OFFER TO PURCHASE FOR CASH BY
STATE FINANCIAL SERVICES CORPORATION
OF UP TO 700,000 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
EACH AT A PURCHASE PRICE NOT GREATER THAN $16.50
NOR LESS THAN $14.00 PER SHARE
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OUR OFFER, THE PRORATION PERIOD AND YOUR RIGHT TO WITHDRAW WILL EXPIRE AT 5:00
P.M. (NEW YORK CITY TIME) ON FRIDAY, DECEMBER 6, 2002, UNLESS OUR OFFER IS
EXTENDED.
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November 1, 2002
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
State Financial Services Corporation, a Wisconsin corporation ("the
Company"), is offering to purchase up to 700,000 shares (or such lesser number
of Shares as are properly tendered and not withdrawn) of its outstanding common
stock, par value $0.10 per share (the "Shares"), including the associated
preferred share purchase rights, at a price not greater than $16.50 nor less
than $14.00 per Share, net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
November 1, 2002 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, as each may be amended and supplemented from time to time,
together constitute the "Offer") enclosed herewith. All shares tendered and
purchased will include the associated preferred share purchase rights issued
pursuant to the Rights Agreement, dated as of July 27, 1999, between State
Financial Services Corporation and American Stock Transfer & Trust Company, as
rights agent, and, unless the context otherwise requires, all references to
Shares include the associated preferred shares purchase rights.
The Company will determine the single per Share price, not greater than
$16.50 nor less than $14.00 per Share, net to the seller in cash, without
interest ("Purchase Price") that it will pay for Shares validly tendered
pursuant to the Offer and not properly withdrawn on or prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase), taking into account the
number of Shares so tendered and the prices specified by tendering shareholders.
The Company will select the Purchase Price that will allow it to buy 700,000
shares (or such lesser number of Shares are properly tendered at prices not
greater than $16.50 nor less than $14.00 per Share). All Shares validly tendered
at prices at or below the Purchase Price and not properly withdrawn on or prior
to the Expiration Date will be purchased at the Purchase Price, upon the terms
and subject to the conditions of the Offer, including the proration, conditional
tender and odd lots provisions. See Section 1 of the Offer to Purchase. The
Company reserves the right, in its sole discretion, to purchase more than
700,000 Shares pursuant to the Offer. See Sections 1 and 16 of the Offer to
Purchase.
Upon the terms and subject to the conditions of the Offer, if, at the
expiration of the Offer, more than 700,000 Shares are validly tendered at or
below the Purchase Price and not properly withdrawn on or prior to the
Expiration Date, the Company will buy Shares in the following order: (i) from
shareholders who owned beneficially as of the close of business on November 1,
2002 and continue to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares who properly tender all their Shares at or below the
Purchase Price; (ii) all Shares conditionally tendered, for which the condition
was satisfied, and all other Shares tendered unconditionally, in each case at
prices at or below the Purchase Price, on a pro rata basis, from all other
shareholders who properly tender their Shares at prices at or below the Purchase
Price (and do not properly withdraw them on or prior to the Expiration Date);
and (iii) if necessary, Shares conditionally tendered, for which the condition
was not satisfied, at prices at or below the Purchase Price selected by random
lot. See Sections 1, 3
and 6 of the Offer to Purchase. If any shareholder tenders all of his or her
Shares and wishes to avoid proration or to limit the extent to which only a
portion of such Shares may be purchased because of the proration provisions, the
shareholder may tender Shares subject to the condition that a specified minimum
number of Shares or none of such Shares be purchased. See Section 6 of the Offer
to Purchase. All Shares not purchased pursuant to the Offer, including Shares
tendered at prices greater than the Purchase Price and Shares not purchased
because of proration will be returned to the tendering shareholders at the
Company's expense as promptly as practicable following the Expiration Date.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 7 OF THE OFFER TO PURCHASE.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. The Offer to Purchase dated November 1, 2002.
2. Letter to Shareholders from Xxxxxxx X. Xxxxx, President and Chief
Executive Officer of the Company.
3. Letter to Clients which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer.
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
the certificates evidencing such Shares (the "Share Certificates") are not
immediately available or time will not permit all required documents to
reach the Depositary prior to the Expiration Date or the procedure for
book-entry transfer cannot be completed by the Expiration Date.
5. The Letter of Transmittal for your use and for the information of
your clients. Facsimile copies of the Letter of Transmittal (with manual
signatures) may be used to tender Shares.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withheld.
7. A return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON FRIDAY, DECEMBER 6, 2002, UNLESS EXTENDED.
The Company's Board of Directors has approved this offer. However, neither
the Company nor its Board of Directors, nor the Information Agent or the Dealer
Manager, is making any recommendation whether shareholders should tender or not
tender their shares or at what price or prices they should choose to tender
their shares. Shareholders must make your own decision whether to tender their
shares and, if so, how many shares to tender and the price or prices at which
they will tender them.
The Company will not pay any fees or commissions to any broker or dealer or
any other person (other than fees paid to the Dealer Manager, Information Agent
or the Depositary as describer in the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. The Company will,
however, upon request, reimburse you for customary mailing and handling expenses
incurred by you in forwarding the enclosed materials to your clients. The
Company will pay all stock transfer taxes applicable to its purchase of Shares
pursuant to the Offer, except as otherwise provided in Instruction 7 of the
Letter of Transmittal, as well as any charges and expenses of the Depositary and
the Information Agent.
To take advantage of the Offer, a duly executed and properly completed
Letter of Transmittal, with any required signature guarantees and any other
required documents, should be sent to the Depositary, and Share Certificates
should be delivered or such Shares should be tendered by book-entry transfer,
all in accordance with the Instructions set forth in the Letter of Transmittal
and the Offer to Purchase.
If shareholders wish to tender Shares, but it is impracticable for them to
forward their Share Certificates or other required documents to the Depositary
prior to the Expiration Date or to comply with the procedures for book-
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entry transfer on a timely basis, a tender may be effected by following the
guaranteed delivery procedures specified under Section 4 of the Offer to
Purchase.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from, the
Information Agent, X. X. Xxxx & Co., Inc. at the address and telephone numbers
set forth on the back cover of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent by calling collect at (000) 000-0000.
Very truly yours,
SANDLER X'XXXXX & PARTNERS, L.P.
Enclosures
NOTHING HEREIN IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER
PERSON AS AN AGENT OF THE COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT, OR
ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO
USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION
WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED
THEREIN.
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