UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act Of 1934
Infocrossing, Inc.
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(Name of Issuer)
Common Stock, $0.01 par value
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(Title of Class of Securities)
2052 65101
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(CUSIP Number)
Charles Auster with copies to:
Infocrossing, Inc. S. Ward Atterbury, Esq.
2 Christie Heights Street White & Case LLP
Leonia, New Jersey 07605 1155 Avenue of the Americas
(201) 840-4700 New York, NY 10036
212-819-8200
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 15, 2000
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d(f) or 13d-1(g), check the following box
|_|.
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CUSIP No. 2052 65101 SCHEDULE 13D
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Charles Auster I.R.S. Identification No.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|_|
(b)|_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO/PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED |_|
PURSUANT TO ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF SHARES BENEFICIALLY 7 SOLE VOTING POWER
OWNED BY EACH REPORTING PERSON 868,446
WITH
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8 SHARED VOTING POWER
0
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9 SOLE DISPOSITIVE POWER
868,446
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
868,446
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES |_|
CERTAIN SHARES
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.34%
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14 TYPE OF REPORTING PERSON
IN
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SCHEDULE 13D
Infocrossing, Inc.
ITEM 1. SECURITY AND ISSUEr
This statement on Schedule 13D relates to the common stock, $0.01 par
value per share ("Common Stock"), of Infocrossing, Inc., a Delaware corporation
(the "Company"), the principal executive offices of which are located at 2
Christie Heights Street, Leonia, New Jersey, 07605.
ITEM 2. IDENTITY AND BACKGROUND
(a) This statement on Schedule 13D is being filed by Charles Auster
("Auster").
(b) The address of Auster's principal place of business and principal
office is 2 Christie Heights Street, Leonia, New Jersey 07605.
(c) Auster's present principal occupation is President and Chief
Executive Officer of the Company located at 2 Christie Heights Street, Leonia,
New Jersey 07605.
(d) During the last five (5) years, Auster has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five (5) years, Auster has not been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding been subject to a judgement, decree or final
order enjoining the future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Auster is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
As of June 15, 2000, the Company and Auster entered into an employment
agreement (the "Employment Agreement") whereby, among other things, the Company
awarded Auster Eight Hundred Thousand (800,000) shares of the Company's Common
Stock (the "Restricted Shares").
Auster was granted the Restricted Shares pursuant to the Employment
Agreement and was not required to provide any funds.
Additionally, pursuant to Section 5 of the Employment Agreement,
Auster purchased 68,446 shares of the Company at a purchase price of $14.61 per
share (the "Stock Investment").
The source of funds used in entering into this transaction was
Auster's personal funds. The amount of funds used in making the purchase of the
Stock Investment is $999,996.06.
ITEM 4. PURPOSE OF THE TRANSACTION
Auster entered into an Employment Agreement with the Company to become
President and Chief Executive Officer of the Company, as well as a director of
the Company. Auster's employment with the Company was effective as of June 15,
2000 and shall continue for a period of two years, on a renewable basis every
two years, provided that neither the Company nor Auster provides written notice
60 days prior to June 15, 2002, or such subsequent anniversary of their
intention not to renew. In addition to receiving an annual salary of $375,000
and a performance bonus of up to $187,500, and certain monetary and non-monetary
benefits, the Company has awarded Auster 800,000 shares of the Company's Common
Stock (the "Restricted Shares") which will be fully vested by June 15, 2004
subject to certain forfeiture and repurchase options.
Auster purchased 68,446 shares of the Company's Common Stock at a
price of $14.61 per share.
In the event that Auster terminates his employment with the Company,
he will be eligible, under certain circumstances, to receive a severance package
which includes any unpaid salary, bonus and expenses as well as a payment equal
to 200% of Auster's then current annual base salary and performance bonus earned
for the immediately preceding fiscal year (the "Severance Payment").
Auster has agreed to a number of non-compete and confidentiality
provisions which will survive beyond the termination of the Employment
Agreement.
