AMCORE FINANCIAL INC
S-4, 1998-02-18
NATIONAL COMMERCIAL BANKS
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<PAGE>   1
 
   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 18, 1998
                                                 REGISTRATION NO. 333-
================================================================================
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                    FORM S-4
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------
 
                             AMCORE FINANCIAL, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
                                     NEVADA
                        (STATE OR OTHER JURISDICTION OF
                         INCORPORATION OR ORGANIZATION)
 
                                      6022
                          (PRIMARY STANDARD INDUSTRIAL
                          CLASSIFICATION CODE NUMBER)
 
                                   36-3183870
                                (I.R.S. EMPLOYER
                              IDENTIFICATION NO.)
 
                               501 SEVENTH STREET
                            ROCKFORD, ILLINOIS 61104
                                 (815) 968-2241
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
 
                            ------------------------
 
                                 JOHN R. HECHT
                            EXECUTIVE VICE PRESIDENT
                             AMCORE FINANCIAL, INC.
                               501 SEVENTH STREET
                            ROCKFORD, ILLINOIS 61104
                                 (815) 968-2241
 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                             OF AGENT FOR SERVICE)
 
                            ------------------------
 
                                   COPIES TO:
 
<TABLE>
<S>                                                   <C>
               WILLIAM R. KUNKEL, ESQ.                             CHRISTOPHER J. ZINSKI, ESQ.
   SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)                    SCHIFF HARDIN & WAITE
                333 WEST WACKER DRIVE                                   7300 SEARS TOWER
               CHICAGO, ILLINOIS 60606                               CHICAGO, ILLINOIS 60606
                   (312) 407-0700                                        (312) 258-5548
</TABLE>
 
                            ------------------------
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective.
    If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box.  [ ]
 
                            ------------------------
 
                        CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                    <C>                    <C>                    <C>
- ---------------------------------------------------------------------------------------------------------------------------------
 
<CAPTION>
                                                                 PROPOSED MAXIMUM       PROPOSED MAXIMUM           AMOUNT OF
       TITLE OF EACH CLASS OF                  AMOUNT             OFFERING PRICE            AGGREGATE          REGISTRATION FEE
     SECURITIES BEING REGISTERED         BEING REGISTERED(1)        PER UNIT(2)         OFFERING PRICE(2)           (2),(3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                    <C>                    <C>                    <C>
Common Stock ($0.22 par value).......     1,910,889 shares           $29.3125              $47,747,835              $4,931
- ---------------------------------------------------------------------------------------------------------------------------------
Share Purchase Rights................     1,910,889 rights              (4)                    (4)                    (4)
=================================================================================================================================
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
 
(1) Estimated solely for the purpose of calculating the registration fee. The
    amount being registered represents the maximum number of shares of common
    stock of AMCORE Financial, Inc. ("AMCORE") and associated share purchase
    rights that may be issued in connection with the conversion and exchange of
    all outstanding shares of common stock of Midwest Federal Financial Corp.
    ("Midwest"), subject to adjustment pursuant to the Merger Agreement, as
    described herein.
(2) Estimated solely for purposes of calculating the registration fee pursuant
    to Rule 457(f)(1) based upon the average of the high ($30.00) and low
    ($28.625) per share prices of Midwest Common Stock as reported on the Nasdaq
    National Market on February 13, 1997 ($29.3125) and the 1,628,924 shares of
    Midwest Common Stock which are to be received by the Registrant or cancelled
    in the transaction discussed herein.
(3) In accordance with Rule 457(b), the registration fee paid herewith has been
    reduced by $9,155, which is the amount of the fee previously paid in
    connection with the Schedule 14A filed with the Commission on January 12,
    1998.
(4) The value attributable to the share purchase rights is reflected in the
    market price of the AMCORE Common Stock to which the Rights are attached.
 
                            ------------------------
 
    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 SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE>   2
 
                                  MIDWEST LOGO
 
                        MIDWEST FEDERAL FINANCIAL CORP.
                               1159 EIGHTH STREET
                            BARABOO, WISCONSIN 53913
 
                            ------------------------
 
                                                               February 23, 1998
 
Dear Shareholder:
 
     You are cordially invited to attend a Special Meeting of the Shareholders
(the "Special Meeting") of Midwest Federal Financial Corp. ("Midwest") to be
held on Wednesday, March 25, 1998 at 1:00 p.m., central time, at Midwest's
offices, 1159 Eighth Street, Baraboo, Wisconsin.
 
     At the Special Meeting, you will be asked to approve an Agreement and Plan
of Reorganization, dated as of November 11, 1997, and as amended (the "Merger
Agreement"), by and among AMCORE Financial, Inc. ("AMCORE"), MF Acquisition
Corp. ("Newco") and Midwest, and a related Plan of Merger, dated as of November
11, 1997 (the "Plan of Merger"), by and between Newco and Midwest, under the
terms of which AMCORE will acquire Midwest through a merger transaction (the
"Merger").
 
     Under the terms of the Merger Agreement and the Plan of Merger and upon
consummation of the Merger, (i) Newco will merge with and into Midwest, with
Midwest being the surviving corporation in the Merger, and (ii) each outstanding
share of common stock, par value $0.01 per share, of Midwest ("Midwest Common
Stock") (other than shares of Midwest Common Stock held by Midwest as treasury
stock immediately prior to the Effective Time (as defined in the Merger
Agreement) and shares of Midwest Common Stock held by AMCORE, Newco, or any
direct or indirect subsidiary of AMCORE, which shares will be cancelled, and
other than shares of Midwest Common Stock held by shareholders of Midwest who
have properly exercised their dissenters' rights under Wisconsin law) will be
cancelled and converted into the right to receive a number of shares of common
stock, par value $0.22 per share, of AMCORE ("AMCORE Common Stock"), to be
determined pursuant to an exchange ratio (the "Exchange Ratio") which is based
upon the average per share closing price of AMCORE Common Stock as reported on
the Nasdaq National Market for the period of twenty trading days ending at the
end of the third trading day immediately preceding the date of the Special
Meeting. A description of the procedure to be used in determining the Exchange
Ratio, together with other important information, is contained in the
accompanying Midwest Proxy Statement and AMCORE Prospectus ("Proxy
Statement/Prospectus"). Your Board of Directors has received a written fairness
opinion from its financial advisor, Edelman & Co., Ltd., dated the date of the
attached Proxy Statement/Prospectus, that, as of such date, and based upon
matters considered as set forth in such opinion, the exchange ratio with AMCORE
is fair, from a financial point of view, to Midwest's shareholders.
 
     The Merger Agreement and the transactions contemplated thereby are
described in greater detail in the accompanying Notice and Proxy
Statement/Prospectus and its various attachments. I encourage you to read these
materials carefully.
 
     In addition, you will be asked to consider and vote upon a proposal to
adjourn the Special Meeting in the event that Midwest's management determines in
its sole discretion, at the time of the Special Meeting, that such adjournment
is in the best interest of Midwest and its shareholders, which would include
adjourning the Special Meeting to enable management to solicit additional
proxies which may be necessary to ensure approval of the Merger Agreement and
the Plan of Merger.
 
     THE BOARD OF DIRECTORS OF MIDWEST HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE PLAN OF MERGER AS BEING IN THE BEST INTERESTS OF MIDWEST AND
ITS SHAREHOLDERS AND RECOMMENDS THAT HOLDERS OF
<PAGE>   3
 
MIDWEST COMMON STOCK VOTE IN FAVOR OF THE MERGER. IN MAKING THIS RECOMMENDATION,
THE BOARD OF DIRECTORS HAS CONSIDERED NUMEROUS FACTORS, WHICH ARE DESCRIBED IN
THE ATTACHED PROXY STATEMENT/PROSPECTUS.
 
     Whether or not you plan to attend the Special Meeting, holders of Midwest
Common Stock are asked to please fill out, sign, and date the enclosed proxy
card, and return it promptly in the accompanying envelope, which requires no
postage if mailed in the United States. If you later find that you may be
present at the Special Meeting or for any other reason desire to revoke your
proxy, you may do so at any time before it is voted.
                                          Sincerely,
 
                                          G. WEGNER SIGNATURE
                                          Gary E. Wegner
                                          President and Chief Executive Officer
<PAGE>   4
 
                                  Midwest Logo
 
                        MIDWEST FEDERAL FINANCIAL CORP.
                               1159 EIGHTH STREET
                            BARABOO, WISCONSIN 53913
                            ------------------------
 
                   NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
                          TO BE HELD ON MARCH 25, 1998
                            ------------------------
 
YOU ARE HEREBY NOTIFIED of and invited to attend a special meeting (the "Special
Meeting") of shareholders of Midwest Federal Financial Corp., a Wisconsin
corporation ("Midwest"), to be held at the principal offices of Midwest at 1159
Eighth Street, Baraboo, Wisconsin, on Wednesday, March 25, 1998, at 1:00 p.m.,
local time, for the purpose of considering and voting upon the following:
 
(1) A proposal to approve and adopt the Agreement and Plan of Reorganization,
     dated as of November 11, 1997, and as amended (the "Merger Agreement"),
     among AMCORE Financial, Inc., a Nevada corporation ("AMCORE"), MF
     Acquisition Corp., a Wisconsin corporation and a wholly-owned subsidiary of
     AMCORE ("Newco"), and Midwest, and a related Plan of Merger, dated as of
     November 11, 1997 (the "Plan of Merger"), by and between Newco and Midwest,
     and the transactions contemplated thereby, pursuant to which, among other
     things, (i) Newco will merge with and into Midwest, with Midwest being the
     surviving corporation in the merger (the "Merger"), and (ii) each
     outstanding share of common stock, par value $0.01 per share, of Midwest
     ("Midwest Common Stock") (other than shares of Midwest Common Stock held by
     Midwest as treasury stock immediately prior to the Effective Time (as
     defined in the Merger Agreement) and shares of Midwest Common Stock held by
     AMCORE, Newco, or any direct or indirect subsidiary of AMCORE, which shares
     will be cancelled, and other than shares of Midwest Common Stock held by
     shareholders of Midwest who have properly exercised their dissenters'
     rights under Wisconsin law) will be cancelled and converted into the right
     to receive a number of shares of common stock, par value $0.22 per share,
     of AMCORE ("AMCORE Common Stock"), to be determined pursuant to an exchange
     ratio (the "Exchange Ratio") which is based upon the average per share
     closing price of AMCORE Common Stock as reported on the Nasdaq National
     Market for the period of twenty trading days ending at the end of the third
     trading day immediately preceding the date of the Special Meeting. A
     description of the procedure to be used in determining the Exchange Ratio,
     together with other important information, is contained in the accompanying
     Midwest Proxy Statement and AMCORE Prospectus ("Proxy
     Statement/Prospectus").
 
(2) A proposal to adjourn the Special Meeting in the event that Midwest's
     management should determine in its sole discretion, at the time of the
     Special Meeting, that such adjournment is in the best interest of Midwest
     and its shareholders, which would include adjourning the Special Meeting to
     enable management to solicit additional proxies which may be necessary to
     ensure approval of the Merger Agreement and the Plan of Merger.
 
     A copy of the Merger Agreement (which includes a copy of the Plan of Merger
as Exhibit B thereto) is attached as Annex II to the Proxy Statement/Prospectus
that accompanies this Notice of Special Meeting of Shareholders.
 
     Shareholders of Midwest ("Midwest Shareholders") have the statutory right
to assert dissenters' rights under Sections 180.1301 to 180.1331 of the
Wisconsin Business Corporation Law (the "WBCL"). In order to perfect this right,
a shareholder must not vote in favor of the Merger (this may be done by marking
the proxy either to vote against the Merger or to abstain from voting thereon or
by not voting at all) and must take such
<PAGE>   5
 
other action as is required by such statute, including delivery of, prior to the
vote upon the Merger, written notice of intent to demand the "fair value" of
such shareholder's shares of Midwest Common Stock. Sections 180.1301 et seq. of
the WBCL are attached to the accompanying Proxy Statement/Prospectus as Annex
III.
 
     THE BOARD OF DIRECTORS OF MIDWEST HAS UNANIMOUSLY DETERMINED THAT THE TERMS
OF THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF MIDWEST AND THE MIDWEST
SHAREHOLDERS, HAS UNANIMOUSLY APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE
PLAN OF MERGER AND THE TRANSACTIONS CONTEMPLATED THEREBY, AND RECOMMENDS THAT
THE MIDWEST SHAREHOLDERS VOTE "FOR" THE APPROVAL AND ADOPTION OF THE MERGER
AGREEMENT AND THE PLAN OF MERGER AND THE TRANSACTIONS CONTEMPLATED THEREBY.
 
     The Board of Directors of Midwest has fixed the close of business on
February 17, 1998, as the record date (the "Record Date") for determination of
the Midwest Shareholders entitled to receive notice of, and to vote at, the
Special Meeting. The Special Meeting may be postponed or adjourned from time to
time upon approval of the Midwest Shareholders without any notice other than by
announcement at the Special Meeting of any postponements or adjournments
thereof, and any and all business for which notice is hereby given may be
transacted at such postponed or adjourned Special Meeting.
 
     The affirmative vote of the holders of a majority of the shares of Midwest
Common Stock outstanding on the Record Date is required to approve the Merger
Agreement and the Plan of Merger. The affirmative vote of a majority of those
votes cast at the Special Meeting is required to approve the proposal to adjourn
the Special Meeting. Please complete, date, sign and promptly return the
enclosed proxy card, which is solicited by the Board of Directors of Midwest, in
the enclosed envelope, whether or not you expect to attend the Special Meeting.
The giving of such proxy does not affect your right to vote in person in the
event you attend the Special Meeting. You may revoke the proxy at any time prior
to its exercise by delivering to Midwest a written notice of revocation,
delivering to Midwest a duly executed proxy bearing a later date, or by voting
in person at the Special Meeting. Failure to return a properly executed proxy
card, or to vote at the Special Meeting, will have the same effect as a vote
against the Merger Agreement and the Plan of Merger.
 
February 23, 1998
                                          By Order of the Board of Directors
 
                                          G. WEGNER SIGNATURE
                                          Gary E. Wegner
                                          President and Chief Executive Officer
 
                                   IMPORTANT
 
PLEASE DO NOT SEND YOUR COMMON STOCK CERTIFICATES AT THIS TIME. IF THE MERGER IS
CONSUMMATED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF YOUR STOCK
CERTIFICATES.
<PAGE>   6
 
                             AMCORE FINANCIAL, INC.
                                   PROSPECTUS
 
AMCORE FINANCIAL LOGO                                     MIDWEST FINANCIAL LOGO
                        MIDWEST FEDERAL FINANCIAL CORP.
                                PROXY STATEMENT
                            ------------------------
    This Proxy Statement/Prospectus ("Proxy Statement/Prospectus") constitutes a
prospectus of AMCORE Financial, Inc., a Nevada corporation ("AMCORE"), with
respect to shares of common stock of AMCORE, par value $0.22 per share ("AMCORE
Common Stock"), to be issued pursuant to an Agreement and Plan of
Reorganization, dated as of November 11, 1997, and as amended (the "Merger
Agreement"), and the related Plan of Merger, dated as of November 11, 1997 (the
"Plan of Merger"), providing for the merger (the "Merger") of MF Acquisition
Corp., a Wisconsin corporation and a wholly-owned subsidiary of AMCORE
("Newco"), with and into Midwest Federal Financial Corp., a Wisconsin
corporation ("Midwest"). The Merger Agreement (which includes a copy of the Plan
of Merger as Exhibit B thereto) is set forth in Annex II and incorporated herein
by reference.
    This Proxy Statement/Prospectus also serves as a Proxy Statement of Midwest
for the special meeting of shareholders of Midwest to be held on March 25, 1998,
and any adjournments or postponements thereof (the "Special Meeting"). At the
Special Meeting, holders of shares of common stock of Midwest will consider and
vote upon the approval and adoption of the Merger Agreement and the Plan of
Merger and a proposal to adjourn the Special Meeting, if necessary.
    Pursuant to the Merger Agreement and the Plan of Merger, (i) Newco will
merge with and into Midwest, with Midwest being the surviving corporation in the
Merger, and (ii) each outstanding share of common stock, par value $0.01 per
share, of Midwest ("Midwest Common Stock") (other than shares of Midwest Common
Stock held by Midwest as treasury stock immediately prior to the Effective Time
(as defined in the Merger Agreement) and shares of Midwest Common Stock held by
AMCORE, Newco, or any direct or indirect subsidiary of AMCORE, which shares will
be cancelled, and other than shares of Midwest Common Stock held by shareholders
of Midwest who have properly exercised their dissenters' rights under Wisconsin
law) will be cancelled and converted into the right to receive a number of
shares of AMCORE Common Stock, to be determined pursuant to an exchange ratio
(the "Exchange Ratio") which is based upon the average per share closing price
of AMCORE Common Stock as reported on the Nasdaq National Market (the "NASDAQ")
for the period of twenty trading days ending at the end of the third trading day
immediately preceding the date of the Special Meeting. A description of the
procedure to be used in determining the Exchange Ratio is contained elsewhere in
this Proxy Statement/Prospectus. See "THE MERGER AGREEMENT -- Conversion of
Shares and Exchange Ratio."
    AMCORE Common Stock is quoted on the NASDAQ. The composite closing price of
AMCORE Common Stock on the NASDAQ on February 13, 1998 was $25.625 per share.
    All information herein with respect to AMCORE and Newco has been furnished
by AMCORE and all information with respect to Midwest and its subsidiaries has
been furnished by Midwest.
    This Proxy Statement/Prospectus does not cover any resale of the securities
to be received by shareholders of Midwest upon consummation of the Merger and no
person is authorized to make any use of this Proxy Statement/Prospectus in
connection with any such resale.
    This Proxy Statement/Prospectus, the accompanying Notice of Special Meeting
of Shareholders and the accompanying Proxy are first being mailed to Midwest
Shareholders on or about February 23, 1998.
    Midwest Shareholders of record at the close of business on the record date,
February 17, 1998 (the "Record Date"), are entitled to notice of, and to vote
at, the Special Meeting. As of the Record Date, approximately 1,628,924 shares
of Midwest Common Stock were issued and outstanding and entitled to vote at the
Special Meeting. Each share of Midwest Common Stock is entitled to one vote on
each matter to be voted upon at the Special Meeting.
    A list of Midwest Shareholders of record as of the Record Date will be
available at Midwest's executive offices beginning two business days after the
notice of the Special Meeting is given and continuing to the date of the Special
Meeting and will also be available at the Special Meeting. Such list may be
examined during ordinary business hours by any Midwest Shareholder of record for
any purpose germane to the meeting.
                            ------------------------
    MIDWEST SHAREHOLDERS SHOULD NOT SEND THEIR MIDWEST COMMON STOCK CERTIFICATES
AT THIS TIME. IF THE MERGER IS CONSUMMATED, MIDWEST SHAREHOLDERS WILL BE SENT
INSTRUCTIONS REGARDING THE SURRENDER OF THEIR STOCK CERTIFICATES.
  THE SECURITIES TO WHICH THIS PROXY STATEMENT/PROSPECTUS RELATE HAVE NOT BEEN
 APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
  SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
 STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
                             STATEMENT/PROSPECTUS.
           ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
  THE SHARES OF AMCORE COMMON STOCK OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS
ACCOUNTS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
                 OTHER GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
       The date of this Proxy Statement/Prospectus is February 19, 1998.
<PAGE>   7
 
     NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS AND, IF GIVEN OR MADE, THE
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY AMCORE, NEWCO OR MIDWEST. THIS PROXY STATEMENT/PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE THE
SECURITIES OFFERED HEREBY, OR THE SOLICITATION OF A PROXY, IN ANY JURISDICTION
TO OR FROM ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION
OF AN OFFER OR PROXY IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROXY
STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES TO WHICH THIS PROXY
STATEMENT/PROSPECTUS RELATES SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF AMCORE, NEWCO OR
MIDWEST SINCE THE DATE OF THIS PROXY STATEMENT/PROSPECTUS.
 
                             AVAILABLE INFORMATION
 
     AMCORE and Midwest are currently subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, file reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, or at the Commission's regional
offices at Citicorp Center, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York
10048. Copies of such material may also be obtained at prescribed rates by
writing to the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission maintains a World Wide Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission, and the
address of such site is http://www.sec.gov.
 
     AMCORE has filed a Registration Statement on Form S-4 (the "Registration
Statement") with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the shares of AMCORE Common Stock to be
issued in connection with the Merger. This Proxy Statement/Prospectus does not
contain all the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. Such additional information may be obtained from the Commission's
principal office in Washington, D.C., as set forth above. Reference is hereby
made to the Registration Statement and related exhibits for further information
with respect to AMCORE, Newco, Midwest and the securities offered hereby.
Statements contained in this Proxy Statement/Prospectus as to the contents of
any document are not necessarily complete, and in each instance reference is
made to such document itself, each such statement being qualified in all
respects by such reference.
 
               INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
 
     THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS RELATING TO AMCORE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS, EXCLUDING
EXHIBITS UNLESS SPECIFICALLY INCORPORATED BY REFERENCE HEREIN, ARE AVAILABLE
WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A PROXY
STATEMENT/PROSPECTUS IS DELIVERED, UPON ORAL OR WRITTEN REQUEST TO MR. JOHN R.
HECHT, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, AMCORE FINANCIAL,
INC., 501 SEVENTH STREET, ROCKFORD, ILLINOIS 61104 (TELEPHONE: 815-968-2241). IN
ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY
MARCH 9, 1998.
 
     THIS PROXY STATEMENT/PROSPECTUS INCORPORATES MIDWEST'S ANNUAL REPORT ON
FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1996 AND MIDWEST'S QUARTERLY REPORT
OF FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 1997, WHICH DOCUMENTS ARE
BEING DELIVERED WITHOUT CHARGE HEREWITH. IN ADDITION, THIS PROXY
STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS RELATING TO MIDWEST WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS, EXCLUDING EXHIBITS
UNLESS SPECIFICALLY INCORPORATED BY REFERENCE HEREIN, ARE AVAILABLE WITHOUT
CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A PROXY
STATEMENT/PROSPECTUS IS DELIVERED, UPON ORAL OR WRITTEN REQUEST TO MR. DEAN
CARTER, CHIEF FINANCIAL OFFICER, MIDWEST FEDERAL FINANCIAL CORP., 1159 EIGHTH
STREET, BARABOO, WISCONSIN, 53913, (TELEPHONE: 608-356-7771). IN ORDER TO ENSURE
TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY MARCH 9, 1998.
 
                                        2
<PAGE>   8
 
     The following documents filed by AMCORE and Midwest with the Commission are
incorporated herein by reference:
 
     1. AMCORE's (i) Annual Report on Form 10-K, for the year ended December 31,
1996, (ii) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997,
June 30, 1997 and September 30, 1997, and (iii) Current Reports on Form 8-K
dated February 6, 1997, April 30, 1997, July 14, 1997, July 31, 1997, August 22,
1997, October 7, 1997 and December 18, 1997;
 
     2. Midwest's (i) Annual Report on Form 10-KSB for the year ended December
31, 1996, (ii) Quarterly Reports on Form 10-QSB for the quarters ended March 31,
1997, June 30, 1997 and September 30, 1997, and (iii) Current Report on Form 8-K
dated November 17, 1997; and
 
     3. the description of AMCORE Common Stock (including the share purchase
rights) contained in AMCORE's registration statements filed pursuant to Section
12 of the Exchange Act and any amendment or report filed for the purpose of
updating such description.
 
     All reports and other documents filed by AMCORE and Midwest pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
hereof and prior to the date of the Special Meeting will be deemed to be
incorporated by reference into this Proxy Statement/Prospectus and to be a part
hereof from the date of filing of such reports and other documents.
 
     Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Proxy
Statement/Prospectus to the extent that a statement contained herein (or in any
subsequently filed document which also is incorporated by reference herein)
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed to constitute a part hereof except as so modified or
superseded.
 
                           FORWARD-LOOKING STATEMENTS
 
     THIS PROXY STATEMENT/PROSPECTUS CONTAINS AND INCORPORATES BY REFERENCE
CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995 WITH RESPECT TO THE RESULTS OF OPERATIONS AND
BUSINESSES OF AMCORE AND MIDWEST. THESE FORWARD-LOOKING STATEMENTS INVOLVE
CERTAIN RISKS AND UNCERTAINTIES. FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE CONTEMPLATED OR PROJECTED, FORECAST OR ESTIMATED IN SUCH
FORWARD-LOOKING STATEMENTS INCLUDE, AMONG OTHERS, THE FOLLOWING POSSIBILITIES:
(I) HEIGHTENED COMPETITION, INCLUDING SPECIFICALLY THE INTENSIFICATION OF PRICE
COMPETITION, THE ENTRY OF NEW COMPETITORS AND THE FORMATION OF NEW PRODUCTS BY
NEW AND EXISTING COMPETITORS; (II) ADVERSE STATE AND FEDERAL LEGISLATION AND
REGULATION; (III) FAILURE TO OBTAIN NEW CUSTOMERS OR RETAIN EXISTING CUSTOMERS;
(IV) INABILITY TO CARRY OUT MARKETING AND/OR EXPANSION PLANS; (V) LOSS OF KEY
EXECUTIVES; (VI) CHANGES IN INTEREST RATES; (VII) GENERAL ECONOMIC AND BUSINESS
CONDITIONS WHICH ARE LESS FAVORABLE THAN EXPECTED; (VIII) UNANTICIPATED CHANGES
IN INDUSTRY TRENDS; AND (IX) CHANGES IN FEDERAL RESERVE BOARD MONETARY POLICIES.
IN ADDITION, FACTORS THAT COULD CAUSE ACTUAL RESULTS OF MIDWEST (ASSUMING
CONSUMMATION OF THE MERGER) TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY OR
PROJECTED, FORECAST OR ESTIMATED IN SUCH FORWARD-LOOKING STATEMENTS RELATING TO
THE RESULTS OF OPERATIONS AND BUSINESS OF MIDWEST FOLLOWING THE MERGER, INCLUDE
(A) COST SAVINGS THAT WILL BE REALIZED FROM THE MERGER (SEE "THE MERGER --
REASONS FOR THE MERGER; RECOMMENDATION OF THE MIDWEST BOARD") AND (B) COSTS
ASSOCIATED WITH THE
 
                                        3
<PAGE>   9
 
MERGER, INCLUDING, AMONG OTHERS, THE FOLLOWING POSSIBILITIES: (I) THE EXPECTED
COST SAVINGS TO BE REALIZED THROUGH COMBINING CERTAIN FUNCTIONS OF BOTH AMCORE
AND MIDWEST CANNOT BE FULLY REALIZED BECAUSE THE CHANGES ARE NOT MADE OR
UNANTICIPATED OFFSETTING COSTS ARE INCURRED; AND (II) COSTS OR DIFFICULTIES
RELATED TO THE INTEGRATION OF THE BUSINESSES OF AMCORE AND MIDWEST ARE GREATER
THAN EXPECTED.
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                              PAGE
<S>                                                           <C>
AVAILABLE INFORMATION.......................................    2
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE...........    2
FORWARD-LOOKING STATEMENTS..................................    3
SUMMARY.....................................................    6
THE MIDWEST SPECIAL MEETING.................................   16
  General...................................................   16
  Date, Place and Time......................................   16
  Matters to be Considered at the Meeting...................   16
  Record Date; Vote Required................................   16
  Solicitation, Revocation and Use of Proxies...............   17
  Other Matters.............................................   18
THE MERGER..................................................   19
  Background of the Merger..................................   19
  Reasons for the Merger; Recommendation of the Midwest
     Board..................................................   21
  Opinion of Midwest's Financial Advisor....................   24
  Interests of Certain Persons in the Merger................   27
  Shareholder Voting Agreements.............................   28
  Management and Operations of Midwest after the Merger.....   29
  Regulatory Approval.......................................   29
  Certain Federal Income Tax Consequences...................   30
  Accounting Treatment of the Merger........................   31
  Rights of Dissenting Shareholders.........................   31
  Resale of AMCORE Common Stock.............................   32
THE MERGER AGREEMENT........................................   33
  Terms.....................................................   33
  Date of Merger............................................   34
  Conversion of Shares and Exchange Ratio...................   34
  Stock Option Agreements...................................   35
  Certain Representations and Warranties....................   35
  Conduct of Business Pending the Merger....................   36
  Dividends.................................................   38
  Employee Benefits.........................................   38
  Conditions to the Merger..................................   40
  Termination...............................................   41
  Termination Fees and Expenses.............................   41
  Amendment and Waiver......................................   42
COMPARISON OF SHAREHOLDERS' RIGHTS..........................   43
  General...................................................   43
  Merger, Consolidation and Sales of Assets.................   43
</TABLE>
 
                                        4
<PAGE>   10
 
<TABLE>
<CAPTION>
                                                              PAGE
<S>                                                           <C>
  Preferred Stock...........................................   45
  Directors.................................................   45
  Dividends.................................................   46
  Amendments to the Charter.................................   46
  Amendments to the Bylaws..................................   46
  Cumulative Voting.........................................   46
  Structure of Board of Directors...........................   47
  Removal of Directors......................................   47
  Rights of Dissenting Shareholders.........................   47
  Special Meetings of Shareholders..........................   48
  Action Without a Meeting..................................   48
  Preemptive Rights.........................................   48
  Liquidation and Dissolution...............................   48
  Indemnification and Personal Liability of Directors and
     Officers...............................................   48
  Share Purchase Rights.....................................   49
SUPERVISION AND REGULATION..................................   51
OPINIONS....................................................   55
EXPERTS.....................................................   55
</TABLE>
 
                                LIST OF ANNEXES
 
<TABLE>
                            <S>          <C>
                            Annex I      Opinion of Midwest's Financial Advisor
                            Annex II     Agreement and Plan of Reorganization
                            Annex III    Sections 180.1301 et seq. of the
                                         Wisconsin Business Corporation Law
</TABLE>
 
                                        5
<PAGE>   11
 
                                    SUMMARY
 
     The following is a summary of certain information contained or incorporated
by reference elsewhere in this Proxy Statement/Prospectus. This summary is not
intended to be complete and is qualified in its entirety by reference to the
more detailed information contained elsewhere herein and in the documents
incorporated by reference herein. The Merger Agreement (which includes the Plan
of Merger as Exhibit B thereto) is set forth in Annex II to this Proxy
Statement/Prospectus, and reference is made thereto for a complete description
of the terms of the Merger. Midwest Shareholders are urged to review carefully
the entire Proxy Statement/Prospectus, each of the Annexes hereto and the
documents incorporated by reference herein. As used in this Proxy
Statement/Prospectus, the terms "AMCORE" and "Midwest" refer to such
corporations, respectively, and, where the context requires, such corporations
and their respective subsidiaries.
 
GENERAL
 
     Midwest and AMCORE have entered into an Agreement and Plan of
Reorganization, dated as of November 11, 1997, and as amended (the "Merger
Agreement"), among AMCORE, MF Acquisition Corp., a Wisconsin corporation and a
wholly-owned subsidiary of AMCORE ("Newco"), and Midwest, and a related Plan of
Merger, dated as of November 11, 1997 (the "Plan of Merger"), between Newco and
Midwest, pursuant to which, among other things, Newco will merge with and into
Midwest, with Midwest being the surviving corporation in the Merger.
Additionally, each outstanding share of common stock, par value $0.01 per share,
of Midwest ("Midwest Common Stock") (other than shares of Midwest Common Stock
held by Midwest as treasury stock immediately prior to the Effective Time (as
defined below) and shares of Midwest Common Stock held by AMCORE, Newco or any
direct or indirect subsidiary of AMCORE, which shares will be cancelled, and
other than shares of Midwest Common Stock held by Midwest Shareholders who have
properly exercised their dissenters' rights under Wisconsin law) will be
cancelled and converted into the right to receive a number (the "Exchange
Ratio") of shares of common stock, par value $0.22 per share, of AMCORE, and
associated share purchase rights (collectively referred to herein as "AMCORE
Common Stock," unless otherwise required by the context), to be determined as
follows: (i) in the event the average of the daily closing prices of a share of
AMCORE Common Stock as reported on the Nasdaq National Market during the period
of 20 trading days ending at the end of the third trading day immediately
preceding the date of the Special Meeting Date (the "AMCORE Average Price") is
less than $20.425, each share of Midwest Common Stock shall be exchanged for and
converted into a number of shares of AMCORE Common Stock determined by dividing
(A) 23.980 by (B) the AMCORE Average Price, (ii) in the event the AMCORE Average
Price is greater than or equal to $20.425 but less than or equal to $27.00, each
share of Midwest Common Stock shall be exchanged for and converted into 1.174
shares of AMCORE Common Stock and (iii) in the event the AMCORE Average Price is
greater than $27.00, each share of Midwest Common Stock shall be exchanged for
and converted into a number of shares of AMCORE Common Stock determined by
dividing (A) 31.700 by (B) the AMCORE Average Price. There can be no assurance
that the closing price for AMCORE Common Stock on the Effective Date will be
equal to the AMCORE Average Price. See "THE MERGER AGREEMENT -- Conversion of
Shares and Exchange Ratio" and "-- Terms." The average of the daily closing
prices of a share of AMCORE Common Stock during the 20-day period ending on
February 13, 1998 (the most recent practicable date prior to the printing of
this Proxy Statement/Prospectus) was $24.88 which, assuming an AMCORE Average
Price equal to such average, would result in an Exchange Ratio of 1.174. See
"THE MERGER AGREEMENT -- Conversion of Shares and Exchange Ratio" and "--
Terms." Upon the consummation of the Merger, the rights of AMCORE shareholders
will be governed by Nevada law and the Restated Articles of Incorporation and
Bylaws of AMCORE.
 
     The proposed Merger is conditioned upon, among other matters, the approval
of Midwest Shareholders of the Merger Agreement and the Plan of Merger.
 
                                        6
<PAGE>   12
 
THE COMPANIES
 
AMCORE FINANCIAL, INC.
 
     AMCORE is a multi-bank holding company incorporated under the laws of the
State of Nevada in 1982. AMCORE has eight banks operating in 54 locations and
eight financial services companies. AMCORE's primary region of operations
includes the Illinois cities of Rockford, Elgin, Woodstock, Carpentersville,
Crystal Lake, Sterling, Dixon, Princeton, Aledo, Rochelle, Ashton, Gridley, Mt.
Morris, Mendota and Peru and the Wisconsin cities of Argyle, Belleville,
Clinton, Darien, Darlington, Madison, Monroe, Montello, Mount Horeb, New Glarus,
Westfield and Verona. At September 30, 1997, AMCORE and its subsidiaries had
total assets of $3.7 billion, total deposits of $2.5 billion and stockholders'
equity of $280.6 million.
 
     On April 18, 1997, AMCORE completed the merger of FNB Acquisition, Inc., a
wholly owned subsidiary of AMCORE with and into First National Bancorp, Inc.
("FNB"), a one-bank holding company with assets of approximately $215 million at
December 31, 1996. FNB is now a wholly owned subsidiary of AMCORE. As a result
of the merger, the former shareholders of FNB received, in total, 2,822,286
shares of AMCORE Common Stock.
 
     On July 16, 1997, AMCORE completed the merger of CBS Acquisition, Inc., a
wholly owned subsidiary of AMCORE with and into Country Bank Shares Corporation
("CBSC"), a five-bank holding company with assets of approximately $301.6
million at December 31, 1996 (as adjusted for certain acquisitions by CBSC).
CBSC is now a wholly owned subsidiary of AMCORE. As a result of the merger, the
former shareholders of CBSC received, in total, 2,469,417 shares of AMCORE
Common Stock.
 
     On September 30, 1997, AMCORE signed a definitive agreement to combine its
asset management operations with Investors Management Group ("IMG"), based in
Des Moines, Iowa. IMG is Iowa's largest independent asset manager. The proposed
transaction will result in the formation of an investment management firm with
more than $3.5 billion in assets under management. The new organization, which
will be headquartered in Des Moines, Iowa, will be known as Investors Management
Group and will be owned by AMCORE Investment Group, N.A., a wholly-owned
subsidiary of AMCORE. Upon consummation of the transaction with IMG, AMCORE's
investment management organization will rank in the top 15% of asset managers in
the United States based upon total assets under management.
 
     Additional information concerning AMCORE is included in the AMCORE reports
and documents incorporated by reference herein. See "INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE."
 
     The principal executive offices of AMCORE are located at 501 Seventh
Street, Rockford, Illinois 61104, and its telephone number is (815) 968-2241.
 
MIDWEST FEDERAL FINANCIAL CORP.
 
     Midwest is a Wisconsin corporation that was organized as a unitary savings
and loan holding company for Baraboo Federal Bank, FSB (the "Bank") in
connection with the Bank's conversion from a federal mutual savings bank to a
federal stock savings bank on June 30, 1992. The Bank conducts its business
through its main office and two limited services offices located in Baraboo,
Wisconsin and six offices located in Sauk Prairie, Portage, Lodi, Kingston and
Dalton, Wisconsin. Through the Bank, Midwest provides its customers with a full
array of community banking services. The Bank is primarily engaged in the
business of attracting deposits from the general public and originating mortgage
loans, which are secured by one-to four-family residential properties, as well
as loans secured by commercial real estate and multi-family properties and
commercial business and consumer loans. At September 30, 1997, Midwest and its
subsidiaries had consolidated total assets of $211.7 million, total deposits of
$159.4 million and stockholders' equity of $19.0 million.
 
     Additional information concerning Midwest is included in the Midwest
reports and documents incorporated by reference herein. See "INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE."
 
                                        7
<PAGE>   13
 
     The principal executive offices of Midwest are located at 1159 Eighth
Street, Baraboo, Wisconsin, 53913, and its telephone number is (608) 356-7771.
 
THE MERGER
 
     Subject to the satisfaction of the terms and conditions set forth in the
Merger Agreement, Newco will be merged with and into Midwest. Upon consummation
of the Merger, Newco's corporate existence will terminate and Midwest will
continue as the surviving corporation. As a result of the Merger, AMCORE will
directly own 100% of the stock of the surviving corporation, Midwest, and
indirectly own all of the issued and outstanding shares of common stock of the
Bank.
 
     Subject to certain limitations and dissenters' rights provided by law, each
issued and outstanding share of Midwest Common Stock (other than shares of
Midwest Common Stock held by Midwest as treasury stock immediately prior to the
Effective Time and shares of Midwest Common Stock held by AMCORE, Newco or any
direct or indirect subsidiary of AMCORE, which shares will be cancelled, and
other than shares of Midwest Common Stock held by Midwest Shareholders who have
properly exercised their dissenters' rights under Wisconsin law) will be
cancelled and converted into the right to receive a number of shares of AMCORE
Common Stock to be determined as follows: (i) in the event the AMCORE Average
Price is less than $20.425, each share of Midwest Common Stock shall be
exchanged for and converted into a number of shares of AMCORE Common Stock
determined by dividing (A) 23.980 by (B) the AMCORE Average Price, (ii) in the
event the AMCORE Average Price is greater than or equal to $20.425 but less than
or equal to $27.00, each share of Midwest Common Stock shall be exchanged for
and converted into 1.174 shares of AMCORE Common Stock and (iii) in the event
the AMCORE Average Price is greater than $27.00, each share of Midwest Common
Stock shall be exchanged for and converted into a number of shares of AMCORE
Common Stock determined by dividing (A) 31.700 by (B) the AMCORE Average Price.
There can be no assurance that the closing price for AMCORE Common Stock on the
Effective Date will be equal to the AMCORE Average Price. Upon consummation of
the Merger, the rights of holders of AMCORE Common Stock will be governed by
Nevada law and the Restated Articles of Incorporation and Bylaws of AMCORE. See
"THE MERGER AGREEMENT -- Conversion of Shares and Exchange Ratio" and "--
Terms."
 
     The Merger will become effective at the close of business on the date on
which the Articles of Merger are received by the State of Wisconsin (the
"Effective Time"). Promptly after the Effective Time, a letter of transmittal
containing instructions with respect to the surrender of stock certificates for
Midwest Common Stock will be furnished to each holder of Midwest Common Stock
outstanding as of the Effective Time of the Merger for use in exchanging such
stock certificates for shares of AMCORE Common Stock in connection with the
Merger. See "THE MERGER AGREEMENT -- Conversion of Shares and Exchange Ratio."
 
THE SPECIAL MEETING
 
     The Special Meeting will be held at the offices of Midwest, located at 1159
Eighth Street, Baraboo, Wisconsin, on Wednesday, March 25, 1998, at 1:00 p.m.
(local time) (the "Special Meeting Date"). At the Special Meeting, Midwest
Shareholders will consider and vote upon a (i) proposal to approve the Merger
Agreement and the Plan of Merger and (ii) a proposal to adjourn the Special
Meeting in the event that Midwest's management should determine in its sole
discretion, at the time of the Special Meeting, that such adjournment is in the
best interest of Midwest and its shareholders, which would include adjourning
the Special Meeting to enable management to solicit additional proxies which may
be necessary to ensure approval of the Merger Agreement and the Plan of Merger.
Only holders of record of Midwest Common Stock at the close of business on
February 17, 1998 (the "Record Date") will be entitled to notice of and to vote
at the Special Meeting. At such date, there were outstanding and entitled to
vote approximately 1,628,924 shares of Midwest Common Stock. Each share of
Midwest Common Stock is entitled to one vote. For additional information
relating to the Special Meeting, see "THE MIDWEST SPECIAL MEETING."
 
                                        8
<PAGE>   14
 
RECORD DATE; VOTE REQUIRED
 
     The Wisconsin Business Corporation Law (the "WBCL") requires that the
Merger Agreement and the Plan of Merger be approved by the affirmative vote of a
majority of the outstanding shares of Midwest Common Stock. At the Record Date,
the directors and executive officers of Midwest and their affiliates and certain
other significant shareholders beneficially owned approximately 532,735 shares
of Midwest Common Stock. At the Record Date, the directors and executive
officers of AMCORE and its subsidiaries did not beneficially own any shares of
Midwest Common Stock. At the Record Date, subsidiaries of Midwest and
subsidiaries of AMCORE, acting as fiduciaries, custodians or agents, had voting
power over no outstanding shares of Midwest Common Stock. Each of the directors
of Midwest (including Gary E. Wegner, the President and Chief Executive Officer
of Midwest) and Scott D. Huedepohl, Vice President of Midwest, who collectively
beneficially own approximately 239,157 shares of Midwest Common Stock
(approximately 14.7% of the outstanding shares of Midwest Common Stock as of the
Record Date), have entered into voting agreements with AMCORE and Midwest (the
"Shareholder Voting Agreements"), pursuant to which such individuals have agreed
to vote all of their shares of Midwest Common Stock in favor of the Merger
Agreement and the Plan of Merger. See "THE MIDWEST SPECIAL MEETING -- Record
Date; Vote Required" and "THE MERGER -- Shareholder Voting Agreements."
 
     The affirmative vote of a majority of those votes cast at the Special
Meeting is required to approve the proposal to adjourn the Special Meeting.
 
RECOMMENDATION OF THE BOARD OF DIRECTORS
 
     THE BOARD OF DIRECTORS OF MIDWEST RECOMMENDS THAT MIDWEST SHAREHOLDERS VOTE
"FOR" APPROVAL OF THE MERGER AGREEMENT. The Board of Directors of Midwest (the
"Midwest Board") believes that the terms of the Merger Agreement are fair and
that the Merger is in the best interest of Midwest and the Midwest Shareholders.
In making its recommendation, the Midwest Board has sought the advice of an
independent financial advisor. See "THE MERGER -- Background of the Merger"; "--
Reasons for the Merger; Recommendation of the Midwest Board" and "-- Opinion of
Midwest's Financial Advisor."
 
OPINION OF FINANCIAL ADVISOR
 
     Midwest's financial advisor, Edelman & Co., Ltd. ("Edelman"), rendered a
written opinion in November, 1997, and an updated written opinion dated as of
the date of this Proxy Statement/Prospectus to the Midwest Board to the effect
that, as of the date of such opinion, the Exchange Ratio governing the number of
shares of AMCORE Common Stock to be received by the holders of Midwest Common
Stock upon consummation of the Merger is fair, from a financial point of view,
to such holders. The opinion of Edelman, attached to this Proxy
Statement/Prospectus as Annex I, sets forth the assumptions made, the matters
considered and the limitations in the review undertaken in rendering such
opinion. See "THE MERGER -- Opinion of Midwest's Financial Advisor."
 
DISSENTERS' RIGHTS
 
     Under the provisions of the WBCL, any Midwest Shareholder who asserts
dissenters' rights will have a statutory right to demand payment of the "fair
value" of their Midwest Common Stock in cash. To perfect this right, a Midwest
Shareholder must not vote such shares in favor of the Merger Agreement at the
Special Meeting (this may be done by marking the proxy either to vote against
the Merger Agreement or to abstain from voting thereon or by not voting at all)
and must take such other action as is required by the provisions of Sections
180.1301 to 180.1331 of the WBCL, including delivering written notice of intent
to demand the "fair value" of Midwest Common Stock. A copy of Sections 180.1301
to 180.1331 of the WBCL is attached hereto as Annex III. See "THE MERGER --
Rights of Dissenting Shareholders."
 
                                        9
<PAGE>   15
 
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
 
     Midwest has received an opinion of Schiff Hardin & Waite, counsel to
Midwest, to the effect that the Merger will be treated as a tax-free
reorganization under Section 368(a)(1)(A) and 368(a)(2)(E) of the Internal
Revenue Code of 1986, as amended (the "Code"). Such opinion is based upon
certain customary representations and is subject to certain customary
assumptions and limitations set forth therein. No ruling will be sought from the
Internal Revenue Service (the "IRS") regarding the Merger, and the IRS may
disagree with the conclusions expressed in such opinion of counsel. The opinion
of Schiff Hardin & Waite will be updated as of the date of the closing of the
Merger.
 
     In accordance with such opinion, no gain or loss will be recognized by a
Midwest Shareholder upon the conversion of such holder's shares of Midwest
Common Stock into shares of AMCORE Common Stock pursuant to the Merger (except
to the extent that cash is received in lieu of fractional shares of AMCORE
Common Stock). See "THE MERGER -- Certain Federal Income Tax Consequences."
 
     EACH MIDWEST SHAREHOLDER IS ADVISED TO CONSULT SUCH HOLDER'S OWN TAX
ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH HOLDER OF THE MERGER UNDER
FEDERAL, STATE, LOCAL, FOREIGN INCOME AND OTHER APPLICABLE TAX LAWS.
 
ACCOUNTING TREATMENT
 
     The Merger will be accounted for as a "pooling of interests." See "THE
MERGER -- Accounting Treatment of the Merger."
 
RESALES OF AMCORE COMMON STOCK BY AFFILIATES
 
     Resales of AMCORE Common Stock issued to "affiliates" of Midwest have not
been registered under applicable securities laws in connection with the Merger.
Such shares may only be sold (a) under a separate registration for distribution
(which AMCORE has not agreed to provide), (b) pursuant to Rule 145 under the
Securities Act, or (c) pursuant to some other exemption from registration. For
AMCORE to be able to account for the Merger as a "pooling of interests," certain
additional restrictions have been placed on affiliates of Midwest and AMCORE
with respect to dispositions of Midwest Common Stock and AMCORE Common Stock
during the period beginning 30 days before the Merger and ending once the
results of at least 30 days of post-Merger combined operations have been
published. See "THE MERGER -- Resale of AMCORE Common Stock."
 
DATE OF THE MERGER
 
     The Merger Agreement provides that the Merger will be consummated on a date
no later than the last business day of the month in which all of the conditions
to the Merger set forth in the Merger Agreement have been waived or satisfied,
including the receipt of all necessary approvals of governmental agencies and
authorities and expiration of the statutory 30-day waiting period following
approval by the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board") or on another mutually agreed upon date (the "Closing Date").
With the approval of the Federal Reserve Board and the Department of Justice,
the waiting period following approval of the Federal Reserve Board may be
reduced to no less than 15 days. See "THE MERGER AGREEMENT -- Terms"; "-- Date
of Merger"; and "-- Conditions to the Merger."
 
TERMS AND CONDITIONS OF THE MERGER; REGULATORY APPROVAL
 
     The Merger is conditioned upon approval by the Midwest Shareholders and the
Federal Reserve Board and upon the satisfaction of other terms and conditions of
the Merger Agreement. The Federal Reserve Board approved the Merger on January
9, 1998. See "THE MERGER -- Regulatory Approval"; "THE MERGER AGREEMENT --
Terms" and "-- Conditions to the Merger."
 
                                       10
<PAGE>   16
 
MANAGEMENT AND OPERATIONS AFTER THE MERGER
 
     Certain executive officers of Midwest and the directors of Newco prior to
the Merger will continue as officers and directors of the surviving corporation.
Following the Merger, Midwest will survive as a separate wholly-owned subsidiary
of AMCORE. AMCORE intends that Midwest will continue to operate the Bank at its
present locations and that Midwest will expand its products and services by
providing certain products and services currently offered by AMCORE affiliates.
See "THE MERGER -- Management and Operations of Midwest After the Merger."
 
TERMINATION; TERMINATION FEES AND EXPENSES
 
     The Merger Agreement may be terminated under certain circumstances,
including at any time before the Closing Date (i) by mutual written consent of
the Board of Directors of AMCORE and Midwest, (ii) by either AMCORE or Midwest
if (A) any requisite regulatory approval shall have been denied, which denial
shall have become final and non-appealable, (B) any governmental entity shall
have issued a final, non-appealable order permanently enjoining or otherwise
prohibiting the consummation of the Merger or (C) the Merger shall not have been
consummated on or before August 31, 1998, unless the failure of the Closing to
occur shall have been due to the failure of the party seeking to terminate the
Merger Agreement to perform or observe the covenants and agreements of such
party, (iii) by AMCORE, if any approval of the shareholders of Midwest required
for the consummation of the Merger shall not have been obtained by reason of the
failure to obtain the required vote at a duly held meeting of shareholders or at
any adjournment or postponement thereof, (iv) by Midwest, if the Midwest Board
receives a Superior Proposal (as hereinafter defined) and promptly thereafter,
after providing notice and certain information to AMCORE, enters into a
definitive acquisition, merger or similar agreement to effect such proposal, (v)
by Midwest, if (A) after notice from Midwest, there exists any material, uncured
breach or breaches of AMCORE's representations and warranties, or (B) after
notice from Midwest, AMCORE shall have failed to perform and comply with, in all
material respects, its agreements and covenants under the Merger Agreement, (vi)
by AMCORE, if (A) after notice from AMCORE, there exists any material, uncured
breach or breaches of Midwest's representations and warranties, (B) after notice
from AMCORE, Midwest shall have failed to perform and comply with, in all
material respects, its agreements and covenants under the Merger Agreement or
(C) the Board of Directors of Midwest or any committee thereof (1) shall have
withdrawn or modified in any manner adverse to AMCORE its approval or
recommendation of the Merger Agreement, the Plan of Merger or the Merger, (2)
shall fail to reaffirm such approval or recommendation upon AMCORE's request,
(3) shall approve or recommend any Transaction Proposal (as hereinafter
defined), or shall not include its recommendation of the Merger Agreement, the
Plan of Merger or the Merger in this Proxy Statement/Prospectus, or (4) shall
resolve to take any of the actions specified in clause (1), (2) or (3). In the
event the Merger Agreement is terminated under certain circumstances, AMCORE or
Midwest, as the case may be, will be obligated to pay the other a fee of $1
million plus out-of-pocket expenses (not to exceed $250,000) in connection with
the Merger Agreement. See "THE MERGER AGREEMENT -- Termination;" and "--
Termination Fees and Expenses."
 
WAIVERS AND AMENDMENTS
 
     AMCORE and Midwest may amend, modify or waive certain terms and conditions
of the Merger Agreement. Any such action that changes the amount or the form of
the consideration to be delivered to the holders of Midwest Common Stock under
the Merger Agreement following a favorable vote by Midwest Shareholders may be
taken only if such action is further approved by such holders. See "THE MERGER
AGREEMENT -- Amendment and Waiver."
 
INTERESTS OF CERTAIN PERSONS IN THE MERGER
 
     Certain members of Midwest's management, the Bank's management and the
Board of Directors of the Bank and the Midwest Board may be deemed to have
interests in the Merger in addition to their interests, if any, as holders of
Midwest Common Stock. The Midwest Board was aware of these factors and
considered them, among other matters, in approving the Merger Agreement and the
transactions contemplated thereby. See "THE MERGER--Interests of Certain Persons
in the Merger."
                                       11
<PAGE>   17
 
MARKETS AND MARKET PRICES
 
     The following table sets forth the closing price per share of AMCORE Common
Stock as reported on the NASDAQ on November 11, 1997, the last trading day
preceding public announcement of the proposed Merger and February 13, 1998, the
most recent practicable date prior to the printing of this Proxy
Statement/Prospectus, as well as the equivalent per share prices for Midwest
Common Stock. Subject to certain limitations and dissenters' rights provided by
law, each issued and outstanding share of Midwest Common Stock (other than
shares of Midwest Common Stock held by Midwest as treasury stock immediately
prior to the Effective Time and shares of Midwest Common Stock held by AMCORE,
Newco or any direct or indirect subsidiary of AMCORE, which shares will be
cancelled, and other than shares of Midwest Common Stock held by Midwest
Shareholders who have properly exercised their dissenters' rights under
Wisconsin law) will be cancelled and converted into the right to receive a
number of shares of AMCORE Common Stock to be determined as follows: (i) in the
event the average of the daily closing prices of a share of AMCORE Common Stock
as reported on the Nasdaq National Market during the period of twenty (20)
trading days ending at the end of the third trading day immediately preceding
the date of the Special Meeting Date (the "AMCORE Average Price") is less than
$20.425, each share of Midwest Common Stock shall be exchanged for and converted
into a number of shares of AMCORE Common Stock determined by dividing (A) 23.980
by (B) the AMCORE Average Price, (ii) in the event the AMCORE Average Price is
greater than or equal to $20.425 but less than or equal to $27.00, each share of
Midwest Common Stock shall be exchanged for and converted into 1.174 shares of
AMCORE Common Stock and (iii) in the event the AMCORE Average Price is greater
than $27.00, each share of Midwest Common Stock shall be exchanged for and
converted into a number of shares of AMCORE Common Stock determined by dividing
(A) 31.700 by (B) the AMCORE Average Price. There can be no assurance that the
closing price for AMCORE Common Stock on the Effective Date will be equal to the
AMCORE Average Price. See "THE MERGER AGREEMENT -- Conversion of Shares and
Exchange Ratio" and "-- Terms." The equivalent per share price of Midwest Common
Stock at each specified date listed below represents the closing price of a
share of AMCORE Common Stock on such date multiplied by an assumed exchange
ratio. In each case, such assumed exchange ratio has been determined as if the
AMCORE Average Price was equal to the market value per share of AMCORE Common
Stock specified at each date. See "THE MERGER AGREEMENT -- Terms" and "--
Conversion of Shares and Exchange Ratio."
 
<TABLE>
<CAPTION>
                                                                                     EQUIVALENT
                                                      AMCORE         MIDWEST           MIDWEST
                                                   COMMON STOCK    COMMON STOCK    PER SHARE PRICE
                                                   ------------    ------------    ---------------
<S>                                                <C>             <C>             <C>
Market Value Per Share at:
  November 11, 1997............................      $23.500         $26.000           $27.589
  February 13, 1998............................      $25.625         $28.625           $30.084
</TABLE>
 
     Because the market price of AMCORE Common Stock is subject to fluctuation,
the market value of the shares of AMCORE Common Stock that holders of Midwest
Common Stock will receive in the Merger may increase or decrease prior to the
Merger. Midwest Shareholders are advised to obtain current market quotations for
AMCORE Common Stock and Midwest Common Stock. AMCORE Common Stock and Midwest
Common Stock are each quoted on the NASDAQ.
 
     The Merger Agreement provides that, between execution of the Merger
Agreement and the Effective Date, Midwest can continue to pay its regular
quarterly cash dividends, provided such dividends are paid prior to the
consummation of the Merger and do not exceed $0.085 per share for any quarter;
and further provided, that Midwest cannot declare or pay any dividends in any
amount on Midwest Common Stock in any calendar quarter in which the Effective
Time is expected to occur and in which the Midwest Shareholders are entitled to
receive dividends on the shares of AMCORE Common Stock into which their shares
of Midwest Common Stock will be converted. Midwest has declared and paid a
$0.085 per share dividend for the fourth quarter of 1997. Because the dividend
policy of Midwest is subject to the discretion of the Board of Directors of
Midwest, cash needs and general business conditions, there can be no assurance
as to the amount of future dividends on Midwest Common Stock prior to the
Effective Date.
 
                                       12
<PAGE>   18
 
                           COMPARATIVE PER SHARE DATA
 
     The following table presents selected comparative unaudited per share data
for AMCORE Common Stock on a historical and pro forma combined basis and for
Midwest Common Stock on a pro forma equivalent basis giving effect to the Merger
on a "pooling of interests" accounting basis. For a description of the "pooling
of interests" accounting basis with respect to the Merger and the related
effects on the historical financial statements of AMCORE, see "THE MERGER --
Accounting Treatment of the Merger." The information is derived from the
consolidated historical financial statements of AMCORE, including the related
notes thereto, incorporated by reference into this Proxy Statement/Prospectus.
This information should be read in conjunction with such historical financial
statements and the related notes thereto. See "INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE."
 
     This information is not necessarily indicative of the results of the future
operations of the combined entity or the actual results that would have occurred
had the Merger been consummated prior to the periods indicated.
 
<TABLE>
<CAPTION>
                                                      NINE MONTHS
                                                         ENDED
                                                     SEPTEMBER 30,    YEARS ENDED DECEMBER 31,
                                                    ---------------   ------------------------
                                                     1997     1996     1996     1995     1994
                                                    ------   ------   ------   ------   ------
<S>                                                 <C>      <C>      <C>      <C>      <C>
Per Share of AMCORE Common Stock:
  Book Value:
     Historical..................................   $10.43   $ 9.65   $ 9.61   $ 9.10   $ 8.03
     Pro forma(1)................................    10.29     8.99     9.49     8.98     7.93
  Cash dividends:
     Historical..................................   $ 0.33   $ 0.27   $ 0.38   $ 0.33   $ 0.31
     Pro forma(1)................................     0.32     0.27     0.36     0.31     0.29
  Net income:
     Historical..................................   $ 0.72   $ 0.86   $ 1.20   $ 0.87   $ 0.97
     Pro forma(1)................................     0.74     0.84     1.17     0.86     0.94
Per Share of Midwest Common Stock:
  Book Value:
     Historical..................................   $11.70   $10.19   $10.43   $10.13   $ 8.68
     Pro forma equivalent(1).....................    12.08    10.55    11.14    10.54     9.31
  Cash dividends:
     Historical..................................   $ 0.26   $ 0.23   $ 0.30   $ 0.26   $ 0.23
     Pro forma equivalent(1).....................     0.38     0.32     0.42     0.36     0.34
  Net income:
     Historical..................................   $ 1.29   $ 0.73   $ 1.12   $ 1.01   $ 0.70
     Pro forma equivalent(1).....................     0.87     0.99     1.35     1.01     1.10
</TABLE>
 
- -------------------------
 
(1) Based upon an Exchange Ratio of 1.174 shares of AMCORE Common Stock for each
    share of Midwest Common Stock. The Exchange Ratio is subject to adjustment.
 
