LETTER TO CLIENTS
OFFER TO PURCHASE FOR CASH
by
STEELTON BANCORP, INC.
UP TO 90,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN $16.25 NOR LESS THAN $14.25 PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M. , EASTERN TIME, ON
THURSDAY, AUGUST 16, 2001, UNLESS THE OFFER IS EXTENDED. STEELTON BANCORP, INC.
MAY EXTEND THE OFFER PERIOD AT ANY TIME.
July 19, 2001
To Our Clients:
Enclosed for your consideration are the offer to purchase, dated July
19, 2001, and the related letter of transmittal in connection with the offer by
Steelton Bancorp, Inc., a Pennsylvania corporation, to purchase for cash 90,000
shares of its common stock, par value $0.10 per share, at a price not greater
than $16.25 nor less than $14.25 per share, net to the seller in cash, without
interest, as specified by shareholders tendering their shares.
Given the prices specified by tendering shareholders and the number of
shares tendered and not properly withdrawn, Steelton Bancorp, Inc. will select
the lowest purchase price between $14.25 and $16.25 net per share in cash,
without interest, that will allow it to purchase 90,000 shares, or, if a lesser
number of shares are properly tendered, all shares that are properly tendered.
All shares acquired in the tender offer will be purchased at the same price.
Steelton Bancorp, Inc.'s offer is being made upon the terms and subject
to the conditions set forth in its offer to purchase, dated July 19, 2001, and
in the related letter of transmittal which, as they may be amended and
supplemented from time to time, together constitute the tender offer.
Only shares properly tendered at prices equal to or below the purchase
price and not properly withdrawn will be purchased. However, because of the
proration provisions described in the offer to purchase, all of the shares
tendered at or below the purchase price may not be purchased if more than 90,000
shares are properly tendered. All shares tendered and not purchased, including
shares tendered at prices above the purchase price and shares not purchased
because of proration or the conditional tender procedures, will be returned at
Steelton Bancorp, Inc.'s expense as soon as practicable following the expiration
date.
Steelton Bancorp, Inc. reserves the right, in its sole discretion, to
purchase more than 90,000 shares pursuant to the offer, subject to applicable
law. Upon the terms and conditions of Steelton Bancorp, Inc.'s offer, if more
than 90,000 shares are properly tendered at prices equal to or below the
purchase price and not properly withdrawn, Steelton Bancorp, Inc. will purchase
properly tendered shares in the following order:
o First, all shares properly tendered and not properly withdrawn by
any "odd lot holder" (as defined below) who:
o tenders all shares owned (beneficially or of record) by the
odd lot holder at a price equal to or below the purchase
price (tenders of less than all the shares owned will not
qualify for this preference); and
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o completes the section entitled "Odd Lots" in the letter of
transmittal and, if applicable, in the notice of guaranteed
delivery; and
o Second, after the purchase of all the shares properly tendered by
odd lot holders and subject to the conditional tender procedures
described in section 5 of the offer to purchase, all other shares
properly tendered at prices equal to or below the purchase price,
on a pro rata basis with appropriate adjustments to avoid
purchases of fractional shares.
A TENDER OF YOUR SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER YOUR SHARES HELD
BY US FOR YOUR ACCOUNT.
Accordingly, please use the attached "Instruction Form" to instruct us
as to whether you wish us to tender any or all of the shares we hold for your
account on the terms and subject to the conditions of the tender offer.
WE CALL YOUR ATTENTION TO THE FOLLOWING:
1. You may tender shares at prices not in excess of $16.25 nor less
than $14.25 per share as indicated in the attached Instruction
Form, net to you in cash, without interest.
2. You should consult with your broker regarding the possibility of
designating the priority in which your shares will be purchased
in the event of proration.
3. The tender offer is not conditioned upon any minimum number of
shares being tendered. The tender offer is, however, subject to
certain other conditions described in the offer to purchase.
4. The tender offer and withdrawal rights will expire at 5:00 p.m.,
Eastern time on Thursday, August 16, 2001, unless Steelton
Bancorp, Inc. extends the tender offer.
5. The tender offer is for 90,000 shares, constituting approximately
25% of the shares outstanding as of July 19, 2001.
6. Tendering shareholders who are registered shareholders or who
tender their shares directly to Illinois Stock Transfer Company
as the depositary, will not be obligated to pay any brokerage
commissions or fees, solicitation fees, or, except as set forth
in the offer to purchase and the letter of transmittal, stock
transfer taxes on Steelton Bancorp, Inc.'s purchase of shares
under the tender offer.
7. If you are an odd lot holder, meaning that you own beneficially
or of record an aggregate of fewer than 100 shares, and you
instruct us to tender on your behalf all such shares at or below
the purchase price before the expiration date and check the box
captioned "Odd Lots" in the attached instruction form, Steelton
Bancorp, Inc., upon the terms and subject to the conditions of
the tender offer, will accept all such shares for purchase before
proration, if any, of the purchase of other shares properly
tendered at or below the purchase price and not properly
withdrawn.
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8. If you wish to tender portions of your shares at different
prices, you must complete a separate Instruction Form for each
price at which you wish to tender each such portion of your
shares. We must submit separate letters of transmittal on your
behalf for each price you will accept.
9. The board of directors of Steelton Bancorp, Inc. has approved the
tender offer. However, neither Steelton Bancorp, Inc. nor its
board of directors nor the information agent makes any
recommendation to shareholders as to whether they should tender
or not tender their shares or as to the price or prices at which
shareholders may choose to tender their shares. Shareholders must
make their own decision as to whether to tender their shares and,
if so, how many shares to tender and the price or prices at which
such shares should be tendered. Steelton Bancorp, Inc.'s
directors and executive officers have advised Steelton Bancorp,
Inc. that they do not intend to tender any shares in the tender
offer.
10. If you wish to have us tender any or all of your shares, please
so instruct us by completing, executing, detaching and returning
to us the attached Instruction Form. If you authorize us to
tender your shares, we will tender all such shares unless you
specify otherwise on the attached Instruction Form.
Please forward your Instruction Form to us as soon as possible to allow
us ample time to tender your shares on your behalf prior to the expiration of
the offer.
The tender offer is being made solely under the offer to purchase and
the related letter of transmittal and is being made to all record holders of
shares. The tender offer is not being made to, nor will tenders be accepted from
or on behalf of, holders of shares residing in any jurisdiction in which the
making of the tender offer or acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction.
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INSTRUCTION FORM
INSTRUCTIONS FOR TENDER OF SHARES OF STEELTON BANCORP, INC.
By signing this instruction form you acknowledge receipt of our letter
and the enclosed offer to purchase, dated July 19, 2001, and the related letter
of transmittal in connection with the offer by Steelton Bancorp, Inc., a
Pennsylvania corporation, to purchase shares of its common stock, $0.10 par
value per share. Steelton Bancorp, Inc. is offering to purchase up to 90,000
shares at a price not greater than $16.25 nor less than $14.25 per share, net to
the seller in cash, without interest, as specified by shareholders tendering
their shares. Steelton Bancorp, Inc.'s offer is being made upon the terms and
subject to the conditions set forth in the offer to purchase and in the related
letter of transmittal, which, as they may be amended or supplemented from time
to time, together constitute the offer.
This will instruct us to tender to Steelton Bancorp, Inc., on your
behalf, the number of shares indicated below (or if no number is indicated
below, all shares) which are beneficially owned by you but registered in our
name, upon the terms and subject to the conditions of the offer.
Number of shares to be tendered:
___________________ shares. (Unless otherwise indicated, it will be
assumed that all shares held by us for
us for your account are to be tendered.)
PRICE AT WHICH YOU ARE TENDERING
(SEE INSTRUCTION 5 TO THE LETTER OF TRANSMITTAL)
You must check one box and only one box if you want to tender your shares. If
more than one box is checked or if no box is checked, your shares will not be
properly tendered.
SHARES TENDERED AT A PRICE DETERMINED BY YOU:
By checking one of the following boxes below instead of the box under "Shares
tendered at a price determined pursuant to the offer," you are tendering shares
at the price checked. This action could result in none of your shares being
purchased if the purchase price selected by Steelton Bancorp, Inc. for the
shares is less than the price checked below. If you want to tender portions of
your shares at more than one price, you must complete a separate letter of
transmittal for each price at which you tender shares. The same shares cannot be
tendered at more than one price.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
[ ] $14.25 [ ] $15.00 [ ] $15.75
[ ] $14.50 [ ] $15.25 [ ] $16.00
[ ] $14.75 [ ] $15.50 [ ] $16.25
OR
SHARES TENDERED AT A PRICE DETERMINED PURSUANT TO THE OFFER:
[ ] By checking this one box instead of one of the price boxes above, you are
tendering shares and are willing to accept the purchase price selected by
Steelton Bancorp, Inc. in accordance with the terms of the offer. This
action will maximize the chance of having Steelton Bancorp, Inc. purchase
your shares (subject to the possibility of proration). Note this action
could result in your receiving a price per share as low as $14.25.
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ODD LOTS
(SEE INSTRUCTION 8 TO THE LETTER OF TRANSMITTAL)
Complete this section only if you own, or are tendering on behalf of a person
who owns, beneficially or of record, an aggregate of fewer than 100 shares and
are tendering all of your shares.
You either (check one box):
[ ] are the beneficial or record owner of an aggregate of fewer than 100
shares, all of which are being tendered; or
[ ] are a broker, dealer, commercial bank, trust company, or other nominee that
(a) is tendering for the beneficial owner(s), shares with respect to which
it is the record holder, and (b) believes, based upon representations made
to it by the beneficial owner(s), that each such person is the beneficial
owner of an aggregate of fewer than 100 shares and is tendering all of the
shares.
CONDITIONAL TENDER
(SEE INSTRUCTION 15 TO THE LETTER OF TRANSMITTAL)
You may condition your tender of shares on Steelton Bancorp, Inc. purchasing a
specified minimum number of your tendered shares, all as described in section 5
of the offer to purchase. Unless the minimum number of shares you indicate below
is purchased by Steelton Bancorp, Inc. in the offer, none of the shares you
tendered will be purchased. It is your responsibility to calculate that minimum
number of shares that must be purchased if any are purchased, and you are urged
to consult your own tax advisor before completing this section. Unless this box
has been checked and a minimum number of shares specified, your tender will be
deemed unconditional.
[ ] The minimum number of shares that must be purchased, if any are purchased,
is: ____________ shares.
If because of proration, the minimum number of shares that you designated above
will not be purchased, Steelton Bancorp, Inc. may accept conditional tenders by
random lot, if necessary. However, to be eligible for purchase by random lot,
you must have tendered all your shares and checked this box:
[ ] The tendered shares represent all shares held by me.
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF
THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
SIGN HERE:
Signature(s): _______________________________________________________
Print Name(s): ______________________________________________________
Address(es): ________________________________________________________
Area Code and Telephone Number: _____________________________________
Taxpayer Identification or Social Security Number: __________________
Date: ______________________, 2001
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