Pursuant to an Amended and Restated Stockholders Agreement dated as of
June 15, 2000, by and among the Company, DB Capital Investors, L.P., Sandler
Capital Partners V, L.P., Sandler Internet Partners, L.P., Sandler Co-Investment
Partners, L.P., certain Management Stockholders (of which Auster is one) party
thereto and certain Non-Management Stockholders party thereto (the "Stockholders
Agreement"), the board of directors of the Company will be increased from 9 to
10 directors.
Additionally, the Restricted Shares will be subject to certain
transfer restrictions, however, the 68,446 common shares purchased by Auster
(the "Exempt Auster Shares") will be exempt from such restrictions.
Additionally, the parties to the Stockholders Agreement agree to vote their
shares for directors according to Section 3 of the Stockholders Agreement.
Although Auster is not required to vote the Exempt Auster Shares in this manner,
he is required to do so for so long as he holds the position of President and
CEO of the Company and remains one of the nominees for director of the Company.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) Auster's beneficial ownership of 868,446 shares of Common Stock
constitutes beneficial ownership of 17.34% of the total number of shares of
outstanding Common Stock.
(b) Auster has the shared power to vote, dispose or direct the vote or
disposition of the 868,446 shares of Common Stock.
(c) During the past sixty days, other than the transactions described
herein, Auster has not effected any transactions in shares of Common Stock.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Employment Agreement. Pursuant to the Employment Agreement, on June
15, 2000 (the "Commencement Date"), the Company awarded Auster Eight Hundred
Thousand (800,000) shares of the Company's Common Stock (the "Restricted
Shares"). The first 25% of the Restricted Shares vest on the first anniversary
of the Commencement Date and the remaining 75% will vest in equal ratable
amounts, so that these shares will be fully vested by June 15, 2004. The
Restricted Shares may be fully vested prior to June 15, 2004 if certain events
occur such as a change of control (as defined in the Employment Agreement) and
the termination of Auster for reasons other than Cause or Non-Performance (as
defined in the Employment Agreement). In certain instances the Restricted Shares
are subject to complete or partial forfeiture, such as termination for
Non-Performance. Moreover, the Company has the right to repurchase all unvested
Restricted Shares.
Additionally, pursuant to Section 5 of the Employment Agreement,
Auster purchased, with his personal funds, 68,446 shares of Common Stock of the
Company at a price of $14.61 per share (the "Stock Investment").
Amended and Restated Stockholders Agreement. Pursuant to the
Stockholders Agreement, the parties thereto agreed to certain restrictions on
the transfer of shares, but with certain exceptions including an exception made
for the Exempt Auster Shares purchased by Auster pursuant to the terms of
Section 5 of the Employment Agreement. Additionally, the parties to the
Stockholders Agreement agreed to vote all their securities for an increase in
the size of the Board of Directors from 9 to 10.
Additionally, the parties agreed that with respect to the Exempt
Auster Shares, Auster has no obligation under the Stockholders Agreement, except
that Auster agreed that as long as he remains employed as President and CEO of
the Company and he is designated by the Company as one of its nominees for
director, he will vote such Exempt Auster Shares in favor of the election of
nominees chosen pursuant to the Stockholders Agreement.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following exhibits are filed with this statement:
1. Employment Agreement, dated as of June 15, 2000 between the Company
and Auster.
2. Amended and Restated Stockholders Agreement, dated as of June 13,
2000 by and among the Company, DB Capital Investors, L.P., Sandler Capital
Partners V, L.P., Sandler Internet Partners, L.P., Sandler Co-Investment
Partners, L.P., the Management Stockholders listed on Schedule A thereto and the
Non-Management Stockholders listed on Schedule B thereto.
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SIGNATURE
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After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: June 26, 2000
By:/s/Charles Auster
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Name: Charles Auster
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EXHIBIT INDEX
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Exhibit No. Description
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1. Employment Agreement, dated as of June 15, 2000,
between the Company and Auster.
2. Amended and Restated Stockholders Agreement, dated as
of June 15, 2000, by and among the Company, DB Capital
Investors, L.P., Sandler Capital Partners V, L.P.,
Sandler Internet Partners, L.P., Sandler Co-Investment
Partners, L.P., the Management Stockholders listed on
Schedule A thereto and the Non-Management Stockholders
listed on Schedule B thereto.
