kept on file with
the Secretary of the Corporation and with the Transfer Agent, shall be made
available for inspection by the public and, upon request, shall be mailed to any
holder of shares of Voting Stock of the Corporation.

     (b) When it appears that a particular Person has become a Purported Owner
of Excess Common Stock in violation of Section 2 of this Article V, or of the
regulations or procedures of the Board of Directors with respect to this Article
V, and that the provisions of this Article V require application, interpretation
or construction, then a majority of the directors of the Corporation shall have
the power and duty to interpret all of the terms and provisions of this Article
V and to determine on the basis of information known to them after reasonable
inquiry all facts necessary to ascertain compliance with this Article V,
including, without limitation, (i) the number of shares of Voting Stock
beneficially owned by any Person or Purported Owner, (ii) whether a Person or
Purported Owner is an Affiliate or Associate of, or is acting in concert with,
any other Person or Purported Owner, (iii) whether a Person or Purported Owner
has an agreement, arrangement or understanding with any other Person or
Purported Owner as to the voting or disposition of any shares of the Voting
Stock, (iv) the application of any other definition or operative provision of
this Article V to the given facts or (v) any other matter relating to the
applicability or effect of this Article V.

     The Board of Directors shall have the right to demand that any Person who
is reasonably believed to be a Purported Owner of Excess Common Stock (or who
holds of record shares of Voting Stock beneficially owned by any Person
reasonably believed to be a Purported Owner in excess of such limit) supply the
Corporation with complete information as to (i) the record owner(s) of all
shares of Voting Stock beneficially owned by such Person or Purported Owner and
(ii) any other factual matter relating to the applicability or effect of this
Article V as may reasonably be requested of such Person or Purported Owner.

     Any applications, interpretations, constructions or any other
determinations made by the Board of Directors pursuant to this Article V, in
good faith and on the basis of such information and assistance as was then
reasonably available for such purpose, shall be conclusive and binding upon the
Corporation and its shareholders, and neither the Corporation nor any of its
shareholders shall have the right to challenge any such application,
interpretation, construction, or determination.

     Section 5. Severability. In the event any provision (or portion thereof) of
this Article V shall be found to be invalid, prohibited or unenforceable for any
reason, the remaining provisions (or portions thereof) of this Article V shall
remain in full force and effect, and shall be construed as if such invalid,
prohibited or unenforceable provision had been stricken herefrom

<PAGE>

                                       -6-


or otherwise rendered inapplicable, it being the intent of this Corporation and
its shareholders that each such remaining provision (or portion thereof) of this
Article V remain, to the fullest extent permitted by law, applicable and
enforceable as to all shareholders, including Purported Owners, if any,
notwithstanding any such finding.

     Section 6. Exclusions. This Article V shall not apply to (a) any offer or
sale with a view towards public resale made exclusively by the Corporation to
any underwriter or underwriters acting on behalf of the Corporation, or to the
selling group acting on such underwriter's or underwriters' behalf, in
connection with a public offering of the Common Stock; or (b) any
reclassification of securities (including any reverse stock split), or
recapitalization of the Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any other transaction or
reorganization that does not have the effect, directly or indirectly, of
changing the beneficial ownership interests of the Corporation's shareholders,
other than pursuant to the exercise of any dissenters' appraisal rights, except
as a result of immaterial changes due to fractional share adjustments, which
changes do not exceed, in the aggregate, one percent (1%) of the issued and
outstanding shares of such class of equity or convertible securities.

                                   ARTICLE VI

                               BOARD OF DIRECTORS

     Section 1. Number of Directors. The initial number of directors of the
Corporation shall be seven and thereafter shall be as determined only by
resolution of the Board of Directors, but shall not be less than five (5) nor
more than fifteen (15) (other than directors elected by holders of shares of one
or more series of Preferred Stock).

     Section 2. Classification of Board. Subject to the rights of any holders of
shares of any series of Preferred Stock that may be issued by the Corporation
pursuant to a resolution or resolutions of the Board of Directors providing for
such issuance, and subject to the provisions hereof, the directors of the
Corporation shall be divided into three classes with respect to term of office,
each class to contain, as near as may be possible, one-third of the entire
number of the Board, with the terms of office of one class expiring each
successive year. One class of directors shall be initially elected for a term
expiring at the annual meeting of shareholders to be held in 1997, another class
shall be initially elected for a term expiring at the annual meeting of
shareholders to be held in 1998 and another class shall be initially elected for
a term expiring at the annual meeting of shareholders to be held in 1999. At
each annual meeting of shareholders, the successors to the class of directors
(other than directors elected by holders of shares of one or more series of
Preferred Stock) whose term expires at that time shall be elected by the
shareholders to serve until the annual meeting of shareholders held three years
next following and until their successors shall be elected and qualified.

<PAGE>

                                       -7-


     In the event of any intervening changes in the authorized number of
directors (other than directors elected by holders of shares of one or more
series of Preferred Stock), only the Board of Directors shall designate the
class or classes to which the increases or decreases in directorships shall be
apportioned in order more nearly to achieve equality of number of directors
among the classes; provided, however, that no such apportionment or
redesignation shall shorten the term of any incumbent director.

     Unless and to the extent that the Bylaws so provide, elections of directors
need not be by written ballot.

     Section 3. Removal of Directors. Any or all of the directors (subject to
the provisions of Section 4 of this Article VI relating to directors elected by
holders of shares of one or more series of Preferred Stock) may be removed at
any time, but only for cause, and any such removal shall require the vote of not
less than a majority of the total votes eligible to be cast by the holders of
all outstanding shares of Capital Stock entitled to vote generally in the
election of directors at a meeting of shareholders expressly called for that
purpose. For purposes of this Section 3, conduct worthy of removal for "cause"
shall include, but not be limited to (a) conduct as a director of the
Corporation or any subsidiary of the Corporation, which conduct involves willful
material misconduct, breach of fiduciary duty involving personal pecuniary gain
or gross negligence in the performance of duties, (b) conduct, whether or not as
a director of the Corporation or a subsidiary of the Corporation, which conduct
involves dishonesty or breach of fiduciary duty and is punishable by
imprisonment for a term exceeding one year under state or federal law or (c)
removal of such person from the Board of Directors of the Bank, if such person
is so serving, in accordance with the Federal Stock Charter and Bylaws of the
Bank.

     Section 4. Directors Elected by Preferred Shareholders. Notwithstanding
anything set forth in this Articles of Incorporation to the contrary, the
qualifications, term of office and provisions governing vacancies, removal and
other matters pertaining to directors elected by holders of shares of one or
more series of Preferred Stock shall be as set forth in a resolution or
resolutions adopted by the Board of Directors setting forth the designations,
preferences and rights relating to any such series of Preferred Stock pursuant
to Article IV, Section 2 hereof.

     Section 5. Evaluation of Acquisition Proposals. The Board of Directors of
the Corporation, when evaluating any offer to the Corporation or to the
shareholders of the Corporation from another party to (a) purchase for cash, or
exchange any securities or property for, any outstanding equity securities of
the Corporation, (b) merge or consolidate the Corporation with another
corporation or (c) purchase or otherwise acquire all or substantially all of the
properties and assets of the Corporation, shall, in connection with the exercise
of its judgment in determining what is in the best interests of the Corporation
and its shareholders, give due consideration to the extent permitted by law not
only to the price or other consideration being offered, but also to all other
relevant factors including, without limitation, the financial and managerial
resources and future prospects of the other party, the possible effects on the
business of the Corporation and its subsidiaries and on the employees,
customers, suppliers and

<PAGE>

                                       -8-


creditors of the Corporation and its subsidiaries and the effects on the
communities in which the Corporation's and its subsidiaries' facilities are
located.

     Section 6. Power to Call Special Meeting of Shareholders. Special meetings
of shareholders for any purpose may be called at any time only by the Chairman
of the Board, the President or by resolution of at least three-fourths of the
Directors of the Corporation then in office. At a special meeting, no business
shall be transacted and no corporate action shall be taken other than that
stated in the notice of meeting prescribed by the Bylaws of the Corporation.

                                   ARTICLE VII

                    ACTION BY SHAREHOLDERS WITHOUT A MEETING

     Except as otherwise provided for or fixed pursuant to the provisions of
Article IV of this Articles of Incorporation relating to the rights of holders
of shares of any series of Preferred Stock, no action that is required or
permitted to be taken by the shareholders of the Corporation at any annual or
special meeting of shareholders may be effected by written consent of
shareholders in lieu of a meeting of shareholders.

                                  ARTICLE VIII

                          CERTAIN BUSINESS COMBINATIONS

     Section 1. Higher Vote Required for Certain Business Combinations. In
addition to any affirmative vote required by law, by this Articles of
Incorporation or by the provisions of any series of Preferred Stock that may at
the time be outstanding, and except as otherwise expressly provided for in
Section 2 of this Article VIII, any Business Combination, as hereinafter
defined, shall require the affirmative vote of not less than eighty percent
(80%) (to the extent permitted by law, but in no event less than two-thirds) of
the total number of votes eligible to be cast by the holders of all outstanding
shares of Voting Stock, voting together as a single class (it being understood,
that for purposes of this Article VIII, each share of the Voting Stock shall
have the number of votes granted to it pursuant to Article IV and Article V of
this Articles of Incorporation or in any resolution or resolutions of the Board
of Directors for issuance of shares of Preferred Stock), together (to the extent
permitted by law) with the affirmative vote of at least fifty percent (50%) of
the total number of votes eligible to be cast by the holders of all outstanding
shares of the Voting Stock not beneficially owned by the Interested Shareholder
involved or any Affiliate or Associate thereof, voting together as a single
class. Such affirmative vote shall be required notwithstanding the fact that no
vote may be required, or that a lesser percentage may be specified, by law or in
any agreement with any national securities exchange or otherwise.

<PAGE>

                                       -9-


     Section 2. When Higher Vote is Not Required. The provisions of Section 1 of
this Article VIII shall not be applicable to any particular Business
Combination, and such Business Combination shall require only such affirmative
vote as is required by law or any other provision of this Articles of
Incorporation, if either (i) the Business Combination shall have been approved
by a majority of the Disinterested Directors then in office or (ii) all of the
conditions specified in the following subsections (a) through (g) are met:

     (a) The aggregate amount of the cash and the Fair Market Value as of the
Consummation Date of consideration other than cash to be received per share by
holders of Common Stock in such Business Combination shall be at least equal to
the higher of the following:

          (i) (if applicable) the highest per share price (including any
     brokerage commissions, transfer taxes, soliciting dealers' fees,
     dealer-management compensation and other expenses, including, but not
     limited to, costs of newspaper advertisements, printing expenses and
     attorneys' fees and expenses) paid by the Interested Shareholder for any
     shares of Common Stock acquired by it (A) within the two year period
     immediately prior to the Announcement Date, or (B) in the transaction in
     which it became an Interested Shareholder, whichever is higher, plus
     interest compounded annually from the Determination Date through the
     Consummation Date at the prime rate of interest of Citibank, N.A. (or other
     major bank headquartered in New York City selected by a majority of the
     Disinterested Directors then in office) from time to time in effect in New
     York City, less the aggregate amount of any cash dividends paid and the
     Fair Market Value of any dividends paid, other than in cash, per share of
     Common Stock from the Determination Date through the Consummation Date in
     an amount up to but not exceeding the amount of such interest payable per
     share of Common Stock; or

          (ii) the Fair Market Value per share of Common Stock on the
     Announcement Date or on the Determination Date, whichever is higher.

     (b) The aggregate amount of the cash and the Fair Market Value as of the
Consummation Date of consideration other than cash to be received per share by
holders of shares of any class or series of outstanding Voting Stock, other than
Common Stock, in such Business Combination shall be at least equal to the
highest of the following (such requirement being applicable to each such class
or series of outstanding Voting Stock, whether or not the Interested Shareholder
has previously acquired any shares of such class or series of Voting Stock):

          (i) (if applicable) the highest per share price (including any
     brokerage commissions, transfer taxes, soliciting dealers' fees,
     dealer-management compensation, and other expenses, including, but not
     limited to, costs of newspaper advertisements, printing expenses and
     attorneys' fees and expenses) paid by the Interested Shareholder for any
     shares of such class or series of Voting Stock acquired by it (A) within
     the two year period immediately prior to the Announcement Date, or (B) in
     the transaction in which it became an Interested Shareholder, whichever is
     higher, plus interest

<PAGE>

                                      -10-

     compounded annually from the Determination Date through the Consummation
     Date at the prime rate of interest of Citibank, N.A. (or other major bank
     headquartered in New York City selected by a majority of the Disinterested
     Directors then in office) from time to time in effect in New York City,
     less the aggregate amount of any cash dividends paid, and the Fair Market
     Value of any dividends paid other than in cash, per share of such class or
     series of Voting Stock from the Determination Date through the Consummation
     Date in an amount up to but not exceeding the amount of such interest
     payable per share of such class or series of Voting Stock;

          (ii) (if applicable) the highest preferential amount per share to
     which the holders of shares of such class or series of Voting Stock are
     entitled in the event of any voluntary or involuntary liquidation,
     dissolution or winding up of the Corporation; or

          (iii) the Fair Market Value per share of such class or series of
     Voting Stock on the Announcement Date or on the Determination Date,
     whichever is higher.

     (c) The consideration to be received by holders of any particular class or
series of outstanding Voting Stock (including Common Stock) in such Business
Combination shall be in cash or in the same form as the Interested Shareholder
has previously paid for shares of such class or series of Voting Stock. If the
Interested Shareholder has paid for shares of any class or series of Voting
Stock with varying forms of consideration, the form of consideration for such
class or series of Voting Stock in such Business Combination shall be either
cash or the form used to acquire the largest number of shares of such class or
series of Voting Stock previously acquired by it.

     (d) The holders of all outstanding shares of Voting Stock not beneficially
owned by the Interested Shareholder immediately prior to the Consummation Date
shall be entitled to receive in such Business Combination cash or other
consideration for their shares in compliance with subsections (a), (b) and (c)
of this Section 2.

     (e) After the Determination Date and prior to the Consummation Date:

          (i) except as approved by a majority of the Disinterested Directors
     then in office, there shall have been no failure to declare and pay, or set
     aside for payment, at the regular date therefor any full quarterly
     dividends (whether or not cumulative) on any outstanding Preferred Stock;

          (ii) there shall have been (A) no reduction in the annual rate of
     dividends paid on the Common Stock (except as necessary to reflect any
     subdivision of the Common Stock), except as approved by a majority of the
     Disinterested Directors then in office, and (B) an increase in such annual
     rate of dividends as necessary to reflect any reclassification (including
     any reverse stock split), recapitalization, reorganization or any similar
     transaction that has the effect of reducing the number of outstanding
     shares of the

<PAGE>

                                      -11-


     Common Stock, unless the failure so to increase such annual rate is
     approved by a majority of the Disinterested Directors then in office; and

          (iii) such Interested Shareholder shall not have become the beneficial
     owner of any additional shares of Voting Stock except (a) as part of the
     transaction that results in such Interested Shareholder becoming an
     Interested Shareholder, (b) as the result of a stock dividend paid by the
     Corporation or (c) upon the exercise or conversion of securities of the
     Corporation issued pro rata to all holders of Common Stock which are
     exercisable for or convertible into shares of Voting Stock.

     (f) After the Determination Date, the Interested Shareholder shall not have
received the benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages provided by or through the
Corporation or an Affiliate of the Corporation, whether in anticipation of or in
connection with such Business Combination or otherwise.

     (g) A proxy or information statement describing the proposed Business
Combination in accordance with the requirements of the Securities Exchange Act
of 1934, as amended, whether or not the Corporation is then subject to such
requirements, and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be mailed to
shareholders of the Corporation at least thirty (30) days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions). The first page of such proxy or information statement
shall prominently display the recommendation, if any, that a majority of the
Disinterested Directors then in office may choose to make to the holders of
Voting Stock regarding the proposed Business Combination. Such proxy or
information statement shall also contain, if a majority of the Disinterested
Directors then in office so requests, an opinion of a reputable investment
banking firm (which firm shall be engaged solely on behalf of the shareholders
of the Corporation other than the Interested Shareholder and shall be selected
by a majority of the Disinterested Directors then in office, furnished with all
information it reasonably requests and paid a reasonable fee for its services by
the Corporation upon the Corporation's receipt of such opinion) as to the
fairness (or lack of fairness) of the terms of the proposed Business Combination
from the point of view of the holders of Voting Stock other than the Interested
Shareholder.

     Section 3. Definitions. For purposes of this Article VIII, the following
terms shall have the following meanings:

     (a) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended, as in effect on the date of filing
by the Secretary of State of the State of Illinois of this Articles of
Incorporation, whether or not the Corporation was then subject to such rule.

<PAGE>

                                      -12-


     (b) "Announcement Date" shall mean the date of the first public
announcement of the proposal of the Business Combination.

     (c) A Person shall be deemed the "beneficial owner," or to have "beneficial
ownership," of any shares of Voting Stock that:

          (i) such Person or any of its Affiliates or Associates beneficially
     owns, directly or indirectly; or

          (ii) such Person or any or its Affiliates or Associates, directly or
     indirectly, has (A) the right to acquire (whether such right is exercisable
     immediately or only after the passage of time) pursuant to any agreement,
     arrangement or understanding (but a Person shall not be deemed to be the
     beneficial owner of any Voting Stock solely by reason of an agreement,
     arrangement or understanding with the Corporation to effect a Business
     Combination) or upon the exercise of conversion rights, exchange rights,
     warrants or options, or otherwise, or (B) the right to vote, or to direct
     the vote of, pursuant to any agreement, arrangement or understanding; or

          (iii) is beneficially owned, directly or indirectly, by any other
     Person with which such first mentioned Person or any of its Affiliates or
     Associates has any agreement, arrangement or understanding for the purpose
     of acquiring, holding, voting or disposing of any shares of Voting Stock;

provided, however, that no director or officer of the Corporation (nor any
Affiliate or Associate of any such director or officer) (y) shall, solely by
reason of any or all of such directors or officers acting in their capacities as
such, be deemed, for any purposes hereof, to beneficially own any Voting Stock
of the Corporation beneficially owned by any other such director or officer (or
any Affiliate or Associate thereof) or (z) shall be deemed to beneficially own
any Voting Stock of the Corporation owned by any pension, profit-sharing, stock
bonus or other compensation plan maintained by the Corporation or by a member of
a controlled group of corporations or trades or businesses of which the
Corporation is a member for the benefit of employees of the Corporation and/or
any Subsidiary, or any trust or custodial arrangement established in connection
with any such plan, not specifically allocated to such Person's personal
account.

     (d) The term "Business Combination" shall mean any transaction that is
referred to in any one or more of the following paragraphs (i) through (vi):

          (i) any merger or consolidation of the Corporation or any Subsidiary
     (other than a merger pursuant to Section 11.30 of the Business Corporation
     Act of the State of Illinois) with (A) any Interested Shareholder or (B)
     any other entity (whether or not such other entity is itself an Interested
     Shareholder) which is, or after such merger or consolidation would be, an
     Affiliate or Associate of any Interested Shareholder; or

<PAGE>

                                      -13-


          (ii) any sale, lease, exchange, mortgage, pledge, transfer or other
     disposition (in one transaction or a series of transactions) to or with any
     Interested Shareholder or any Affiliate or Associate of any Interested
     Shareholder of any assets of the Corporation or any Subsidiary having an
     aggregate Fair Market Value equal to five percent (5%) or more of the total
     assets of the Corporation or the Subsidiary in question, as of the end of
     its most recent fiscal year ending prior to the time the determination is
     being made; or

          (iii) the issuance or transfer by the Corporation or any Subsidiary
     (in one transaction or a series of transactions) of any securities of the
     Corporation or any Subsidiary to any Interested Shareholder or any
     Affiliate or Associate of any Interested Shareholder other than (A) on a
     pro rata basis to all holders of Voting Stock, (B) in connection with the
     exercise or conversion of securities issued pro rata that are exercisable
     for, or convertible into, securities of the Corporation or any Subsidiary
     of the Corporation or (C) the issuance or transfer of such securities
     having an aggregate Fair Market Value equal to less than one percent (1%)
     of the aggregate Fair Market Value of all of the outstanding Capital Stock;
     or

          (iv) the adoption of any plan or proposal for the liquidation or
     dissolution of the Corporation proposed by or on behalf of any Interested
     Shareholder or any Affiliate or Associate of any Interested Shareholder; or

          (v) any reclassification of securities (including any reverse stock
     split), or recapitalization of the Corporation, or any merger or
     consolidation of the Corporation with any of its Subsidiaries or any other
     transaction (whether or not with or into or otherwise involving an
     Interested Shareholder) which has the effect, directly or indirectly, of
     increasing the proportionate share of the outstanding shares of any class
     or series of equity or convertible securities of the Corporation or any
     Subsidiary that is directly or indirectly owned by any Interested
     Shareholder or any Affiliate or Associate of any Interested Shareholder,
     except as a result of immaterial changes due to fractional share
     adjustments, which changes do not exceed, in the aggregate, 1% of the
     issued and outstanding shares of such class or series of equity or
     convertible securities; or

          (vi) the acquisition by the Corporation or a Subsidiary of any
     securities of an Interested Shareholder or its Affiliates or Associates.

     (e) "Consummation Date" shall mean the date of the consummation of the
Business Combination.

     (f) "Determination Date" shall mean the date on which the Interested
Shareholder became an Interested Shareholder.

     (g) "Disinterested Director" shall mean any member of the Board of
Directors of the Corporation who is not an Affiliate or Associate of, or
otherwise affiliated with, the Inter-

<PAGE>

                                      -14-


ested Shareholder and who either was a member of the Board of Directors prior to
the Determination Date, or was recommended for election by a majority of the
Disinterested Directors in office at the time such director was nominated for
election. If there is no Interested Shareholder, each member of the Board of
Directors shall be a Disinterested Director.

     (h) "Fair Market Value" shall mean (i) in the case of stock, the highest
closing price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange listed stocks or, if such stock is not quoted on the Composite Tape,
the New York Stock Exchange, or, if such stock is not listed on such Exchange,
on the principal United States securities exchange registered under the
Securities Exchange Act of 1934, as amended, on which such stock is listed, or,
if such stock is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the 30-day period
preceding the date in question on the Nasdaq Stock Market or any system then in
use, or, if no such quotation is available, the fair market value on the date in
question of a share of such stock as determined in good faith by a majority of
the Disinterested Directors then in office, in each case with respect to any
class of stock, appropriately adjusted for any dividend or distribution in
shares of such stock or any stock split or reclassification of outstanding
shares of such stock into a greater number of shares of such stock or any
combination or reclassification of outstanding shares of such stock into a
smaller number of shares of such stock; and (ii) in the case of property other
than cash or stock, the fair market value of such property on the date in
question as determined in good faith by a majority of the Disinterested
Directors then in office.

     (i) References to "highest per share price" shall in each case with respect
to any class of stock reflect an appropriate adjustment for any dividend or
distribution in shares of such stock or any stock split or reclassification of
outstanding shares of such stock into a greater number of shares of such stock
or any combination or reclassification of outstanding shares of such stock into
a smaller number of shares of such stock.

     (j) "Interested Shareholder" shall mean any Person (other than the
Corporation, any Subsidiary or any pension, profit-sharing, stock bonus or other
compensation or employee benefit plan maintained by the Corporation or by a
member of a controlled group of corporations or trades or businesses of which
the corporation is a member for the benefit of employees of the Corporation
and/or any Subsidiary, or any trust or custodial arrangement established in
connection with any such plan) who or which:

          (i) is the beneficial owner of ten percent (10%) or more of the Voting
     Stock; 

     or

          (ii) is an Affiliate or Associate of the Corporation and at any time
     within the two-year period immediately prior to the date in question was
     the beneficial owner of ten percent (10%) or more of the then outstanding
     shares of Voting Stock; or

<PAGE>

                                      -15-


          (iii) is an assignee of or has otherwise succeeded to any shares of
     Voting Stock that were at any time within the two-year period immediately
     prior to the date in question beneficially owned by any other Interested
     Shareholder, if such assignment or succession shall have occurred in the
     course of a transaction or series of transactions not involving a public
     offering within the meaning of the Securities Act of 1933, as amended, and
     not executed on any exchange or in the over-the-counter market through a
     registered broker or dealer.

In determining whether a Person is an Interested Shareholder pursuant to this
subsection (j), the number of shares of Voting Stock deemed to be outstanding
shall include shares deemed owned through application of subsection (c) of this
Section 3 but shall not include any other shares of Voting Stock that may be
issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.

     (k) "Person" shall mean any corporation, partnership, trust, unincorporated
organization or association, syndicate, any other entity or a natural person,
together with any Affiliate or Associate of such Person or any other Person
acting in concert with such Person.

     (l) "Subsidiary" shall mean any corporation or entity of which a majority
of any class or series of equity securities is owned, directly or indirectly, by
the Corporation; provided, however, that for the purposes of the definition of
Interested Shareholder set forth in subsection (j) of this Section 3, the term
"Subsidiary" shall mean only a corporation or entity of which a majority of each
class or series of outstanding voting securities is owned, directly or
indirectly, by the Corporation.

     (m) "Voting Stock" shall mean all of the outstanding shares of Capital
Stock entitled to vote generally in the election of directors.

     Section 4. Powers of the Disinterested Directors. When it appears that a
particular Person may be an Interested Shareholder and that the provisions of
this Article VIII need to be applied or interpreted, then a majority of the
directors of the Corporation who would qualify as Disinterested Directors shall
have the power and duty to interpret all of the terms and provisions of this
Article VIII, and to determine on the basis of information known to them after
reasonable inquiry of all facts necessary to ascertain compliance with this
Article VIII, including, without limitation, (a) whether a Person is an
Interested Shareholder, (b) the number of shares of Voting Stock beneficially
owned by any Person, (c) whether a Person is an Affiliate or Associate of
another, (d) the Fair Market Value of (i) the assets that are the subject of any
Business Combination, (ii) the securities to be issued or transferred by the
Corporation or any Subsidiary in any Business Combination, (iii) the
consideration other than cash to be received by holders of shares of any class
or series of Common Stock or Voting Stock other than Common Stock in any
Business Combination, (iv) the outstanding Capital Stock or (v) any other item
the Fair Market Value of which requires determination pursuant to this Article
VIII and (e) whether all of the applicable conditions set forth in Section 2 of
this Article VIII have been met with respect to any Business Combination.

<PAGE>

                                      -16-


     Any construction, application or determination made by the Board of
Directors or the Disinterested Directors pursuant to this Article VIII, in good
faith and on the basis of such information and assistance as was then reasonably
available for such purpose, shall be conclusive and binding upon the Corporation
and its shareholders, and neither the Corporation nor any of its shareholders
shall have the right to challenge any such construction, application or
determination.

     Section 5. Effect on Fiduciary Obligations of Interested Shareholders.
Nothing contained in this Article VIII shall be construed to relieve any
Interested Shareholder from any fiduciary obligations imposed by law.

     Section 6. Amendment, Repeal, Etc. Notwithstanding any other provisions of
this Articles of Incorporation or the Bylaws (and notwithstanding the fact that
a lesser percentage may be specified by law, this Articles of Incorporation or
the Bylaws of the Corporation), in addition to any affirmative vote required by
applicable law and any voting rights granted to or held by holders of Preferred
Stock, any amendment, alteration, repeal or rescission of any provision of this
Article VIII must also be approved by either (i) a majority of the Disinterested
Directors or (ii) the affirmative vote of not less than eighty percent (80%) of
the total number of votes eligible to be cast by the holders of all outstanding
shares of the Voting Stock, voting together as a single class, together with the
affirmative vote of not less than fifty percent (50%) of the total number of
votes eligible to be cast by the holders of all outstanding shares of the Voting
Stock not beneficially owned by any Interested Shareholder or Affiliate or
Associate thereof, voting together as a single class.

                                   ARTICLE IX

                        LIMITATION OF DIRECTOR LIABILITY

     A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is expressly prohibited by the Business Corporation Act of
the State of Illinois as the same exists or may hereafter be amended.

     Any amendment, termination or repeal of this Article IX or any provisions
hereof shall not adversely affect or diminish in any way any right or protection
of a director of the Corporation existing with respect to any act or omission
occurring prior to the time of the final adoption of such amendment, termination
or repeal.

     In addition to any requirements of law or of any other provisions of this
Articles of Incorporation, the affirmative vote of the holders of not less than
eighty percent (80%) of the total number of votes eligible to be cast by the
holders of all outstanding shares of Capital Stock entitled to vote thereon
shall be required to amend, alter, rescind or repeal any provision of this
Article IX.

<PAGE>

                                      -17-

                                    ARTICLE X

                                 INDEMNIFICATION

     Section 1. Actions, Suits or Proceedings Other than by or in the Right of
the Corporation. To the fullest extent permitted by the Business Corporation Act
of the State of Illinois, the Corporation shall indemnify any person who is or
was or has agreed to become a director or officer of the Corporation who was or
is made a party to or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Corporation) by reason of the fact that he or she is or was or has agreed to
become a director or officer of the Corporation, or, is or was serving or has
agreed to serve at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and the Corporation may indemnify any other person who
is or was or has agreed to become an employee or agent of the Corporation who
was or is made a party to or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Corporation) by reason of the fact that he or she is or was or has agreed to
become an employee or agent of the Corporation, or is or was serving or has
agreed to serve at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against costs, charges, expenses (including attorneys'
fees and expenses), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or her or on his or her behalf in connection with
such action, suit or proceeding and any appeal therefrom, if he or she acted in
good faith and in a manner he or she reasonably believed to be in, or not
opposed to, the best interests of the Corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he or she reasonably believed to be
in, or not opposed to, the best interests of the Corporation and, with respect
to any criminal action or proceeding, had reasonable cause to believe that his
or her conduct was unlawful. Notwithstanding anything contained in this Article
X, the Corporation shall not be obligated to indemnify any director or officer
in connection with an action, suit or proceeding, or part thereof, initiated by
such person against the Corporation unless such action, suit or proceeding, or
part thereof, was authorized or consented to by the Board of Directors.

           Section 2. Actions or Suits by or in the Right of the Corporation.
To the fullest extent permitted by the Business Corporation Act of the State of
Illinois, the Corporation shall indemnify any person who is or was or has agreed
to become a director or officer of the Corporation who was or is a party or is
threatened to be made a party to any threatened, pending

<PAGE>

                                      -18-


or completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he or she is or was or has
agreed to become a director or officer of the Corporation, or is was serving or
has agreed to serve at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and the Corporation may indemnify any other person who
is or was or has agreed to become an employee or agent of the Corporation who
was or is made a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he or she is or was
or has agreed to become an employee or agent of the Corporation, or is was
serving or has agreed to serve at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, or by reason of any action alleged to have been taken
or omitted in such capacity, against costs, charges and expenses (including
attorneys' fees and expenses) actually and reasonably incurred by him or her or
on his or her behalf in connection with the defense or settlement of such action
or suit and any appeal therefrom, if he or she acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, the best
interests of the Corporation, except no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been adjudged
to be liable to the Corporation unless and only to the extent that the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of such liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
costs, charges and expenses which such court shall deem proper. Notwithstanding
anything contained in this Article X, the Corporation shall not be obligated to
indemnify any director or officer in connection with an action or suit, or part
thereof, initiated by such person against the Corporation unless such action or
suit, or part thereof, was authorized or consented to by the Board of Directors.

     Section 3. Indemnification for Costs, Charges and Expenses of a Successful
Party. To the extent that a director, officer, employee or agent of the
Corporation has been successful, on the merits or otherwise (including, without
limitation, the dismissal of an action without prejudice), in defense of any
action, suit or proceeding referred to in Section 1 or 2 of this Article X, or
in defense of any claim, issue or matter therein, such person shall be
indemnified against all costs, charges and expenses (including attorneys' fees
and expenses) actually and reasonably incurred by such person or on such
person's behalf in connection therewith.

     Section 4. Indemnification for Expenses of a Witness. To the extent that
any person who is or was or has agreed to become a director or officer of the
Corporation is made a witness to any action, suit or proceeding to which he or
she is not a party by reason of the fact that he or she was, is or has agreed to
become a director or officer of the Corporation, or is or was serving or has
agreed to serve as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, at the
request of the Corporation, such person shall be indemnified against all costs,
charges and expenses actually and reasonably incurred by such person or on such
person's behalf in connection therewith.

<PAGE>

                                      -19-


     To the extent that any person who is or was or has agreed to become an
employee or agent of the Corporation is made a witness to any action, suit or
proceeding to which he or she is not a party by reason of the fact that he or
she was, is or has agreed to become an employee or agent of the Corporation, or
is or was serving or has agreed to serve as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, at the request of the Corporation, such person may be indemnified
against all costs, charges and expenses actually and reasonably incurred by such
person or on such person's behalf in connection therewith.

     Section 5. Determination of Right to Indemnification. Any indemnification
under Section 1 or 2 of this Article X (unless ordered by a court) shall be
made, if at all, by the Corporation only as authorized in the specific case upon
a determination that indemnification of the director, officer, employee or agent
is proper under the circumstances because he or she has met the applicable
standard of conduct set forth in Section 1 or 2 of this Article X. Any
indemnification under Section 4 of this Article X (unless ordered by a court)
shall be made, if at all, by the Corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper under the circumstances. Such determinations shall
be made by (a) a majority vote of directors who were not parties to such action,
suit or proceeding even though less than a quorum of the Board of Directors or
(b) if there are no such directors, or if such directors so direct, by
independent counsel in a written opinion or (c) by the shareholders of the
Corporation. To obtain indemnification under this Article X, any person referred
to in Section 1, 2, 3 or 4 of this Article X shall submit to the Corporation a
written request, including therewith such documents as are reasonably available
to such person and are reasonably necessary to determine whether and to what
extent such person is entitled to indemnification.

     Section 6. Advancement of Costs, Charges and Expenses. Costs, charges and
expenses (including attorneys' fees and expenses) incurred by or on behalf of a
director or officer in defending a civil or criminal action, suit or proceeding
referred to in Section 1 or 2 of this Article X shall be paid by the Corporation
in advance of the final disposition of such action, suit or proceeding;
provided, however, that the payment of such costs, charges and expenses incurred
by or on behalf of a director or officer in advance of the final disposition of
such action, suit or proceeding shall be made only upon receipt of a written
undertaking, by or on behalf of the director or officer to repay all amounts so
advanced in the event that it shall ultimately be determined that such director
or officer is not entitled to be indemnified by the Corporation as authorized in
this Article X or by law. No security shall be required for such undertaking and
such undertaking shall be accepted without reference to the recipient's
financial ability to make repayment. The majority of the directors who were not
parties to such action, suit or proceeding may, upon approval of such director
or officer of the Corporation, authorize the Cor-poration's counsel to represent
such person, in any action, suit or proceeding, whether or not the Corporation
is a party to such action, suit or proceeding.

     Section 7. Procedure for Indemnification. Any indemnification under Section
1, 2, 3 or 4 of this Article X or advancement of costs, charges and expenses
under Section 6

<PAGE>

                                      -20-


of this Article X shall be made promptly, and in any event within sixty (60)
days (except indemnification to be determined by shareholders which will be
determined at the next annual meeting of shareholders), upon the written request
of the director or officer. The right to indemnification or advancement of
expenses as granted by this Article X shall be enforceable by the director,
officer, employee or agent in any court of competent jurisdiction in the State
of Illinois in the event the Corporation denies such request, in whole or in
part, or if no disposition of such request is made within sixty (60) days of the
request. Such person's costs, charges and expenses incurred in connection with
successfully establishing his or her right to indemnification or advancement, to
the extent successful, in any such action shall also be indemnified by the
Corporation. It shall be a defense to any such action (other than an action
brought to enforce a claim for the advancement of costs, charges and expenses
under Section 6 of this Article X where the required undertaking, if any, has
been received by the Corporation) that the claimant has not met the standard of
conduct set forth in Section 1 or 2 of this Article X, but the burden of proving
such defense shall be on the Corporation. Neither the failure of the Corporation
(including its directors, its independent counsel and its shareholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or she
has met the applicable standard of conduct set forth in Section 1 or 2 of this
Article X, nor the fact that there has been an actual determination by the
Corporation (including its directors, its independent counsel and its
shareholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.

     Section 8. Settlement. The Corporation shall not be obligated to reimburse
the costs, charges and expenses of any settlement to which it has not agreed.
If, in any action, suit or proceeding (including any appeal) within the scope of
Section 1 or 2 of this Article X, the person to be indemnified shall have
unreasonably failed to enter into a settlement thereof offered or assented to by
the opposing party or parties in such action, suit or proceeding, then,
notwithstanding any other provision of this Article X, the indemnification
obligation of the Corporation to such person in connection with such action,
suit or proceeding shall not exceed the total of the amount at which settlement
could have been made and the expenses incurred by or on behalf of such person
prior to the time such settlement could reasonably have been effected.

     Section 9. Other Rights; Continuation of Right to Indemnification;
Individual Contracts. The indemnification and advancement of costs, charges and
expenses provided by or granted pursuant to this Article X shall not be deemed
exclusive of any other rights to which any person seeking indemnification or
advancement of costs, charges and expenses may be entitled under law (common or
statutory) or any Bylaw, agreement, policy of indemnification insurance or vote
of shareholders or directors or otherwise, both as to action in his or her
official capacity and as to action in any other capacity while holding office,
and shall continue as to any person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the legatees, heirs,
distributees, executors and administrators of any such person. Nothing contained
in this Article X shall be deemed to prohibit the Corporation from entering
into, and the Corporation is specifically authorized to enter into, agreements
with directors,

<PAGE>

                                      -21-


officers, employees and agents providing indemnification rights and procedures
different from those set forth herein. All rights to indemnification under this
Article X shall be deemed to be a contract between the Corporation and each
director, officer, employee or agent of the Corporation who serves or served in
such capacity (or is was serving or has agreed to serve at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) at any time while this
Article X is in effect.

     Section 10. Savings Clause. If this Article X or any portion shall be
invalidated on any ground by any court of competent jurisdiction, the
Corporation shall nevertheless indemnify each director or officer, and may
indemnify each employee or agent, of the Corporation as to any costs, charges,
expenses (including attorneys' fees and expenses), judgments, fines and amounts
paid in settlement with respect to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (including an action by or in
the right of the Corporation), to the full extent permitted by any applicable
portion of this Article X that shall not have been invalidated and to the
fullest extent permitted by applicable law.

     Section 11. Insurance. The Corporation may purchase and maintain insurance,
at its expense, to protect itself and any person who is or was a director,
officer, employee or agent of the Corporation or is was serving or has agreed to
serve at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any costs, charges or expenses, liability or loss incurred by
such person in any such capacity, or arising out of such person's status as
such, whether or not the Corporation would have the power to indemnify such
person against such costs, charges or expenses, liability or loss under the
Articles of Incorporation or applicable law; provided, however, that such
insurance is available on acceptable terms as determined by a vote of the Board
of Directors. To the extent that any director, officer, employee or agent is
reimbursed by an insurance company under an indemnification insurance policy for
any costs, charges, expenses (including attorneys' fees and expenses),
judgments, fines and amounts paid in settlement to the fullest extent permitted
by any applicable portion of this Article X, the Bylaws, any agreement, the
policy of indemnification insurance or otherwise, the Corporation shall not be
obligated to reimburse the person to be indemnified in connection with such
proceeding.

     Section 12. Definitions. For purposes of this Article X, the following
terms shall have the following meanings:

     (a) "The Corporation" shall include, in addition to the resulting
corporation, any constituent corporation or entity (including any constituent of
a constituent) absorbed by way of an acquisition, consolidation, merger or
otherwise, which, if its separate existence had continued, would have had power
and authority to indemnify its directors, officers, employees or agents so that
any person who is or was a director, officer, employee or agent of such
constituent corporation or entity, or is or was serving at the written request
of such constituent corporation or entity as a director or officer of another
corporation, entity, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this

<PAGE>

                                      -22-


Article X with respect to the resulting or surviving corporation or entity as
such person would have with respect to such constituent corporation or entity if
its separate existence had continued;

     (b) "Other enterprises" shall include employee benefit plans, including,
but not limited to, any employee benefit plan of the Corporation;

     (c) "Director or officer" of the Corporation shall include any director,
officer, partner or trustee who is or was or has agreed to serve at the request
of the Corporation as a director, officer, partner or trustee of another
corporation, partnership, joint venture, trust or other enterprise;

     (d) "Serving at the request of the Corporation" shall include any service
that imposes duties on, or involves services by a director, officer, employee or
agent of the Corporation with respect to an employee benefit plan, its
participants or beneficiaries, including acting as a fiduciary thereof;

     (e) "Fines" shall include any penalties and any excise or similar taxes
assessed on a person with respect to an employee benefit plan;

     (f) To the fullest extent permitted by law, a person shall be deemed to
have acted in "good faith and in a manner he or she reasonably believed to be
in, or not opposed to, the best interests of the Corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his or
her conduct was unlawful," if his or her action is based on the records or books
of account of the Corporation or another enterprise, or on information supplied
to him or her by the officers of the Corporation or another enterprise in the
course of their duties, or on the advice of legal counsel for the Corporation or
another enterprise or on information or records given or reports made to the
Corporation or another enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by the
Corporation or another enterprise; and

     (g) A person shall be deemed to have acted in a manner "not opposed to the
best interests of the Corporation," as referred to in Sections 1 and 2 of this
Article X if such person acted in good faith and in a manner he or she
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan.

     Section 13. Subsequent Amendment and Subsequent Legislation. Neither the
amendment, termination or repeal of this Article X or of relevant provisions of
the Business Corporation Act of the State of Illinois or any other applicable
laws, nor the adoption of any provision of this Articles of Incorporation or the
Bylaws of the Corporation or of any statute inconsistent with this Article X
shall eliminate, affect or diminish in any way the rights of any director,
officer, employee or agent of the Corporation to indemnification under the
provisions of this Article X with respect to any action, suit or proceeding
arising out of, or relating to, any actions, transactions or facts occurring
prior to the final adoption of any such amendment, termination, repeal,
provision or statute.

<PAGE>

                                      -23-


     If the Business Corporation Act of the State of Illinois is amended to
expand further the indemnification permitted to directors and officers of the
Corporation, then the Corporation shall indemnify such persons to the fullest
extent permitted by the Business Corporation Act of the State of Illinois, as so
amended.

                                   ARTICLE XI

                                   AMENDMENTS

     Section 1. Amendments of Articles of Incorporation. In addition to any
affirmative vote required by applicable law and any voting rights granted to or
held by holders of shares of any Series of Preferred Stock, any alteration,
amendment, repeal or rescission (collectively, any "Change") of any provision of
this Articles of Incorporation must be approved by the Board of Directors and by
the affirmative vote of the holders of a majority (or such greater proportion as
may otherwise be required pursuant to any specific provision of this Articles of
Incorporation) of the total votes eligible to be cast by the holders of all
outstanding shares of Capital Stock entitled to vote thereon; provided, however,
that if any such Change relates to Section 13 of Article X or Articles V, VI,
VII or XI of this Articles of Incorporation, such Change must also be approved
either by (i) not less than a majority of the authorized number of directors
and, if one or more Interested Shareholders (as defined in Article VIII hereof)
exists, by not less than a majority of the Disinterested Directors (as defined
in Article VIII hereof), or (ii) the affirmative vote of the holders of not less
than two-thirds of the total votes eligible to be cast by the holders of all
outstanding shares of Capital Stock entitled to vote thereon and, if the Change
is proposed by or on behalf of an Interested Shareholder or a director who is an
Affiliate or Associate (as such terms are defined in Article VIII hereof) of an
Interested Shareholder, by the affirmative vote of the holders of not less than
a majority of the total votes eligible to be cast by holders of all outstanding
shares of Capital Stock entitled to vote thereon not beneficially owned by an
Interested Shareholder or an Affiliate or Associate thereof. Subject to the
foregoing, the Corporation reserves the right to amend this Articles of
Incorporation from time to time in any and as many respects as may be desired
and as may be lawfully contained in an original certificate of incorporation
filed at the time of making such amendment.

     Except as may otherwise be provided in this Articles of Incorporation, the
Corporation reserves the right at any time, and from time to time, to amend,
alter, change or repeal any provision contained in this Articles of
Incorporation and to add or insert herein any other provisions authorized by the
laws of the State of Illinois at the time in force, in the manner now or
hereafter prescribed by law, and all rights, preferences and privileges of any
nature conferred upon shareholders, directors or any other persons whomsoever by
and pursuant to this Articles of Incorporation in its present form or as
hereafter amended are granted subject to the rights reserved in this Section 1.

     Section 2. Amendments of Bylaws. In furtherance and not in limitation of
the powers conferred by statute, the Board of Directors of the Corporation is
expressly authorized

<PAGE>

                                      -24-


to make, alter, amend, rescind or repeal from time to time any of the Bylaws of
the Corporation in accordance with the terms thereof; provided, however, that
any Bylaw made by the Board of Directors may be altered, amended, rescinded or
repealed in accordance with the terms thereof by the holders of shares of
Capital Stock entitled to vote thereon at any annual meeting or at any special
meeting called for that purpose. Notwithstanding the foregoing, any provision of
the Bylaws that contains a supermajority voting requirement shall only be
altered, amended, rescinded or repealed by a vote of the Board of Directors or
holders of shares of Capital Stock entitled to vote thereon that is not less
than the supermajority specified in such provision.

<PAGE>

                                      -25-


                                   ARTICLE XII

                                     NOTICES

     The name and mailing address of the incorporator of this Corporation is:

          Fairfield Savings Bank, F.S.B.
          1190 RFD
          Long Grove, Illinois 60047-7304

     Fairfield Savings Bank, F.S.B. a savings bank organized and existing under
the laws of the United States, caused this Articles of Incorporation to be
signed by George M. Briody, its President, and attested to by Barbara J. Urban,
its Secretary, this 3rd day of September, 1996.

                                     FAIRFIELD SAVINGS BANK, F.S.B.



                                     By:/s/ George M. Briody
                                        ----------------------
                                        George M. Briody
                                        President

Attest:


/s/ Barbara J. Urban
- ---------------------------
    Barbara J. Urban
    Secretary


<PAGE>

                                    EX-3.2
                     ByLaws of Big Foot Financial Corp.


================================================================================


                                     BYLAWS

                                       OF

                            BIG FOOT FINANCIAL CORP.


================================================================================

<PAGE>

                               TABLE OF CONTENTS

                                                                          Page
                                                                          ----

                                   ARTICLE I

                                    OFFICES

Section 1.  Registered Office..............................................  1
Section 2.  Additional Offices.............................................  1

                                  ARTICLE II

                                 SHAREHOLDERS

Section 1.  Place of Meetings..............................................  1
Section 2.  Annual Meetings................................................  1
Section 3.  Special Meetings...............................................  1
Section 4.  Notice of Meetings.............................................  1
Section 5.  Waiver of Notice...............................................  2
Section 6.  Fixing of Record Date..........................................  2
Section 7.  Quorum.........................................................  2
Section 8.  Conduct of Meetings............................................  3
Section 9.  Voting; Proxies................................................  3
Section 10. Inspectors of Election.........................................  4
Section 11. Procedure for Nominations......................................  4
Section 12. Substitution of Nominees.......................................  5
Section 13. New Business...................................................  6

                                  ARTICLE III

                                 CAPITAL STOCK

Section 1.  Certificates of Stock..........................................  7
Section 2.  Transfer Agent and Registrar...................................  7
Section 3.  Registration and Transfer of Shares............................  7
Section 4.  Lost, Destroyed and Mutilated Certificates.....................  8
Section 5.  Holder of Record...............................................  8

                                  ARTICLE IV

                              BOARD OF DIRECTORS

Section 1.  Responsibilities; Number of Directors..........................  8
Section 2.  Qualifications.................................................  8
Section 3.  Regular and Annual Meetings....................................  8


                                        i

<PAGE>

Section 4.  Special Meetings...............................................  9
Section 5.  Notice of Meetings; Waiver of Notice...........................  9
Section 6.  Conduct of Meetings............................................  9
Section 7.  Quorum and Voting Requirements................................. 10
Section 8.  Informal Action by Directors................................... 10
Section 9.  Resignation.................................................... 10
Section 10. Vacancies...................................................... 10
Section 11. Compensation................................................... 10
Section 12. Amendments Concerning the Board................................ 10

                                    ARTICLE V

                                   COMMITTEES

Section 1.  Standing Committees............................................ 11
Section 2.  Executive Committee............................................ 11
Section 3.  Audit Committee................................................ 12
Section 4.  Compensation Committee......................................... 12
Section 5.  Nominating Committee........................................... 13
Section 6.  Other Committees............................................... 13

                                  ARTICLE VI

                                    OFFICERS

Section 1.  Number......................................................... 13
Section 2.  Term of Office and Removal..................................... 14
Section 3.  Chairman of the Board.......................................... 14
Section 4.  President...................................................... 14
Section 5.  Vice Presidents................................................ 14
Section 6.  Secretary...................................................... 14
Section 7.  Treasurer...................................................... 15
Section 8.  Other Officers and Employees................................... 15
Section 9.  Compensation of Officers and Others............................ 15

                                   ARTICLE VII

                                    DIVIDENDS.............................. 15

                                  ARTICLE VIII

                                   AMENDMENTS.............................. 15


                                       ii

<PAGE>

                                     BYLAWS

                                       OF

                            BIG FOOT FINANCIAL CORP.

                                    ARTICLE I

                                     OFFICES

     Section 1. Registered Office. The registered office of Big Foot Financial
Corp. (the "Corporation") in the State of Illinois shall be in the City of
Chicago, County of Cook, Illinois.

     Section 2. Additional Offices. The Corporation may also have offices and
places of business at such other places, within or without the State of
Illinois, as the Board of Directors (the "Board") may from time to time
designate or the business of the Corporation may require.

                                   ARTICLE II

                                  SHAREHOLDERS

     Section 1. Place of Meetings. Meetings of shareholders of the Corporation
shall be held at such place, within or without the State of Illinois, as may be
fixed by the Board and designated in the notice of meeting. If no place is so
fixed, such meetings shall be held at the principal administrative office of the
Corporation.

     Section 2. Annual Meetings. The annual meeting of shareholders of the
Corporation for the election of directors and the transaction of any other
business which may properly come before such meeting shall be held each year on
a date and at a time to be designated by the Board.

     Section 3. Special Meetings. Special meetings of shareholders, for any
purpose, may be called at any time only by the Chairman of the Board, the
President or by resolution of at least three-fourths of the directors then in
office. Special meetings shall be held on the date and at the time and place as
may be designated by the Board. At a special meeting, no business shall be
transacted and no corporate action shall be taken other than that stated in the
notice of meeting.

     Section 4. Notice of Meetings. Except as otherwise required by law, written
notice stating the place, date and hour of any meeting of shareholders and, in
the case of a special meeting, the purpose or purposes for which the meeting is
called, shall be delivered to each shareholder of record entitled to vote at
such meeting, either personally or by mail not less

<PAGE>

                                       -2-


than ten (10) nor more than sixty (60) days before the date of such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the U.S.
mail, with postage thereon prepaid, addressed to the shareholder at his or her
address as it appears on the stock transfer books or records of the Corporation
as of the record date prescribed in Section 6 of this Article II, or at such
other address as the shareholder shall have furnished in writing to the
Secretary. Notice of any special meeting shall indicate that the notice is being
issued by or at the direction of the person or persons calling such meeting.
When any meeting of shareholders, either annual or special, is adjourned to
another time or place, no notice of the adjourned meeting need be given, other
than an announcement at the meeting at which such adjournment is taken giving
the time and place to which the meeting is adjourned; provided, however, that if
the adjournment is for more than thirty (30) days, or, if after adjournment, the
Board fixes a new record date for the adjourned meeting, notice of the adjourned
meeting shall be given to each shareholder of record entitled to vote at the
meeting.

     Section 5. Waiver of Notice. Notice of any annual or special meeting need
not be given to any shareholder who submits a signed waiver of notice of any
meeting, in person or by proxy or by his or her duly authorized
attorney-in-fact, whether before or after the meeting. The attendance of any
shareholder at a meeting, in person or by proxy, shall constitute a waiver of
notice by such shareholder, except where a shareholder attends a meeting for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business because the meeting is not lawfully called or convened.

     Section 6. Fixing of Record Date. Except as otherwise required by law, for
the purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend or other distribution or the allotment of any
rights, or in order to make a determination of shareholders for any other proper
purpose, the Board shall fix a date as the record date for any such
determination of shareholders, which date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board. Such date in any
case shall be not more than sixty (60) days and, in the case of a meeting of
shareholders, not less than ten (10) days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section 6, such determination
shall, unless otherwise provided by the Board, also apply to any adjournment
thereof. If no record date is fixed, (a) the record date for determining
shareholders entitled to notice of or vote at a meeting of shareholders shall be
at the close of business on the day next preceding the day on which the notice
is given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held, and (b) the record date for
determining shareholders for any other purpose shall be at the close of business
on the day on which the Board adopts the resolution relating thereto.

     Section 7. Quorum. The holders of record of a majority of the total number
of votes eligible to be cast in the election of directors generally by the
holders of the outstanding shares of the capital stock of the Corporation
entitled to vote thereat, represented in person or

<PAGE>

                                       -3-


by proxy, shall constitute a quorum for the transaction of business at a meeting
of shareholders, except as otherwise provided by law, these Bylaws or the
Articles of Incorporation. If less than a majority of such total number of votes
is represented at a meeting, a majority of the number of votes so represented
may adjourn the meeting from time to time without further notice, provided, that
if such adjournment is for more than thirty (30) days, a notice of the adjourned
meeting shall be given to each shareholder of record entitled to vote at the
meeting. At such adjourned meeting at which a quorum is present, any business
may be transacted that might have been transacted at the meeting as originally
called. When a quorum is once present to organize a meeting of shareholders,
such quorum is not broken by the subsequent withdrawal of any shareholders.

     Section 8. Conduct of Meetings. The Chairman of the Board, shall serve as
chairman at all meetings of the shareholders or, if the Chairman of the Board is
absent or otherwise unable to so serve, such other person as shall be appointed
by a majority of the entire Board shall serve as chairman at any meeting of
shareholders held in such absence. The Secretary or, in his or her absence, such
other person as the chairman of the meeting shall appoint, shall serve as
secretary of the meeting. The chairman of the meeting shall conduct all meetings
of the shareholders in accordance with the best interests of the Corporation and
shall have the authority and discretion to establish reasonable procedural rules
for the conduct of such meetings, including such regulation of the manner of
voting and the conduct of discussion as he or she shall deem appropriate.

     Section 9. Voting; Proxies. Each shareholder entitled to vote at any
meeting may vote either in person or by proxy. Unless otherwise specified in the
Articles of Incorporation or in a resolution, or resolutions, of the Board
providing for the issuance of preferred stock, each shareholder entitled to vote
shall be entitled to one vote for each share of capital stock registered in his
or her name on the transfer books or records of the Corporation. Each
shareholder entitled to vote may authorize another person or persons to act for
him or her by proxy. All proxies shall be in writing, signed by the shareholder
or by his or her duly authorized attorney-in-fact, and shall be filed with the
Secretary before being voted. No proxy shall be valid after eleven (11) months
from the date of its execution unless otherwise provided in the proxy. The
attendance at any meeting by a shareholder who shall have previously given a
proxy applicable thereto shall not, as such, have the effect of revoking the
proxy unless such shareholder shall either revoke his proxy in writing or vote
in person at such meeting. The Corporation may treat any duly executed proxy as
not revoked and in full force and effect until it receives a duly executed
instrument revoking it, or a duly executed proxy bearing a later date. If
ownership of a share of voting stock of the Corporation stands in the name of
two or more persons, in the absence of written directions to the Corporation to
the contrary, any one or more of such shareholders may cast all votes to which
such ownership is entitled. If an attempt is made to cast conflicting votes by
the several persons in whose names shares of stock stand, the vote or votes to
which those persons are entitled shall be cast as directed by a majority of
those holding such stock and present at such meeting. If such conflicting votes
are evenly split on any particular matter, each faction may vote the securities
in question proportionally, or any person voting the shares, or a beneficiary,
if any, may apply to a court of competent jurisdiction in the

<PAGE>

                                       -4-


State of Illinois to appoint an additional person to act with the persons so
voting the shares, which shall then be voted as determined by a majority of such
persons and the person appointed by the court. Except for the election of
directors or as otherwise provided by law, the Articles of Incorporation or
these Bylaws, at all meetings of shareholders, all matters shall be determined
by a vote of the holders of a majority of the number of votes eligible to be
cast by the holders of the outstanding shares of capital stock of the
Corporation present and entitled to vote thereat. Directors shall, except as
otherwise required by law, these Bylaws or the Articles of Incorporation, be
elected by a plurality of the votes cast by each class of shares entitled to
vote at a meeting of shareholders, present and entitled to vote in the election.

     Section 10. Inspectors of Election. In advance of any meeting of
shareholders, the Board shall appoint one or more persons, other than officers,
directors or nominees for office, as inspectors of election to act at such
meeting or any adjournment thereof. Such appointment shall not be altered at the
meeting. If inspectors of election are not so appointed, the chairman of the
meeting shall make such appointment at the meeting. If any person appointed as
inspector fails to appear or fails or refuses to act at the meeting, the vacancy
so created may be filled by appointment by the Board in advance of the meeting
or at the meeting by the chairman of the meeting. The duties of the inspectors
of election shall include determining the number of shares outstanding and the
voting power of each, the shares represented at the meeting, the existence of a
quorum, the validity and effect of proxies, receiving votes, ballots or
consents, hearing and deciding all challenges and questions arising in
connection with the right to vote, counting and tabulating all votes, ballots or
consents, determining the results and doing such acts as are proper to the
conduct of the election or the vote with fairness to all shareholders. Any
report or certificate made by them shall be prima facie evidence of the facts
stated and of the vote as certified by them. Each inspector shall be entitled to
a reasonable compensation for his or her services, to be paid by the
Corporation.

     Section 11. Procedure for Nominations. Subject to the provisions hereof,
the Nominating Committee of the Board shall select nominees for election as
directors. Except in the case of a nominee substituted as a result of the death,
incapacity, withdrawal or other inability to serve of a nominee, the Nominating
Committee shall deliver written nominations to the Secretary at least sixty (60)
days prior to the date of the annual meeting. Provided the Nominating Committee
makes such nominations, no nominations for directors except those made by the
Nominating Committee shall be voted upon at the annual meeting of shareholders
unless other nominations by shareholders are made in accordance with the
provisions of this Section 11. Nominations of individuals for election to the
Board at an annual meeting of shareholders may be made by any shareholder of
record of the Corporation entitled to vote for the election of directors at such
meeting who provides timely notice in writing to the Secretary as set forth in
this Section 11. To be timely, a shareholder's notice must be delivered to or
received by the Secretary not later than the following dates: (i) with respect
to an election of directors to be held at an annual meeting of shareholders,
sixty (60) days in advance of such meeting if such meeting is to be held on a
day which is within thirty (30) days preceding the anniversary of the previous
year's annual meeting, or ninety (90) days in advance of such meeting if such
meeting is to be held on or after the anniversary of the previous year's annual
meeting; and (ii) with

<PAGE>

                                       -5-


respect to an election to be held at an annual meeting of shareholders held at a
time other than within the time periods set forth in the immediately preceding
clause (i), or at a special meeting of shareholders for the election of
directors, the close of business on the tenth (10th) day following the date on
which notice of such meeting is first given to shareholders. For purposes of
this Section 11, notice shall be deemed to first be given to shareholders when
disclosure of such date of the meeting of shareholders is first made in a press
release reported to Dow Jones News Services, Associated Press or comparable
national news service, or in a document publicly filed by the Corporation with
the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of
the Securities Exchange Act of 1934, as amended. Such shareholder's notice shall
set forth (a) as to each person whom the shareholder proposes to nominate for
election or re-election as a director, (i) the name, age, business address and
residence address of such person, (ii) the principal occupation or employment of
such person, (iii) such person's written consent to serve as a director, if
elected, and (iv) such other information regarding each nominee proposed by such
shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission (whether
or not the Corporation is then subject to such rules); and (b) as to the
shareholder giving the notice (i) the name and address of such shareholder, (ii)
the class and number of shares of the Corporation which are owned of record by
such shareholder and the dates upon which he or she acquired such shares, (iii)
a description of all arrangements or understandings between the shareholder and
nominee and any other person or persons (naming such person or persons) pursuant
to which the nominations are to be made by the shareholder and (iv) the
identification of any person employed, retained or to be compensated by the
shareholder submitting the nomination or by the person nominated, or any person
acting on his or her behalf to make solicitations or recommendations to
shareholders for the purpose of assisting in the election of such director, and
a brief description of the terms of such employment, retainer or arrangement for
compensation. At the request of the Board, any person nominated by the Board for
election as a director shall furnish to the Secretary that information required
to be set forth in a shareholder's notice of nomination which pertains to the
nominee together with the required written consent. No person shall be elected
as a director of the Corporation unless nominated in accordance with the
procedures set forth in this Section 11.

     The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not properly brought before the
meeting in accordance with the provisions hereof, and, if he should so
determine, he shall declare to the meeting that such nomination was not properly
brought before the meeting and shall not be considered.

     Section 12. Substitution of Nominees. In the event that a person is validly
designated as a nominee in accordance with Section 11 of this Article II and
shall thereafter become unwilling or unable to stand for election to the Board,
the Nominating Committee may designate a substitute nominee upon delivery, not
fewer than five (5) days prior to the date of the meeting for the election of
such nominee, of a written notice to the Secretary setting forth such
information regarding such substitute nominee as would have been required to be
delivered to the Secretary pursuant to Section 11 of this Article II had such
substitute nominee been

<PAGE>

                                       -6-


initially proposed as a nominee. Such notice shall include a signed consent to
serve as a director of the Corporation, if elected, of each such substituted
nominee.

     Section 13. New Business. Any new business to be taken up at the annual
meeting at the request of the Chairman of the Board or by resolution of at least
three-fourths of the directors then in office shall be stated in writing and
filed with the Secretary at least fifteen (15) days before the date of the
annual meeting, and all business so stated, proposed and filed shall be
considered at the annual meeting, but, except as provided in this Section 13, no
other proposal shall be acted upon at the annual meeting. Any proposal offered
by any shareholder may be made at the annual meeting and the same may be
discussed and considered, but unless properly brought before the meeting such
proposal shall not be acted upon at the meeting. For a proposal to be properly
brought before an annual meeting by a shareholder, the shareholder must be a
shareholder of record and have given timely notice thereof in writing to the
Secretary. To be timely, a shareholder's notice must be delivered to or received
by the Secretary not later than the following dates: (i) with respect to an
annual meeting of shareholders, sixty (60) days in advance of such meeting if
such meeting is to be held on a day which is within thirty (30) days preceding
the anniversary of the previous year's annual meeting, or ninety (90) days in
advance of such meeting if such meeting is to be held on or after the
anniversary of the previous year's annual meeting; and (ii) with respect to an
annual meeting of shareholders held at a time other than within the time periods
set forth in the immediately preceding clause (i), the close of business on the
tenth (10th) day following the date on which notice of such meeting is first
given to shareholders. For purposes of this Section 13, notice shall be deemed
to first be given to shareholders when disclosure of such date of the meeting of
shareholders is first made in a press release reported to Dow Jones News
Services, Associated Press or comparable national news service, or in a document
publicly filed by the Corporation with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as
amended. A shareholder's notice to the Secretary shall set forth as to the
matter the shareholder proposes to bring before the annual meeting (a) a brief
description of the proposal desired to be brought before the annual meeting; (b)
the name and address of the shareholder proposing such business; (c) the class
and number of shares of the Corporation which are owned of record by the
shareholder and the dates upon which he or she acquired such shares; (d) the
identification of any person employed, retained, or to be compensated by the
shareholder submitting the proposal, or any person acting on his or her behalf,
to make solicitations or recommendations to shareholders for the purpose of
assisting in the passage of such proposal, and a brief description of the terms
of such employment, retainer or arrangement for compensation; and (e) such other
information regarding such proposal as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission or required to be delivered to the Corporation pursuant to the proxy
rules of the Securities and Exchange Commission (whether or not the Corporation
is then subject to such rules). This provision shall not prevent the
consideration and approval or disapproval at an annual meeting of reports of
officers, directors and committees of the Board or the management of the
Corporation, but in connection with such reports, no new business shall be acted
upon at such annual meeting unless stated and filed as herein provided. This
provision shall not constitute a waiver of any right of the Corporation under
the proxy rules of the Securities and Exchange

<PAGE>

                                       -7-


Commission or any other rule or regulation to omit a shareholder's proposal from
the Corporation's proxy materials.

     The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that any new business was not properly brought before the
meeting in accordance with the provisions hereof, and, if the chairman should so
determine, the chairman shall declare to the meeting that such new business was
not properly brought before the meeting and shall not be considered.

                                   ARTICLE III

                                  CAPITAL STOCK

     Section 1. Certificates of Stock. Certificates representing shares of stock
shall be in such form as shall be determined by the Board. Each certificate
shall state that the Corporation will furnish to any shareholder upon request
and without charge a statement of the powers, designations, preferences and
relative, participating, optional or other special rights of the shares of each
class or series of stock and the qualifications or restrictions of such
preferences and/or rights, or shall set forth such statement on the certificate
itself. The certificates shall be numbered in the order of their issue and
entered in the books of the Corporation or its transfer agent or agents as they
are issued. Each certificate shall state the registered holder's name and the
number and class of shares and shall be signed by the President, and the
Secretary or any Assistant Secretary, and may, but need not, bear the seal of
the Corporation or a facsimile thereof. Any or all of the signatures on the
certificates may be facsimiles. In case any officer who shall have signed any
such certificate shall cease to be such officer of the Corporation, whether
because of death, resignation or otherwise, before such certificate shall have
been delivered by the Corporation, such certificate may nevertheless be adopted
by the Corporation and be issued and delivered as though the person or persons
who signed such certificate or certificates had not ceased to be such officer or
officers of the Corporation.

     Section 2. Transfer Agent and Registrar. The Board shall have the power to
appoint one or more Transfer Agents and Registrars for the transfer and
registration of certificates of stock of any class and may require that stock
certificates be countersigned and registered by one or more of such Transfer
Agents and Registrars.

     Section 3. Registration and Transfer of Shares. Subject to the provisions
of the Articles of Incorporation of the Corporation, the name of each person
owning a share of the capital stock of the Corporation shall be entered on the
books of the Corporation together with the number of shares held by him or her,
the numbers of the certificates covering such shares and the dates of issue of
such certificates. Subject to the provisions of the Articles of Incorporation of
the Corporation, the shares of stock of the Corporation shall be transferable on
the books of the Corporation by the holders thereof in person, or by their duly
authorized attorneys or legal representatives, on surrender and cancellation of
certificates for a like number of shares, accompanied by an assignment or power
of transfer endorsed thereon or attached

<PAGE>

                                       -8-


thereto, duly executed, with such guarantee or proof of the authenticity of the
signature as the Corporation or its agents may reasonably require and with
proper evidence of payment of any applicable transfer taxes. Subject to the
provisions of the Articles of Incorporation of the Corporation, a record shall
be made of each transfer.

     Section 4. Lost, Destroyed and Mutilated Certificates. The holder of any
shares of stock of the Corporation shall immediately notify the Corporation of
any loss, theft, destruction or mutilation of the certificates therefor. The
Corporation may issue, or cause to be issued, a new certificate of stock in the
place of any certificate theretofore issued by it alleged to have been lost,
stolen or destroyed upon evidence satisfactory to the Corporation of the loss,
theft or destruction of the certificate and, in the case of mutilation, the
surrender of the mutilated certificate. The Corporation may, in its discretion,
require the owner of the lost, stolen or destroyed certificate, or his or her
legal representatives, to give the Corporation a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
theft, destruction or mutilation of any such certificate and the issuance of
such new certificate, or may refer such owner to such remedy or remedies as he
or she may have under the laws of the State of Illinois.

     Section 5. Holder of Record. Subject to the provisions of the Articles of
Incorporation of the Corporation, the Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder thereof in fact
and shall not be bound to recognize any equitable or other claim to or interest
in such shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise expressly provided by law.

                                   ARTICLE IV

                               BOARD OF DIRECTORS

     Section 1. Responsibilities; Number of Directors. The business and affairs
of the Corporation shall be under the direction of the Board. The Board shall
consist of not less than five (5) nor more than fifteen (15) directors (other
than directors elected by the holders of shares of any series of preferred stock
of the Corporation). Within the foregoing limits, the number of directors shall
be determined only by resolution of the Board. A minimum of two (2) directors
shall be persons other than officers or employees of the Corporation or its
subsidiaries and shall not have a relationship which, in the opinion of the
Board (exclusive of such persons), could interfere with the exercise of
independent judgment in carrying out the responsibilities of a director. No more
than two directors shall be officers or employees of the Corporation or its
subsidiaries.

     Section 2. Qualifications. Each director shall be at least eighteen (18)
years of age.

<PAGE>

                                       -9-


     Section 3. Regular and Annual Meetings. An annual meeting of the Board for
the election of officers shall be held, without notice other than these Bylaws,
immediately after, and at the same place as, the annual meeting of the
shareholders, or, with notice, at such other time or place as the Board may fix
by resolution. The Board may provide, by resolution, the time and place, within
or without the State of Illinois, for the holding of regular meetings of the
Board without notice other than such resolution.

     Section 4. Special Meetings. Special meetings of the Board may be called
for any purpose at any time by or at the request of the Chairman of the Board or
the President. Special meetings of the Board shall also be called by the
Secretary upon the written request, stating the purpose or purposes of the
meeting, of at least sixty percent (60%) of the directors then in office, but in
any event not less than five (5) directors. The persons authorized to call
special meetings of the Board shall give notice of such meetings in the manner
prescribed by these Bylaws and may fix any place, within or without the
Corporation's regular business area, as the place for holding any special
meeting of the Board called by such persons.

     Section 5. Notice of Meetings; Waiver of Notice. Except as otherwise
provided in Section 3 of this Article IV, at least twenty-four (24) hours notice
of meetings shall be given to each director if given in person or by telephone,
telegraph, telex, facsimile or other electronic transmission, and at least five
(5) days notice of meetings shall be given if given in writing and delivered by
courier or by postage prepaid mail. Such notice shall be deemed given when sent
or given to any mail or courier service or company providing electronic
transmission service. Any director may waive notice of any meeting by submitting
a signed waiver of notice with the Secretary, whether before or after the
meeting. The attendance of a director at a meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business because the meeting is not lawfully called or convened.

     Section 6. Conduct of Meetings. Meetings of the Board shall be presided
over by the Chairman of the Board or such other director or officer as the
Chairman of the Board shall designate, and, in the absence or incapacity of the
Chairman of the Board, the presiding officer shall be the then senior member of
the Board in terms of length of service on the Board (which length of service
shall include length of service on the Board of Directors of Fairfield Savings
Bank, F.S.B. and any predecessors thereto). The Secretary or, in his absence, a
person appointed by the Chairman of the Board (or other presiding person), shall
act as secretary of the meeting. The Chairman of the Board (or other person
presiding) shall conduct all meetings of the Board in accordance with the best
interests of the Corporation and shall have the authority and discretion to
establish reasonable procedural rules for the conduct of Board meetings. At the
discretion of the Chairman of the Board, any one or more directors may
participate in a meeting of the Board or a committee of the Board by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at any such meeting.