SELECTED FINANCIAL DATA
 
     The following tables set forth certain historical consolidated financial
information for AMCORE and Midwest. AMCORE historical consolidated financial
information has been restated to include the effects of AMCORE's mergers with
CBSC and FNB, which were each accounted for under the pooling-of-interests
method of accounting. See "THE MERGER -- Accounting Treatment of the Merger."
 
                                       13
<PAGE>   19
 
                             AMCORE FINANCIAL, INC.
 
               SELECTED CONSOLIDATED FINANCIAL DATA (HISTORICAL)
 
<TABLE>
<CAPTION>
                                     NINE MONTHS ENDED
                                       SEPTEMBER 30,                           YEARS ENDED DECEMBER 31,
                                  -----------------------   --------------------------------------------------------------
                                     1997         1996         1996         1995         1994         1993         1992
                                  ----------   ----------   ----------   ----------   ----------   ----------   ----------
                                                         (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<S>                               <C>          <C>          <C>          <C>          <C>          <C>          <C>
STATEMENT OF INCOME:
Interest Income.................  $  192,737   $  173,482   $  235,036   $  202,268      172,279   $  169,219   $  167,982
Interest expense................     109,115       94,670      128,902      104,017       76,761       74,609       79,348
Net interest income.............      83,622       78,812      106,134       98,251       95,518       94,610       88,634
Provision for loan losses.......       6,524        4,355        5,428        3,165        1,751        2,762        5,867
Non-interest income.............      33,353       31,732       42,270       36,874       33,891       32,693       28,457
Operating expense...............      84,531       74,276       98,939      101,730       92,604       89,640       79,252
Income before income taxes......      25,920       31,913       44,037       30,230       35,054       34,901       31,952
Net income......................  $   19,317   $   22,983   $   31,876   $   23,025   $   25,685   $   25,656   $   22,411
PER COMMON SHARES:
Net income......................  $     0.72   $     0.86   $     1.20   $     0.87   $     0.97   $     0.97   $     0.86
Cash dividends..................        0.33         0.27         0.38         0.33         0.31         0.23         0.21
Book value......................       10.43         9.65         9.61         9.10         8.03         7.65         6.87
Dividend payout ratio...........       45.83%       31.40%       31.85%       37.81%       31.66%       24.00%       24.17%
Average Common Shares
  Outstanding (in thousands)....      26,836       26,639       26,649       26,504       26,443       26,392       26,153
SELECTED FINANCIAL RATIOS: (1)
Return on average assets........        1.00%        0.98%        1.00%        0.85%        1.03%        1.08%        1.05%
Return on average equity........       13.06%       12.78%       13.14%       10.27%       12.28%       13.38%       13.15%
Net interest margin(2)..........        3.66%        3.84%        3.78%        4.12%        4.48%        4.60%        4.77%
Average equity to average
  assets........................        7.62%        7.66%        7.63%        8.26%        8.35%        8.04%        8.02%
BALANCE SHEET INFORMATION:
Total assets....................  $3,725,667   $3,399,776   $3,331,995   $2,903,282   $2,607,626   $2,421,104   $2,353,059
Loans and leases, net of
  unearned income...............   1,904,178    1,787,329    1,807,661    1,620,365    1,481,497    1,320,204    1,250,931
Securities......................   1,580,065    1,289,267    1,268,505    1,014,745      884,983      828,211      825,033
Deposits........................   2,472,408    2,392,191    2,351,990    2,208,838    2,119,063    2,033,741    2,006,177
Long-term borrowings............     131,829      157,417      131,612      115,752       30,157       35,204       35,990
Stockholders' equity............     280,623      243,271      257,420      242,096      212,571      202,589      180,994
</TABLE>
 
- -------------------------
(1) Nine month returns are annualized.
 
(2) On a fully tax equivalent basis.
 
                                       14
<PAGE>   20
 
                        MIDWEST FEDERAL FINANCIAL CORP.
 
               SELECTED CONSOLIDATED FINANCIAL DATA (HISTORICAL)
 
<TABLE>
<CAPTION>
                                     NINE MONTHS ENDED
                                       SEPTEMBER 30,                           YEARS ENDED DECEMBER 31,
                                  -----------------------   --------------------------------------------------------------
                                     1997         1996         1996         1995         1994         1993         1992
                                  ----------   ----------   ----------   ----------   ----------   ----------   ----------
                                                         (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<S>                               <C>          <C>          <C>          <C>          <C>          <C>          <C>
STATEMENT OF INCOME:
Interest income.................  $   12,244   $   11,062   $   14,937   $   12,501   $    8,950   $    8,417   $    8,771
Interest expense................       6,448        5,724        7,776        6,577        4,343        4,151        4,881
Net interest income.............       5,796        5,338        7,161        5,924        4,607        4,266        3,890
Provision for loan losses.......         207          250          318          165          108           96           84
Non-interest income.............       2,155        1,801        2,314        1,931        1,229        1,072          726
Operating expense...............       4,361        4,953        6,329        4,863        3,711        3,390        2,890
Income before income taxes......       3,382        1,936        2,828        2,827        2,017        1,852        1,642
Net income......................  $    2,230   $    1,247   $    1,947   $    1,787   $    1,279   $    1,418   $    1,057
PER COMMON SHARES: (1)
Net income......................  $     1.29   $     0.73   $     1.12   $     1.01   $     0.70   $     0.71   $     0.51
Cash dividends..................        0.26         0.23         0.30         0.26         0.23         0.14         0.03
Book value......................       11.70        10.19        10.43        10.13         8.68         8.34         7.50
Dividend payout ratio...........       20.16%       31.51%       26.79%       12.87%       17.14%       19.72%        5.88%
Average Common Shares
  Outstanding (in thousands)....       1,724        1,746        1,743        1,774        1,825        1,993        2,061
SELECTED FINANCIAL RATIOS: (2)
Return on average assets........        1.46%        0.93%        1.05%        1.11%        0.98%        1.20%        0.97%
Return on average equity........       16.64%       12.00%       11.74%       11.34%        8.54%        9.48%        9.09%
Net interest margin.............        4.09%        4.04%        4.16%        3.97%        3.77%        3.95%        3.80%
Average equity to average
  assets........................        8.74%        9.26%        9.04%        9.81%       11.47%       12.69%       10.65%
BALANCE SHEET INFORMATION:
Total assets....................  $  211,689   $  194,707   $  196,300   $  177,164   $  150,966   $  122,444   $  113,349
Loans and leases, net of
  unearned income...............     158,118      140,331      144,202      122,925      113,818       85,719       75,372
Securities......................      37,725       37,940       35,421       38,065       23,493       25,160       28,193
Deposits........................     159,427      153,278      152,491      142,591      125,624       99,583       93,423
Long-term borrowings............       9,000            0            0        6,000        2,000            0            0
Stockholders' equity............      19,047       16,340       16,904       16,541       14,795       15,067       14,853
</TABLE>
 
- -------------------------
(1) Pre-1995 per share data is adjusted for stock splits.
 
(2) Nine month returns are annualized.
 
                                       15
<PAGE>   21
 
                          THE MIDWEST SPECIAL MEETING
 
GENERAL
 
     This Proxy Statement/Prospectus is being furnished in connection with the
solicitation on behalf of the Midwest Board of proxies to be voted at the
Special Meeting to be held at the principal offices of Midwest, 1159 Eighth
Street, Baraboo, Wisconsin, on Wednesday, March 25, 1998, at 1:00 p.m. local
time, and any adjournment or postponements thereof.
 
     This Proxy Statement/Prospectus is also furnished by AMCORE to Midwest
Shareholders as a prospectus in connection with the issuance by AMCORE of shares
of AMCORE Common Stock upon consummation of the Merger. This Proxy
Statement/Prospectus, the attached Notice of Special Meeting of Shareholders,
and the form of proxy enclosed herewith are first being mailed to Midwest
Shareholders on or about February 23, 1998.
 
DATE, PLACE AND TIME
 
     The Special Meeting will be held at the principal offices of Midwest, 1159
Eighth Street, Baraboo, Wisconsin, on Wednesday, March 25, 1998, at 1:00 p.m.
local time (the "Special Meeting Date").
 
MATTERS TO BE CONSIDERED AT THE MEETING
 
     At the Special Meeting, holders of shares of Midwest Common Stock as of the
Record Date will be asked to consider and vote upon a proposal to approve and
adopt the Merger Agreement and the Plan of Merger and the transactions
contemplated thereby. See "THE MERGER AGREEMENT." The description of the Merger,
the Merger Agreement and the Plan of Merger in this Proxy Statement/Prospectus
is, of necessity, selective and is, therefore, qualified in its entirety by
reference to the Merger Agreement (which includes a copy of the Plan of Merger
as Exhibit B thereto), a copy of which is attached to this Proxy
Statement/Prospectus as Annex II.
 
     At the Special Meeting, holders of shares of Midwest Common Stock as of the
Record Date will also be asked to consider and vote upon a proposal to adjourn
the Special Meeting in the event that Midwest's management should determine in
its sole discretion, at the time of the Special Meeting, that such adjournment
is in the best interest of Midwest and its shareholders, which would include
adjourning the Special Meeting to enable management to solicit additional
proxies which may be necessary to ensure approval of the Merger Agreement and
the Plan of Merger.
 
RECORD DATE; VOTE REQUIRED
 
     The Midwest Board has fixed February 17, 1998 as the Record Date for the
determination of the Midwest Shareholders entitled to notice of and to vote at
the Special Meeting. On the Record Date, approximately 1,628,924 shares of
Midwest Common Stock were issued and outstanding. Shares of Midwest Common Stock
are the only outstanding voting securities of Midwest. Each holder of record of
shares of Midwest Common Stock on the Record Date is entitled to cast one vote
per share, exercisable in person or by properly executed proxy, upon each matter
properly submitted for the vote of the Midwest Shareholders at the Special
Meeting. The presence, in person or by properly executed proxy, of the holders
of a majority of the shares of Midwest Common Stock outstanding and entitled to
vote at the Special Meeting is necessary to constitute a quorum at the Special
Meeting.
 
     THE MIDWEST BOARD HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF THE MERGER
ARE FAIR TO, AND IN THE BEST INTERESTS OF, MIDWEST AND THE MIDWEST SHAREHOLDERS,
HAS UNANIMOUSLY APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE PLAN OF MERGER
AND THE TRANSACTIONS CONTEMPLATED THEREBY, AND RECOMMENDS THAT THE MIDWEST
SHAREHOLDERS VOTE "FOR" THE APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AND
THE PLAN OF MERGER AND THE TRANSACTIONS CONTEMPLATED THEREBY.
 
     Holders of shares of Midwest Common Stock on the Record Date will be
entitled to dissenters' rights under the WBCL in connection with the Merger.
Midwest Shareholders who vote in favor of the Merger,
 
                                       16
<PAGE>   22
 
however, will waive their dissenters' rights. See "THE MERGER -- Rights of
Dissenting Shareholders" and Annex III Sections 180.1301 et seq. of the WBCL.
 
     The affirmative vote of the holders of a majority of the outstanding shares
of Midwest Common Stock is required under applicable law to approve and adopt
the Merger Agreement and the Plan of Merger. The affirmative vote of a majority
of those votes cast at the Special Meeting is required to approve the proposal
to adjourn the Special Meeting. All shares of Midwest Common Stock which are
entitled to vote and are represented at the Special Meeting by properly executed
proxies received and not duly and timely revoked will be voted at the Special
Meeting in accordance with the instructions contained therein. In the absence of
contrary instructions, such shares will be voted "FOR" the approval and adoption
of the Merger Agreement and the Plan of Merger and "FOR" the approval of the
proposal to adjourn the Special Meeting, if necessary. Because approval of the
Merger Agreement and the Plan of Merger requires the affirmative vote of at
least a majority of the total outstanding shares of Midwest Common Stock, and
not a majority of the shares actually voted, the failure to submit a proxy or to
vote in person at the Special Meeting will have the same effect as a vote
"AGAINST" the Merger Agreement and the Plan of Merger. A properly executed proxy
marked "ABSTAIN," although counted for purposes of determining whether there is
a quorum at the Special Meeting, will not be voted and will have the same effect
as a vote "AGAINST" the Merger Agreement and the Plan of Merger. Broker
non-votes (referring to where a broker or other nominee physically indicates on
the proxy that it does not have discretionary authority as to certain shares of
Midwest Common Stock to vote on a particular matter) will not be counted as
having been voted in person or by proxy at the Special Meeting and will also
have the same effect as a vote "AGAINST" the Merger Agreement and the Plan of
Merger.
 
     The directors of Midwest (including Gary E. Wegner, the President and Chief
Executive Officer of Midwest) and Scott D. Huedepohl, Vice President of Midwest,
who collectively beneficially own approximately 239,157 shares of Midwest Common
Stock (approximately 14.7% of the outstanding shares of Midwest Common Stock as
of the Record Date), have entered into Shareholder Voting Agreements with
Midwest and AMCORE. Pursuant to such Shareholder Voting Agreements, the
directors and executive officers of Midwest have agreed to vote their shares in
favor of the Merger Agreement and the Plan of Merger and the transactions
contemplated thereby, provided that the Merger Agreement has not been
terminated. In addition, such directors and officers have agreed not to transfer
shares in violation of the "pooling of interests" rules. See "THE MERGER --
Shareholder Voting Agreements."
 
SOLICITATION, REVOCATION AND USE OF PROXIES
 
     In addition to solicitation by use of the mails, proxies may be solicited
by directors, officers and employees of Midwest in person or by telephone,
facsimile or by other means of communication. Such directors, officers and
employees will not be additionally compensated, but may be reimbursed for
reasonable out-of-pocket expenses, in connection with such solicitation.
Arrangements will be made with banks and brokerage firms and other custodians,
nominees and fiduciaries for forwarding of proxy solicitation materials to the
beneficial owners of shares held of record by such custodians, nominees and
fiduciaries, and AMCORE will reimburse such custodians, nominees and fiduciaries
for reasonable expenses incurred in connection therewith. AMCORE will bear all
expenses of the solicitation of proxies, including the cost of mailing this
Proxy Statement/Prospectus.
 
     A shareholder may revoke any proxy given pursuant to this solicitation at
any time prior to its exercise by the execution of a proxy signed at a later
date or by the giving of written notice of revocation to the Secretary of
Midwest at any time before the taking of the vote at the Special Meeting. Any
written notice of revocation should be delivered to Midwest Federal Financial
Corp., 1159 Eighth Street, Baraboo, Wisconsin 53913, Attention: Nancy L. Bilz,
Secretary, before the taking of the vote at the Special Meeting. Furthermore, a
shareholder giving a proxy may revoke such proxy by attending the Special
Meeting and voting the shareholder's shares in person.
 
     HOLDERS OF MIDWEST COMMON STOCK ARE REQUESTED TO COMPLETE, DATE AND SIGN
THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY TO MIDWEST IN THE ENCLOSED
ENVELOPE. MIDWEST SHAREHOLDERS SHOULD NOT SEND STOCK CERTIFI-
 
                                       17
<PAGE>   23
 
CATES WITH THEIR PROXY CARDS. IF THE MERGER IS CONSUMMATED, MIDWEST SHAREHOLDERS
WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF THEIR STOCK CERTIFICATES.
 
OTHER MATTERS
 
     As of the date of this Proxy Statement/Prospectus, the Midwest Board does
not intend to bring any other business before the Special Meeting other than as
set forth in the Notice of Special Meeting of Shareholders and, so far as is
known to the Midwest Board, no matters are to be brought before the Special
Meeting except as specified in the Notice of Special Meeting Shareholders. As to
any other business that may properly come before the meeting, however, the proxy
holders intend to vote the proxies in respect thereof in accordance with their
judgment and discretion.
 
                                       18
<PAGE>   24
 
                                   THE MERGER
 
     The following description of the Merger does not purport to be complete and
is qualified in its entirety by reference to the Merger Agreement, which is
incorporated by reference into this Proxy Statement/Prospectus. All Midwest
Shareholders are urged to read the Merger Agreement in its entirety.
 
BACKGROUND OF THE MERGER
 
     The past several years have been a period of substantial and rapid change
in the financial services industry, characterized by, among other things,
intensifying competition and increasing consolidation. Competition for deposits
and customer relationships has increased as mutual funds and providers of
non-FDIC-insured products have successfully attracted assets that had in the
past routinely been invested in depository institutions like the Bank. Lending
also has attracted competitors as large regional and national banking
organizations, credit unions, insurance companies, brokerage firms and mortgage
banking companies, among others, have effectively solicited mortgage, consumer
and other loan customers from community banks like the Bank, in many cases
without geographic limitations. The recent consolidation among financial
institutions is an outgrowth, in part, of the removal of many interstate
barriers limiting expansion of these organizations, the perceived need by many
financial institutions to increase their critical mass in order to compete
effectively and relatively high acquisition premiums that some selling
institutions believe may decline in the future. During this period, the Midwest
Board has periodically reviewed Midwest's strategic alternatives in light of
these changing competitive conditions and has taken various steps to maintain
and enhance Midwest's long-term competitive position and profitability.
 
     Midwest was formed to become the unitary savings and loan holding company
for the Bank upon the Bank's conversion from a federal mutual savings bank to a
federal stock savings bank on June 30, 1992. From that date to March 31, 1997,
the assets of Midwest grew by 75% and the stock price of Midwest increased by
529%. Net income (adjusted for the one-time charge to recapitalize the SAIF) for
the year ended December 31, 1996 was 128% higher than the Bank's net income for
the year ended December 31, 1992. Midwest's operating strategy has been to
operate not like a traditional thrift institution, but rather to adopt various
products and services traditionally associated with commercial banks, such as
commercial loans, non-interest bearing commercial deposits and trust services.
 
     From time to time since the 1992 conversion, Midwest management and the
Midwest Board have considered alternative strategic directions for the company,
including affiliating with another financial institution. Through industry
contacts and input from financial and legal advisers, Gary E. Wegner, President
and Chief Executive Officer of Midwest, sought to remain apprised of trends in
the consolidation market. The Midwest Board periodically received input
regarding consolidation trends from Mr. Wegner as well as legal and financial
advisers and other individuals invited to discuss industry issues with the
Midwest Board.
 
     Expansion through the acquisition of smaller financial institutions or
branch facilities has been considered as opportunities have arisen that were
consistent with Midwest's objective of profitable growth. Although Midwest has
not acquired another financial institution since becoming a public company in
1992, it has grown by other means through focusing on the expansion of its
retail branch network. Five of the Bank's nine offices were purchases or
start-ups during the last five years, including two purchased from another
financial institution in 1994.
 
     Based on the following trends and developments, Mr. Wegner decided in May
of 1997 to recommend to the Midwest Board that it consider a possible sale of
the company. Midwest had record earnings in 1996, but during the first quarter
of 1997 its stock had traded in a range of closing prices from $17.25 to $18.50
per share, compared to a range of $18.00 to $24.50 during the previous quarter.
Trading volume was frequently less than 1,000 shares per day. Mr. Wegner was
concerned about the liquidity and volatility of Midwest stock. He was also
concerned whether Midwest could indefinitely sustain its prior high rate of
growth in assets and profitability. He and the Midwest Board were aware of
continuing merger activity near Midwest's market area, including acquisitions by
AMCORE of community banks located in southern Wisconsin. Current acquisition
market pricing and the continued fundamental strength of the economy seemed to
indicate favorable timing for consideration of a sale in Mr. Wegner's view. The
Midwest Board considered and accepted Mr. Wegner's
                                       19
<PAGE>   25
 
recommendation and determined in May of 1997 to engage a financial adviser to
assist it in finding a purchaser for the company.
 
     On May 29, 1997, Edelman was engaged to assist Midwest as its financial
advisor to assist Midwest in finding a purchaser for the company. Edelman, with
the assistance of Midwest, compiled a Confidential Memorandum concerning
Midwest's operations and Midwest's interest in a proposed business combination.
On July 23, 1997, Edelman met with the Midwest Board and distributed and
reviewed the Confidential Memorandum with it. Edelman also reviewed a list of
banks, thrifts, insurance companies and securities firms that Edelman and Mr.
Wegner believed may have an interest in engaging in a business combination with
Midwest. Edelman was authorized to distribute the Confidential Memorandum to
prospective purchasers. A total of 45 prospective purchasers were contacted by
Edelman, 24 of which asked to receive the Confidential Memorandum and nine of
which subsequently submitted preliminary expressions of interest in effecting a
business combination with Midwest (the "Expressions").
 
     On September 9, 1997, Edelman met with the Midwest Board to review the
Expressions. Following its review of the proposals, the Midwest Board determined
that Edelman should invite six of the nine parties to conduct additional due
diligence with respect to Midwest and to submit revised proposals in the form of
a markup of a proposed definitive agreement prepared by Midwest and Schiff
Hardin & Waite ("Schiff"), Midwest's outside legal counsel.
 
     On October 22, 1997, following review of additional documentary material
and discussions with management concerning Midwest, four parties submitted
revised proposals for a combination with Midwest.
 
     On October 24, 1997, the Midwest Board met with Edelman and Schiff to
review the revised proposals. Edelman provided a financial analysis of the
revised proposals, and Schiff explained the relevant legal considerations.
During the following week, at the behest of the Midwest Board, management of
Midwest, Schiff and Edelman held meetings with three of the interested parties
(the "Bidders") to discuss the financial terms of their respective proposals.
The revised proposals from the Bidders were superior to the revised proposal
submitted by the fourth prospective purchaser, so the Midwest Board determined
to first pursue the proposals from the Bidders, while retaining the option to
revisit the proposal from the fourth prospective purchaser if the proposals by
the Bidders did not materialize as expected into an acceptable final business
combination agreement. The Bidders and the fourth prospective purchaser each
offered shares of their respective common stock as merger consideration, which
would be exchanged for Midwest Common Stock.
 
     Beginning on October 27, 1997 and for the next two days, Mr. Wegner, Scott
D. Huedepohl, the Bank's Executive Vice President, Schiff and Edelman met with
each of the Bidders: (i) AMCORE, (ii) a bank holding company with less than $500
million in total assets (the "Bank Bidder") and (iii) a thrift holding company
(the "Thrift Bidder"). Each of the Bidders was advised that the Midwest Board
intended to convene a meeting on October 31 to further evaluate the Bidders'
proposals and to determine which of the three Bidders it would negotiate with
toward a definitive business combination agreement. In conversations with AMCORE
and the Thrift Bidder, Edelman advised each that their bids were close relative
to price, that each should consider whether they could improve their bid and, if
so, to notify Edelman prior to Midwest's board meeting on October 31 so that a
revised bid could be considered by the Midwest Board. AMCORE notified Edelman
that it did not intend to increase its bid, while the Thrift Bidder increased
its bid. The AMCORE and Thrift Bidder proposals remained extremely close
relative to price. The per share price bid by the Bank Bidder was significantly
in excess of the bids submitted by AMCORE and the Thrift Bidder.
 
     On October 31, 1997, the Midwest Board met with Edelman and Schiff to
discuss the results of the meetings with the Bidders and to further evaluate
their proposals. Following a discussion concerning the Bidders and the terms of
their proposals, the Midwest Board directed management, Edelman and Schiff to
pursue negotiations toward a definitive business combination agreement with
AMCORE, which would later be submitted to the Midwest Board for its
consideration. Between October 31, 1997 and November 11, 1997, the terms of a
definitive business combination agreement were negotiated between AMCORE and
Midwest.
 
     On November 10, the Midwest Board met again with Edelman and legal counsel
to consider the Merger Agreement. Edelman reviewed information regarding the
three Bidders and their proposals. It was noted that
 
                                       20
<PAGE>   26
 
the AMCORE proposal and the proposal by the Thrift Bidder were extremely close
in terms of price as measured by the recent stock prices of each party. The bid
by the Bank Bidder, however, was significantly higher than AMCORE's and the
Thrift Bidder's price proposals.
 
     AMCORE was the largest of the Bidders in terms of asset size, market
capitalization and stock trading volume. The Midwest Board was informed that the
Bank Bidder, which was the smallest of the Bidders in terms of asset size,
market capitalization and stock trading volume, had a different business plan
than AMCORE and the Thrift Bidder in that the Bank Bidder did not intend to
change the name of the Bank and intended to give Midwest minority representation
on its post-merger holding company board of directors.
 
     Edelman advised the Midwest Board that Midwest was an incremental
geographic market extension for AMCORE, but that the Bank Bidder's operations
were concentrated in another geographical market area. In light of the
materiality of a Midwest acquisition to the Bank Bidder, Edelman noted that the
Bank Bidder's future stock value could be more closely dependent on the ongoing
performance of Midwest's operations. Edelman also noted that stock market
reaction to merger announcements could be more pronounced in more material
acquisitions.
 
     The Midwest Board deliberated concerning the differences among the
proposals from the three Bidders. The Midwest Board considered the expertise and
depth necessary to successfully integrate the operations of Midwest and the Bank
Bidder and to maintain and enhance shareholder value in the future. Concerns
were expressed regarding the probable products to be offered by, and management
depth of, the combined operation. Concerns were also expressed regarding the
combined operation's ability to grow effectively and profitably through further
acquisitions, which the Midwest Board considered important to rationalize the
combined operation in a geographical sense. Notwithstanding that the per share
price offered by the Bank Bidder was higher than the price offered by AMCORE and
the Thrift Bidder, the Midwest Board determined that the proposal by the Bank
Bidder was not in the best interests of shareholders. Given the risks and
uncertainties involved in the Bank Bidder's transaction and its future business
plan, the Midwest Board determined that the proposal by AMCORE was superior
compared to the Bank Bidder's proposal.
 
     The Midwest Board determined that an affiliation with AMCORE, a financial
institution holding company with significantly greater critical mass and better
competitive posture than Midwest, would benefit Midwest's shareholders by giving
them an ownership interest in a company better positioned than Midwest to
compete in the financial services industry in the years ahead.
 
     Schiff also reviewed with the Midwest Board the draft of the Merger
Agreement, as well as the fiduciary duties of the Midwest Board. The Midwest
Board asked questions of Mr. Wegner, Mr. Huedepohl, Schiff and Edelman regarding
the three proposals and the Merger Agreement.
 
     Also at the meeting on November 10, Edelman provided its verbal opinion to
the Midwest Board that the Exchange Ratio was fair, from a financial point of
view, to the holders of Midwest common stock (see "The Merger -- Opinion of
Midwest's Financial Advisor"). After deliberating concerning the Merger
Agreement and the proposals by the Bank Bidder and the Thrift Bidder, the
Midwest Board, by unanimous vote of all directors, authorized and approved the
Merger Agreement and the transactions contemplated thereby, determined that the
Merger Agreement be submitted to a vote of the Midwest Shareholders and
authorized Mr. Wegner to execute the Merger Agreement, subject to satisfactory
resolution of final contract terms. The Merger Agreement was executed in the
evening of November 11, 1997, and the Merger was publicly announced the morning
of November 12, 1997. Edelman subsequently delivered its written opinion that as
of November 11, 1997, the Exchange Ratio was fair, from a financial point of
view, to the holders of Midwest common stock.
 
REASONS FOR THE MERGER; RECOMMENDATION OF THE MIDWEST BOARD
 
REASONS FOR MERGER--AMCORE
 
     The AMCORE Board and Executive Committee considered a number of factors,
including, among other things, the financial condition of Midwest and projected
synergies which are anticipated to result from the Merger. The Executive
Committee concluded that the Merger presents an unique opportunity for AMCORE
                                       21
<PAGE>   27
 
to increase its presence in Wisconsin through the acquisition of an established
financial institution having operations in the targeted area. AMCORE's decision
to pursue discussions with Midwest was primarily a result of AMCORE's assessment
of the value of Midwest's franchise, its substantial asset base within the
Wisconsin area, the potential of other acquisitions in the Wisconsin area and
the compatibility of the businesses of the two banking organizations. The AMCORE
Board and Executive Committee believe that the Merger will benefit AMCORE's
shareholders.
 
     The AMCORE Board and Executive Committee considered that the Merger would
be effective in fulfilling AMCORE's long-term objective of enhancing its market
presence in Wisconsin. The AMCORE Board and Executive Committee also considered
that the Merger would extend AMCORE's advanced consumer banking technology and
customer services to Midwest's retail customer base, while similarly extending a
broader range of corporate and private banking services to its Wisconsin
customers.
 
     The AMCORE Board further considered the gains to be achieved through the
application of AMCORE's Acquisition Integration Policy which is used as a
framework for the integration and consolidation of institutions which it
acquires. Integration involves the process of including a new subsidiary in the
products, services, practices, and general operating philosophies of AMCORE,
thereby employing the combined resources of AMCORE and Midwest to better serve
the communities and offer a broad array of products and services through an
expanded branch network.
 
     The foregoing discussion of the information and factors considered by the
AMCORE Board and the Executive Committee is not intended to be exhaustive, but
includes the material factors considered by the AMCORE Board and the Executive
Committee in approving the Merger.
 
REASONS FOR MERGER -- MIDWEST
 
     The Midwest Board has concluded that the Merger would be in the best
interests of Midwest and its shareholders. In reaching this determination, the
Midwest Board consulted with Schiff with respect to the legal duties of the
Midwest Board, regulatory matters, tax matters and the Merger Agreement and
issues related thereto. The Midwest board also consulted with Edelman with
respect to the financial aspects and fairness of the Exchange Ratio. The Midwest
Board also consulted with senior management on all of the foregoing issues as
well as the future prospects of Midwest if it remained independent and other
advantages of the Merger. The Midwest Board considered a number of factors,
without assigning any specific or relative weight to the consideration of such
factors. The material factors considered were the following.
 
     (i) Midwest had experienced substantial growth in assets and net income and
its stock price had increased significantly since the Bank converted from mutual
to stock form in June 1992. See "-- Background of the Merger." The Midwest Board
was concerned, based in part on views expressed by Mr. Wegner, that it would be
difficult to maintain in the years ahead the rate of growth that Midwest had
experienced since 1992. Accordingly, this was a factor that the Midwest Board
considered in determining that it was the right time to sell the company. By
entering into the Merger Agreement, the Midwest Board obtained value for Midwest
Shareholders for their shares as determined under the terms of the Exchange
Ratio, and the prospect for future value based on the future prospects of
AMCORE's stock price.
 
     (ii) Midwest's market capitalization on November 11, 1997, the day before
the Merger was announced, was $47.8 million and Midwest had 1,627,674 shares of
common stock issued and outstanding. Since Midwest became a public company in
1992, Midwest has experienced low liquidity for its shares, which has resulted
in a much wider spread in the bid and ask price for the stock than the Midwest
Board had wanted. While Midwest has attempted to create more liquidity for its
shares through a series of stock splits and repurchases of its shares in the
open market, the Midwest Board continued to remain concerned about the liquidity
for the Midwest shares. The lack of liquidity for the Midwest shares caused
investors difficulty in acquiring or selling shares at predictable prices,
particularly given the large bid/ask spread, and also hindered Midwest's ability
to use its shares as merger consideration in connection with expanding through
the acquisition of other financial institutions. By affiliating with AMCORE, a
financial institution holding company having a market capitalization of $643
million as of November 11, 1997 Midwest Shareholders will have significantly
more liquidity for their shares, and the other difficulties associated with
liquidity would be significantly abated. The Midwest
                                       22
<PAGE>   28
 
Board determined that share liquidity would still pose a potential problem if
Midwest consummated a business combination with the Bank Bidder.
 
     (iii) The Midwest Board had been kept apprised from time to time of merger
and acquisition activity in the financial institutions industry by Mr. Wegner
and Mr. Edelman. The Midwest Board had begun to monitor this activity more
closely in 1996 and 1997 as the activity appeared to intensify and prices paid
for financial institutions appeared to be increasing. In light of the Midwest
Board's concerns about Midwest's ability to continue to sustain the levels of
growth and shareholder returns it had experienced in the past and the higher
prices being paid for banking organizations like Midwest, the Midwest Board
determined that the time was right to consider a sale of the company.
 
     (iv) The Midwest Board believed that Midwest had recorded exceptional
financial performance since it went public in 1992 and that if that performance
continued at the same rate, the market would continue to price Midwest's stock
at the price-to-book and price-to-earnings multiples it had in the past. But
given the Midwest Board's concerns regarding Midwest's ability to sustain its
earnings growth, the Midwest Board believed that there was significant risk that
these multiples could not be sustained for the foreseeable future. As a result,
the Midwest Board determined that exchanging Midwest Common Stock for stock of a
company like AMCORE, which had a greater geographic diversification of its
assets and operations and critical mass that offered it significant competitive
advantages over Midwest, would reduce the risk to Midwest Shareholders that the
value of their shares would be sustained over the long term. In short, the
current and future value of Midwest's stock is a function of the risk inherent
in the security, and the Midwest Board determined that this risk could be
reduced by trading the Midwest stock for stock of AMCORE, a much larger banking
organization.
 
     (v) As a banking organization with assets of approximately $200 million,
the Midwest Board determined that Midwest's smaller size relative to much larger
regional banking organizations like AMCORE and the Thrift Bidder would be a
disadvantage to Midwest in the years ahead. Critical mass and the associated
economies of scale allow larger banking organizations like AMCORE to deliver
products and services more cost effectively and efficiently and provide many
more opportunities for cross-selling other products and services. The Midwest
Board also determined that similar critical mass difficulties would be involved
in a combination between Midwest and the Bank Bidder. Indeed these problems
would be exacerbated since there would be few opportunities to reduce expenses
as a result of the combination with the Bank Bidder and the geographic diversity
of the two operations, and the associated fragmentation of markets, would negate
in many respects the benefits associated with combining assets and otherwise
increasing its critical mass.
 
     (vi) The Midwest Board determined that AMCORE's business plan, and
Midwest's integration with and into AMCORE's operations, would benefit Midwest,
Midwest Shareholders and the communities in which the Bank operates. AMCORE
expressed its desire to allow local responsibility and visibility for business
involving customer contact, while centralizing, where possible, those items that
did not involve customer contact. In addition, AMCORE had demonstrated through
several recent acquisitions its intentions to grow its franchise. The Midwest
Board identified AMCORE's growth potential as another potential benefit for the
shareholders of Midwest upon the exchange of Midwest stock for AMCORE stock.
 
     (vii) When the Midwest Board compared the proposals by AMCORE and the
Thrift Bidder, it considered the differences between affiliating with a
commercial bank compared to a thrift institution. Since 1992, the Bank had
significantly increased its commercial real estate and commercial business
lending, where at March 31, 1997, approximately 32% of the Bank's loan portfolio
consisted of commercial loans. This commercial lending focus and the addition of
the trust department in 1994 is more characteristic of a commercial bank than a
traditional thrift, the lending focus of which would be in one- to four-family
residential mortgage loans. As such, the Midwest Board determined that
integrating the Bank with AMCORE's bank subsidiaries would be a more natural
combination compared to combining with the Thrift Bidder. AMCORE's products and
services also would be a natural extension of those services currently offered
by the Bank, and the Bank's existing customers would benefit from having these
additional commercial bank products and services at their disposal. A
combination with the Thrift Bidder would have been less beneficial to the Bank's
customers. Apart from the integration issues raised by combining with a bank or
thrift, the
 
                                       23
<PAGE>   29
 
Midwest Board also determined that affiliating with a commercial banking
organization like AMCORE offered Midwest Shareholders greater potential future
value compared to stock of a savings institution holding company like the Thrift
Bidder.
 
     (viii) The Midwest Board took into consideration and relied upon the advice
of Edelman, Midwest's financial adviser. At the Midwest board meeting held on
November 10, 1997, Edelman provided a financial analysis of the proposals by the
Three Bidders and its verbal opinion that the Exchange Ratio was fair, from a
financial point of view, to the holders of Midwest common stock. Edelman
subsequently delivered its written opinion that as of November 11, 1997, the
Exchange Ratio was fair, from a financial point of view, to the holders of
Midwest common stock. That opinion was updated as of the date of this Proxy
Statement/Prospectus and is attached hereto as Annex I. The Midwest Board
considered the presentation by Edelman concerning certain financial aspects of
the Merger Agreement and the related transactions. For information regarding the
presentation by Edelman, see "THE MERGER -- Opinion of Midwest's Financial
Advisor."
 
     The foregoing discussion of the information and factors considered by the
Midwest Board is not intended to be exhaustive but is believed to include all
material factors considered by the Midwest Board. Throughout its deliberations,
the Midwest Board received the advice of its outside legal counsel. After
deliberating with respect to the Merger and the other transactions contemplated
by the Merger Agreement, considering, among other things, the information and
factors described above (including reliance on the opinion of Edelman), the
Midwest Board concluded that the Merger is fair to, and in the best interest of,
the Midwest Shareholders. In reaching this conclusion, the Midwest Board did not
assign relative or specific weights to the above information and factors or
determine that any information or factor was of particular importance. A
determination of various weighting would, in the view of the Midwest Board, be
impractical. Rather, the Midwest Board viewed its position and recommendations
as being based on the totality of the information and factors presented to and
considered by it. In addition, individual members of the Midwest Board may have
given different weight to different information and factors.
 
     FOR THE REASONS SET FORTH ABOVE, THE MIDWEST BOARD HAS DETERMINED THAT THE
TERMS OF THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, MIDWEST
SHAREHOLDERS. ACCORDINGLY, THE MIDWEST BOARD UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF MIDWEST VOTE FOR APPROVAL OF THE MERGER AGREEMENT AND THE PLAN
OF MERGER.
 
OPINION OF MIDWEST'S FINANCIAL ADVISOR
 
     On May 29, 1997, Midwest engaged Edelman to provide financial advisory
services in connection with the possible sale of Midwest. Edelman is a financial
advisory and consulting firm engaged in advising financial institutions and
other businesses regarding financing and merger transactions and other matters.
Midwest selected Edelman because of its expertise with financial institutions,
and its particular knowledge of, and experience with, Midwest. Edelman had
previously advised Midwest regarding certain acquisition efforts. In his tenure
at another firm, the principal of Edelman also provided services to Midwest in
connection with its 1992 mutual-to-stock conversion.
 
     At a meeting of the Midwest Board of Directors on November 10, 1997,
Edelman provided its verbal opinion to the Board that the Exchange Ratio was
fair, from a financial point of view, to the holders of Midwest Common Stock.
Edelman subsequently delivered its written opinion that as of November 11, 1997,
the date of the Merger Agreement, the Exchange Ratio was fair, from a financial
point of view, to the holders of Midwest Common Stock. Edelman subsequently
updated its opinion as of the date of this Proxy Statement/Prospectus.
 
     The full text of Edelman's opinion, as updated as of the date of this Proxy
Statement/Prospectus, is attached hereto as Annex I. THE SUMMARY OF EDELMAN'S
OPINION AS OF THE DATE OF THIS PROXY STATEMENT/ PROSPECTUS AS SET FORTH HEREIN
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION, AND
SHAREHOLDERS ARE URGED TO READ SUCH OPINION.
 
                                       24
<PAGE>   30
 
     In forming its opinion, Edelman reviewed, among other things, (i) with
respect to Midwest, Annual Reports on Form 10-KSB and Annual Reports to Midwest
Shareholders for the fiscal years ended December 31, 1992 through 1996;
Quarterly Reports on Form 10-QSB for the quarters ended March 31, June 30, and
September 30, 1997; (ii) with respect to AMCORE, Annual Reports on Form 10-K and
Annual Reports to AMCORE Shareholders for the fiscal years ended December 31,
1992 through 1996; Quarterly Reports on Form 10-Q for the quarters ended March
31, June 30, and September 30, 1997; and unaudited financial information
concerning the quarter and fiscal year ended December 31, 1997 contained in
AMCORE's press release dated January 21, 1998; (iii) the Merger Agreement, along
with this Proxy Statement/Prospectus; (iv) certain other information concerning
the future prospects of Midwest and AMCORE, and of the combined entity, as
furnished by the respective companies, which Edelman discussed separately with
the senior management of Midwest and AMCORE; (v) historical market price and
trading data for Midwest and AMCORE Common Stock; (vi) the financial performance
and condition of Midwest and AMCORE and similar data for other financial
institutions which Edelman believed to be relevant; (vii) the financial terms of
other mergers which Edelman believed to be relevant; and (viii) such other
information as Edelman deemed appropriate. Edelman met with certain senior
officers of Midwest and AMCORE to discuss the foregoing as well as other matters
relevant to its opinion including the past and current business operations,
financial condition and future prospects of Midwest and AMCORE. Edelman also
took into account its assessment of general economic, market and financial
conditions, and such additional financial and other factors as Edelman deemed
relevant.
 
     In conducting its review and preparing its opinion, Edelman relied upon the
accuracy and completeness of the financial and other information regarding
Midwest and AMCORE provided to it by the respective managements of Midwest and
AMCORE, and on certain other publicly available financial and other information,
and did not independently verify any such information. Edelman relied upon the
management of Midwest and AMCORE in forming a view of the future prospects of
Midwest and AMCORE, and in forming assumptions regarding a range of potential
cost savings resulting from the Merger. Edelman assumed, without independent
verification, that the aggregate allowances for loan losses at Midwest and
AMCORE were adequate to cover such losses. Edelman did not inspect any
properties, assets or liabilities of Midwest or AMCORE and did not make or
obtain any evaluations or appraisals of any properties, assets or liabilities of
Midwest or AMCORE. In rendering its opinion, Edelman assumed that the Merger
will be consummated on the terms described in the Merger Agreement and the Plan
of Merger.
 
     EDELMAN'S OPINION IS DIRECTED SOLELY TO THE FAIRNESS, FROM A FINANCIAL
POINT OF VIEW, OF THE EXCHANGE RATIO AND DOES NOT ADDRESS THE DECISION TO EFFECT
THE MERGER OR CONSTITUTE A RECOMMENDATION TO ANY MIDWEST SHAREHOLDER AS TO HOW
SUCH SHAREHOLDER SHOULD VOTE ON THE MERGER. IT IS FURTHER UNDERSTOOD THAT
EDELMAN'S OPINION IS BASED ON ECONOMIC AND MARKET CONDITIONS AND OTHER
CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS PROXY STATEMENT/PROSPECTUS, AND
DOES NOT REPRESENT AN OPINION AS TO WHAT THE VALUE OF AMCORE STOCK WILL BE WHEN
ISSUED TO THE SHAREHOLDERS OF MIDWEST UPON CONSUMMATION OF THE MERGER OR
THEREAFTER.
 
     In connection with rendering its opinion to the Midwest Board, Edelman
performed a variety of financial analyses that are summarized below. The
preparation of a fairness opinion is a complex process involving subjective
judgments and quantitative analysis and is not necessarily susceptible to
partial analysis or summary description. Edelman believes that its analyses and
the summary set forth herein must be considered as a whole and that selecting
portions of such analyses and the factors considered therein, without
considering all factors and analyses, creates an incomplete view of the analyses
and processes underlying Edelman's opinion. Any estimates or assumptions used in
Edelman's analyses are not necessarily indicative of actual future value or
results, which may be significantly more or less favorable than is suggested by
such estimates or assumptions. No company or previous transaction used in
Edelman's analyses was identical to Midwest or AMCORE or the Merger. The fact
that any specific analysis has been referred to in the summary below is not
meant to indicate that such analysis was given more weight than any other
analysis. Edelman may have given various analyses more or less weight than other
analyses, and may have deemed various assumptions more or less probable than
other assumptions.
 
                                       25
<PAGE>   31
 
     The following is a brief summary of the analyses performed by Edelman in
connection with its opinion:
 
     1. Comparable Transactions.  Edelman analyzed certain pricing statistics
regarding bank and thrift mergers and compared these to pricing ratios for the
Merger. In acquisitions of banks nationwide announced during 1996 and from
January 1, 1997 through February 12, 1998, average price to tangible book value
ratios were 197% and 242%, respectively, compared to 154% and 194% for thrifts.
Among acquisitions of $100 million to $400 million asset size institutions in
Wisconsin and bordering states completed since January 1, 1996, median bank
price to tangible book value and price to earnings ratios exceeded thrift
pricing 193% to 150% and 19.0 to 16.3, respectively. Midwest, a unitary savings
and loan holding company regulated by the Office of Thrift Supervision, was
valued at 258% price to tangible book value in the Merger based on latest
available (September 30, 1997) book value per share and the average of the
closing bid and ask prices of AMCORE stock on February 18, 1998, the last day
prior to the date of this Proxy Statement/Prospectus. Based on last 12 months
earnings per share, Midwest was valued in the Merger at 18.1 times reported
earnings. Price to earnings adjusted for gains on sales of holding company
securities was 19.9.
 
     2. Comparable Companies.  Edelman compared certain operating and stock
valuation ratios of AMCORE and a group of 10 other midwestern banking companies
with total assets of $1 billion to $5 billion. The other companies (the "Group")
included Brenton Banks, Inc.; Community First Bankshares, Inc.; Chemical
Financial Corporation; F&M Bancorporation, Inc.; First Merchants Corporation;
Grand Premier Financial, Inc.; Mississippi Valley Bancshares, Inc.; Pinnacle
Banc Group, Inc.; First Source Corporation; and First Financial Corporation.
Based on latest available financial information (AMCORE's as of December 31,
1997), AMCORE and the Group median had tangible equity to tangible assets of
7.5% and 8.8%, respectively, and non-performing assets to total assets of .59%
and .35%, respectively. Adjusted for charges related to mergers and information
systems, AMCORE had returns on average assets and equity of 1.00% and 13.05%,
respectively, for the last 12 months, compared to Group medians of 1.28% and
14.42%. Based on February 18, 1998 closing stock prices, AMCORE's price to last
12 months adjusted earnings was 20.0, compared to a Group median last 12 months
price to earnings ratio of 20.2. Price to average securities analyst estimates
of current fiscal year earnings as reported by the Institutional Brokers
Estimate System ("IBES") was 16.7 for AMCORE and 18.1 for the Group median.
AMCORE had a price to tangible book value ratio of 250% compared to 272% for the
Group median. It was also noted that AMCORE stock had appreciated 44% since the
beginning of 1997, compared to 61% for the Group median, 63% for the Nasdaq Bank
Index and 36% for the S&P 500 index.
 
     Edelman also compared certain operating and stock valuation ratios of
Midwest to a universe of 222 publicly traded thrift stocks which
contemporaneously with the Merger announcement were not subject to pending
acquisitions and which had financial data available for the third quarter of
1997 (the "Universe"). Based on November 10, 1997 closing prices, Midwest's
ratio of last 12 months price to earnings (as adjusted for holding company
securities gains) was 17.1, compared to a Universe median of 17.9. Midwest's
price to tangible book value was 222%, compared to a Universe median of 166%.
Midwest and the Universe median, respectively, had total assets of $212 million
and $496 million; tangible equity to tangible assets of 9.0% and 9.2%; and
non-performing assets to total assets of .09% and .47%. Midwest's returns on
average assets and equity for the last 12 months, adjusted for holding company
securities gains, were 1.29% and 14.89%, compared to Universe medians of .95%
and 9.31%.
 
     3. Trading and Dividend Analysis.  Edelman reviewed certain trading,
liquidity and dividend data regarding Midwest and AMCORE. AMCORE stock traded a
daily average of 23,608 shares from January 1, 1996 through November 11, 1997,
the last day before the Merger was announced, compared to 1,563 for Midwest.
Based on current quarterly dividend rates and the Exchange Ratio, the Merger
constituted a dividend increase of 66% for Midwest shareholders. Edelman also
reviewed the averages of the daily ratios of Midwest to AMCORE closing market
price (the "Trading Ratio") over various time horizons and compared this to the
Exchange Ratio. The Exchange Ratio represented a premium over the average
Trading Ratio of 9.3% during January 1, 1997 through November 11, 1997; 9.9%
during July 1, 1997 through November 11, 1997; 8.8% during the 20 trading days
ending November 11, 1997; and 1.6% based on the average of the stocks' closing
bid and ask prices on November 11, 1997.
 
                                       26
<PAGE>   32
 
     4. Contribution Analysis.  Edelman compared Midwest shareholders' pro forma
ownership in AMCORE to Midwest's relative contribution of assets, equity, market
capitalization and income. Based on shares outstanding, options awarded and
February 18, 1998 market pricing of AMCORE stock, Midwest shareholders stood to
receive approximately 7.1% of the combined entity. By comparison, based on
latest available financial data (through September 30, 1997 for Midwest and
through December 31, 1997 for AMCORE) Midwest represented 5.5% of the two
companies' total assets, 6.5% of their total tangible shareholders' equity, 9.1%
of their last 12 months net income and 6.9% of their last 12 months income
adjusted for holding company securities gains at Midwest and merger and
information systems charges at AMCORE. As of November 11, 1997, the last day
before the Merger was announced, Midwest represented 6.9% of the two companies'
total market capitalization.
 
     5. Impact Analysis.  Edelman analyzed the theoretical impact of the Merger
on AMCORE's profitability based on various assumptions regarding financial
performance following closing. Sensitivity analysis was conducted with
assumptions regarding Midwest as follows: stand-alone profitability growth of 0%
to 15%, additional operating expense reduction due to the Merger of 2.5% to
12.5% and additional tax rate reduction due to the Merger of 0% to 1%. Based on
the foregoing factors, the Exchange Ratio and average securities analyst
estimates of AMCORE earnings per share for fiscal 1998 as reported by IBES,
Edelman calculated that the Merger would result in a per share profitability
impact ranging from negative 1.0% to positive .6%.
 
     6. Present Value Analysis.  Edelman calculated the theoretical stand-alone
value of Midwest shares on a present value basis across a range of 5-year
projections and valuation assumptions. Three scenarios were analyzed reflecting,
respectively, (a) increases in net income adjusted for holding company
securities gains of 10%, 15% and 20% annually; (b) trading values of 12, 15 and
18 times income in five years; and (c) discount rates of 10%, 12.5% and 15%.
Dividend growth was assumed to be 5% annually. Based on dividends paid and a
period-end stock trading value in the three scenarios, Edelman calculated
present values per share for Midwest of $19.45, $25.96 and $33.57. Based on the
average of the closing AMCORE bid and ask prices on February 18, 1998, the value
per Midwest share represented by the Exchange Ratio equaled $30.16.
 
     Edelman and Midwest entered into an agreement relating to the services
Edelman is providing in connection with the Merger. Pursuant to this agreement,
Midwest has paid Edelman an engagement fee of $15,000 and an opinion fee of
$10,000. Upon closing of the Merger, Midwest will also pay Edelman fees equal to
(a) .85% of sale price (as defined in the agreement), plus (b) 5.0% of the
amount by which sale price exceeds $47.5 million, minus (c) the engagement fee.
Midwest has also agreed to reimburse Edelman for out-of-pocket expenses
associated with its services subject to a maximum of $10,000 and to indemnify
Edelman against certain liabilities.
 
INTERESTS OF CERTAIN PERSONS IN THE MERGER
 
     Certain members of Midwest's management, the Bank's management and the
Board of Directors of the Bank and the Midwest Board may be deemed to have
interests in the Merger in addition to their interests, if any, as holders of
Midwest Common Stock. The Midwest Board was aware of these factors and
considered them, among other matters, in approving the Merger Agreement and the
transactions contemplated thereby.
 
     Officers of the Surviving Corporation.  The Merger Agreement provides that
the directors of Newco and the officers of Midwest immediately prior to the
Effective Time will become the officers of the surviving corporation. See "THE
MERGER -- Management and Operations of Midwest after the Merger."
 
     Indemnification.  AMCORE has agreed, for a period of five years from and
after the Effective Time, to indemnify and hold harmless each present and former
director, officer and employee of Midwest or any Midwest subsidiary against any
losses, claims, damages, liabilities, costs, expenses (including reasonable
attorney's fees), judgments, fines and amounts paid in settlement incurred in
connection with any claim, action, suit, proceeding or investigation, whether
asserted or arising before or after the Effective Time, to the full extent
permitted under applicable law (and AMCORE has agreed to advance expenses as
incurred to the full extent permitted under applicable law, provided that the
person to whom expenses are advanced provides any undertaking as required by
applicable law); provided such claim, action, suit, proceeding or investigation
is based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he or she is
                                       27
<PAGE>   33
 
or was a director, officer or employee of Midwest or any of its subsidiaries or
any of their predecessors or (ii) the Merger Agreement or Plan of Merger or any
of the transactions contemplated thereby, whether civil, criminal or
administrative. AMCORE will use its reasonable efforts to obtain, after the
Effective Time, directors' and officers' liability insurance coverage for the
officers and directors of Midwest and any Midwest subsidiary immediately prior
to the Effective Time (or policies providing comparable coverage) for a period
of three years after the Effective Time; provided, that AMCORE will not expend
for such insurance in any such year an amount greater than 150% of the cost of
the directors' and officers' liability policies maintained by Midwest for the
year ended December 31, 1996.
 
     Employee Benefits.  As a result of the Merger, directors, officers and
employees of Midwest and its subsidiaries may receive additional benefits in
connection with the Midwest benefit plans and programs. See "THE MERGER
AGREEMENT -- Employee Benefits."
 
     Stock Options.  Certain members of management of Midwest hold options to
purchase shares of Midwest Common Stock that will become fully exercisable in
connection with the Merger in accordance with the terms of the option plan and
agreement pursuant to which each such option was granted. All options to
purchase shares of Midwest Common Stock will be converted as of the Effective
Time into options to purchase AMCORE Common Stock. See "THE MERGER AGREEMENT --
Stock Option Agreements."
 
     Change in Control/Severance Agreements.  Midwest and/or the Bank have
entered into employment agreements containing change in control provisions (the
"Change in Control Agreements") with Gary E. Wegner, Scott D. Huedepohl and Mel
Bindl (each, an "Executive"). In the Merger Agreement, AMCORE has agreed that
the transactions contemplated by the Merger Agreement and the Plan of Merger
constitute a "change in control" of Midwest for purposes of the Change in
Control Agreements, and has agreed to perform the terms of the Change in Control
Agreements.
 
     The Change in Control Agreements of Messrs. Wegner and Huedepohl provide,
among other things, that if, within 12 months of a "change in control," the
Executive terminates his employment for any reason, the Executive will be
entitled to (i) a lump sum payment equal to the product of 2.99 times the
Executive's base amount as defined in Section 280G(b)(3) of the Code and (ii)
service credit for purposes of all employee benefit plans (including, but not
limited to, health and life insurance and incentive, pension and retirement
plans), and will be deemed to be an employee of Midwest and the Bank, for the
duration of his Change in Control Agreement. The Change in Control Agreements
generally provide that, if any amount payable to the Executive under the Change
in Control Agreements would constitute an "excess parachute payment" under
Section 280G of the Code, then the amount of such payment will be reduced such
that the aggregate payment will not exceed an amount equal to $1.00 less than
the maximum amount that Midwest may pay without loss of deduction under Section
280G(a) of the Code.
 
     The Change in Control Agreement of Mr. Bindl provides that if, after a
change in control, Mr. Bindl is terminated other than for "just cause,"
retirement or disability by the Bank during the term of his Change of Control
Agreement, he will be entitled to, among other things, a lump sum payment equal
to the product of 2.99 times his base amount, as defined in Section 280G(b)(3)
of the Code.
 
     Assuming that, within twelve months of a change in control, each of the
Executives' employment was terminated upon an immediate, qualifying termination
of employment, the amounts payable to each Executive under his Change in Control
Agreement, exclusive of any unpaid compensation through the date of termination,
would be approximately as follows: Mr. Wegner $340,000; Mr. Huedepohl, $194,000
and Mr. Bindl, $294,000.
 
SHAREHOLDER VOTING AGREEMENTS
 
     Concurrent with the execution of the Merger Agreement, AMCORE, Midwest,
each of the directors of Midwest (including Gary E. Wegner, President and Chief
Executive Officer of Midwest), and Scott D. Huedepohl, a Vice President of
Midwest, executed a separate Shareholder Voting Agreement (each a "Voting
Agreement," and collectively, the "Voting Agreements") by which each such person
agreed that he will vote all shares of Midwest Common Stock owned or
subsequently acquired in favor of the Merger, the Merger
 
                                       28
<PAGE>   34
 
Agreement and the Plan of Merger at any meeting of Midwest Shareholders.
Additionally, until the earliest to occur of the Effective Time of the Merger,
the termination of the Voting Agreements or the abandonment of the Merger, each
such person agreed that he will not vote any such shares in favor of the
approval of any other action, proposal or agreement which would result in
conditions under the Merger Agreement not being fulfilled or in favor of any
extraordinary corporate transaction, or sale or transfer of subsidiaries. Each
such shareholder also agreed not to transfer shares of Midwest Common Stock
owned by such person without the prior written consent of AMCORE and to the
entry of stop transfer instructions with Midwest against the transfer of such
shares. The Voting Agreements will terminate upon the termination of the Merger
Agreement or at the Effective Time. As of the Record Date, persons who had
executed Voting Agreements owned beneficially an aggregate of approximately
239,157 shares of Midwest Common Stock, or approximately 14.7% of the issued and
outstanding shares.
 
     The foregoing summary of the Voting Agreements is qualified in its entirety
by the text of the Voting Agreements, the form of which is attached as Exhibit A
to Annex II hereto and which is incorporated herein by reference.
 
MANAGEMENT AND OPERATIONS OF MIDWEST AFTER THE MERGER
 
     The Merger Agreement provides that, on the Closing Date, Newco will be
merged with and into Midwest. The surviving entity will be Midwest and the
separate corporate existence of Newco will terminate. As a result of the Merger,
Midwest will become and be operated as a wholly-owned subsidiary of AMCORE, and
the Bank, which is now owned by Midwest, will be controlled by AMCORE.
 
     The directors of Newco and the officers of Midwest (except for Gary E.
Wegner) immediately prior to the Merger will continue as the directors and
officers of the surviving corporation following the Merger. After the Merger,
AMCORE contemplates that Midwest will continue to maintain its separate
corporate identity and name, and that the officers of Midwest as the surviving
entity will be the same individuals who currently serve as Midwest's officers
(except for Mr. Wegner). Following the Merger, AMCORE will manage and direct the
operations of the Bank as it manages and directs its present bank subsidiaries.
 
