S-3

    As filed with the Securities and Exchange Commission on October 10, 2003
                                                     Registration No. 333-______

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM S-3
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933
                            -------------------------

                            WEBFINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

             Delaware                                            56-2043000
   (State or other jurisdiction of                           (I.R.S. Employer
   incorporation or organization)                          Identification Number)

                               590 Madison Avenue
                                   32nd Floor
                            New York, New York 10022
                                 (212) 758-3232
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)
                          ----------------------------

                             Warren G. Lichtenstein
                      President and Chief Executive Officer
                               590 Madison Avenue
                                   32nd Floor
                            New York, New York 10022
                                 (212) 758-3232
            (Name, address, including zip code, and telephone number,
             including area code, of agent for service of process)


                                   Copies to:
                               Adam Finerman, Esq.
                 Olshan Grundman Frome Rosenzweig & Wolosky LLP
                                 505 Park Avenue
                            New York, New York 10022
                                 (212) 753-7200
                         ------------------------------

        Approximate date of commencement of proposed sale to the public:
 As soon as practicable after the effective date of this registration statement.
                            -------------------------






            If the only  securities  being  registered  on this  Form are  being
offered pursuant to dividend or interest  reinvestment  plans,  please check the
following box. |_|

            If any of the  securities  being  registered  on this Form are to be
offered  on a  delayed  or  continuous  basis  pursuant  to Rule 415  under  the
Securities Act of 1933,  other than  securities  offered only in connection with
dividend or interest reinvestment plans, please check the following box. |X|

            If this  Form is  filed to  register  additional  securities  for an
offering  pursuant to Rule 462(b)  under the  Securities  Act,  please check the
following box and list the Securities Act  registration  statement number of the
earlier effective registration statement for the same offering. |_|

            If this Form is a  post-effective  amendment  filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act  registration   statement  number  of  the  earlier  effective  registration
statement for the same offering. |_|

            If delivery  of the  prospectus  is expected to be made  pursuant to
Rule 434, please check the following box. |_|


                         CALCULATION OF REGISTRATION FEE

========================================================================================
                                            Proposed Maximum
                                            Aggregate Offering          Amount Of
     Title of Shares to be Registered             Price(1)           Registration Fee
- ----------------------------------------------------------------------------------------
Common Stock, par value $.001 per share,      $10,000,000(2)              $809.00
issuable upon exercise of nontransferable
Rights...................................
========================================================================================

(1)  Estimated  solely for the purpose of calculating  the  registration  fee in
     accordance with Rule 457(o) under the Securities Act of 1933, as amended.
(2)  Represents   the  gross   proceeds   from  the  assumed   exercise  of  all
     nontransferable rights issued.

            THE  REGISTRANT  HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON SUCH
DATE OR  DATES AS MAY BE  NECESSARY  TO  DELAY  ITS  EFFECTIVE  DATE  UNTIL  THE
REGISTRANT SHALL FILE A FURTHER  AMENDMENT WHICH  SPECIFICALLY  STATES THAT THIS
REGISTRATION  STATEMENT  SHALL  THEREAFTER  BECOME  EFFECTIVE IN ACCORDANCE WITH
SECTION  8(A)  OF  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED,  OR  UNTIL  THE
REGISTRATION  STATEMENT  SHALL BECOME  EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.






            The  information  in  this  prospectus  is not  complete  and may be
changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these  securities  and is not  soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

                  SUBJECT TO COMPLETION, DATED OCTOBER 10, 2003
PROSPECTUS
                            WebFinancial Corporation
                         ________ Shares of Common Stock


            Our Board of Directors declared a dividend of rights to purchase our
common  stock  to  holders  of  record  as of  __________,  2003.  Through  this
prospectus,  we are offering the shares of common stock that rights  holders may
purchase upon exercising such subscription rights.

            You  received  one right for each share of common stock you owned on
the record  date of  _________,  2003.  Each right will  entitle you to purchase
_____ shares of our common stock at a subscription price of $______ per share.

            The rights are currently exercisable and will expire if they are not
exercised  by 5:00 p.m.,  New York City time,  on  _____________,  2003.  We may
extend the period for exercising the rights in our sole discretion.  If you want
to exercise  your  rights,  you must submit your  subscription  documents  to us
before the expiration date. Rights that are not exercised by the expiration date
will expire and will have no value.

            The  proceeds  from the  exercise of rights will be used for working
capital and general corporate purposes.

            Shares of our common stock are listed on the Nasdaq  Stock  Market's
SmallCap  Market under the symbol "WEFN." On October __, 2003, the last reported
sales price for our common stock was $___ per share.

            AN  INVESTMENT  IN OUR  COMMON  STOCK  IS  VERY  RISKY.  YOU  SHOULD
CAREFULLY  CONSIDER  THE RISK  FACTORS  BEGINNING  ON PAGE 6 OF THIS  PROSPECTUS
BEFORE EXERCISING YOUR SUBSCRIPTION RIGHTS.

            NEITHER  THE  SECURITIES  AND  EXCHANGE  COMMISSION  NOR  ANY  STATE
SECURITIES  COMMISSION  HAS  APPROVED  OR  DISAPPROVED  OF THESE  SECURITIES  OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

                             -----------------------

               The date of this prospectus is ____________, 2003.







                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----


Questions and Answers about this Offering......................................1

Risk Factors...................................................................6

Our Company...................................................................10

Use of Proceeds...............................................................11

Capitalization................................................................12

Price Range of Common Stock...................................................12

The Offering..................................................................13

Material United States Federal Income Tax Consequences........................20

Plan of Distribution..........................................................21

Legal Matters.................................................................22

Experts.......................................................................23

Where You Can Find More Information...........................................23

Forward-Looking Statements....................................................23

                                       i





            You should rely only on the  information in this  prospectus and the
additional  information  described  under the  heading  "Where You Can Find More
Information."  We have not  authorized  any  other  person to  provide  you with
different  information.  If anyone  provides you with different or  inconsistent
information, you should not rely on it. We are not making an offer to sell these
securities in any  jurisdiction  where the offer or sale is not  permitted.  You
should  assume  that  the  information  in this  prospectus  and the  additional
information  described  under the heading "Where You Can Find More  Information"
were  accurate  on the date on the  front  cover  of the  prospectus  only.  Our
business,  financial  condition,  results of  operations  and prospects may have
changed since that date.

                    QUESTIONS AND ANSWERS ABOUT THIS OFFERING

            This  section   highlights   information   contained   elsewhere  or
incorporated by reference in this prospectus.  This section does not contain all
of the important  information  that you should consider  before  exercising your
subscription  rights and  investing  in our common  stock.  You should read this
entire prospectus carefully.

Q:    WHAT ARE WE OFFERING IN THIS PROSPECTUS?

A:    Our  Board  of  Directors  has  declared  a  dividend  of  nontransferable
      subscription  rights to purchase shares of our common stock to each of our
      stockholders of record on _____________, 2003. Through this prospectus, we
      are  offering  the  shares of common  stock  that  holders  of rights  may
      purchase upon exercise of their rights.

Q:    WHO MAY PARTICIPATE IN THIS OFFERING?

A:    Only  holders of record of our common  stock as of  ___________,  2003 are
      entitled to participate  in this  offering.  Any attempt to participate in
      this  offering  by anyone  that was not a holder  of record of our  common
      stock on such date will be null and void.

Q:    WHAT IS A SUBSCRIPTION RIGHT?

A:    Each subscription  right is a right to purchase _____ shares of our common
      stock  and  carries  with  it  a  basic  subscription   privilege  and  an
      over-subscription privilege.

Q:    WHAT IS THE BASIC SUBSCRIPTION PRIVILEGE?

A:    The basic  subscription  privilege of each right  entitles you to purchase
      _____  shares of our common  stock at a  subscription  price of $_____ per
      share. You may exercise any number of your subscription rights, or you may
      choose not to exercise any subscription rights. We will not distribute any
      fractional shares or pay cash in place of fractional  shares,  but we will
      round down the  aggregate  number of shares you are entitled to receive to
      the nearest whole number.

Q:    WHAT IS THE OVER-SUBSCRIPTION PRIVILEGE?

A:    We do not expect that all of our  stockholders  will exercise all of their
      basic subscription  rights. By extending  over-subscription  privileges to
      our stockholders, we are providing stockholders that exercise all of their
      basic  subscription  privileges  with the  opportunity  to purchase  those
      shares that are not purchased by other stockholders. The over-subscription
      privilege of each right  entitles  you, if you fully  exercise  your basic
      subscription  privilege,  to subscribe for additional shares of our common
      stock  unclaimed by other holders of rights in this offering,  at the same
      subscription price per share.

Q:    WILL I ALWAYS RECEIVE THE FULL NUMBER OF SHARES THAT I OVER-SUBSCRIBE FOR?

A:    If an  insufficient  number of shares is  available  to fully  satisfy all
      over-subscription   privilege  requests,  the  available  shares  will  be
      distributed  proportionately  among  rights  holders who  exercised  their
      over-subscription  privilege  based on the  number of shares  each  rights
      holder subscribed for under the basic subscription privilege.

      Also,  pursuant  to the terms of our  charter,  you will not be allowed to
      subscribe for a number of shares that would increase your ownership of our
      shares of common stock to 4.9% or above of our then outstanding  shares of







      common  stock,  unless you already owned at least 5.0% of our common stock
      on the date such restriction became effective.

      The  subscription  agent will return any excess  payments by mail  without
      interest or deduction  promptly after the  expiration of the  subscription
      period.

Q:    HOW LONG WILL THE SUBSCRIPTION PERIOD LAST?

A:    You  will be able to  exercise  your  subscription  rights  only  during a
      limited  period.  If you do not exercise your  subscription  rights before
      5:00 p.m., New York City time, on  _____________,  2003, your subscription
      rights will expire. We may, in our sole discretion,  decide to extend this
      offering until some later time. If we extend the expiration  date, we will
      give oral or written  notice to the  subscription  agent on or before such
      expiration date,  followed by a press release no later than 9:00 a.m., New
      York City time,  on the next business day after the  previously  scheduled
      expiration date.

Q:    AM I REQUIRED TO SUBSCRIBE IN THIS OFFERING?

A:    No.

Q:    WHAT HAPPENS IF I CHOOSE NOT TO EXERCISE MY SUBSCRIPTION RIGHTS?

A:    You will retain your current  number of shares of common stock even if you
      do not exercise your  subscription  rights.  If you choose not to exercise
      your subscription rights, then the percentage of our common stock that you
      own may  decrease.  The  magnitude  of the  reduction  of your  percentage
      ownership  will  depend  upon  the  extent  to  which  you and  the  other
      stockholders exercise your rights.

Q:    HOW DO I EXERCISE MY SUBSCRIPTION RIGHTS?

A:    You may  exercise  your  subscription  rights by properly  completing  and
      signing your  subscription  certificate,  and delivering it and the rights
      certificate,  with full payment of the  subscription  price for the shares
      you  are   subscribing   (including   any   amounts   in  respect  of  the
      over-subscription privilege), to the subscription agent on or prior to the
      expiration  date. If you use the mail, we recommend  that you use insured,
      registered  mail,  return  receipt  requested.  If you cannot deliver your
      rights  certificate to the subscription  agent on time, you may follow the
      guaranteed delivery procedures  described under "The Offering - Guaranteed
      Delivery Procedures."

Q:    WHAT  SHOULD I DO IF I WANT TO  EXERCISE  MY  SUBSCRIPTION  RIGHTS  BUT MY
      SHARES ARE HELD IN THE NAME OF MY BROKER, CUSTODIAN BANK OR OTHER NOMINEE?

A:    If you hold shares of our common stock through a broker, custodian bank or
      other nominee, we will ask your broker, custodian bank or other nominee to
      notify you of this  offering.  If you wish to exercise  your  subscription
      rights, you will need to have your broker, custodian bank or other nominee
      act for you. To indicate your decision,  you should complete and return to
      your broker, custodian bank or other nominee the form entitled "Beneficial
      Owner  Election  Form." You  should  receive  this form from your  broker,
      custodian  bank or other nominee with the other  offering  materials.  You
      should contact your broker, custodian bank or other nominee if you believe
      you are entitled to participate in this offering but you have not received
      this form.

Q:    WHAT SHOULD I DO IF I WANT TO EXERCISE MY  SUBSCRIPTION  RIGHTS AND I AM A
      STOCKHOLDER IN A FOREIGN COUNTRY OR IN THE ARMED SERVICES?

A:    The subscription  agent will mail subscription  certificates to you if you
      are a rights  holder whose  address is outside the United States or if you
      have an Army Post Office or a Fleet Post Office address.  To exercise your
      rights,  you must notify the subscription  agent on or prior to 5:00 p.m.,
      New York City time, on ____________,  2003, and take all other steps which
      are necessary to exercise your rights, on or prior to that time. If you do
      not follow these procedures prior to the expiration date, your rights will
      expire.

                                       2





Q:    WILL  I BE  CHARGED  A  SALES  COMMISSION  OR A FEE BY  WEBFINANCIAL  IF I
      EXERCISE MY SUBSCRIPTION RIGHTS?

A:    No. We will not charge a brokerage  commission or a fee to rights  holders
      for exercising their subscription  rights.  However,  if you exercise your
      subscription  rights through a broker or nominee,  you will be responsible
      for any fees charged by your broker or nominee.

Q:    WHAT ARE THE UNITED STATES FEDERAL INCOME TAX  CONSEQUENCES  OF EXERCISING
      MY SUBSCRIPTION RIGHTS AS A HOLDER OF COMMON STOCK?

A:    A holder of common stock  generally will not recognize  income or loss for
      federal income tax purposes in connection  with the receipt or exercise of
      subscription  rights.  We urge you to consult  your own tax  advisor  with
      respect to the  particular tax  consequences  of this offering to you. See
      "Material United States Federal Income Tax Consequences."

Q:    HOW MANY SHARES MAY I PURCHASE?

A:    You will receive one nontransferable  subscription right for each share of
      common stock that you owned at the close of business on __________,  2003,
      the record date. Each right contains the basic subscription  privilege and
      the  over-subscription   privilege.   Each  basic  subscription  privilege
      entitles  you to purchase  _____  shares of our common  stock for $___ per
      share. Fractional shares will be eliminated by rounding down the aggregate
      number of shares you are entitled to receive to the nearest  whole number.
      See  "The  Offering  -  Subscription   Privileges  -  Basic   Subscription
      Privilege." The over-subscription  privilege entitles you to subscribe for
      additional shares of our common stock at the same  subscription  price per
      share on a pro-rata basis to the number of shares you purchased under your
      basic  subscription  privilege,  provided  you fully  exercise  your basic
      subscription  privilege.  "Pro-rata"  means in proportion to the number of
      shares of our common stock that you and the other rights holders  electing
      to  exercise  their   over-subscription   privileges   have  purchased  by
      exercising the basic  subscription  privileges on their holdings of common
      stock.  See "The Offering -  Subscription  Privileges -  Over-Subscription
      Privilege." However, pursuant to the terms of our charter, you will not be
      allowed  to  subscribe  for a number of shares  that would  increase  your
      ownership  of our  shares  of  common  stock  to 4.9% or above of our then
      outstanding shares of common stock, unless you already owned at least 5.0%
      of our common stock on the date such restriction became effective.

Q:    WHEN  WILL I  RECEIVE  CERTIFICATES  FOR  THE  SHARES  PURCHASED  IN  THIS
      OFFERING?

A:    We will issue certificates  representing shares purchased in this offering
      to you or to the Depository Trust Company on your behalf,  as the case may
      be, as soon as practicable after the expiration of the subscription period
      and after all pro rata allocations and adjustments have been completed. We
      will not be able to  calculate  the  number of shares to be issued to each
      exercising  holder  until  5:00  p.m.,  New York City  time,  on the third
      business day after the expiration  date, which is the latest time by which
      subscription  rights  certificates  may be delivered  to the  subscription
      agent  under the  guaranteed  delivery  procedures  described  under  "The
      Offering - Guaranteed Delivery Procedures."

Q:    IF THIS  OFFERING  IS NOT  COMPLETED,  WILL  MY  SUBSCRIPTION  PAYMENT  BE
      REFUNDED TO ME?

A:    Yes.  The  subscription  agent will hold all funds it  receives  in escrow
      until completion of this offering. If this offering is not completed,  the
      subscription   agent  will  return   promptly,   without   interest,   all
      subscription payments.

Q:    HOW WAS THE SUBSCRIPTION PRICE ESTABLISHED?

A:    The subscription  price was established by our board of directors based on
      the  recommendation  of a special  committee of  directors.  These factors
      included the historic and then current  market price of our common  stock,
      our business  prospects,  our recent and  anticipated  operating  results,
      general  conditions  in the  securities  markets,  our need  for  capital,
      alternatives  available to us for raising capital,  the amount of proceeds
      desired, the pricing of similar transactions,  the liquidity of our common
      stock, and the level of risk to our investors.

                                       3





Q:    ARE THERE RISKS IN EXERCISING MY SUBSCRIPTION RIGHTS?

A:    Yes. The exercise of your rights  involves  risks.  Exercising your rights
      means  buying  additional  shares  of  our  common  stock  and  should  be
      considered as carefully as you would consider any other equity  investment
      in our company.  Among other  things,  you should  carefully  consider the
      risks described under the heading "Risk Factors," beginning on page 6.

Q:    AFTER I EXERCISE MY SUBSCRIPTION  RIGHTS,  CAN I CHANGE MY MIND AND CANCEL
      MY PURCHASE?

A:    No. Once you send in your subscription  certificate and payment you cannot
      revoke the exercise of your subscription  rights,  even if you later learn
      information  about us that you consider to be unfavorable  and even if the
      market  price of our common  stock is below the  subscription  price.  You
      should not exercise your  subscription  rights unless you are certain that
      you  wish  to  purchase  additional  shares  of our  common  stock  at the
      subscription price. See "The Offering - No Revocation."

Q:    MAY I TRANSFER MY  SUBSCRIPTION  RIGHTS IF I DO NOT WANT TO  PURCHASE  ANY
      SHARES?

A:    No. Should you choose not to exercise your  subscription  rights,  you may
      not  sell,  give  away  or  otherwise   transfer  your  rights.   However,
      subscription rights will be transferable by operation of law (for example,
      upon death of the recipient).

Q:    WHY IS WEBFINANCIAL ENGAGING IN THIS OFFERING?

A:    We are making this offering in order to raise  approximately $10.0 million
      (less offering  expenses) in new capital to be used as additional  working
      capital for our business and general corporate purposes.

      Our  board of  directors  believes  that  this  offering  will  ultimately
      strengthen our financial condition through generating  additional cash and
      increasing our  stockholders'  equity. We want to give you the opportunity
      to  participate  in this fund  raising  effort and to purchase  additional
      shares of our common stock.

Q:    WHAT IS THE BOARD OF DIRECTORS' RECOMMENDATION REGARDING THIS OFFERING?

A:    Our board of directors is not making any  recommendation as to whether you
      should  exercise  your  subscription  rights.  You are  urged to make your
      decision based on your own assessment of this offering and our company.

Q:    HOW MANY  SHARES  OF OUR  COMMON  STOCK  WILL BE  OUTSTANDING  AFTER  THIS
      OFFERING?

A:    As of September 2, 2003,  we had  4,366,866  shares of common stock issued
      and outstanding.  We expect to issue up to an additional  _________ shares
      in this  offering.  After this offering,  we anticipate  that we will have
      _________ shares of common stock  outstanding.  Depending on the number of
      subscriptions we receive from stockholders,  this offering could result in
      a change in  control  of  WebFinancial  because  of the over  subscription
      privilege held by Steel Partners II, L.P. See "Risk Factors"  beginning on
      page 6.

Q:    WILL THE NEW  SHARES BE  INITIALLY  LISTED ON THE  NASDAQ  STOCK  MARKET'S
      SMALLCAP MARKET AND TREATED LIKE OTHER SHARES?

A:    Yes.  Our common  stock is listed on the Nasdaq  Stock  Market's  SmallCap
      Market under the symbol  "WEFN." We expect that the shares of common stock
      issued in this offering  will also be listed on the Nasdaq Stock  Market's
      SmallCap Market under the same symbol.

Q:    HOW WILL THIS  OFFERING  AFFECT  STEEL  PARTNERS'  OWNERSHIP OF OUR COMMON
      STOCK?

A:    Steel Partners II, L.P.  beneficially  owns 1,737,345 shares of our common
      stock,  representing  approximately  39.8% of our outstanding common stock
      and of the voting power of our outstanding voting securities.

      If no holders of  subscription  rights other than Steel Partners  exercise
      their  rights in this  offering,  Steel  Partners  may, as a result of its
      over-subscription  privilege, own _____ shares, representing approximately
      ____% of our  outstanding  common  stock  and of the  voting  power of our
      outstanding voting securities.  If all rights holders exercise their basic
      subscription  privileges  in full,  then Steel  Partners  will continue to
      beneficially own approximately 39.8% of our common stock and of the voting
      power of our outstanding voting securities.

                                       4





      Warren Lichtenstein, our President and Chief Executive Officer, owns 2,500
      shares of our common stock. Mr. Lichtenstein, as the sole managing member
      of the general partner of Steel Partners II, L.P., is deemed to also
      beneficially own the shares of common stock owned by Steel Partners II,
      L.P.

Q:    CAN THE BOARD OF DIRECTORS WITHDRAW THIS OFFERING?

A:    Yes. Our board of directors  may decide to withdraw  this  offering at any
      time for any reason. If we withdraw this offering, any money received from
      subscribing stockholders will be refunded promptly,  without interest. See
      "The Offering - Withdrawal and Amendment."

Q:    WHAT SHOULD I DO IF I HAVE OTHER QUESTIONS OR NEED ASSISTANCE?

A:    If you have questions or need assistance,  please contact _______________,
      the information agent, or  ____________________,  the subscription  agent,
      for this offering, at the following addresses and telephone numbers:



                             The Information Agent:
                             _______________________
                             _______________________
                             _______________________

                                       or


                             The Subscription Agent:
                             _______________________
                             _______________________
                             _______________________


      For a more  complete  description  of this  offering,  see "The  Offering"
      beginning on page 13.

                                       5





                                  RISK FACTORS

            The  exercise of your  subscription  rights for shares of our common
stock  involves  a high  degree  of risk.  You  should  carefully  consider  the
following factors and other  information  presented or incorporated by reference
in this  prospectus  before deciding to invest in our common stock. If we do not
successfully  address any one or more of the risks described below,  there could
be a material adverse effect on our financial  condition,  operating results and
business. We cannot assure you that we will successfully address these risks.

RISKS RELATING TO OUR BUSINESS:

CHANGES IN INTEREST RATES COULD HAVE A NEGATIVE EFFECT ON OUR OPERATING RESULTS.

            Our earnings depend substantially on "rate differentials," which are
the differences between the rates we earn on loans, securities and other earning
assets,  and the interest rates we pay on deposits and other  borrowings.  These
rates are  highly  sensitive  to many  factors  which are  beyond  our  control,
including general economic  conditions and the policies of various  governmental
and regulatory authorities. Changes in interest rates impact the level of loans,
deposits  and  investments,  the credit  profile of  existing  loans,  the rates
received on loans and securities and the rates paid on deposits and  borrowings.
Significant  fluctuations  in interest rates may adversely  affect our financial
condition and results of operations.

SIGNIFICANT  NEW LAWS OR CHANGES IN EXISTING LAWS OR MONETARY  POLICY  AFFECTING
THE  BANKING  INDUSTRY  COULD HAVE A MATERIAL  ADVERSE  AFFECT ON OUR RESULTS OF
OPERATIONS.

            We are subject to extensive  government  regulation and  supervision
under various state and federal laws, rules and regulations, including rules and
regulations of the Federal Reserve, the FDIC and the State of Utah Department of
Financial  Institutions.  These laws and regulations  are designed  primarily to
protect depositors,  borrowers,  and the Bank Insurance Fund of the FDIC, and to
further certain social policies.  Significant new laws, changes in existing laws
or repeals of  existing  laws may cause our  results  to change  materially.  In
addition,  federal  monetary  policy,  particularly  as implemented  through the
Federal  Reserve  System,  significantly  affects credit  conditions for us. The
effects of any such changes in these laws,  regulations  and policies  cannot be
predicted,  but they  could  have a  material  adverse  impact on our  financial
condition and results of operations.

WE  FACE  SUBSTANTIAL  COMPETITION  IN OUR  INDUSTRY  SECTOR  FROM  BANKING  AND
FINANCIAL  INSTITUTIONS  THAT HAVE LARGER AND GREATER  FINANCIAL  AND  MARKETING
CAPABILITIES, WHICH MAY HINDER OUR ABILITY TO COMPETE SUCCESSFULLY.

            The  banking  and  financial  services  businesses  in our  lines of
business are highly competitive.  The increasingly  competitive environment is a
result of changes in  regulation,  changes in  technology  and product  delivery
systems,  and the accelerating  pace of consolidation  among financial  services
providers.  We compete with many different  banking and financial  institutions,
including:

            o   commercial and savings banks and savings and loan associations;
            o   credit unions;
            o   finance companies;
            o   brokerage and investment banking firms; and
            o   asset-based non-bank lenders.

            All of these  entities are branches or  subsidiaries  of much larger
organizations affiliated with statewide, regional or national banking companies,
and as a result may have greater resources and lower cost of funds. There can be
no assurance that we will be able to compete effectively in the future.

WE COULD  SUSTAIN  LOSSES  IF WE  INCORRECTLY  ASSESS  THE  CREDITWORTHINESS  OF
BORROWERS, GUARANTORS OR RELATED PARTIES.

            Our earnings are  significantly  affected by our ability to properly
originate,  underwrite  and  service  loans.  We  could  sustain  losses  if our
borrowers,  guarantors or related parties fail to perform in accordance with the
terms of  their  loans.  We have  adopted  underwriting  and  credit  monitoring
procedures and credit policies,  including the  establishment  and review of the
allowance  for credit  losses,  that  management  believes  are  appropriate  to

                                       6





minimize this risk by assessing the likelihood of nonperformance,  tracking loan
performance  and   diversifying  our  credit   portfolio.   These  policies  and
procedures,  however,  may not  prevent  unexpected  losses  that could hurt our
business and financial condition.