<PAGE>

                                      -10-


     Section 7. Quorum and Voting Requirements. A quorum at any meeting of the
Board shall consist of not less than a majority of the directors then in office
or such greater number as shall be required by law, these Bylaws or the Articles
of Incorporation, but not less than one-third (1/3) of the total number. If less
than a required quorum is present, the majority of those directors present shall
adjourn the meeting to another time and place without further notice. At such
adjourned meeting at which a quorum shall be represented, any business may be
transacted that might have been transacted at the meeting as originally noticed.
Except as otherwise provided by law, the Articles of Incorporation or these
Bylaws, a majority vote of the directors present at a meeting, if a quorum is
present, shall constitute an act of the Board.

     Section 8. Informal Action by Directors. Unless otherwise restricted by the
Articles of Incorporation or these Bylaws, any action required or permitted to
be taken at any meeting of the Board or of any committee thereof, may be taken
without a meeting if all members of the Board or such committee, as the case may
be, consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or such committee.

     Section 9. Resignation. Any director may resign at any time by sending a
written notice of such resignation to the principal office of the Corporation
addressed to the President. Unless otherwise specified therein, such resignation
shall take effect upon receipt thereof.

     Section 10. Vacancies. To the extent not inconsistent with the Articles of
Incorporation and subject to the limitations prescribed by law and the rights of
holders of Preferred Stock, vacancies in the office of director, including
vacancies created by newly created directorships resulting from an increase in
the number of directors, shall be filled by a vote of a majority of the
directors then holding office, whether or not a quorum, at any regular or
special meeting of the Board, and any director so elected shall serve until the
next annual or special meeting of the shareholders at which directors are to be
elected. At such meeting, the vacancy or vacancies shall be filled by a majority
of the shareholders, and any director so elected shall hold office for the
balance of the term for which he or she was elected. Subject to the rights of
holders of Preferred Stock, no person shall be elected a director pursuant to
this Section unless nominated by the Nominating Committee.

     Section 11. Compensation. From time to time, as the Board deems necessary,
the Board shall fix the compensation of directors, and officers of the
Corporation in such one or more forms as the Board may determine.

     Section 12. Amendments Concerning the Board. The number and other
restrictions and qualifications for directors of the Corporation as set forth in
these Bylaws may be altered only by a vote, in addition to any vote required by
law, of two-thirds of the entire Board or by the affirmative vote of the holders
of record of not less than eighty percent (80%) of the total votes eligible to
be cast by holders of all outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors at a meeting of the
shareholders called for that purpose.

<PAGE>

                                      -11-


                                    ARTICLE V

                                   COMMITTEES

     Section 1. Standing Committees. At each annual meeting of the Board, the
directors shall designate from their own number, by resolution adopted by a
majority of the entire Board, the following committees:

     (a) Executive Committee

     (b) Audit Committee

     (c) Compensation Committee

     (d) Nominating Committee

which shall be standing committees of the Board. The Board shall appoint a
director to fill any vacancy on any committee of the Board. The members of the
committees shall serve at the pleasure of the Board.

     Section 2. Executive Committee. There shall be an Executive Committee of
the Board, consisting of at least five (5) members, as shall be appointed by
Board resolution or these Bylaws. The President and the Secretary shall be
ex-officio members of the Executive Committee, with power to vote on all matters
so long as they are also directors of the Corporation. Four (4) members of the
Executive Committee, at least three (3) of whom must be non-officer directors,
or such other number of members as the Board may establish by resolution, shall
constitute a quorum for the transaction of business. The vote of a majority of
members present at any meeting including the presiding member, who shall be
eligible to vote, shall constitute the action of the Executive Committee.

     The Chairman of the Board or such other director or officer as the Chairman
of the Board shall designate shall serve as chairman of the Executive Committee,
or, if the office of Chairman of the Board is vacant, the President (so long as
the President is also a director) shall serve as chairman of the Executive
Committee. In the absence of the chairman of the Executive Committee, the
committee shall designate, from among its membership present, a person to
preside at any meeting held in such absence. The Executive Committee shall
designate, from its membership or otherwise, a secretary who shall report to the
Board at its next regular meeting all proceedings and actions taken by the
Executive Committee. The Executive Committee shall meet as necessary at the call
of the Chairman of the Board or at the call of a majority of the members of the
Executive Committee.

     The Executive Committee shall, to the extent not inconsistent with law,
these Bylaws, the Articles of Incorporation or resolutions adopted by the Board,
exercise all the

<PAGE>

                                      -12-


powers and authority of the Board in the management of the business and affairs
of the Corporation in the intervals between the meetings of the Board.

     Section 3. Audit Committee. The Audit Committee shall consist of at least
three (3) members whose background and experience are financial and/or business
management related, none of whom shall be an officer or salaried employee of the
Corporation or its subsidiaries, an attorney who receives a fee or other
compensation for legal services rendered to the Corporation or any other
individual having a relationship which, in the opinion of the Board, would
interfere with the exercise of independent judgment in carrying out the
responsibilities of a director. At any regular meeting of the Board, any
director who is otherwise eligible to serve on the Audit Committee may be
elected to fill a vacancy that has occurred on the Audit Committee. The Board
shall designate one member of the committee to serve as chairman of the
committee. The Audit Committee shall meet annually, at the call of the chairman
of the committee and may hold such additional meetings as the chairman of the
committee may deem necessary, to examine, or cause to be examined, the records
and affairs of the Corporation to determine its true financial condition, and
shall present a report of examination to the Board at the Board's next regular
meeting following the meeting of the Audit Committee. The committee shall
appoint, from its membership or otherwise, a secretary who shall cause to be
kept written minutes of all meetings of the committee. The Audit Committee shall
make, or cause to be made, such other examinations as it may deem advisable or
whenever so directed by the Board and shall report thereon in writing at a
regular meeting of the Board. The Audit Committee shall make recommendations to
the Board in relation to the employment of accountants and independent auditors
and arrange for such other assistance as it may deem necessary or desirable. The
Audit Committee shall review and evaluate the procedures and performance of the
Corporation's internal auditing staff. A quorum shall consist of at least
one-third of the members of the committee, and in no event less than two (2)
members of the committee.

     Section 4. Compensation Committee. The Compensation Committee shall consist
of at least three (3) members, none of whom shall be an officer or salaried
employee of the Corporation or its subsidiaries as shall be appointed by Board
resolution or these Bylaws. In addition, the President and the Secretary shall
be ex-officio members of the Compensation Committee without any power to vote.
The Board shall designate one member of the committee to serve as chairman of
the Compensation Committee, who shall have the authority to adopt and establish
procedural rules for the conduct of all meetings of the committee.

     The committee shall meet annually at the call of the chairman of the
committee, and may hold such additional meetings as the Chairman of the Board
may deem necessary. A quorum shall consist of at least one-third of the voting
members of the Committee, and in no event less than two (2) voting members of
the committee. The vote of a majority of the voting members present at any
meeting, including the chairman of the committee who shall be eligible to vote,
shall constitute the action of the Compensation Committee. The committee shall
appoint, from its membership or otherwise, a secretary who shall cause to be
kept written minutes of all meetings of the committee.

<PAGE>

                                      -13-


     The Compensation Committee shall be responsible for overseeing the
development, implementation and conduct of the Corporation's employment and
personnel policies, notices and procedures, including the administration of the
Corporation's compensation and benefit programs.

     Section 5. Nominating Committee. The Nominating Committee shall consist of
at least three (3) members, none of whom shall be an officer or a salaried
employee of the Corporation or its subsidiaries. In addition, the President and
the Secretary shall be ex-officio members of the Nominating Committee, with
power to vote on all matters so long as they are also directors of the
Corporation. Notwithstanding the foregoing, no director shall serve on the
Nominating Committee in any capacity in any year during which such director's
term as a director is scheduled to expire. The Nominating Committee shall review
qualifications of and interview candidates for the Board and shall make
nominations for election of board members in accordance with the provisions of
these Bylaws in relation to those suggestions to the Board. A quorum shall
consist of at least one-third of the members of the Committee, and in no event
less than two (2) members of the committee.

     Section 6. Other Committees. The Board may by resolution authorize such
other committees as from time to time it may deem necessary or appropriate for
the conduct of the business of the Corporation. The members of each committee so
authorized shall be appointed by the Board from members of the Board. In
addition, the President and the Secretary shall be ex-officio members of each
such committee. Each such committee shall exercise such powers as may be
assigned by the Board to the extent not inconsistent with law, these Bylaws the
Articles of Incorporation or resolutions adopted by the Board.

                                   ARTICLE VI

                                    OFFICERS

     Section 1. Number. The Board shall, at each annual meeting, elect a Chief
Executive Officer, a President, a Secretary and such other officers as the Board
from time to time may deem necessary or the business of the Corporation may
require. Any number of offices may be held by the same person except that no
person may simultaneously hold the offices of President and Secretary.

     The election of all officers shall be by the Board. If such election is not
held at the meeting held annually for the election of officers, such officers
may be so elected at any subsequent regular meeting or at a special meeting
called for that purpose, in the same manner above provided. Each person elected
shall have such authority, bear such title and perform such duties as provided
in these Bylaws and as the Board may prescribe from time to time. All officers
elected or appointed by the Board shall assume their duties immediately upon
their election and shall hold office at the pleasure of the Board. Whenever a
vacancy occurs among the officers, it may be filled at any regular or special
meeting called for that purpose, in the same manner as above provided.

<PAGE>

                                      -14-


     Section 2. Term of Office and Removal. Each officer shall serve until his
or her successor is elected and duly qualified, the office is abolished or he or
she is removed. Except for the Chief Executive Officer and the President, any
officer may be removed at any regular meeting of the Board with or without cause
by the Board. The Board may remove the Chief Executive Officer or the President
at any time, with or without cause, only by a vote of two-thirds of the
non-officer directors then holding office at any regular or special meeting of
the Board called for that purpose.

     Section 3. Chairman of the Board. The Chairman of the Board shall preside
at all meetings of the shareholders; preside at all meetings of the Board and of
the Executive Committee; make recommendations to the Board regarding
appointments to all committees; and sign instruments in the name of the
Corporation.

     In the absence or disability of the Chairman of the Board, the Board shall
designate a person who shall exercise the powers and perform the duties which
otherwise would fall upon the Chairman of the Board.

     Section 4. President. The President shall be the Chief Executive Officer of
the Corporation and shall, subject to the direction of the Board, oversee all
the major activities of the Corporation and its subsidiaries and be responsible
for assuring that the policy decisions of the Board are implemented as
formulated. The President shall be responsible, in consultation with such
officers and members of the Board the President deems appropriate, for planning
the growth of the Corporation. The President shall be responsible for
shareholder relations and relations with investment bankers or other similar
financial institutions and shall be empowered to designate officers of the
Corporation and its subsidiaries to assist in such activities. The President
shall be principally responsible for exploring and reporting to the Board all
opportunities for mergers, acquisitions and new business. The President, under
authority given to the President shall have the authority to sign instruments in
the name of the Corporation. The President shall have general supervision and
direction of all of the Corporation's officers and personnel, subject to and
consistent with policies enunciated by the Board. The President shall have such
other powers as may be assigned to the President by the Board or its committees.

     Section 5. Vice Presidents. Executive Vice Presidents, Senior Vice
Presidents and Vice Presidents may be appointed by the Board to perform such
duties as may be prescribed by these Bylaws, the Board or the President as
permitted by the Board.

     Section 6. Secretary. The Secretary shall attend all meetings of the Board
and of the shareholders and shall record, or cause to be recorded, all votes and
minutes of all proceedings of the Board and of the shareholders in a book or
books to be kept for that purpose. The Secretary shall perform such executive
and administrative duties as may be assigned by the Board or the President. The
Secretary shall have charge of the seal of the Corporation, shall submit such
reports and statements as may be required by law or by the Board, shall conduct
all correspondence relating to the Board and its proceedings and shall have such
other powers

<PAGE>

                                      -15-


and duties as are generally incident to the office of Secretary and as may be
assigned to him or her by the Board, the Chairman of the Board or the President.

     Section 7. Treasurer. The Treasurer shall be the chief accounting officer
of the Corporation and shall be responsible for the maintenance of adequate
systems and records. The Treasurer shall also be the chief financial officer of
the Corporation and shall keep a record of all assets, liabilities, receipts,
disbursements and other financial transactions and shall see that all
expenditures are made in accordance with procedures duly established from time
to time by the Board. The Treasurer shall make such reports as may be required
by the Board or as are required by law.

     Section 8. Other Officers and Employees. Other officers and employees
appointed by the Board shall have such authority and shall perform such duties
as may be assigned to them, from time to time, by the Board or the President.

     Section 9. Compensation of Officers and Others. The compensation of all
officers shall be fixed from time to time by the Board, or by any committee or
officer authorized by the Board to do so, upon the recommendation and report by
the Compensation Committee. The compensation of employee and agents shall be
fixed by the Board, or by any committee or officer authorized by the Board to do
so.

                                   ARTICLE VII

                                    DIVIDENDS

     The Board shall have the power, subject to the provisions of law and the
requirements of the Articles of Incorporation, to declare and pay dividends out
of surplus (or, if no surplus exists, out of net profits of the Corporation, for
the fiscal year in which the dividend is declared and/or the preceding fiscal
year, except where there is an impairment of capital stock), to pay such
dividends to the shareholders in cash, in property or in shares of the capital
stock of the Corporation and to fix the date or dates for the payment of such
dividends.

                                  ARTICLE VIII

                                   AMENDMENTS

     These Bylaws, except as provided by applicable law or the Articles of
Incorporation, or as otherwise set forth in these Bylaws, may be amended or
repealed at any regular meeting of the entire Board by the vote of two-thirds of
the Board; provided, however, that (a) a notice specifying the change or
amendment shall have been given at a previous regular meeting and entered in the
minutes of the Board; (b) a written statement describing the change or amendment
shall be made in the notice mailed to the directors of the meeting at which the
change or amendment shall be acted upon; and (c) any Bylaw made by the Board may
be altered, amended, rescinded or repealed by the holders of shares of capital
stock entitled to vote

<PAGE>

                                      -16-


thereon at any annual meeting or at any special meeting called for that purpose
in accordance with the percentage requirements set forth in the Articles of
Incorporation and/or these Bylaws. Notwithstanding the foregoing, any provision
of these Bylaws that contains a supermajority voting requirement shall only be
altered, amended, rescinded or repealed by a vote of the Board or holders of
capital stock entitled to vote thereon that is not less than the supermajority
specified in such provision.


<PAGE>


                                      EX-4.3
                  Form of Stock Cert. of Big Foot Financial Corp.


                            BIG FOOT FINANCIAL CORP.
              INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS

THIS CERTIFIES THAT



is the owner of



                     FULLY PAID AND NONASSESSABLE SHARES OF
                   COMMON STOCK, $.01 PAR VALUE PER SHARE, OF

                            BIG FOOT FINANCIAL CORP.

(the "Corporation"), a corporation formed under the laws of the State of
Illinois. The shares represented by this certificate are transferable only on
the stock transfer books of the Corporation by the holder of record hereof, or
by his duly authorized attorney or legal representative, upon the surrender of
this certificate properly endorsed. This certificate is not valid until
countersigned and registered by the Corporation's transfer agent and registrar.
The shares represented by this certificate are not insured by the Federal
Deposit Insurance Corporation or any other government agency.

     IN WITNESS WHEREOF, the Corporation has caused this certificate to be
executed by the facsimile signature of its duly authorized officers and has
caused a facsimile of its corporate seal to be hereunto affixed.



Dated:


By:                                       By:


      Secretary                                 President

<PAGE>

                            BIG FOOT FINANCIAL CORP.

     The shares represented by this certificate are issued subject to all the
provisions of the Articles of Incorporation and Bylaws of Big Foot Financial
Corp. (the "Corporation"), as from time to time amended (copies of which are on
file at the principal office of the Corporation), to all of which the holder by
acceptance hereof assents. The following description constitutes a summary of
certain provisions of, and is qualified in its entirety by reference to, the
Articles of Incorporation.

     The Articles of Incorporation of the Corporation contains certain
provisions, applicable upon the effective date of the conversion of Fairfield
Savings Bank, F.S.B. (the "Bank") from a federally chartered mutual savings bank
to a federally chartered stock savings bank under the name Fairfield Savings
Bank, F.S.B. and the concurrent acquisition by the Corporation of all of the
outstanding capital stock of the Bank, that restrict persons from directly or
indirectly acquiring or holding, or attempting to acquire or hold, the
beneficial ownership of in excess of 10% of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of directors
("Voting Stock"). The Articles of Incorporation contains a provision that
provides that shares of Common Stock that are beneficially owned, directly or
indirectly, by a person who beneficially owns in excess of 10% of the Voting
Stock of the Corporation shall automatically be converted into shares of Excess
Common Stock of the Corporation. Shares of Excess Common Stock are identical to
shares of Common Stock except that they are limited to one one-hundredth (1/100)
of one vote per share. In addition, the Corporation is authorized to refuse to
recognize a transfer or attempted transfer of any shares of Voting Stock to any
person who beneficially owns, or who the Corporation believes would become by
virtue of such transfer the beneficial owner of, in excess of 10% of the Voting
Stock. These restrictions are not applicable to underwriters in connection with
a public offering of the common stock, certain reorganization transactions
described in the Articles of Incorporation or to acquisitions of Voting Stock by
the Corporation, any majority-owned subsidiary of the Corporation or any
pension, profit-sharing, stock bonus or other compensation plan maintained by
the Corporation or by a member of a controlled group of corporations or trades
or businesses of which the Corporation is a member for the benefit of the
employees of the Corporation and for any subsidiary, or any trust or custodial
arrangement established in connection with any such plan.

     The Articles of Incorporation of the Corporation contains provisions
providing that the affirmative vote of the holders of at least 80% of the Voting
Stock of the Corporation may be required to approve certain business
combinations and other transactions with persons who directly or indirectly
acquire or hold the beneficial ownership of in excess of 10% of the Voting Stock
of the Corporation.

     The Corporation will furnish to any shareholder upon written request and
without charge, a statement of the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights. Such request may be made to the Corporation or to its
transfer agent and registrar.

                                   ----------

     The following abbreviations when used in the inscription on the face of
this certificate shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  -  as tenants in common
TEN ENT  -  as tenants by the entireties
JT TEN   -  as joint tenants with right of survivorship and
            not as tenants in common

UNIF GIFT MIN ACT ___________________ Custodian___________________
                  (Cust)                           (Minor)
under Uniform Gifts to Minors Act ________________________________
                                       (State)

     Additional abbreviations may also be used though not in the above list

     For value received, ___________________________________ hereby sell, assign
and transfer unto ______________________________ shares of Common Stock
evidenced by this Certificate, and do hereby irrevocably constitute and appoint
_______________________________ as Attorney, to transfer the said shares on the
books of the herein named Corporation, with full power of substitution.

Date:_______________________  __________________________________________________
                              Signature
                              __________________________________________________
                              Signature

                              NOTICE:     The signature to this assignment must 
                                          correspond with the name as written 
                                          upon the face of the Certificate, in 
                                          every particular, without alteration 
                                          or enlargement, or any change 
                                          whatsoever.

                                   ----------

<PAGE>

                                   RESTRICTION
                    [Note: to be used only on certain shares]

     The shares, or any interest therein, represented by this certificate may
not be sold or otherwise disposed of, directly or indirectly, by the registered
holder hereof for a period of one year from the date of issuance hereof, except
in the event of the death or judicial declaration of incompetency of the
registered holder.


<PAGE>

                              EX-5.1
              Form of Opinion of Thacher Proffitt & Wood


                                                      _____________, 1996


Big Foot Financial Corp.
1190 RFD
Long Grove, Illinois  60047

Ladies and Gentlemen:

     We have acted as special counsel to Big Foot Financial Corp., an Illinois
corporation (the "Corporation"), in connection with the registration under the
Securities Act of 1933, as amended, by the Corporation of an aggregate of
2,314,375 shares of Common Stock, par value $.01 per share (the "Shares"), of
the Corporation, and the related preparation and filing by the Corporation with
the Securities and Exchange Commission of a Registration Statement on Form S-1
(the "Registration Statement"). In rendering the opinions set forth below, we do
not express any opinion concerning law other than the federal law of the United
States and the corporate law of the State of Illinois. In rendering the opinions
hereinafter set forth, as to matters governed by the laws of the State of
Illinois, we have relied, without independent investigation, upon the opinion of
Gomberg, Sharfman, Gold & Ostler, P.C., dated _________, 1996, a copy of which
is annexed hereto. To the extent that we have relied on the foregoing opinion,
our opinions are subject to the same qualifications, limitations, assumptions
and exceptions set forth therein.

     We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records and other instruments,
and have examined such matters of law, as we have deemed necessary or advisable
for purposes of rendering the opinions set forth below. As to matters of fact,
we have examined and relied upon the representations of the Corporation
contained in the Registration Statement and, where we have deemed appropriate,
representations or certificates of officers of the Corporation or public
officials. We have assumed the authenticity of all documents submitted to us as
originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to the originals of all documents submitted to us as
copies. In making our examination of any documents, we have assumed that all
parties, other than the Corporation, had the corporate power and authority to
enter into and perform all obligations thereunder, and, as to such parties, we
have also assumed the due authorization by all requisite action, the due
execution and delivery of such documents and the validity and binding effect and
enforceability thereof.

<PAGE>

Big Foot Financial Corp.
_____________, 1996                                                      Page 2.


     Based on the foregoing, we are of the opinion that the Shares to be issued
and sold by the Corporation have been duly authorized and, when issued and sold
as contemplated in the Registration Statement and the Plan of Conversion of
Fairfield Savings Bank, F.S.B. (the "Bank"), will be validly issued and
outstanding, fully paid and non-assessable.

     In rendering the opinions set forth above, we have not passed upon and do
not purport to pass upon the application of securities or "blue-sky" laws of any
jurisdiction (except federal securities laws).

     This opinion is given solely for the benefit of the Corporation and
investors who purchase Shares pursuant to the Registration Statement and may not
be relied upon by any other person or entity, nor quoted in whole or in part, or
otherwise referred to in any document without our express written consent.

     We consent to the filing of this opinion as an Exhibit to the Corporation's
Registration Statement and to the Bank's Application for Conversion on Form AC
(the "Form AC") and to the reference to our firm under the headings "The
Conversion--Effects of Conversion--Tax Aspects" and "Legal Matters" in the
prospectus which is part of such Registration Statement and to the reference to
our firm in the Form AC.

                                          Very truly yours,

                                          THACHER PROFFITT & WOOD


                                          By
                                              V. Gerard Comizio


       [Attachment 1: Opinion of Gomberg, Sharfman, Gold & Ostler, P.C.]

                               [To be provided]


<PAGE>


                                    EX-8.1
                      Opinion of Thacher Proffitt & Wood


(212) 912-7628


                                                      , 1996


Fairfield Savings Bank F.S.B.
1190 RFD
Long Grove, Illinois 60047-7304

Dear Sirs:

     You have requested our opinion regarding certain federal income tax
consequences of the proposed conversion of Fairfield Savings Bank, F.S.B. (the
"Bank") from a federally chartered mutual savings bank to a federally chartered
stock savings bank (the "Conversion"), the sale of all of the outstanding
capital stock of the Bank to Big Foot Financial Corp., an Illinois corporation
(the "Company"), and the sale by the Company of up to 2,314,275 shares of its
common stock, par value of $.01 per share (the "Common Stock") to the Bank's
Eligible Account Holders, Employee Plans, Supplemental Eligible Account Holders,
Other Members and Bank Employees, and to certain other parties, pursuant to the
Plan of Conversion of Fairfield Savings Bank, F.S.B., adopted by the Board of
Directors of the Bank on May 21, 1996, as amended (the "Plan"). These and
related transactions are described in the Plan and in the prospectus included in
the Company's Registration Statement filed on Form S-1 with the Securities and
Exchange Commission in connection with the Conversion (the "Prospectus"). We are
rendering this opinion pursuant to Article VI of the Plan. All capitalized terms
used but not defined in this letter shall have the meanings set forth in the
Plan or Prospectus.

     In connection with the opinions expressed below, we have examined and
relied upon originals, or copies certified or otherwise identified to our
satisfaction, of the Plan and the Prospectus and of such corporate records of
the Bank and the Company as we have deemed appropriate. We have also relied,
without independent verification, upon the           , 1996 letter of the Bank 
and the Company to Thacher Proffitt & Wood containing certain representations.
We have assumed that the Bank, the Company and other parties will act in
accordance with the Plan, and that the representations made by the Bank and the
Company in the foregoing letter are true. In addition, we have made such
investigations of law as we have deemed appropriate to form a basis for the
opinions expressed below.

<PAGE>

Fairfield Savings Bank, F.S.B.
           , 1996                                                        Page 2.


     Based on and subject to the foregoing, it is our opinion that, for federal
income tax purposes, under current law:

     1. The Bank's change in form from mutual to stock ownership will constitute
a reorganization under section 368(a)(1)(F) of the Internal Revenue Code of
1986, and neither the Bank nor the Company will recognize any gain or loss as a
result of the Conversion.

     2. No gain or loss will be recognized by the Bank or the Company upon the
purchase of the Bank's capital stock by the Company in the Conversion, or by the
Company upon the purchase of shares of Common Stock pursuant to the Plan.

     3. No gain or loss will be recognized by Eligible Account Holders or by
Supplemental Eligible Account Holders upon the issuance to them of deposit
accounts in, and interests in the liquidation account of, the Bank in its stock
form in exchange for their deposit accounts in the Bank in its mutual form.

     4. The tax basis of the depositors' deposit accounts in the Bank in its
stock form immediately after the Conversion will be the same as the basis of
their deposit accounts in the Bank in its mutual form immediately prior to the
Conversion.

     5. The tax basis of each Eligible Account Holder's and each Supplemental
Eligible Account Holder's interest in the liquidation account of the Bank will
be zero.

     6. No gain or loss will be recognized by Eligible Account Holders or by
Supplemental Eligible Account Holders upon the distribution to them of
nontransferable subscription rights to purchase shares of the Common Stock,
provided that the amount to be paid for the Common Stock pursuant to such
subscription rights is equal to the fair market value of such stock.

     7. The tax basis to the stockholders of the shares of Common Stock
purchased in the Conversion pursuant to the subscription rights will be the
amount paid therefor, and the holding period for such shares of Common Stock
will begin on the date on which such subscription rights are exercised.

     In rendering opinion 6, above, and our opinion regarding the tax basis of
shares of Common Stock in 7, above, we have relied, without independent
verification, on the opinion of Capital Resources Group, Inc. that the
nontransferable subscription rights have no value.

     Except as set forth above, we express no opinion to any party as to the tax
consequences, whether federal, state, local or foreign, of the Conversion or of
any transaction related thereto or contemplated by the Plan. This opinion is
given solely for the benefit of the parties to the Plan and Eligible Account
Holders, Supplemental Eligible Account Holders and other investors who purchase
shares pursuant to the Company's Registration Statement on Form S-1 (the
"Registration Statement"), and may not be relied upon by any other party or
entity or referred to in any document without our

<PAGE>

Fairfield Savings Bank, F.S.B.
           , 1996                                                        Page 3.


express written consent. We consent to the filing of this opinion as an exhibit
to the Registration Statement and to the Application for Conversion on Form AC
of the Bank.


                                               Very truly yours,

                                               THACHER PROFFITT & WOOD



                                               By:



AJC:ajc


<PAGE>


                                    EX-8.2
                                    Opinion


9/12/96

Board of Directors
Fairfield Savings Bank, F.S. B.
Box 1190 RFD
Long Grove, Illinois  60047


Board of Directors
Big Foot Financial Corp.
Box 1190 RFD
Long Grove, Illinois  60047

     Re:  State of Illinois Tax Consequences of the Conversion of Fairfield
          Savings Bank, F.S.B. from a Federally Chartered Mutual Savings Bank to
          a Federally Chartered Stock Savings Bank and Sale of Common Stock of
          Big Foot Financial Corp.

You have requested an opinion of the potential State of Illinois income tax
consequences of the proposed conversion of Fairfield Savings Bank, F.S.B. from a
federally chartered mutual savings bank ("Fairfield Savings") to a federally
chartered stock savings bank ("Fairfield Savings Stock") and the acquisition of
Fairfield Savings Stock's capital stock by Big Foot Corp. ("Big Foot"), a newly
formed holding company, pursuant to the plan of conversion (Conversion).

You have submitted for our consideration the prospectus (Prospectus) for the
Conversion of Fairfield Savings from the mutual to stock form of organization.
Based upon our review of the Prospectus and our understanding of the Facts (as
detailed in Section I) and your Representations (as detailed in Section II), we
have rendered our opinion (in Section III) regarding the potential State of
Illinois income tax effect of the proposed Conversion.

Our opinion is restricted solely to the State of Illinois income tax
consequences discussed herein regarding the Conversion of Fairfield Savings from
the mutual to the stock form of organization, the issuance of Fairfield Savings
Stock's outstanding 

<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 2


shares to Big Foot, and the granting of non-transferable rights to subscribe to
Big Foot's stock to an employer's stock ownership plan, eligible account holders
supplemental eligible account holders, and certain other members and recipients.
We express no opinion regarding matters not expressly addressed herein and no
inference should be made regarding any matter not expressly addressed.

This opinion is exclusively for the use of Big Foot, Fairfield Savings Stock and
Fairfield Savings in their submission to the Office of Thrift Supervision or
other appropriate governmental body or agency for approval of the proposed
Conversion and related transactions described herein and is not to be used for
any other purpose without our written consent. We do consent to the inclusion of
this opinion as an Exhibit to the Form S-1 Registration Statement of Big Foot
and the references to this opinion in such Registration Statement.

Our conclusions reflect our professional judgment based on the facts and
representations delineated herein as well as existing tax authorities that are
subject to change. Any changes in facts, representations, or in existing tax
authority could, of course, affect our conclusions. Further, our opinion
represents merely our view of the transactions. No assurance can be given that
either the Treasury, the Internal Revenue Service, or the Illinois Department of
Revenue will agree with our opinion. The views of the Internal Revenue Service
and the Illinois Department of Revenue may differ from those expressed herein.

                                    SECTION I
                               STATEMENT OF FACTS

Fairfield Savings, with administrative offices in Long Grove, Illinois, is a
federally chartered mutual savings bank. As a mutual savings bank, Fairfield
Savings has never been authorized to issue stock. Instead, the proprietary
interest in the reserves and undivided profits of Fairfield Savings belong to
the deposit account holders of Fairfield Savings, hereinafter sometimes referred
to as "depositors". A depositor of Fairfield Savings has a right to share, pro
rata, with respect to the withdrawal value of his respective deposit account of
any liquidation proceeds distributed in the event Fairfield

<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 3


Savings is ever liquidated. In addition, a depositor of Fairfield Savings is
entitled to interest on his account balance as fixed and paid by Fairfield
Savings.

In order to provide organizational and economic strength to Fairfield Savings,
the Board of Directors adopted a plan of conversion ("Plan of Conversion")
whereby Fairfield Savings will convert itself into a federally chartered stock
savings bank (Fairfield Savings Stock), the stock of which will be held entirely
by Big Foot, a newly organized Illinois corporation. Big Foot will acquire the
stock of Fairfield Savings Stock by purchase, using proceeds received from the
sale of its own stock under the Plan of Conversion. In connection with the
Conversion, Big Foot will issue shares of its $.01 par value common stock
("Common Stock") in the Subscription and Community Offering. The price of the
Common Stock will be based on an independent appraiser's valuation of the
estimated proforma market value of the Common Stock as determined by the
estimated total proforma market value of Fairfield Savings Stock and Big Foot
after conversion. The Conversion will be subject to the approval of the Office
of Thrift Supervision, Department of Treasury ("OTS").

In accordance with the Plan of Conversion, non-transferable rights to subscribe
for the purchase of Common Stock have been granted under the Plan of Conversion
to the following persons in a subscription offering ("Subscription Offering"),
(1) holders of qualifying deposit accounts as of the close of business on
December 31, 1994 ("Eligible Account Holders"), (2) Big Foot's tax qualified
stock employee benefit plans including the Employee Stock Ownership Plan
("Employee Plans"), (3) Supplemental Eligible Account Holders, a term which is
defined to mean any person who is a holder of a qualified deposit account at
Fairfield Savings as of September 30, 1996 (other than Eligible Account Holders,
or directors or officers of Fairfield Savings), (4) members of Fairfield
Savings, consisting of depositors and borrowers of Fairfield Savings as of the
voting record date other than Eligible Account Holders or Supplemental Eligible
Account Holders ("Other Members") and (5) employees and officers of Fairfield
Savings, other than those who would qualify as Eligible Account Holders,
Supplemental Eligible Account Holders or Other Members ("Fairfield Savings'
Employees"). All subscriptions received will be subject to the availability of
Common Stock after satisfaction of all subscriptions of all persons having prior
rights in the Subscription Offering and to the maximum and minimum purchase
limitations set forth in the Plan of Conversion. Currently, and subject to the
prior rights of

<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 4


holders of subscription rights, any shares of Common Stock not subscribed for in
the Subscription Offering will be offered in a community offering ("Community
Offering") to certain members of the general public, with preference given to
natural persons residing in the Lake and Cook counties in Illinois, in which
Fairfield Savings maintains an office. It is anticipated that all shares not
subscribed for in the Subscription and Community Offerings will be offered by
Big Foot to the general public in a syndicated community offering ("Syndicated
Community Offering").

The Conversion will not affect Fairfield Savings' deposit accounts, individual
account balances or existing FDIC insurance coverage, nor will it affect
Fairfield Savings' loan accounts, loan balances or the obligations of the
borrowers to Fairfield Savings. Upon Conversion, voting rights with respect to
Fairfield Savings' corporate matters shall vest exclusively in Big Foot, which
will be the sole shareholder of Fairfield Savings Stock's stock.

Fairfield Savings Stock will continue, after completion of the Conversion, to
provide existing services to depositors and borrowers pursuant to existing
policies and will maintain existing offices, management and employees. Fairfield
Savings Stock will continue to be insured by the FDIC up to applicable limits
and will continue to be regulated by the FDIC. The affairs of Fairfield Savings
Stock will be directed by the existing Board of Directors of Fairfield Savings,
who will become directors of Fairfield Savings Stock. Fairfield Savings'
depositors will pay expenses of the Conversion solely attributable to them, if
any, Fairfield Savings and Big Foot will each pay their own expenses of the
Conversion and will not pay any expenses solely attributable to the shareholders
of Big Foot.

The proposed Conversion of Fairfield Savings does not include a receivership,
foreclosure or similar proceeding before a federal or state agency involving a
financial institution.

After the Conversion, each depositor of Fairfield Savings Stock shall have a
claim upon complete liquidation of Fairfield Savings Stock of the same priority
as general creditors. The claim of a depositor shall be limited to the amount of
the depositor's account balance plus accrued interest.


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 5


A liquidation account for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders shall be established upon Conversion in an
amount equal to the surplus and reserves ("Net Worth") of Fairfield Savings as
of the latest balance sheet contained in the final Prospectus used in connection
with the Conversion. After Conversion, each Eligible Account Holder and
Supplemental Eligible Account Holder shall be entitled, upon a complete
liquidation of Fairfield Savings Stock, to such Holder's pro rata interest in
the liquidation account. The establishment of the liquidation account will not
operate to restrict the use of application of any of the Net Worth accounts of
Fairfield Savings Stock, except that Fairfield Savings Stock will not declare or
pay cash dividends or repurchase any of its stock if the result thereof would be
to reduce its Net Worth below the amount required for the liquidation account.
Each Eligible Account Holder and Supplemental Eligible Account Holder will have
a pro rata interest in the total liquidation account for the amount each of
Holder's deposit accounts on December 31, 1994 and September 30, 1996,
respectively, the eligibility record dates, bore to the balance of all Deposit
Accounts in Fairfield Savings on such dates.

If however, on any annual closing date of Fairfield Savings Stock, commencing
December 31, 1994 (with respect to an Eligible Account Holder) and September 30,
1996 (with respect to a Supplemental Eligible Account Holder) the amount in any
Deposit Account is less than the amount in such Deposit Account on December 31,
1994 (with respect to an Eligible Account Holder) and September 30, 1996 (with
respect to a Supplemental Eligible Account Holder) or any other annual closing
date, then an Eligible Account Holder's or Supplemental Eligible Account
Holder's interest in the liquidation account relating to such Deposit account
would be reduced from time to time by the proportion of any such reduction, and
such interest will cease to exist if such Deposit Account is closed. In
addition, no interest in the liquidation account would ever be increased despite
any subsequent increase in the related Deposit Account. Any assets remaining
after the above liquidation rights of Eligible Account Holders and Supplemental
Eligible Account Holders are satisfied would be distributed to Big Foot as the
sole stockholder of Fairfield Savings Stock.

The assets and liabilities, including deposits, of Fairfield Savings shall
become the assets and liabilities of Fairfield Savings Stock. All account
balances at the termination 

<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 6


of operations under Fairfield Savings' charter will be transferred by operation
of law intact to Fairfield Savings Stock.

                                   SECTION II
                                 REPRESENTATIONS

     You have also provided the following representations concerning this
transaction:

     (1)  Fairfield Savings' Eligible Account Holders, Supplemental Eligible
          Account Holders, Other Members, and Fairfield Savings' Employees will
          pay the expenses of the Conversion solely applicable to them, if any.
          Big Foot, and Fairfield Savings will each pay expenses of the
          transaction attributable to them and will not pay any expenses solely
          attributable to the depositors or to Big Foot's shareholders.

     (2)  The proposed transactions do not involve the payment to Big Foot,
          Fairfield Savings, or Fairfield Savings Stock of financial assistance
          from Federal agencies within the meaning of Notice 89-102, 1989-40,
          C.B.1.

     (3)  The fair market value of the withdrawable deposit accounts plus
          interest in the liquidation account of Fairfield Savings Stock to be
          constructively received under the Plan of Conversion will, in each
          instance, be equal to the fair market value of the withdrawable
          deposit accounts in Fairfield Savings surrendered in exchange
          therefor.

     (4)  No amount of an individual's total qualifying deposits in Fairfield
          Savings as of the eligibility record dates will be excluded from
          participating in the liquidation account.

     (5)  No Eligible Account Holder or Supplemental Eligible Account Holder as
          of the eligibility record dates will be excluded from participating in
          the liquidation account.


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 7


     (6)  None of the shares of Common Stock to be purchased by the
          depositor-employees of Fairfield Savings will be issued or acquired at
          a discount. However, shares will be given to certain employees as a
          compensation by means of Fairfield Savings Stock's stock award plans.
          Compensation to be paid to such depositor-employees will be
          commensurate with amounts paid to third parties bargaining at arm's
          length for similar services.

     (7)  No cash or property will be given to Eligible Account Holders, or
          Supplemental Eligible Account Holders, or others in lieu of (a)
          non-transferable subscription rights, or (b) an interest in the
          liquidation account of Fairfield Savings Stock.

     (8)  The exercise price of the subscription rights received by Fairfield
          Savings' Eligible Account Holders or Supplemental Eligible Account
          Holders to purchase Big Foot Common Stock will be equal to the fair
          market value of the stock of Big Foot at the time of the completion of
          the proposed transactions determined by an independent appraisal and
          they will have no purchase price advantage.

     (9)  The Eligible Account Holders' or Supplemental Eligible Account
          Holders' proprietary interest in Fairfield Savings arise solely by
          virtue of the fact that they are account holders in Fairfield Savings.
          None of the compensation to be received by Eligible Account
          Holders-Employees or Supplemental Eligible Account Holder-Employees of
          Fairfield Savings will be separate consideration for any of their
          deposits in Fairfield Savings.

     (10) To the best of knowledge of management of Fairfield Savings, there is
          not now, nor will there be at the time of reorganization, any plan or
          intention on the part of the depositors in Fairfield Savings to
          withdraw their deposits from Fairfield Savings Stock following the
          Conversion.

     (11) All distributions to deposit holders in their capacity as deposit
          holders (except for normal interest payments made by Fairfield
          Savings) will, in the aggregate, constitute less than one percent of
          the fair market value of the net assets of Fairfield Savings.


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 8


     (12) Fairfield Savings has received an opinion from Capital Resources
          ("Capital Resources Opinion") which concludes that the subscription
          rights to be received by Eligible Account Holders, Supplemental
          Eligible Account Holders, and other eligible subscribers do not have
          any value, since they are acquired by the recipients without cost, are
          non-transferable and of short duration, and afford the recipients a
          right only to purchase conversion stock at a price equal to its
          estimated fair market value, which will be the same price as the
          public offering price for unsubscribed shares of Conversion stock.

     (13) Big Foot has no plan or intention to sell, liquidate or otherwise
          dispose of the stock of Fairfield Savings Stock or sell the assets of
          Fairfield Savings Stock other than in the ordinary course of business.

     (14) Big Foot and Fairfield Savings Stock have no current plan or intention
          to redeem or otherwise acquire any of the shares of Common Stock
          issued in the Conversion transaction.

     (15) Fairfield Savings, Fairfield Savings Stock, and Big Foot are
          corporations within the meaning of Section 7701(a)(3) of the Internal
          Revenue Code of 1986, as amended (the "Code") and are not investment
          companies within the meaning of Code Section 368(a)(2)(F)(iii) and
          (iv).

     (16) Upon the completion of the Conversion, Big Foot will own and hold 100%
          of the issued and outstanding capital stock of Fairfield Savings Stock
          and no other shares of capital stock of Fairfield Savings Stock will
          be issued and/or outstanding. At the time of the Conversion, Fairfield
          Savings Stock does not have any plan or intention to issue additional
          shares of its stock following the transaction. Further, no shares of
          preferred stock of Fairfield Savings Stock, if any, will be issued
          and/or outstanding.

     (17) There is no plan or intention for Fairfield Savings Stock to be
          liquidated or merged with another corporation following this proposed
          transaction.


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 9


     (18) If all of the net proceeds from the sale of conversion stock had been
          contributed by Big Foot to Fairfield Savings Stock in exchange for
          common stock of Fairfield Savings Stock in the transaction, as opposed
          to Big Foot retaining a portion of such net proceeds (the "retained
          proceeds,") and Fairfield Savings Stock immediately thereafter made a
          distribution of the retained proceeds to Big Foot, Fairfield Savings
          Stock would have sufficient current and accumulated earnings and
          profits for tax purposes such that the distribution would not result
          in the recapture of any portion of the tax bad debt reserves of
          Fairfield Savings Stock under Code Section 593(e).

     (19) After the Conversion, Fairfield Savings Stock will continue the
          business of Fairfield Savings in the same manner as prior to the
          Conversion. Following the Conversion, Fairfield Savings Stock has no
          plan or intention and Big Foot has no plan or intention to cause
          Fairfield Savings Stock to sell its assets other than in the ordinary
          course of business.

     (20) Fairfield Savings Stock has no plan or intention to issue additional
          shares of stock following the proposed transaction, other than shares
          that may be issued to employees and/or directors pursuant to certain
          stock option or stock award plans or that may be issued to employee
          benefit plans.

     (21) Immediately after the Conversion, the assets and liabilities of
          Fairfield Savings Stock will be identical to the assets and
          liabilities of Fairfield Savings immediately prior to the Conversion,
          plus substantially all the net proceeds from the sale of Fairfield
          Savings Stock's common stock to Big Foot.

     (22) The fair market value of the assets of Fairfield Savings, which will
          be transferred to Fairfield Savings Stock in the Conversion, will be
          equal to or exceed the sum of the liabilities of Fairfield Savings
          which will be assumed by Fairfield Savings Stock and any liabilities
          to which the transferred assets are subject. Fairfield Savings will
          have a positive regulatory net worth at the time of the transaction.


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 10


     (23) The applicable authority, as defined in Code Section 368(a)(3)(D), has
          not made the certification of insolvency described in Code Section
          368(a)(3)(D), nor will such certification be made prior to or
          otherwise in connection with the proposed transaction. Fairfield
          Savings is not under the jurisdiction of a Bankruptcy or similar
          court.

     (24) Upon the completion of the Conversion, there will be no rights,
          warrants, contracts, agreements, or commitments or understanding with
          respect to the capital stock of Fairfield Savings Stock, nor will
          there be any securities outstanding which are convertible into the
          capital stock of Fairfield Savings Stock.

     (25) The liabilities of Fairfield Savings assumed by Fairfield Savings
          Stock plus the liabilities, if any, to which the transferred assets
          are subject were incurred by Fairfield Savings in the ordinary course
          of its business and are associated with the assets transferred.

     (26) Fairfield Savings will not have any Federal net operating loss
          carryovers or capital loss carryovers at the time of the Conversion.

     (27) The tax basis of Fairfield Savings Stock's assets (excluding cash,
          goodwill and any marketable security whose fair market value is at
          least 95% of its adjusted basis) immediately before the acquisition of
          its stock by Big Foot does not exceed the fair market value of
          Fairfield Savings Stock's assets by more than 15%. Further, the
          difference between the fair market value of Fairfield Savings Stock's
          assets, within the meaning of Code Section 382(h), and its tax basis
          in such assets immediately before the acquisition of its shares by Big
          Foot is not greater than the lesser of (a) $10,000,000 or (b) 15% of
          the fair market value of its assets.

     (28) Assets used to pay expenses of the Conversion and all distributions
          (except for regular, normal interest payments and other payments in
          the normal course of business made by Fairfield Savings immediately
          preceding the transaction) will in the aggregate constitute less than
          1% of the net assets of Fairfield Savings and any such expenses and
          distributions will be paid by 


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 11


          Fairfield Savings Stock from the proceeds of the sale of the
          Conversion stock.

                                   SECTION III
                                     OPINION

The State of Illinois has adopted federal law as currently amended as the
starting point for computing Illinois taxable income [35 ILCS 5/203(b)]. Income
tax terms are defined in relation to the Internal Revenue code [35 ILCS 5/102].
Taxpayers are required to use the same taxable year and accounting methods as
are used in computing federal taxable income [35 ILCS 5/401(a) and 5/402(a)].

For State of Illinois tax purposes, the Internal Revenue Code and related
regulations, rulings and case law are controlling unless specifically provided
in the Illinois statutes. There are no specific provisions in the Illinois
statutes governing the proposed transactions. Thus, our opinion below addresses
our view as to the Federal income tax consequences of the proposed transactions
which, as indicated above, should also be the Illinois income tax consequences.

Based solely upon the facts and representations listed above and provided that
the facts and representations are correct, we render the following opinion with
respect to the Federal and State of Illinois income tax consequences of the
proposed transaction. Our opinion is only applicable to the tax effects of those
Internal Revenue Code Sections specifically discussed below. No opinion is
expressed nor can any inferences be drawn as to the applicability of any other
Code Section.

     1.   The proposed Conversion of Fairfield Savings from a Federally
          chartered mutual savings bank ("Fairfield Savings") to a Federally
          chartered stock savings bank ("Fairfield Savings Stock") will
          constitute a tax-free reorganization within the meaning of Code
          Section 368(a)(1)(F), and no gain or loss will be recognized to
          Fairfield Savings or Fairfield Savings Stock as a result or such
          Conversion.


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 12


     2.   No gain or loss will be recognized to Fairfield Savings Stock upon the
          receipt of money from Big Foot in exchange for common stock of
          Fairfield Savings Stock [Code Section 1032(a)].

     3.   No gain or loss will be recognized by Big Foot upon the receipt of
          money for stock issued in the Conversion. [Code Section 1032(a)].

     4.   The assets of Fairfield Savings Stock following the proposed
          Conversion will have the same basis as in the hands of Fairfield
          Savings immediately before the Conversion [Code Section 362(b)].

     5.   The holding period of Fairfield Savings Stock's assets following the
          proposed Conversion will include the period such assets were held by
          Fairfield Savings immediately before the Conversion [Code Section
          1223(2)].

     6.   No gain or loss will be recognized by Eligible Account Holders or
          Supplemental Eligible Account Holders of Fairfield Savings upon the
          issuance to them of accounts in Fairfield Savings Stock in the same
          dollar amount as their accounts in Fairfield Savings, plus interests
          in the liquidation account of Fairfield Savings Stock, because the
          fair market value of the withdrawable accounts coupled with the
          liquidation account interest in Fairfield Savings Stock at the time of
          the Conversion is deemed to be equal to the basis of the accounts in
          Fairfield Savings (Code Section 1001; see Paulsen v. Commissioner, 469
          U.S. 131, 139 (1985), quoting Society for Savings v. Bowers, 349 U.S.
          143 (1955); but see Revenue Rulings 69-3, 1969-1 CB 103 and 69-646,
          1969-2 CB54, the interest received rises to the level of "stock" and,
          thus, Code Section 354 applies).

     7.   Provided that the amount to be paid for such stock pursuant to the
          subscription rights is equal to the fair market value of the stock, no
          gain or loss will be recognized by Eligible Account Holders,
          Supplemental Eligible Account Holders, Other Members, directors,
          officers, and employees of Fairfield Savings, upon the distribution to
          them of stock in Big Foot [Code Section 356(a)]. Gain realized, if
          any, by the Eligible Account Holders, Supplemental Eligible Account
          Holders, and other recipients on the 


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 13


          distribution to them of the nontransferable subscription rights to
          purchase shares of Common Stock will be recognized but only in an
          amount not in excess of the fair market value of such subscription
          rights [Code Section 356(a)]. Eligible Account Holders, Supplemental
          Eligible Account Holders, and other recipients will not realize any
          taxable income as a result of the exercise by them of the
          non-transferable subscription rights (Rev. Rul. 56-572, 1956-2 C.B.
          182). This opinion is predicated on the representation that no person
          shall receive any payment in lieu of the issuance of subscription
          rights and upon the Capital Resources Opinion that the subscription
          rights do not have any value. However, notwithstanding the Capital
          Resources Opinion, if the subscription rights are subsequently found
          to have a fair market value, income may be recognized by the various
          recipients of the subscription rights (in certain cases whether or not
          the rights are exercised) and Big Foot and Fairfield Savings Stock may
          be taxable on the distribution of subscription rights (Code Section
          311).

     8.   Pursuant to Code Section 1012, the basis of the savings accounts in
          Fairfield Savings Stock to be constructively received by the account
          holders of Fairfield Savings will be equal to the cost of such
          property. The cost will be the fair market value of their savings
          account in Fairfield Savings Stock constructively received in exchange
          for their savings account in Fairfield Savings. For this purpose, the
          fair market value of the deposit accounts in Fairfield Savings Stock
          after the proposed Conversion will be equal to the basis the Eligible
          Account Holders and Supplemental Eligible Account Holders have in
          their deposits in Fairfield Savings immediately before the proposed
          Conversion. The basis for each account holder's interest in the
          liquidation account of Fairfield Savings Stock will be equal to the
          cost of such property. The cost will be the same as the fair market
          value of the proprietary interest received in Fairfield Savings Stock,
          in exchange for their proprietary interest in Fairfield Savings. The
          account holders' interest in the liquidation account in Fairfield
          Savings Stock will be deemed to have a basis and fair market value
          equal to zero. [See Paulsen v. Commissioner, 469 U.S. at 139 (1985)
          and Rev. Rul. 71-233, 1971-1 C.B. 113].


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 14


     9.   The basis of Big Foot's stock to its stockholders will be the purchase
          price paid therefore plus the basis, if any, of non-transferable
          subscription rights (Code Section 1012). Accordingly, assuming the
          subscription rights have no value, the basis of the Common Stock to
          the Eligible Account Holders and Supplemental Eligible Account Holders
          will be the amount paid therefore. Our opinion is predicated upon the
          Capital Resources Opinion that the subscription rights do not have any
          value. The holding period of the Common Stock purchased pursuant to
          the exercise of subscription rights shall commence on the date on
          which the right to acquire such stock was exercised [Code Section 1223
          (6)].

    10.   For purposes of Code Section 381, Fairfield Savings Stock will be
          treated as if there had been no reorganization. Accordingly, the
          taxable year of Fairfield Savings will not end on the effective date
          of the Conversion and the tax attributes of Fairfield Savings will be
          taken into account by Fairfield Savings Stock as if there had been no
          reorganization [Treasury Regulation Section 1.381(b)-(1)(a)(2)]. The
          part of the taxable year of Fairfield Savings before the Conversion
          through Fairfield Savings' normal year end will constitute a single
          taxable year of Fairfield Savings Stock (Revenue Ruling 57-276, 1957-1
          C.B. 126).

     11.  Pursuant to the provisions of Code Section 381(c)(2) and Treasury
          Regulation Section 1.381(c)(2)-1, Fairfield Savings Stock will succeed
          and take into account the earnings and profits of Fairfield Savings as
          of the date of the Conversion. The Conversion will not diminish the
          accumulated earnings and profits of Fairfield Savings Stock available
          for the subsequent distribution of dividends within the meaning of
          Code Section 316 and Treasury Regulations Section 1.312-11(b) and (c)
          as well as Code Section 593(e).

     12.  Pursuant to the provisions of Code Section 381(c)(3) and Treasury
          Regulation Section 1.381(c)(3)-1, and subject to the restrictions
          therein, Fairfield Savings Stock will succeed to and take into account
          capital loss carryovers, if any, of Fairfield Savings in its first
          taxable year ending after the date of the Conversion subject to the
          limitations of Code Section 382, if applicable.


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 15


     13.  Pursuant to the provisions of Code Section 381(c)(4) and Treasury
          Regulation Section 1.381(c)(4)-1(a)(1)(ii), Fairfield Savings Stock
          will succeed to and take into account, immediately after the
          Conversion, those accounts of Fairfield Savings that represent "Base
          Year" tax bad debt reserves as defined in the Small Business Job
          Protection Act of 1996. Such Base Year tax bad debt reserves will not
          be required to be restored to the gross income of Fairfield Savings or
          Fairfield Savings Stock for the taxable year of the Conversion, and
          the Base Year tax bad debt reserves will have the same character in
          the hands of Fairfield Savings Stock as they would have in the hands
          of Fairfield Savings if no transfer occurred.

     14.  The creation of the liquidation account on the records of Fairfield
          Savings Stock will have no effect on Fairfield Savings Stock's or
          Fairfield Savings' taxable income, deductions, or distributions to
          shareholders under Code Section 593(e).

     15.  Pursuant to the provisions of Code Section 381(c)(1) and Treasury
          Regulation Section 1.381(c)(1)-1, and subject to restrictions therein,
          Fairfield Savings Stock will succeed to and take into account net
          operating loss carryovers, if any, of Fairfield Savings in its first
          taxable year ending after the date of the Conversion, subject to the
          limitations of Code Section 382, if applicable.

     16.  Big Foot's acquisition of the stock of Fairfield Savings Stock will
          result in an ownership change of Fairfield Savings Stock within the
          meaning of Code Section 382(b)(2). Accordingly, if Fairfield Savings
          Stock had any net operating loss carryovers or net built-in losses,
          their use in the future years would be limited to the product of the
          pre-ownership fair market value of Fairfield Savings Stock and the
          long-term Federal tax-exempt rate on the effective date of the
          ownership change or, if higher, the rate in effect for either of the
          two calendar months immediately preceding the ownership change [Code
          Sections 382(a)(1) and 382 (f)(1)].


<PAGE>

Board of Directors
Fairfield Savings Bank, F.S.B.
Big Foot Financial Corp.
9/12/96
Page 16


     17.  The limitations on the deduction of built-in deductions pursuant to
          Treasury Regulations Section 1.1502-15(a) and built-in losses pursuant
          to Code Section 382(h)(3)(B)(i) with respect to Fairfield Savings
          Stock's assets upon the acquisition of its shares by Big Foot will not
          apply.

                                     SUMMARY

Based on the foregoing, it is our view that there should be no material adverse
State of Illinois income tax consequences to Big Foot, Fairfield Savings (mutual
or stock), Eligible Account Holders or Supplemental Eligible Account Holders and
other recipients of conversion stock, as a result of the proposed transactions.
However, as indicated earlier, our opinion is based upon the facts and
representations detailed herein as well as current Federal and State of Illinois
income tax law, related cases, rulings, etc. Any changes in the proposed
transactions or in Federal and State of Illinois income tax law prior to
consummation of the proposed transactions or which are retroactive in effect,
could cause us to modify our opinion.

We consent to the inclusion of this opinion as an exhibit to the Form S-1
Registration Statement of Big Foot and the references to and summary of this
opinion in such Registration Statement.

Very truly yours,

KPMG Peat Marwick
/s/ Vincent L. Lanuza
Vincent L. Lanuza
Partner


<PAGE>


                                    EX-8.3
                       Opinion of Capital Resources Group

                   [Capital Resources Group, Inc. letterhead]



                                                  September 13, 1996


Board of Directors
Fairfield Savings Bank, F.S.B.
1190 RFD
Long Grove, Illinois  60047-7304

Dear Board Members:

     All capitalized terms not otherwise defined in this letter have the
meanings given such terms in the Plan of Conversion adopted by the Board of
Directors of Fairfield Savings Bank, F.S.B. ("Bank").

     It is our understanding that, pursuant to Office of Thrift Supervision
regulations, subscription rights are non-transferable. Persons violating such
prohibition may lose their right to purchase stock in the Conversion and be
subject to other possible sanctions.

     Because the Subscription Rights to purchase shares of common stock in the
Bank to be issued to the Bank's employee stock benefit plans, depositors of the
Bank, and to other members of the Bank will be acquired by such recipients
without cost, will be non-transferable and of short duration, and will afford
the recipients the right only to purchase shares of common stock at the same
price as will be paid by members of the general public in a Community or Public
Offering, we are of the opinion that:

     (1)  the Subscription Rights will have no ascertainable fair market value
          and,

     (2)  the price at which the Subscription Rights are exercisable will not be
          more or less than the fair market value of the shares on the date of
          the exercise.

                                           Very truly yours,

                                           /s/ Capital Resouces Group, Inc.
                                           CAPITAL RESOURCES GROUP, INC.



<PAGE>

                                    EX-10.1
                         Employee Stock Ownership Plan


                            BIG FOOT FINANCIAL CORP.

                          EMPLOYEE STOCK OWNERSHIP PLAN


                          Adopted on September 17, 1996
                             Effective July 1, 1996

<PAGE>

                                TABLE OF CONTENTS
                                                                         Page
                                                                         ----

                                    ARTICLE I

                                   DEFINITIONS

Section 1.1    Account...................................................  1
Section 1.2    Affiliated Employer.......................................  1
Section 1.3    Allocation Compensation...................................  1
Section 1.4    Board.....................................................  2
Section 1.5    Beneficiary...............................................  2
Section 1.6    Change in Control.........................................  2
Section 1.7    Code......................................................  2
Section 1.8    Computation Period........................................  2
Section 1.9    Disability................................................  2
Section 1.10   Domestic Relations Order..................................  2
Section 1.11   Effective Date............................................  2
Section 1.12   Eligibility Computation Period............................  3
Section 1.13   Eligible Employee.........................................  3
Section 1.14   Eligible Participant......................................  3
Section 1.15   Employee..................................................  3
Section 1.16   Employer..................................................  3
Section 1.17   Employment Commencement Date..............................  3
Section 1.18   ERISA.....................................................  3
Section 1.19   ESOP Contribution.........................................  3
Section 1.20   Fair Market Value.........................................  3
Section 1.21   Family Member.............................................  4
Section 1.22   Financed Share............................................  4
Section 1.23   Five Percent Owner........................................  4
Section 1.24   Forfeitures...............................................  4
Section 1.25   Former Participant........................................  4
Section 1.26   General Investment Account................................  4
Section 1.27   Highly Compensated Employee...............................  4
Section 1.28   Hour of Service...........................................  6
Section 1.29   Investment Account........................................  6
Section 1.30   Investment Fund...........................................  6
Section 1.31   Loan Repayment Account....................................  6
Section 1.32   Loan Repayment Contribution...............................  6
Section 1.33   Maternity or Paternity Leave..............................  6
Section 1.34   Military Service..........................................  7
Section 1.35   Named Fiduciary...........................................  7
Section 1.36   Officer...................................................  7
Section 1.37   One-Year Break in Service.................................  7
Section 1.38   Participant...............................................  7
Section 1.39   Plan......................................................  7
Section 1.40   Plan Administrator........................................  7


                                       (i)

<PAGE>

                                                                         Page
                                                                         ----

Section 1.41   Plan Year.................................................  7
Section 1.42   Qualified Domestic Relations Order........................  7
Section 1.43   Qualified Participant.....................................  8
Section 1.44   Retirement................................................  8
Section 1.45   Share.....................................................  8
Section 1.46   Share Acquisition Loan....................................  8
Section 1.47   Share Investment Account..................................  8
Section 1.48   Tender Offer..............................................  8
Section 1.49   Total Compensation........................................  8
Section 1.50   Trust.....................................................  8
Section 1.51   Trust Agreement...........................................  9
Section 1.52   Trust Fund................................................  9
Section 1.53   Trustee...................................................  9
Section 1.54   Valuation Date............................................  9
Section 1.55   Vesting Computation Period................................  9
Section 1.56   Year of Eligibility Service...............................  9
Section 1.57   Year of Vesting Service...................................  9

                                   ARTICLE II

                                  PARTICIPATION

Section 2.1    Eligibility for Participation.............................  9
Section 2.2    Commencement of Participation............................. 10
Section 2.3    Termination of Participation.............................. 10

                                   ARTICLE III

                               SPECIAL PROVISIONS

Section 3.1    Military Service.......................................... 10
Section 3.2    Maternity or Paternity Leave.............................. 11
Section 3.3    Adjustments to Years of Eligibility Service............... 12
Section 3.4    Leave of Absence.......................................... 12
Section 3.5    Family and Medical Leave.................................. 12

                                   ARTICLE IV

                   CONTRIBUTIONS BY PARTICIPANTS NOT PERMITTED

Section 4.1    Contributions by Participants Not Permitted............... 12


                                      (ii)

<PAGE>

                                                                         Page
                                                                         ----

                                    ARTICLE V

                          CONTRIBUTIONS BY THE EMPLOYER

Section 5.1    In General................................................ 13
Section 5.2    Loan Repayment Contributions.............................. 13
Section 5.3    ESOP Contributions........................................ 13
Section 5.4    Time and Manner of Payment................................ 14

                                   ARTICLE VI

                            SHARE ACQUISITION LOANS

Section 6.1    In General................................................ 14
Section 6.2    Collateral; Liability for Repayment....................... 15
Section 6.3    Loan Repayment Account.................................... 15
Section 6.4    Release of Financed Shares................................ 16
Section 6.5    Restrictions on Financed Shares........................... 17

                                   ARTICLE VII

                           ALLOCATION OF CONTRIBUTIONS

Section 7.1    Allocation Among Eligible Participants.................... 17
Section 7.2    Allocation of Released Shares or Other Property........... 17
Section 7.3    Allocation of ESOP Contributions.......................... 17

                                  ARTICLE VIII

                           LIMITATIONS ON ALLOCATIONS

Section 8.1    Optional Limitations on Allocations of                 
                 Contributions........................................... 18
Section 8.2    General Limitations on Contributions...................... 18

                                   ARTICLE IX

                                     VESTING

Section 9.1    Vesting................................................... 22
Section 9.2    Vesting on Death, Disability, Retirement or            
                 Change in Control....................................... 22
Section 9.3    Forfeitures on Termination of Employment.................. 23


                                      (iii)

<PAGE>

                                                                         Page
                                                                         ----

Section 9.4    Amounts Credited Upon Re-Employment....................... 23
Section 9.5    Allocation of Forfeitures................................. 23
                                                                      
                                 ARTICLE X                            
                                                                      
                              THE TRUST FUND                          
                                                                      
Section 10.1   The Trust Fund............................................ 24
Section 10.2   Investments............................................... 24
Section 10.3   Diversification of Investments............................ 24
Section 10.4   Use of Commingled Trust Funds............................. 25
Section 10.5   Management and Control of Assets.......................... 26
                                                                      
                                ARTICLE XI                            
                                                                      
                 VALUATION OF INTERESTS IN THE TRUST FUND             
                                                                      
Section 11.1   Establishment of Investment Accounts...................... 26
Section 11.2   Share Investment Accounts................................. 26
Section 11.3   General Investment Accounts............................... 26
Section 11.4   Valuation of Investment Accounts.......................... 27
Section 11.5   Annual Statements......................................... 27
                                                                      
                                ARTICLE XII                           
                                                                      
                                  SHARES                              
                                                                      
Section 12.1   Specific Allocation of Shares............................. 27
Section 12.2   Dividends................................................. 28
Section 12.3   Voting Rights............................................. 28
Section 12.4   Tender Offers............................................. 30
                                                                      
                               ARTICLE XIII                           
                                                                      
                            PAYMENT OF BENEFITS                       
                                                                      
Section 13.1   In General................................................ 32
Section 13.2   Designation of Beneficiaries.............................. 33
Section 13.3   Distributions to Participants and                      
                 Former Participants..................................... 34
Section 13.4   Manner of Payment......................................... 36
Section 13.5   Put Options............................................... 37
                                                                   

                                      (iv)

<PAGE>

                                                                         Page
                                                                         ----

Section 13.6   Right of First Refusal.................................... 38
Section 13.7   Minimum Required Distributions............................ 38
Section 13.8   Direct Rollover of Eligible Rollover Distributions........ 40
Section 13.9   Valuation of Shares Upon Settlement to a Participant...... 41
Section 13.10  Mandatory Cashouts........................................ 41

                                   ARTICLE XIV

                                CHANGE IN CONTROL

Section 14.1   Definition of Change in Control........................... 41
Section 14.2   Vesting on Change of Control.............................. 43
Section 14.3   Repayment of Loan......................................... 43
Section 14.4   Plan Termination After Change in Control.................. 44
Section 14.5   Amendment of Article XIV.................................. 44

                                   ARTICLE XV

                                 ADMINISTRATION

Section 15.1   Named Fiduciaries......................................... 44
Section 15.2   Plan Administrator........................................ 45
Section 15.3   Claims Procedure.......................................... 46
Section 15.4   Claims Review Procedure................................... 47
Section 15.5   Allocation of Fiduciary Responsibilities and
                 Employment of Advisors.................................. 47
Section 15.6   Other Administrative Provisions........................... 48

                                   ARTICLE XVI

                  AMENDMENT, TERMINATION AND TAX QUALIFICATION

Section 16.1   Amendment and Termination by Big Foot Financial Corp...... 49
Section 16.2   Amendment or Termination Other Than by
                 Big Foot Financial Corp................................. 49
Section 16.3   Conformity to Internal Revenue Code....................... 49
Section 16.4   Contingent Nature of Contributions........................ 50

                                  ARTICLE XVII

                     SPECIAL RULES FOR TOP HEAVY PLAN YEARS

Section 17.1   In General................................................ 50
Section 17.2   Definition of Top Heavy Plan.............................. 51


                                       (v)

<PAGE>

                                                                         Page
                                                                         ----

Section 17.3   Determination Date........................................ 51
Section 17.4   Cumulative Accrued Benefits............................... 51
Section 17.5   Key Employees............................................. 52
Section 17.6   Required Aggregation Group................................ 53
Section 17.7   Permissible Aggregation Group............................. 53
Section 17.8   Special Requirements During Top Heavy Plan Years.......... 53

                                  ARTICLE XVIII

                            MISCELLANEOUS PROVISIONS

Section 18.1   Governing Law............................................. 54
Section 18.2   No Right to Continued Employment.......................... 54
Section 18.3   Construction of Language.................................. 55
Section 18.4   Headings.................................................. 55
Section 18.5   Merger with Other Plans................................... 55
Section 18.6   Non-alienation of Benefits................................ 55
Section 18.7   Procedures Involving Domestic Relations Orders............ 56
Section 18.8   Leased Employees.......................................... 56
Section 18.9   Status as an Employee Stock Ownership Plan................ 57


                                      (vi)

<PAGE>

                            BIG FOOT FINANCIAL CORP.

                          EMPLOYEE STOCK OWNERSHIP PLAN

                                    ARTICLE I

                                   DEFINITIONS

          The following definitions shall apply for the purposes of the Plan,
unless a different meaning is clearly indicated by the context:

          Section 1.1 Account means an account established for each Participant
to which is allocated such Participant's share, if any, of all Financed Shares
and other property that are released from the Loan Repayment Account in
accordance with section 6.4, together with his share, if any, of any ESOP
Contributions that may be made by the Employer.

          Section 1.2 Affiliated Employer means any corporation which is a
member of a controlled group of corporations (as defined in section 414(b) of
the Code) that includes the Employer; any trade or business (whether or not
incorporated) that is under common control (as defined in section 414(c) of the
Code) with the Employer; any organization (whether or not incorporated) that is
a member of an affiliated service group (as defined in section 414(m) of the
Code) that includes the Employer; any leasing organization (as defined in
section 414(n) of the Code) to the extent that any of its employees are required
pursuant to section 414(n) of the Code to be treated as employees of the
Employer; and any other entity that is required to be aggregated with the
Employer pursuant to regulations under section 414(o) of the Code.

          Section 1.3 Allocation Compensation during any period means the
compensation taken into account in determining the allocation of benefits and
contributions among Participants and consists of the aggregate compensation
received by an Employee from the Employer with respect to such period that is
reportable to the Internal Revenue Service as wages for such period pursuant to
section 6041(a) of the Code, plus the amount by which such Employee's
compensation with respect to such period has been reduced pursuant to a
compensation reduction agreement under the terms of any of the following plans
which may be maintained by the Employer:

          (a) a qualified cash or deferred arrangement described in section
     401(k) of the Code;

          (b) a salary reduction simplified employee pension plan described in
     section 408(k) of the Code;

          (c) a tax deferred annuity plan described in section 403(b) of the
     Code; or

<PAGE>

                                       -2-


          (d) a cafeteria plan described in section 125 of the Code.

In no event, however, shall an Employee's Allocation Compensation for any
calendar year include any compensation in excess of $150,000. The $150,000
limitation set forth in the preceding sentence shall be indexed in accordance
with regulations prescribed under section 401(a)(17) of the Code. If there are
less than twelve (12) months in the Plan Year, the $150,000 limitation (as
adjusted) shall be prorated by multiplying such limitation by a fraction, the
numerator of which is the number of months in the Plan Year and the denominator
of which is twelve (12). For purposes of applying the foregoing limitations to
any person who is a Five Percent Owner or who is one of the ten Highly
Compensated Employees with the highest Total Compensation (determined prior to
the application of this sentence), any Allocation Compensation paid to the
spouse of such person or to any lineal descendant of such person who has not
attained age 19 on or before the last day of such calendar year shall be deemed
to have been paid to such person and, in such case, the dollar limitation on
compensation in section 401(a)(17) of the Code shall be allocated among such
persons in proportion to the Allocation Compensation actually paid to each
person.

          Section 1.4 Board means the Board of Directors of Big Foot Financial
Corp.

          Section 1.5 Beneficiary means the person or persons designated by a
Participant or Former Participant or other person entitled to a benefit under
the Plan, or otherwise determined to be entitled to a benefit under the Plan. If
more than one person is designated, each shall have an equal share unless the
person making the designation directed otherwise. The word "person" includes an
individual, a trust, an estate or any other person that is permitted to be named
as a Beneficiary.

          Section 1.6 Change in Control means an event described in section
14.1.

          Section 1.7 Code means the Internal Revenue Code of 1986 (including
the corresponding provisions of any succeeding law).

          Section 1.8 Computation Period means an Eligibility Computation Period
or a Vesting Computation Period.

          Section 1.9 Disability means a condition of total incapacity, mental
or physical, for further performance of duty with the Employer, which the Plan
Administrator shall have determined, on the basis of competent medical evidence,
is likely to be permanent.