REGULATORY APPROVAL
 
     On January 9, 1998, the Merger was approved by the Federal Reserve Board
under the Bank Holding Company Act of 1956, as amended (the "BHCA"), which
generally requires that the Federal Reserve Board take into consideration the
financial and managerial resources and future prospects of the respective
institutions and the convenience and needs of the communities to be served. The
BHCA prohibits the Federal Reserve Board from approving the Merger if it would
result in a monopoly or be in furtherance of any combination or conspiracy to
monopolize or to attempt to monopolize the business of banking in any part of
the United States, or if its effect in any section of the country may be
substantially to lessen competition or to tend to create a monopoly, or if it
would in any other manner be a restraint of trade, unless the Federal Reserve
Board finds that the anti-competitive effects of the Merger are clearly
outweighed in the public interest by the probable effect of the transaction in
meeting the convenience and needs of the communities to be served. The Federal
Reserve Board has the authority to deny an application if it concludes that the
combined organizations would have an inadequate capital position. Furthermore,
the Federal Reserve Board must also assess the records of the depository
subsidiaries of AMCORE and Midwest under the Community Reinvestment Act of 1977,
as amended (the "CRA"). The CRA requires that the Federal Reserve Board analyze,
and take into account when evaluating an application, each depository
institution's record of meeting the credit needs of its local communities,
including low and moderate-income neighborhoods, consistent with safe and sound
operation. See "SUPERVISION AND REGULATION."
 
     Under the BHCA, the Merger may not be consummated until the 30th day
following the date of Federal Reserve Board approval, during which time the
United States Department of Justice may challenge the Merger on antitrust
grounds. The commencement of an antitrust action would stay the effectiveness of
the Federal Reserve Board's approval unless a court specifically orders
otherwise. With the approval of the Federal Reserve Board and the Department of
Justice, the waiting period following Federal Reserve Board approval
 
                                       29
<PAGE>   35
 
may be reduced to no less than fifteen days. The BHCA provides for the
publication of notice and public comment on the application and authorizes the
regulatory agency to permit interested parties to intervene in the proceedings.
See "SUPERVISION AND REGULATION."
 
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
 
     The following is a summary description of the material federal income tax
consequences of the Merger to the Midwest Shareholders. The discussion is based
upon the provisions of the Code, applicable Treasury Regulations promulgated
thereunder, judicial decisions and administrative rulings and practices, all as
in effect on the date of this Proxy Statement/Prospectus and all of which are
subject to possible prospective or retroactive change. The discussion does not
address any state, local or foreign income or other tax consequences of the
Merger.
 
     The following discussion is not a complete description of all of the
federal income tax consequences of the Merger to Midwest Shareholders, and, in
particular, does not address all aspects of federal income taxation that may be
relevant to a particular Midwest Shareholder in light of such holder's personal
investment or tax circumstances, or to a Midwest Shareholder that is subject to
special treatment under the federal income tax laws (including life insurance
companies, foreign persons, tax-exempt entities, financial institutions,
broker-dealers, or holders who acquired Midwest Common Stock pursuant to the
exercise of employee stock options or otherwise as compensation). In addition,
no information is provided as to the tax consequences of the Merger to any
Midwest Shareholder who exercises and perfects dissenters' rights. The
discussion further assumes that the Midwest Common Stock will be held as capital
assets by the Midwest Shareholders at the Effective Time of the Merger.
 
     EACH MIDWEST SHAREHOLDER IS ADVISED TO CONSULT SUCH HOLDER'S OWN TAX
ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH HOLDER OF THE MERGER,
INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN INCOME AND
OTHER TAX LAWS.
 
     Midwest has received an opinion of Schiff Hardin & Waite, counsel to
Midwest, to the effect that the Merger will be treated as a tax-free
reorganization under Section 368(a)(1)(A) and 368(a)(2)(E) of the Code. Such
opinion is based upon certain customary representations and is subject to
certain customary assumptions and limitations set forth therein. It should be
noted that a ruling will not be sought from the IRS regarding the Merger. The
opinion of counsel referred to above will not be binding on the IRS, and the IRS
may disagree with the conclusions expressed in such opinion. Schiff Hardin &
Waite's opinion will be updated as of the Effective Time.
 
     Schiff Hardin & Waite has advised Midwest that, in accordance with its
opinion referred to above, the material federal income tax consequences of the
Merger to the Midwest Shareholders, assuming tax-free reorganization treatment,
will be as follows:
 
          (i) No gain or loss will be recognized by a Midwest Shareholder upon
     the conversion of the holder's shares of Midwest Common Stock solely into
     shares of AMCORE Common Stock pursuant to the Merger. A Midwest Shareholder
     that receives cash in lieu of a fractional share of AMCORE Common Stock
     will recognize gain or loss, which will be capital gain or loss, equal to
     the difference between the amount of cash received and the ratable portion
     of the holder's tax basis in the shares of Midwest Common Stock being
     converted pursuant to the Merger that is allocable to such fractional
     share.
 
          (ii) The aggregate tax basis of the shares of AMCORE Common Stock
     received by a former Midwest Shareholder pursuant to the Merger will be the
     same as the holder's aggregate tax basis in the shares of Midwest Common
     Stock being converted pursuant to the Merger, reduced by the ratable
     portion of such tax basis that is allocable to any fractional share of
     AMCORE Common Stock with respect to which cash is being received.
 
          (iii) The holding period of the shares of AMCORE Common Stock received
     by a former Midwest Shareholder pursuant to the Merger will include the
     holder's holding period with respect to the shares of Midwest Common Stock
     being converted pursuant to the Merger.
                                       30
<PAGE>   36
 
ACCOUNTING TREATMENT OF THE MERGER
 
     The parties anticipate that the merger will qualify for "pooling of
interests" accounting treatment. Under the pooling of interests method of
accounting, the historical basis of the assets and liabilities of AMCORE and
Midwest will be combined at the Effective Time and carried forward at their
previously recorded amounts, and the shareholders' equity accounts of Midwest
will be combined with the shareholders' equity accounts on AMCORE's consolidated
balance sheet. Income and other financial statements of AMCORE will not be
restated retroactively because the Merger is not material to the financial
statements of AMCORE.
 
     In order for the Merger to qualify for pooling of interests accounting
treatment, among other things, at least 90% of the outstanding Midwest Common
Stock must be exchanged for AMCORE Common Stock. AMCORE and Midwest have each
agreed not to take any action which would disqualify the Merger from pooling of
interests accounting treatment by AMCORE.
 
     The unaudited pro forma data included in this Proxy Statement/Prospectus
have been prepared using the pooling of interests method of accounting. See
"SUMMARY -- Comparative Per Share Data."
 
RIGHTS OF DISSENTING SHAREHOLDERS
 
     Under the provisions of Section 180.1301 et seq. of the WBCL, a copy of
which is attached to this Proxy Statement/Prospectus as Annex III, any holder of
record or beneficial shareholder of Midwest Common Stock has the statutory right
to dissent from the Merger and obtain payment of the fair value of his or her
shares in cash. However, certain shareholders of Midwest have contractually
agreed with AMCORE to vote in favor of the Merger. See "THE MERGER --
Shareholder Voting Agreements." Any holder electing to exercise his or her
statutory dissenters' rights must deliver written notice of his or her intent to
demand payment for his or her shares to Midwest and not vote in favor of the
Merger Agreement and the Plan of Merger. Such notice must be delivered to
Midwest before the vote on the Merger Agreement and the Plan of Merger is taken.
Further, AMCORE's obligations under the Merger Agreement are conditioned upon
holders of not more than three percent (3%) of Midwest Common Stock outstanding
as of the Record Date having undertaken steps to perfect their right to object
under the WBCL. A shareholder may object as to less than all of the shares
registered in his or her name only if the shareholder dissents with respect to
all shares beneficially owned by any one person and notifies Midwest in writing
of the name and address of each person on whose behalf he or she asserts
dissenters' rights, subject to the provisions of Section 180.1303 of the WBCL.
 
     A PROXY OR VOTE AGAINST THE MERGER AGREEMENT AND THE PLAN OF MERGER WILL
NOT, OF ITSELF, BE REGARDED AS A WRITTEN NOTICE OF INTENT TO DEMAND PAYMENT FOR
PURPOSES OF ASSERTING DISSENTERS' RIGHTS.
 
     The Effective Time of the Merger will occur upon the filing of the Articles
of Merger with the Department of Financial Institutions of the State of
Wisconsin. Within 10 days of the Effective Time, Midwest will give a written
dissenters' notice to each dissenting shareholder who has made demand in
accordance with Section 180.1321(1), containing a form for demanding payment, a
statement indicating where the holder must send the payment demand, an
explanation of the extent to which the transfer of shares will be restricted
after the payment demand is received and a date by which the payment demand must
be received by Midwest. A holder to whom a dissenters' notice is sent, must
demand payment in writing and certify whether he or she acquired beneficial
ownership of the shares before the date specified in the dissenters' notice.
 
     As soon as the Merger is effected or upon receipt of a demand for payment,
whichever is later, Midwest will pay each holder who has complied with the
provisions of Section 180.1301 et seq. the amount that the corporation estimates
to be the fair value of the holder's shares, plus accrued interest. Such payment
will be accompanied by a copy of Midwest's latest available financial statement,
a statement of the corporation's estimate of the fair value of the shares, an
explanation of how the interest was calculated, a statement of the dissenter's
right to demand payment under Section 180.1328 of the WBCL if he or she is
dissatisfied with the payment and a copy of Sections 180.1301 to 180.1331 of the
WBCL.
 
                                       31
<PAGE>   37
 
     Midwest may elect to withhold the payment required by Section 180.1325 from
a dissenter unless the dissenter was the beneficial owner of the shares before
the date specified in the dissenter's notice under Section 180.1322(2)(c) as the
date of the first announcement to news media or to shareholders of the terms of
the Merger. To the extent Midwest makes such an election, it must estimate the
fair value of the shares, plus accrued interest and pay that amount to each
dissenter who agrees to accept it in full satisfaction of his or her demand.
Midwest will send with its offer a statement of its estimate of the fair value
of the shares, an explanation of how the interest was calculated and a statement
of the dissenter's right to demand payment under Section 180.1328 if the
dissenter is dissatisfied with the offer.
 
     Any dissenter may notify the corporation of his or her estimate of the fair
value of his or her shares and demand payment of such estimate less any payment
received from the corporation or reject the corporation's payment or offer of
payment for any one of the following reasons: (i) the dissenter believes that
the amount paid or offered by the corporation is less than the fair value of his
or her shares or that the accrued interest is incorrectly calculated; (ii) the
corporation fails to make the payment within 60 days after the date for
demanding payment set out in the dissenters' notice; or (iii) Midwest fails to
effect the Merger and does not return the deposited shares within 60 days of the
date set for demand of payment.
 
     In the event any holder of Midwest Common Stock fails to comply strictly
with the applicable statutory requirements, he or she will be bound by the terms
of the Merger Agreement and will not be entitled to payment for his or her
shares under such statute. ANY HOLDER OF MIDWEST COMMON STOCK WHO WISHES TO
OBJECT TO THE MERGER AND DEMAND PAYMENT FOR HIS OR HER SHARES OF MIDWEST COMMON
STOCK SHOULD CONSIDER CONSULTING HIS OR HER OWN LEGAL ADVISOR.
 
     Since an executed proxy relating to Midwest Common Stock on which no voting
direction is made will be voted at the Special Meeting in favor of the Merger
Agreement, an objecting shareholder who wishes to have his or her shares of
Midwest Common Stock represented by proxy at the Special Meeting, but preserve
his or her rights of appraisal, must mark his or her proxy either to vote
against the Merger Agreement and the Plan of Merger or to abstain from voting
thereon, make the required objection and demand, and make the required
submission of stock certificates as described herein.
 
     The foregoing, while a summary of all material provisions of Section
180.1301 et seq. of the WBCL, is qualified in its entirety by reference to the
text of such statutory provision, which is set forth in Annex III hereto.
 
RESALE OF AMCORE COMMON STOCK
 
     The shares of AMCORE Common Stock to be issued in the Merger to holders of
Midwest Common Stock will be issued pursuant to a Registration Statement under
the Securities Act, and thus may be freely traded by holders of Midwest Common
Stock who are not "affiliates" of Midwest (and are not affiliates of AMCORE at
the time of the proposed resale). Pursuant to the Merger Agreement, AMCORE has
received a written undertaking from each person Midwest identified to AMCORE as
a shareholder who is an executive officer or director of Midwest, to the effect
that (a) such person will not sell or dispose of AMCORE Common Stock acquired by
such person in the Merger, except (i) under a separate registration for
distribution (which AMCORE has not agreed to provide), (ii) pursuant to Rule 145
promulgated under the Securities Act, or (iii) pursuant to transaction which, in
the opinion of counsel for the affiliate or as described in a "no-action" letter
from the staff of the SEC, is not required to be registered under the Securities
Act; and (b) such person will not otherwise dispose of the AMCORE Common Stock
or otherwise reduce his or her risk relative to the AMCORE Common Stock (i)
during the 30-day period immediately preceding the Effective Time or (ii) prior
to the publication by AMCORE of an earnings statement covering at least 30 days
of combined operations after the Closing Date.
 
                                       32
<PAGE>   38
 
                              THE MERGER AGREEMENT
 
TERMS
 
     At the Effective Time, Newco will merge with and into Midwest, with Midwest
as the surviving corporation, and Midwest will become a wholly-owned subsidiary
of AMCORE. At the Effective Time, each outstanding share of Midwest Common Stock
(other than shares of Midwest Common Stock held by Midwest as treasury stock
immediately prior to the Effective Time and shares of Midwest Common Stock held
by AMCORE, Newco or any direct or indirect subsidiary of AMCORE, which shares
will be cancelled, and other than shares of Midwest Common Stock held by Midwest
Shareholders who have properly exercised their dissenters' rights under
Wisconsin law) will be cancelled and converted into the right to receive a
number of shares of AMCORE Common Stock, to be determined as follows: (i) in the
event the AMCORE Average Price is less than $20.425, each share of Midwest
Common Stock shall be exchanged for and converted into a number of shares of
AMCORE Common Stock determined by dividing (A) 23.980 by (B) the AMCORE Average
Price, (ii) in the event the AMCORE Average Price is greater than or equal to
$20.425 but less than or equal to $27.00, each share of Midwest Common Stock
shall be exchanged for and converted into 1.174 shares of AMCORE Common Stock
and (iii) in the event the AMCORE Average Price is greater than $27.00, each
share of Midwest Common Stock shall be exchanged for and converted into a number
of shares of AMCORE Common Stock determined by dividing (A) 31.700 by (B) the
AMCORE Average Price. There can be no assurance that the closing price for
AMCORE Common Stock on the Effective Date will be equal to the AMCORE Average
Price. As of February 13, 1998, the most recent practicable date prior to the
printing of this Proxy Statement/Prospectus, the average of the daily closing
prices of a share of AMCORE Common Stock during the 20-day period ending on
February 13, 1998 was $24.88 which, assuming an AMCORE Average Price equal to
such average, would result in an Exchange Ratio of 1.174. See "THE MERGER
AGREEMENT -- Conversion of Shares and Exchange Ratio" and "THE MERGER -- Rights
of Dissenting Shareholders."
 
     Set forth below is a table setting forth several numerical examples of the
Exchange Ratio that would be used to determine the number of shares of AMCORE
Common Stock that shareholders of Midwest would receive in the Merger per share
of Midwest Common Stock, based on assumed AMCORE Average Prices.
 
                 EXAMPLES OF CALCULATION OF THE EXCHANGE RATIO
 
<TABLE>
<CAPTION>
                                                                EXCHANGE
                ASSUMED AMCORE AVERAGE PRICE                    RATIO(1)
                ----------------------------                    --------
<S>                                                             <C>
$18.000.....................................................     1.332
$20.425 -- $ 27.000.........................................     1.174
$30.000.....................................................     1.057
</TABLE>
 
- -------------------------
(1) Represents the number of shares of AMCORE Common Stock to be issued for each
    share of Midwest Common Stock. THERE CAN BE NO ASSURANCE THAT THE CLOSING
    PRICE FOR AMCORE COMMON STOCK ON THE EFFECTIVE DATE WILL BE EQUAL TO THE
    AMCORE AVERAGE PRICE. See "THE MERGER -- Conversion of Shares and Exchange
    Ratio."
 
     The Articles of Incorporation and the Bylaws of Newco in effect at the
Effective Time will govern the surviving corporation until amended or repealed
in accordance with applicable law. The directors of Newco and the officers of
Midwest (except for Gary E. Wegner) immediately prior to the Effective Time will
be the directors and officers of the surviving corporation, each of such
directors and officers to hold office in accordance with the Articles of
Incorporation and Bylaws of the surviving corporation. The terms of the Merger
were determined on the basis of arm's-length negotiations. See "THE MERGER --
Management and Operations of Midwest After the Merger."
 
                                       33
<PAGE>   39
 
DATE OF MERGER
 
     Under the BHCA, the Merger cannot take effect before the 30th calendar day
following the date of approval by the Federal Reserve Board. With the approval
of the Federal Reserve Board and the Department of Justice, the waiting period
may be reduced to no less than fifteen days. Approval of the Federal Reserve
Board was obtained on January 9, 1998. See "THE MERGER -- Regulatory Approval";
and "THE MERGER AGREEMENT -- Conditions to the Merger."
 
     Under the Merger Agreement, the Merger will occur upon the satisfaction or
waiver of all of the conditions to the Merger, including the expiration of the
statutory waiting period after Federal Reserve Board approval, or on such date
as AMCORE and Midwest may both agree to, but in no event later than the last
business day of the month in which all of the conditions to the Merger have been
so satisfied or waived, and will take effect upon the date Newco and Midwest
file the Articles of Merger. There can be no assurances as to if or when such
approvals will be obtained or that the Merger will be consummated. If the Merger
is not effected on or before August 31, 1998, the Merger Agreement may be
terminated by either AMCORE or Midwest. See "THE MERGER Conditions to the
Merger" and "-- Termination."
 
     The Merger will become effective at the close of business on the date on
which the Articles of Merger are received by the Department of Financial
Institutions of the State of Wisconsin. It is anticipated that such filing will
be made concurrent with the closing under the Merger Agreement.
 
CONVERSION OF SHARES AND EXCHANGE RATIO
 
     At the Effective Time of the Merger, all the issued and outstanding shares
of Midwest Common Stock, except any Dissenting Shares, will be acquired in
exchange for AMCORE Common Stock or cash in lieu of any fractional shares of
AMCORE Common Stock. Each outstanding share of Midwest Common Stock (other than
shares of Midwest Common Stock held by Midwest as treasury stock immediately
prior to the Effective Time (as defined below) and shares of Midwest Common
Stock held by AMCORE, Newco or any direct or indirect subsidiary of AMCORE,
which shares will be cancelled, and other than shares of Midwest Common Stock
held by Midwest Shareholders who have properly exercised their dissenters'
rights under Wisconsin law) will be cancelled and converted into the right to
receive a number of shares of AMCORE Common Stock to be determined as follows:
(i) in the event the AMCORE Average Price is less than $20.425, each share of
Midwest Common Stock shall be exchanged for and converted into a number of
shares of AMCORE Common Stock determined by dividing (A) 23.980 by (B) the
AMCORE Average Price, (ii) in the event the AMCORE Average Price is greater than
or equal to $20.425 but less than or equal to $27.00, each share of Midwest
Common Stock shall be exchanged for and converted into 1.174 shares of AMCORE
Common Stock and (iii) in the event the AMCORE Average Price is greater than
$27.00, each share of Midwest Common Stock shall be exchanged for and converted
into a number of shares of AMCORE Common Stock determined by dividing (A) 31.700
by (B) the AMCORE Average Price. The AMCORE Average Price will be an amount
equal to the average of the daily closing prices of a share of AMCORE Common
Stock as reported on the NASDAQ during the period of twenty (20) trading days
ending at the end of the third trading day immediately preceding the Special
Meeting. There can be no assurance that the closing price for AMCORE Common
Stock on the Effective Date will be equal to the AMCORE Average Price. As of
February 13, 1998, the most recent practicable date prior to the printing of
this Proxy Statement/Prospectus, the average of the daily closing prices of a
share of AMCORE Common Stock during the 20-day period ending on February 13,
1998 was $24.88 which, assuming an AMCORE Average Price equal to such average,
would result in an Exchange Ratio of 1.174. See "THE MERGER AGREEMENT Terms" and
"THE MERGER -- Rights of Dissenting Shareholders."
 
     Each Midwest Option that is outstanding and unexercised immediately prior
the Effective Time will cease to represent a right to acquire shares of Midwest
Common Stock. At the Effective Time, all such options will be automatically
converted into options to purchase a number of shares of AMCORE Common Stock
equal to the number of shares of Midwest Common Stock that could have been
purchased under such Midwest Option multiplied by the Exchange Ratio at an
exercise price per share equal to the original exercise price divided by the
Exchange Ratio. See "THE MERGER AGREEMENT -- Stock Option Agreements."
 
                                       34
<PAGE>   40
 
     No fractional shares of AMCORE Common Stock will be issued in the Merger.
Each holder of Midwest Common Stock who would otherwise be entitled to receive a
fractional share will receive cash in an amount equal to the cash value of such
fractional share, which cash value will be determined by multiplying (i) the
average of the last sales price for AMCORE Common Stock as reported on the
Nasdaq National Market for the twenty (20) trading days immediately preceding
the fifth trading day prior to the Closing Date by (ii) the fraction of a share
(rounded to the nearest tenth) of AMCORE Common Stock to which such holder would
otherwise be entitled to receive.
 
     Within ten business days after the Effective Time, an agent (the "Exchange
Agent") acting on behalf of Midwest (as the surviving corporation) will send to
each holder of Midwest Common Stock a letter of transmittal containing
instructions with respect to the surrender of stock certificates of Midwest
Common Stock for exchange into one or more certificates evidencing AMCORE Common
Stock, as provided in the Merger Agreement. Until so surrendered, each
outstanding certificate which, prior to the Effective Time, represented shares
of Midwest Common Stock will be deemed for all purposes to evidence only the
right to receive the shares of AMCORE Common Stock into which such shares of
Midwest Common Stock have been converted; provided, however, unless and until
such certificates representing Midwest Common Stock are so surrendered, no stock
certificates representing the shares of AMCORE Common Stock, nor any dividends
or other distributions of any kind payable in respect of shares of AMCORE Common
Stock into which such Midwest Common Stock has been converted, shall be paid or
delivered to the holder of an unsurrendered certificate and no interest shall be
earned on such cash dividend amounts. After the Effective Time, upon surrender
of certificates representing shares of Midwest Common Stock, there shall be
delivered to the record holder of the certificates representing AMCORE Common
Stock issued in exchange therefor, on or as soon as practicable after such date
of surrender, the amount of any such dividends, or other distributions, and the
certificates representing the Midwest Common Stock, which as of any date
subsequent to the Effective Time, but prior to the surrender of Midwest
certificates, became payable or deliverable and were not paid or delivered to
such holder with respect to such shares.
 
STOCK OPTION AGREEMENTS
 
     The Merger Agreement provides that each unexpired and unexercised Midwest
Option granted under either of the Midwest Option Plans will be automatically
converted at the Effective Time into an option (a "New AMCORE Option") to
purchase a number of shares of AMCORE Common Stock equal to the number of shares
of Midwest Common Stock that could have been purchased under the Midwest Option
agreements, multiplied by the Exchange Ratio, at a price per share of AMCORE
Common Stock equal to the option exercise price determined pursuant to the
Midwest Stock Option Agreements divided by the Exchange Ratio. Such New AMCORE
Option will be subject to the terms, benefits, rights and features of the
Midwest Option Plans and agreements evidencing grants of such Midwest Options
thereunder as in existence immediately prior to the Effective Time, which will
continue to apply to each New AMCORE Option from and after the Effective Time.
The Merger Agreement also provides that (i) from and after the Effective Time,
AMCORE will assume all of Midwest's obligations under the Midwest Option Plans
and (ii) at the Effective Time, the Midwest Option Plans will be terminated,
provided that such termination will not affect the rights of holders of Midwest
Options which are outstanding and unexercised immediately prior thereto.
 
CERTAIN REPRESENTATIONS AND WARRANTIES
 
     The Merger Agreement contains representations and warranties of AMCORE,
Newco and Midwest customary for transactions of this nature. These include,
among other things, representations and warranties of AMCORE and Newco as to:
(i) their respective due organization, existence, good standing, organizational
documents and similar corporate matters; (ii) their respective capital
structures; (iii) their authority relative to the execution and delivery of, and
performance of their respective obligations under, the Merger Agreement; (iv)
the absence of any conflict with their organizational documents, applicable law
or certain contracts; (v) the consents and approvals necessary to consummate the
Merger; (vi) AMCORE's consolidated financial statements and the June 30, 1997
Report of Condition of AMCORE Bank, Rockford, N.A.; (vii) reports and other
documents filed with certain regulatory agencies; (viii) AMCORE's filings with
the
 
                                       35
<PAGE>   41
 
Commission; (ix) broker's fees; (x) the absence of material adverse changes
since December 31, 1996; (xi) legal proceedings; (xii) their compliance with
applicable laws; (xiii) the absence of certain agreements with regulatory
agencies; (xiv) the accuracy of the information supplied for inclusion in this
Proxy Statement/Prospectus; (xv) the absence of known reasons which may result
in the denial or undue delay of regulatory approvals; and (xvi) the vote
required to consummate the Merger.
 
     Midwest's representations and warranties with respect to itself and its
subsidiaries include, among other things, those as to: (i) their due
organization, existence, good standing, organizational documents and similar
corporate matters; (ii) their respective capital structures; (iii) their
authority relative to the execution and delivery of, and performance of their
obligations under, the Merger Agreement; (iv) the absence of any conflict with
their organizational documents, applicable law or certain contracts; (v) the
consents and approvals necessary to consummate the Merger; (vi) Midwest's
consolidated financial statements and the June 30, 1997 Report of Condition of
the Bank, (vii) reports and other documents filed with certain regulatory
agencies; (viii) Midwest's filings with the Commission; (ix) broker's fees; (x)
the absence of certain changes or events since December 31, 1996, (xi) legal
proceedings, (xii) the accuracy of information supplied in this Proxy
Statement/Prospectus, (xiii) intellectual property; (xiv) the title to and
condition of properties, and certain environmental matters; (xv) tax matters;
(xvi) employee benefit plans; (xvii) their compliance with applicable laws;
(xviii) certain contracts and commitments; (xix) the absence of certain
agreements with regulatory agencies; (xx) the absence of activities prohibited
by the Office of Thrift Supervision (the "OTS"); (xxi) title to, and absence of
third party security interests in, investment securities; (xxii) absence of
material undisclosed liabilities; (xxiii) insurance; (xxiv) allowance for loan
losses; (xxv) the accuracy of a shareholder list provided to AMCORE by Midwest;
(xxvi) the absence of undisclosed agreements between Midwest and directors,
officers and certain shareholders; (xxvii) the accuracy of the representations
and warranties of Midwest in the Merger Agreement, and of the information set
forth in Midwest's disclosure schedule and in the Plan of Merger; (xxviii) the
absence of known reasons which may result in the denial or undue delay of
regulatory approvals; (xxix) the vote required to consummate the Merger; and
(xxx) the absence of derivative instruments or arrangements.
 
CONDUCT OF BUSINESS PENDING THE MERGER
 
     The Merger Agreement provides that Midwest and AMCORE will take or refrain
from taking certain actions prior to the Closing Date.
 
     Pursuant to the Merger Agreement, unless AMCORE's prior written consent is
obtained, Midwest will, and will cause each of its subsidiaries to, operate its
business only in the usual, regular and ordinary course consistent in all
material respects with prudent banking practices. In furtherance thereof,
Midwest will, and will cause the Bank to (i) not engage in certain transactions
affecting their respective capital structures; (ii) not engage in any merger,
reorganization or recapitalization; (iii) not purchase or otherwise acquire any
of the assets, or any class of stock, of any corporation, bank, or other
business (other than purchases of passive investments in the ordinary course of
business consistent with past business practices); (iv) not liquidate, sell,
dispose of, or encumber any assets or acquire any assets, other than in the
ordinary course of its business consistent with past practice; (v) not sell any
intangible rights, including but not limited to mortgage servicing rights; (vi)
not split, combine, or reclassify any of its capital stock or issue or authorize
or propose the issuance of any other securities in respect of, in lieu of, or in
substitution for shares of its capital stock; (vii) not release or relinquish
any material contract rights not in the ordinary course of business; (viii) not
engage in certain transactions regarding options or other convertible
securities, except with respect to the issuance of shares of its capital stock
upon the valid exercise of Midwest Options outstanding and unexercised
immediately prior to the Effective Time; (ix) not propose or adopt any
amendments or changes to their respective corporate charters or by-laws; (x) not
take any action which, or fail to take any action which failure, would, or is
reasonably likely to (A) adversely affect the ability of either of AMCORE or
Midwest to obtain any necessary approvals of governmental authorities required
for the transactions contemplated by the Merger Agreement; (B) adversely affect
Midwest's ability to perform its covenants and agreements under the Merger
Agreement and the Plan of Merger; (C) result in any of its representation and
warranties set forth in the Merger Agreement or the Plan of Merger being or
becoming untrue in any material respect; (D) result in any of the
 
                                       36
<PAGE>   42
 
conditions precedent to the obligations of AMCORE and Newco not being satisfied;
or (E) result in a violation of any provisions of the Merger Agreement or the
Plan of Merger except, in every case, as may be required by applicable law; (xi)
not increase the compensation of their directors, officers or key employees
beyond a specified level; (xii) make no single new loan which is in excess of
50% of the Bank's legal lending limit, except for loans currently committed to
be made pursuant to written commitment letters, or make any other loans, or
renewals or restructuring of loans regardless of amount except in the ordinary
course of business and consistent in all material respects with prudent banking
practices and policies and applicable rules and regulations of regulatory
authorities with respect to amount, terms, security and quality of the
borrower's credit; (xiii) use their best efforts to maintain their present
insurance coverage in respect to their respective properties and businesses;
(xiv) make no significant changes in the general nature of the business
conducted by Midwest and the Bank; (xv) not enter into any employment,
consulting or other similar agreements that are not terminable on 30 days'
notice or less without penalty or obligation (beyond the notice period of 30
days or less); (xvi) not (A) except as required by applicable law, take any
action with respect to any agreement, arrangement, plan or policy between
Midwest or any of the Midwest Subsidiaries and one or more of its current or
former directors, officers or employees or (B) subject to certain exceptions,
increase in any manner the compensation or fringe benefits of any director,
officer or employee or pay any benefit not required by any plan or agreement as
in effect as of the date hereof (including, without limitation, the granting of
stock options, stock appreciation rights, restricted stock, restricted stock
units or performance units or shares) or (C) enter into, modify or renew any
contract, agreement, commitment or arrangement providing for the payment to any
director, officer or employee of such party of compensation or benefits
contingent, or the terms of which are materially altered, upon the occurrence of
any of the transactions contemplated by the Merger Agreement or the Plan of
Merger; (xvii) timely file all required tax returns with all applicable taxing
authorities and will not make any application for or consent to any extension of
time for filing any tax return or any extension of the period of limitations
applicable thereto; (xviii) not make any expenditure for fixed assets in excess
of $25,000 for any single item, or $100,000 in the aggregate, or enter into any
lease of fixed assets, if the monthly rental payment under such lease exceeds
$5,000; (xix) not incur any liabilities or obligations, make any commitments or
disbursements, acquire or dispose of any property or asset, make any contract or
agreement, or engage in any transaction, except in the ordinary course
consistent in all material respects with prudent banking and fiduciary practices
(which includes accepting new fiduciary appointments on terms consistent with
past practices), except for dispositions of real estate owned; (xx) not do or
fail to do anything that will cause a breach of, or default under, any contract,
agreement, commitment, obligation, appointment, plan, trust or other arrangement
to which Midwest or the Bank is a party or by which either Midwest or the Bank
is otherwise bound or under which the Bank has agreed to act as a fiduciary or
otherwise exercise fiduciary powers; (xxi) not engage in or agree to engage in
any "covered transaction" within the meaning of Sections 23A or 23B of the
Federal Reserve Act (without regard to applicability of any exemptions contained
in said Section 23A); (xxii) only purchase or invest in obligations of the
government of the United States or agencies of the United States or
mortgage-backed securities of the kind owned by the Bank as of September 30,
1997 and to not execute individual investment transactions of greater than
$1,000,000; (xxiii) make no changes of a material nature in their accounting
procedures, methods, policies or practices or the manner in which they conduct
their businesses and maintain their records; (xxiv) not to accept or renew any
brokered deposits; (xxv) not take or cause to be taken any actions that would,
or would be reasonably likely to (A) prevent AMCORE from accounting for the
Merger as a "pooling-of-interests" for accounting purposes or (B) adversely
affect the status of the Merger as a tax-free reorganization under Section
368(a) of the Code; (xxvi) not make any equity investment or commitment to make
such an investment in real estate or in any real estate development project,
other than in connection with foreclosures, settlements in lieu of foreclosure
or troubled loan or debt restructuring in the ordinary course of business
consistent with prudent banking practices; and (xxvii) not agree in writing or
otherwise to do any of the foregoing.
 
     In the Merger Agreement, Midwest has agreed not to solicit, encourage or
authorize (including by way of furnishing information) or take any other action
to facilitate any inquiries or the making of any proposal that constitutes or
may lead to any Transaction Proposal (as hereinafter defined). Midwest may,
however, engage in discussions with a third party in response to an unsolicited
Superior Proposal (as hereinafter defined) (i) if the Midwest Board determines
in good faith on the basis of advice of its financial advisors and an opinion of
 
                                       37
<PAGE>   43
 
outside counsel that failure to take such action could reasonably be expected to
violate the fiduciary obligations of the Midwest Board, (ii) Midwest requires
such third party to execute a confidentiality agreement and (iii) Midwest
promptly notifies AMCORE of all relevant details of such proposal (including
such third party's identity) and provides AMCORE with copies of all materials
delivered to such person. "Transaction Proposal" means, in general, any of the
following involving Midwest: a bona fide proposal to acquire more than 25% of
the outstanding shares of Midwest Common Stock; any merger or other business
combination involving Midwest or any of its subsidiaries; a sale or other
disposition of a substantial portion of assets of Midwest or any of its
subsidiaries; the acquisition by any person (other than AMCORE or any subsidiary
of Midwest) of beneficial ownership of 25% or more of the outstanding shares of
Midwest Common Stock; any reclassification of securities or recapitalization of
Midwest that effectively results in a change in control; any transaction having
an effect similar to the foregoing, or a public announcement with respect to a
proposal, plan of intention by any person to effect any of the foregoing
transactions. "Superior Proposal" means, in general, a bona fide, written and
unsolicited proposal or offer made with respect to a Transaction Proposal on
terms which the Midwest Board determines in good faith, and in the exercise of
reasonable judgment, to be more favorable to Midwest and the Midwest
Shareholders than the Merger.
 
     Midwest and AMCORE have, subject to the restrictions set forth in the
Merger Agreement, each agreed, upon request, to furnish to the other party all
information concerning themselves and their subsidiaries, directors, officers
and shareholders and such other matters as may be necessary in furtherance of
the Merger. Midwest and AMCORE have also agreed, subject to the terms and
conditions of the Merger Agreement, to use their best efforts to take, or cause
to be taken, all actions necessary, proper or advisable to comply promptly with
all legal requirements which may be imposed on such party or its subsidiaries
and to consummate the Merger. AMCORE has further agreed to use all reasonable
efforts to cause the shares of AMCORE Common Stock to be issued in the Merger to
be approved for listing on the NASDAQ, subject to official notice of issuance.
 
DIVIDENDS
 
     Under the Merger Agreement, neither Midwest nor the Bank can declare or pay
any stock dividend, cash dividend or other distribution without the prior
written consent of AMCORE, provided, however, that until the Effective Date
Midwest may continue to declare and pay its regular quarterly cash dividend to
its shareholders in the amount of $.085 per share of Midwest Common Stock, and
the Bank may pay cash dividends to Midwest in the aggregate amount of $300,000.
With respect to its regular quarterly cash dividend to its shareholders in the
amount of $0.085 per share of Midwest Common Stock, until the Effective Date,
Midwest may only declare such dividend for a record date on or after the record
date for payment of dividends by AMCORE on AMCORE Common Stock for such quarter.
In addition, the Merger Agreement provides that Midwest shall not declare or pay
any dividends or make any distributions in any amount on Midwest Common Stock in
any calendar quarter in which the Effective Time is expected to occur and in
which the holders of Midwest Common Stock will be entitled to receive dividends
on the shares of AMCORE Common Stock into which the shares of Midwest Common
Stock have been converted. The intent is that the holders of Midwest Common
Stock will not receive and will not become entitled to receive for the same
calendar quarter period a payment of cash dividends both as holders of Midwest
Common Stock and as holders of AMCORE Common Stock.
 
EMPLOYEE BENEFITS
 
     Welfare Benefit Plans.  The Merger Agreement provides that at the Effective
Time, each employee of Midwest and its subsidiaries will become eligible to
participate in all employee welfare benefit plans and other fringe benefit
programs offered or maintained by AMCORE and its subsidiaries on terms and
conditions substantially similar in the aggregate to those that AMCORE and its
subsidiaries may make available to similarly situated officers and employees,
including any health, life, long- or short-term disability, severance, vacation
or paid time off programs (the "AMCORE Welfare Benefit Plans"). The period of
employment and compensation of each such employee with Midwest and its
subsidiaries will be counted for all purposes (except for purposes of benefit
accrual) under the AMCORE Welfare Benefit Plans. In addition, any
 
                                       38
<PAGE>   44
 
expenses incurred by an employee of Midwest or any of its subsidiaries under
Midwest's or the Bank's employee welfare benefit plans (such as deductibles or
co-payments), will be counted for all purposes under the AMCORE Welfare Benefit
Plans. AMCORE has agreed to waive any pre-existing condition exclusions for
conditions existing on the Closing Date, and actively-at-work requirements for
periods ending on the Closing Date contained in the AMCORE Welfare Benefit Plans
as they apply to such employees and former employees and their respective
dependents.
 
     Baraboo Employee Stock Ownership Plan.  The Merger Agreement provides that,
as of the Effective Time, the Baraboo Federal Bank, FSB Employee Stock Ownership
Plan (the "Baraboo ESOP") will be terminated, as AMCORE and Midwest mutually
determine, and the loan between Midwest and the Baraboo ESOP will be repaid in
full with an amount of unallocated shares of AMCORE Common Stock held in the
Baraboo ESOP. Unallocated shares of AMCORE Common Stock remaining after
repayment of such loan shall be allocated in kind to the Baraboo ESOP accounts
of participants in accordance with the terms of the Baraboo ESOP. All
participants in the Baraboo ESOP will fully vest and have a nonforfeitable
interest in their accounts under the Baraboo ESOP determined as of the Effective
Time. As soon as practicable after the receipt of a favorable determination
letter from the Internal Revenue Service ("IRS") as to the tax qualified status
of the Baraboo ESOP upon its termination under Section 401(a) and 4975(e) of the
Code (the "Final Determination Letter"), distributions of the benefits under the
Baraboo ESOP shall be made to the ESOP Participants. In the event that AMCORE,
Midwest and their respective representatives, prior to the Effective Time, and
AMCORE and its representatives after the Effective Time, reasonably determine
that the Baraboo ESOP cannot obtain a favorable Final Determination Letter, or
that the amounts held therein cannot be so applied, allocated or distributed
without causing the Baraboo ESOP to lose its tax qualified status, Midwest prior
to the Effective Time and AMCORE after the Effective Time have agreed to take
such action as they may reasonably determine with respect to the distribution of
benefits to the ESOP Participants, provided that the assets of the Baraboo ESOP
will be held or paid for the benefit of the ESOP Participants and provided
further that in no event will any portion of the amounts held in the Baraboo
ESOP revert, directly or indirectly to Midwest or any affiliate thereof, or to
AMCORE or any affiliate thereof.
 
     Baraboo Pension Plan.  AMCORE has acknowledged and agreed that all
participants in the Baraboo Federal Bank, FSB Profit Sharing 401K Plan (the
"Baraboo Pension Plan") will be fully vested as of the Effective Time in their
accounts under the Baraboo Pension Plan. At AMCORE's discretion, the Baraboo
Pension Plan may be merged with and into an AMCORE defined contribution plan
subject to a favorable IRS letter as to its tax qualified status under Section
401(a) of the Code (the "AMCORE Plan") on or after the Effective Time. If such
Merger occurs or if Midwest employees otherwise become eligible to participate
in the AMCORE Plan, all participants in the Baraboo Pension Plan will become
participants in the AMCORE Plan and each Midwest employee's service with Midwest
or a Midwest subsidiary shall be counted for all purposes of the AMCORE Plan. If
the Baraboo Pension Plan is not merged into the AMCORE Plan within 12 months
after the Effective Time, AMCORE shall terminate the Baraboo Pension Plan and
all participants will be offered the option of a lump-sum cash payment, subject
to applicable provisions of the Code.
 
     Post-Retirement Welfare Plan.  AMCORE has agreed to maintain and continue
without modification the payment of premiums for post-retirement Medicare
supplement policies and medical insurance for the benefit of Mrs. Janet
McArthur, Mrs. Robert Hirshinger, Mr. Emmett Brown, Mrs. Lorraine Brown and Mr.
Gary E. Wegner, President and Chief Executive Officer of Midwest and the Bank
(the "Post-Retirement Welfare Plan").
 
     Midwest Severance/Change in Control Arrangements. AMCORE has agreed to
perform the terms of certain contractual arrangements, including severance and
change in control arrangements, as in effect on the date of the Merger
Agreement. AMCORE has further agreed that the transactions contemplated by the
Merger Agreement and the Plan of Merger constitute a change in control of
Midwest for purposes of any such severance or change in control arrangements.
See "THE MERGER -- Interests of Certain Persons in the Merger -- Change in
Control/Severance Agreements."
 
                                       39
<PAGE>   45
 
CONDITIONS TO THE MERGER
 
     The obligations of AMCORE and Newco to consummate the Merger are also
subject to the satisfaction or waiver by AMCORE of certain conditions, including
(i) the representations and warranties made by Midwest in the Merger Agreement
and all other documents relating thereto shall be true and correct at the
Closing, and Midwest shall have performed each of its obligations under the
Merger Agreement, (ii) the receipt by AMCORE of an officer's certificate
relating to Midwest's fulfillment of the conditions to AMCORE's obligations
under the Merger Agreement, (iii) the receipt by AMCORE of requisite regulatory
approvals, the expiration of all regulatory waiting periods and the absence of
pending suits or actions seeking to enjoin the Merger, (iv) the approval of the
Merger Agreement and Plan of Merger by Midwest's shareholders, and the execution
and delivery by Midwest to AMCORE of the Merger Agreement, the Plan of Merger,
the Articles of Merger and all other documents and certificates relating
thereto, (v) the effectiveness of the Registration Statement, and the absence of
any stop order or other proceeding suspending the effectiveness thereof, (vi)
the absence of any suit or proceeding pending or overtly threatened (A)
involving any of the assets, properties, business or operations of Midwest which
would reasonably be expected to have a material adverse effect, or (B) by any
governmental authority seeking to restrain or prohibit the consummation of the
Merger, (vii) the receipt by AMCORE of the legal opinion of Schiff Hardin &
Waite, counsel to Midwest, (viii) the absence of any material adverse change
since November 11, 1997 to the Closing Date, in the business, properties,
financial condition, loan portfolio, operations or prospects of Midwest or the
Bank, taken as a whole, (ix) the receipt of all consents or approvals from third
parties required under agreements between Midwest and such third parties which
are required to consummate the Merger, (x) holders of not more than three
percent (3%) of the outstanding shares of Midwest Common Stock perfecting their
dissenters rights, (xi) the receipt by AMCORE by December 11, 1997 of certain
executed letter agreements from Midwest affiliates, and the receipt by AMCORE by
November 18, 1997 of certain executed Shareholder Voting Agreements from each
member of the Board of Directors of Midwest, and Scott D. Huedepohl, (xii) the
receipt by AMCORE of any further documents it may request evidencing compliance
by Midwest with the terms of the Merger Agreement and the Plan of Merger, (xiii)
the receipt by AMCORE of any statements which may be necessary to update the
representations and warranties of Midwest to make them true and correct at the
Closing, none of which shall reflect a material adverse change, (xiv) the
receipt by AMCORE of good standing certificates relating to Midwest and the Bank
from the appropriate officials of the State of Wisconsin and the OTS, each dated
within 15 days of the Closing Date, (xv) the receipt by AMCORE of a letter
addressed to AMCORE covering matters reasonably requested by AMCORE and Newco
with respect to Midwest's financial condition, and (xvi) in the event that the
Closing Date shall occur on or after February 15, 1998, receipt by AMCORE of
audited consolidated financial statements for the fiscal year ended December 31,
1997 of Midwest and its subsidiaries.
 
     The obligations of Midwest to consummate the Merger are also subject to the
satisfaction or waiver by Midwest of certain conditions, including (i) the
representations and warranties made by AMCORE and Newco in the Merger Agreement
and all other documents relating thereto shall be true and correct at the
Closing, and AMCORE and Newco shall each have performed each of their respective
obligations under the Merger Agreement, (ii) the receipt by Midwest of an
officer's certificate relating to AMCORE's and Newco's fulfillment of the
conditions to AMCORE's and Newco's obligations under the Merger Agreement, (iii)
the receipt by AMCORE of requisite regulatory approvals, the expiration of all
regulatory waiting periods and the absence of pending suits or actions seeking
to enjoin the Merger, (iv) the approval of the Merger Agreement and Plan of
Merger by AMCORE, as sole shareholder of Newco, and the execution and delivery
by AMCORE and Newco to Midwest of the Merger Agreement, the Plan of Merger, the
Articles of Merger and all other documents and certificates relating thereto,
(v) the effectiveness of the Registration Statement, and the absence of any stop
order or other proceeding suspending the effectiveness thereof, (vi) the absence
of any suit or proceeding pending or overtly threatened by any governmental
authority seeking to restrain or prohibit the consummation of the Merger, (vii)
the receipt by AMCORE of the legal opinion of Skadden, Arps, Slate, Meagher &
Flom (Illinois), counsel to AMCORE and Newco, (viii) the receipt by Midwest of
an updated opinion to the effect that the Exchange Ratio is fair, from a
financial point of view, to the shareholders of Midwest, (ix) the receipt by
Midwest of an opinion from Schiff Hardin & Waite, Midwest's legal counsel, to
the effect that the Merger will constitute a tax-free reorganization under
Sections 368(a)(1)(A) and
                                       40
<PAGE>   46
 
368(a)(2)(E) of the Code, (x) the absence of any material adverse change since
November 11, 1997 to the Closing Date, in the business, properties, financial
condition, loan portfolio, operations or prospects of AMCORE, (xi) the receipt
by Midwest of any further documents it may request evidencing compliance by
AMCORE and Newco with the terms of the Merger Agreement and the Plan of Merger,
and (xii) the receipt by Midwest of any statements which may be necessary to
update the representations and warranties of AMCORE and Newco to make them true
and correct at the Closing, none of which shall reflect a material adverse
change.
 
TERMINATION
 
     The Merger Agreement may be terminated under certain circumstances,
including at any time before the Closing Date (i) by mutual written consent of
the Board of Directors of AMCORE and Midwest, (ii) by either AMCORE or Midwest
if (A) any requisite regulatory approval shall have been denied, which denial
shall have become final and non-appealable, (B) any governmental entity shall
have issued a final, non-appealable order permanently enjoining or otherwise
prohibiting the consummation of the Merger or (C) the Merger shall not have been
consummated on or before August 31, 1998, unless the failure of the Closing to
occur shall have been due to the failure of the party seeking to terminate the
Merger Agreement to perform or observe the covenants and agreements of such
party, (iii) by AMCORE, if any approval of the shareholders of Midwest required
for the consummation of the Merger shall not have been obtained by reason of the
failure to obtain the required vote at a duly held meeting of shareholders or at
any adjournment or postponement thereof, (iv) by Midwest, if the Midwest Board
receives a Superior Proposal (as hereinafter defined) and promptly thereafter,
after providing notice and certain information to AMCORE, enters into a
definitive acquisition, merger or similar agreement to effect such proposal, and
(v) by Midwest, if (A) after notice from Midwest, there exists any material,
uncured breach or breaches of AMCORE's representations and warranties, or (B)
after notice from Midwest, AMCORE shall have failed to perform and comply with,
in all material respects, its agreements and covenants under the Merger
Agreement, (vi) by AMCORE, if (A) after notice from AMCORE, there exists any
material, uncured breach or breaches of Midwest's representations and
warranties, (B) after notice from AMCORE, Midwest shall have failed to perform
and comply with, in all material respects, its agreements and covenants under
the Merger Agreement or (C) the Board of Directors of Midwest or any committee
thereof (1) shall have withdrawn or modified in any manner adverse to AMCORE its
approval or recommendation of the Merger Agreement, the Plan of Merger or the
Merger, (2) shall fail to reaffirm such approval or recommendation upon AMCORE's
request, (3) shall approve or recommend any Transaction Proposal (as hereinafter
defined), or shall not include its recommendation of the Merger Agreement, the
Plan of Merger or the Merger in this Proxy Statement/Prospectus, or (4) shall
resolve to take any of the actions specified in clause (1), (2) or (3).
 
TERMINATION FEES AND EXPENSES
 
     Midwest has agreed to pay AMCORE a $1 million termination fee if: (i) the
Merger Agreement is terminated (A) by Midwest, as a result of the determination
by the Midwest Board of the existence of a Superior Proposal, where Midwest
terminates the Merger Agreement after giving AMCORE full information on the
competing proposal and after five business days still determines the competing
proposal to be a Superior Proposal and promptly thereafter enters into a
definitive agreement for such Superior Proposal, (B) by AMCORE, as a result of a
failure of Midwest to call the Special Meeting or the failure of the Board of
Directors of Midwest to recommend the Merger to the Midwest Shareholders, (C) by
AMCORE, as a result of the failure of the Midwest Shareholders to approve the
Merger at the Special Meeting, or (D) by AMCORE, as a result of the Board of
Directors of Midwest (1) withdrawing or modifying in a manner adverse to AMCORE
its approval or recommendation of the Merger Agreement, the Plan of Merger or
the Merger, (2) failing to reaffirm such approval or recommendation upon
AMCORE's request, (3) approving or recommending any Transaction Proposal or not
including its recommendation of the Merger Agreement, the Plan of Merger or the
Merger in this Proxy Statement/Prospectus or (4) resolving to take any of the
actions in clauses (1) through (3); and (ii) prior to, or contemporaneously
with, such termination, there is a Transaction Proposal and prior to, or within
12 months of, such termination, Midwest shall have entered into a definitive
agreement relating to such Transaction Proposal.
                                       41
<PAGE>   47
 
     The Merger Agreement also provides that if the Merger Agreement is
terminated by Midwest or AMCORE because (i) there exists a material breach of
the other party's representations and warranties, which breach has remained
uncured for a period of 30 days after receipt of notice from the terminating
party, or (ii) the other party shall have failed to perform or comply with, in
all material respects, its agreements and covenants under the Merger Agreement,
which failure has remained uncured for a period of 30 days after receipt of
notice from the terminating party, the breaching party shall pay the terminating
party in cash an amount equal to all out-of-pocket expenses incurred in
connection with the Merger up to $250,000. In the event that the Merger
Agreement is terminated by a party as a result of a willful breach by the other
party, the non-breaching party shall be entitled to (i) any amounts received as
a result of any remedies available to it at law or in equity and (ii) such
party's out-of-pocket expenses incurred in connection with the Merger (which
expenses will not be subject to the $250,000 limitation).
 
AMENDMENT AND WAIVER
 
     AMCORE and Midwest may each waive, as to the other, inaccuracies in the
representations and warranties contained in the Merger Agreement (or in any
document delivered pursuant thereto) or performance of any of the obligations
and compliance with any of the covenants or conditions of the Merger Agreement
and may amend or modify the Merger Agreement. Any such action taken that changes
the amount or the form of the consideration to be delivered to the holders of
Midwest Common Stock under the Merger Agreement following a favorable vote by
its shareholders may be taken only if such action is further approved by the
holders of Midwest Common Stock.
 
                         ADJOURNMENT OF SPECIAL MEETING
 
     Under certain circumstances, Midwest's management may determine at the time
of the Special Meeting that it is in the best interests of Midwest and the
Midwest Shareholders to adjourn the Special Meeting to a later date. For
example, in the event that the number of shares present, in person or by proxy,
at the Special Meeting is insufficient to constitute a quorum or to approve the
Merger Agreement and the Plan of Merger, Midwest's management might decide to
adjourn the Special Meeting to permit further solicitation of proxies. Midwest
might also decide to adjourn the Special Meeting in the event that the parties
determine that regulatory approval of the Merger will be unduly delayed or that
events occurring subsequent to the date of this Proxy Statement/Prospectus
require Midwest and AMCORE to furnish additional proxy soliciting information to
the Midwest Shareholders and to give the Midwest Shareholders an opportunity to
assimilate such information. If the Special Meeting is adjourned, no further
notice of the time and place of the adjourned meeting is required to be given to
Midwest Shareholders other than an announcement of such time and place at the
Special Meeting.
 
     If the Special Meeting is postponed or adjourned, at any subsequent
reconvening of the Special Meeting, all proxies will be voted in the same manner
as such proxies would have been voted at the original convening of the Special
Meeting (except for any proxies which have theretofore effectively been revoked
or withdrawn).
 
     The vote of a majority of the shares present at the Special Meeting, in
person or by proxy, whether or not a quorum is present, is required to approve a
proposal for adjournment of the Special Meeting. In order to allow Midwest's
management to vote proxies received by Midwest at the time of the Special
Meeting in favor of such an adjournment, in the event that Midwest determines,
in its sole discretion, that such an adjournment is in the best interests of
Midwest and the Midwest Shareholders, Midwest has submitted the question of
adjournment as a separate matter for the consideration and vote of the Midwest
Shareholders. The Board of Directors of Midwest recommends that the Midwest
Shareholders vote "FOR" the proposal to adjourn the Special Meeting so that such
proxies may be voted in favor of such adjournment under such circumstances.
 
                                       42
<PAGE>   48
 
                       COMPARISON OF SHAREHOLDERS' RIGHTS
 
GENERAL
 
     AMCORE is incorporated under the laws of the State of Nevada. Accordingly,
the rights of AMCORE shareholders are governed by AMCORE's Restated Articles of
Incorporation (the "AMCORE Charter"), its Bylaws and Nevada law. Midwest is
incorporated under the laws of the State of Wisconsin and, accordingly, the
rights of Midwest Shareholders are governed by Midwest's Articles of
Incorporation (the "Midwest Charter"), its Bylaws and Wisconsin law. The Nevada
and Wisconsin corporation laws differ in many respects, as do the respective
Charters and Bylaws of AMCORE and Midwest. AMCORE is a bank holding company
regulated by the Federal Reserve Board under the BHCA. Midwest is a savings and
loan holding company regulated by the Office of Thrift Supervision. Newco is
chartered under the laws of the State of Wisconsin and is therefore subject to
regulation under such laws and to regulation and examination by the State of
Wisconsin Division of Banking.
 
     Upon consummation of the Merger, Midwest Shareholders will become
shareholders of AMCORE and, as such, all of their rights will be governed by the
AMCORE Charter, Bylaws and Nevada law.
 
     The following summary of the material differences that may affect the
rights and interests of Midwest Shareholders is not intended to be an
all-inclusive discussion of such differences.
 
MERGER, CONSOLIDATION AND SALES OF ASSETS
 
     Nevada law requires that certain extraordinary corporate actions, such as
most mergers, consolidations, dissolutions or sales of substantially all of a
corporation's assets, be approved by the vote of a majority of the corporation's
outstanding shares and by a majority of each class entitled to vote thereon
unless a higher percentage is required by the corporation's charter.
 
     Nevada law also contains a "control share" statute that would require the
acquirer of a "controlling interest" of certain Nevada corporations (an "Issuing
Corporation") to obtain the approval of the holders of a majority of the
outstanding shares of the Issuing Corporation not owned by such acquirer and
officers and employee-directors of the Issuing Corporation in order to receive
voting rights for (i) shares acquired or proposed to be acquired in an
acquisition in which such acquirer obtained or proposed to acquire a
"controlling interest" in the Issuing Corporation, and (ii) all shares acquired
within 90 days immediately preceding the date the acquirer obtained or proposed
to acquire a "controlling interest" in the Issuing Corporation. Under this
statute, a person is deemed to have acquired a "controlling interest" in an
Issuing Corporation if, subject to certain exceptions, such person acquires
voting power equal to or more than 20% of the outstanding voting power of the
Issuing Corporation.
 
     This statute applies only to corporations organized in Nevada having 200 or
more shareholders, at least 100 of whom are shareholders of record and residents
of Nevada, and that do business in Nevada directly or through an affiliated
corporation. The provisions of this statute are applicable to any acquisition of
a controlling interest in an issuing corporation unless, before an acquisition
is made, the articles of incorporation or bylaws of the corporation in effect on
the 10th day following the acquisition of a controlling interest by an acquiring
person provide that the provisions of those sections do not apply. The AMCORE
Charter and Bylaws do not provide that such sections of the statute do not apply
to AMCORE, though AMCORE does not believe this statute is currently applicable
to AMCORE.
 
     The AMCORE Charter requires the approval of at least 70% of the outstanding
shares of AMCORE Common Stock entitled to vote if a transaction involves a
Business Combination (as hereinafter defined) with, or proposed by or on behalf
of, any Interested Stockholder (as hereinafter defined) or any Affiliate or
Associate (as hereinafter defined) of any Interested Stockholder or any person
who thereafter would be an Affiliate or Associate of such Interested
Stockholder, unless certain fair price criteria and procedural requirements are
satisfied or the transaction is approved by a majority of Continuing Directors
(as hereinafter defined).
 
                                       43
<PAGE>   49
 
     An "Interested Stockholder" is any person who is or has announced or
publicly disclosed an intention to become the beneficial owner of 30% or more of
the voting stock of AMCORE. The terms "Affiliate" and "Associate" have the same
meanings ascribed for such terms in Rule 12b-2 under the Exchange Act as in
effect on February 12, 1986. A "Business Combination" includes certain
transactions with or proposed by or on behalf of an Interested Stockholder or
related parties, including, among others, (i) a merger or consolidation of
AMCORE or any subsidiary; (ii) the sale or disposition by AMCORE or any
subsidiary of any assets or securities having an aggregate value of $5 million
or more or constituting more than 10% of the book value of the total assets or
of the stockholders' equity of the entity in question; (iii) the adoption of any
plan or proposal for the liquidation or dissolution of AMCORE or for any
amendment of AMCORE's bylaws; or (iv) any reclassification of securities,
recapitalization, merger or other transaction with the effect, directly or
indirectly, of increasing an Interested Stockholder's proportionate share of the
outstanding capital stock of AMCORE or a subsidiary. A "Continuing Director" is
a member of the AMCORE Board of Directors who is not affiliated with an
Interested Stockholder or was a director before any Interested Stockholder
became an Interested Stockholder or was recommended or elected by a majority of
Continuing Directors.
 
