Terra Nova Financial Group, Inc. - Exhibit 10.1




Exhibit 10.1



  
REINCORPORATION AGREEMENT AND PLAN OF MERGER
  

   

 

             This
Reincorporation Agreement and Plan of Merger (this "Merger Agreement"),
is entered into as of June 20, 2008, by and between Terra Nova Financial Group,
Inc., a Texas corporation ("TN Texas"), and Terra Nova Newco, Inc., an Illinois
corporation and a wholly owned subsidiary of TN Texas ("TN Illinois") .




RECITALS: 



             A.
        TN Texas is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Texas. As of the date hereof, the authorized capital stock of TN Texas consists
of 150,000,000 shares of common stock, par value $.01 per share, of which 26,017,057
shares are issued and outstanding, and 5,000,000 shares of preferred stock, par
value $10.00 per share, none of which are outstanding; 



             B.
        TN Illinois is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Illinois. As of the date hereof, the authorized capital stock of TN Illinois
consists of 150,000,000 shares of common stock, par value $.01 per share, and
5,000,000 shares of preferred stock, par value $10.00 per share. As of the date
hereof and prior to giving effect to the transactions contemplated hereby, no
shares of preferred stock of TN Illinois are outstanding and 100 shares of common
stock of TN Illinois are issued and outstanding, all of which are held by TN Texas;




             C.        
The board of directors of TN Texas has determined that it is advisable and in
the best interests of TN Texas and the shareholders of TN Texas (the "TN Texas
Shareholders") to effect the reincorporation of TN Texas in the State of Illinois
and has approved a plan of merger providing for the merger of TN Texas with and
into TN Illinois on the terms and subject to the conditions set forth herein;




             D.
        The board of directors of TN Illinois
has determined that it is advisable and in the best interests of TN Illinois and
the sole stockholder of TN Illinois that TN Illinois enter into, and has accordingly
approved, a plan of merger providing for the merger of TN Texas with and into
TN Illinois on the terms and subject to the conditions set forth herein; 



             E.
        The TN Texas Shareholders have
approved this Merger Agreement at the regular annual meeting thereof held on May
23, 2008 in accordance with TN Texas' articles of incorporation and bylaws and
the Texas Business Corporation Act (the "Texas BCA"); 



             F.
        The sole stockholder of TN Illinois
has approved this Merger Agreement by a duly adopted written consent in accordance
with TN Illinois' articles of incorporation and bylaws and the Illinois Business
Corporation Act (the "Illinois BCA"); 



             G.
        The respective boards of directors
of TN Texas and TN Illinois have authorized and approved the plan of merger of
TN Texas with and into TN Illinois upon the terms and subject to the conditions
set forth herein, and have directed that this Merger Agreement be executed by
the undersigned officers; and 



 

  







             H.
        It is the intention of TN Texas
and TN Illinois that the Merger (as defined herein) be a tax-free reorganization
within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended
(the "Code"). 



             NOW,
THEREFORE, for and in consideration of the mutual premises contained in this Merger
Agreement and for other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties, intending to be legally bound, agree as
follows: 



ARTICLE I 

  THE MERGER 



             Section
1.1         Merger of TN Texas into
TN Illinois. At the Effective Time (as defined in Section 2.1), TN Texas shall
merge (the "Merger") with and into TN Illinois in accordance with the Texas
BCA and Illinois BCA. 