          Section 1.10 Domestic Relations Order means a judgment, decree or
order (including the approval of a property settlement) that is made pursuant to
a state domestic relations or community property law and relates to the
provision of child support, alimony payments, or marital property rights to a
spouse, child or other dependent of a Participant or Former Participant.

          Section 1.11 Effective Date means July 1, 1996.

<PAGE>

                                       -3-


          Section 1.12 Eligibility Computation Period means, with respect to any
person, (a) the 12-consecutive month period beginning on such person's
Employment Commencement Date and (b) each 12-consecutive month period that
begins on an anniversary of such person's Employment Commencement Date.

          Section 1.13 Eligible Employee means an Employee who is eligible for
participation in the Plan in accordance with Article II.

          Section 1.14 Eligible Participant means, for any Plan Year, an
Employee who is or was a Participant during all or part of such Plan Year;
provided, however, that no Employee shall be an Eligible Participant for the
Plan Year that includes the effective date of the transaction pursuant to which
the Fairfield Savings Bank, F.S.B. becomes a wholly owned subsidiary of Big Foot
Financial Corp. if he terminates employment with the Employer prior to such
effective date.

          Section 1.15 Employee means any person, including an officer, who is
employed by the Employer.

          Section 1.16 Employer means Big Foot Financial Corp., and any
successor thereto and any Affiliated Employer which, with the prior written
approval of the Board of Directors of Big Foot Financial Corp. and subject to
such terms and conditions as may be imposed by the Board of Directors of Big
Foot Financial Corp., shall adopt this Plan.

          Section 1.17 Employment Commencement Date means the date on which a
person first performs an Hour of Service, except that if an Employee separates
from service with the Employer, incurs a One-Year Break in Service and
subsequently returns to service with the Employer, his Employment Commencement
Date shall be the date on which he first performs an Hour of Service following
the One-Year Break in Service.

          Section 1.18 ERISA means the Employee Retirement Income Security Act
of 1974, as amended from time to time (including the corresponding provisions of
any succeeding law).

          Section 1.19 ESOP Contribution means Shares or amounts of money
contributed to the Plan by the Employer in accordance with section 5.3.

          Section 1.20 Fair Market Value on any date means:

          (a) with respect to a Share:

               (i) the final quoted sale price on the date in question (or, if
          there is no reported sale on such date, on the last preceding date on
          which any reported sale occurred) as reported in the principal
          consolidated reporting system with respect to securities listed or
          admitted to trading on the principal United States securities exchange
          on which like Shares are listed or admitted to trading; or

<PAGE>

                                       -4-


               (ii) if like Shares are not listed or admitted to trading on any
          such exchange, the closing bid quotation with respect to a Share on
          such date on the National Association of Securities Dealers Automated
          Quotation System, or, if no such quotation is provided, on another
          similar system, selected by the Plan Administrator, then in use; or

               (iii) if sections 1.20(a)(i) and (ii) are not applicable, the
          fair market value of a Share as determined by an appraiser independent
          of the Employer and experienced and expert in the field of corporate
          appraisal.

          (b) with respect to property other than Shares, the fair market value
     determined in the manner determined by the Trustee.

          Section 1.21 Family Member means, with respect to any person, such
person's spouse and lineal ascendants or descendants and the spouses of such
lineal ascendants or descendants.

          Section 1.22 Financed Share means: (a) a Share that has been purchased
with the proceeds of a Share Acquisition Loan, that has been allocated to the
Loan Repayment Account in accordance with section 6.3 and that has not been
released in accordance with section 6.4; or (b) a Share that constitutes a
dividend paid with respect to a Share described in section 1.23(a), that has
been allocated to the Loan Repayment Account in accordance with section 6.3 and
that has not been released in accordance with section 6.4.

          Section 1.23 Five Percent Owner means, for any Plan Year, a person
who, during such Plan Year, owned (or was considered as owning for purposes of
section 318 of the Code): (a) more than 5% of the value of all classes of
outstanding stock of the Employer; or (b) stock possessing more than 5% of the
combined voting power of all classes of outstanding stock of the Employer.

          Section 1.24 Forfeitures means the amounts forfeited by Participants
and Former Participants on termination of employment prior to full vesting,
pursuant to section 9.3, less amounts credited because of re-employment,
pursuant to section 9.4.

          Section 1.25 Former Participant means a Participant whose
participation in the Plan has terminated pursuant to section 2.3.

          Section 1.26 General Investment Account means an Investment Account
established and maintained in accordance with Article XI.

          Section 1.27 Highly Compensated Employee means, for any Plan Year, an
Employee who:

          (a) at any time during such Plan Year or the immediately preceding
     Plan Year was a Five Percent Owner; or

<PAGE>

                                       -5-


          (b) is a member of the group consisting of the 100 Employees and
     persons employed by any Affiliated Employer who received the greatest Total
     Compensation for such Plan Year and during such Plan Year:

               (i) received Total Compensation for such Plan Year in excess of
          $75,000 (or such higher amount as may be permitted under section
          414(q) of the Code); or

               (ii) received Total Compensation for such Plan Year that was in
          excess of both (A) $50,000 (or such higher amount as may be permitted
          under section 414(q) of the Code) and (B) the Total Compensation for
          such Plan Year of at least 80% of the Employees and persons employed
          by any Affiliated Employer for such Plan Year; or

               (iii) was an Officer of the Employer or any Affiliated Employer
          and received Total Compensation for such Plan Year in excess of 50% of
          the amount in effect under section 415(b)(1)(A) of the Code for such
          Plan Year; or

          (c) during the immediately preceding Plan Year:

          (i) received Total Compensation for such Plan Year in excess of
     $75,000 (or such higher amount as may be permitted under section 414(q) of
     the Code); or

          (ii) received Total Compensation for such Plan Year that was in excess
     of both (A) $50,000 (or such higher amount as may be permitted under
     section 414(q) of the Code) and (B) the Total Compensation for such Plan
     Year of at least 80% of the Employees and persons employed by an Affiliated
     Employer for such Plan Year; or

          (iii) was an Officer of the Employer or any Affiliated Employer and
     received Total Compensation for such Plan Year in excess of 50% of the
     amount in effect under section 415(b)(1)(A) of the Code for such Plan Year.

The determination of who is a Highly Compensated Employee will be made in
accordance with section 414(q) of the Code and the regulations thereunder. For
purposes of applying any provisions of the Plan applicable to Highly Compensated
Employees, any person who is a Family Member of a Five Percent Owner or one of
the ten Highly Compensated Employees with the highest Total Compensation for a
Plan Year shall not be treated as a separate person for such Plan Year, and any
Total Compensation or Allocation Compensation paid to such person for such Plan
Year, as well as his share of allocations of contributions or Shares under this
Plan, shall be attributed to the Five Percent Owner or Highly Compensated
Employee and, in such case, the provisions of the Plan shall apply to each
person as based on the ratio of his Total Compensation or Allocation
Compensation to the sum of the Total Compensation or Allocation Compensation of
all persons treated as one person with him.

<PAGE>

                                      -6-


          Section 1.28 Hour of Service means:

          (a) Each hour for which a person is paid, or entitled to payment, for
     the performance of duties for the Bank or any Affiliated Employer. These
     hours shall be credited to the person for the Computation Period or
     Computation Periods in which the duties are performed; and

          (b) Each hour for which a person is paid, or entitled to payment, by
     the Bank or any Affiliated Employer on account of a period of time during
     which no duties are performed (irrespective of whether the employment
     relationship has terminated) due to vacation, holiday, illness, incapacity
     (including disability), layoff, jury duty, military duty, or leave of
     absence. No more than 501 Hours of Service shall be credited under this
     section 1.28(b) for any single continuous period (whether or not such
     period occurs in a single Computation Period). Hours under this section
     1.28(b) shall be calculated and credited pursuant to section 2530.200b-2 of
     the Department of Labor's regulations (or any successor regulation), which
     are incorporated herein by reference; and

          (c) Each hour for which back pay, irrespective of any mitigation of
     damages, is either awarded or agreed to by the Bank or any Affiliated
     Employer. The same Hours of Service shall not be credited both under
     section 1.28(a) or (b), as the case may be, and under this section 1.28(c).
     Hours under this section 1.28(c) shall be credited to the person for the
     Computation Period or Computation Periods to which the award or agreement
     pertains, rather than the Computation Period in which the award, agreement
     or payment is made.

          Section 1.29 Investment Account means either a General Investment
Account or a Share Investment Account.

          Section 1.30 Investment Fund means any one of the three or more funds
as may be established from time to time by the Plan Administrator which,
together with any and all Shares and other investments held under the Plan,
constitute the Trust Fund.

          Section 1.31 Loan Repayment Account means an account established and
maintained in accordance with section 6.3.

          Section 1.32 Loan Repayment Contribution means amounts of money
contributed to the Plan by the Employer in accordance with section 5.2.

          Section 1.33 Maternity or Paternity Leave means a person's absence
from work for the Employer and all Affiliated Employers: (a) by reason of the
pregnancy of such person; (b) by reason of the birth of a child of such person;
(c) by reason of the placement of a child with the person in connection with the
adoption of such child by such person; or (d) for purposes of caring for a child
of such person immediately following the birth of the child or the placement of
the child with such person.

<PAGE>

                                       -7-


          Section 1.34 Military Service means service in the armed forces of the
United States. It may also include, if and to the extent that the Board so
provides and if all Participants and Former Participants in like circumstances
are similarly treated, special service for the government of the United States
and other public service.

          Section 1.35 Named Fiduciary means any person, committee, corporation
or organization as described in section 15.1.

          Section 1.36 Officer means an employee who is an administrative
executive in regular and continued service with the Employer or any Affiliated
Employer; provided, however, that at no time shall more than the lesser of (a)
50 employees or (b) the greater of: (i) 3 employees or (ii) 10% of all employees
be treated as Officers. The determination of whether an employee is to be
considered an Officer shall be made in accordance with section 416(i) of the
Code.

          Section 1.37 One-Year Break in Service means, with respect to any
person: (a) for purposes of eligibility to participate, an Eligibility
Computation Period during which such person is credited with fewer than 501
Hours of Service and (b) for purposes of vesting, a Vesting Computation Period
during which such person is credited with fewer than 501 Hours of Service.

          Section 1.38 Participant means any person who has satisfied the
eligibility requirements set forth in section 2.1, who has become a Participant
in accordance with section 2.2, and whose participation has not terminated under
section 2.3.

          Section 1.39 Plan means the Big Foot Financial Corp. Employee Stock
Ownership Plan, as amended from time to time.

          Section 1.40 Plan Administrator means any person, committee,
corporation or organization designated in section 15.2, or appointed pursuant to
section 15.2, to perform the responsibilities of that office.

          Section 1.41 Plan Year means the 12-month period commencing July 1,
1996 and each 12-month period beginning on July 1st thereafter.

          Section 1.42 Qualified Domestic Relations Order means a Domestic
Relations Order that: (a) clearly specifies (i) the name and last known mailing
address of the Participant or Former Participant and of each person given rights
under such Domestic Relations Order, (ii) the amount or percentages of the
Participant's or Former Participant's benefits under this Plan to be paid to
each person covered by such Domestic Relations Order, (iii) the number of
payments or the period to which such Domestic Relations Order applies, and (iv)
the name of this Plan; and (b) does not require the payment of a benefit in a
form or amount that is (i) not otherwise provided for under the Plan, or (ii)
inconsistent with a previous Qualified Domestic Relations Order.


<PAGE>

                                       -8-


          Section 1.43 Qualified Participant means a Participant who has
attained age 55 and who has been a Participant in the Plan for at least 10
years.

          Section 1.44 Retirement means: (a) any termination of participation in
the Plan at or after attainment of age 65; and (b) any retirement under an
applicable qualified defined benefit plan of the Employer as in effect from time
to time with entitlement to a normal or early retirement allowance.

          Section 1.45 Share means a share of any class of stock issued by the
Employer or any Affiliated Employer; provided, however, that such share is a
"qualifying employer security" within the meaning section 409(l) of the Code and
section 407(d)(5) of ERISA.

          Section 1.46 Share Acquisition Loan means a loan obtained by the
Trustee in accordance with Article VI.

          Section 1.47 Share Investment Account means an Investment Account
established and maintained in accordance with Article XI.

          Section 1.48 Tender Offer means a tender offer made to holders of any
one or more classes of Shares generally, or any other offer, made to holders of
any one or more classes of Shares generally, to purchase, exchange, redeem or
otherwise transfer Shares, whether for cash or other consideration.

          Section 1.49 Total Compensation during any period means an employee's
aggregate total compensation paid by the Employer and any Affiliated Employer
with respect to such period and reportable for federal income tax purposes
pursuant to section 6041(a) of the Code. In addition, solely for purposes of
identifying those employees who are Highly Compensated Employees, each
employee's Total Compensation shall include any amounts by which the employee's
compensation paid by the Employer or any Affiliated Employer has been reduced
pursuant to a compensation reduction agreement under the terms of any qualified
cash or deferred arrangement described in section 401(k) of the Code, any salary
reduction simplified employee pension plan described in section 408(k) of the
Code, any tax deferred annuity plan described in section 403(b) of the Code, or
any cafeteria plan described in section 125 of the Code. In no event, however,
shall an employee's Total Compensation for any calendar year include any
compensation in excess of $150,000 (or such higher amount as may be permitted
under section 401(a)(17) of the Code). For purposes of applying the foregoing
limitations to any person who is a Five Percent Owner or who is one of the ten
Highly Compensated Employees with the highest Total Compensation (determined
prior to the application of this sentence), any Total Compensation paid to the
spouse of such person or to any lineal descendant of such person who has not
attained age 19 on or before the last day of such calendar year, shall be deemed
to have been paid to such person.

          Section 1.50 Trust means the legal relationship created by the Trust
Agreement pursuant to which the Trustee holds the Trust Fund in trust. The Trust
may be referred to as the "Big Foot Financial Corp. Employee Stock Ownership
Plan Trust."

<PAGE>

                                       -9-


          Section 1.51 Trust Agreement means the agreement between Big Foot
Financial Corp. and the Trustee therein named or its successors pursuant to
which the Trust Fund shall be held in trust.

          Section 1.52 Trust Fund means the corpus (consisting of contributions
paid over to the Trustee, and investments thereof), and all earnings,
appreciations or additions thereof and thereto, held by the Trustee under the
Trust Agreement in accordance with the Plan, less any depreciation thereof and
any payments made therefrom pursuant to the Plan.

          Section 1.53 Trustee means the Trustee of the Trust Fund from time to
time in office. The Trustee shall serve as Trustee until it is removed or
resigns from office and is replaced by a successor Trustee appointed in
accordance with the terms of the Trust Agreement.

          Section 1.54 Valuation Date means the last business day of March,
June, September and December.

          Section 1.55 Vesting Computation Period means, with respect to any
person, the 12-month period beginning on such person's Employment Commencement
Date and each Plan Year beginning after such Employment Commencement Date.

          Section 1.56 Year of Eligibility Service means, with respect to any
person, an Eligibility Computation Period during which such person receives
credit for at least 1,000 Hours of Service. For this purpose, service prior to
the Effective Date shall be taken into account.

          Section 1.57 Year of Vesting Service means, with respect to any
person, a Vesting Computation Period during which such person receives credit
for at least 1,000 Hours of Service. If an Employee has credit for 1,000 Hours
of Service in the Vesting Computation Period that includes his Employment
Commencement Date and 1,000 Hours of Service in the first Vesting Computation
Period that begins after his Employment Commencement Date, he shall receive
credit for two Years of Vesting Service even if such periods overlap. For this
purpose, service prior to the Effective Date shall be taken into account.

                                   ARTICLE II

                                  PARTICIPATION

          Section 2.1 Eligibility for Participation.

          (a) Only Eligible Employees may be or become Participants in the Plan.
An Employee shall be an Eligible Employee if he is a common-law employee of an
Employer, has completed at least one Year of Eligibility Service and is not
excluded under section 2.1(b).

          (b) An Employee is not an Eligible Employee if he:

<PAGE>

                                      -10-


          (i) is an Employee who has waived any claim to participation in the
     Plan; or

          (ii) is an Employee or in a unit of Employees covered by a collective
     bargaining agreement with the Employer where retirement benefits were the
     subject of good faith bargaining, unless such agreement expressly provides
     that Employees such as he be covered under the Plan; or

          (iii) is a "leased employee" as defined in section 18.8(a).

          Section 2.2 Commencement of Participation.

          Every Employee who is an Eligible Employee on the Effective Date shall
automatically become a Participant on the Effective Date. An Employee who
becomes an Eligible Employee after the Effective Date shall automatically become
a Participant on the first day of the month following the month in which he
becomes an Eligible Employee.

          Section 2.3 Termination of Participation.

          Participation in the Plan shall cease, and a Participant shall become
a Former Participant, upon termination of employment with the Employer, death,
Disability or Retirement, failure to return to work upon the expiration of a
leave of absence granted by the Employer pursuant to section 3.3 or becoming an
Employee who is excluded under section 2.1(b) or distribution of the entire
vested interest in his Account.

                                   ARTICLE III

                               SPECIAL PROVISIONS

          Section 3.1 Military Service.

          In the case of a termination of employment of any Employee to enter
directly into Military Service, the entire period of his absence shall be
treated, for purposes of vesting and eligibility for participation (but not,
except as required by law, for purposes of eligibility to share in allocations
of contributions in accordance with Article VII), as if he had worked for the
Employer during the period of his absence. In the event of the re-employment of
such person by the Employer within a period of not more than six months:

          (a) after he becomes entitled to release or discharge, if he has
     entered into the armed forces; or

<PAGE>

                                      -11-


          (b) after such service terminates, if he has entered into other
     service defined as Military Service;

such period, also, shall be deemed to be Military Service.

          Section 3.2 Maternity or Paternity Leave.

          (a) Subject to section 3.2(c), in the event of an Employee's absence
from work in the service of the Employer and all Affiliated Employers for a
period:

               (i) that commences on or after October 1, 1985;

               (ii) for which the person is not paid or entitled to payment by
          the Employer or any Affiliated Employer; and

               (iii) that constitutes Maternity or Paternity Leave;

then the rules of section 3.2(b) shall apply.

          (b) In cases of absence described in section 3.2(a), solely for
purposes of determining whether a One-Year Break in Service has occurred, the
person shall be credited for the period of an absence described in section
3.2(a) with the number of Hours of Service equal to the lesser of:

          (i) (A) the number of Hours of Service that would have been credited
     to the person if he had continued working for the Bank during the period of
     such absence, or (B) if the number of Hours of Service prescribed under
     section 3.2(b)(i)(A) cannot be determined, 8 Hours of Service for each
     working day during the period of absence; or

          (ii) 501 Hours of Service.

     Such credit shall be given during the Computation Period during which such
     absence began, if necessary to prevent a One-Year Break in Service from
     occurring during such Computation Period, and in all other cases, such
     credit shall be given during the immediately following Computation Period.

          (c) Notwithstanding anything in the Plan to the contrary, this section
3.2 shall not apply unless the person furnishes to the Plan Administrator such
information as the Plan Administrator may reasonably require in order to
establish (i) that the person's absence is one described in section 3.2(a), and
(ii) the number of working days during such absence.

<PAGE>

                                      -12-


          Section 3.3 Adjustments to Years of Eligibility Service.

          The Years of Eligibility Service of an Employee who returns to the
employment of the Employer or any Affiliated Employer following a separation
from service shall include his Years of Eligibility Service prior to such
separation from service, and such an Employee shall be readmitted to
participation immediately upon his return to service if he is then an Eligible
Employee; provided, however, that if such separation from service includes a
One-Year Break in Service, such prior Years of Eligibility Service shall not be
included until he has completed one Year of Eligibility Service following his
return to service, and upon completion of such one Year of Eligibility Service,
he shall be readmitted to participation in the Plan with retroactive effect to
the date of his return to employment, if he is then an Eligible Employee, but he
shall not participate in any ESOP Contributions or Loan Repayment Contributions
allocated during the interim period.

          Section 3.4 Leave of Absence.

          In the event of temporary absence from work in the service of the
Employer and all Affiliated Employers for any period for which a Participant
shall have been granted a leave of absence by the Employer, the entire period of
his absence shall be treated for purposes of vesting and eligibility for
participation (but not for purposes of eligibility to share in the allocation of
contributions in accordance with Article VII), as if he had worked for the
Employer during the period of his absence. Absence from work for a period
greater than, or failure to return to work upon the expiration of, the period of
leave of absence granted by the Employer shall terminate participation in the
Plan as of the date on which such period ended. In granting leaves of absence
for purposes of the Plan, all Employees in like circumstances shall be similarly
treated.

          Section 3.5 Family and Medical Leave.

          In the event of absence for a period recognized a family and medical
leave under the federal Family and Medical Leave Act of 1992, the period of such
absence shall be recognized for purposes of vesting and eligibility to
participant to the full extent required by law.

                                   ARTICLE IV

                   CONTRIBUTIONS BY PARTICIPANTS NOT PERMITTED

          Section 4.1 Contributions by Participants Not Permitted.

          Participants shall not be required, nor shall they be permitted, to
make contributions to the Plan.

<PAGE>

                                      -13-


                                    ARTICLE V

                          CONTRIBUTIONS BY THE EMPLOYER

          Section 5.1 In General.

          Subject to the limitations of Article VIII, for each Plan Year, the
Employer shall contribute to the Plan the amount, if any, determined by the
Board, but in no event less than the amount described in section 5.2(a). The
amount contributed for any Plan Year shall be treated as a Loan Repayment
Contribution, an ESOP Contribution, or a combination thereof, in accordance with
the provisions of this Article V.

          Section 5.2 Loan Repayment Contributions.

          For each Plan Year, a portion of the Employer's contributions, if any,
to the Plan for such Plan Year equal to the sum of:

          (a) the minimum amount required to be added to the Loan Repayment
     Account in order to provide adequate funds for the payment of the principal
     and interest then required to be repaid under the terms of any outstanding
     Share Acquisition Loan obtained by the Trustee; plus

          (b) the additional amount, if any, designated by the Plan
     Administrator to be applied to the prepayment of principal or interest
     under the terms of any outstanding Share Acquisition Loan obtained by the
     Trustee;

shall be treated as a Loan Repayment Contribution for such Plan Year. A Loan
Repayment Contribution for a Plan Year shall be allocated to the Loan Repayment
Account and shall be applied by the Trustee, in the manner directed by the Plan
Administrator, to the payment of accrued interest and to the reduction of the
principal balance of any Share Acquisition Loan obtained by the Trustee that is
outstanding on the date on which the Loan Repayment Contribution is made. To the
extent that a Loan Repayment Contribution for a Plan Year results in a release
of Financed Shares in accordance with section 6.4, such Shares shall be
allocated among the Accounts of Eligible Participants for such Plan Year in
accordance with section 7.2.

          Section 5.3 ESOP Contributions.

          In the event that the amount of the Employer's contributions to the
Plan for a Plan Year exceeds the amount of the Loan Repayment Contributions for
such Plan Year, such excess shall be treated as an ESOP Contribution and shall
be allocated among the Accounts of the Eligible Participants for such Plan Year
in accordance with section 7.3.

<PAGE>

                                      -14-


          Section 5.4 Time and Manner of Payment.

          (a) Payment of contributions made pursuant to this Article V shall be
made:

          (i) in cash, in the case of a Loan Repayment Contribution; and

          (ii) in cash, in Shares or in a combination of cash and Shares, in the
     case of an ESOP Contribution.

          (b) Contributions made pursuant to this Article V for a Plan Year
shall be paid to the Trust Fund on or before the due date (including any
extensions thereof) of the Employer's federal income tax return for its taxable
year during which such Plan Year ends. All such contributions shall be allocated
to the Accounts of the Eligible Participants, in the case of an ESOP
Contribution, or to the Loan Repayment Account, in the case of a Loan Repayment
Contribution, as soon as is practicable following the payment thereof to the
Trust Fund.

                                   ARTICLE VI

                             SHARE ACQUISITION LOANS

          Section 6.1 In General.

          The Plan Administrator may, with the prior approval of the Board,
direct the Trustee to obtain a Share Acquisition Loan on behalf of the Plan, the
proceeds of which shall be applied on the earliest practicable date:

          (a) to purchase Shares; or

          (b) to make payments of principal or interest, or a combination of
     principal and interest, with respect to such Share Acquisition Loan; or

          (c) to make payments of principal and interest, or a combination of
     principal and interest, with respect to a previously obtained Share
     Acquisition Loan that is then outstanding.

Any such Share Acquisition Loan shall be obtained on such terms and conditions
as the Plan Administrator may approve; provided, however, that such terms and
conditions shall provide for the payment of interest at no more than a
reasonable rate and shall permit such Share Acquisition Loan to satisfy the
requirements of section 4975(d)(3) of the Code and section 408(b)(3) of ERISA.

<PAGE>

                                      -15-


          Section 6.2 Collateral; Liability for Repayment.

          (a) The Plan Administrator may direct the Trustee to pledge, at the
time a Share Acquisition Loan is obtained, the following assets of the Plan as
collateral for such Share Acquisition Loan:

          (i) any Shares purchased with the proceeds of such Share Acquisition
     Loan and any earnings attributable thereto;

          (ii) any Financed Shares then pledged as collateral for a prior Share
     Acquisition Loan which is repaid with the proceeds of such Share
     Acquisition Loan and any earnings attributable thereto; and

          (iii) pending the application thereof to purchase Shares or repay a
     prior Share Acquisition Loan, the proceeds of such Share Acquisition Loan
     and any earnings attributable thereto.

Except as specifically provided in this section 6.2(a), no assets of the Plan
shall be pledged as collateral for the repayment of any Share Acquisition Loan.

          (b) No person entitled to payment under a Share Acquisition Loan shall
have any right to the assets of the Plan except for:

          (i) Financed Shares that have been pledged as collateral for such
     Share Acquisition Loan pursuant to section 6.2(a);

          (ii) Loan Repayment Contributions made pursuant to section 5.2; and

          (iii) earnings attributable to Financed Shares described in section
     6.2(b)(i) and to Loan Repayment Contributions described in section
     6.2(b)(ii).

Except in the event of a default or a refinancing pursuant to which an existing
Share Acquisition Loan is repaid, the aggregate amount of all payments of
principal and interest made by the Trustee with respect to all Share Acquisition
Loans obtained on behalf of the Plan shall at no time exceed the aggregate
amount of all Loan Repayment Contributions theretofore made plus the aggregate
amount of all earnings (other than dividends paid in the form of Shares)
attributable to Financed Shares and to such Loan Repayment Contributions.

          (c) Any Share Acquisition Loan shall be without recourse against the
Plan and Trust.

          Section 6.3 Loan Repayment Account.

          In the event that one or more Share Acquisition Loans shall be
obtained, a Loan Repayment Account shall be established under the Plan. The Loan
Repayment Account shall be credited with all Shares acquired with the proceeds
of a Share Acquisition Loan, all Loan

<PAGE>

                                      -16-


Repayment Contributions and all earnings (including dividends paid in the form
of Shares) or appreciation attributable to such Shares and Loan Repayment
Contributions. The Loan Repayment Account shall be charged with all payments of
principal and interest made by the Trustee with respect to any Share Acquisition
Loan, all Shares released in accordance with section 6.4 and all losses,
depreciation or expenses attributable to Shares or to other property credited
thereto. The Financed Shares, as well as any earnings thereon, shall be
allocated to such Loan Repayment Account and shall be accounted for separately
from all other amounts contributed under the Plan.

          Section 6.4 Release of Financed Shares.

          As of the last day of each Plan Year during which a Share Acquisition
Loan is outstanding, a portion of the Financed Shares purchased with the
proceeds of such Share Acquisition Loan and allocated to the Loan Repayment
Account shall be released. The number of Financed Shares released in any such
Plan Year shall be equal to the amount determined according to one of the
following methods:

          (a) by computing the product of: (i) the number of Financed Shares
     purchased with the proceeds of such Share Acquisition Loan and allocated to
     the Loan Repayment Account immediately before the release is effected;
     multiplied by (ii) a fraction, the numerator of which is the aggregate
     amount of the principal and interest payments (other than payments made
     upon the refinancing of a Share Acquisition Loan as contemplated by section
     6.1(c)) made with respect to such Share Acquisition Loan during such Plan
     Year, and the denominator of which is the aggregate amount of all principal
     and interest remaining to be paid with respect to such Share Acquisition
     Loan as of the first day of such Plan Year; or

          (b) by computing the product of: (i) the number of Financed Shares
     purchased with the proceeds of such Share Acquisition Loan and allocated to
     the Loan Repayment Account immediately before the release is effected;
     multiplied by (ii) a fraction, the numerator of which is the aggregate
     amount of the principal payments (other than payments made upon the
     refinancing of a Share Acquisition Loan as contemplated by section 6.1(c))
     made with respect to such Share Acquisition Loan during such Plan Year, and
     the denominator of which is the aggregate amount of all of principal
     remaining to be paid with respect to such Share Acquisition Loan as of the
     first day of such Plan Year; provided, however, that the method described
     in this section 6.4(b) may be used only if the Share Acquisition Loan does
     not extend for a period in excess of 10 years after the date of origination
     and only to the extent that principal payments on such Share Acquisition
     Loan are made at least as rapidly as under a loan of like principal amount
     with a like interest rate and term requiring level amortization of
     principal and interest.

The method to be used shall be specified in the documents governing the Share
Acquisition Loan or, if not specified therein, prescribed by the Plan
Administrator, in its discretion. In the event that property other than, or in
addition to, Financed Shares shall be held in the Loan Repayment

<PAGE>

                                      -17-


Account and pledged as collateral for a Share Acquisition Loan, then the
property to be released pursuant to this section 6.4 shall be property having a
Fair Market Value determined by applying the method to be used to the Fair
Market Value of all property pledged as collateral for such Share Acquisition
Loan; provided, however, that no property other than Financed Shares shall be
released pursuant to this section 6.4 unless all Financed Shares have previously
been released.

          Section 6.5 Restrictions on Financed Shares.

          Except to the extent required under any applicable law, rule or
regulation, no Shares purchased with the proceeds of a Share Acquisition Loan
shall be subject to a put, call or other option, or to any buy-sell or similar
arrangement, while held by the Trustee or when distributed from the Plan. The
provisions of this section 6.5 shall continue to apply in the event that this
Plan shall cease to be an employee stock ownership plan, within the meaning of
section 4975(e)(7) of the Code.

                                   ARTICLE VII

                           ALLOCATION OF CONTRIBUTIONS

          Section 7.1 Allocation Among Eligible Participants.

          Subject to the limitations of Article VIII, ESOP Contributions for a
Plan Year made in accordance with section 5.3 and Financed Shares and other
property that are released from the Loan Repayment Account for a Plan Year in
accordance with section 6.4 shall be allocated among the Eligible Participants
for such Plan Year, in the manner provided in this Article VII.

          Section 7.2 Allocation of Released Shares or Other Property.

          Subject to the limitations of Article VIII, in the event that Financed
Shares or other property are released from the Loan Repayment Account for a Plan
Year in accordance with section 6.4, such released Shares or other property
shall be allocated among the Accounts of the Eligible Participants for the Plan
Year in the proportion that each such Eligible Participant's Allocation
Compensation for the Plan Year bears to the aggregate Allocation Compensation of
all Eligible Participants for such Plan Year.

          Section 7.3 Allocation of ESOP Contributions.

          Subject to the limitations of Article VIII, in the event that the
Employer makes an ESOP Contribution for a Plan Year, such ESOP Contribution
shall be allocated among the Accounts of the Eligible Participants for such Plan
Year in the proportion that each such Eligible

<PAGE>

                                      -18-


Participant's Allocation Compensation for the Plan Year bears to the aggregate
Allocation Compensation of all Eligible Participants for such Plan Year.

                                  ARTICLE VIII

                           LIMITATIONS ON ALLOCATIONS

          Section 8.1 Optional Limitations on Allocations of Contributions.

          If, for any Plan Year, the application of sections 7.2 and 7.3 would
result in more than one-third of the number of Shares or of the amount of money
or property to be allocated thereunder being allocated to the Accounts of
Eligible Participants for such Plan Year who are also Highly Compensated
Employees for such Plan Year, then the Plan Administrator may, but shall not be
required to, direct that this section 8.1 shall apply in lieu of sections 7.2
and 7.3. If the Plan Administrator gives such a direction, then the Plan
Administrator shall impose a maximum dollar limitation on the amount of
Allocation Compensation that may be taken into account for each Eligible
Participant. The dollar limitation which shall be imposed shall be the
limitation which produces the result that the aggregate Allocation Compensation
taken into account for Eligible Participants who are Highly Compensated
Employees, constitutes exactly one-third of the aggregate Allocation
Compensation taken into account for all Eligible Participants. In determining
whether more than one-third of the number of Shares or of the amount of money or
property to be allocated under the Plan for a Plan Year would be allocated to
the Highly Compensated Employees, any allocation to be made to the Account of a
Family Member of a Highly Compensated Employee who is either a Five Percent
Owner or one of the ten Highly Compensated Employees with the highest Total
Compensation, shall be treated as an allocation to such Highly Compensated
Employee.

          Section 8.2 General Limitations on Contributions.

          (a) No amount shall be allocated to a Participant's Account under this
Plan for any Limitation Year, to the extent that such an allocation would result
in an Annual Addition of an amount greater than the lesser of (i) $30,000 (or
such other amount as is permissible under section 415(c)(1)(A) of the Code, or
(ii) 25% of the Participant's Total Compensation for such Limitation Year.

          (b) In the case of a Participant who may be entitled to benefits under
any qualified defined benefit plan (whether or not terminated) now in effect or
ever maintained by the Employer, such Participant's Annual Additions under this
Plan shall, in addition to the limitations provided under section 8.2(a), be
further limited so that the sum of the Participant's Defined Contribution Plan
Fraction plus his Defined Benefit Plan Fraction does not exceed 1.0 for any
Limitation Year; provided, however, that for any Limitation Year ending prior to
January 1, 1983, the sum of his Defined Contribution Plan Fraction plus his
Defined Benefit Plan Fraction shall not exceed 1.4; and provided further, that
this limitation shall only apply if

<PAGE>

                                      -19-


and to the extent that the benefits under the Employer's Retirement Plan or any
other defined contribution plan are not limited so that such sum is not
exceeded.

          (c) For purposes of this section 8.2, the following special
definitions shall apply:

          (i) Annual Addition means the sum of the following amounts allocated
     on behalf of a Participant for a Limitation Year:

               (A) all contributions by the Employer (including contributions
          made under a salary reduction agreement pursuant to sections 401(k),
          408(k) or 403(b) of the Code) under any qualified defined contribution
          plan (other than this Plan) maintained by the Employer, as well as the
          Participant's allocable share, if any, of any forfeitures under such
          plans; plus

               (B) (I) for Limitation Years that began prior to January 1, 1987,
          the lesser of (1) 50% of the Participant's voluntary nondeductible
          contributions to all qualified defined contribution plans maintained
          by the Employer, or (2) the amount by which the Participant's
          nondeductible voluntary contributions to such plans exceeds 6% of his
          Total Compensation; and (II) for Limitation Years that begin after
          December 31, 1986, all of the Participant's voluntary nondeductible
          contributions to such plans; plus

               (C) all ESOP Contributions under this Plan; plus

               (D) except as hereinafter provided in this section 8.2(c)(i), a
          portion of the Employer's Loan Repayment Contributions to the Plan for
          such Limitation Year which bears the same proportion to the total
          amount of the Employer's Loan Repayment Contributions for the
          Limitation Year that the number of Shares (or the Fair Market Value of
          property other than Shares) allocated to the Participant's Account
          pursuant to section 7.2 or 8.1, whichever is applicable, bears to the
          aggregate number of Shares (or Fair Market Value of property other
          than Shares) so allocated to all Participants for such Limitation
          Year.

     Notwithstanding section 8.2(c)(i)(D), if, for any Limitation Year, the
     aggregate amount of ESOP Contributions allocated to the Accounts of the
     individuals who are Highly Compensated Employees for such Limitation Year,
     when added to such Highly Compensated Employees' allocable share of any
     Loan Repayment Contributions for such Limitation Year, does not exceed
     one-third of the total of all ESOP Contributions and Loan Repayment
     Contributions for such Limitation Year, then that portion, if any, of the
     Loan Repayment Contributions for such Limitation Year that is applied to
     the payment of interest on a Share Acquisition Loan shall not be included
     as an Annual Addition. In determining whether more than one-third of the
     number of Shares or of the amount of money or property to

<PAGE>

                                      -20-


     be allocated under the Plan for a Plan Year would be allocated to the
     Highly Compensated Employees, any allocation to be made to the Account of a
     Family Member of a Highly Compensated Employee who is either a Five Percent
     Owner or one of the ten Highly Compensated Employees with the highest Total
     Compensation, shall be treated as an allocation to such Highly Compensated
     Employee. In no event shall any Financed Shares, any dividends or other
     earnings thereon, any proceeds of the sale thereof or any portion of the
     value of the foregoing be included as an Annual Addition.

          (ii) Employer means Big Foot Financial Corp., and all members of a
     controlled group of corporations, as defined in section 414(b) of the Code,
     as modified by section 415(h) of the Code, all commonly controlled trades
     or businesses, as defined in section 414(c) of the Code, as modified by
     section 415(h) of the Code, all affiliated service groups, as defined in
     section 414(m) of the Code, of which Big Foot Financial Corp. is a member,
     as well as any leasing organization, as defined in section 18.8, that
     employs any person who is considered an employee under section 18.8 and any
     other entity that is required to be aggregated with the Employer pursuant
     to regulations under section 414(o) of the Code.

          (iii) Defined Benefit Plan Fraction means, for any Participant for any
     Limitation Year, a fraction, the numerator of which is the Projected Annual
     Benefit (determined as of the end of such Limitation Year) of the
     Participant under any qualified defined benefit plans (whether or not
     terminated) maintained by the Employer for the current and all prior
     Limitation Years, and the denominator of which is as follows: (A) for
     Limitation Years ending prior to January 1, 1983, the lesser of (I) the
     dollar limitation in effect under section 415(b)(1) (A) of the Code for
     such Limitation Year, or (II) the amount which may be taken into account
     under section 415(b)(1)(B) of the Code with respect to such Participant for
     such Limitation Year; and (B) in all other cases, the lesser of (I) (except
     as provided in section 17.8(b) for a Top Heavy Plan Year) the product of
     1.25 multiplied by the dollar limitation in effect under section
     415(b)(1)(A) of the Code for such Limitation Year, or (II) the product of
     1.4 multiplied by the amount which may be taken into account under section
     415(b)(1)(B) of the Code with respect to such Participant for such
     Limitation Year.

          (iv) Defined Contribution Plan Fraction means, for any Participant for
     any Limitation Year, a fraction (A) the numerator of which is the sum of
     such Participant's Annual Additions (determined as of the end of such
     Limitation Year) under this Plan and any other qualified defined
     contribution plans (whether or not terminated) maintained by the Employer
     for the current and all prior Limitation Years, and (B) the denominator of
     which is as follows: (I) for Limitation Years ending prior to January 1,
     1983, the sum of the lesser of the following amounts for such Limitation
     Year and for each prior Limitation Year during which such Participant was
     employed by the Employer: (1) the Maximum Permissible Amount for such
     Limitation Year (without regard to section 415(c)(6) of the

<PAGE>

                                      -21-


     Code), or (2) the amount which may be taken into account under section
     415(c)(1)(B) of the Code with respect to such Participant for such
     Limitation Year; and (II) in all other cases, the sum of the lesser of the
     following amounts for such Limitation Year and for each prior Limitation
     during which such Participant was employed by the Employer: (1) (except as
     provided in section 16.8(b) for a Top Heavy Plan Year) the product of 1.25
     multiplied by the Maximum Permissible Amount for such Limitation Year
     (determined without regard to section 415(c)(6) of the Code), or (2) the
     product of 1.4 multiplied by the amount which may be taken into account
     under section 415(c)(1)(B) of the Code (or section 415(c)(7) of the Code,
     if applicable) with respect to such Participant for such Limitation Year;
     provided, however, that the Plan Administrator may, at his election, adopt
     the transition rule set forth in section 415(e)(6) of the Code in making
     the computation set forth in this section 8.2(c)(iv). If the sum of a
     Participant's Defined Benefit Plan Fraction and Defined Contribution Plan
     Fraction exceeded 1.0 as of September 30, 1983, then such Participant's
     Defined Contribution Plan Fraction shall be determined under regulations to
     be prescribed by the Secretary of the Treasury so that the sum of the
     fractions does not exceed 1.0.

          (v) Limitation Year means the Plan Year; provided, however, that if
     the Employer changes the Limitation Year, the new Limitation Year shall
     begin on a date within the Limitation Year in which the amendment is made.

          (vi) Maximum Permissible Amount means (A) $25,000 (or such higher
     amount as may be permitted under section 415(d) of the Code because of cost
     of living increases) for Limitation Years beginning prior to January 1,
     1983, and (B) the greater of (I) $30,000, or (II) 25% of the dollar
     limitation in effect under section 415(b)(1)(A) of the Code for Limitation
     Years beginning on or after January 1, 1983.

          (vii) Projected Annual Benefit means a Participant's annual retirement
     benefit (adjusted to the actuarial equivalent of a straight life annuity if
     expressed in a form other than a straight life or qualified joint and
     survivor annuity) under any qualified defined benefit plan maintained by
     the Employer, whether or not terminated, assuming that the Participant will
     continue employment until the later of current age or normal retirement age
     under such plan, and that the Participant's Total Compensation for the
     Limitation Year and all other relevant factors used to determine benefits
     under such plan will remain constant for all future Limitation Years.

          (d) When a Participant's Annual Addition to this Plan must be reduced
to satisfy the limitations of section 8.2(a) or (b), such reduction shall be
applied first to ESOP Contributions; and second, if necessary, to Shares
allocated as a result of a Loan Repayment Contribution which are included as an
Annual Addition in such order as shall result in the smallest reduction in the
number of Shares allocable to the Participant's Account. The amount by which any
Participant's Annual Addition to this Plan is reduced shall be allocated in

<PAGE>

                                      -22-


accordance with Articles V and VII as a contribution by the Employer in the next
succeeding Limitation Year.

          (e) Prior to determining a Participant's actual Total Compensation for
a Limitation Year, the Employer may determine the limitations under this section
8.2 for a Participant on the basis of a reasonable estimation of the
Participant's Total Compensation for the Limitation Year that is uniformly
determined for all Participants who are similarly situated. As soon as it is
administratively feasible after the end of the Limitation Year, the limitations
of this section 8.2 shall be determined on the basis of the Participant's actual
Total Compensation for the Limitation Year.

                                   ARTICLE IX

                                     VESTING

          Section 9.1 Vesting.

          Subject to the provisions of section 14.2, the balance credited to
each Employee's Account shall become vested in accordance with the following
schedule:

                          Years of                 Vested
                      Vesting Service            Percentage
                     -----------------           ----------
                           less than 3                0%
                     3 but less than 4               20%
                     4 but less than 5               40%
                     5 but less than 6               60%
                     6 but less than 7               80%
                     7 or more                      100%

          Section 9.2 Vesting on Death, Disability, Retirement or Change in
Control.

          Any previously unvested portion of the remainder of the balance
credited to the Account of a Participant or of a person who is a Former
Participant solely because he is excluded from participation under section
2.1(b) shall become fully vested in him immediately upon attainment of age 65,
or, if earlier, upon the termination of his participation by reason of death,
Disability, Retirement or upon the occurrence of a Change in Control of the
Employer.

<PAGE>

                                      -23-


          Section 9.3 Forfeitures on Termination of Employment.

          Upon the termination of employment of a Participant or Former
Participant for any reason other than death, Disability, Retirement, that
portion of the balance credited to his Account which is not vested at the date
of such termination shall be forfeited as of the last Valuation Date for the
Plan Year in which such termination of employment occurs. The proceeds of such
forfeitures, less amounts, if any, required to be credited because of
re-employment pursuant to section 9.4, shall be treated as Forfeitures and shall
be disposed of as provided in section 9.5.

          Section 9.4 Amounts Credited Upon Re-Employment.

          If an Employee forfeited any amount of the balance credited to his
Account upon his termination of employment with the Employer, and is re-employed
prior to the occurrence of five consecutive One-Year Breaks in Service, then:

          (i) an amount equal to the Fair Market Value of the Shares forfeited,
     determined as of the date of forfeiture; and

          (ii) the amount credited to his General Investment Account that was
     forfeited, determined as of the date of forfeiture;

shall be credited back to his Account from the proceeds of forfeitures which are
redeemed pursuant to section 9.3 during the Plan Year in which he is
re-employed, unless such proceeds are insufficient, in which case the Employer
shall make an additional contribution in the amount of such deficiency.

          Section 9.5 Allocation of Forfeitures.

          Any Forfeitures that occur during a Plan Year shall be treated as Loan
Repayment Contributions and ESOP Contributions in the proportions designated by
the Plan Administrator in accordance with Article V and allocated as an
additional benefit in accordance with Article VII.

<PAGE>

                                      -24-


                                    ARTICLE X

                                 THE TRUST FUND

          Section 10.1 The Trust Fund.

          The Trust Fund shall be held and invested under the Trust Agreement
with the Trustee. The provisions of the Trust Agreement shall vest such powers
in the Trustee as to investment, control and disbursement of the Trust Fund, and
such other provisions not inconsistent with the Plan, including provision for
the appointment of one or more "investment managers" within the meaning of
section 3(38) of ERISA to manage and control (including acquiring and disposing
of) all or any of the assets of the Trust Fund, as the Board may from time to
time authorize. Except as required by ERISA, no bond or other security shall be
required of any Trustee at any time in office.

          Section 10.2 Investments.

          Except to the extent provided to the contrary in section 10.3, the
Trust Fund shall be invested in:

          (a) Shares;

          (b) such Investment Funds as may be established from time to time by
     the Plan Administrator; and

          (c) such other investments as may be permitted under the Trust
     Agreement;

in such proportions as shall be determined by the Plan Administrator or, if so
provided under the Trust Agreement, as directed by one or more investment
managers or by the Trustee, in its discretion; provided, however, that the
investments of the Trust Fund shall consist primarily of Shares. Notwithstanding
the immediately preceding sentence, the Trustee may temporarily invest the Trust
Fund in short-term obligations of, or guaranteed by, the United States
Government or an agency thereof, or may retain uninvested, or sell investments
to provide, amounts of cash required for purposes of the Plan.

          Section 10.3 Diversification of Investments.

          (a) Notwithstanding section 10.2, each Qualified Participant may:

          (i) during the first 90 days of each of the first four Plan Years to
     begin after the Plan Year in which he first becomes a Qualified
     Participant, elect that such percentage of the balance credited to his
     Account as he may specify, but

<PAGE>

                                      -25-


     in no event more than 25% of the balance credited to his Account, be
     invested in one or more of the Investment Funds; and

          (ii) during the first 90 days of the fifth Plan Year to begin after
     the Plan Year in which he first becomes a Qualified Participant or of any
     Plan Year thereafter, elect that such percentage of the balance credited to
     his Account as he may specify, but in no event more than 50% of the balance
     credited to his Account, be invested in one or more of the Investment
     Funds.

For purposes of an election under this section 10.3, the balance credited to a
Participant's Account shall be the balance credited to his Account determined as
of the last Valuation Date to occur in the Plan Year immediately preceding the
Plan Year in which such election is made.

          (b) An election made under section 10.3(a) shall be made in writing,
in the form and manner prescribed by the Plan Administrator, and shall be filed
with the Plan Administrator during the election period specified in section
10.3(a). As soon as is practicable following the end of the election period
during which such election is made, the Plan Administrator shall take such
actions as are necessary to cause the specified percentage of the balance
credited to the Account of the Qualified Participant making the election to be
invested in the specified Investment Funds. Any investments made pursuant to
this section 10.3 shall be specifically allocated to the General Investment
Account of the Qualified Participant for whom they are made.

          (c) An election made under section 10.3(a) may be changed or revoked
at any time during the election period described in section 10.3(a) during which
it is initially made, during any subsequent election period described in section
10.3(a) or, upon at least 15 days' advance written notice given in the form and
manner prescribed by the Plan Administrator, as of the first day of any calendar
quarter of any Plan Year that begins after the Participant first becomes a
Qualified Participant. In no event, however, shall any election under this
section 10.3 result in more than 25% of the balance credited to the
Participant's Account being invested at the direction of the Participant, if
such election is made during a Plan Year to which section 10.3(a)(i) applies, or
result in more than 50% of the balance credited to the Participant's Account
being invested at the direction of the Participant, if such election is made
during the Plan Year to which section 10.3(a)(ii) applies or thereafter.

          Section 10.4 Use of Commingled Trust Funds.

          Subject to the provisions of the Trust Agreement, amounts held in the
Trust Fund may be invested in:

          (a) any commingled or group trust fund described in section 401(a) of
     the Code and exempt under section 501(a) of the Code; or

          (b) any common trust fund exempt under section 584 of the Code
     maintained exclusively for the collective investment of the assets of
     trusts that are exempt under section 501(a) of the Code;

<PAGE>

                                      -26-

provided that the trustee of such commingled, group or common trust fund is a
bank or trust company.

          Section 10.5 Management and Control of Assets.

          All assets of the Plan shall be held by the Trustee in trust for the
exclusive benefit of Participants, Former Participants and their Beneficiaries.
No part of the corpus or income of the Trust Fund shall be used for, or diverted
to, purposes other than for the exclusive benefit of Participants, Former
Participants and their Beneficiaries, and for defraying reasonable
administrative expenses of the Plan and Trust Fund. No person shall have any
interest in or right to any part of the earnings of the Trust Fund, or any
rights in, to or under the Trust Fund or any part of its assets, except to the
extent expressly provided in the Plan.

                                   ARTICLE XI

                    VALUATION OF INTERESTS IN THE TRUST FUND

          Section 11.1 Establishment of Investment Accounts.

          The Plan Administrator shall establish, or cause to be established,
for each person for whom an Account is maintained a Share Investment Account and
a General Investment Account. Such Share Investment Accounts and General
Investment Accounts shall be maintained in accordance with this Article XI.

          Section 11.2 Share Investment Accounts.

          The Share Investment Account established for a person in accordance
with section 11.1 shall be credited with: (a) all Shares allocated to such
person's Account; (b) all Shares purchased with amounts of money or property
allocated to such person's Account; (c) all dividends paid in the form of Shares
with respect to Shares credited to his Account; and (d) all Shares purchased
with amounts credited to such person's General Investment Account. Such Share
Investment Account shall be charged with all Shares that are sold or exchanged
to acquire other investments or to provide cash and with all Shares that are
distributed in kind.

          Section 11.3 General Investment Accounts.

          The General Investment Account that is established for a person in
accordance with section 11.1 shall be credited with: (a) all amounts, other than
Shares, allocated to such person's Account; (b) all dividends paid in a form
other than Shares with respect to Shares credited to such person's Share
Investment Account; (c) the proceeds of any sale of Shares credited to such
person's Share Investment Account; and (d) any earnings attributable to amounts

<PAGE>

                                      -27-


credited to such person's General Investment Account. Such General Investment
Account shall be charged with all amounts credited thereto that are applied to
the purchase of Shares, any losses or depreciation attributable to amounts
credited thereto, any expenses allocable thereto and any distributions of
amounts credited thereto.

          Section 11.4 Valuation of Investment Accounts.

          (a) The Plan Administrator shall determine, or cause to be determined,
the aggregate value of each person's Share Investment Account as of each
Valuation Date by multiplying the number of Shares credited to such Share
Investment Account on such Valuation Date by the Fair Market Value of a Share on
such Valuation Date.

          (b) As of each Valuation Date, the Accounts of each Participant shall
be separately adjusted to reflect their proportionate share of any appreciation
or depreciation in the fair market value of the Investment Funds, any income
earned by the Investment Funds and any expenses incurred by the Investment
Funds, as well as any contributions, withdrawals or distributions and investment
transfers not posted as of the last Valuation Date.

          Section 11.5 Annual Statements.

          There shall be furnished, by mail or otherwise, at least once in each
Plan Year to each person who would then be entitled to receive all or part of
the balance credited to any Account if the Plan were then terminated, a
statement of his interest in the Plan as of such date as shall be selected by
the Plan Administrator, which statement shall be deemed to have been accepted as
correct and be binding on such person unless the Plan Administrator receives
written notice to the contrary within 30 days after the statement is mailed or
furnished to such person.

                                   ARTICLE XII

                                     SHARES

          Section 12.1 Specific Allocation of Shares.

          All Shares purchased under the Plan shall be specifically allocated to
the Share Investment Accounts of Participants, Former Participants and their
Beneficiaries in accordance with section 11.2, with the exception of Financed
Shares, which shall be allocated to the Loan Repayment Account.

<PAGE>

                                      -28-


          Section 12.2 Dividends.

          (a) Dividends paid with respect to Shares held under the Plan shall be
credited to the Loan Repayment Account, if paid with respect to Financed Shares.
Such dividends shall be: (i) applied to the payment of principal and accrued
interest with respect to any Share Acquisition Loan, if paid in cash; or (ii)
held in the Loan Repayment Account as Financed Shares for release in accordance
with section 6.4, if paid in the form of Shares.

          (b) Dividends paid with respect to Shares allocated to a person's
Share Investment Account shall be credited to such person's Share Investment
Account. Cash dividends credited to a person's General Investment Account shall
be, at the direction of the Board, either: (i) held in such General Investment
Account and invested in accordance with sections 10.2 and 11.2; (ii) distributed
immediately to such person; (iii) distributed to such person within 90 days of
the close of the Plan Year in which such dividends were paid; or (iv) used to
make payments of principal or interest on a Share Acquisition Loan; provided,
however, that the Fair Market Value of Financed Shares released from the Loan
Repayment Account equals or exceeds the amount of the dividend.

          Section 12.3 Voting Rights.

          (a) Each person shall direct the manner in which all voting rights
appurtenant to Shares allocated to his Share Investment Account will be
exercised, provided that such Shares were allocated to his Share Investment
Account as of the applicable record date. Such person shall, for such purpose,
be deemed a "named fiduciary" within the meaning of section 402(a)(2) of ERISA.
Such a direction shall be given by completing and filing with the inspector of
elections, the Trustee or such other person who shall be independent of the
Employer as the Plan Administrator shall designate, at least 10 days prior to
the date of the meeting of holders of Shares at which such voting rights will be
exercised, a written direction in the form and manner prescribed by the Plan
Administrator. The inspector of elections, the Trustee or such other person
designated by the Plan Administrator shall tabulate the directions given on a
strictly confidential basis, and shall provide the Plan Administrator with only
the final results of the tabulation. The final results of the tabulation shall
be followed by the Plan Administrator in directing the Trustee as to the manner
in which such voting rights shall be exercised. The Plan Administrator shall
make a reasonable effort to furnish, or cause to be furnished, to each person
for whom a Share Investment Account is maintained all annual reports, proxy
materials and other information known by the Plan Administrator to have been
furnished by the issuer of the Shares, or by any solicitor of proxies, to the
holders of Shares.

          (b) To the extent that any person shall fail to give instructions with
respect to the exercise of voting rights appurtenant to Shares allocated to his
Share Investment Account:

          (i) the Trustee shall, with respect to each matter to be voted upon:
     (A) cast a number of affirmative votes equal to the product of (I) the
     number of allocated Shares for which no written instructions have been
     given, multiplied by (II) a fraction, the numerator of which is the number
     of allocated Shares for which affirmative votes will be cast in accordance
     with written instructions given

<PAGE>

                                      -29-


     as provided in section 12.3(a) and the denominator of which is the
     aggregate number of affirmative and negative votes which will be cast in
     accordance with written instructions given as aforesaid, and (B) cast a
     number of negative votes equal to the excess (if any) of (I) the number of
     allocated Shares for which no written instructions have been given over
     (II) the number of affirmative votes being cast with respect to such
     allocated Shares pursuant to section 12.3(b)(i)(A); or

          (ii) if the Trustee shall determine that it may not, consistent with
     its fiduciary duties, vote the allocated Shares for which no written
     instructions have been given in the manner described in section 12.3(b)(i),
     it shall vote such Shares in such manner as it, in its discretion, may
     determine to be in the best interests of the persons to whose Share
     Investment Accounts such Shares have been allocated.

          (c) (i) The voting rights appurtenant to Financed Shares shall be
exercised as follows with respect to each matter as to which holders of Shares
may vote:

          (A) a number of votes equal to the product of (I) the total number of
     votes appurtenant to Financed Shares allocated to the Loan Repayment
     Account on the applicable record date; multiplied by (II) a fraction, the
     numerator of which is the total number of affirmative votes cast by
     Participants, Former Participants and the Beneficiaries of deceased Former
     Participants with respect to such matter pursuant to section 12.3(a) and
     the denominator of which is the total number of affirmative and negative
     votes cast by Participants, Former Participants and the Beneficiaries of
     deceased Former Participants, shall be cast in the affirmative; and

          (B) a number of votes equal to the excess of (I) the total number of
     votes appurtenant to Financed Shares allocated to the Loan Repayment
     Account on the applicable record date, over (II) the number of affirmative
     votes cast pursuant to section 12.3(c)(i)(A) shall be cast in the negative.

To the extent that the Financed Shares consist of more than one class of Shares,
this section 12.3(c)(i) shall be applied separately with respect to each class
of Shares.

          (ii) If voting rights are to be exercised with respect to Financed
Shares as provided in section 12.3(c)(i)(A) and (B) at a time when there are no
Shares allocated to the Share Investment Accounts of Participants, Former
Participants and the Beneficiaries of deceased Former Participants, then the
voting rights appurtenant to Financed Shares shall be exercised as follows with
respect to each matter as to which holders of Shares may vote:

          (A) Each person who is a Participant on the applicable record date and
     who was a Participant on the last day of the Plan Year ending on or
     immediately prior to such record date will be granted a number of votes
     equal to the quotient, rounded to the nearest integral number, of (I) such
     Participant's Allocation Compensation for the Plan Year ending on or
     immediately prior to such record date

<PAGE>

                                      -30-


     (or for the portion of such Plan Year during which he was a Participant);
     divided by (II) $1,000.00; and

          (B) a number of votes equal to the product of (I) the total number of
     Financed Shares allocated to the Loan Repayment Account on the applicable
     record date; multiplied by (II) a fraction, the numerator of which is the
     total number of votes that are cast in the affirmative with respect to such
     matter pursuant to section 12.3(c)(ii)(A) and the denominator of which is
     the total number of votes that are cast either in the affirmative or in the
     negative with respect to such matter pursuant to section 12.3(c)(ii)(A),
     shall be cast in the affirmative; and

          (C) a number of votes equal to the excess of (I) the total number of
     Financed Shares allocated to the Loan Repayment Account on the applicable
     record date, over (II) the number of affirmative votes cast with respect to
     such matter pursuant to section 12.3(c)(ii)(B), shall be cast in the
     negative.

To the extent that the Financed Shares consist of more than one class of Shares,
this section 12.3(c)(ii) shall be applied separately with respect to each class
of Shares.

          Section 12.4 Tender Offers.

          (a) Each person shall direct whether Shares allocated to his Share
Investment Account will be delivered in response to any Tender Offer. Such
person shall, for such purpose, be deemed a "named fiduciary" within the meaning
of section 402(a)(2) of ERISA. Such a direction shall be given by completing and
filing with the Trustee or such other person who shall be independent of the
Employer as the Plan Administrator shall designate, at least 10 days prior to
the latest date for exercising a right to deliver Shares pursuant to such Tender
Offer, a written direction in the form and manner prescribed by the Plan
Administrator. The Trustee or other person designated by the Plan Administrator
shall tabulate the directions given on a strictly confidential basis, and shall
provide the Plan Administrator with only the final results of the tabulation.
The final results of the tabulation shall be followed by the Plan Administrator
in directing the number of Shares to be delivered. The Plan Administrator shall
make a reasonable effort to furnish, or cause to be furnished, to each person
for whom a Share Investment Account is maintained, all information known by the
Plan Administrator to have been furnished by the issuer or by or on behalf of
any person making such Tender Offer, to the holders of Shares in connection with
such Tender Offer.

          (b) To the extent that any person shall fail to give instructions with
respect to Shares allocated to his Share Investment Account:

          (i) the Trustee shall (A) tender or otherwise offer for purchase,
     exchange or redemption a number of such Shares equal to the product of (I)
     the number of allocated Shares for which no written instructions have been
     given, multiplied by (II) a fraction, the numerator of which is the number
     of allocated Shares tendered or otherwise offered for purchase, exchange or
     redemption in

<PAGE>

                                      -31-


     accordance with written instructions given as provided in section 12.4(a)
     and the denominator of which is the aggregate number of allocated Shares
     for which written instructions have been given as aforesaid, and (B)
     withhold a number of Shares equal to the excess (if any) of (I) the number
     of allocated Shares for which no written instructions have been given over
     (II) the number of Shares being tendered or otherwise offered pursuant to
     section 12.4(b)(i)(A); or

          (ii) if the Trustee shall determine that it may not, consistent with
     its fiduciary duties, exercise the tender or other rights appurtenant to
     allocated Shares for which no written instructions have been given in the
     manner described in section 12.4(b)(i), it shall tender, or otherwise
     offer, or withhold such Shares in such manner as it, in its discretion, may
     determine to be in the best interests of the persons to whose Share
     Investment Accounts such Shares have been allocated.

          (c) In the case of any Tender Offer, any Financed Shares held in the
Loan Repayment Account shall be dealt with as follows:

          (i) If such Tender Offer occurs at a time when there are no Shares
     allocated to the Share Investment Accounts of Participants, Former
     Participants and the Beneficiaries of deceased Former Participants, then
     the disposition of the Financed Shares shall be determined as follows:

               (A) each person who is a Participant on the applicable record
          date and who was a Participant on the last day of the Plan Year ending
          on or immediately prior to such record date will be granted a number
          of tender rights equal to the quotient, rounded to the nearest
          integral number, of (I) such Participant's Allocation Compensation for
          the Plan Year ending on or immediately prior to such record date (or
          for the portion of such Plan Year during which he was a Participant),
          divided by (II) $1,000.00; and

               (B) on the last day for delivering Shares or otherwise responding
          to such Tender Offer, a number of Shares equal to the product of (I)
          the total number of Financed Shares allocated to the Loan Repayment
          Account on the last day of the effective period of such Tender Offer;
          multiplied by (II) a fraction, the numerator of which is the total
          number of tender rights exercised in favor of the delivery of Shares
          in response to the Tender Offer pursuant to section 12.4(c)(i)(A) and
          the denominator of which is the total number of tender rights that are
          exercisable in response to the Tender Offer pursuant to section
          12.4(c)(i)(A), shall be delivered in response to the Tender Offer; and

               (C) a number of Shares equal to the excess of (I) the total
          number of Financed Shares allocated to the Loan Repayment Account on
          the last day of the effective period of such Tender Offer; over (II)
          the

<PAGE>

                                      -32-


          number of Shares to be delivered in response to the Tender Offer
          pursuant to section 12.4(c)(i)(B), shall be withheld from delivery.

          (ii) If such Tender Offer occurs at a time when the voting rights
     appurtenant to such Financed Shares are to be exercised in accordance with
     section 12.3(c)(i), then:

               (A) on the last day for delivering Shares or otherwise responding
          to such Tender Offer, a number of Financed Shares equal to the product
          of (I) the total number of Financed Shares allocated to the Loan
          Repayment Account on the last day of the effective period of such
          Tender Offer; multiplied by (II) a fraction, the numerator of which is
          the total number of Shares delivered from the Share Investment
          Accounts of Participants, Former Participants and the Beneficiaries of
          deceased Former Participants in response to such Tender Offer pursuant
          to section 12.4(a), and the denominator of which is the total number
          of Shares allocated to the Share Investment Accounts of Participants,
          Former Participants and Beneficiaries of deceased Former Participants
          immediately prior to the last day for delivering Shares or otherwise
          responding to such Tender Offer, shall be delivered; and

               (B) a number of Financed Shares equal to the excess of (I) the
          total number of Financed Shares allocated to the Loan Repayment
          Account on the last day for delivering Shares or otherwise responding
          to such Tender Offer; over (II) the number of Financed Shares to be
          delivered pursuant to section 12.4(c)(ii)(A), shall be withheld from
          delivery.

To the extent that the Financed Shares consist of more than one class of Shares,
this section 12.4(c) shall be applied separately with respect to each class of
Shares.

                                  ARTICLE XIII

                               PAYMENT OF BENEFITS

          Section 13.1 In General.

          The balance credited to a Participant's or Former Participant's
Account under the Plan shall be paid only at the times, to the extent, in the
manner and to the persons provided in this Article XIII.

<PAGE>

                                      -33-


          Section 13.2 Designation of Beneficiaries.

          (a) Subject to section 13.2(b), any person entitled to a benefit under
the Plan may designate a Beneficiary to receive any amount to which he is
entitled that remains undistributed on the date of his death. Such person shall
designate his Beneficiary (and may change or revoke any such designation) in
writing in the form and manner prescribed by the Plan Administrator. Such
designation, and any change or revocation thereof, shall be effective only if
received by the Plan Administrator prior to such person's death and shall become
irrevocable upon such person's death.

          (b) A Participant or Former Participant who is married shall
automatically be deemed to have designated his spouse as his Beneficiary,
unless, prior to the time such designation would, under section 13.2(a), become
irrevocable:

               (i) the Participant or Former Participant designates an
          additional or a different Beneficiary in accordance with this section
          13.2; and

               (ii) (A) the spouse of such Participant or Former Participant
          consents to such designation in a writing that acknowledges the effect
          of such consent and is witnessed by a Plan representative or a notary
          public; or (B) the spouse of such Participant or Former Participant
          has previously consented to such designation by signing a written
          waiver of any right to consent to any designation made by the
          Participant or Former Participant, and such waiver acknowledged the
          effect of the waiver and was witnessed by a Plan representative or a
          notary public; or (C) it is established to the satisfaction of a Plan
          representative that the consent required under section 13.2(b)(ii)(A)
          may not be obtained because such spouse cannot be located or because
          of other circumstances permitted under regulations issued by the
          Secretary of the Treasury.

          (c) In the event that a Beneficiary entitled to payments hereunder
shall die after the death of the person who designated him but prior to
receiving payment of his entire interest in the Account of the person who
designated him, then such Beneficiary's interest in the Account of such person,
or any unpaid balance thereof, shall be paid as provided in section 13.3 to the
Beneficiary who has been designated by the deceased Beneficiary, or if there is
none, to the executor or administrator of the estate of such deceased
Beneficiary, or if no such executor or administrator is appointed within such
time as the Plan Administrator, in his sole discretion, shall deem reasonable,
to such one or more of the spouse and descendants and blood relatives of such
deceased Beneficiary as the Plan Administrator may select. If a person entitled
to a benefit under the Plan and any of the Beneficiaries designated by him shall
die in such circumstances that there shall be substantial doubt as to which of
them shall have been the first to die, for all purposes of the Plan, the person
who made the Beneficiary designation shall be deemed to have survived such
Beneficiary.

          (d) If no Beneficiary survives the person entitled to the benefit
under the Plan or if no Beneficiary has been designated by such person, such
benefit shall be paid to the executor or administrator of the estate of such
person, or if no such executor or administrator is appointed within such time as
the Plan Administrator, in his sole discretion, shall deem

<PAGE>

                                      -34-


reasonable, to such one or more of the spouse and descendants and blood
relatives of such deceased person as the Plan Administrator may select.

          Section 13.3 Distributions to Participants and Former Participants.

          (a)(i) Subject to the provisions of section 13.7 with respect to
required minimum distributions, the vested portion of the balance credited to a
Participant's or a Former Participant's Account shall be distributed to him
commencing as of the last Valuation Date to occur in the Plan Year in which the
Participant or Former Participant terminates employment with the Employer or
attains age 65, whichever is later; unless the Participant or Former Participant
elects otherwise pursuant to section 13.3(a)(ii), and the payment, or first in a
series of payments, is actually made within three months following such
Valuation Date.

          (ii) A Participant or Former Participant may, upon request on a form
provided by the Plan Administrator and filed with the Plan Administrator not
later than 15 days prior to the date on which his employment with the Employer
terminates, elect that his vested interest in his Account be paid commencing as
of any earlier or later Valuation Date after his termination of employment, but
in no event later than the last Valuation Date to occur in the calendar year in
which the Participant or Former Participant attains age 70 1/2, in which case
the payment, or first in a series of payments, shall be made within three months
following such Valuation Date.

          (b)(i) Subject to section 13.3(b)(ii), the vested portion of the
balance credited to the Account of a Participant or Former Participant will be
paid to him, commencing as of the Valuation Date determined under section
13.3(a), in substantially equal annual installments over a fixed period equal to
the greater of:

          (A) five years; or

          (B) if the vested portion of the balance credited to the Account of
     the Participant or Former Participant, determined as of the Valuation Date
     determined under section 13.3(a), is greater than $500,000 (or such larger
     amount as may be prescribed by the Secretary of the Treasury pursuant to
     section 409(o) of the Code), the sum of five years plus the lesser of (I)
     five additional years, or (II) one additional year for each $100,000 (or
     fraction thereof) by which the vested portion of the balance credited to
     the Participant's or Former Participant's Account exceeds $500,000 (or such
     larger amount as may be prescribed by the Secretary of the Treasury
     pursuant to section 409(o) of the Code).

          (ii) A Participant or Former Participant may, upon request on a form
provided by the Plan Administrator and filed with the Plan Administrator not
later than 15 days prior to the date on which his employment terminates, elect
that the vested portion of the balance credited to his Account be paid,
commencing as of the Valuation Date determined under section 13.3(a):

<PAGE>

                                      -35-


          (A) in substantially equal annual installments over a fixed period not
     to exceed the lesser of (I) 10 years, or (II) the life expectancy of the
     Participant or Former Participant, or, if his Beneficiary is a natural
     person, the joint life and last survivor expectancy of the Participant or
     Former Participant and his Beneficiary; or

          (B) subject to section 13.4, in a lump sum payment.

          (c) If any person entitled to a benefit under the Plan dies before his
entire benefit has been distributed to him, then the remainder of such benefit
shall be paid to the Beneficiary designated by him under section 13.2 either:

          (i) in a lump sum distribution as of the Valuation Date next following
     the date of his death, and the amount thereof shall be based upon the
     vested portion of the balance credited to his Account as of such Valuation
     Date; or

          (ii) if, prior to the death of the Participant or Former Participant
     whose vested Account is being distributed, an election pursuant to section
     13.3(b)(ii)(B) is in effect for him, in a lump sum distribution as of the
     Valuation Date specified in such election, or, if earlier, as of the latest
     Valuation Date that would permit payment to be made within five years after
     the Participant's or Former Participant's death, and the amount thereof
     shall be based upon the vested portion of the balance credited to his
     Account as of such Valuation Date; or

          (iii) if, prior to the death of the Participant or Former Participant
     whose vested Account is being distributed, an election pursuant to section
     13.3(b)(ii)(A) is in effect for him:

               (A) over the period and at the times set forth in such election,
          if distribution has begun prior to the Participant's or Former
          Participant's death; or

               (B) commencing at the time set forth in such election and over
          the period set forth in such election (or, if less, over a period
          equal to the life expectancy of the Beneficiary of the deceased
          Participant or Former Participant), if the deceased Participant's or
          Former Participant's spouse is his Beneficiary and distribution has
          not begun prior to the deceased Participant's or Former Participant's
          death; or

               (C) commencing on the date specified in such election (or, if
          earlier, the last Valuation Date that will permit payment to begin
          within one year after the deceased Participant's or Former
          Participant's death) and over the period set forth in such election
          (or, if less, over a period equal to the life expectancy of the
          Beneficiary of the deceased Participant or Former Participant), if the
          deceased Participant's or Former Participant's Beneficiary is a
          natural person other than his spouse and distribution

<PAGE>

                                      -36-


          has not begun prior to the deceased Participant's or Former
          Participant's death;

     and the amount thereof shall be based upon the vested portion of the
     balance credited to his Account as of the Valuation Dates as of which
     payments are determined; or

          (iv) upon written application of the Beneficiary made in such form and
     manner as the Plan Administrator may prescribe, at another time or in
     another manner permitted under section 13.3(a) or (b), subject to the
     following limitations:

               (A)(I) If such Beneficiary is a natural person other than the
          spouse of the deceased Participant or Former Participant whose vested
          Account is being distributed, a distribution that commences within one
          year after such deceased Participant's or Former Participant's death
          shall be made over a fixed period that does not exceed the life
          expectancy of such Beneficiary when distribution commences.

