AMCORE FINANCIAL, INC.

EXHIBIT 10.9

AMCORE FINANCIAL, INC.

Annual Incentive Plan

Revised February 11, 2004

1. General

This Annual Incentive Plan (the “Plan”) of AMCORE Financial, Inc. (the “Company”) authorizes the grant of annual incentive awards (“Awards”) to executives and key employees, and sets forth certain terms and conditions of such Awards. The purpose of the Plan is to help the Company secure and retain senior executives and key employees of outstanding ability and to motivate such persons to exert their greatest efforts on behalf of the Company and its subsidiaries by providing incentives directly linked to the revenue, net income, customer satisfaction, earnings per share, strategic goals and other measures of the financial and business success of the Company. The Plan will be administered by the Compensation Committee of the AMCORE Financial, Inc. Board of Directors (the “Committee”), provided that the Committee may condition any of its actions on approval or ratification by the Board of Directors. The Committee shall have full and final authority to take all actions hereunder, subject to and consistent with the provisions of the Plan. The Committee may delegate to specified officers or employees of the Company authority to perform administrative or other functions under the Plan.

2. Definitions

In addition to such terms and those terms defined in Section 1 above, the following are defined terms under this Plan:

(a) “Annual Incentive Award” or “Award” means the amount of a Participant’s Annual Incentive Award Opportunity in respect to a specified Performance Year determined by the Committee to have been earned and the Participant’s rights to future payments of cash in settlement thereof.

(b) “Annual Incentive Award Opportunity” or “Award Opportunity” means the Participant’s opportunity to earn specified dollar-denominated amounts based on performance during a Performance Year. An Annual Incentive Award Opportunity constitutes a conditional right to receive settlement of an Annual Incentive Award.

(c) “Participant” means an employee participating in this Plan.

(d) “Performance Goal” means the Company, divisional, individual, or other accomplishment required as a condition to the earning of an Award Opportunity.

(e) “Performance Year” means the period of one fiscal year over which an Annual Incentive Award Opportunity may be earned, provided that the Committee may specify a shorter or longer duration for any Performance Year.

(f) “Termination of Employment” means the termination of a Participant’s employment by the Company or a Subsidiary immediately after which the Participant is not employed by the Company or any Subsidiary.

3. Eligibility

Company officers and other employees whom the Committee determines may have a significant impact on the performance of the Company may be selected by the Committee to participate in this Plan.

4. Designation and Earning of Annual Incentive Award Opportunities

(a) Designation of Award Opportunities and Performance Goals. The Committee shall select employees to participate in the Plan for a Performance Year and designate, for each such Participant, the Award Opportunity the Participant may earn for such Performance Year, the Performance Goal the achievement of which will result in the earning of the Award Opportunity or a portion thereof, and the levels of earning of the Award Opportunity corresponding to the levels of achievement of the Performance Goal. The Award Opportunity earnable by each Participant shall range from 0% to not more than 200% of a specified target Award Opportunity. The Committee shall specify a table, grid, or formula that sets forth the amount of a Participant’s Award Opportunity that will be earned corresponding to the level of achievement of a specified Performance Goal. There is no limitation on the timing of the Committee’s determinations under this Section 4(a).

(b) Determination of Annual Incentive Award. Within a reasonable time after the end of each Performance Year, the Committee will determine the extent to which the Performance Goal for the earning of the Participant’s Annual Incentive Award Opportunity was achieved during such Performance Year and the resulting Award to the Participant. In making this determination, the Committee may adjust upward or downward the amount of an Award, in its sole discretion, in light of such considerations as the Committee may deem relevant (but subject to the applicable limitations of the Plan). The Annual Incentive Award shall not be deemed vested, however, until such date as the Company pays and settles the Annual Incentive Award, as determined by the Committee.

5. Accounts and Settlement of Awards.

(a) Elective Deferral. A Participant will be permitted to elect to defer settlement of the Annual Incentive Award if and to the extent such deferral is authorized by such Participant under any Company deferred compensation plan then in effect, and if validly elected by the Participant under the terms of such plan. Unless otherwise determined by the Committee, a Participant’s deferral election with respect to earned Annual Incentive Awards must be filed with the Company not later than six months prior to the end of the Performance Year.

(b) Settlement of Award. Any non-deferred Annual Incentive Award shall be paid and settled by the Company reasonably promptly after the date of determination by the Committee under Section 4(b) hereof. With respect to any deferred amount of a Participant’s Annual Incentive Award, such amount will be credited to the Participant’s deferral account under the applicable Company deferred compensation plan as promptly as practicable at or after the date designated for payment by the Committee under Section 4(b) hereof.

(c) Tax Withholding. The Company shall deduct from any payment in settlement of a Participant’s Annual Incentive Award or other payment to the Participant any Federal, state, or local withholding or other tax or charge which the Company is then required to deduct under applicable law with respect to the Award.

(d) Non-Transferability. An Annual Incentive Award Opportunity and any resulting Annual Incentive Award, including any deferred amount resulting from an Award, and other rights hereunder shall be non-transferable except in accordance with the laws of descent and distribution or, if permitted by the Committee, pursuant to a beneficiary designation of the Participant in the event of the Participant’s death.

6. Effect of Termination of Employment.

Upon a Participant’s Termination of Employment prior to completion of a Performance Year or, after completion of a Performance Year but prior to the date of determination by the Committee under Section 4(b) hereof with respect to that Performance Year, the Participant’s Annual Incentive Award Opportunity relating to such Performance Year shall cease to be earnable and shall be canceled, and the Participant shall have no further rights or opportunities hereunder, unless otherwise provided in an employment agreement between the Company and the Participant in effect at the time of Termination of Employment or otherwise determined by the Committee.

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7. General Provisions.