WE ARE  SUBJECT  TO  CREDIT  AND  INTEREST  RATE  RISK IN  EXCESS  OF AN  AMOUNT
RECOGNIZED ON OUR BALANCE SHEET.

            We are a party to financial instruments with off-balance sheet risk.
In  the  normal  course  of  business,   these  financial   instruments  include
commitments to extend credit in the form of loans or through  letters of credit.
Those instruments  involve, to varying degrees,  elements of credit and interest
rate risk in excess of the amount  recognized on the balance sheet. Our exposure
to  credit  loss in the  event  of  nonperformance  by the  other  party  to the
financial  instrument  for  commitments  to extend credit is  represented by the
contractual  amount  of those  instruments.  Commitments  to extend  credit  are
agreements  to  lend  to a  customer,  provided  there  is no  violation  of any
condition  established  in  the  contract.   Commitments  generally  have  fixed
expiration dates or other termination  clauses and may require payment of a fee.
Since  certain of the  commitments  are expected to expire  without  being drawn
upon, the total  commitment  amounts do not  necessarily  represent  future cash
requirements.   We  use  the  same  credit  policy  in  making  commitments  and
conditional  obligations as we do for on-balance sheet instruments.  We evaluate
each  customer's  credit  worthiness  on a  case-by-case  basis.  The  amount of
collateral  obtained,  if deemed necessary upon extension of credit, is based on
management's  credit evaluation of the borrower.  At December 31, 2002 and 2001,
our  undisbursed  commercial  loan  commitments  totaled  approximately  $0  and
$600,000,  respectively.  For the same periods,  our undisbursed consumer credit
card loan commitments totaled approximately $0 and $2,876,000, respectively. For
the same periods,  our undisbursed  accounts  receivable  factoring  commitments
totaled approximately $6,382,000 and $0, respectively.

CHANGES  IN  ECONOMIC  CONDITIONS  COULD  DISRUPT  OUR  BUSINESS  AND  CAUSE OUR
PROFITABILITY TO DECLINE.

            Our  operating  results  and  asset  quality  may  be  significantly
affected by national and local  economic  conditions.  We are subject to adverse
changes in general economic  conditions in the United States, such as inflation,
recession, high levels of unemployment, consumer credit and bankruptcies. We are
also  subject  to  unfavorable  changes in  economic  conditions  affecting  our
markets,  which may have a negative  effect on our  profitability.  Such changes
could  result  from  numerous  factors  beyond our  control,  including  acts of
terrorism,  armed conflict,  business  closings or layoffs,  inclement  weather,
natural  disasters and adverse trends or events affecting various other industry
groups.

OUR ABILITY TO GROW OUR BUSINESS AND COMPETE SUCCESSFULLY COULD BE SIGNIFICANTLY
IMPAIRED IF WE LOSE THE SERVICES OF KEY PERSONNEL.

            Our success  depends in large part upon the  abilities of our senior
management, including Warren Lichtenstein, our chief executive officer. The loss
of the services of Mr. Lichtenstein or any other member of our senior management
could have a material  adverse  effect on our business.  Our future  success and
growth also  depends on our ability to continue to attract,  motivate and retain
highly  qualified  employees,  including  those with the expertise  necessary to
operate our  business.  Competition  for  personnel  in the banking  industry is
intense,  and we cannot assure you that we will be successful in attracting  and
retaining  such  personnel.  Departures  and  additions of key  personnel may be
disruptive  to our  business  and could  have a material  adverse  effect on our
business, financial condition and results of operations.

WE MAY EXPAND INTO NEW  NON-BANKING  ACTIVITIES,  WHICH WOULD EXPOSE US TO RISKS
ASSOCIATED WITH NEW BUSINESSES.

            We may expand our operations into new non-banking  activities in the
future.  Although we have experience in providing  bank-related  services,  this
expertise  may not assist us in  expansion  into  non-banking  activities.  As a
result, we may be exposed to risks associated with new businesses, such as (1) a
lack of market and product  knowledge  or awareness  of other  industry  related
matters and (2) an  inability  to attract and retain  qualified  employees  with
experience in these non-banking activities.

OUR BUSINESS COULD BE HARMED IF THERE IS A NON-FAVORABLE RESOLUTION TO THE LEGAL
PROCEEDING COMMENCED AGAINST US BY ANDREW WINOKUR.

            In January 2000, Mr. Winokur, a former executive  officer,  director
and stockholder of Praxis  Investment  Advisors,  Inc., one of our subsidiaries,
filed a lawsuit  in the  Superior  Court of the State of  California,  County of

                                       7





Napa. The lawsuit alleges that Praxis breached its employment agreement with Mr.
Winokur.  The lawsuit also asserts  claims for  interference  with  contract and
unjust enrichment based upon his alleged wrongful termination. The lawsuit seeks
damages of an unspecified  amount and compliance by Praxis with the  termination
pay-out provisions in Mr. Winokur's employment agreement.

            On March 4, 2002, the lawsuit was submitted to binding  arbitration.
The panel found no breach of contract and no intentional  interference  with Mr.
Winokur's  contractual  rights.  However,  the panel found that Mr.  Winokur was
entitled to the termination pay-out provision in his employment agreement. Under
this  provision,  Mr. Winokur could  potentially be entitled to receive  certain
compensation  based on the  proceeds  of the sale of  WebBank,  if we  reject an
investment bank valuation of WebBank. While Mr. Winokur would not be entitled to
receive  any  compensation  in the  event  that  the  sale  does  not  exceed  a
predetermined amount as provided in the employment  agreement,  we may be forced
to sell  WebBank  if the sale  price  exceeds  the  predetermined  amount in the
employment contract, even if we do not want to sell WebBank. In addition, if the
sale  price of WebBank  exceeds  the  predetermined  amount but is less than the
investment bank valuation of WebBank, we may be required to sell WebBank at less
than its value.

            At the present time,  Mr.  Winokur has ceased to  participate in the
process of valuing WebBank and the matter appears to be closed.  We believe that
a  valuation  or  proceeds   from  a  sale  of  WebBank  would  not  exceed  the
predetermined amount as provided in the employment agreement. Therefore, we also
believe  that we will not be  required  to put  WebBank up for sale and that Mr.
Winokur will not be entitled to any  termination  pay-out under the terms of his
employment  agreement.  However, the valuation process may proceed in the future
and if we are required to make a payment, our business could be harmed.

WARREN G. LICHTENSTEIN,  OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER,  THROUGH HIS
AFFILIATION  WITH STEEL PARTNERS II, L.P., HAS THE ABILITY TO EXERT  SIGNIFICANT
INFLUENCE  OVER OUR  OPERATIONS AND MAY HAVE INTERESTS THAT DIFFER FROM THOSE OF
OUR OTHER STOCKHOLDERS.

            Prior to this offering,  Warren G.  Lichtenstein,  our President and
Chief  Executive   Officer,   owns  2,500  shares  of  our  common  stock.   Mr.
Lichtenstein,  as the sole  managing  member  of the  general  partner  of Steel
Partners II, L.P., is deemed to also  beneficially  own the shares of our common
stock owned by Steel Partners II, L.P. Steel Partners II, L.P. beneficially owns
1,737,345 shares of our common stock,  representing  approximately  39.8% of our
outstanding  common stock prior to this offering.  If no stockholders other than
Steel Partners II, L.P. exercise their subscription  rights,  Steel Partners II,
L.P. will purchase all of the shares in this  offering,  thereby  increasing its
ownership to approximately ____%. Mr.  Lichtenstein,  as sole managing member of
the general  partner of Steel Partners II, L.P., has sole  investment and voting
control over the shares  beneficially  owned by Steel Partners II, L.P. and thus
has the ability to exert  significant  influence  over our policies and affairs,
including  the election of our board of directors and the approval of any action
requiring   stockholder   vote,   such  as  amendments  to  our  Certificate  of
Incorporation and approving mergers or sales of substantially all of our assets.
The interests of Mr.  Lichtenstein  and Steel  Partners II, L.P. may differ from
the interests of our other  stockholders  in some respects and Mr.  Lichtenstein
and Steel Partners II, L.P. may take action adverse to our other stockholders.

            In  addition,  Steel  Partners  II, L.P. has advised us that it, and
certain of its affiliates, have recently filed certain required notices with the
Federal Deposit  Insurance  Corporation  (FDIC) under the federal Change in Bank
Control Act, as well as with the Utah Department of Financial Institutions.  The
obligation to file these notices  arises in connection  with Steel  Partners II,
L.P.'s ownership interest in the Company and our acquisition of WebBank in 1998.
These  notices  are  being  reviewed  by the  FDIC and the  Utah  Department  of
Financial  Institutions.  Steel  Partners II, L.P.  believes  that the filing of
these notices is not expected to have any effect on the Company, or WebBank, but
relates to bank holding company  requirements  resulting from Steel Partners II,
L.P.'s ownership interest in the Company. There can be no assurance, however, as
to  what,  if  any,  action  the  FDIC  or  the  Utah  Department  of  Financial
Institutions may take.

RISKS RELATING TO THIS OFFERING:

THE  SUBSCRIPTION  PRICE PER SHARE IS NOT AN INDICATION OF OUR VALUE AND YOU MAY
NOT BE ABLE TO SELL SHARES  PURCHASED  UPON THE  EXERCISE  OF YOUR  SUBSCRIPTION
RIGHTS AT A PRICE EQUAL TO OR GREATER THAN THE SUBSCRIPTION PRICE.

            The  subscription  price per  share  does not  necessarily  bear any
relationship to the book value of our assets, operations,  cash flows, earnings,
financial  condition or any other  established  criteria for value. As a result,

                                       8





you should not consider the  subscription  price as an indication of the current
value of our company or our common stock.  We cannot assure you that you will be
able to sell shares  purchased  in this  offering at a price equal to or greater
than the subscription price.

[IF PRICED AT A DISCOUNT] THIS OFFERING MAY CAUSE THE PRICE OF OUR COMMON STOCK
TO DECREASE IMMEDIATELY, AND THIS DECREASE MAY CONTINUE.

            The  subscription  price per share equals ___% of the current market
price of our common  stock  determined  by  averaging  the closing  price of our
common  stock on Nasdaq for the ____  preceding  trading days ending on _______,
2003.  This  discount,  along  with the number of shares we propose to issue and
ultimately will issue if this offering is completed,  may result in an immediate
decrease in the market  value of our common  stock.  This  decrease may continue
after the completion of this offering.

AS A HOLDER  OF  COMMON  STOCK,  YOU MAY  SUFFER  SIGNIFICANT  DILUTION  OF YOUR
PERCENTAGE OWNERSHIP OF OUR COMMON STOCK.

            If you do not  exercise  your  subscription  rights  and  shares are
purchased by other stockholders in this offering,  your proportionate voting and
ownership  interest will be reduced and the percentage that your original shares
represent of our expanded equity after exercise of the subscription  rights will
be diluted.  For example,  if you own 200,000  shares of our common stock before
this offering,  or approximately  4.58% of our outstanding common stock, and you
exercise none of your subscription  rights while all other  subscription  rights
are exercised by other  stockholders,  then your  percentage  ownership would be
reduced  to  approximately  ____%.  The  magnitude  of  the  reduction  of  your
percentage  ownership  will  depend upon the extent to which you  exercise  your
subscription rights.

ONCE YOU EXERCISE  YOUR  SUBSCRIPTION  RIGHTS,  YOU MAY NOT REVOKE SUCH EXERCISE
EVEN IF THERE IS A DECLINE IN OUR COMMON STOCK PRICE.

            The public  trading  market  price of our common  stock may  decline
after you elect to exercise your subscription  rights.  If that occurs,  you may
have  committed  to buy shares of common  stock at a price above the  prevailing
market price and you will have an immediate unrealized loss. Moreover, we cannot
assure you that following the exercise of  subscription  rights you will be able
to sell your  shares of common  stock at a price  equal to or  greater  than the
subscription price.

YOU MAY NOT REVOKE THE  EXERCISE  OF YOUR RIGHTS EVEN IF WE DECIDE TO EXTEND THE
EXPIRATION DATE OF THE SUBSCRIPTION PERIOD.

            We may, in our sole  discretion,  extend the expiration  date of the
subscription  period.  During any potential  extension of time, our common stock
price may  decline  below the  subscription  price and  result in a loss on your
investment upon the exercise of rights to acquire shares of our common stock. If
the expiration  date is extended after you send in your  subscription  forms and
payment, you still may not revoke or change your exercise of rights.

YOU WILL NOT RECEIVE INTEREST ON SUBSCRIPTION FUNDS RETURNED TO YOU.

            If we cancel this offering,  neither we nor the  subscription  agent
will have any  obligation  with  respect to the  subscription  rights  except to
return, without interest, any subscription payments to you.

THE  SUBSCRIPTION  RIGHTS  ARE NOT  TRANSFERABLE  AND THERE IS NO MARKET FOR THE
SUBSCRIPTION RIGHTS.

            You may not sell, give away or otherwise  transfer your subscription
rights.  The  subscription  rights are only  transferable  by  operation of law.
Because  the  subscription  rights are  non-transferable,  there is no market or
other  means  for  you  to  directly  realize  any  value  associated  with  the
subscription  rights.  You must  exercise  the  subscription  rights and acquire
additional shares of our common stock to realize any value.

YOUR  PARTICIPATION  IN THE OFFERING IS NOT ASSURED SINCE WE MAY TERMINATE  THIS
OFFERING.

            Once you exercise your subscription  rights,  you may not revoke the
exercise for any reason unless we amend this offering. If we decide to terminate
the offering,  we will not have any obligation with respect to the  subscription
rights except to return any subscription payments, without interest.

                                       9





YOU NEED TO ACT PROMPTLY AND FOLLOW  SUBSCRIPTION  INSTRUCTIONS,  OTHERWISE YOUR
SUBSCRIPTION MAY BE REJECTED.

            Stockholders who desire to purchase shares in this offering must act
promptly to ensure that all required forms and payments are actually received by
the subscription agent prior to 5:00 p.m., New York City time, on the expiration
date. If you fail to complete and sign the required  subscription forms, send an
incorrect   payment  amount,  or  otherwise  fail  to  follow  the  subscription
procedures that apply to your desired  transaction,  the subscription agent may,
depending on the  circumstances,  reject your  subscription  or accept it to the
extent of the payment received. Neither we nor our subscription agent undertakes
to contact you  concerning,  or attempt to correct,  an  incomplete or incorrect
subscription form or payment. We have the sole discretion to determine whether a
subscription exercise properly follows the subscription procedures.

YOU MAY NOT RECEIVE ALL OF THE SHARES YOU SUBSCRIBE OR OVER-SUBSCRIBE FOR.

            If an  insufficient  number of shares is available to fully  satisfy
all  over-subscription   privilege  requests,   the  available  shares  will  be
distributed   proportionately   among  rights   holders  who   exercised   their
over-subscription  privilege  based on the number of shares each  rights  holder
subscribed for under the basic  subscription  privilege.  Also,  pursuant to the
terms of our  charter,  you will not be  allowed  to  subscribe  for a number of
shares that would  increase your ownership of our shares of common stock to 4.9%
or above of our then  outstanding  shares of common  stock,  unless you  already
owned at least  5.0% of our  common  stock on the date such  restriction  became
effective.


RISKS RELATING TO OUR COMMON STOCK:

OUR COMMON STOCK IS VOLATILE AND THE VALUE OF ANY INVESTMENT IN OUR COMMON STOCK
MAY FLUCTUATE.

            The  market  price for our common  stock has been,  and is likely to
continue to be, highly  volatile.  The market for our common stock is subject to
fluctuations as a result of a variety of factors,  including  factors beyond our
control. These include:

            o   current  expectations  of our future revenue and earnings growth
                rates;

            o   changes in market valuations of similar companies;

            o   conditions or trends in the industry;

            o   general market and economic conditions; and

            o   other events or factors that are unforeseen.

            Our  common  stock has been  listed  on the  Nasdaq  Stock  Market's
SmallCap Market under the symbol "WEFN" since November 15, 1996. During the past
three  years,  the price per share of our common  stock has ranged from a low of
$1.30 to a high of $3.63. See "Price Range of Common Stock."

SINCE WE DO NOT INTEND TO PAY  DIVIDENDS  ON SHARES OF OUR  COMMON  STOCK IN THE
FORESEEABLE  FUTURE, AN INVESTOR WILL ONLY SEE A RETURN ON HIS INVESTMENT IF THE
VALUE OF THE SHARES APPRECIATES.

            We currently expect to retain our future earnings, if any, to reduce
debt and for use in the operation of our business.  We do not anticipate  paying
any cash  dividends  on shares of our common  stock in the  foreseeable  future.
Therefore,  an investor will only see a return on his investment if the value of
the shares appreciates.

                                   OUR COMPANY

            We operate,  through our  subsidiaries,  in niche  banking  markets.
WebBank,  a Utah  industrial loan  corporation,  of which we indirectly own 93%,
provides commercial and consumer specialty finance  transactions  utilizing,  in
some cases,  U.S.  Government  credit  enhancement.  The  benefits of  WebBank's
special charter allow it to "export"  Utah's  regulatory  environment  (interest
rates,  late  charges,  and  prepayment  fees,  etc.) to all fifty states of the
United States.  WebBank is a small, business oriented institution insured by the
Federal Deposit Insurance  Corporation  (FDIC) and examined and regulated by the
FDIC and the State of Utah  Department  of Financial  Institutions.  Part of the
business  plan of WebBank  represents a  non-traditional  approach to generating

                                       10





growth within the context of the  regulatory  standards of safety and soundness.
Prudent business goals and protection of WebBank's  charter are the key elements
of our business  strategy for WebBank.  Pursuant to this  strategy,  WebBank has
focused on several lines of business as described below:

            o     ACCOUNTS   RECEIVABLE   FACTORING.   This   is   a   form   of
                  collateral-based  commercial  lending in which  companies sell
                  their  receivables to a lender,  principally to secure working
                  capital.  The  receivables  are repaid directly to the lender.
                  WebBank is engaged in accounts receivable  factoring utilizing
                  a sourcing and  servicing  company.  The owner of the sourcing
                  and servicing company is also an employee of WebBank.

            o     CREDIT CARD PROCESSING.  This is a highly competitive  product
                  and service  that WebBank  provides and  continues to actively
                  pursue.   WebBank  offers  customized  service  within  Utah's
                  favorable banking environment.

            o     PRIVATE  LABEL  STUDENT  LENDING.  This is an  alternative  to
                  federally  subsidized  student  loan  programs.  A third party
                  sourcing  company is engaged to source  these  loans.  WebBank
                  provides  funding to the  students  and sells the loans to the
                  third party shortly after origination of each loan.

            o     ELECTIVE MEDICAL AND DENTAL TREATMENT LENDING.  This is a form
                  of unsecured consumer lending that allows customers to finance
                  elective   surgery  or  other  treatments  not  covered  under
                  traditional  health  insurance plans. A third party company is
                  engaged to source these loans. WebBank provides funding to the
                  patients and sells the loans to the third party  shortly after
                  origination of each loan.

            o     USDA BUSINESS AND INDUSTRY (B&I) LENDING. This is a commercial
                  loan  product  of which 70% to 90% is  guaranteed  by the full
                  faith and credit of the Federal  government.  The loan program
                  is administered by the United States Department of Agriculture
                  to assist  businesses  located in rural  areas  (under  50,000
                  population)  to  promote  industrial   modernization  and  job
                  creation.  Originations of new B&I loans were  discontinued by
                  WebBank in 2001.  However,  WebBank continues to service loans
                  in its existing portfolio and for several other investors.

            We continue to evaluate our  different  business  lines and consider
various  alternatives  to maximize the  aggregate  value of our  businesses  and
increase  stockholder  value,   including  seeking  acquisitions  and/or  merger
transactions,  as well as product line  extensions  and/or  expansions.  Some of
these  alternatives may include insurance  related deposit  gathering  programs,
consumer e-lending  programs,  and selective  acquisitions,  divestitures or the
discontinuance  of an existing  business  line.  No firm  commitments  have been
realized and no letters of intent have been signed at this time. There can be no
assurance  that we will be able to accomplish any of these  alternatives  and be
profitable.

            Our principal  executive  offices are located at 590 Madison Avenue,
32nd  Floor,  New  York,  New York  10022,  and our  telephone  number  is (212)
758-3232.


                                 USE OF PROCEEDS

            The gross proceeds from the exercise of the  subscription  rights in
this offering will be approximately  $10.0 million.  We will use the proceeds of
this offering for working capital and general corporate purposes.

                                       11





                                 CAPITALIZATION

            The following table sets forth our summary capitalization as of June
30,  2003 on an  historical  basis and  should be read in  conjunction  with our
financial  statements  and notes  thereto  incorporated  by reference  into this
prospectus.  The table also  includes  our  capitalization  on a pro forma basis
assuming the completion of this offering.

                                                                               Actual     Pro Forma
                                                                               ------     ---------
                                                                         (in thousands) (in thousands)

Total debt
Short-term debt .........................................................       6,295       6,295
Long-term debt ..........................................................       7,114       7,114

            Total debt ..................................................      13,409      13,409
                                                                              -------      ------

Stockholders' equity:
      Common stock, $.001 par value, authorized 50,000,000 shares, issued
      4,366,866 .........................................................           4          --
      Paid-in capital ...................................................      36,606      _____
      Accumulated deficit ...............................................     (24,305)     _____
      Accumulated other comprehensive income
      (loss) ............................................................        (102)     _____

            Total Stockholders' equity ..................................      12,203      _____
                                                                              -------      ------

Total capitalization ....................................................      25,612      _____
                                                                              =======


                           PRICE RANGE OF COMMON STOCK

            Our  common  stock has been  listed  on the  Nasdaq  Stock  Market's
SmallCap Market under the symbol "WEFN" since November 15, 1996. On October ___,
2003,  the closing price of our common stock was $____ per share.  The following
table  shows the  common  stock's  high and low sales  prices on Nasdaq  for the
periods indicated.

            Period                         High Sale             Low Sale

            2001:
            First Quarter                  $   3.63              $   2.63
            Second Quarter                     3.26                  2.66
            Third Quarter                      3.05                  2.52
            Fourth Quarter                     2.99                  2.20

            2002:
            First Quarter                  $   2.67              $   2.05
            Second Quarter                     2.37                  1.34
            Third Quarter                      2.28                  1.45
            Fourth Quarter                     2.71                  1.56

            2003:
            First Quarter                  $   2.70              $   1.73
            Second Quarter                     2.63                  1.70
            Third Quarter                      2.75                  2.10
            Fourth Quarter
            (through October 7, 2003)          2.25                  2.18

            On September 2, 2003 there were  approximately 547 record holders of
            our common stock.

                                       12





            We have not paid  cash  dividends  on our  common  stock in 2002 and
2001. We intend to retain any future  earnings for working  capital needs and to
finance potential future  acquisitions,  and presently do not intend to pay cash
dividends on our common stock for the foreseeable future.


                                  THE OFFERING

            Our Board of Directors  has proposed that we attempt to raise equity
capital through this offering to all of our stockholders and to use the proceeds
from the  subscription of such rights for working capital and general  corporate
purposes.  The Board  declared a dividend of rights to purchase our common stock
to holders of record as of __________,  2003.  Through this  prospectus,  we are
offering  the shares of common  stock that  rights  holders  may  purchase  upon
exercising such subscription rights.

REASONS FOR THIS OFFERING

            In  approving  this  offering,  our  Board  of  Directors  carefully
considered  our need for  additional  capital  and several  alternative  capital
raising methods,  including a credit facility and a private  placement of equity
securities.  The  alternatives  considered  were not selected  because they were
either not feasible,  too costly or inefficient,  among other reasons. The Board
also  considered  the  potential  change in  control by Steel  Partners  and the
potential   dilution  of  the  ownership   percentage  of  our  current   common
stockholders  caused by this  offering.  While the  ownership  percentage of our
current  common  stockholders  may  decrease,  the  Board  considered  that  the
magnitude of this dilution would be subject to, and dependent upon, the decision
of each common  stockholder  whether to exercise their  subscription  rights for
additional shares of our common stock in this offering.

            After  weighing the factors  discussed  above and the effect of this
offering of generating approximately $10.0 million (less expenses related to the
offering) in  additional  capital for us, the board of directors  believes  that
this  offering is the best  alternative  for capital  raising and is in the best
interests  of our  company  and  our  stockholders.  As  described  in  "Use  of
Proceeds,"  the proceeds of this offering are intended to be used for additional
working capital for our business and other general corporate purposes.

            Our Board of Directors  believes that this offering will  ultimately
strengthen  our  financial  condition  through  generating  additional  cash and
increasing our stockholders' equity. See "Use of Proceeds" and "Capitalization".
However,  our board of directors is not making any  recommendation as to whether
you should exercise your subscription rights.

SUBSCRIPTION RIGHTS

            Basic  Subscription  Privilege.  We  distributed  to the  holders of
record of our common stock, at the close of business on ________________,  2003,
at no  charge,  one  nontransferable  subscription  right for each  share of our
common  stock they own.  The  subscription  rights will be  evidenced  by rights
certificates.  Each subscription right will entitle the holder to purchase _____
shares of our common stock.  You are not required to exercise any or all of your
subscription rights.

            If,  pursuant to your  exercise  of your  subscription  rights,  the
number of shares of common  stock you are  entitled to receive  would  result in
your receipt of fractional  shares, the aggregate number of shares issued to you
will be rounded down to the nearest whole  number.  You will not receive cash in
lieu of fractional shares.

            OVER-SUBSCRIPTION  PRIVILEGE.  Subject to the  allocation  described
below,  each subscription  right also grants each subscription  rights holder an
over-subscription  privilege to purchase  additional  shares of our common stock
that are not  purchased  by other  rights  holders  pursuant to the other rights
holders'  basic  subscription  privileges.  You are  entitled to  exercise  your
over-subscription  privilege  only  if  you  exercise  your  basic  subscription
privilege in full.