     The Business Combination provisions of the AMCORE Charter are intended to
prevent certain of the potential inequities of Business Combinations that are
part of "two-step" transactions. In the absence of such provisions, a purchaser
who acquired control of AMCORE could subsequently, by virtue of such control
force the remaining shareholders to sell or exchange their shares at a price
that would not reflect any premium such purchaser may have paid in order to
acquire its controlling interest. Such provisions may also discourage the
accumulation of large blocks of AMCORE's stock which could be disruptive to the
stability of AMCORE'S important relationships with its employees, customers and
the communities that it serves. Such an accumulation could precipitate a change
of control of AMCORE on terms unfavorable to AMCORE's other shareholders.
 
     The Business Combination provisions of the AMCORE Charter may render more
difficult or discourage a merger with or takeover of AMCORE, the acquisition of
control of AMCORE by a large shareholder and the removal of incumbent
management. Such provisions would also discourage some takeover attempts by
persons who intend to acquire AMCORE in two steps and eliminate remaining
shareholder interests by means of a Business Combination involving less
consideration per share than the acquiring person would propose to pay for its
initial interest in AMCORE equal to or greater than 30% (but less than 100%) of
the outstanding voting stock of AMCORE. To the extent that this provision
discourages certain business combinations, AMCORE's shareholders may be deprived
of higher market prices for their stock that often prevail as a result of such
events.
 
     Section 180.1150 of the WBCL provides that in particular circumstances the
voting of shares of a Wisconsin "issuing public corporation" (a Wisconsin
corporation which has at least 100 Wisconsin resident shareholders, 500 or more
shareholders of record and total assets exceeding $1 million) held by any person
in excess of 20% of the voting power is limited to 10% of the full voting power
of such excess shares. Full voting power may be restored under Section 180.1150
if a majority of the voting power of shares represented at a meeting, including
those held by the party seeking restoration, are voted in favor of such
restoration.
 
     In addition, Section 180.1132 of the WBCL sets forth certain fair price
provisions which govern mergers and share exchanges with, or sales of
substantially all a Wisconsin issuing public corporation's assets to, a 10%
shareholder, mandating that any such transaction meet one of two requirements.
The first requirement is that the transaction be approved by 80% of all
shareholders and two-thirds of "disinterested" shareholders, which generally
exclude the 10% shareholder. The second requirement is the payment of a
statutory fair price, which is intended to insure that shareholders in the
second step merger, share exchange or asset sale receive at least what
shareholders received in the first step.
 
     Further, Section 180.1134 of the WBCL requires shareholder approval for
certain transactions in the context of a tender offer or similar action for in
excess of 50% of a Wisconsin issuing public corporation's stock. Shareholder
approval is required for the acquisition of more than 5% of the corporation's
stock at a price above market value, unless the corporation makes an equal offer
to acquire all shares. Shareholder approval is also required for the sale or
option of assets which amount to at least 10% of the market value of the
 
                                       44
<PAGE>   50
 
corporation, but this requirement does not apply if the corporation meets
certain minimum outside director standards.
 
     Sections 180.1140 through 180.1144 of the WBCL prohibit certain "business
combinations" between a "resident domestic corporation" and a person
beneficially owning 10% or more of the outstanding voting stock of such
corporation (an "interested shareholder") within three years after the date such
person became a 10% beneficial owner (the "acquisition date"), unless the
business combination or the acquisition of such stock has been approved before
the acquisition date by the corporation's board of directors. After such
three-year period, a business combination with the interested shareholder may be
consummated only with the approval of the holders of a majority of the voting
stock not beneficially owned by the interested shareholder, unless the
combination satisfied certain adequacy-of-price standards intended to provide a
fair price for shares held by disinterested shareholders. Midwest presently
meets the definition of a "resident domestic corporation."
 
PREFERRED STOCK
 
     The AMCORE charter authorizes the AMCORE Board to issue up to 10 million
shares of AMCORE preferred stock from time to time or in series, without any
action on the part of AMCORE's shareholders, and to determine the designation of
each series, the number of shares to be issued, dividend rates, redemption
provisions, sinking fund provisions, liquidation preferences and such other
provisions and rights as the Board of Directors may deem advisable. The
dividends fixed by the Board of Directors will be in preference to dividends on
any other class of stock of AMCORE. The preferred dividends may or may not be
cumulative. The preferred stock may also be entitled to a preference upon
dissolution or liquidation if AMCORE's Board of Directors so designates. The
preferred stock may not have any voting rights and cannot be convertible or
exchangeable for shares of AMCORE Common Stock. There is no preferred stock
issued or outstanding at the present time.
 
     The Midwest charter authorizes the Midwest Board to issue up to 1 million
shares of Midwest serial preferred stock from time to time, without any action
on the part of Midwest's shareholders, and to fix and state the powers,
designations, preferences and relative rights of such shares and the
qualifications, limitations or restrictions thereof, including the number of
shares to be issued, dividend rates, redemption provisions, sinking fund
provisions, liquidation preferences and such other provisions and rights as the
Board of Directors may deem advisable. The preferred dividends may or may not be
cumulative. The serial preferred stock may also be entitled to a preference upon
dissolution or liquidation if Midwest's Board of Directors so designates. At the
discretion of the Midwest Board of Directors, the serial preferred stock may
have voting rights and may be convertible or exchangeable for shares of Midwest
Common Stock. There is no serial preferred stock issued or outstanding at the
present time.
 
DIRECTORS
 
     The AMCORE Board is divided into three classes as nearly equal in number as
possible, with the directors in each class serving for staggered three-year
terms. At each annual meeting of AMCORE's shareholders, the successors to the
class of directors whose term expires at the time of such meeting are elected by
a majority of the votes cast, assuming a quorum is present.
 
     Holders of AMCORE Common Stock are not entitled to any preemptive rights,
except in certain circumstances required by Nevada law. AMCORE Common Stock is
fully paid and not liable to any calls or assessments by AMCORE, except in the
event of a capital impairment of AMCORE.
 
     The Midwest Board is divided into three classes as nearly equal in number
as possible, with the directors in each class serving for staggered three-year
terms. At each annual meeting of Midwest's shareholders, the successors to the
class of directors whose term expires at the time of such meeting are elected by
a majority of the votes cast, assuming a quorum is present.
 
     Holders of Midwest Common Stock are not entitled to any preemptive rights,
except in certain circumstances required by Wisconsin law. Midwest Common Stock
is fully paid and not liable to any calls or
 
                                       45
<PAGE>   51
 
assessments by Midwest, except in the event of a capital impairment of Midwest,
and under Section 180.0622(2)(b) of the WBCL.
 
DIVIDENDS
 
     Under Nevada law, a corporation may authorize and make a distribution to
its shareholders unless, after giving effect to such distribution, (i) the
corporation would be unable to pay its debts as they become due, or (ii) except
as specifically allowed by the corporation's charter, the corporation's total
assets would be less than the sum of its total liabilities plus the amount
necessary, if the corporation were dissolved at the time of distribution, to
satisfy the preferential rights of shareholders whose preferential rights are
superior to those receiving the distribution.
 
     There are no provisions in the AMCORE Charter or Bylaws allowing
distributions in a manner other than that prescribed by Nevada law or in the
Midwest Charter or Bylaws restricting the declaration or payment of dividends.
In addition, the ability of both AMCORE and Midwest to pay dividends is
dependent upon their ability to receive dividends from their respective
subsidiaries. The bank subsidiaries of AMCORE and Midwest are subject to federal
and state regulations that impose restrictions on the payment of dividends.
 
AMENDMENTS TO THE CHARTER
 
     Unless a higher vote is required by a corporation's charter or bylaws,
Nevada law requires that a proposed charter amendment be approved by a majority
of the voting power entitled to vote upon the amendment and, under certain
circumstances, a majority of the outstanding stock of each class entitled to
vote thereon. The AMCORE Charter provides that certain amendments require the
affirmative vote of 70% of the outstanding shares, including amendments that
affect the provisions related to the size and structure of the Board of
Directors, the provision governing the nomination of directors contained in
AMCORE's Bylaws, the prohibition of shareholder action by written consent, and
the Business Combination provisions (discussed above).
 
     Under Wisconsin law, unless a higher vote is required by a corporation's
charter, an amendment to the charter of a Wisconsin corporation may be approved
by a majority of the outstanding shares entitled to vote upon the proposed
amendment and a majority of the outstanding stock of each group entitled to vote
thereon as a group. The Midwest Charter provides that certain amendments to the
Midwest Charter require the affirmative vote of at least 80% of the shares
entitled to vote thereon, including amendments that affect the provisions
relating to shareholders meetings and the prohibition of cumulative voting, the
provisions relating to notice for shareholder proposals and shareholder
nominations for director, the provisions relating to the size, structure and
removal of the Board of Directors, provisions relating to the elimination of
directors' liability, provisions relating to Midwest's election to be subject to
the approval requirements for certain Business Combinations provided in the WBCL
(discussed above), and the provisions relating to amending the Midwest Charter
and Bylaws.
 
AMENDMENTS TO THE BYLAWS
 
     Except for the provisions governing the nomination of directors, which
require the affirmative vote of 70% of the outstanding shares, the AMCORE Bylaws
may be altered or repealed and new bylaws adopted by the AMCORE Board, but any
bylaws adopted by the AMCORE Board may be altered or repealed, and new bylaws
adopted, by the shareholders entitled to vote thereon.
 
     The Midwest Bylaws may be altered, amended, repealed or adopted by either a
two-thirds majority vote of the Midwest Board of Directors or by an 80%
supermajority vote of the Midwest shareholders entitled to vote thereon.
 
CUMULATIVE VOTING
 
     The AMCORE Charter and Midwest Charter each specifically precludes
cumulative voting for the election of directors.
 
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<PAGE>   52
 
STRUCTURE OF BOARD OF DIRECTORS
 
     The AMCORE Charter provides for a Board of Directors divided into three
classes, with the term of one class expiring each year. The AMCORE Charter
further requires that the Board consist of between three and fourteen directors
with each class consisting of as near to one-third the total number of directors
as possible. The AMCORE Board currently consists of 12 members divided into
classes of three, four and five directors, respectively.
 
     The AMCORE Bylaws require that to nominate a person for election to the
Board of Directors a shareholder must provide notice to AMCORE that is delivered
or mailed to and received at the principal executive offices of AMCORE not less
than 50 nor more than 75 days prior to the meeting. The shareholder's notice
must identify each person whom the shareholder proposes to nominate, provide
information regarding the nominee's principal occupation, the class and number
of shares of AMCORE capital stock beneficially owned by the nominee, and any
other information required to be disclosed in solicitations for proxies pursuant
to Regulation 14A of the Exchange Act. The notice must also set forth the
nominating shareholder's identity and the class and number of shares of AMCORE
capital stock that are beneficially owned by the shareholder. AMCORE may also
require the proposed nominee to furnish such reasonable additional information
as may be required to determine the eligibility of the proposed nominee to serve
as director.
 
     The Midwest Charter provides for a Board of Directors divided into three
classes, with the term of one class expiring each year. The Midwest Charter
further requires that the Board consist of between six and 25 directors with
each class consisting of as near to one-third the total number of directors as
possible. The Midwest Board currently consists of seven members divided into
classes of two, three and two directors, respectively.
 
     The Midwest Charter requires that to nominate a person for election to the
Board of Directors a shareholder must provide notice to Midwest that is
delivered or mailed to the Corporate Secretary of Midwest not less than 30 nor
more than 40 days prior to the meeting. The shareholder's notice must identify
the name, age and business and residence addresses of each person whom the
shareholder proposes to nominate, provide information regarding the nominee's
principal occupation, the number of shares of Midwest capital stock beneficially
owned by the nominee, and any other information required to be disclosed in
solicitations for proxies pursuant to Regulation 14A of the Exchange Act,
including, without limitation, the nominee's written consent to being named in
the proxy statement as a nominee and to serving as a director, if elected. The
notice must also set forth the nominating shareholder's identity and address and
the class and number of shares of Midwest capital stock that are beneficially
owned by the shareholder. Midwest may also require the proposed nominee to
furnish such additional information as may be reasonably requested by Midwest.
 
REMOVAL OF DIRECTORS
 
     Under Nevada law, unless a higher vote is required by a corporation's
charter, a director may be removed from office, with or without cause, by the
affirmative vote of shareholders representing at least two-thirds of the issued
and outstanding voting stock. The AMCORE Charter does not require a higher
percentage for removal of directors.
 
     Under Wisconsin law, any director or the entire board of directors may be
removed with or without cause by shareholders representing a majority of the
shares entitled to vote at an election of directors, unless the corporation's
charter or bylaws provide that directors may be removed only for cause. Under
the Midwest Charter, a director may be removed from office only for cause upon
the affirmative supermajority vote of 80% of the outstanding shares of Midwest
capital stock entitled to vote thereon.
 
RIGHTS OF DISSENTING SHAREHOLDERS
 
     If a shareholder dissents from a merger or consolidation in the manner
provided by Nevada law, the Nevada statute entitles such holder to appraisal
rights unless the shares received in connection with the transaction are
registered on a securities exchange on the record date fixed to determine the
shareholders
 
                                       47
<PAGE>   53
 
entitled to vote on the agreement of merger or consolidation. The AMCORE Charter
and Bylaws do not confer any additional appraisal rights.
 
     Under the provisions of Wisconsin law, any shareholders who assert
dissenters' rights will have a statutory right to demand payment of the "fair
value" of their stock in cash. To perfect this right, a shareholder must not
vote such shares in favor of the Merger Agreement at the Special Meeting (this
may be done by marking the proxy either to vote against the Merger Agreement or
to abstain from voting thereon or by not voting at all) and must take such other
action as is required by the provisions of Section 180.1301 to 180.1331 of the
WBCL, including delivering written notice of intent to demand the "fair value"
of Midwest Common Stock. See "THE MERGER -- Rights of Dissenting Shareholders."
 
SPECIAL MEETINGS OF SHAREHOLDERS
 
     The AMCORE Bylaws permit a special meeting of shareholders to be called by
the Chairman of the Board, the President or a majority of the AMCORE Board. A
meeting is required to be held upon the written request of the holders of not
less than 10% of outstanding AMCORE Common Stock entitled to vote at the
meeting.
 
     The Midwest Charter permits a special meeting of shareholders to be called
by the Board of Directors or any committee of the Board of Directors which has
been expressly granted the authority to call such meeting. A meeting is required
to be held upon the request of the holders of 10% of all the votes entitled to
be cast on any issue proposed to be considered at the special meeting, provided
such holders sign, date and deliver to Midwest one or more written demands for
the meeting describing the purposes for which it is to be held.
 
ACTION WITHOUT A MEETING
 
     The AMCORE Charter prohibits shareholder action by written consent.
 
     The Midwest Charter allows action to be taken without a shareholders
meeting pursuant to, and subject to the limitations of, Section 180.0704 of the
WBCL, which permits any action which may be taken at an annual or special
shareholder meeting to be taken without a meeting and without a vote if written
consents are obtained from holders of the outstanding stock having the minimum
number of votes necessary to authorize the action at a meeting at which all
shares entitled to vote thereon were present and voted.
 
PREEMPTIVE RIGHTS
 
     Although both Nevada and Wisconsin law permit the designation of preemptive
rights in a corporation's charter, neither the AMCORE Charter nor the Midwest
Charter provides holders of common stock preemptive rights to acquire any
securities of AMCORE or Midwest, respectively.
 
LIQUIDATION AND DISSOLUTION
 
     Under both Nevada and Wisconsin law, voluntary dissolution of a corporation
requires the adoption of a resolution by a majority of the board of directors
and the affirmative vote of a majority of the outstanding shares entitled to
vote thereon. The AMCORE Charter requires the approval of 70% of the votes
entitled to be cast by the holders of all outstanding shares of voting stock for
the adoption of any plan or proposal for the liquidation or dissolution of the
company that is proposed by an Interested Stockholder.
 
INDEMNIFICATION AND PERSONAL LIABILITY OF DIRECTORS AND OFFICERS
 
     AMCORE is required, pursuant to the AMCORE Charter, to indemnify all
persons who may be indemnified under Nevada law to the fullest extent permitted
by such law. Similarly, Midwest is required, pursuant to Midwest Charter, to
indemnify all persons who may be indemnified under the Wisconsin indemnification
statute to the fullest extent permitted thereunder. Generally, under Nevada and
Wisconsin law, a corporation may indemnify officers, directors, employees and
agents of a corporation against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by them in connection with any threatened, pending or completed civil, criminal,
administrative or
                                       48
<PAGE>   54
 
investigative proceeding (other than derivative actions) if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation and, with respect to any criminal action, they
had no reasonable cause to believe their conduct was unlawful. With respect to
derivative actions, officers, directors, employees and agents of a corporation
may be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by them in connection with the defense or settlement of such
action if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation, except that no
such indemnification may be made in respect of any claim 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 the action was brought determines that such
person is entitled to indemnification despite the adjudication of liability. To
the extent that an officer, director, employee or agent is successful on the
merits or otherwise in defense of any action, suit or proceeding referred to
above, the corporation shall indemnify such officer, director, employee or agent
against expenses (including attorneys' fees) actually and reasonably incurred in
connection therewith.
 
     The AMCORE Charter and the Midwest Charter also each permit each respective
corporation to purchase and maintain insurance or make other financial
arrangements to insure its directors, officers, employees and agents against
liabilities, whether or not AMCORE or Midwest, respectively, are themselves
permitted to indemnify against such liabilities.
 
     As permitted by Nevada law, the AMCORE Charter eliminates, to the fullest
extent permitted by Nevada law, the personal liability of directors and officers
to AMCORE for breaches of fiduciary duty. Under the AMCORE Charter, directors
and officers are not indemnified for acts or omissions involving intentional
misconduct, fraud or a knowing violation of law or for violations of Section
78.300 of the Nevada General Corporation Law regarding unlawful payment of
dividends. The Midwest Charter eliminates, to the fullest extent permitted by
Wisconsin law, the personal liability of directors for monetary damages for
breach or failure to perform any duty resulting from such person's status as
directors unless the breach or failure to perform results from (i) a wilful
failure to deal fairly with Midwest or its shareholders in a matter in which
such director has a material conflict of interest, (ii) a violation of criminal
law, unless such director had reasonable cause to believe his or her conduct was
lawful, (iii) a transaction from which the director received an improper
personal benefit or (iv) wilful misconduct.
 
     AMCORE has entered into indemnification contracts (the "Indemnification
Agreements") with its directors and officers. The Indemnification Agreements
provide for indemnification of directors and officers to the fullest extent
permitted by law. These agreements cover all expenses, judgments, fines and
penalties incurred and amounts paid in settlement in connection with
investigating, defending, being a witness or participating in or preparing to
defend, be a witness in or participate in any threatened, pending or completed
action, suit or proceeding or any inquiry or investigation, whether civil,
criminal, administrative or otherwise, related to the fact that such director or
officer was a director or officer, employee, agent or fiduciary of AMCORE or was
serving as such at the request of AMCORE. The Indemnification Agreements impose
upon AMCORE the burden of proving that the director or officer is not entitled
to indemnification.
 
     Midwest is not a party to indemnification contracts with Midwest's
directors and officers.
 
     Insofar as the foregoing provisions may permit indemnification of
directors, officers or persons controlling AMCORE for liabilities arising under
the Securities Act, AMCORE understands that, in the opinion of the Commission,
such indemnification is against public policy as expressed in the Securities Act
and therefore is unenforceable.
 
SHARE PURCHASE RIGHTS
 
     The AMCORE Common Stock Purchase Rights Plan provides that each share of
AMCORE Common Stock issued in the Merger will have attached thereto one Right.
Each Right, when exercisable, entitles the registered holder to purchase from
AMCORE one share of AMCORE Common Stock at a purchase price of $70.00 per share
(the "Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in the Rights Agreement (the "Rights Agreement") dated as
of February 21, 1996, between AMCORE and Firstar Trust Company, as Rights Agent.
                                       49
<PAGE>   55
 
     Initially, the Rights are attached to all Common Stock certificates
representing shares then outstanding, and no separate certificates representing
the Rights ("Rights Certificates") will be distributed. The Rights will separate
from the Common Stock and a Distribution Date (as hereinafter defined) will
occur upon the earlier of (i) 10 days following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of the outstanding AMCORE Common Stock (the date of such announcement being the
"Stock Acquisition Date"), (ii) 10 business days (or such later date as the
AMCORE Board shall determine) following the commencement of a tender offer or
exchange offer that would result in a person or group beneficially owning 15% or
more of such outstanding AMCORE Common Stock or (iii) 10 business days after the
AMCORE Board shall declare any person to be an "Adverse Person." In order to
declare a person to be an Adverse Person the AMCORE Board must determine that
such person, alone or together with its affiliates and associates, has become
the beneficial owner of an amount of AMCORE Common Stock which the AMCORE Board
determines to be substantial (which amount shall in no event be less than 10% of
the AMCORE Common Stock then outstanding) and, after reasonable inquiry and
investigation, including consultation with such persons as such directors shall
deem appropriate, that (a) such beneficial ownership by such person is intended
to cause AMCORE to repurchase the AMCORE Common Stock beneficially owned by such
person or to cause pressure on AMCORE to take action or enter into a transaction
or series of transactions intended to provide such person with short-term
financial gains under circumstances where the AMCORE Board determines that the
best long-term interests of AMCORE would not be served by taking such action or
entering into such transaction or series of transactions at that time or (b)
such beneficial ownership is causing or reasonably likely to cause a material
adverse impact (including, but not limited to, impairment of relationships with
customers or impairment of AMCORE's ability to maintain its competitive
position) on the business or prospects of AMCORE, on AMCORE's employees,
customers or suppliers or on the communities in which AMCORE operates or is
located.
 
     As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the AMCORE Common Stock as of the close
of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. All shares of AMCORE Common Stock
issued prior to the Distribution Date will be issued with Rights. Shares of
AMCORE Common Stock issued after the Distribution Date will be issued with
Rights if such shares are issued pursuant to the exercise of stock options or
under an employee benefit plan, or upon the conversion of securities issued
after adoption of the Rights Agreement. Except as otherwise determined by the
AMCORE Board, no other shares of AMCORE Common Stock issued after the
Distribution Date will be issued with Rights.
 
     The Rights are not exercisable until the Distribution Date and will expire
at the close of business on February 27, 2006, unless earlier redeemed by AMCORE
as described above.
 
     In the event that (i) a person becomes the beneficial owner of more than
15% of the then-outstanding AMCORE Common Stock (except pursuant to an offer for
all outstanding shares of AMCORE Common Stock which the independent directors
determine to be fair to and otherwise in the best interests of AMCORE and its
shareholders) or (ii) the AMCORE Board declares a person to be an Adverse
Person, following the Distribution Date, each holder of a Right will thereafter
have the right to receive, upon exercise, AMCORE Common Stock (or, in certain
circumstances, cash, property or other securities of AMCORE) having a value
equal to two times the Exercise Price of the Right. The Exercise Price is the
Purchase Price multiplied by the number of shares of AMCORE Common Stock
issuable upon exercise of a Right prior to any of the events described in this
paragraph (initially, one). Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this paragraph, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or Adverse Person will be null and
void. However, Rights are not exercisable following the occurrence of any of the
events set forth above until such time as the Rights are no longer redeemable by
AMCORE as set forth below.
 
     In the event that, at any time following the Stock Acquisition Date, (i)
AMCORE is acquired in a share exchange, merger or other business combination
transaction, (other than a merger which follows an offer described in the second
preceding paragraph), or (ii) 50% or more of AMCORE's assets or earning power is
sold or transferred, each holder of a Right (except Rights which previously have
been voided as set forth
                                       50
<PAGE>   56
 
above) shall thereafter have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the exercise price of
the Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
 
     The Purchase Price payable, and the number of shares of AMCORE Common Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
AMCORE Common Stock, (ii) if holders of the AMCORE Common Stock are granted
certain rights or warrants to subscribe for shares of AMCORE Common Stock or
convertible securities at less than the current market price of the AMCORE
Common Stock, or (iii) upon the distribution to holders of the AMCORE Common
Stock of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
 
     With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of AMCORE Common Stock will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
AMCORE Common Stock on the last trading date prior to the date of exercise.
 
     At any time prior to the earlier of (i) ten days following the Stock
Acquisition Date, and (ii) the Expiration Date, AMCORE may redeem the Rights in
whole, but not in part, at a price of $.01 per Right, subject to adjustment.
Notwithstanding the foregoing, the AMCORE Board may not redeem the Rights
following a determination that any person is an Adverse Person. AMCORE may, at
its option, pay the redemption price in cash, shares of AMCORE Common Stock
(based on the current market price of the AMCORE Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the AMCORE
Board. Immediately upon the action of AMCORE's Board of Directors electing to
redeem the Rights, the right to exercise the Rights will terminate and the only
right of the holders of Rights thereafter will be to receive the applicable
redemption price.
 
     Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of AMCORE, including, without limitation, the right to
vote or to receive dividends.
 
     The provisions of the Rights Agreement may be amended by the AMCORE Board
prior to the Distribution Date without the approval of the holders of the
Rights. After the Distribution Date, the provisions of the Rights Agreement may
be amended by the AMCORE Board in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person or Adverse
Person), or to shorten or lengthen any time period under the Rights Agreement;
provided, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
 
     The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire AMCORE
without conditioning the offer on a substantial number of Rights being acquired.
Accordingly, the existence of the Rights may deter certain acquirers from making
takeover proposals or tender offers. However, the Rights are not intended to
prevent a takeover, but rather are designed to enhance the ability of the AMCORE
Board to negotiate with an acquirer on behalf of all of the shareholders. In
addition, the Rights should not interfere with a proxy contest.
 
     Midwest does not have a similar rights plan in place.
 
                           SUPERVISION AND REGULATION
 
GENERAL
 
     As a bank holding company, AMCORE is subject to regulation under the BHCA
and its examination and reporting requirements. Under the BHCA, a bank holding
company may not directly or indirectly acquire the ownership or control of more
than 5% of the voting shares or substantially all of the assets of any company,
without the prior approval of the Federal Reserve Board. In addition, bank
holding companies are generally prohibited under the BHCA from engaging in
nonbanking activities, subject to certain exceptions.
                                       51
<PAGE>   57
 
     Under current regulations of the Federal Reserve Board, a holding company
and its non-bank subsidiaries are permitted, among other activities, to engage
in such banking-related businesses as sales and consumer finance, equipment
leasing, mortgage banking, computer service bureau and software operations and
financial advisory services. The BHCA does not place territorial restrictions on
the activities of non-bank subsidiaries of bank holding companies. In addition,
federal legislation prohibits acquisition of "control" of a bank or bank holding
company without prior notice to certain federal bank regulators. "Control" is
defined in certain cases as the acquisition of ten percent or more of the
outstanding shares of a bank or bank holding company.
 
     Federal and state laws and regulations of general application to banks
regulate, among other things, the scope of business, investments, reserves
against deposits, capital levels relative to assets and risk and the
establishment of branches, mergers, consolidations and the payment of dividends.
 
     AMCORE and certain of AMCORE's subsidiary banks are supervised and examined
by the Federal Reserve Board. Nationally chartered affiliate banks are
supervised and regularly examined by the OCC and are subject to examination by
the Federal Reserve Board. In addition, all affiliate banks are subject to
periodic examinations by the Federal Deposit Insurance Corporation ("FDIC"). The
Bank is currently regulated by the OTS.
 
CERTAIN TRANSACTIONS WITH AFFILIATES
 
     There are various legal restrictions on the extent to which a bank holding
company and certain of its nonbank subsidiaries can borrow or otherwise obtain
credit from its bank subsidiaries. In general, these restrictions require that
any such extensions of credit must be on non-preferential terms and secured by
designated amounts of specified collateral and be limited, as to any one of the
holding company or such nonbank subsidiaries, to 10% of the lending bank's
capital stock and surplus, and as to the holding company and all such nonbank
subsidiaries in the aggregate, to 20% of such capital stock and surplus.
 
PAYMENT OF DIVIDENDS
 
     AMCORE and Midwest are legal entities separate and distinct from their
banking and other subsidiaries. The principal source of AMCORE's and Midwest's
revenues are dividends from their national and state banking or savings
association subsidiaries. Various federal and state statutory provisions limit
the amount of dividends the affiliate banks or savings associations can pay to
AMCORE or Midwest without regulatory approval.
 
     AMCORE.  The approval of the appropriate bank regulator is required for any
dividend by a national bank or state member bank if the total of all dividends
declared by the bank in any calendar year would exceed the total of its net
profits, as defined by regulatory agencies, for such year combined with its
retained net profits for the preceding two years. In addition, a national bank
or a state member bank may not pay a dividend in an amount greater than its net
profits then on hand. The payment of dividends by any affiliate bank may also be
affected by other factors, such as the maintenance of adequate capital for such
affiliate bank.
 
     Midwest.  The OTS regulations impose limitations upon all capital
distributions by savings associations, including cash dividends. The regulations
establish three tiers of associations. An association that exceeds all fully
phased-in capital requirements before and after the proposed capital
distribution ("Tier 1 Association") and has not been advised by the OTS that it
is in need of more than normal supervision, could, after prior notice but
without the approval of the OTS, make capital distributions during a calendar
year up to the higher of (a) 100 percent of its net income 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 percent of its net reserve over the
most recent fourquarter period. Any additional distributions would require prior
regulatory approval. In computing the association's permissible percentage of
capital distributions, previous distributions made during the prior four quarter
period must be included. As of December 31, 1996, the Bank met the requirements
of a Tier 1 Association. In the event that the Bank's capital fell below its
fully phased-in capital requirement or the OTS notified the Bank that it was in
need of more than normal supervision, the Bank's ability to pay dividends to
Midwest could be restricted. In addition, the OTS could prohibit a proposed
capital distribution by any association, which would otherwise be
                                       52
<PAGE>   58
 
permitted by regulation, if the OTS determines that such distribution would
constitute an unsafe or unsound practice. Moreover, under the OTS prompt
corrective action regulations, the Bank would be prohibited from making any
capital distribution if, after the distribution, the Bank would have (i) a total
risk-based capital ratio of less than 8 percent, (ii) a Tier 1 risk-based
capital ratio of less than 4 percent or (iii) a leverage ratio of less than 4
percent, or less than 3 percent if the Bank is rated composite 1 under the CAMEL
rating system in the most recent examination of the association and is not
experiencing or anticipating significant growth.
 
CAPITAL ADEQUACY
 
     The Federal Reserve Board has issued standards for measuring capital
adequacy for bank holding companies. These standards are designed to provide
riskresponsive capital guidelines and to incorporate a consistent framework for
use by financial institutions operating in major international financial
markets. The banking regulators have issued standards for banks and savings
associations that are similar to, but not identical with, the standards for bank
holding companies.
 
     In general, the risk-related standards require banks and bank holding
companies to maintain capital based on "risk adjusted" assets so that categories
of assets with potentially higher credit risk will require more capital backing
than categories with lower credit risk. In addition, banks and bank holding
companies are required to maintain capital to support off-balance sheet
activities such as loan commitments.
 
     The standards classify total capital for this risk-based measure into two
tiers referred to as Tier 1 and Tier 2. Tier 1 capital consists of common
shareholders' equity, certain non-cumulative and cumulative perpetual preferred
stock, and minority interests in equity accounts of consolidated subsidiaries;
Tier 2 capital consists of the allowance for loan and lease losses (within
certain limits), perpetual preferred stock not included in Tier 1, hybrid
capital instruments, term subordinated debt, and intermediate-term preferred
stock. Bank holding companies are required to meet a minimum ratio of 8% of
qualifying total capital to risk-adjusted assets, and a minimum ratio of 4% of
qualifying Tier 1 capital to risk-adjusted assets. Capital that qualifies as
Tier 2 capital is limited in amount to 100% of Tier 1 capital in testing
compliance with the total risk-based capital minimum standards.
 
     In addition, the Federal Reserve Board has established minimum leverage
ratio guidelines for banks, savings associations and bank holding companies.
These guidelines provide for a minimum ratio of Tier 1 capital to adjusted
average total assets (the "leverage ratio") of 3% for bank holding companies
that meet certain specified criteria, including having the highest regulatory
rating. Other bank holding companies generally are required to maintain a
leverage ratio of at least 3% plus 100 to 200 basis points. The guidelines also
provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above minimum supervisory levels, without significant reliance on intangible
assets. Furthermore, the Federal Reserve Board has indicated that it may
consider other indicia of capital strength in evaluating proposals for expansion
or new activities.
 
     The federal bank regulatory agencies have issued various proposals to amend
the risk-based capital guidelines for banks, savings associations and bank
holding companies. Under one proposal, banks would be required to give explicit
consideration to interest rate risk as an element of capital adequacy by
maintaining capital to compensate for such risk in an amount measured by the
bank's exposure to interest rate risk in excess of a regulatory threshold.
Another proposal would revise the treatment given to (i) low-level recourse
arrangements to reduce the amount of capital required and (ii) certain direct
credit substitutes provided by banking organizations to require that capital be
maintained against the value of the assets enhanced or the loans protected. A
proposal recently issued by the Federal Reserve Board and expected to be joined
in by the other bank regulatory agencies increases the amount of capital
required to be carried against certain long-term derivative contracts; in
addition, the proposal recognizes the effect of certain bilateral netting
arrangements in reducing potential future exposure under these contracts. AMCORE
believes that these changes will not, if adopted, have a material effect on
their compliance with capital adequacy requirements.
 
                                       53
<PAGE>   59
 
THE INTERSTATE BANKING AND COMMUNITY DEVELOPMENT LEGISLATION
 
     In September 1994, legislation was enacted that may have a significant
effect in restructuring the banking industry in the United States. The
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 facilitates
the interstate expansion and consolidation of banking organizations by
permitting (i) bank holding companies that are adequately capitalized and
managed to acquire banks located in states outside their home states regardless
of whether such acquisitions are authorized under the law of the host state,
(ii) the interstate merger of banks after June 1, 1997, subject to the right of
individual states to "opt in" or to "opt out" of this authority before that
date, (iii) banks to establish new branches on an interstate basis provided that
such action is specifically authorized by the law of the host state, (iv)
foreign banks to establish, with approval of the regulators in the United
States, branches outside their home states to the same extent that national or
state banks located in the home state would be authorized to do so, and (v)
banks to receive deposits, renew time deposits, close loans, service loans and
receive payments on loans and other obligations as agent for any bank or thrift
affiliate, whether the affiliate is located in the same state or a different
state. One effect of this legislation is to permit AMCORE to acquire banks
located in any state and to permit bank holding companies located in any state
to acquire banks and bank holding companies in Wisconsin. Overall, this
legislation is likely to have the effects of increasing competition and
promoting geographic diversification in the banking industry.
 
     The Riegle Community Development and Regulatory Improvement Act of 1994,
also enacted in September 1994, is intended to (i) increase the flow of loans to
businesses in distressed communities by providing incentives to lenders to
provide credit within those communities, (ii) remove impediments to the
securitization of small business loans, (iii) provide for a reduction in
paperwork and to streamline bank regulation through, for example, the
coordination of examinations in a bank holding company context, a reduction in
the number of currency transaction reports required and improvements to the
National Flood Insurance Program that include enabling lenders to force place
flood insurance and (iv) increase the level of consumer protection provided to
customers in banking transactions. AMCORE and Midwest believes that these
provisions of the new law will not have a material effect on their operations.
 
FDIC INSURANCE ASSESSMENTS
 
     The subsidiary banks of AMCORE and Midwest are subject to FDIC deposit
insurance assessments based on a risk-based premium schedule. Under this
schedule, the annual premiums ranged from $.04 to $.31 for every $100 of
deposits with an average assessment rate of $.045. Beginning in 1996, the FDIC
announced it would reduce the deposit assessment premiums for 92% of its members
that are assessed in the highest capital and supervisory categories to $2,000
per year. Each financial institution is assigned to one of three capital groups
- -- well capitalized, adequately capitalized or undercapitalized -- and further
assigned to one of three subgroups within a capital group, on the basis of
supervisory evaluations by the institution's primary federal and, if applicable,
state supervisors and on the basis of other information relevant to the
institution's financial condition and the risk posed to the applicable insurance
fund. The actual assessment rate applicable to a particular institution will,
therefore, depend in part upon the risk assessment classification so assigned to
the institution by the FDIC. See "SUPERVISION AND REGULATION -- FIRREA and
FDICIA."
 
FIRREA AND FDICIA
 
     In recent years Congress has enacted significant legislation which has
substantially changed the federal deposit insurance system and the regulatory
environment in which depository institutions and their holding companies
operate. The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), the Comprehensive Thrift and Bank Fraud Prosecution and Taxpayer
Recovery Act of 1990 and the Federal Deposit Insurance Corporation Improvement
Act of 1991 ("FDICIA") have significantly increased the enforcement powers of
the federal regulatory agencies having supervisory authority over AMCORE and its
subsidiaries. Certain parts of such legislation, most notably those which
increase deposit insurance assessments and authorize further increases to
recapitalize the bank deposit insurance fund, increase the cost of doing
business for depository institutions and their holding companies. FIRREA also
provides that all commonly controlled FDIC insured depository institutions may
be held liable for any loss incurred by the
                                       54
<PAGE>   60
 
FDIC resulting from a failure of, or any assistance given by the FDIC, to any of
such commonly controlled institutions. Federal regulatory agencies have
implemented provisions of FDICIA with respect to taking prompt corrective action
when a depository institution's capital falls to certain levels. Under the new
rules, five capital categories have been established which range from
"critically undercapitalized" to "well capitalized." Failure of a depository
institution to maintain a capital level within the top two categories will
result in specific actions from the federal regulatory agencies. These actions
could include the inability to pay dividends' restricting new business activity,
prohibiting bank acquisitions, asset growth limitations and other restrictions
on a case-by-case basis.
 
     In addition to the impact of regulation, commercial banks are affected
significantly by the actions of the Federal Reserve Board as it attempts to
control the money supply and credit availability in order to influence the
economy. Changes to such monetary policies have had a significant effect on
operating results of financial institutions in the past and are expected to have
such an effect in the future; however, the effect of possible future changes in
such policies on the business and operations of the subsidiary banks cannot be
determined.
 
LEGISLATION: ELIMINATION OF THE SAVINGS ASSOCIATION CHARTER
 
     Congress has been considering legislation in various forms that would
require federal savings associations to convert their charters to national bank
charters. In the absence of appropriate "grandfather" provisions, legislation
eliminating the savings association charter could cause Midwest to be treated as
a bank holding company. This could have a material adverse effect on Midwest
because (i) bank holding companies are subject to extensive regulation including
minimum regulatory capital requirements similar to those imposed on thrifts and
banks (see "-- Capital Adequacy") and (ii) Midwest can engage in activities that
are not permissible for bank holding companies. In addition, the regulatory and
accounting treatment for banks and thrifts differ in certain significant
respects. It is not certain when and in what form such legislation may
eventually be enacted and there can be no assurances that any legislation that
is enacted would contain adequate grandfather rights.
 
                                    OPINIONS
 
     Certain legal matters in connection with the Merger will be passed upon for
AMCORE by Skadden, Arps, Slate, Meagher & Flom (Illinois), Chicago, Illinois,
relying as to all matters of Nevada law upon Marshall Hill Cassas & de Lipkau,
Reno, Nevada and as to all matters of Wisconsin law upon Foley & Lardner,
Milwaukee, Wisconsin and for Midwest by Schiff Hardin & Waite, Chicago,
Illinois.
 
                                    EXPERTS
 
     The consolidated financial statements of AMCORE and its subsidiaries as of
December 31, 1996 and for each of the years in the three-year period ended
December 31, 1996, incorporated by reference herein and elsewhere in the
Registration Statement have been incorporated by reference herein and in the
Registration Statement in reliance on the report of McGladrey and Pullen, LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
 
     The consolidated financial statements of Midwest and its subsidiaries as of
December 31, 1996 and for each of the years in the three-year period ended
December 31, 1996, incorporated by reference herein and elsewhere in the
Registration Statement have been incorporated by reference herein and in the
Registration Statement in reliance on the report of McGladrey and Pullen, LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
 
                                       55
<PAGE>   61
 
                                                                         ANNEX I
 
                         EDELMAN & CO. LTD. LETTERHEAD
 
February 19, 1998
Board of Directors
Midwest Federal Financial Corp.
1159 8th St.
Baraboo, WI 53913
 
Gentlemen:
 
     We understand that Midwest Federal Financial Corp. ("MWFD") and Amcore
Financial, Inc. ("Amcore") have entered into an Agreement and Plan of
Reorganization dated November 11, 1997, as amended, ("the Agreement") providing
for the acquisition of 100% of the outstanding shares of common stock of MWFD by
Amcore pursuant to a merger transaction (the "Merger"). Under the Agreement,
upon consummation of the Merger, each share of MWFD common stock issued and
outstanding will be exchanged for 1.174 shares of Amcore common stock, subject
to adjustment as set forth in section 1.4(a) of the Agreement (the "Exchange
Ratio"). The terms and conditions of the Merger are more fully set forth in the
Agreement.
 
     You have requested our opinion as to the fairness, from a financial point
of view, to the holders of MWFD Common Stock of the Exchange Ratio.
 
     In forming our opinion, we have reviewed, among other things, (i) with
respect to MWFD, Annual Reports on Form 10-KSB and Annual Reports to MWFD
Shareholders for the fiscal years ended December 31, 1992 through 1996; and
Quarterly Reports on Form 10-QSB for the quarters ended March 31, June 30 and
September 30, 1997; (ii) with respect to Amcore, Annual Reports on Form 10-K and
Annual Reports to Amcore Shareholders for the fiscal years ended December 31,
1992 through 1996; Quarterly Reports on Form 10-Q for the quarters ended March
31, June 30 and September 30, 1997; and unaudited financial information
concerning the quarter and fiscal year ended December 31, 1997 contained in
Amcore's press release dated January 21, 1998; (iii) the Agreement, along with
the Proxy Statement/Prospectus concerning the Merger dated February 19, 1998;
(iv) certain other information concerning the future prospects of MWFD and
AMCORE, and of the combined entity, as furnished by the respective companies,
which we discussed separately with the senior management of MWFD and Amcore; (v)
historical market price and trading data for MWFD and Amcore Common Stock; (vi)
the financial performance and condition of MWFD and Amcore and similar data for
other financial institutions which we believed to be relevant; (vii) the
financial terms of other mergers which we believed to be relevant; and (viii)
such other information as we deemed appropriate.
 
     We met with certain senior officers of MWFD and Amcore to discuss the
foregoing as well as other matters relevant to our opinion including the past
and current business operations, financial condition and future prospects of
MWFD and Amcore. We also took into account our assessment of general economic,
market and financial conditions, and such additional financial and other factors
as we deemed relevant.
 
     In conducting our review and preparing our opinion, we relied upon the
accuracy and completeness of the financial and other information regarding MWFD
and Amcore provided to us by the respective managements of MWFD and Amcore, and
on certain other publicly available financial and other information, and did not
independently verify any such information. We relied upon the management of MWFD
and Amcore in forming a view of the future prospects of MWFD and Amcore, and in
forming assumptions regarding a range of potential cost savings resulting from
the Merger. We assumed, without independent verification, that the aggregate
allowances for loan losses at MWFD and Amcore were adequate to cover such
losses. We did not inspect any properties, assets or liabilities of MWFD or
Amcore and did not make or obtain any evaluations or appraisals of any
properties, assets or liabilities of MWFD or Amcore. In rendering our opinion,
we have assumed that the Merger will be consummated on the terms described in
the Agreement.
 
                                       I-1
<PAGE>   62
 
     In addition to our services in connection with rendering this opinion, we
have acted as financial advisor to the MWFD Board of Directors in connection
with this transaction and will receive a fee for our services upon closing of
the Merger.
 
     Our engagement and the opinion expressed herein are for the benefit of the
MWFD Board of Directors. Our opinion is directed solely to the fairness, from a
financial point of view, of the Exchange Ratio and does not address the decision
to effect the Merger or constitute a recommendation to any MWFD shareholder as
to how such shareholder should vote on the Merger. It is further understood that
our opinion is based on economic and market conditions and other circumstances
existing as of February 19, 1998, and does not represent an opinion as to what
the value of Amcore stock will be when issued to the shareholders of MWFD upon
consummation of the Merger or thereafter.
 
     It is understood that, except for inclusion in full in the Proxy
Statement/Prospectus relating to the Merger, this letter may not be disclosed or
otherwise referred to without our prior written consent, which will not
unreasonably be withheld, except as may otherwise be required by law or by a
court of competent jurisdiction.
 
     Based on and subject to the foregoing and such other factors as we deem
relevant, we are of the opinion that the Exchange Ratio is fair, from a
financial point of view, to the holders of MWFD common stock.
 
Sincerely,
 
Edelman & Co., Ltd.
 
                                       I-2
<PAGE>   63
 
                                                                        ANNEX II
 
                      AGREEMENT AND PLAN OF REORGANIZATION
 
                                  BY AND AMONG
 
                            AMCORE FINANCIAL, INC.,
 
                              MF ACQUISITION CORP.
 
                                      AND
 
                        MIDWEST FEDERAL FINANCIAL CORP.
 
                   DATED AS OF NOVEMBER 11, 1997, AS AMENDED
<PAGE>   64
 
                               TABLE OF CONTENTS
 
                                   ARTICLE I
 
                                   THE MERGER
 
<TABLE>
<CAPTION>
                                                                     PAGE
                                                                     -----
<S>    <C>                                                           <C>
1.1    The Merger..................................................  II-1
1.2    Effective Date..............................................  II-1
1.3    Effects of the Merger.......................................  II-2
1.4    Effect on Capital Stock.....................................  II-2
1.5    Stock Options...............................................  II-3
1.6    Tax Consequences............................................  II-4
1.7    The Closing.................................................  II-4
 
                                  ARTICLE II
                           EXCHANGE OF CERTIFICATES
2.1    AMCORE to Make Shares Available.............................  II-4
2.2    Exchange of Certificates....................................  II-4
 
                                 ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF MIDWEST
3.1    Corporate Organization......................................  II-6
3.2    Capitalization..............................................  II-6
3.3    Authority...................................................  II-7
3.4    No Violation................................................  II-7
3.5    Consents and Approvals......................................  II-8
3.6    Financial Statements........................................  II-8
3.7    Reports.....................................................  II-9
3.8    SEC Documents...............................................  II-9
3.9    Broker's Fees...............................................  II-9
3.10   Absence of Certain Changes..................................  II-9
3.11   Legal Proceedings...........................................  II-10
3.12   Midwest Information.........................................  II-10
3.13   Intellectual Property.......................................  II-10
3.14   Title and Condition.........................................  II-11
3.15   Taxes and Tax Returns.......................................  II-12
3.16   Employee Benefit Plans......................................  II-13
3.17   Compliance with Applicable Law..............................  II-15
3.18   Certain Contracts...........................................  II-15
3.19   Agreements with Regulatory Agencies.........................  II-16
3.20   Other Activities of Midwest and its Midwest Subsidiaries....  II-16
3.21   Investment Securities.......................................  II-16
3.22   Undisclosed Liabilities.....................................  II-16
3.23   Insurance...................................................  II-16
3.24   Loan Loss Reserves..........................................  II-16
3.25   Shareholder Voting Agreements...............................  II-17
3.26   Agreements with Directors, Officers, and Shareholders.......  II-17
3.27   Accuracy of Information.....................................  II-17
3.28   Approval Delays.............................................  II-17
</TABLE>
 
                                      II-i
<PAGE>   65
 
<TABLE>
<CAPTION>
                                                                     PAGE
                                                                     -----
<S>    <C>                                                           <C>
3.29   Vote Required...............................................  II-17
3.30   No Derivative Instruments or Arrangements...................  II-17
 
                                  ARTICLE IV
                   REPRESENTATIONS AND WARRANTIES OF AMCORE
                            AND ACQUISITION CORP.
4.1    Corporate Organization......................................  II-18
4.2    Capitalization..............................................  II-18
4.3    Authority...................................................  II-18
4.4    No Violation................................................  II-18
4.5    Consents and Approvals......................................  II-19
4.6    Financial Statements........................................  II-19
4.7    Reports.....................................................  II-20
4.8    SEC Documents...............................................  II-20
4.9    Broker's Fees...............................................  II-20
4.10   Absence of Certain Changes or Events........................  II-20
4.11   Legal Proceedings...........................................  II-21
4.12   Compliance with Applicable Law..............................  II-21
4.13   Agreements with Regulatory Agencies.........................  II-21
4.14   Accuracy of Information.....................................  II-21
4.15   Approval Delays.............................................  II-21
4.16   Vote Required...............................................  II-21
 
                                  ARTICLE V
                            ADDITIONAL AGREEMENTS
5.1    Conduct of Business.........................................  II-22
5.2    Access to Information and Due Diligence.....................  II-24
5.3    Meeting of Shareholders of Midwest..........................  II-25
5.4    Registration Statement and Regulatory Filings...............  II-25
5.5    Reasonable Efforts..........................................  II-26
5.6    Business Relations and Publicity............................  II-26
5.7    Listing of Shares...........................................  II-26
5.8    Affiliate Letters; Shareholder Voting Agreements............  II-26
5.9    No Conduct Inconsistent with this Agreement.................  II-26
5.10   Board of Directors' Notices, Minutes, Etc...................  II-28
5.11   Untrue Representations and Warranties.......................  II-28
5.12   Indemnification; Directors' and Officers' Insurance.........  II-28
5.13   Employee Benefit Plans......................................  II-29
5.14   Filing and Other Fees.......................................  II-31
5.15   Tax Treatment...............................................  II-31
5.16   Environmental Audits........................................  II-31
5.17   Midwest Severance/Change in Control Agreements..............  II-31
5.18   Current Information.........................................  II-31
5.19   Certain Revaluations, Changes, and Adjustments..............  II-32
5.20   Accountant's Letter.........................................  II-32
5.21   Dissent Process.............................................  II-32
</TABLE>
 
                                      II-ii

<PAGE>   66
 
<TABLE>
<CAPTION>
                                                                     PAGE
                                                                     -----
<S>    <C>                                                           <C>
 
       ARTICLE VI
       CONDITIONS PRECEDENT
6.1    Conditions Precedent to Obligations of AMCORE and
       Acquisition Corp............................................  II-32
6.2    Conditions Precedent to Obligations of Midwest..............  II-35
 
       ARTICLE VII
       TERMINATION, EXPENSES AND AMENDMENT
7.1    Termination.................................................  II-37
7.2    Effect of Termination.......................................  II-39
7.3    Termination Fee; Expenses...................................  II-39
7.4    Amendment...................................................  II-40
7.5    Extension; Waiver...........................................  II-40
 
                               ARTICLE VIII
                            GENERAL PROVISIONS
8.1    Non-survival of Representations, Warranties and
       Agreements..................................................  II-40
8.2    Notices.....................................................  II-40
8.3    Interpretation..............................................  II-41
8.4    Counterparts................................................  II-41
8.5    Entire Agreement............................................  II-41
8.6    Governing Law...............................................  II-41
8.7    Publicity...................................................  II-41
8.8    Assignment; Third Party Beneficiaries.......................  II-41
</TABLE>
 
                                    EXHIBITS
 
<TABLE>
<CAPTION>
                                                                REFERENCE IN TEXT
                                                                 APPEARS ON PAGE
                                                                -----------------
<S>                                                             <C>
Exhibit A -- Shareholder Voting Agreement...................         II-A-1
Exhibit B -- Plan of Merger.................................         II-B-1
Exhibit C -- Form of Affiliate Letter.......................         II-C-1
Exhibit D -- Articles of Incorporation of Acquisition
  Corp......................................................         II-D-1
</TABLE>
 
                                     II-iii
<PAGE>   67
 
                                   SCHEDULES
 
<TABLE>
<S>                 <C>
MIDWEST FEDERAL
Schedule 3.1 (b)    Ownership of Voting Stock or Equity Securities by Midwest
Schedule 3.1 (c)    Ownership of Voting Stock or Equity Securities by Midwest
                    Subsidiaries
Schedule 3.2 (a)    Outstanding Subscriptions, Options, Warrants etc.
Schedule 3.10       Material Liabilities and Events
Schedule 3.11(a)    Legal Proceedings, Claims etc.
Schedule 3.11(c)    Lender Liability Causes of Action
Schedule 3.14(a)    Leased Properties
Schedule 3.14(c)    Environmental Law Compliance
Schedule 3.14(e)    Environmental Claims
Schedule 3.15(a)    Tax Audits and Tax Allocation Agreements
Schedule 3.16(b)    List of Midwest Plans
Schedule 3.16(f)    Post-Retirement Welfare Plans
Schedule 3.16(g)    Termination Payments
Schedule 3.18(a)    Certain Contracts
Schedule 3.22       Undisclosed Liabilities
Schedule 3.23       Insurance
Schedule 3.25       Shareholder Voting Agreement
Schedule 3.26       Transactions by Affiliates
Schedule 3.30       Derivative Instruments or Arrangements
 
AMCORE
Schedule 4.11(a)    Legal Proceedings, Claims etc.
</TABLE>
 
                                      II-iv
<PAGE>   68
 
                      AGREEMENT AND PLAN OF REORGANIZATION
 
     This Agreement and Plan of Reorganization (this "Agreement"), dated as of
the 11th day of November, 1997, and as amended, by and among AMCORE FINANCIAL,
INC., a Nevada corporation ("AMCORE"), MF ACQUISITION CORP., a Wisconsin
corporation and wholly-owned subsidiary of AMCORE ("Acquisition Corp."), and
MIDWEST FEDERAL FINANCIAL CORP., a Wisconsin corporation ("Midwest").
 
     WHEREAS, the respective Boards of Directors of the parties hereto deem it
advisable and in the best interests of the parties hereto and their respective
shareholders to consummate the Merger (as defined in Section 1.1), upon the
terms and subject to the conditions of this Agreement; and
 
     WHEREAS, as a condition and inducement to AMCORE's and Acquisition Corp.'s
willingness to enter into this Agreement and the Plan of Merger, concurrently
with the execution hereof, certain beneficial and record shareholders of Midwest
are entering into agreements (each, a "Shareholder Voting Agreement") to vote in
favor of or consent to the Merger (as hereinafter defined), substantially in the
form attached hereto as Exhibit A; and
 
     WHEREAS, the parties hereto desire and intend that the Merger qualify for
federal income tax purposes as a tax-free reorganization under Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code") and the regulations
thereunder; and
 
     WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with this Agreement and the
Merger;
 
     NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, the parties hereto covenant and agree as follows:
 
                                   ARTICLE I
                                   THE MERGER
 
     1.1 The Merger.  Subject to the terms and conditions of this Agreement and
the Plan of Merger, a copy of which is attached hereto as Exhibit B (the "Plan
of Merger"), in accordance with the Wisconsin Business Corporation Law, as
amended (the "WBCL"), at the Effective Time (as defined in Section 1.2)
Acquisition Corp. shall merge with and into Midwest (the "Merger"), the separate
corporate existence of Acquisition Corp. shall cease, and Midwest shall be the
surviving corporation (as such, the "Surviving Corporation"). The parties hereto
agree that Acquisition Corp. and Midwest will execute a Plan of Merger
substantially in the form attached hereto as Exhibit B, which provides for the
terms of the Merger and the mode of carrying same into effect. As set forth more
fully in the Plan of Merger, pursuant to the Merger:
 
          (a) the Articles of Incorporation of Acquisition Corp., as in effect
     immediately prior to the Effective Time, a copy of which is attached hereto
     as Exhibit D, shall be, from and after the Effective Time, the Articles of
     Incorporation of the Surviving Corporation, until thereafter amended as
     provided therein and under Wisconsin law;
 
          (b) the Bylaws of Acquisition Corp., as in effect immediately prior to
     the Effective Time, shall be, from and after the Effective Time, the Bylaws
     of the Surviving Corporation, until thereafter amended as provided therein
     and under Wisconsin law;
 
          (c) the directors of Acquisition Corp. immediately prior to the
     Effective Time shall be, from and after the Effective Time, the directors
     of the Surviving Corporation to serve until his or her death, resignation
     or removal or until his or her successor is duly elected and qualified; and
 
          (d) the officers of Midwest immediately prior to the Effective Time
     shall be, from and after the Effective Time, the officers of the Surviving
     Corporation to serve until his or her death, resignation or removal or
     until his or her successor is duly elected and qualified.
 
     1.2 Effective Date.  The Merger shall be effective on a date (the
"Effective Date"), mutually agreed upon by the parties and specified in articles
of merger to be filed with the Wisconsin Department of Financial
 
                                      II-1
<PAGE>   69
 
Institutions (the "WDFI"), which date shall be the date that the WDFI receives
the properly executed articles of merger in the manner provided for by the WBCL.
The term "Effective Time" shall be the close of business on the date when the
Merger becomes effective, in accordance with this Section 1.2.
 
     1.3 Effects of the Merger.  At and after the Effective Time, the Merger
shall have the effects set forth in Section 180.1106 of the WBCL.
 
     1.4 Effect on Capital Stock.
 
          (a) At the Effective Time, subject to Section 2.2, by virtue of the
     Merger and without any action on the part of Midwest, or the holder of any
     securities of Midwest, each share of common stock, $.01 par value per
     share, of Midwest (the "Midwest Common Stock") issued and outstanding
     immediately prior to the Effective Time (other than shares canceled
     pursuant to Section 1.4(c) and other than shares of Midwest Common Stock,
     the holders of which have validly demanded appraisal of such shares
     pursuant to Subchapter XIII of the WBCL and shall not have voted in favor
     or the Merger), shall be converted into the right to receive that number
     (the "Exchange Ratio") of fully paid and nonassessable shares of common
     stock of AMCORE, $0.22 par value per share (the "AMCORE Common Stock"), to
     be determined by the Exchange Ratio, which shall be as follows:
 
             (i) In the event the AMCORE Average Price is less than $20.425,
        each share of Midwest Common Stock shall be exchanged for and converted
        into a number of shares of AMCORE Common Stock determined by dividing
        (A) $23.980 by (B) the AMCORE Average Price.
 
             (ii) In the event the AMCORE Average Price is greater than or equal
        to $20.425 but less than or equal to $27.00, each share of Midwest
        Common Stock shall be exchanged for and converted into 1.174 shares of
        AMCORE Common Stock.
 
             (iii) In the event the AMCORE Average Price is greater than $27.00,
        each share of Midwest Common Stock shall be exchanged for and converted
        into a number of shares of AMCORE Common Stock determined by dividing
        (A) $31.700 by (B) the AMCORE Average Price.
 