               (II) If such Beneficiary is the spouse of the deceased
          Participant or Former Participant whose vested Account is being
          distributed, a distribution that commences no later than the later of:
          (1) the date on which the deceased Participant or Former Participant
          would have attained age 70 1/2 had he lived; or (2) the first
          anniversary of the death of such deceased Participant or Former
          Participant; shall be made over a fixed period that does not exceed
          the life expectancy of such Beneficiary when distribution commences.

               (III) In all other cases where the spouse of the deceased
          Participant or Former Participant whose vested Account is being
          distributed is not the Beneficiary, payment must be completed within
          five years after the death of such deceased Participant or Former
          Participant.

               (B) In cases where distribution has commenced prior to the death
          of the deceased Participant or Former Participant whose vested Account
          is being distributed, distribution must be completed as least as
          rapidly as under the method in effect prior to such deceased
          Participant's or Former Participant's death.

          Section 13.4 Manner of Payment.

          (a) Subject to section 13.4(b), payments of distributions made
pursuant to section 13.3 or section 13.7 shall be paid, in accordance with the
written direction of the person requesting the payment, in whole Shares, in
cash, or in a combination of cash and whole Shares. Such written direction shall
be given in such form and manner as the Plan Administrator may prescribe. If no
such direction is given, then payment shall be made in the maximum number of
whole Shares that may be acquired with the amount of the payment, plus, if
necessary, an

<PAGE>

                                      -37-


amount of money equal to any remaining amount of the payment that is less than
the Fair Market Value of a whole Share.

          (b) No distribution of a lump sum payment shall be made in cash to the
extent that the making of such distribution, when combined with all other
distributions to be made in cash as of the same Valuation Date, would require
the sale of Shares constituting 1% or more of all outstanding Shares; provided,
however, that this section 13.4(b) shall not apply to or in respect of a
Participant or Former Participant:

          (i) following such Participant's or Former Participant's termination
     of employment with the Employer on account of his Retirement or Disability;
     or

          (ii) following such Participant's or Former Participant's 65th
     birthday; or

          (iii) following the death of such Participant or Former Participant.

          Section 13.5 Put Options.

          (a) Except as provided otherwise in section 13.5(b), each Participant
or Former Participant to whom Shares are distributed under the Plan, each
Beneficiary of a deceased Participant or Former Participant, including the
estate of a deceased Participant or Former Participant, to whom Shares are
distributed under the Plan, and each person to whom such a Participant, Former
Participant or Beneficiary gives Shares that have been distributed under the
Plan shall have the right to require the Employer to purchase from him all or
any portion of such Shares. A person shall exercise such right by delivering to
the Employer a written notice, in such form and manner as the Employer may by
written notice to such person prescribe, setting forth the number of Shares to
be purchased by the Employer, the number of the stock certificate evidencing
such person's ownership of such Shares, and the effective date of purchase. Such
notice shall be given, and the effective date of the purchase specified therein
shall be, no later than the last day of the fifteenth calendar month to begin
after the date on which the Shares to be purchased by the Employer were
distributed from the Plan. As soon as practicable following its receipt of such
notice, the Employer shall take such actions as are necessary to purchase the
Shares specified in such notice at a price per Share equal to the Fair Market
Value of a Share determined as of the effective date of the purchase.

          (b) The Employer shall have no obligation to purchase any Share (i)
pursuant to a notice given, or on an effective date of purchase, after the last
day of the fifteenth calendar month to begin after the date on which such Share
was distributed from the Plan; (ii) following the earliest date on which Shares
are publicly traded on an established market; or (iii) if the Employer is a
"bank" within the meaning of section 581 of the Code and is prohibited by law
from redeeming or purchasing its own securities.

<PAGE>

                                      -38-


          Section 13.6 Right of First Refusal.

          (a) For any period during which Shares are not publicly traded on any
established market, no person who owns Shares that were distributed from the
Plan, other than a person to whom such Shares were sold in compliance with this
section 13.6, shall sell such Shares to any person other than the Employer
without first offering to sell such Shares to the Employer (or person designated
by the Employer) in accordance with this section 13.6.

          (b) In the event that a person to whom this section 13.6 applies shall
receive and desire to accept from a person other than the Employer a bona fide
offer to purchase Shares to which this section 13.6 applies, he shall furnish to
the Employer a written notice which shall:

          (i) include a copy of such offer to purchase;

          (ii) offer to sell to the Employer the Shares subject to such offer to
     purchase at a price per Share that is equal to the greater of:

               (A)  the price per Share specified in such offer to purchase; or

               (B)  the Fair Market Value of a Share as of the date of purchase;

     and otherwise upon the same terms and conditions as those specified in such
     offer to purchase; and

          (iii) include an indication of his intention to accept such offer to
     purchase if the Employer does not accept his offer to sell.

          (c) The Employer shall have the right to purchase the Shares covered
by the offer to sell contained in a notice given pursuant to section 13.6(b), on
the terms and conditions specified in such notice, by written notice given to
the party making the offer to sell not later than the fourteenth day after the
notice described in section 13.6(b) is given. If the Employer does not give such
a notice during the prescribed fourteen day period, then the person owning such
Shares may accept the offer to purchase described in the notice.

          Section 13.7 Minimum Required Distributions.

          (a) Required minimum distributions of a Participant's or Former
Participant's Account shall commence no later than:

          (i) if the Participant or Former Participant attained age 70 1/2 prior
     to January 1, 1988 and was not a Five Percent Owner at any time during the
     Plan Year ending in the calendar year in which he attained age 70 1/2,
     during any of the four preceding Plan Years or during any subsequent years,
     the later of (A) the calendar year in which he attains or attained age 70
     1/2 or (B) the calendar year in which he terminates employment with the
     Employer; or

<PAGE>

                                      -39-


          (ii) if the Participant or Former Participant attained age 70 1/2
     prior to January 1, 1988 and is or was a Five Percent Owner at any time
     during the Plan Year ending in the calendar year in which he attained age
     70 1/2, or during any of the four preceding Plan Years or during any
     subsequent years, the later of (A) the calendar year in which he attains
     age 70 1/2 or (B) the calendar year in which he first becomes a Five
     Percent Owner; or

          (iii) in all other cases, the calendar year in which the Participant
     or Former Participant attains age 70 1/2.

          (b) The required minimum distributions contemplated by section 13.7(a)
shall be made as follows:

          (i) The minimum required distribution to be made for the calendar year
     for which the first minimum distribution is required shall be no later than
     April 1st of the immediately following calendar year and shall be equal to
     the quotient obtained by dividing (A) the vested balance credited to the
     Participant's or Former Participant's Account as of the last Valuation Date
     to occur in the calendar year immediately preceding the calendar year in
     which the first minimum distribution is required (adjusted to account for
     any additions thereto or subtractions therefrom after such Valuation Date
     but on or before December 31st of such calendar year); by (B) the
     Participant's or Former Participant's life expectancy (or, if his
     Beneficiary is a natural person, the joint life and last survivor
     expectancy of him and his Beneficiary); and

          (ii) the minimum required distribution to be made for each calendar
     year following the calendar year for which the first minimum distribution
     is required shall be made no later than December 31st of the calendar year
     for which the distribution is required and shall be equal to the quotient
     obtained by dividing (A) the vested balance credited to the Participant's
     or Former Participant's Account as of the last Valuation Date to occur in
     the calendar year prior to the calendar year for which the distribution is
     required (adjusted to account for any additions thereto or subtractions
     therefrom after such Valuation Date but on or before December 31st of such
     calendar year and, in the case of the distribution for the calendar year
     immediately following the calendar year for which the first minimum
     distribution is required, reduced by any distribution for the prior
     calendar year that is made in the current calendar year); by (B) the
     Participant's or Former Participant's life expectancy (or, if his
     Beneficiary is a natural person, the joint life and last survivor
     expectancy of him and his Beneficiary).

For purposes of this section 13.7, the life expectancy of a Participant or
Former Participant (or the joint life and last survivor expectancy of a
Participant or Former Participant and his designated Beneficiary) for the
calendar year in which the Participant or Former Participant attains age 70 1/2
shall be determined on the basis of Tables V and VI, as applicable, of section
1.72-9 of the Income Tax Regulations as of the Participant's or Former
Participant's and Beneficiary's birthday in such year. Such life expectancy or
joint life and last survivor

<PAGE>

                                      -40-


expectancy for any subsequent year shall be equal to the excess of (1) the life
expectancy or joint life and last survivor expectancy for the year in which the
Participant or Former Participant attains age 70 1/2, over (2) the number of
whole years that have elapsed since the Participant or Former Participant
attained age 70 1/2.

          (c) Payment of the distributions required to be made to a Participant
or Former Participant under this section 13.7 shall be made in accordance with
section 13.4.

          Section 13.8 Direct Rollover of Eligible Rollover Distributions.

          (a) A Distributee may elect, at the time and in the manner prescribed
by the Plan Administer, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the Distributee in a
Direct Rollover.

          (b) The following rules shall apply with respect to Direct Rollovers
made pursuant to this section 13.8:

          (i) A Participant may only elect to make a Direct Rollover of an
     Eligible Rollover Distribution if such Eligible Rollover Distribution (when
     combined with other Eligible Rollover Distributions made or to be made in
     the same calendar year) is reasonably expected to be at least $200;

          (ii) If a Participant elects a Direct Rollover of a portion of an
     Eligible Rollover Distribution, that portion must be equal to at least
     $500; and

          (iii) A Participant may not divide his or her Eligible Rollover
     Distribution into separate distributions to be transferred to two or more
     Eligible Retirement Plans.

          (c) For purposes of this section 13.8 and any other applicable section
of the Plan, the following definitions shall have the following meanings:

          (i) "Direct Rollover" means a payment by the Plan to the Eligible
     Retirement Plan specified by the Distributee.

          (ii) "Distributee" means an Employee or former Employee. In addition,
     the Employee's or former Employee's surviving spouse and the Employee's
     spouse or former spouse who is the alternate payee under a Qualified
     Domestic Relations Order are considered Distributees with regard to the
     interest of the spouse or former spouse.

          (iii) "Eligible Retirement Plan" means an individual retirement
     account described in section 408(a) of the Code, an individual retirement
     annuity described in section 408(b) of the Code, an annuity plan described
     in section 403(a) of the Code, or a qualified trust described in section
     401(a) of the Code that accepts the Distributee's Eligible Rollover
     Distribution. However, in the

<PAGE>

                                      -41-


     case of an Eligible Rollover Distribution to the current or former spouse
     who is the alternative payee under a Qualified Domestic Relations Order or
     to a surviving spouse, an Eligible Retirement Plan is an individual
     retirement account or individual retirement annuity.

          (iv) "Eligible Rollover Distribution" means any distribution of all or
     any portion of the balance to the credit of the Distributee, except that an
     Eligible Rollover Distribution does not include: any distribution that is
     one of a series of substantially equal periodic payments (not less
     frequently than annually) made for the life (or life expectancy) of the
     Distributee or the joint lives (or joint life expectancies) of the
     Distributee's designated Beneficiary, or for a specified period of ten (10)
     years or more; any distribution to the extent such distribution is required
     under section 401(a)(9) of the Code; and the portion of any distribution
     that is not includible in gross income (determined without regard to the
     exclusion for net unrealized appreciation with respect to employer
     securities).

          Section 13.9 Valuation of Shares Upon Settlement to a Participant.

          Notwithstanding any contrary provision in this Article XIII, in the
event that all or a portion of a payment of a distribution to a Participant is
to be made in cash, such Participant shall only be entitled to receive the
proceeds of the Shares allocated to his Account that are sold in connection with
such distribution and which are valued as of the date of such sale.

          Section 13.10 Mandatory Cashouts.

          Notwithstanding anything in the Plan to the contrary, if, as of the
Valuation Date coincident with or next following a Participant's termination of
employment, the total vested balance credited to his Account is $3,500 or less,
such vested balance shall be distributed in a single distribution as soon as
practicable after such Valuation Date. Any person with no vested balance in his
Account shall be deemed to have received a distribution of such balance of $0.

                                   ARTICLE XIV

                                CHANGE IN CONTROL

          Section 14.1 Definition of Change in Control.

          A Change in Control of the Employer shall be deemed to have occurred
upon the happening of any of the following events:

<PAGE>

                                      -42-


          (a) the occurrence of any event upon which any "person" (as such term
     is used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
     as amended ("Exchange Act")), other than (A) a trustee or other fiduciary
     holding securities under an employee benefit plan maintained for the
     benefit of employees of Big Foot Financial Corp.; (B) a corporation owned,
     directly or indirectly, by the stockholders of Big Foot Financial Corp. in
     substantially the same proportions as their ownership of stock of Big Foot
     Financial Corp.; or (C) any group constituting a person in which employees
     of Big Foot Financial Corp. are substantial members, becomes the
     "beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange
     Act), directly or indirectly, of securities issued by Big Foot Financial
     Corp. representing 25% or more of the combined voting power of all of Big
     Foot Financial Corp.'s then outstanding securities; or

          (b) the occurrence of any event upon which the individuals who on the
     date the Plan is adopted are members of the Board, together with
     individuals whose election by the Board or nomination for election by Big
     Foot Financial Corp.'s stockholders was approved by the affirmative vote of
     at least two-thirds of the members of the Board then in office who were
     either members of the Board on the date this Plan is adopted or whose
     nomination or election was previously so approved, cease for any reason to
     constitute a majority of the members of the Board, but excluding, for this
     purpose, any such individual whose initial assumption of office is in
     connection with an actual or threatened election contest relating to the
     election of directors of Big Foot Financial Corp. (as such terms are used
     in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

          (c) the shareholders of Big Foot Financial Corp. approve either:

               (i) a merger or consolidation of Big Foot Financial Corp. with
          any other corporation, other than a merger or consolidation following
          which both of the following conditions are satisfied:

                    (A) either (1) the members of the Board of Big Foot
               Financial Corp. immediately prior to such merger or consolidation
               constitute at least a majority of the members of the governing
               body of the institution resulting from such merger or
               consolidation; or (2) the shareholders of Big Foot Financial
               Corp. own securities of the institution resulting from such
               merger or consolidation representing 80% or more of the combined
               voting power of all such securities then outstanding in
               substantially the same proportions as their ownership of voting
               securities of Big Foot Financial Corp. before such merger or
               consolidation; and

                    (B) the entity which results from such merger or
               consolidation expressly agrees in writing to assume and perform
               Big Foot Financial Corp.'s obligations under the Plan; or

<PAGE>

                                      -43-


               (ii) a plan of complete liquidation of Big Foot Financial Corp.
          or an agreement for the sale or disposition by Big Foot Financial
          Corp. of all or substantially all of its assets; and

          (d) any event that would be described in section 14.1(b)(i), (ii) or
     (iii) if "Fairfield Savings Bank, F.S.B." were substituted for "Big Foot
     Financial Corp." therein; and

In no event, however, shall the transaction by which Fairfield Savings Bank,
F.S.B. converts from a mutual savings association to a stock savings
association, or any transaction by which a company wholly owned by Fairfield
Savings Bank, F.S.B. becomes the parent company of Fairfield Savings Bank,
F.S.B. be deemed a Change in Control.

          Section 14.2 Vesting on Change of Control.

Upon the effective date of a Change in Control, the Account of each person who
would then, upon termination of the Plan, be entitled to a benefit, shall be
fully vested and nonforfeitable.

          Section 14.3 Repayment of Loan.

          (a) Upon a Change in Control described in section 14.1(c) (or which
would be described in section 14.1(c) if "Fairfield Savings Bank, F.S.B." were
substituted for "Big Foot Financial Corp." thereunder), the Plan Administrator
shall direct the Trustee to sell a sufficient number of Shares to repay any
outstanding Share Acquisition Loan in full. The proceeds of such sale shall be
used to repay such Share Acquisition Loan. After repayment of the Share
Acquisition Loan, all remaining Shares which had been unallocated (or the
proceeds thereof, if applicable) shall be allocated among the accounts of all
Participants who were employed by an Employer on the effective date of such
Change in Control. Such allocation of Shares or proceeds shall be credited as of
the date on which the Change in Control occurs to the Accounts of each
Participant who has not had a termination of participation under section 2.3 as
of such date (each, an "Affected Participant"), in proportion to their
Allocation Compensation, for the period, beginning on the January 1 immediately
preceding the date on which the Change in Control occurs and ending on the date
on which the Change in Control occurs. If any amount cannot be allocated to an
Affected Participant in the year of such Change in Control as a result of the
limitations of section 415 of the Code, the amounts will be allocated in
subsequent years to those persons who were Affected Participants and who
continue to be Participants in the Plan until finally distributed to Affected
Participants.

          (b) In the event that the application of section 415 of the Code
prevents the allocation of all of the Shares or other assets released from the
Loan Repayment Account as provided in section 14.3(a) as of the effective date
of the Change in Control, each Affected Participant shall be entitled to receive
a supplemental benefit payment directly from the Employer. The supplemental
benefit payment to each Affected Participant shall be an amount equal to the
excess of:

<PAGE>

                                      -44-


          (i) the total amount of Shares or other property that would be
     allocated to such Affected Participant's Account under section 14.3(a) if
     section 415 of the Code did not apply; over

          (ii) the total of Shares or other property actually allocated to such
     Affected Participant's Account under section 14.3(a).

Such payment (without offset for any allocations which may occur under this Plan
subsequent to the Change in Control) shall be made as soon as practicable, but
in any event within ten (10) business days, after the effective date of the
Change in Control. This section 14.3(b) shall be treated as a separate,
non-qualified "excess benefit plan" within the meaning of section 3(34) of ERISA
and shall be interpreted, administered and enforced in a manner consistent with
this intention. To the extent that any Affected Participant is entitled to the
same or a similar payment under any other non-qualified plan, program or
arrangement of the Employer, any payment under this section 14.3(b) shall be
coordinated with the payments under such other non-qualified programs, plan or
arrangements in such manner as shall be determined by the Plan Administrator to
be necessary to prevent the duplication of benefits.

          Section 14.4 Plan Termination After Change in Control.

After repayment of the loan and allocation of shares or proceeds as provided in
section 14.2, the Plan shall be terminated and all amounts shall be distributed
as soon as practicable.

          Section 14.5 Amendment of Article XIV.

Article XIV of the Plan may not be amended after a Change in Control of the
Employer unless required by the Internal Revenue Service as a condition to the
continued treatment of the Plan as a tax-qualified plan under section 401(a) of
the Code.

                                   ARTICLE XV

                                 ADMINISTRATION

          Section 15.1 Named Fiduciaries.

          The term "Named Fiduciary" shall mean (but only to the extent of the
responsibilities of each of them) the Plan Administrator, the Board and the
Trustee. This Article XV is intended to allocate to each Named Fiduciary the
responsibility for the prudent execution of the functions assigned to him or it,
and none of such responsibilities or any other responsibility shall be shared by
two or more of such Named Fiduciaries. Whenever one Named Fiduciary is required
by the Plan or Trust Agreement to follow the directions of another Named
Fiduciary, the two Named Fiduciaries shall not be deemed to have been assigned a
shared responsibility,

<PAGE>

                                      -45-


but the responsibility of the Named Fiduciary giving the directions shall be
deemed his sole responsibility, and the responsibility of the Named Fiduciary
receiving those directions shall be to follow them insofar as such instructions
are on their face proper under applicable law.

          Section 15.2 Plan Administrator.

          There shall be a Plan Administrator, who shall be such Employee or
officer as may be designated by the Board, as hereinafter provided, and who
shall, subject to the responsibilities of the Plan Administrator and the Board,
have the responsibility for the day-to-day control, management, operation and
administration of the Plan (except trust duties). The Plan Administrator shall
have the following responsibilities:

          (a) To maintain records necessary or appropriate for the
     administration of the Plan;

          (b) To give and receive such instructions, notices, information,
     materials, reports and certifications to the Trustee as may be necessary or
     appro- priate in the administration of the Plan;

          (c) To prescribe forms and make rules and regulations consistent with
     the terms of the Plan;

          (d) To require such proof of age or evidence of good health of an
     Employee, Participant or Former Participant or the spouse of either, or of
     a Beneficiary as may be necessary or appropriate in the administration of
     the Plan;

          (e) To prepare and file, distribute or furnish all reports, plan
     descriptions, and other information concerning the Plan, including, without
     limitation, filings with the Secretary of Labor and communications with
     Participants, Former Participants and other persons, as shall be required
     of the Plan Administrator under ERISA;

          (f) To determine any question arising in connection with the Plan, and
     the Plan Administrator's decision or action in respect thereof shall be
     final and conclusive and binding upon the Employer, the Trustee,
     Participants, Former Participants, Beneficiaries and any other person
     having an interest under the Plan;

          (g) To review and dispose of claims under the Plan filed pursuant to
     section 15.4 and appeals filed pursuant to section 15.5;

          (h) If the Plan Administrator shall determine that by reason of
     illness, senility, insanity, or for any other reason, it is undesirable to
     make any payment to a Participant, Former Participant, Beneficiary or any
     other person entitled thereto, to direct the application of any amount so
     payable to the use or benefit of such person in any manner that he may deem
     advisable or to direct in his discretion the withholding of any payment
     under the Plan due to any person under

<PAGE>

                                      -46-


     legal disability until a representative competent to receive such payment
     in his behalf shall be appointed pursuant to law;

          (i) To review the performance of the Trustee and such investment
     managers as may be appointed in or pursuant to the Trust Agreement in
     investing, managing and controlling the assets of the Plan;

          (j) To the extent required by ERISA, to establish a funding policy and
     method consistent with the objectives of the Plan and the requirements of
     ERISA, and to review such policy and method at least annually;

          (k) To report and make recommendations to the Board regarding changes
     in the Plan, including changes in the operation and management of the Plan
     and removal and replacement of the Trustee and such investment managers as
     may be appointed in or pursuant to the Trust Agreement;

          (l) To the extent provided under and subject to the provisions of the
     Trust Agreement, to appoint "investment managers" as defined in section
     3(38) of ERISA to manage and control (including acquiring and disposing of)
     all or any of the assets of the Plan;

          (m) With the prior approval of the Board, to direct the Trustee to
     obtain one or more Share Acquisition Loans;

          (n) To develop and provide procedures and forms necessary to enable
     Participants to give voting and tendering directions on a confidential
     basis;

          (o) To discharge such other responsibilities or follow such directions
     as may be assigned or given by the Board; and

          (p) To discharge such other responsibilities or follow such directions
     as may be assigned or given by the Board; and

          (q) To perform any duty or take any action which is allocated to the
     Plan Administrator under the Plan.

The Plan Administrator shall have the power and authority necessary or
appropriate to carry out his responsibilities. The Plan Administrator may resign
only by giving at least 30 days' prior written notice of resignation to the
Board, and such resignation shall be effective on the date specified in such
notice.

          Section 15.3 Claims Procedure.

          Any claim relating to benefits under the Plan shall be filed with the
Plan Administrator on a form prescribed by him. If a claim is denied in whole or
in part, the Plan

<PAGE>

                                      -47-


Administrator shall give the claimant written notice of such denial, which
notice shall specifically set forth:

          (a) The reasons for the denial;

          (b) The pertinent Plan provisions on which the denial was based;

          (c) Any additional material or information necessary for the claimant
     to perfect his claim and an explanation of why such material or information
     is needed; and

          (d) An explanation of the Plan's procedure for review of the denial of
     the claim.

In the event that the claim is not granted and notice of denial of a claim is
not furnished by the 30th day after such claim was filed, the claim shall be
deemed to have been denied on that day for the purpose of permitting the
claimant to request review of the claim.

          Section 15.4 Claims Review Procedure.

          Any person whose claim filed pursuant to section 15.5 has been denied
in whole or in part by the Plan Administrator may request review of the claim by
the Plan Administrator, upon a form prescribed by the Plan Administrator. The
claimant shall file such form (including a statement of his position) with the
Plan Administrator no later than 60 days after the mailing or delivery of the
written notice of denial provided for in section 15.5, or, if such notice is not
provided, within 60 days after such claim is deemed denied pursuant to section
15.5. The claimant shall be permitted to review pertinent documents. A decision
shall be rendered by the Plan Administrator and communicated to the claimant not
later than 30 days after receipt of the claimant's written request for review.
However, if the Plan Administrator finds it necessary, due to special
circumstances (for example, the need to hold a hearing), to extend this period
and so notifies the claimant in writing, the decision shall be rendered as soon
as practicable, but in no event later than 120 days after the claimant's request
for review. The Plan Administrator's decision shall be in writing and shall
specifically set forth:

          (a) The reasons for the decision; and

          (b) The pertinent Plan provisions on which the decision is based.

Any such decision of the Plan Administrator shall be binding upon the claimant
and the Employer, and the Plan Administrator shall take appropriate action to
carry out such decision.

          Section 15.5 Allocation of Fiduciary Responsibilities and Employment
of Advisors.

          Any Named Fiduciary may:

<PAGE>

                                      -48-


          (a) Allocate any of his or its responsibilities (other than trustee
     responsibilities) under the Plan to such other person or persons as he or
     it may designate, provided that such allocation and designation shall be in
     writing and filed with the Plan Administrator;

          (b) Employ one or more persons to render advice to him or it with
     regard to any of his or its responsibilities under the Plan; and

          (c) Consult with counsel, who may be counsel to the Employer.

          Section 15.6 Other Administrative Provisions.

          (a) Any person whose claim has been denied in whole or in part must
exhaust the administrative review procedures provided in section 15.4 prior to
initiating any claim for judicial review.

          (b) No bond or other security shall be required of the Plan
Administrator, or any officer or Employee of the Employer to whom fiduciary
responsibilities are allocated by a Named Fiduciary, except as may be required
by ERISA.

          (c) Subject to any limitation on the application of this section
15.6(c) pursuant to ERISA, neither the Plan Administrator, nor any officer or
Employee of the Employer to whom fiduciary responsibilities are allocated by a
Named Fiduciary, shall be liable for any act of omission or commission by
himself or by another person, except for his own individual willful and
intentional malfeasance.

          (d) The Plan Administrator may, except with respect to actions under
section 15.4, shorten, extend or waive the time (but not beyond 60 days)
required by the Plan for filing any notice or other form with the Plan
Administrator, or taking any other action under the Plan.

          (e) The Plan Administrator may direct that the costs of services
provided pursuant to section 15.5, and such other reasonable expenses as may be
incurred in the administration of the Plan, shall be paid out of the funds of
the Plan unless the Employer shall pay them.

          (f) Any person, group of persons, committee, corporation or
organization may serve in more than one fiduciary capacity with respect to the
Plan.

          (g) Any action taken or omitted by any fiduciary with respect to the
Plan, including any decision, interpretation, claim denial or review on appeal,
shall be conclusive and binding on all interested parties and shall be subject
to judicial modification or reversal only to the extent it is determined by a
court of competent jurisdiction that such action or omission was arbitrary and
capricious and contrary to the terms of the Plan.

<PAGE>

                                      -49-


                                   ARTICLE XVI

                  AMENDMENT, TERMINATION AND TAX QUALIFICATION

          Section 16.1 Amendment and Termination by Big Foot Financial Corp.

          The Employer expects to continue the Plan indefinitely, but
specifically reserves the right, in its sole discretion, at any time, by
appropriate action of the Board, to amend, in whole or in part, any or all of
the provisions of the Plan and to terminate the Plan at any time. Subject to the
provisions of section 16.2, no such amendment or termination shall permit any
part of the Trust Fund to be used for or diverted to purposes other than for the
exclusive benefit of Participants, Former Participants, Beneficiaries or other
persons entitled to benefits, and no such amendment or termination shall reduce
the accrued benefit of any Participant, Former Participant, Beneficiary or other
person who may be entitled to benefits, without his consent. In the event of a
termination or partial termination of the Plan, or in the event of a complete
discontinuance of the Employer's contributions to the Plan, the Accounts of each
affected person shall forthwith become nonforfeitable and shall be payable in
accordance with the provisions of Article XIII.

          Section 16.2 Amendment or Termination Other Than by Big Foot Financial
Corp.

          In the event that a corporation or trade or business other than Big
Foot Financial Corp. shall adopt this Plan, such corporation or trade or
business shall, by adopting the Plan, empower Big Foot Financial Corp. to amend
or terminate the Plan, insofar as it shall cover employees of such corporation
or trade or business, upon the terms and conditions set forth in section 16.1;
provided, however, that any such corporation or trade or business may, by action
of its board of directors or other governing body, amend or terminate the Plan,
insofar as it shall cover employees of such corporation or trade or business, at
different times and in a different manner. In the event of any such amendment or
termination by action of the board of directors or other governing body of such
a corporation or trade or business, a separate plan shall be deemed to have been
established for the employees of such corporation or trade or business, and the
assets of such plan shall be segregated from the assets of this Plan at the
earliest practicable date and shall be dealt with in accordance with the
documents governing such separate plan.

          Section 16.3 Conformity to Internal Revenue Code.

          The Employer has established the Plan with the intent that the Plan
and Trust will at all times be qualified under section 401(a) and exempt under
section 501(a) of the Code and with the intent that contributions under the Plan
will be allowed as deductions in computing the net income of the Employer for
federal income tax purposes, and the provisions of the Plan and Trust Agreement
shall be construed to effectuate such intentions. Accordingly, notwithstanding
anything to the contrary hereinbefore provided, the Plan and the Trust Agreement
may be amended at any time without prior notice to Participants, Former
Participants, Beneficiaries or

<PAGE>

                                      -50-


any other persons entitled to benefits, if such amendment is deemed by the Board
to be necessary or appropriate to effectuate such intent.

          Section 16.4 Contingent Nature of Contributions.

          (a) All ESOP Contributions to the Plan are conditioned upon the
issuance by the Internal Revenue Service of a determination that the Plan and
Trust are qualified under section 401(a) of the Code and exempt under section
501(a) of the Code. If the Employer applies to the Internal Revenue Service for
such a determination within 90 days after the date on which it files its federal
income tax return for its taxable year that includes the last day of the Plan
Year in which the Plan is adopted, and if the Internal Revenue Service issues a
determination that the Plan and Trust are not so qualified or exempt, all ESOP
Contributions made by the Employer prior to the date of receipt of such a
determination may, at the election of the Employer, be returned to the Employer
within one year after the date of such determination.

          (b) All ESOP Contributions and Loan Repayment Contributions to the
Plan are made upon the condition that such ESOP Contributions and Loan Repayment
Contributions will be allowed as a deduction in computing the net income of the
Employer for federal income tax purposes. To the extent that any such deduction
is disallowed, the amount disallowed may, at the election of the Employer, be
returned to the Employer within one year after the deduction is disallowed.

          (c) Any contribution to the Plan made by the Employer as a result of a
mistake of fact may, at the election of the Employer, be returned to the
Employer within one year after such contribution is made.

                                  ARTICLE XVII

                     SPECIAL RULES FOR TOP HEAVY PLAN YEARS

          Section 17.1 In General.

          As of the Determination Date for each Plan Year, the Plan
Administrator shall determine whether the Plan is a Top Heavy Plan in accordance
with the provisions of this Article XVII. If, as of such Determination Date, the
Plan is a Top Heavy Plan, then the Plan Year immediately following such
Determination Date shall be a Top Heavy Plan Year and the special provisions of
this Article XVII shall be in effect; provided, however, that if, as of the
Determination Date for the Plan Year in which the Effective Date occurs, the
Plan is a Top Heavy Plan, such Plan Year shall be a Top Heavy Plan Year, and the
provisions of this Article XVII shall be given retroactive effect for such Plan
Year.

<PAGE>

                                      -51-


          Section 17.2 Definition of Top Heavy Plan.

          (a) Subject to section 17.2(c), the Plan is a Top Heavy Plan if, as of
a Determination Date: (i) it is not a member of a Required Aggregation Group,
and (ii)(A) the sum of the Cumulative Accrued Benefits of all Key Employees
exceeds 60% of (B) the sum of the Cumulative Accrued Benefits of all Employees
(excluding former Key Employees), former Employees (excluding former Key
Employees and other former Employees who have not performed any services for the
Employer or any Affiliated Employer during the immediately preceding five Plan
Years), and their Beneficiaries.

          (b) Subject to section 17.2(c), the Plan is a Top Heavy Plan if, as of
a Determination Date: (i) the Plan is a member of a Required Aggregation Group,
and (ii)(A) the sum of the Cumulative Accrued Benefits of all Key Employees
under all plans that are members of the Required Aggregation Group exceeds 60%
of (B) the sum of the Cumulative Accrued Benefits of all Employees (excluding
former Key Employees), former Employees (excluding former Key Employees and
other former Employees who have not performed any services for the Employer or
any Affiliated Employer during the immediately preceding five Plan Years), and
their Beneficiaries under all plans that are members of the Required Aggregation
Group.

          (c) Notwithstanding sections 17.2(a) and 17.2(b), the Plan is not a
Top Heavy Plan if, as of a Determination Date: (i) the Plan is a member of a
Permissible Aggregation Group, and (ii)(A) the sum of the Cumulative Accrued
Benefits of all Key Employees under all plans that are members of the
Permissible Aggregation Group does not exceed 60% of (B) the sum of the
Cumulative Accrued Benefits of all Employees (excluding former Key Employees),
former Employees (excluding former Key Employees and other former Employees who
have not performed any services for the Employer or any Affiliated Employer
during the immediately preceding five Plan Years), and their Beneficiaries under
all plans that are members of the Permissible Aggregation Group.

          Section 17.3 Determination Date.

          The Determination Date for the Plan Year in which the Effective Date
occurs shall be the last day of such Plan Year, and the Determination Date for
each Plan Year beginning after the Plan Year in which the Effective Date occurs
shall be the last day of the preceding Plan Year. The Determination Date for any
other qualified plan maintained by the Employer for a plan year shall be the
last day of the preceding plan year of each such plan, except that in the case
of the first plan year of such plan, it shall be the last day of such first plan
year.

          Section 17.4 Cumulative Accrued Benefits.

          (a) An individual's Cumulative Accrued Benefits under this Plan as of
a Determination Date are equal to the sum of:

          (i) the balance credited to such individual's Account under this Plan
     as of the most recent Valuation Date preceding the Determination Date;

<PAGE>

                                      -52-


          (ii) the amount of any ESOP Contributions or Loan Repayment
     Contributions made after such Valuation Date but on or before the
     Determination Date; and

          (iii) the amount of any distributions of such individual's Cumulative
     Accrued Benefits under the Plan during the five year period ending on the
     Determination Date.

For purposes of this section 17.4(a), the computation of an individual's
Cumulative Accrued Benefits, and the extent to which distributions, rollovers
and transfers are taken into account, will be made in accordance with section
416 of the Code and the regulations thereunder.

          (b) For purposes of this Plan, the term "Cumulative Accrued Benefits"
with respect to any other qualified plan, shall mean the cumulative accrued
benefits determined for purposes of section 416 of the Code under the provisions
of such plans.

          (c) For purposes of determining the top heavy status of a Required
Aggregation Group or a Permissible Aggregation Group, the Cumulative Accrued
Benefits under this Plan and the Cumulative Accrued Benefits under any other
plan shall be determined as of the Determination Date that falls within the same
calendar year as the Determination Dates for all other members of such Required
Aggregation Group or Permissible Aggregation Group.

          Section 17.5 Key Employees.

          (a) For purposes of the Plan, the term Key Employee means any employee
or former employee of the Employer or any Affiliated Employer who is at any time
during the current Plan Year or was at any time during the immediately preceding
four Plan Years:

          (i) a Five Percent Owner;

          (ii) a person who would be described in section 1.23 if the number
     "1%" were substituted for the number "5%" in section 1.23 and who has an
     annual Total Compensation from the Employer and any Affiliated Employer of
     more than $150,000;

          (iii) an Officer of the Employer or any Affiliated Employer who has an
     annual Total Compensation greater than 50% of the amount in effect under
     section 415(b)(1)(A) of the Code for any such Plan Year; or

          (iv) one of the ten persons owning the largest interests in the
     Employer and having an annual Total Compensation from the Employer or any
     Affiliated Employer in excess of the dollar limitation in effect under
     section 415(c)(1)(A) of the Code for such Plan Year.

          (b) For purposes of section 17.5(a):

<PAGE>

                                      -53-


          (i) for purposes of section 17.5(a)(iii), in the event the Employer or
     any Affiliated Employer has more officers than are considered Officers, the
     term Key Employee shall mean those officers, up to the maximum number, with
     the highest annual compensation in any one of the five consecutive Plan
     Years ending on the Determination Date; and

          (ii) for purposes of section 17.5(a)(iv), if two or more persons have
     equal ownership interests in the Employer, each such person shall be
     considered as having a larger ownership interest than any such person with
     a lower annual compensation from the Employer or any Affiliated Employer.

          (c) For purposes of section 17.5(a): (i) a person's compensation from
Affiliated Employers shall be aggregated, but his ownership interests in
Affiliated Employers shall not be aggregated; (ii) an employee shall only be
deemed to be an officer if he has the power and responsibility of a person who
is an officer within the meaning of section 416 of the Code; and (iii) the term
Key Employee shall also include the Beneficiary of a deceased Key Employee.

          Section 17.6 Required Aggregation Group.

          For purposes of this Article XVII, a Required Aggregation Group shall
consist of (a) this Plan; (b) any other qualified plans maintained by the
Employer and any Affiliated Employers that cover Key Employees; and (c) any
other qualified plans that are required to be aggregated for purposes of
satisfying the requirements of sections 401(a)(4) or 410(b) of the Code.

          Section 17.7 Permissible Aggregation Group.

          For purposes of this Article XVII, a Permissible Aggregation Group
shall consist of (a) the Required Aggregation Group and (b) any other qualified
plans maintained by the Employer and any Affiliated Employers; provided,
however, that the Permissible Aggregation Group must satisfy the requirements of
sections 401(a)(4) and 410(b) of the Code.

          Section 17.8 Special Requirements During Top Heavy Plan Years.

          (a) Notwithstanding any other provision of the Plan to the contrary,
for each Top Heavy Plan Year, in the case of a Participant (other than a Key
Employee) on the last day of such Top Heavy Plan Year who is not also a
participant in another qualified plan which satisfies the minimum contribution
and benefit requirements of section 416 of the Code with respect to such
Participant, the sum of the ESOP Contributions and Loan Repayment Contributions
made with respect to such Participant, when expressed as a percentage of his
Total Compensation for such Top Heavy Plan Year, shall not be less than 3% of
such Participant's Total Compensation for such Top Heavy Plan Year or, if less,
the highest combined rate, expressed as a percentage of Total Compensation at
which ESOP Contributions and Loan

<PAGE>

                                      -54-


Repayment Contributions were made on behalf of a Key Employee for such Top Heavy
Plan Year. The Employer shall make an additional contribution to the Account of
each Participant to the extent necessary to satisfy the foregoing requirement.

          (b) For any Top Heavy Plan Year, the number "1.0" shall be substituted
for the number "1.25" in sections 8.2(c)(iii) and 8.2(c)(iv), except that:

          (i) this section 17.8(b) shall not apply to any individual for a Top
     Heavy Plan Year that is not a Super Top Heavy Plan Year if the requirements
     of section 17.8(a) would be satisfied for such Super Top Heavy Plan Year if
     the number "4%" were substituted for the number 3% in section 17.8(a); and

          (ii) this section 17.8(b) shall not apply to an individual for a Top
     Heavy Plan Year if, during such Top Heavy Plan Year, there are no ESOP
     Contributions or Loan Repayment Contributions allocated to such individual
     under this Plan, there are no contributions under any other qualified
     defined contribution plan maintained by the Employer, and there are no
     accruals for such individual under any qualified defined benefit plan
     maintained by the Employer.

For purposes of this section 17.8(b), the term Super Top Heavy Plan Year means a
Top Heavy Plan Year in which the Plan would meet the definitional requirements
of sections 17.2(a) or 17.2(b) if the term "90%" were substituted for the term
"60%" in sections 17.2(a), 17.2(b) and 17.2(c).

                                  ARTICLE XVIII

                            MISCELLANEOUS PROVISIONS

          Section 18.1 Governing Law.

          The Plan shall be construed, administered and enforced according to
the laws of the State of Illinois without giving effect to the conflict of laws
principles thereof, except to the extent that such laws are preempted by federal
law.

          Section 18.2 No Right to Continued Employment.

          Neither the establishment of the Plan, nor any provisions of the Plan
or of the Trust Agreement establishing the Trust Fund nor any action of the Plan
Administrator, the Plan Administrator or the Trustee, shall be held or construed
to confer upon any Employee any right to a continuation of employment by the
Employer. The Employer reserves the right to dismiss any Employee or otherwise
deal with any Employee to the same extent as though the Plan had not been
adopted.

<PAGE>

                                      -55-


          Section 18.3 Construction of Language.

          Wherever appropriate in the Plan, words used in the singular may be
read in the plural, words used in the plural may be read in the singular, and
words importing the masculine gender may be read as referring equally to the
feminine and the neuter. Any reference to an Article or section number shall
refer to an Article or section of the Plan, unless otherwise indicated.

          Section 18.4 Headings.

          The headings of Articles and sections are included solely for
convenience of reference. If there is any conflict between such headings and the
text of the Plan, the text shall control.

          Section 18.5 Merger with Other Plans.

          The Plan shall not be merged or consolidated with, nor transfer its
assets or liabilities to, any other plan unless each Participant, Former
Participant, Beneficiary and other person entitled to benefits, would (if that
plan then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the benefit he would
have been entitled to receive if the Plan had terminated immediately before the
merger, consolidation or transfer.

          Section 18.6 Non-alienation of Benefits.

          (a) Except as provided in section 18.6(b), the right to receive a
benefit under the Plan shall not be subject in any manner to anticipation,
alienation or assignment, nor shall such right be liable for or subject to
debts, contracts, liabilities or torts. Should any Participant, Former
Participant or other person attempt to anticipate, alienate or assign his
interest in or right to a benefit, or should any person claiming against him
seek to subject such interest or right to legal or equitable process, all the
interest or right of such Participant or Former Participant or other person
entitled to benefits in the Plan shall cease, and in that event such interest or
right shall be held or applied, at the direction of the Plan Administrator, for
or to the benefit of such Participant or Former Participant, or other person or
his spouse, children or other dependents in such manner and in such proportions
as the Plan Administrator may deem proper.

          (b) This section 18.6 shall not prohibit the Plan Administrator from
recognizing a Domestic Relations Order that is determined to be a Qualified
Domestic Relations Order in accordance with section 18.7.

<PAGE>

                                      -56-


          Section 18.7 Procedures Involving Domestic Relations Orders.

          Upon receiving a Domestic Relations Order, the Plan Administrator
shall segregate in a separate account or in an escrow account or separately
account for the amounts payable to any person pursuant to such Domestic
Relations Order, pending a determination whether such Domestic Relations Order
constitutes a Qualified Domestic Relations Order, and shall give notice of the
receipt of the Domestic Relations Order to the Participant or Former Participant
and each other person affected thereby. If, within 18 months after receipt of
such Domestic Relations Order, the Plan Administrator, a court of competent
jurisdiction or another appropriate authority determines that such Domestic
Relations Order constitutes a Qualified Domestic Relations Order, the Plan
Administrator shall direct the Trustee to pay the segregated amounts (plus any
interest thereon) to the person or persons entitled thereto under the Qualified
Domestic Relations Order. If it is determined that the Domestic Relations Order
is not a Qualified Domestic Relations Order or if no determination is made
within the prescribed 18- month period, the segregated amounts shall be
distributed as though the Domestic Relations Order had not been received, and
any later determination that such Domestic Relations Order constitutes a
Qualified Domestic Relations Order shall be applied only with respect to
benefits that remain undistributed on the date of such determination. The Plan
Administrator shall be authorized to establish such reasonable administrative
procedures as he deems necessary or appropriate to administer this section 18.7.
This section 18.7 shall be construed and administered so as to comply with the
requirements of section 401(a)(13) of the Code.

          Section 18.8 Leased Employees.

          (a) Subject to section 18.8(b), a leased employee shall be treated as
an Employee for purposes of the Plan. For purposes of this section 18.8, the
term "leased employee" means any person (i) who would not, but for the
application of this section 18.8, be an Employee and (ii) who pursuant to an
agreement between the Employer and any other person ("leasing organization") has
performed for the Employer (or for the Employer and related persons determined
in accordance with section 414(n)(6) of the Code), on a substantially full-time
basis for a period of at least one year, services of a type historically
performed by employees in the business field of the Employer.

          (b) For purposes of the Plan:

          (i) contributions or benefits provided to the leased employee by the
     leasing organization which are attributable to services performed for the
     Employer shall be treated as provided by the Employer; and

          (ii) section 18.8(a) shall not apply to a leased employee if:

               (A) the number of leased employees performing services for the
          Employer does not exceed 20% of the number of the Employer's Employees
          who are not Highly Compensated Employees; and

<PAGE>

                                      -57-


               (B) such leased employee is covered by a money purchase pension
          plan providing (I) a nonintegrated contribution rate of at least 10%
          of the leased employee's compensation; (II) immediate participation;
          (III) full and immediate vesting; and (IV) coverage for all of the
          employees of the leasing organization (other than employees who
          perform substantially all of their services for the leasing
          organization).

          Section 18.9 Status as an Employee Stock Ownership Plan.

          It is intended that the Plan constitute an "employee stock ownership
plan," as defined in section 4975(e)(7) of the Code and section 407(d)(6) of
ERISA. The Plan shall be construed and administered to give effect to such
intent.

<PAGE>

                                 TRUST AGREEMENT

                                     BETWEEN

                            BIG FOOT FINANCIAL CORP.

                                       AND

                                    [TRUSTEE]

                                     FOR THE

                            BIG FOOT FINANCIAL CORP.
                          EMPLOYEE STOCK OWNERSHIP PLAN


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


                      Entered into as of ____________, 1996

<PAGE>

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

                                    ARTICLE I

                                   TRUST FUND

Section 1.1   Trust Fund..................................................  2
Section 1.2   Collection of Contributions.................................  2
Section 1.3   Non-diversion of Funds......................................  2
                                                                       
                                   ARTICLE II
                                                                       
                          INVESTMENT AND ADMINISTRATION
                                                                       
Section 2.1   In General..................................................  3
Section 2.2   Investment Funds............................................  3
Section 2.3   Appointment of Investment Manager...........................  3
Section 2.4   Investment Decisions........................................  4
Section 2.5   Investment in Commingled Funds..............................  5
Section 2.6   Liquidity...................................................  5
Section 2.7   Investment Directions by Participants.......................  6
Section 2.8   Trustee's Administrative Authority..........................  6
Section 2.9   Exercise of Voting Rights with Respect to Shares............  8
Section 2.10  Response to Tender Offers and Similar Events................  8
Section 2.11  Share Acquisition Loans.....................................  8
                                                                       
                                   ARTICLE III
                                                                       
                    TRUSTEE, PLAN ADMINISTRATOR AND COMMITTEE
                                                                       
Section 3.1   Committee and Plan Administrator............................  9
Section 3.2   Trustee's Reliance.......................................... 10
Section 3.3   Legal Counsel............................................... 10
Section 3.4   Liability under the Plan.................................... 10
                                                                       
                                   ARTICLE IV
                                                                       
                        DISTRIBUTIONS FROM THE TRUST FUND
                                                                       
Section 4.1   In General.................................................. 10
Section 4.2   Direction by the Plan Administrator......................... 11
Section 4.3   Method of Payment........................................... 11
                                                                    

                                       (i)
<PAGE>

                                                                            Page
                                                                            ----

                                    ARTICLE V

                                RESPONSIBILITIES

Section 5.1   General Standard of Care.................................... 11
Section 5.2   No Liability for Acts of Others............................. 12
Section 5.3   Compliance with ERISA....................................... 13
                                                                       
                                   ARTICLE VI
                                                                       
                               TRUSTEE'S ACCOUNTS
                                                                       
Section 6.1   Accounts.................................................... 13
Section 6.2   Valuation of Trust Fund..................................... 13
Section 6.3   Reports to the Plan Administrator........................... 13
Section 6.4   Right of Judicial Settlement................................ 14
Section 6.5   Enforcement of Agreement.................................... 14
                                                                       
                                   ARTICLE VII
                                                                       
                         TAXES; COMPENSATION OF TRUSTEE
                                                                       
Section 7.1   Taxes....................................................... 15
Section 7.2   Compensation of Trustee; Expenses........................... 15
                                                                       
                                  ARTICLE VIII
                                                                       
                       RESIGNATION AND REMOVAL OF TRUSTEE
                                                                       
Section 8.1   Resignation or Removal of Trustee........................... 15
Section 8.2   Appointment of Successor.................................... 16
Section 8.3   Succession.................................................. 16
Section 8.4   Successor Bound by Agreement................................ 16
                                                                       
                                   ARTICLE IX
                                                                       
                            AMENDMENT AND TERMINATION
                                                                       
Section 9.1   Amendment and Termination................................... 16


                                      (ii)

<PAGE>

                                                                            Page
                                                                            ----

                                    ARTICLE X

                                  MISCELLANEOUS

Section 10.1    Binding Effect; Assignability............................. 17
Section 10.2    Governing Law............................................. 17
Section 10.3    Notices................................................... 17
Section 10.4    Severability.............................................. 18
Section 10.5    Waiver.................................................... 18
Section 10.6    Non-Alienation............................................ 18
Section 10.7    Qualified Plan and Trust.................................. 19
Section 10.8    Return of Contributions................................... 19
Section 10.9    Compliance with Securities Laws........................... 19
Section 10.10   Headings.................................................. 20
Section 10.11   Construction of Language.................................. 20
Section 10.12   Counterparts.............................................. 20


                                      (iii)
<PAGE>

                                 TRUST AGREEMENT

                                     FOR THE

                            BIG FOOT FINANCIAL CORP.

                          EMPLOYEE STOCK OWNERSHIP PLAN

            This AGREEMENT ("Agreement") is made as of September 12, 1996, by
and between BIG FOOT FINANCIAL CORP., a corporation organized under the laws of
the State of Delaware and having its executive offices at 1190 RFD, Long Grove,
Illinois 60047-7304 ("Company"), and [TRUSTEE], a corporation organized under
the laws of the [___________] and having an office at [________________________]
("Trustee").

                              W I T N E S S E T H :

            WHEREAS, the Company has, by action of its Board of Directors,
adopted an Employee Stock Ownership Plan ("Plan") to be qualified under section
401(a) of the Internal Revenue Code of 1986, as amended ("Code"), for the
exclusive benefit of its eligible employees ("Participants") and their
beneficiaries; and

            WHEREAS, the Company has, in accordance with the terms of the Plan,
appointed a Plan Administrator ("Plan Administrator") and a Committee
("Committee") to administer the Plan; and

            WHEREAS, the Plan contemplates the establishment and continuance of
a trust so long as it remains in effect to be and to remain qualified for tax
exempt status under section 501(a) of the Code, to which contributions will be
made from time to time, to be accepted, invested and maintained in accordance
with this Agreement; and

            WHEREAS, the Plan provides for the assets of such trust to be
invested primarily in shares of common stock of the Company ("Shares") and for
the assumption of debt for the purpose of purchasing Shares;

            NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Company and the Trustee hereby agree as follows:

<PAGE>

                                       -2-


                                    ARTICLE I

                                   TRUST FUND

            Section 1.1 Trust Fund.

            The Company hereby establishes with the Trustee a trust, pursuant to
the Plan, in which shall be deposited such Shares and such sums of money as
shall from time to time be paid or delivered to or deposited with the Trustee by
or with the approval of the Company in accordance with terms of the Plan. All
such Shares and all such sums of money, all investments and reinvestments
thereof and all earnings, appreciation and additions allocable thereto, less
losses, depreciation and expenses allocable thereto and any payments made
therefrom as authorized under the Plan or this Agreement shall constitute the
"Trust Fund". The Trust Fund shall be held, managed and administered by the
Trustee, IN TRUST, and dealt with in accordance with the provisions of this
Agreement and in accordance with any funding policy or guidelines established
under the Plan that are communicated in writing to the Trustee.

            Section 1.2 Collection of Contributions.

            The Trustee shall have no authority over and shall have no
responsibility for the administration of the Plan or for the collection of any
contributions to the Trust Fund required under the Plan, nor shall it have any
authority to bring any action or proceeding to enforce the collection of any
such amount or to make inquiry as to whether any such contributions received by
it were properly collected or computed in accordance with the terms of the Plan.

            Section 1.3 Non-diversion of Funds.

            Notwithstanding anything to the contrary contained in this Agreement
or any amendment hereto, no part of the Trust Fund other than such expenses and
taxes properly charged to the Trust Fund under the Plan or this Agreement shall
be used for or diverted to purposes other than for the exclusive benefit of Plan
Participants and their beneficiaries (including alternate payees entitled to
benefits under the Plan pursuant to a qualified domestic relations order
described in section 414(p) of the Code).

<PAGE>

                                       -3-


                                   ARTICLE II

                          INVESTMENT AND ADMINISTRATION

            Section 2.1 In General.

            The Trust Fund shall be held by the Trustee and shall be invested
and reinvested as hereinafter provided in this Article II, without distinction
between principal and income and without regard to the restrictions of the laws
of any jurisdiction relating to the investment of trust funds. Subject to
section 2.7, the Trust Fund shall be invested at all times, pursuant to
directions given in accordance with section 2.4, primarily in Shares.

            Section 2.2 Investment Funds.

            (a) The Trustee shall establish and maintain, for the investment of
the Trust Fund, such separate investment funds (individually, an "Investment
Fund") as the Company may request by written notice to the Trustee. In the
absence of such notice, the Trust Fund shall consist of a single Investment
Fund.

            (b) To the extent directed to do so pursuant to section 2.4, the
Trustee shall hold and invest amounts paid over to it pursuant to this Agreement
in such Investment Funds as shall have been established in accordance with
section 2.2(a), and shall allocate amounts paid over to it among the Investment
Funds in the manner and in the proportion designated by the Plan Administrator
pursuant to the terms of the Plan. The Trustee shall also credit to each such
Investment Fund all earnings and appreciation allocable thereto and shall charge
against each such fund any depreciation, losses, expenses, payments and
distributions allocable thereto.

            (c) The Trustee shall invest and reinvest amounts allocated to each
Investment Fund in accordance with such written investment criteria as shall be
established by the Committee and communicated in writing to the Trustee.
Notwithstanding any such investment criteria, the Trustee is authorized to
retain in an Investment Fund, for as long as it is deemed advisable by the
person responsible for directing the investment of the particular Investment
Fund, (i) any securities or other property received by means of a dividend,
distribution, exchange, conversion, liquidation or otherwise than by initial
purchase; and (ii) any investments which were authorized hereunder when made by
the Trustee.

            Section 2.3 Appointment of Investment Manager.

            (a) The Committee may, in its discretion, appoint an investment
manager ("Investment Manager") to direct the investment and reinvestment of an
Investment Fund. Any such Investment Manager shall either (i) be registered as
an investment adviser under the Investment Advisers Act of 1940, as amended
("Investment Advisers Act"); (ii) be a bank, as defined in the Investment
Advisers Act; or (iii) be an insurance company qualified to perform investment
services under the laws of more than one state.

<PAGE>

                                       -4-


            (b) The Plan Administrator shall give written notice to the Trustee
of the appointment of an Investment Manager pursuant to section 2.3(a). Such
notice shall include: (i) a specification of the portion of the Trust Fund to
which the appointment applies; (ii) a certification by the Plan Administrator
that the Investment Manager satisfies the requirements of section 2.3(a)(i),
(ii) or (iii); (iii) a copy of the instruments appointing the Investment Manager
and evidencing the Investment Manager's acceptance of the appointment; (iv)
directions as to the manner in which the Investment Manager is authorized to
give instructions to the Trustee, including the persons authorized to give
instructions and the number of signatures required for any written instruction;
(v) an acknowledgement by the Investment Manager that it is a fiduciary of the
Plan; and (vi) if applicable, a certificate evidencing the Investment Manager's
current registration under the Investment Advisers Act. For purposes of this
Agreement, the appointment of an Investment Manager pursuant to this section 2.3
shall become effective as of the effective date specified in such notice, or, if
later, as of the date on which the Trustee receives proper notice of such
appointment.

            (c) The Plan Administrator shall give written notice to the Trustee
of the resignation or removal of an Investment Manager previously appointed
pursuant to this section 2.3. From and after the date on which the Trustee
receives such notice, or, if later, the effective date of the resignation or
removal specified in such notice, the Committee shall be responsible, in
accordance with this section 2.3, for the investment and reinvestment of the
portion of the Trust Fund theretofore managed by such Investment Manager, until
such time as a successor Investment Manager has been duly appointed pursuant to
this section 2.3.

            Section 2.4 Investment Decisions.

            (a) The Trustee shall invest and reinvest the Trust Fund as follows:

            (i) in accordance with the directions of the Committee; or

            (ii) to the extent that an Investment Manager is appointed to direct
      the investment of any Investment Fund, in accordance with the directions
      of such Investment Manager.

The Trustee shall be under no duty or obligation to review any investment to be
acquired, held or disposed of pursuant to directions of the Committee or any
Investment Manager nor to make any recommendation with respect to the
disposition or continued retention of any such investment. To the extent that
the Trustee is subject to direction by the Committee or an Investment Manager,
the Trustee shall have no liability or responsibility for its actions or
inaction pursuant to the direction of, or its failure to act in the absence of
directions from, the Committee or an Investment Manager, except to the extent
provided in section 5.2. To the extent that the Trustee is subject to direction
by the Committee or an Investment Manager, the Company hereby agrees to
indemnify the Trustee and hold it harmless from and defend it against any claim
or liability which may be asserted against the Trustee by reason of any action
or inaction by it pursuant to a direction by the Committee or by an Investment
Manager or failing to act in the absence of any such direction.

<PAGE>

                                       -5-


            (b) An Investment Manager appointed pursuant to section 2.3 shall,
from time to time, issue orders for the purchase or sale of securities directly
to a broker. Written notification of the issuance of each such order shall be
given promptly to the Trustee by the Committee or the Investment Manager, and
the execution of each such order shall be confirmed by written advice to the
Trustee by the broker. Such notification shall be authority for the Trustee to
pay for securities purchased against receipt thereof and to deliver securities
sold against payment therefor, as the case may be.

            (c) To the extent that neither the Committee nor an Investment
Manager furnishes directions as to the investment of any portion of the Trust
Fund that is subject to its direction, the Trustee shall invest and reinvest the
Trust Fund (i) in Shares and (ii) to the extent that it is not practicable to
invest and reinvest the Trust Fund in Shares, in any savings account, time or
other interest bearing deposit or in any other interest bearing obligation of
any one or more savings banks, savings and loan associations, banks and other
financial institutions, or any of them, including the Trustee or any subsidiary
of the Company, or, subject to section 2.5, in any commingled, common or group
trust fund at least 75% of the assets of which are invested in such savings
accounts, time or other interest bearing deposits or other interest bearing
obligations.

            Section 2.5 Investment in Commingled Funds.

            The Trustee may, if directed to do so by the Committee or an
Investment Manager or if authorized to do so pursuant to section 2.4, invest any
amounts, other than Shares, held by it under this Agreement in any commingled or
group trust fund described in section 401(a) of the Code and exempt under
section 501(a) of the Code or in any common trust fund exempt under section 584
of the Code, provided that such trust fund satisfies the requirements of this
Agreement applicable to such amounts and that the Trustee serves as trustee of
such commingled, group or common trust fund. To the extent that the Trust Fund
is at any time invested in any commingled, group or common trust fund, the
declaration of trust or other instrument pertaining to such fund and any
amendments thereto are hereby adopted as part of this Agreement and deemed to
form a part of the Plan. If there is any conflict between the provisions of this
Agreement and such declaration of trust or other instrument, then the terms of
the declaration of trust or other instrument of the commingled, group or common
trust fund shall govern.

            Section 2.6 Liquidity.

            Notwithstanding any provisions of this Article II to the contrary,
the Trustee, in its sole discretion or as the Plan Administrator shall request,
may retain uninvested cash or cash balances, and sell, to provide cash or cash
balances, such investments in whatever portion of the Trust Fund that it may
deem advisable, without being required to pay interest thereon. Pending
investment, the Trustee, in its sole discretion, may temporarily invest any
funds held or received by it for investment in an investment fund established
hereunder in commercial paper or in obligations of, or guaranteed by, the United
States government or any of its agencies.

<PAGE>

                                       -6-


            Section 2.7 Investment Directions by Participants.

            Each Participant entitled thereto under the terms of the Plan
("Qualified Participant") shall have the right to direct the allocation to the
various Investment Funds established hereunder to be made by the Trustee for a
portion of such Qualified Participant's account under the Plan. The Plan
Administrator shall by written notice furnish the Trustee with the investment
directions for each Qualified Participant's account in the Plan. The Trustee
shall act in accordance with the most recent directions it has received from the
Plan Administrator for each account and shall have no discretion over or
responsibility or liability for its actions taken in accordance with such
directions. The Company hereby agrees to indemnify and defend the Trustee and
hold it harmless from and against any claim asserted against or liability
imposed on the Trustee by reason of its having acted on any direction given by a
Qualified Participant with respect to his own account.

            Section 2.8 Trustee's Administrative Authority.

            (a) In addition to and not by way of limitation of any other powers
conferred upon the Trustee by law or by other provisions of this Agreement, but
subject to the provisions of section 1.3 and this Article II, the Trustee is
authorized and empowered:

            (i) subject to section 2.10, to sell, exchange, convey, transfer or
      dispose of and also to grant options with respect to any property, whether
      real or personal, at any time held by it, and any sale may be made by
      private contract or by public auction, and for cash or upon credit, or
      partly for cash and partly upon credit, and no person dealing with the
      Trustee shall be bound to see to the application of the purchase money or
      to inquire into the validity, expediency or propriety of any such sale or
      other disposition;

            (ii) to retain, manage, operate, repair and rehabilitate and to
      mortgage or lease for any period any real estate held by it and, in its
      discretion, cause to be formed any corporation or trust to hold title to
      any such real property;

            (iii) unless otherwise agreed to and subject to sections 2.9 and
      2.10, to vote in person or by proxy on any stocks, bonds, or other
      securities held by it, to exercise any options appurtenant to any stocks,
      bonds or other securities for the conversion thereof into other stocks,
      bonds or securities, or to exercise any rights to subscribe for additional
      stocks, bonds or other securities and to make any and all necessary
      payment therefor and to enter into any voting trust;

            (iv) with respect to any investment, to join in, dissent from, or
      oppose any action or inaction of any corporation, or of the directors,
      officers or stockholders of any corporation, including, without
      limitation, any reorganization, recapitalization, consolidation,
      liquidation, sale or merger;

            (v) to settle, adjust, compromise, or submit to arbitration any
      claims, debts or damages due or owing to or from the Trust Fund; and

<PAGE>

                                       -7-


            (vi) to deposit any property with any protective, reorganization or
      similar committee, to delegate power thereto and to pay and agree to pay
      part of its expenses and compensation and any assessments levied with
      respect to any property so deposited.

In exercising such powers with respect to any portion of the Trust Fund that is
invested in the discretion of the Trustee or pursuant to section 2.4(c), the
Trustee shall act in its discretion. In exercising such powers with respect to
any portion of the Trust Fund that is invested pursuant to directions of the
Committee or of an Investment Manager, the Trustee shall act in accordance with
directions provided by the Committee or Investment Manager. The Trustee shall be
under no duty or obligation to review any action to be taken, nor to recommend
any action, pursuant to this section 2.8(a) with respect to any portion of the
Trust Fund that is under the direction of the Committee or an Investment
Manager. The Trustee shall have no liability or responsibility for its actions
or inaction pursuant to the direction of, or its failure to act in the absence
of directions from, the Committee or an Investment Manager, except to the extent
provided in section 5.2.

            (b) In addition to and not by way of limitation of any other powers
conferred upon the Trustee by law or other provisions of this Agreement, but
subject to section 1.3 and this Article II, the Trustee is authorized and
empowered, in its discretion:

            (i) to commence or defend suits or legal proceedings, and to
      represent the Trust Fund in all suits or legal proceedings in any court or
      before any other body or tribunal;

            (ii) to register securities in its name or in the name of any
      nominee or nominees with or without indication of the capacity in which
      the securities shall be held, or to hold securities in bearer form, but
      the books and records of the Trustee shall at all times show that such
      investments are part of the Trust Fund;

            (iii) subject to section 2.11, to borrow or raise moneys for the
      purposes of the Trust Fund from any lender, except the Trustee in its
      individual capacity, and for any sum so borrowed to issue its promissory
      note as Trustee and to secure the repayment thereof by pledging all or any
      part of the Trust Fund, and no person lending money to the Trustee shall
      be bound to see the application of the money loaned or to inquire into the
      validity, expediency or propriety of any such borrowing;

            (iv) to make distributions in cash or in Shares upon the direction
      of the Committee and to make transfers of funds into and out of the
      Investment Funds for value or upon the direction of the Plan
      Administrator;

            (v) to employ such agents, counsel and accountants as the Trustee
      shall deem advisable and to pay their reasonable expenses and
      compensation;

            (vi) to make, execute, acknowledge, and deliver any and all deeds,
      leases, assignments and instruments; and

<PAGE>

                                       -8-


            (vii) generally to do all acts which the Trustee may deem necessary
      or desirable for the administration and protection of the Trust Fund.

            Section 2.9 Exercise of Voting Rights with Respect to Shares.

            The Committee shall direct the Trustee as to the manner of exercise
of voting rights appurtenant to Shares held in the Trust Fund. The Trustee shall
act in accordance with the directions that it receives from the Committee for
each matter as to which voting rights are to be exercised and shall refrain from
exercising the voting rights appurtenant to Shares held in the Trust Fund in the
absence of such directions. The Trustee shall have no discretion over or
responsibility or liability for its actions taken in accordance with such
directions, or for its failure to exercise such voting rights in the absence of
such directions. The Company hereby agrees to indemnify the Trustee and hold it
harmless from and defend it against any claim asserted against or liability
imposed on the Trustee by reason of its having acted on any direction given by
the Committee in accordance with this section 2.9 or failing to act in the
absence of any such direction.

            Section 2.10 Response to Tender Offers and Similar Events.

            The Committee shall direct the Trustee as to the manner of exercise
of any rights to tender Shares held in the Trust Fund or otherwise act in
response to any tender offer with respect to Shares or any other offer to
purchase, exchange, redeem or otherwise transfer such Shares. The Trustee shall
act in accordance with the directions that it receives from the Committee for
each matter as to which such rights are to be exercised and shall refrain from
taking any action in response to such an offer in the absence of such
directions. The Trustee shall have no discretion over or responsibility or
liability for its actions taken in accordance with such directions, or for its
failure to exercise such rights in the absence of such directions. The Company
hereby agrees to indemnify the Trustee and hold it harmless from and defend it
against any claim asserted against or liability imposed on the Trustee by reason
of its having acted on any direction given by the Committee in accordance with
this section 2.10 or failing to act in the absence of any such direction.

            Section 2.11 Share Acquisition Loans.

            (a) The Trustee shall, if directed to do so by the Committee, obtain
a loan ("Share Acquisition Loan") on behalf of the Plan and shall apply the
proceeds of such Share Acquisition Loan in the proportions directed by the
Committee:

            (i) to purchase Shares; or

            (ii) to make payments of principal or interest, or a combination of
      principal and interest, with respect to such Share Acquisition Loan; or

<PAGE>

                                       -9-


            (iii) to make payments of principal and interest, or a combination
      of principal and interest, with respect to a previously obtained Share
      Acquisition Loan that is then outstanding.

Any such Share Acquisition Loan shall be on such terms and conditions as the
Committee may determine, and the Trustee shall have no duty or obligation to
inquire as to the expediency or propriety of any such Share Acquisition Loan or
any of the terms and conditions thereof.

            (b) If directed to do so by the Committee, the Trustee shall execute
a promissory note, in its capacity as Trustee, evidencing the obligation of the
Plan to repay a Share Acquisition Loan and shall pledge, in such proportions as
the Committee may direct, the following assets of the Plan as collateral for
such Share Acquisition Loan:

            (i) any Shares purchased with the proceeds of such Share Acquisition
      Loan; and

            (ii) any Shares purchased with the proceeds of a previous Share
      Acquisition Loan, provided that such previous Share Acquisition Loan is
      repaid with the proceeds of the Share Acquisition Loan for which such
      Shares are pledged.

Any Share Acquisition Loan shall be without recourse against the Plan or the
Trustee, and, except as specifically provided in this section 2.11, no assets of
the Plan shall be pledged as collateral for a Share Acquisition Loan.

            (c) The Trustee shall apply the Company's contributions to the Trust
Fund, the earnings on such contributions, and the earnings with respect to
Shares that shall have been pledged as collateral for a Share Acquisition Loan,
in such proportions as the Committee may direct, to the payment of principal and
interest with respect to such Share Acquisition Loan.

                                   ARTICLE III

                    TRUSTEE, PLAN ADMINISTRATOR AND COMMITTEE

            Section 3.1 Committee and Plan Administrator.

            The Company shall certify to the Trustee the names and specimen
signatures of the Plan Administrator and of the members of the Committee
appointed by the Company to administer the Plan and give directions to the
Trustee. Such certification shall include directions as to the number of
signatures required for any communication or direction to the Trustee. The
Company shall promptly give notice to the Trustee of changes in the identity of
the Plan Administrator or in the membership of the Committee. The Plan
Administrator or the Committee may also certify to the Trustee the name of any
person, together with a specimen signature of any such person, authorized to act
for it in relation to the Trustee. The Plan

<PAGE>

                                      -10-


Administrator or the Committee shall promptly give notice to the Trustee of any
change in any person authorized to act on behalf of it. For all purposes under
this Agreement, until any such notice is received by the Trustee, the Trustee
shall be fully protected in assuming that the identity of the Plan
Administrator, the membership of the Committee and the authority of any person
certified to act in its behalf remain unchanged.

            Section 3.2 Trustee's Reliance.

            The Trustee may rely and act upon any certificate, notice or
direction of the Plan Administrator or the Committee, or of a person authorized
to act on its behalf, or of the Company or of an Investment Manager which the
Trustee believes to be genuine and to have been signed by the person or persons
duly authorized to sign such certificate, notice, or direction.

            Section 3.3 Legal Counsel.

            The Trustee may consult with legal counsel (who may, but need not,
be counsel to the Company) concerning any question which may arise under this
Agreement, and the opinions of such counsel shall be full and complete
protection with respect to any action taken, or omitted, by the Trustee
hereunder in good faith in accordance with the opinion of such counsel.

            Section 3.4 Liability under the Plan.