            If you wish to exercise your over-subscription privilege, you should
indicate the number of additional  shares that you would like to purchase in the
space  provided  on  your  subscription  certificate.  When  you  send  in  your
subscription  certificate,  you must also send the full  purchase  price for the
number of additional  shares that you have requested to purchase (in addition to
the payment due for shares purchased through your basic subscription privilege).
If the number of shares  remaining after the exercise of all basic  subscription
privileges  is not  sufficient  to satisfy all requests  for shares  pursuant to
over-subscription  privileges,  you will be allocated additional shares pro-rata
(subject to elimination of fractional shares), based on the number of shares you
purchased  through the basic  subscription  privilege in proportion to the total
number of  shares  that you and other  over-subscribing  stockholders  purchased
through the basic subscription  privilege.  However, if your pro-rata allocation

                                       13





exceeds the number of shares you  requested  on your  subscription  certificate,
then you will  receive  only the number of shares  that you  requested,  and the
remaining  shares  from your  pro-rata  allocation  will be divided  among other
rights holders exercising their over-subscription  privileges. Also, pursuant to
the terms of our charter,  you will not be allowed to subscribe  for a number of
shares that would  increase your ownership of our shares of common stock to 4.9%
or above of our then  outstanding  shares of common  stock,  unless you  already
owned at least  5.0% of our  common  stock on the date such  restriction  became
effective.

            As soon as practicable after the expiration date,  ________________,
acting as our subscription  agent, will determine the number of shares of common
stock that you may purchase  pursuant to the  over-subscription  privilege.  You
will receive certificates representing these shares as soon as practicable after
the  expiration  date and  after  all  pro-rations  and  adjustments  have  been
effected.  If you request and pay for more shares than are  allocated to you, we
will refund that overpayment,  without interest. In connection with the exercise
of the over-subscription  privilege, banks, brokers and other nominee holders of
subscription  rights who act on behalf of beneficial  owners will be required to
certify  to us and to the  subscription  agent  as to the  aggregate  number  of
subscription rights that have been exercised, and the number of shares of common
stock that are being requested through the over-subscription  privilege, by each
beneficial owner on whose behalf the nominee holder is acting.

SUBSCRIPTION PRICE

            The subscription price for a subscription right is $_____ per share.
The per share price equals ___% of the current  market price of our common stock
determined  by averaging the closing price of our common stock on Nasdaq for the
______ preceding  trading days ending on ______,  2003. The  subscription  price
does not  necessarily  bear any  relationship  to our  past or  expected  future
results of operations,  cash flows,  current financial  condition,  or any other
established  criteria for value. No change will be made to the cash subscription
price by reason of changes in the trading price of our common stock prior to the
closing of this offering.

DETERMINATION OF SUBSCRIPTION PRICE

            Our board of directors  set all of the terms and  conditions of this
offering,   including   the   subscription   price,   which  was  based  on  the
recommendation  of a special  committee of directors,  excluding those directors
affiliated  with Steel  Partners who did not  participate  (in their capacity as
directors)  in the  consideration  or voting with respect to these  matters.  In
establishing  the  subscription  price,  our board of directors  considered  the
following factors:

            o    strategic alternatives for capital raising,

            o    the market price of our common stock,

            o    the pricing of similar transactions,

            o    the amount of proceeds desired,

            o    our business prospects,

            o    our recent and anticipated operating results, and

            o    general conditions in the securities markets.

            We determined  the ___%  [premium][discount]  to our current  market
price after taking into account the preceding factors. We did not seek or obtain
any opinion of financial  advisors or  investment  bankers in  establishing  the
subscription  price for the offering.  You should not consider the  subscription
price as an  indication  of the value of our  company  or our common  stock.  We
cannot  assure you that you will be able to sell  shares  purchased  during this
offering at a price equal to or greater than the subscription  price. On October
__, 2003, the closing sale price of our common stock was $_______ per share.

EXPIRATION DATE, EXTENSIONS AND TERMINATION

            You may  exercise  your  subscription  right at any time before 5:00
p.m.,  New York  City  time,  on  ______,  2003,  the  expiration  date for this
offering.  However,  we may  extend the  offering  period  for  exercising  your
subscription  rights  from  time to time in our sole  discretion.  If you do not
exercise your  subscription  rights before the expiration date, your unexercised
subscription  rights will be null and void.  We will not be  obligated  to honor
your exercise of  subscription  rights if the  subscription  agent  receives the
documents  relating to your exercise  after the expiration  date,  regardless of
when you  transmitted  the  documents,  unless you have timely  transmitted  the
documents under the guaranteed delivery procedures described below.

                                       14





            We have the sole  discretion to extend the expiration date from time
to time by giving oral or written notice to the subscription  agent on or before
the  scheduled  expiration  date.  If we elect to extend the  expiration of this
offering,  we will issue a press release  announcing the extension no later than
9:00 a.m.,  New York City time, on the next business day after the most recently
announced expiration date.

WITHDRAWAL AND AMENDMENT

            We reserve the right to withdraw or terminate  this  offering at any
time for any reason. In the event that this offering is withdrawn or terminated,
all funds received from subscriptions by stockholders will be returned. Interest
will not be payable on any returned funds.

            We reserve the right to amend the terms of this offering. If we make
an amendment that we consider significant, we will:

            o   mail notice of the amendment to all stockholders of record as of
                the record date;

            o   extend the expiration date by at least 10 days; and

            o   offer  all  subscribers  no less  than 10  days  to  revoke  any
                subscription already submitted.

            The extension of the expiration date will not, in and of itself,  be
treated as a significant amendment for these purposes.

METHOD OF SUBSCRIPTION - EXERCISE OF SUBSCRIPTION RIGHTS

            You  may  exercise  your  subscription   rights  by  delivering  the
following to the  subscription  agent,  at or prior to 5:00 p.m.,  New York City
time, on ______________, 2003, the date on which the rights expire:

            o   your properly completed and executed rights certificate with any
                required    signature    guarantees   or   other    supplemental
                documentation; and

            o   your full  subscription  price payment for each share subscribed
                for  under   your   basic   subscription   privilege   and  your
                over-subscription privilege.

You should read and follow the instructions  accompanying the rights certificate
carefully.

SIGNATURE GUARANTEE MAY BE REQUIRED

            Your signature on each rights  certificate  must be guaranteed by an
eligible  institution such as a member firm of a registered  national securities
exchange or a member of the National Association of Securities Dealers, Inc., or
from a commercial bank or trust company having an office or correspondent in the
United States,  subject to standards and procedures  adopted by the subscription
agent, unless:

            o   your rights certificate provides that shares are to be delivered
                to you as record holder of those subscription rights; or

            o   you are an eligible institution.

DELIVERY OF SUBSCRIPTION MATERIALS AND PAYMENT

            You  should  deliver  your  rights  certificate  and  payment of the
subscription  price or, if  applicable,  notice of guaranteed  delivery,  to the
subscription   agent   by   mail,   by  hand  or  by   overnight   courier   to:
____________________ at  ____________________________________.  The subscription
agent's telephone number is __________________.

            You are  responsible  for the  method  of  delivery  of your  rights
certificate(s)  with your subscription price payment to the subscription  agent.
If you send your rights  certificate(s)  and subscription price payment by mail,
we recommend  that you send them by  registered  mail,  properly  insured,  with
return receipt requested. You should allow a sufficient number of days to ensure
delivery to the subscription agent prior to the time this offering expires.

            Do not  send  your  rights  certificate(s)  and  subscription  price
payment to us.  Your  delivery  to an address  other than the  address set forth
above will not constitute valid delivery.

                                       15





METHOD OF PAYMENT

            Your payment of the subscription  price must be made in U.S. dollars
for  the  full  number  of  shares  of  common  stock  you are  subscribing  (or
over-subscribing) for by either:

            o   check or bank draft (cashier's  check) drawn upon a U.S. bank or
                money order payable to the subscription agent; or

            o   wire   transfer  of   immediately   available   funds,   to  the
                subscription  account  maintained by the  subscription  agent at
                _________________________________________________.

RECEIPT OF PAYMENT

            Your payment will be considered  received by the subscription  agent
only upon:

            o   receipt and clearance of any uncertified check,

            o   receipt by the subscription agent of any certified check or bank
                draft drawn upon a United  States  bank,  any money order or any
                funds transferred by wire transfers, or

            o   receipt  of  good  funds  in the  subscription  agent's  account
                designated above.

            Please note that funds paid by  uncertified  personal check may take
at least five business days to clear.  Accordingly,  if you wish to pay by means
of an uncertified  personal check,  we urge you to make payment  sufficiently in
advance of the expiration  date to ensure that the  subscription  agent receives
cleared funds before that date. We also urge you to consider payment by means of
a certified or cashier's check or money order.

CALCULATION OF SUBSCRIPTION RIGHTS EXERCISED

            If you do not  indicate  the  number of  subscription  rights  being
exercised,  or do not forward full payment of the total  subscription  price for
the number of subscription  rights that you indicate are being  exercised,  then
you will be deemed to have  exercised  your basic  subscription  privilege  with
respect to the maximum number of rights that may be exercised with the aggregate
subscription price payment you delivered to the subscription agent.

YOUR FUNDS WILL BE HELD BY THE  SUBSCRIPTION  AGENT UNTIL SHARES OF COMMON STOCK
ARE ISSUED

            The  subscription  agent will hold your payment of the  subscription
price payment in a segregated  account with other  payments  received from other
rights  holders  until we issue  your  shares to you.  If this  offering  is not
completed,  or we do not apply  your full  subscription  price  payment  to your
purchase  of shares of our common  stock,  the  subscription  agent will  return
promptly, without interest, all excess subscription payments.

NO REVOCATION

            Once you have exercised your  subscription  privileges,  you may not
revoke your exercise.  Subscription rights not exercised prior to the expiration
date of this offering will expire.

NON-TRANSFERABILITY OF THE SUBSCRIPTION RIGHTS

            Except in the limited  circumstances  described below,  only you may
exercise the basic subscription  privilege and the over-subscription  privilege.
You may not  sell,  give  away or  otherwise  transfer  the  basic  subscription
privilege or the over-subscription privilege.

            Notwithstanding  the  foregoing,  your rights may be  transferred by
operation  of law;  for  example,  a  transfer  of rights  to the  estate of the
recipient upon the death of the recipient would be permitted.  If the rights are
transferred  as  permitted,  evidence  satisfactory  to us that the transfer was
proper must be received by us prior to the expiration date of this offering.

ISSUANCE OF STOCK CERTIFICATES

            Stock  certificates  for shares  purchased in this  offering will be
issued as soon as practicable after the expiration date. Our subscription  agent
will  deliver  subscription  payments  to us  only  after  consummation  of this
offering  and the  issuance  of  stock  certificates  to our  stockholders  that
exercised rights. Unless you instruct otherwise in your subscription certificate
form, shares purchased by the exercise of subscription rights will be registered
in the name of the person exercising the rights.

                                       16





GUARANTEED DELIVERY PROCEDURES

            If you wish to exercise  your  subscription  rights,  but you do not
have sufficient time to deliver the rights certificate evidencing your rights to
the subscription  agent on or before the time your  subscription  rights expire,
you may exercise your subscription  rights by the following  guaranteed delivery
procedures:

            o   deliver your  subscription  price payment in full for each share
                you  subscribed  for under your  subscription  privileges in the
                manner set forth in "- Method of  Payment"  to the  subscription
                agent on or prior to the expiration date;

            o   deliver  the form  entitled  "Notice  of  Guaranteed  Delivery,"
                substantially in the form provided with the  "Instructions as to
                Use  of  Rights  Certificates"   distributed  with  your  rights
                certificates, at or prior to the expiration date; and

            o   deliver the properly  completed  rights  certificate  evidencing
                your  rights  being  exercised  and the related  nominee  holder
                certification,  if  applicable,  with  any  required  signatures
                guaranteed, to the subscription agent within three business days
                following the date of your Notice of Guaranteed Delivery.

            Your  Notice  of   Guaranteed   Delivery   must  be   delivered   in
substantially  the same form provided with the  Instructions as to Use of Rights
Certificates,  which will be  distributed  to you with your rights  certificate.
Your Notice of Guaranteed  Delivery must come from an eligible  institution,  or
other eligible guarantee  institutions which are members of, or participants in,
a signature guarantee program acceptable to the subscription agent.

            In your Notice of Guaranteed Delivery, you must state:

            o   your name;

            o   the number of  subscription  rights  represented  by your rights
                certificates  and the number of shares of our  common  stock you
                are subscribing (and over-subscribing) for; and

            o   your guarantee that you will deliver to the  subscription  agent
                any rights  certificates  evidencing the subscription rights you
                are exercising within three business days following the date the
                subscription agent receives your Notice of Guaranteed Delivery.

            You  may  deliver  your  Notice  of   Guaranteed   Delivery  to  the
subscription agent in the same manner as your rights certificates at the address
set forth above  under " - Delivery  of  Subscription  Materials  and  Payment."
Alternatively,  you may  transmit  your  Notice of  Guaranteed  Delivery  to the
subscription    agent    by    facsimile     transmission     (Facsimile    No.:
______________________.   To  confirm   facsimile   deliveries,   you  may  call
______________________.

            Please call the information  agent to request any additional  copies
of the form of Notice of Guaranteed Delivery you may need.

DETERMINATIONS REGARDING THE EXERCISE OF YOUR SUBSCRIPTION RIGHTS

            We will decide all questions  concerning the  timeliness,  validity,
form and  eligibility  of your  exercise  of your  subscription  rights  and our
determinations will be final and binding. We, in our sole discretion,  may waive
any defect or  irregularity,  or permit a defect or irregularity to be corrected
within such time as we may determine.  We may reject the exercise of any of your
subscription  rights because of any defect or irregularity.  We will not receive
or accept any subscription  until all  irregularities  have been waived by us or
cured by you within such time as we decide, in our sole discretion.

            Neither  we nor the  subscription  agent  will be under  any duty to
notify you of any defect or  irregularity  in connection with your submission of
rights  certificates  and we will not be liable for failure to notify you of any
defect  or  irregularity.  We  reserve  the  right to reject  your  exercise  of
subscription rights if your exercise is not in accordance with the terms of this
offering or in proper form.  We will also not accept your  exercise of rights if
our issuance of shares of our common stock to you could be deemed unlawful under
applicable law or is materially burdensome to us.

            If you are given notice of a defect in your  subscription,  you will
have five  business days after the giving of notice to correct it. You will not,
however, be allowed to cure any defect later than 5:00 p.m., New York City time,
on _______,  2003. We will not consider an exercise to be made until all defects
have been cured or waived.

                                       17





NOTICE TO BANKERS, TRUSTEES OR OTHER DEPOSITARIES

            If you are a broker,  a trustee or a depositary  for  securities who
holds  shares  of our  common  stock for the  account  of others at the close of
business on the record date, you should notify the respective  beneficial owners
of such shares of this offering as soon as possible to find out their intentions
with  respect  to  exercising  their  subscription  rights.  You  should  obtain
instructions from the beneficial owners with respect to the subscription rights,
as set forth in the  instructions we have provided to you for your  distribution
to beneficial owners. If the beneficial owner so instructs,  you should complete
the appropriate  rights  certificates and submit them to the subscription  agent
with the proper payment. If you hold shares of our common stock for the accounts
of more than one beneficial  owner,  you may exercise the number of subscription
rights to which all such beneficial owners in the aggregate otherwise would have
been  entitled  had they been direct  record  holders of our common stock on the
record  date,  provided  that you,  as a nominee  record  holder,  make a proper
showing to the  subscription  agent by  submitting  the form  entitled  "Nominee
Holder Certification" which we will provide to you with your offering materials.

NOTICE TO BENEFICIAL OWNERS

            If you are a beneficial  owner of shares of our common stock or will
receive  your  subscription  rights  through a broker,  custodian  bank or other
nominee, we will ask your broker,  custodian bank or other nominee to notify you
of this offering.  If you wish to exercise your  subscription  rights,  you will
need to have your broker,  custodian  bank or other  nominee act for you. If you
hold  certificates  of our common  stock  directly and would prefer to have your
broker,  custodian bank or other nominee exercise your subscription  rights, you
should contact your nominee and request it to effect the transaction for you. To
indicate  your  decision with respect to your  subscription  rights,  you should
complete and return to your  broker,  custodian  bank or other  nominee the form
entitled  "Beneficial  Owner  Election  Form." You should receive this form from
your broker,  custodian bank or other nominee with the other offering materials.
If you wish to obtain a separate  rights  certificate,  you should  contact  the
nominee as soon as possible and request that a separate  rights  certificate  be
issued to you.

SHARES OF COMMON STOCK OUTSTANDING AFTER THIS OFFERING

            Upon the  issuance  of the  shares of common  stock  offered in this
offering,  ___________  shares of common  stock will be issued and  outstanding.
This would  represent an approximate  ___% increase in the number of outstanding
shares of common stock.

EFFECTS OF OFFERING ON OUR STOCK OPTION PLANS AND OTHER PLANS

            As of October 7, 2003,  there were  outstanding  options to purchase
111,408 shares of our common stock issued or committed to be issued  pursuant to
stock options granted by us. None of the outstanding  options have anti-dilution
or other  provisions  for adjustment to exercise price or number of shares which
will  be  automatically   triggered  by  this  offering.  Each  outstanding  and
unexercised  option will remain  unchanged and will be exercisable  for the same
number of shares of common stock and at the same  exercise  price as before this
offering.

RELATIONSHIP WITH STEEL PARTNERS

            Pursuant to the terms of a  management  agreement,  Steel  Partners,
Ltd.  provides  us with  office  space and certain  management,  consulting  and
advisory  services.  The management  agreement is automatically  renewable on an
annual basis unless terminated by either party, for any reason, upon at least 60
days written notice.  The agreement also provides that we will  indemnify,  save
and hold  Steel  Partners,  Ltd.  harmless  from  and  against  any  obligation,
liability,  cost or damage  resulting  from its actions  under the terms of such
agreement,  except to the  extent  occasioned  by gross  negligence  or  willful
misconduct of its officers, directors or employees.

            In addition, Jim Henderson,  an employee of Steel Partners, Ltd. and
an  executive  officer  of  ours,  performs  services  for  us in  the  area  of
management,  accounting and finances,  and such other services as are reasonably
requested by WebBank.  This agreement will continue in force until terminated by
either  of the  parties  upon 30 days  written  notice.  Glen  Kassan,  our Vice
President and Chief  Financial  Officer,  is also an employee of Steel Partners,
Ltd.

            In  consideration  of the  services  rendered  under the  management
agreement, Steel Partners, Ltd. charges us a fixed monthly fee totaling $310,000
per annum,  adjustable annually upon our agreement with Steel Partners,  Ltd. In
consideration of the services  provided by Mr. Henderson,  Steel Partners,  Ltd.
charges WebBank  $100,000 per annum. The fees payable by WebBank are included in

                                       18





the fees payable by us under the management agreement.  We believe that the cost
of obtaining the type and quality of services  rendered by Steel Partners,  Ltd.
under  these  agreements  is no less  favorable  than the cost at which we could
obtain such services from unaffiliated entities.

            Warren  Lichtenstein,  our President and Chief Executive Officer, is
an affiliate of Steel Partners,  Ltd. based on his ownership of shares of common
stock of Steel Partners, Ltd., directly and through Steel Partners II, L.P., and
by virtue of his positions as Chairman, President and Chief Executive Officer of
Steel Partners, Ltd. Mr. Lichtenstein is the sole managing member of the general
partner  of Steel  Partners  II,  L.P.  Mr.  Lichtenstein  disclaims  beneficial
ownership of the shares of common stock of Steel  Partners,  Ltd. owned by Steel
Partners II, L.P. (except to the extent of his pecuniary interest in such shares
of common stock).

            Steel Partners II, L.P. also currently owns 1,737,345  shares of our
common stock, which is equal to approximately 39.8% of our outstanding shares of
common stock. Warren Lichtenstein, who owns 2,500 shares of our common stock, is
deemed to also  beneficially  own all of the shares owned by Steel  Partners II,
L.P. due to his affiliation therewith.  Steel Partners II, L.P. has been offered
its pro rata portion of the  subscription  rights  (including  over-subscription
privilege). If our other stockholders purchase all of the shares offered to them
for sale,  Steel  Partners II, L.P.  will purchase its pro rata amount and would
continue  to  beneficially   own   approximately   39.8%  of  our  common  stock
outstanding.  If no  stockholders  other than Steel  Partners II, L.P.  exercise
their subscription rights, Steel Partners II, L.P. will purchase up to _________
shares in the  offering.  In that case,  Steel  Partners  II,  L.P.'s  ownership
interest could be approximately  ____%, and the aggregate  ownership interest of
the other outstanding  stockholders could decrease to approximately  ____%. Even
if some  stockholders  other than Steel Partners II, L.P. exercise their rights,
Steel  Partners  II,  L.P.  could  still  obtain a majority  ownership  interest
pursuant to its subscription  rights.  As a result,  Steel Partners II, L.P. may
have the voting power to control the election of our board of directors  and the
approval of other matters presented for consideration by the stockholders, which
could  include  mergers,  acquisitions,  amendments  to our  charter and various
corporate governance actions.

            In  addition,  Steel  Partners  II, L.P. has advised us that it, and
certain of its affiliates, have recently filed certain required notices with the
Federal Deposit  Insurance  Corporation  (FDIC) under the federal Change in Bank
Control Act, as well as with the Utah Department of Financial Institutions.  The
obligation to file these notices  arises in connection  with Steel  Partners II,
L.P.'s ownership interest in the Company and our acquisition of WebBank in 1998.
These  notices  are  being  reviewed  by the  FDIC and the  Utah  Department  of
Financial  Institutions.  Steel  Partners II, L.P.  believes  that the filing of
these notices is not expected to have any effect on the Company, or WebBank, but
relates to bank holding company  requirements  resulting from Steel Partners II,
L.P.'s ownership interest in the Company. There can be no assurance, however, as
to  what,  if  any,  action  the  FDIC  or  the  Utah  Department  of  Financial
Institutions may take.


SUBSCRIPTION AGENT

            We have appointed ________________________ as subscription agent for
this  offering.  We will pay the fees and certain  expenses of the  subscription
agent, which we estimate will total approximately $_____________.  Under certain
circumstances,  we may indemnify the subscription agent from certain liabilities
that may arise in connection with this offering.

INFORMATION AGENT

            We have appointed  ________________________ as information agent for
this  offering.  We will pay the fees and certain  expenses  of the  information
agent, which we estimate will total approximately $_____________.  Under certain
circumstances,  we may indemnify the information agent from certain  liabilities
that may arise in connection with this offering.

FEES AND EXPENSES

            Other  than  for  fees  charged  by the  information  agent  and the
subscription agent, you are responsible for paying any other commissions,  fees,
taxes or  other  expenses  incurred  in  connection  with  the  exercise  of the
subscription  rights.  Neither us, the  information  agent nor the  subscription
agent will pay such expenses.

OTHER MATTERS

            We are not making this  offering in any state or other  jurisdiction
in which it is unlawful to do so, nor are we selling or accepting  any offers to
purchase any shares of our common stock from rights holders who are residents of
those  states or other  jurisdictions.  We may delay  the  commencement  of this

                                       19





offering  in those  states or other  jurisdictions,  or change the terms of this
offering,  in order to comply  with the  securities  law  requirements  of those
states or other jurisdictions. We may decline to make modifications to the terms
of this  offering  requested  by those states or other  jurisdictions,  in which
case,  if you are a resident in those states or  jurisdictions,  you will not be
eligible to participate in this offering.

            We will not be  required  to issue to you  shares  of  common  stock
pursuant to this  offering if, in our  opinion,  you would be required to obtain
prior  clearance or approval from any state or federal  regulatory  authority to
own or control such shares if, at the time the subscription  rights expire,  you
have not obtained such clearance or approval.

NO BOARD RECOMMENDATION

            An investment  in shares of our common stock must be made  according
to each investor's evaluation of its own best interests.  Accordingly, our board
of directors makes no  recommendation  to rights holders  regarding whether they
should exercise their subscription rights.

IF YOU HAVE QUESTIONS ABOUT EXERCISING RIGHTS

            If you have  questions or need  assistance  concerning the procedure
for exercising  subscription  rights,  or if you would like additional copies of
this prospectus, the Instructions as to Use of Rights Certificates or the Notice
of  Guaranteed  Delivery,  you  should  contact  the  information  agent  or the
subscription agent at the following addresses and telephone numbers:

                             The Information Agent:

                              ____________________
                              ____________________
                              ____________________

                                       or

                             The Subscription Agent:

                              ____________________
                              ____________________
                              ____________________

             MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

            The following  discussion is a summary of the material U.S.  federal
income tax  consequences  of (i) the  dividend by us of  subscription  rights to
holders  of common  stock that hold such  stock as a capital  asset for  federal
income tax purposes,  and (ii) the exercise of such rights.  This  discussion is
based on laws, regulations,  rulings and decisions in effect on the date of this
prospectus,  all of which are  subject  to  change  (possibly  with  retroactive
effect)  and to  differing  interpretations.  This  discussion  applies  only to
holders that are U.S. persons,  which is defined as a citizen or resident of the
United States, a domestic partnership, a domestic corporation, any estate (other
than a foreign  estate),  and any  trust so long as a court  within  the  United
States is able to exercise primary  supervision over the  administration  of the
trust and one or more U.S. persons have the authority to control all substantial
decisions of the trust. Generally,  for federal income tax purposes an estate is
classified as a "foreign estate" based on the location of the estate assets, the
country of the estate's  domiciliary  administration,  and the  nationality  and
residency of the domiciliary's personal representative.

            This  discussion  does not  address  all  aspects of federal  income
taxation  that  may  be  relevant  to  holders  in  light  of  their  particular
circumstances  or to holders who may be subject to special tax  treatment  under
the Internal Revenue Code of 1986, as amended,  including  holders of options or
warrants,  holders who are dealers in  securities or foreign  currency,  foreign
persons (defined as all persons other than U.S. persons),  insurance  companies,
tax-exempt organizations, banks, financial institutions, broker-dealers, holders
who hold common  stock as part of a hedge,  straddle,  conversion  or other risk
reduction transaction,  or who acquired common stock pursuant to the exercise of
compensatory stock options or warrants or otherwise as compensation.