     For purposes hereof, the "AMCORE Average Price" shall mean the average of
the daily closing prices of a share of AMCORE Common Stock as reported on the
Nasdaq National Market during the period of twenty (20) trading days ending at
the end of the third trading day immediately preceding the Shareholders Meeting.
 
          (b) All of the shares of Midwest Common Stock converted into AMCORE
     Common Stock pursuant to this Article I shall no longer be outstanding and
     shall automatically be canceled and shall cease to exist as of the
     Effective Time, and each certificate (each a "Midwest Common Stock
     Certificate") previously representing any such shares of Midwest Common
     Stock shall thereafter represent only the right to receive (i) a
     certificate representing the number of whole shares of AMCORE Common Stock
     (each an "AMCORE Common Stock Certificate") and (ii) cash in lieu of
     fractional shares into which the shares of Midwest Common Stock previously
     represented by such Midwest Common Stock Certificate have been converted
     pursuant to this Section 1.4, Section 2.2 and the Plan of Merger. Midwest
     Common Stock Certificates previously representing shares of Midwest Common
     Stock shall be exchanged for AMCORE Common Stock Certificates representing
     whole shares of AMCORE Common Stock and cash in lieu of fractional shares
     issued in consideration therefor upon the surrender of such Midwest Common
     Stock Certificates in accordance with Section 2.2, without any interest
     thereon. No dividends declared with respect to shares of AMCORE Common
     Stock shall be paid to the holder of any unsurrendered Midwest Common Stock
     Certificate until such holder shall have surrendered such Midwest Common
     Stock Certificate, at which time the holder shall be paid the amount of any
     dividends, without interest, that theretofore became payable with respect
     to the shares evidenced by such Midwest Common Stock Certificate.
 
          (c) At the Effective Time, all shares of Midwest Common Stock that are
     owned by Midwest as treasury stock or owned by AMCORE (other than shares of
     Midwest Common Stock held directly or indirectly in trust accounts, managed
     accounts and the like or otherwise held in a fiduciary capacity that are
     beneficially owned by third parties (any such shares, and shares of AMCORE
     Common Stock which
 
                                      II-2
<PAGE>   70
 
     are similarly held, whether held directly or indirectly by AMCORE or
     Midwest, as the case may be, being referred to herein as "Trust Account
     Shares")), if any, shall be canceled and shall cease to exist, and no stock
     of AMCORE or other consideration shall be delivered in exchange therefor.
     All shares of AMCORE Common Stock that are owned by Midwest or any Midwest
     Subsidiary (other than Trust Account Shares) shall become treasury stock of
     AMCORE.
 
          (d) The 1,000 shares of common stock, $0.01 par value per share, of
     Acquisition Corp., issued and outstanding immediately prior to the
     Effective Time (the "Acquisition Corp. Common Stock"), shall be converted
     into a like number of shares of Common Stock of the Surviving Corporation
     at the Effective Time.
 
          (e) There shall be included with each share of AMCORE Common Stock
     issued in the Merger an equal number of any share purchase rights (the
     "Rights") issued pursuant to the Rights Agreement, dated as of February 21,
     1996 between AMCORE and Firstar Trust Company, as rights agent. All
     references in this Agreement to AMCORE Common Stock to be received pursuant
     to the Merger should be deemed to include the Rights.
 
     1.5 Stock Options.
 
          (a) At the Effective Time, each option granted by Midwest under the
     terms of the Midwest Federal Financial Corp. 1992 Stock Option and
     Incentive Plan (the "1992 Stock Option Plan") and the Midwest Federal
     Financial Corp. 1997 Nonqualified Stock Option Plan (the "1997 Stock Option
     Plan") (the 1997 Stock Option Plan together with the 1992 Stock Option Plan
     are collectively referred to herein as the "Midwest Option Plans") to
     purchase shares of Midwest Common Stock that is outstanding and unexercised
     immediately prior thereto (an "Outstanding Midwest Option") shall cease to
     represent a right to acquire shares of Midwest Common Stock and shall be
     converted automatically into an option to purchase shares of AMCORE Common
     Stock in an amount and at an exercise price determined pursuant to
     paragraph (c) of this Section 1.5(a "Converted Option"), subject to the
     terms, benefits, rights and features of the Midwest Option Plans and the
     agreements evidencing grants of such options thereunder as in existence
     immediately prior to the Effective Time, which shall continue to apply to
     each Converted Option from and after the Effective Time.
 
          (b) From and after the Effective Time, AMCORE shall assume any and all
     obligations of Midwest under the Midwest Option Plans, and the Midwest
     Option Plans shall be terminated, provided that such termination shall not
     affect the rights of the holders of Outstanding Midwest Options.
 
          (c) (i) The number of shares of AMCORE Common Stock to be subject to
     each Converted Option shall be equal to the product of the number of shares
     of Midwest Common Stock subject to the original option and the Exchange
     Ratio, provided that any fractional shares of AMCORE Common Stock resulting
     from such multiplication shall be rounded down to the nearest whole share;
     and (ii) the exercise price per share of AMCORE Common Stock under the
     Converted Option shall be equal to the exercise price per share of Midwest
     Common Stock under the original option divided by the Exchange Ratio,
     provided that such exercise price shall be rounded up to the nearest whole
     cent.
 
          (d) The committee of the Midwest Board of Directors that administers
     the Midwest Option Plans (the "Midwest Option Plan Committee") has approved
     the foregoing adjustments pursuant to the terms of the Midwest Option
     Plans.
 
          (e) Promptly after the execution of this Agreement, Midwest shall take
     such action, which shall be reasonably satisfactory to AMCORE, as Midwest
     may deem necessary, in order that each Converted Option shall be, at the
     Effective Time, assumed by AMCORE and shall from and after the Effective
     Time no longer entitle the holder thereof to purchase shares of Midwest
     Common Stock but shall be converted into and shall become by virtue of the
     Merger, automatically and without any action on the part of the holder
     thereof, a stock option to purchase such number of shares of AMCORE Common
     Stock at such exercise price as determined pursuant to paragraph (c) of
     this Section 1.5.
 
                                      II-3
<PAGE>   71
 
     1.6 Tax Consequences.  It is intended that the Merger shall constitute a
reorganization within the meaning of Section 368(a) of the Code, and that this
Agreement and the Plan of Merger shall constitute a "plan of reorganization" for
purposes of Section 368 of the Code.
 
     1.7 The Closing.  The consummation of the transactions contemplated by this
Agreement and the Plan of Merger shall take place at a closing (the "Closing")
to be held upon the satisfaction or waiver of all of the conditions to the
Merger set forth herein and in the Plan of Merger, which Closing shall take
place at 10:00 a.m., local time, at the offices of Skadden, Arps, Slate, Meagher
& Flom (Illinois) ("Skadden") (or at such other place upon which the parties may
agree), on a date mutually agreeable to the parties hereto, but in no event
later than the last business day of the month in which all of the conditions to
the Merger set forth herein and in the Plan of Merger have been satisfied or
waived (hereinafter referred to as the "Closing Date").
 
                                   ARTICLE II
                            EXCHANGE OF CERTIFICATES
 
     2.1 AMCORE to Make Shares Available.  At or prior to the Effective Time,
AMCORE shall deposit, or shall cause to be deposited, with Firstar Trust Company
(the "Exchange Agent"), for the benefit of the holders of Midwest Common Stock
Certificates, for exchange in accordance with this Article II, AMCORE Common
Stock Certificates and cash in lieu of any fractional shares of AMCORE Common
Stock (such cash and AMCORE Common Stock Certificates, together with any
dividends or distributions with respect thereto paid after the Effective Time,
being hereinafter referred to as the "Conversion Fund") to be issued pursuant to
Section 1.4 and paid pursuant to Section 2.2(a) in exchange for outstanding
shares of Midwest Common Stock.
 
     2.2 Exchange of Certificates.
 
          (a) As soon as practicable after the Effective Time, and in no event
     later than ten (10) business days thereafter, the Surviving Corporation
     shall cause the Exchange Agent to mail to each holder of record of one or
     more Midwest Common Stock Certificates a letter of transmittal (which shall
     specify that delivery shall be effected, and risk of loss and title to the
     Midwest Common Stock Certificates shall pass, only upon delivery of the
     Midwest Common Stock Certificates to the Exchange Agent) and instructions
     for use in effecting the surrender of the Midwest Common Stock Certificates
     in exchange for AMCORE Common Stock Certificates and any cash in lieu of
     fractional shares into which the shares of Midwest Common Stock represented
     by such Midwest Common Stock Certificate or Certificates shall have been
     converted pursuant to this Agreement and the Plan of Merger. Upon proper
     surrender of a Midwest Common Stock Certificate for exchange and
     cancellation to the Exchange Agent, together with such properly completed
     letter of transmittal, duly executed, the holder of such Midwest Common
     Stock Certificate shall be entitled to receive in exchange therefor, as
     applicable, (i) a AMCORE Common Stock Certificate representing that number
     of whole shares of AMCORE Common Stock to which such holder of Midwest
     Common Stock shall have become entitled pursuant to the provisions of
     Section 1.4 hereof (after taking into account all shares of Midwest Common
     Stock then held by such holder), and (ii) a check representing the amount
     of any cash in lieu of fractional shares that such holder has the right to
     receive in respect of such Midwest Common Stock Certificate, and the
     Midwest Common Stock Certificate so surrendered shall forthwith be
     canceled. No interest will be paid or accrued on any cash in lieu of
     fractional shares payable to holders of Midwest Common Stock Certificates.
 
          (b) If any AMCORE Common Stock Certificate is to be issued in a name
     other than that in which the Midwest Common Stock Certificate surrendered
     in exchange therefor is registered, it shall be a condition of the issuance
     thereof that the Midwest Common Stock Certificate so surrendered shall be
     properly endorsed (or accompanied by an appropriate instrument of transfer)
     and otherwise in proper form for transfer, and that the person requesting
     such exchange shall pay to the Exchange Agent in advance any transfer or
     other taxes required by reason of the issuance of a AMCORE Common Stock
     Certificate in any name other than that of the registered holder of the
     Midwest Common Stock Certificate surrendered, or required for any other
     reason, or shall establish to the satisfaction of the Exchange Agent that
     such tax has been paid or is not payable.
 
                                      II-4
<PAGE>   72
 
          (c) After the Effective Time, there shall be no transfers on the stock
     transfer books of Midwest of the shares of Midwest Common Stock that were
     issued and outstanding immediately prior to the Effective Time. If, after
     the Effective Time, Midwest Common Stock Certificates are presented for
     transfer to the Exchange Agent, they shall be canceled and exchanged for
     AMCORE Common Stock Certificates representing shares of AMCORE Common Stock
     as provided in this Article II.
 
          (d) Notwithstanding anything to the contrary contained herein, no
     certificates or scrip representing fractional shares of AMCORE Common Stock
     shall be issued upon the surrender for exchange of Midwest Common Stock
     Certificates, no dividend or distribution with respect to AMCORE Common
     Stock shall be payable on or with respect to any fractional share, and such
     fractional share interests shall not entitle the owner thereof to vote or
     to any other rights of a shareholder of the Surviving Corporation. In lieu
     of the issuance of any such fractional share, the Surviving Corporation
     shall pay to each former shareholder of Midwest who otherwise would be
     entitled to receive such fractional share an amount in cash determined by
     multiplying (i) the average of the last sales price for AMCORE Common Stock
     as reported on the Nasdaq National Market for the twenty (20) trading days
     immediately preceding the fifth trading day prior to the Closing Date by
     (ii) the fraction of a share (rounded to the nearest tenth when expressed
     as an Arabic number) of AMCORE Common Stock to which such holder would
     otherwise be entitled to receive pursuant to Section 1.4.
 
          (e) Any portion of the Conversion Fund that remains unclaimed by the
     shareholders of Midwest for twelve (12) months after the Effective Time
     shall be paid to the Surviving Corporation. Any shareholders of Midwest who
     have not theretofore complied with this Article II shall thereafter look
     only to the Surviving Corporation for the issuance of certificates
     representing shares of AMCORE Common Stock and the payment of cash in lieu
     of any fractional shares and any unpaid dividends and distributions on
     AMCORE Common Stock deliverable in respect of each share of Midwest Common
     Stock such shareholder holds as determined pursuant to this Agreement and
     the Plan of Merger, in each case, without any interest thereon.
     Notwithstanding the foregoing, none of AMCORE, Midwest, the Exchange Agent
     or any other person shall be liable to any former holder of shares of
     Midwest Common Stock, for any amount delivered in good faith to a public
     official pursuant to applicable abandoned property, escheat or similar
     laws.
 
          (f) In the event any Midwest Common Stock Certificate shall have been
     lost, stolen or destroyed, upon the making of an affidavit of that fact by
     the person claiming such Midwest Common Stock Certificate to be lost,
     stolen or destroyed and, if reasonably required by the Surviving
     Corporation, the posting by such person of a bond in such amount as the
     Exchange Agent may determine is reasonably necessary as indemnity against
     any claim that may be made against it with respect to such Midwest Common
     Stock Certificate, the Exchange Agent will issue in exchange for such lost,
     stolen or destroyed Midwest Common Stock Certificate a AMCORE Common Stock
     Certificate representing the shares of AMCORE Common Stock and any cash in
     lieu of fractional shares deliverable in respect thereof pursuant to this
     Agreement and the Plan of Merger.
 
          (g) No dividends or other distributions declared with respect to
     AMCORE Common Stock and payable to the holders of record thereof after the
     Effective Time shall be paid to the holder of any unsurrendered Midwest
     Common Stock Certificate until the holder thereof shall surrender such
     Midwest Common Stock Certificate in accordance with this Article II. After
     the surrender of a Midwest Common Stock Certificate in accordance with this
     Article II, the record holder thereof shall be entitled to receive any such
     dividends or other distributions, without interest thereon, which
     theretofore had become payable with respect to shares of AMCORE Common
     Stock represented by such Midwest Common Stock Certificate. No holder of an
     unsurrendered Midwest Common Stock Certificate shall be entitled, until the
     surrender of such Midwest Common Stock Certificate, to vote the shares of
     AMCORE Common Stock into which Midwest Common Stock shall have been
     converted.
 
                                      II-5
<PAGE>   73
 
                                  ARTICLE III
                   REPRESENTATIONS AND WARRANTIES OF MIDWEST
 
     Midwest hereby represents and warrants to AMCORE and Acquisition Corp. as
follows.
 
     3.1 Corporate Organization.
 
          (a) Midwest is a corporation duly organized and validly existing under
     the laws of the State of Wisconsin. Midwest has the corporate power and
     authority to own or lease all of its properties and assets and to carry on
     its business as it is now being conducted, and is duly licensed or
     qualified to do business in each jurisdiction in which the nature of the
     business conducted by it or the character or location of the properties and
     assets owned or leased by it makes such licensing or qualification
     necessary, except where the failure to be so licensed or qualified would
     not have a Material Adverse Effect (as defined below) on Midwest. Midwest
     is duly registered as a savings and loan holding company under the Home
     Owners' Loan Act ("HOLA"). True and complete copies of the Articles of
     Incorporation and Bylaws of Midwest, as in effect as of the date of this
     Agreement, have previously been made available by Midwest to AMCORE. As
     used in this Agreement, the term "Material Adverse Effect" means, with
     respect to Midwest or AMCORE, as the case may be, a material adverse effect
     (i) on the business, assets, properties, results of operations, financial
     condition, or (insofar as they can reasonably be foreseen) prospects of
     such party and its Subsidiaries, taken as a whole, or (ii) on the
     consummation of the Merger; provided, however, that in no event shall the
     one-time-Savings-Association-Insurance-Fund special assessment previously
     imposed by the Federal Deposit Insurance Corporation be deemed to
     constitute a Material Adverse Effect on either Midwest or AMCORE. The word
     "Subsidiary" when used with respect to any party means any bank,
     corporation, partnership, limited liability company, or other organization,
     whether incorporated or unincorporated, which is consolidated with such
     party for financial reporting purposes.
 
          (b) As of the date of this Agreement, Midwest has, as its sole direct
     or indirect Subsidiaries, Baraboo Federal Bank, FSB ("Baraboo Federal" or
     the "Bank"), a federally-chartered-capital-stock savings bank and B.F.
     Financial Services, Incorporated ("B.F. Financial"; together with the Bank,
     the "Midwest Subsidiaries"). Except as set forth on Schedule 3.1(b) of the
     disclosure schedules to this Agreement prepared and delivered by Midwest
     (the "Midwest Disclosure Schedules"), Midwest does not own any voting stock
     or equity securities of any bank, corporation, partnership, limited
     liability company, or other organization, whether incorporated or
     unincorporated, other than the Midwest Subsidiaries.
 
          (c) Each Midwest Subsidiary (i) is duly organized and validly existing
     as a corporation under the laws of its jurisdiction of organization, (ii)
     is duly qualified to do business and in good standing in all jurisdictions
     (whether federal, state, local or foreign) where its ownership or leasing
     of property or the conduct of its business requires it to be so qualified
     and in which the failure to be so qualified would have a Material Adverse
     Effect on Midwest, and (iii) has all requisite corporate power and
     authority to own or lease its properties and assets and to carry on its
     business as now conducted. Except as set forth in Schedule 3.1(c) of the
     Midwest Disclosure Schedules, none of the Midwest Subsidiaries owns any
     voting stock or equity securities of any bank, corporation, partnership,
     limited liability company, or other organization, whether incorporated or
     unincorporated, other than the voting stock or equity securities of another
     Midwest Subsidiary.
 
     3.2 Capitalization.
 
          (a) The authorized capital stock of Midwest consists of 3,000,000
     shares of Midwest Common Stock, $0.01 par value per share, of which, as of
     September 30, 1997, 1,627,674 shares were issued and outstanding (which
     number excludes 255,780 shares of Midwest Common Stock reserved for
     issuance under Outstanding Midwest Options) and 1,000,000 shares of
     Preferred Stock, $0.01 par value per share, of which none are currently
     issued and outstanding. As of the date hereof, 442,324 shares of Midwest
     Common Stock were held in treasury. All of the issued and outstanding
     shares of Midwest Common Stock have been duly authorized and validly issued
     and are fully paid, nonassessable (except as otherwise provided by Section
     180.0622(2)(b) of the WBCL) and free of preemptive rights. Except for the
 
                                      II-6
<PAGE>   74
 
     Midwest Option Plans and as set forth on Schedule 3.2(a)of the Midwest
     Disclosure Schedules, Midwest does not have and is not bound by any
     outstanding subscriptions, options, warrants, calls, commitments or
     agreements of any character calling for the purchase or issuance of any
     shares of Midwest Common Stock or any other equity securities of Midwest or
     any securities representing the right to purchase or otherwise receive any
     shares of the capital stock of Midwest. No shares of Midwest Common Stock
     have been reserved for issuance, other than the shares of Midwest Common
     Stock reserved for issuance under the Midwest Option Plans or as set forth
     on Schedule 3.2(a). Since September 30, 1997, Midwest has not issued any
     shares of its capital stock or any securities convertible into or
     exercisable for any shares of its capital stock except upon exercise of
     stock options pursuant to the Midwest Option Plans outstanding as of
     September 30, 1997.
 
          (b) Midwest owns, directly or indirectly, all of the issued and
     outstanding shares of capital stock of each of the Midwest Subsidiaries,
     free and clear of any liens, pledges, charges, encumbrances and security
     interests whatsoever ("Liens"). All of the shares of capital stock of each
     Midwest Subsidiary are duly authorized and validly issued and are fully
     paid, nonassessable (except as otherwise provided by Section 180.0622(2)(b)
     of the WBCL) and free of preemptive rights. No Midwest Subsidiary has or is
     bound by any outstanding subscriptions, options, warrants, calls,
     commitments or agreements of any character calling for the purchase or
     issuance of any shares of capital stock or any other equity security of
     such Midwest Subsidiary or any securities representing the right to
     purchase or otherwise receive any shares of capital stock or any other
     equity security of such Midwest Subsidiary.
 
     3.3 Authority.  Midwest has full corporate power and authority to execute
and deliver each of this Agreement and the Plan of Merger and, subject to
shareholder and regulatory approvals, to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Plan of Merger and the consummation of the transactions contemplated
hereby and thereby have been duly and validly approved by the Board of Directors
of Midwest. The Board of Directors of Midwest has directed that this Agreement
and the Plan of Merger and the transactions contemplated hereby and thereby be
submitted to Midwest's shareholders for approval at a meeting of such
shareholders and will recommend approval of this Agreement by Midwest's
shareholders at the special meeting described in Section 5.3 hereof and, except
for the adoption of this Agreement and the Plan of Merger by the affirmative
vote of the holders of a majority of the outstanding shares of Midwest Common
Stock, no other corporate proceedings on the part of Midwest are necessary to
approve this Agreement and the Plan of Merger and to consummate the transactions
contemplated hereby and thereby. This Agreement has been duly and validly
executed and delivered by Midwest and (assuming due authorization, execution and
delivery by AMCORE) constitute valid and binding obligations of Midwest,
enforceable against Midwest in accordance with their respective terms.
Furthermore, the Plan of Merger, when executed and delivered by Midwest and
(assuming due authorization, execution and delivery by AMCORE), shall constitute
a valid and binding obligation of Midwest, enforceable against Midwest in
accordance with its terms.
 
     3.4 No Violation.  Neither the execution and delivery of this Agreement and
the Plan of Merger by Midwest nor the consummation by Midwest of the
transactions contemplated hereby or thereby, nor compliance by Midwest with any
of the terms or provisions hereof or thereof, will (a) violate any provision of
the Articles of Incorporation or Bylaws or similar organizational documents of
Midwest or any of the Midwest Subsidiaries, or (b) assuming that the consents
and approvals referred to in Section 3.5 are duly obtained, (i) violate any
statute, code, ordinance, rule, regulation, decree or injunction, or published
judgment, order or writ, applicable to Midwest or any of the Midwest
Subsidiaries or any of their respective properties or assets, or (ii) violate,
conflict with, result in a breach of any provision of or the loss of any benefit
under, constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, result in the termination of or a right
of termination or cancellation under, accelerate the performance required by, or
result in the creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or assets of Midwest or any of
the Midwest Subsidiaries under the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Midwest or any of the Midwest Subsidiaries is
a party, or by which they or any of their respective properties or assets may be
bound or affected, except (in the case of clause (b) above) for such
 
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violations, conflicts, breaches or defaults which either individually or in the
aggregate will not have a Material Adverse Effect on Midwest or any of the
Midwest Subsidiaries, taken as a whole.
 
     3.5 Consents and Approvals.  No consents or approvals of or filings or
registrations with any court, administrative agency or commission or other
governmental authority or instrumentality (each a "Governmental Entity") or with
any third party are necessary in connection with the execution and delivery by
Midwest of this Agreement and the Plan of Merger and the consummation by Midwest
of the Merger and the other transactions contemplated hereby and thereby except
for (a) the filing by AMCORE of an application (the "Federal Reserve
Application") with the Board of Governors of the Federal Reserve System (the
"Federal Reserve") under the Bank Holding Company Act of 1956, as amended (the
"BHCA") and the approval of such application, (b) the filing of the Federal
Reserve Application with the Wisconsin Department of Financial Institutions,
Division of Savings Institutions and such Division's notification that it will
not disapprove the application, (c) the filing of a copy of such Federal Reserve
Application with the Federal Trade Commission and the Department of Justice, and
the expiration of the applicable waiting period, (d) the filing with the
Securities and Exchange Commission (the "SEC") of a proxy statement in
definitive form and a registration statement on Form S-4 relating to the meeting
of Midwest's shareholders to be held in connection with this Agreement and the
Plan of Merger and the transactions contemplated hereby and thereby (the "Proxy
Statement/Prospectus"), (e) the filing of Articles of Merger with the WDFI under
the WBCL, (f) such filings and approvals as are required to be made or obtained
under the securities or "blue sky" laws of various states in connection with the
issuance of the shares of AMCORE Common Stock pursuant to this Agreement and the
Plan of Merger, and (e) the approval of this Agreement and the Plan of Merger by
the requisite vote of the shareholders of Midwest and by AMCORE, as sole
shareholder of Acquisition Corp.
 
     3.6 Financial Statements.  Midwest has heretofore furnished to AMCORE
copies of the following financial statements: (a) the audited Consolidated
Balance Sheet of Midwest as of December 31, 1994, 1995 and 1996, and the
Consolidated Statements of Earnings, Stockholders' Equity, and Cash Flows for
each of the years in the three-year period ended December 31, 1996 (the "Latest
Statement Date"), together with the notes thereto, and the unqualified opinion
of Wipfli Ullrich Bertelson for 1994 and 1995 and McGladry & Pullen, LLP for
1996, Midwest's independent auditors (the "Latest Midwest Financial
Statements"); (b) the Consolidated Balance Sheet of Midwest and the Consolidated
Statement of Earnings for each quarter ended between the Latest Statement Date
and the date hereof; and (c) Report of Condition of the Bank as of June 30,
1997, together with the related Reports of Income for the period then ended, as
included in the call report of the Bank as of said date as filed with the
Federal Deposit Insurance Corporation (the "FDIC") (collectively, the "Midwest
Financial Statements"). The Midwest Financial Statements are true and correct in
all material respects and fairly present the financial position and results of
operation of Midwest and its Subsidiaries as of the dates and for the periods
then ended. Each of the financial statements referred to in clauses (a) and (b)
of this Section 3.6 has been prepared in accordance with GAAP (applied on a
consistent basis except as disclosed in the footnotes thereto) and, with respect
to the financial statements referred to in clause (b), subject to normal year
end adjustments. The financial statements referred to in clause (c) of this
Section 3.6 have been prepared in accordance with the applicable regulations and
standards of the FDIC. The Midwest Financial Statements do not, as of the date
thereof, include any material assets or omit to state any material liability,
absolute or contingent, or other facts, the inclusion or omission of which
renders such financial statements, in light of the circumstances under which
they were made, misleading in any material respect. Since the Latest Statement
Date, there has been no change in the financial condition, results of operation,
assets, or business of Midwest or any of the Midwest Subsidiaries (other than
changes in the ordinary course of business, none of which, individually or in
the aggregate, would reasonably be expected to have a Material Adverse Effect),
nor has there been any other event or condition of any character that has had a
Material Adverse Effect, and to the knowledge of Midwest, no fact or condition
exists that would reasonably be expected to have such a Material Adverse Effect
in the future. The Midwest Financial Statements, pursuant to GAAP, reflect
adequate provision for, or reserves against, the possible credit losses of
Midwest and Midwest Subsidiaries as of such dates. There are no facts,
circumstances, trends, or expectations known to Midwest that could cause Midwest
to restate the level of such allowance for loan losses. The books and records of
Midwest and Midwest Subsidiaries have been, and are being, maintained in all
material respects in
 
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accordance with applicable legal and accounting requirements and reflect only
actual transactions, except to the extent required by applicable legal or
accounting requirements.
 
     3.7 Reports.  Midwest and each of the Midwest Subsidiaries have timely
filed all reports, registrations and statements, together with any amendments
required to be made with respect thereto, that they were required to file since
July 1, 1992 with (i) the OTS, (ii) the FDIC, (iii) any state regulatory
authority (each a "State Regulator"), (iv) the SEC, and (v) any self-regulatory
organization ("SRO") with jurisdiction over any of the activities of Midwest or
any of the Midwest Subsidiaries (collectively "Regulatory Agencies"), and all
other reports and statements required to be filed by them since July 1, 1992,
including, without limitation, any report or statement required to be filed
pursuant to the laws, rules or regulations of the United States, any state, or
any Regulatory Agency, and have paid all fees and assessments due and payable in
connection therewith, except where the failure to file such report, registration
or statement or to pay such fees and assessments, either individually or in the
aggregate, will not have a Material Adverse Effect on Midwest. Except for normal
examinations conducted by a Regulatory Agency in the regular course of the
business of Midwest and the Midwest Subsidiaries, no Regulatory Agency has
initiated any proceeding or, to the best knowledge of Midwest, investigation
into the business or operations of Midwest or any of the Midwest Subsidiaries
since July 1, 1992. There is no unresolved written violation, written criticism,
or written exception by any Regulatory Agency with respect to any report or
statement relating to any examinations of Midwest or any of the Midwest
Subsidiaries, which is likely, either individually or in the aggregate, to have
a Material Adverse Effect on Midwest.
 
     3.8 SEC Documents.  Midwest has made available to AMCORE a true and
complete copy of each report, schedule, registration statement and definitive
proxy statement filed by Midwest with the SEC (other than reports filed pursuant
to Section 13(d) or 13(g) of the Exchange Act) since December 31, 1992 (as such
documents have since the time of their filing been amended, the "Midwest SEC
Documents"), which are all the documents (other than preliminary material and
reports required pursuant to Section 13(d) or 13(g) of the Exchange Act) that
Midwest was required to file with the SEC since such date. As of their
respective dates of filing with the SEC, the Midwest SEC Documents complied in
all material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such Midwest SEC
Documents, and did 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. The financial statements of Midwest included in the Midwest SEC
Documents complied as to form, as of their respective dates of filing with the
SEC, in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted by
Form 10-QSB of the SEC) and fairly present in all material respects the
consolidated financial position of Midwest and the consolidated Midwest
Subsidiaries as of the dates thereof and the consolidated results of operations,
changes in stockholders' equity and cash flows of such companies for the periods
then ended. All material agreements, contracts and other documents required to
be filed as exhibits to any of the Midwest SEC Documents have been so filed.
 
     3.9 Broker's Fees.  Other than Midwest's arrangement with Edelman & Co.,
Ltd. to serve as a financial advisor to Midwest in connection with the Merger
and related transactions contemplated by this Agreement and the Plan of Merger,
neither Midwest nor any Midwest Subsidiary nor any of their respective officers
or directors has employed any financial advisor, broker or finder or incurred
any liability for any financial advisory fees, broker's fees, commissions or
finder's fees in connection with the Merger or related transactions contemplated
by this Agreement and the Plan of Merger.
 
     3.10  Absence of Certain Changes.  Since the Latest Statement Date, neither
Midwest nor any of the Midwest Subsidiaries has, except as set forth in Schedule
3.10 of the Midwest Disclosure Schedules, (a) issued or sold any corporate debt
securities (except documents and instruments issued in the ordinary course of
the banking business of the Bank); (b) granted any option for the purchase of
its capital stock; (c) declared or set aside or paid any dividend or other
distribution in respect of its capital stock; (d) incurred
 
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<PAGE>   77
 
any material obligation or liability (absolute or contingent) except obligations
or liabilities incurred in the ordinary course of business, (e) mortgaged,
pledged, or subjected to lien or encumbrance (other than statutory liens for
taxes not yet delinquent) any of its assets or properties, except pledges to
secure government deposits and in connection with repurchase or reverse
repurchase agreements; (f) discharged or satisfied any lien or encumbrance or
paid any obligation or liability (absolute or contingent), other than current
liabilities included in Midwest's consolidated balance sheet as of the Latest
Statement Date, and current liabilities incurred since the date thereof in the
ordinary course of business; (g) sold, exchanged, or otherwise disposed of any
of its capital assets other than in the ordinary course of business; (h) made or
modified any general wage or salary increase, entered into or modified any
employment contract with any officer or salaried employee, or instituted any
employee welfare, fringe benefit, bonus, stock option, profit sharing,
retirement, or similar plan or arrangement and has not contributed any amounts,
funds or property to any trust in respect of any obligations under such plans or
arrangements; (i) suffered any damage, destruction, or loss, whether or not
covered by insurance, having a Material Adverse Effect, or waived any rights of
value that are material in the aggregate, considering its business taken as a
whole; (j) except in the ordinary course of business, entered, or agreed to
enter, into any agreement or arrangement granting any preferential right to
purchase any of its assets, properties, or rights or requiring the consent of
any party to the transfer and assignment of any such assets, properties, or
rights; (k) entered into any transaction outside the ordinary course of its
business, except as expressly contemplated by this Agreement or the Plan of
Merger; (l) except in the ordinary course of business or as reflected in the
Midwest Financial Statements, sold or otherwise disposed of any of its loans and
investment securities; or (m) changed accounting principles utilized by Midwest
or its Subsidiaries.
 
     3.11 Legal Proceedings.
 
          (a) Except as set forth in Schedule 3.11(a), there are no pending or,
     to the best of Midwest's knowledge, threatened, legal, administrative,
     arbitration or other proceedings, claims, actions or governmental or
     regulatory investigations of any nature against Midwest or any of the
     Midwest Subsidiaries or challenging the validity or propriety of the
     transactions contemplated by this Agreement or the Plan of Merger.
 
          (b) There is no injunction, order, judgment, decree, or regulatory
     restriction (other than regulatory restrictions that apply to similarly
     situated savings and loan holding companies or savings associations)
     imposed upon Midwest, any of the Midwest Subsidiaries or the assets of
     Midwest or any of the Midwest Subsidiaries.
 
          (c) Schedule 3.11(c) of the Midwest Disclosure Schedule sets forth all
     pending litigation involving any claim against Midwest and/or any Midwest
     Subsidiary, whether directly or by counterclaim, involving a "lender
     liability" cause of action.
 
     3.12 Midwest Information.  The information relating to Midwest and the
Midwest Subsidiaries to be contained in a proxy statement of Midwest or
furnished to AMCORE for the Registration Statement (as defined in Section 5.4
hereof) which such proxy statement will be included as a prospectus, or in any
other document filed with any other regulatory agency in connection herewith by
Midwest, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading. The proxy statement of
Midwest (except for such portions thereof that relate only to AMCORE) will
comply in all material respects with any applicable provisions of the Exchange
Act and the rules and regulations thereunder.
 
     3.13 Intellectual Property.  Midwest and its Subsidiaries own or possess
valid and binding licenses or other rights to use without payment all material
patents, copyrights, trade secrets, tradenames, servicemarks and trademarks used
in its businesses and neither Midwest nor any of the Midwest Subsidiaries has
received any notices of conflict with respect thereto that asserts the right of
others. Midwest and the Midwest Subsidiaries have in all material respects
performed all the obligations required to be performed by them and are not in
default in any material respect under any contract, agreement, arrangement or
commitment relating to any of the foregoing, except where such nonperformance or
default would not, individually, or in the aggregate, have a Material Adverse
Effect on Midwest.
 
                                      II-10
<PAGE>   78
 
     3.14 Title and Condition.
 
          (a) Each of Midwest and its Subsidiaries has good, valid, and
     marketable title to all assets and properties, whether real or personal,
     tangible or intangible, that it purports to own, including without
     limitation all assets and properties reflected in the Midwest Financial
     Statements or acquired subsequent thereto (except to the extent that such
     assets and properties have been disposed of for fair value in the ordinary
     course of business since the Latest Statement Date), subject to no liens,
     mortgages, security interests, encumbrances, or charges of any kind, except
     (i) as noted in said financial statements or the notes thereto; (ii)
     statutory liens for taxes not yet delinquent; (iii) securing interests
     granted to secure deposits of funds by federal, state, or other
     governmental agencies granted in connection with repurchase or reverse
     repurchase agreements or otherwise incurred in the ordinary course of
     business; and (iv) minor defects and irregularities in title and
     encumbrances that do not materially impair the use thereof for the purposes
     for which they are held, and such liens, mortgage, security interests,
     encumbrances, and charges as are not in the aggregate material to the
     assets and properties of Midwest or any of the Midwest Subsidiaries.
     Midwest or any of the Midwest Subsidiaries, as lessee, has the right under
     valid and subsisting leases to occupy, use, possess, and control all
     property leased by Midwest or any of the Midwest Subsidiaries, qualified
     only by the written terms of such leases, as set forth in Schedule 3.14 of
     the Midwest Disclosure Schedules. A legal description of all real property
     currently owned or leased by Midwest and its Subsidiaries, including
     properties held by its Subsidiaries as a result of foreclosure or
     repossession or carried on Midwest's Subsidiaries' books as "other real
     estate owned" (the "Current Real Properties"), has been provided as
     Schedule 3.14(a) of the Midwest Disclosure Schedules. The Current Real
     Properties and all tangible properties therein are in generally good
     condition and have been well maintained in accordance with reasonable and
     prudent business practices applicable to like facilities.
 
          (b) There are no proceedings, claims, disputes, or conditions
     affecting any of the Current Real Properties of Midwest or its Subsidiaries
     that could reasonably be expected to materially curtail or interfere with
     use of such property.
 
          (c) Except as described in Schedule 3.14(c) of the Midwest Disclosure
     Schedules, the Current Real Properties and the Loan Property (as defined
     below) are in material compliance with all Environmental Laws, as
     hereinafter defined, and there are no conditions existing currently at the
     Current Real Properties, the Loan Property, and to the knowledge of Midwest
     and any of the Midwest Subsidiaries, all other real properties owned,
     leased, held or administered in any capacity by Midwest or its Subsidiaries
     at any time in the past ("Former Real Properties") (together with Current
     Real Properties and the Loan Property, the "Real Properties") that would
     subject Midwest or any of the Midwest Subsidiaries to damages, penalties,
     injunctive relief, or cleanup costs under any Environmental Laws or
     assertions thereof, or which require or are likely to require cleanup,
     removal, remedial action, or other response pursuant to Environmental Laws
     by Midwest or any of the Midwest Subsidiaries; neither Midwest nor any of
     the Midwest Subsidiaries (either in its own capacity or as trustee or
     fiduciary) has violated Environmental Laws, nor is Midwest or any of the
     Midwest Subsidiaries (either in its own capacity or as trustee or
     fiduciary) required to clean up, remove, or take remedial or other
     responsive action at any property due to the disposal, treating,
     depositing, discharge, leaking, or other release of any hazardous
     substances or materials. No material permits, licenses or approvals are
     required under Environmental Laws relative to the Current Real Properties;
     and, except as disclosed in Schedule 3.14(c) of the Midwest Disclosure
     Schedules, there are not now nor, to Midwest's knowledge, have there ever
     been materials (including, without limitation, asbestos) stored, deposited,
     treated, recycled, used, or disposed of on, under, or at the Real
     Properties (or tanks or other facilities thereon containing such
     materials), which materials, if known to be present on the Real Properties
     or present in soils or ground water, would require material cleanup,
     removal, or some other remedial action under Environmental Laws. The term
     "Environmental Laws" shall mean all applicable federal, state, and local
     environmental laws relating to pollution, protection of the environment, or
     protection of human health and safety including, without limitation, the
     Solid Waste Disposal Act, the Hazardous Materials Transportation Act, the
     Clean Water Act, the Clean Air Act, the Resource Conservation and Recovery
     Act, the Toxic Substances Control Act, the Occupational Safety and Health
     Act and the Comprehensive Environmental
 
                                      II-11
<PAGE>   79
 
     Response, Compensation and Liability Act of 1980, as amended ("CERCLA"),
     any so-called "Superfund" or "Superlien" laws, their state and local laws,
     their state and local law counterparts, all rules and regulations
     promulgated thereunder and relevant common law standards. For purposes of
     this Section 3.14(c), "Loan Property" means any property in which the
     Midwest or any of the Midwest Subsidiaries holds a security interest, and
     where required by the context, said term meaning the owner or operator of
     such property.
 
          (d) With respect to each facility in which Midwest and/or its
     Subsidiaries has held or currently holds indicia of ownership to protect a
     security interest in the facility ("Midwest Interested Property"), Midwest
     and/or its Subsidiaries has at all times conducted its operations such that
     it did not "participate in the management of the facility" or otherwise
     become liable under any Environmental Laws with respect to such facilities.
 
          (e) Except as set forth on Schedule 3.14(e), no claim, action, suit,
     demand, investigation, or proceeding is pending or known to be threatened
     against Midwest or any of the Midwest Subsidiaries relating to any Real
     Property or otherwise involving any Real Property, before any court or
     other governmental authority or arbitration tribunal relating to pollution,
     Environmental Laws, or the environment; there is no outstanding judgment,
     order, writ, injunction, decree, or award against or affecting Midwest or
     any of the Midwest Subsidiaries with respect to Real Property or, to the
     knowledge of Midwest, with respect to Midwest Interested Property, other
     than liens on such Midwest Interested Property in the ordinary course; and
     neither Midwest nor any of the Midwest Subsidiaries has been identified, to
     their knowledge, as a potentially responsible party any Governmental Entity
     in a matter arising under any Environmental Laws. Schedule 3.14(e) of the
     Midwest Disclosure Schedules includes a list of all environmental reports,
     investigations, or audits relating to any Real Property or Midwest
     Interested Property of which Midwest has knowledge, whether conducted by or
     on behalf of Midwest or any of the Midwest Subsidiaries or a third party,
     and whether done at the initiative of Midwest or any of the Midwest
     Subsidiaries or directed by a Governmental Entity or other third party that
     are in the possession of Midwest or any of the Midwest Subsidiaries.
     Midwest has delivered to AMCORE complete and accurate copies of each such
     report, or the results of each such investigation or audit, in each case to
     the extent reasonably available to Midwest.
 
     3.15 Taxes and Tax Returns.
 
          (a) Each of Midwest and the Midwest Subsidiaries has duly filed all
     federal, state, county, foreign and, to the best of Midwest's knowledge,
     local information returns and tax returns required to be filed by it on or
     prior to the date hereof (all such returns being accurate and complete in
     all material respects) and has duly paid or made provisions for the payment
     of all Taxes (as defined in Section 3.15(b)) and other governmental charges
     which have been incurred or are due or claimed to be due from it by
     federal, state, county, foreign or local taxing authorities on or prior to
     the date of this Agreement (including, without limitation, if and to the
     extent applicable, those due in respect of its properties, income,
     business, capital stock, deposits, franchises, licenses, sales and
     payrolls) other than Taxes or other charges which are not yet delinquent or
     are being contested in good faith and have not been finally determined.
     There are no material disputes pending with respect to, or claims asserted
     for, Taxes or assessments upon Midwest or any of the Midwest Subsidiaries
     for which Midwest does not have adequate reserves, nor has Midwest or any
     of the Midwest Subsidiaries given any currently effective waivers extending
     the statutory period of limitation applicable to any federal, state,
     county, foreign or local income tax return for any period. In addition, (i)
     proper and accurate amounts have been withheld by Midwest and each of the
     Midwest Subsidiaries from their employees for all prior periods in
     compliance with the tax withholding provisions of applicable federal,
     state, foreign and local laws, except where failure to do so would not, in
     the aggregate, have a Material Adverse Effect on Midwest, (ii) federal,
     state, foreign, county and local returns which are accurate and complete in
     all material respects have been filed by Midwest and each of the Midwest
     Subsidiaries for all periods for which returns were due with respect to
     income tax withholding, Social Security and unemployment taxes, (iii) the
     amounts shown on such federal, state, foreign, local or county returns to
     be due and payable have been paid in full or adequate provision therefor
     has been included by Midwest in its consolidated financial statements, and
     (iv) there are no Tax liens
 
                                      II-12
<PAGE>   80
 
     upon any property or assets of Midwest or any of the Midwest Subsidiaries
     except liens for taxes not yet past due. Except as set forth in Schedule
     3.15(a), neither Midwest nor any of the Midwest Subsidiaries has been
     required to include in income any adjustment pursuant to Section 481 of the
     Code by reason of a voluntary change in accounting method initiated by
     Midwest or any of the Midwest Subsidiaries, and the Internal Revenue
     Service (the "IRS") has not initiated or proposed any such adjustment or
     change in accounting method. Except as set forth in the financial
     statements described in Section 3.8, neither Midwest nor any of the Midwest
     Subsidiaries has entered into a transaction which is being accounted for as
     an installment obligation under Section 453 of the Code. Neither Midwest
     nor any of the Midwest Subsidiaries has, during the past five (5) years,
     except as disclosed in Schedule 3.15(a) of the Midwest Disclosure
     Schedules, received any notice of deficiency or proposed deficiency from
     the IRS or any other taxing authority with respect to any federal, state or
     local taxes, and to Midwest's knowledge, no circumstances exist that
     reasonably could be expected to result in assessments. No federal, state or
     local tax return of Midwest or any of the Midwest Subsidiaries is currently
     the subject of any audit by the IRS or any other taxing authority. Except
     as disclosed in Section 3.15(a) of the Midwest Disclosure Schedules,
     neither Midwest nor any of the Midwest Subsidiaries is a party to any
     agreement providing for allocation or sharing of taxes. Neither Midwest nor
     any of the Midwest Subsidiaries has ever been a member of an affiliated
     group of corporations (within the meaning of Section 1504(a) of the Code)
     filing federal consolidated income tax returns or state unitary combined,
     consolidated or similar income tax returns, other than the affiliated group
     of which Midwest is the common parent.
 
          (b) As used in this Agreement, the term "Tax" or "Taxes" means all
     federal, state, county, local, and foreign income, excise, gross receipts,
     gross income, ad valorem, profits, gains, property, capital, sales,
     transfer, use, payroll, employment, severance, withholding, duties,
     intangibles, franchise, backup withholding, and other taxes, charges,
     levies or like assessments together with all penalties and additions to tax
     and interest thereon.
 
     3.16 Employee Benefit Plans.
 
        (a) (i) Midwest Plan.  The term "Midwest Plan" includes each employee
        benefit plan, as defined in Section 3(3) of ERISA (other than a
        Multiemployer Plan and including any terminated Midwest Plans) that
        currently or since January 1, 1997: (1) is or has been maintained for
        employees of Midwest or of any Midwest Control Group member or (2) to
        which Midwest or any Midwest Control Group member made or was required
        to make contributions.
 
             (ii) Qualified Plan.  The term "Qualified Plan" means any Midwest
        Plan which is an employee pension benefit plan as defined in Section
        3(2) of ERISA and which is intended to meet the qualification
        requirements of the Code.
 
             (iii) Title IV Plan.  The term "Title IV Plan" means any Qualified
        Plan that is a defined benefit plan (as defined in Section 3(37) of
        ERISA) and is subject to Title IV of ERISA.
 
             (iv) Multiemployer Plan.  The term "Multiemployer Plan" means any
        employee benefit plan that is a "multiemployer plan" within the meaning
        of Section 3(37) of ERISA.
 
             (v) Midwest Control Group.  The term "Midwest Control Group" means
        a controlled group of corporations of which Midwest is a member within
        the meaning of Section 414(b) of the Code, any group of corporations or
        entities under common control with Midwest within the meaning of Section
        414(c) of the Code or any affiliated service group of which Midwest is a
        member within the meaning of Section 414(m) of the Code.
 
             (vi) ERISA.  The term "ERISA" means the Employee Retirement Income
        Security Act of 1974, as amended.
 
          (b) All Midwest Plans are set forth on Schedule 3.16(b) of the Midwest
     Disclosure Schedules.
 
          (c) Neither Midwest nor any member of the Midwest Control Group
     currently, or at any time since January 1, 1992, maintains, or maintained,
     or is required to contribute to, contributes or contributed to, any Title
     IV Plan, or any Multiemployer Plan.
 
                                      II-13
<PAGE>   81
 
        (d) (i) Each Midwest Plan has been administered in material compliance
        with its terms and with all filing, reporting, disclosure and other
        requirements of all applicable statutes (including but not limited to
        ERISA and the Code), regulations or interpretations thereunder.
 
             (ii) Neither Midwest nor any Midwest Subsidiary or affiliate of
        Midwest, nor any of their respective employees or directors, nor any
        fiduciary, has engaged in any transaction, including the execution and
        delivery of this Agreement and other agreements, instruments and
        documents for which execution and delivery by Midwest is contemplated
        herein, in violation of Section 406(a) or (b) of ERISA or any
        "prohibited transaction" (as defined in Section 4975(c)(1) of the Code)
        for which no exemption exists under Section 408(b) of ERISA or Section
        4975(d) of the Code or for which no administrative exemption has been
        granted under Section 408(a) of ERISA.
 
             (iii) Each Qualified Plan is the subject of a favorable Internal
        Revenue Service determination with respect to such qualification and no
        event has occurred and no condition exists which could reasonably be
        expected to result in the revocation of such determination.
 
             (iv) No liability, claim, investigation, audit, action or
        litigation has been incurred, made, commenced or, to the knowledge of
        Midwest, is threatened or anticipated, by or against Midwest or any
        member of the Midwest Control Group with respect to any Midwest Plan
        (other than for benefits payable in the ordinary course).
 
        (e) (i) Complete and correct copies of all current and prior documents,
        including all amendments thereto, with respect to each Midwest Plan,
        have been delivered to AMCORE. These documents include, but are not
        limited to, the following: Midwest Plan documents, trust agreements, the
        most recent IRS determination letter, insurance contracts, annuity
        contracts, summary plan descriptions with any applicable summaries of
        material modifications thereto, filings with governmental agencies,
        investment manager and investment adviser contracts, service provider
        agreements, and audit reports, financial statements and annual reports
        (Form 5500) for the most recent three plan years ending prior to the
        date of this Agreement.
 
             (ii) All contributions payable to each Qualified Plan for all
        benefits earned and other liabilities accrued through September 30,
        1997, determined in accordance with the terms and conditions of such
        Qualified Plan, ERISA and the Code, have been paid or otherwise provided
        for, and to the extent unpaid are reflected in the consolidated balance
        sheet of Midwest and Midwest Subsidiaries as of September 30, 1997.
 
          (f) Except as set forth in Schedule 3.16(f) of the Midwest Disclosure
     Schedules, no Midwest Plan provides medical, surgical, hospitalization,
     death or similar benefits (whether or not insured) for employees or former
     employees of Midwest or the Midwest Subsidiaries for periods extending
     beyond their retirement or other termination of service, other than (i)
     coverage mandated by applicable law, (ii) death benefits under any "pension
     plan," as that term is defined in section 3(2) of ERISA or (iii) benefits
     the full costs of which is borne by the current or former employee (or his
     beneficiary).
 
          (g) Except as set forth in Section 3.16(g) of the Midwest Disclosure
     Schedules, the consummation of the transactions contemplated by this
     Agreement will not, either alone or in combination with another event, (i)
     entitle any current or former employee or officer of the Company or any
     member of the Midwest Control Group to severance pay, unemployment
     compensation or any other payment, except as expressly provided in this
     Agreement, or (ii) accelerate the time of payment or vesting, or increase
     the amount of compensation due any such employee or officer.
 
          (h) No amounts payable under the Midwest Plans or any employment,
     severance or similar plan, program, policy or agreement established or
     entered into by Midwest for the benefit of any current or former employee
     or officer of Midwest will fail to be deductible for federal income tax
     purposes by virtue of Section 280G of the Code.
 
          (i) Except as provided in Section 1.5 hereof, since December 31, 1996,
     the Midwest Option Plan Committee has taken no action under Section 12 of
     the 1992 Stock Option Plan or Section 6 of the 1997
 
                                      II-14
<PAGE>   82
 
     Stock Option Plan. The foregoing sentence shall not be deemed to preclude
     the Midwest Option Plan Committee from making any determination regarding
     whether or not a change in control has occurred under Section 12(b) of the
     1992 Stock Option Plan and Section 6(a) of the 1997 Stock Option Plan.
 
     3.17 Compliance with Applicable Law.  Midwest and each of the Midwest
Subsidiaries hold all licenses, franchises, permits and authorizations necessary
for the lawful conduct of their respective businesses under and pursuant to all,
and have complied with and are not in default under any, applicable laws,
statutes, orders, rules, regulations, policies and/or guidelines of any
Governmental Entity relating to Midwest or any of the Midwest Subsidiaries,
except where the failure to hold such license, franchise, permit or
authorization or such noncompliance or default would not, individually or in the
aggregate, have a Material Adverse Effect on Midwest.
 
     3.18 Certain Contracts.
 
          (a) Except as set forth in Schedule 3.18(a) of the Midwest Disclosure
     Schedules or as an exhibit to the Midwest SEC Documents, neither Midwest
     nor any of the Midwest Subsidiaries is a party to or bound by:
 
             (i) any contract, arrangement, commitment or understanding (whether
        written or oral) with respect to the employment or compensation of any
        directors, officers or employees;
 
             (ii) any contract, arrangement, commitment or understanding
        (whether written or oral) which, upon the consummation of the
        transactions contemplated by this Agreement or the Plan of Merger, will
        (either alone or upon the occurrence of any additional acts or events)
        result in any payment (including, without limitation, severance,
        unemployment compensation, golden parachute or otherwise) becoming due
        from Midwest, AMCORE, the Surviving Corporation, or any of their
        respective Subsidiaries to any officer, director or employee thereof or
        to the trustee under any "rabbi trust" or similar arrangement;
 
             (iii) any contract, arrangement, commitment or understanding
        (whether written or oral) which materially restricts the conduct of any
        line of business by Midwest; or
 
             (iv) any contract, arrangement, commitment or understanding
        (whether written or oral), including any stock option plan, stock
        appreciation rights plan, restricted stock plan or stock purchase plan,
        any of the benefits of which will be increased or be required to be
        paid, or the vesting of the benefits of which will be accelerated, by
        the occurrence of any of the transactions contemplated by this Agreement
        or the Plan of Merger, or the value of any of the benefits of which will
        be calculated on the basis of any of the transactions contemplated by
        this Agreement or the Plan of Merger;
 
             (v) any contract, commitment or agreement made outside the ordinary
        course of business; or
 
             (vi) any union contract or collective bargaining agreement.
 
     Each contract, arrangement, commitment or understanding which is material
to the business or operations of Midwest and the Midwest Subsidiaries, taken as
a whole, is referred to herein as a "Midwest Contract," and neither Midwest nor
any of the Midwest Subsidiaries knows of, or has received notice of, any
violation of any Midwest Contract by any of the other parties thereto, which,
individually or in the aggregate, would have a Material Adverse Effect on
Midwest.
 
        (b) (i) Each Midwest Contract is valid and binding on Midwest or the
        applicable Midwest Subsidiary, as the case may be, and is in full force
        and effect, (ii) Midwest and each of the Midwest Subsidiaries has
        performed all obligations required to be performed by it to date under
        each Midwest Contract to which it is a party, except where such
        noncompliance, individually or in the aggregate, would not have a
        Material Adverse Effect on Midwest, and (iii) no event or condition
        exists which constitutes or, after notice or lapse of time or both,
        would constitute, a default on the part of Midwest or any of the Midwest
        Subsidiaries under any such Midwest Contract, except where any such
        default, individually or in the aggregate, would not have a Material
        Adverse Effect on Midwest.
 
                                      II-15
<PAGE>   83
 
     3.19 Agreements with Regulatory Agencies.  Neither Midwest nor any of the
Midwest Subsidiaries is subject to any cease-and-desist or other order issued
by, or is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or has been since
December 31, 1992, a recipient of any supervisory letter from, or since December
31, 1992, has adopted any board resolutions at the request of any Regulatory
Agency or other Governmental Entity that currently restricts the conduct of its
business or that relates to its capital adequacy, compliance with laws, its
credit policies, its management or its business (each, whether or not set forth
in the Midwest Disclosure Schedules, a "Midwest Regulatory Agreement "), nor has
Midwest or any of the Midwest Subsidiaries been advised since December 31, 1992
by any Regulatory Agency or other Governmental Entity that it is considering
issuing or requesting any such Midwest Regulatory Agreement.
 
     3.20 Other Activities of Midwest and its Midwest Subsidiaries.  Neither
Midwest nor any of the Midwest Subsidiaries that is neither a savings
association, a savings association operating subsidiary or a savings association
service corporation directly or indirectly engages in any activity prohibited by
the OTS. Without limiting the generality of the foregoing, no equity investment
of Midwest or any Midwest Subsidiary that is neither a savings association, a
savings association operating subsidiary nor a savings association service
corporation is prohibited by the OTS.
 
     3.21 Investment Securities.  Each of Midwest and the Midwest Subsidiaries
has good and marketable title to all securities held by it (except securities
sold under repurchase agreements or held in any fiduciary or agency capacity),
free and clear of any Lien, except to the extent such securities are pledged in
the ordinary course of business consistent with prudent banking practices to
secure obligations of Midwest or any of the Midwest Subsidiaries. Such
securities are valued on the books of Midwest and the Midwest Subsidiaries in
accordance with GAAP.
 
     3.22 Undisclosed Liabilities.  Except for those liabilities that are fully
reflected or reserved against on the consolidated statement of financial
condition of Midwest included in the Midwest Third Quarter 10-QSB, liabilities
disclosed in Schedule 3.22 of the Midwest Disclosure Schedules, and liabilities
incurred in the ordinary course of business consistent with past practice since
September 30, 1997, (none of which would reasonably be expected to have
individually or in the aggregate a Material Adverse Effect on Midwest and the
Midwest Subsidiaries, taken as a whole), neither Midwest nor any of the Midwest
Subsidiaries has incurred any liability of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether due or to become due)
that, either alone or when combined with all similar liabilities, has had, or
could reasonably be expected to have, a Material Adverse Effect on Midwest.
 
     3.23 Insurance.  Schedule 3.23 of the Midwest Disclosure Schedules
describes all policies of insurance and fidelity bonds in which Midwest or any
of the Midwest Subsidiaries is named as an insured party or which otherwise
relate to or cover any assets or properties of Midwest or any of the Midwest
Subsidiaries. Each of such policies is in full force and effect, and the
coverage provided under such properties complies with the requirements of any
contracts binding on Midwest or any of the Midwest Subsidiaries relating to such
assets or properties. Except as set forth in Schedule 3.23 of the Midwest
Disclosure Schedules, neither Midwest nor any of the Midwest Subsidiaries has
received any notice of cancellation or termination with respect to any material
insurance policy of Midwest or any of the Midwest Subsidiaries. Since December
31, 1994, there have been no claims with respect to Midwest or any of the
Midwest Subsidiaries under such fidelity bonds and insurance policies, and
neither Midwest nor any of the Midwest Subsidiaries is aware of any acts of
dishonesty or losses that would form the basis of a material claim under such
fidelity bonds or insurance coverage.
 
     3.24 Loan Loss Reserves.  The reserve for possible loan losses shown on the
September 30, 1997 call report filed for the Bank is adequate in all material
respects under the requirements of GAAP to provide for possible losses, net of
recoveries relating to loans previously charged off, on loans outstanding
(including accrued interest receivable) as of September 30, 1997. The aggregate
loan balances of the Bank at such date in excess of such reserves are, to the
best knowledge and belief of Midwest, collectible in accordance with their
terms.
 
                                      II-16
<PAGE>   84
 
     3.25 Shareholder Voting Agreements.  Midwest has furnished to AMCORE, as
Schedule 3.25 of the Midwest Disclosure Schedules, a current shareholder list
that identifies each shareholder who is an executive officer (as defined under
applicable SEC rules and regulations) or director of Midwest or any of the
Midwest Subsidiaries or a holder of five percent (5%) or more of the outstanding
Midwest Common Stock.
 
     3.26 Agreements with Directors, Officers, and Shareholders.  Except as set
forth in Schedule 3.26 of the Midwest Disclosure Schedule, no director,
executive officer, or holder of five percent (5%) or more of the outstanding
capital stock of Midwest, nor any director or executive officer of any of the
Midwest Subsidiaries (each, a "Midwest Principal or Midwest Subsidiary
Principal") is or has during the period subsequent to December 31, 1996, been a
party (other than as (i) a depositor or (ii) a debtor in respect of a loan from
Midwest or any of the Midwest Subsidiaries which is not in excess of $250,000)
to any transaction with Midwest or any of the Midwest Subsidiaries. Except as
disclosed in Schedule 3.26 of the Midwest Disclosure Schedules, no Midwest
Principal or Midwest Subsidiary Principal holds any position with or owns more
than five percent (5%) of the outstanding shares of any class of voting stock of
any depository organization other than Midwest.
 
     3.27 Accuracy of Information.  The statements contained in this Article
III, in the Midwest Disclosure Schedules, in the Plan of Merger and in any other
written documents executed and/or delivered by or on behalf of Midwest pursuant
to the terms of this Agreement are true and correct in all material respects,
and this Article III, such Midwest Disclosure Schedules, such Plan of Merger and
any such other documents do not omit any material fact necessary to make the
statements contained therein not materially misleading.
 
     3.28 Approval Delays.  Midwest knows of no reason why any of the regulatory
approvals referenced in Section 6.1(c) should be denied or unduly delayed.
 
     3.29 Vote Required.  The approval by the holders of a majority of the votes
entitled to be cast by all holders of Midwest Common Stock to approve the Merger
is the only vote of the holders of any class or series of the capital stock of
Midwest required for any of the transactions contemplated by this Agreement and
the Plan of Merger.
 
     3.30 No Derivative Instruments or Arrangements.  Except as set forth in
Schedule 3.30 of the Midwest Disclosure Schedules, as of the date hereof, there
are no interest rate or exchange rate swaps, caps, floors or option agreements
or other interest rate or exchange rate risk management instruments or
arrangements to which Midwest or any of the Midwest Subsidiaries is a party or
by which any of the properties or assets of Midwest or any of the Midwest
Subsidiaries is bound.
 
                                      II-17
<PAGE>   85
 
                                   ARTICLE IV
 
                       REPRESENTATIONS AND WARRANTIES OF
 
                          AMCORE AND ACQUISITION CORP.
 
     Each of AMCORE and Acquisition Corp. jointly and severally represent and
warrant to Midwest as follows:
 
     4.1 Corporate Organization.  AMCORE is a corporation duly organized and
validly existing under the laws of the State of Nevada. Acquisition Corp. is a
corporation duly organized and validly existing under the laws of the State of
Wisconsin. Each of AMCORE and Acquisition Corp. has the corporate power and
authority to own or lease all of its properties and assets and to carry on its
business as it is now being conducted, and is duly licensed or qualified to do
business in each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary, except where the failure to
be so licensed or qualified would not have a Material Adverse Effect on each of
AMCORE and Acquisition Corp. AMCORE is duly registered as a bank holding company
under BHCA. True and complete copies of the Articles of Incorporation and Bylaws
of each of AMCORE and Acquisition Corp., as in effect as of the date of this
Agreement, have previously been made available by each of AMCORE and Acquisition
Corp. to Midwest.
 
     4.2 Capitalization.  The authorized capital stock of AMCORE consists of
45,000,000 shares of common stock, $0.22 par value per share, of which, as of
September 30, 1997, 26,907,805 shares were issued and outstanding and 10,000,000
shares of Preferred Stock, $1.00 par value per share, of which, as of September
30, 1997, none were issued and outstanding. As of September 30, 1997, 773,348
shares of AMCORE Common Stock were held in treasury. All of the issued and
outstanding shares of AMCORE Common Stock have been duly authorized and validly
issued and are fully paid, nonassessable. The shares of AMCORE Common Stock to
be issued pursuant to Article II hereof will, upon issuance, be duly authorized,
validly issued, fully paid, nonassessable, and free of preemptive rights.
 
     4.3 Authority.  Each of AMCORE and Acquisition Corp. has full corporate
power and authority to execute and deliver each of this Agreement and the Plan
of Merger subject to shareholder and regulatory approvals, and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Plan of Merger and the consummation of the transactions
contemplated hereby and thereby have been duly and validly approved by the Board
of Directors of each of AMCORE and Acquisition Corp, and AMCORE, as the owner of
all of the outstanding shares of capital stock of Acquisition Corp. has caused
this Agreement, the Plan of Merger and the Merger to be approved in accordance
with the WBCL. No other corporate proceedings on the part of AMCORE or
Acquisition Corp. are necessary to approve this Agreement and the Plan of Merger
and to consummate the transactions contemplated hereby and thereby. This
Agreement has been duly and validly executed and delivered by each of AMCORE and
Acquisition Corp. and (assuming due authorization, execution and delivery by
Midwest) constitute valid and binding obligations of each of AMCORE and
Acquisition Corp., enforceable against each of AMCORE and Acquisition Corp. in
accordance with its terms. Furthermore, the Plan of Merger, when executed and
delivered by Acquisition Corp. and (assuming due authorization, execution and
delivery by Midwest), shall constitute a valid and binding obligation of
Acquisition Corp., enforceable against Acquisition Corp. in accordance with its
terms.
 
     4.4 No Violation.  Neither the execution and delivery of this Agreement and
the Plan of Merger by AMCORE nor the consummation by AMCORE of the transactions
contemplated hereby or thereby, nor compliance by AMCORE with any of the terms
or provisions hereof or thereof, will (a) violate any provision of the Articles
of Incorporation or Bylaws or similar organizational documents of AMCORE or its
Subsidiaries, or (b) assuming that the consents and approvals referred to in
Section 4.5 are duly obtained, (i) violate any statute, code, ordinance, rule,
regulation, decree or injunction or published judgment, order or writ applicable
to AMCORE or any of its Subsidiaries or any of their respective properties or
assets, or (ii) violate, conflict with, result in a breach of any provision of
or the loss of any benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in
 
                                      II-18
<PAGE>   86
 
the termination of or a right of termination or cancellation under, accelerate
the performance required by, or result in the creation of any lien, pledge,
security interest, charge or other encumbrance upon any of the respective
properties or assets of AMCORE or any of its Subsidiaries under the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which AMCORE or
any of its Subsidiaries is a party, or by which they or any of their respective
properties or assets may be bound or affected, except (in the case of clause (b)
above) for such violations, conflicts, breaches or defaults which either
individually or in the aggregate will not have a Material Adverse Effect on
AMCORE or its Subsidiaries.
 
     4.5 Consents and Approvals.  No consents or approvals of or filings or
registrations with any Governmental Entity or with any third party are necessary
in connection with the execution and delivery by each of AMCORE and Acquisition
Corp. of this Agreement and the Plan of Merger and the consummation by
Acquisition Corp. of the Merger and the other transactions contemplated hereby
and thereby except for (a) the filing by AMCORE of the Federal Reserve
Application with the Board of Governors of the Federal Reserve under the BHCA
and the approval of such application, (b) the filing of the Federal Reserve
Application with the Wisconsin Department of Financial Institutions, Division of
Savings Institutions and such Division's notification that it will not
disapprove the application, (c) the filing of a copy of such Federal Reserve
Application with the Federal Trade Commission and the Department of Justice, and
the expiration of the applicable waiting period, (d) the filing with the SEC of
the Proxy Statement/Prospectus in definitive form relating to the meetings of
Midwest's shareholders to be held in connection with this Agreement and the Plan
of Merger and the transactions contemplated hereby, (e) the filing of Articles
of Merger with the WDFI under the WBCL, (f) such filings and approvals as are
required to be made or obtained under the securities or "blue sky" laws of
various states in connection with the issuance of the shares of AMCORE Common
Stock pursuant to this Agreement and the Plan of Merger, and (g) the approval of
this Agreement and Plan of Merger by the requisite vote of the shareholders of
Acquisition Corp. and Midwest.
 
     4.6 Financial Statements.  AMCORE has heretofore furnished to Midwest
copies of the following financial statements: (a) the audited Consolidated
Balance Sheets of AMCORE as of December 31, 1994, 1995 and 1996, and the
Consolidated Statements of Income, Stockholders' Equity, and Cash Flows for each
of the years in the three-year period ended December 31, 1996 (the "Latest
Statement Date"), together with the notes thereto, and the unqualified opinion
of McGladry & Pullen, LLP, AMCORE's independent auditors (the "Latest AMCORE
Financial Statements"); (b) the Consolidated Balance Sheet of AMCORE for each
quarter ended between the Latest Statement Date and June 30, 1997 and the
Consolidated Statement of Income for each quarter ended between the Latest
Statement Date and the date hereof; and (c) the Report of Condition of AMCORE
Bank, Rockford, N.A. as of June 30, 1997, together with the related Reports of
Income for the period then ended, as included in its call report as filed with
the FDIC (collectively, the "AMCORE Financial Statements"). The AMCORE Financial
Statements are true and correct in all material respects and fairly present the
financial position and results of operation of AMCORE and its Subsidiaries as of
the dates and for the periods then ended. Each of the financial statements
referred to in clauses (a) and (b) of this Section 4.6 has been prepared in
accordance with GAAP (applied on a consistent basis except as disclosed in the
footnotes thereto) and, with respect to the financial statements referred to in
clause (b), subject to normal year end adjustments. The financial statements
referred to in clause (c) of this Section 4.6 have been prepared in accordance
with the applicable regulations and standards of the FDIC. The AMCORE Financial
Statements do not, as of the date thereof, include any material assets or omit
to state any material liability, absolute or contingent, or other facts, the
inclusion or omission of which renders such financial statements, in light of
the circumstances under which they were made, misleading in any material
respect. Except as set forth in the AMCORE SEC Documents (as hereinafter
defined), since the Latest Statement Date, there has been no change in the
financial condition, results of operation, assets, or business of AMCORE or any
of the AMCORE Subsidiaries (other than changes in the ordinary course of
business, none of which, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect), nor has there been any other event
or condition of any character that has had a Material Adverse Effect, and to the
knowledge of AMCORE, no fact or condition exists that would reasonably be
expected to have such a Material Adverse Effect in the future.
 
                                      II-19
<PAGE>   87
 
     4.7 Reports.  AMCORE and each of AMCORE Subsidiaries have timely filed all
reports, registrations and statements, together with any amendments required to
be made with respect thereto, that they were required to file since July 1, 1994
with the Regulatory Agencies, and all other reports and statements required to
be filed by them since July 1, 1994, including, without limitation, any report
or statement required to be filed pursuant to the laws, rules or regulations of
the United States, any state, or any Regulatory Agency, and have paid all fees
and assessments due and payable in connection therewith, except where the
failure to file such report, registration or statement or to pay such fees and
assessments, either individually or in the aggregate, will not have a Material
Adverse Effect on AMCORE. Except for normal examinations conducted by a
Regulatory Agency in the regular course of the business of AMCORE or AMCORE
Subsidiaries, no Regulatory Agency has initiated any proceeding or, to the best
knowledge of AMCORE, investigation into the business or operations of AMCORE or
any of AMCORE Subsidiaries since July 1, 1994. There is no unresolved written
violation, written criticism, or written exception by any Regulatory Agency with
respect to any report or statement relating to any examinations of AMCORE or any
of AMCORE Subsidiaries, which is likely, either individually or in the
aggregate, to have a Material Adverse Effect on AMCORE.
 
     4.8 SEC Documents.  AMCORE has made available to Midwest a true and
complete copy of each report, schedule, registration statement and definitive
proxy statement filed by AMCORE with the SEC (other than reports filed pursuant
to Section 13(d) or 13(g) of the Exchange Act) since December 31, 1994 (as such
documents have since the time of their filing been amended, the "AMCORE SEC
Documents"), which are all the documents (other than preliminary material and
reports required pursuant to Section 13(d) or 13(g) of the Exchange Act) that
AMCORE was required to file with the SEC since such date. As of their respective
dates of filing with the SEC, the AMCORE SEC Documents complied in all material
respects with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such AMCORE SEC Documents, and
did 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. The financial statements of AMCORE included in the AMCORE SEC
Documents complied as to form, as of their respective dates of filing with the
SEC, in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted by
Form 10-Q of the SEC) and fairly present in all material respects the
consolidated financial position of AMCORE and its consolidated Subsidiaries as
of the dates thereof and the consolidated results of operations, changes in
stockholders' equity and cash flows of such companies for the periods then
ended. All material agreements, contracts and other documents required to be
filed as exhibits to any of the AMCORE SEC Documents have been so filed.
 
     4.9 Broker's Fees.  Other than AMCORE's arrangement with Robert W. Baird &
Co. Incorporated to serve as a financial advisor to AMCORE in connection with
the Merger and related transactions contemplated by this Agreement and the Plan
of Merger, neither AMCORE nor any AMCORE Subsidiary nor any of their respective
officers or directors has employed any financial advisor, broker or finder or
incurred any liability for any financial advisory fees, broker's fees,
commissions or finder's fees in connection with the Merger or related
transactions contemplated by this Agreement and the Plan of Merger.
 
     4.10 Absence of Certain Changes or Events.
 
          (a) Except as publicly disclosed in AMCORE SEC Documents (as defined
     in Section 4.6) filed prior to the date hereof, since December 31, 1996,
     (i) AMCORE and AMCORE Subsidiaries taken as a whole have not incurred any
     material liability, except in the ordinary course of their business, and
     (ii) no event has occurred which has had, individually or in the aggregate,
     a Material Adverse Effect on AMCORE or will have a Material Adverse Effect
     on AMCORE.
 
          (b) Except as publicly disclosed in AMCORE SEC Documents filed prior
     to the date hereof, since December 31, 1996, AMCORE and each AMCORE
     Subsidiary have carried on their respective businesses in all material
     respects in the ordinary and usual course.
 
                                      II-20
<PAGE>   88
 
     4.11 Legal Proceedings.
 
          (a) Except as set forth in Schedule 4.11 of AMCORE Disclosure
     Schedules or in AMCORE's most recent Form 10-Q there are no pending or, to
     the best of AMCORE's knowledge, threatened, legal, administrative,
     arbitration or other proceedings, claims, actions or governmental or
     regulatory investigations of any nature against AMCORE or any of AMCORE
     Subsidiaries or challenging the validity or propriety of the transactions
     contemplated by this Agreement, or the Plan of Merger as to which there is
     a reasonable probability of an adverse determination and which, if
     adversely determined, would have a Material Adverse Effect on AMCORE.
 
          (b) There is no injunction, order, judgment, decree, or regulatory
     restriction (other than regulatory restrictions that apply to similarly
     situated savings and loan holding companies or savings associations)
     imposed upon AMCORE, any of AMCORE Subsidiaries or the assets of AMCORE or
     any of AMCORE Subsidiaries which has had a Material Adverse Effect on
     AMCORE.
 
     4.12 Compliance with Applicable Law.  AMCORE and each of AMCORE
Subsidiaries hold all licenses, franchises, permits and authorizations necessary
for the lawful conduct of their respective businesses under and pursuant to all,
and have complied with and are not in default under any, applicable laws,
statutes, orders, rules, regulations, policies and/or guidelines of any
Governmental Entity relating to AMCORE or any of AMCORE Subsidiaries, except
where the failure to hold such license, franchise, permit or authorization or
such noncompliance or default would not, individually or in the aggregate, have
a Material Adverse Effect on AMCORE.
 
     4.13 Agreements with Regulatory Agencies.  Neither AMCORE nor any of AMCORE
Subsidiaries is subject to any cease-and-desist or other order issued by, or is
a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or has been since
December 31, 1994, a recipient of any supervisory letter from, or since December
31, 1994 has adopted any board resolutions at the request of any Regulatory
Agency or other Governmental Entity that currently restricts the conduct of its
business or that relates to its capital adequacy, compliance with laws, its
credit policies, its management or its business (each, whether or not set forth
in AMCORE Disclosure Schedules, an "AMCORE Regulatory Agreement") nor has AMCORE
or any of AMCORE Subsidiaries been advised since December 31, 1994 by any
Regulatory Agency or other Governmental Entity that it is considering issuing or
requesting any such AMCORE Regulatory Agreement.
 
     4.14 Accuracy of Information.  The statements contained in this Article IV,
in the AMCORE Disclosure Schedules, in the Plan of Merger and in any other
written documents executed and/or delivered by or on behalf of AMCORE pursuant
to the terms of this Agreement are true and correct in all material respects,
and this Article IV, such AMCORE Disclosure Schedules, such Plan of Merger and
any such other documents do not omit any material fact necessary to make the
statements contained therein not materially misleading.
 
     4.15  Approval Delays.  AMCORE knows of no reason why any of the regulatory
approvals referred to in Section 6.1(c) should be denied or unduly delayed.
 
     4.16 Vote Required.  The approval by AMCORE, as sole shareholder of
Acquisition Corp., to approve this Agreement, the Plan of Merger and the Merger
(including the issuance of shares of AMCORE Common Stock in connection
therewith) is the only vote of the holders of any class or series of the capital
stock of AMCORE or Acquisition Corp. required for any of the transactions
contemplated by this Agreement.
 
                                      II-21
<PAGE>   89
 
                                   ARTICLE V
                             ADDITIONAL AGREEMENTS
 
     5.1 Conduct of Business.  Between the date hereof and the Closing Date,
Midwest shall conduct its business and shall cause the Bank to conduct its
business in the usual and ordinary course consistent in all material respects
with prudent banking practices. Without limiting the foregoing, without the
prior written consent of AMCORE:
 
          (a) Midwest shall, and shall cause the Bank to, not (i) redeem,
     purchase, or otherwise acquire any shares of its capital stock or any
     securities or obligations convertible into or exchangeable for any shares
     of its capital stock, or any options, warrants, conversion or other rights
     to acquire any shares of its capital stock or any such securities or
     obligations; (ii) merge with or into any other corporation or bank, permit
     any other corporation or bank to merge into it or consolidate with any
     other corporation or bank, or effect any reorganization or
     recapitalization; (iii) purchase or otherwise acquire any of the assets, or
     any class of stock, of any corporation, bank, or other business (other than
     purchases of passive investments in the ordinary course of business
     consistent with past business practices); (iv) liquidate, sell, dispose of,
     or encumber any assets or acquire any assets, other than in the ordinary
     course of its business consistent with past practice; (v) sell any
     intangible rights, including but not limited to mortgage servicing rights;
     (vi) split, combine, or reclassify any of its capital stock or issue or
     authorize or propose the issuance of any other securities in respect of, in
     lieu of, or in substitution for shares of its capital stock; (vii) release
     or relinquish any material contract rights not in the ordinary course of
     business; or (viii) issue, deliver, award, grant, or sell, or authorize or
     propose the issuance, delivery, award, grant, or sale of, any shares of its
     capital stock of any class (including shares held in treasury), any debt
     instrument having a right to vote or any securities convertible into, or
     any rights, warrants, or options to acquire, any such shares, voting debt,
     or convertible securities, except with respect to the issuance of shares of
     its capital stock upon the valid exercise of Outstanding Midwest Options;
 
          (b) Midwest shall not, and shall cause the Bank not to, propose or
     adopt any amendments or changes to their respective corporate charters or
     by-laws;
 
          (c) Midwest shall not, and shall cause the Bank not to, take any
     action which, or fail to take any action which failure, would or is
     reasonably likely to (i) adversely affect the ability of either of AMCORE
     or Midwest to obtain any necessary approvals of governmental authorities
     required for the transactions contemplated hereby; (ii) adversely affect
     Midwest's ability to perform its covenants and agreements under this
     Agreement and the Plan of Merger; (iii) result in any of its representation
     and warranties set forth in this Agreement or the Plan of Merger being or
     becoming untrue in any material respect; (iv) result in any of the
     conditions to the Merger set forth in Section 6.1 hereof not being
     satisfied; or (v) result in a violation of any provisions of this Agreement
     or the Plan of Merger except, in every case, as may be required by
     applicable law;
 
          (d) Midwest shall, and shall cause the Bank to, not increase the
     compensation of their directors, officers or key employees, provided,
     however, that (i) the compensation of officers and key employees of Midwest
     and the Bank may be increased effective January 1, 1998, in a manner
     consistent with prior practice of Midwest and the Bank, provided that the
     combined amount of the increases paid to all such officers and key
     employees shall not exceed, in the aggregate, by greater than 4% such
     amounts as are paid to such officers or key employees for the year ended
     December 31, 1997, and (ii) Midwest and the Bank may pay to their employees
     year-end bonuses for the 1997 fiscal year, in a manner consistent with
     prior practice of Midwest and the Bank.
 
          (e) Midwest shall, and shall cause the Bank to, make no single new
     loan which is in excess of 50% of the Bank's legal lending limit, except
     for loans currently committed to be made pursuant to written commitment
     letters, and Midwest shall, and shall cause the Bank to, make no other
     loans, or renewals or restructuring of loans regardless of amount except in
     the ordinary course of business and consistent in all material respects
     with prudent banking practices and policies and applicable rules and
     regulations of regulatory authorities with respect to amount, terms,
     security and quality of the borrower's credit;
 
                                      II-22
<PAGE>   90
 
          (f) Midwest shall not declare or pay any stock dividend, cash dividend
     or other distribution without the prior written consent of AMCORE,
     provided, however, that until the Effective Date the Company may continue
     to declare and pay its regular quarterly cash dividend to its shareholders
     in the amount of $.085 per share of Common Stock, and the Bank may pay cash
     dividends to Midwest in the aggregate amount of $300,000; provided,
     however, that until the Effective Date, Midwest may continue to declare and
     pay is regular quarterly cash dividend to its shareholders in the amount of
     $0.085 per share of Midwest Common Stock, each of which dividends shall be
     declared for a record date on or after the record date for payment of
     dividends by AMCORE on AMCORE Common Stock for such quarter; provided,
     further, that Midwest shall not declare or pay any dividends or make any
     distributions in any amount on Midwest Common Stock in any calendar quarter
     in which the Effective Time is expected to occur and in which the holders
     of Midwest Common Stock will be entitled to receive dividends on the shares
     of AMCORE Common Stock into which the shares of Midwest Common Stock have
     been converted. It is the intent of the last clause of the immediately
     preceding sentence to provide that holders of Midwest Common Stock will
     receive either the payment of cash dividends on their shares of Midwest
     Common Stock permitted pursuant to this Section 5.1(f) or the payment of
     cash dividends as the holders of shares of AMCORE Common Stock received in
     the Merger for the calendar quarter during which the Effective Time shall
     occur, but will not receive and will not become entitled to receive for the
     same calendar quarter both the payment of a cash dividend as holders of
     Midwest Common Stock and the payment of a cash dividend as holders of
     AMCORE Common Stock received in the Merger; and if Midwest does not declare
     and pay cash dividends in a particular calendar quarter because of
     Midwest's reasonable expectation that the Effective Time was to have
     occurred in such calendar quarter, and the Effective Time shall not in fact
     have occurred in such calendar quarter, then, as a result thereof, Midwest
     shall be entitled to declare and pay a cash dividend (within the
     limitations of this Section 5.1(f), and on such shares of Midwest Common
     Stock) for such calendar quarter by the declaration and payment of such
     cash dividends as soon as reasonably practicable.
 
          (g) Midwest shall, and shall cause the Bank to, use their best efforts
     to maintain their present insurance coverage in respect to their respective
     properties and businesses;
 
          (h) Midwest shall, and shall cause the Bank to, make no significant
     changes, outside the ordinary course of business, in the general nature of
     the business conducted by Midwest and the Bank, including but not limited
     to the investment or use of their assets, the liabilities they incur, or
     the facilities they operate;
 
          (i) Midwest shall, and shall cause the Bank to, not enter into any
     employment, consulting or other similar agreements that are not terminable
     on 30 days' notice or less without penalty or obligation (beyond the notice
     period of 30 days or less);
 
          (j) Midwest shall, and shall cause the Bank to, (i) except as required
     by applicable law, maintain qualification pursuant to the Code or as
     otherwise provided pursuant to this Agreement, adopt, amend, renew or
     terminate any Midwest Plan or any agreement, arrangement, plan or policy
     between Midwest or any of the Midwest Subsidiaries and one or more of its
     current or former directors, officers or employees or (ii) except for
     normal increases in the ordinary course of business consistent with past
     practice, except for the $70,000 contribution to the Baraboo Federal Bank,
     FSB Employee Stock Ownership Plan during the year ending December 31, 1997
     (which amount represents a contribution to that plan in addition to the
     normal annual contribution), except as required by applicable law or as
     otherwise provided pursuant to this Agreement, not increase in any manner
     the compensation or fringe benefits of any director, officer or employee or
     pay any benefit not required by any plan or agreement as in effect as of
     the date hereof (including, without limitation, the granting of stock
     options, stock appreciation rights, restricted stock, restricted stock
     units or performance units or shares) or (iii) enter into, modify or renew
     any contract, agreement, commitment or arrangement providing for the
     payment to any director, officer or employee of such party of compensation
     or benefits contingent, or the terms of which are materially altered, upon
     the occurrence of any of the transactions contemplated by this Agreement or
     the Plan of Merger;
 
                                      II-23
<PAGE>   91
 
          (k) Midwest shall, and shall cause the Bank to, timely file all
     required tax returns with all applicable taxing authorities and will not
     make any application for or consent to any extension of time for filing any
     tax return or any extension of the period of limitations applicable
     thereto;
 
          (l) Except as already reflected in the financial statements referred
     to in Section 3.8 hereof, Midwest shall, and shall cause the Bank to, not
     make any expenditure for fixed assets in excess of $25,000 for any single
     item, or $100,000 in the aggregate, or enter into any lease of fixed
     assets, if the monthly rental payment under such lease exceeds $5,000;
 
          (m) Midwest shall, and shall cause the Bank to, not incur any
     liabilities or obligations, make any commitments or disbursements, acquire
     or dispose of any property or asset, make any contract or agreement, or
     engage in any transaction, except in the ordinary course consistent in all
     material respects with prudent banking and fiduciary practices (which
     includes accepting new fiduciary appointments on terms consistent with past
     practices), except for dispositions of real estate owned;
 
          (n) Midwest shall, and shall cause the Bank to, not do or fail to do
     anything that will cause a breach of, or default under, any contract,
     agreement, commitment, obligation, appointment, plan, trust or other
     arrangement to which Midwest or the Bank is a party or by which either
     Midwest or the Bank is otherwise bound or under which the Bank has agreed
     to act as a fiduciary or otherwise exercise fiduciary powers;
 
          (o) Midwest shall, and shall cause the Bank to, not engage in or agree
     to engage in any "covered transaction" within the meaning of Sections 23A
     or 23B of the Federal Reserve Act (without regard to applicability of any
     exemptions contained in said Section 23A);
 
          (p) Midwest shall, and shall cause the Bank to, only purchase or
     invest in obligations of the government of the United States or agencies of
     the United States or mortgage-backed securities of the kind owned by the
     Bank as of September 30, 1997 and to not execute individual investment
     transactions of greater than $1,000,000;
 
          (q) Midwest shall, and shall cause the Bank to, make no changes of a
     material nature in their accounting procedures, methods, policies or
     practices or the manner in which they conduct their businesses and maintain
     their records;
 
          (r) Midwest shall cause the Bank not to accept or renew any brokered
     deposits;
 
          (s) Midwest shall not, and shall cause the Bank not to, take or cause
     to be taken any actions that would, or would be reasonably likely to (i)
     prevent AMCORE from accounting for the Merger as a "pooling-of-interests"
     for accounting purposes or (ii) adversely affect the status of the Merger
     as a tax-free reorganization under Section 368(a) of the Code;
 
          (t) Midwest shall not, and shall cause the Bank not to, make any
     equity investment or commitment to make such an investment in real estate
     or in any real estate development project, other than in connection with
     foreclosures, settlements in lieu of foreclosure or troubled loan or debt
     restructuring in the ordinary course of business consistent with prudent
     banking practices; and
 
        (u) agree in writing or otherwise to do any of the foregoing.
 
     5.2 Access to Information and Due Diligence.
 
          (a) Upon reasonable notice and subject to applicable laws relating to
     the exchange of information, each of Midwest and AMCORE shall, and shall
     cause the Midwest Subsidiaries and AMCORE Subsidiaries, respectively, to,
     afford to the officers, employees, accountants, counsel and other
     representatives of the other party, access, during normal business hours
     during the period prior to the Effective Time, to all its properties,
     books, contracts, commitments and records and, during such period, each of
     Midwest and AMCORE shall, and shall cause the Midwest Subsidiaries and
     AMCORE Subsidiaries, respectively, to, make available to the other party
     (i) a copy of each report, schedule, registration statement and other
     document filed or received by it during such period pursuant to the
     requirements of federal securities laws or federal or state banking laws,
     and (ii) all other information concerning its
 
                                      II-24
<PAGE>   92
 
     business, properties and personnel as such party may reasonably request.
     Neither Midwest, AMCORE, the Midwest Subsidiaries nor AMCORE Subsidiaries
     shall be required to provide access to or to disclose information where
     such access or disclosure would (A) violate or prejudice the rights of
     Midwest's or AMCORE's, as the case may be, customers or contravene any law,
     rule, regulation, order, judgment, decree, fiduciary duty or binding
     agreement entered into prior to the date of this Agreement, or (B) impair
     any attorney-client privilege of the disclosing party. The parties hereto
     will make appropriate substitute disclosure arrangements under
     circumstances in which the restrictions of the preceding sentence apply.
 
          (b) Each of Midwest and AMCORE shall hold all information furnished by
     or on behalf of the other party or the Midwest Subsidiaries or AMCORE
     Subsidiaries, as the case may be, or their representatives pursuant to
     Section 5.2(a) in confidence and shall return all documents containing any
     information concerning the properties, business and assets of each other
     party that may have been obtained in the course of negotiations or
     examination of the affairs of each other party either prior or subsequent
     to the execution of this Agreement (other than such information as shall be
     in the public domain or otherwise ascertainable from public or outside
     sources) and shall destroy any information, analyses or the like derived
     from such confidential information. Each of Midwest and AMCORE shall use
     such information solely for the purpose of conducting business, legal and
     financial reviews of the other party and for such other purposes as may be
     related to this Agreement and the Plan of Merger.
 
          (c) No investigation by either of the parties or their respective
     representatives shall affect the representations and warranties of the
     other set forth herein. Without limitation of the foregoing, each party
     shall promptly notify the other party of any information obtained by such
     party during the course of any due diligence conducted by such party or its
     representatives in accordance with this Section 5.2 which is materially
     inconsistent with any representation or warranty made by the other party
     under this Agreement; provided, however, that either party's failure to
     provide such notice to the other party shall not, in turn, be deemed to
     constitute a breach of such party's obligations under this Agreement and
     the Plan of Merger.
 
     5.3 Meeting of Shareholders of Midwest.  As soon as practicable after the
date of this Agreement, Midwest shall call and hold a meeting of its
shareholders for the purpose of voting upon this Agreement, the Plan of Merger
and the transactions herein and therein contemplated in accordance with
Midwest's Articles of Incorporation, its bylaws and the WBCL (the "Shareholders
Meeting"). Midwest shall, through its Board of Directors, recommend to its
shareholders, consistent with its fiduciary duties, approval of this Agreement,
the Plan of Merger and the Merger.
 
     5.4 Registration Statement and Regulatory Filings
 
          (a) AMCORE shall file with the SEC as soon as practicable after the
     execution of this Agreement, a Registration Statement on an appropriate
     form under the Securities Act covering AMCORE Common Stock to be issued
     pursuant to this Agreement and shall use its reasonable best efforts to
     cause the same to become effective and thereafter, until the Effective Time
     or termination of this Agreement, to keep the same effective and, if
     necessary, amend and supplement the same. Such Registration Statement and
     any amendments and supplements thereto are referred to herein as the
     "Registration Statement." The Registration Statement shall include a Proxy
     Statement/Prospectus thereto reasonably acceptable to AMCORE and Midwest,
     prepared by AMCORE and Midwest for use in connection with the meeting of
     shareholders of Midwest referred to in Section 5.3 of this Agreement, all
     in accordance with the rules and regulations of the SEC. AMCORE shall, as
     soon as practicable after the execution of this Agreement, make all
     filings, if any, required to obtain all blue sky permits, authorizations,
     consents or approvals required for the issuance of AMCORE Common Stock. In
     advance of filing the Registration Statement, AMCORE shall provide Midwest
     and its counsel with a copy of the Registration Statement and provide an
     opportunity to comment thereon, and thereafter shall promptly advise
     Midwest and its counsel of any material communication received by AMCORE or
     its counsel from the SEC with respect to the Registration Statement. None
     of the information furnished by AMCORE or Midwest for inclusion in the
     Registration Statement, the Proxy Statement/Prospectus or any other
     document filed with the SEC or
 
                                      II-25
<PAGE>   93
 
     any state securities commission, at the respective times at which such
     documents are filed with the SEC or such state securities commission, or,
     in the case of the Registration Statement, when it becomes effective, or in
     the case of the Proxy Statement/Prospectus, when mailed or at the time of
     the Shareholders Meeting, shall be false or misleading with respect to any
     material fact or shall omit to state any material fact necessary in order
     to make the statements therein, in light of the circumstances in which they
     were made, not misleading.
 
          (b) AMCORE will use its best commercially reasonable efforts to obtain
     the regulatory approvals referred to in Section 6.1(c) hereof, and Midwest
     will cooperate fully in the process of obtaining all such approvals. As
     soon as practicable after the date of this Agreement, AMCORE will make all
     appropriate initial filings necessary to obtain the regulatory approvals
     referred to in Section 6.1(c) hereof. The obligation to take all reasonable
     actions shall not be construed as including an obligation to accept any
     terms of or conditions to a consent, authorization, order, or approval of,
     or any exemption by, any party that are not acceptable to AMCORE, in its
     sole discretion, or to change the business practices of AMCORE or any
     AMCORE Subsidiary. AMCORE shall provide Midwest with copies of all
     application filed and all approvals when received.
 
     5.5 Reasonable Efforts.  The parties to this Agreement agree to use their
reasonable efforts in good faith to satisfy the various conditions to Closing
and to consummate the Merger as soon as practicable. None of the parties hereto
will intentionally take or intentionally permit to be taken any action that
would be in breach of the terms or provisions of this Agreement or that would
cause any of the representations contained herein to be or to become untrue.
 
     5.6 Business Relations and Publicity.  Midwest will use reasonable efforts
to preserve its reputation and relationship with suppliers, clients, depositors,
customers, employees and others having business relations with it. No press
release or other communication in connection with or relating to this Agreement
or the transactions contemplated hereby (other than communications with
appropriate regulatory authorities) shall be issued or made except as mutually
agreed upon, provided that AMCORE, after consultation with Midwest, may make
such disclosures concerning the transactions provided for herein as AMCORE
believes are required by law.
 
     5.7 Listing of Shares.  AMCORE shall use all reasonable efforts to cause
the shares of AMCORE Common Stock issuable in the Merger to be approved for
listing on the Nasdaq National Market.
 
     5.8 Affiliate Letters; Shareholder Voting Agreements.  Midwest shall
provide AMCORE with such information as may be reasonably necessary to determine
the identity of those persons who may be deemed to be "affiliates" of Midwest
within the meaning of Rule 145 (or any successor rule) promulgated by the SEC
under the Securities Act or within the meaning of SEC Staff Accounting Bulletin
No. 65 (interpreting certain requirements for treating a business combination as
a pooling of interests) and a list of those persons whom Midwest believes may be
deemed to be affiliates. Within 30 days of the execution of this Agreement,
Midwest will obtain and deliver to AMCORE affiliate letters, substantially in
the form of Exhibit C to this Agreement, from each of the directors and
principal officers of Midwest and will use its best efforts to obtain such
letters from the holders of five percent (5%) or more of the outstanding shares
of Midwest Common Stock and from any other persons who, in the opinion of
counsel for AMCORE, may be deemed to be affiliates within the meaning of Rule
145 or SEC Staff Accounting Bulletin No. 65. On or before November 18, 1997,
Midwest will obtain and deliver to AMCORE a Shareholder Voting Agreement, in the
form attached as Exhibit A, executed by each shareholder of the Company
identified in Schedule 3.25 who is a director of Midwest, Gary E. Wegner and
Scott D. Huedepohl.
 
     5.9 No Conduct Inconsistent with this Agreement.
 
          (a) Midwest agrees that it will not, during the term of this
     Agreement, (i) solicit, encourage or authorize (including by way of
     furnishing information or assistance) or take any other action to
     facilitate any inquires or proposals that constitute, or may be reasonably
     expected to lead to, any Transaction Proposal (as hereinafter defined), or
     discuss or negotiate with any person in furtherance of such inquiries or to
     obtain a Transaction Proposal, or agree to or endorse any Transaction
     Proposal, or authorize or
 
                                      II-26
<PAGE>   94
 
     permit any of its officers, directors, or employees or any investment
     banker, financial advisor, attorney, accountant, or other representative
     retained by it or any of the Midwest Subsidiaries to take any such action;
     provided, however, that the Board of Directors of Midwest (the "Board")
     may, in response to an unsolicited written proposal from a third party
     regarding a Superior Proposal (as hereinafter defined), furnish or cause to
     be furnished information to and engage in discussions with such third
     party, but only if (A) the Board determines in good faith, after
     consultation with its independent financial advisors and based upon the
     written opinion of its outside counsel that failure to take such action
     could be reasonably expected to result in a breach of the fiduciary duties
     of such Board under applicable law and (B) prior to furnishing such
     non-public information to, or entering into discussions or negotiations
     with such third party, Midwest receives from such third party an executed
     confidentiality agreement. Midwest will immediately cease and cause to be
     terminated any existing activities, discussions or negotiations previously
     conducted with any third parties other than AMCORE with respect to any of
     the foregoing. Midwest will take all actions necessary or advisable to
     inform the appropriate individuals or entities referred to in the first
     sentence hereof of the obligations undertaken in this Section 5.9. In the
     event that the Board furnishes information to or engages in such
     discussions with any person, Midwest shall promptly notify AMCORE orally
     and in writing of all of the relevant details relating to all inquiries and
     proposals that it may receive relating to any of such matters (including
     the identity of the person making such inquiry or proposal) and provide
     AMCORE with copies of all materials delivered to such person.
 
          (b) Nothing contained in Section 5.9(a) shall prohibit Midwest from
     disclosing to its shareholders a position contemplated by Rule 14e-2(a)
     under the Exchange Act with respect to a tender offer for Midwest's common
     stock.
 
          (c) As used herein, "Superior Proposal" means a bona fide, written and
     unsolicited proposal or offer made by any corporation (excluding AMCORE or
     any of its Subsidiaries or Affiliates), partnership, person, other entity,
     or group (as defined in Section 13(d)(3) of the Exchange Act) (each, for
     purposes of this Section 5.9, a "Person") with respect to a Transaction
     Proposal on terms which the Board determines in good faith, and in the
     exercise of reasonable judgment (based on the advice of independent
     financial advisors and legal counsel), to be more favorable to Midwest and
     its shareholders than the transactions contemplated hereby (including
     taking into account the financing thereof). "Transaction Proposal" as used
     in this Agreement means (in each case other than the transactions
     contemplated hereby) (A) a bona fide tender offer or exchange offer for 25%
     or more of the then outstanding shares of Midwest which shall have been
     publicly proposed to be made or shall have been commenced or made by any
     Person; (B) a merger, consolidation, or other business combination with
     Midwest, or with any of the Midwest Subsidiaries, which shall have been
     effected by any Person, or an agreement relating to any such transaction
     which shall have been entered into; (C) any sale, lease, exchange,
     mortgage, pledge, transfer, or other disposition (whether in one
     transaction or a series of related transactions) involving a substantial
     part of Midwest's consolidated assets (including any stock of the Bank), or
     all or a substantial part of the assets of any of the Midwest Subsidiaries,
     to any Person which shall have been effected, or any agreement relating to
     such transaction which shall have been entered into; (D) the acquisition by
     any Person (other than AMCORE or any of Midwest's Subsidiaries in a
     fiduciary capacity for third parties, none of whom beneficially owns 10% or
     more of the outstanding Midwest Common Stock) of beneficial ownership
     (within the meaning of Rule 13d-3 under the Exchange Act, which will be
     deemed for purposes hereof to provide that a Person beneficially owns any
     shares of Midwest Common Stock that may be acquired by such person pursuant
     to any right, option, warrant, or other agreement, regardless of when such
     acquisition would be permitted by the terms thereof) of 25% or more of the
     outstanding shares of Midwest Common Stock (including Midwest Common Stock
     currently beneficially owned by such Person); (E) any reclassification of
     securities or recapitalization of Midwest or other transaction that has the
     effect, directly or indirectly, of increasing the proportionate share of
     any class of equity security (including securities convertible into equity
     securities) of Midwest that is owned by any Person which shall have been
     effected, or any agreement relating to such transaction which shall have
     been entered into or plan with respect thereto adopted; (F) any transaction
     having an effect similar to those described in (A) through (E) above; or
     (G) a public announcement with respect to a proposal, plan, or intention by
 
                                      II-27
<PAGE>   95
 
     Midwest or another Person to effect any of the foregoing transactions
     (which may include publication of notice of filing or any similar notice
     under applicable law).
 
     5.10 Board of Directors' Notices, Minutes, Etc.  Midwest shall give
reasonable notice to AMCORE of all meetings of the Board of Directors and Board
committees of Midwest and the Bank, and if known, the agenda for or business to
be discussed at such meeting. Midwest shall transmit to AMCORE, promptly, copies
of all notices, minutes, consents and other materials that Midwest or the Bank
provides to their directors to the extent permissible under law, other than
materials relating to any proposed acquisition of Midwest or the Bank. AMCORE
agrees to hold in confidence and trust and to act in a fiduciary manner with
respect to such information.
 
     5.11 Untrue Representations and Warranties.  During the term of this
Agreement, if a party hereto becomes aware of any facts or of the occurrence or
impending occurrence of any event that would cause one or more of such party's
representations and warranties contained in this Agreement to be or to become
untrue as of the Closing Date then:
 
          (a) such party shall immediately give detailed written notice thereof
     to the other party; and
 
          (b) such party shall use reasonable efforts to change such facts or
     events to make such representations and warranties true, unless the same
     shall have been waived in writing by the other party.
 
     5.12 Indemnification; Directors' and Officers' Insurance.
 
          (a) In the event of any threatened or actual claim, action, suit,
     proceeding or investigation, whether civil, criminal or administrative,
     including, without limitation, any such claim, action, suit, proceeding or
     investigation in which any individual who is now, or has been at any time
     prior to the date of this Agreement, or who becomes prior to the Effective
     Time, a director or officer or employee of Midwest or the Midwest
     Subsidiaries (the "Indemnified Parties"), is, or is threatened to be, made
     a party based in whole or in part on, or arising in whole or in part out
     of, or pertaining to (i) the fact that he or she is or was a director,
     officer or employee of Midwest or the Midwest Subsidiaries or any of their
     respective predecessors, or (ii) this Agreement or the Plan of Merger or
     any of the transactions contemplated hereby or thereby, whether in any case
     asserted or arising before or after the Effective Time, AMCORE agrees to
     cooperate and use reasonable efforts to defend against and respond thereto.
     It is understood and agreed that after the Effective Time, AMCORE shall
     (and shall cause the Surviving Corporation to) indemnify and hold harmless,
     as and to the fullest extent permitted by law, each such Indemnified Party
     against any losses, claims, damages, liabilities, costs, expenses
     (including payment of reasonable attorney's fees and expenses and other
     costs in advance of the final disposition of any claim, suit, proceeding or
     investigation incurred by each Indemnified Party to the fullest extent
     permitted by law upon receipt of any undertaking required by applicable
     law), judgments, fines and amounts paid in settlement in connection with
     any such threatened or actual claim, action, suit, proceeding or
     investigation, and in the event of any such threatened or actual claim,
     action, suit, proceeding or investigation (whether asserted or arising
     before or after the Effective Time), the Indemnified Parties may retain
     counsel reasonably satisfactory to them after consultation with the
     Surviving Corporation; provided, however, that (A) AMCORE shall have the
     right to assume the defense thereof and upon such assumption AMCORE shall
     not be liable to any Indemnified Party for any legal expenses of other
     counsel or any other expenses subsequently incurred by any Indemnified
     Party in connection with the defense thereof, except that if AMCORE elects
     not to assume such defense or counsel for the Indemnified Parties
     reasonably advises the Indemnified Parties that there are issues that raise
     conflicts of interest between AMCORE and the Indemnified Parties, the
     Indemnified Parties may retain counsel reasonably satisfactory to them
     after consultation with AMCORE, and AMCORE shall pay the reasonable fees
     and expenses of such counsel for the Indemnified Parties, (B) AMCORE shall
     be obligated pursuant to this paragraph to pay for only one firm of counsel
     for all Indemnified Parties, unless an Indemnified Party shall have
     reasonably concluded, based on an opinion of counsel, that there is a
     material conflict of interest between the interests of such Indemnified
     Party and the interests of one or more other Indemnified Parties and that
     the interests of such Indemnified Party will not be adequately represented
     unless separate counsel is retained, in which case, AMCORE shall be
     obligated to pay such
 
                                      II-28
<PAGE>   96
 
     separate counsel, (C) AMCORE shall not be liable for any settlement
     effected without its prior written consent (which consent shall not be
     unreasonably withheld) and (D) AMCORE shall have no obligation hereunder to
     any Indemnified Party when and if a court of competent jurisdiction shall
     ultimately determine, and such determination shall have become final and
     nonappealable, that indemnification of such Indemnified Party in the manner
     contemplated hereby is prohibited by applicable law. Any Indemnified Party
     wishing to claim Indemnification under this Section 5.12, upon learning of
     any such claim, action, suit, proceeding or investigation, shall notify
     AMCORE thereof, provided that the failure to so notify shall not affect the
     obligations of AMCORE under this Section 5.12 except to the extent such
     failure to notify materially prejudices AMCORE. The Surviving Corporation's
     obligations under this Section 5.12 shall continue in full force and effect
     for a period of five years from the Effective Time (or the period of the
     applicable statute of limitations, if longer); provided, however, that all
     rights to indemnification in respect of any claim (a "Claim") asserted or
     made within such period shall continue until the final disposition of such
     Claim.
 
          (b) AMCORE shall use reasonable efforts (i) to obtain, after the
     Effective Time, directors' and officers' liability insurance coverage for
     the officers and directors of the Surviving Corporation, and (ii) either
     (A) to cause the individuals serving as officers and directors of Midwest
     or the Midwest Subsidiaries immediately prior to the Effective Time to be
     covered for a period of three years from the Effective Time by the
     directors' and officers' liability insurance policies maintained by the
     Surviving Corporation, or to (B) substitute therefor policies of at least
     the same coverage and amounts containing terms and conditions that are not
     less advantageous than the policies previously maintained by Midwest and
     the Midwest Subsidiaries, respectively, with respect to acts or omissions
     occurring prior to the Effective Time that were committed by such officers
     and directors in their capacity as such; provided, however, that AMCORE
     shall not in any such year be required to expend an amount in excess of
     150% of the aggregate premiums paid by Midwest and the Midwest Subsidiaries
     for directors' and officers' liability insurance for the year ended
     December 31, 1996.
 
     5.13 Employee Benefit Plans.
 
          (a) At the Effective Time, each employee of Midwest and the Midwest
     Subsidiaries shall immediately become eligible to participate in all
     employee welfare benefit plans and other fringe benefits programs offered
     or maintained by AMCORE and its subsidiaries on terms and conditions
     substantially similar in the aggregate to those that AMCORE and its
     subsidiaries may make available to similarly situated officers and
     employees, including, without limitation, any health, life, long-term
     disability, short-term disability, severance, vacation or paid time off
     programs ("AMCORE's Welfare Plans"). The period of employment and
     compensation of each employee of Midwest and the Midwest Subsidiaries with
     Midwest and the Midwest Subsidiaries shall be counted for all purposes
     (except for purposes of benefit accrual) under AMCORE's Welfare Plans,
     including, without limitation, for purposes of service credit and
     eligibility. Any expenses incurred by an employee of Midwest or the Midwest
     Subsidiaries under Midwest's or the Bank's employee welfare benefit plans
     (such as deductibles or co-payments), shall be counted for all purposes
     under AMCORE's Welfare Plans. AMCORE shall waive any pre-existing condition
     exclusions for conditions existing on the Closing Date, and
     actively-at-work requirements for periods ending on the Closing Date
     contained in AMCORE's Welfare Benefit Plans as they apply to the employees
     of Midwest and the Midwest Subsidiaries and former employees and their
     dependents.
 
          (b) As of the Effective Time, the Baraboo Federal Bank, FSB Employee
     Stock Ownership Plan (the "Baraboo ESOP ") shall be terminated, as AMCORE
     and Midwest shall mutually determine, and the loan between Midwest and the
     Baraboo ESOP shall be repaid in full with an amount of unallocated shares
     of AMCORE Common Stock (which shall have been converted from shares of
     Midwest Common Stock pursuant to Section 1.4 hereof) held in the ESOP
     having an aggregate fair market value equaling as closely as possible, but
     not less than, the balance of the loan at the Closing Date. The fair market
     value of such unallocated shares shall be equal to the closing sales price
     of AMCORE Common Stock on the Closing Date, or such other price, as
     determined by the trustees for the Baraboo ESOP, which represents the fair
     market value of the AMCORE Common Stock on the Closing Date, multiplied by
     the number of unallocated shares of AMCORE Common Stock held by the Baraboo
     ESOP, and any remaining
 
                                      II-29
<PAGE>   97
 
     unallocated shares of AMCORE Common Stock after such repayment shall be
     allocated in kind to the Baraboo ESOP accounts of those Bank employees who
     are participants and beneficiaries (such individuals hereafter, the "ESOP
     Participants"), in accordance with the terms of the Baraboo ESOP as amended
     with respect to such termination. All ESOP Participants shall fully vest
     and have a nonforfeitable interest in their accounts under the Baraboo ESOP
     determined as of the Effective Time. As soon as practicable after the
     receipt of a favorable determination letter from the Internal Revenue
     Service ("IRS ") as to the tax qualified status of the Baraboo ESOP upon
     its termination under Section 401(a) and 4975(e) of the Code (the "Final
     Determination Letter"), distributions of the benefits under the Baraboo
     ESOP shall be made to the ESOP Participants. From and after the date of
     this Agreement, in anticipation of such termination and distribution,
     AMCORE, Midwest and their respective representatives prior to the Effective
     Time, and AMCORE and its representatives after the Effective Time, shall
     use their best efforts to apply for and obtain such favorable Final
     Determination Letter from the IRS. In the event that AMCORE, Midwest and
     their respective representatives, prior to the Effective Time, and AMCORE
     and its representatives after the Effective Time, reasonably determine that
     the Baraboo ESOP cannot obtain a favorable Final Determination Letter, or
     that the amounts held therein cannot be so applied, allocated or
     distributed without causing the Baraboo ESOP to lose its tax qualified
     status, Midwest prior to the Effective Time and AMCORE after the Effective
     Time shall take such action as they may reasonably determine with respect
     to the distribution of benefits to the ESOP Participants, provided that the
     assets of the Baraboo ESOP shall be held or paid for the benefit of the
     ESOP Participants and provided further that in no event shall any portion
     of the amounts held in the Baraboo ESOP revert, directly or indirectly, to
     Midwest or any affiliate thereof or to AMCORE or any affiliate thereof.
 
          (c) AMCORE acknowledges and agrees that all participants in the
     Baraboo Federal Bank, FSB Profit Sharing 401K Plan (the "Baraboo Pension
     Plan") shall be fully vested as of the Effective Time in their accounts
     under the Baraboo Pension Plan. If AMCORE maintains a defined contribution
     plan subject to a favorable IRS letter as to its tax qualified status under
     Section 401(a) of the Code (the "AMCORE Plan") on or after the Effective
     Time, the Baraboo Pension Plan may be merged with and into AMCORE Plan. If
     such merger occurs or if Midwest employees otherwise become eligible to
     participate in the AMCORE Plan: (i) all participants in the Baraboo Pension
     Plan shall become participants in the AMCORE Plan; and (ii) each Midwest
     Employee's period of employment with Midwest or a Midwest Subsidiary shall
     be counted for all purposes under AMCORE Plan, including, without
     limitation, for purposes of eligibility and vesting. If the Baraboo Pension
     Plan is not merged into the AMCORE Plan within 12 months after the
     Effective Time, it shall be terminated and all participants offered the
     option of a lump-sum cash payment, subject to applicable provisions of the
     Code.
 
          (d) On and after the Effective Time, AMCORE shall maintain and
     continue without modification the payment of premiums for post-retirement
     Medicare supplement policies and medical insurance for the benefit of Mrs.
     Janet McArthur, Mrs. Robert Hirshinger, Mr. Emmett Brown, Mrs. Lorraine
     Brown and Mr. Gary E. Wegner, President and Chief Executive Officer of
     Midwest and the Bank (the "Post-Retirement Welfare Plan"). Other than those
     individuals specified in this Section 5.13(d), there are no persons
     eligible for benefits under the PostRetirement Welfare Plan. At or prior to
     December 31, 1997, Midwest shall properly record on its financial
     statements in accordance with GAAP an amount which is not less than
     $214,000 representing liabilities which have accrued in connection with the
     Post-Retirement Welfare Plan.
 
          (e) Subject to AMCORE's approval, which shall not be unreasonably
     withheld, Midwest and Bank shall be permitted to take whatever action they
     deem to be reasonably necessary to comply with the provisions of this
     Section, including without limitation, action necessary to provide that all
     account balances under the Baraboo ESOP and Baraboo Pension Plan shall be
     fully vested and nonforfeitable as of the Effective Time.
 
          (f) Without the prior written consent of AMCORE, which shall not be
     unreasonably withheld, and except as provided in Section 1.5 hereof, the
     Midwest Option Plan Committee shall not take any action after the date
     hereof pursuant to Section 12 of the 1992 Stock Option Plan or Section 6 of
     the 1997 Stock
 
                                      II-30
<PAGE>   98
 
     Option Plan. The foregoing sentence shall not be deemed to preclude the
     Midwest Option Plan Committee from making any determination regarding
     whether or not a change in control has occurred under Section 12(b) of the
     1992 Stock Option Plan and Section 6(a) of the 1997 Stock Option Plan.
 
     5.14 Filing and Other Fees.  All filing and other fees paid to the SEC, the
OTS or any Government Entity in connection with the Merger and the transactions
contemplated by this Agreement and the costs and expenses of printing and
mailing the Proxy/Statement Prospectus shall be borne by AMCORE.
 
     5.15 Tax Treatment.  Midwest shall use its best efforts to cause the Merger
to qualify as a reorganization within the meaning of Section 368(a) of the Code.
Midwest shall not take or fail to take, and shall cause its Affiliates not to
take or fail to take, any action, which action or failure to act would prevent,
or be reasonably likely to prevent, the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Code.
 
     5.16 Environmental Audits.  AMCORE shall have the right to engage an
environmental consulting engineering firm, reasonably acceptable to Midwest, to
perform environmental site assessments of the Real Properties of Midwest or its
Subsidiaries (collectively, the "Audited Properties") which shall satisfy the
American Society of Testing and Materials "Standard Practice for Environmental
Site Assessments: Phase I Environmental Site Assessment Process" (ASTM
Designation: E-1527-93), except that such assessment shall also include a review
of compliance with Environmental Laws (the "Environmental Audits"), and render
reports of the Environmental Audits (the "Environmental Reports") to determine,
to AMCORE's reasonable satisfaction, whether there are any indications or
evidence that (i) any toxic substance has been stored, deposited, treated,
recycled, used or accidentally or intentionally disposed of, discharged,
spilled, released, dumped, emitted or otherwise placed on, under or at, or used
in any construction on, any such Audited Property, (ii) any such Audited
Property is contaminated by or contains any toxic substance or (iii) any
violations of Environmental Laws have occurred or are likely to occur on any
Audited Property. The scope of the Environmental Audits may also include any
testing or sampling of materials to determine, to AMCORE's reasonable
satisfaction, whether any clean up, removal, remedial action or other response
("Remediation Action") is required to bring the Audited Properties into material
compliance with Environmental Laws or to eliminate any condition that could
result in a material liability as a result of the ownership, lease, operation or
use of any Audited Property, and the estimated cost of such Remediation Action
(the "Remediation Costs"). All Environmental Audits shall initially be provided
to AMCORE and Midwest in draft form. AMCORE shall require that the environmental
consulting firm not disclose (except as required by law) any information in the
Environmental Audits to anyone other than AMCORE and Midwest. AMCORE will use
reasonable efforts to engage an environmental consulting engineering firm within
fifteen (15) days of the date hereof and AMCORE will use reasonable efforts to
cause the Environmental Audits to be completed within forty five (45) days of
the date hereof. Midwest agrees to cooperate with AMCORE's environmental
consultant. AMCORE shall be solely responsible for all costs associated with the
Environmental Reports.
 
     5.17 Midwest Severance/Change in Control Agreements.  AMCORE agrees to
perform the terms of any contractual arrangements, including severance and
change in control arrangements, as disclosed on Schedule 3.18(a) of the Midwest
Disclosure Schedules and as in effect on the date hereof. AMCORE agrees that the
transactions contemplated by this Agreement and the Plan of Merger constitute a
change in control of Midwest for purposes of any severance or change in control
arrangements referred to above.
 
     5.18 Current Information.  During the period from the date of this
Agreement to the Effective Time, Midwest will cause one or more of its
designated representatives to confer on a regular and frequent basis (not less
than monthly) with representatives of AMCORE and to report (i) the general
status of the ongoing operations of Midwest and the Midwest Subsidiaries and
(ii) the status of, and the action proposed to be taken with respect to, those
loans held by Midwest or any of the Midwest Subsidiaries which, individually or
in combination with one or more other loans to the same borrower thereunder,
have an original principal amount of $800,000 or more and are non-performing
assets. Midwest will promptly notify AMCORE of any material change in the normal
course of business or in the operation of the properties of Midwest or any of
the Midwest Subsidiaries and of any governmental complaints, investigations or
hearings (or communications indicating
 
                                      II-31
<PAGE>   99
 
that the same may be contemplated), or the institution or the threat of
significant litigation involving Midwest or any of the Midwest Subsidiaries, and
will keep AMCORE fully informed of such events.
 
     5.19 Certain Revaluations, Changes, and Adjustments.  On or before the
Effective Time, upon the request of AMCORE, Midwest shall, consistent with
generally accepted accounting principles, modify and change its loan, litigation
and real estate valuation policies and practices (including loan classifications
and levels of reserves) so as to be applied consistently on a mutually
satisfactory basis with those of AMCORE and establish such accruals and reserves
as shall be necessary to reflect Merger-related expenses and costs incurred by
Midwest, provided, however, that Midwest shall not be required to take such
action (a) more than five (5) days prior to the Effective Time; (b) unless
AMCORE agrees in writing that all conditions to closing set forth in Section 6.2
have been satisfied or waived; and (c) unless Midwest shall have received a
written waiver by AMCORE of its right to terminate this Agreement, and no
accrual or reserve made by Midwest or any of the Midwest Subsidiaries pursuant
to this Section 5.19, or any litigation or regulatory proceeding arising out of
any such accrual or reserve, shall constitute or be deemed to be a breach,
violation of or failure to satisfy any representation, warranty, covenant,
condition or other provision of this Agreement or otherwise be considered in
determining whether any such breach, violation or failure to satisfy shall have
occurred.
 
     5.20  Accountant's Letter.  At the request of AMCORE, Midwest shall use its
best efforts to cause to be delivered to AMCORE "cold comfort" letters of
McGladrey & Pullen, LLP, Midwest's independent public accountant, dated the date
on which the Registration Statement shall become effective and the Effective
Time, respectively, and addressed to AMCORE, reasonably customary in form,
scope, and substance for letters delivered by independent public accountants in
connection with the procedures undertaken by them with respect to the financial
statements and other financial information of Midwest contained in registration
statements similar to the Registration Statement and the other matters
contemplated by AICPA Statement No. 72 and customarily included in comfort
letters relating to transactions similar to transactions such as those
contemplated by this Agreement and the Plan of Merger.
 
     5.21 Dissent Process.  Midwest will give to AMCORE prompt notice of any
written notice relating to the exercise of dissenters' rights granted under the
WBCL, including the name of the dissenting stockholder and the number of shares
of Midwest Common Stock to which the dissent relates. AMCORE will have the right
to participate in all negotiations and proceedings relating thereto, and
exceptions required by law. Midwest will not make any payment with respect to,
or settle or offer to settle, any appraisal demands without AMCORE's prior
written consent.
 
                                   ARTICLE VI
                              CONDITIONS PRECEDENT
 
     6.1 Conditions Precedent to Obligations of AMCORE and Acquisition
Corp.  Unless the conditions are waived by AMCORE or Acquisition Corp., all
obligations of AMCORE and Acquisition Corp. under this Agreement are subject to
the fulfillment, prior to or at the Closing, of each of the following
conditions:
 
          (a) Representations and Warranties; Performance of Agreements.  The
     representations and warranties of Midwest contained in Article III of this
     Agreement, or in any documents, certificates, schedules or exhibits
     delivered by, or on behalf, of Midwest to AMCORE pursuant to this Agreement
     shall be true and correct as of this date and shall be true and correct at
     the Closing as though made on and as of the Closing Date, and Midwest shall
     have performed in all material respects all agreements herein required to
     be performed by it on or prior to the Closing.
 
          (b) Closing Certificate.  AMCORE shall have received a certificate
     signed by the Chief Executive Officer of Midwest, dated as of the Closing
     Date, certifying in such detail as AMCORE may reasonably request, as to the
     fulfillment of the conditions to the obligations of AMCORE as set forth in
     this Agreement and required to be fulfilled by Midwest on or before the
     Closing.
 
          (c) Regulatory and Other Approvals.  AMCORE shall have obtained the
     approval of all appropriate regulatory entities of the transactions
     contemplated by this Agreement and the Plan of Merger, all required
     regulatory waiting periods shall have expired, and there shall be pending
     on the Closing Date no
 
                                      II-32
<PAGE>   100
 
     motion for rehearing or appeal from such approval or any suit or action
     seeking to enjoin the transaction provided for herein or to obtain
     substantial damages in respect of them.
 
          (d) Approval of Merger and Delivery of Agreement.  This Agreement, the
     Plan of Merger and the transactions contemplated therein shall have been
     approved by the shareholders of Midwest in accordance with applicable law
     and the Articles of Incorporation and Bylaws of Midwest, and the proper
     officers of Midwest shall have executed and delivered to AMCORE copies of
     this Agreement, the Plan of Merger and articles of merger, in form suitable
     for filing with the WDFI, and shall have executed and delivered all such
     other certificates, statements or other instruments as may be necessary or
     appropriate to effect such filings.
 
          (e) Effectiveness of the Registration Statement.  The Registration
     Statement shall have become effective with respect to the shares of common
     stock of AMCORE to be issued in the Merger, no stop order suspending the
     effectiveness of such Registration Statement shall have been issued, no
     proceeding for that purpose shall have been instituted or threatened, and
     all requests for additional information on the part of the SEC shall have
     been complied with to AMCORE's satisfaction.
 
          (f) No Litigation with Respect to Transactions.  At the Closing Date,
     no suit, action, or proceeding shall be pending or overtly threatened, and
     no liability or claim shall have been asserted against Midwest or any
     Midwest Subsidiary that has not been disclosed in Schedule 3.11 (a)
     involving any of the assets, properties, business, or operations of Midwest
     or its Subsidiaries that would reasonably be expected to have a Material
     Adverse Effect, or (b) before any court or other governmental agency by the
     federal or any state government in which it is or will be sought to
     restrain or prohibit the consummation of the Merger.
 
          (g) Opinion of Counsel.  AMCORE shall have received an opinion of
     Schiff Hardin & Waite, counsel for Midwest, dated as of the Closing Date,
     and in form and substance satisfactory to AMCORE and its counsel as
     follows:
 
             (i) Midwest is a corporation validly existing under the laws of the
        State of Wisconsin and has the corporate power to own all of its
        properties and assets and to carry on its business as it is now being
        conducted as described in the Registration Statement. Midwest is a
        registered savings and loan holding company under the Home Owners' Loan
        Act.
 
             (ii) The Bank is validly existing as a savings association under
        the laws of the United States of America and has the corporate power to
        own all of its properties and assets and carry on its business as now
        being conducted as described in the Registration Statement.
 
             (iii) Each of the Midwest Subsidiaries (other than the Bank) is a
        corporation validly existing under the laws of its respective
        jurisdiction of incorporation and each has the corporate power to own
        all of its properties and to carry on its business as it is now being
        conducted as described in the Registration Statement.
 
             (iv) The authorized capitalization of Midwest consists of (i)
        4,000,000 shares of common stock, $.01 par value per share, of which
        1,627,674 shares are issued and outstanding and 442,324 shares are held
        in the treasury; and (ii) 1,000,000 shares of preferred stock, $.01 par
        value per share, of which no shares are issued and outstanding. All such
        issued shares of common stock have been duly authorized and validly
        issued and are fully paid and nonassessable (except with respect to
        assessability as provided in Section 180.0622(2)(b) of the WBCL). To the
        best of counsel's knowledge, except for the rights of AMCORE under this
        Agreement and the Plan of Merger and except for the Outstanding Midwest
        Options, there are no options, agreements, contracts or other rights in
        existence to purchase or acquire from Midwest any shares of capital
        stock of Midwest.
 
             (v) Midwest has full corporate power and authority to execute and
        deliver the Agreement and the Plan of Merger and to consummate the
        transactions contemplated hereby and thereby. The execution and delivery
        and performance of the Agreement and the Plan of Merger and the
        consummation of the transactions contemplated hereby and thereby have
        been duly and validly
 
                                      II-33
<PAGE>   101
 
        approved by the Board of Directors of Midwest, and in the case of the
        Agreement and Plan of Merger, by the shareholders of Midwest, these
        being the only corporate authorizations required under the Articles of
        Incorporation and Bylaws of Midwest and the WBCL. The Agreement and the
        Plan of Merger have been duly and validly executed and delivered by
        Midwest and constitute valid and binding obligations of Midwest,
        enforceable against Midwest in accordance with their respective terms.
 
             (vi) The execution, delivery and performance by Midwest of the
        Agreement and the Plan of Merger does not violate the Articles of
        Incorporation or Bylaws of Midwest.
 
             (vii) No consents or approvals of, or filings or registrations
        with, any Governmental Entity are necessary in connection with the
        execution and delivery by Midwest of the Agreement and the Plan of
        Merger and the consummation by Midwest of the Merger and the other
        transactions contemplated thereby that have not been received or
        obtained as of the date hereof, except where the failure to obtain such
        consent or approval or to make such filing or registration will not have
        or be reasonably likely to have a Material Adverse Effect on Midwest.
 
             (viii) To the best of counsel's knowledge, there are no actions,
        suits or proceedings, pending or threatened against or affecting Midwest
        or the Midwest Subsidiaries, at law or in equity or before or by any
        governmental department, commission, board, bureau, agency or
        instrumentality, or before any arbitrator of any kind which, in the
        opinion of counsel, based upon such knowledge, if the relief sought in
        the pleadings in such actions, suits and proceedings were granted or if
        the threatened claims were accrued in full, are likely to have a
        Material Adverse Effect on Midwest.
 
     In rendering its opinion, such counsel may rely as to matters of fact upon
such certificates of the officers of Midwest or Midwest Subsidiaries,
governmental officials and, with respect to paragraph (v) above, certificates of
third parties specified in its opinion, as such counsel deems appropriate. Such
counsel need express no opinion as to the adequacy of the Registration Statement
or Proxy Statement/Prospectus.
 
          (h) No Adverse Changes.  Between the date of this Agreement and the
     Closing Date, the business of Midwest and the Bank, taken as a whole, shall
     have been conducted in the ordinary course consistent with in all respects
     prudent banking practices, and there shall not have occurred any material
     adverse change or any condition, event, circumstance, fact or occurrence
     (other than general economic or competitive conditions), other than as
     provided in this Agreement, that may reasonably be expected to result in a
     material adverse change in the business, properties, financial condition,
     loan portfolio, operations or prospects of Midwest or the Bank, considered
     as a whole. Neither Midwest nor the Bank, taken as a whole, shall have any
     contingent liabilities outside the ordinary course of business.
 
          (i) Consents.  Midwest and the Bank shall have obtained all such
     written consents, permissions and approvals as required under any
     agreements, contracts, appointments, indentures, plans, trusts or other
     arrangements with third parties required to effect the transactions
     contemplated by this Agreement and the Plan of Merger.
 
          (j) Dissenting Shareholders.  The holders of not more than three
     percent of the Midwest Shares shall have given written demand for
     dissenter's rights in accordance with the WBCL.
 
          (k) Affiliate Letters; Shareholder Voting Agreements.  Not later than
     30 days following the date of execution of this Agreement, AMCORE shall
     have received letters, substantially in the form attached hereto as Exhibit
     C, from each of the directors, principal officers and holders of five
     percent (5%) or more of the outstanding shares of the Midwest Common Stock
     (except for any holders of five percent (5%) or more of the outstanding
     shares of Midwest Common Stock from whom Midwest, despite its best efforts,
     was unable to obtain such letters) and from any person who, in the opinion
     of counsel for Midwest, may be deemed to be "affiliates" with the meaning
     of Rule 145 under the Securities Act or SEC Staff Accounting Bulletin No.
     65, pursuant to which such affiliates shall agree, among other things, not
     to make any sale, transfer or other disposition of (a) shares of capital
     stock of Midwest or AMCORE within 30 days prior to the Merger, and (b)
     shares of common stock of AMCORE issued in the Merger prior to the
     publication by AMCORE of the financial results of the combined operations
     of AMCORE and
 
                                      II-34
<PAGE>   102
 
     Midwest covering a period of at least 30 days after the Merger. On or
     before November 18, 1997, AMCORE shall have received a Shareholder Voting
     Agreement, in the form attached as Exhibit A, executed by each shareholder
     of the Company identified in Schedule 3.25 who is a director of Midwest,
     Gary E. Wegner and Scott D. Huedepohl.
 
          (l) Other Documents.  AMCORE shall have received at the Closing all
     such other documents, certificates or instruments as it may have reasonably
     requested evidencing compliance by Midwest with the terms of this Agreement
     and the Plan of Merger.
 
          (m) Updated Statements.  Midwest shall have provided to AMCORE any
     information necessary to make the Representations and Warranties set forth
     in Article III true and correct as of the Closing Date (the "Midwest
     Updated Statements") and none of such Midwest Updated Statements shall
     reflect a material adverse change from the Midwest Representations and
     Warranties made as of the date of this Agreement.
 
          (n) Good Standing Certificates.  AMCORE shall have received statements
     from the appropriate officials of the State of Wisconsin, certifying to the
     effect that each of Midwest and its Subsidiaries is a corporation validly
     existing, in active status, in good standing or the like, and a certificate
     of existence from the Office of Thrift Supervision stating that the Bank is
     validly existing under the laws of the United States, each dated within
     fifteen (15) business days prior to the Closing Date.
 
          (o) Accountant's Letter.  Midwest shall have caused to be delivered to
     AMCORE letters from the Midwest's independent public accountants, as
     provided in Section 5.20 hereof, dated the date on which the Registration
     Statement or last amendment thereto shall become effective, and dated the
     date of the Closing, and addressed to AMCORE and Midwest, with respect to
     Midwest's consolidated financial position and results of operation,
     reasonably customary in form, scope, and substance for letters delivered by
     independent public accountants in connection with the information of
     Midwest contained in the Registration Statement and the other matters
     contemplated by AICPA Statement No. 72 and customarily included in comfort
     letters relating to transactions similar to those contemplated by the
     Agreement and the Plan of Merger.
 
          (p) 1997 Audited Financial Statements.  If the Closing Date shall
     occur on or after February 15, 1998, Midwest shall have delivered to AMCORE
     audited consolidated financial statements as of and for the fiscal year
     ended December 31, 1997, that (i) are prepared in accordance with GAAP
     consistently applied, (ii) fairly reflect the financial positions of
     Midwest and its Subsidiaries, as of such date, and the results of
     operations of Midwest and its Subsidiaries, for the period ended on such
     date, and (iii) reflect in accordance with GAAP consistently applied,
     adequate provision for, or reserves against, the possible loan losses of
     Midwest and its Subsidiaries.
 
     6.2 Conditions Precedent to Obligations of Midwest.  Unless the conditions
are waived by Midwest, all obligations of Midwest under this Agreement are
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions:
 
          (a) Representations and Warranties; Performance of Agreements.  The
     representations and warranties of AMCORE and Acquisition Corp. contained in
     Article IV of this Agreement, or in any documents, certificates, schedules
     or exhibits delivered by them, or on their behalf to Midwest pursuant to
     this Agreement shall be true and correct as of this date and shall be true
     and correct at the Closing as though made on and as of the Closing Date,
     and AMCORE and Acquisition Corp. shall have performed in all material
     respects all agreements herein required to be performed by them on or prior
     to the Closing.
 
          (b) Closing Certificate.  Midwest shall have received a certificate
     signed by the Chief Executive Officer of AMCORE, dated as of the Closing
     Date, certifying in such detail as Midwest may reasonably request, as to
     the fulfillment of the conditions to the obligations of Midwest as set
     forth in this Agreement and required to be fulfilled by AMCORE or
     Acquisition Corp. on or before the Closing.
 
          (c) Regulatory and Other Approvals.  AMCORE shall have obtained the
     approval of all appropriate regulatory entities of the transactions
     contemplated by this Agreement and the Plan of Merger; all
 
                                      II-35
<PAGE>   103
 
     required regulatory waiting periods shall have expired, and there shall be
     pending on the Closing Date no motion for rehearing or appeal from such
     approval or any suit or action seeking to enjoin the transaction provided
     for herein or to obtain substantial damages in respect of them.
 
          (d) Approval of Merger and Delivery of Agreement.  This Agreement, the
     Plan of Merger and the transactions contemplated therein shall have been
     approved by AMCORE, as the sole shareholder of Acquisition Corp., in
     accordance with applicable law and the Articles of Incorporation and Bylaws
     of Acquisition Corp., and the proper officers of AMCORE and Acquisition
     Corp. shall have executed and delivered to Midwest copies of this
     Agreement, the Plan of Merger and articles of merger, in form suitable for
     filing with the WDFI, and shall have executed and delivered all such other
     certificates, statements or other instruments as may be necessary or
     appropriate to effect such filings.
 
          (e) Effectiveness of the Registration Statement.  The Registration
     Statement shall have become effective with respect to the shares of common
     stock of AMCORE to be issued in the Merger, no stop order suspending the
     effectiveness of such Registration Statement shall have been issued, no
     proceeding for that purpose shall have been instituted or threatened, and
     all requests for additional information on the part of the SEC shall have
     been complied with to Midwest's satisfaction.
 
          (f) No Litigation with Respect to Transactions.  At the Closing Date,
     no suit, action, or proceeding shall be pending or overtly threatened
     before any court or other governmental agency by the federal or any state
     government in which it is or will be sought to restrain or prohibit the
     consummation of the Merger.
 
          (g) Opinion of Counsel.  AMCORE shall have received an opinion of
     Skadden, counsel for AMCORE, dated as of the Closing Date, and in form and
     substance satisfactory to Midwest and its counsel as follows.
 
             (i) AMCORE is a corporation validly existing and in good standing
        under the laws of the State of Nevada and has the corporate power to own
        all of its properties and assets and to carry on its business as it is
        now being conducted as described in the Registration Statement.
        Acquisition Corp. is a corporation duly organized and validly existing
        under the laws of the State of Wisconsin. AMCORE is a registered bank
        holding company under the BHCA.
 
             (ii) The shares of common stock of AMCORE deliverable pursuant to
        this Agreement and the Plan of Merger will be duly authorized and, upon
        issuance and delivery in accordance with the terms hereof and thereof,
        will be validly issued, fully paid, and nonassessable, with no liability
        attaching to the ownership thereof arising from AMCORE. The Registration
        Statement shall have become effective by an order of the SEC, there
        shall have been no stop order issued or threatened by the SEC that
        suspends the effectiveness of such Registration Statement and no
        proceeding shall have been commenced, pending, or overtly threatened for
        such purpose. The AMCORE Common Stock to be issued in the Merger shall
        have been qualified or exempted under all applicable state securities or
        blue sky laws, and shall have been approved for listing on the Nasdaq
        National Market, subject to official notice of issuance thereof.
 
             (iii) AMCORE and Acquisition Corp. have full corporate power and
        authority to execute and deliver the Agreement and the Plan of Merger
        and to consummate the transactions contemplated hereby and thereby. The
        execution and delivery and performance of the Agreement and the Plan of
        Merger and the consummation of the transactions contemplated hereby and
        thereby have been duly and validly approved by the Board of Directors of
        AMCORE and Acquisition Corp., and, in the case of the Agreement and Plan
        of Merger, by AMCORE as the sole shareholder of Acquisition Corp., these
        being the only corporate authorizations required under the Articles of
        Incorporation and Bylaws of AMCORE and Acquisition Corp. and the WBCL.
        The Agreement and the Plan of Merger have been duly and validly executed
        and delivered by AMCORE and Acquisition Corp. and constitute valid and
        binding obligations of AMCORE and Acquisition Corp. enforceable against
        AMCORE and Acquisition Corp. in accordance with their respective terms.
 
                                      II-36
<PAGE>   104
 
             (iv) The execution, delivery and performance by AMCORE and
        Acquisition Corp. of the Agreement and the Plan of Merger does not
        violate the Articles of Incorporation or Bylaws of AMCORE or Acquisition
        Corp.
 
             (v) No consents or approvals of, or filings or registrations with,
        any Governmental Entity are necessary in connection with the execution
        and delivery by AMCORE or Acquisition Corp. of the Agreement and the
        Plan of Merger and the consummation by AMCORE and Acquisition Corp. of
        the Merger and the other transactions contemplated hereby and thereby,
        respectively, that have not been received or obtained as of the date
        hereof, except where the failure to obtain such consent or approval or
        to make such filing or registration will not have or be reasonably
        likely to have a Material Adverse Effect on AMCORE or Midwest.
 
     In rendering its opinion, such counsel may rely (i) as to matters of fact,
upon such certificates of the officers of AMCORE or the AMCORE Subsidiaries or
governmental officials as such counsel deems appropriate and (ii) as to matters
of law, upon such opinions of local counsel as such counsel deems appropriate.
 
          (h) Fairness Opinion.  Midwest shall have received from Edelman & Co.,
     Ltd. a fairness opinion, updating as of the date of mailing of the Proxy
     Statement/Prospectus the opinion delivered on the date of this Agreement
     and in form and substance reasonably satisfactory to Midwest, to the effect
     that the Exchange Ratio is fair, from a financial point of view, to the
     shareholders of Midwest.
 
          (i) Tax Opinion.  Midwest shall have received an opinion of their
     legal counsel, in form and substance reasonably satisfactory to it, dated
     as of the Effective Date, substantially to the effect that the Merger will
     constitute a tax free reorganization under Sections 368(a)(1)(A) and
     368(a)(2)(E) of the Code.
 
          (j) No Adverse Changes.  Between the date of this Agreement and the
     Closing Date, there shall not have occurred any material adverse change or
     any condition, event, circumstance, fact or occurrence (other than general
     economic or competitive conditions) that may reasonably be expected to
     result in a material adverse change in the business, properties, financial
     condition, loan portfolio, operations or prospects of AMCORE.
 
          (k) Other Documents.  Midwest shall have received at the Closing all
     such other documents, certificates or instruments as it may have reasonably
     requested evidencing compliance by AMCORE and Acquisition Corp. with the
     terms of this Agreement and the Plan of Merger.
 
          (l) Updated Statements.  AMCORE shall have provided to Midwest any
     information necessary to make the Representations and Warranties set forth
     in Article IV true and correct as of the Closing Date (the "AMCORE Updated
     Statements") and none of such AMCORE Updated Statements shall reflect a
     material adverse change from AMCORE Representations and Warranties made as
     of the date of this Agreement.
 
                                  ARTICLE VII
                      TERMINATION, EXPENSES AND AMENDMENT
 
     7.1 Termination.  This Agreement may be terminated prior to the Effective
Time:
 
          (a) at any time, whether before or after approval of the matters
     presented in connection with the Merger by the shareholders of Midwest, by
     written agreement between AMCORE and Midwest, if the Board of Directors of
     each so determines;
 
          (b) at any time, whether before or after approval of the matters
     presented in connection with the Merger by the shareholders of Midwest, by
     either the Board of Directors of Midwest or the Board of Directors of
     AMCORE and Acquisition Corp. if (i) any Governmental Entity that must grant
     a Requisite Regulatory Approval has denied approval of the Merger and such
     denial has become final and nonappealable or (ii) any Governmental Entity
     of competent jurisdiction shall have issued a final
 
                                      II-37
<PAGE>   105
 
     nonappealable order permanently enjoining or otherwise prohibiting the
     consummation of the transactions contemplated by this Agreement;
 
          (c) by either the Board of Directors of Midwest or the Board of
     Directors of AMCORE and Acquisition Corp. if the Merger shall not have been
     consummated on or before August 31, 1998, unless the failure of the Closing
     to occur by such date shall be due to the failure of the party seeking to
     terminate this Agreement to perform or observe the covenants and agreements
     of such party set forth herein;
 
          (d) by AMCORE if any approval of the shareholders of Midwest required
     for the consummation of the Merger shall not have been obtained by reason
     of the failure to obtain the required vote at a duly held meeting of
     shareholders or at any adjournment or postponement thereof;
 
          (e) by Midwest, if the Board shall determine that a Transaction
     Proposal constitutes a Superior Proposal and the Board shall have received
     a written opinion of its outside counsel that the failure to accept such
     Superior Proposal could reasonably be expected to result in a breach of the
     fiduciary duties of the Board under applicable law; provided, however, that
     Midwest may not terminate this Agreement pursuant to this clause (e)
     unless:
 
             (i) five (5) business days shall have elapsed after delivery to
        AMCORE of a written notice of such determination by such Board and,
        during such 5 business day period, Midwest shall have informed AMCORE of
        the material terms and conditions and financing arrangements of such
        Transaction Proposal and the identity of the person or group making such
        Transaction Proposal, and
 
             (ii) at the end of such 5 day business period, such Board shall
        continue reasonably to believe that such Transaction Proposal
        constitutes a Superior Proposal and promptly thereafter Midwest shall
        enter into a definitive acquisition, merger or similar agreement to
        effect such Superior Proposal.
 
     Notwithstanding the foregoing, Midwest shall not have the right to
terminate this Agreement pursuant to this subsection (e) unless it has
simultaneously or previously paid the $1,000,000 fee owed to AMCORE pursuant to
Section 7.3(b) and confirms its obligation to reimburse AMCORE for its expenses
pursuant to Section 7.3(c).
 
          (f) by Midwest, by written notice to AMCORE, if
 
             (i) there exists any material breach or breaches of the
        representations and warranties of AMCORE made herein, and such breaches
        shall not have been remedied within thirty (30) days after receipt by
        AMCORE of notice in writing from Midwest, specifying the nature of such
        breaches and requesting that they be remedied; or
 
             (ii) AMCORE shall have failed to perform and comply with, in all
        material respects, its agreements and covenants hereunder and such
        failure to perform or comply shall not have been remedied within thirty
        (30) days after receipt by AMCORE of notice in writing from Midwest,
        specifying the nature of such failure and requesting that it be
        remedied;
 
          (g) by AMCORE, by written notice to Midwest, if
 
             (i) there exists any material breach or breaches of the
        representations and warranties of Midwest made herein, and such breaches
        shall not have been remedied within thirty (30) days after receipt by
        Midwest of notice in writing from AMCORE, specifying the nature of such
        breaches and requesting that they be remedied;
 
             (ii) Midwest shall have failed to perform and comply with, in all
        material respects, its agreements and covenants hereunder and such
        failure to perform or comply shall not have been remedied within thirty
        (30) days after receipt by Midwest of notice in writing from AMCORE,
        specifying the nature of such failure and requesting that it be
        remedied;
 
             (iii) the Board of Directors of Midwest or any committee thereof:
 
                                      II-38
<PAGE>   106
 
                (A) shall withdraw or modify in any manner adverse to AMCORE its
           approval or recommendation of this Agreement, the Plan of Merger or
           the Merger,
 
                (B) shall fail to reaffirm such approval or recommendation upon
           AMCORE's request,
 
                (C) shall approve or recommend any Transaction Proposal, or
           shall not include its recommendation of this Agreement, the Plan of
           Merger or the Merger in the Proxy Statement/Prospectus (as defined in
           Section 3.5 hereof); or
 
                (D) shall resolve to take any of the actions specified in clause
           (A), (B) or (C); or
 
             (iv) the condition set forth in Section 6.2(h) hereof shall not
        have been fulfilled and Midwest shall not have waived such condition.
 
          (h) By written notice from AMCORE to Midwest delivered not later than
     forty-five (45) days of the date hereof, if AMCORE's good faith estimate of
     Remediation Costs based upon the Environmental Audits is $700,000 or more;
     provided, that AMCORE shall, upon such notice, provide Midwest with full
     and complete access to the Environmental Audits.
 
     7.2 Effect of Termination.  Subject to Section 7.3, in the event of
termination of this Agreement by Midwest or AMCORE pursuant to Section 7.1 there
shall be no liability on the part of either Midwest or AMCORE or their
respective officers or directors hereunder, except that Section 5.2(b), Section
5.17, Section 7.2 and Section 7.3 shall survive the termination.
 
     7.3 Termination Fee; Expenses.
 
          (a) Termination Fee Upon Breach or Willful Breach.  If this Agreement
     is terminated at such time that this Agreement is terminable pursuant to
     one (but not both) of (A) Section 7.1(f)(i) or (ii), or (B) Section
     7.1(g)(i) or (ii), then the breaching party shall promptly (but no later
     than five (5) business days after receipt of notice from the non-breaching
     party) pay to the non-breaching party in cash an amount equal to all
     out-of-pocket expenses incurred in connection with the transactions
     contemplated by this Agreement and the Plan of Merger (including, but not
     limited to, investment banker fees, attorneys' fees and any internal costs
     of due diligence); provided, however, that the amount of expenses which
     shall be so reimbursed shall not exceed $250,000; and provided, further,
     that, if this Agreement is terminated by a party as a result of a willful
     breach by the other party, the non-breaching party may pursue any remedies
     available to it at law or in equity and shall, in addition to its
     out-of-pocket expenses (which shall be paid as specified above and shall
     not be limited to $250,000), be entitled to recover such additional amounts
     as such non-breaching party may be entitled to receive at law or in equity.
 
          (b) Alternative Termination Fee.  In the event that this Agreement is
     terminated (i) (A) by Midwest as provided in Section 7.1(e), (B) by AMCORE
     as provided in Section 7.1(g)(ii) as a result of Midwest's breach of
     Section 5.3, (C) by AMCORE as provided in Section 7.1(d) (following a
     failure of Midwest's shareholders to grant the necessary approval in
     Section 3.30), or as provided in Section 7.1(g)(iii) or (D) by AMCORE as
     provided in Section 7.1(g)(iv), and (ii) prior to, or contemporaneously
     with, such termination, there is a Transaction Proposal and prior to, or
     within 12 months of, such termination, Midwest shall have entered into a
     definitive agreement relating to such Transaction Proposal, then Midwest
     shall pay to AMCORE, in immediately available funds, an amount equal to
     $1,000,000 within ten (10) business days after demand for payment by AMCORE
     following such termination.
 
          (c) Expenses.  In addition to any termination fee payable pursuant to
     paragraph (b) of this Section 7.3, the party paying such termination fee
     shall also be responsible for the other party's out-of-pocket expenses
     incurred in connection with the transactions contemplated by this Agreement
     and the Plan of Merger (including, but not limited to, investment banker's
     fees, attorneys' fees and any internal costs of due diligence); provided,
     however, that the amount of expenses which shall be so reimbursed shall not
     exceed $250,000. In the event that this Agreement shall be terminated and
     no termination fee is payable pursuant to paragraph (a) or (b) of this
     Section 7.3, each party shall bear its own expenses. If one party fails to
     promptly pay to any other party any fee due hereunder, the defaulting party
     shall pay the
 
                                      II-39
<PAGE>   107
 
     costs and expenses (including legal fees and expenses) in connection with
     any action, including the filing of any lawsuit or other legal action,
     taken to collect payment, together with interest on the amount of any
     unpaid fee at the publicly announced prime rate as published in the Wall
     Street Journal (Midwest Edition) from the date such fee was required to be
     paid.
 
     7.4 Amendment.  Subject to compliance with applicable law, this Agreement
may be amended by the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after approval of the
matters presented in connection with the Merger by the shareholders of Midwest;
provided, however, that after any approval of the transactions contemplated by
this Agreement by the shareholders of Midwest, there may not be, without further
approval of such shareholders, any amendment of this Agreement that changes the
amount or the form of the consideration to be delivered to the holders of
Midwest Common Stock hereunder other than as contemplated by this Agreement.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
 
     7.5 Extension; Waiver.  At any time prior to the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, and (c) waive compliance
with any of the agreements or conditions contained herein; provided, however,
that after any approval of the transactions contemplated by this Agreement by
the shareholders of Midwest, there may not be, without further approval of such
shareholders, any extension or waiver of this Agreement or any portion thereof
which reduces the amount or changes the form of the consideration to be
delivered to the holders of Midwest Common Stock hereunder other than as
contemplated by this Agreement. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party, but such extension or waiver or
failure to insist on strict compliance with an obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
 
                                  ARTICLE VIII
                               GENERAL PROVISIONS
 
     8.1 Non-survival of Representations, Warranties and Agreements.  None of
the representations, warranties, covenants and agreements in this Agreement or
the Plan of Merger (or in any instrument delivered pursuant to this Agreement,
which shall terminate in accordance with its terms) shall survive the Effective
Time, except for those covenants and agreements contained herein and therein
which by their terms apply in whole or in part after the Effective Time. Without
by implication limiting the foregoing, none of the directors or officers of the
parties hereto shall have any liability for any of the representations,
warranties, covenants and agreements contained herein.
 
     8.2 Notices.  All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation), mailed by registered or certified mail (return receipt requested)
or delivered by an express courier (with confirmation) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
 
     If to AMCORE or Acquisition Corp. addressed to:
                       Mr. John R. Hecht
                       Senior Vice President
                       AMCORE Financial, Inc.
                       501 Seventh Street
                       Rockford, Illinois 61104
                       Telephone: (815) 961-7171
                       Facsimile: (815) 961-3443
 
                                      II-40
<PAGE>   108
 
     with a copy to:
                       Mr. William R. Kunkel, Esq.
                       Skadden, Arps, Slate, Meagher & Flom (Illinois)
                       333 West Wacker Drive
                       Suite 2100
                       Chicago, Illinois 60606
                       Telephone: (312) 407-0700
                       Facsimile: (312) 407-0411
 
     If to Midwest, addressed to:
                       Mr. Gary E. Wegner
                       President and Chief Executive Officer
                       Midwest Federal Financial Corp.
                       1159 Eighth Street
                       Baraboo, Wisconsin 53913-0450
                       Telephone: (608) 356-7771
                       Facsimile: (608) 356-7869
 
     with a copy to:
                       Christopher J. Zinski, Esq.
                       Schiff Hardin & Waite
                       7200 Sears Tower
                       Chicago, Illinois 60606
                       Telephone: (312) 258-5548
                       Facsimile: (312 ) 258-5600
 
     8.3 Interpretation.  When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a section of or
exhibit or schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." No provision of this Agreement shall be construed to require
Midwest, the Midwest Subsidiaries, AMCORE or AMCORE Subsidiaries or affiliates
to take any action which would violate any applicable law, rule or regulation.
 
     8.4 Counterparts.  This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement and shall become effective
when counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
 
     8.5 Entire Agreement.  This Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties hereto with respect to the subject matter hereof.
 
     8.6 Governing Law.  This Agreement and the exhibits attached hereto shall
be governed and construed in accordance with the laws of the State of Wisconsin,
without regard to any applicable conflicts of law.
 
     8.7 Publicity.  Except as otherwise required by applicable law or the rules
of The Nasdaq Stock Market or any other applicable securities exchange, neither
Midwest nor AMCORE shall, nor shall Midwest or AMCORE permit the Midwest
Subsidiaries or AMCORE Subsidiaries, respectively, to issue or cause the
publication of any press release or other public announcement with respect to,
or otherwise make any public statement concerning, the transactions contemplated
by this Agreement without the consent of the other party, which consent shall
not be unreasonably withheld.
 
     8.8 Assignment; Third Party Beneficiaries.  Neither this Agreement nor any
of the rights, interests or obligations of the parties under this Agreement
shall be assigned by any of the parties hereto (whether by
 
                                      II-41
<PAGE>   109
 
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns. Except as otherwise specifically provided in this
Section 8.9 and in Section 5.8, this Agreement (including the documents and
instruments referred to herein) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
 
                                      II-42
<PAGE>   110
 
     IN WITNESS WHEREOF, AMCORE, Acquisition Corp. and Midwest have executed
this Agreement as of the day and year hereinabove first written.
 
                                          AMCORE FINANCIAL, INC.
 
                                          By: /s/  JOHN R. HECHT
                                            Name: John R. Hecht
                                            Title: Senior Vice President
 
                                          MF ACQUISITION CORP.
 
                                          By: /s/  JOHN R. HECHT
                                            Name: John R. Hecht
                                            Title: Senior Vice President
 
                                          MIDWEST FEDERAL FINANCIAL CORP.
 
                                          By: /s/  GARY E. WEGNER
                                            Name: Gary E. Wegner
                                            Title: President and Chief Executive
                                              Officer
 
                                      II-43
<PAGE>   111
 
                                                                       EXHIBIT A
 
                          SHAREHOLDER VOTING AGREEMENT
 
     SHAREHOLDER VOTING AGREEMENT, dated as of    --   , 1997 (this
"Agreement "), by and among the undersigned (hereinafter the "Shareholder "),
Midwest Federal Financial Corp., a Wisconsin corporation (the "Company"), and
AMCORE Financial, Inc., a Nevada corporation ("AMCORE ").
 
     WHEREAS, AMCORE, MF Acquisition Corp., a Wisconsin corporation and wholly
owned subsidiary of AMCORE ("Newco"), and the Company, have, contemporaneously
with the execution of this Agreement, entered into an Agreement and Plan of
Reorganization, dated as of the date hereof (the "Merger Agreement "), which
provides, among other things, that Newco shall be merged with and into the
Company pursuant to the merger contemplated by the Merger Agreement (the
"Merger "),
 
     WHEREAS, as of the date hereof, the Shareholder is the Beneficial Owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act ")) of    --   shares of common stock, no par value, of the
Company (the "Company Common Stock") and, if applicable,    --   options to
purchase shares of Company Common Stock under the Midwest Option Plans (as
defined in the Merger Agreement) ("Company Options "), and
 
     WHEREAS, as a condition to the willingness of AMCORE to enter into the
Merger Agreement, AMCORE has required that the Shareholder and the Company
agree, and in order to induce AMCORE to enter into the Merger Agreement, the
Shareholder and the Company have agreed, to enter into this Agreement.
 
     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
 
                                     II-A-1
<PAGE>   112
 
                                   ARTICLE I
 
                                VOTING OF SHARES
 
     Section I.1 Voting Agreement.  The Shareholder hereby agrees to: (a)
appear, or cause the holder of record on the applicable record date (the "Record
Holder ") to appear, at any annual or special meeting of shareholders of the
Company for the purpose of obtaining a quorum; (b) vote, or cause the Record
Holder to vote, in person or by proxy, all of the shares of the Company Common
Stock owned or with respect to which the Shareholder has or shares voting power
and shares of Company Common Stock which shall, or with respect to which voting
power shall, hereafter be acquired by the Shareholder (collectively, the
"Shares ") in favor of the Merger, the Merger Agreement (as in effect on the
date hereof) and the transactions contemplated by the Merger Agreement; (c)
vote, or cause the Record Holder to vote, the Shares against any action,
proposal or agreement that could reasonably be expected to result in a breach in
any material respect of any covenant, representation or warranty or any other
obligation of the Company under the Merger Agreement, or which could reasonably
be expected to result in any of the conditions to the Company's obligations
under the Merger Agreement not being fulfilled; and (d) vote, or cause the
Record Holder to vote, such Shares against: (i) any extraordinary corporate
transaction (other than the Merger), such as a merger, consolidation, business
combination, reorganization, recapitalization or liquidation involving the
Company or any of its subsidiaries; and (ii) a sale or transfer of a material
amount of the assets of the Company or any of its subsidiaries (each of the
events described in (i) and (ii) above as an "Alternative Transaction"). The
Shareholder acknowledges receipt and review of a copy of the Merger Agreement.
Notwithstanding any other provision of this Article I, the provisions of such
Article I shall not prohibit or restrain the Shareholder from complying with his
fiduciary obligations as a director or officer of the Company.
 
     Section I.2 No Ownership Interest.  Nothing contained in this Agreement
shall be deemed to vest in AMCORE any direct or indirect ownership or incidence
of ownership of or with respect to any Shares. All rights, ownership, and
economic benefits of and relating to the Shares or Company Options shall remain
and belong to the Shareholder, and AMCORE shall have no authority to manage,
direct, superintend, restrict, regulate, govern, or administer any of the
policies or operations of the Company or exercise any power or authority to
direct the Shareholder in the voting of any of the Shares, except as otherwise
expressly provided herein, or the performance of its duties or responsibilities
as a shareholder of the Company.
 
     Section I.3 Evaluation of Investment.  The Shareholder, by reason of its
knowledge and experience in financial and business matters, believes itself
capable of evaluating the merits and risks of the investment in shares of common
stock, par value $0.22 per share, of AMCORE ("AMCORE Common Stock"),
contemplated by the Merger Agreement.
 
     Section I.4 Documents Delivered.  The Shareholder acknowledges receipt of
copies of the following documents:
 
          (a) Merger Agreement and all exhibits thereto;
 
          (b) AMCORE's 1996 Annual Report (including Annual Report on Form 10-K
     for the year ended December 31, 1996);
 
          (c) AMCORE's Proxy Statement dated March 27, 1997; and
 
          (d) AMCORE's Quarterly Report for the quarter ended September 30, 1997
     (including Report on Form 10-Q).
 
     Section I.5 Investment Purpose.  The Shareholder hereby represents,
warrants, and agrees that it is acquiring the shares of AMCORE Common Stock
pursuant to the Merger Agreement solely for its own account, for investment, and
not with a view to the distribution or resale thereof.
 
     Section I.6 No Inconsistent Agreements.  The Shareholder hereby covenants
and agrees that, except as contemplated by this Agreement and the Merger
Agreement, the Shareholder shall not enter into any voting agreement or grant a
proxy or power of attorney with respect to the Shares which is inconsistent with
this Agreement.
 
                                     II-A-2
<PAGE>   113
 
                                   ARTICLE II
 
                            RESTRICTIONS ON TRANSFER
 
     Section II.1 Transfer of Title.  (a) The Shareholder hereby covenants and
agrees that the Shareholder will not, prior to the termination of this
Agreement, either directly or indirectly, offer, agree or otherwise sell,
assign, pledge, hypothecate, transfer, exchange, or dispose of any Shares or
Company Options or any other securities or rights convertible into or
exchangeable for shares of Company Common Stock, owned either directly or
indirectly by the Shareholder or with respect to which the Shareholder has the
power of disposition, whether now or hereafter acquired, other than pursuant to
the Merger, without the prior written consent of AMCORE.
 
          (b) The Shareholder hereby agrees and consents to the entry of stop
     transfer instructions with the Company against the transfer of any Shares
     consistent with the terms of Section 2.1(a).
 
                                  ARTICLE III
 
               REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
 
     The Shareholder hereby represents and warrants to AMCORE as follows:
 
     Section III.1 Authority Relative to This Agreement.  The Shareholder is
competent to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by the Shareholder and,
assuming the due authorization, execution and delivery by AMCORE and the
Company, constitutes a legal, valid and binding obligation of the Shareholder,
enforceable against the Shareholder in accordance with its terms except that (i)
the enforceability hereof may be subject to applicable bankruptcy, insolvency or
other similar laws, now or hereinafter in effect affecting creditors' rights
generally and (ii) the availability of the remedy of specific performance or
injunctive or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court before which any
proceeding therefor may be brought.
 
     Section III.2 No Conflict.  The execution and delivery of this Agreement by
the Shareholder does not, and the performance of this Agreement by the
Shareholder shall not result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the Shares pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Shareholder is a party or by which the Shareholder or the Shares or
Company Options are bound or affected, except, in the case of each of the
foregoing, for any such conflicts, violations, breaches, defaults or other
occurrences which would not prevent or delay the performance of the Shareholder
of its obligations under this Agreement.
 
     Section III.3 Title to the Shares.  The Shares held by the Shareholder are
owned free and clear of all security interests, liens, claims, pledges, options,
rights of first refusal, agreements, limitations on the Shareholder's voting
rights, charges and other encumbrances of any nature whatsoever and the
Shareholder has not appointed or granted any proxy, which appointment or grant
is still effective, with respect to the Shares.
 
                                   ARTICLE IV
 
                                 MISCELLANEOUS
 
     Section IV.1 Termination.  This Agreement shall terminate upon the earliest
to occur of (a) the termination of the Merger Agreement or (b) the Effective
Time (as defined in the Merger Agreement).
 
     Section IV.2 Enforcement of Agreement.  The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its
 
                                     II-A-3
<PAGE>   114
 
specified terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to specific performance of the terms and provisions hereof in
addition to any other remedy to which they are entitled at law or in equity.
 
     Section IV.3 Successors and Affiliates.  This Agreement shall inure to the
benefit of and shall be binding upon the parties hereto and their respective
heirs, legal representatives and assigns. If the Shareholder shall acquire
ownership of, or voting power with respect to, any additional Shares in any
manner, whether by the exercise of any Company Options or any securities or
rights convertible into or exchangeable for shares of Company Common Stock,
operation of law or otherwise, such Shares shall be held subject to all of the
terms and provisions of this Agreement. Without limiting the foregoing, the
Shareholder specifically agrees that the obligations of the Shareholder
hereunder shall not be terminated by operation of law, whether by death or
incapacity of the Shareholder or otherwise.
 
     Section IV.4 Entire Agreement.  This Agreement constitutes the entire
agreement among AMCORE, the Company and the Shareholder with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, among AMCORE, the Company and the Shareholder with
respect to the subject matter hereof.
 
     Section IV.5 Captions and Counterparts.  The captions in this Agreement are
for convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement. This
Agreement may be executed in several counterparts, each of which shall
constitute one and the same instrument.
 
     Section IV.6 Amendment.  This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
 
     Section IV.7 Waivers.  Except as provided in this Agreement, no action
taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any other
provision hereunder.
 
     Section IV.8 Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in a mutually acceptable manner in order that
the terms of this Agreement remain as originally contemplated to the fullest
extent possible.
 
     Section IV.9 Notices.  All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made and shall be effective upon receipt, if delivered personally, mailed by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like changes of address) or sent by electronic
transmission (provided that a confirmation copy is sent by another approved
means) to the telecopier number specified below:
 
     If to Shareholder:
                       at the address set forth on the signature page hereto
 
     If to AMCORE or Newco:
                       Mr. John R. Hecht
                       Senior Vice President
                       AMCORE Financial, Inc.
                       501 Seventh Street
                       Rockford, Illinois 61104
                       Telecopy No. (815) 961-3443
 
                                     II-A-4
<PAGE>   115
 
     with a copy to:
                       William R. Kunkel, Esq.
                       Skadden, Arps, Slate,
                       Meagher & Flom (Illinois)
                       333 West Wacker Drive
                       Suite 2100
                       Chicago, Illinois 60606-1285
                       Telecopy No. (312) 407-0411
 
     If to the Company:
                       Gary E. Wegner
                       President and Chief Executive Officer
                       Midwest Federal Financial Corp.
                       1159 Eighth Street
                       Baraboo, Wisconsin 53913-0450
                       Telecopy No. (608) 356-7869
 
     with a copy to:
                       Christopher J. Zinski, Esq.
                       Schiff Hardin & Waite
                       7200 Sears Tower
                       Chicago, Illinois 60606-6473
                       Telecopy No. (312) 258-5600
 
     Section IV.10 Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
 
                                     II-A-5
<PAGE>   116
 
     IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement
to be duly executed on the date hereof.
 
                                          AMCORE FINANCIAL, INC.
 
                                          By:
                                          --------------------------------------
                                          Name: John R. Hecht
                                          Title: Senior Vice President
 
                                          MIDWEST FEDERAL FINANCIAL CORP.
 
                                          By:
                                          --------------------------------------
                                          Name: Gary E. Wegner
                                          Title: President and Chief Executive
                                          Officer
 
                                          --------------------------------------
                                          Name: [Shareholder]
                                          Title:
                                          Address:
                                          --------------------------------------
 
                                               ---------------------------------
 
                                               ---------------------------------
 
                                     II-A-6
<PAGE>   117
 
                                                                       EXHIBIT B
 
                                 PLAN OF MERGER
                                    BETWEEN
                           MF ACQUISITION CORPORATION
                                      AND
                        MIDWEST FEDERAL FINANCIAL CORP.
 
     PLAN OF MERGER (this "Plan"), dated as of November 11, 1997, by and between
MF Acquisition Corp., a Wisconsin corporation ("Acquisition Corp.") and
wholly-owned subsidiary of AMCORE Financial, Inc., a Nevada corporation (the
"AMCORE"), and Midwest Federal Financial Corp., a Wisconsin corporation
("Midwest").
 
     WHEREAS, AMCORE and Midwest have entered into an Agreement and Plan of
Reorganization, dated November 11, 1997 (the "Agreement"), which sets forth the
terms of the merger by which Acquisition Corp. will merge with and into Midwest
(the "Merger"), the separate corporate existence of Acquisition Corp. will
cease, and Midwest will be the surviving corporation (as such, the "Surviving
Corporation") in the Merger;
 
     WHEREAS, Acquisition Corp. and Midwest have determined to enter into this
Plan, pursuant to Section 1.1 of the Agreement; and
 
     WHEREAS, this Plan provides for the terms and conditions of the Merger and
the mode for carrying the Merger into effect.
 
     NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, the parties hereto covenant and agree as follows.
 
                                   ARTICLE I
 
                                   THE MERGER
 
     1.1 The Merger.  Subject to the terms and conditions of the Agreement and
this Plan, and in accordance with the Wisconsin Business Corporation Law (the
"WBCL"), at the Effective Time (as defined in Section 1.2 hereof), Acquisition
Corp. shall merge with and into Midwest, and Midwest shall survive the Merger
and shall continue its corporate existence under the laws of the State of
Wisconsin.
 
     1.2 Effective Date.  The Merger shall be effective on a date, mutually
agreed upon by the parties and specified in articles of merger to be filed with
the Wisconsin Department of Financial Institutions (the "Effective Date"), which
date shall be the date of filing of properly executed articles of merger with
the Wisconsin Department of Financial Institutions (the "WDFI") in the manner
provided for by the WBCL. The term "Effective Time" shall be the date and time
when the Merger becomes effective, in accordance with this Section 1.2.
 
     1.3 Effects of the Merger.  At and after the Effective Time, the Merger
shall have the effects set forth in Section 180.1106 of the WBCL.
 
     1.4 Effect on Capital Stock.
 
          (a) At the Effective Time, subject to Section 2.2, by virtue of the
     Merger and without any action on the part of Midwest, or the holder of any
     securities of Midwest, each share of common stock, $.01 par value per
     share, of Midwest (the "Midwest Common Stock") issued and outstanding
     immediately prior to the Effective Time (other than shares canceled
     pursuant to Section 1.4(c) and other than shares of Midwest Common Stock,
     the holders of which have validly demanded appraisal of such shares
     pursuant to Subchapter XIII of the WBCL and shall not have voted in favor
     or the Merger), shall be converted into the right to receive that number
     (the "Exchange Ratio") of fully paid and nonassessable shares of
 
                                     II-B-1
<PAGE>   118
 
     common stock of AMCORE, $0.22 par value per share (the "AMCORE Common
     Stock"), to be determined by the Exchange Ratio, which shall be as follows:
 
             (i) In the event the AMCORE Average Price is less than $20.425,
        each share of Midwest Common Stock shall be exchanged for and converted
        into a number of shares of AMCORE Common Stock determined by dividing
        (A) $23.980 by (B) the AMCORE Average Price.
 
             (ii) In the event the AMCORE Average Price is greater than or equal
        to $20.425 but less than or equal to $27.00, each share of Midwest
        Common Stock shall be exchanged for and converted into 1.174 shares of
        AMCORE Common Stock.
 
             (iii) In the event the AMCORE Average Price is greater than $27.00,
        each share of Midwest Common Stock shall be exchanged for and converted
        into a number of shares of AMCORE Common Stock determined by dividing
        (A) $31.700 by (B) the AMCORE Average Price.
 
     For purposes hereof, the "AMCORE Average Price" shall mean the average of
the daily closing prices of a share of AMCORE Common Stock as reported on the
Nasdaq National Market during the period of twenty (20) trading days ending at
the end of the third trading day immediately preceding the Shareholders Meeting
provided for in the Agreement.
 
          (b) All of the shares of Midwest Common Stock converted into AMCORE
     Common Stock pursuant to this Article I shall no longer be outstanding and
     shall automatically be canceled and shall cease to exist as of the
     Effective Time, and each certificate (each a "Midwest Common Stock
     Certificate") previously representing any such shares of Midwest Common
     Stock shall thereafter represent only the right to receive (i) a
     certificate representing the number of whole shares of AMCORE Common Stock
     (each an "AMCORE Common Stock Certificate") and (ii) cash in lieu of
     fractional shares into which the shares of Midwest Common Stock previously
     represented by such Midwest Common Stock Certificate have been converted
     pursuant to this Section 1.4 and Section 2.2. Midwest Common Stock
     Certificates previously representing shares of Midwest Common Stock shall
     be exchanged for AMCORE Common Stock Certificates representing whole shares
     of AMCORE Common Stock and cash in lieu of fractional shares issued in
     consideration therefor upon the surrender of such Midwest Common Stock
     Certificates in accordance with Section 2.2, without any interest thereon.
     No dividends declared with respect to shares of AMCORE Common Stock shall
     be paid to the holder of any unsurrendered Midwest Common Stock Certificate
     until such holder shall have surrendered such Midwest Common Stock
     Certificate, at which time the holder shall be paid the amount of any
     dividends, without interest, that theretofore became payable with respect
     to the shares evidenced by such Midwest Common Stock Certificate.
 
          (c) At the Effective Time, all shares of Midwest Common Stock that are
     owned by Midwest as treasury stock or owned by AMCORE (other than shares of
     Midwest Common Stock held directly or indirectly in trust accounts, managed
     accounts and the like or otherwise held in a fiduciary capacity that are
     beneficially owned by third parties (any such shares, and shares of AMCORE
     Common Stock which are similarly held, whether held directly or indirectly
     by AMCORE or Midwest, as the case may be, being referred to herein as
     "Trust Account Shares")), if any, shall be canceled and shall cease to
     exist, and no stock of AMCORE or other consideration shall be delivered in
     exchange therefor. All shares of AMCORE Common Stock that are owned by
     Midwest or any Midwest Subsidiary (other than Trust Account Shares) shall
     become treasury stock of AMCORE.
 
          (d) The 1,000 shares of common stock, $0.01 par value per share, of
     Acquisition Corp., issued and outstanding immediately prior to the
     Effective Time (the "Acquisition Corp. Common Stock"), shall be converted
     into a like number of shares of Common Stock of the Surviving Corporation
     at the Effective Time.
 
          (e) There shall be included with each share of AMCORE Common Stock
     issued in the Merger an equal number of any share purchase rights (the
     "Rights") issued pursuant to the Rights Agreement, dated as of February 21,
     1996 between AMCORE and Firstar Trust Company, as rights agent. All
 
                                     II-B-2
<PAGE>   119
 
     references in this Plan to AMCORE Common Stock to be received pursuant to
     the Merger should be deemed to include the Rights.
 
     1.5 Articles of Incorporation.  The Articles of Incorporation of Midwest,
as in effect immediately prior to the Effective Time, shall be, from and after
the Effective Time, the Articles of Incorporation of the Surviving Corporation,
until thereafter amended as provided therein and under Wisconsin law.
 
     1.6 Bylaws.  The Bylaws of Acquisition Corp., as in effect immediately
prior to the Effective Time, shall be, from and after the Effective Time, the
Bylaws of the Surviving Corporation, until thereafter amended as provided
therein and under Wisconsin law.
 
     1.7 Tax Consequences.  It is intended that the Merger shall constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), and that the Agreement and this Plan shall
constitute a "plan of reorganization" for purposes of Section 368 of the Code.
 
     1.8 Board of Directors of the Surviving Corporation.  The directors of
Acquisition Corp. immediately prior to the Effective Time shall be, from and
after the Effective Time, the directors of the Surviving Corporation to serve
until his or her death, resignation or removal or until his or her successor is
duly elected and qualified.
 
     1.9 The Closing.  The consummation of the transactions contemplated by the
Agreement and this Plan shall take place at a closing (the "Closing") to be held
upon the satisfaction or waiver of all of the conditions to the Merger set forth
in the Agreement and this Plan, which Closing shall take place at 10:00 a.m.,
local time, at the offices of Skadden, Arps, Slate, Meagher & Flom (Illinois)
(or at such other place upon which the parties may agree), on a date mutually
agreeable to the parties hereto but in no event later than the last business day
of the month in which all of the conditions to the Merger set forth in the
Agreement and in this Plan have been satisfied or waived (hereinafter referred
to as the "Closing Date").
 
                                   ARTICLE II
 
                            EXCHANGE OF CERTIFICATES
 
     2.1 AMCORE to Make Shares Available.  At or prior to the Effective Time,
AMCORE shall deposit, or shall cause to be deposited, with Firstar Trust Company
(the "Exchange Agent"), for the benefit of the holders of Midwest Common Stock
Certificates, for exchange in accordance with this Article II, AMCORE Common
Stock Certificates and cash in lieu of any fractional shares of AMCORE Common
Stock (such cash and AMCORE Common Stock Certificates, together with any
dividends or distributions with respect thereto paid after the Effective Time,
being hereinafter referred to as the "Conversion Fund") to be issued pursuant to
Section 1.4 and paid pursuant to Section2.2(a) in exchange for outstanding
shares of Midwest Common Stock.
 
     2.2 Exchange of Certificates.
 
          (a) As soon as practicable after the Effective Time, and in no event
     later than ten (10) business days thereafter, the Surviving Corporation
     shall cause the Exchange Agent to mail to each holder of record of one or
     more Midwest Common Stock Certificates a letter of transmittal (which shall
     specify that delivery shall be effected, and risk of loss and title to the
     Midwest Common Stock Certificates shall pass, only upon delivery of the
     Midwest Common Stock Certificates to the Exchange Agent) and instructions
     for use in effecting the surrender of the Midwest Common Stock Certificates
     in exchange for AMCORE Common Stock Certificates and any cash in lieu of
     fractional shares into which the shares of Midwest Common Stock represented
     by such Midwest Common Stock Certificate or Certificates shall have been
     converted pursuant to the Agreement and this Plan. Upon proper surrender of
     a Midwest Common Stock Certificate for exchange and cancellation to the
     Exchange Agent, together with such properly completed letter of
     transmittal, duly executed, the holder of such Midwest Common Stock
     Certificate shall be entitled to receive in exchange therefor, as
     applicable, (i) a AMCORE Common Stock Certificate representing that number
     of whole shares of AMCORE Common Stock to which such holder of Midwest
     Common Stock shall have become entitled pursuant to the provisions of
     Section 1.4
                                     II-B-3
<PAGE>   120
 
     hereof (after taking into account all shares of Midwest Common Stock then
     held by such holder), and (ii) a check representing the amount of any cash
     in lieu of fractional shares that such holder has the right to receive in
     respect of such Midwest Common Stock Certificate, and the Midwest Common
     Stock Certificate so surrendered shall forthwith be canceled. No interest
     will be paid or accrued on any cash in lieu of fractional shares payable to
     holders of Midwest Common Stock Certificates.
 
          (b) If any AMCORE Common Stock Certificate is to be issued in a name
     other than that in which the Midwest Common Stock Certificate surrendered
     in exchange therefor is registered, it shall be a condition of the issuance
     thereof that the Midwest Common Stock Certificate so surrendered shall be
     properly endorsed (or accompanied by an appropriate instrument of transfer)
     and otherwise in proper form for transfer, and that the person requesting
     such exchange shall pay to the Exchange Agent in advance any transfer or
     other taxes required by reason of the issuance of a AMCORE Common Stock
     Certificate in any name other than that of the registered holder of the
     Midwest Common Stock Certificate surrendered, or required for any other
     reason, or shall establish to the satisfaction of the Exchange Agent that
     such tax has been paid or is not payable.
 
          (c) After the Effective Time, there shall be no transfers on the stock
     transfer books of Midwest of the shares of Midwest Common Stock that were
     issued and outstanding immediately prior to the Effective Time. If, after
     the Effective Time, Midwest Common Stock Certificates are presented for
     transfer to the Exchange Agent, they shall be canceled and exchanged for
     AMCORE Common Stock Certificates representing shares of AMCORE Common Stock
     as provided in this Article II.
 
          (d) Notwithstanding anything to the contrary contained herein, no
     certificates or scrip representing fractional shares of AMCORE Common Stock
     shall be issued upon the surrender for exchange of Midwest Common Stock
     Certificates, no dividend or distribution with respect to AMCORE Common
     Stock shall be payable on or with respect to any fractional share, and such
     fractional share interests shall not entitle the owner thereof to vote or
     to any other rights of a shareholder of the Surviving Corporation. In lieu
     of the issuance of any such fractional share, the Surviving Corporation
     shall pay to each former shareholder of Midwest who otherwise would be
     entitled to receive such fractional share an amount in cash determined by
     multiplying (i) the average of the last sales price for AMCORE Common Stock
     as reported on Nasdaq National Market for the twenty (20) trading days
     immediately preceding the fifth trading day prior to the Closing Date by
     (ii) the fraction of a share (rounded to the nearest tenth when expressed
     as an Arabic number) of AMCORE Common Stock to which such holder would
     otherwise be entitled to receive pursuant to Section 1.4.
 
          (e) Any portion of the Conversion Fund that remains unclaimed by the
     shareholders of Midwest for twelve (12) months after the Effective Time
     shall be paid to the Surviving Corporation. Any shareholders of Midwest who
     have not theretofore complied with this Article II shall thereafter look
     only to the Surviving Corporation for the issuance of certificates
     representing shares of AMCORE Common Stock and the payment of cash in lieu
     of any fractional shares and any unpaid dividends and distributions on
     AMCORE Common Stock deliverable in respect of each share of Midwest Common
     Stock such shareholder holds as determined pursuant to the Agreement and
     this Plan, in each case, without any interest thereon. Notwithstanding the
     foregoing, none of AMCORE, Midwest, the Exchange Agent or any other person
     shall be liable to any former holder of shares of Midwest Common Stock, for
     any amount delivered in good faith to a public official pursuant to
     applicable abandoned property, escheat or similar laws.
 
          (f) In the event any Midwest Common Stock Certificate shall have been
     lost, stolen or destroyed, upon the making of an affidavit of that fact by
     the person claiming such Midwest Common Stock Certificate to be lost,
     stolen or destroyed and, if reasonably required by the Surviving
     Corporation, the posting by such person of a bond in such amount as the
     Exchange Agent may determine is reasonably necessary as indemnity against
     any claim that may be made against it with respect to such Midwest Common
     Stock Certificate, the Exchange Agent will issue in exchange for such lost,
     stolen or destroyed Midwest Common Stock Certificate a AMCORE Common Stock
     Certificate representing the shares of
 
                                     II-B-4
<PAGE>   121
 
     AMCORE Common Stock and any cash in lieu of fractional shares deliverable
     in respect thereof pursuant to the Agreement and this Plan.
 
                                  ARTICLE III
 
                             SHAREHOLDER APPROVALS
 
     3.1 AMCORE, as the owner of all of the outstanding shares of capital stock
of Acquisition Corp., has caused the Agreement, this Plan and the Merger to be
approved in accordance with the WBCL. Furthermore, Midwest shall call a meeting
of its shareholders to be held as soon as reasonably practicable for the purpose
of voting upon the Agreement and this Plan (the "Shareholders Meeting"), and,
subject to the terms and conditions of the Agreement and this Plan, Midwest
shall use reasonable efforts to cause such meeting to occur on the same date and
shall use all reasonable efforts to obtain shareholder approval of the
Agreement, this Plan and the Merger.
 
                                   ARTICLE IV
 
                               GENERAL PROVISIONS
 
     4.1 Termination.  Notwithstanding anything herein to the contrary, in the
event the Agreement shall have been terminated pursuant to Article VII thereof,
this Plan shall automatically terminate.
 
     4.2 Counterparts.  This Plan may be executed in counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.
 
     4.3 Governing Law.  This Plan shall be governed and construed in accordance
with the laws of the State of Wisconsin, without regard to any applicable
conflicts of law.
 
     4.4 Amendment.  Subject to compliance with applicable law, this Plan may be
amended by the parties hereto, by action taken or authorized by their respective
Boards of Directors, at any time before or after approval of the matters
presented in connection with the Merger by the shareholders of Acquisition Corp.
or Midwest, provided, however, that after any approval of the transactions
contemplated by this Plan by the respective shareholders of Acquisition Corp. or
Midwest, there may not be, without further approval of such shareholders, any
amendment of this Plan that changes the amount or the form of the consideration
to be delivered to the holders of Midwest Common Stock hereunder other than as
contemplated by the Agreement and this Plan. This Plan may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto.
 
                                     II-B-5
<PAGE>   122
 
     IN WITNESS WHEREOF, Acquisition Corp. and Midwest have caused this Plan to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
 
<TABLE>
<S>                                                         <C>
MF ACQUISITION CORP.                                        MIDWEST FEDERAL FINANCIAL CORP.
 
                By: /s/ JOHN R. HECHT                                      By: /s/ GARY E. WEGNER
- -----------------------------------------------------       -----------------------------------------------------
                 Name: John R. Hecht                                        Name: Gary E. Wegner
                  Title: President                              Title: President and Chief Executive Officer
</TABLE>
 
                                     II-B-6
<PAGE>   123
 
                                                                       EXHIBIT C
 
                           [FORM OF AFFILIATE LETTER]
 
                                        , 19
 
AMCORE Financial, Inc.
501 Seventh Street
Rockford, Illinois 61104
 
Midwest Federal Financial Corp.
1159 Eighth Street
Baraboo, Wisconsin 53913-0450
 
     RE: AGREEMENT AND PLAN OF REORGANIZATION, DATED           , 1997, AMONG
         AMCORE FINANCIAL, INC., MF ACQUISITION CORP. AND MIDWEST FEDERAL
         FINANCIAL CORP.
 
Ladies and Gentlemen:
 
     Reference is made to the Agreement and Plan of Reorganization (the
"Agreement") dated as of           , 1997, by and among AMCORE Financial, Inc.,
a Nevada corporation ("AMCORE"), MF Acquisition Corp., a Wisconsin corporation
and wholly-owned subsidiary of AMCORE ("Acquisition Corp.") and Midwest Federal
Financial Corp., a Wisconsin corporation ("Midwest"), providing for the merger
of Acquisition Corp. with and into Midwest (the "Merger"). Under the terms of
the Agreement, all of the outstanding shares of common stock of Midwest, $0.01
par value (the "Midwest Common Stock"), will be converted into shares of common
stock of AMCORE, $0.22 par value (the "AMCORE Common Stock").
 
     The undersigned has been advised that the issuance of shares of AMCORE
Common Stock to the undersigned in connection with the Merger will be registered
with the Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act"), on a Registration Statement on Form
S-4 and that such registration will not cover any resale or other disposition of
AMCORE Common Stock. The undersigned also has been advised that the undersigned
may be deemed to be an affiliate of the AMCORE within the meaning of Rule 145 of
the rules and regulations of the SEC under the Securities Act and that the
shares of AMCORE Common Stock acquired by the undersigned in connection with the
Merger may only be disposed of in conformity with the provisions hereof.
 
     The undersigned represents and warrants to and agrees with AMCORE,
Acquisition Corp. and Midwest as follows:
 
          (a) The undersigned shall not sell, exchange, transfer or otherwise
     dispose of any shares of AMCORE Common Stock received by the undersigned in
     the Merger except (i) at such time as a registration statement under the
     Securities Act covering sales of such AMCORE Common Stock by the
     undersigned is effective, (ii) within the limits, and in accordance with
     the applicable provisions of, Rule 145 under the Securities Act, or (iii)
     in a transaction which, in the opinion of counsel for the undersigned or as
     described in a "no-action" or interpretive letter from the staff of the
     SEC, in each case satisfactory to AMCORE, is not required to be registered
     under the Securities Act. The undersigned acknowledges and agrees that
     AMCORE is under no obligation to register the sale, transfer or other
     disposition of such AMCORE Common Stock by the undersigned or on his or her
     behalf, or to take any other action necessary to make an exemption from
     registration available.
 
          (b) Notwithstanding the foregoing, the undersigned shall not sell, or
     in any other way reduce his or her risk relative to, any shares of (i)
     Midwest Common Stock during the period commencing thirty (30) days prior to
     the effective date of the Merger, or (ii) AMCORE Common Stock received by
     the undersigned in the Merger during the period beginning with the
     effective date of the Merger and ending on the date on which financial
     results covering at least thirty days of post-Merger combined operations of
     Midwest and AMCORE have been published within the meaning of Section 201.01
     of the SEC's Codification of Financial Reporting Policies.
 
                                     II-C-1
<PAGE>   124
 
          (c) AMCORE shall not be bound by any attempted sale of any shares of
     AMCORE Common Stock by the undersigned, and AMCORE's transfer agent shall
     be given an appropriate stop transfer order and shall not be required to
     register any such attempted sale, unless the sale has been effected in
     compliance with the terms of this Letter Agreement. There will be placed on
     the certificate representing the shares of AMCORE Common Stock issued to
     the undersigned in the Merger, or any substitutions therefor, a restrictive
     legend stating in substance:
 
       "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS
       OF RULE 145(d), PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
       AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT
       COMPLIANCE WITH SAID RULE AND SECURITIES EXCHANGE COMMISSION ACCOUNTING
       RELEASES 130 AND 135."
 
          (d) The provisions of paragraphs (a), (b) and (c) hereof shall also
     apply to any securities that may be paid as a dividend or otherwise
     distributed on or with respect to, or issued or delivered in exchange or
     substitution for, shares of AMCORE Common Stock received in the Merger by
     the undersigned.
 
          [(e) The undersigned does not have any present plan or intention to
     sell or otherwise dispose of shares of AMCORE Common Stock received by the
     undersigned in the Merger. The undersigned undertakes to give prompt
     written notice to AMCORE, c/o John R. Hecht, Senior Vice President, if and
     as soon as, anytime after the date hereof and prior to or on the effective
     date of the Merger, the undersigned has a plan or intention to sell or
     otherwise dispose of shares of AMCORE Common Stock received by the
     undersigned in the Merger.] [To be included only in those letters furnished
     by 5% shareholders]
 
          (f) The undersigned has the capacity to enter into this Letter
     Agreement and to make the representations, warranties and agreements
     herein, and to perform the obligations of the undersigned hereunder. This
     Letter Agreement constitutes a valid and binding obligation of the
     undersigned, enforceable against the undersigned in accordance with its
     terms. This Letter Agreement shall be binding upon, and enforceable
     against, administrators, executors, personal representatives, donees,
     heirs, legatees and devisees of the undersigned, and any pledgee holding as
     collateral any shares of AMCORE Common Stock issued to the undersigned in
     the Merger, and any such person shall be required to acknowledge in writing
     the terms of this Letter Agreement.
 
     AMCORE agrees that the stop transfer instructions and legend referred to in
paragraph (c) hereof will be promptly removed upon (i) the sale, exchange,
transfer or other disposition of the AMCORE Common Stock received in the Merger
in full compliance with the provisions of this Letter Agreement or (ii) two
years after the effective date of the Merger, provided that, in the latter case,
the undersigned is not an affiliate of AMCORE and adequate current public
information with respect to AMCORE is then available, within the meaning of Rule
144(c) under the Securities Act. AMCORE agrees to publish the financial results
referred to in paragraph (b) above no later than the date of filing of the first
Quarterly Report on Form 10-Q or Annual Report on Form 10-K that, in the
ordinary course, would include financial results for at least a thirty-day
period following the effective date of the Merger. AMCORE further agrees that,
promptly after publication of the financial results referred to in paragraph (b)
above, the portion of such legend referencing Accounting Series Releases 130 and
135 shall be removed.
 
                                     II-C-2
<PAGE>   125
 
     This Letter Agreement shall terminate concurrently with any termination of
the Agreement in accordance with its terms.
                                          Very truly yours,
 
                                          --------------------------------------
                                          [Name]
 
Agreed to and accepted this  _________ day of  ___________________  , 1997.
 
AMCORE FINANCIAL, INC.
 
By:
 
Title:
 
MIDWEST FEDERAL FINANCIAL CORP.
 
By:
 
Title:
 
                                     II-C-3
<PAGE>   126
 
                                                                       EXHIBIT D
 
                           ARTICLES OF INCORPORATION
 
     The undersigned, an individual, does hereby act as incorporator in adopting
the following Articles of Incorporation for the purpose of organizing a business
corporation (hereinafter called the "Corporation") pursuant to the provisions of
the Wisconsin Business Corporation Law.
 
     FIRST: The Corporation is incorporated under the Wisconsin Business
Corporation Law.
 
     SECOND: The name of the Corporation is
 
                              MF ACQUISITION CORP.
 
     THIRD: The total number of shares of stock that the Corporation shall have
authority to issue is 1000 shares of Common Stock, each having a par value of
$.01
 
     FOURTH: The street address of the initial registered office of the
Corporation in the State of Wisconsin is 25 West Main Street, Madison, Wisconsin
53703.
 
     The name of the initial registered agent of the Corporation at the said
registered office is CSC-Lawyers Incorporating Service Company.
 
     FIFTH: The name and the address of the incorporator are:
 
<TABLE>
<CAPTION>
                       NAME                                     ADDRESS
                       ----                                     -------
    <S>                                        <C>
                 M. Martha Sherry                         333 West Wacker Dr.
                                                               Suite 2100
                                                        Chicago, Illinois 60606
</TABLE>
 
     SIXTH: The purpose for which the Corporation is organized is to engage in
any lawful act or activity for which a corporation may be organized as provided
in Section 180.0301 of the Wisconsin Business Corporation Law.
 
     SEVENTH: Except as may otherwise be provided by Section 180.0704 of the
Wisconsin Business Corporation Law, and subject to the applicable requirements
of that Section, action required or permitted by the Wisconsin Business
Corporation Law to be taken at a shareholders' meeting may be taken without a
meeting by shareholders who would be entitled to vote at a meeting those shares
with voting power to cast not less than the minimum number or, in the case of
voting by voting groups, the minimum numbers of votes that would be necessary to
authorize or take the action at a meeting at which all shares entitled to vote
were present and voted.
 
     EIGHTH: The Corporation shall, to the fullest extent permitted by the
provisions of the Wisconsin Business Corporation Law, as the same may be amended
and supplemented, indemnify any and all persons whom it shall have power to
indemnify under said provisions from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said provisions, and
the indemnification provided for herein shall not be deemed exclusive of any
other rights to which those indemnified may be entitled under any Bylaw, vote of
shareholders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent.
 
                                     II-D-1
<PAGE>   127
 
     NINTH: The duration of the corporation shall be perpetual.
 
Signed on November 6 , 1997.
 
                                          /s/  M. MARTHA SHERRY
 
                                          --------------------------------------
 
                                          M. Martha Sherry, Incorporator
 
This document was drafted by
 
M. Martha Sherry
333 West Wacker Drive
Suite 2100
Chicago, Illinois 60606
 
                                     II-D-2
<PAGE>   128
 
                                                                       ANNEX III
 
                       WISCONSIN BUSINESS CORPORATION LAW
                                SUBCHAPTER XIII
                               DISSENTERS' RIGHTS
 
     180.1301 DEFINITIONS. IN SS. 180.1301 TO 180.1331:
 
          (1) "Beneficial shareholder" means a person who is a beneficial owner
     of shares held by a nominee as the shareholder.
 
          (1m) "Business combination" has the meaning given in s. 180.1130(3).
 
          (2) "Corporation" means the issuer corporation or, if the corporate
     action giving rise to dissenters' rights under s.180.1302 is a merger or
     share exchange that has been effectuated, the surviving domestic
     corporation or foreign corporation of the merger or the acquiring domestic
     corporation or foreign corporation of the share exchange.
 
          (3) "Dissenter" means a shareholder or beneficial shareholder who is
     entitled to dissent from corporate action under s.180.1302 and who
     exercises that right when and in the manner required by ss. 180.1320 to
     1328.
 
          (4) "Fair value", with respect to a dissenter's shares other than in a
     business combination, means the value of the shares immediately before the
     effectuation of the corporate action to which the dissenter objects,
     excluding any appreciation or depreciation in anticipation of the corporate
     action unless exclusion would be inequitable. "Fair value", with respect to
     a dissenter's shares in a business combination, means market value, as
     defined in s.180.1130(9)(a) 1 to 4.
 
          (5) "Interest" means interest from the effectuation date of the
     corporate action until the date of payment, at the average rate currently
     paid by the corporate on its principal bank loans or, if none, at a rate
     that is fair and equitable under all the circumstances.
 
          (6) "Issuer corporation" means a domestic corporation that is the
     issuer of the shares held by a dissenter before the corporate action.
 
     180.1302 RIGHT TO DISSENT.  (1) Except as provided in sub (4) and s.
180.1008(3), a shareholder or beneficial shareholder may dissent from, and
obtain payment of the fair value of his or her shares in the event of, any of
the following corporate actions:
 
             (a) Consummation of a plan of merger to which the issuer
        corporation is a party if any of the following applies:
 
                1. Shareholder approval is required for the merger by s.
           180.1103 or by the articles of incorporation.
 
                2. The issuer corporation is a subsidiary that is merged with
           its parent under s. 180.1104.
 
             (b) Consummation of a plan of share exchange if the issuer
        corporation's shares will be acquired, and the shareholder or the
        shareholder holding shares on behalf of the beneficial shareholder is
        entitled to vote on the plan.
 
             (c) Consummation of a sale or exchange of all, or substantially
        all, of the property of the issuer corporation other than in the usual
        and regular course of business, including a sale in dissolution, but not
        including any of the following:
 
                1. A sale pursuant to court order.
 
                2. A sale for cash pursuant to a plan by which all or
           substantially all of the net proceeds of the sale will be distributed
           to the shareholders within one year after the date of sale.
 
                                      III-1
<PAGE>   129
 
             (d) Except as provided in sub. (2), any other corporate action
        taken pursuant to a shareholder vote to the extent that the articles of
        incorporation, bylaws or a resolution of the board of directors provides
        that the voting or nonvoting shareholder or beneficial shareholder may
        dissent and obtain payment for his or her shares.
 
          (2) Except as provided in sub. (4) and s. 180.1008(3), the articles of
     incorporation may allow a shareholder or beneficial shareholder to dissent
     from an amendment of the articles of incorporation and obtain payment of
     the fair value of his or her shares if the amendment materially and
     adversely affects rights in respect of a dissenter's shares because it does
     any of the following:
 
             (a) Alters or abolishes a preferential right of the shares.
 
             (b) Creates, alters or abolishes a right in respect of redemption,
        including a provision respecting a sinking fund for the redemption or
        repurchase, of the shares.
 
             (c) Alters or abolishes a preemptive right of the holder of shares
        to acquire shares or other securities.
 
             (d) Excludes or limits the right of the shares to vote on any
        matter or to cumulate votes, other than a limitation by dilution through
        issuance of shares or other securities with similar voting rights.
 
             (e) Reduces the number of shares owned by the shareholder or
        beneficial shareholder to a fraction of a share if the fractional share
        so created is to be acquired for cash under s. 180.0604.
 
          (3) Notwithstanding sub. (1)(a) to (c), if the issuer corporation is a
     statutory close corporation under ss. 180.1801 to 180.1837, a shareholder
     of the statutory close corporation may dissent from a corporate action and
     obtain payment of the fair value of his or her shares, to the extent
     permitted under sub. (1)(d) or (2) or s. 180.1803, 180.1813(1)(d) or
     (2)(b), 180.1815(3) or 180.1829(1)(c).
 
          (4) Except in a business combination or unless the articles of
     incorporation provide otherwise, subs. (1) and (2) do not apply to the
     holders of shares of any class or series if the shares of the class or
     series are registered on a national securities exchange or quoted on the
     national association of securities dealers, inc., automated quotations
     system on the record date fixed to determine the shareholders entitled to
     notice of a shareholders meeting at which shareholders are to vote on the
     proposed corporate action.
 
          (5) Except as provided in s. 180.1833, a shareholder or beneficial
     shareholder entitled to dissent and obtain payment for his or her shares
     under ss. 180.1301 to 180.1331 may not challenge the corporate action
     creating his or her entitlement unless the action is unlawful or fraudulent
     with respect to the shareholder, beneficial shareholder or issuer
     corporation.
 
     180.1303 DISSENT BY SHAREHOLDERS AND BENEFICIAL SHAREHOLDERS.  (1) A
shareholder may assert dissenters' rights as to fewer than all of the shares
registered in his or her name only if the shareholder dissents with respect to
all shares beneficially owned by any one person and notifies the corporation in
writing of the name and address of each person on whose behalf he or she asserts
dissenters' rights. The rights of a shareholder who under this subsection
asserts dissenters' rights as to fewer than all of the shares registered in his
or her name are determined as if the shares as to which he or she dissents and
his or her other shares were registered in the names of different shareholders.
 
          (2) A beneficial shareholder may assert dissenters' rights as to
     shares held on his or her behalf only if the beneficial shareholder does
     all of the following:
 
             (a) Submits to the corporate the shareholder's written consent to
        the dissent not later than the time that the beneficial shareholder
        assets dissenters' rights.
 
             (b) Submits the consent under par. (a) with respect to all shares
        of which he or she is the beneficial shareholder.
 
     180.1320 NOTICE OF DISSENTERS' RIGHTS.  (1) If proposed corporate action
creating dissenters' rights under s. 180.1302 is submitted to a vote at a
shareholders' meeting, the meeting notice shall state that
 
                                      III-2
<PAGE>   130
 
shareholders and beneficial shareholders are or may be entitled to assert
dissenters' rights under ss. 180.1301 to 180.1331 and shall be accompanied by a
copy of those sections.
 
          (2) If corporate action creating dissenters' rights under s. 180.1302
     is authorized without a vote of shareholders, the corporation shall notify,
     in writing and in accordance with s. 180.0141 [which is set forth below],
     all shareholders entitled to assert dissenters' rights that the action was
     authorized and send them the dissenters' notice described in s. 180.1322.
 
     180.1321 NOTICE OF INTENT TO DEMAND PAYMENT.  (1) If proposed corporate
action creating dissenters' rights under s. 180.1302 is submitted to a vote at a
shareholder's meeting, a shareholder or beneficial shareholder who wishes to
assert dissenters' rights shall do all of the following:
 
             (a) Deliver to the issuer corporation before the vote is taken
        written notice that complies with s. 180.0141 of the shareholder's
        beneficial shareholder's intent to demand payment for his or her shares
        if the proposed action is effectuated.
 
             (b) Not vote his or her shares in favor of the proposed action.
 
          (2) A shareholder or beneficial shareholder who fails to satisfy sub.
     (1) is not entitled to payment for his or her shares under ss. 180.1301 to
     180.1331.
 
     180.1322 DISSENTERS' NOTICE.  (1) If proposed corporate action creating
dissenters' rights under s. 180.1302 is authorized at a shareholders' meeting,
the corporation shall deliver a written dissenters' notice to all shareholders
and beneficial shareholders who satisfied s. 180.1321.
 
          (2) The dissenters' notice shall be sent no later than 10 days after
     the corporate action is authorized at a shareholders' meeting or without a
     vote of shareholders, whichever is applicable. The dissenters' notice shall
     comply with s. 180.0141 and shall include or have attached all of the
     following:
 
             (a) A statement indicating where the shareholder or beneficial must
        send the payment demand ad where and when certificates for certificated
        shares must be deposited.
 
             (b) For holders of uncertificated shares, an explanation of the
        extent to which transfer of the shares will be restricted after the
        payment demand is received.
 
             (c) A form for demanding payment that includes the date of the
        first announcement to news media or to shareholders of the terms of the
        proposed corporate action and that whether he or she acquired beneficial
        ownership of the shares before that date.
 
             (d) A date by which the corporation must receive the payment
        demand, which may not be fewer than 30 days nor more than 60 days after
        the date on which the dissenters' notice delivered.
 
             (e) A copy of ss. 180.1301 to 180.1331.
 
     180.1323 DUTY TO DEMAND PAYMENT.  (1) A shareholder or beneficial
shareholder who is sent a dissenters' notice described in s. 180.1322, or a
beneficial shareholder whose shares are held by a nominee who is sent a
dissenters' notice described in s. 180.1322, must demand payment in writing and
certify whether he or she acquired beneficial ownership of the shares before the
date specified in the dissenters' notice under s. 180.1322(2)(c). A shareholder
or beneficial shareholder with certificated shares must also deposit his or her
certificates in accordance with the terms of the notice.
 
          (2) A shareholder or beneficial shareholder with certificated shares
     who demands payment and deposits his or her share certificates under sub.
     (1) retains all other rights of a shareholder or beneficial shareholder
     until these rights are canceled or modified by the effectuation of the
     corporate action.
 
          (3) A shareholder or beneficial shareholder with certificated or
     uncertificated shares who does not demand payment by the date set in the
     dissenters' notice, or a shareholder or beneficial shareholder with
     certificated shares who does not deposit his or her share certificates
     where required and by the date set in the dissenters' notice is not
     entitled to payment for his or her shares under ss. 180.1301 to 180.1331.
 
                                      III-3
<PAGE>   131
 
     180.1324 RESTRICTIONS ON UNCERTIFICATED SHARES.  (1) The issuer corporation
may restrict the transfer of uncertificated shares from the date that the demand
for payment for those shares is received until the corporate action is
effectuated or the restrictions released under s. 180.1326.
 
          (2) The shareholder or beneficial shareholder who asserts dissenters'
     rights as to uncertificated shares retains all of the rights of a
     shareholder or beneficial shareholder, other than those restricted under
     sub. (1), until these rights are canceled or modified by the effectuation
     of the corporate action.
 
     180.1325 PAYMENT.  (1) Except as provided in s. 180.1327, as soon as the
corporate action is effectuated or upon receipt of a payment demand, whichever
is later, the corporation shall pay each shareholder or beneficial shareholder
who has complied with s. 180.1323 the amount that the corporation estimates to
be the fair value of his or her shares, plus accrued interest.
 
          (2) The payment shall be accompanied by all of the following:
 
             (a) The corporation's latest available financial statements,
        audited and including footnote disclosure if available, but including
        not less than a balance sheet as of the end of a fiscal year ending not
        more than 16 months before the date of payment, an income statement for
        that year, a statement of changes in shareholders' equity for that year
        and the latest available interim financial statements, if any.
 
             (b) A statement of the corporation's estimate of the fair value of
        the shares.
 
             (c) An explanation of how the interest was calculated.
 
             (d) A statement of the dissenter's right to demand payment under s.
        180.1328 if the dissenter is dissatisfied with the payment.
 
             (e) A copy of ss. 180.1301 to 180.1331.
 
     180.1326 FAILURE TO TAKE ACTION.  (1) If an issuer corporation does not
effectuate the corporate action within 60 days after the date set under s.
180.1322 for demanding payment, the issuer corporation shall return the
deposited certificates and release the transfer restrictions imposed on
uncertified shares.
 
          (2) If after returning deposited certificates and releasing transfer
     restrictions, the issuer corporation effectuates the corporate action, the
     corporation shall deliver a new dissenters' notice under s. 180.1322 and
     repeat the payment demand procedure.
 
     180.1327 AFTER-ACQUIRED SHARES.  (1) A corporation may elect to withhold
payment required by s. 180.1325 from a dissenter unless the dissenter was the
beneficial owner of the shares before the date specified in the dissenters'
notice under s. 180.1322(2)(c) as the date of the first announcement to news
media or to shareholders of the terms of the proposed corporate action.
 
          (2) To the extent that the corporation elects to withhold payment
     under sub. (1) after effectuating the corporate action, it shall estimate
     the fair value of the shares, plus accrued interest, and shall pay this
     amount to each dissenter who agrees to accept it in full satisfaction of
     his or her demand. The corporation shall send with its offer a statement of
     its estimate of the fair value of the shares, an explanation of how the
     interest was calculated, and a statement of the dissenter's right to demand
     payment under s. 180.1328 if the dissenter is dissatisfied with the offer.
 
     180.1328 PROCEDURE IF DISSENTER DISSATISFIED WITH PAYMENT OR OFFER.  (1) A
dissenter may, in the manner provided in sub. (2), notify the corporation of the
dissenter's estimate of the fair value of his or her shares and amount of
interest due, and demand payment of his or her estimate, less any payment
received under s. 180.1325, or reject the offer under s. 180.1327 and demand
payment of the fair value of his or her shares and interest due, if any of the
following applies:
 
             (a) The dissenter believes that the amount paid under s. 180.1325
        or offered under s. 180.1327 is less than the fair value of his or her
        shares or that the interest due is incorrectly calculated.
 
                                      III-4
<PAGE>   132
 
             (b) The corporation fails to make payment under s. 180.1325 within
        60 days after the date set under s. 180.1322 for demanding payment.
 
             (c) The issuer corporation, having failed to effectuate the
        corporate action, does not return the deposited certificates or release
        the transfer restrictions imposed on uncertificated shares within 60
        days after the date set under s. 180.1322 for demanding payment.
 
          (2) A dissenter waives his or her rights to demand payment under this
     section unless the dissenter notifies the corporation of his or her demand
     under sub. (1) in writing within 30 days after the corporation made or
     offered payment for his or her shares. The notice shall comply with s.
     180.0141.
 
     180.1330 COURT ACTION.  (1) If a demand for payment under s. 180.1328
remains unsettled, the corporation shall bring a special proceeding within 60
days after receiving the payment demand under s. 180.1328 and petition the court
to determine the fair value of the shares and accrued interest. If the
corporation does not bring the special proceeding within the 60-day period, it
shall pay each dissenter whose demand remains unsettled the amount demanded.
 
          (2) The corporation shall bring the special proceeding in the circuit
     court for the county where its principal office or, if none in this state,
     its registered office is located. If the corporation is a foreign
     corporation without a registered office in this state, it shall bring the
     special proceeding in the county in the state in which was located the
     registered office of the issuer corporation that merged with or whose
     shares were acquired by the foreign corporation.
 
          (3) The corporation shall make all dissenters, whether or not
     residents of this state, whose demands remain unsettled parties to the
     special proceeding. Each party to the special proceeding shall be served
     with a copy of the petition as provided in s. 801.14.
 
          (4) The jurisdiction of the court in which the special proceeding is
     brought under sub. (2) is plenary and exclusive. The court may appoint one
     or more persons as appraisers to receive evidence and recommend decision on
     the question of fair value. An appraiser has the power described in the
     order appointing him or her or in any amendment to the order. The
     dissenters are entitled to the same discovery rights as parties in other
     civil proceedings.
 
          (5) Each dissenter made a party to the special proceeding is entitled
     to judgment for any of the following:
 
             (a) the amount, if any, by which the court finds the fair value of
        his or her shares, plus interest, exceeds the amount paid by the
        corporation.
 
             (b) The fair value, plus accrued interest, of his or her shares
        acquired on or after the date specified in the dissenter's notice under
        s. 180.1322(2)(c), for which the corporation elected to withhold payment
        under s. 180.1327.
 
     180.1331 COURT COSTS AND COUNSEL FEES.  (1)(a) Notwithstanding ss. 814.01
to 814.04, the court in a special proceeding brought under s. 180.1330 shall
determine all costs of the proceeding, including the reasonable compensation and
expenses of appraisers appointed by the court and shall assess the costs against
the corporation, except as provided in par. (b).
 
             (b) Notwithstanding ss. 814.01 and 814.04, the court may assess
        costs against all or some of the dissenters, in amounts that the court
        finds to be equitable, to the extent that the court finds the dissenters
        acted arbitrarily, vexatiously or not in good faith in demanding payment
        under s. 180.1328.
 
          (2) The parties shall bear their own expenses of the proceeding,
     except that, notwithstanding ss. 814.01 to 814.04, the court may also
     assess the fees and expenses of counsel and experts for the respective
     parties, in amounts that the court finds to be equitable, as follows:
 
             (a) Against the corporation and in favor of any dissenter if the
        court finds that the corporation did not substantially comply with ss.
        180.1320 to 180.1328.
 
                                      III-5
<PAGE>   133
 
             (b) Against the corporation or against a dissenter, in favor of any
        other party, if the court finds that the party against whom the fees and
        expenses are assessed acted arbitrarily, vexatiously or not in good
        faith with respect to the rights provided by this chapter.
 
          (3) Notwithstanding sec.sec. 814.01 to 814.04, if the court finds that
     the services of counsel and experts for any dissenter were of substantial
     benefit to other dissenters similarly situated, the court may award to
     these counsel and experts reasonable fees to be paid out of the amounts
     awarded the dissenters who were benefitted.
 
                                     * * *
 
     180.0141 NOTICE.  (1) This section applies to notice that is required under
this chapter and that is made subject to this section by express reference to
this section.
 
        (2) (a) A person shall give notice in writing, except as provided in
        par. (b).
 
             (b) A person may give oral notice is oral notice is permitted by
        the articles of incorporation or bylaws and not otherwise prohibited by
        this chapter.
 
          (3) Except as provided in sec.180.0721(4) or unless otherwise provided
     in the articles of incorporation or bylaws, notice may be communicated in
     person, by telephone, telegraph, teletype, facsimile or other form of wire
     or wireless communication, or by mail or private carrier, and, if these
     forms of personal notice are impracticable, notice may be communicated by a
     newspaper of general circulation in the area where published, or by radio,
     television or other form of public broadcast communication.
 
          (4) Written notice to a domestic corporation or a foreign corporation
     authorized to transact business in this state may be addressed to its
     registered agent at its registered office or to the domestic corporation or
     foreign corporation at its principal office. With respect to a foreign
     corporation that has not yet filed an annual report under sec.180.1622, the
     address of the foreign corporation's principal office may be determined
     from its application for a certificate of authority.
 
        (5) (a) Except as provided in par. (b) and sec.sec.180.0807(2) and
        180.0843(1), written notice is effective at the earliest of the
        following:
 
                1. When received.
 
                2. Five days after its deposit in the U.S. mail, if mailed
           postpaid and correctly addressed.
 
                3. On the date shown on the return receipt, if sent by
           registered or certified mail, return receipt requested, and the
           receipt is signed by or on behalf of the addressee.
 
                4. On the effective date specified in the articles of
           incorporation or bylaws.
 
             (b) Written notice by a domestic corporation or foreign corporation
        to its shareholder is effective when mailed and may be addressed to the
        shareholder's address shown in the domestic corporation's or foreign
        corporation's current record of shareholders.
 
             (c) Oral notice is effective when communicated.
 
                                      III-6
<PAGE>   134
 
                                    PART II
 
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
     AMCORE has purchased for the benefit of its officers and directors, and
those of certain subsidiaries, insurance policies whereby the insurance
companies agree, among other things, that in the event any such officer or
director becomes legally obligated to make a payment (including legal fees and
expenses) in connection with an alleged wrongful act, such insurance companies
will pay AMCORE up to $5,000,000. Wrongful act means any breach of duty,
neglect, error, misstatement, misleading statement or other act done by an
officer or director of AMCORE or any subsidiary.
 
     Reference is made to the caption "COMPARISON OF STOCKHOLDERS' RIGHTS --
Indemnification and Personal Liability of Directors and Officers" in the Proxy
Statement/Prospectus for a description of certain statutory and charter
provisions under which controlling persons, directors and officers of AMCORE are
afforded indemnification against liabilities which they may incur in such
capacities and for the statement of the Commission with respect thereto as to
the enforceability thereof.
 
     Pursuant to the Merger Agreement, AMCORE has agreed to indemnify the
executive officers and directors of Midwest and its subsidiaries for a period of
five years after the Effective Time to the same extent such persons are
currently indemnified pursuant to Midwest's Articles of Incorporation and
Bylaws.
 
ITEM 21. EXHIBITS.
 
          (a) The following exhibits have been filed (except where otherwise
     indicated) as part of this Registration Statement:
 
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<S>            <C>
 2.1           Agreement and Plan of Reorganization, dated as of November
               11, 1997, and as amended, among AMCORE Financial, Inc., MF
               Acquisition Corp. and Midwest Federal Financial Corp.
               (included as Annex II to the Proxy Statement/Prospectus)
 3.1           Amended and Restated Articles of Incorporation of AMCORE
               Financial, Inc. dated May 1, 1990 (incorporated by reference
               to Exhibit 23 of AMCORE's Annual Report on Form 10-K for the
               year ended December 23, 1989)
 3.2           Bylaws of AMCORE Financial, Inc. as amended May 17, 1990
               (incorporated by reference as Exhibit 3.1 of AMCORE's Annual
               Report on Form 10-K for the year ended December 31, 1994)
 4.1           Shareholder Rights Plan of AMCORE Financial, Inc.
               (incorporated by reference to Exhibit 4.1 to the AMCORE
               Financial, Inc. Form 8-K dated February 21, 1996)
 5.1           Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois)
 8.1           Opinion of Schiff Hardin & Waite
10.1           Form of Shareholder Voting Agreement, dated as of November
               18, 1997, between AMCORE Financial, Inc., Midwest Federal
               Financial Corp. and certain directors, officers and other
               significant shareholders Midwest Federal Financial Corp.
               (included as Exhibit A to Annex II to the Proxy
               Statement/Prospectus)
21.1           Subsidiaries of AMCORE Financial, Inc. (incorporated by
               reference to Exhibit 21 of AMCORE's Annual Report on Form
               10-K for the year ended December 31, 1996)
23.1           Consent of McGladrey and Pullen, LLP
23.2           Consent of McGladrey and Pullen, LLP
23.3           Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)
               (included in Exhibit 5.1)
23.4           Consent of Schiff Hardin & Waite (included in Exhibit 8.1)
</TABLE>
 
                                      II-1
<PAGE>   135
 
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<S>            <C>
23.6           Consent of Edelman & Co., Ltd. (included in Annex I to the
               Proxy Statement/Prospectus)
24.1           Powers of Attorney (included in Part II of the Form S-4)
99             Form of Proxy for Midwest Federal Financial Corp.
</TABLE>
 
          (b) No financial statement schedules are required to be filed with
     regard to AMCORE or Midwest.
 
ITEM 22. UNDERTAKINGS.
 
          (1) AMCORE hereby undertakes that, for purposes of determining any
     liability under the Securities Act of 1933, as amended, each filing of the
     Registrant's Special report pursuant to Section 13(a) or Section 15(d) of
     the Securities Exchange Act of 1934, as amended, that is incorporated by
     reference in the Registration Statement 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.
 
          (2) AMCORE hereby undertakes that prior to any public reoffering of
     the securities registered hereunder through use of a Prospectus which is a
     part of this Registration Statement, by any person or party who is deemed
     to be an underwriter within the meaning of Rule 145(c), the issuer
     undertakes that such reoffering Prospectus will contain the information
     called for by the applicable registration form with respect to reofferings
     by persons who may be deemed underwriters, in addition to the information
     called for by the other items of the applicable form.
 
          (3) AMCORE undertakes that every Prospectus (i) that is filed pursuant
     to paragraph (2) immediately preceding, or (ii) that purports to meet the
     requirements of section 10(a)(3) of the Act and is used in connection with
     an offering of securities subject to Rule 415, will be filed as a part of
     an amendment to the Registration Statement and will not be used until such
     amendment is effective, and that, for purposes of determining any liability
     under the Securities Act of 1933, as amended, 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.
 
          (4) Insofar as indemnification for liabilities arising under the
     Securities Act of 1933, as amended, may be permitted to directors, officers
     and controlling persons of AMCORE pursuant to the foregoing provisions, or
     otherwise, AMCORE has been advised that in the opinion of the Securities
     and Exchange Commission such indemnification is against public policy as
     expressed in the Act and is, therefore, unenforceable. In the event that a
     claim for indemnification against such liabilities (other than the payment
     by AMCORE of expenses incurred or paid by a director, officer or
     controlling person or AMCORE 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, AMCORE 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 is against public policy as expressed in the
     Act and will be governed by the final adjudication of such issue.
 
          (5) AMCORE hereby undertakes to respond to requests for information
     that is incorporated by reference into the Prospectus pursuant to Items 4,
     10(b), 11 or 13 of Form S-4, within one business day of receipt of such
     request, and to send the incorporated documents by first class mail or
     other equally prompt means. This includes information contained in
     documents filed subsequent to the effective date of the Registration
     Statement through the date of responding to the request.
 
          (6) AMCORE hereby undertakes to supply by means of a post-effective
     amendment all information concerning a transaction, and the company being
     acquired involved therein, that was not the subject of and included in the
     Registration Statement when it became effective.
 
          (7) AMCORE hereby undertakes 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.
 
                                      II-2
<PAGE>   136
 
                                   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 City of Rockford, State of
Illinois, on this 18th day of February 1998.
 
                                          AMCORE FINANCIAL, INC.
 
                                          By:       /s/ JOHN R. HECHT
 
                                            ------------------------------------
                                                       John R. Hecht
                                                Executive Vice President and
                                                  Chief Financial Officer
 
                               POWER OF ATTORNEY
 
     KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of AMCORE Financial, Inc. hereby constitutes and appoints Robert J.
Meuleman and John R. Hecht, or either of them (with full power to each of them
to act alone), his true and lawful attorney-in-fact and agent, with full power
of substitution, for him and on his behalf and in his name, place and stead, in
any and all capacities, to sign, execute and file this Registration Statement
under the Securities Act of 1933, as amended, and any or all amendments
(including, without limitation, post-effective amendments and any amendment or
amendments or additional registration statements filed pursuant to Rule 462 of
the Securities Act increasing the amount of securities for which registration is
being sought), with all exhibits and any and all documents required to be filed
with respect thereto, with the Securities and Exchange Commission or any
regulatory authority, granting unto such attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same, as fully to all intents and purposes as he himself might or
could do if personally present, hereby ratifying and confirming that all such
attorneys-in-fact and agents, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done.
 
     Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
 
<TABLE>
<CAPTION>
                  SIGNATURE                                   TITLE                        DATE
                  ---------                                   -----                        ----
<C>                                            <S>                                   <C>
           /s/ ROBERT J. MEULEMAN              Director and President and Chief      February 18, 1998
- ---------------------------------------------  Executive Officer (principal
             Robert J. Meuleman                executive officer)
 
              /s/ JOHN R. HECHT                Executive Vice President and Chief    February 18, 1998
- ---------------------------------------------  Financial Officer (principal
                John R. Hecht                  financial officer and principal
                                               accounting officer)
 
             /s/ MILTON R. BROWN               Director                              February 18, 1998
- ---------------------------------------------
               Milton R. Brown
 
            /s/ LAWRENCE E. GLOYD              Director                              February 18, 1998
- ---------------------------------------------
              Lawrence E. Gloyd
 
          /s/ WILLIAM R. MCMANAMAN             Director                              February 18, 1998
- ---------------------------------------------
            William R. McManaman
</TABLE>
 
                                      II-3
<PAGE>   137
 
<TABLE>
<CAPTION>
                  SIGNATURE                                   TITLE                        DATE
                  ---------                                   -----                        ----
<C>                                            <S>                                   <C>
             /s/ RICHARD C. DELL               Director                              February 18, 1998
- ---------------------------------------------
               Richard C. Dell
 
             /s/ ROBERT A. DOYLE               Director                              February 18, 1998
- ---------------------------------------------
               Robert A. Doyle
 
                /s/ TED ROSS                   Director                              February 18, 1998
- ---------------------------------------------
                  Ted Ross
 
           /s/ JACK D. WARD, ESQ.              Director                              February 18, 1998
- ---------------------------------------------
             Jack D. Ward, Esq.
</TABLE>
 
                                      II-4
<PAGE>   138
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
EXHIBIT
  NO.
- -------
<S>        <C>
 
 2.1       Agreement and Plan of Reorganization, dated as of November
           11, 1997, and as amended, among AMCORE Financial, Inc., MF
           Acquisition Corp. and Midwest Federal Financial Corp.
           (included as Annex II to the Proxy Statement/Prospectus)
 3.1       Amended and Restated Articles of Incorporation of AMCORE
           Financial, Inc. dated May 1, 1990 (incorporated by reference
           to Exhibit 23 of AMCORE's Annual Report on Form 10-K for the
           year ended December 23, 1989)
 3.2       Bylaws of AMCORE Financial, Inc. as amended May 17, 1990
           (incorporated by reference as Exhibit 3.1 of AMCORE's Annual
           Report on Form 10-K for the year ended December 31, 1994)
 4.1       Shareholder Rights Plan of AMCORE Financial, Inc.
           (incorporated by reference to Exhibit 4.1 to the AMCORE
           Financial, Inc. Form 8-K dated February 21, 1996)
 5.1       Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois)
 8.1       Opinion of Schiff Hardin & Waite
10.1       Form of Shareholder Voting Agreement, dated as of November
           18, 1997, between AMCORE Financial, Inc., Midwest Federal
           Financial Corp. and certain directors, officers and other
           significant shareholders Midwest Federal Financial Corp.
           (included as Exhibit A to Annex II to the Proxy
           Statement/Prospectus)
21.1       Subsidiaries of AMCORE Financial, Inc. (incorporated by
           reference to Exhibit 21 of AMCORE's Annual Report on Form
           10-K for the year ended December 31, 1996)
23.1       Consent of McGladrey and Pullen, LLP
23.2       Consent of McGladrey and Pullen, LLP
23.3       Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)
           (included in Exhibit 5.1)
23.4       Consent of Schiff Hardin & Waite (included in Exhibit 8.1)
23.6       Consent of Edelman & Co., Ltd. (included as Annex I to the
           Proxy Statement/Prospectus)
24.1       Powers of Attorney (included in Part II of the Form S-4)
99.1       Form of Proxy for Midwest Federal Financial Corp.
</TABLE>

<PAGE>   1
                                                        EXHIBIT 5.1

          [SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS) LETTERHEAD]


                              February 18, 1998


AMCORE Financial, Inc.
501 Seventh Street
Rockford, Illinois  61104

        Re:     AMCORE Financial, Inc. -- Registration Statement 
                under the Securities Act of 1933 on Form S-4

Ladies and Gentlemen:

     We have acted as counsel to AMCORE Financial, Inc., a Nevada corporation
(the "Company"), in connection with the preparation of the Registration
Statement on Form S-4 filed by the Company on February 18, 1998 with the
Securities and Exchange Commission (the "Commission") relating to the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of up to 1,910,889 shares (the "Shares") of the common stock of the
Company, par value $.22 per share, including the associated Common Stock
Purchase Rights of the Company (the "Rights"), to be issued pursuant to a
Rights Agreement, dated as of February 21, 1996, between the Company and
Firstar Trust Company, as Rights Agent (such Registration Statement, as so
amended, being hereinafter referred to as the "Registration Statement").

     This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K promulgated under the Securities Act.

     In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following: (1)
the Registration Statement; (2) the Agreement and Plan of Reorganization, dated
as of November 11, 1997, and as amended (the "Merger Agreement"), by and among
the Company, MF Acquisition Corp. ("MFAC") and Midwest Federal Financial Corp.
("Midwest"), and the related Plan of Merger, dated as of November 11, 1997 (the
"Plan of Merger"), by and between MFAC and Midwest, pursuant to which
agreements the Shares, including the associated Rights, are to be exchanged for
shares of common stock, par value $.01 per share, of Midwest (the "Merger"); 
(3) the Articles of Incorporation of the Company, as amended to date
and as certified by the Nevada 

<PAGE>   2


Secretary of State; (4) certain resolutions of the Board of Directors
of the Company relating to the issuance of the Shares and the other
transactions contemplated by the Registration Statement and the Merger
Agreement; and (5) the Rights Agreement.

     In our examination, we have assumed the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, photostatic or telecopied copies and
the originals of such copies.  We have assumed that all documents submitted to
us unsigned have been properly executed by the proper parties and delivered in
a timely manner.  As to any facts material to this opinion that we did not
independently establish or verify, we have relied upon statements and
representations of officers and other representatives of the Company and
others.

     Members of our firm are admitted to the practice of law in the State of
Illinois and we express no opinion as to the laws of any other jurisdiction,
except the State of Nevada to the extent specifically referred to herein.  As
to all matters governed by the laws of the State of Nevada, we have relied upon
the opinion delivered to us by the Nevada law firm of Marshall, Hill, Cassas &
de Lipkau, dated February 18, 1997.

        Based upon the foregoing, it is our opinion that:

        1. The Company is duly organized, validly existing and in good standing 
  under the laws of the State of Nevada.

        2. When (a) the Registration Statement, as finally amended,
  becomes effective, (b) the Merger becomes effective pursuant to the         
  terms of the Merger Agreement and the Plan of Merger, and (c)               
  certificates representing the Shares are duly executed, countersigned,      
  registered and duly delivered to the Exchange Agent (as defined in the      
  Merger Agreement) for exchange with shares of common stock of Midwest,      
  pursuant to the terms of the Merger Agreement, the Shares, including        
  the associated Rights, will be validly issued, fully paid and               
  nonassessable (assuming compliance with State securities law then in        
  force and applicable thereto).                                              

        This opinion is limited to matters governed by the laws of the State of
Nevada, excluding any Nevada state "blue sky" laws.  We hereby consent to the
filing of this opinion with the Commission as Exhibit 5 to the Registration
Statement and to the reference to our firm under the heading "Opinions"
in the Proxy Statement/Prospectus constituting a part of the Registration
Statement. In giving such 

                                      2

<PAGE>   3

consent, we do not thereby admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act.

                            Very truly yours,


                            /s/ Skadden, Arps, Slate, Meagher & Flom (Illinois)



                                      3

<PAGE>   1

                                                                     Exhibit 8.1



                       [SCHIFF HARDIN & WAITE LETTERHEAD]

                                       February 18, 1998


Midwest Federal Financial Corp.
1159 Eighth Street
Baraboo, Wisconsin 53913

Gentlemen:

     You have requested our opinion regarding certain federal income tax
consequences of the proposed merger (the "Merger") of MF Acquisition Corp., a
Wisconsin corporation ("Acquisition"), with and into Midwest Federal Financial
Corp., a Wisconsin corporation ("Midwest").  Acquisition is a wholly owned
subsidiary of AMCORE Financial, Inc., a Nevada corporation ("AMCORE").

     In formulating our opinion, we examined such documents as we deemed
appropriate, including the Agreement and Plan of Reorganization between AMCORE,
Midwest and Acquisition dated November 11, 1997, as subsequently amended on 
December 22, 1997 and January 27, 1998, and the related Plan of Merger
By and Between Acquisition and Midwest, dated November 11, 1997 (the "Merger
Agreement") and the Form S-4 Registration Statement/Proxy Statement, dated
February 18, 1998 (the "Registration Statement").  In addition, we have
obtained such additional information as we have deemed relevant and necessary
through consultation with various officers and representatives of Midwest and
AMCORE.

     Our opinion set forth below assumes (1) the accuracy of the statements and
facts concerning the Merger set forth in the Merger Agreement and the
Registration Statement, (2) the consummation of the Merger in the manner
contemplated by, and in accordance with the terms set forth in, the Merger
Agreement and the Registration Statement and (3) the accuracy of (i) the
representations made by AMCORE, as set forth in the Officers' Certificate
delivered to us by AMCORE as of this date and (ii) the representations made by
Midwest, as set forth in the Officers' Certificate delivered to us by Midwest
as of this date.

     In connection with the Merger, the stockholders of Midwest will exchange,
in the aggregate, all of the shares of Midwest common stock, $ .01 par value
per share (the "Common Stock"), for the right to receive, in the aggregate,
except for cash paid in lieu of fractional shares or cash paid to dissenting
stockholders, solely shares of AMCORE common stock, $0.22 par value per share
("AMCORE Common Stock").

     Based upon the facts and statements set forth above, our examination and
review of the documents referred to above and subject to the assumptions set
forth above, we are of the opinion that for federal income tax purposes:

            1.   The Merger will constitute a reorganization within the meaning
                 of Section 368(a)(1)(A) and Section 368(a)(2)(E) of the
                 Internal Revenue Code of 1986, as amended (the "Code").

            2.   No gain or loss will be recognized by Midwest, AMCORE or
                 Acquisition, as the case may be, as a result of the Merger.

            3.   No gain or loss will be recognized by the stockholders of
                 Midwest upon the receipt of AMCORE Common Stock solely in
                 exchange for their Common Stock.




<PAGE>   2
            4.   The basis of the AMCORE Common Stock received by a Midwest
                 stockholder will be the same as the basis of Common Stock that
                 was exchanged therefor.

            5.   The holding period of the AMCORE Common Stock received by a
                 Midwest stockholder will include the period during which the
                 Common Stock surrendered in exchange therefor was held by a
                 Midwest stockholder provided that the Common Stock surrendered
                 was a capital asset in the hands of the Midwest stockholder on
                 the date of the exchange.

            6.   Where a dissenting Midwest stockholder receives solely cash in
                 exchange for his/her Common Stock, such cash will be treated as
                 having been received by that Midwest stockholder as a
                 distribution in redemption of his/her Common Stock subject to
                 the provisions and limitations of Section 302 of the Code.

            7.   Any cash received by a holder of Common Stock in lieu of a
                 fractional share will be treated as received in exchange for
                 such fractional share, and any gain or loss recognized as a
                 result of the receipt of such cash will be capital gain or loss
                 equal to the difference between the cash received and the
                 portion of the Midwest stockholder's basis in Common Stock
                 allocable to such fractional share interest.

We express no opinion concerning any tax consequences of the Merger other than
those specifically set forth herein.  In particular, this opinion does not
address all aspects of federal income taxation that may be relevant to Midwest
stockholder that is subject to special treatment under the federal income tax
laws (including life insurance companies, foreign persons, tax-exempt entities,
financial institutions, broker-dealers, or holders who acquired Common Stock
pursuant to the exercise of employee stock options or otherwise as
compensation).  The opinion further assumes that the Common Stock will be held
as a capital asset by a stockholder of Midwest at the Effective Time of the
Merger.

     Our opinion is based on present law and existing interpretations thereof
by the courts and the Internal Revenue Service.  Any change in the facts,
currently or in the future, or any change in the law or existing
interpretations thereof, may adversely affect our opinion.  Further, our
opinion is not binding on the Internal Revenue Service and the tax effects
discussed above are not subject to absolute resolution prior to the running of
the statute of limitations or the rendering of a final determination by a court
of law or by closing agreement with the Internal Revenue Service.  Finally, it
should be noted that we have expressed no opinion except as specifically set
forth herein.



                                    SCHIFF HARDIN & WAITE



                                    By: /s/ Lawrence H. Jacobson
                                        Lawrence H. Jacobson






<PAGE>   1
                                                                    EXHIBIT 23.1



                      Consent of McGladrey & Pullen, LLP



We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4, pertaining to Midwest Federal Financial Corp., of our
report, dated January 20, 1997, except for the pending mergers in Note 2 as to
which the date is February 10, 1997 and for the subsequent event in Note 17 as
to which the date is March 25, 1997, which appears on page 57 of the Annual
Report Form 10-K of AMCORE Financial, Inc. for the year ended December 31,
1996.  We also consent to the reference to our Firm under the caption "Experts"
in the aforementioned Registration Statement.



                                                /s/ McGladrey & Pullen, LLP

Rockford, IL
February 17, 1998

<PAGE>   1
                                                        EXHIBIT 23.2

                        INDEPENDENT AUDITORS' CONSENT


We consent to incorporation by reference in the Registration Statement on Form
S-4 of AMCORE Financial, Inc. of our report dated January 24, 1997, relating to
the consolidated statement of financial condition of Midwest Federal Financial
Corp. and subsidiary as of December 31, 1996, and the related consolidated
statements of income, stockholders' equity, and cash flows for the year ended
December 31, 1996, which report appears in the December 31, 1996 annual report
on Form 10-KSB of Midwest Federal Financial Corp. and to the reference of our
firm under the heading "Experts" in the Proxy

                                        /s/ McGladrey & Pullen, LLP

                                            MCGLADREY & PULLEN, LLP 

Madison, Wisconsin
February 17, 1998

<PAGE>   1

                                                                  Exhibit 99.1

                                REVOCABLE PROXY

                        MIDWEST FEDERAL FINANCIAL CORP.
                               1159 Eighth Street
                           Baraboo, Wisconsin  53913

                      THIS PROXY IS SOLICITED ON BEHALF OF
                             THE BOARD OF DIRECTORS
                       OF MIDWEST FEDERAL FINANCIAL CORP.

     The undersigned hereby appoints David M. Gunderson and Dr. James D.
Mathers, and each of them, as Proxies, each with the power to appoint his/her
substitute, and hereby authorizes each of them to represent and to vote, as
designated below, all the shares of stock of Midwest Federal Financial Corp.
("Midwest") held of record by the undersigned on February 17, 1998 at the
Special Meeting of shareholders of Midwest to be held on March 25, 1998 and at
all adjournments thereof.
        

The Board of Directors Recommends a Vote "FOR" the following Proposals:

  (1) To approve and adopt the Agreement and Plan of Reorganization, dated as
  of November 11, 1997, and as amended (the "Merger Agreement"), among AMCORE
  Financial, Inc., a Nevada corporation ("AMCORE"), MF Acquisition Corp., a
  Wisconsin corporation and a wholly- owned subsidiary of AMCORE ("Newco"), and
  Midwest, and the related Plan of Merger, dated as of November 11, 1997 (the
  "Plan of Merger"), between Newco and Midwest, and the transactions
  contemplated thereby, as more fully described in the accompanying Midwest
  Proxy Statement and AMCORE Prospectus.


<TABLE>

<S>                       <C>                       <C>
                          
[  ] FOR approval         [  ] AGAINST              [  ] ABSTAIN from
and adoption of the       approval and              vote on the Merger
Merger Agreement          adoption of the           Agreement and the
and the Plan of           Merger Agreement          Plan of Merger
Merger                    and the Plan of  
                          Merger                   

</TABLE>

  (2) To adjourn the Special Meeting in the event that Midwest's management
  shall determine that such adjournment is in the best interest of Midwest and
  its shareholders, as more fully described in the accompanying Midwest Proxy
  Statement and AMCORE Prospectus, which would include adjourning the Special
  Meeting to enable management to solicit additional proxies which may be
  necessary to ensure approval of the Merger Agreement and the Plan of Merger.


<TABLE>

<S>                     <C>                        <C>
[  ] FOR                [  ]    AGAINST            [  ]   ABSTAIN

</TABLE>




<PAGE>   2

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTIONS ARE MADE FOR A PROPOSAL, THIS PROXY WILL BE VOTED FOR
THAT PROPOSAL.


Dated: __________________, 1998
                                        _______________________________
                                        Signature
                                        
                                        _______________________________
                                        Signature, if held jointly

Please sign exactly as name appears hereon. When shares are held by joint
tenants, each should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. When executed by a
corporation, the proxy should be signed by a duly authorized officer, including
title as such. If a partnership, please sign in partnership name by an
authorized person.

PLEASE SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.







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