            The duties and obligations of the Trustee shall be limited to those
expressly set forth in this Agreement, notwithstanding any reference herein to
the Plan. The Trustee shall not be obliged to take or defend any action or
participate in or proceed with any suit or legal or administrative proceeding
which might subject it to substantial cost or expense or liability unless first
indemnified by the Company in an amount and by security satisfactory to it
against all losses, costs, damages and expenses which may result therefrom or be
occasioned thereby.

                                   ARTICLE IV

                        DISTRIBUTIONS FROM THE TRUST FUND

            Section 4.1 In General.

            The Trustee shall make payments from the Trust Fund in such amounts,
at such times, and to such persons as the Plan Administrator may, from time to
time, direct.

<PAGE>

                                      -11-


            Section 4.2 Direction by the Plan Administrator.

            (a) A direction by the Plan Administrator to make a distribution
from the Trust Fund shall:

            (i) be made in writing;

            (ii) specify the amount of the payment or the number of Shares to be
      distributed, the date such payment is to be made, the person to whom
      payment is to be made, and the address to which the payment is to be sent;
      and

            (iii) be deemed to certify to the Trustee that such direction and
      any payment pursuant thereto are authorized under the terms of the Plan.

            (b) The Trustee shall be entitled to rely conclusively on the Plan
Administrator's certification of its authority to direct a payment without
independent investigation. The Trustee shall have no liability to any person
with respect to payments made in accordance with the provisions of this Article
IV.

            Section 4.3 Method of Payment.

            Payments of money by the Trustee may be made by its check payable to
the order of the payee designated by the Plan Administrator and mailed to the
payee's address last furnished to the Trustee by the Plan Administrator, or, if
no such address has been so furnished, to the payee in care of the Company.
Distributions of Shares shall be made by causing the Company, or its transfer
agent, to issue to the distributee a stock certificate evidencing ownership of
the designated number of Shares. To the extent that any distribution of Shares
to any person requires the registration of such Shares under the securities or
blue sky laws of the United States or any state, or otherwise requires any
governmental approvals, the Company shall undertake to complete such
registration or obtain such approvals at its sole expense.

                                    ARTICLE V

                                RESPONSIBILITIES

            Section 5.1 General Standard of Care.

            The Trustee, the Plan Administrator, the members of the Committee
and any Investment Manager shall at all times discharge their duties with
respect to the Trust Fund solely in the interest of the Plan Participants and
their beneficiaries (including alternate payees entitled to benefits under the
Plan pursuant to a qualified domestic relations order described in section
414(p) of the Code) and with the care, skill, prudence, and diligence that,
under the

<PAGE>

                                      -12-


circumstances prevailing, a prudent man acting in a like capacity and familiar
with such matters would use in the conduct of an enterprise of a like character
and with like aims.

            Section 5.2 No Liability for Acts of Others.

            (a) Subject to section 5.2(b), no "fiduciary" (as such term is
defined in section 3(21) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) under this Agreement shall be liable for an act or
omission of another person in carrying out any fiduciary responsibility where
such fiduciary responsibility is allocated to such other person by this
Agreement or pursuant to a procedure established in this Agreement except to the
extent that:

            (i) such fiduciary participated knowingly in, or knowingly undertook
      to conceal, an act or omission of such other person, knowing such act or
      omission to be a breach of fiduciary responsibility;

            (ii) such fiduciary, by his failure to comply with section 404(a)(1)
      of ERISA in the administration of his specific responsibilities which give
      rise to his status as a fiduciary, has enabled such other person to commit
      a breach of fiduciary responsibility;

            (iii) such fiduciary has knowledge of a breach of fiduciary
      responsibility by such other person, unless he makes reasonable efforts
      under the circumstances to remedy the breach; or

            (iv) such fiduciary is a "named fiduciary" (as such term is defined
      in section 402(a)(2) of ERISA) and has violated his duties under section
      404(a)(1) of ERISA:

                  (A) with respect to the allocation of fiduciary
            responsibilities among named fiduciaries or the designation of
            persons other than named fiduciaries to carry out fiduciary
            responsibilities under this Agreement;

                  (B) with respect to the establishment or implementation of
            procedures for allocating fiduciary responsibilities among named
            fiduciaries or for designating persons other than named fiduciaries
            to carry out fiduciary responsibilities under this Agreement; or

                  (C) in continuing the allocation of fiduciary responsibilities
            among named fiduciaries or the designation of persons other than
            named fiduciaries to carry out fiduciary responsibilities under this
            Agreement.

            (b) Notwithstanding anything in this Agreement to the contrary, the
Trustee shall have no liability or responsibility for an act or omission of an
Investment Manager appointed pursuant to section 2.3 in carrying out its
fiduciary responsibilities with respect to the Plan, unless the Trustee (i) by
its failure to comply with section 404(a)(1) of ERISA in the

<PAGE>

                                      -13-


administration of its specific responsibilities which give rise to its status as
a fiduciary, has enabled such Investment Manager to commit a breach of fiduciary
responsibility, or (ii) participated knowingly in, or knowingly undertook to
conceal, an act or omission of such Investment Manager, knowing such act or
omission to be a breach of fiduciary responsibility.

            Section 5.3 Compliance with ERISA.

            Notwithstanding anything in this Agreement, as amended from time to
time, to the contrary, no provision of this Agreement shall be construed so as
to violate the requirements of ERISA.

                                   ARTICLE VI

                               TRUSTEE'S ACCOUNTS

            Section 6.1 Accounts.

            The Trustee shall keep accurate and detailed accounts of all
investments, reinvestments, receipts and disbursements, and other transactions
hereunder, and all such accounts and the books and records relating thereto
shall be open to inspection at all reasonable times by the Company or the Plan
Administrator or persons designated by them.

            Section 6.2 Valuation of Trust Fund.

            The Trustee shall value or cause to be valued the Trust Fund and any
Investment Fund that has been established hereunder as of the last business day
of each calendar quarter ("Valuation Date"), and shall report to the Plan
Administrator the value of the Trust Fund and each Investment Fund as of such
date, within a reasonable time after the first day of the month next succeeding
each Valuation Date.

            Section 6.3 Reports to the Plan Administrator.

            (a) Within seventy-five (75) days following the last day of each
fiscal year of the trust, and within seventy-five (75) days following the
effective date of the resignation or removal of the Trustee as provided in
section 8.1, the Trustee shall render to the Plan Administrator a written
account setting forth all investments, receipts, disbursements and other
transactions affecting the Trust Fund or any Investment Fund, which account
shall be signed by the Trustee and mailed to the Plan Administrator.

            (b) The Plan Administrator shall notify the Trustee in writing of
any objection or exception to an account so rendered not later than sixty (60)
days following the date on which

<PAGE>

                                      -14-


the Account was mailed to the Plan Administrator, whereupon the Plan
Administrator and the Trustee shall cooperate in resolving such objection or
exception.

            (c) If the Plan Administrator has not communicated in writing to the
Trustee within sixty (60) days following the mailing of the account to the Plan
Administrator any exception or objection to the account, the account shall
become an account stated at the end of such sixty (60) day period. If the Plan
Administrator does communicate such an exception or objection, as to which it
later becomes satisfied, the Plan Administrator shall thereupon indicate in
writing its approval of the account, or of the account as amended, and the
account shall thereupon become an account stated.

            (d) Whenever an account shall have become an account stated as
aforesaid, such account shall be deemed to be finally settled and shall be
conclusive upon the Trustee, the Company and all persons having or claiming to
have any interest in the Trust Fund or under the Plan, and the Trustee shall be
fully and completely discharged and released to the same extent as if the
account had been settled and allowed by a judgment or decree of a court of
competent jurisdiction in an action or proceeding in which the Trustee, the
Company, and all persons having or claiming to have any interest in the Trust
Fund or under the Plan were parties.

            Section 6.4 Right of Judicial Settlement.

            Notwithstanding the provisions of section 6.3, the Trustee, the Plan
Administrator, and the Company, or any of them, shall have the right to apply at
any time to a court of competent jurisdiction for the judicial settlement of the
Trustee's account. In any such case, it shall be necessary to join as parties
thereto only the Trustee, the Plan Administrator and the Company; and any
judgment or decree which may be entered therein shall be conclusive upon all
persons having or claiming to have any interest in the Trust Fund or under the
Plan.

            Section 6.5 Enforcement of Agreement.

            To protect the Trust Fund from expenses which might otherwise be
incurred, the Company and the Plan Administrator shall have authority, either
jointly or severally, to enforce this Agreement on behalf of all persons
claiming any interest in the Trust Fund or under the Plan, and no other person
may institute or maintain any action or proceeding against the Trustee or the
Trust Fund in the absence of written authority from the Plan Administrator or a
judgment of a court of competent jurisdiction that in refusing authority the
Plan Administrator acted fraudulently or in bad faith.

<PAGE>

                                      -15-


                                   ARTICLE VII

                         TAXES; COMPENSATION OF TRUSTEE

            Section 7.1 Taxes.

            Any taxes that may be imposed upon the Trust Fund or the income
therefrom shall be deducted from and charged against the Trust Fund or to the
particular Investment Funds to which such taxes are applicable.

            Section 7.2 Compensation of Trustee; Expenses.

            The Trustee shall receive for its services hereunder such
compensation as may be agreed upon in writing from time to time by the Company
and the Trustee and shall be reimbursed for its reasonable expenses, including
counsel fees, incurred in the performance of its duties hereunder. The Trustee
shall deduct from and charge against the Trust Fund such compensation and all
such expenses unless previously paid by the Company, except that all commissions
paid in connection with the acquisition or sale of Shares shall be paid by the
Company. Expenses of the Trust Fund, as well as compensation of the Trustee,
that are not paid by the Company and that are general in nature and not directly
related to a particular Investment Fund shall be charged to the Trust Fund and
allocated to each of the Investment Funds in the same proportion that the value
of each such Investment Fund bears to the value of the Trust Fund on the
Valuation Date next preceding the date of such payments. Any expenses directly
related to a particular Investment Fund that are not paid by the Company shall
be charged to such Investment Fund.

                                  ARTICLE VIII

                       RESIGNATION AND REMOVAL OF TRUSTEE

            Section 8.1 Resignation or Removal of Trustee.

            The Trustee may resign as trustee hereunder at any time by giving
sixty (60) days prior written notice to the Company. The Company may remove the
Trustee as trustee hereunder at any time by giving the Trustee prior written
notice of such removal, which shall include notice of the appointment of a
successor trustee. Such removal shall take effect not earlier than sixty (60)
days following receipt of such notice by the Trustee unless otherwise agreed
upon by the Trustee and the Company.

<PAGE>

                                      -16-


            Section 8.2 Appointment of Successor.

            In the event of the resignation or removal of the Trustee, a
successor trustee shall be appointed by the Company. Except as is otherwise
provided in section 8.1, such appointment shall take effect upon delivery to the
Trustee of an instrument so appointing the successor and an instrument of
acceptance executed by such successor, both of which instruments shall be duly
acknowledged before a notary public. If within sixty (60) days after notice of
resignation shall have been given by the Trustee a successor shall not have been
appointed as aforesaid, the Trustee may apply to any court of competent
jurisdiction for the appointment of such successor.

            Section 8.3 Succession.

            (a) Upon the appointment of a successor, the Trustee shall transfer
and deliver the Trust Fund to such successor; provided, however, that the
Trustee may reserve such sum of money as it shall in its sole discretion deem
advisable for payment of its fees and all expenses in connection with the
settlement of its account, and any balance of such reserve remaining after the
payment of such charges shall be paid over to the successor trustee. If such
reserve shall be insufficient to pay such charges, the Trustee shall be entitled
to recover the amount of any deficiency from the Company, from the successor
trustee, or from both.

            (b) Upon the completion of the succession and the rendering of its
final accounts, the Trustee shall have no further responsibilities whatsoever
under this Agreement.

            Section 8.4 Successor Bound by Agreement.

            All the provisions of this Agreement shall apply to any successor
trustee with the same force and effect as if such successor had been originally
named herein as the trustee hereunder.

                                   ARTICLE IX

                            AMENDMENT AND TERMINATION

            Section 9.1 Amendment and Termination.

            (a) The Company may, at any time and from time to time, by
instrument in writing executed pursuant to authorization of its Board of
Directors, (i) amend in whole or in part any or all of the provisions of this
Agreement, or (ii) terminate this Agreement and the trust created hereby;
provided, however, that no amendment which affects the rights, duties or
responsibilities of the Trustee may be made without the Trustee's consent; and
provided further that no such amendment shall divert any part of the Trust Fund
to purposes other than for the exclusive benefit of the Plan Participants or
their beneficiaries (including alternate payees entitled

<PAGE>

                                      -17-


to benefits under the Plan pursuant to a qualified domestic relations order
described in section 414(p) of the Code) at any time prior to the satisfaction
of all liabilities with respect to such Participants and their beneficiaries
under the Plan and this Agreement.

            (b) Any such amendment shall become effective upon receipt by the
Trustee of the instrument of amendment and endorsement thereon by the Trustee of
its consent thereto, if such consent is required. Any such termination shall
become effective upon the receipt by the Trustee of the instrument of
termination; thereafter the Trustee, upon the direction of the Plan
Administrator, shall liquidate the Trust Fund to the extent required for
distribution and, after the final account of the Trustee has been approved or
settled, shall distribute the balance of the Trust Fund remaining in its hands
as directed by the Plan Administrator, or in the absence of such direction, as
may be directed by a judgment or decree of a court of competent jurisdiction.
Following any such termination, the powers of the Trustee hereunder shall
continue as long as any of the Trust Fund remains in its hands.

                                    ARTICLE X

                                  MISCELLANEOUS

            Section 10.1 Binding Effect; Assignability.

            This Agreement shall be binding upon, and the powers granted to the
Company and the Trustee, respectively, shall be exercisable by the respective
successors and assigns of the Company and the Trustee. Any corporation which
shall, by merger, consolidation, purchase, or otherwise, succeed to
substantially all the trust business of the Trustee shall, upon such succession
and without any appointment or other action by the Company, be and become
successor trustee hereunder.

            Section 10.2 Governing Law.

            Except to the extent that the federal law of the United States of
America is applicable, this Agreement and the trust created and the Trust Fund
held hereunder shall be interpreted, construed and administered in accordance
with the law of the State of Illinois applicable to contracts to be performed
entirely within the State of Illinois and between parties all of whom are
citizens and residents of such state. All contributions to the Trust Fund shall
be deemed to take place in the State of Illinois.

            Section 10.3 Notices.

            Any communication requested or permitted to be given under this
Agreement, including any notice, direction, designation, certification, order,
instruction, or objection shall be in writing and signed by the person
authorized under the Plan to give the communication.

<PAGE>

                                      -18-


The person receiving such a communication shall be fully protected in acting in
accordance therewith. Any notice required or permitted to be given to a party
hereunder shall be deemed given if in writing and hand delivered or mailed,
postage prepaid, certified mail, return receipt requested, to such party at the
following address or at such other address as such party may by notice specify:

            If to the Company:

                  Big Foot Financial Corp.
                  1190 RFD
                  Long Grove, Illinois  60047-7304

                  Attention:  President

            If to the Trustee:

                  ________________________
                  ________________________
                  ________________________

                  Attention:  ___________________

            Section 10.4 Severability.

            The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of the remaining
provisions.

            Section 10.5 Waiver.

            Failure of any party to insist at any time or times upon strict
compliance with any provision of this Agreement shall not be a waiver of such
provision at such time or any later time unless in a writing designated as a
waiver and signed by or on behalf of the party against whom enforcement of the
waiver is sought.

            Section 10.6 Non-Alienation.

            No interest, right or claim in or to any part of the Trust Fund or
any payment therefrom shall be assignable, transferable or subject to sale,
mortgage, pledge, hypothecation, commutation, anticipation, garnishment,
attachment, execution, or levy of any kind, and the Trustee and the Plan
Administrator shall not recognize any attempt to assign, transfer, sell,
mortgage, pledge, hypothecate, commute, or anticipate the same, except to the
extent required by law.

<PAGE>

                                      -19-


            Section 10.7 Qualified Plan and Trust.

            This Agreement and the trust hereby created are part of an employee
benefit plan which the Company intends shall be qualified under section 401(a)
of the Code and until advised to the contrary, the Trustee may assume that the
Plan so qualifies and that the trust is exempt from tax under section 501(a) of
the Code. However, any taxes that may be assessed on or in respect of the Trust
Fund shall be a charge against the Trust Fund. All contributions made prior to
the receipt by the Company of a determination from the Internal Revenue Service
to the effect that the trust forming part of the Plan is a qualified trust under
section 401(a) of the Code and that the trust is exempt from federal income tax
under section 501(a) of the Code shall be made on the express condition that
such a determination is received, and in the event that the Internal Revenue
Service determines that the trust and Plan are not so qualified, all
contributions made prior to the date of the receipt of such determination, after
giving effect to any income, gain or loss, less any compensation and expenses
properly chargeable thereto, shall be returned to the Company.

            Section 10.8 Return of Contributions.

            (a) In the event that any contribution to the Trust Fund by the
Company shall be the result of a mistake of fact, such contribution (after
giving effect to any income gain or loss, less any compensation or expenses
properly chargeable thereto) shall be returned to the Company promptly upon
discovery of the mistake of fact; provided, however, that no such return shall
be made after the first anniversary of the date of the contribution.

            (b) In the event that a contribution to the Trust Fund by the
Company shall be conditioned upon its deductibility under the Code, the amount
of such contribution which shall have been disallowed as a deduction shall be
returned to the Company within one (1) year after the date on which it is
disallowed.

            Section 10.9 Compliance with Securities Laws.

            In the event that the Plan or any portion thereof, or any interest
therein, by virtue of investments made in Shares, shall be deemed to be a
"security" for purposes of the Securities Act of 1933, the Securities Exchange
Act of 1934 or any other federal or state law, for which there is no exemption
from the registration, reporting, blue sky or other requirements applicable to
securities under such laws, the Company shall, at its sole cost and expense,
take all such actions as are necessary or appropriate to comply with the
requirements of such laws. The Company hereby agrees to indemnify the Trustee
and hold it harmless from and against any claim or liability which may be
asserted against the Trustee by reason of any determination that the Plan or any
portion thereof, or any interest therein, constitutes such a security.

<PAGE>

                                      -20-


            Section 10.10 Headings.

            The headings of Articles and sections are included solely for
convenience of reference. If there is any conflict between such headings and the
text of the Agreement, the text shall control.

            Section 10.11 Construction of Language.

            Whenever appropriate in this Agreement, words used in the singular
may be read in the plural; words used in the plural may be read in the singular;
and words importing the masculine gender shall be deemed equally to refer to the
female gender or the neuter. Any reference to a section number shall refer to a
section of this Agreement, unless otherwise indicated.

            Section 10.12 Counterparts.

            This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.

<PAGE>

                                      -21-


            IN WITNESS WHEREOF, the Company and the Trustee, respectively, have
caused this Agreement to be executed in their corporate names and their
corporate seals to be hereunto affixed and duly attested, on the dates indicated
below their respective signatures.

                                    BIG FOOT FINANCIAL CORP.


                                    By _______________________________________
                                             George M. Briody

                                    Title:   President

                                    Date: __________________

ATTEST:


- -----------------------------------
            Secretary


      [Seal]
                                    [TRUSTEE]


                                    By _______________________________________
                                             ________________

                                    Title:___________________

                                    Date: ___________________

ATTEST:


- -----------------------------------
            Secretary

      [Seal]


<PAGE>

                                   EX-10.2
                                Loan Agreement


                                 LOAN AGREEMENT

                                 by and between

                            BIG FOOT FINANCIAL CORP.
                       EMPLOYEE STOCK OWNERSHIP PLAN TRUST

                                       and

                            BIG FOOT FINANCIAL CORP.


                           Made and Entered Into as of
                              _______________, 1996

<PAGE>

                                TABLE OF CONTENTS
                                                                           Page
                                                                           ----

                                   ARTICLE I

                                  DEFINITIONS

Section 1.1     Business Day................................................  1
Section 1.2     Code........................................................  1
Section 1.3     Default.....................................................  2
Section 1.4     ERISA.......................................................  2
Section 1.5     Event of Default............................................  2
Section 1.6     Fiscal Year.................................................  2
Section 1.7     Independent Counsel.........................................  2
Section 1.8     Loan........................................................  2
Section 1.9     Loan Documents..............................................  2
Section 1.10    Pledge Agreement............................................  2
Section 1.11    Principal Amount............................................  2
Section 1.12    Promissory Note.............................................  2
Section 1.13    Register....................................................  2
                                                                         
                                   ARTICLE II
                                                                         
                          THE LOAN; PRINCIPAL AMOUNT;
                      INTEREST; SECURITY; INDEMNIFICATION
                                                                         
Section 2.1    The Loan; Principal Amount...................................  2
Section 2.2    Interest.....................................................  3
Section 2.3    Promissory Note..............................................  3
Section 2.4    Payment of Trust Loan........................................  4
Section 2.5    Prepayment...................................................  4
Section 2.6    Method of Payments...........................................  5
Section 2.7    Use of Proceeds of Loan......................................  6
Section 2.9    Registration of the Promissory Note..........................  6
                                                                         
                                  ARTICLE III
                                                                         
                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER
                                                                         
Section 3.1    Power, Authority, Consents...................................  7
Section 3.2    Due Execution, Validity, Enforceability......................  7
Section 3.3    Properties, Priority of Liens................................  7
Section 3.4    No Defaults, Compliance with Laws............................  7
Section 3.5    Purchases of Common Stock....................................  7


                                       (i)

<PAGE>

                                                                          Page
                                                                          ----

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE LENDER

Section 4.1    Power, Authority, Consents..................................  8
Section 4.2    Due Execution, Validity, Enforceability.....................  8
Section 4.3    ESOP; Contributions.........................................  8
Section 4.4    Trustee; Committee..........................................  8
Section 4.5    Compliance with Laws; Actions...............................  9

                                    ARTICLE V

                                EVENTS OF DEFAULT

Section 5.1    Events of Default under Loan Agreement......................  9
Section 5.2    Lender's Rights upon Event of Default.......................  9

                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS

Section 6.1    Payments Due to the Lender.................................. 10
Section 6.2    Payments.................................................... 10
Section 6.3    Survival.................................................... 10
Section 6.4    Modifications, Consents and Waivers; Entire Agreement....... 10
Section 6.5    Remedies Cumulative......................................... 11
Section 6.6    Further Assurances; Compliance with Covenants............... 11
Section 6.7    Notices..................................................... 11
Section 6.8    Counterparts................................................ 13
Section 6.9    Construction; Governing Law................................. 13
Section 6.10   Severability................................................ 13
Section 6.11   Binding Effect; No Assignment or Delegation................. 13

EXHIBIT A Form of Promissory Note..........................................A-1
EXHIBIT B Form of Pledge Agreement.........................................B-1
EXHIBIT C Form of Assignment...............................................C-1
EXHIBIT D Form of Irrevocable Proxy........................................D-1


                                      (ii)

<PAGE>

                                 LOAN AGREEMENT

            This LOAN AGREEMENT ("Loan Agreement") is made and entered into as
of the _____ day of ________, 1996, by and between the BIG FOOT FINANCIAL CORP.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST ("Borrower"), a trust forming part of the
Big Foot Financial Corp. Employee Stock Ownership Plan ("ESOP"), acting through
and by its Trustee, [____________________] ("Trustee"), a banking corporation
organized under the laws of [_____________________] and having an office at
[________________________]; and BIG FOOT FINANCIAL CORP. ("Lender"), a
corporation organized and existing under the laws of the state of Illinois,
having an office at 1190 RFD, Long Grove, Illinois 60047-7304.

                              W I T N E S S E T H :

            WHEREAS, the Board of Directors of the Lender ("Board") has
authorized the Borrower to purchase shares of common stock of Big Foot Financial
Corp. ("Common Stock"), either directly from Big Foot Financial Corp. or in open
market purchases, in an amount not to exceed ____________ shares of Common Stock
or, if less, shares of Common Stock having an aggregate purchase price of
($_____); and

            WHEREAS, the Board has further authorized the Borrower to borrow
funds from the Lender for the purpose of financing authorized purchases of
Common Stock; and

            WHEREAS, the Lender is willing to make a loan to the Borrower for
such purpose;

            NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

            The following definitions shall apply for purposes of this Loan
Agreement, except to the extent that a different meaning is plainly indicated by
the context:

            Section 1.1 Business Day means any day other than a Saturday, Sunday
or other day on which banks are authorized or required to close under federal
law or the laws of the State of Illinois.

            Section 1.2 Code means the Internal Revenue Code of 1986 (including
the corresponding provisions of any succeeding law).

<PAGE>

                                       -2-


            Section 1.3 Default means an event or condition which would
constitute an Event of Default. The determination as to whether an event or
condition would constitute an Event of Default shall be determined without
regard to any applicable requirement of notice or lapse of time.

            Section 1.4 ERISA means the Employee Retirement Income Security Act
of 1974, as amended (including the corresponding provisions of any succeeding
law).

            Section 1.5 Event of Default means an event or condition described
in Article 5.

            Section 1.6 Fiscal Year means the fiscal year of Big Foot Financial
Corp.

            Section 1.7 Independent Counsel means Thacher Proffitt & Wood or
other counsel mutually satisfactory to both the Lender and the Borrower.

            Section 1.8 Loan means the loan described in section 2.1.

            Section 1.9 Loan Documents means, collectively, this Loan Agreement,
the Promissory Note and the Pledge Agreement and all other documents now or
hereafter executed and delivered in connection with such documents, including
all amendments, modifications and supplements of or to all such documents.

            Section 1.10 Pledge Agreement means the agreement described in
section 2.8(a).

            Section 1.11 Principal Amount means the face amount of the
Promissory Note, determined as set forth in section 2.1(c).

            Section 1.12 Promissory Note means the promissory note described in
section 2.3.

            Section 1.13 Register means the register described in section 2.9.

                                   ARTICLE II

                           THE LOAN; PRINCIPAL AMOUNT;
                       INTEREST; SECURITY; INDEMNIFICATION

            Section 2.1 The Loan; Principal Amount.

            (a) The Lender hereby agrees to lend to the Borrower [_____________]
Dollars ($[__________]). For all purposes of this Loan Agreement, the Principal
Amount on any date shall be equal to the excess, if any, of:

<PAGE>

                                       -3-


            (i) the aggregate amount disbursed by the Lender pursuant to section
      2.1(b) on or before such date; over

            (ii) the aggregate amount of any repayments of such amounts made
      before such date.

The Lender shall maintain on the Register a record of, and shall record on the
Promissory Note, the Principal Amount, any changes in the Principal Amount and
the effective date of any changes in the Principal Amount.

            Section 2.2 Interest.

            (a) The Borrower shall pay to the Lender interest on the Principal
Amount, for the period commencing on the date of this Loan Agreement and
continuing until the Principal Amount shall be paid in full, the rate of eight
percent (8%) per annum. Interest payable under this Agreement shall be computed
on the basis of a year of 365 days and actual days elapsed (including the first
day but excluding the last) occurring in the period to which the computation
relates.

            (b) Except as otherwise provided in this section 2.2(b), accrued
interest on the Principal Amount shall be payable by the Borrower annually in
arrears commencing on the last Business Day of the first calendar year to end
following the date of this Agreement and continuing on the last Business Day of
June each year thereafter and upon the payment or prepayment of such Loan. All
interest on the Principal Amount shall be paid by the Borrower in immediately
available funds. The Lender shall remit to the Borrower, at least three (3)
Business Days before the end of each calendar year, a statement of the interest
payment due under section 2.2(a) for such year; provided, however, that a delay
or failure by the Lender in providing the Borrower with such statement shall not
alter the Borrower's obligation to make such payment.

            (c) Anything in this Loan Agreement or the Promissory Note to the
contrary notwithstanding, the obligation of the Borrower to make payments of
interest shall be subject to the limitation that payments of interest shall not
be required to be made to the Lender to the extent that the Lender's receipt
thereof would not be permissible under the law or laws applicable to the Lender
limiting rates of interest which may be charged or collected by the Lender. Any
such payment referred to in the preceding sentence shall be made by the Borrower
to the Lender on the earliest interest payment date or dates on which the
receipt thereof would be permissible under the laws applicable to the Lender
limiting rates of interest which may be charged or collected by the Lender. Such
deferred interest shall not bear interest.

            Section 2.3 Promissory Note.

            The Loan shall be evidenced by a Promissory Note of the Borrower in
substantially the form of Exhibit A attached hereto, dated the date hereof,
payable to the order of the Lender in the Principal Amount and otherwise duly
completed.

<PAGE>

                                       -4-


            Section 2.4 Payment of Trust Loan.

            (a) The Principal Amount of the Loan shall be repaid in annual
installments payable on the last Business Day of each Fiscal Year ending after
the date of this Agreement. The amount of each such annual installment shall be
equal to a fraction of the Principal Amount on the due date of such installment,
determined in accordance with the following schedule:

                  Installment Due on
                 Last Business Day of   Fraction of Outstanding
                Fiscal Year Ending in       Principal Amount
                ---------------------   -----------------------
                          1997                    1/20
                          1998                    1/10
                          1999                    1/10
                          2000                    1/10
                          2001                    1/10
                          2002                    1/10
                          2003                    1/10
                          2004                    1/10
                          2005                    1/10
                          2006                    1/10
                  10th anniversary         entire outstanding
                       of loan              Principal Amount

; provided, however, that the Borrower shall not be required to make any payment
of principal due to be made in any Fiscal Year to the extent that (i) following
such payment, the consolidated return on average assets of Big Foot Financial
Corp. for such Fiscal Year would be less than one-half of one percent (0.5%) or
the consolidated return on average equity for such Fiscal Year would be less
than four percent (4%) or (ii) such payment would not be deductible for federal
income tax purposes for such Fiscal Year under section 404 of the Code.

      (b) Any payment not required to made pursuant to the clause (i) of the
proviso in section 2.4(a) shall be deferred to and be payable on the earlier of
the twentieth (20th) anniversary of the loan origination date or the last
Business Day of the first Fiscal Year in which such proviso would not apply to
alleviate a requirement of payment; and payment not required to be made pursuant
to clause (ii) of section 2.4(a) shall be deferred to and be payable on the last
day of the first Fiscal Year in which such payment may be made on a tax
deductible basis.

            Section 2.5 Prepayment.

            The Borrower shall be entitled to prepay the Loan in whole or in
part, at any time and from time to time; provided, however, that the Borrower
shall give notice to the Lender of any such prepayment; and provided, further,
that any partial prepayment of the Loan shall be in an amount not less than TEN
THOUSAND DOLLARS ($10,000.00). Any such prepayment

<PAGE>

                                       -5-


shall be: (a) permanent and irrevocable: (b) accompanied by all accrued interest
through the date of such prepayment; (c) made without premium or penalty; and
(d) applied in the inverse order of the maturity of the installments thereof
unless the Lender and the Borrower agree to apply such prepayments in some other
order.

            Section 2.6 Method of Payments.

            (a) All payments of principal, interest, other charges (including
indemnities) and other amounts payable by the Borrower hereunder shall be made
in lawful money of the United States, in immediately available funds, to the
Lender at the address specified in or pursuant to this Loan Agreement for
notices to the Lender, not later than 3:00 P.M., Chicago time, on the date on
which such payment shall become due. Any such payment made on such date but
after such time shall, if the amount paid bears interest, and except as
expressly provided to the contrary herein, be deemed to have been made on, and
interest shall continue to accrue and be payable thereon until, the next
succeeding Business Day. If any payment of principal or interest becomes due on
a day other than a Business Day, such payment may be made on the next succeeding
Business Day, and when paid, such payment shall include interest to the day on
which such payment is in fact made.

            (b) Notwithstanding anything to the contrary contained in this Loan
Agreement or the Promissory Note, neither the Borrower nor the Trustee shall be
obligated to make any payment, repayment or prepayment on the Promissory Note or
take or refrain from taking any other action hereunder or under the Promissory
Note if doing so would cause the ESOP to cease to be an employee stock ownership
plan within the meaning of section 4975(e)(7) of the Code or qualified under
section 401(a) of the Code or cause the Borrower to cease to be a tax exempt
trust under section 501(a) of the Code or if such act or failure to act would
cause the Borrower or the Trustee to engage in any "prohibited transaction" as
such term is defined in section 4975(c) of the Code and the regulations
promulgated thereunder which is not exempted by section 4975(c)(2) or (d) of the
Code and the regulations promulgated thereunder or in section 406 of ERISA and
the regulations promulgated thereunder which is not exempted by section 408(b)
of ERISA and the regulations promulgated thereunder; provided, however, that in
each case, the Borrower or the Trustee or both, as the case may be, may act or
refrain from acting pursuant to this section 2.6(b) on the basis of an opinion
of Independent Counsel. The Borrower and the Trustee may consult with
Independent Counsel, and any opinion of such Independent Counsel shall be full
and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
opinion of Independent Counsel. Nothing contained in this section 2.6(b) shall
be construed as imposing a duty on either the Borrower or the Trustee to consult
with Independent Counsel. Any obligation of the Borrower or the Trustee to make
any payment, repayment or prepayment on the Promissory Note or to take or
refrain from taking any other act hereunder or under the Promissory Note which
is excused pursuant to this section 2.6(b) shall be considered a binding
obligation of the Borrower or the Trustee, or both, as the case may be, for the
purposes of determining whether a Default or Event of Default has occurred
hereunder or under the Promissory Note and nothing in this section 2.6(b) shall
be construed as providing a defense to any remedies otherwise available upon a
Default or an Event of Default hereunder (other than the remedy of specific
performance).

<PAGE>

                                       -6-


            Section 2.7 Use of Proceeds of Loan.

            The entire proceeds of the Loan shall be used solely for acquiring
shares of Common Stock, and for no other purpose whatsoever.

            Section 2.8 Security.

            (a) In order to secure the due payment and performance by the
Borrower of all of its obligations under this Loan Agreement, simultaneously
with the execution and delivery of this Loan Agreement by the Borrower, the
Borrower shall:

            (i) pledge to the Lender as Collateral (as defined in the Pledge
      Agreement), and grant to the Lender a first priority lien on and security
      interest in, the Common Stock purchased with the Principal Amount, by the
      execution and delivery to the Lender of a Pledge Agreement in the form
      attached hereto as Exhibit B; and

            (ii) execute and deliver, or cause to be executed and delivered,
      such other agreements, instruments and documents as the Lender may
      reasonably require in order to effect the purposes of the Pledge Agreement
      and this Loan Agreement.

            (b) The Lender shall release from encumbrance under the Pledge
Agreement and transfer to the Borrower, as of the date on which any payment or
prepayment of the Principal Amount is made, a number of shares of Common Stock
held as Collateral pursuant to section 6.4(b) of the ESOP.

            Section 2.9 Registration of the Promissory Note.

            (a) The Lender shall maintain a Register providing for the
registration of the Principal Amount and any stated interest and of transfer and
exchange of the Promissory Note. Transfer of the Promissory Note may be effected
only by the surrender of the old instrument and either the reissuance by the
Borrower of the old instrument to the new holder or the issuance by the Borrower
of a new instrument to the new holder. The old Promissory Note so surrendered
shall be cancelled by the Lender and returned to the Borrower after such
cancellation.

            (b) Any new Promissory Note issued pursuant to section 2.9(a) shall
carry the same rights to interest (unpaid and to accrue) carried by the
Promissory Note so transferred or exchanged so that there will not be any loss
or gain of interest on the note surrendered. Such new Promissory Note shall be
subject to all of the provisions and entitled to all of the benefits of this
Agreement. Prior to due presentment for registration or transfer, the Borrower
may deem and treat the registered holder of any Promissory Note as the holder
thereof for purposes of payment and all other purposes. A notation shall be made
on each new Promissory Note of the amount of all payments of principal and
interest theretofore paid.

<PAGE>

                                       -7-


                                   ARTICLE III

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER


            The Borrower hereby represents and warrants to the Lender as
follows:

            Section 3.1 Power, Authority, Consents.

            The Borrower has the power to execute, deliver and perform this Loan
Agreement, the Promissory Note and the Pledge Agreement, all of which have been
duly authorized by all necessary and proper corporate or other action.

            Section 3.2 Due Execution, Validity, Enforceability.

            Each of the Loan Documents, including, without limitation, this Loan
Agreement, the Promissory Note and the Pledge Agreement, have been duly executed
and delivered by the Borrower; and each constitutes the valid and legally
binding obligation of the Borrower, enforceable in accordance with its terms.

            Section 3.3 Properties, Priority of Liens.

            The liens which have been created and granted by the Pledge
Agreement constitute valid, first liens on the properties and assets covered by
the Pledge Agreement, subject to no prior or equal lien.

            Section 3.4 No Defaults, Compliance with Laws.

            The Borrower is not in default in any material respect under any
agreement, ordinance, resolution, decree, bond, note, indenture, order or
judgment to which it is a party or by which it is bound, or any other agreement
or other instrument by which any of the properties or assets owned by it is
materially affected.

            Section 3.5 Purchases of Common Stock.

            Upon consummation of any purchase of Common Stock by the Borrower
with the proceeds of the Loan, the Borrower shall acquire valid, legal and
marketable title to all of the Common Stock so purchased, free and clear of any
liens, other than a pledge to the Lender of the Common Stock so purchased
pursuant to the Pledge Agreement. Neither the execution and delivery of the Loan
Documents nor the performance of any obligation thereunder violates any
provision of law or conflicts with or results in a breach of or creates (with or
without the giving of notice or lapse of time, or both) a default under any
agreement to which the Borrower is a party or by which it is bound or any of its
properties is affected. No consent of any federal, state or local governmental
authority, agency or other regulatory body, the absence of which could have a
materially adverse effect on the Borrower or the Trustee, is or was required to
be obtained in connection with the execution, delivery or performance of the
Loan Documents and the transactions contemplated therein or in connection
therewith, including, without limitation,

<PAGE>

                                       -8-


with respect to the transfer of the shares of Common Stock purchased with the
proceeds of the Loan pursuant thereto.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE LENDER

            The Lender hereby represents and warrants to the Borrower as
follows:

            Section 4.1 Power, Authority, Consents.

            The Lender has the power to execute, deliver and perform this Loan
Agreement, the Pledge Agreement and all documents executed by the Lender in
connection with the Loan, all of which have been duly authorized by all
necessary and proper corporate or other action. No consent, authorization or
approval or other action by any governmental authority or regulatory body, and
no notice by the Lender to, or filing by the Lender with, any governmental
authority or regulatory body is required for the due execution, delivery and
performance of this Loan Agreement.

            Section 4.2 Due Execution, Validity, Enforceability.

            This Loan Agreement and the Pledge Agreement have been duly executed
and delivered by the Lender; and each constitutes a valid and legally binding
obligation of the Lender, enforceable in accordance with its terms.

            Section 4.3 ESOP; Contributions.

            The ESOP and the Borrower have been duly created, organized and
maintained by the Lender in compliance with all applicable laws, regulations and
rulings. The ESOP qualifies as an "employee stock ownership plan" as defined in
section 4975(e) (7) the Code. The ESOP provides that the Lender may make
contributions to the ESOP in an amount necessary to enable the Trustee to
amortize the Loan in accordance with the terms of the Promissory Note and this
Loan Agreement, and the Lender will make such contributions; provided, however,
that no such contributions shall be required if they would adversely affect the
qualification of the ESOP under section 401(a) of the Code.

            Section 4.4 Trustee; Committee.

            The Lender has taken such action as is required to be taken by it to
duly appoint the Trustee and the members of the Board. The Lender expressly
acknowledges and agrees that this Loan Agreement, the Promissory Note and the
Pledge Agreement are being executed by the Trustee not in its individual
capacity but solely as trustee of and on behalf of the Borrower.

<PAGE>

                                       -9-


            Section 4.5 Compliance with Laws; Actions.

            Neither the execution and delivery by the Lender of this Loan
Agreement or any instruments required thereby, nor compliance with the terms and
provisions of any such documents by the Lender, constitutes a violation of any
provision of any law or any regulation, order, writ, injunction or decree or any
court or governmental instrumentality, or an event of default under any
agreement, to which the Lender is a party or by which the Lender is bound or to
which the Lender is subject, which violation or event of default would have a
material adverse effect on the Lender. There is no action or proceeding pending
or threatened against either of the ESOP or the Borrower before any court or
administrative agency.

                                    ARTICLE V

                                EVENTS OF DEFAULT

            Section 5.1 Events of Default under Loan Agreement.

            Each of the following events shall constitute an "Event of Default"
hereunder:

            (a) Failure to make any payment or mandatory prepayment of principal
of the Promissory Note when due, or failure to make any payment of interest on
the Promissory Note not later than five (5) Business Days after the date when
due.

            (b) Failure by the Borrower to perform or observe any term,
condition or covenant of this Loan Agreement or of any of the other Loan
Documents, including, without limitation, the Promissory Note and the Pledge
Agreement.

            (c) Any representation or warranty made in writing to the Lender in
any of the Loan Documents or any certificate, statement or report made or
delivered in compliance with this Loan Agreement, shall have been false or
misleading in any material respect when made or delivered.

            Section 5.2 Lender's Rights upon Event of Default.

            If an Event of Default under this Loan Agreement shall occur and be
continuing, the Lender shall have no rights to assets of the Borrower other
than: (a) contributions (other than contributions of Common Stock) that are made
by the Lender to enable the Borrower to meet its obligations pursuant to this
Loan Agreement and earnings attributable to the investment of such contributions
and (b) "Eligible Collateral" (as defined in the Pledge Agreement); provided,
however, that: (i) the value of the Borrower's assets transferred to the Lender
following an Event of Default in satisfaction of the due and unpaid amount of
the Loan shall not exceed the amount in default (without regard to amounts owing
solely as a result of any acceleration of the Loan); (ii) the Borrower's assets
shall be transferred to the Lender following an Event of Default only to the
extent of the failure of the Borrower to meet the payment

<PAGE>

                                      -10-


schedule of the Loan; and (iii) all rights of the Lender to the Common Stock
purchased with the proceeds of the Loan covered by the Pledge Agreement
following an Event of Default shall be governed by the terms of the Pledge
Agreement.

                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS

            Section 6.1 Payments Due to the Lender.

            If any amount is payable by the Borrower to the Lender pursuant to
any indemnity obligation contained herein, then the Borrower shall pay, at the
time or times provided therefor, any such amount and shall indemnify the Lender
against and hold it harmless from any loss or damage resulting from or arising
out of the nonpayment or delay in payment of any such amount. If any amounts as
to which the Borrower has so indemnified the Lender hereunder shall be assessed
or levied against the Lender, the Lender may notify the Borrower and make
immediate payment thereof, together with interest or penalties in connection
therewith, and shall thereupon be entitled to and shall receive immediate
reimbursement therefor from the Borrower, together with interest on each such
amount as provided in section 2.2(c). Notwithstanding any other provision
contained in this Loan Agreement, the covenants and agreements of the Borrower
contained in this section 6.1 shall survive: (a) payment of the Promissory Note
and (b) termination of this Loan Agreement.

            Section 6.2 Payments.

            All payments hereunder and under the Promissory Note shall be made
without set-off or counterclaim and in such amounts as may be necessary in order
that all such payments shall not be less than the amounts otherwise specified to
be paid under this Loan Agreement and the Promissory Note, subject to any
applicable tax withholding requirements. Upon payment in full of the Promissory
Note, the Lender shall mark such Promissory Note "Paid" and return it to the
Borrower.

            Section 6.3 Survival.

            All agreements, representations and warranties made herein shall
survive the delivery of this Loan Agreement and the Promissory Note.

            Section 6.4 Modifications, Consents and Waivers; Entire Agreement.

            No modification, amendment or waiver of or with respect to any
provision of this Loan Agreement, the Promissory Note, the Pledge Agreement, or
any of the other Loan Documents, nor consent to any departure from any of the
terms or conditions thereof, shall in any event be effective unless it shall be
in writing and signed by the party against whom enforcement thereof is sought.
Any such waiver or consent shall be effective only in the specific

<PAGE>

                                      -11-


instance and for the purpose for which given. No consent to or demand on a party
in any case shall, of itself, entitle it to any other or further notice or
demand in similar or other circumstances. This Loan Agreement embodies the
entire agreement and understanding between the Lender and the Borrower and
supersedes all prior agreements and understandings relating to the subject
matter hereof.

            Section 6.5 Remedies Cumulative.

            Each and every right granted to the Lender hereunder or under any
other document delivered hereunder or in connection herewith, or allowed it by
law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of the Lender or the holder of the Promissory Note to
exercise, and no delay in exercising, any right shall operate as a waiver
thereof, nor shall any single or partial exercise of any right preclude any
other or future exercise thereof or the exercise of any other right. The due
payment and performance of the obligations under the Loan Documents shall be
without regard to any counterclaim, right of offset or any other claim
whatsoever which the Borrower may have against the Lender and without regard to
any other obligation of any nature whatsoever which the Lender may have to the
Borrower, and no such counterclaim or offset shall be asserted by the Borrower
in any action, suit or proceeding instituted by the Lender for payment or
performance of such obligations.

            Section 6.6 Further Assurances; Compliance with Covenants.

            At any time and from time to time, upon the request of the Lender,
the Borrower shall execute, deliver and acknowledge or cause to be executed,
delivered and acknowledged, such further documents and instruments and do such
other acts and things as the Lender may reasonably request in order to fully
effect the terms of this Loan Agreement, the Promissory Note, the Pledge
Agreement, the other Loan Documents and any other agreements, instruments and
documents delivered pursuant hereto or in connection with the Loan.

            Section 6.7 Notices.

            Except as otherwise specifically provided for herein, all notices,
requests, reports and other communications pursuant to this Loan Agreement shall
be in writing, either by letter (delivered by hand or commercial messenger
service or sent by registered or certified mail, return receipt requested,
except for routine reports delivered in compliance with Article VI hereof which
may be sent by ordinary first-class mail) or telex or facsimile, addressed as
follows:

<PAGE>

                                      -12-


            (a) If to the Borrower:

                        Big Foot Financial Corp.
                         Employee Stock Ownership Plan Trust
                        c/o  Big Foot Financial Corp.
                        1190 RFD
                        Long Grove, Illinois 60120-5569
                        Attention:  Mr. George M. Briody
                                    President
                                    --------------------

                with copies to:

                        [Trustee]

                        ___________________
                        ___________________
                        Attention:  ______________
                                    ______________

                        Thacher Proffitt & Wood
                        Two World Trade Center, 39th Floor
                        New York New York  10048
                        Attention:  W. Edward Bright, Esq.
                                    ----------------------


                        [Trustee Counsel]

                        ___________________
                        ___________________
                        Attention:  ______________
                                    ______________

            (b)   If to the Lender:

                        Big Foot Financial Corp.
                        1190 RFD
                        Long Grove, Illinois 60047-7304
                        Attention:  Mr. George M. Briody
                                    President
                                    --------------------

                  with a copy to:

                        Thacher Proffitt & Wood
                        Two World Trade Center, 39th Floor
                        New York New York  10048
                        Attention:  W. Edward Bright, Esq.
                                    ----------------------

Any notice, request or communication hereunder shall be deemed to have been
given on the day on which it is delivered by hand or by commercial messenger
service, or sent by telex or

<PAGE>

                                      -13-


facsimile, to such party at its address specified above, or, if sent by mail, on
the third Business Day after the day deposited in the mail, postage prepaid,
addressed as aforesaid. Any party may change the person or address to whom or
which notices are to be given hereunder, by notice duly given hereunder;
provided, however, that any such notice shall be deemed to have been given only
when actually received by the party to whom it is addressed.

            Section 6.8 Counterparts.

            This Loan Agreement may be signed in any number of counterparts
which, when taken together, shall constitute one and the same document.

            Section 6.9 Construction; Governing Law.

            The headings used in the table of contents and in this Loan
Agreement are for convenience only and shall not be deemed to constitute a part
hereof. All uses herein of any gender or of singular or plural terms shall be
deemed to include uses of the other genders or plural or singular terms, as the
context may require. All references in this Loan Agreement to an Article or
section shall be to an Article or section of this Loan Agreement, unless
otherwise specified. This Loan Agreement, the Promissory Note, the Pledge
Agreement and the other Loan Documents shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Illinois.

            Section 6.10 Severability.

            Wherever possible, each provision of this Loan Agreement shall be
interpreted in such manner as to be effective and valid under applicable law;
however, the provisions of this Loan Agreement are severable, and if any clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision in this Loan Agreement in any jurisdiction. Each of
the covenants, agreements and conditions contained in this Loan Agreement is
independent, and compliance by a party with any of them shall not excuse
non-compliance by such party with any other. The Borrower shall not take any
action the effect of which shall constitute a breach or violation of any
provision of this Loan Agreement.

            Section 6.11 Binding Effect; No Assignment or Delegation.

            This Loan Agreement shall be binding upon and inure to the benefit
of the Borrower and its successors and the Lender and its successors and
assigns. The rights and obligations of the Borrower under this Agreement shall
not be assigned or delegated without the prior written consent of the Lender,
and any purported assignment or delegation without such consent shall be void.

<PAGE>

                                      -14-


            IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed as of the date first above written.

                                    BIG FOOT FINANCIAL CORP.
                                      EMPLOYEE STOCK OWNERSHIP PLAN TRUST

                                    By    [TRUSTEE], as Trustee


                                    By:__________________________________

                                    Title:_______________________________

                                    BIG FOOT FINANCIAL CORP.


                                    By:__________________________________

                                    Title:_______________________________

<PAGE>

                                    EXHIBIT A
                                TO LOAN AGREEMENT
                                 BY AND BETWEEN
                            BIG FOOT FINANCIAL CORP.
                       EMPLOYEE STOCK OWNERSHIP PLAN TRUST
                                       AND
                            BIG FOOT FINANCIAL CORP.


                             FORM OF PROMISSORY NOTE

[___________]                                               Long Grove, Illinois
PRINCIPAL AMOUNT                                            December, 1996

            FOR VALUE RECEIVED, the undersigned, Big Foot Financial Corp.
Employee Stock Ownership Plan Trust ("Borrower"), acting by and through its
Trustee, [_______________] ("Trustee"), hereby promises to pay to the order of
Big Foot Financial Corp. ("Lender") [_________________________________________]
($[___________]) payable in accordance with the Loan Agreement made and entered
into between the Borrower and the Lender as of [_________], 1996 ("Loan
Agreement") pursuant to which this Promissory Note is issued, in one installment
of __________________________ ______________________ DOLLARS ($_______), payable
on June 30, 1997 and nine annual installments of
____________________________________ DOLLARS ($_______), commencing on the last
Business Day of [___], 1998 and continuing on the last Business Day of June of
each year until the last Business Day of June, 2006, and one annual installment
payable on December ___, 2007, at which time the entire Principal Amount then
outstanding and all accrued interest shall become due and payable; provided,
however, that the Borrower shall not be required to make any payment of
principal due to be made in any Fiscal Year to the extent that (i) following
such payment, the consolidated return on average assets of Big Foot Financial
Corp. for such Fiscal Year would be less than one-half of one percent (0.5%) or
the consolidated return on average equity for such Fiscal Year would be less
than four percent (4%) or (ii) such payment would not be deductible for federal
income tax purposes for such Fiscal Year under section 404 of the Code. Any
payment not required to made pursuant to the clause (i) of the above proviso
shall be deferred to and be payable on the earlier of the tenth (10th)
anniversary of the loan origination date or the last day of the first Fiscal
Year in which such proviso would not apply to alleviate a requirement of
payment; and payment not required to be made pursuant to clause (ii) of the
above proviso shall be deferred to and be payable on the last day of the first
Fiscal Year in which such payment may be made on a tax deductible basis.

            This Promissory Note shall bear interest at the rate per annum set
forth or established under the Loan Agreement, such interest to be payable
annually in arrears, commencing on and thereafter on the last Business Day of
each June of each year and upon payment or prepayment of this Promissory Note.

            Anything herein to the contrary notwithstanding, the obligation of
the Borrower to make payments of interest shall be subject to the limitation
that payments of interest shall not

<PAGE>

                                       A-2


be required to be made to the Lender to the extent that the Lender's receipt
thereof would not be permissible under the law or laws applicable to the Lender
limiting rates of interest which may be charged or collected by the Lender. Any
such payments of interest which are not made as a result of the limitation
referred to in the preceding sentence shall be made by the Borrower to the
Lender on the earliest interest payment date or dates on which the receipt
thereof would be permissible under the laws applicable to the Lender limiting
rates of interest which may be charged or collected by the Lender. Such deferred
interest shall not bear interest.

            Payments of both principal and interest on this Promissory Note are
to be made at the principal office of the Lender at 1190 RFD, Long Grove,
Illinois 60047-7304, or such other place as the holder hereof shall designate to
the Borrower in writing, in lawful money of the United States of America in
immediately available funds.

            Failure to make any payment of principal on this Promissory Note
when due, or failure to make any payment of interest on this Promissory Note not
later than five (5) Business Days after the date when due, shall constitute a
default hereunder, whereupon the principal amount of and accrued interest on
this Promissory Note shall immediately become due and payable in accordance with
the terms of the Loan Agreement.

            This Promissory Note is secured by a Pledge Agreement between the
Borrower and the Lender of even date herewith and is entitled to the benefits
thereof.

                                    BIG FOOT FINANCIAL CORP.
                                     EMPLOYEE STOCK OWNERSHIP PLAN TRUST

                                    By    [TRUSTEE], as Trustee


                                    By:_________________________________


                                    Title:______________________________

<PAGE>

                                    EXHIBIT B
                                TO LOAN AGREEMENT
                                 BY AND BETWEEN
                            BIG FOOT FINANCIAL CORP.
                       EMPLOYEE STOCK OWNERSHIP PLAN TRUST
                                       AND
                            BIG FOOT FINANCIAL CORP.

                            FORM OF PLEDGE AGREEMENT

            This PLEDGE AGREEMENT ("Pledge Agreement") is made as of the _____
day of ______, 1996, by and between the BIG FOOT FINANCIAL CORP. EMPLOYEE STOCK
OWNERSHIP PLAN TRUST, acting by and through its Trustee, [TRUSTEE], a banking
corporation organized under the laws of [_____________] and having an office at
[____________________________________] ("Pledgor"), and BIG FOOT FINANCIAL
CORP., a corporation organized and existing under the laws of the State of
Illinois, having an office at 1190 RFD, Long Grove, Illinois 60047-7304
("Pledgee").

                              W I T N E S S E T H :

            WHEREAS, this Pledge Agreement is being executed and delivered to
the Pledgee pursuant to the terms of a Loan Agreement of even date herewith
("Loan Agreement"), by and between the Pledgor and the Pledgee;

            NOW, THEREFORE, in consideration of the mutual agreements contained
herein and in the Loan Agreement, the parties hereto do hereby covenant and
agree as follows:

            Section 1. Definitions. The following definitions shall apply for
purposes of this Pledge Agreement, except to the extent that a different meaning
is plainly indicated by the context; all capitalized terms used but not defined
herein shall have the respective meanings assigned to them in the Loan
Agreement:

            (a) Collateral shall mean the Pledged Shares and, subject to section
      5 hereof, and to the extent permitted by applicable law, all rights with
      respect thereto, and all proceeds of such Pledged Shares and rights.

            (b) Event of Default shall mean an event so defined in the Loan
      Agreement.

            (c) Liabilities shall mean all the obligations of the Pledgor to the
      Pledgee, howsoever created, arising or evidenced, whether direct or
      indirect, absolute or contingent, now or hereafter existing, or due or to
      become due, under the Loan Agreement and the Promissory Note.

<PAGE>

                                       B-2


            (d) Pledged Shares shall mean all the shares of Common Stock of Big
      Foot Financial Corp. purchased by the Pledgor with the proceeds of the
      loan made by the Pledgee to the Pledgor pursuant to the Loan Agreement,
      but excluding any such shares previously released pursuant to section 4.

            Section 2. Pledge. To secure the payment of and performance of all
the Liabilities, the Pledgor hereby pledges to the Pledgee, and grants to the
Pledgee a security interest in and lien upon, the Collateral.

            Section 3. Representations and Warranties of the Pledgor. The
Pledgor represents, warrants, and covenants to the Pledgee as follows:

            (a) the execution, delivery and performance of this Pledge Agreement
      and the pledging of the Collateral hereunder do not and will not conflict
      with, result in a violation of, or constitute a default under any
      agreement binding upon the Pledgor;

            (b) the Pledged Shares are and will continue to be owned by the
      Pledgor free and clear of any liens or rights of any other person except
      the lien hereunder and under the Loan Agreement in favor of the Pledgee,
      and the security interest of the Pledgee in the Pledged Shares and the
      proceeds thereof is and will continue to be prior to and senior to the
      rights of all others;

            (c) this Pledge Agreement is the legal, valid, binding and
      enforceable obligation of the Pledgor in accordance with its terms;

            (d) the Pledgor shall, from time to time, upon request of the
      Pledgee, promptly deliver to the Pledgee such stock powers, proxies, and
      similar documents, satisfactory in form and substance to the Pledgee, with
      respect to the Collateral as the Pledgee may reasonably request; and

            (e) subject to the first sentence of section 4(b), the Pledgor shall
      not, so long as any Liabilities are outstanding, sell, assign, exchange,
      pledge or otherwise transfer or encumber any of its rights in and to any
      of the Collateral.

            Section 4. Eligible Collateral.

            (a) As used herein the term "Eligible Collateral" shall mean that
amount of Collateral which has an aggregate fair market value equal to the
amount by which the Pledgor is in default (without regard to any amounts owing
solely as the result of an acceleration of the Loan Agreement) or such lesser
amount of Collateral as may be required pursuant to section 13 of this Pledge
Agreement.

            (b) The Pledged Shares shall be released from this Pledge Agreement
in a manner conforming to the requirements of Treasury Regulations Section
54.4975-7(b)(8), as the same may be from time to time amended or supplemented,
and section 6.4(b) of the ESOP. Subject to such Regulations, the Pledgee may
from time to time, after any Default or Event of Default, and without prior
notice to the Pledgor, transfer all or any part of the Eligible Collateral

<PAGE>

                                       B-3


into the name of the Pledgee or its nominee, with or without disclosing that
such Eligible Collateral is subject to any rights of the Pledgor and may from
time to time, whether before or after any of the Liabilities shall become due
and payable, without notice to the Pledgor, take all or any of the following
actions: (i) notify the parties obligated on any of the Eligible Collateral to
make payment to the Pledgee of any amounts due or to become due thereunder, (ii)
release or exchange all or any part of the Eligible Collateral, or compromise or
extend or renew for any period (whether or not longer than the original period)
any obligations of any nature of any party with respect thereto, and (iii) take
control of any proceeds of the Eligible Collateral.

            Section 5. Delivery.

            (a) The Pledgor shall deliver to the Pledgee upon execution of this
Pledge Agreement (i) an assignment by the Pledgor of all the Pledgor's rights to
and interest in the Pledged Shares and (ii) an irrevocable proxy, in form and
substance satisfactory to the Pledgee, signed by the Pledgor with respect to the
Pledged Shares.

            (b) So long as no Default or Event of Default shall have occurred
and be continuing, (i) the Pledgor shall be entitled to exercise any and all
voting and other rights pertaining to the Collateral or any part thereof for any
purpose not inconsistent with the terms of this Pledge Agreement, and (ii) the
Pledgor shall be entitled to receive any and all cash dividends or other
distributions paid in respect of the Collateral.

            Section 6. Events of Default.

            (a) If a Default or an Event of Default shall be existing, in
addition to the rights it may have under the Loan Agreement, the Promissory
Note, and this Pledge Agreement, or by virtue of any other instrument, (i) the
Pledgee may exercise, with respect to the Eligible Collateral, from time to time
any rights and remedies available to it under the Uniform Commercial Code as in
effect from time to time in the State of Illinois or otherwise available to it
and (ii) the Pledgee shall have the right, for and in the name, place and stead
of the Pledgor, to execute endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or any of the Eligible
Collateral. Written notification of intended disposition of any of the Eligible
Collateral shall be given by the Pledgee to the Pledgor at least three (3)
Business Days before such disposition. Subject to section 13 below, any proceeds
of any disposition of Eligible Collateral may be applied by the Pledgee to the
payment of expenses in connection with the Eligible Collateral, including,
without limitation, reasonable attorneys' fees and legal expenses, and any
balance of such proceeds may be applied by the Pledgee toward the payment of
such of the Liabilities as are in Default, and in such order of application, as
the Pledgee may from time to time elect. No action of the Pledgee permitted
hereunder shall impair or affect its rights in and to the Eligible Collateral.
All rights and remedies of the Pledgee expressed hereunder are in addition to
all other rights and remedies possessed by it, including, without limitation,
those contained in the documents referred to in the definition of Liabilities in
section 1 hereof.

            (b) In any sale of any of the Eligible Collateral after a Default or
an Event of Default shall have occurred, the Pledgee is hereby authorized to
comply with any limitation or restriction in connection with such sale as it may
be advised by counsel is necessary in order to

<PAGE>

                                       B-4


avoid any violation of applicable law (including, without limitation, compliance
with such procedures as may restrict the number of prospective bidders and
purchasers or further restrict such prospective bidders or purchasers to persons
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Eligible
Collateral), or in order to obtain such required approval of the sale or of the
purchase by any governmental regulatory authority or official, and the Pledgor
further agrees that such compliance shall not result in such sale's being
considered or deemed not to have been made in a commercially reasonable manner,
nor shall the Pledgee be liable or accountable to the Pledgor for any discount
allowed by reason of the fact that such Eligible Collateral is sold in
compliance with any such limitation or restriction.

            Section 7. Payment in Full. Upon the payment in full of all
outstanding Liabilities, this Pledge Agreement shall terminate and the Pledgee
shall forthwith assign, transfer and deliver to the Pledgor, against receipt and
without recourse to the Pledgee, all Collateral then held by the Pledgee
pursuant to this Pledge Agreement.

            Section 8. No Waiver. No failure or delay on the part of the Pledgee
in exercising any right or remedy hereunder or under any other document which
confers or grants any rights in the Pledgee in respect of the Liabilities shall
operate as a waiver thereof nor shall any single or partial exercise of any such
right or remedy preclude any other or further exercise thereof or the exercise
of any other right or remedy of the Pledgee.

            Section 9. Binding Effect; No Assignment or Delegation. This Pledge
Agreement shall be binding upon and inure to the benefit of the Pledgor, the
Pledgee and their respective successors and assigns, except that the Pledgor may
not assign or transfer its rights hereunder without the prior written consent of
the Pledgee (which consent shall not unreasonably be withheld). Each duty or
obligation of the Pledgor to the Pledgee pursuant to the provisions of this
Pledge Agreement shall be performed in favor of any person or entity designated
by the Pledgee, and any duty or obligation of the Pledgee to the Pledgor may be
performed by any other person or entity designated by the Pledgee.

            Section 10. Governing Law. This Pledge Agreement shall be governed
by and construed in accordance with the laws of the State of Illinois applicable
to agreements to be performed wholly within the State of Illinois.

            Section 11. Notices. All notices, requests, instructions or
documents hereunder shall be in writing and delivered personally or sent by
United States mail, registered or certified, return receipt requested, with
proper postage prepaid, as follows:

            (a) If to the Pledgee:

                        Big Foot Financial Corp.
                        1190 RFD
                        Long Grove, Illinois 60047-7304
                        Attention:  Mr. George M. Briody
                                    President
                                    --------------------

<PAGE>

                                       B-5


                with a copy to:

                        Thacher Proffitt & Wood
                        Two World Trade Center, 39th Floor
                        New York, New York  10048
                        Attention:  W. Edward Bright, Esq.
                                    ----------------------

            (b)   If to the Pledgor:

                        Big Foot Financial Corp.
                         Employee Stock Ownership Plan Trust
                        c/o  Big Foot Financial Corp.
                        1190 RFD
                        Long Grove, Illinois 60047-7304
                        Attention:  Mr. George M. Briody
                                    President
                                    --------------------

                  with copies to:

                        [Trustee]
                        _____________________
                        _____________________
                        Attention:  ______________
                                    ______________

                        Thacher Proffitt & Wood
                        Two World Trade Center, 39th Floor
                        New York, New York  10048
                        Attention:  W. Edward Bright, Esq.
                                    ----------------------

or at such other address as either of the parties may designate by written
notice to the other party. If delivered personally, the date on which a notice,
request, instruction or document is delivered shall be the date on which such
delivery is made, and, if delivered by mail, the date on which such notice,
request, instruction or document is deposited in the mail shall be the date of
delivery. Each notice, request, instruction or document shall bear the date on
which it is delivered.

            Section 12. Interpretation. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision hereof shall be prohibited by
or invalid under such law, such provisions shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions hereof.

            Section 13. Construction. All provisions hereof shall be construed
so as to maintain (a) the ESOP as a qualified leveraged employee stock ownership
plan under section 401(a) and 4975(e)(7) of the Internal Revenue Code of 1986
(the "Code"), (b) the Trust as

<PAGE>

                                       B-6


exempt from taxation under section 501(a) of the Code and (c) the Trust Loan as
an exempt loan under section 54.4975-7(b) of the Treasury Regulations and as
described in Department of Labor Regulation section 2550.408b-3.

            IN WITNESS WHEREOF, this Pledge Agreement has been duly executed by
the parties hereto as of the day and year first above written.

                            BIG FOOT FINANCIAL CORP.
                             EMPLOYEE STOCK OWNERSHIP PLAN TRUST

                            By    [TRUSTEE], as Trustee
                                    and not in any other capacity


                            By:__________________________________


                            Title:_______________________________



                            BIG FOOT FINANCIAL CORP.


                            By:__________________________________


                            Title:_______________________________

<PAGE>

                                    EXHIBIT C
                                TO LOAN AGREEMENT
                                 BY AND BETWEEN
                            Big Foot Financial Corp.
                       EMPLOYEE STOCK OWNERSHIP PLAN TRUST
                                       AND
                            Big Foot Financial Corp.

                               FORM OF ASSIGNMENT

            In consideration of the loan made by Big Foot Financial Corp.
("Lender") to the Big Foot Financial Corp. Employee Stock Ownership Plan Trust
("Borrower") pursuant to the Loan Agreement of even date herewith between the
Lender and the Borrower ("Loan Agreement") and pursuant to the Pledge Agreement
between the Lender and the Borrower of even date herewith pertaining thereto,
the undersigned Borrower hereby transfers, assigns and conveys to Lender all its
right, title and interest in and to those certain shares of common stock of the
Lender which it shall purchase with the proceeds of the loan made pursuant to
the Loan Agreement, and agrees to transfer and endorse to Lender the
certificates representing such shares as and when required pursuant to the Loan
Agreement or Pledge Agreement.

                            BIG FOOT FINANCIAL CORP.
                             EMPLOYEE STOCK OWNERSHIP PLAN TRUST

                            By    [TRUSTEE], as Trustee
                                    and not in any other capacity


                            By:__________________________________


                            Title:_______________________________

December __, 1996

<PAGE>

                                    EXHIBIT D
                                TO LOAN AGREEMENT
                                 BY AND BETWEEN
                            Big Foot Financial Corp.
                       EMPLOYEE STOCK OWNERSHIP PLAN TRUST
                                       AND
                            Big Foot Financial Corp.

                            FORM OF IRREVOCABLE PROXY

            In consideration of the loan made by Big Foot Financial Corp.
("Lender") to the Big Foot Financial Corp. Employee Stock Ownership Plan Trust
("Borrower") pursuant to the Loan Agreement of even date herewith between the
Lender and the Borrower ("Loan Agreement") and the Pledge Agreement between the
Lender and the Borrower of even date herewith pertaining thereto, the
undersigned Borrower hereby appoints the Lender as its proxy, with power of
substitution, to represent and to vote those certain shares of common stock of
the Lender which it shall purchase with the proceeds of the loan made pursuant
to the Loan Agreement. This proxy, when properly executed, shall be irrevocable
and shall give the Lender full power and authority to vote on any and all
matters for which other holders of shares of common stock of the Lender are
entitled to vote.

                            BIG FOOT FINANCIAL CORP.
                             EMPLOYEE STOCK OWNERSHIP PLAN TRUST

                            By    [TRUSTEE], as Trustee
                                    and not in any other capacity


                            By:__________________________________


                            Title:_______________________________

December __, 1996

<PAGE>

                                    EX-10.3
                BIG FOOT FIN. CORP. - EXEC. EMPLOYMENT AGREEMENT


                            BIG FOOT FINANCIAL CORP.
                         EXECUTIVE EMPLOYMENT AGREEMENT


          This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
______________, 1996 by and between BIG FOOT FINANCIAL CORP., a publicly-held
business corporation organized and operating under the laws of the State of
Illinois and having an office at 1190 RFD, Long Grove, Illinois 60047-7034
("Holding Company") and [EXECUTIVE], an individual residing at
_________________________________________ ("Executive").

                              W I T N E S S E T H :

          WHEREAS, the Executive currently serves the Holding Company in the
capacity of ________________________; and

          WHEREAS, effective as of the date of this Agreement, Fairfield Savings
Bank, F.S.B. ("Bank") has converted from a federal savings bank to a federal
stock savings bank and has become the wholly-owned subsidiary of the Holding
Company; and

          WHEREAS, the Holding Company desires to assure for itself the
continued availability of the Executive's services and the ability of the
Executive to perform such services with a minimum of personal distraction in the
event of a pending or threatened Change of Control (as hereinafter defined); and

          WHEREAS, the Executive is willing to continue to serve the Holding
Company on the terms and conditions hereinafter set forth;

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth, the Holding Company and the
Executive hereby agree as follows:

          Section 1. Employment.

          The Holding Company agrees to continue to employ the Executive, and
the Executive hereby agrees to such continued employment, during the period and
upon the terms and conditions set forth in this Agreement.

          Section 2. Employment Period; Remaining Unexpired Employment Period.

          (a) The terms and conditions of this Agreement shall be and remain in
effect during the period of employment established under this section 2
("Employment Period"). The Employment Period shall be for an initial term of
three (3) years beginning on the date of this Agreement and ending on the third
(3rd) anniversary date of this Agreement (each, an "Anniversary Date"), plus
such extensions, if any, as are provided by the Board of Directors of the
Holding Company ("Board") pursuant to section 2(b).


                                  Page 1 of 20

<PAGE>

          (b) Except as provided in section 2(c), beginning on the date of this
Agreement, the Employment Period shall automatically be extended for one (1)
additional day each day, unless either the Holding Company or the Executive
elects not to extend the Agreement further by giving written notice to the other
party, in which case the Employment Period shall end on the third (3rd)
anniversary of the date on which such written notice is given. For all purposes
of this Agreement, the term "Remaining Unexpired Employment Period" as of any
date shall mean the period beginning on such date and ending on: (i) if a notice
of non- extension has been given in accordance with this section 2(b), the third
(3rd) anniversary of the date on which such notice is given; and (ii) in all
other cases, the third (3rd) anniversary of the date as of which the Remaining
Unexpired Employment Period is being determined. Upon termination of the
Executive's employment with the Holding Company for any reason whatsoever, any
daily extensions provided pursuant to this section 2(b), if not therefore
discontinued, shall automatically cease.

          (c) Nothing in this Agreement shall be deemed to prohibit the Holding
Company at any time from terminating the Executive's employment during the
Employment Period with or without notice for any reason; provided, however, that
the relative rights and obligations of the Holding Company and the Executive in
the event of any such termination shall be determined under this Agreement.

          Section 3. Duties.