                                       20





            We have not  sought,  and will not seek,  an opinion of counsel or a
ruling from the  Internal  Revenue  Service  regarding  the  federal  income tax
consequences  of the  distribution  of the rights or the related share issuance.
The following  summary does not address the tax consequences of the distribution
of the rights or the related share issuance under foreign,  state,  or local tax
laws.  ACCORDINGLY,  EACH  HOLDER OF COMMON  STOCK  SHOULD  CONSULT  ITS OWN TAX
ADVISOR WITH RESPECT TO THE PARTICULAR TAX  CONSEQUENCES OF THE  DISTRIBUTION OF
THE RIGHTS OR THE RELATED SHARE ISSUANCE TO SUCH HOLDER.

            The federal income tax  consequences for a holder of common stock on
the  receipt of  subscription  rights  and the  exercise  of such  rights are as
follows:

            o   A holder will not recognize  taxable  income for federal  income
                tax  purposes in  connection  with the  receipt of  subscription
                rights.

            o   Except as provided in the following  sentence,  the tax basis of
                the  subscription  rights  received by a holder will be zero. If
                either (i) the fair market value of the  subscription  rights on
                the date such subscription rights are distributed is equal to at
                least 15% of the fair  market  value on such date of the  common
                stock with respect to which the subscription rights are received
                or (ii) the holder irrevocably  elects, by attaching a statement
                to its federal  income tax return for the taxable  year in which
                the  subscription  rights are received,  to allocate part of the
                tax basis of such common stock to the subscription  rights, then
                upon exercise of the subscription rights, the holder's tax basis
                in the common stock will be  allocated  between the common stock
                and the  subscription  rights in proportion to their  respective
                fair  market  values  on the date the  subscription  rights  are
                distributed.  A holder's  holding  period  for the  subscription
                rights received will include the holder's holding period for the
                common stock with respect to which the subscription  rights were
                received.   We  believe  that  the  fair  market  value  of  the
                subscription rights will not exceed 15% of the fair market value
                of the common stock to which the subscription rights relate.

            o   A holder that allows the subscription  rights received to expire
                will not  recognize  any gain or loss,  and the tax basis of the
                common  stock owned by such  holder  with  respect to which such
                subscription  rights were  distributed  will be equal to the tax
                basis of such common stock immediately before the receipt of the
                subscription rights.

            o   A holder will not  recognize  any gain or loss upon the exercise
                of the subscription rights.

            o   The tax basis of the common stock acquired  through  exercise of
                the  subscription  rights will equal the sum of the subscription
                price for the common stock and the  holder's tax basis,  if any,
                in the subscription rights as described above.

            o   The  holding  period  for  the  common  stock  acquired  through
                exercise of the  subscription  rights will begin on the date the
                subscription rights are exercised.

                              PLAN OF DISTRIBUTION

            We are offering the shares of our common stock underlying the rights
directly to you. We have not employed any brokers,  dealers or  underwriters  in
connection  with the  solicitation  or exercise of  subscription  rights in this
offering and no  commissions,  fees or discounts will be paid in connection with
this  offering.  ______________________________  is acting  as our  subscription
agent to effect the  exercise of the rights and the  issuance of the  underlying
shares  of  common  stock.  Therefore,  we  anticipate  that our  officers'  and
employees' role will be limited to:

            o   Responding  to inquiries of potential  purchasers,  provided the
                response is limited to information contained in the registration
                statement of which this prospectus is a part; and

            o   Ministerial and clerical work involved in effecting transactions
                pertaining  to the  sale  of the  common  stock  underlying  the
                rights.

            We intend to  distribute  and deliver this  prospectus by hand or by
mail  only,  and not by  electronic  delivery.  Also,  we intend to use  printed
prospectuses only, and not any other forms of prospectus.

                                       21





            We have distributed to the holders of record of our common stock, at
the close of business on  __________,  2003, at no charge,  one  nontransferable
subscription   right  for  each  share  of  our  common  stock  they  own.  Each
subscription  right is a right to purchase  _____ shares of our common stock and
carries  with  it  a  basic  subscription  privilege  and  an  over-subscription
privilege.  The basic  subscription  privilege  of each  right  entitles  you to
purchase _____ shares of our common stock at a subscription  price of $_____ per
share.  You may  exercise  any number of your  subscription  rights,  or you may
choose not to exercise  any  subscription  rights.  We will not  distribute  any
fractional shares or pay cash in lieu of fractional  shares, but will round down
the aggregate  number of shares you are entitled to receive to the nearest whole
number.

            We do not expect that all of our  stockholders  will exercise all of
their basic subscription privileges. By extending  over-subscription  privileges
to our  stockholders,  we are providing  stockholders that exercise all of their
basic subscription privileges with the opportunity to purchase those shares that
are not purchased by other stockholders.

            If you wish to exercise your over-subscription privilege, you should
indicate the number of additional  shares that you would like to purchase in the
space  provided  on  your  subscription  certificate.  When  you  send  in  your
subscription  certificate,  you must also send the full  purchase  price for the
number of additional  shares that you have requested to purchase (in addition to
the payment due for shares purchased through your basic subscription privilege).
If the number of shares  remaining after the exercise of all basic  subscription
privileges  is not  sufficient  to satisfy all requests  for shares  pursuant to
over-subscription  privileges,  you will be allocated additional shares pro-rata
(subject to elimination of fractional shares), based on the number of shares you
purchased  through the basic  subscription  privilege in proportion to the total
number of  shares  that you and other  over-subscribing  stockholders  purchased
through the basic subscription  privilege.  However, if your pro-rata allocation
exceeds the number of shares you  requested  on your  subscription  certificate,
then you will  receive  only the number of shares  that you  requested,  and the
remaining  shares  from your  pro-rata  allocation  will be divided  among other
rights holders exercising their over-subscription  privileges. Also, pursuant to
the terms of our charter,  you will not be allowed to subscribe  for a number of
shares that would  increase your ownership of our shares of common stock to 4.9%
or above of our then  outstanding  shares of common  stock,  unless you  already
owned at least  5.0% of our  common  stock on the date such  restriction  became
effective.

            As soon as practicable after the expiration date,  ________________,
acting as our subscription  agent, and we will determine the number of shares of
common stock that you may purchase pursuant to the over-subscription  privilege.
You will receive  certificates  representing these shares as soon as practicable
after the  expiration  date.  If you  request  and pay for more  shares than are
allocated  to  you,  we will  refund  that  overpayment,  without  interest.  In
connection with the exercise of the over-subscription  privilege, banks, brokers
and other nominee holders of subscription rights who act on behalf of beneficial
owners will be required to certify to us and to the subscription agent as to the
aggregate number of subscription rights that have been exercised, and the number
of shares of common stock that are being requested through the over-subscription
privilege,  by each  beneficial  owner on whose  behalf  the  nominee  holder is
acting.

            We will pay  __________________,  the  information  agent,  a fee of
$______  plus  expenses,  and  __________,  the  subscription  agent,  a fee  of
approximately  $_____ plus expenses,  for their services in connection with this
offering.  We also have agreed to  indemnify  under  certain  circumstances  the
information agent and the subscription  agent from any liability it may incur in
connection with this offering.

            We expect that shares of our common  stock  issued upon the exercise
of  subscription  rights will be listed on the Nasdaq  Stock  Market's  SmallCap
Market under the symbol "WEFN," the same symbol our currently outstanding shares
of common stock now trade.

                                  LEGAL MATTERS

            The validity of the shares of common stock offered  hereby,  and the
description in this  prospectus of the U.S.  federal income tax  consequences of
this offering,  will be passed upon for us by Olshan Grundman Frome Rosenzweig &
Wolosky LLP, New York, New York.

                                       22





                                     EXPERTS

            The consolidated financial statements of WebFinancial Corporation at
December  31,  2002 and 2001,  and for the years then  ended,  appearing  in our
annual  report  on Form  10-K for the year  ended  December  31,  2002 have been
audited by Grant Thornton LLP,  independent  accountants,  as set forth in their
report thereon included  therein.  Such  consolidated  financial  statements are
incorporated  herein by  reference  in reliance  upon such  report  incorporated
therein  by  reference  given  on the  authority  of  such  firm as  experts  in
accounting and auditing.


                       WHERE YOU CAN FIND MORE INFORMATION

            We are subject to the  informational  requirements of the Securities
Exchange Act of 1934.  Accordingly,  we file reports, proxy statements and other
information  with the SEC. You may read and copy any materials that we file with
the  SEC  at  the  SEC's  Public  Reference  Room  at 450  Fifth  Street,  N.W.,
Washington,  D.C.  20549 upon  payment of the  prescribed  fees.  You may obtain
information on the operation of the Public  Reference Room by calling the SEC at
1-800-SEC-0330.  The SEC also maintains an Internet site that contains  reports,
proxy and information  statements and other materials that are filed through the
SEC's Electronic Data Gathering,  Analysis, and Retrieval, or EDGAR, system. You
can access this web site at HTTP://WWW.SEC.GOV.  We also post our SEC filings on
our web  site at  HTTP://WWW.WEBFINANCIALCORPORATION.COM.  Our  common  stock is
listed on the Nasdaq Stock Market's SmallCap Market.

            The SEC allows us to  "incorporate  by reference" the information we
file with the SEC. This permits us to disclose  important  information to you by
referencing  these  filed  documents.  Any  information  referenced  this way is
considered part of this prospectus, and any information filed with the SEC after
the date on the cover of this prospectus will  automatically be deemed to update
and supercede this information. We incorporate by reference the documents listed
below and any future filings made by us with the SEC file number 000-00631 under
Sections  13(a),  13(c),  14 or 15(d) of the Exchange  Act of 1934,  as amended,
until all of the securities described in this prospectus are sold:

            o   our annual  report on Form 10-K for the year ended  December 31,
                2002,

            o   our  quarterly  report on Form 10-QSB for the period ended March
                31, 2003,

            o   our  quarterly  report on Form 10-QSB for the period  ended June
                30, 2003, and

            o   the description of our common stock contained in our resignation
                statement  on Form 8-A  filed  with the SEC on March  27,  1995,
                including  all  amendments  and  reports  filed for  purposes of
                updating such description.

            This  prospectus is part of a registration  statement filed with the
SEC.  This  prospectus  does not contain all the  information  contained  in the
registration statement. The full registration statement can be obtained from the
SEC.  This  prospectus  contains a general  description  of our  company and the
securities being offered for sale. You should read this prospectus together with
the additional information incorporated by reference.

            You can request a copy of any document  incorporated by reference in
this prospectus, at no cost, by writing or telephoning us at the following:

                            WebFinancial Corporation
                         590 Madison Avenue, 32nd Floor
                            New York, New York 10022
                        Attention: Warren G. Lichtenstein
                            Telephone: (212) 758-3232

                           FORWARD-LOOKING STATEMENTS

            We believe that certain  statements  contained  or  incorporated  by
reference in this prospectus are "forward-looking statements" within the meaning
of the  Private  Securities  Litigation  Reform  Act of 1995 and are  considered
prospective.  The following  statements  are or may  constitute  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995:

                                       23





            o     statements before, after or including the words "may," "will,"
                  "could," "should," "believe," "expect," "future," "potential,"
                  "anticipate,"  "intend,"  "plan,"  "estimate" or "continue" or
                  the negative or other variations of these words, and

            o     other statements about matters that are not historical facts.

            We may be  unable to  achieve  the  future  results  covered  by the
forward-looking  statements.  The statements are subject to risks, uncertainties
and other factors that could cause actual results to differ  materially from the
future results that the statements  express or imply. See "Risk Factors" on page
6. Please do not put undue reliance on these forward-looking  statements,  which
speak only as of the date of this prospectus.

                                       24





                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.    OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

            The following is an itemization  of all expenses  (subject to future
contingencies)  incurred or to be incurred by us in connection with the issuance
and distribution of the securities being offered.  All items below are estimates
other than the  Securities  and  Exchange  Commission  registration  fee and the
Nasdaq listing fee. WebFinancial will pay all of such expenses.


            Securities and Exchange Commission registration fee          $809.00
            Nasdaq listing fee.................................              *
            Printing and engraving expenses....................              *
            Accounting fees and expenses.......................              *
            Legal fees and expenses............................              *
            Subscription Agent fees and expenses...............              *
            Information Agent fees and expenses................              *
            Miscellaneous......................................              *
                                                                        --------
                        Total......................................     $    *
                                                                        ========

* To be completed by amendment.

ITEM 15.       INDEMNIFICATION OF DIRECTORS AND OFFICERS.

            Article Tenth of the Registrant's  Amended and Restated  Certificate
of Incorporation  and Section 5 of Article VIII of the Registrant's  Amended and
Restated Bylaws state as follows:

            (a) The corporation shall indemnify any person who was or is a party
or is  threatened  to be made a party to any  threatened,  pending or  completed
action,  suit  or  proceeding,   whether  civil,  criminal,   administrative  or
investigative  (other than an action by or in the right of the  corporation)  by
reason of the fact that he is or was a director,  officer,  employee or agent of
the  corporation,  or is or was serving at the request of the  corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other  enterprise,  against  expenses  (including  attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred by him in connection  with such action,  suit or proceeding if he acted
in good faith and in a manner he reasonably  believed to be in or not opposed to
the best interests of the corporation,  and, with respect to any criminal action
or proceeding,  had no reasonable cause to believe his conduct was unlawful. The
termination of any action,  suit or proceeding by judgment,  order,  settlement,
conviction,  or upon a plea of nolo contendere or its equivalent,  shall not, of
itself,  create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best interest
of the corporation,  and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

            (b) The corporation shall indemnify any person who was or is a party
or is  threatened  to be made a party to any  threatened,  pending or  completed
action or suit by or in the right of the  corporation  to procure a judgment  in
its favor by reason of the fact that he is or was a director,  officer, employee
or  agent  of the  corporation,  or is or was  serving  at  the  request  of the
corporation as a director,  officer,  employee or agent of another  corporation,
partnership,   joint  venture,  trust  or  other  enterprise,  against  expenses
(including   attorneys'  fees)  actually  and  reasonably  incurred  by  him  in
connection  with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interest of the  corporation  and except that no  indemnification  shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such action
or  suit  was  brought  shall  determine  upon  application  that,  despite  the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and  reasonably  entitled to indemnity for such expenses  which
the court of Chancery or such other court shall deem proper.

                                      II-1





            (c) To the extent that a director, officer, employee or agent of the
corporation  has been  successful  on the merits or  otherwise in defense of any
action,  suit  or  proceeding  referred  to in  paragraphs  (a)  and (b) of this
Section,  or in defense of any claim,  issue or matter  therein,  including  the
dismissal  of an action  without  prejudice,  he  shall,  without  limiting  the
provisions of paragraph (a) above, be indemnified  against  expenses  (including
attorneys'  fees)  actually  and  reasonably   incurred  by  him  in  connection
therewith.

            (d) Any indemnification under paragraphs (a) and (b) of this Section
(unless ordered by a court) shall be made by the corporation  only as authorized
in the specific case upon a determination that  indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable  standard  of  conduct  set forth in  paragraphs  (a) and (b) of this
Section.  Such  determination  shall be made (i) by the board of  directors by a
majority  vote of a quorum  consisting of directors who were not parties to such
action,  suit or proceedings,  or (ii) if such a quorum is not  obtainable,  or,
even  if  obtainable  a  quorum  of  disinterested   directors  so  directs,  by
independent legal counsel in a written opinion, or (iii) by the stockholders.

            (e) Expenses  (including  attorneys' fees) incurred by an officer or
director in  defending  any civil,  criminal,  administrative  or  investigative
action,  suit or proceeding  shall be paid by the  corporation in advance of the
final  disposition  of  such  action,  suit or  proceeding  upon  receipt  of an
undertaking  by or on behalf of such director or officer to repay such amount if
it shall  ultimately be determined  that he is not entitled to be indemnified by
the corporation pursuant to this Section or as otherwise authorized by law. Such
expenses (including  attorneys' fees) incurred by other employees and agents may
be so paid upon such terms and  conditions,  if any,  as the board of  directors
deems appropriate.

            (f) The  indemnification and advancement of expenses provided by, or
granted  pursuant to, the other  paragraphs  of this Section shall not be deemed
exclusive  of any  other  rights  to  which  those  seeking  indemnification  or
advancement  of expenses may be entitled  under any by-law,  agreement,  vote of
stockholders or disinterested  directors or otherwise,  both as to action in his
official  capacity  and as to action in  another  capacity  while  holding  such
office.

            (g) The  corporation,  at its  expense,  may  purchase  and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director,  officer, employee or agent of another corporation,  partnership,
joint venture,  trust or other enterprise against any liability asserted against
him and  incurred by him in any such  capacity,  or arising out of his status as
such,  whether  or not the  corporation  would have the power to  indemnify  him
against  such  liability  under  the  provisions  of this  Section  or under the
provisions of the General Corporation Law of the State of Delaware.

            (h) The  indemnification and advancement of expenses provided by, or
granted  pursuant to, this Section shall  continue as to a person who has ceased
to be a director,  officer,  employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such person.

            (i) All rights to indemnification  and advancement of expenses under
this Section shall be deemed to be provided by contract  between the corporation
and the director,  officer, employee or agent who serves in such capacity at any
time while the by-laws and/or  certificate of  incorporation  and other relevant
provisions  of the General  Corporation  Law of the State of Delaware  and other
applicable law, if any, are in effect.

            (j) Any repeal or  modification  of the foregoing  paragraphs by the
stockholders  of the  corporation  shall  not  adversely  affect  any  right  or
protection of a director, officer, employee or agent of the corporation existing
at the time of such repeal or modification.

            (k) If the  General  Corporation  Law of the  State of  Delaware  is
amended to authorize  corporate  action  permitting  the  corporation to further
indemnify or advance expenses to directors,  officers, employees or agents, then
such  person,  in addition to the  circumstances  in which he is now entitled to
indemnification and advancement of expenses, shall be entitled to be indemnified
and have  expenses  advanced  to the  fullest  extent  permitted  by the General
Corporation Law of the State of Delaware, as so amended.

                                      II-2





            (l) For purposes of this Section,  references  to "the  corporation"
shall  include,  in  addition  to the  resulting  corporation,  any  constituent
corporation   (including  any  constituent  of  a  constituent)  absorbed  in  a
consolidation  or merger which, if its separate  existence had continued,  would
have had power and authority to indemnify its directors,  officers, employees or
agents, so that any person who is or was a director,  officer, employee or agent
of such  constituent  corporation,  or is or was  serving at the request of such
constituent  corporation  as a director,  officer,  employee or agent of another
corporation,  partnership, joint venture, trust or other enterprise, shall stand
in the same  position  under the  provisions of this Section with respect to the
resulting  or  surviving  corporation  as he would  have  with  respect  to such
constituent corporation if its separate existence had continued.

            (m) For purposes of this Section,  references to "other enterprises"
shall include  employee  benefit plans;  references to "fines" shall include any
excise taxes assessed on a person with respect to an employee  benefit plan; and
references  to  "serving at the request of the  corporation"  shall  include any
service as a  director,  officer,  employee  or agent by the  corporation  which
imposes duties on, or involves services by, such director,  officer, employee or
agent  with  respect  to  an  employee  benefit  plan,  its   participants,   or
beneficiaries;  and a  person  who  acted  in  good  faith  and in a  manner  he
reasonably  believed to be in the interest of the participants and beneficiaries
of an  employee  benefit  plan  shall be deemed to have  acted in a manner  "not
opposed  to the best  interests  of the  corporation,"  as  referred  to in this
Section.

            (n) If this Section or any portion  thereof shall be  invalidated on
any ground by any court of competent  jurisdiction,  then the corporation  shall
nevertheless  indemnify each person as provided above as to expenses  (including
attorneys' fees),  judgments,  fines and amounts paid in settlement with respect
to any action, suit or proceeding,  whether civil,  criminal,  administrative or
investigative,   including  a  grand  jury  proceeding  and  an  action  by  the
corporation,  to the fullest extent permitted by any applicable  portion of this
Section that shall not have been invalidated or by any other applicable law.


ITEM 16.       EXHIBITS.

Exhibit #      Description

3.1*           Amended  and  Restated   Certificate  of   Incorporation  of  the
               Registrant, filed on March 19, 1999.

3.2*           Certificate of Amendment of Certificate of  Incorporation  of the
               Registrant, filed on July 8, 1999.

3.3            By-Laws of the Registrant (incorporated by reference from Exhibit
               I-5 to the  Registration  Statement  on Form 8-A filed  March 27,
               1995).

4.1            Specimen  certificate  for Common Stock,  $.001 par value, of the
               Registrant  (incorporated  by  reference  to  Exhibit  I-1 to the
               Registration Statement on Form 8-A filed March 27, 1995).

4.2*           Form of Subscription Rights Certificate.

5.1**          Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP.

23.1*          Consent of Grant Thornton LLP.

23.2**         Consent  of  Olshan  Grundman  Frome  Rosenzweig  &  Wolosky  LLP
               (included in opinion filed as Exhibit 5.1).

24.1*          Power of Attorney (included on signature page hereto).

99.1*          Form of Instructions as to Use of Rights Certificates.

99.2*          Form of Notice of Guaranteed Delivery for Rights Certificates.

99.3*          Form of Letter to Security Holders Who Are Record Holders.

                                      II-3





99.4*          Form of Letter to Securities  Dealers,  Commercial  Banks,  Trust
               Companies and Other Nominees.

99.5*          Form of Letter to Clients of Security  Holders Who Are Beneficial
               Holders.

99.6*          Form of Nominee Holder Certification Form.

99.7*          Beneficial Owner Election Form.

99.8*          Substitute Form W-9 (including  Guidelines for  Certification  of
               Taxpayer Identification Number on Substitute Form W-9).

99.9**         Form  of  Subscription  Agency  Agreement  between   WebFinancial
               Corporation and ___________.

99.10**        Form  of  Information   Agent  Agreement   between   WebFinancial
               Corporation and _____________.

- ----------------

*        Filed herewith
**       To be filed by amendment


ITEM 17.       UNDERTAKINGS.

            (a) The undersigned Registrant hereby undertakes:

                        (1) To file,  during any period in which offers or sales
            are being made,  a  post-effective  amendment  to this  Registration
            Statement  to include any material  information  with respect to the
            plan of distribution  not previously  disclosed in the  Registration
            Statement  or  any  material  change  to  such  information  in  the
            Registration Statement;

                        (2) That, for the purpose of  determining  any liability
            under the  Securities  Act of 1933,  each  post-effective  amendment
            shall be deemed to be a new registration  statement  relating to the
            securities  offered therein,  and the offering of such securities at
            that  time  shall be  deemed to be the  initial  bona fide  offering
            thereof; and

                        (3)  To  remove   from   registration   by  means  of  a
            post-effective  amendment  any of the  securities  being  registered
            which remain unsold at the termination of the offering.

            (b) The undersigned  registrant hereby undertakes that, for purposes
of determining  any liability  under the Securities Act of 1933,  each filing of
the  registrant's  annual  report  pursuant  to  Section  13(a)  or 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  Section  15(d)  of  the
Securities  Exchange  Act of 1934) that is  incorporated  by  reference  in this
Registration  Statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

            (c) Insofar as  indemnification  for  liabilities  arising under the
Securities Act of 1933 may be permitted to directors,  officers and  controlling
persons of the Registrant  pursuant to the foregoing  provisions,  or otherwise,
the  Registrant  has been  advised  that in the  opinion of the  Securities  and
Exchange  Commission such  indemnification is against public policy as expressed
in the Act and is,  therefore,  unenforceable.  In the  event  that a claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
Registrant of expenses  incurred or paid by a director,  officer or  controlling
person  of the  Registrant  in the  successful  defense  of an  action,  suit or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered,  the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

                                      II-4





                                   SIGNATURES

            Pursuant to the  requirements  of the  Securities  Act of 1933,  the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the  City of New  York,  State of New  York,  on the 10th day of
October, 2003.


                                     WEBFINANCIAL CORPORATION


                                     By: /s/ Warren G. Lichtenstein
                                         ---------------------------------------
                                         Warren G. Lichtenstein
                                         President and Chief Executive Officer

            KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Warren G. Lichtenstein and Jack L.
Howard, and each of them individually,  as his true and lawful attorneys-in-fact
and  agents,  with full power of  substitution,  for him in his name,  place and
stead,  in  any  and  all  capacities,  in  connection  with  this  Registration
Statement,  including  to  sign  and  file  in the  name  and on  behalf  of the
undersigned  as director or officer of the Registrant (i) any and all amendments
or supplements (including any and all stickers and post-effective amendments) to
this Registration  Statement,  with all exhibits thereto, and other documents in
connection therewith,  and (ii) any and all additional registration  statements,
and any and all amendments thereto,  relating to the same offering of securities
as those that are covered by this Registration Statement that are filed pursuant
to Rule 462(b)  promulgated under the Securities Act of 1933 with the Securities
and Exchange  Commission  and any applicable  securities  exchange or securities
self-regulatory body, granting unto said  attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite  or necessary  to be done in and about the  premises,  as fully to all
intents and  purposes as he might or could do in person,  hereby  ratifying  and
confirming all that said attorneys-in-fact and agents, or their substitute,  may
lawfully do or cause to be done by virtue hereof.

            Pursuant to the  requirements  of the Securities  Act of 1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated:


Signature                        Title                                          Date
- ---------                        -----                                          ----

/s/ Warren G. Lichtenstein       President, Chief Executive Officer and         October 10, 2003
- --------------------------       Director (principal executive officer)


/s/ Glen M. Kassan               Vice President and Chief Financial Officer     October 10, 2003
- --------------------------       (principal financial and accounting officer)
Glen M. Kassan


/s Jack L. Howard                Director                                       October 10, 2003
- --------------------------
Jack L. Howard



/s/ Howard Mileaf                Director                                       October 10, 2003
- --------------------------
Howard Mileaf


/s/ Joseph L. Mullen             Director                                       October 10, 2003
- --------------------------
Joseph L. Mullen


/s/ Mark E. Schwarz              Director                                       October 10, 2003
- --------------------------
Mark E. Schwarz

                                      II-5

EX-3.1

                                                                     EXHIBIT 3.1



                              AMENDED AND RESTATED

                          CERTIFICATE OF INCORPORATION


                                       OF


                              ROSE'S HOLDINGS, INC.


                                      under


                      The Delaware General Corporation Law








                              AMENDED AND RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                              ROSE'S HOLDINGS, INC.

