================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K
----------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) NOVEMBER 30, 2004
----------
RCG COMPANIES INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------
DELAWARE 1-8662 23-2265039
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
6836 MORRISON BLVD., STE. 200, CHARLOTTE,
NORTH CAROLINA 28211
(Address of principal executive offices) (Zip Code)
(704) 366-5054
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
================================================================================
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
================================================================================
ITEM 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENT
On November 30, 2004, RCG Companies Incorporated ("RCG") entered into an
Agreement and Plan of Merger by and among RCG, Farequest Holdings, Inc.
("Farequest"), William A. Goldstein ("Goldstein"), and WTI Acquisition, Inc.
("WTI"), the wholly-owned subsidiary of RCG. Under the terms and conditions of
the Merger Agreement, WTI shall be merged with and into Farequest. Under the
transaction the Farequest Stockholders will (i) initially receive 45% of its
outstanding common stock as of the Effective Time of the Merger; (ii) the right
to receive additional shares of RCG's common stock if when there are issuances
of shares of RCG common stock upon the conversion of RCG's Series A 6%
convertible preferred stock; and (iii) a promissory note payable within one year
after the Effective Time of the Merger at the option of RCG, in either (a) an
amount in cash equal to lesser of (x) $6,037,872 or (y) 19% of the value of the
total maximum consideration payable or (b) 3,018,936 shares of RCG common stock.
The promissory note shall bear interest at 4% per annum and the interest shall
be payable at maturity at RCG's option of either cash or RCG common stock valued
at the greater of (i) $2.00 per share or (ii) the market value at the maturity
date.
At the Effective Time of the Agreement, the RCG board of directors shall
have expanded to eight (8) members, William A. Goldstein shall be appointed the
Chairman of the Board of Directors, and for a period of three years thereafter,
RCG's board of directors shall nominate and recommend for election with the
stockholders Mr. Goldstein as Chairman of the Board and provided that Mr.
Goldstein shall have continued to own at least 10% of the outstanding common
stock of RCG, RCG's board of directors will also nominate and recommend for
election by the stockholders two additional directors named by Mr. Goldstein.
Such nominee shall be independent directors and shall be reasonably acceptable
to the then existing board of directors. Mr. Goldstein agrees to vote his shares
of RCG common stock (i) during such three year period for Michael Pruitt as a
member of the RCG board of directors, provided that Mr. Pruitt hold 750,000
shares of RCG common stock at the time of the nomination, and (ii) for the
remaining nominees nominated by the RCG board for a one year term beginning with
the Effective Time.
The Agreement is subject to customary closing conditions, however, each
party shall have a period of 30 days from the date of Agreement to exercise its
right not to proceed with the transaction based upon its due diligence review.
RCG will be required to obtain the approval of its shareholders to
complete this transaction and will file a proxy statement/prospectus with
respect to such transaction.
RCG issued a press release describing the transaction, a copy of which is
attached hereto.
This material is not a substitute for the proxy statement/prospectus that
RCG will file with the Securities and Exchange Commission. Investors are urged
to read the document when it is available because it will contain important
information, including detailed risk factors. The proxy statement/prospectus
with other important documents to be filed by RCG Companies Incorporated will be
available free of charge at the SEC's website, www.sec.gov or from RCG Companies
Incorporated. RCG's directors and certain other executive officers may be
considered participants in the solicitation of proxies in connection with the
Merger. Information concerning RCG's directors and executive officers can be
found in the documents filed by RCG with the SEC. Certain directors and
executive officers of RCG may have direct or indirect interest in the Merger.
Additional information about the participants will be contained in the proxy
statement/prospectus.
ITEM 7.01. REGULATION FD DISCLOSURE
On December 1, 2004, RCG issued a press release announcing the Agreement
and Plan of Merger. A copy of the press release is filed as an exhibit herewith.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits
Exhibit Description
------- -----------
10.1 Agreement and Plan of Merger by and among RCG Companies
Incorporated, Farequest Holdings, Inc., William A. Goldstein,
WTI Acquisition, Inc., dated as of November 30, 2004.
99.1 Press Release dated December 1, 2004.
================================================================================
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 1, 2004
RCG COMPANIES INCORPORATED
By: /s/ Michael Pruitt
------------------------------
Michael Pruitt
President
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
10.1 Agreement and Plan of Merger by and among RCG Companies
Incorporated, Farequest Holdings, Inc., William A. Goldstein,
WTI Acquisition, Inc., dated as of November 30, 2004.
99.1 Press Release dated December 1, 2004.