             Section
1.2         Effects of Merger.
At the Effective Time, the separate existence of TN Texas shall cease and TN Illinois
shall be the surviving corporation (hereinafter referred to as the "Surviving
Corporation") and shall possess all the rights, privileges, powers and franchises
of a public as well as of a private nature, and be subject to all the restrictions,
disabilities and duties of each of TN Texas and TN Illinois (together referred
to as the "Constituent Corporations"); and all the rights, privileges,
powers and franchises of each of the Constituent Corporations, and all property,
real, personal and mixed, and all debts due to either of the Constituent Corporations,
on whatever account, as well as for stock subscriptions and all other things in
action or belonging to each of the Constituent Corporations, shall be vested in
the Surviving Corporation; and all property, rights, privileges, powers and franchises,
and all and every other interest shall be thereafter as effectually the property
of the Surviving Corporation as they had been of the several and respective Constituent
Corporations, and the title to any real estate vested in either of such Constituent
Corporations by deed or otherwise under the laws of the States of Illinois or
Texas, as the case may be, shall not revert or be in any way impaired for any
reason whatsoever; but all rights of creditors and all liens upon any property
of any of the Constituent Corporations shall be preserved unimpaired, and all
debts, liabilities and duties of the respective Constituent Corporations shall
thereafter attach to the Surviving Corporation and may be enforced against it
to the same extent as if those debts, liabilities and duties had been incurred
or contracted by it. All corporate acts, plans, policies, agreements, arrangements,
approvals and authorizations of TN Texas, the TN Texas Shareholders, the board
of directors of TN Texas and any committee thereof, and officers and agents of
TN Texas which were valid and effective immediately prior to the Effective Time
shall be taken for all purposes as corporate acts, plans, policies, agreements,
arrangements, approvals and authorizations of the Surviving Corporation and shall
be as effective and binding thereon as the same were with respect to TN Texas.
Each employee or agent of TN Texas shall become an employee or agent of TN Illinois,
as applicable, and continue to be entitled to the same rights and benefits which
she or he enjoyed as an employee or agent of TN Texas, as applicable. The requirements
of any plans or agreements of TN Texas involving the issuance or purchase by TN
Texas of certain shares of its capital stock shall be satisfied by the issuance
or purchase of a like number of shares of the Surviving Corporation. 





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ARTICLE II 

  EFFECTIVE TIME; EFFECTS OF MERGER 

 

              Section
2.1.         Effective Time. The
Merger shall become effective on the date articles of merger are filed with the
Secretary of State of the State of Texas and the articles of merger are filed
with the Secretary of State of the State of Illinois (the "Effective Time").
At the Effective Time, the Merger shall have the effects specified in the Illinois
BCA, the Texas BCA and this Merger Agreement. 



             Section
2.2.         Articles of Incorporation
and Bylaws. At the Effective Time, the articles of incorporation and the bylaws
of TN Illinois, as in effect immediately prior to the Effective Time, shall remain
the articles of incorporation and bylaws of the Surviving Corporation, with the
exception that Item 1 of the articles of incorporation relating to the name of
the Surviving Corporation shall be amended upon the Effective Time to read as
follows: 



             1.
Corporate Name: Terra Nova Financial Group, Inc. 



             and
said articles of incorporation, as herein amended, and bylaws shall continue in
full force and effect until the same shall be altered, amended or repealed in
accordance with the Illinois BCA. 



             Section
2.3.         Directors and Officers.
At the Effective Time, the directors and officers of TN Texas in office at the
Effective Time shall retain their positions as the directors and officers, respectively,
of the Surviving Corporation, each of such directors and officers to hold office,
subject to the applicable provisions of the articles of incorporation and bylaws
of the Surviving Corporation and Illinois law, until his or her successor is duly
elected or appointed and qualified, or until his or her earlier death, resignation
or removal. 



ARTICLE III 

  CONVERSION AND EXCHANGE OF STOCK 



             Section
3.1         Conversion. 



             (a)        
Shares of TN Texas. At the Effective Time, by virtue of the Merger and
without any action on the part of any holder thereof: 



             (i)
each previously issued share of common stock, par value $.01 per share, of TN
Texas ("TN Texas Common Stock") that remains outstanding immediately prior
to the Effective Time, other than shares of TN Texas Common Stock, if any, for
which appraisal rights have been perfected under Sections 5.12 and 5.13 of the
Texas BCA, shall be changed and converted into one fully paid and nonassessable
share of common stock, $.01 par value per share, of the Surviving Corporation
("TN Illinois Common Stock"); and 



             (ii)
each option, warrant or other similar right to acquire shares of TN Texas Common
Stock that remains outstanding immediately prior to the Effective Time shall be
changed and converted into an equivalent option, warrant or similar right to acquire
(on the same terms and conditions as were applicable to the converted option,
warrant or similar right, as applicable) the same number of shares of TN Illinois
Common Stock, and no "additional benefits" (within the meaning of Section 424(a)(2)
of the Code) shall be accorded to the optionees pursuant to the assumption of
their options. 