            Rose's  Holdings,  Inc.,  originally  incorporated on August 5, 1997
(the  "Corporation") and existing under and by virtue of the General Corporation
Law of the State of Delaware (the "GCL"), does hereby certify that the following
Amended  and  Restated  Certificate  of  Incorporation  was  authorized  by  the
affirmative  vote of a  majority  of the  outstanding  shares  entitled  to vote
thereon pursuant to Sections 222, 242 and 245 of the GCL.

            FIRST: The name of the Corporation is Rose's Holdings, Inc.

            SECOND:  The address of the  Corporation's  registered office in the
State of Delaware is Corporation Trust Center,  1209 Orange Street,  Wilmington,
County of New Castle,  Delaware 19801,  and the name of its registered  agent at
such address is The Corporation Trust Company.

            THIRD:  The nature of the  business to be  conducted or promoted and
the purposes of the  Corporation are to engage in any lawful act or activity for
which  corporations  may be organized  under the General  Corporation Law of the
State of Delaware.

            FOURTH:  The  Corporation  shall  have  the  authority  to  issue an
aggregate of Sixty Million  (60,000,000) shares of capital stock. The authorized
capital  shall be divided into common stock (the "Common  Stock") and  preferred
stock (the "Preferred Stock"). The Common Stock of the Corporation shall consist
of Fifty Million  (50,000,000)  shares, par value $.001 per share. The Preferred
Stock of the Corporation shall consist of Ten Million  (10,000,000)  shares, par
value $.001 per share.

            No stockholder of the Corporation  shall by reason of his holding of
shares of any class or  series  have any  preemptive  or  preferential  right to
purchase  or  subscribe  to any  shares  of any  class or series of stock of the
Corporation,  now or hereafter authorized, or any securities convertible into or
carrying  options or warrants  to purchase  any shares of any class or series of
stock of the Corporation,  now or hereafter authorized,  other than such rights,
if any, as the Board of Directors, in its discretion from time to time may grant
and at such price as the Board of Directors may fix.

            FIFTH: The Common Stock shall have the powers, preferences,  rights,
qualifications, limitations and restrictions set forth below.

            (a)   POWERS.  The Board of  Directors  is  authorized,  subject  to
                  limitations  prescribed  by law and the  provisions of Article
                  FOURTH,  to provide  for the  issuance of the shares of Common
                  Stock  in one or more  classes  or  series,  and by  filing  a
                  certificate  pursuant  to the  applicable  law of the State of
                  Delaware,  to establish from time to time the number of shares
                  to be  included  in  each  such  series,  and  subject  to the
                  provisions  of this  Article  FIFTH,  to fix the  designation,
                  powers,  preferences  and  rights  of the  shares of each such
                  class  or  series  and  the  qualifications,   limitations  or
                  restrictions thereof.

                                      -1-




            (b)   VOTING RIGHTS.  The holders of shares of Common Stock shall be
                  entitled  to one vote for each  share so held with  respect to
                  all matters voted on by the stockholders of the Corporation.

            (c)   DIVIDENDS.  Dividends  may be paid on the Common  Stock as and
                  when declared by the Board of Directors.

            (d)   LIQUIDATION RIGHTS. Subject to the prior and superior right of
                  the  Preferred  Stock,   upon  any  voluntary  or  involuntary
                  liquidation,  dissolution  or  winding  up of  affairs  of the
                  Corporation,  the holders of Common Stock shall be entitled to
                  receive of the funds to be distributed  such amount as remains
                  after  distribution  of all  amounts,  if any,  required to be
                  distributed  to holders  of any  Preferred  Stock.  Such funds
                  shall be paid to the  holders of Common  Stock on the basis of
                  the number of shares of Common stock held by each of them.

            (e)   RESERVE  POWERS.  The holders of shares of Common  Stock shall
                  have all other powers,  preferences and rights  conferred upon
                  owners of shares of capital  stock under the laws of the State
                  of Delaware,  except insofar as such powers,  preferences  and
                  rights are expressly restricted by the provisions of Paragraph
                  (b) of this Article FIFTH.

            SIXTH:  The  Preferred  Stock  shall have the  powers,  preferences,
rights, qualifications, limitations and restrictions set forth below.

            (a)   POWERS.  The Board of  Directors  is  authorized,  subject  to
                  limitations  prescribed  by law and the  provisions of Article
                  FOURTH, to provide for the issuance of the shares of Preferred
                  Stock  in one or more  classes  or  series,  and by  filing  a
                  certificate  pursuant  to the  applicable  law of the State of
                  Delaware,  to establish from time to time the number of shares
                  to  be  included  in  each  such   series,   and  to  fix  the
                  designation,  powers,  preferences and rights of the shares of
                  each such class or series and the qualifications,  limitations
                  or restrictions thereof.

            (b)   LIQUIDATION  RIGHTS.  If upon  any  voluntary  or  involuntary
                  liquidation, dissolution or winding up of the Corporation, the
                  assets  available  for  distribution  to  holders of shares of
                  Preferred Stock of all classes or series shall be insufficient
                  to pay such holders the full preferential amount to which they
                  are entitled,  then such assets shall be  distributed  ratably
                  among the shares of all classes or series of  Preferred  Stock
                  in  accordance  with the  respective  liquidation  preferences
                  (including unpaid cumulative  dividends,  if any) payable with
                  respect thereto.

            SEVENTH:

            (a)   The  number of  directors  constituting  the  entire  Board of
                  Directors  shall be not less than five nor more than nine, the
                  exact  number  to be  fixed  from  time  to  time by vote of a
                  majority of the entire Board of Directors;  provided, however,
                  that the  number of  directors  shall not be  reduced so as to
                  shorten the term of any director at the time in office.

            (b)   The Board of  Directors,  excluding  directors  elected by the
                  holders  of shares  of any  class or series of stock  having a
                  preference over the Common Stock of the Corporation as to

                                      -2-





                  dividends  or upon  liquidation  as provided in Article  SIXTH
                  hereto,  shall be divided into three classes,  as nearly equal
                  in number as the then total number of  directors  constituting
                  the entire Board of Directors permits, with the term of office
                  of one class  expiring each year, and each director shall hold
                  office  for a term  expiring  at the third  annual  meeting of
                  stockholders  following his or her election and, in each case,
                  until his or her  successor  shall have been duly  elected and
                  qualified;  provided,  however,  that commencing at the annual
                  meeting of  stockholders  to be held in fiscal year 1999, with
                  respect to directors  whose terms expire at the annual meeting
                  of stockholders  held in fiscal year 1999, 2000 and 2001, each
                  such director  shall,  upon the expiration of his or her term,
                  be elected to serve until the annual  meeting of  stockholders
                  held in the following fiscal year and, in each case, until his
                  or her successor shall have been duly elected and qualified.

            (c)   Except as  otherwise  provided in this  Article  SEVENTH,  any
                  vacancies  in the Board of Directors  for any reason,  and any
                  directorships  resulting  from any  increase  in the number of
                  directors, may be filled by the Board of Directors,  acting by
                  a majority of the directors then in office, although less than
                  a quorum.  Any  director  chosen to fill a vacancy  shall hold
                  office  until the next  election  of the class for which  such
                  director shall have been chosen and until his or her successor
                  shall have been elected and qualified.

            EIGHTH:  In furtherance of and not in limitation of powers conferred
by statute, it is further provided that:

            (a)   Subject to the limitations and exceptions,  if any,  contained
                  in the by-laws of the  Corporation,  the Board of Directors is
                  expressly  authorized  to make,  alter,  amend or  repeal  the
                  by-laws  of the  Corporation  by  the  affirmative  vote  of a
                  majority  or more of the  number  of  directors  then  holding
                  office;  provided,  however, that the Board of Directors shall
                  not have the  power to  alter,  amend  or  repeal  any  by-law
                  provision   which  by  its  terms   requires  a  vote  of  the
                  stockholders of the  Corporation,  such  provision(s) to be so
                  designated in the by-laws of the Corporation; and

            (b)   Elections of directors  need not be by written  ballot unless,
                  and only to the extent, otherwise provided in the by-laws.

            NINTH:  All  action  by the  stockholders  shall  be taken at a duly
called special or annual meeting of the stockholders of the Corporation at which
a quorum is present,  and the stockholders of the Corporation shall not have the
right to act by  written  consent as  provided  by  Section  228 of the  General
Corporation Law of the State of Delaware.

            This Article NINTH may not be altered, amended or repealed except by
the  affirmative  vote  of  the  holders  of  shares  of  capital  stock  of the
Corporation  entitled to cast sixty-six and two-thirds percent (66-2/3%) or more
of the  aggregate  number  of  votes  entitled  to be  cast  by all  holders  of
outstanding shares of the capital stock of the Corporation.

                                      -3-





            TENTH:

            (a)   The  Corporation  shall  indemnify  any person who was or is a
                  party or is threatened  to be made a party to any  threatened,
                  pending  or  completed  action,  suit or  proceeding,  whether
                  civil,  criminal,  administrative or investigative (other than
                  an action by or in the right of the  Corporation) by reason of
                  the fact that he is or was a  director,  officer,  employee or
                  agent of the Corporation,  or is or was serving at the request
                  of the Corporation as a director,  officer,  employee or agent
                  of another corporation,  partnership,  joint venture, trust or
                  other  enterprise,   against  expenses  (including  attorneys'
                  fees),  judgments,   fines  and  amounts  paid  in  settlement
                  actually and  reasonably  incurred by him in  connection  with
                  such action,  suit or proceeding if he acted in good faith and
                  in a manner he reasonably  believed to be in or not opposed to
                  the best  interests of the  Corporation,  and, with respect to
                  any criminal action or proceeding,  had no reasonable cause to
                  believe his  conduct  was  unlawful.  The  termination  of any
                  action,  suit or  proceeding by judgment,  order,  settlement,
                  conviction,   or  upon  a  plea  of  nolo  contendere  or  its
                  equivalent,  shall not, of itself,  create a presumption  that
                  the person did not act in good faith and in a manner  which he
                  reasonably  believed  to be in or  not  opposed  to  the  best
                  interest of the Corporation, and, with respect to any criminal
                  action or proceeding, had reasonable cause to believe that his
                  conduct was unlawful.

            (b)   The  Corporation  shall  indemnify  any person who was or is a
                  party or is threatened  to be made a party to any  threatened,
                  pending or completed  action or suit by or in the right of the
                  Corporation  to procure a  judgment  in its favor by reason of
                  the fact that he is or was a  director,  officer,  employee or
                  agent of the Corporation,  or is or was serving at the request
                  of the Corporation as a director,  officer,  employee or agent
                  of another corporation,  partnership,  joint venture, trust or
                  other enterprise, against expenses (including attorneys' fees)
                  actually and reasonably incurred by him in connection with the
                  defense or  settlement  of such  action or suit if he acted in
                  good faith and in a manner he reasonably  believed to be in or
                  not opposed to the best interest of the Corporation and except
                  that no indemnification shall be made in respect of any claim,
                  issue or  matter  as to which  such  person  shall  have  been
                  adjudged  to be liable to the  Corporation  unless and only to
                  the extent that the Court of Chancery of the State of Delaware
                  or the court in which such  action or suit was  brought  shall
                  determine upon application  that,  despite the adjudication of
                  liability  but in view of all the  circumstances  of the case,
                  such person is fairly and reasonably entitled to indemnity for
                  such expenses  which the court of Chancery or such other court
                  shall deem proper.

            (c)   To the extent that a director,  officer,  employee or agent of
                  the Corporation has been successful on the merits or otherwise
                  in defense of any action,  suit or  proceeding  referred to in
                  paragraphs (a) and (b) of this Article TENTH, or in defense of
                  any claim, issue or matter therein, including the dismissal of
                  an action without  prejudice,  he shall,  without limiting the
                  provisions  of paragraph  (a) above,  be  indemnified  against
                  expenses  (including  attorneys' fees) actually and reasonably
                  incurred by him in connection therewith.

            (d)   Any  indemnification  under  paragraphs  (a)  and  (b) of this
                  Article TENTH (unless ordered by a court) shall be made by the
                  Corporation  only as  authorized  in the specific  case upon a
                  determination that  indemnification of the director,  officer,
                  employee  or agent is proper in the  circumstances  because he
                  has met the applicable standard of conduct set forth in

                                      -4-





                  paragraphs   (a)  and  (b)  of  this   Article   TENTH.   Such
                  determination shall be made (i) by the Board of Directors by a
                  majority vote of a quorum consisting of directors who were not
                  parties to such action, suit or proceedings, or (ii) if such a
                  quorum is not  obtainable,  or, even if obtainable a quorum of
                  disinterested  directors  so  directs,  by  independent  legal
                  counsel in a written opinion, or (iii) by the stockholders.

            (e)   Expenses (including attorneys' fees) incurred by an officer or
                  director in defending any civil,  criminal,  administrative or
                  investigative  action, suit or proceeding shall be paid by the
                  Corporation  in  advance  of the  final  disposition  of  such
                  action,  suit or proceeding  upon receipt of an undertaking by
                  or on behalf of such  director or officer to repay such amount
                  if it shall  ultimately be determined  that he is not entitled
                  to be indemnified by the Corporation  pursuant to this Article
                  TENTH  or  as  otherwise  authorized  by  law.  Such  expenses
                  (including  attorneys'  fees) incurred by other  employees and
                  agents may be so paid upon such terms and conditions,  if any,
                  as the Board of Directors deems appropriate.

            (f)   The  indemnification  and advancement of expenses provided by,
                  or granted  pursuant to, the other  paragraphs of this Article
                  TENTH  shall not be deemed  exclusive  of any other  rights to
                  which those seeking indemnification or advancement of expenses
                  may  be  entitled  under  any  by-law,   agreement,   vote  of
                  stockholders or disinterested directors or otherwise,  both as
                  to action in his official capacity and as to action in another
                  capacity while holding such office.

            (g)   The  Corporation,  at its  expense,  may purchase and maintain
                  insurance  on behalf of any person  who is or was a  director,
                  officer,  employee or agent of the  Corporation,  or is or was
                  serving  at the  request  of the  Corporation  as a  director,
                  officer,   employee   or   agent   of   another   corporation,
                  partnership,  joint venture, trust or other enterprise against
                  any liability  asserted against him and incurred by him in any
                  such capacity,  or arising out of his status as such,  whether
                  or not the  Corporation  would have the power to indemnify him
                  against such  liability  under the  provisions of this Article
                  TENTH or under the provisions of the General  Corporation  Law
                  of the State of Delaware.

            (h)   The  indemnification  and advancement of expenses provided by,
                  or granted  pursuant to, this Article TENTH shall  continue as
                  to a person who has ceased to be a director, officer, employee
                  or  agent  and  shall  inure  to the  benefit  of  the  heirs,
                  executors and administrators of such person.

            (i)   All rights to  indemnification  and  advancement  of  expenses
                  under this  Article  TENTH  shall be deemed to be  provided by
                  contract  between the Corporation  and the director,  officer,
                  employee  or agent  who  serves in such  capacity  at any time
                  while this  Certificate  of  Incorporation  and other relevant
                  provisions  of the  General  Corporation  Law of the  State of
                  Delaware and other applicable law, if any, are in effect.

            (j)   Any repeal or modification of the foregoing  paragraphs by the
                  stockholders of the Corporation shall not adversely affect any
                  right or protection of a director,  officer, employee or agent
                  of the  Corporation  existing  at the time of such  repeal  or
                  modification.

            (k)   If the  General  Corporation  Law of the State of  Delaware is
                  amended  to  authorize   corporate   action   permitting   the
                  Corporation to further indemnify or advance expenses to

                                      -5-





                  directors, officers, employees or agents, then such person, in
                  addition to the  circumstances  in which he is now entitled to
                  indemnification and advancement of expenses, shall be entitled
                  to be  indemnified  and have expenses  advanced to the fullest
                  extent  permitted by the General  Corporation Law of the State
                  of Delaware, as so amended.

            (l)   For   purposes   of  this   Article   TENTH,   references   to
                  "Corporation"  shall  include,  in addition  to the  resulting
                  corporation,   any  constituent   corporation  (including  any
                  constituent of a constituent)  absorbed in a consolidation  or
                  merger which, if its separate  existence had continued,  would
                  have had power  and  authority  to  indemnify  its  directors,
                  officers,  employees  or agents,  so that any person who is or
                  was a director, officer, employee or agent of such constituent
                  corporation,  or is or was  serving  at the  request  of  such
                  constituent  corporation as a director,  officer,  employee or
                  agent of  another  corporation,  partnership,  joint  venture,
                  trust or other  enterprise,  shall stand in the same  position
                  under the provisions of this Article TENTH with respect to the
                  resulting  or  surviving  corporation  as he would  have  with
                  respect  to  such  constituent  corporation  if  its  separate
                  existence had continued.

            (m)   For  purposes  of this  Article  TENTH,  references  to "other
                  enterprises" shall include employee benefit plans;  references
                  to "fines" shall include any excise taxes assessed on a person
                  with respect to an employee  benefit plan;  and  references to
                  "serving at the request of the Corporation"  shall include any
                  service  as a  director,  officer,  employee  or  agent by the
                  Corporation  which imposes duties on, or involves services by,
                  such director,  officer,  employee or agent with respect to an
                  employee benefit plan, its participants, or beneficiaries; and
                  a person who acted in good faith and in a manner he reasonably
                  believed  to  be in  the  interest  of  the  participants  and
                  beneficiaries  of an employee  benefit plan shall be deemed to
                  have acted in a manner "not  opposed to the best  interests of
                  the Corporation," as referred to in this Article TENTH.

            (n)   If  this  Article  TENTH  or  any  portion  thereof  shall  be
                  invalidated   on  any   ground  by  any  court  of   competent
                  jurisdiction,   then  the   Corporation   shall   nevertheless
                  indemnify  each  person  as  provided  above  as  to  expenses
                  (including attorneys' fees), judgments, fines and amounts paid
                  in settlement with respect to any action,  suit or proceeding,
                  whether  civil,  criminal,  administrative  or  investigative,
                  including  a  grand  jury  proceeding  and  an  action  by the
                  Corporation, to the fullest extent permitted by any applicable
                  portion  of this  Article  TENTH  that  shall  not  have  been
                  invalidated or by any other applicable law.

            ELEVENTH:  Whenever a compromise or arrangement is proposed  between
this  Corporation  and its  creditors  or any class of them and/or  between this
Corporation  and its  stockholders  or any class of them, any court of equitable
jurisdiction  within the State of Delaware may, on the  application in a summary
way of this  Corporation  or of any  creditor or  stockholder  thereof or on the
application of any receiver or receivers  appointed for this  Corporation  under
the  provisions  of  Section  291 of  Title  8 of the  Delaware  Code  or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this  Corporation  under the  provisions  of  Section  279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors,  and/or of
the stockholders or class of stockholders of this  Corporation,  as the case may
be, to be summoned in such  manner as the said court  directs.  If a majority in
number  representing  three-fourths  in  value  of the  creditors  or  class  of
creditors,  and/or  of  the  stockholders  or  class  of  stockholders  of  this
Corporation,  as the case may be, agree to any compromise or arrangement  and to
any reorganization of this Corporation as a consequence of such compromise or

                                      -6-





arrangement,  the said  compromise or  arrangement  and the said  reorganization
shall,  if sanctioned by the court to which the said  application has been made,
be  binding  on all the  creditors  or class  of  creditors,  and/or  on all the
stockholders or class of stockholders,  of this Corporation, as the case may be,
and also on this Corporation.

            TWELFTH:  No director of the Corporation  shall be personally liable
to the Corporation or to any of its  stockholders  for monetary  damages arising
out  of  such  director's  breach  of  fiduciary  duty  as  a  director  of  the
Corporation,  except for liability (i) for any breach of the director's  duty of
loyalty to the Corporation or its  stockholders,  (ii) for acts or omissions not
in good faith or which involve intentional  misconduct or a knowing violation of
law,  (iii) for  unlawful  payment of dividends  or unlawful  stock  purchase or
redemption  under  Section  174 of the General  Corporation  Law of the State of
Delaware or any successor provision, or (iv) for any transaction from which such
director derived an improper personal benefit. If the General Corporation Law of
the State of Delaware is amended after the effective date of this Certificate of
Incorporation to authorize  corporate action further eliminating or limiting the
personal  liability  of  directors,  then the  liability  of a  director  of the
Corporation  shall be eliminated or limited to the fullest  extent  permitted by
the General Corporation Law of the State of Delaware, as so amended.

            Any amendment to or repeal or  modification  of this Article TWELFTH
(i) by the  stockholders  of the  Corporation  or  (ii) by an  amendment  to the
General  Corporation  Law  of the  State  of  Delaware  (unless  such  statutory
amendment  specifically provides to the contrary) shall not adversely affect any
right or protection,  existing at the time of such repeal or  modification  with
respect to any acts or omissions occurring either before or after such repeal or
modification,  or a person  serving as a director  at the time of such repeal or
modification.

            THIRTEENTH:  The  Corporation  reserves  the right to amend,  alter,
change or repeal any provision contained in this Certificate of Incorporation in
the manner  now or  hereafter  prescribed  by statute  and this  Certificate  of
Incorporation,  and all rights  conferred upon  stockholders  herein are granted
subject to this reservation.

            FOURTEENTH:

            (a)   For purposes of this Article  FOURTEENTH,  the following terms
                  shall have the meanings indicated below:

                  (i)   "Agent"   shall  mean  the  Person   designated  by  the
                        Corporation   for   purposes   of    effectuating    the
                        transactions described in paragraphs (c) and (d) of this
                        Article.

                  (ii)  "Board"  shall  mean  the  board  of  directors  of  the
                        Corporation.

                  (iii) "Code" shall mean the Internal  Revenue Code of 1986, as
                        amended from time to time, or any successor statute, and
                        the regulations thereunder.

                  (iv)  "Corporation" shall mean Rose's Holdings, Inc.

                  (v)   "Excess Stock" shall mean, with respect to a Transfer of
                        Stock, the amount of such Stock that is in excess of the
                        amount  of  Stock  that  may  be   transferred   without
                        restriction  pursuant  to  subparagraph  (b)(i)  of this
                        Article.

                                      -7-





                  (vi)  "Existing Five Percent  Stockholder" shall mean any five
                        percent  stockholder  (within the meaning of Section 382
                        of the  Code) of the  Corporation,  other  than a direct
                        Public  Group  of  the  Corporation,  on  the  date  the
                        Transfer   restrictions   contained   in  this   Article
                        FOURTEENTH become effective.

                  (vii) "Expiration  Date" shall mean the beginning of a taxable
                        year of the Corporation to which the Board determines in
                        writing  that no Tax  Benefits  may be carried  forward,
                        unless the Board shall fix an earlier date in accordance
                        with paragraph (h) of this Article.

                 (viii) "Initial Transferor" shall mean the Person who initially
                        purported  to  Transfer  Excess  Stock  to  a  Purported
                        Acquiror.

                  (ix)  "Optionee" shall mean any Person holding an Option Right
                        to acquire Stock.

                  (x)   "Option  Right" shall mean any option,  warrant or other
                        right to acquire,  convert into, or exchange or exercise
                        for, or any similar interests in, shares of Stock.

                  (xi)  "Ownership  Interest  Percentage"  shall mean the sum of
                        such  Person's  or  Public  Group's   direct   ownership
                        interest  in  the   Corporation,   as  determined  under
                        Treasury  Regulation  Section   1.382-2T(f)(8)  (or  any
                        successor  regulation),  and  such  Person's  or  Public
                        Group's indirect  ownership interest in the Corporation,
                        as  determined   under   Treasury   Regulation   Section
                        1.382-2T(f)(15)   or  1.1502-92T(c)  (or  any  successor
                        regulations), except that, for purposes of determining a
                        person's indirect ownership interest in the Corporation,
                        Treasury    Regulation    Sections   1.382-    2T(g)(2),
                        1.3822T(g)(3),     1.382-2T(h)(2)(iii)     and    1.382-
                        2T(h)(6)(iii) (or any successor  regulations)  shall not
                        apply and any  Option  Right to acquire  Stock  shall be
                        deemed to have been exercised.

                  (xii) "Person" shall mean any individual, corporation, estate,
                        trust, association, company, partnership, joint venture,
                        or other  entity  or  organization,  including,  without
                        limitation,  any "entity" within the meaning of Treasury
                        Regulation   Section   1.382-3(a)   (or  any   successor
                        regulation).

                 (xiii) "Prohibited  Distribution" shall mean dividends or other
                        distributions  made with respect to Stock  received by a
                        Purported Acquiror.

                  (xiv) "Prohibited  Party"  shall  mean  that  Person or Public
                        Group that is caused to be in violation of  subparagraph
                        (b)(i) of this  Article as a result of a Transfer  which
                        does not involve a Transfer of Stock of the Corporation.

                  (xv)  "Public  Group"  shall  mean  a  group  of  individuals,
                        entities  or  other   Persons   described   in  Treasury
                        Regulation Section 1.382-2T(f)(13).

                  (xvi) "Purported  Acquiror"  shall mean a Transferee of Excess
                        Stock.

                 (xvii) "Sales Proceeds" shall mean the proceeds received upon a
                        sale of  Excess  Stock,  and  the sum of all  Prohibited
                        Distributions received with respect to the Excess Stock.

                                      -8-





               (xviii)  "Stock"  shall mean  shares of stock of the  Corporation
                        (other than stock described in Section 1504(a)(4) of the
                        Code  or  stock  that  is  not   described   in  Section
                        1504(a)(4)  solely  because it is  entitled to vote as a
                        result of  dividend  arrearages),  any Option  Rights to
                        acquire  Stock,  and all other  interests  that would be
                        treated as stock of the Corporation pursuant to Treasury
                        Regulation  Section  1.382-  2T(f)(18) (or any successor
                        regulation).

                  (xix) "Tax  Benefits"   shall  mean  the   Corporation's   net
                        operating loss  carryovers,  capital loss carryovers and
                        built-in losses.

