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Exhibit 10.2
 
NQO OPTION AGREEMENT
STATE FINANCIAL SERVICES CORPORATION
1998 STOCK INCENTIVE PLAN

THIS AGREEMENT made as of February 3, 2004, between State Financial Services
Corporation (hereafter "Corporation"), a Wisconsin corporation, and (hereafter
"Optionee"), an officer/employee of the Corporation and/or one of its
subsidiaries.
PREMISES

Whereas, the Corporation has adopted the State Financial Services Corporation
1998 Stock Incentive Plan (hereafter "Plan") under which the Option Committee
may, among other things, grant options to key officers/employees of the
Corporation and its subsidiaries to purchase shares of the Corporation's common
stock, par value $.10 per share (hereafter "Common Stock"), subject to terms,
condition, restrictions and discretion as it may deem appropriate.

Whereas, the Optionee is a key officer/employee of the Corporation and/or its
subsidiaries and has been selected by the Option Committee to receive an Option
under the Plan as an incentive to continue his/her services and to increase
his/her proprietary interest in the Corporation.

Whereas, pursuant to the Plan, the grant of the Option to the Optionee is
conditioned upon the due execution of this Option Agreement.

NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements herein set forth, the parties hereby mutually covenant and agree as
follows:

1.           Grant

  (a) The Corporation grants to the Optionee an Option to purchase from the
Corporation all or any part of an aggregate <# of shares> number of shares of
Common Stock (hereafter "Optioned Shares") on the terms and conditions and
restrictions set forth in this Option Agreement and in the Plan. The terms and
provisions of the Plan are incorporated herein in their entirety. In the event
of a conflict or ambiguity between the Option Agreement and the Plan, the terms
and provisions of the Plan shall be controlling.

  (b) The Options under this grant are not intended to constitute "incentive
stock options" as that term is used in Section 422A of the Code and shall
constitute "nonqualified stock options".

  (c) The Option price to be paid for the Optioned Shares shall be $ which is
not less than 100% of the Fair Market Value of the Common Stock on the date the
Option was granted.

2.            Term of Option

  (a) Subject to the limitations of this Option Agreement, Options shall vest,
in relation to date of grant as follows:

Years after Date of Grant
Vested Percentage of Options Available
1 year
25%
2 years
25%
3 years
50%

Vesting will be accelerated in certain circumstances subject to applicable laws
and Plan provisions if approved by the Option Committee. These circumstances
include a change in control of the Corporation, or the disability or death of
the Optionee.

  (b) Thereafter, the Optionee may exercise this Option, in whole or in part,
for the number of shares vested, however the Option shall expire for the number
of Optioned Shares that have not been purchased on February 3, 2014, ten years
from the grant date.

        

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(c) The minimum number of Optioned Shares that may be purchased at one time
shall be the lesser of 100 Optioned Shares or ten percent (10%) of the aggregate
number of shares granted under this Agreement.

(d) The Option may be exercised only by written notice, delivered or mailed by
postpaid, registered or certified mail, addressed to the Secretary of the
Corporation specifying the number of Optioned Shares being purchased. Such
notice shall be accompanied by payment in cash or its equivalent of the entire
Exercise Price of the Optioned Shares being purchased or by tendering previously
acquired shares of Common Stock having a Fair Market Value determined in
conformity with the requirements of Section 7.4 of the Plan at the time of
exercise equal to the entire purchase price of the Optioned Shares being
purchased or any combination of cash and Common Stock. The Option Committee, in
its discretion, may provide through any subsidiary bank of the Corporation, a
loan to the Optionee subject to applicable laws.

3.           Withholding Taxes

All deliveries and distributions under this Option Agreement are subject to
withholding of all applicable taxes. The Optionee by this Option Agreement may
authorize the Corporation or any subsidiary to retain and withhold from any cash
amounts due or to become due from the Corporation to the Optionee an amount
equal to such taxes as may be required by any government to be withheld or to
retain and withhold the number of shares having a market value not less than the
amount of such taxes and cancel any such shares so withheld, in order to
reimburse the Corporation or any subsidiary, unless the Optionee has made
arrangements satisfactory to the Option Committee, regarding such payment.

4.             Transfer

The Options herein granted shall not be transferable by the Optionee otherwise
than by will or the laws of descent and distribution and may be exercised during
the life of the Optionee only by the Optionee.

5.             Termination of Options

Except as may be otherwise provided by the Option Committee, vested Options may
not be exercised:

  (a) more than three months after termination of the Optionee’s employment or
services with the Corporation or a subsidiary for any reason other than
termination for cause, disability or death; or

  (b) after termination of the Optionee’s employment or services with the
Corporation or a subsidiary if the termination is for cause; or

  (c) more than 12 months after termination of employment or services by reason
of death or disability; or

  (d) more than 10 years from the grant date.