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             (b)        
Cancellation. At the Effective Time, each share of TN Illinois Common Stock
issued and outstanding immediately prior to the Effective Time and held by TN
Texas shall be canceled without any consideration being issued or paid therefor.




             Section
3.2         Exchange of Certificates.




             (a)        
After the Effective Time, each holder of an outstanding certificate representing
TN Texas Common Stock may, at such holder's election, surrender such certificate
for cancellation to Computershare Trust Company, N.A., as transfer agent (the
"Exchange Agent"), and each such holder shall be entitled to receive in
exchange therefor a certificate or certificates representing the number of shares
of TN Illinois Common Stock into which the surrendered shares were converted as
provided herein. Unless and until so surrendered, each outstanding certificate
theretofore representing shares of TN Texas Common Stock shall be deemed for all
purposes to represent the number of shares of TN Illinois Common Stock into which
such shares of TN Texas Common Stock were converted at the Effective Time. The
holder of record of shares represented by any such outstanding certificate(s),
as shown on the books and records of TN Illinois or the Exchange Agent, shall
have and be entitled to exercise any voting and other rights with respect to,
and to receive dividends and other distributions upon shares of TN Illinois Common
Stock represented by, such outstanding certificate(s) until such certificate(s)
are surrendered to TN Illinois or the Exchange Agent for transfer, converted or
otherwise accounted for. 



             (b)
       Each certificate representing TN Illinois
Common Stock issued in connection with the Merger shall bear the same legends
regarding transfer restrictions, if any, as the certificate representing TN Texas
Common Stock converted in accordance herewith and given in exchange therefore
(or such other additional legends as may be agreed upon by the holder thereof
and TN Illinois), unless otherwise determined by the board of directors of TN
Illinois in compliance with applicable laws. 



             (c)
        If a certificate representing
shares of TN Illinois Common Stock is to be issued in a name other than that in
which the certificate representing shares of TN Texas Common Stock surrendered
in exchange therefor is registered, it shall be a condition of issuance thereof:
(i) that the certificate so surrendered be properly endorsed and otherwise in
proper form for transfer; (ii) that such transfer be otherwise proper and comply
with applicable federal and state securities laws; and (iii) that the person requesting
such transfer pay to TN Illinois or the Exchange Agent any transfer or other taxes
payable by reason of issuance of such new certificate in a name other than that
of the registered holder of the certificate surrendered or establish to the satisfaction
of TN Illinois that such tax has been paid or that no tax shall result from by
reason of the issuance. 



             3.3
Treatment of 2005 Long-Term Incentive Plan: Employee Benefit Plans and Arrangements:
Shares of TN Illinois Common Stock Reserved for Issuance. 



             (a)        TN
Illinois and TN Texas shall take all action necessary to ensure that: 



                          (i)
        TN Texas' 2005 Long-Term Incentive
Plan (the "LTIP"), as amended and in effect immediately prior to the Effective
Time, is wholly, validly and unconditionally assumed by TN Illinois at the Effective
Time and that TN Illinois succeeds to all of the rights and obligations of TN
Texas under the LTIP, including by taking all action necessary to ensure that
each option to purchase shares of TN Texas Common Stock that remains outstanding
immediately prior to the  



  


4







Effective Time is converted at the Effective Time into an equivalent option
to acquire the same number of shares of TN Illinois Common Stock on the same terms
and conditions as were applicable to the converted option; 



                          (ii)        each
warrant to purchase TN Texas Common Stock outstanding immediately prior to the
Effective Time is converted at the Effective Time into a warrant to purchase,
on the same terms and conditions as were applicable under such TN Texas warrant,
the exact same number of shares of TN Illinois Common Stock; and 



                          (iii)      
with respect to any equity award otherwise granted under the LTIP, each participant's
rights to shares of TN Texas Common Stock under the LTIP becomes rights to shares
of TN Illinois Common Stock. 



             (b)        Upon
the Effective Time, one (1) share of TN Illinois Common Stock shall be reserved
for issuance upon the exercise of options, warrants or other similar rights to
purchase one (1) share of TN Texas Common Stock so reserved immediately prior
to the Effective Date. 