                  (xx)  "Transfer"  shall  mean any  issuance,  sale,  transfer,
                        gift, assignment,  devise or other disposition,  as well
                        as any other event, that causes a Person or Public Group
                        to acquire or increase an Ownership Interest  Percentage
                        in the Corpo  ration,  or any agreement to take any such
                        actions  or cause any such  events,  including,  without
                        limitation,  (x) the  granting or exercise of any Option
                        Right with respect to Stock,  (y) the disposition of any
                        securities or rights convertible into or exchangeable or
                        exercisable  for Stock or any  interest  in Stock or any
                        exercise of any such  conversion or exchange or exercise
                        right and (z)  transfers of interests in other  entities
                        that result in changes in direct or  indirect  ownership
                        of  Stock,   in  each   case,   whether   voluntary   or
                        involuntary,   of  record,   by   operation  by  law  or
                        otherwise; provided, however, that a pledge shall not be
                        deemed a Transfer,  but a foreclosure  pursuant  thereto
                        shall be deemed to be a Transfer.

                  (xxi) "Transferee"  shall  mean any  Person  to whom  Stock is
                        transferred.

                 (xxii) "Treasury  Regulation"  shall  mean any of the  treasury
                        regulations promulgated under the Code.

            (b)   In order to preserve the Tax Benefits to which the Corporation
                  is entitled under the Code, the following  restrictions  shall
                  apply until the Expiration Date.

                  (i)   No Person,  other than the Corporation,  shall engage in
                        any  Transfer  of Stock  with any  other  Person  to the
                        extent that such Transfer, if effective, would cause the
                        Ownership  Interest  Percentage  of any Person or Public
                        Group to (i)  increase  to 4.9  percent  or above,  (ii)
                        increase   from  4.9  percent  or  above  to  a  greater
                        Ownership  Interest  Percentage  or  (iii)  create a new
                        Public   Group   under   Treasury   Regulation   Section
                        1.382-2T(j)(3)(i),   except   as   otherwise   permitted
                        pursuant to subparagraph (b)(ii) of this Article.

                  (ii)  Any Transfer that would otherwise be prohibited pursuant
                        to subparagraph (b)(i) shall nonetheless be permitted if
                        (i)  the  Transfer  is  by  an  Existing   Five  Percent
                        Stockholder  of Stock owned by such  stockholder  on the
                        date the Transfer restrictions contained in subparagraph
                        (b)(i) become effective or (ii) information  relating to
                        a specific  proposed  transaction  is  presented  to the
                        Board and the Board  determines in its  discretion  that
                        (x) based upon a written opinion of tax counsel selected
                        by the Board,  such  transaction  will not jeopardize or
                        create a material  limitation on the Corporation's  then
                        current or future  ability to utilize its Tax  Benefits,
                        taking into account both the  proposed  transaction  and


                                      -9-




                        potential  future  transactions,   or  (y)  the  overall
                        economic benefits of such transaction to the Corporation
                        outweigh the detriments of such transaction.  Nothing in
                        this  subparagraph   shall  be  construed  to  limit  or
                        restrict  the  Board in the  exercise  of its  fiduciary
                        duties under applicable law.

            (c)   (i) Any  attempted  Transfer of Excess  Stock shall be void ab
                  initio and not  effective to transfer  ownership of the Excess
                  Stock to the  Purported  Acquiror  thereof,  who  shall not be
                  entitled  to any rights as a  stockholder  of the  Corporation
                  with   respect  to  the  Excess  Stock   (including,   without
                  limitation,  the right to vote or to  receive  dividends  with
                  respect  thereto  and,  to the extent that a vote is cast by a
                  Purported  Acquiror,  the vote shall be rescinded as void), or
                  otherwise as the holder of the Excess Stock,  unless  approval
                  of the Board is obtained as provided in  subparagraph  (b)(ii)
                  of this Article FOURTEENTH.

                  (ii) Upon demand by the  Corporation,  the Purported  Acquiror
                  shall transfer any  certificate or other evidence of purported
                  ownership of the Excess Stock within the Purported  Acquiror's
                  possession or control, along with any Prohibited Distributions
                  received by the Purported Acquiror, to the Agent. If, prior to
                  the  notification  by the Agent of such demand,  the Purported
                  Acquiror has sold the Excess Stock to an unrelated party in an
                  arm's-length   transaction   that  would  not   constitute   a
                  prohibited  Transfer  pursuant to subparagraph  (b)(i) of this
                  Article  FOURTEENTH  if made by the  Initial  Transferor,  the
                  Purported  Acquiror  shall be deemed  to have sold the  Excess
                  Stock on behalf of the  Initial  Transferor,  and,  in lieu of
                  transferring the Excess Stock to the Agent, shall transfer the
                  Sale  Proceeds  to the Agent,  except to the  extent  that the
                  Agent grants written  permission to the Purported  Acquiror to
                  retain a portion of the Sale Proceeds not exceeding the amount
                  that  would have been  payable  by the Agent to the  Purported
                  Acquiror pursuant to subparagraph (c)(iii) if the Excess Stock
                  had  been  sold by the  Agent  rather  than  by the  Purported
                  Acquiror.  Any  purported  Transfer of the Excess Stock by the
                  Purported Acquiror,  other than a Transfer described in one of
                  the  two  preceding  sentences,  shall  not  be  effective  to
                  transfer any ownership of the Excess Stock.

                  (iii) The Agent shall sell in an arm's-length  transaction (on
                  the public  securities market in which the Stock is traded, if
                  possible)  any Excess  Stock  transferred  to the Agent by the
                  Purported   Acquiror   to  the  extent  such  sale  would  not
                  constitute  a  prohibited  Transfer  pursuant to  subparagraph
                  (b)(i) of this Article FOURTEENTH. The Sales Proceeds shall be
                  allocated  and  paid  to  the  Purported  Acquiror  up to  the
                  following amount: (x) where applicable, the purported purchase
                  price  paid  or  value  of  consideration  surrendered  by the
                  Purported  Acquiror  for the  Excess  Stock  and (y) where the
                  purported  Transfer  of the  Excess  Stock  to  the  Purported
                  Acquiror  was by gift,  inheritance  or any similar  purported
                  Transfer,  the fair  market  value of the Excess  Stock at the
                  time of such purported  Transfer.  Any Sale Proceeds in excess
                  of the amount allocable to the Purported  Acquiror pursuant to
                  the  preceding  sentence,  shall be  transferred  to an entity
                  designated  by the  Corporation  that is  described in Section
                  501(c)(3)  of the Code.  In no event  shall  any such  amounts
                  inure to the benefit of the Corporation or the Agent, but such
                  amounts may be used to cover expenses incurred by the Agent in
                  performing its duties under this paragraph.

                                      -10-





            (d)   In the event of any Transfer which does not involve a Transfer
                  of Stock,  but which would cause a Prohibited Party to violate
                  a  restriction  on  Transfers  provided  for in  this  Article
                  FOURTEENTH  (such as, for example,  the acquisition by a third
                  entity of two  unrelated  entities each  previously  holding 4
                  percent  of  the  Stock),  the  application  of  subparagraphs
                  (c)(ii) and  (c)(iii)  shall be modified as  described in this
                  paragraph (d). The  Prohibited  Party shall not be required to
                  dispose of any interest that is not Stock, but shall be deemed
                  to have disposed of or caused the disposition of, and shall be
                  required to dispose of or cause the disposition of, sufficient
                  Stock  to  cause   the   Prohibited   Party   following   such
                  disposition,  not to be in violation of subparagraph (b)(i) of
                  this Article  FOURTEENTH.  Such disposition shall be deemed to
                  occur  simultaneously  with the  Transfer  giving  rise to the
                  application of this  provision,  and such Stock that is deemed
                  to be disposed of shall be  considered  Excess Stock and shall
                  be disposed  of through the Agent as provided in  subparagraph
                  (c)(ii) and subparagraph  (c)(iii) of this Article FOURTEENTH,
                  except  that  the  maximum  aggregate  amount  payable  to the
                  Prohibited  Party in  connection  with such sale  shall be the
                  fair  market  value  of the  Excess  Stock  at the time of the
                  purported  Transfer.  All  expenses  incurred  by the Agent in
                  disposing of the Excess Stock shall be paid out of any amounts
                  due the Prohibited Party.

            (e)   Within 30 business days after learning of a purported Transfer
                  of Excess  Stock to a Purported  Acquiror  or a Transfer  that
                  would  cause a  Person  to  become  a  Prohibited  Party,  the
                  Corporation  (through  its  Secretary)  shall  demand that the
                  Purported  Acquiror or Prohibited Party surrender to the Agent
                  the  certificates  representing  the Excess Stock, or any Sale
                  Proceeds, and any Prohibited Distributions.  If such surrender
                  is not made by the  Purported  Acquiror  or  Prohibited  Party
                  within  30  business  days from the date of such  demand,  the
                  Corporation  may institute  legal  proceedings  to compel such
                  transfer;  provided,  however,  that nothing in this paragraph
                  (e) shall  preclude the  Corporation  in its  discretion  from
                  immediately bringing legal proceedings without a prior demand,
                  and also  provided  that  failure  of the  Corporation  to act
                  within the time periods set forth in this  paragraph (e) shall
                  not constitute a waiver of any right of the Corporation  under
                  this Article FOURTEENTH.

            (f)   The Corporation may require as a condition to the registration
                  of the  Transfer of any shares of its Stock that the  proposed
                  Transferee   furnish  to  the   Corporation   all  information
                  reasonably  requested by the  Corporation  with respect to all
                  the  proposed   Transferee's   direct  or  indirect  ownership
                  interests in, or options to acquire, Stock.

            (g)   All certificates evidencing ownership of shares of Stock shall
                  bear substantially the following legend:

                        The shares of Stock  represented by this Certificate are
                  subject to  restrictions  on  Transfer  for the purpose of the
                  preservation   of  the   Corporation's   net  operating   loss
                  carryovers and related tax attributes  pursuant to Section 382
                  of the Internal Revenue Code of 1986, as amended.  Without the
                  authorization of the Board of Directors,  no Person other than
                  the  Corporation,  shall  engage in any Transfer of Stock with
                  any  other  Person  to  the  extent  that  such  Transfer,  if
                  effective,  would cause the Ownership  Interest  Percentage of
                  any Person or Public  Group to (i)  increase to 4.9 percent or
                  above,  (ii)  increase  from 4.9 percent or above to a greater
                  Ownership  Interest  Percentage  or (iii)  create a new Public
                  Group under  Treasury  Regulation  Section  1.382-2T(j)(3)(i).
                  (For this purpose Ownership  includes ownership by attribution
                  as well as direct ownership).

                                      -11-





                  Notwithstanding  the foregoing,  the transfer  restrictions do
                  not apply to the  Transfer  by a  stockholder  which is a five
                  percent stockholder (within the meaning of Section 382) on the
                  date the transfer restrictions became effective of Stock owned
                  by such  stockholder  on that date.  Italicized  terms in this
                  legend have the  meanings  defined in Article  Fourteen of the
                  Certificate of  Incorporation.  A copy of the  restrictions on
                  Transfer will be sent without charge to each  stockholder  who
                  so requests. If the restrictions on Transfer are violated, the
                  Transfer  will  be  void  ab  initio,   with  the  Corporation
                  retaining  the right to repossess and dispose of such Stock in
                  a permitted Transfer.

            (h)   Nothing  contained in this Article  FOURTEENTH shall limit the
                  authority of the Board to take such other action to the extent
                  permitted by law as it deems necessary or advisable to protect
                  the  Corporation and the interests of the holders of its Stock
                  in  preserving   the  Tax  Benefits.   Without   limiting  the
                  generality of the  foregoing,  in the event of a change in law
                  making  one or  more of the  following  actions  necessary  or
                  desirable,  the Board may, by adopting a written resolution of
                  the Board,  (i) accelerate or extend the Expiration Date, (ii)
                  modify the Ownership  Interest  Percentage in the  Corporation
                  specified  in the first  sentence  of  subparagraph  (b)(i) or
                  (iii)  modify the  definitions  of any terms set forth in this
                  Article FOURTEENTH;  provided,  however,  that the Board shall
                  not cause there to be such acceleration,  extension, change or
                  modification  unless it  concludes in writing that such action
                  is  reasonably  necessary  or  advisable  to preserve  the Tax
                  Benefits or that the continuation of these  restrictions is no
                  longer  reasonably  necessary for the  preservation of the Tax
                  Benefits,  and its conclusion is based upon a written  opinion
                  of tax counsel to the  Corporation.  Such  written  conclusion
                  shall be filed with the Secretary of the Corporation and shall
                  be  mailed  by the  Secretary  to  all  stockholders  of  this
                  Corporation  within  10  days  after  the  date  of  any  such
                  conclusion.

            (i)   The  Corporation  and the  members of the Board shall be fully
                  protected  in  relying  in good  faith  upon the  information,
                  opinions,   reports  or  statements  of  the  chief  executive
                  officer,  the chief financial  officer or the chief accounting
                  officer  of  the  Corporation  or of the  Corporation's  legal
                  counsel,  independent  auditors,  transfer  agent,  investment
                  bankers   or  other   employees   and  agents  in  making  the
                  determinations  and  findings  contemplated  by  this  Article
                  FOURTEENTH   and  the  members  of  the  Board  shall  not  be
                  responsible  for any  good  faith  errors  made in  connection
                  therewith.

            (j)   Notwithstanding  any other  provisions of this  Certificate of
                  Incorporation  or any  provision  of law that might  otherwise
                  permit a lesser or no vote, but in addition to any affirmative
                  vote of the holders of any  particular  class or series of the
                  capital  stock of the  Corporation  required by law or by this
                  Certificate  of  Incorporation,  the  affirmative  vote of the
                  holders  of not less  than  two-thirds  of the  shares  of the
                  Corporation then entitled to be voted generally in an election
                  of  directors,  voting  together as a single  class,  shall be
                  required  to  amend  or  repeal,  or to  adopt  any  provision
                  inconsistent with, this Article FOURTEENTH.


                                  [END OF TEXT]

                                      -12-






            IN WITNESS  WHEREOF,  said  Rose's  Holdings,  Inc.  has caused this
Amended and Restated  Certificate of Incorporation to be signed by its President
and attested to by its Secretary this 16th day of April, 1999.

                                           ROSE'S HOLDINGS, INC.


                                           By:  /s/ Warren G. Lichtenstein
                                                --------------------------
                                                Warren G. Lichtenstein
                                                President



Attest:


By: /s/ Jack L. Howard
    ----------------------
        Jack L. Howard
        Secretary


                                      -13-

EX-3.2

                                                                     EXHIBIT 3.2

                            CERTIFICATE OF AMENDMENT

                                       OF

                          CERTIFICATE OF INCORPORATION

                                       OF

                              ROSE'S HOLDINGS, INC.


            ROSE'S  HOLDINGS,  INC.,  originally  incorporated on the 5th day of
August,  1997  (the  "Corporation"),  and  existing  under  and by virtue of the
General  Corporation  Law of the  State of  Delaware,  in  order  to  amend  its
Certificate of Incorporation, does hereby certify as follows:

            FIRST: The name of the Corporation is: Rose's Holdings, Inc.

            SECOND:   The  Board  of  Directors  of  the  Company  duly  adopted
resolutions  proposing  and  declaring  it  advisable  that the  Certificate  of
Incorporation  of the  Company be amended to change the  corporate  title of the
Corporation,  and that Article  FIRST of the  Certificate  of  Incorporation  be
amended to read, in its entirety, as follows:

                      FIRST:   The name of the Corporation is:
                               WebFinancial Corporation.

            THIRD:  This  amendment  of the  Certificate  of  Incorporation  was
authorized  by the  affirmative  vote of a majority  of the  outstanding  shares
entitled  to vote  thereon  pursuant  to  Sections  222  and 242 of the  General
Corporation Law of the State of Delaware.

            FOURTH:  This amendment to the  Certificate of  Incorporation  shall
become effective on July 9, 1999.


                                  [END OF TEXT]






            IN WITNESS  WHEREOF,  said  Rose's  Holdings,  Inc.  has caused this
Certificate of Amendment of the Certificate of Incorporation to be signed by its
President and attested to by its Secretary this 8th day of July, 1999.


                                               ROSE'S HOLDINGS, INC.


                                               By: /s/ Warren G. Lichtenstein
                                                   -----------------------------
                                                   Warren G. Lichtenstein
                                                   President





ATTESTED AND ACKNOWLEDGED:


By:  /s/ Jack L. Howard
     -----------------------------
     Jack L. Howard
     Secretary

EX-4.2

                                                                     EXHIBIT 4.2


                                            Rights Certificate Number: _________
                                                     Number of Rights: _________

                            WEBFINANCIAL CORPORATION

                         SUBSCRIPTION RIGHTS CERTIFICATE

        Evidencing Subscription Rights to Purchase Shares of Common Stock
                           of WebFinancial Corporation
                       Subscription Price: $____ per Share

              THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED
        ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON __________, 2003,
                         UNLESS EXTENDED BY THE COMPANY

Dear Stockholder:

            As the  registered  owner of this  Rights  Certificate,  you are the
owner of the number of subscription rights shown above. You have been issued, at
no charge,  one subscription  right for each share of common stock that you held
on _______, 2003. The subscription rights entitle you to subscribe for shares of
common  stock,  par value $0.001 per share,  of  WebFinancial  Corporation  (the
"Company").  Each  subscription  right will  entitle the holder to purchase  ___
shares  of  our  common  stock  (the  "Basic  Subscription  Privilege")  at  the
subscription  price  of $____  per  share  (the  "Subscription  Price").  If you
subscribe  for all of the shares  available  pursuant to the Basic  Subscription
Privilege,  you are also entitled to subscribe for additional shares (subject to
pro-ration) at the Subscription Price (the "Over-Subscription Privilege"). For a
more complete  description  of the terms and  conditions  of these  subscription
rights, please refer to the Prospectus and the "Instructions as to Use of Rights
Certificates" accompanying this Rights Certificate.

                 THESE SUBSCRIPTION RIGHTS ARE NON-TRANSFERABLE.

You have four choices:

1.    You can  subscribe for all of the shares  underlying  the number of rights
      listed at the top of this page;

2.    You can subscribe for less than all of the shares underlying the number of
      rights listed  above,  and allow the rest of your  subscription  rights to
      expire;

3.    If you  have  subscribed  for all of such  shares  (exercised  your  Basic
      Subscription   Privilege  in  full),  then  you  can  also  subscribe  for
      additional  shares of common stock,  subject to an  allocation  process as
      described in the Prospectus; or

4.    If you do not  want  to  purchase  any  shares,  you  can  disregard  this
      material.






To subscribe for any number of shares, full payment of the Subscription Price is
required for each share of common stock you are subscribing for (including under
the Over-Subscription  Privilege).  You must complete pages 3 and 4 of this form
to subscribe for new shares.

Date: ________________, 2003

                                          WEBFINANCIAL CORPORATION


                                          By: _________________________________
                                              Name:
                                              Title:




                                       2




                     DELIVERY OPTIONS FOR RIGHTS CERTIFICATE

              For delivery by mail, hand or overnight courier to:

                                _________________
                                _________________
                                _________________
                                _________________

Delivery  other  than in the  manner or to the  address  listed  above  will not
constitute valid delivery.

                PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY.

If you  wish  to  subscribe  for  shares  pursuant  to your  Basic  Subscription
Privilege in full or a portion thereof:

I subscribe for ____________ shares    x  $____   =     $______________________
                                                               (Line 1)

If you  subscribed  for your Basic  Subscription  Privilege  in full and wish to
subscribe for additional shares pursuant to the Over-Subscription Privilege:

I subscribe for ____________ shares    x  $____   =     $______________________
                                                               (Line 2)

Total amount of payment enclosed (sum of line 1 and line 2): $__________________

I acknowledge that I have received the Prospectus for this offering and I hereby
irrevocably  subscribe for the number of shares indicated above on the terms and
conditions specified in the Prospectus.

______________________________________________
Signature(s)

IMPORTANT:  The signature(s)  must correspond with the name(s) as printed on the
reverse of this Subscription  Rights  Certificate in every  particular,  without
alteration or enlargement, or any other change whatsoever.

If you wish to have your shares delivered to an address other than that shown on
front,  your signature must be guaranteed by an eligible  guarantor  institution
(bank, stock broker, savings & loan association or credit union) with membership
in an approved signature  guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15.

Signature Guaranteed: __________________________________________________________
                             (Name of Bank or Firm)

                      __________________________________________________________
                             (Signature of Officer)

         FOR INSTRUCTIONS ON THE USE OF THE RIGHTS CERTIFICATES, CONSULT
                       ________________, AT ____________.

                                       3





                          Method of Payment (Check One)

/ /      Uncertified personal check, payable to "_____________,  as Subscription
         Agent." Please note that funds paid by  uncertified  personal check may
         take at least five  business days to clear.  Accordingly,  subscription
         rights  holders  who  wish to pay the  purchase  price  by  means of an
         uncertified  personal check are urged to make payment  sufficiently  in
         advance of the expiration  date to ensure that such payment is received
         and clears by the expiration date, and are urged to consider payment by
         means of a  certified  or bank check,  money order or wire  transfer of
         immediately available funds.

/ /      Certified  check or bank  check  drawn on a U.S.  bank or money  order,
         payable to "____________________, as Subscription Agent."

/ /      Wire transfer of  immediately  available  funds directed to the account
         maintained by _____________________ at:

                             ______________________
                             ______________________
               Account Name: ______________________

            If the amount  enclosed or  transmitted is not sufficient to pay the
purchase price for all shares of common stock that are subscribed for, or if the
number of shares of common  stock being  subscribed  for is not  specified,  the
number of  shares  of common  stock  subscribed  for will be  assumed  to be the
maximum number that could be subscribed for upon payment of such amount.  If the
amount  enclosed or  transmitted  exceeds the  purchase  price for all shares of
common stock that the  undersigned has subscribed or  over-subscribed  for (such
excess amount, the "Subscription  Excess"),  the Subscription Agent shall return
the Subscription  Excess to the subscriber without interest or deduction as soon
as practicable after the expiration of the offering.

                                       4

EX-23.1

                                                                    EXHIBIT 23.1

               CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



We have issued our report dated February 8, 2003  accompanying  the consolidated
financial statements of WebFinancial  Corporation and subsidiaries  appearing in
the 2002 Annual Report of the Company to its shareholders included in the Annual
report on Form 10-K for the year ended  December 31, 2002 which is  incorporated
by reference in this Registration  Statement. We consent to the incorporation by
reference in the Registration  Statement of the aforementioned report and to the
use of our name as it appears under the caption "Experts."



/s/ Grant Thornton LLP
Salt Lake City, Utah
October 9, 2003

EX-99.1

                                                                    EXHIBIT 99.1

                            WEBFINANCIAL CORPORATION

                  Instructions as to Use of Rights Certificates

                             -----------------------

            Consult the Information Agent, the Subscription  Agent, or your bank
or broker if you have any questions.

                             -----------------------

            The following  instructions relate to a rights offering (the "Rights
Offering") by WebFinancial Corporation,  a Delaware corporation (the "Company"),
to the  holders  of record  (collectively,  the  "Recordholders")  of its common
stock,  par value $0.001 per share (the "Common  Stock").  Recordholders  at the
close of  business  on  __________,  2003  (the  "Record  Date")  are  receiving
non-transferable  subscription  rights  (the  "Rights")  to  subscribe  for  and
purchase shares of the Common Stock (the "Underlying  Shares").  An aggregate of
__________  Underlying Shares will be offered by the Company's  Prospectus dated
_________, 2003 (the "Prospectus"). Each Recordholder will receive one Right for
each share of Common  Stock  owned of record as of the close of  business on the
Record Date. The Rights will expire,  if not  exercised,  at 5:00 p.m., New York
City time, on ___________,  2003,  unless extended in the sole discretion of the
Company (as it may be extended,  the  "Expiration  Date").  After the Expiration
Date,  unexercised  Rights  will be null  and  void.  The  Company  will  not be
obligated to honor any purported  exercise of Rights received by _______________
(the  "Subscription  Agent")  after  5:00  p.m.,  New  York  City  time,  on the
Expiration Date, regardless of when the documents relating to such exercise were
sent, except pursuant to the Guaranteed Delivery Procedures described below. The
Company  may  extend  the  Expiration  Date from time to time by giving  oral or
written  notice to the  Subscription  Agent on or before  the  Expiration  Date,
followed by a press release no later than 9:00 a.m.,  New York City time, on the
next business day after the  previously  scheduled  Expiration  Date. The Rights
will  be  evidenced  by   non-transferable   Rights  certificates  (the  "Rights
Certificates").

            The  number of Rights to which you are  entitled  is  printed on the
face of your  Rights  Certificate.  Each  Right  allows  the  holder  thereof to
subscribe for ___ shares of Common Stock (the "Basic Subscription Privilege") at
a Subscription Price of $_______ per share of Common Stock.

            In  addition,  each  holder  of Rights  who  exercises  their  Basic
Subscription   Privilege   in  full  will  be   eligible   to   subscribe   (the
"Over-Subscription  Privilege")  at the same  Subscription  Price for  shares of
Common Stock that are not purchased  pursuant to the exercise of Rights by other
holders of Rights under the Basic Subscription  Privilege (the "Excess Shares"),
subject to  availability  and  pro-ration as described  below.  Shares of Common
Stock will be available for purchase pursuant to the Over-Subscription Privilege
only to the extent that Underlying Shares are not subscribed for pursuant to the
Basic Subscription  Privilege.  If there are not enough Excess Shares to satisfy
all subscriptions made under the Over-Subscription  Privilege,  the Company will
allocate the remaining Excess Shares pro rata, after  eliminating all fractional
shares,  among  those  Rights  holders  who  exercised  their  Over-Subscription
Privileges.  "Pro rata" means in proportion  to the number of Underlying  Shares
that each holder of Rights has purchased by exercising their Basic  Subscription






Privileges. If there is a pro rata allocation of the remaining Excess Shares and
a holder of Rights  receives an allocation of a greater  number of Excess Shares
than they  subscribed  for under  their  Over-Subscription  Privilege,  then the
Company  will  allocate to them only the number of Excess  Shares for which they
subscribed.  The Company will  allocate the  remaining  Excess  Shares among all
other holders exercising their Over-Subscription  Privileges.  Such reallocation
will be repeated  until all Excess Shares have been allocated to the full extent
of  the   Over-Subscription   Privilege.   See  "The   Offering--   Subscription
Rights--Over  Subscription  Privilege" in the Prospectus.  Also, pursuant to the
terms of the Company's  charter, a holder will not be allowed to subscribe for a
number of shares that would  increase such  holder's  ownership of the Company's
shares of common stock to 4.9% or above of the Company's then outstanding shares
of common stock, unless such holder already owned at least 5.0% of the Company's
outstanding common stock on the date such restriction became effective.

