UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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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): JANUARY 20, 2005
THE A CONSULTING TEAM, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 0-22945 13-3169913
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
200 PARK AVENUE SOUTH, NEW YORK, NEW YORK 10003
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 979-8228
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:
[ ] 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 A MATERIAL DEFINITIVE AGREEMENT
On January 21, 2005, The A Consulting Team, Inc. ("TACT") entered into
a Share Exchange Agreement among Vanguard Info-Solutions Corporation, a New
Jersey corporation formerly known as B2B Solutions, Inc. ("Vanguard"), the
stockholders of Vanguard named therein (the "Vanguard Stockholders"), the
authorized representative named therein and TACT (the "Share Exchange
Agreement"). Pursuant to the Share Exchange Agreement, TACT has agreed to a
transaction (the "Exchange Transaction") in which TACT will acquire all of the
issued and outstanding shares of capital stock of Vanguard in exchange for an
aggregate of 7,312,796 shares of common stock of TACT, $.01 par value per share
("Common Shares"). 6,312,796 Common Shares will be issued to the Vanguard
Stockholders upon consummation of the transactions contemplated by the Share
Exchange Agreement. 1,000,000 Common Shares will be delivered by TACT into
escrow for a period of one year to secure indemnification obligations of certain
of the Vanguard Stockholders. The consummation of the Exchange Transaction
requires the approval of the holders of TACT capital stock and is subject to
customary conditions to closing, as well as the consummation of the Company
Stock Purchase Transaction and the Selling Shareholder Stock Purchase
Transaction, each as defined below. TACT engaged Ehrenkrantz King Nussbaum Inc.
as its financial advisor in connection with the Exchange Transaction, who opined
to TACT's board of directors that the terms and conditions of the Exchange
Transaction were fair to TACT's current holders of Common Shares.
On January 21, 2005, TACT entered into a Stock Purchase Agreement with
Oak Finance Investments Limited ("Oak"), a British Virgin Islands company (the
"Company Stock Purchase Agreement"). Pursuant to the Company Stock Purchase
Agreement, TACT has agreed to sell, and Oak has agreed to purchase, 625,000
Common Shares at a purchase price of $8.00 per Common Share (the "Company Stock
Purchase Transaction"). TACT also granted to Oak, or an assignee of Oak, an
option to purchase an additional 625,000 Common Shares at a purchase price of
$8.00 per Common Share within 120 days of the consummation of the transactions
contemplated by the Company Stock Purchase Agreement. The consummation of the
transactions contemplated by the Company Stock Purchase Agreement requires the
approval of the holders of TACT capital stock and is subject to customary
conditions to closing, as well as the consummation of the Exchange Transaction
and the Selling Shareholder Stock Purchase Transaction.
On January 21, 2005, Oak and Shmuel BenTov, the Chairman of the Board
of Directors of TACT and its Chief Executive Officer (the "Selling
Shareholder"), entered into a Stock Purchase Agreement (the "Shareholder Stock
Purchase Agreement"). Pursuant to the Shareholder Stock Purchase Agreement, the
Selling Shareholder has agreed to sell, and Oak has agreed to purchase,
1,024,697 Common Shares beneficially owned by the Selling Shareholder at a
purchase price of $10.25 per Common Share (the "Selling Shareholder Stock
Purchase Transaction"), provided, that if TACT does not pay a dividend on the
Common Shares of $0.75 per Common Share on or prior to the date that the
transactions contemplated by the Shareholder Stock Purchase Agreement are
consummated, then the price per Common Share payable to the Selling Shareholder
shall be increased by the amount of the difference between $0.75 and the amount
of any dividend actually paid. Prior to the consummation of the Selling
Shareholder Stock Purchase Transaction, the Selling Shareholder is required to
convert all shares of preferred stock of TACT owned by him into Common Shares.
The Selling Shareholder and Oak entered into a Principal Shareholder's Agreement
(the "Voting Agreement") in connection with their execution and delivery of the
Shareholder Stock Purchase Agreement. Pursuant to the Voting Agreement, the
Selling Shareholder has agreed to, among other things, vote all Common Shares
beneficially owned by him (excluding 3,750 Common Shares beneficially owned by
the Selling Stockholder that are held of record by Ronit BenTov, the spouse of
the Selling Stockholder) in favor of the Exchange Transaction and the Company
Stock Purchase Transaction at any meeting of the holders of any class or classes
of capital stock of TACT called to approve such transactions (or any written
consents distributed in lieu of a meeting). The Selling Shareholder has also
granted Oak an irrevocable proxy to, among other things, vote all Common Shares
beneficially owned by him (excluding 3,750 Common Shares beneficially owned by
the Selling Stockholder that are held of record by Ronit BenTov, the spouse of
the Selling Stockholder) in favor of the Exchange Transaction and the Company
Stock Purchase Transaction at any meeting of the holders of any class or classes
of capital stock of TACT. The consummation of the transactions contemplated by
the Shareholder Stock Purchase Agreement is subject to customary conditions to
closing, as well as the consummation of the Exchange Transaction and the Company
Stock Purchase Transaction and TACT and the Selling Shareholder entering into an
amendment to the Selling Shareholder's existing employment agreement.