          The Executive shall serve as [_________] of the Holding Company,
having such power, authority and responsibility and performing such duties as
are prescribed by or under the By-Laws of the Holding Company and as are
customarily associated with such position. The Executive shall devote his full
business time and attention (other than during holidays, approved vacation
periods, and periods of illness or approved leaves of absence) to the business
and affairs of the Holding Company and shall use his best efforts to advance the
interests of the Holding Company.

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive
hereunder, the Holding Company shall pay to him a salary at an initial annual
rate of [_______________________ DOLLARS ($_______)], payable in approximately
equal installments in accordance with the Holding Company's customary payroll
practices for senior officers. The Board shall review the Executive's annual
rate of salary at such times during the Employment Period as it deems
appropriate, but not less frequently than once every twelve months, and may, in
its discretion, approve an increase therein. In addition to salary, the
Executive may receive other cash compensation from the Holding Company for
services hereunder at such times, in such amounts and on such terms and
conditions as the Board may determine from time to time.


                                  Page 2 of 20

<PAGE>

          Section 5. Employee Benefit Plans and Programs.

          During the Employment Period, the Executive shall be treated as an
employee of the Holding Company and shall be entitled to participate in and
receive benefits under any and all qualified or non-qualified retirement,
pension, savings, profit-sharing or stock bonus plans, any and all group life,
health (including hospitalization, medical and major medical), dental, accident
and long-term disability insurance plans, professional financial planning
services and tax preparation programs and any other employee benefit and
compensation plans (including, but not limited to, any incentive compensation
plans or programs, stock option and appreciation rights plans and restricted
stock plans) as may from time to time be maintained by, or cover employees of,
the Holding Company, in accordance with the terms and conditions of such
employee benefit plans and programs and compensation plans and programs and
consistent with the Holding Company's customary practices.

          Section 6. Indemnification and Insurance.

          (a) During the Employment Period and for a period of six (6) years
thereafter, the Holding Company shall cause the Executive to be covered by and
named as an insured under any policy or contract of insurance obtained by it to
insure its directors and officers against personal liability for acts or
omissions in connection with service as an officer or director of the Holding
Company or service in other capacities at the request of the Holding Company.
The coverage provided to the Executive pursuant to this section 6 shall be of
the same scope and on the same terms and conditions as the coverage (if any)
provided to other officers or directors of the Holding Company.

          (b) To the maximum extent permitted under applicable law, during the
Employment Period and for a period of six (6) years thereafter, the Holding
Company shall indemnify the Executive against and hold him harmless from any
costs, liabilities, losses and exposures to the fullest extent and on the most
favorable terms and conditions that similar indemnification is offered to any
director or officer of the Holding Company or any subsidiary or affiliate
thereof.

          Section 7. Outside Activities.

          The Executive may serve as a member of the boards of directors of such
business, community and charitable organizations as he may disclose to and as
may be approved by the Board (which approval shall not be unreasonably
withheld); provided, however, that such service shall not materially interfere
with the performance of his duties under this Agreement. The Executive may also
engage in personal business and investment activities which do not materially
interfere with the performance of his duties hereunder; provided, however, that
such activities are not prohibited under any code of conduct or investment or
securities trading policy established by the Holding Company and generally
applicable to all similarly situated executives. The Executive may also serve as
an officer or director of the Bank on such terms and conditions as the Holding
Company and the Bank may mutually agree upon, and such service shall not be
deemed to materially interfere with the Executive's performance of his duties
hereunder or otherwise result in a material breach of this Agreement. If the
Executive is discharged or


                                  Page 3 of 20

<PAGE>

suspended, or is subject to any regulatory prohibition or restriction with
respect to participation in the affairs of the Bank, he shall continue to
perform services for the Holding Company in accordance with this Agreement but
shall not directly or indirectly provide services to or participate in the
affairs of the Bank in a manner inconsistent with the terms of such discharge or
suspension or any applicable regulatory order.

          Section 8. Working Facilities and Expenses.

          The Executive's principal place of employment shall be at the Holding
Company's executive offices at the address first above written, or at such other
location within Lake or Cook County at which the Holding Company shall maintain
its principal executive offices, or at such other location as the Holding
Company and the Executive may mutually agree upon. The Holding Company shall
provide the Executive at his principal place of employment with a private
office, secretarial services, and other support services and facilities suitable
to his position with the Holding Company and necessary or appropriate in
connection with the performance of his assigned duties under this Agreement and
shall furnish to the Executive for his business use outside the office a
personal computer, fax machine and other equipment appropriate to permit the
Executive to carry on his assigned duties while away from the office. The
Holding Company shall provide to the Executive for his exclusive use an
automobile owned or leased by the Holding Company and appropriate to his
position, to be used in the performance of his duties hereunder, including
commuting to and from his personal residence. The Holding Company shall
reimburse the Executive for his ordinary and necessary business expenses,
including, without limitation, all expenses associated with his business use of
the aforementioned automobile, fees for memberships in such clubs and
organizations as the Executive and the Holding Company shall mutually agree are
necessary and appropriate for business purposes, and his travel and
entertainment expenses incurred in connection with the performance of his duties
under this Agreement, in each case upon presentation to the Holding Company of
an itemized account of such expenses in such form as the Holding Company may
reasonably require.

          Section 9. Termination of Employment with Severance Benefits.

          (a) The Executive shall be entitled to the severance benefits
described herein in the event that his employment with the Holding Company
terminates during the Employment Period under any of the following
circumstances:

          (i) the Executive's voluntary resignation from employment with the
     Holding Company within ninety (90) days following:

               (A) the failure of the Board to appoint or re-appoint or elect or
          re-elect the Executive to the position stated in section 3 of this
          Agreement (or a more senior office of the Holding Company);

               (B) if the Executive is a member of the Board as of the date of
          this Agreement, the failure of the stockholders of the Holding Company
          to elect or re-elect the Executive to the Board or the failure of the
          Board


                                  Page 4 of 20

<PAGE>

          (or the nominating committee thereof) to nominate the Executive for
          such election or re-election;

               (C) the expiration of a thirty (30) day period following the date
          on which the Executive gives written notice to the Holding Company of
          its material failure, whether by amendment of the Holding Company's
          Organization Certificate or By-laws, action of the Board or the
          Holding Company's stockholders or otherwise, to vest in the Executive
          the functions, duties, or responsibilities prescribed in section 3 of
          this Agreement, unless, during such thirty (30) day period, the
          Holding Company cures such failure in a manner determined by the
          Executive, in his discretion, to be satisfactory; or

               (D) the expiration of a thirty (30) day period following the date
          on which the Executive gives written notice to the Holding Company of
          its material breach of any term, condition or covenant contained in
          this Agreement (including, without limitation any reduction of the
          Executive's rate of base salary in effect from time to time and any
          change in the terms and conditions of any compensation or benefit
          program in which the Executive participates which, either individually
          or together with other changes, has a material adverse effect on the
          aggregate value of his total compensation package), unless, during
          such thirty (30) day period, the Holding Company cures such failure in
          a manner determined by the Executive, in his discretion, to be
          satisfactory; or

          (ii) subject to the provisions of section 10, the termination of the
     Executive's employment with the Holding Company for any other reason not
     described in section 9(a);

then, the Holding Company shall provide the benefits and pay to the Executive
the amounts described in section 9(b).

          (b) Upon the termination of the Executive's employment with the
Holding Company under circumstances described in section 9(a) of this Agreement,
the Holding Company shall pay and provide to the Executive (or, in the event of
his death, to his estate):

          (i) his earned but unpaid compensation as of the date of the
     termination of his employment with the Holding Company, such payment to be
     made at the time and in the manner prescribed by law applicable to the
     payment of wages but in no event later than thirty (30) days after
     termination of employment;

          (ii) the benefits, if any, to which he is entitled as a former
     employee under the employee benefit plans and programs and compensation
     plans and programs maintained for the benefit of the Holding Company's
     officers and employees;


                                  Page 5 of 20

<PAGE>

          (iii) continued group life, health (including hospitalization, medical
     and major medical), dental, accident and long-term disability insurance
     benefits, in addition to that provided pursuant to section 9(b)(ii), and
     after taking into account the coverage provided by any subsequent employer,
     if and to the extent necessary to provide for the Executive, for the
     Remaining Unexpired Employment Period, coverage equivalent to the coverage
     to which he would have been entitled under such plans (as in effect on the
     date of his termination of employment, or, if his termination of employment
     occurs after a Change of Control, on the date of such Change of Control,
     whichever benefits are greater), if he had continued working for the
     Holding Company during the Remaining Unexpired Employment Period at the
     highest annual rate of compensation achieved during that portion of the
     Employment Period which is prior to the Executive's termination of
     employment with the Holding Company and if, upon the expiration of such
     coverage, the Executive has received or is eligible to receive pension
     benefits under a pension plan of the Holding Company or the Bank, a further
     continuation of such coverage for the remaining lifetimes of the Executive
     and his spouse;

          (iv) within thirty (30) days following his termination of employment
     with the Holding Company, a lump sum payment, in an amount equal to the
     present value of the salary that the Executive would have earned if he had
     continued working for the Holding Company during the Remaining Unexpired
     Employment Period at the highest annual rate of salary achieved during that
     portion of the Employment Period which is prior to the Executive's
     termination of employment with the Holding Company, where such present
     value is to be determined using a discount rate equal to the applicable
     short-term federal rate prescribed under section 1274(d) of the Internal
     Revenue Code of 1986 ("Code"), compounded using the compounding period
     corresponding to the Holding Company's regular payroll periods for its
     officers, such lump sum to be paid in lieu of all other payments of salary
     provided for under this Agreement in respect of the period following any
     such termination;

          (v) within thirty (30) days following his termination of employment
     with the Holding Company, a lump sum payment in an amount equal to the
     excess, if any, of:

               (A) the present value of the aggregate benefits to which he would
          be entitled under any and all qualified and non-qualified defined
          benefit pension plans maintained by, or covering employees of, the
          Holding Company, if he were 100% vested thereunder and had continued
          working for the Holding Company during the Remaining Unexpired
          Employment Period, such benefits to be determined as of the date of
          termination of employment by adding to the service actually recognized
          under such plans an additional period equal to the Remaining Unexpired
          Employment Period and by adding to the compensation recognized under
          such plans for the year in which termination of employment occurs all
          amounts payable under sections 9(b)(i), (iv), (vii), (viii) and (ix);
          over


                                  Page 6 of 20

<PAGE>

               (B) the present value of the benefits to which he is actually
          entitled under such defined benefit pension plans as of the date of
          his termination;

     where such present values are to be determined using the mortality tables
     prescribed under section 415(b)(2)(E)(v) of the Code and a discount rate,
     compounded monthly equal to the annualized rate of interest prescribed by
     the Pension Benefit Guaranty Corporation for the valuation of immediate
     annuities payable under terminating single-employer defined benefit plans
     for the month in which the Executive's termination of employment occurs
     ("Applicable PBGC Rate");

          (vi) within thirty (30) days following his termination of employment
     with the Holding Company, a lump sum payment in an amount equal to the
     present value of the additional employer contributions (or if greater in
     the case of a leveraged employee stock ownership plan or similar
     arrangement, the additional assets allocable to him through debt service,
     based on the fair market value of such assets at termination of employment)
     to which he would have been entitled under any and all qualified and
     non-qualified defined contribution plans maintained by, or covering
     employees of, the Holding Company, as if he were 100% vested thereunder and
     had continued working for the Holding Company during the Remaining
     Unexpired Employment Period at the highest annual rate of compensation
     achieved during that portion of the Employment Period which is prior to the
     Executive's termination of employment with the Holding Company, and making
     the maximum amount of employee contributions, if any, required under such
     plan or plans, such present value to be determined on the basis of a
     discount rate, compounded using the compounding period that corresponds to
     the frequency with which employer contributions are made to the relevant
     plan, equal to the Applicable PBGC Rate;

          (vii) the payments that would have been made to the Executive under
     any cash bonus or long-term or short-term cash incentive compensation plan
     maintained by, or covering employees of, the Holding Company if he had
     continued working for the Holding Company during the Remaining Unexpired
     Employment Period and had earned the maximum bonus or incentive award in
     each calendar year that ends during the Remaining Unexpired Employment
     Period, such payments to be equal to the product of:

               (A) the maximum percentage rate at which an award was ever
          available to the Executive under such incentive compensation plan;
          multiplied by

               (B) the salary that would have been paid to the Executive during
          each such calendar year at the highest annual rate of salary achieved
          during that portion of the Employment Period which is prior to the
          Executive's termination of employment with the Holding Company:

     such payments to be made (without discounting for early payment) within
     thirty (30) days following the Executive's termination of employment;


                                  Page 7 of 20

<PAGE>

          (viii) to the extent permitted under applicable law, upon the
     surrender of options or appreciation rights issued to the Executive under
     any stock option and appreciation rights plan or program maintained by, or
     covering employees of, the Holding Company, a lump sum payment in an amount
     equal to the product of:

               (A) the excess of (I) the fair market value of a share of stock
          of the same class as the stock subject to the option or appreciation
          right, determined as of the date of termination of employment, over
          (II) the exercise price per share for such option or appreciation
          right, as specified in or under the relevant plan or program;
          multiplied by

               (B) the number of shares with respect to which options or
          appreciation rights are being surrendered.

     For purposes of this section 9(b)(viii), the Executive shall be deemed
     fully vested in all options and appreciation rights under any stock option
     or appreciation rights plan or program maintained by, or covering employees
     of, the Holding Company, even if he is not vested under such plan or
     program; and

          (ix) to the extent permitted under applicable law, upon the surrender
     of any shares awarded to the Executive under any restricted stock plan
     maintained by, or covering employees of, the Holding Company, a lump sum
     payment in an amount equal to the product of:

               (A) the fair market value of a share of stock of the same class
          of stock granted under such plan, determined as of the date of the
          Executive's termination of employment; multiplied by

               (B) the number of shares which are being surrendered.

     For purposes of this section 9(b)(ix), the Executive shall be deemed fully
     vested in all shares awarded under any restricted stock plan maintained by,
     or covering employees of, the Holding Company, even if he is not vested
     under such plan.

The Holding Company and the Executive hereby stipulate that the damages which
may be incurred by the Executive following any such termination of employment
are not capable of accurate measurement as of the date first above written and
that the payments and benefits contemplated by this section 9(b) constitute
reasonable damages under the circumstances and shall be payable without any
requirement of proof of actual damage and without regard to the Executive's
efforts, if any, to mitigate damages. The Holding Company and the Executive
further agree that the Holding Company may condition the payments and benefits
(if any) due under sections 9(b)(iii), (iv), (v), (vi) and (vii) on the receipt
of the Executive's resignation from any and all positions which he holds as an
officer, director or committee member with respect to the Holding Company, the
Bank or any subsidiary or affiliate of either of them.


                                  Page 8 of 20

<PAGE>

          Section 10. Termination without Additional Holding Company Liability.

          In the event that the Executive's employment with the Holding Company
shall terminate during the Employment Period on account of:

          (a) the discharge of the Executive for "cause," which, for purposes of
     this Agreement shall mean personal dishonesty, incompetence, willful
     misconduct, breach of fiduciary duty involving personal profit, intentional
     failure to perform stated duties, willful violation of any law, rule or
     regulation (other than traffic violations or similar offenses) or final
     cease and desist order, or any material breach of this Agreement, in each
     case as measured against standards generally prevailing at the relevant
     time in the savings and community banking industry; provided, however, that
     the Executive shall not be deemed to have been discharged for cause unless
     and until the following procedures shall have been followed:

               (i) the Board shall adopt a resolution duly approved by
          affirmative vote of a majority of the entire Board at a meeting called
          and held for such purpose calling for the Executive's termination for
          cause and setting forth the purported grounds for such termination
          ("Proposed Termination Resolution");

               (ii) as soon as practicable, and in any event within five (5)
          days, after adoption of such resolution, the Board shall furnish to
          the Executive a written notice of termination which shall be
          accompanied by a certified copy of the Proposed Termination Resolution
          ("Notice of Proposed Termination");

               (iii) the Executive shall be afforded a reasonable opportunity to
          make oral and written presentations to the members of the Board, on
          his own behalf, or through a representative, who may be his legal
          counsel, to refute the grounds set forth in the Proposed Termination
          Resolution at one or more meetings of the Board to be held no sooner
          than fifteen (15) days and no later than thirty (30) days after the
          Executive's receipt of the Proposed Termination Notice ("Termination
          Hearings"); and

               (iv) within ten (10) days following the end of the Termination
          Hearings, the Board shall adopt a resolution duly approved by
          affirmative vote of a majority of the entire Board at a meeting called
          and held for such purpose (A) finding that in the good faith opinion
          of the Board the grounds for termination set forth in the Proposed
          Termination Resolution exist and (B) terminating the Executive's
          employment ("Termination Resolution"); and

               (v) as promptly as practicable, and in any event within one (1)
          business day after adoption of the Termination Resolution, the Board
          shall furnish to the Executive written notice of termination, which
          notice shall include a copy of the Termination Resolution and specify
          an effective date of termination that is not later than the date on
          which such notice is given;


                                  Page 9 of 20

<PAGE>

          (b) the Executive's voluntary resignation from employment with the
     Holding Company for reasons other than those specified in section 9(a);

          (c) the Executive's death; or

          (d) a determination that the Executive is eligible for long-term
     disability benefits under the Holding Company's long-term disability
     insurance program or, if there is no such program, under the federal Social
     Security Act;

then the Holding Company shall have no further obligations under this Agreement,
other than the payment to the Executive (or, in the event of his death, to his
estate) of his earned but unpaid salary as of the date of the termination of his
employment, and the provision of such other benefits, if any, to which he is
entitled as a former employee under the employee benefit plans and programs and
compensation plans and programs maintained by, or covering employees of, the
Holding Company.

          (e) For purposes of section 10(a)(i)(A) or (B), no act or failure to
act, on the part of the Executive, shall be considered "willful" unless it is
done, or omitted to be done, by the Executive in bad faith or without reasonable
belief that the Executive's action or omission was in the best interests of the
Holding Company. Any act, or failure to act, based upon authority given pursuant
to a resolution duly adopted by the Board or based upon the written advice of
counsel for the Holding Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Holding Company. The cessation of employment of the Executive shall not be
deemed to be for "cause" within the meaning of section 10(a)(i) unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of three-fourths of the non-employee members of
the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in section 10(a)(i) above, and specifying the particulars thereof in
detail.

          Section 11. Termination Upon or Following a Change of Control.

          (a) A Change of Control of the Holding Company ("Change of Control")
shall be deemed to have occurred upon the happening of any of the following
events:

          (i) approval by the stockholders of the Holding Company of a
     transaction that would result in the reorganization, merger or
     consolidation of the Holding Company, respectively, with one or more other
     persons, other than a transaction following which:

               (A) at least 51% of the equity ownership interests of the entity
          resulting from such transaction are beneficially owned (within the
          meaning of Rule 13d-3 promulgated under the Exchange Act) in
          substantially the same relative proportions by persons who,
          immediately prior to such transaction, beneficially owned (within the
          meaning of Rule 13d-3


                                  Page 10 of 20

<PAGE>

          promulgated under the Exchange Act) at least 51% of the outstanding
          equity ownership interests in the Holding Company; and

               (B) at least 51% of the securities entitled to vote generally in
          the election of directors of the entity resulting from such
          transaction are beneficially owned (within the meaning of Rule 13d-3
          promulgated under the Exchange Act) in substantially the same relative
          proportions by persons who, immediately prior to such transaction,
          beneficially owned (within the meaning of Rule 13d-3 promulgated under
          the Exchange Act) at least 51% of the securities entitled to vote
          generally in the election of directors of the Holding Company;

          (ii) the acquisition of all or substantially all of the assets of the
     Holding Company or beneficial ownership (within the meaning of Rule 13d-3
     promulgated under the Exchange Act) of 25% or more of the outstanding
     securities of the Holding Company entitled to vote generally in the
     election of directors by any person or by any persons acting in concert, or
     approval by the stockholders of the Holding Company of any transaction
     which would result in such an acquisition;

          (iii) a complete liquidation or dissolution of the Holding Company, or
     approval by the stockholders of the Holding Company of a plan for such
     liquidation or dissolution;

          (iv) the occurrence of any event if, immediately following such event,
     at least 50% of the members of the board of directors of the Holding
     Company do not belong to any of the following groups:

               (A) individuals who were members of the board of directors of the
          Holding Company on the date of this Agreement; or

               (B) individuals who first became members of the board of
          directors of the Holding Company after the date of this Agreement
          either:

                    (I) upon election to serve as a member of the board of
               directors of the Holding Company by affirmative vote of
               three-quarters of the members of such board, or of a nominating
               committee thereof, in office at the time of such first election;
               or

                    (II) upon election by the stockholders of the Board to serve
               as a member of the board of directors of the Board, but only if
               nominated for election by affirmative vote of three-quarters of
               the members of the board of directors of the Board, or of a
               nominating committee thereof, in office at the time of such first
               nomination;

          provided, however, that such individual's election or nomination did
          not result from an actual or threatened election contest (within the
          meaning of Rule 14a-11 of Regulation 14A promulgated under the
          Exchange Act) or


                                  Page 11 of 20

<PAGE>

          other actual or threatened solicitation of proxies or consents (within
          the meaning of Rule 14a-11 of Regulation 14A promulgated under the
          Exchange Act) other than by or on behalf of the Board of the Holding
          Company; or

          (v) any event which would be described in section 11(a)(i), (ii),
     (iii) or (iv) if the term "Bank" were substituted for the term "Holding
     Company" therein.

In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Holding Company, the
Bank, or a subsidiary of either of them, by the Holding Company, the Bank, or a
subsidiary of either of them, or by any employee benefit plan maintained by any
of them. For purposes of this section 11(a), the term "person" shall have the
meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

          (b) In the event of a Change of Control, the Executive shall be
entitled to the payments and benefits contemplated by section 9(b) in the event
of his termination employment with the Holding Company under any of the
circumstances described in section 9(a) of this Agreement or under any of the
following circumstances:

          (i) resignation, voluntary or otherwise, by the Executive at any time
     during the Employment Period following his demotion, loss of title, office
     or significant authority or responsibility, or following any reduction in
     any element of his package of compensation and benefits;

          (ii) resignation, voluntary or otherwise, by the Executive at any time
     during the Employment Period following any relocation of his principal
     place of employment or any change in working conditions at such principal
     place of employment which the Executive, in his reasonable discretion,
     determines to be embarrassing, derogatory or otherwise adverse;

          (iii) resignation, voluntary or otherwise, by the Executive at any
     time during the Employment Period following the failure of any successor to
     the Holding Company in the Change of Control to include the Executive in
     any compensation or benefit program maintained by it or covering any of its
     executive officers, unless the Executive is already covered by a
     substantially similar plan of the Holding Company which is at least as
     favorable to him; or

          (iv) resignation, voluntary or otherwise, for any reason whatsoever
     following the effective date of the Change of Control.

          Section 12. Tax Indemnification.

          (a) This section 12 shall apply if the Executive's employment is
terminated upon or following (i) a Change of Control (as defined in section 11
of this Agreement); or (ii) a change "in the ownership or effective control" of
the Holding Company or the Bank or "in the


                                  Page 12 of 20

<PAGE>

ownership of a substantial portion of the assets" of the Holding Company or the
Bank within the meaning of section 280G of the Code. If this Section 12 applies,
then, if for any taxable year, the Executive shall be liable for the payment of
an excise tax under section 4999 of the Code with respect to any payment in the
nature of compensation made by the Holding Company, the Bank or any direct or
indirect subsidiary or affiliate of the Holding Company or the Bank to (or for
the benefit of) the Executive, the Holding Company shall pay to the Executive an
amount equal to X, determined under the following formula:

          X    =                     E x P
                    ------------------------------------
                    1 - [(FI x (1 - SLI)) + SLI + E + M]

               where

          E    =    the rate at which the excise tax is assessed under section
                    4999 of the Code;

          P    =    the amount with respect to which such excise tax is
                    assessed, determined without regard to this section 12;

          FI   =    the highest marginal rate of income tax applicable to the
                    Executive under the Code for the taxable year in question;

          SLI  =    the sum of the highest marginal rates of income tax
                    applicable to the Executive under all applicable state and
                    local laws for the taxable year in question; and

          M    =    the highest marginal rate of Medicare tax applicable to the
                    Executive under the Code for the taxable year in question.

With respect to any payment in the nature of compensation that is made to (or
for the benefit of) the Executive under the terms of this Agreement, or
otherwise, and on which an excise tax under section 4999 of the Code will be
assessed, the payment determined under this section 12(a) shall be made to the
Executive on the earlier of (i) the date the Holding Company, the Bank or any
direct or indirect subsidiary or affiliate of the Holding Company or the Bank is
required to withhold such tax, or (ii) the date the tax is required to be paid
by the Executive.

          (b) Notwithstanding anything in this section 12 to the contrary, in
the event that the Executive's liability for the excise tax under section 4999
of the Code for a taxable year is subsequently determined to be different than
the amount determined by the formula (X + P) x E, where X, P and E have the
meanings provided in section 12(a), the Executive or the Holding Company, as the
case may be, shall pay to the other party at the time that the amount of such
excise tax is finally determined, an appropriate amount, plus interest, such
that the payment made under section 12(a), when increased by the amount of the
payment made to the Executive under this section 12(b) by the Holding Company,
or when reduced by the amount of the payment made to the Holding Company under
this section 12(b) by the Executive, equals the amount that should have properly
been paid to the Executive under section 12(a). The interest paid under this
section 12(b) shall be determined at the rate provided under section
1274(b)(2)(B) of the Code. To confirm that the proper amount, if any, was paid
to the


                                  Page 13 of 20

<PAGE>

Executive under this section 12, the Executive shall furnish to the Holding
Company a copy of each tax return which reflects a liability for an excise tax
payment made by the Holding Company, at least 20 days before the date on which
such return is required to be filed with the Internal Revenue Service.

          Section 13. Covenant Not To Compete.

          In the event of his termination of employment with the Holding Company
prior to the expiration of the Employment Period, for a period of one (1) year
following the date of his termination of employment with the Holding Company
(or, if less, for the Remaining Unexpired Employment Period), the Executive
shall not, without the written consent of the Holding Company, become an
officer, employee, consultant, director or trustee of any competitor (as herein
defined) if in this capacity he would be working within one hundred (100) miles
of the place where the headquarters of the Holding Company are located on the
date of the Executive's termination of employment. For this purpose, a
"competitor" is any savings bank, savings and loan association, savings and loan
holding company, bank or bank holding company, or any direct or indirect
subsidiary or affiliate of any such entity. This section 13 shall not apply if
the Executive's employment is terminated without cause or due to death or
voluntary resignation as described in section 9(a). If the Executive's
employment shall be terminated on account of disability as provided in section
10(d) of this Agreement, this section 13 shall not apply if (a) the Executive
first offers, by written notice, to accept a similar position with, or perform
similar services for, the Holding Company on substantially the same terms and
conditions proposed by the competitor and (b) the Holding Company declines to
accept such offer within ten (10) days after such notice is given.

          Section 14. Confidentiality.

          Unless he obtains the prior written consent of the Holding Company,
the Executive shall keep confidential and shall refrain from using for the
benefit of himself, or any person or entity other than the Holding Company or
any entity which is a subsidiary of the Holding Company or of which the Holding
Company is a subsidiary, any material document or information obtained from the
Holding Company, or from its parent or subsidiaries, in the course of his
employment with any of them concerning their properties, operations or business
(unless such document or information is readily ascertainable from public or
published information or trade sources or has otherwise been made available to
the public through no fault of his own) until the same ceases to be material (or
becomes so ascertainable or available); provided, however, that nothing in this
section 14 shall prevent the Executive, with or without the Holding Company's
consent, from participating in or disclosing documents or information in
connection with any judicial or administrative investigation, inquiry or
proceeding to the extent that such participation or disclosure is required under
applicable law.


                                  Page 14 of 20

<PAGE>

          Section 15. Solicitation.

          The Executive hereby covenants and agrees that, for a period of one
(1) year following his termination of employment with the Holding Company, he
shall not, without the written consent of the Holding Company, either directly
or indirectly:

          (a) solicit, offer employment to, or take any other action intended,
     or that a reasonable person acting in like circumstances would expect, to
     have the effect of causing any officer or employee of the Holding Company,
     the Bank or any affiliate, as of the date of this Agreement, of either of
     them, to terminate his or her employment and accept employment or become
     affiliated with, or provide services for compensation in any capacity
     whatsoever to, any savings bank, savings and loan association, bank, bank
     holding company, savings and loan holding company, or other institution
     engaged in the business of accepting deposits and making loans, doing
     business within one hundred (100) miles of the headquarters of the Holding
     Company, the Bank or any affiliate, as of the date of this Agreement, of
     either of them;

          (b) provide any information, advice or recommendation with respect to
     any such officer or employee of any savings bank, savings and loan
     association, bank, bank holding company, savings and loan holding company,
     or other institution engaged in the business of accepting deposits and
     making loans, doing business within one hundred (100) miles of the
     headquarters of the Holding Company, the Bank, or any affiliate, as of the
     date of this Agreement, of either of them, that is intended, or that a
     reasonable person acting in like circumstances would expect, to have the
     effect of causing any officer or employee of the Holding Company, the Bank,
     or any affiliate, as of the date of this Agreement, of either of them, to
     terminate his employment and accept employment or become affiliated with,
     or provide services for compensation in any capacity whatsoever to, any
     savings bank, savings and loan association, bank, bank holding company,
     savings and loan holding company, or other institution engaged in the
     business of accepting deposits and making loans, doing business within one
     hundred (100) miles of the headquarters of the Holding Company, the Bank,
     or any affiliate, as of the date of this Agreement, of either of them; or

          (c) solicit, provide any information, advice or recommendation or take
     any other action intended, or that a reasonable person acting in like
     circumstances would expect, to have the effect of causing any customer of
     the Holding Company to terminate an existing business or commercial
     relationship with the Holding Company.

          Section 16. No Effect on Employee Benefit Plans or Programs.

          The termination of the Executive's employment during the term of this
Agreement or thereafter, whether by the Holding Company or by the Executive,
shall have no effect on the rights and obligations of the parties hereto under
the Holding Company's qualified or non-qualified retirement, pension, savings,
thrift, profit-sharing or stock bonus plans, group life,


                                  Page 15 of 20

<PAGE>

health (including hospitalization, medical and major medical), dental, accident
and long-term disability insurance plans or such other employee benefit plans or
programs, or compensation plans or programs, as may be maintained by, or cover
employees of, the Holding Company from time to time.

          Section 17. Successors and Assigns.

          This Agreement will inure to the benefit of and be binding upon the
Executive, his legal representatives and testate or intestate distributees, and
the Holding Company and its successors and assigns, including any successor by
merger or consolidation or a statutory receiver or any other person or firm or
corporation to which all or substantially all of the assets and business of the
Holding Company may be sold or otherwise transferred. Failure of the Holding
Company to obtain from any successor its express written assumption of the
Holding Company's obligations hereunder at least sixty (60) days in advance of
the scheduled effective date of any such succession shall be deemed a material
breach of this Agreement.

          Section 18. Notices.

          Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five (5) days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:

          If to the Executive:

               ______________________
               ______________________
               ______________________

          If to the Holding Company:

               Big Foot Financial Corp.
               1190 RFD
               Long Grove, Illinois  60047-7034

               Attention:     Board of Directors -- Non-Employee Directors
                              --------------------------------------------

          with a copy to:

               Thacher Proffitt & Wood
               Two World Trade Center
               New York, New York 10048

               Attention:     W. Edward Bright, Esq.
                              ----------------------


                                  Page 16 of 20

<PAGE>

          Section 19. Indemnification for Attorneys' Fees.

          The Holding Company shall indemnify, hold harmless and defend the
Executive against reasonable costs, including legal fees, incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved, as a result of his efforts, in good faith, to defend or enforce the
terms of this Agreement; provided, however, that the Executive shall have
substantially prevailed on the merits pursuant to a judgment, decree or order of
a court of competent jurisdiction or of an arbitrator in an arbitration
proceeding, or in a settlement. For purposes of this Agreement, any settlement
agreement which provides for payment of any amounts in settlement of the Holding
Company's obligations hereunder shall be conclusive evidence of the Executive's
entitlement to indemnification hereunder, and any such indemnification payments
shall be in addition to amounts payable pursuant to such settlement agreement,
unless such settlement agreement expressly provides otherwise.

          Section 20. Severability.

          A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.

          Section 21. Waiver.

          Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.

          Section 22. Counterparts.

          This Agreement may be executed in two (2) or more counterparts, each
of which shall be deemed an original, and all of which shall constitute one and
the same Agreement.

          Section 23. Governing Law.

          This Agreement shall be governed by and construed and enforced in
accordance with the federal laws of the United States and, to the extent that
federal law is inapplicable, in accordance with the laws of the State of
Illinois applicable to contracts entered into and to be performed entirely
within the State of Illinois.


                                  Page 17 of 20

<PAGE>

          Section 24. Headings and Construction.

          The headings of sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any section. Any
reference to a section number shall refer to a section of this Agreement, unless
otherwise stated.

          Section 25. Entire Agreement; Modifications.

          This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.

          Section 26. Guarantee.

          The Holding Company hereby agrees to guarantee the payment by the Bank
of any benefits and compensation to which the Executive is or may be entitled to
under the terms and conditions of the employment agreement dated as of
______________________, 1996 between the Bank and the Executive, a copy of which
is attached hereto as Exhibit A ("Bank Agreement").

          Section 27. Non-duplication.

          In the event that the Executive shall perform services for the Bank or
any other direct or indirect subsidiary of the Holding Company, any compensation
or benefits provided to the Executive by such other employer shall be applied to
offset the obligations of the Holding Company hereunder, it being intended that
this Agreement set forth the aggregate compensation and benefits payable to the
Executive for all services to the Holding Company and all of its direct or
indirect subsidiaries.

          Section 28. Required Regulatory Provisions.

          Notwithstanding anything herein contained to the contrary, any
payments to the Executive by the Holding Company, whether pursuant to this
Agreement or otherwise, are subject to and conditioned upon their compliance
with section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. ss.1828(k),
and any regulations promulgated thereunder.


                                  Page 18 of 20

<PAGE>

          IN WITNESS WHEREOF, the Holding Company has caused this Agreement to
be executed and the Executive has hereunto set his hand, all as of the day and
year first above written.


                                        ____________________________________
                                                       EXECUTIVE


ATTEST:                                 BIG FOOT FINANCIAL CORP.

By ____________________________
           Secretary                    By____________________________________
                                             Name:
                                             Title:
[Seal]


                                  Page 19 of 20

<PAGE>

STATE OF ILLINOIS        )
                         : ss.:
COUNTY OF                )

          On this ________ day of ____________________, 1996, before me
personally came __________________, to me known, and known to me to be the
individual described in the foregoing instrument, who, being by me duly sworn,
did depose and say that he resides at the address set forth in said instrument,
and that he signed his name to the foregoing instrument.


                                        ____________________________________
                                                  Notary Public


STATE OF ILLINOIS        )
                         : ss.:
COUNTY OF                )

          On this ________ day of ____________________, 1996, before me
personally came ___________, to me known, who, being by me duly sworn, did
depose and say that he resides at
______________________________________________, that he is a member of the Board
of Directors of BIG FOOT FINANCIAL CORP., the Illinois corporation described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such seal; that it was
so affixed by order of the Board of Directors of said corporation; and that he
signed his name thereto by like order.


                                        ____________________________________
                                                  Notary Public


                                  Page 20 of 20

<PAGE>


                                   EX-10.4
                  FAIRFIELD SAVINGS BANK - EMPLOYMENT AGREEMENT


                         FAIRFIELD SAVINGS BANK, F.S.B.
                              EMPLOYMENT AGREEMENT

          This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
_______________ by and between FAIRFIELD SAVINGS BANK, F.S.B., a savings bank
organized and operating under the federal laws of the United States and having
an office at 1190 RFD, Long Grove, Illinois 60047-7304 ("Bank") and [EXECUTIVE],
an individual residing at _________________________________________
("Executive").

                              W I T N E S S E T H :

          WHEREAS, Executive currently serves the Bank in the capacity of
[___________]; and

          WHEREAS, effective as of the date of this Agreement, the Bank has
converted from a federal savings bank to a federal stock savings bank and has
become the wholly-owned subsidiary of [_________ Bancorp, Inc.] a publicly-held
Illinois corporation ("Holding Company"); and

          WHEREAS, the Bank desires to assure for itself the continued
availability of the Executive's services and the ability of the Executive to
perform such services with a minimum of personal distraction in the event of a
pending or threatened Change of Control (as hereinafter defined); and

          WHEREAS, the Executive is willing to continue to serve the Bank on the
terms and conditions hereinafter set forth;

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth, the Bank and the Executive
hereby agree as follows:

          Section 1. Employment.

          The Bank agrees to continue to employ the Executive, and the Executive
hereby agrees to such continued employment, during the period and upon the terms
and conditions set forth in this Agreement.

          Section 2. Employment Period; Remaining Unexpired Employment Period.

          (a) The terms and conditions of this Agreement shall be and remain in
effect during the period of employment established under this section 2
("Employment Period"). The Employment Period shall be for an initial term of
three years beginning on the date of this Agreement. Prior to the first
anniversary of the date of this Agreement and on each anniversary date
thereafter (each, an "Anniversary Date"), the Board of Directors of the Bank
("Board") shall review the terms of this Agreement and the Executive's
performance of services hereunder and may, in the absence of objection from the
Executive, approve an extension of the


                                  Page 1 of 19

<PAGE>

Employment Agreement. In such event, the Employment Agreement shall be extended
to the third anniversary of the relevant Anniversary Date.

          (b) For all purposes of this Agreement, the term "Remaining Unexpired
Employment Period" as of any date shall mean the period beginning on such date
and ending on the Anniversary Date on which the Employment Period (as extended
pursuant to section 2(a) of this Agreement) is then scheduled to expire.

          (c) Nothing in this Agreement shall be deemed to prohibit the Bank at
any time from terminating the Executive's employment during the Employment
Period with or without notice for any reason; provided, however, that the
relative rights and obligations of the Bank and the Executive in the event of
any such termination shall be determined under this Agreement.

          Section 3. Duties.

          The Executive shall serve as [___________________] of the Bank, having
such power, authority and responsibility and performing such duties as are
prescribed by or under the By-Laws of the Bank and as are customarily associated
with such position. The Executive shall devote his full business time and
attention (other than during holidays, approved vacation periods, and periods of
illness or approved leave of absence) to the business and affairs of the Bank
and shall use his best efforts to advance the interests of the Bank.

          Section 4. Cash Compensation.

          In consideration for the services to be rendered by the Executive
hereunder, the Bank shall pay to him a salary at an initial annual rate of
[______________________ ($____________)], payable in approximately equal
installments in accordance with the Bank's customary payroll practices for
senior officers. The Board shall review the Executive's annual rate of salary at
such times as it deems appropriate, but not less frequently than once every
twelve months, and may, in its discretion, approve an increase therein. In
addition to salary, the Executive may receive other cash compensation from the
Bank for services hereunder at such times, in such amounts and on such terms and
conditions as the Board may determine from time to time.

          Section 5. Employee Benefit Plans and Programs.

          During the Employment Period, the Executive shall be treated as an
employee of the Bank and shall be eligible to participate in and receive
benefits under any and all qualified or non-qualified retirement, pension,
savings, profit-sharing or stock bonus plans, any and all group life, health
(including hospitalization, medical and major medical), dental, accident and
long-term disability insurance plans, professional financial planning services
and tax preparation programs and any other employee benefit and compensation
plans (including, but not limited to, any incentive compensation plans or
programs, stock option and appreciation rights plans and restricted stock plans)
as may from time to time be maintained by, or cover employees of, the


                                  Page 2 of 19

<PAGE>

Bank, in accordance with the terms and conditions of such employee benefit plans
and programs and compensation plans and programs and consistent with the Bank's
customary practices.

          Section 6. Indemnification and Insurance.

          (a) During the Employment Period and for a period of six (6) years
thereafter, the Bank shall cause the Executive to be covered by and named as an
insured under any policy or contract of insurance obtained by it to insure its
directors and officers against personal liability for acts or omissions in
connection with service as an officer or director of the Bank or service in
other capacities at the request of the Bank. The coverage provided to the
Executive pursuant to this section 6 shall be of the same scope and on the same
terms and conditions as the coverage (if any) provided to other officers or
directors of the Bank.

          (b) To the maximum extent permitted under applicable law, during the
Employment Period and for a period of six (6) years thereafter, the Bank shall
indemnify, and shall cause its subsidiaries and affiliates to indemnify the
Executive against and hold him harmless from any costs, liabilities, losses and
exposures to the fullest extent and on the most favorable terms and conditions
that similar indemnification is offered to any director or officer of the Bank
or any subsidiary or affiliate thereof. This section 6(b) shall not be
applicable where section 18 is applicable.

          Section 7. Outside Activities.

          The Executive may serve as a member of the boards of directors of such
business, community and charitable organizations as he may disclose to and as
may be approved by the Board (which approval shall not be unreasonably
withheld); provided, however, that such service shall not materially interfere
with the performance of his duties under this Agreement. The Executive may also
engage in personal business and investment activities which do not materially
interfere with the performance of his duties hereunder; provided, however, that
such activities are not prohibited under any code of conduct or investment or
securities trading policy established by the Bank and generally applicable to
all similarly situated executives. The Executive may also serve as an officer or
director of the Holding Company on terms and conditions as the Bank and the
Holding Company may mutually agree upon, and such service shall not be deemed to
materially interfere with the Executive's performance of his duties hereunder or
otherwise to result in a material breach of this Agreement.

          Section 8. Working Facilities and Expenses.

          The Executive's principal place of employment shall be at the Bank's
executive offices at the address first above written, or at such other location
within Lake and Cook County at which the Bank shall maintain its principal
executive offices, or at such other location as the Bank and the Executive may
mutually agree upon. The Bank shall provide the Executive at his principal place
of employment with a private office, secretarial services and other support
services and facilities suitable to his position with the Bank and necessary or
appropriate in connection with the performance of his assigned duties under this
Agreement and shall furnish to the Executive for his business use outside the
office a personal computer, fax machine and other


                                  Page 3 of 19

<PAGE>

equipment appropriate to permit the Executive to carry on his assigned duties
while away from the office. The Bank shall provide to the Executive for his
exclusive use an automobile owned or leased by the Bank and appropriate to his
position, to be used in the performance of his duties hereunder, including
commuting to and from his personal residence. The Bank shall reimburse the
Executive for his ordinary and necessary business expenses, including, without
limitation, all expenses associated with his business use of the aforementioned
automobile, fees for memberships in such clubs and organizations as the
Executive and the Bank shall mutually agree are necessary and appropriate for
business purposes, and his travel and entertainment expenses incurred in
connection with the performance of his duties under this Agreement, in each case
upon presentation to the Bank of an itemized account of such expenses in such
form as the Bank may reasonably require.

          Section 9. Termination of Employment with Severance Benefits.

          (a) The Executive shall be entitled to the severance benefits
described herein in the event that his employment with the Bank terminates
during the Employment Period under any of the following circumstances:

          (i) The Executive's voluntary resignation from employment with the
     Bank within ninety (90) days following:

               (A) the failure of the Board to appoint or re-appoint or elect or
          re-elect the Executive to the office described in section 3 of this
          Agreement (or a more senior office) of the Bank;

               (B) if the Executive is a member of the Board as of the date of
          this agreement, the failure of the stockholders of the Bank to elect
          or re-elect the Executive or the failure of the Board (or the
          nominating committee thereof) to nominate the Executive for such
          election or re-election;

               (C) the expiration of a thirty (30) day period following the date
          on which the Executive gives written notice to the Bank of its
          material failure, whether by amendment of the Bank's Organization
          Certificate or By-laws, action of the Board or the Bank's stockholders
          or otherwise, to vest in the Executive the functions, duties, or
          responsibilities prescribed in section 3 of this Agreement, unless,
          during such thirty (30) day period, the Bank fully cures such failure;

               (D) the expiration of a thirty (30) day period following the date
          on which the Executive gives written notice to the Bank of its
          material breach of any term, condition or covenant contained in this
          Agreement (including, without limitation, any reduction of the
          Executive's rate of base salary in effect from time to time and any
          change in the terms and conditions of any compensation or benefit
          program in which the Executive participates which, alone or together
          with other changes, has a material adverse effect on the aggregate
          value of his total compensation package), unless, during such thirty
          (30) day period, the Bank fully cures such failure; or


                                  Page 4 of 19

<PAGE>

          (ii) the termination of the Executive's employment with the Bank for
     any other reason not described in section 10(a);

then, subject to section 25, the Bank shall provide the benefits and pay to the
Executive the amounts described in section 9(b).

          (b) Upon the termination of the Executive's employment with the Bank
under circumstances described in section 9(a) of this Agreement, the Bank shall
pay and provide to the Executive (or, in the event of his death, to his estate):

          (i) his earned but unpaid compensation (including, without limitation,
     all items which constitute wages under applicable law and the payment of
     which is not otherwise provided for under this section 9(b)) as of the date
     of the termination of his employment with the Bank, such payment to be made
     at the time and in the manner prescribed by law applicable to the payment
     of wages but in no event later than thirty (30) days after termination of
     employment;

          (ii) the benefits, if any, to which he is entitled as a former
     employee under the employee benefit plans and programs and compensation
     plans and programs maintained for the benefit of the Bank's officers and
     employees;

          (iii) continued group life, health (including hospitalization, medical
     and major medical), dental, accident and long-term disability insurance
     benefits, in addition to that provided pursuant to section 9(b)(ii), and
     after taking into account the coverage provided by any subsequent employer,
     if and to the extent necessary to provide for the Executive, for the
     Remaining Unexpired Employment Period, coverage equivalent to the coverage
     to which he would have been entitled under such plans (as in effect on the
     date of his termination of employment, or, if his termination of employment
     occurs after a Change of Control, on the date of such Change of Control,
     whichever benefits are greater) if he had continued working for the Bank
     during the Remaining Unexpired Employment Period at the highest annual rate
     of compensation achieved during that portion of the Employment Period which
     is prior to the Executive's termination of employment with the Bank and if,
     upon the expiration of such coverage, the Executive has received or is
     eligible to receive pension benefits under a pension plan of the Holding
     Company or the Bank, a further continuation of such coverage for the
     remaining lifetimes of the Executive and his spouse;

          (iv) within thirty (30) days following his termination of employment
     with the Bank, a lump sum payment, in an amount equal to the present value
     of the salary that the Executive would have earned if he had continued
     working for the Bank during the Remaining Unexpired Employment Period at
     the highest annual rate of salary achieved during that portion of the
     Employment Period which is prior to the Executive's termination of
     employment with the Bank, where such present value is to be determined
     using a discount rate equal to the applicable short-term federal rate
     prescribed under section 1274(d) of the Internal Revenue Code of 1986
     ("Code"), compounded using the compounding period corresponding to the
     Bank's regular payroll periods for its officers, such lump


                                  Page 5 of 19

<PAGE>

     sum to be paid in lieu of all other payments of salary provided for under
     this Agreement in respect of the period following any such termination;

          (v) within thirty (30) days following his termination of employment
     with the Bank, a lump sum payment in an amount equal to the excess, if any,
     of:

               (A) the present value of the aggregate benefits to which he would
          be entitled under any and all qualified and non-qualified defined
          benefit pension plans maintained by, or covering employees of, the
          Bank, if he were 100% vested thereunder and had continued working for
          the Bank during the Remaining Unexpired Employment Period, such
          benefits to be determined as of the date of termination of employment
          by adding to the service actually recognized under such plans an
          additional period equal to the Remaining Unexpired Employment Period
          and by adding to the compensation recognized under such plans for the
          year in which termination of employment occurs all amounts payable
          under sections 9(b)(i), (iv), (vii), (viii) and (ix); over

               (B) the present value of the benefits to which he is actually
          entitled under such defined benefit pension plans as of the date of
          his termination;

     where such present values are to be determined using the mortality tables
     prescribed under section 415(b)(2)(E)(v) of the Code and a discount rate,
     compounded monthly, equal to the annualized rate of interest prescribed by
     the Pension Benefits Guaranty Corporation for the valuation of immediate
     annuities payable under terminating single-employer defined benefit plans
     for the month in which the Executive's termination of employment occurs
     ("Applicable PBGC Rate");

          (vi) within thirty (30) days following his termination of employment
     with the Bank, a lump sum payment in an amount equal to the present value
     of the additional employer contributions (or if greater in the case of a
     leveraged employee stock ownership plan or similar arrangement, the
     additional assets allocable to him through debt service, based on the fair
     market value of such assets at termination of employment) to which he would
     have been entitled under any and all qualified and non-qualified defined
     contribution plans maintained by, or covering employees of, the Bank, if he
     were 100% vested thereunder and had continued working for the Bank during
     the Remaining Unexpired Employment Period at the highest annual rate of
     compensation achieved during that portion of the Employment Period which is
     prior to the Executive's termination of employment with the Bank, and
     making the maximum amount of employee contributions, if any, required under
     such plan or plans, such present value to be determined on the basis of a
     discount rate, compounded using the compounding period that corresponds to
     the frequency with which employer contributions are made to the relevant
     plan, equal to the Applicable PBGC Rate;

          (vii) the payments that would have been made to the Executive under
     any cash bonus or long-term or short-term cash incentive compensation plan


                                  Page 6 of 19

<PAGE>

     maintained by, or covering employees of, the Bank if he had continued
     working for the Bank during the Remaining Unexpired Employment Period and
     had earned the maximum bonus or incentive award in each calendar year that
     ends during the Remaining Unexpired Employment Period, such payments to be
     equal to the product of:

               (A) the maximum percentage rate at which an award was ever
          available to the Executive under such incentive compensation plan;
          multiplied by

               (B) the salary that would have been paid to the Executive during
          each such calendar year at the highest annual rate of salary achieved
          during that portion of the Employment Period which is prior to the
          Executive's termination of employment with the Bank:

     such payments to be made (without discounting for early payment) within
     thirty (30) days following the Executive's termination of employment; and

          (viii) to the extent permitted under applicable law, upon the
     surrender of options or appreciation rights issued to the Executive under
     any stock option and appreciation rights plan or program maintained by, or
     covering employees of, the Bank, a lump sum payment in an amount equal to
     the product of:

               (A) the excess of (I) the fair market value of a share of stock
          of the same class as the stock subject to the option or appreciation
          right, determined as of the date of termination of employment, over
          (II) the exercise price per share for such option or appreciation
          right, as specified in or under the relevant plan or program;
          multiplied by

               (B) the number of shares with respect to which options or
          appreciation rights are being surrendered.

     For purposes of this section 9(b)(viii), the Executive shall be deemed
     fully vested in all options and appreciation rights under any stock option
     or appreciation rights plan or program maintained by, or covering employees
     of, the Bank, even if he is not vested under such plan or program;

          (ix) to the extent permitted under applicable law, upon the surrender
     of any shares awarded to the Executive under any restricted stock plan
     maintained by, or covering employees of, the Bank, a lump sum payment in an
     amount equal to the product of:

               (A) the fair market value of a share of stock of the same class
          of stock granted under such plan, determined as of the date of the
          Executive's termination of employment; multiplied by

               (B) the number of shares which are being surrendered.


                                  Page 7 of 19

<PAGE>

          For purposes of this section 9(b)(ix), the Executive shall be deemed
          fully vested in all shares awarded under any restricted stock plan
          maintained by, or covering employees of, the Bank, even if he is not
          vested under such plan.

The Bank and the Executive hereby stipulate that the damages which may be
incurred by the Executive following any such termination of employment are not
capable of accurate measurement as of the date first above written and that the
payments and benefits contemplated by this section 9(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to the Executive's efforts, if any, to
mitigate damages. The Bank and the Executive further agree that the Bank may
condition the payments and benefits (if any) due under sections 9(b)(iii), (iv),
(v), (vi) and (vii) on the receipt of the Executive's resignation from any and
all positions which he holds as an officer, director or committee member with
respect to the Bank, the Holding Company or any subsidiary or affiliate of
either of them.

          Section 10. Termination without Additional Bank Liability.

          In the event that the Executive's employment with the Bank shall
terminate during the Employment Period on account of:

          (a) the discharge of the Executive for "cause," which, for purposes of
     this Agreement shall mean personal dishonesty, incompetence, willful
     misconduct, breach of fiduciary duty involving personal profit, intentional
     failure to perform stated duties, willful violation of any law, rule or
     regulation (other than traffic violations or similar offenses) or final
     cease and desist order, or any material breach of this Agreement, in each
     case as measured against standards generally prevailing at the relevant
     time in the savings and community banking industry; provided, however, that
     the Executive shall not be deemed to have been discharged for cause unless
     and until the following procedures shall have been followed:

               (i) the Board shall adopt a resolution duly approved by
          affirmative vote of a majority of the entire Board at a meeting called
          and held for such purpose calling for the Executive's termination for
          cause and setting forth the purported grounds for such termination
          ("Proposed Termination Resolution");

               (ii) as soon as practicable, and in any event within five (5)
          days, after adoption of such resolution, the Board shall furnish to
          the Executive a written notice of termination which shall be
          accompanied by a certified copy of the Proposed Termination Resolution
          ("Notice of Proposed Termination");

               (iii) the Executive shall be afforded a reasonable opportunity to
          make oral and written presentations to the members of the Board, on
          his own behalf, or through a representative, who may be his legal
          counsel, to refute the grounds set forth in the Proposed Termination
          Resolution at one


                                  Page 8 of 19

<PAGE>

          or more meetings of the Board to be held no sooner than fifteen (15)
          days and no later than thirty (30) days after the Executive's receipt
          of the Proposed Termination Notice ("Termination Hearings"); and

               (iv) within ten (10) days following the end of the Termination
          Hearings, the Board shall adopt a resolution duly approved by
          affirmative vote of a majority of the entire Board at a meeting called
          and held for such purpose (A) finding that in the good faith opinion
          of the Board the grounds for termination set forth in the Proposed
          Termination Resolution exist and (B) terminating the Executive's
          employment ("Termination Resolution"); and

               (v) as promptly as practicable, and in any event within one (1)
          business day after adoption of the Termination Resolution, the Board
          shall furnish to the Executive written notice of termination, which
          notice shall include a copy of the Termination Resolution and specify
          an effective date of termination that is not later than the date on
          which such notice is given;

          (b) The Executive's voluntary resignation from employment with the
     Bank for reasons other than those specified in section 9(a)(i);

          (c) The Executive's death; or

          (d) a determination that the Executive is eligible for long-term
     disability benefits under the Bank's long-term disability insurance program
     or, if there is no such program, under the federal Social Security Act;

then the Bank shall have no further obligations under this Agreement, other than
the payment to the Executive (or, in the event of his death, to his estate) of
his earned but unpaid salary as of the date of the termination of his
employment, and the provision of such other benefits, if any, to which he is
entitled as a former employee under the employee benefit plans and programs and
compensation plans and programs maintained by, or covering employees of, the
Bank.

          (e) For purposes of section 10(a), no act or failure to act, on the
     part of the Executive, shall be considered "willful" unless it is done, or
     omitted to be done, by the Executive in bad faith or without reasonable
     belief that the Executive's action or omission was in the best interests of
     the Company. Any act, or failure to act, based upon authority given
     pursuant to a resolution duly adopted by the Board or based upon the
     written advice of counsel for the Company shall be conclusively presumed to
     be done, or omitted to be done, by the Executive in good faith and in the
     best interests of the Company. The cessation of employment of the Executive
     shall not be deemed to be for "cause" within the meaning of section 10(a)
     unless and until there shall have been delivered to the Executive a copy of
     a resolution duly adopted by the affirmative vote of three-fourths of the
     non-employee members of the Board at a meeting of the Board called and held
     for such purpose (after reasonable notice is provided to the Executive and
     the Executive is given an opportunity, together with counsel, to be heard
     before the Board),


                                  Page 9 of 19

<PAGE>

     finding that, in the good faith opinion of the Board, the Executive is
     guilty of the conduct described in section 10(a) above, and specifying the
     particulars thereof in detail.

          Section 11. Termination Upon or Following a Change of Control.

          (a) A Change of Control of the Bank ("Change of Control") shall be
deemed to have occurred upon the happening of any of the following events:

          (i) approval by the stockholders of the Bank of a transaction that
     would result in the reorganization, merger or consolidation of the Bank,
     respectively, with one or more other persons, other than a transaction
     following which:

               (A) at least 51% of the equity ownership interests of the entity
          resulting from such transaction are beneficially owned (within the
          meaning of Rule 13d-3 promulgated under the Exchange Act) in
          substantially the same relative proportions by persons who,
          immediately prior to such transaction, beneficially owned (within the
          meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51%
          of the outstanding equity ownership interests in the Bank; and

               (B) at least 51% of the securities entitled to vote generally in
          the election of directors of the entity resulting from such
          transaction are beneficially owned (within the meaning of Rule 13d-3
          promulgated under the Exchange Act) in substantially the same relative
          proportions by persons who, immediately prior to such transaction,
          beneficially owned (within the meaning of Rule 13d-3 promulgated under
          the Exchange Act) at least 51% of the securities entitled to vote
          generally in the election of directors of the Bank;

          (ii) the acquisition of all or substantially all of the assets of the
     Bank or beneficial ownership (within the meaning of Rule 13d-3 promulgated
     under the Exchange Act) of 25% or more of the outstanding securities of the
     Bank entitled to vote generally in the election of directors by any person
     or by any persons acting in concert, or approval by the stockholders of the
     Bank of any transaction which would result in such an acquisition; or

          (iii) a complete liquidation or dissolution of the Bank, or approval
     by the stockholders of the Bank of a plan for such liquidation or
     dissolution; or

          (iv) the occurrence of any event if, immediately following such event,
     at least 50% of the members of the board of directors of the Bank do not
     belong to any of the following groups:

               (A) individuals who were members of the board of directors of the
          Bank on the date of this Agreement; or


                                  Page 10 of 19
<PAGE>

               (B) individuals who first became members of the board of
          directors of the Bank after the date of this Agreement either:

                    (I) upon election to serve as a member of the Board of
               directors of the Bank by affirmative vote of three-quarters of
               the members of such board, or of a nominating committee thereof,
               in office at the time of such first election; or

                    (II) upon election by the stockholders of the Board to serve
               as a member of the board of directors of the Bank, but only if
               nominated for election by affirmative vote of three-quarters of
               the members of the board of directors of the Bank, or of a
               nominating committee thereof, in office at the time of such first
               nomination;

          provided, however, that such individual's election or nomination did
          not result from an actual or threatened election contest (within the
          meaning of Rule 14a-11 of Regulation 14A promulgated under the
          Exchange Act) or other actual or threatened solicitation of proxies or
          consents (within the meaning of Rule 14a-11 of Regulation 14A
          promulgated under the Exchange Act) other than by or on behalf of the
          board of directors of the Bank;

          (iv) any event which would be described in section 11(a)(i), (ii),
     (iii) or (iv) if the term "Holding Company" were substituted for the term
     "Bank" therein.

In no event, however, shall a Change of Control be deemed to have occurred as a
result of any acquisition of securities or assets of the Holding Company, the
Bank, or a subsidiary of either of them, by the Holding Company, the Bank, or a
subsidiary of either of them, or by any employee benefit plan maintained by any
of them. For purposes of this section 11, the term "person" shall have the
meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

          (b) In the event of a Change of Control, the Executive shall be
entitled to the payments and benefits contemplated by section 9(b) in the event
of his termination employment with the Bank under any of the circumstances
described in section 9(a) of this Agreement or under any of the following
circumstances:

          (i) resignation, voluntary or otherwise, by the Executive at any time
     during the Employment Period and within ninety (90) days following his
     demotion, loss of title, office or significant authority or responsibility,
     or following any reduction in any element of his package of compensation
     and benefits;

          (ii) resignation, voluntary or otherwise, by the Executive at any time
     during the Employment Period and within ninety (90) days following any
     relocation of his principal place of employment or any change in working


                                  Page 11 of 19

<PAGE>

     conditions at such principal place of employment which is embarrassing,
     derogatory or otherwise materially adverse;

          (iii) resignation, voluntary or otherwise, by the Executive at any
     time during the Employment Period following the failure of any successor to
     the Bank in the Change of Control to include the Executive in any
     compensation or benefit program maintained by it or covering any of its
     executive officers, unless the Executive is already covered by a
     substantially similar plan of the Bank which is at least as favorable to
     him; or

          (iv) resignation, voluntary or otherwise, for any reason whatsoever
     following the expiration of a transition period of thirty days beginning on
     the effective date of the Change of Control (or such longer period, not to
     exceed ninety (90) days beginning on the effective date of the Change in
     Control, as the Bank or its successor may reasonably request) to facilitate
     a transfer of management responsibilities.

          Section 12. Covenant Not To Compete.

          In the event of his termination of employment with the Bank prior to
the expiration of the Employment Period, for a period of one (1) year following
the date of his termination of employment with the Bank (or, if less, for the
Remaining Unexpired Employment Period), the Executive shall not, without the
written consent of the Bank, become an officer, employee, consultant, director
or trustee of any competitor (as herein defined) if in this capacity he would be
working within one hundred (100) miles of the place where the headquarters of
the Bank are located on the date of the Executive's termination of employment.
For this purpose, a "competitor" is any savings bank, savings and loan
association, savings and loan holding company, bank or bank holding company, or
any direct or indirect subsidiary or affiliate of any such entity. This section
13 shall not apply if the Executive's employment is terminated without cause or
due to death or voluntary resignation as described in section 9(a). If the
Executive's employment shall be terminated on account of disability as provided
in section 10(d) of this Agreement, this section 13 shall not apply if (a) the
Executive first offers, by written notice, to accept a similar position with, or
perform similar services for, the Bank on substantially the same terms and
conditions proposed by the competitor and (b) the Bank declines to accept such
offer within ten (10) days after such notice is given.

          Section 13. Confidentiality.

          Unless he obtains the prior written consent of the Bank, the Executive
shall keep confidential and shall refrain from using for the benefit of himself,
or any person or entity other than the Bank or any entity which is a subsidiary
of the Bank or of which the Bank is a subsidiary, any material document or
information obtained from the Bank, or from its parent or subsidiaries, in the
course of his employment with any of them concerning their properties,
operations or business (unless such document or information is readily
ascertainable from public or published information or trade sources or has
otherwise been made available to the public through no fault of his own) until
the same ceases to be material (or becomes so ascertainable or available);
provided, however, that nothing in this section 13 shall prevent the Executive,


                                  Page 12 of 19

<PAGE>

with or without the Bank's consent, from participating in or disclosing
documents or information in connection with any judicial or administrative
investigation, inquiry or proceeding to the extent that such participation or
disclosure is required under applicable law.

          Section 14. Solicitation.

          The Executive hereby covenants and agrees that, for a period of one
(1) year following his termination of employment with the Bank, he shall not,
without the written consent of the Bank, either directly or indirectly:

          (a) solicit, offer employment to, or take any other action intended,
     or that a reasonable person acting in like circumstances would expect, to
     have the effect of causing any officer or employee of the Bank, the Holding
     Company or any affiliate, as of the date of this Agreement, of either of
     them to terminate his employment and accept employment or become affiliated
     with, or provide services for compensation in any capacity whatsoever to,
     any savings bank, savings and loan association, bank, bank holding company,
     savings and loan holding company, or other institution engaged in the
     business of accepting deposits and making loans, doing business within one
     hundred (100) miles of the headquarters of the Bank, the Holding Company or
     any affiliate, as of the date of this Agreement, of either of them;

          (b) provide any information, advice or recommendation with respect to
     any such officer or employee of any savings bank, savings and loan
     association, bank, bank holding company, savings and loan holding company,
     or other institution engaged in the business of accepting deposits and
     making loans, doing business within one hundred (100) miles of the
     headquarters of the Bank, the Holding Company or any affiliate, as of the
     date of this Agreement, of either of them that is intended, or that a
     reasonable person acting in like circumstances would expect, to have the
     effect of causing any officer or employee of the Bank, the Holding Company
     or any affiliate, as of the date of this Agreement, of either of them to
     terminate his employment and accept employment or become affiliated with,
     or provide services for compensation in any capacity whatsoever to, any
     savings bank, savings and loan association, bank, bank holding company,
     savings and loan holding company, or other institution engaged in the
     business of accepting deposits and making loans, doing business within one
     hundred (100) miles of the headquarters of the Bank, the Holding Company,
     or any affiliate, as of the date of this Agreement, of either of them;

          (c) solicit, provide any information, advice or recommendation or take
     any other action intended, or that a reasonable person acting in like
     circumstances would expect, to have the effect of causing any customer of
     the Bank to terminate an existing business or commercial relationship with
     the Bank.


                                  Page 13 of 19

<PAGE>

          Section 15. No Effect on Employee Benefit Plans or Programs.

          The termination of the Executive's employment during the term of this
Agreement or thereafter, whether by the Bank or by the Executive, shall have no
effect on the rights and obligations of the parties hereto under the Bank's
qualified or non-qualified retirement, pension, savings, thrift, profit-sharing
or stock bonus plans, group life, health (including hospitalization, medical and
major medical), dental, accident and long-term disability insurance plans or
such other employee benefit plans or programs, or compensation plans or
programs, as may be maintained by, or cover employees of, the Bank from time to
time.

          Section 16. Successors and Assigns.

          This Agreement will inure to the benefit of and be binding upon the
Executive, his legal representatives and testate or intestate distributees, and
the Bank and its successors and assigns, including any successor by merger or
consolidation or any other person or firm or corporation to which all or
substantially all of the assets and business of the Bank may be sold or
otherwise transferred. Failure of the Bank to obtain from any successor its
express written assumption of the Bank's obligations hereunder at least sixty
(60) days in advance of the scheduled effective date of any such succession
shall be deemed a material breach of this Agreement unless cured within ten (10)
days after notice thereof by the Executive to the Bank.

          Section 17. Notices.

          Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five (5) days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:

          If to the Executive:

               ______________________
               ______________________
               ______________________

          If to the Bank:

               Fairfield Savings Bank, F.S.B.
               1190 RFD
               Long Grove, Illinois 60047-7304

               Attention:_____________________


                                  Page 14 of 19

<PAGE>

          with a copy to:

               Thacher Proffitt & Wood
               Two World Trade Center
               New York, New York 10048

               Attention:     W. Edward Bright, Esq.
                              ----------------------

          Section 18. Indemnification for Attorneys' Fees.

          The Bank shall indemnify, hold harmless and defend the Executive
against reasonable costs, including legal fees, incurred by him in connection
with or arising out of any action, suit or proceeding in which he may be
involved, as a result of his efforts, in good faith, to defend or enforce the
terms of this Agreement; provided, however, that the Executive shall have
substantially prevailed on the merits pursuant to a judgment, decree or order of
a court of competent jurisdiction or of an arbitrator in an arbitration
proceeding, or in a settlement. For purposes of this Agreement, any settlement
agreement which provides for payment of any amounts in settlement of the Bank's
obligations hereunder shall be conclusive evidence of the Executive's
entitlement to indemnification hereunder, and any such indemnification payments
shall be in addition to amounts payable pursuant to such settlement agreement,
unless such settlement agreement expressly provides otherwise.

          Section 19. Severability.

          A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.

          Section 20. Waiver.

          Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.

          Section 21. Counterparts.

          This Agreement may be executed in two (2) or more counterparts, each
of which shall be deemed an original, and all of which shall constitute one and
the same Agreement.


                                  Page 15 of 19

<PAGE>

          Section 22. Governing Law.

          This Agreement shall be governed by and construed and enforced in
accordance with the federal laws of the United States and, to the extent that
federal law is inapplicable, in accordance with the laws of the State of
Illinois applicable to contracts entered into and to be performed entirely
within the State of Illinois.

          Section 23. Headings and Construction.

          The headings of sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any section. Any
reference to a section number shall refer to a section of this Agreement, unless
otherwise stated.

          Section 24. Entire Agreement; Modifications.

          This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.

          Section 25. Required Regulatory Provisions.

          The following provisions are included for the purposes of complying
with various laws, rules and regulations applicable to the Bank:

          (a) Notwithstanding anything herein contained to the contrary, in no
     event shall the aggregate amount of compensation payable to the Executive
     under section 9(b) hereof (exclusive of amounts described in section
     9(b)(i), (viii) and (ix)) exceed three times the Executive's average annual
     total compensation for the last five consecutive calendar years to end
     prior to his termination of employment with the Bank (or for his entire
     period of employment with the Bank if less than five calendar years).

          (b) Notwithstanding anything herein contained to the contrary, any
     payments to the Executive by the Bank, whether pursuant to this Agreement
     or otherwise, are subject to and conditioned upon their compliance with
     section 18(k) of the Federal Deposit Insurance Act ("FDI Act"), 12 U.S.C.
     ss.1828(k), and any regulations promulgated thereunder.

          (c) Notwithstanding anything herein contained to the contrary, if the
     Executive is suspended from office and/or temporarily prohibited from
     participating in the conduct of the affairs of the Bank pursuant to a
     notice served under section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C.
     ss.1818(e)(3) or 1818(g)(1), the Bank's obligations under this Agreement
     shall be suspended as of the date of service of such notice, unless stayed
     by appropriate proceedings. If


                                  Page 16 of 19

<PAGE>

     the charges in such notice are dismissed, the Bank, in its discretion, may
     (i) pay to the Executive all or part of the compensation withheld while the
     Bank's obligations hereunder were suspended and (ii) reinstate, in whole or
     in part, any of the obligations which were suspended.

          (d) Notwithstanding anything herein contained to the contrary, if the
     Executive is removed and/or permanently prohibited from participating in
     the conduct of the Bank's affairs by an order issued under section 8(e)(4)
     or 8(g)(1) of the FDI Act, 12 U.S.C. ss.1818(e)(4) or (g)(1), all
     prospective obligations of the Bank under this Agreement shall terminate as
     of the effective date of the order, but vested rights and obligations of
     the Bank and the Executive shall not be affected.

          (e) Notwithstanding anything herein contained to the contrary, if the
     Bank is in default (within the meaning of section 3(x)(1) of the FDI Act,
     12 U.S.C. ss.1813(x)(1), all prospective obligations of the Bank under this
     Agreement shall terminate as of the date of default, but vested rights and
     obligations of the Bank and the Executive shall not be affected.

          (f) Notwithstanding anything herein contained to the contrary, all
     prospective obligations of the Bank hereunder shall be terminated, except
     to the extent that a continuation of this Agreement is necessary for the
     continued operation of the Bank: (i) by the Director of the Office of
     Thrift Supervision ("OTS") or his designee or the Federal Deposit Insurance
     Corporation ("FDIC"), at the time the FDIC enters into an agreement to
     provide assistance to or on behalf of the Bank under the authority
     contained in section 13(c) of the FDI Act, 12 U.S.C. ss.1823(c); (ii) by
     the Director of the OTS or his designee at the time such Director or
     designee approves a supervisory merger to resolve problems related to the
     operation of the Bank or when the Bank is determined by such Director to be
     in an unsafe or unsound condition. The vested rights and obligations of the
     parties shall not be affected.

If and to the extent that any of the foregoing provisions shall cease to be
required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.


                                  Page 17 of 19

<PAGE>

          IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed
and the Executive has hereunto set his hand, all as of the day and year first
above written.


                                        ____________________________________
                                                  [EXECUTIVE]


ATTEST:                                 FAIRFIELD SAVINGS BANK, F.S.B.