            You should  indicate your wishes with regard to the exercise of your
Rights by completing the  appropriate  portions of your Rights  Certificate  and
returning the  certificate to the  Subscription  Agent in the envelope  provided
pursuant to the procedures described in the Prospectus.

            YOUR RIGHTS  CERTIFICATES,  OR NOTICE OF  GUARANTEED  DELIVERY,  AND
SUBSCRIPTION  PRICE PAYMENT,  INCLUDING FINAL  CLEARANCE OF ANY CHECKS,  MUST BE
RECEIVED BY THE  SUBSCRIPTION  AGENT ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME,
ON THE  EXPIRATION  DATE.  ONCE A HOLDER OF RIGHTS HAS  EXERCISED A RIGHT,  SUCH
EXERCISE MAY NOT BE REVOKED.  RIGHTS NOT EXERCISED  PRIOR TO THE EXPIRATION DATE
OF THE RIGHTS OFFERING WILL EXPIRE.

            1. Method of Subscription--Exercise of Rights.
               ------------------------------------------

            To exercise your Rights,  complete your Rights  Certificate and send
the properly  completed and executed Rights  Certificate  evidencing such Rights
with any  signatures  required to be  guaranteed  so  guaranteed,  together with
payment in full of the  Subscription  Price for each Underlying Share subscribed
for  pursuant  to the Basic  Subscription  Privilege  and the  Over-Subscription
Privilege,  to the  Subscription  Agent on or prior to 5:00 p.m.,  New York City
time on the Expiration Date. Payment of the Subscription Price will be held in a
segregated account to be maintained by the Subscription Agent. All payments must
be made  in U.S.  dollars  for  the  full  number  of  Underlying  Shares  being
subscribed for:

            (a) by uncertified  personal  check,  payable to  ______________  as
      Subscription Agent for the Company,

            (b) by certified  check or bank check drawn on a U.S.  bank or money
      order, payable to _________________ as Subscription Agent for the Company,
      or

            (c) by wire transfer of immediately  available funds directed to the
      account maintained by the Subscription Agent (the "Subscription  Account")
      at:

                                       2





                                    _______________________
                                    ABA #__________________
                                    Account # _____________
                                    Account Name: _____________

Any wire transfer should clearly  indicate the identity of the subscriber who is
paying the Subscription  Price by the wire transfer.  Payments will be deemed to
have been received by the Subscription Agent only upon:

            (a) receipt and clearance of any uncertified check;

            (b) receipt by the Subscription Agent of any certified check or bank
      draft drawn upon a U.S. bank or any money order; or

            (c)  receipt  of  collected  funds  in  the   Subscription   Account
      designated above.

            If paying by check, bank draft or money order, please reference your
Subscription Rights Certificate number on your check, bank draft or money order.
If paying  by  uncertified  personal  check,  please  note  that  funds  paid by
uncertified  personal  check  may take at least  five  business  days to  clear.
Accordingly,  holders of Rights who wish to pay the Subscription  Price by means
of an  uncertified  personal  check are urged to make  payment  sufficiently  in
advance of the  Expiration  Date to ensure  that such  payment is  received  and
clears by the Expiration  Date, and are urged to consider  payment by means of a
certified or bank check,  money order or wire transfer of immediately  available
funds.

            The Rights Certificate and payment of the Subscription Price, or, if
applicable,  Notices of Guaranteed Delivery (as defined below) must be delivered
to the Subscription Agent by one of the methods described below:

                  By mail, by hand or by overnight courier to:

                            ________________________
                            ________________________
                            ________________________
              Telephone Number for Confirmation: _________________

            DELIVERY  TO ANY  ADDRESS OR BY A METHOD  OTHER THAN THOSE SET FORTH
ABOVE DOES NOT CONSTITUTE VALID DELIVERY.

            The  address  and  telephone  number  of the  Information  Agent for
inquiries, information or requests for additional documentation are as follows:


                            ________________________
                            ________________________
                            ________________________
                            ________________________

                                       3





            By making  arrangements with your bank or broker for the delivery of
funds on your behalf you may also  request  such bank or broker to exercise  the
Rights  Certificate  on your  behalf.  Alternatively,  you may  cause a  written
guarantee substantially in the form enclosed herewith (the "Notice of Guaranteed
Delivery"), from a member firm of a registered national securities exchange or a
member of the  National  Association  of  Securities  Dealers,  Inc.,  or from a
commercial bank or trust company having an office or correspondent in the United
States or from a bank, stockbroker, savings and loan association or credit union
with membership in an approved signature guarantee  medallion program,  pursuant
to Rule 17Ad-15 of the  Securities  Exchange Act of 1934, as amended  (each,  an
"Eligible Institution"), to be received by the Subscription Agent on or prior to
the Expiration Date together with payment in full of the applicable Subscription
Price.  Such Notice of Guaranteed  Delivery must state your name,  the number of
Rights  represented  by the  Rights  Certificate(s)  held by you,  the number of
Underlying  Shares  being  subscribed  for  pursuant  to the Basic  Subscription
Privilege and the number of Underlying  Shares,  if any,  being  subscribed  for
pursuant to the  Over-Subscription  Privilege,  and that you will  guarantee the
delivery to the Subscription Agent of any properly completed and executed Rights
Certificate(s)  evidencing  such Rights within three (3) business days following
the date of the Notice of Guaranteed  Delivery.  If this  procedure is followed,
the  properly  completed  Rights  Certificate(s)  evidencing  the  Rights  being
exercised, with any signatures required to be guaranteed so guaranteed,  must be
received by the Subscription  Agent within three (3) business days following the
date of the Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may
be delivered to the Subscription Agent in the same manner as Rights Certificates
at the address set forth above, or may be transmitted to the Subscription  Agent
by facsimile transmission  (Facsimile No.  _____________).  Additional copies of
the  Notice  of  Guaranteed  Delivery  may be  obtained  upon  request  from the
Information Agent at the address,  or by calling the telephone number, set forth
above.

            Banks,  brokers and other nominee holders of Rights who exercise the
Basic Subscription  Privilege and the  Over-Subscription  Privilege on behalf of
beneficial  owners of Rights  will be  required  to certify to the  Subscription
Agent and the Company, in connection with the exercise of the  Over-Subscription
Privilege, as to the aggregate number of Rights that have been exercised and the
number of  Underlying  Shares  that are being  subscribed  for  pursuant  to the
Over-Subscription  Privilege, by each beneficial owner of Rights (including such
nominee  itself) on whose behalf such nominee  holder is acting.  If more Excess
Shares are subscribed for pursuant to the  Over-Subscription  Privilege than are
available for sale,  the Excess Shares will be  allocated,  as described  above,
among beneficial owners exercising the Over-Subscription Privilege in proportion
to such owners' exercise of Rights pursuant to the Basic Subscription Privilege.

            If the aggregate  Subscription  Price paid by you is insufficient to
purchase  the number of  Underlying  Shares  subscribed  for, or if no number of
Underlying Shares to be purchased is specified,  then you will be deemed to have
exercised the Basic Subscription  Privilege to purchase Underlying Shares to the
full extent of the payment tendered.

            If the aggregate  Subscription  Price paid by you exceeds the amount
necessary  to  purchase  the  number  of  Underlying  Shares  for which you have
indicated  an  intention  to  subscribe  (such  excess  being the  "Subscription
Excess"),  then you  will be  deemed  to have  exercised  the  Over-Subscription
Privilege to the full extent of the excess payment tendered, to purchase, to the

                                       4





extent  available,  that  number of whole  shares of Common  Stock  equal to the
quotient obtained by dividing the Subscription Excess by the Subscription Price.
Any  remaining  amount  shall be  returned to you by mail,  without  interest or
deduction,  as soon as  practicable  after  the  Expiration  Date and  after all
pro-rations  and  adjustments  contemplated  by the terms of the Rights Offering
have been effected.

            The  Company  will not issue any  fractional  Underlying  Shares (or
distribute cash in lieu thereof). If the number of Rights exercised by you would
result in your receiving a fractional  Underlying Share, the aggregate number of
Underlying Shares to be issued will be rounded down to the nearest whole number.

            2. Issuance of Common Stock.
               -------------------------

            The  following  deliveries  and payments will be made to the address
your Rights Certificate was delivered to, unless you provide instructions to the
contrary in your Rights Certificate.

            (a) Basic Subscription  Privilege.  As soon as practicable after the
      Expiration Date and the valid exercise of Rights,  the Subscription  Agent
      will  mail to each  exercising  Rights  holder  certificates  representing
      shares of  Common  Stock  purchased  pursuant  to the  Basic  Subscription
      Privilege.  See  "The  Offering--Issuance  of Stock  Certificates"  in the
      Prospectus.

            (b)  Over-Subscription  Privilege.  As soon as practicable after the
      Expiration Date and after all pro-rations and adjustments  contemplated by
      the terms of the Rights  Offering  have been  effected,  the  Subscription
      Agent  will  mail  to  each  Rights  holder  who  validly   exercises  the
      Over-Subscription Privilege certificates representing the number of shares
      of Common Stock,  if any,  allocated to such Rights holder pursuant to the
      Over-Subscription     Privilege.    See    "The     Offering--Subscription
      Rights--Over-Subscription Privilege" in the Prospectus.

            (c)  Excess  Cash  Payments.   As  soon  as  practicable  after  the
      Expiration Date and after all pro-rations and adjustments  contemplated by
      the terms of the Rights  Offering  have been  effected,  the  Subscription
      Agent will mail to each Rights holder who has  exercised,  or is deemed to
      have exercised, the Over-Subscription Privilege any excess amount, without
      interest or deduction,  received in payment of the Subscription  Price for
      Excess  Shares  that are  subscribed  for by such  Rights  holder  but not
      allocated  to  such  Rights  holder  pursuant  to  the   Over-Subscription
      Privilege.

            3. Sale or Transfer of Rights.
               --------------------------

            The Rights are not  transferable in any way, except to affiliates of
the  recipient  and except by operation  of law.  Evidence  satisfactory  to the
Company  that any such  permitted  transfer is proper must be  delivered  to the
Company prior to the Expiration Date by one of the methods described below:

                  By mail, by hand or by overnight courier to:

                             _______________________
                             _______________________
                             _______________________

                                       5





            4. Execution.
               ----------

            (a)  Execution by  Registered  Holder.  The  signature on the Rights
      Certificate must correspond with the name of the registered holder exactly
      as it appears on the face of the Rights Certificate without any alteration
      or  change  whatsoever.  Persons  who sign  the  Rights  Certificate  in a
      representative  or other  fiduciary  capacity must indicate their capacity
      when signing and, unless waived by the Subscription  Agent in its sole and
      absolute  discretion,  must present to the Subscription Agent satisfactory
      evidence of their authority to so act.

            (b) Execution by Person Other than Registered  Holder. If the Rights
      Certificate  is  executed by a person  other than the holder  named on the
      face of the Rights Certificate, proper evidence of authority of the person
      executing the Rights  Certificate must accompany the same unless, for good
      cause, the Subscription Agent dispenses with proof of authority.

            (c) Signature  Guarantees.  Your  signature must be guaranteed by an
      Eligible   Institution  if  you  specify   special   payment  or  delivery
      instructions.

            5. Method of Delivery.
               ------------------

            The method of  delivery  of Rights  Certificates  and payment of the
Subscription Price to the Subscription Agent will be at the election and risk of
the  Rights  holder,  but,  if  sent  by  mail,  it  is  recommended  that  such
certificates and payments be sent by registered  mail,  properly  insured,  with
return  receipt  requested,  and that a sufficient  number of days be allowed to
ensure delivery to the Subscription  Agent and the clearance of payment prior to
5:00 p.m.,  New York City time,  on the  Expiration  Date.  Because  uncertified
personal checks may take at least five business days to clear,  you are strongly
urged to pay, or arrange for payment,  by means of certified or cashier's check,
money order or wire transfer of funds.

            6. Special Provisions Relating to the Delivery of Rights Through the
               -----------------------------------------------------------------
Depository Trust Company.
- -------------------------

            In the case of Rights that are held of record through the Depository
Trust  Company  (the  "Book-Entry  Transfer  Facility"),  exercises of the Basic
Subscription  Privilege and the  Over-Subscription  Privilege may be effected by
instructing  the  Book-Entry  Transfer  Facility  to  transfer  Rights  from the
Book-Entry  Transfer Facility account of such holder to the Book-Entry  Transfer
Facility account of the Subscription  Agent,  together with  certification as to
the aggregate  number of Rights  exercised  and the number of Underlying  Shares
thereby  subscribed  for pursuant to the Basic  Subscription  Privilege  and the
Over-Subscription  Privilege by each beneficial  owner of Rights on whose behalf
such nominee is acting,  and payment of the Subscription Price for each share of
Common Stock subscribed for pursuant to the Basic Subscription Privilege and the
Over-Subscription Privilege.

                                       6




            7. Substitute Form W-9.
               -------------------

            Each Rights holder who elects to exercise  Rights should provide the
Subscription  Agent  with a  correct  Taxpayer  Identification  Number  (TIN) on
Substitute   Form  W-9.   See   "Guidelines   for   Certification   of  Taxpayer
Identification   Number  on  Substitute   Form  W-9."  Failure  to  provide  the
information  on the form may subject  such  holder to a $50.00  penalty for each
such failure and to 30% federal income tax withholding with respect to dividends
that may be paid by the  Company on shares of Common  Stock  purchased  upon the
exercise of Rights (for those holders exercising Rights).

                                       7

EX-99.2

                                                                    EXHIBIT 99.2

                            WEBFINANCIAL CORPORATION

                          Notice Of Guaranteed Delivery
                             For Rights Certificates

            This form, or one substantially  equivalent hereto,  must be used to
exercise  Rights  pursuant to the  Offering  described in the  Prospectus  dated
_________,  2003 (the  "Prospectus")  of  WebFinancial  Corporation,  a Delaware
corporation  (the  "Company"),   if  a  holder  of  Rights  cannot  deliver  the
certificate(s)  evidencing  the Rights  (the  "Rights  Certificate(s)"),  to the
Subscription Agent listed below (the  "Subscription  Agent") at or prior to 5:00
p.m., New York City time, on ___________,  2003, unless such time is extended by
the  Company  as  described  in the  Prospectus  (as it  may  be  extended,  the
"Expiration  Date").  Such form must be  delivered  by hand or sent by facsimile
transmission,  first class mail or overnight courier to the Subscription  Agent,
and must be received  by the  Subscription  Agent on or prior to the  Expiration
Date.

            Payment of the  Subscription  Price for each share of the  Company's
Common Stock subscribed for upon exercise of such Rights must be received by the
Subscription  Agent in the manner specified in "The  Offering-Method of Payment"
in the  Prospectus  at or  prior  to 5:00  p.m.,  New  York  City  time,  on the
Expiration  Date even if the Rights  Certificate(s)  evidencing  such  Rights is
(are) being delivered pursuant to the Guaranteed Delivery Procedures thereof.

                  By mail, by hand or by overnight courier to:

                             _______________________
                             _______________________
                     Facsimile Transmission: _______________
                        Telephone Number: _______________

            Delivery of this  instrument  to an address  other than as set forth
above or  transmission  of this instrument via facsimile other than as set forth
above does not constitute a valid delivery.

            If you have any questions or require  additional  copies of relevant
documents, please contact:

                              _____________________
                              _____________________
                              _____________________
                              _____________________







Ladies and Gentlemen:

            The undersigned hereby represents that the undersigned is the holder
of Rights  Certificate(s)  representing  _________________  Rights and that such
Rights Certificate(s) cannot be delivered to the Subscription Agent at or before
5:00  p.m.,  New York City  time,  on the  Expiration  Date.  Upon the terms and
subject  to the  conditions  set forth in the  Prospectus,  receipt  of which is
hereby  acknowledged,  the  undersigned  hereby elects to exercise (i) the Basic
Subscription  Privilege to subscribe for ___ shares of Common Stock with respect
to each of the Rights  represented  by such Rights  Certificate(s)  and (ii) the
Over-Subscription  Privilege  relating to such Rights, to the extent that shares
of Common  Stock that are not  otherwise  purchased  pursuant to the exercise of
Rights (the "Excess Shares") are available  therefor,  for an aggregate of up to
________________  Excess  Shares,  subject to  availability  and  pro-ration  as
described in the Prospectus.

            The undersigned  understands that payment of the Subscription  Price
for each share of Common Stock subscribed for pursuant to the Basic Subscription
Privilege  and  the   Over-Subscription   Privilege  must  be  received  by  the
Subscription Agent at or before 5:00 p.m., New York City time, on the Expiration
Date  and  represents  that  such  payment,   in  the  aggregate   amount  of  $
__________________ either (check appropriate box):

            / /    is being delivered to the Subscription Agent herewith; or

            / /    has been delivered  separately to the  Subscription  Agent in
                   the  manner  set  forth  below  (check  appropriate  box  and
                   complete information relating thereto):

                   / /   Wire transfer of funds
                         Name of transferor institution: _______________________
                         Date of transfer: _____________________________________
                         Confirmation number (if available): ___________________

                  / /    Uncertified  check:  (Payment by uncertified check will
                         not be deemed to have been received by the Subscription
                         Agent until such check has cleared.  Holders  paying by
                         such means are urged to make  payment  sufficiently  in
                         advance  of the  Expiration  Date to  ensure  that such
                         payment clears by such date.)

                  / /    Certified check

                  / /    Bank draft (cashier's check)

                  / /    Money Order

Signature(s) _________________________        Address __________________________
______________________________________        __________________________________
Name(s) ____________________________          __________________________________
___________________________________           Area Code and Tel. No(s).

Rights Certificate No(s). (if available)  ______________________________________

                                       2





                              Guarantee of Delivery
           (Not To Be Used For Rights Certificate Signature Guarantee)

            The undersigned,  a member firm of a registered  national securities
exchange or of the  National  Association  of  Securities  Dealers,  Inc.,  or a
commercial bank or trust company having an office or correspondent in the United
States,  or a bank,  stockbroker,  savings and loan  association or credit union
with membership in an approved signature guarantee  medallion program,  pursuant
to Rule 17Ad-15 of the Securities  Exchange Act of 1934, as amended,  guarantees
that the undersigned  will deliver to the  Subscription  Agent the  certificates
representing  the Rights being  exercised  hereby,  with any required  signature
guarantee and any other required  documents,  all within three (3) business days
after the date hereof.

_______________________________________         Dated: _________________________
_______________________________________         ________________________________
            (Address)                                   (Name of Firm)

_______________________________________         ________________________________
   (Area Code and Telephone Number)                (Authorized Signature)

            The  institution  that  completes  this  form must  communicate  the
guarantee to the Subscription  Agent and must deliver the Rights  Certificate(s)
to the  Subscription  Agent  within the time period shown in the  Prospectus  of
WebFinancial Corporation, dated ___________, 2003. Failure to do so could result
in a financial loss to such institution.

                                       3

EX-99.3

                                                                    EXHIBIT 99.3

                            WEBFINANCIAL CORPORATION


                                             __________, 2003

Dear Security Holders:

            This notice is being  distributed by WebFinancial  Corporation  (the
"Company")  to all  holders of record of shares of its common  stock,  par value
$0.001 per share (the  "Common  Stock"),  at the close of business on  ________,
2003 (the "Record Date"), in connection with a distribution in a rights offering
(the "Rights Offering") of  non-transferable  subscription rights (the "Rights")
to  subscribe  for and  purchase  shares of its  Common  Stock.  The  Rights are
described in the Company's Prospectus dated __________, 2003 (the "Prospectus").

            In the Rights  Offering,  the Company is offering  an  aggregate  of
_______ shares of Common Stock (the  "Underlying  Shares"),  as described in the
Prospectus.

            The Rights will expire,  if not  exercised,  at 5:00 p.m.,  New York
City time, on  _______________,  2003, unless extended in the sole discretion of
the Company (as it may be extended, the "Expiration Date").

            As described in the Prospectus,  you will receive one Right for each
share of Common  Stock  owned of record at the close of  business  on the Record
Date.

            Each Right  allows you to  subscribe  for ___ shares of Common Stock
(the "Basic Subscription  Privilege") at the cash price of $_____ per share (the
"Subscription Price").

            In  addition,  each  holder  of Rights  who  exercises  their  Basic
Subscription   Privilege   in  full  will  be   eligible   to   subscribe   (the
"Over-Subscription  Privilege") at the  Subscription  Price for shares of Common
Stock that are not  otherwise  purchased  pursuant to the  exercise of Rights by
other  holders of Rights  under the Basic  Subscription  Privilege  (the "Excess
Shares"),  subject to availability and pro-ration as described below.  Shares of
Common Stock will be available  for purchase  pursuant to the  Over-Subscription
Privilege only to the extent that any  Underlying  Shares are not subscribed for
pursuant to the Basic  Subscription  Privilege.  If there are not enough  Excess
Shares to satisfy all subscriptions made under the Over-Subscription  Privilege,
the Company will allocate the remaining  Excess Shares pro-rata  (subject to the
elimination of fractional shares) among those Rights holders who exercised their
Over-Subscription  Privileges,  in proportion to the number of Underlying Shares
each beneficial holder exercising the Over-Subscription  Privilege has purchased
pursuant to the Basic Subscription  Privilege;  provided,  however, that if such
pro-rata  allocation  results in any Rights  holder  being  allocated  a greater
number of Excess Shares than such holder subscribed for pursuant to the exercise
of such holder's Over-Subscription Privilege, then such holder will be allocated
only  such  number  of  Excess  Shares  as such  holder  subscribed  for and the
remaining Excess Shares will be allocated among all other holders exercising the
Over-Subscription  Privilege on the same pro-rata  basis  outlined  above.  Such
pro-ration  will be repeated  until all Excess Shares have been allocated to the
full extent of the Over-Subscription  Privilege. See "The Offering--Subscription
Rights--Over-Subscription  Privilege" in the Prospectus.  Also,  pursuant to the







terms of the Company's  charter, a holder will not be allowed to subscribe for a
number of shares that would  increase such  holder's  ownership of the Company's
shares of common stock to 4.9% or above of the Company's then outstanding shares
of common stock, unless such holder already owned at least 5.0% of the Company's
outstanding common stock on the date such restriction became effective.

            The Rights are  evidenced by  non-transferable  Rights  certificates
(the  "Rights  Certificates")  and will  cease to have any value at the close of
business on the Expiration Date.

            Enclosed are copies of the following documents:

1.          Prospectus;

2.          Rights Certificate;

3.          Instructions as to Use of Rights Certificates;

4.          Notice of Guaranteed Delivery for Rights Certificates;

5.          Substitute  Form W-9  (including  Guidelines  for  Certification  of
            Taxpayer Identification Number on Substitute Form W-9); and

6.          A return envelope  addressed to  ________________,  the Subscription
            Agent.

            Your prompt  action is  requested.  To exercise  Rights,  you should
properly  complete and sign the Rights  Certificate (or the Notice of Guaranteed
Delivery if you are following the Guaranteed  Delivery  Procedures)  and forward
it,  with  payment  of the  Subscription  Price in full for each share of Common
Stock  subscribed  for  pursuant  to the Basic  Subscription  Privilege  and the
Over-Subscription  Privilege,  to the  Subscription  Agent,  as indicated in the
Prospectus. The Subscription Agent must receive the Rights Certificate or Notice
of Guaranteed Delivery with payment of the Subscription  Price,  including final
clearance  of any  checks,  prior to 5:00  p.m.,  New  York  City  time,  on the
Expiration Date.  FAILURE TO RETURN THE PROPERLY  COMPLETED  RIGHTS  CERTIFICATE
WITH THE CORRECT  PAYMENT  WILL  RESULT IN YOUR NOT BEING ABLE TO EXERCISE  YOUR
RIGHTS.  A Rights holder  cannot  revoke the exercise of its Rights.  Rights not
exercised prior to the Expiration Date will expire.

            Additional  copies  of the  enclosed  materials  and  assistance  or
information may be obtained from the Information Agent, at ______________.

                                         Very truly yours,



                                         WEBFINANCIAL CORPORATION

                                       2

EX-99.4

                                                                    EXHIBIT 99.4

                            WEBFINANCIAL CORPORATION


                                                            ___________, 2003

To Securities Dealers, Commercial Banks, Trust Companies and Other Nominees:

            This letter is being distributed to securities  dealers,  commercial
banks, trust companies and other nominees in connection with the rights offering
(the "Rights Offering") by WebFinancial Corporation (the "Company") of shares of
its Common Stock (as such term is defined below),  pursuant to  non-transferable
subscription  rights  (the  "Rights")  distributed  to  all  holders  of  record
(collectively,  the  "Recordholders")  of shares of its common stock,  par value
$0.001 per share (the "Common Stock"),  at the close of business on ______, 2003
(the "Record Date"). The Rights are described in the Company's  Prospectus dated
_______, 2003 (the "Prospectus").

            In the Rights  Offering,  the Company is offering  an  aggregate  of
______ shares of Common Stock, as described in the Prospectus.

            The Rights will expire,  if not  exercised,  at 5:00 p.m.,  New York
City time, on _________,  2003,  unless  extended in the sole  discretion of the
Company (as it may be extended, the "Expiration Date").

            Each Right  entitles the holder thereof to subscribe for ____ shares
of Common  Stock  (the  "Basic  Subscription  Privilege")  at the cash  price of
$______ per share (the "Subscription Price").

            Each  Right also  entitles  the holder  thereof  to  subscribe  (the
"Over-Subscription  Privilege") for additional  shares of Common Stock that have
not been purchased by other  Recordholders  pursuant to their Basic Subscription
Privilege,  at the  Subscription  Price,  if such holder has fully exercised its
Basic Subscription Privilege. See "The Offering" in the Prospectus.

            The Rights are evidenced by a non-transferable Rights certificate (a
"Rights Certificate")  registered in your name or the name of your nominee. Each
beneficial  owner of shares of Common Stock  registered in your name or the name
of your nominee is entitled to one Right for each share of Common Stock owned by
such beneficial owner at the close of business on the Record Date.