(a) Changes to this Plan. The Committee may at any time amend, alter, suspend, discontinue, or terminate this Plan; provided, however, that any amendment to the Plan beyond the scope of the Committee’s authority shall be subject to the approval of the Board of Directors. In addition, the Committee may, in its discretion, accelerate the termination of any deferral period and the resulting payment and settlement of deferred amounts, with respect to an individual Participant or all Participants, without the consent of the affected Participants.

(b) Unfunded Status of Participant Rights. Annual Incentive Award Opportunities, Awards, accounts, deferred amounts, and related rights of a Participant represent unfunded incentive and deferred compensation obligations of the Company for ERISA and federal income tax purposes and, with respect thereto, the Participant shall have rights no greater than those of an unsecured creditor of the Company.

(c) No Right to Continued Employment. Neither the Plan nor any action taken hereunder shall be construed as giving any employee the right to be retained in the employ of the Company or any of its subsidiaries or affiliates, nor shall it interfere in any way with the right of the Company or any of its subsidiaries or affiliates to terminate any employee’s employment at any time.

(d) Nonexclusivity of the Plan. The adoption of this Plan shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensation arrangements as it may deem desirable for any Participant.

(e) Severability. The invalidity of any provision of the Plan or a document hereunder shall not be deemed to render the remainder of this Plan or such document invalid.

(f) Successors. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise, and whether or not the corporate existence of the Company continues) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform the Company’s obligations under the Plan in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place; provided, however, that such successor may replace the Plan with a Plan substantially equivalent in opportunity and achievability, as determined by a nationally recognized compensation consulting firm, and covering the Participants at the time of such succession. Any successor and the ultimate parent company of such successor shall in any event be subject to the requirements of this Section 7(f) to the same extent as the Company. Subject to the foregoing, the Company may transfer and assign its rights and obligations hereunder.

(g) Governing Law. The validity, construction, and effect of the Plan, any rules and regulations or document hereunder shall be determined in accordance with the laws (including those governing contracts) of the State of Illinois, without giving effect to principles of conflicts of laws.

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Exhibit

AMCORE FINANCIAL, INC.

Annual Incentive Plan

Designation of 2004 Performance Period, Performance Goal,

and Annual Incentive Award Opportunities

In furtherance of Section 4 of the Annual Incentive Plan (the “Plan”), for the Company’s 2004 fiscal year (the “2004 Performance Year”) the Annual Incentive Award Opportunities, Performance Goals and participation shall be as set forth in this Exhibit to the Plan. Terms used in this Exhibit have the meanings defined in the Plan, and all provisions of this Exhibit are governed by the Plan.

Part I. Participants and Annual Incentive Award Opportunities

(a) Designation of Participants and Annual Incentive Award Opportunity Terms. Participants initially designated for participation in the Plan for the 2004 Performance Year shall be the employees specified on Schedules I and II hereto. For each such Participant, for the 2004 Performance Year, the Participant’s potential Annual Incentive Award that the Committee may award as a result of achievement of the applicable Performance Goal at the “Threshold,” “Target” and “Exceptional” levels of performance (expressed as a percentage of base salary in effect at December 31, 2004), and related Award Opportunity terms are set forth on Schedules I and II hereto.

(b) Nature of Performance Goals. For the 2004 Performance Year, the Performance Goals applicable to each Participant identified on Schedule I shall be based 100% on the AMCORE Value Scorecard (reflecting on Company-wide performance). For the 2004 Performance Year, the Performance Goals applicable to each Participant identified on Schedule II under the caption “Business Unit Executives” shall be based and weighted 60% to 70% on the AMCORE Value Scorecard and 30% to 40% on the AMCORE Business Unit/Function Scorecard applicable to such Participant, and for each Participant identified on Schedule II under the caption “Shared Services Executives” shall be based and weighted 50% on the AMCORE Value Scorecard and 50% on the AMCORE Business Unit/Function Scorecard applicable to such Participant.

For all participants of the Plan, the threshold of core EPS must be met in order to have any Annual Incentive Award payouts on any portion of the plan.

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(c) Relationship of Threshold and Exceptional Performance Levels and Payouts to Target. For the 2004 Performance Year, the Threshold level of performance shall represent 90% of the Target level of performance and the Exceptional level of performance shall represent 110% of the Target level of performance, determined in all cases on a “self-funding” basis, meaning performance shall be measured after accounting for all costs of payout of Annual Incentive Awards under the Plan. No Award will be paid if performance is below the Threshold level, and no Award will be paid in excess of the Exceptional Award level for performance that exceeds the Exceptional performance level. For performance between the Threshold and Target level or between the Target and Exceptional levels, the amount of the Annual Incentive Award will be determined by straight-line interpolation.

Part II. Definition of Performance Goal Terms and Adjustments to Performance Goals.

(a) Committee Determination Regarding Performance Goal Terms. EPS, net income, revenues, and related business criteria and goals that are terms of Performance Goals shall be determined by the Committee, based on the Company’s audited financial statements and other information deemed relevant by the Committee.

(b) Adjustments. The Committee may determine to adjust performance measures under Part I in view of extraordinary events, including changes in accounting rules, in order to preserve the incentive provided by Award Opportunities. In no event, however, will any such modification or adjustment or any exercise of discretion hereunder result in the earning of an Annual Incentive Award Opportunity in excess of the maximum Award earnable under Part I for the Performance Year.

(c) Committee Discretion. All determinations of the Committee hereunder shall be in its sole discretion, subject to the terms of the Plan.

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Any modifications, amendments or adjustments to the Plan or any of its key provisions will be at the discretion of the Plan Sponsor, subject to the approval of the Internal Compensation Committee.

IN WITNESS WHEROF, this Plan Document has been approved and is effective as of the date and year indicated below.

Effective date of plan: February 11, 2004

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