By ____________________________
           Secretary                    By____________________________________
                                             Name:
                                             Title:

[Seal]


                                  Page 18 of 19

<PAGE>

STATE OF ILLINOIS        )
                         : ss.:
COUNTY OF                )

     On this ________ day of ____________________, 1996, before me personally
came __________________, to me known, and known to me to be the individual
described in the foregoing instrument, who, being by me duly sworn, did depose
and say that he resides at the address set forth in said instrument, and that he
signed his name to the foregoing instrument.


                                        ____________________________________
                                                  Notary Public


STATE OF ILLINOIS        )
                         : ss.:
COUNTY OF                )

     On this ________ day of ____________________, 1996, before me personally
came ___________, to me known, who, being by me duly sworn, did depose and say
that he resides at ______________________________________________, that he is a
member of the Board of Directors of FAIRFIELD SAVINGS BANK, F.S.B., the savings
bank described in and which executed the foregoing instrument; that he knows the
seal of said savings bank; that the seal affixed to said instrument is such
seal; that it was so affixed by order of the Board of Directors of said savings
bank; and that he signed his name thereto by like order.


                                        ____________________________________
                                                  Notary Public


                                  Page 19 of 19

<PAGE>

                                  EX-10.5
                          EMPLOYEE RETENTION AGREEMENT


                          EMPLOYEE RETENTION AGREEMENT

          This EMPLOYEE RETENTION AGREEMENT ("Agreement") is made and entered
into as of the ___th day of _____________, 1996, by and among FAIRFIELD SAVINGS
BANK, F.S.B., a savings bank organized and operating under the federal laws of
the United States and having its executive offices at 1190 RFD, Long Grove,
Illinois 60047-7034 ("Bank"); BIG FOOT FINANCIAL CORP., a business corporation
organized and existing under the laws of the State of Illinois and also having
its executive offices at 1190 RFD, Long Grove, Illinois 60047-7034 ("Holding
Company"); and __________________________, an individual residing at
______________________________________________________ ("Employee").

                              W I T N E S S E T H :

          WHEREAS, effective as of the date of this Agreement, the Bank has
converted from a federal mutual savings bank to a federal stock savings bank and
has become a wholly-owned subsidiary of the Holding Company; and

          WHEREAS, the Bank desires to secure for itself the continued
availability of the Employee's services; and

          WHEREAS, the Bank recognizes that a third party may at some time in
the future pursue a Change of Control of the Bank or the Holding Company and
that this possibility may result in the departure or distraction of the Bank's
employees; and

          WHEREAS, the Bank has determined that appropriate steps should be
taken to encourage the continued attention and dedication of the Bank's
employees, including the Employee, to their duties for the Bank without the
distraction that may arise from the possibility of a Change of Control of the
Bank or the Holding Company; and

          WHEREAS, the Bank believes that, by assuring certain employees,
including the Employee, of reasonable financial security in the event of a
Change of Control of the Bank or the Holding Company, such employees will be in
a position to perform their duties free from financial self-interest and in the
best interests of the Bank and its shareholders; and

          WHEREAS, for purposes of securing the Employee's services for the
Bank, the Board of Directors of the Bank ("Board") has authorized the proper
officers of the Bank to enter into an employee retention agreement with the
Employee on the terms and conditions set forth herein; and

          WHEREAS, the Board of Directors of the Holding Company has authorized
the Holding Company to guarantee the Bank's obligations under such an employee
retention agreement; and


                                  Page 1 of 17

<PAGE>

          WHEREAS, the Employee is willing to make the Employee's services
available to the Bank on the terms and conditions set forth herein;

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and obligations hereinafter set forth, the Bank, the Holding Company
and the Employee hereby agree as follows:

          Section 1. Effective Date.

          (a) This Agreement shall be effective as of the date first above
written and shall remain in effect during the term of this Agreement which shall
be for a period of [three (3)] years commencing on the date of this Agreement,
plus such extensions as are provided pursuant to section 1(b); provided,
however, that if the term of this Agreement has not otherwise terminated, the
term of this Agreement will terminate on the date of the Employee's termination
of employment with the Bank; and provided, further, that the obligations under
section 8 of this Agreement shall survive the term of this Agreement if payments
become due hereunder.

          (b) Prior to each anniversary date of this Agreement, the Board shall
consider the advisability of an extension of the term in light of the
circumstances then prevailing and may, in its discretion, approve an extension
to take effect as of the upcoming anniversary date. If an extension is approved,
the term of this Agreement shall be extended so that it will expire [three (3)]
years after such anniversary date.

          (c) Notwithstanding anything herein contained to the contrary: (i) the
Employee's employment with the Bank may be terminated at any time, subject to
the terms and conditions of this Agreement; and (ii) nothing in this Agreement
shall mandate or prohibit a continuation of the Employee's employment following
the expiration of the Assurance Period upon such terms and conditions as the
Bank and the Employee may mutually agree upon.

          Section 2. Assurance Period.

          (a) The assurance period ("Assurance Period") shall be for a period
commencing on the date of a Change of Control, as defined in section 10 of this
Agreement, and ending on the second (2nd) anniversary of the date on which the
Assurance Period commences, plus such extensions as are provided pursuant to the
following sentence. The Assurance Period shall be automatically extended for one
(1) additional day each day, unless either the Bank or the Employee elects not
to extend the Assurance Period further by giving written notice to the other
party, in which case the Assurance Period shall become fixed and shall end on
the second (2nd) anniversary of the date on which such written notice is given;
provided, however, that if, following a Change of Control, the Office of Thrift
Supervision (or its successor) is the Bank's primary federal regulator, the
Agreement shall be subject to extension not more frequently than annually and
only upon review and approval of the Board.

          (b) Upon termination of the Employee's employment with the Bank, any
daily extensions provided pursuant to the preceding sentence, if not theretofore
discontinued, shall cease and the remaining unexpired Assurance Period under
this Agreement shall be a fixed


                                  Page 2 of 17

<PAGE>

period ending on the later of the second (2nd) anniversary of the date of the
Change of Control, as defined in section 10 of this Agreement, or the second
(2nd) anniversary of the date on which the daily extensions were discontinued.

          Section 3. Duties.

          During the period of the Employee's employment that falls within the
Assurance Period, the Employee shall: (a) except to the extent allowed under
section 6 of this Agreement, devote his full business time and attention (other
than during holidays, vacation periods, and periods of illness, disability or
approved leave of absence) to the business and affairs of the Bank and use his
best efforts to advance the Bank's interests; (b) serve in the position to which
the Employee is appointed by the Bank, which, during the Assurance Period, shall
be the position that the Employee held on the day before the Assurance Period
commenced or any higher office at the Bank to which he may subsequently be
appointed; and (c) subject to the direction of the Board and the By-laws of the
Bank, have such functions, duties, responsibilities and authority commonly
associated with such position.

          Section 4. Compensation.

          In consideration for the services rendered by the Employee during the
Assurance Period, the Bank shall pay to the Employee during the Assurance Period
a salary at an annual rate equal to the greater of:

          (a) the annual rate of salary in effect for the Employee on the day
     before the Assurance Period commenced; or

          (b) such higher annual rate as may be prescribed by or under the
     authority of the Board;

provided, however, that in no event shall the Employee's annual rate of salary
under this Agreement in effect at a particular time during the Assurance Period
be reduced without the Employee's prior written consent. The annual salary
payable under this section 4 shall be subject to review at least once annually
and shall be paid in accordance with the Bank's customary payroll practices.
Nothing in this section 4 shall be deemed to prevent the Employee from receiving
additional compensation other than salary for his services to the Bank, or
additional compensation for his services to the Holding Company, upon such terms
and conditions as may be prescribed by or under the authority of the Board or
the Board of Directors of the Holding Company.

          Section 5. Employee Benefit Plans and Programs.

          Except as otherwise provided in this Agreement, the Employee shall,
during the Assurance Period, be treated as an employee of the Bank and be
eligible to participate in and receive benefits under any qualified or
non-qualified defined benefit or defined contribution retirement plan, group
life, health (including hospitalization, medical and major medical), dental,
accident and long-term disability insurance plans, and such other employee
benefit plans and programs, including, but not limited to, any incentive
compensation plans or programs (whether


                                  Page 3 of 17

<PAGE>

or not employee benefit plans or programs), any stock option and appreciation
rights plan, employee stock ownership plan and restricted stock plan, as may
from time to time be maintained by, or cover employees of, the Bank, in
accordance with the terms and conditions of such employee benefit plans and
programs and compensation plans and programs and with the Bank's customary
practices.

          Section 6. Board Memberships.

          The Employee may serve as a member of the boards of directors of such
business, community and charitable organizations as he may disclose to and as
may be approved by the Board (which approval shall not be unreasonably
withheld), and he may engage in personal business and investment activities for
his own account; provided, however, that such service and personal business and
investment activities shall not materially interfere with the performance of his
duties under this Agreement.

          Section 7. Working Facilities and Expenses.

          During the Assurance Period, the Employee's principal place of
employment shall be at the Bank's executive offices at the address first above
written, or at such other location within Lake or Cook County at which the Bank
shall maintain its principal executive offices, or at such other location as the
Bank and the Employee may mutually agree upon. The Bank shall provide the
Employee, at his principal place of employment, with support services and
facilities suitable to his position with the Bank and necessary or appropriate
in connection with the performance of his assigned duties under this Agreement.
The Bank shall reimburse the Employee for his ordinary and necessary business
expenses, including, without limitation, the Employee's travel and entertainment
expenses, incurred in connection with the performance of the Employee's duties
under this Agreement, upon presentation to the Bank of an itemized account of
such expenses in such form as the Bank may reasonably require.

          Section 8. Termination of Employment with Severance Benefits.

          (a) In the event that the Employee's employment with the Bank shall
terminate during the Assurance Period, or prior to the commencement of the
Assurance Period but within three (3) months of and in connection with a Change
of Control as defined in section 10 of this Agreement, on account of:

          (i) The Employee's voluntary resignation from employment with the Bank
     within ninety (90) days following:

               (A) the failure of the Bank to appoint or re-appoint or elect or
          re-elect the Employee to serve in the same position in which the
          Employee was serving on the day before the Assurance Period commenced,
          or a more senior office;

               (B) the expiration of a thirty (30) day period following the date
          on which the Employee gives written notice to the Bank of its material
          failure, whether by amendment of the Bank's Organization Certificate
          or


                                  Page 4 of 17

<PAGE>

          By-laws, action of the Board or the Holding Company's stockholders or
          otherwise, to vest in the Employee the functions, duties, or
          responsibilities vested in the Employee on the day before the
          Assurance Period commenced (or the functions, duties and
          responsibilities of a more senior office to which the Employee may be
          appointed), unless during such thirty (30) day period, the Bank fully
          cures such failure;

               (C) the failure of the Bank to cure a material breach of this
          Agreement by the Bank, within thirty (30) days following written
          notice from the Employee of such material breach;

               (D) a reduction in the compensation provided to the Employee, or
          a material reduction in the benefits provided to the Employee under
          the Bank's program of employee benefits, compared with the
          compensation and benefits that were provided to the Employee on the
          day before the Assurance Period commenced;

               (E) a change in the Employee's principal place of employment that
          would result in a one-way commuting time in excess of the greater of
          (I) 60 minutes or (II) the Employee's commuting time immediately prior
          to such change; or

          (ii) the discharge of the Employee by the Bank for any reason other
     than for "cause" as provided in section 9(a);

then, subject to section 21, the Bank shall provide the benefits and pay to the
Employee the amounts provided for under section 8(b) of this Agreement;
provided, however, that if benefits or payments become due hereunder as a result
of the Employee's termination of employment prior to the commencement of the
Assurance Period, the benefits and payments provided for under section 8(b) of
this Agreement shall be determined as though the Employee had remained in the
service of the Bank (upon the terms and conditions in effect at the time of his
actual termination of service) and had not terminated employment with the Bank
until the date on which the Employee's Assurance Period would have commenced.

          (b) Upon the termination of the Employee's employment with the Bank
under circumstances described in section 8(a) of this Agreement, the Bank shall
pay and provide to the Employee (or, in the event of the Employee's death, to
the Employee's estate):

          (i) the Employee's earned but unpaid compensation (including, without
     limitation, all items which constitute wages under applicable law and the
     payment of which is not otherwise provided for under this section 8(b)) as
     of the date of the termination of the Employee's employment with the Bank,
     such payment to be made at the time and in the manner prescribed by law
     applicable to the payment of wages but in no event later than thirty (30)
     days after termination of employment;


                                  Page 5 of 17

<PAGE>

          (ii) the benefits, if any, to which the Employee is entitled as a
     former employee under the employee benefit plans and programs and
     compensation plans and programs maintained for the benefit of the Bank's
     officers and employees;

          (iii) continued group life, health (including hospitalization, medical
     and major medical), dental, accident and long-term disability insurance
     benefits, in addition to that provided pursuant to section 8(b)(ii) and
     after taking into account the coverage provided by any subsequent employer,
     if and to the extent necessary to provide for the Employee, for the
     remaining unexpired Assurance Period, coverage equivalent to the coverage
     to which the Employee would have been entitled under such plans (as in
     effect on the date of his termination of employment, or, if his termination
     of employment occurs after a Change of Control, on the date of such Change
     of Control, whichever benefits are greater) if the Employee had continued
     working for the Bank during the remaining unexpired Assurance Period at the
     highest annual rate of compensation achieved during the Employee's period
     of actual employment with the Bank, it being understood that the Employee's
     "qualifying event" for purposes of continuation coverage under the
     Consolidated Budget Reconciliation Act ("COBRA") shall occur at the
     expiration of this period;

          (iv) within thirty (30) days following the Employee's termination of
     employment with the Bank, a lump sum payment, in an amount equal to the
     present value of the salary that the Employee would have earned if the
     Employee had continued working for the Bank during the remaining unexpired
     Assurance Period at the highest annual rate of salary achieved during the
     Employee's period of actual employment with the Bank, where such present
     value is to be determined using a discount rate equal to the applicable
     short-term federal rate prescribed under section 1274(d) of the Internal
     Revenue Code of 1986 ("Code"), compounded using the compounding periods
     corresponding to the Bank's regular payroll periods for its employees, such
     lump sum to be paid in lieu of all other payments of salary provided for
     under this Agreement in respect of the period following any such
     termination;

          (v) within thirty (30) days following the Employee's termination of
     employment with the Bank, a lump sum payment in an amount equal to the
     excess, if any, of:

               (A) the present value of the aggregate benefits to which the
          Employee would be entitled under any and all qualified and
          non-qualified defined benefit pension plans maintained by, or covering
          employees of, the Bank if the Employee were 100% vested thereunder and
          had continued working for the Bank during the remaining unexpired
          Assurance Period, such benefits to be determined as of the date of
          termination of employment by adding to the service actually recognized
          under such plans an additional period equal to the remaining unexpired
          Assurance Period and by adding to the compensation recognized under
          such plans for the


                                  Page 6 of 17

<PAGE>

          year in which termination of employment occurs all amounts payable
          under sections 8(b)(i) and (vii);

               (B) the present value of the benefits to which the Employee is
          actually entitled under such defined benefit pension plans as of the
          date of his termination;

     where such present values are to be determined using the mortality tables
     prescribed under section 415(b)(2)(E)(v) of the Code and a discount rate,
     compounded monthly, equal to the annualized rate of interest prescribed by
     the Pension Benefit Guaranty Corporation for the valuation of immediate
     annuities payable under terminating single-employer defined benefit plans
     for the month in which the Employee's termination of employment occurs
     ("Applicable PBGC Rate").

          (vi) within thirty (30) days following his termination of employment
     with the Holding Company, a lump sum payment in an amount equal to the
     present value of the additional employer contributions (or if greater in
     the case of a leveraged employee stock ownership plan or similar
     arrangement, the additional assets allocable to him through debt service,
     based on the fair market value of such assets at termination of employment)
     to which he would have been entitled under any and all qualified and
     non-qualified defined contribution plans maintained by, or covering
     employees of, the Holding Company, as if he were 100% vested thereunder and
     had continued working for the Holding Company during the Remaining
     Unexpired Employment Period at the highest annual rate of compensation
     achieved during that portion of the Employment Period which is prior to the
     Executive's termination of employment with the Holding Company, and making
     the maximum amount of employee contributions, if any, required under such
     plan or plans, such present value to be determined on the basis of a
     discount rate, compounded using the compounding period that corresponds to
     the frequency with which employer contributions are made to the relevant
     plan, equal to the Applicable PBGC Rate; and

          (vii) the payments that would have been made to the Employee under any
     cash bonus or long-term or short-term cash incentive compensation plan
     maintained by, or covering employees of, the Bank, if he had continued
     working for the Bank during the remaining unexpired Assurance Period and
     had earned the maximum bonus or incentive award in each calendar year that
     ends during the remaining unexpired Assurance Period, such payments to be
     equal to the product of:

               (A) the maximum percentage rate at which an award was ever
          available to the Employee under such incentive compensation plan;
          multiplied by

               (B) the salary that would have been paid to the Employee during
          each such calendar year at the highest annual rate of salary


                                  Page 7 of 17

<PAGE>

          achieved during the remaining unexpired Assurance Period, such
          payments to be made (without discounting for early payment) within
          thirty (30) days following the Employee's termination of employment.

The Bank and the Employee hereby stipulate that the damages which may be
incurred by the Employee following any such termination of employment are not
capable of accurate measurement as of the date first above written and that the
payments and benefits contemplated by this section 8(b) constitute reasonable
damages under the circumstances and shall be payable without any requirement of
proof of actual damage and without regard to the Employee's efforts, if any, to
mitigate damages.

          Section 9. Termination without Additional Bank Liability.

          In the event that the Employee's employment with the Bank shall
terminate during the Assurance Period on account of:

          (a) the discharge of the Executive for "cause," which, for purposes of
     this Agreement shall mean personal dishonesty, incompetence, willful
     misconduct, breach of fiduciary duty involving personal profit, intentional
     failure to perform stated duties, willful violation of any law, rule or
     regulation (other than traffic violations or similar offenses) or final
     cease and desist order, or any material breach of this Agreement, in each
     case as measured against standards generally prevailing at the relevant
     time in the savings and community banking industry; provided, however, that
     the Executive shall not be deemed to have been discharged for cause unless
     and until the following procedures shall have been followed:

               (i) the Board shall adopt a resolution duly approved by
          affirmative vote of a majority of the entire Board at a meeting called
          and held for such purpose calling for the Executive's termination for
          cause and setting forth the purported grounds for such termination
          ("Proposed Termination Resolution");

               (ii) as soon as practicable, and in any event within five (5)
          days, after adoption of such resolution, the Board shall furnish to
          the Executive a written notice of termination which shall be
          accompanied by a certified copy of the Proposed Termination Resolution
          ("Notice of Proposed Termination");

               (iii) the Executive shall be afforded a reasonable opportunity to
          make oral and written presentations to the members of the Board, on
          his own behalf, or through a representative, who may be his legal
          counsel, to refute the grounds set forth in the Proposed Termination
          Resolution at one or more meetings of the Board to be held no sooner
          than fifteen (15) days and no later than thirty (30) after the
          Executive's receipt of the Proposed Termination Notice ("Termination
          Hearings"); and


                                  Page 8 of 17

<PAGE>

               (iv) within ten (10) days following the end of the Termination
          Hearings, the Board shall adopt a resolution duly approved by
          affirmative vote of a majority of the entire Board at a meeting called
          and held for such purpose (A) finding that in the good faith opinion
          of the Board the grounds for termination set forth in the Proposed
          Termination Resolution exist and (B) terminating the Executive's
          employment ("Termination Resolution"); and

               (v) as promptly as practicable, and in any event within one (1)
          business day after adoption of the Termination Resolution, the Board
          shall furnish to the Executive written notice of termination, which
          notice shall include a copy of the Termination Resolution and specify
          an effective date of termination that is not later than the date on
          which such notice is given;

          (b) the Employee's voluntary resignation from employment with the Bank
     for reasons other than those specified in section 8(a)(i); or

          (c) the Employee's death; or

          (d) a determination that the Employee is eligible for long-term
     disability benefits under the Bank's long-term disability insurance program
     or, if there is no such program, under the federal Social Security Act;

then the Bank shall have no further obligations under this Agreement, other than
the payment to the Employee (or, in the event of his death, to his estate) of
his earned but unpaid salary as of the date of the termination of his
employment, and the provision of such other benefits, if any, to which the
Employee is entitled as a former employee under the employee benefit plans and
programs and compensation plans and programs maintained by, or covering
employees of, the Bank.

          (e) For purposes of section 9(a), no act or failure to act, on the
     part of Executive, shall be considered "willful" unless it is done, or
     omitted to be done, by Executive in bad faith or without reasonable belief
     that Executive's action or omission was in the best interests of the
     Holding Company. Any act, or failure to act, based upon authority given
     pursuant to a resolution duly adopted by the Board or based upon the
     written advice of counsel for the Holding Company shall be conclusively
     presumed to be done, or omitted to be done, by Executive in good faith and
     in the best interests of the Holding Company. The cessation of employment
     of Executive shall not be deemed to be for "cause" within the meaning of
     section 9(a) unless and until there shall have been delivered to Executive
     a copy of a resolution duly adopted by the affirmative vote of
     three-fourths of the non-employee members of the Board at a meeting of the
     Board called and held for such purpose (after reasonable notice is provided
     to Executive and Executive is given an opportunity, together with counsel,
     to be heard before the Board), finding that, in the good faith opinion of
     the Board, Executive is guilty of the conduct described in section 9(a)
     above, and specifying the particulars thereof in detail.


                                  Page 9 of 17

<PAGE>

          Section 10. Change of Control.

          (a) A Change of Control of the Bank ("Change of Control") shall be
deemed to have occurred upon the happening of any of the following events:

          (i) approval by the stockholders of the Bank of a transaction that
     would result in the reorganization, merger or consolidation of the Bank,
     respectively, with one or more other persons, other than a transaction
     following which:

               (A) at least 51% of the equity ownership interests of the entity
          resulting from such transaction are beneficially owned (within the
          meaning of Rule 13d-3 promulgated under the Exchange Act) in
          substantially the same relative proportions by persons who,
          immediately prior to such transaction, beneficially owned (within the
          meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51%
          of the outstanding equity ownership interests in the Bank; and

               (B) at least 51% of the securities entitled to vote generally in
          the election of directors of the entity resulting from such
          transaction are beneficially owned (within the meaning of Rule 13d-3
          promulgated under the Exchange Act) in substantially the same relative
          proportions by persons who, immediately prior to such transaction,
          beneficially owned (within the meaning of Rule 13d-3 promulgated under
          the Exchange Act) at least 51% of the securities entitled to vote
          generally in the election of directors of the Bank;

          (ii) the acquisition of substantially all of the assets of the Bank or
     beneficial ownership (within the meaning of Rule 13d-3 promulgated under
     the Exchange Act) of 25% or more of the outstanding securities of the Bank
     entitled to vote generally in the election of directors by any person or by
     any persons acting in concert, or approval by the stockholders of the Bank
     of any transaction which would result in an acquisition; or

          (iii) a complete liquidation or dissolution of the Bank, or approval
     by the stockholders of the Bank of a plan for such liquidation or
     dissolution;

          (iv) the occurrence of any event if, immediately following such event,
     at least fifty percent (50%) of the members of the Board do not belong to
     any of the following groups:

               (A) individuals who were members of the Board on the date of this
          Agreement; or

               (B) individuals who first became members of the Board after the
          date of this Agreement either:


                                  Page 10 of 17

<PAGE>

                    (I) upon election to serve as a member of the Board by
               affirmative vote of three-quarters (3/4) of the members of such
               Board, or a nominating committee thereof, in office at the time
               of such first election; or

                    (II) upon election by the stockholders of the Board to serve
               as a member of the Board, but only if nominated for election by
               affirmative vote of three-quarters (3/4) of the members of the
               Board, or of a nominating committee thereof, in office at the
               time of such first nomination;

     provided, however, that such individual's election or nomination did not
     result from an actual or threatened election contest (within the meaning of
     Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other
     actual or threatened solicitation of proxies or consents (within the
     meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange
     Act) other than by or on behalf of the Board of the Bank;

          (v) any event which would be described in section 10(a)(i), (ii),
     (iii) or (iv) if the term "Holding Company" were substituted for the term
     "Bank" therein.

          (b) In no event, however, shall a Change of Control be deemed to have
occurred as a result of any acquisition of securities or assets of the Holding
Company, the Bank or any subsidiary of either of them, by the Holding Company,
the Bank or any subsidiary of either of them, or by any employee benefit plan
maintained by any of them.

          Section 11. No Effect on Employee Benefit Plans or Programs.

          The termination of the Employee's employment during the Assurance
Period or thereafter, whether by the Bank or by the Employee, shall have no
effect on the rights and obligations of the parties hereto under the Bank's
Pension Plan, group life, health (including hospitalization, medical and major
medical), dental, accident and long-term disability insurance plans or such
other employee benefit plans or programs, or compensation plans or programs
(whether or not employee benefit plans or programs) and any defined contribution
plan, employee stock ownership plan, stock option and appreciation rights plan,
and restricted stock plan, as may be maintained by, or cover employees of, the
Bank from time to time; provided, however, that nothing in this Agreement shall
be deemed to duplicate any compensation or benefits provided under any
agreement, plan or program covering the Employee to which the Bank or the
Holding Company is a party and any duplicative amount payable under any such
agreement, plan or program shall be applied as an offset to reduce the amounts
otherwise payable hereunder.

          Section 12. Successors and Assigns.

          This Agreement will inure to the benefit of and be binding upon the
Employee, his legal representatives and testate or intestate distributees, and
the Bank and the Holding


                                  Page 11 of 17

<PAGE>

Company, their respective successors and assigns, including any successor by
merger or consolidation or a statutory receiver or any other person or firm or
corporation to which all or substantially all of the respective assets and
business of the Bank or the Holding Company may be sold or otherwise
transferred.

          Section 13. Notices.

          Any communication required or permitted to be given under this
Agreement, including any notice, direction, designation, consent, instruction,
objection or waiver, shall be in writing and shall be deemed to have been given
at such time as it is delivered personally, or five (5) days after mailing if
mailed, postage prepaid, by registered or certified mail, return receipt
requested, addressed to such party at the address listed below or at such other
address as one such party may by written notice specify to the other party:

          If to the Employee:

               ______________________
               ______________________
               ______________________

          If to the Bank:

               Fairfield Savings Bank, F.S.B.
               1190 RFD
               Long Grove, Illinois  60047-7034

               Attention:  Corporate Secretary
                           -------------------

          with a copy to:

               Thacher Proffitt & Wood
               Two World Trade Center
               New York, New York 10048

               Attention:  W. Edward Bright, Esq.
                           ----------------------

          If to the Holding Company:

               Big Foot Financial Corp.
               1190 RFD
               Long Grove, Illinois  60047-7304

               Attention:  Board of Directors
                           ------------------


                                  Page 12 of 17

<PAGE>

          with a copy to:

               Thacher Proffitt & Wood
               Two World Trade Center
               New York, New York 10048

               Attention:  W. Edward Bright, Esq.

          Section 14. Indemnification and Attorneys' Fees.

          The Bank shall indemnify, hold harmless and defend the Employee
against reasonable costs, including legal fees, incurred by the Employee in
connection with or arising out of any action, suit or proceeding in which the
Employee may be involved, as a result of the Employee's efforts, in good faith,
to defend or enforce the terms of this Agreement; provided, however, that the
Employee shall have substantially prevailed on the merits pursuant to a
judgment, decree or order of a court of competent jurisdiction or of an
arbitrator in an arbitration proceeding, or in a settlement. For purposes of
this Agreement, any settlement agreement which provides for payment of any
amounts in settlement of the Bank's obligations hereunder shall be conclusive
evidence of the Employee's entitlement to indemnification hereunder, and any
such indemnification payments shall be in addition to amounts payable pursuant
to such settlement agreement, unless such settlement agreement expressly
provides otherwise.

          Section 15. Severability.

          A determination that any provision of this Agreement is invalid or
unenforceable shall not affect the validity or enforceability of any other
provision hereof.

          Section 16. Waiver.

          Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant, or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.

          Section 17. Counterparts.

          This Agreement may be executed in two (2) or more counterparts, each
of which shall be deemed an original, and all of which shall constitute one and
the same Agreement.

          Section 18. Governing Law.

          This Agreement shall be governed by and construed and enforced in
accordance with the federal laws of the United States, and in the absence of
controlling federal law, the laws of the State of Illinois, without reference to
conflicts of law principles.


                                  Page 13 of 17

<PAGE>

          Section 19. Headings and Construction.

          The headings of sections in this Agreement are for convenience of
reference only and are not intended to qualify the meaning of any section. Any
reference to a section number shall refer to a section of this Agreement, unless
otherwise stated.

          Section 20. Entire Agreement; Modifications.

          This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and supersedes in its entirety any and all prior
agreements, understandings or representations relating to the subject matter
hereof. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.

          Section 21. Required Regulatory Provisions.

          The following provisions are included for the purposes of complying
with various laws, rules and regulations applicable to the Bank:

          (a) Notwithstanding anything herein contained to the contrary, in no
     event shall the aggregate amount of compensation payable to the Employee
     under section 8(b) hereof (exclusive of amounts described in section
     8(b)(i), (viii) and (ix)) exceed the three times the Employee's average
     annual total compensation for the last five consecutive calendar years to
     end prior to his termination of employment with the Bank (or for his entire
     period of employment with the Bank if less than five calendar years).

          (b) Notwithstanding anything herein contained to the contrary, any
     payments to the Employee by the Bank, whether pursuant to this Agreement or
     otherwise, are subject to and conditioned upon their compliance with
     section 18(k) of the Federal Deposit Insurance Act ("FDI Act"), 12 U.S.C.
     ss.1828(k), and any regulations promulgated thereunder.

          (c) Notwithstanding anything herein contained to the contrary, if the
     Employee is suspended from office and/or temporarily prohibited from
     participating in the conduct of the affairs of the Bank pursuant to a
     notice served under section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C.
     ss.1818(e)(3) or 1818(g)(1), the Bank's obligations under this Agreement
     shall be suspended as of the date of service of such notice, unless stayed
     by appropriate proceedings. If the charges in such notice are dismissed,
     the Bank, in its discretion, may (i) pay to the Employee all or part of the
     compensation withheld while the Bank's obligations hereunder were suspended
     and (ii) reinstate, in whole or in part, any of the obligations which were
     suspended.

          (d) Notwithstanding anything herein contained to the contrary, if the
     Employee is removed and/or permanently prohibited from participating in the
     conduct of the Bank's affairs by an order issued under section 8(e)(4) or
     8(g)(1) of the FDI Act, 12 U.S.C. ss.1818(e)(4) or (g)(1), all prospective
     obligations of


                                  Page 14 of 17

<PAGE>

     the Bank under this Agreement shall terminate as of the effective date of
     the order, but vested rights and obligations of the Bank and the Employee
     shall not be affected.

          (e) Notwithstanding anything herein contained to the contrary, if the
     Bank is in default (within the meaning of section 3(x)(1) of the FDI Act,
     12 U.S.C. ss.1813(x)(1), all prospective obligations of the Bank under this
     Agreement shall terminate as of the date of default, but vested rights and
     obligations of the Bank and the Employee shall not be affected.

          (f) Notwithstanding anything herein contained to the contrary, all
     prospective obligations of the Bank hereunder shall be terminated, except
     to the extent that a continuation of this Agreement is necessary for the
     continued operation of the Bank: (i) by the Director of the Office of
     Thrift Supervision ("OTS") or his designee or the Federal Deposit Insurance
     Corporation ("FDIC"), at the time the FDIC enters into an agreement to
     provide assistance to or on behalf of the Bank under the authority
     contained in section 13(c) of the FDI Act, 12 U.S.C. ss.1823(c); (ii) by
     the Director of the OTS or his designee at the time such Director or
     designee approves a supervisory merger to resolve problems related to the
     operation of the Bank or when the Bank is determined by such Director to be
     in an unsafe or unsound condition. The vested rights and obligations of the
     parties shall not be affected.

If and to the extent that any of the foregoing provisions shall cease to be
required or by applicable law, rule or regulation, the same shall become
inoperative as though eliminated by formal amendment of this Agreement.

          Section 22. Guaranty.

          The Holding Company hereby irrevocably and unconditionally guarantees
to the Employee the payment of all amounts, and the performance of all other
obligations, due from the Bank in accordance with the terms of this Agreement as
and when due without any requirement of presentment, demand of payment, protest
or notice of dishonor or nonpayment.


                                  Page 15 of 17
<PAGE>

          IN WITNESS WHEREOF, the Bank and the Holding Company have caused this
Agreement to be executed and the Employee has hereunto set his hand, all as of
the day and year first above written.


                                        ______________________________
                                        [EMPLOYEE]


ATTEST:                                 FAIRFIELD SAVINGS BANK, F.S.B.


By ______________________________
          Secretary                     By____________________________
                                             Name:
[Seal]                                       Title:


ATTEST:                                 BIG FOOT FINANCIAL CORP.


By ______________________________
          Secretary                     By____________________________
                                             Name:
[Seal]                                       Title:


                                  Page 16 of 17

<PAGE>

STATE OF ILLINOIS        )
                         : ss.:
COUNTY OF                )

          On this day of , 19__, before me personally came ___________, to me
known, and known to me to be the individual described in the foregoing
instrument, who, being by me duly sworn, did depose and say that he resides at
the address set forth in said instrument, and that he signed his name to the
foregoing instrument.


                                        ______________________________
                                                  Notary Public

STATE OF ILLINOIS        )
                         : ss.:
COUNTY OF                )

          On this day of , 19__, before me personally came ______
_______________, to me known, who, being by me duly sworn, did depose and say
that he resides at ______________________________________________, that he is a
member of the Board of Directors of Fairfield Savings Bank, F.S.B., the savings
bank described in and which executed the foregoing instrument; that he knows the
seal of said savings association; that the seal affixed to said instrument is
such seal; that it was so affixed by authority of the Board of Directors of said
savings bank; and that he signed his name thereto by like authority.


                                        ______________________________
                                                  Notary Public

STATE OF ILLINOIS        )
                         : ss.:
COUNTY OF                )

     On this day of , 19__, before me personally came ___________, to me known,
who, being by me duly sworn, did depose and say that he resides at __________
_________________________________, that he is a member of the Board of Directors
of Big Foot Financial Corp., the corporation described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such seal; that it was so affixed by order of the
Board of Directors of said corporation; and that he signed his name thereto by
like order.


                                        ______________________________
                                                  Notary Public


                                  Page 17 of 17


<PAGE>

                                    EX-10.6
                     AMENDED AND RESTATED SEVERANCE PAY PLAN


                     AMENDED AND RESTATED SEVERANCE PAY PLAN

                                       OF

                         FAIRFIELD SAVINGS BANK, F.S.B.


                          Adopted on September 17, 1996

                        Effective on [Date of Conversion]

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                    ARTICLE I

                                     PURPOSE

Section 1        Statement of Purpose ....................................    1

                                   ARTICLE II

                                   DEFINITIONS

Section 2.1      Bank ....................................................    1
Section 2.2      Board ...................................................    1
Section 2.3      Cause ...................................................    1
Section 2.4      Change of Control .......................................    2
Section 2.5      Employee ................................................    3
Section 2.6      FDI Act .................................................    3
Section 2.7      Involuntary Severance ...................................    3
Section 2.8      OTS .....................................................    4
Section 2.9      Plan ....................................................    4
Section 2.10     Plan Administrator ......................................    4
Section 2.11     Plan Year ...............................................    4
Section 2.12     Salary ..................................................    4
Section 2.13     Service .................................................    4

                                   ARTICLE III

                                    BENEFITS

Section 3.1      Severance Benefits for Employees ........................    4
Section 3.2      Vesting .................................................    6
Section 3.3      Indemnification .........................................    6

                                   ARTICLE IV


                                       (i)

<PAGE>

                                                                            Page
                                                                            ----

                                 ADMINISTRATION

Section 4.1      Named Fiduciaries .......................................    6
Section 4.2      Plan Administrator ......................................    6
Section 4.3      Claims Procedure ........................................    8
Section 4.4      Claims Review Procedure .................................    8
Section 4.5      Allocation of Fiduciary Responsibilities
                   and Employment of Advisors ............................    9
Section 4.6      Other Administrative Provisions .........................    9

                                    ARTICLE V

                                  MISCELLANEOUS

Section 5.1      Rights of Employees .....................................   10
Section 5.2      Non-alienation of Benefits ..............................   10
Section 5.3      Non-Duplication of Benefits .............................   10
Section 5.4      Construction ............................................   10
Section 5.5      Headings ................................................   10
Section 5.6      Governing Law ...........................................   10
Section 5.7      Severability ............................................   11
Section 5.8      Termination or Amendment ................................   11
Section 5.9      Required Regulatory Provisions ..........................   11
Section 5.10     Withholding .............................................   12
Section 5.11     Status as Welfare Benefit Plan Under ERISA ..............   12


                                      (ii)

<PAGE>

              SEVERANCE PAY PLAN OF FAIRFIELD SAVINGS BANK, F.S.B.

                                    ARTICLE I

                                     PURPOSE

          Section 1 Statement of Purpose.

          Fairfield Savings Bank, F.S.B. adopts this Severance Pay Plan for the
benefit of its eligible Employees. The Bank recognizes that, as a public
company, it will be subject to the possibility of a negotiated or unsolicited
change of control which may result in a loss of employment for some of its
Employees. The purpose of the Plan is to encourage the Bank's Employees to
continue working for their employer with their full time and attention devoted
to their employer's affairs by providing prescribed income security and job
placement assistance in the event of an Involuntary Severance following a Change
of Control.

                                   ARTICLE II

                                  DEFINITIONS

          For purposes of the Plan, the following terms shall have the meanings
assigned to them below, unless a different meaning is plainly indicated by the
context:

          Section 2.1 Bank means Fairfield Savings Bank, F.S.B. (or its
successors or assigns, whether by merger, consolidation, sale of assets,
statutory receivership, operation of law or otherwise) and any affiliate of
Fairfield Savings Bank, F.S.B. which, with the approval of the Board of
Directors of Fairfield Savings Bank, F.S.B., and subject to such conditions as
may be imposed by such Board, adopts this Plan.

          Section 2.2 Board means the Board of Directors of Fairfield Savings
Bank, F.S.B.

          Section 2.3 Cause means, with respect to the conduct of an Employee in
connection with his employment with the Bank, personal dishonesty, incompetence,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any law, rule
or regulation (other than traffic violations or similar offenses) or final cease
and desist order in each case as measured against standards generally prevailing
at the relevant time in the savings and community banking industry; provided,
however, that following a Change of Control of the Bank or a company which
directly or indirectly owns 100% of the outstanding common stock of the Bank, an
Employee shall not be deemed to have been discharged for Cause unless and until
he shall have received a written notice of termination from the Board,
accompanied by a resolution duly adopted by affirmative vote of a majority of
the entire Board at a meeting called and held for such purpose (after reasonable
notice to the Employee and a reasonable opportunity for the Employee to make
oral

<PAGE>

                                       -2-


and written presentations to the members of the Board, on his own behalf, or
through a representative, who may be his legal counsel, to refute the grounds
for the proposed determination) finding that in the good faith opinion of the
Board grounds exist for discharging the Employee for "Cause".

          Section 2.4 Change of Control means:

          (a) with respect to Fairfield Savings Bank, F.S.B.:

               (i) the occurrence of any event upon which any "person"
          (as such term is used in sections 13(d) and 14(d) of the
          Securities Exchange Act of 1934, as amended ("Exchange
          Act")), other than (A) a trustee or other fiduciary holding
          securities under an employee benefit plan maintained for the
          benefit of employees of Fairfield Savings Bank, F.S.B.; (B)
          a corporation owned, directly or indirectly, by the
          stockholders of Fairfield Savings Bank, F.S.B. in
          substantially the same proportions as their ownership of
          stock of Fairfield Savings Bank, F.S.B.; or (C) any group
          constituting a person in which employees of Fairfield
          Savings Bank, F.S.B. are substantial members, becomes the
          "beneficial owner" (as defined in Rule 13d-3 promulgated
          under the Exchange Act), directly or indirectly, of
          securities issued by Fairfield Savings Bank, F.S.B.
          representing 25% or more of the combined voting power of all
          of Fairfield Savings Bank, F.S.B.'s then outstanding
          securities; or

               (ii) the occurrence of any event upon which the
          individuals who on the date the Plan is adopted are members
          of the Board, together with individuals whose election by
          the Board or nomination for election by Fairfield Savings
          Bank, F.S.B.'s stockholders was approved by the affirmative
          vote of at least two-thirds of the members of the Board then
          in office who were either members of the Board on the date
          this Plan is adopted or whose nomination or election was
          previously so approved, cease for any reason to constitute a
          majority of the members of the Board, but excluding, for
          this purpose, any such individual whose initial assumption
          of office is in connection with an actual or threatened
          election contest relating to the election of directors of
          Fairfield Savings Bank, F.S.B. (as such terms are used in
          Rule 14a-11 of Regulation 14A promulgated under the Exchange
          Act); or

               (iii) the shareholders of Fairfield Savings Bank,
          F.S.B. (or, if Fairfield Savings Bank, F.S.B. is not then a
          stock form institution, the Board of Fairfield Savings Bank,
          F.S.B.) approve either:

                    (A) a merger or consolidation of Fairfield Savings
               Bank, F.S.B. with any other corporation, other than a
               merger or consolidation following which both of the
               following conditions are satisfied:

<PAGE>

                                       -3-


                         (I) either (1) the members of the Board of
                    Fairfield Savings Bank, F.S.B. immediately prior
                    to such merger or consolidation constitute at
                    least a majority of the members of the governing
                    body of the institution resulting from such merger
                    or consolidation; or (2) the shareholders of
                    Fairfield Savings Bank, F.S.B. own securities of
                    the institution resulting from such merger or
                    consolidation representing 80% or more of the
                    combined voting power of all such securities then
                    outstanding in substantially the same proportions
                    as their ownership of voting securities of
                    Fairfield Savings Bank, F.S.B. before such merger
                    or consolidation; and

                         (II) the entity which results from such
                    merger or consolidation expressly agrees in
                    writing to assume and perform Fairfield Savings
                    Bank, F.S.B.'s obligations under the Plan; or

                    (B) a plan of complete liquidation of Fairfield
               Savings Bank, F.S.B. or an agreement for the sale or
               disposition by Fairfield Savings Bank, F.S.B. of all or
               substantially all of its assets; and

               (b) with respect to any company which owns, directly or
          indirectly, 100% of the outstanding common stock Fairfield
          Savings Bank, F.S.B., any event that would be described in
          section 2.4(a) if the name of such company were substituted
          for "Fairfield Savings Bank, F.S.B." therein.

In no event, however, shall the transaction by which Fairfield Savings Bank,
F.S.B. converts from a mutual savings bank to a stock savings bank, or any
transaction by which a company wholly owned by Fairfield Savings Bank, F.S.B.
becomes the parent company of Fairfield Savings Bank, F.S.B. be deemed a Change
of Control.

          Section 2.5 Employee means any person, including an officer, who is
employed by the Bank, other than: (a) a person whose regular work schedule is
for less than 1,000 hours per year; (b) an Employee receiving long-term
disability benefits; or (c) a person who has an employment contract, change of
control agreement or other agreement with the Bank or who is covered by other
programs which provide severance benefits or by their terms exclude such person
from participation in this Plan.

          Section 2.6 FDI Act means the Federal Deposit Insurance Act, as the
same may be amended from time to time, and the corresponding provisions of any
successor statute.

          Section 2.7 Involuntary Severance means (a) the discharge or dismissal
of an Employee by the Bank other than for Cause, or the resignation by the
Employee from his position with the Bank, which resignation the Employee is
asked or compelled by the Bank to tender other than for Cause; or (b)
termination of employment at an Employee's election within sixty (60) days after
any action following a Change of Control which, either alone or together


<PAGE>

                                       -4-


with other actions, results in: (i) the reduction in the Employee's Salary by
more than 20%; (ii) the assignment of the Employee to a job requiring relocation
of his residence in order to be able to commute without unreasonable difficulty,
expense or inconvenience; (iii) the assignment of the Employee to duties or to
an office or working space which involves unreasonable personal embarrassment;
or (iv) a material adverse change in the Employee's title, position or
responsibilities at the Bank.

          Section 2.8 OTS means the Office of Thrift Supervision of the United
States Department of the Treasury, and its successors.

          Section 2.9 Plan means this Severance Pay Plan of Fairfield Savings
Bank, F.S.B., as the same may be amended from time to time.

          Section 2.10 Plan Administrator means the committee consisting of all
non-employee directors of the Board of Directors of Fairfield Savings Bank,
F.S.B. who perform functions normally associated with a compensation committee.

          Section 2.11 Plan Year means the calendar year.

          Section 2.12 Salary means the highest basic annual rate of salary of
the Employee for his services to the Bank (excluding overtime, bonuses and other
forms of additional compensation) attained by the Employee during his employment
with the Bank. If the Employee is paid on an hourly-rate basis, Salary shall
mean the weekly amount of base wages paid for the number of hours of work
contemplated by such person's normal weekly work schedule.

          Section 2.13 Service means service rendered by an Employee that is
recognized under the Fairfield Savings Bank, F.S.B. Profit Sharing and Savings
Plan for vesting purposes as of the date of the Employee's Involuntary
Severance, including service prior to the dates on which the Plan is adopted or
made effective.

                                   ARTICLE III

                                    BENEFITS


          Section 3.1 Severance Benefits for Employees.

          (a) An Employee with at least one (1) year of Service whose employment
with the Bank is terminated under circumstances constituting an Involuntary
Severance, other than for Cause, as a result of, within twelve months following
or within three (3) months prior to, a Change of Control with respect to the
Bank or any company which directly or indirectly owns 100% of the outstanding
common stock of the Bank shall be entitled to the following benefits:

          (i) if the Employee is or has, at any time after the date of the
     conversion of the Bank from a mutual savings institution to a stock form
     savings


<PAGE>

                                       -5-


     institution, been an officer of the Bank, he shall be entitled, as
     severance pay, to a weekly payment in an amount equal to one week's Salary,
     commencing with the first week following the date of the Employee's
     Involuntary Severance and continuing for three times the number of weeks as
     the Employee has whole years of Service, subject to a maximum continuation
     of fifty-two (52) weeks.

          (ii) if the Employee is not an Employee described in section
     3.1(a)(i), he shall be entitled, as severance pay, to a weekly payment in
     an amount equal to one week's Salary, commencing with the first week
     following the date of the Employee's Involuntary Severance and continuing
     for the following number of weeks:


          WHOLE YEARS OF SERVICE             WEEKS OF SALARY CONTINUATION

     4 or fewer                         4 weeks
     
     at least 5 but less than 10        5 weeks plus 2 weeks for each Year of
                                        Service over 5
     
     at least 10                        10 weeks plus three weeks for each Year
                                        of Service over 10


subject to a maximum continuation of fifty-two (52) weeks.

provided, however, that in no event shall any Employee described in section
3.1(a)(i) or (ii) receive, as severance pay under this Plan, less than four
weeks' Salary.

            (b) Each Employee who is entitled to payments under section
3.1(a)(i) or (ii) shall, for the duration of such payments, continue to be
eligible for all of the benefits provided under the Bank's employee benefit
plans and programs (excluding tax-qualified plans and other plans which by law
must restrict participation to active employees) as if he were still an Employee
and working at the Bank, except that he shall cease to accrue vacation and shall
be paid a lump sum payment at the date of his Involuntary Severance in lieu of
any unused accrued vacation.

            (c) Each Employee who is entitled to benefits under section
3.1(a)(i) or (ii) shall also be entitled to outplacement services as follows:

               (i) an Employee described in section 3.1(a)(i) shall be entitled
          to utilize the services of an outplacement counseling firm at the
          Bank's expense for assistance in preparing a resume, developing
          interviewing skills, identifying career opportunities and evaluating
          job offers and for access to office and secretarial facilities,
          provided that the fee for such services shall not exceed 12% of the
          Employee's Salary; and

               (ii) if the Employee is not an Employee described in section
          3.1(a)(i), he shall be entitled to utilize the services of an
          outplacement counseling firm at the Bank's expense, for assistance in
          preparing a resume, developing interviewing skills, identifying career
          opportunities and evaluating job offers, provided that the


<PAGE>

                                       -6-


          fee for such services shall not exceed 6% of the Employee's Salary or
          $1,000, whichever is higher.

The outplacement firm utilized by any Employee or group of Employees shall be
selected by the Plan Administrator or, if permitted by the Plan Administrator,
selected by the Employee or Employees subject to the Plan Administrator's
approval.

          Section 3.2 Vesting.

          The benefits to be provided under this Article III of the Plan to an
Employee shall be completely vested and nonforfeitable upon the occurrence of a
Change of Control with respect to the Bank or any company which directly or
indirectly owns 100% of the outstanding common stock of the Bank.

          Section 3.3 Indemnification.

          The Bank shall indemnify, hold harmless and defend each Employee
against costs or expenses, including reasonable attorneys' fees, incurred by him
or arising out of any action, suit or proceeding in which he may be involved, as
a result of his efforts, in good faith, to defend or enforce his rights under
this Plan; provided, however, that the Employee shall have substantially
prevailed on the merits pursuant to a judgment, decree or order of a court of
competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a
settlement. For purposes of this Agreement, any settlement agreement which
provides for payment of any amounts in settlement of the Bank's obligations
hereunder shall be conclusive evidence of the Employee's entitlement to
indemnification hereunder, and any such indemnification payments shall be in
addition to amounts payable pursuant to such settlement agreement, unless such
settlement agreement expressly provides otherwise.

                                   ARTICLE IV

                                 ADMINISTRATION

          Section 4.1 Named Fiduciaries.

          The term "Named Fiduciary" shall mean (but only to the extent of the
responsibilities of each of them) the Plan Administrator and the Board. This
Article IV is intended to allocate to each Named Fiduciary the responsibility
for the prudent execution of the functions assigned to him or it, and none of
such responsibilities or any other responsibility shall be shared by two or more
of such Named Fiduciaries. Whenever one Named Fiduciary is required by the Plan
to follow the directions of another Named Fiduciary, the two Named Fiduciaries
shall not be deemed to have been assigned a shared responsibility, but the
responsibility of the Named Fiduciary giving the directions shall be deemed his
sole responsibility, and the responsibility of the Named Fiduciary receiving
those directions shall be to follow them insofar as such instructions are on
their face proper under applicable law.

<PAGE>

                                       -7-

          Section 4.2 Plan Administrator.

          The Plan Administrator shall subject to the responsibilities of the
Board, have the responsibility for the day-to-day control, management, operation
and administration of the Plan. The Plan Administrator shall have the following
responsibilities:

          (a) To maintain records necessary or appropriate for the
     administration of the Plan;

          (b) To give and receive such instructions, notices, information,
     materials, reports and certifications as may be necessary or appropriate in
     the administration of the Plan;

          (c) To prescribe forms and make rules and regulations consistent with
     the terms of the Plan and with the interpretations and other actions of the
     Board;

          (d) To require such proof or evidence of any matter from any person as
     may be necessary or appropriate in the administration of the Plan;

          (e) To prepare and file, distribute or furnish all reports, plan
     descriptions, and other information concerning the Plan, including, without
     limitation, filings with the Secretary of Labor and employee communications
     as shall be required of the Plan Administrator under ERISA;

          (f) To determine any question arising in connection with the Plan,
     including any question of Plan interpretation, and the Plan Administrator's
     decision or action in respect thereof shall be final and conclusive and
     binding upon all persons having an interest under the Plan;

          (g) To review and dispose of claims under the Plan filed pursuant to
     section 4.3 and appeals of claims decisions pursuant to section 4.4;

          (h) If the Plan Administrator shall determine that by reason of
     illness, senility, insanity, or for any other reason, it is undesirable to
     make any payment to the person entitled thereto, to direct the application
     of any amount so payable to the use or benefit of such person in any manner
     that the Plan Administrator may deem advisable or to direct in the Plan
     Administrator's discretion the withholding of any payment under the Plan
     due to any person under legal disability until a representative competent
     to receive such payment in his behalf shall be appointed pursuant to law;

          (i) To discharge such other responsibilities or follow such directions
     as may be assigned or given by the Board; and

          (j) To perform any duty or take any action which is allocated to the
     Plan Administrator under the Plan.

<PAGE>

                                       -8-


The Plan Administrator shall have the power and authority necessary or
appropriate to carry out his responsibilities.

          Section 4.3 Claims Procedure.

          Any claim relating to benefits under the Plan shall be filed with the
Plan Administrator on a form prescribed by it. If a claim is denied in whole or
in part, the Plan Administrator shall give the claimant written notice of such
denial, which notice shall specifically set forth:

          (a) The reasons for the denial;

          (b) The pertinent Plan provisions on which the denial was based;

          (c) Any additional material or information necessary for the claimant
     to perfect his claim and an explanation of why such material or information
     is needed; and

          (d) An explanation of the Plan's procedure for review of the denial of
     the claim.

In the event that the claim is not granted and notice of denial of a claim is
not furnished by the 30th day after such claim was filed, the claim shall be
deemed to have been denied on that day for the purpose of permitting the
claimant to request review of the claim.

          Section 4.4 Claims Review Procedure.

          Any person whose claim filed pursuant to section 4.3 has been denied
in whole or in part by the Plan Administrator may request review of the claim by
the Plan Administrator, upon a form prescribed by the Plan Administrator. The
claimant shall file such form (including a statement of his position) with the
Plan Administrator no later than 60 days after the mailing or delivery of the
written notice of denial provided for in section 4.3, or, if such notice is not
provided, within 60 days after such claim is deemed denied pursuant to section
4.3. The claimant shall be permitted to review pertinent documents. A decision
shall be rendered by the Plan Administrator and communicated to the claimant not
later than 30 days after receipt of the claimant's written request for review.
However, if the Plan Administrator finds it necessary, due to special
circumstances (for example, the need to hold a hearing), to extend this period
and so notifies the claimant in writing, the decision shall be rendered as soon
as practicable, but in no event later than 120 days after the claimant's request
for review. The Plan Administrator's decision shall be in writing and shall
specifically set forth:

          (a) The reasons for the decision; and

          (b) The pertinent Plan provisions on which the decision is based.


<PAGE>

                                       -9-


Any such decision of the Plan Administrator shall be binding upon the claimant
and the Bank, and the Plan Administrator shall take appropriate action to carry
out such decision.

          Section 4.5 Allocation of Fiduciary Responsibilities and Employment of
Advisors.

          Any Named Fiduciary may:

          (a) Allocate any of his or its responsibilities (other than trustee
     responsibilities) under the Plan to such other person or persons as he or
     it may designate, provided that such allocation and designation shall be in
     writing and filed with the Plan Administrator;

          (b) Employ one or more persons to render advice to him or it with
     regard to any of his or its responsibilities under the Plan; and

          (c) Consult with counsel, who may be counsel to the Bank.

          Section 4.6 Other Administrative Provisions.

          (a) Any person whose claim has been denied in whole or in part must
exhaust the administrative review procedures provided in section 4.4 prior to
initiating any claim for judicial review.

          (b) No bond or other security shall be required of the Plan
Administrator, or any officer or Employee of the Bank to whom fiduciary
responsibilities are allocated by a Named Fiduciary, except as may be required
by ERISA.

          (c) Subject to any limitation on the application of this section
4.6(c) pursuant to ERISA, neither the Plan Administrator, nor any officer or
Employee of the Bank to whom fiduciary responsibilities are allocated by a Named
Fiduciary, shall be liable for any act of omission or commission by himself or
by another person, except for his own individual willful and intentional
malfeasance.

          (d) The Plan Administrator may, except with respect to actions under
section 4.4, shorten, extend or waive the time (but not beyond 60 days) required
by the Plan for filing any notice or other form with the Plan Administrator, or
taking any other action under the Plan.

          (e) Any person, group of persons, committee, corporation or
organization may serve in more than one fiduciary capacity with respect to the
Plan.

          (f) Any action taken or omitted by any fiduciary with respect to the
Plan, including any decision, interpretation, claim denial or review on appeal,
shall be conclusive and binding on the Bank and all interested parties and shall
be subject to judicial modification or reversal only to the extent it is
determined by a court of competent jurisdiction that such action or omission was
arbitrary and capricious and contrary to the terms of the Plan.

<PAGE>

                                      -10-

                                    ARTICLE V

                                  MISCELLANEOUS

          Section 5.1 Rights of Employees.

          No Employee shall have any right or claim to any benefit under the
Plan except in accordance with the provisions of the Plan. The establishment of
the Plan shall not be construed as conferring upon any Employee or other person
any legal right to a continuation of employment or to any terms or conditions of
employment, nor as limiting or qualifying the right of the Bank to discharge any
Employee.

          Section 5.2 Non-alienation of Benefits.

          The right to receive a benefit under the Plan shall not be subject in
any manner to anticipation, alienation, or assignment, nor shall such right be
liable for or subject to debts, contracts, liabilities, or torts.

          Section 5.3 Non-Duplication of Benefits.

          No provisions in this Plan shall be deemed to duplicate any
compensation or benefits provided under any agreement, plan or program covering
the Employee to which the Bank is a party and any duplicative amount payable
under any such agreement, plan or program shall be applied as an offset to
reduce the amounts otherwise payable hereunder.

          Section 5.4 Construction.

          Whenever appropriate in the Plan, words used in the singular may be
read in the plural; words used in the plural may be read in the singular; and
the masculine gender shall be deemed equally to refer to the feminine gender or
the neuter. Any reference to a section number shall refer to a section of this
Plan, unless otherwise stated.

          Section 5.5 Headings.

          The headings of sections are included solely for convenience of
reference, and if there is any conflict between such headings and the text of
the Plan, the text shall control.

          Section 5.6 Governing Law.

          Except to the extent preempted by federal law, the Plan shall be
construed, administered and enforced according to the laws of the State of
Illinois applicable to contracts

<PAGE>

                                      -11-


between citizens and residents of the State of Illinois entered into and to be
performed entirely within such jurisdiction.

          Section 5.7 Severability.

          The invalidity or unenforceability, in whole or in part, of any
provision of this Plan shall in no way affect the validity or enforceability of
the remainder of such provision or of any other provision of this Plan, and any
provision, or part thereof, deemed to be invalid or unenforceable shall be
reformed as necessary to render it valid and enforceable to the maximum possible
extent.

          Section 5.8 Termination or Amendment.

          The Bank intends to keep this Plan in effect, but, subject to the
provisions of section 4 hereunder, the Bank expressly reserves the right to
terminate or amend the Plan, in whole or in part, at any time by action of the
Board; provided, however, that no such amendment or termination which adversely
affects the current or prospective rights of any Employee shall be effective
earlier than six (6) months after written notice thereof is given to such
Employee.

          Section 5.9 Required Regulatory Provisions.

          The following provisions are included for the purposes of complying
with various laws, rules and regulations applicable to the Bank:

          (a) Notwithstanding anything herein contained to the contrary, in no
     event shall the aggregate amount of compensation payable to any person
     under Article III of this Plan exceed three times such person's average
     annual total compensation for the last five consecutive calendar years to
     end prior to his termination of employment with the Bank (or for his entire
     period of employment with the Bank and its predecessors, if less than five
     calendar years).

          (b) Notwithstanding anything herein contained to the contrary, any
     payments to the Employee by the Bank, whether pursuant to this Plan or
     otherwise, are subject to and conditioned upon their compliance with
     section 18(k) of the FDI Act and any regulations promulgated thereunder.

          (c) Notwithstanding anything herein contained to the contrary, if the
     Employee is suspended from office and/or temporarily prohibited from
     participating in the conduct of the affairs of the Bank pursuant to a
     notice served under section 8(e)(3) or 8(g)(1) of the FDI Act, the Bank's
     obligations under this Plan shall be suspended as of the date of service of
     such notice, unless stayed by appropriate proceedings. If the charges in
     such notice are dismissed, the Bank, in its discretion, may (i) pay to the
     Employee all or part of the compensation


<PAGE>

                                      -12-


     withheld while the Bank's obligations hereunder were suspended and (ii)
     reinstate, in whole or in part, any of the obligations which were
     suspended.

          (d) Notwithstanding anything herein contained to the contrary, if the
     Employee is removed and/or permanently prohibited from participating in the
     conduct of the Bank's affairs by an order issued under section 8(e)(4) or
     8(g)(1) of the FDI Act, all prospective obligations of the Bank under this
     Plan shall terminate as of the effective date of the order, but vested
     rights and obligations of the Bank and the Employee shall not be affected.

          (e) Notwithstanding anything herein contained to the contrary, if the
     Bank is in default (within the meaning of section 3(x)(1) of the FDI Act,
     all prospective obligations of the Bank under this Plan shall terminate as
     of the date of default, but vested rights and obligations of the Bank and
     the Employee shall not be affected.

          (f) Notwithstanding anything herein contained to the contrary, all
     prospective obligations of the Bank hereunder shall be terminated, except
     to the extent that a continuation of this Plan is necessary for the
     continued operation of the Bank: (i) by the Director of the OTS or his
     designee or the FDIC, at the time the FDIC enters into an agreement to
     provide assistance to or on behalf of the Bank under the authority
     contained in section 13(c) of the FDI Act; (ii) by the Director of the OTS
     or his designee at the time such Director or designee approves a
     supervisory merger to resolve problems related to the operation of the Bank
     or when the Bank is determined by such Director to be in an unsafe or
     unsound condition. The vested rights and obligations of the parties shall
     not be affected.

If and to the extent that any of the foregoing provisions shall cease to be
required by applicable law, rule or regulation, the same shall become
inoperative automatically as though eliminated by formal amendment of the Plan.

          Section 5.10 Withholding.

          Payments from this Plan shall be subject to all applicable federal,
state and local income withholding taxes.

          Section 5.11 Status as Welfare Benefit Plan Under ERISA.

          This Plan is an "employee welfare benefit plan" within the meaning of
section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and shall be construed, administered and enforced according to the
provisions of ERISA.


<PAGE>


                                   EX-10.8
                              Engagement Letter


March 27, 1996


Mr. George M. Briody
President and Chief Executive Officer
Fairfield Savings Bank, F.S.B.
1190 RFD
Long Grove, Illinois 60047


Dear Mr. Briody:

     This letter sets forth the agreement between Fairfield Savings Bank, F.S.B.
(the "Bank") and Capital Resources Group, Inc. ("CRG"), whereby the Bank has
engaged CRG to determine the estimated pro forma market value of the shares of
common stock that are to be issued and sold by the Bank in conjunction with its
conversion into a stock savings institution (the "Conversion") and to prepare
the regulatory business plan for the formation of the new holding company.

     CRG agrees to deliver the valuation, in writing, to the Bank at the above
address on or before a mutually-agreed upon date. Further, we agree to discuss
with the board of directors the valuation, the methodology employed and other
relevant factors of the appraisal. In addition, CRG agrees to undertake all the
necessary filing requirements with respect to the valuation appraisal report
with the Office of Thrift Supervision ("OTS") and Securities and Exchange
Commission ("SEC"). It is understood that the services of CRG under this
agreement shall be limited as described above.

     The Bank agrees to pay CRG for its services to prepare the appraisal and
the regulatory business plan and to reimburse CRG for certain expenses necessary
and incident to the completion of the appraisal. Professional fees for our
services are $22,500 for the appraisal and $10,000 for the regulatory holding
company business plan . Payment shall be made according to the following
schedule:

     o    $5,000 upon execution of this letter of agreement;
     o    $17,500 upon delivery of the completed appraisal report; and
     o    $10,000 upon delivery of the completed regulatory business plan.

     Any updated appraisal reports necessary in the conversion process will be
produced for a fixed fee of $5,000. Typically, no updates are required for the
business plan.

     As part of the due diligence process, CRG will require that senior
management be available for a management review session conducted on the Bank's
premises. If additional

<PAGE>

professional time is required for matters other than appraisal updates, standard
hourly rates will be charged for the consultants involved.

     Reimbursement of expenses for travel, communications, reproduction, data
and computer time shall be paid to CRG as incurred and billed. CRG will make
every attempt to hold these costs to a minimum.

     In the event the Bank shall, for any reason, discontinue its conversion to
a stock savings institution prior to the filing of the original appraisal and
business plan with the OTS, the Bank agrees to compensate CRG according to CRG's
standard billing rates for consulting services based on accumulated and
verifiable time expenses, not to exceed $32,500 plus reimbursable expenses.

     If, during the course of the Bank's Conversion, unforeseen events occur so
as to materially change the nature of the work content of the appraisal services
described in this contract, the terms of said contract shall be subject to
renegotiation by the Bank and CRG. Such unforeseen events shall include, but not
be limited to, major changes in OTS' procedures as they relate to conversion
regulations, appraisal guidelines or processing procedures as they relate to
conversions, major changes in management, operating policies or financial
condition, and excessive delays in completing the transaction and/or suspension
of processing of conversions such that completion of the proposed Conversion
requires the preparation by CRG of a new appraisal report which differs
substantially from the appraisal report prepared by CRG.

     The Bank and CRG hereby agree to the following:

     1. The Bank agrees to supply to CRG such information with respect to its
business and financial condition as CRG may reasonably request in order to
provide the aforesaid valuation. Such information heretofore or hereafter
supplied or made available to CRG shall include without limitation: annual
financial statements, periodic regulatory filings and material agreements, debt
instruments, commitments and contingencies, potential gains/losses and corporate
books and records.

     2. The Bank hereby represents and warrants to CRG that any information
provided to CRG does not and will not, to the best of the Bank's knowledge, at
all relevant times, contain any untrue statement of a material fact or fail to
state a material fact necessary to make the statements therein not false or
misleading.

     3. (a) The Bank agrees that it will indemnify and hold harmless CRG and any
affiliates of CRG who act for or on behalf of CRG in connection with the
services called for under this agreement, from and against any and all losses,
claims, damages and liabilities (including, but not limited to, all losses and
expenses in connection with claims under the federal securities laws) caused by
or arising out of any untrue statement of a material fact contained in the
information supplied by the Bank to CRG or by an omission to state a material
fact in the information so provided that is required to be stated therein or
necessary to make the statements not misleading.

     (b) The Bank will not be responsible for any such losses, claims, damages
and liabilities if CRG is determined to be negligent or otherwise at fault.

<PAGE>

     (c) CRG will not be responsible for any such losses, claims, damages and
liabilities to the extent that it reasonably relied upon information furnished
by the Bank whether or not the Bank is determined to be negligent or otherwise
at fault.

     (d) Should CRG incur legal expenses in defending any legal action
challenging the valuation where CRG is not negligent or otherwise at fault or is
found by a court of law to be not negligent or otherwise at fault, the Bank will
indemnify CRG for all such expenses.

     The Bank and CRG are not affiliated, and neither the Bank nor CRG has an
economic interest in, or is held in common with, the other and has not derived a
significant portion of its gross revenues, receipts or net income for any period
from transactions with the other.

     Please acknowledge your agreement to the foregoing by signing as indicated
below and returning to CRG a signed copy of this letter.

                                         Sincerely,

                                         CAPITAL RESOURCES GROUP, INC.


                                         /s/ Michael B. Seiler
                                         Michael B. Seiler
                                         Senior Vice President

MBS/cct

Agreed To and Accepted By:

Fairfield Savings Bank, F.S.B.


/s/ Timothy L. McCue               4/2/96
- --------------------------------------------------
Timothy L. McCue
Vice President, Chief Financial Officer


<PAGE>


                                  EX-10.9
                              Engagement Letter


June 17, 1996

Mr. Timothy L. McCue
Vice President
Fairfield Savings Bank, F.S.B.
Old McHenry Road
1190 RFD
Long Grove, IL  60047

Dear Mr. McCue:

We are pleased to provide this proposal for conversion agent services to assist
with the conversion of Fairfield Savings Bank, F.S.B. to a stock savings bank.
Choosing the right conversion agent is an important step to ensuring a smooth
and successful conversion. Crowe Chizek has been actively involved in providing
conversion accounting and EDP related services to the thrift industry since
1977, and since that time we've provided conversion agent services to over 125
converting thrifts. Enclosed for your review is a partial listing of Crowe
Chizek conversion engagements.

The personnel making up your project team are trained professional data
processing and business consultants with experience in conversion agent work. As
a certified public accounting and management consulting firm, we offer a wide
range of services and capabilities, as well as the flexibility to adapt to your
unique operating environment. We also provide numerous services designed to
reduce your printing and mailing costs, including:

      o     Consolidation of multiple accounts held by an individual

      o     Household sorting for member mailings - Household sorting allows
            multiple family members living at the same address to be included in
            a single mailing package. This often results in a significant
            reduction in overall printing and mailing expenses.

      o     Sorting of all labels, proxy cards and/or stock order forms by Zip
            code and multiple mailing classes

In addition, Crowe Chizek provides software and services to complement your
marketing agent's efforts which far exceed those of other conversion agents. We
will work with you and your marketing agent to develop the most cost-effective
approach to meet your conversion objectives. To provide the utmost response and
turn-around time, all electronic data processing is done on our own in-house
computers. Contrary to other conversion agents who may require your data to be
submitted in a special format, our fees are not predicated on any special
processing by

<PAGE>

Mr. Timothy L. McCue
June 17, 1996
Page 2


your data center. This service results in faster turn-around time and lower
overall conversion costs.

Based upon our understanding of the requirements of Fairfield Savings Bank,
F.S.B., our fee to act as the conversion agent will be $12,500, payable as
follows: $5,000 upon signing of this letter, and the remainder upon closing of
the conversion. If for any reason the conversion should not close, fees will be
billed to the extent that the services as outlined below have been completed.
This fee does not include out-of-pocket expenses, which will be billed at actual
cost. However, out-of-pocket expenses will not exceed $1,000 without prior
approval by the bank. We believe that you will find our estimate to be based
upon reasonable expectations of the work required. Of course, should we
encounter a situation that would significantly alter our expectations, we would
discuss with you the required changes in effort and fees before proceeding.

SERVICES PROPOSED

We propose that Crowe Chizek provide electronic data processing services in the
following areas:

      1.    Data Extraction and Verification
      2.    Consolidation of Account Data
      3.    Blue Sky Laws Supporting Information
      4.    Household Identification for Mailing
      5.    Proxy Form Imprinting
      6.    Subscription Order Form Imprinting (if required)
      7.    Proxy Form Imprinting for Follow-up Mailings
      8.    Proxy Target Group Identification
      9.    Subscription Category Analysis Tools (software)
      10.   Proxy and/or Stock Solicitation Cards
      11.   Use of Crowe Chizek's Stock Subscription Management Software
      12.   Proxy Tabulation and Reporting
      13.   Inspectors of Election for the Special Meeting
      14.   Interest and Refund Check Generation
      15.   1099 Form Preparation
      16.   1099 Magnetic Media Reporting to the IRS
      17.   Transfer Agent Certificate Information (paper & magnetic media)
      18.   Liquidation Account Reporting

<PAGE>

Mr. Timothy L. McCue
June 17, 1996
Page 3


For more detail on each of the services outlined above, please refer to the
accompanying Description of Conversion Agent Services.

OVER-SUBSCRIPTION/UNDER-SUBSCRIPTION SERVICES

Crowe Chizek will provide assistance as needed in the event of either an over or
under subscription. In the event of an over subscription, we will provide
assistance to your marketing agent in the allocation process. In the event of an
under subscription, we will provide similar assistance with resolicitation
processing.