            We are asking  persons who hold shares of Common Stock  beneficially
and who have  received  the Rights  distributable  with  respect to those shares
through a broker,  dealer,  commercial bank, trust company or other nominee,  as
well as persons who hold  certificates  of Common  Stock  directly and prefer to
have such  institutions  effect  transactions  relating  to the  Rights on their
behalf,  to contact  the  appropriate  institution  or nominee and request it to
effect the transactions for them. In addition,  we are asking  beneficial owners
who wish to obtain a separate  Rights  Certificate  to contact  the  appropriate
nominee as soon as possible and request that a separate  Rights  Certificate  be
issued.






            If  you  exercise  the  Over-Subscription  Privilege  on  behalf  of
beneficial owners of Rights, you will be required to certify to the Subscription
Agent and the Company, in connection with the exercise of the  Over-Subscription
Privilege,  as to the  aggregate  number  of Rights  that  have  been  exercised
pursuant to the Basic  Subscription  Privilege,  whether the Basic  Subscription
Privilege of each beneficial  owner of Rights on whose behalf you are acting has
been  exercised  in full,  and the  number  of  shares  of  Common  Stock  being
subscribed for pursuant to the  Over-Subscription  Privilege by each  beneficial
owner of Rights on whose behalf you are acting.

            Enclosed are copies of the following documents:

1.          Prospectus;

2.          Instructions as to Use of Rights Certificates;

3.          A form of letter that may be sent to your clients for whose accounts
            you hold shares of Common Stock  registered in your name or the name
            of your nominee, with an attached form of instruction;

4.          Notice of Guaranteed Delivery for Rights Certificates;

5.          Nominee Holder Certification;

6.          Substitute  Form W-9  (including  Guidelines  for  Certification  of
            Taxpayer Identification Number on Substitute Form W-9); and

7.          A return envelope  addressed to  _______________,  the  Subscription
            Agent.

            We are  asking  you to  contact  those  of your  clients  for  whose
accounts you hold shares of Common Stock  registered in your name or the name of
your nominee to obtain their instructions with respect to the Rights.

            All  commissions,  fees  and  other  expenses  (including  brokerage
commissions  and  transfer   taxes),   other  than  fees  and  expenses  of  the
Subscription Agent,  incurred in connection with the exercise of the Rights will
be for the  account of the holder of the Rights,  and none of such  commissions,
fees or expenses will be paid by the Company or the Subscription Agent.

            Your prompt  action is  requested.  To exercise  Rights,  you should
deliver the properly  completed and signed Rights  Certificate (or the Notice of
Guaranteed  Delivery if you are following the Guaranteed  Delivery  Procedures),
with  payment of the  Subscription  Price in full for each share of Common Stock
subscribed for, to the Subscription  Agent, as indicated in the Prospectus.  The
Subscription  Agent must receive the Rights  Certificate or Notice of Guaranteed
Delivery with payment of the  Subscription  Price,  including final clearance of
any checks,  prior to 5:00 p.m.,  New York City time,  on the  Expiration  Date.
FAILURE TO RETURN THE PROPERLY  COMPLETED  RIGHTS  CERTIFICATE  WITH THE CORRECT
PAYMENT  WILL RESULT IN YOUR NOT BEING ABLE TO EXERCISE  YOUR  RIGHTS.  A Rights
holder cannot revoke the exercise of its Rights.  Rights not exercised  prior to
the Expiration Date will expire.

                                       2





            Additional  copies  of the  enclosed  materials  and  assistance  or
information may be obtained from the Information Agent at _________________.

                                          Very truly yours,



                                          WEBFINANCIAL CORPORATION



Nothing in the Prospectus or in the enclosed  documents shall  constitute you or
any person as an agent of WebFinancial Corporation,  the Subscription Agent, the
Information  Agent or any other person  making or deemed to be making  offers of
the securities  issuable upon valid exercise of the rights,  or authorize you or
any other person to make any statements on behalf of any of them with respect to
the offering except for statements made in the Prospectus.

                                       3

EX-99.5

                                                                    EXHIBIT 99.5

                            WEBFINANCIAL CORPORATION


                                                 _____________, 2003

To Our Clients:

            Enclosed for your  consideration are a Prospectus,  dated _________,
2003 (the "Prospectus"), and the "Instructions as to Use of Rights Certificates"
relating to the offering  (the "Rights  Offering") by  WebFinancial  Corporation
(the  "Company")  of shares of its Common Stock (as defined  below)  pursuant to
non-transferable  subscription rights (the "Rights")  distributed to all holders
of record of shares of its common stock, par value $0.001 per share (the "Common
Stock"), at the close of business on ___________,  2003 (the "Record Date"). The
Rights are described in the Prospectus.

            In the Rights  Offering,  the Company is offering  an  aggregate  of
_______ shares of Common Stock (the  "Underlying  Shares"),  as described in the
Prospectus.

            The Rights will expire,  if not  exercised,  at 5:00 p.m.,  New York
City time, on __________,  2003,  unless  extended in the sole discretion of the
Company (as it may be extended, the "Expiration Date").

            As described in the Prospectus,  you will receive one Right for each
share of Common Stock carried by us in your account as of the Record Date.

            Each Right allows you to subscribe  for _____ shares of Common Stock
(the "Basic  Subscription  Privilege") at the cash price of $_________ per share
(the "Subscription Price").

            In  addition,  each  holder  of Rights  who  exercises  their  Basic
Subscription   Privilege   in  full  will  be   eligible   to   subscribe   (the
"Over-Subscription  Privilege") at the  Subscription  Price for shares of Common
Stock that are not  otherwise  purchased  pursuant to the  exercise of Rights by
other  holders of Rights  under the Basic  Subscription  Privilege  (the "Excess
Shares"),  subject to availability and pro-ration as described below.  Shares of
Common Stock will be available  for purchase  pursuant to the  Over-Subscription
Privilege only to the extent that any  Underlying  Shares are not subscribed for
pursuant to the Basic  Subscription  Privilege.  If there are not enough  Excess
Shares to satisfy all subscriptions made under the Over-Subscription  Privilege,
the Company will allocate the remaining  Excess Shares pro-rata  (subject to the
elimination of fractional shares) among those Rights holders who exercised their
Over-Subscription  Privileges,  in proportion to the number of Underlying Shares
each beneficial holder exercising the Over-Subscription  Privilege has purchased
pursuant to the Basic Subscription  Privilege;  provided,  however, that if such
pro-rata  allocation  results in any Rights  holder  being  allocated  a greater
number of Excess Shares than such holder subscribed for pursuant to the exercise
of such holder's Over-Subscription Privilege, then such holder will be allocated
only  such  number  of  Excess  Shares  as such  holder  subscribed  for and the
remaining Excess Shares will be allocated among all other holders exercising the
Over-Subscription  Privilege on the same pro-rata  basis  outlined  above.  Such
pro-ration  will be repeated  until all Excess Shares have been allocated to the
full extent of the Over-Subscription  Privilege. See "The Offering--Subscription






Rights--Over-Subscription  Privilege" in the Prospectus.  Also,  pursuant to the
terms of the Company's  charter, a holder will not be allowed to subscribe for a
number of shares that would  increase such  holder's  ownership of the Company's
shares of common stock to 4.9% or above of the Company's then outstanding shares
of common stock, unless such holder already owned at least 5.0% of the Company's
outstanding common stock on the date such restriction became effective.

            The Rights will be evidenced by non-transferable Rights certificates
and will  cease to have any value at the  close of  business  on the  Expiration
Date.

            The materials  enclosed are being forwarded to you as the beneficial
owner of Common Stock  carried by us in your account but not  registered in your
name.  Exercises  of  rights  may be made  only by us as the  record  owner  and
pursuant  to your  instructions.  Accordingly,  we  request  instructions  as to
whether  you wish us to elect to  subscribe  for any  shares of Common  Stock to
which you are entitled  pursuant to the terms and subject to the  conditions set
forth in the enclosed  Prospectus.  However,  we urge you to read the Prospectus
and other enclosed  materials  carefully before  instructing us to exercise your
Rights.

            Your  instructions to us should be forwarded as promptly as possible
in order to permit us to exercise  Rights on your behalf in accordance  with the
provisions of the Rights Offering. The Rights Offering will expire at 5:00 p.m.,
New York City time, on the Expiration  Date.  Once you have exercised your Basic
Subscription Privilege and your Over-Subscription  Privilege,  such exercise may
not be revoked.

            If you wish to have us, on your behalf,  exercise the Rights for any
shares  of Common  Stock to which you are  entitled,  please so  instruct  us by
completing,  executing and returning to us the "Beneficial  Owner Election Form"
included herewith.

            Any  questions  or requests  for  assistance  concerning  the Rights
Offering should be directed to the Information Agent at _____________.

                                       2

EX-99.6

                                                                    EXHIBIT 99.6

                            WEBFINANCIAL CORPORATION


                          NOMINEE HOLDER CERTIFICATION

            The  undersigned,  a bank,  broker,  trustee,  depositary  or  other
nominee of rights (the  "Rights") to purchase  shares of common  stock  ("Common
Stock") of WebFinancial  Corporation (the  "Company"),  pursuant to the offering
described in the Company's prospectus dated _________,  2003 (the "Prospectus"),
hereby certifies to the Company and to  ________________,  as Subscription Agent
for such offering,  that (1) the  undersigned  has  exercised,  on behalf of the
beneficial  owners thereof (which may include the  undersigned),  Rights for the
number  of  shares  of  Common  Stock  specified  below  pursuant  to the  Basic
Subscription  Privilege (as defined in the  Prospectus)  on behalf of beneficial
owners of Rights who have  subscribed  for the purchase of additional  shares of
Common  Stock  pursuant to the  Over-Subscription  Privilege  (as defined in the
Prospectus),  listing  separately  below each such exercised Basic  Subscription
Privilege and the corresponding Over-Subscription Privilege (without identifying
any  such  beneficial  owner),  and  (2)  each  such  beneficial  owner's  Basic
Subscription Privilege has been exercised in full:

                                                       Number of Shares                    Number of Shares
                  Number of Shares Owned            Subscribed for Pursuant           Subscribed for Pursuant to
                    on the Record Date          to Basic Subscription Privilege       Over-Subscription Privilege

1.          _______________________              _______________________               _______________________
2.          _______________________              _______________________               _______________________
3.          _______________________              _______________________               _______________________
4.          _______________________              _______________________               _______________________
5.          _______________________              _______________________               _______________________
6.          _______________________              _______________________               _______________________
7.          _______________________              _______________________               _______________________
8.          _______________________              _______________________               _______________________
9.          _______________________              _______________________               _______________________







Provide the following information if applicable:

___________________________________________
Depository Trust Company ("DTC")
Participant Number

[PARTICIPANT]


By:__________________________________
Name:
Title:

_____________________________________
DTC Basic Subscription Confirmation Number(s)

                                       2

EX-99.7

                                                                    EXHIBIT 99.7

                         BENEFICIAL OWNER ELECTION FORM

                                  INSTRUCTIONS

            The  undersigned  acknowledge(s)  receipt  of  your  letter  and the
enclosed  materials  referred to therein  relating to the  offering of shares of
common stock (the "Common Stock") of WebFinancial Corporation (the "Company").

            This will  instruct  you whether to exercise  the Rights to purchase
shares of Common  Stock  distributed  with respect to the shares of Common Stock
held by you for the  account  of the  undersigned,  pursuant  to the  terms  and
subject  to  the  conditions  set  forth  in  the  Prospectus  and  the  related
"Instructions as to Use of Rights Certificates."

            Box 1. / / Please DO NOT EXERCISE RIGHTS for shares of Common Stock.

            Box 2. / / Please EXERCISE RIGHTS for shares of Common Stock as set
forth below.

                                Number of Shares        Subscription Price             Payment
                                ----------------        ------------------             -------
Basic Subscription Privilege    ______________     X        _____             =    $__________(line 1)
Over-Subscription Privilege     ______________     X        _____             =    $__________(line 2)
                                Total Payment Required (Sum of lines 1 and 2) =    $_______________

            Box 3. / / Payment in the following  amount is enclosed  $_________.
                       (This amount must equal the amount set forth under "Total
                       Payment Required" above).

            Box 4. / / Please  deduct   payment  from  the   following   account
                       maintained by you as follows:

_____________________________________            _______________________________
            Type of Account                             Account No.
Amount to be deducted: $________________         _______________________________
                                                 _______________________________
                                                 Signature(s)

                                                 Please type or print
                                                 name(s) below:
                                                 _______________________________
                                                 _______________________________
Date: _____________________, 2003

EX-99.8

                                                                    EXHIBIT 99.8

                            WEBFINANCIAL CORPORATION

             IMPORTANT TAX INFORMATION REGARDING BACKUP WITHHOLDING

            Under the United States federal income tax laws,  dividend  payments
that may be made by  WebFinancial  Corporation  (the "Company") on shares of its
Common  Stock,  par value $0.001,  issued upon the exercise of  non-transferable
subscription  rights  (the  "Rights"),  may be  subject  to backup  withholding.
Generally such payments will be subject to backup  withholding unless the holder
(i) is exempt  from  backup  withholding  or (ii)  furnishes  the payer with its
correct  taxpayer  identification  number  ("TIN") and certifies that the number
provided  is correct and  further  certifies  that such holder is not subject to
backup  withholding  as a result of a failure to report all interest or dividend
income in the past. Each Rights holder that exercises  Rights and wants to avoid
backup withholding should provide the Subscription Agent, as the Company's agent
in  respect  of  exercised   Rights,   with  such  holder's   correct   taxpayer
identification  number (or with a  certification  that such holder is awaiting a
taxpayer identification number) and with a certification that such holder is not
subject to backup withholding by completing Substitute Form W-9 below.

            Certain  holders  (including,  among others,  all  corporations  and
certain  foreign  individuals)  are exempt  from these  backup  withholding  and
reporting requirements. In general, in order for a foreign individual to qualify
as an exempt  recipient,  that holder must submit a statement,  signed under the
penalties  of  perjury,  attesting  to that  individual's  exempt  status.  Such
statements may be obtained from the Subscription  Agent.  Exempt holders,  while
not required to file  Substitute  Form W-9,  should file  Substitute Form W-9 to
avoid possible erroneous backup  withholding.  See the enclosed  "Guidelines for
Certification  of Taxpayer  Identification  Number on  Substitute  Form W-9" for
additional instructions.

            If backup  withholding  applies,  the  Company  or the  Subscription
Agent,  as the case may be,  will be  required to withhold up to 30% of any such
dividend  payments made to a stockholder or other payee.  Backup  withholding is
not an additional tax. Rather, the amount of backup withholding is treated, like
any other withheld amounts, as an advance payment of the person's tax liability,
and the tax liability of persons subject to backup  withholding  will be reduced
by the amount of tax  withheld.  If  withholding  results in an  overpayment  of
taxes, a refund may be obtained.

PURPOSE OF SUBSTITUTE FORM W-9

            To prevent backup withholding on dividend payments,  a Rights holder
that  exercises  Rights is  required  to notify the  Subscription  Agent of such
holder's  correct TIN by completing the Substitute Form W-9 below and certifying
on  Substitute  Form W-9 that the TIN  provided  is correct (or that such Rights
holder is  awaiting a TIN).  In  addition,  the holder is required to certify on
Substitute Form W-9 that it is (i) exempt from backup  withholding,  or (ii) not
subject to backup  withholding  due to prior  under  reporting  of  interest  or
dividend income,  or (iii) the Internal Revenue Service (the "IRS") has notified
it that it is no longer subject to backup withholding.

                                       1





WHAT NUMBER TO GIVE THE SUBSCRIPTION AGENT

            The Rights  holder  that  exercises  Rights is  required to give the
Subscription  Agent the TIN of the record  owner of the  shares of Common  Stock
issued upon the exercise of the Rights.  If such record owner is an  individual,
the TIN is the taxpayer's social security number.  For most other entities,  the
TIN is the employer  identification number. If the shares of Common Stock issued
upon the exercise of the Rights are in more than one name or are not in the name
of the actual  owner,  consult the enclosed  "Guidelines  for  Certification  of
Taxpayer Identification Number on Substitute Form W-9" for additional guidelines
on what number to report.  If the  Subscription  Agent is not provided  with the
correct  taxpayer  identification  number in connection with such payments,  the
holder may be subject to a penalty imposed by the IRS.

                                       2





                               SUBSTITUTE FORM W-9
            PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN)

   PAYERS NAME: [___________________________________________________________]

- --------------------------------------------------------------------------------
Part 1 - PLEASE PROVIDE YOUR TIN AND CERTIFY          _________________________
BY SIGNING AND DATING BELOW                           Social Security Number or
                                                       Employer ID Number
- --------------------------------------------------------------------------------
Part 2 - Certification - under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer  Identification  Number
(or I am  waiting  for a number  to be issued to me),  (2) I am not  subject  to
backup  withholding  because (a) I am exempt from backup  withholding,  or (b) I
have not been notified by the Internal Revenue Service ("IRS") that I am subject
to backup withholding as a result of failure to report all interest or dividends
or  (c)  the  IRS  has  notified  me  that  I am no  longer  subject  to  backup
withholding,  and (3) all  other  information  provided  on this  form is  true,
correct and complete. / /

- --------------------------------------------------------------------------------
Part 3 - Awaiting TIN / /

- --------------------------------------------------------------------------------
Part 4 - For Payee Exempt from Backup Withholding / /

- --------------------------------------------------------------------------------
Please fill in your name and address below.

______________________________________________________
Name

______________________________________________________
Address (number and street)

______________________________________________________
City, State and Zip Code

CERTIFICATE  INSTRUCTIONS  - You must  cross out Item (2) in Part 2 above if you
have  been  notified  by the IRS  that  your are  currently  subject  to  backup
withholding because of under reporting interest or dividends on your tax return.
However,  if after  being  notified  by the IRS that you were  subject to backup
withholding, you received another notification from the IRS stating that you are
no longer subject to backup  withholding,  do not cross out Item (2). If you are
exempt from backup withholding, check the box in part 4 above.

- --------------------------------------------------------------------------------
Signature_________________________           Date _____________________, 2003
- --------------------------------------------------------------------------------

          NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN
             BACKUP WITHHOLDING OF 30% OF ANY PAYMENTS MADE TO YOU.
       PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
      IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

            YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECK
                    THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.

- --------------------------------------------------------------------------------
             CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER.

            I certify under penalties of perjury that a taxpayer  identification
number has not been issued to me, and either (a) I have mailed or  delivered  an
application  to  receive a  taxpayer  identification  number to the  appropriate
Internal Revenue Service Center or Social Security  Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within sixty (60) days, 30%
of all  reportable  payments  made to me  thereafter  will be  withheld  until I
provide a number.

Signature_________________________________  Date _____________________, 2003
- --------------------------------------------------------------------------------

                                       3



             GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                          NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER  IDENTIFICATION NUMBER TO GIVE THE PAYER -
Social  Security  numbers  have  nine  digits  separated  by two  hyphens:  i.e.
000-00-0000.  Employer identification numbers have nine digits separated by only
one hyphen: i.e.  00-0000000.  The table below will help determine the number to
give the payer.


- --------------------------------------------------------   ---------------------------------------------------------
                                 Give the                                                       Give the EMPLOYER
                                 SOCIAL SECURITY                                                IDENTIFICATION
For this type of Account:        number of --              For this type of Account:            number of--
- --------------------------------------------------------   ---------------------------------------------------------

1.   Individual                  The individual            8.  Sole proprietorship account      The owner (4)

2.   Two or more individuals     The actual owner of the   9.  A valid trust, estate, or        Legal entity (5)
     (joint account)             account or, if combined       pension trust
                                 funds, any one of the
                                 individuals (1)

                                                           10. Corporate                        The corporation

3.   Husband and wife (joint     The actual owner of the
     account)                    account or, if joint
                                 funds, either person (1)

                                                           11. Association, club,               The organization
                                                               religious, charitable,
                                                               educational or other
                                                               tax-exempt organization

4.   Custodian account of a      The minor (2)
     minor (Uniform Gift
     to Minors Act)                                        12. Partnership                      The partnership

5.   Adult and minor (joint      The adult or, if the                                           The broker or nominee
     account)                    minor is the only
                                 contributor, the
                                 minor (1)
                                                           13. A broker or registered           The broker or nominee
                                                               nominee

                                                           14. Account with the Department      The public entity
                                                               of Agriculture in the name
                                                               of a public entity (such as
                                                               a State or local government
                                                               school district, or prison)
                                                               that receives agricultural
                                                               program payments

6.   Account in the name of      The ward, minor or
     guardian or committee for   incompetent person (3)
     a designated ward, minor,
     or incompetent person

7.    a. The usual revocable     The grantor-trustee (1)
      savings trust account
      (grantor is also trustee)

      b. So-called trust account The actual owner (1)
      that is not a legal or
      valid trust under State
      law

- --------------------------------------------------------------------------------------------------------------------

(1)   List all names  first and circle the name of the person  whose  number you
      furnish.
(2)   Circle the minor's name and furnish the minor's social security number.
(3)   Circle the ward's,  minor's or incompetent  person's name and furnish such
      person's social security number.
(4)   Provide the name of the owner.  You may also enter your business or "doing
      business  as" name.  You may use either  your  Social  Security  Number or
      Taxpayer Identification Number (if you have one).
(5)   List all names first and circle the name of the legal  trust,  estate,  or
      pension trust. (Do not furnish the  identification  number of the personal
      representative or trustee unless the legal entity itself is not designated
      in the account title).

Note: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.

             GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
                          NUMBER ON SUBSTITUTE FORM W-9
                                     Page 2

OBTAINING A NUMBER                                                o   Payments of tax-exempt interest (including
If you do not have a taxpayer identification number or                exempt interest dividends under Section 852)
you do not know your number, obtain Form SS-5,
Application for a Social Security Number Card, or                 o   Payments described in Section 6049(b) (5) to
Form SS-4, Application  for Employer  Identification  Number,         non-resident aliens.
at the local office  of  the  Social  Security  Administration
or the Internal Revenue Service and apply for a number.           o   Payments on tax-free covenant bonds under Section 1451.

                                                                  o   Payments made by certain foreign organizations.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding              o   Payments made to a nominee.
on ALL payments include the following:                            EXEMPT PAYEES  DESCRIBED  ABOVE MUST STILL
                                                                  COMPLETE THE SUBSTITUTE FORM W-9 TO AVOID
o  A corporation.                                                 POSSIBLE  ERRONEOUS BACKUP  WITHHOLDING.
o  A financial institution.                                       FILE THE SUBSTITUTE FORM W-9 WITH THE PAYER,
o  An organization exempt from tax under Section 501 (a)          FURNISH YOUR  TAXPAYER  IDENTIFICATION  NUMBER,
   of the Internal Revenue Code of 1986, as amended (the          WRITE "EXEMPT" ON THE FACE OF THE  FORM, AND RETURN
   "Code"), or an individual retirement plan.                     IT TO THE PAYER.  IF THE PAYMENTS ARE INTEREST,
o  The United States or any agency or instrumentality             DIVIDENDS OR  PATRONAGE  DIVIDENDS,  ALSO SIGN AND
   thereof.                                                       DATE THE FORM.

o  A State, the District of Columbia, a possession of the            Certain payments other than interest, dividends,
   United States, or any subdivision or instrumentality          and patronage dividends that are not subject to
   thereof.                                                      information reporting are also not subject to backup
o   A foreign government, a political subdivision of a           withholding.  For  details,  see the  regulations  under
    foreign government, or any agency or instrumentality         Sections 6041, 6041A(a), 6045, and 6050A of the Code.
    thereof.
                                                                 PRIVACY ACT NOTICE - Section 6109 of the Code requires
o   An international organization or any agency, or              most recipients of dividends, interest, or other payments
    instrumentality thereof.                                     to give correct taxpayer identification  numbers to payers who
                                                                 must report the  payments to IRS. IRS uses  the  numbers  for
o   A registered dealer in securities or commodities             identification  purposes  and to help  verify  the accuracy  of
    registered in the U.S. or a possession of the U.S.           your tax return.  Payers must be given the numbers  whether or
                                                                 not recipients are required to file tax returns.  Payers may be
o   A real estate investment trust.                              required to withhold 30% of taxable  interest,  dividends and
                                                                 certain other payments to a payee who does not furnish a
o   A common trust fund operated by a bank under Section         taxpayer  identification  number to payer.  Certain penalties
    584(a) of the Code.                                          may also apply.
o   An exempt charitable remainder trust, or a non-exempt
    trust described in Section 4947(a)(1) of the Code.
o   An entity registered at all times under the Investment
    Company Act of 1940.
o   A foreign central bank of issue.

Payments of dividends and patronage dividends not                PENALTIES
generally subject to backup withholding include the              (1)  FAILURE TO FURNISH  TAXPAYER  IDENTIFICATION  NUMBER -
following:                                                       If you fail to furnish your correct  taxpayer  identification
                                                                 number to a payer, you are subject to a penalty of $50 for
o   Payments to nonresident aliens subject to withholding        each such failure unless your failure is due to reasonable
    under Section 1441 of the Code.                              cause and not willful neglect.

o   Payments to partnerships not engaged in a trade or          (2) CIVIL PENALTY FOR FALSE  INFORMATION  WITH RESPECT TO
    business in the U.S. and which have at least one            WITHHOLDING - If you make a false  statement  with no
    nonresident partner.                                        reasonable  basis which results in no backup withholding, you
                                                                are subject to a penalty of $500.
o   Payments of patronage dividends where the amount
    received is not paid in money.                              (3) CRIMINAL  PENALTY FOR  FALSIFYING  INFORMATION - Willfully
                                                                falsifying certifications  or  affirmations  may subject  you
o   Payments made by certain foreign organizations.             to criminal penalties including fines and/or imprisonment.

Payments of interest not generally subject to backup            (4) MISUSE OF TINS - If the requester discloses or uses
withholding include the following:                              taxpayer identification  numbers in violation of Federal law,
                                                                the  requester may be subject to civil and criminal penalties.

o   Payments of interest on obligations issued by
    individuals. Note: You may be subject to backup
    withholding if this interest is $600 or more
    and is paid in the course of the payer's trade
    or business and you have not provided your correct
    taxpayer identification number to payer.                    FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX
                                                                CONSULTANT OR THE INTERNAL REVENUE SERVICE.

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