6.              Acquisition, Merger and Liquidation

In the event of an acquisition, merger or liquidation, the Optionee shall have
the rights set forth in the Plan in respect of this Option.

7.  General Provisions

  (a) The Optionee agrees for himself/herself and his/her heirs, legatees, and
legal representatives, with respect to all shares of Common Stock acquired
pursuant to the terms and conditions of this Option Agreement (or any shares of
Common Stock issued pursuant to a stock dividend or stock split thereon or any
securities issued in lieu thereof or in substitution or exchange therefore) that
he and his heirs, legatees and legal representatives will not sell or otherwise
dispose of such shares except pursuant to an effective Registration Statement
under the Securities Act of 1933 or except in a transaction which, in the
opinion of counsel for the Corporation, is exempt from registration under such
Act.

       

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  (b) Except as provided in Article 5.3 of the Plan, the existence of the Option
herein granted shall not affect in any way the right or power of the Corporation
or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Corporation's capital
structure or its business, or any merger or consolidation of the Corporation, or
any issuance of bonds, debentures, preferred or prior preference stock ahead of
or affecting the Common Stock or the rights thereof, or dissolution or
liquidation of the Corporation, or any sale or transfer of all or any part of
its assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

  (c) Nothing in this Option Agreement shall confer on the Optionee any right to
continue in the employ of the Corporation of any subsidiary banks or in any way
affect the Corporation's or any subsidiary bank's right to terminate the
Optionee's employment without prior notice at any time for any or no reason.

  (d) This Option Agreement shall be subject to the terms of the Plan as may be
amended, except this Option Agreement may not, in any way, be restricted or
limited by any Plan amendment or termination approved after the grant date,
without the Optionee's written consent.

  (e) This Option Agreement shall be construed and enforced in accordance with
and shall be governed by the laws of the State of Wisconsin.

  (f) The Option Committee in its sole discretion shall determine any dispute or
disagreement that may arise under or as a result of or pursuant to this Option
Agreement. Any interpretation, determination or other action made or taken by
the Option Committee pursuant to the provisions of this Option Agreement shall
be final, binding and conclusive for all purposes and upon all persons.

  (g) Notice to the Corporation required under or relating to this Agreement
shall be in writing and addressed to:

State Financial Services Corporation
Attention: Beth J. Bahr
815 North Water Street
Milwaukee, WI 53202

Any notice of the Optionee shall be addressed to:

  (h) This Agreement contains the entire understanding of the parties and shall
not be modified of amended except in writing and duly signed by the parties. No
waiver by either party of any default under this Agreement shall be deemed a
waiver of any later default.

  (i) Except as otherwise provided by law, it is understood that the number of
options granted to the Optionee and the terms of this Agreement shall be held in
strict confidence, except for such disclosure by the Optionee, as may be
required for financial and estate planning purposes.

  (j) The Optionee acknowledges receipt of a copy of the Plan, as amended. All
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Plan.

       

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IN WITNESS WHEREOF, the parties have signed this Option Agreement as of the date
hereof.

                        STATE FINANCIAL SERVICES CORPORATION

By:      
   
Michael J. Falbo
 
President and Chief Executive Officer
       
Attest:

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Daniel Westrope
Senior Vice President,
 
Chief Financial Officer
   
«First_Name_______________________» 
«Last_Name________________________»
 
Optionee

 

       

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STATE FINANCIAL SERVICES CORPORATION
ISO OPTION AGREEMENT
1998 STOCK INCENTIVE PLAN
BENEFICIARY DESIGNATION FORM

OPTIONEE'S NAME:  <employee name>                                               
Date:                                                       

As a Optionee in the above Plan, I hereby designate the following individual(s)
as my primary and alternate beneficiaries in the event of my death prior to the
date on which I exercise my rights, or receive all benefits due to me under the
Plan. I reserve the right to change this designation with the understanding that
this designation, and any change thereof, will be effective only upon delivery
to State Financial Services Corporation. The right to exercise my unexercised
options under the Plan, if any, will be transferred to my primary beneficiaries
who survive me, and to my alternate beneficiaries who survive me only if none of
my primary beneficiaries survive me.

Primary Beneficiaries

Name:
   
Social Security #:
 
Full Address:
   
Relationship:
       
Percentage Designation:
       
Birth Date:
                 
Name:
   
Social Security #:
 
Full Address:
   
Relationship:
       
Percentage Designation:
           
Birth Date:
       

 

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Alternate beneficiaries

Name:
   
Social Security #:
 
Full Address:
   
Relationship:
       
Percentage Designation:
       
Birth Date:
                 
Name:
   
Social Security #:
 
Full Address:
   
Relationship:
       
Percentage Designation:
           
Birth Date:
       

 
I acknowledge that execution of this form and delivery thereof to State
Financial Services Corporation revokes all prior beneficiary designations I have
made with respect to my outstanding awards under the Plan.

     
Signature of Optionee
     
Social Security Number