STANDARD LIMITATIONS

In quoting the service fee estimates, and in engaging Crowe Chizek to work with
Fairfield Savings Bank, F.S.B., the following standard limitations are
understood:

      o     The Thrift will provide the necessary information in a fashion
            suitable for the conduct of work specified above, and Crowe Chizek
            will hold all non-public information made available to it strictly
            confidential;

      o     The Thrift will promptly notify Crowe Chizek of any changes in the
            Plan of Conversion;

      o     The Thrift warrants the information provided to be accurate and
            Crowe Chizek has no requirement to make any independent verification
            thereof; and

      o     The Thrift agrees not to hold Crowe Chizek liable for any damages
            sustained because of delays or errors occurring by reason of
            circumstances beyond its control and not caused by Crowe Chizek
            negligence or bad faith.

If the terms and objectives of our engagement as described above are acceptable,
please provide authorization to proceed by returning one copy of this letter
signed by the appropriate person at Fairfield Savings Bank, F.S.B. A
postage-paid envelope is enclosed for your convenience.

We believe that stock conversion is a significant step for any thrift. We also
believe that our experience, audit discipline and proven electronic data
processing capabilities in this area can be an asset to your conversion process.
We will call you after you review this proposal to further discuss our services
and to offer our suggestions for the efficient processing of your

<PAGE>

Mr. Timothy L. McCue
June 17, 1996
Page 4


conversion effort. Of course, should you have any questions regarding the
enclosed information, or if we can be of service in any way, please do not
hesitate to call.

Sincerely,


Allan D. Jean
Senior Manager

cc:   Stephen E. Nelson - Hovde Financial, Inc.
      Mark Sokolow - Thacher Proffitt & Wood

Accepted:


Fairfield Savings Bank, F.S.B.


By: __________________________


Title:________________________


Date:_________________________


<PAGE>

      
                            EX-21.1
                  Subsidiaries of the Registrant


Exhibit 21.1      Subsidiaries of the Registrant

     There are currently no subsidiaries of Big Foot Financial Corp. (the
"Registrant"). Following the conversion of Fairfield Savings Bank, F.S.B. (the
"Bank") from a federally chartered mutual savings bank to a federally chartered
stock savings bank and the issuance and sale of the issued and outstanding
common stock of the Bank to the Registrant, the Bank will be a wholly-owned
subsidiary of the Registrant.


<PAGE>

                                    EX-23.1
                        Consent of Ind. Cert. Pub. Accts. 
                                     

                             Consent of Independent
                          Certified Public Accountants


The Board of Directors
Fairfield Savings Bank, F.S.B:


We consent to the use of our report included herein and to the reference to our
firm under the headings "Effects of Conversion - Tax Aspects," "Legal and Tax
Opinions," and "Experts" in the prospectus.


                                       /s/ KPMG Peat Marwick


Chicago, Illinois
September 13, 1996



<PAGE>

                                  EX-23.2
                       Consent of Thacher Proffitt & Wood


                       CONSENT OF THACHER PROFFITT & WOOD


               We hereby consent to the reference to our firm under the heading
"Legal Matters" in the prospectus which is a part of (i) the Registration
Statement on Form S-1 of Big Foot Financial Corp., filed with the Securities and
Exchange Commission and (ii) the Application for Conversion on Form AC of
Fairfield Savings Bank, F.S.B. filed with the Office of Thrift Supervision.


                                                Very truly yours,
                                                /s/ Thacher Proffitt & Wood
                                                THACHER PROFFITT & WOOD
           

September 13, 1996


<PAGE>


                                 EX-23.4
               Consent of Capital Resources Group, Inc.


                   [Capital Resources Group, Inc. letterhead]


                                          September 13, 1996


Board of Directors
Fairfield Savings Bank, F.S.B.
1190 RFD
Long Grove, Illinois  60047-7304

Dear Board Members:

     We hereby consent to the use of our firm's name, Capital Resources Group,
Inc. ("CRG") in the Application for Approval of Conversion filed by Fairfield
Savings Bank, F.S.B. for permission to convert to a capital stock savings bank
and references to the Conversion Valuation Appraisal Report ("Report") and the
valuation of Fairfield Savings Bank, F.S.B. provided by CRG. We also consent to
the use of our firm's name and references to our Report in the Form S-1
Registration Statement filed by Big Foot Financial Corp.

                                             Very truly yours,


                                             /s/ Michael B. Seiler
                                             Michael B. Seiler
                                             Senior Vice President


<TABLE> <S> <C>

<PAGE>
<ARTICLE> 9
       
<S>                             <C>
<PERIOD-TYPE>                   12-MOS
<FISCAL-YEAR-END>                          JUL-31-1996
<PERIOD-END>                               JUL-31-1996
<CASH>                                       2,568,612
<INT-BEARING-DEPOSITS>                       2,040,308
<FED-FUNDS-SOLD>                                     0
<TRADING-ASSETS>                                     0
<INVESTMENTS-HELD-FOR-SALE>                 58,277,886
<INVESTMENTS-CARRYING>                      44,133,079
<INVESTMENTS-MARKET>                        42,154,697
<LOANS>                                     78,843,572
<ALLOWANCE>                                    300,000
<TOTAL-ASSETS>                             194,624,437
<DEPOSITS>                                 137,176,770
<SHORT-TERM>                                30,200,000
<LIABILITIES-OTHER>                          3,968,180
<LONG-TERM>                                  9,700,000
                                0
                                          0
<COMMON>                                             0
<OTHER-SE>                                  13,579,487
<TOTAL-LIABILITIES-AND-EQUITY>             194,624,437
<INTEREST-LOAN>                              6,026,328
<INTEREST-INVEST>                            7,127,216
<INTEREST-OTHER>                                     0
<INTEREST-TOTAL>                            13,153,544
<INTEREST-DEPOSIT>                           5,924,074
<INTEREST-EXPENSE>                           8,449,672
<INTEREST-INCOME-NET>                        4,703,872
<LOAN-LOSSES>                                  137,558
<SECURITIES-GAINS>                                   0
<EXPENSE-OTHER>                              4,708,290
<INCOME-PRETAX>                                342,996
<INCOME-PRE-EXTRAORDINARY>                     225,996
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   225,996
<EPS-PRIMARY>                                        0
<EPS-DILUTED>                                        0
<YIELD-ACTUAL>                                    6.90
<LOANS-NON>                                          0
<LOANS-PAST>                                   118,303
<LOANS-TROUBLED>                                     0
<LOANS-PROBLEM>                                      0
<ALLOWANCE-OPEN>                               166,000
<CHARGE-OFFS>                                    3,588
<RECOVERIES>                                         0
<ALLOWANCE-CLOSE>                              300,000
<ALLOWANCE-DOMESTIC>                           300,000
<ALLOWANCE-FOREIGN>                                  0
<ALLOWANCE-UNALLOCATED>                              0
        

</TABLE>

<PAGE>
                                         A PROPERLY COMPLETED ORIGINAL STOCK
                                         ORDER FORM
      BIG FOOT FINANCIAL CORP.
                                         AND ORIGINAL CERTIFICATION FORM MUST BE
                                         USED TO PURCHASE COMMON STOCK. THE
                                         ASSOCIATION IS NOT
 Subscription and Community Offering
         (Stock Order Form)
                                         REQUIRED TO ACCEPT COPIES OF THESE
                                         FORMS.
- --------------------------------------------------------------------------------
 
DEADLINE
 
The Subscription Offering ends at 12:00 Noon, Central Time, on December   ,
1996. Your Stock Order Form and Certification Form, properly executed and with
the correct payment, must be received at the address on the bottom of this form
or hand-delivered to any office of Fairfield Savings Bank, F.S.B. (the "Bank")
by this deadline, or it will be considered void. Please read the Stock Ownership
Guide and Order Form Instructions as you complete this Form.
- --------------------------------------------------------------------------------
<TABLE>
<S>                                          <C>                    <C>                 <C>
(1)         Number of Shares                                        Subscription Price
                                                       X                  $10.00                  =
 
<CAPTION>
(1)         Number of Shares                 (2)         Total Payment Due
<S>                                          <C>
                                             $
</TABLE>
 
  The minimum number of shares that may be subscribed for is 25 and the
  maximum number that may be subscribed for by each Eligible Account Holder,
  Supplemental Eligible Account Holder or Other Member in the Subscription
  Offering, or by any person, together with associates and persons acting in
  concert with such person, in the Community Offering, is $150,000 (15,000
  shares). However, no person, together with associates or persons acting in
  concert with such person, may purchase in the aggregate more than 1.0% of
  the shares offered.
 
(3) / / Check here if you are a director, officer or employee of Fairfield
Savings Bank, F.S.B. or a member of such person's immediate family.
 
METHOD OF PAYMENT
                                   (6)a / / Check here if you are an Eligible
                                            Account Holder with a savings
                                            deposit account(s)
(4) / / Enclosed is a check, bank draft
        or money order payable to totaling $50.00 or more as of December 31,
        1994. LIST ACCOUNT(S) BELOW.
     Fairfield Savings Bank, F.S.B.
 
<TABLE>
<S>                           <C>
(6)b / / Check here if you
         are a Supplemental
         Eligible Account
         Holder with a
         savings deposit
 $                            Cash can be used only if presented
                                       inaccount(s) totaling $50.00
                                       or more as of September 30,
                                       1996. LIST ACCOUNT(S) person
                              at a branch office of FairfieldBELOW.
                              Savings Bank, F.S.B. No wire transfers
</TABLE>
 
                                   (6)c / / Check here if you are an Other
                                            Member with a savings deposit
<TABLE>
<S>                           <C>
                              will be accepted.
</TABLE>
 
                                                 , 1996 or a borrower of the
                                            Bank as of July 1, 1991. LIST
                                            ACCOUNT(S)
(5) / / The undersigned authorizes
        withdrawal from the following
        account(s) BELOW.
     at Fairfield Savings Bank, F.S.B.
        INDIVIDUAL RETIREMENT ACCOUNTS
                                   (6)d / / Check here if you are a Bank
                                            Employee.
     AND QUALIFIED PLANS MAINTAINED AT
                                            FAIRFIELD
                                            SAVINGS
                                            BANK,
                                            F.S.B.
 
<TABLE>
<S>                                           <C>
     Account Title [Names on Accounts]                     Account Number(s)
</TABLE>
     CANNOT BE USED.
<TABLE>
<S>                                           <C>
             Account Number(s)                                   Amount
 ..........................................  ............................
                                             $
 ..........................................  ............................
                                             $
                                             $
TOTAL WITHDRAWAL AMOUNT                      $
</TABLE>
<TABLE>
<S>                                     <C>                              <C>
There is no penalty for early withdrawals used for this payment.
 
                                   PLEASE NOTE: FAILURE TO LIST ALL YOUR
                                   ACCOUNTS MAY RESULT IN THE LOSS OF PART OR
                                   ALL OF YOUR SUBSCRIPTION RIGHTS. IF
                                   ADDITIONAL SPACE IS NEEDED, PLEASE UTILIZE
                                   THE BACK OF THIS ORDER FORM.
 
STOCK REGISTRATION
 
(7) Form of Stock Ownership:
 .....................................  ...............................  / / Uniform Transfer to Minors
 .....................................  ...............................
/ / Individual                          / / Joint Tenants
/ / Corporation or Partnership          / / Tenants in Common            / / Uniform Gifts to Minors
 
<CAPTION>
 .....................................  / / IRA/Qualified Plan
 
 .....................................
 
/ / Corporation or Partnership          / / Fiduciary/Trust
 
                                          (under Agreement Dated )
 
</TABLE>
<TABLE>
<S>                                                                                                            <C>              <C>
                                                                                                               Social Security
(8) Name(s) in which stock is to be registered (Please print clearly)                                          No. or Tax ID No.
                                                                                                               Social Security
Name(s), continued                                                                                             No. or Tax ID No.
Street Address                                                                     City                State   Zip Code
 
<CAPTION>
(8) Name(s) in which stock is to be registered (Please print clearly)
Name(s), continued
Street Address                                                                     City                State   County of Residence
</TABLE>
 
<TABLE>
<S>                           <C>                                     <C>
(9) Telephone Information     Daytime Phone                           Evening Phone
                              (    )                                  (    )
</TABLE>
 
NASD AFFILIATION
 
(10) / / Check here if you are a member of the National Association of
Securities Dealers, Inc. ("NASD"), a person associated with an NASD member, a
member of the immediate family of any such person to whose support such person
contributes, directly or indirectly, or the holder of an account in which an
NASD member or person associated with an NASD member has a beneficial interest.
To comply with conditions under which an exemption from the NASD's
Interpretation With Respect to Free-Riding and Withholding is available, you
agree, if you have checked the NASD Affiliation box, (i) not to sell, transfer
or hypothecate the stock for a period of three months following issuance, and
(ii) to report this subscription in writing to the applicable NASD member within
one day of payment therefor.
 
ASSOCIATES/ACTING IN CONCERT
 
(11) / / Check here, and complete the reverse side of this Form, if you or any
associates (as defined on the reverse side of this Form) or persons acting in
concert with you have submitted other orders for shares in the Subscription
and/or Community Offerings.
 
ACKNOWLEDGEMENT
 
(12) To be effective, this Stock Order Form and accompanying Certification Form
must be properly completed and actually received by Fairfield Savings Bank,
F.S.B. not later than            , Central Time, on             , 1996, unless
extended; otherwise this Stock Order Form and all subscription rights will be
void. It is understood that this Stock Order Form will be accepted in accordance
with, and subject to, the terms and conditions of the Plan of Conversion of the
Bank described in the accompanying Prospectus. The undersigned hereby
acknowledges receipt of the Prospectus at least 48 hours prior to delivery of
this Stock Order Form to the Bank. The undersigned agrees that after receipt by
Fairfield Savings Bank, F.S.B., this Stock Order Form may not be modified,
withdrawn or cancelled without the Bank's consent and if authorization to
withdraw from savings deposit accounts at the Bank has been given as payment for
shares, the amount authorized for withdrawal shall not otherwise be available
for withdrawal by the undersigned. If the Plan of Conversion is not approved by
the voting members of the Bank at a Special Meeting to be held on December   ,
1996, or at any adjournment or postponement thereof, all orders will be
cancelled and funds received as payment, with accrued interest, (if any), will
be returned promptly.
 
UNDER PENALTY OF PERJURY, I certify that the Social Security or Tax ID Number
and the information provided on this Stock Order Form are true, correct and
complete, that I am not subject to back-up withholding, that I am purchasing
solely for my own account and that there is no agreement or understanding
regarding the sale or transfer of such shares or my right to subscribe for
shares herewith.
 
FEDERAL REGULATIONS PROHIBIT ANY PERSON FROM TRANSFERRING, OR ENTERING INTO ANY
AGREEMENT DIRECTLY OR INDIRECTLY TO TRANSFER, THE LEGAL OR BENEFICIAL OWNERSHIP
OF SUBSCRIPTION RIGHTS OR THE UNDERLYING SECURITIES TO THE ACCOUNT OF ANOTHER.
FAIRFIELD SAVINGS BANK, F.S.B. AND BIG FOOT FINANCIAL CORP., WILL PURSUE ANY AND
ALL LEGAL AND EQUITABLE REMEDIES IN THE EVENT THEY BECOME AWARE OF THE TRANSFER
OF SUBSCRIPTION RIGHTS AND WILL NOT HONOR ORDERS KNOWN BY THEM TO INVOLVE SUCH
TRANSFER.
 
<TABLE>
<S>                                                                   <C>
    (13) Signature                                         Date       Signature                                                 Date
</TABLE>
 
      (ALL ORDER FORMS MUST BE ACCOMPANIED BY A SIGNED CERTIFICATION FORM)
 
<TABLE>
<S>               <C>                                          <C>
                                                  STOCK INFORMATION CENTER
  OFFICE USE      Date Rec'd //                                Order #  Batch #
</TABLE>
                                               Fairfield Savings Bank, F.S.B.
                                                          1190 RFD
<TABLE>
<S>               <C>                                          <C>
                  Check #                                      Category
</TABLE>
                                                 Long Grove, Illinois 60047
                                                       (847) 634-2100
<TABLE>
<S>               <C>                                          <C>
                  Amount $                                     Initials
</TABLE>
<PAGE>
Item (6)a, (6)b, (6)c (continued)
 
<TABLE>
<CAPTION>
       ACCOUNT TITLE [NAMES ON ACCOUNTS]                         ACCOUNT NUMBER(S)
<S>                                               <C>
 ...............................................  ................................................
 ...............................................  ................................................
 ...............................................  ................................................
 ...............................................  ................................................
 ...............................................  ................................................
 ...............................................  ................................................
</TABLE>
 
Item (11) (continued)
List below all other orders submitted by you or Associates (as defined below) or
by persons acting in concert with you.
 
<TABLE>
<CAPTION>
   NAME(S) LISTED ON OTHER STOCK ORDER FORMS                  NUMBER OF SHARES ORDERED
<S>                                               <C>
 ...............................................  ................................................
 ...............................................  ................................................
 ...............................................  ................................................
 ...............................................  ................................................
 ...............................................  ................................................
 ...............................................  ................................................
 ...............................................  ................................................
 ...............................................  ................................................
</TABLE>
 
"Associate" is defined as: (i) any corporation or organization (other than Big
Foot Financial Corp., Fairfield Savings Bank, F.S.B. or a majority-owned
subsidiary of Fairfield Savings Bank, F.S.B.) of which such person is a
director, officer or partner or is, directly or indirectly, either alone or with
one or more members of his or her immediate family, the beneficial owner of 10%
or more of any class of equity securities; (ii) any trust or other estate in
which such person has a substantial beneficial interest or as to which such
person serves as a trustee or in a similar fiduciary capacity, except that the
term "Associate" does not include Big Foot Financial Corp.'s or Fairfield
Savings Bank, F.S.B.'s employee stock benefit plans in which such person has a
substantial beneficial interest or serves as a trustee or in a similar fiduciary
capacity, and except that, for purposes of aggregating total shares that may be
acquired or held by officers and directors and their Associates, the term
"Associate" does not include any tax-qualified employee stock benefit plan; and
(iii) any relative or spouse of such person, or any relative of such spouse, who
either has the same home as such person or who is a director or officer of Big
Foot Financial Corp. or Fairfield Savings Bank, F.S.B. or any subsidiaries
thereof. Directors and officers of Big Foot Financial Corp. or Fairfield Savings
Bank, F.S.B. are not treated as associates solely by virtue of holding such
positions.
<PAGE>
      YOU MUST SIGN THE FOLLOWING CERTIFICATION IN ORDER TO PURCHASE STOCK
 
                               CERTIFICATION FORM
 
    I ACKNOWLEDGE THAT THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), AND IS
NOT GUARANTEED BY BIG FOOT FINANCIAL CORP., FAIRFIED SAVINGS BANK, F.S.B., THE
FEDERAL GOVERNMENT OR BY ANY GOVERNMENT AGENCY.
 
    If anyone asserts that this security is federally insured or guaranteed, or
is as safe as an insured deposit, I should call the Office of Thrift
Supervision, Regional Director, at the Central Regional Office at (312)
917-5000.
 
    I further certify that, before purchasing the common stock, par value $.01
per share, of Big Foot Financial Corp. (the "Company"), the proposed holding
company for Fairfield Savings Bank, F.S.B., I received a Prospectus of the
Company dated             , 1996 relating to such offer of common stock.
 
    The Prospectus that I received contains disclosure concerning the nature of
the common stock being offered by the Company and describes the risks involved
in the investment in this common stock, including but not limited to the:
<TABLE>
<CAPTION>
       1.  Potential Impact of Changes in Interest Rates                                                               (page)
<C>        <S>                                                                                                     <C>
       2.  Impact of the Economy on Operations                                                                         (page)
       3.  Competition                                                                                                 (page)
       4.  Recapitalization of the SAIF; SAIF Premiums and Possible Special Assessment                                 (page)
       5.  Recent Tax Legislation Regarding Tax Bad Debt Reserves                                                      (page)
       6.  Concentration in Mortgage-backed Securities                                                                 (page)
       7.  Impact of Technological Advances                                                                            (page)
       8.  Residential and Non-Residential Lending Risks                                                               (page)
       9.  Certain Anti-Takeover Provisions                                                                            (page)
      10.  Absence of Market for Common Stock and Recent Performance of Conversion Offerings                           (page)
      11.  Possible Increase in Estimated Price Range and Number of Shares Issued                                      (page)
      12.  Possible Dilutive Effect of Stock Options and Stock Programs                                                (page)
      13.  Possible Adverse Income Tax Consequences of the Distribution of Subscription Rights                         (page)
      14.  Financial Institution Regulation and Possible Legislation                                                   (page)
      15.  Risk of Delayed Offering                                                                                    (page)
 
<CAPTION>
       1.
<C>        <C>
       2.
       3.
       4.
       5.
       6.
       7.
       8.
       9.
      10.
      11.
      12.
      13.
      14.
      15.
</TABLE>
<TABLE>
<S>                                <C>                                <C>
Signature                                        Date                 Signature
Name (please print)                                                   Name (please print)
 
<CAPTION>
Signature                                        Date
Name (please print)
</TABLE>
<PAGE>
                            BIG FOOT FINANCIAL CORP.
                           STOCK OWNERSHIP GUIDE AND
                            ORDER FORM INSTRUCTIONS
                ------------------------------------------------
 
- ----------------------------
STOCK OWNERSHIP GUIDE
- --------------------------
 
INDIVIDUAL
 
Include the first name, middle initial and last name of the shareholder. Avoid
the use of two initials. Please omit words that do not affect ownership rights,
such as "Mrs.", "Mr.", "Dr.", "special account", "single person", etc.
 
JOINT TENANTS
 
Joint tenants with right of survivorship may be specified to identify two or
more owners. When stock is held by joint tenants with right of survivorship,
ownership is intended to pass automatically to the surviving joint tenant(s)
upon the death of any joint tenant. All parties must agree to the transfer or
sale of shares held by joint tenants.
 
TENANTS IN COMMON
 
Tenants in common may also be specified to identify two or more owners. When
stock is held by tenants in common, upon the death of one co-tenant, ownership
of the stock will be held by the surviving co-tenant(s) and by the heirs of the
deceased co-tenant. All parties must agree to the transfer or sale of shares
held by tenants in common.
 
UNIFORM TRANSFER TO MINORS OR UNIFORM GIFTS TO MINORS
 
For Illinois residents and residents of most other states, stock may be held in
the name of the custodian for the benefit of a minor under the Uniform Transfer
to Minors Act. For residents of many other states, stock may be held in a
similar type of ownership under the Uniform Gifts to Minors Act. For either
ownership, the minor is the actual owner of the stock with the adult custodian
being responsible for the investment until the minor reaches legal age. There
may be only one custodian and one minor designated on a stock certificate. The
standard abbreviation for Custodian is "CUST," while the Uniform Transfer to
Minors Act is "Unif Tran Min Act" and the Uniform Gifts to Minors Act is "Unif
Gift Min Act." Standard U.S. Postal Service state abbreviations should be used
to describe the appropriate state. For example, stock held by John Doe as
custodian for Susan Doe under the Illinois Uniform Transfer to Minors Act will
be abbreviated John Doe, CUST Susan Doe Unif Tran Min Act, IL (use minor's
social security number).
 
FIDUCIARY/TRUST
 
Information provided with respect to stock to be held in a fiduciary capacity
must contain the following:
 
- - The name(s) of the fiduciary. If an individual, list the first name, middle
  initial and last name. If a corporation, list the full corporate title (name).
  If an individual and a corporation, list the corporation's title before the
  individual.
 
- - The fiduciary capacity, such as administrator, executor, personal
  representative, conservator, trustee, committee, etc.
 
- - A description of the document governing the fiduciary relationship, such as a
  trust agreement or court order. Documentation establishing a fiduciary
  relationship may be required to register your stock in a fiduciary capacity.
 
- - The date of the document governing the relationship, except that the date of a
  trust created by a will need not be included in the description.
 
- - The name of the maker, donor or testator and the name of the beneficiary.
 
An example of fiduciary ownership of stock in the case of a trust is: John Doe,
Trustee Under Agreement Dated 10-1-87 for Susan Doe.
 
- --------------------------------------------------------------------
 
You may mail your completed Stock Order Form and Certification Form in the
envelope that has been provided, or you may deliver your Stock Order Form and
Certification Form to any branch of Fairfield Savings Bank, F.S.B. Your Stock
Order Form and Certification Form, property completed, and payment in full (or
withdrawal authorization) at the subscription price must be actually received by
Fairfield Savings Bank, F.S.B. no later than           , Central Time, on
            , 1996 or it will become void. If you have any remaining questions,
or if you would like assistance in completing your Stock Order Form and
Certification Form, you may call our Stock Information Center during the regular
business hours of the Bank's office located at 1190 RFD, Long Grove, Illinois,
no later than           , Central Time, on             , 1996.
- -----------------------------------------
INSTRUCTIONS
- --------------------------
 
ITEMS 1 AND 2--
 
Fill in the number of shares that you wish to purchase and the total payment
due. The amount due is determined by multiplying the number of shares by the
subscription price of $10.00 per share. The minimum purchase in the Subscription
and Community Offerings is 25 shares. In the Subscription Offering, the maximum
purchase by each Eligible Account Holder, Supplemental Eligible Account Holder
or Other Member is $150,000 (15,000 shares), and the maximum purchase in the
Community Offering by any person, together with associates or persons acting in
concert, is $150,000 (15,000 shares). However, no person, together with
associates and persons acting in concert with such person, may purchase in the
aggregate more than 1% of the shares offered. Based on the offering of 2,012,500
shares, 1% of the shares offered amounts to 20,125 shares. Eligible Account
Holders, Supplemental Eligible Account Holders, Other Members and Bank
Employees, desiring to purchase shares in the Community Offering, if any, must
do so by obtaining from the Stock Information Center an additional Stock Order
Form and submitting a completed additional Stock Order Form which indicates the
number of shares to be purchased in the Community Offering. Fairfield Savings
Bank, F.S.B. and Big Foot Financial Corp. have reserved the right to reject the
subscription of any order received in the Community Offering, in whole or in
part.
 
ITEM 3--
 
Please check this box to indicate whether you are a director, officer or
employee of Fairfield Savings Bank, F.S.B. or a member of such person's
immediate family.
 
ITEM 4--
 
Payment for shares may be made in cash (only if delivered by you in person) or
by check, bank draft or money order payable to Fairfield Savings Bank, F.S.B. No
wire transfers will be accepted. Your funds will earn interest at the Bank's
[passbook] rate of interest from the date of receipt until the Conversion is
completed or terminated. DO NOT MAIL CASH TO PURCHASE STOCK! Please check this
box if your method of payment is by check, bank draft or money order.
 
ITEM 5--
 
If you pay for your stock by a withdrawal from Fairfield Savings Bank, F.S.B.
deposit account, insert the account number(s) and the amount of your withdrawal
authorization for each account. The total amount withdrawn should equal the
amount of your stock purchase. There will be no penalty assessed for early
withdrawals from certificate accounts used for stock purchases. This form of
payment may not be used if your account is an Individual Retirement Account or
Qualified Plan.
 
ITEM 6--
 
a. Please check this box if you are an Eligible Account Holder, that is you had
a savings deposit account(s) totalling $50.00 or more on December 31, 1994.
 
b. Please check this box if you are a Supplemental Eligible Account Holder, that
is you had a savings deposit account(s) totaling $50.00 or more on September 30,
1996.
 
c. Please check this box if you are an Other Member, that is you had a savings
deposit account(s) as of             , 1996 or a borrower of Bank as of July 1,
1991.
 
d. Please check this box if you are a Bank Employee
 
Please list all names on the account(s) and all account number(s) of accounts
you had at these dates in order to insure proper identification of your purchase
rights. Please note: Failure to list your accounts may result in the loss of
part or all of your subscription rights.
 
ITEM 7, 8 AND 9--
 
The stock transfer industry has developed a uniform system of shareholder
registrations that we will use in the issuance of your Big Foot Financial Corp.
Common Stock. Please complete items 7, 8 and 9 as fully and accurately as
possible, and be certain to supply your social security or Tax I.D. number and
your daytime and evening telephone number(s). We will need to call you if we
cannot execute your order as given. If you have any questions regarding the
registration of your stock, please consult your legal advisor. Stock ownership
must be registered in one of the ways described above under the caption "Stock
Ownership Guide."
 
ITEM 10--
 
Please check this box if you are a member of the NASD or if this item otherwise
applies to you.
 
ITEM 11--
 
Please check this box if you or any associate (as defined on the reverse side of
the Stock Order Form) or person acting in concert with you has submitted another
order for shares and complete the reverse side of the Stock Order Form.
 
ITEMS 12 AND 13--
 
Please sign and date the Stock Order Form and Certification Form where
indicated. Before you sign, review the Stock Order Form, including the
acknowledgement, and the Certification Form. Normally, one signature is
required. An additional signature is required only when payment is to be made by
withdrawal from a deposit account that requires multiple signatures to withdraw
funds.
<PAGE>


                                     EX-99.2
                         Form of Marketing Materials


                                      Logo
                         Fairfield Savings Bank, F.S.B.

November __,  1996

Dear Valued Customer,

The Board of Directors of Fairfield Savings Bank, F.S.B. (the "Bank") has voted
unanimously in favor of a plan to convert the Bank from a federally chartered
mutual savings bank to a federally chartered stock savings bank (the
"Conversion"). As a stock company, the Bank will be structured under the same
form of ownership used by most businesses and banks. This Conversion to stock
ownership will increase the Bank's capital which will enable the Bank to support
future banking activities. The Conversion will not affect your savings deposit
accounts or loans with the Bank or existing FDIC insurance coverage for your
savings deposit accounts.

As part of the Conversion, the Bank has formed a holding company, Big Foot
Financial Corp. (the "Company"), which will own all of the common stock of the
Bank. The Company is offering up to 2,012,500 shares of its common stock to
certain customers of the Bank at a subscription price of $10.00 per share. As a
depositor on either December 31, 1994, September 30, 1996, or _________, 1996,
or a borrower on ____________, 1996 whose loans have been outstanding since July
1, 1991. you have a preferential right to subscribe to purchase the common stock
of the Company during the Subscription Offering without paying a fee or
commission. For your convenience, the enclosed packet contains the following
materials:

o     PROXY STATEMENT, which includes a PROSPECTUS: These will provide you with
      information about your right to vote on the Conversion, an overview of the
      Bank's operations and details on the proposed stock offering. Please read
      them carefully.

o     PROXY QUESTIONS AND ANSWERS: This brochure highlights key information
      found in the Proxy Statement. It also gives instructions for completing
      your proxy card.

o     PROXY CARD: Please sign, date, and return the proxy card in the enclosed
      [color of envelope] postage-paid envelope. Your family may have received
      more than one card. All cards should be signed and returned.

o     STOCK QUESTIONS AND ANSWERS: This brochure answers key questions about the
      Conversion.

o     STOCK ORDER FORM and CERTIFICATION FORM to be completed in order to
      purchase shares of the Company stock. Payment by check or written
      authorization to withdraw from a specified Bank account must accompany
      each stock order form and certification. This order must be received by
      the Company no later than 12:00 Noon, Central Time, on ____________, 1996.

On behalf of the Board, we ask that you help the Bank take this important step
by signing the enclosed proxy card(s) and casting your vote in favor of the Plan
of Conversion. Your vote is very important! Please mail your proxy card(s) today
in the enclosed [color of envelope] postage-paid return envelope.

If you would like to purchase the Company stock in your IRA account, using IRA
funds, we may be able to accommodate you. Please contact the Stock Information
Center as soon as possible at (847) _____.

We believe it is in the best interests of the Bank to have our customers as our
stockholders. We encourage you to review this investment opportunity carefully.
If you have any questions, please call the Stock Information Center at (847)
_____.

Sincerely,


George M. Briody
President

Enclosures

M

      This letter is neither an offer to sell nor a solicitation of an offer to
buy the common stock. The offer is made only by the Prospectus, copies of which
may be obtained by contacting the Stock Information Center.

      The shares of common stock offered in the conversion are not savings
accounts or deposits and are not insured by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency.

<PAGE>

                                      Logo
                         Fairfield Savings Bank, F.S.B.

November __,  1996

Dear Friend,

The Board of Directors of Fairfield Savings Bank, F.S.B. (the "Bank") has voted
unanimously in favor of a plan to convert the Bank from a federally chartered
mutual savings bank to a federally chartered stock savings bank (the
"Conversion"). As a stock company, the Bank will be structured under the same
form of ownership used by most businesses and banks. This Conversion to stock
ownership will increase the Bank's capital which will enable the Bank to support
future banking activities.

As part of the Conversion, the Bank has formed a holding company, Big Foot
Financial Corp. (the "Company"), which will own all of the common stock of the
Bank. The Company is offering up to 2,012,500 shares of its common stock to
certain customers of the Bank at a subscription price of $10.00 per share. As a
former depositor of the Bank on either December 31, 1994, September 30, 1996, or
_________, 1996, or a borrower on ___________, 1996 whose loans have been
outstanding since July 1, 1991, you have a preferential right to subscribe to
purchase the common stock of the Company during the Subscription Offering
without paying a fee or commission. For your convenience, the enclosed packet
contains the following materials:

o     PROSPECTUS: This document provides detailed information about the Bank's
      operations and the proposed stock offering. Please read it carefully.

o     STOCK QUESTIONS AND ANSWERS: This brochure answers key questions about the
      Conversion.

o     STOCK ORDER FORM and CERTIFICATION FORM to be completed in order to
      purchase shares of the Company common stock. Payment by check or money
      order must accompany each stock order form and certification form. This
      order must be received by the Company no later than 12:00 Noon, Central
      Time, on ____________, 1996.

If you would like to purchase the Company's stock for your IRA account, using
IRA funds, we may be able to accommodate you. Please contact the Stock
Information Center as soon as possible at (847) _____.

We believe it is in the best interests of the Bank to have our customers as our
stockholders. We encourage you to review this investment opportunity carefully.
If you have any questions, please call the Stock Information Center at (847)
_____.

Sincerely,



George M. Briody
President

Enclosures

F

      This letter is neither an offer to sell nor a solicitation of an offer to
buy the common stock. The offer is made only by the Prospectus, copies of which
may be obtained by contacting the Stock Information Center.

      The shares of common stock offered in the conversion are not savings
accounts or deposits and are not insured by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency.

<PAGE>

                                      Logo
                         Fairfield Savings Bank, F.S.B.

November __,  1996

Dear Valued Customer,

The Board of Directors of Fairfield Savings Bank, F.S.B. (the "Bank") has voted
unanimously in favor of a plan to convert the Bank from a federally chartered
mutual savings bank to a federally chartered stock savings bank (the
"Conversion"). As a stock company, the Bank will be structured under the same
form of ownership used by most businesses and banks. This Conversion to stock
ownership will increase the Bank's capital which will enable the Bank to support
future banking activities. The Conversion will not affect your savings deposit
accounts or loans with the Bank or existing FDIC insurance coverage for your
savings deposit accounts.

If you are a current depositor of the Bank, you will find enclosed a proxy
statement and proxy card(s). On behalf of the Board, we ask that you help the
Bank take this important step by signing the enclosed proxy card(s) and casting
your vote in favor of the Plan of Conversion. Your vote is very important!
Please mail your proxy card(s) today in the enclosed postage-paid [color of
envelope] return envelope. For your convenience, the enclosed packet contains
the following materials:

o     PROXY STATEMENT: This gives detailed information about your right to vote
      on the Conversion. Please read it carefully.

o     PROXY QUESTIONS AND ANSWERS: This brochure highlights key information
      found in the Proxy Statement. It also gives instructions for completing
      your proxy card.

o     PROXY CARD: Please sign, date, and return the proxy card in the enclosed
      [color of envelope] postage-paid envelope. Your family may have received
      more than one card. All cards should be signed and returned.

Big Foot Financial Corp., the proposed holding company for the Bank, is making
an initial public offering of its common stock in connection with the
Conversion. However, we regret to inform you that we are unable to offer shares
of common stock in the offering to members of the Bank residing outside of the
United States. If you have any questions, please call the Stock Information
Center at (847) _____.

Sincerely,


George M. Briody
President

Enclosures

FOR


      This letter is neither an offer to sell nor a solicitation of an offer to
buy the common stock. The offer is made only by the Prospectus.

      The shares of common stock offered in the conversion are not savings
accounts or deposits and are not insured by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency.

<PAGE>

                                      Logo
                         Fairfield Savings Bank, F.S.B.

November __,  1996

Dear Valued Customer,

The Board of Directors of Fairfield Savings Bank, F.S.B. (the "Bank") has voted
unanimously in favor of a plan to convert the Bank from a federally chartered
mutual savings bank to a federally chartered stock savings bank (the
"Conversion"). As a stock company, the Bank will be structured under the same
form of ownership used by most businesses and banks. This Conversion to stock
ownership will increase the Bank's capital which will enable the Bank to support
future banking activities. The Conversion will not affect your savings deposit
accounts or loans with the Bank or existing FDIC insurance coverage for your
savings deposit accounts.

If you are a current depositor of the Bank, you will find enclosed a proxy
statement and proxy card(s). On behalf of the Board, we ask that you help the
Bank take this important step by signing the enclosed proxy card(s) and casting
your vote in favor of the Plan of Conversion. Your vote is very important!
Please mail your proxy card(s) today in the enclosed postage-paid [color of
envelope] return envelope. For your convenience, the enclosed packet contains
the following materials:

o     PROXY STATEMENT: This gives detailed information about your right to vote
      on the Conversion. Please read it carefully.

o     PROXY QUESTIONS AND ANSWERS: This brochure highlights key information
      found in the Proxy Statement. It also gives instructions for completing
      your proxy card.

o     PROXY CARD: Please sign, date and return the proxy card in the enclosed
      [color of envelope] postage-paid envelope. Your family may have received
      more than one card. All cards should be signed and returned.

Big Foot Financial Corp., the proposed holding company for the Bank, is making
an initial public offering of its common stock in connection with the
Conversion. However, the laws of your state would require us to register (1) Big
Foot Financial Corp. common stock to be issued in the offering or (2) an agent
of Big Foot Financial Corp. to solicit the sale of such stock. Because the
number of eligible subscribers in your state is not sufficiently large to
justify the expenses of such registration, we are unable to offer you shares of
common stock in the offering. If you have any questions, please call the Stock
Information Center at (847) _____.

Sincerely,


George M. Briody
President

Enclosures

DAR

      This letter is neither an offer to sell nor a solicitation of an offer to
buy the common stock. The offer is made only by the Prospectus.

      The shares of common stock offered in the conversion are not savings
accounts or deposits and are not insured by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency.

<PAGE>

                                      Logo
                         Fairfield Savings Bank, F.S.B.

November __,  1996

Dear Interested Investor,

The Board of Directors of Fairfield Savings Bank, F.S.B. (the "Bank") has voted
unanimously in favor of a plan to convert the Bank from a federally chartered
mutual savings bank to a federally chartered stock savings bank (the
"Conversion"). As a stock company, the Bank will be structured under the same
form of ownership used by most businesses and banks. This Conversion to stock
ownership will increase the Bank's capital and will enable the Bank to support
future banking activities.

As part of the Conversion, the Bank has formed a holding company, Big Foot
Financial Corp. (the "Company"), which will own all of the common stock of the
Bank. The Company is offering up to 2,012,500 shares of its common stock to
certain customers of the Bank at a subscription price of $10.00 per share. As an
interested investor in the common stock of the Company, you have requested some
information regarding the Bank and the Conversion. For your convenience, the
enclosed packet contains the following materials:

o     PROSPECTUS: This document provides detailed information about the Bank's
      operations and the proposed stock offering. Please read it carefully.

o     STOCK QUESTIONS AND ANSWERS: This brochure answers key questions about the
      Conversion.

We believe it is in the best interests of the Bank to have our customers as our
stockholders; therefore, we are not accepting orders from the local community or
general public until the conclusion of the subscription offering to customers
and members of the Bank, which is expected to occur on at 12:00 Noon, Central
Time, on ____________, 1996. If you have any questions, please call the Stock
Information Center at (847) _____.

Sincerely,


George M. Briody
President

Enclosures

I

      This letter is neither an offer to sell nor a solicitation of an offer to
buy the common stock. The offer is made only by the Prospectus, copies of which
may be obtained by contacting the Stock Information Center.

      The shares of common stock offered in the conversion are not savings
accounts or deposits and are not insured by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency.

<PAGE>

                            Big Foot Financial Corp.

November __,  1996

Dear Friend,

The Board of Directors of Fairfield Savings Bank, F.S.B. (the "Bank") has voted
unanimously in favor of a plan to convert the Bank from a federally chartered
mutual savings bank to a federally chartered stock savings bank (the
"Conversion"). As a stock company, the Bank will be structured under the same
form of ownership used by most businesses and banks. This Conversion to stock
ownership will increase the Bank's capital which will enable the Bank to support
future banking activities.

As part of the Conversion, the Bank has formed a holding company, Big Foot
Financial Corp. (the "Company"), which will own all of the common stock of the
Bank. The Company is offering up to 2,012,500 shares of its common stock to
certain customers of the Bank at a subscription price of $10.00 per share. As a
former depositor of the Bank on either December 31, 1994, September 30, 1996, or
_________, 1996, or a borrower on ______________, 1996 whose loans have been
outstanding since July 1, 1991, you have a preferential right to subscribe to
purchase the common stock of the Company during the Subscription Offering
without paying a fee or commission. For your convenience, the enclosed packet
contains the following materials:

o     PROSPECTUS: This document provides detailed information about the Bank's
      operations and the proposed stock offering. Please read it carefully.

o     STOCK QUESTIONS AND ANSWERS: This brochure answers key questions about the
      Conversion.

o     STOCK ORDER FORM and CERTIFICATION FORM to be completed in order to
      purchase shares of the Company common stock. Payment by check or money
      order must accompany each stock order form and certification form. This
      order must be received by the Company no later than 12:00 Noon, Central
      Time, on ____________, 1996.

If you would like to purchase the Company's stock for your IRA account, using
IRA funds, we may be able to accommodate you. Please contact the Stock
Information Center as soon as possible at (847) _____.

We believe it is in the best interests of the Bank to have our customers as our
stockholders. We encourage you to review this investment opportunity carefully.
If you have any questions, please call the Stock Information Center at (847)
_____.

Sincerely,


George M. Briody
President

Enclosures

FA

      This letter is neither an offer to sell nor a solicitation of an offer to
buy the common stock. The offer is made only by the Prospectus, copies of which
may be obtained by contacting the Stock Information Center.

      The shares of common stock offered in the conversion are not savings
accounts or deposits and are not insured by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency.

<PAGE>

                            Big Foot Financial Corp.

November __,  1996


Dear Valued Customer,

The Board of Directors of Fairfield Savings Bank, F.S.B. (the "Bank") has voted
unanimously in favor of a plan to convert the Bank from a federally chartered
mutual savings bank to a federally chartered stock savings bank (the
"Conversion"). As a stock company, the Bank will be structured under the same
form of ownership used by most businesses and banks. This Conversion to stock
ownership will increase the Bank's capital which will enable the Bank to support
future banking activities. The Conversion will not affect your savings deposit
accounts or loans with the Bank or existing FDIC insurance coverage for your
savings deposit accounts.

As part of the Conversion, the Bank has formed a holding company, Big Foot
Financial Corp. (the "Company"), which will own all of the common stock of the
Bank. The Company is offering up to 2,012,500 shares of its common stock to
certain customers of the Bank at a subscription price of $10.00 per share. As a
depositor on either December 31, 1994, September 30, 1996, or _________, 1996,
or a borrower on __________, 1996 whose loans have been outstanding since July
1, 1991,you have a preferential right to subscribe to purchase the common stock
of the Company during the Subscription Offering without paying a fee or
commission. For your convenience, the enclosed packet contains the following
materials:

o     PROXY STATEMENT, which includes a PROSPECTUS: These will provide you with
      information about your right to vote on the Conversion, an overview of the
      Bank's operations and details on the proposed stock offering. Please read
      them carefully.

o     PROXY QUESTIONS AND ANSWERS: This brochure highlights key information
      found in the Proxy Statement. It also gives instructions for completing
      your proxy card.

o     PROXY CARD: Please sign, date, and return the proxy card in the enclosed
      [color of envelope] postage-paid envelope. Your family may have received
      more than one card. All cards should be signed and returned.

o     STOCK QUESTIONS AND ANSWERS: This brochure answers key questions about the
      Conversion.

o     STOCK ORDER FORM and CERTIFICATION FORM to be completed in order to
      purchase shares of the Company's stock. Payment by check or written
      authorization to withdraw from a specified Bank account must accompany
      each stock order form and certification. This order must be received by
      the Company no later than 12:00 Noon, Central Time, on ____________, 1996.

On behalf of the Board, we ask that you help the Bank take this important step
by signing the enclosed proxy card(s) and casting your vote in favor of the Plan
of Conversion. Your vote is very important! Please mail your proxy card(s) today
in the enclosed [color of envelope] postage-paid return envelope.

If you would like to purchase the Company's stock in your IRA account, using IRA
funds, we may be able to accommodate you. Please contact the Stock Information
Center as soon as possible at (847) _____.

We believe it is in the best interests of the Bank to have our customers as our
stockholders. We encourage you to review this investment opportunity carefully.
If you have any questions, please call the Stock Information Center at (847)
_____.

Sincerely,


George M. Briody
President

Enclosures

MA

      This letter is neither an offer to sell nor a solicitation of an offer to
buy the common stock. The offer is made only by the Prospectus, copies of which
may be obtained by contacting the Stock Information Center.

      The shares of common stock offered in the conversion are not savings
accounts or deposits and are not insured by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency.

<PAGE>

                             Hovde Securities, Inc.

                     INVESTMENT BANKERS & FINANCIAL ADVISORS
                                  [Letterhead]

November __,  1996

Dear Members and Friends of Fairfield Savings Bank, F.S.B.,

At the request of Big Foot Financial Corp. (the "Company"), and Fairfield
Savings Bank, F.S.B. (the "Bank"), we have enclosed certain materials regarding
the offering of shares of Common Stock of the Company in connection with the
conversion of the Bank from a federally chartered mutual savings bank to a
federally chartered stock savings bank. The materials include a Prospectus, as
well as a stock order form and certification form, which offer you the
opportunity to subscribe for shares of Common Stock.

It is urged that you study these materials carefully. If you decide to subscribe
for shares, you must return the properly completed stock order form and signed
certification form along with full payment for the shares (or appropriate
instructions authorizing withdrawal from a savings deposit account at the Bank)
no later than 12:00 Noon, Central Time, on ____________, 1996 in the enclosed
postage-paid envelope or deliver it to any office of the Bank. If you have any
questions after reading the enclosed materials, please call the Stock
Information Center at (847) _____. The Stock Information Center is open during
the regular business hours of the Bank's office located at ______________,
Illinois.

We have been asked to supply these documents to you in view of certain
requirements of the securities laws of your jurisdiction. We should not be
understood as recommending or soliciting in any way any action by you with
regard to the enclosed materials.

Sincerely,

HOVDE SECURITIES, INC.

BS

      This letter is neither an offer to sell nor a solicitation of an offer to
buy the common stock. The offer is made only by the Prospectus, copies of which
may be obtained by contacting the Stock Information Center.

      The shares of common stock offered in the conversion are not savings
accounts or deposits and are not insured by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency.

<PAGE>

                                      Logo
                         Fairfield Savings Bank, F.S.B.

_____________, 1996

Dear Subscriber,

I want to thank you for your interest in Big Foot Financial Corp.'s common
stock. We are extremely proud of the support we received from our customers and
the community as we successfully completed the sale of xxx,xxx shares of common
stock.

As you purchased your stock with a check or cash, we are enclosing a check for
payment of the interest on those funds. Your stock certificate(s) are being
mailed directly to you from our Transfer Agent, XXXXXXXX.

Again, thank you for your interest. If you have any questions, please do not
hesitate to contact me.

Sincerely,


George M. Briody
President

<PAGE>

                                      Logo
                         Fairfield Savings Bank, F.S.B.

____________, 1996


Dear Subscriber:

I want to thank you for your interest in Big Foot Financial, Corp. common stock.
We are extremely proud of the support we received from our customers and the
community as we successfully completed the sale of xxx,xxx shares of common
stock.

However, due to the oversubscription of our common stock during the Subscription
Offering, we regret we were unable to fill a portion of your order. Enclosed is
a refund check for the amount of your order we were unable to fill plus
interest. The stock certificates for the balance of your order are being sent to
you directly from our transfer agent, XXXXXXX.

If you continue to be interested in acquiring common shares of Big Foot
Financial Corp., the stock should begin trading on the Nasdaq National Market on
or about ____________, 1996 under the symbol BFFC.

Again, thank you for your interest. If you have any questions, please do not
hesitate to contact me.

Sincerely,


George M. Briody
President

<PAGE>

                            Big Foot Financial Corp.

____________, 1996


Welcome Shareholder:

We are pleased to enclose the stock certificate that represents your share of
ownership in Big Foot Financial, Corp. As a shareholder, you have our commitment
to keep you informed of the Company's financial performance and condition.

Please examine your stock certificates to be certain that it is properly
registered and that it represents the correct number of shares that you have
purchased. If you have any questions or concerns about your certificate, you
should contact the Transfer Agent immediately at the following address:

                                (TRANSFER AGENT)
                             (Address & Telephone #)

Please remember that your certificate is a negotiable security which should be
kept in a secure place, such as a safe deposit box or on deposit with your
stockbroker.

On behalf of the Board of Directors and the employees of Big Foot Financial
Corp. and Fairfield Savings Bank, F.S.B., we would like to thank you for
supporting our offering.

Sincerely,


George M. Briody
President

The shares of Common Stock offered in the conversion are not savings accounts or
deposits and are not insured by the FDIC or any other government agency.

<PAGE>

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

                                    PROXYGRAM
                   {FAIRFIELD SAVINGS BANK, F.S.B. LETTERHEAD}

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

DEAR CUSTOMER:

OUR RECORDS INDICATE THAT YOUR VOTE ON FAIRFIELD SAVINGS BANK, F.S.B.'S PLAN OF
CONVERSION HAS NOT YET BEEN RECEIVED.

YOUR VOTE IS VERY IMPORTANT TO US. PLEASE ACT PROMPTLY! SIGN AND DATE ALL PROXY
CARDS YOU HAVE RECEIVED, INCLUDING THOSE YOU RECEIVED WITH THIS LETTER, AND MAIL
THEM IN THE ENCLOSED POSTAGE- PAID ENVELOPE OR DELIVER THEM TO ANY FAIRFIELD
OFFICE. YOUR PROPERLY EXECUTED PROXY CARD(S) MUST BE RECEIVED BY THE BANK NO
LATER THAN _____ P.M., CENTRAL TIME, ____________, 1996, THE DATE OF THE BANK'S
SPECIAL MEETING OF MEMBERS.

YOUR BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE PLAN OF CONVERSION AND
URGES YOU TO VOTE "FOR" THE PLAN.

REMEMBER, VOTING FOR THE PLAN OF CONVERSION DOES NOT OBLIGATE YOU TO BUY ANY
STOCK.

THE BALANCE, MATURITY AND WITHDRAWABILITY OF YOUR SAVINGS DEPOSITS WITH
FAIRFIELD SAVINGS BANK, F.S.B. WILL NOT CHANGE (UNLESS YOU ELECT TO PURCHASE
STOCK IN THE CONVERSION AND PAY FOR THE STOCK BY AUTHORIZING A WITHDRAWAL FROM A
FAIRFIELD DEPOSIT). SAVINGS DEPOSITS WILL REMAIN INSURED BY THE FDIC TO THE
MAXIMUM EXTENT PROVIDED BY LAW.

SHOULD YOU NEED FURTHER INFORMATION OR ASSISTANCE, PLEASE CALL OUR STOCK
INFORMATION CENTER AT (847) XXX-XXXX.

THANK YOU!

                             THE BOARD OF DIRECTORS
                                       OF
                         FAIRFIELD SAVINGS BANK, F.S.B.

      This does not constitute an offer to sell or a solicitation of an offer to
buy any shares of Big Foot Financial Corp. Common Stock offered in connection
with the conversion. Offers to sell and solicitations of offers to buy shares of
Big Foot Financial Corp. Common Stock in connection with the conversion are made
by means of the Prospectus. A prospectus may be obtained by calling the Stock
Information Center at (847) XXX-XXXX.

      The shares of Big Foot Financial Corp. Common Stock offered in the
conversion are not savings accounts or deposits and are not insured by the FDIC
or any other government agency.

<PAGE>

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

                                   STOCK GRAM
                   {FAIRFIELD SAVINGS BANK, F.S.B. LETTERHEAD}

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

DEAR CUSTOMER:

WE ARE PLEASED TO ANNOUNCE THAT BIG FOOT FINANCIAL CORP. IS OFFERING UP TO
_________ SHARES OF ITS COMMON STOCK IN CONNECTION WITH THE CONVERSION OF
FAIRFIELD SAVINGS BANK, F.S.B. ("FAIRFIELD") FROM A FEDERALLY CHARTERED MUTUAL
SAVINGS BANK TO A FEDERALLY CHARTERED STOCK SAVINGS BANK.

FAIRFIELD IS CONVERTING TO INCREASE ITS CAPITAL AND TO STRUCTURE ITSELF IN A
FORM USED BY COMMERCIAL BANKS AND MANY OTHER BUSINESS ENTITIES AND A GROWING
NUMBER OF SAVINGS INSTITUTIONS. WE PREVIOUSLY MAILED YOU A SUBSCRIPTION AND
COMMUNITY OFFERING PROSPECTUS PROVIDING YOU DETAILED INFORMATION ABOUT FAIRFIELD
AND THE PROPOSED STOCK OFFERING. WE ASK YOU TO PLEASE READ THESE MATERIALS.

WE INVITE OUR LOYAL CUSTOMERS TO BECOME CHARTER SHAREHOLDERS OF BIG FOOT
FINANCIAL CORP. IF YOU ARE INTERESTED IN PURCHASING SHARES OF COMMON STOCK, YOU
MUST SUBMIT YOUR STOCK ORDER FORM, CERTIFICATION FORM AND PAYMENT PRIOR TO 12:00
P.M., _______________, 1996.

IF YOU HAVE ANY QUESTIONS REGARDING THE STOCK OFFERING PLEASE CALL THE STOCK
INFORMATION CENTER AT (847) XXX-XXXX OR STOP BY OUR OFFICE LOCATED AT
____________________________, ILLINOIS.

THANK YOU!

                             THE BOARD OF DIRECTORS
                                       OF
                         FAIRFIELD SAVINGS BANK, F.S.B.

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

      This does not constitute an offer to sell or the solicitation of an offer
to buy any shares of Big Foot Financial Corp. Common Stock offered in connection
with the Conversion. Offers to sell and solicitations of offers to buy shares of
Big Foot Financial Corp. Common Stock in connection with the Conversion are made
only by means of the Prospectus. A Prospectus may be obtained by calling the
Stock Information Center at (847) XXX-XXXX.

      The shares of Common Stock offered in the Conversion are not savings
accounts or deposits and are not insured by the FDIC or any other government
agency.

<PAGE>

                                      STOCK
                                    QUESTIONS
                                        &
                                     ANSWERS


                            Big Foot Financial Corp.
                                     [Logo]

<PAGE>

                              QUESTIONS AND ANSWERS
                                 ABOUT INVESTING

You can be one of the charter shareholders of Big Foot Financial Corp. (the
"Company"), the proposed holding company of Fairfield Savings Bank, F.S.B. (the
"Bank"). The Company is "going public" as part of the Bank's conversion to a
federally chartered stock savings bank (the "Conversion"). Now you have the
opportunity to become an owner of your bank. This brochure answers some of the
most frequently asked questions about the conversion to stock ownership and
about your opportunity to invest in the Company.

Investment in common stock involves certain risks. For a discussion of these
risks and other factors, investors are urged to read the accompanying
Prospectus.

                              ABOUT THE TRANSACTION

What is a conversion?

The Bank presently operates as a federally chartered mutual savings bank. It has
no shareholders, and its directors are elected by our member savers and certain
borrowers. After the Conversion, we will be a federally chartered stock savings
bank owned by a holding company. This holding company, Big Foot Financial Corp.,
will be owned by shareholders who will have voting rights with respect to
certain key business matters. The Company is offering shares of its common stock
to the Bank's members and the Company's stock benefit plans, including an
employee stock ownership plan, which is being established in connection with the
Conversion. Any shares that remain unsold may then be offered to members of the
general public.

What is Big Foot Financial Corp. and why is it being formed?

The Company is a newly organized Illinois holding company created by the Bank
specifically to purchase 100% ownership of the Bank upon its conversion to stock
form. The holding company is offering shares of its Common Stock for sale to the
Bank's members and, if shares are available, to the general public. All of the
common stock to be issued by the Bank will be owned by the Company. The
additional capital provided through the offering of the Company's stock will
support future lending activities and local expansion of the financial services
currently offered through the Bank.

What are the benefits of conversion?

The Conversion and sale of stock will increase the Bank's capital and enable it
to:

      o     Enhance its ability to access capital markets;

      o     Expand its current operations;

      o     Acquire other financial institutions or branch offices;

      o     Provide affordable home financing opportunities to the communities
            it serves; and

      o     Diversify into other financial services to the extent allowable by
            applicable law.


                                    Stock - 2

<PAGE>

Will the Conversion have any effect on my savings or loan accounts?

No. The Conversion will not affect the amount, interest rate or withdrawal
rights of your deposit accounts (unless you elect to purchase stock in the
Conversion and pay for your stock by authorizing a withdrawal from an account at
the Bank). Deposit accounts at the Bank will continue to be insured by the
Federal Deposit Insurance Corporation (the "FDIC") to the maximum legal limit.
Your savings deposit accounts are not being converted to stock. The rights and
obligations of borrowers under their loan agreements also will not be affected.

How do I benefit from the Conversion?

The Conversion is expected, among other things, to enable the Bank to provide
the customers and communities it serves with a higher level of service and
access to a broader variety of financial products and services. Also, while you
are not obligated to become a shareholder of the Company, you will have the
opportunity to purchase shares at the initial public offering price and at no
commission cost to you.

                                 ABOUT INVESTING

Who may purchase stock?

The Company is currently conducting a Subscription Offering. All of the persons
listed below may subscribe to purchase common stock during the Subscription
Offering.

      o     Eligible Account Holders. Persons who had savings deposits totaling
            $50 or more at the Bank on the Eligibility Record Date, December 31,
            1994;

      o     Employee Stock Ownership Plan of the Company;

      o     Supplemental Eligible Account Holders. Persons who had savings
            deposits totaling $50 or more at the Bank on the Supplemental
            Eligibility Record Date, September 30, 1996, but not as of December
            31, 1994 (and not including directors, officers or their
            associates);

      o     Other Members. Depositors and certain borrowers (those whose loans
            were outstanding on July 1, 1991) on the Voting Record Date,
            _________, 1996, other than Other Members who would otherwise
            qualify as Eligible Account Holders or Supplemental Eligible Account
            Holders; and

      o     Bank Employees. Employees and officers of the Bank, other than those
            employees and officers who would otherwise qualify as Eligible
            Account Holders, Supplemental Eligible Account Holders or Other
            Members.

The Company may also conduct a direct Community Offering after the Subscription
Offering, with a first preference given in the direct Community Offering to
natural persons residing in the counties in which the Bank has offices.

What is the price per share and how many shares are being offered?

The aggregate value of the Company's stock has been determined by Capital
Resources Group, Inc., an independent, nationally recognized appraisal firm. The
Subscription Price per share is $10.00. Up to 2,012,500 shares or, under certain
circumstances, up to 2,314,375 shares are being offered for sale.


                                    Stock - 3
<PAGE>

Will everyone pay the same price for the stock?

Yes. All the subscribers, including the Board of Directors and management, pay
the same price during the Subscription Offering.

Are depositors obligated to buy stock?

No. But our members receive a priority subscription right to purchase the common
stock.

How much common stock may I purchase?

The minimum purchase is 25 shares, or $250. The maximum amount which an
individual (or individuals exercising subscription rights through a single
account at the Bank) may purchase in the Subscription Offering is $150,000. The
maximum that an individual may purchase in the Community Offering is also
$150,000. No individual, together with associates and persons acting in concert,
may purchase in the Offering more than 1% of the stock sold.

The Prospectus sections entitled "The Conversion--Subscription Offering and
Subscription Rights" and "--Community Offering" more fully describe the purchase
limits and the stock allocation procedures in case of oversubscription.

Is the stock insured by the FDIC?

No. Like any other common stock, the Company's stock will not be insured.
However, your savings deposit accounts will continue to be insured up to the
maximum amount allowed by the FDIC.

How do I order stock, and what methods can be used for payment of my stock
purchases?

Complete the stock order form and certification form as instructed. Make sure to
indicate the number of shares you wish to purchase and the total amount remitted
(multiply the number of shares subscribed for by $10.00 per share). Total
payment must accompany the order form and certification form and be received by
the Bank prior to 12:00 Noon, Central Time, on ____________, 1996. The payment
options for stock purchases are as follows:

      o     Check or money order sent or delivered to any of the Bank's offices
            or the Stock Information Center. If payment is made by check or
            money order, interest will be earned at the rate of interest paid by
            the Bank on passbook accounts from the date of receipt until the
            Conversion is completed or terminated.

      o     Withdrawal of funds from an existing account at the Bank in an
            amount equal to the purchase price for all shares subscribed for.
            Once authorization for withdrawal of funds has been made, the
            subscriber may not withdraw the designated amount unless the Plan of
            Conversion is terminated or as otherwise required by regulatory
            authorities. All funds maintained in savings deposit accounts will
            continue to be insured by the FDIC up to legally applicable limits
            and will earn interest until closing of the Conversion. There will
            not be a penalty for early withdrawal of certificate accounts for
            stock purchases in the Subscription Offering.

      o     IRA purchases. If you wish to purchase shares of the Company's stock
            for an IRA account, either at the Bank or elsewhere, we may be able
            to accommodate you. Please contact the Stock Information Center at
            (847) _____ so that we may assist you with the appropriate
            procedures for such a purchase. Transfer of such funds takes time,
            so please make arrangements as soon as possible.


                                    Stock - 4
<PAGE>

In the future, how may I purchase more shares or sell my shares?

The Company has applied to have its common stock quoted on The Nasdaq National
Market under the symbol "Big Foot Financial Corp." If the common stock is quoted
on The Nasdaq National Market, most brokers should be able to assist you with
future purchases and sales. However, the marketability of the common stock will
depend upon the presence in the marketplace of both willing buyers and willing
sellers at a given time, and no assurance can be given that an active trading
market will develop.

When will I receive my stock certificate(s)?

Stock certificates will be mailed by the Company's transfer agent as soon as
practicable after the Conversion is completed. Please be aware that you may not
be able to sell the shares that you purchased until you receive your
certificate(s).

Will there be any dividends?

The Board of Directors of the Company initially does not intend to pay a cash
dividend. Any future dividend policy will be determined by the Board of
Directors and will take into account various regulatory restrictions, earnings
and market conditions, among other factors.

May I change my mind?

The stock order form you execute cannot be canceled or withdrawn. However, you
may order additional shares by completing another stock order form.

Are my subscription rights transferable?

No. No person may transfer or enter into any agreement to transfer the
subscription rights issued under the Plan of Conversion, or the shares to be
issued upon their exercise. Persons violating such prohibition may lose their
right to purchase stock in the Conversion.

How may I get more information?

We hope that these questions and answers will help you to better understand the
Conversion and the stock offering. If you desire further information, please
contact our Stock Information Center at (847) _____.


                                    Stock - 5
<PAGE>

                            Big Foot Financial Corp.
                                     [Logo]

                            STOCK INFORMATION CENTER
                                    1190 RFD
                           Long Grove, Illinois 60047
                                 (847) 634-2100

      This does not constitute an offer to sell or the solicitation of an offer
to buy any shares of Common Stock of the Company offered in connection with the
Conversion, nor does it constitute the solicitation of a proxy in connection
with the Conversion. Offers to sell and solicitations of offers to buy shares of
the Company Common Stock in connection with the Conversion are made only by
means of the Prospectus. Solicitations of proxies in connection with the
Conversion are made only by means of the Proxy Statement. There shall be no sale
of the Company Common Stock in any state or jurisdiction in which any offer,
solicitation of an offer or sale of the Company Common Stock would be unlawful
prior to the registration or qualification of such shares under the securities
laws of any such state or jurisdiction. A Prospectus and a Proxy Statement may
be obtained by calling the Bank's Stock Information Center at (847) _____.

      THE SHARES OF THE COMPANY'S COMMON STOCK OFFERED IN THE CONVERSION ARE NOT
SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION (FDIC) OR ANY OTHER GOVERNMENT AGENCY.


                                    Stock - 6
<PAGE>

                                      PROXY
                                    QUESTIONS
                                        &
                                     ANSWERS


                         Fairfield Savings Bank, F.S.B.
                                     [Logo]

<PAGE>

                              QUESTIONS AND ANSWERS
                                  ABOUT VOTING
                              ABOUT THE TRANSACTION

What is a conversion?

Fairfield Savings Bank, F.S.B. (the "Bank") presently operates as a federally
chartered mutual savings bank. It has no shareholders and its directors are
elected by our member savers and certain borrowers. After the Conversion, we
will be a federally chartered stock savings bank owned by a holding company.
This holding company, Big Foot Financial Corp. (the "Company"), will be owned by
shareholders who will have voting rights with respect to certain key business
matters. The Company is offering shares of its common stock to the Bank's
members and the Company's employee stock benefit plans, including an employee
stock benefit plans, including an employee stock ownership plan, which is being
established in connection with the Conversion. Any shares that remain unsold may
then be offered to members of the general public.

What is the Company and why is it being formed?

The Company is a newly organized holding company created by the Bank
specifically to purchase 100% ownership of the Bank upon its conversion to stock
form. The Company is offering shares of its Common Stock for sale to the Bank's
members and, if shares are available, to the general public. All of the common
stock to be issued by the Bank will be owned by the Company. The additional
capital provided through the offering of the Company stock will support future
lending activities and local expansion of the financial services currently
offered through the Bank.

What are the benefits of conversion?

The Conversion and sale of stock will increase the Bank's capital and enable it
to:

      o     Enhance its ability to access capital markets:

      o     Expand its current operations;

      o     Acquire other financial institutions or branch offices;

      o     Provide affordable home financing opportunities to the communities
            it serves; and

      o     Diversify into other financial services to the extent allowable by
            applicable law.

Will the Conversion have any effect on my savings or loan account?

No. The Conversion will not affect the amount, interest rate or withdrawal
rights of your deposit account (unless you purchase stock in the Conversion and
pay for your stock by authorizing a withdrawal from an account at the Bank).
Deposit accounts at the Bank will continue to be insured by the Federal Deposit
Insurance Corporation (the "FDIC" ) to the maximum legal limit. Your savings
deposit accounts are not being converted to stock. The rights and obligations of
borrowers under their loan agreements also will not be affected.

How do I benefit from the Conversion?

The Conversion is expected, among other things, to enable the Bank to provide
the customers and communities it serves with a higher level of service and
access to a broader variety of financial products


                                    Proxy - 1
<PAGE>

and services. Also, while you are not obligated to become a shareholder of the
Company, you will have the opportunity to purchase shares at the initial public
offering price and at no commission cost to you.

                          ABOUT MEMBERS' VOTING RIGHTS

Who is eligible to vote on the Plan of Conversion?

Depositors on the Voting Record Date, which is _________, 1996, as well as
certain borrowers (those whose loans were outstanding on July 1, 1991) as of the
Voting Record Date, who will continue as such through the date of the Special
Meeting.

How was my number of votes determined?

Each savings deposit account holder is entitled to cast one vote for each $100,
or fraction thereof, of the aggregate withdrawal value of all such account
holder's savings accounts on the Voting Record Date. Each borrower member is
entitled to one vote as a borrower in addition to any votes he or she is
entitled to as a saver. The maximum number of votes per member is 1,000.

If I vote for the Plan of Conversion on the proxy will I be obligated to
purchase stock?

No. Signing the proxy card and voting for the Conversion in no way obligates you
to purchase stock. However, all members are urged to vote for the Conversion.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE PLAN OF CONVERSION AND
RECOMMENDS MEMBERS VOTE "FOR" APPROVAL OF THE PLAN OF CONVERSION.

Am I required to vote?

No. However, failure to vote is the same as voting against the Conversion.
Therefore, all members are urged to vote for the Conversion.

May I come to the Special Meeting and vote?

Yes. However, we encourage you to send a proxy card even if you plan to attend
the meeting. The proxy card is revocable and can be changed by voting a later
dated proxy or ballot at the meeting.

Why did I receive several proxy cards?

If you have more than one account, you could receive more than one proxy card,
depending on the ownership strength of your accounts. PLEASE VOTE, SIGN AND
RETURN ALL PROXY CARDS!

Must both parties on a joint savings account sign the proxy card?

No.  Only one signature is required, but both parties should sign if possible.

If I don't buy stock may I still vote at the Bank's annual meetings?

After Conversion, all of the outstanding capital stock of the Bank will be owned
and voted by the Company. Only shareholders of the Company will have voting
rights at the Company's annual meetings and as to certain business decisions
affecting the Company. However, the operations of the Bank and the general terms
and balances of your savings deposit accounts and loans remain unchanged.


                                    Proxy - 2
<PAGE>

How may I get more information?

We hope that these questions and answers will help you to better understand the
Conversion. If you desire further information, please contact our Stock
Information Center at (847) _____.

                             VOTE YES FOR CONVERSION

                                YOUR VOTE COUNTS!

      The Board of Directors of the Bank has unanimously adopted a plan to
convert the Bank from a mutual savings bank to a stock savings bank. The Board
of Directors concluded that the Conversion would be in the best interests of the
Bank, its depositors, borrowers and the communities served by the Bank. As a
member of the Bank, you have the right to vote on the Bank's plan to convert to
the stock form of organization. Further details on the Conversion, including the
background and reasons for the Conversion, are contained in the Proxy Statement.
Please read it carefully.

                         HOW TO COMPLETE THE PROXY CARD

1.    Check the appropriate box. Your Board of Directors unanimously recommends
      voting "FOR" the Conversion.

2.    Enter the date on the Proxy Card.

3.    Sign the Proxy Card.

4.    Return your completed Proxy Card in the postage-paid [color of envelope]
      envelope provided, or bring it to the Bank office most convenient for you.

5.    Please complete and return all Proxy Cards you receive.


                                    Proxy - 3
<PAGE>

                         Fairfield Savings Bank, F.S.B.
                                     [Logo]

                            STOCK INFORMATION CENTER
                                    1190 RFD
                           Long Grove, Illinois 60047
                                 (847) 634-2100

      This does not constitute an offer to sell or the solicitation of an offer
to buy any shares of Common Stock of Big Foot Financial Corp. offered in
connection with the Conversion, nor does it constitute the solicitation of a
proxy in connection with the Conversion. Offers to sell and solicitations of
offers to buy shares of Big Foot Financial Corp. Common Stock in connection with
the Conversion are made only by means of the Prospectus. Solicitations of
proxies in connection with the Conversion are made only by means of the Proxy
Statement. There shall be no sale of Big Foot Financial Corp. Common Stock in
any state or jurisdiction in which any offer, solicitation of an offer or sale
of Big Foot Financial Corp. Common Stock would be unlawful prior to the
registration or qualification of such shares under the securities laws of any
such state or jurisdiction. A Prospectus and a Proxy Statement may be obtained
by calling the Bank's Stock Information Center at (847) _____.

      THE SHARES OF BIG FOOT FINANCIAL CORP. COMMON STOCK OFFERED IN THE
CONVERSION ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR ANY OTHER GOVERNMENT AGENCY.


                                    Proxy - 4



© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission