EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
AMONG
WEB STREET SECURITIES, INC.,
an Illinois corporation,
WEB STREET FINANCIAL GROUP, INC.,
a Delaware corporation
AND
WEB STREET SECURITIES, INC.,
a Delaware corporation
THIS AGREEMENT AND PLAN OF MERGER, dated as of March 19, 1998, is made
among WEB STREET SECURITIES, INC., an Illinois corporation ("WS-IL"), WEB STREET
FINANCIAL GROUP, INC., a Delaware corporation ("WSFG"), and WEB STREET
SECURITIES, INC., a Delaware corporation and a wholly-owned subsidiary of WSFG
("WS-DE"). WS-IL and WS-DE are hereinafter sometimes referred to as the
"Constituent Entities."
WHEREAS, the Board of Directors and shareholders of WS-IL holding a
majority in interest of each class of WS-IL capital stock deem it advisable and
in the best interests of WS-IL that WS-DE be merged with and into WS-IL;
WHEREAS, the Board of Directors and all of the stockholders of WSFG deem it
advisable and in the best interests of WSFG that WS-DE be merged with and into
WS-IL;
WHEREAS, the Board of Directors and WSFG, as the sole stockholder of WS-DE,
deem it advisable and in the best interests of WS-DE that WS-DE be merged with
and into WS-IL; and
WHEREAS, the merger of a corporation organized under the laws of the
Delaware into another corporation organized under the laws of Illinois is
permitted under Section 11.35 of the Illinois Business Corporation Act, as
amended (the "IBCA"), and Section 252 of the Delaware General Corporation Law,
as amended (the "DGCL").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto agree that WS-DE shall
be merged with and into WS-IL, and that the terms and conditions of such merger,
the mode of carrying the same into effect, and the manner and basis of
converting and exchanging the stock of WS-DE into the stock of WS-IL, shall be
as follows:
1. The Merger. At the Effective Time (as defined in Section 6 below),
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WS-IL and WS-DE shall be merged into a single corporation on the terms and
conditions hereinafter set forth and in accordance with the applicable
provisions of the IBCA and the DGCL, by WS-DE merging with and into WS-IL(the
"Merger"), and WS-IL shall be the "Surviving Entity." The separate existence of
WS-DE shall cease, and the existence of WS-IL, under the name "Web Street
Securities, Inc." shall continue unaffected and unimpaired by the Merger with
all the rights, privileges, immunities and powers, and subject to all the
duties, obligations and liabilities of a corporation formed under the IBCA.
2. Articles of Incorporation; By-laws. The Articles of Incorporation of
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WS-IL, in effect at the Effective Time, shall continue to be the Articles of
Incorporation of the Surviving Entity, until the same shall be altered, amended
or repealed in accordance with the provisions thereof and the provisions of
applicable law. The By-laws of WS-IL, in effect at the Effective Time, shall
continue to be the By-laws of the Surviving Entity, until the same shall be
altered, amended or repealed in accordance with the provisions thereof and the
provisions of applicable law.
3. Officers and Directors. The officers and the directors of WS-IL
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immediately prior to the Effective Time shall continue to be the officers and
directors, respectively, of the Surviving Entity until their successors shall
have been duly elected in accordance with the Articles of Incorporation of the
Surviving Entity and applicable laws.
4. Effect of Merger. At and after the Effective Time, the Surviving
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Entity shall possess all the rights, privileges, powers and franchises of a
public as well as of a private nature, and shall be subject to all of the
restrictions, disabilities and duties, of each of the Constituent Entities; and
all and singular, the rights, privileges, powers and franchises of the
Constituent Entities, and all property, real, personal and mixed, and all debts
due to each of the Constituent Entities on whatever account shall be vested in
the Surviving Entity; and all property, rights, privileges, powers and
franchises, and all and every other interest shall be thereafter as effectually
the property of the Surviving Entity as they were of the Constituent Entities,
and the title to any real estate vested by deed or otherwise in each of the
Constituent Entities shall not revert or be in any way impaired; but all rights
of creditors and all liens upon any property of each of the Constituent Entities
shall be preserved unimpaired, and all debts, liabilities and duties of each of
the Constituent Entities shall thenceforth attach to the Surviving Entity and
may be enforced against it to the same extent as if said debts, liabilities and
duties had been incurred or contracted by it. If at any time the Surviving
Entity shall consider or be advised that any further assignment or assurances in
law or any things are necessary or desirable to vest in the Surviving Entity,
according to the terms hereof, the title of any property or rights of WS-DE, the
directors and/or the officers of WS-DE immediately prior to the Effective Time
shall and will execute and make all such proper assignments and assurances and
do all things necessary or proper to vest title in such property or rights in
the Surviving Entity, and otherwise to carry out the purposes of this Plan and
Agreement of Merger.
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5. Conversion and Redemption of Shares. At the Effective Time, by virtue
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of the Merger and without any action on the part of any holder thereof:
(a) each share of common stock, no par value, of WS-IL which shall be
outstanding immediately prior to the Effective Time shall at the Effective Time
be converted into 1.25 (one and twenty-five hundredths) shares of newly issued
WSFG common stock, $.01 par value;
(b) each share of Class B (Special) stock, no par value, of WS-IL which
shall be outstanding immediately prior to the Effective Time shall at the
Effective Time be converted into one share of newly issued WSFG Series C
preferred stock, $.01 par value;
(c) each share of Class A Preferred stock, $10 par value, of WS-IL which
shall be outstanding immediately prior to the Effective Time shall at the
Effective Time be converted into 1.25 (one and twenty-five hundredths) shares of
newly issued WSFG Series A preferred stock, $.01 par value; and
(d) each share of common stock, $.01 par value, of WSFG held by Xxxxxx X.
Xxx and each of such shares held by Avi Fox immediately prior to the Effective
Time shall at the Effective Time be redeemed by WSFG in consideration for
$.000001 per share. All shares of common stock of WSFG held by Xxxxxx Xxxxxxxxx
at the Effective Time shall remain unaffected.
6. Effective Time of the Merger. The effective time of the Merger (the
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"Effective Time") shall be the time of the later to occur of the following two
events: (a) the Secretary of State of the State of Illinois shall have accepted
for filing the Articles of Merger filed in connection with the Merger and (b)
the Secretary of State of the State of Delaware shall have accepted for filing
the Certificate of Merger filed in connection with the Merger.
7. Amendment and Termination.
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(a) This Plan and Agreement of Merger may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
(b) At any time prior to the Effective Time, whether before or after
approval by the Constituent Entities, this Plan and Agreement of Merger may be
terminated and the Merger abandoned by agreement of the Constituent Entities.
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IN WITNESS WHEREOF, this Plan and Agreement of Merger has been executed by
the parties hereto as of the date first above written.
WS-IL
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WEB STREET SECURITIES, INC., an Illinois
corporation
By: /s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
Chairman
WSFG
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WEB STREET FINANCIAL GROUP, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
Chairman
WS-DE
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WEB STREET SECURITIES, INC., a Delaware
corporation
By: /s/ Xxxxxx X. Xxx
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Xxxxxx X. Xxx
Chairman
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