On January 21, 2005, TACT entered into an employment agreement (the
"New Employment Agreement") with its chief financial officer, Richard D.
Falcone. The terms of the New Employment Agreement will become effective upon
the consummation of the Exchange Transaction. The term of the Employment
Agreement is three years.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
As described in Item 1.01, TACT has entered into the Share Exchange
Agreement and the Company Stock Purchase Agreement, pursuant to each of which it
has agreed to issue shares of unregistered equity securities in reliance upon
Section 4(2) of the Securities Act of 1933, as amended.
ITEM 5.01. CHANGES IN CONTROL OF REGISTRANT
If the transactions contemplated by the Exchange Agreement, the Company
Stock Purchase Agreement and the Shareholder Stock Purchase Agreement described
in Item 1.01 are ultimately consummated, TACT will undergo a change in control.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.
On January 20, 2005, the Board of Directors of TACT voted to expand the
size of the Board of Directors to seven members. It is currently contemplated
that Shmuel BenTov and Reuven Battat will resign from the Board of Directors of
TACT prior to the consummation of the Exchange Transaction. Following the
consummation of the Exchange Transaction, Andrew Harry Ball and William A.
Newman will be elected to fill the vacancies created by the resignations of
Shmuel BenTov and Reuven Battat by the two remaining members of the Board of
Directors. A fifth director, who will be independent, will also be elected.
Following consummation of the Exchange Transaction, the Chief Executive
Officer of Vanguard will assume the role of Chief Executive Officer of TACT.
Shmuel BenTov, TACT's current Chief Executive Officer, will remain with TACT in
a business development and advisory role.
ITEM 8.01. OTHER EVENTS.
On January 20, 2005, the Board of Directors of TACT voted to approve
the change of the name of the registrant from The A Consulting Team, Inc. to
Vanguard Info-Solutions International Inc. (the "Name Change"). The Name Change
requires the approval of the holders of a majority of TACT's outstanding voting
capital stock.
On January 20, 2005, the Board of Directors of TACT voted to approve
the declaration of a cash dividend of $0.75 per share on the shares of issued
and outstanding common stock and preferred stock of TACT to the holders of
record of such shares of common stock and preferred stock of TACT as of a date
to be determined subsequently by the Board of Directors of TACT (the
"Dividend"). The payment of the Dividend will be contingent upon the
consummation of the transactions contemplated by the Share Exchange Agreement
and the Company Stock Purchase Agreement.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit 2.1 Share Exchange Agreement, dated as of January 21, 2005,
among Vanguard Info-Solutions Corporation (a New Jersey Corporation formerly
known as B2B Solutions, Inc.), the Vanguard Stockholders named therein, the
authorized representative named therein and The A Consulting Team, Inc.
Exhibit 9.1 Principal Shareholder's Agreement, dated as of January 21,
2005, by and between Oak Finance Investments Limited and Shmuel BenTov.
Exhibit 10.1 Stock Purchase Agreement, dated as of January 21, 2005, by
and between Oak Finance Investments and The A Consulting Team, Inc.
Exhibit 10.2 Stock Purchase Agreement, dated as of January 21, 2005,
between Oak Finance Investments Limited and Shmuel BenTov.
Exhibit 10.3 Employment Agreement, to be dated as of the date of the
consummation of the transactions contemplated by the Share Exchange Agreement,
dated as of January 21, 2005 among Vanguard Info-Solutions Corporation (a New
Jersey Corporation formerly known as B2B Solutions, Inc.), the Vanguard
Stockholders named therein, the authorized representative named therein and The
A Consulting Team, Inc., by and between The A Consulting Team, Inc. and Richard
D. Falcone.
Exhibit 99.1 Press Release, dated January 23, 2005, regarding the
circumstances discussed in this report.
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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.
THE A CONSULTING TEAM, INC.
By: /s/ Shmuel BenTov
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DATE: January 26, 2005 Shmuel BenTov, Chairman,
Chief Executive Officer and President
By: /s/ Richard D. Falcone
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DATE: January 26, 2005 Richard D. Falcone, Treasurer
and Chief Financial Officer