             (c)        
Following the Effective Time, the Surviving Corporation shall maintain in effect
all employee benefit plans and arrangements for employees, officers and directors
of the Surviving Corporation as in effect for employees, officers and directors
of TN Texas immediately prior to the Effective Time. All employees of TN Texas
will preserve the credit (for all purposes including eligibility to participate,
vesting, vacation entitlement and severance benefits) they had for service with
TN Texas as employees of TN Illinois. The Surviving Corporation will assume and
honor in accordance with their terms all written employment, severance, retention
and termination agreements (including any change in control provisions therein)
applicable to employees of TN Texas and its subsidiaries. 



ARTICLE IV 

  GENERAL 



             Section
4. 1         Covenants of TN Illinois.
TN Illinois covenants and agrees that it will, on or before the Effective Time:




             (a)        
file any and all documents necessary to the assumption by TN Illinois of all of
the tax liabilities of TN Texas; 



             (b)
       file Articles of Merger with the Secretary
of State of the State of Texas; 



             (c)        
file Articles of Merger with the Secretary of State of the State of Illinois;
and 



             (d)
        take all such other actions as
may be required by the Texas BCA and the Illinois BCA to effect the Merger. 



             Section
4.2         Covenants of TN Texas.
TN Texas covenants and agrees that it will, at or before the Effective Time, take
all such other actions as may be required by the Texas BCA and the Illinois BCA
to effect the Merger. 





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ARTICLE V 

  MISCELLANEOUS 



             Section
5.1         Amendment. This Merger
Agreement may be amended, modified or supplemented, in whole or in part, at any
time prior to the Effective Time with the mutual consent of the respective board
of directors of TN Texas and TN Illinois to the full extent permitted under applicable
law, provided, however, that any such amendment, modification or
supplement shall not (a) alter or change the amount or kind of shares to be received
in exchange for or on conversion of all or any of the shares of TN Texas pursuant
to the terms hereof or (b) alter or change any term hereof in the event such alteration
or change would adversely affect the holders of shares of common stock of TN Texas.




             Section
5.2         Abandonment: Postponement.
At any time prior to the Effective Time, this Merger Agreement may be terminated
and the Merger may be abandoned by the respective board of directors of TN Texas
or TN Illinois, or the consummation of the Merger may be postponed for a reasonable
period of time, without any action of the TN Texas Shareholders or the sole stockholder
of TN Illinois, notwithstanding the approval of this Merger Agreement by the TN
Texas Shareholders, the sole stockholder of TN Illinois or the board of directors
of either TN Texas or TN Illinois. 



             Section
5.3         Further Assurances.
If, at any time after the Effective Time, the Surviving Corporation determines
or is advised that any further assignments, transfers, deeds, conveyances or assurances
or any other acts or things are necessary or desirable (a) to vest, perfect or
confirm, of record or otherwise, in the Surviving Corporation, its right, title
or interest in, to or under any of the rights, properties or assets of TN Texas
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger, or (b) otherwise to carryon the purposes of this
Merger Agreement, the directors and officers of the Surviving Corporation shall
be authorized to execute and deliver, in the name and on behalf of TN Texas, all
such deeds, assignments and assurances and to do, in the name and on behalf of
TN Texas, all such other acts and things necessary or desirable to vest, perfect
or confirm any and all right, title or interest in, to or under such rights, properties
or assets in the Surviving Corporation or otherwise to carry out the purposes
of this Merger Agreement. 



             Section
5.4         Counterparts. This
Merger Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall be deemed to
be one and the same instrument. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the
same force and effect as if such facsimile signature page were an original thereof.




             Section
5.5         Governing Law. This
Merger Agreement shall be governed by, and construed in accordance with, the laws
of the State of Illinois, without regard for the conflicts of laws principles
thereof. 




[SIGNATURE PAGE FOLLOWS] 

  

  

  

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             IN
WITNESS WHEREOF, the parties to this Merger Agreement have executed this Merger
Agreement on and as of the day first written above. 



Terra Nova Financial Group, Inc., 

a Texas corporation 



By: 



	Name:	Michael
      G. Nolan	 
	Title:	Chief Executive Officer	 






Terra Nova Newco, Inc., 

an Illinois corporation 



By: 



	Name:	Michael
      G. Nolan	 
	Title:	Chief Executive Officer	 






[Signature Page to Reincorporation Agreement
  and Plan of Merger]