SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 2)
ESC Medical Systems Ltd.
(Name of Issuer)
Ordinary Shares, NIS 0.10 par value per share
(Title of Class of Securities)
M40868107
(CUSIP Number)
Barnard J. Gottstein
Carr-Gottstein Properties
550 West 77th Avenue, Suite 1540
Anchorage, Alaska 99501
(907) 278-2277
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
with a copy to:
Joseph J. Giunta, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071-3144
(213) 687-5000
March 9, 1999
(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 that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box: ---
/ /
CUSIP No. M40868107 13D
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(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Barnard J. Gottstein, as trustee of the Barnard J. Gottstein Revocable
Trust
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
___
(a) / /
(b) /X /
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS*
PF, OO
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) ___
/X /
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
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: (7) SOLE VOTING POWER
: 1,932,134 shares held by
: the Barnard J. Gottstein
: Revocable Trust, for which
: Barnard J. Gottstein serves
: as Trustee.
:-----------------------------------------
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING POWER
OWNED BY EACH REPORTING : 0
PERSON WITH :-----------------------------------------
: (9) SOLE DISPOSITIVE POWER
: 1,932,134 shares heldby
: the Barnard J. Gottstein
: Revocable Trust, for which
: Barnard J. Gottstein serves
: as Trustee.
:-----------------------------------------
:(10) SHARED DISPOSITIVE POWER
: 0
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,932,134 shares held by the Barnard J. Gottstein Revocable Trust, for
which Barnard J. Gottstein serves as Trustee.
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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)
6.72%
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(14) TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT
CUSIP No. M40868107 13D
-----------------------------------------------------------------------------
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Barnard J. Gottstein Revocable Trust
-----------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
___
(a)/ /
(b)/X /
-----------------------------------------------------------------------------
(3) SEC USE ONLY
-----------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
PF, OO
----------------------------------------------------------------------------
(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
Washington
-----------------------------------------------------------------------------
: (7) SOLE VOTING POWER
: 1,932,134 shares held by
: the Barnard J. Gottstein
: Revocable Trust, for which
: Barnard J. Gottstein serves
: as Trustee.
:------------------------------------------
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING POWER
OWNED BY EACH REPORTING : 0
PERSON WITH :------------------------------------------
: (9) SOLE DISPOSITIVE POWER
: 1,932,134 shares held by
: the Barnard J. Gottstein
: Revocable Trust, for which
: Barnard J. Gottstein serves
: as Trustee.
:------------------------------------------
:(10) SHARED DISPOSITIVE POWER
: 0
-----------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,932,134 shares held by the Barnard J. Gottstein Revocable Trust, for
which Barnard J. Gottstein serves as Trustee.
-----------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* / /
-----------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.72%
-----------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
OO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. M40868107 13D
-----------------------------------------------------------------------------
(1) NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Barnard J. Gottstein
-----------------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
___
(a)/ /
(b)/X /
-----------------------------------------------------------------------------
(3) SEC USE ONLY
-----------------------------------------------------------------------------
(4) SOURCE OF FUNDS*
PF, OO
-----------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) ___
/ X /
-----------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES
-----------------------------------------------------------------------------
: (7) SOLE VOTING POWER
: 1,932,134 shares held by
: the Barnard J. Gottstein
: Revocable Trust, for which
: Barnard J. Gottstein serves
: as Trustee.
:-----------------------------------------
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING POWER
OWNED BY EACH REPORTING : 0
PERSON WITH :-----------------------------------------
: (9) SOLE DISPOSITIVE POWER
: 1,932,134 shares held by
: the Barnard J. Gottstein
: Revocable Trust, for which
: Barnard J. Gottstein serves
: as Trustee.
:------------------------------------------
:(10) SHARED DISPOSITIVE POWER
: 0
-----------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,932,134 shares held by the Barnard J. Gottstein Revocable Trust, for
which Barnard J. Gottstein serves as Trustee.
-----------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* / /
-----------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.72%
-----------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. M40868107 13D
This Amendment No. 2 (the "Amendment") amends the Statement on
Schedule 13D, dated September 29, 1998, as amended by Amendment No. 1,
dated January 15, 1999 (the "Original Schedule 13D"), relating to the
Shares (as defined under Item 1 below) of the Company (as defined under
Item 1 below). Each of the Barnard J. Gottstein Revocable Trust, Barnard
J. Gottstein, as trustee of the Barnard J. Gottstein Revocable Trust, and
Barnard J. Gottstein, as an individual (collectively, the "Reporting
Persons"), are filing this Amendment to reflect, among other things, a
change in the Reporting Persons' purposes and intentions with respect to
the Shares, and to update the information with respect to the Reporting
Persons' ownership of the Shares. Mr. Gottstein has reached an
understanding with Mr. Arie Genger (who has previously filed his own
Schedule 13D along with TPR Investment Associates, Inc., Trans-Resources,
Inc., Haifa Chemicals Ltd. and Haifa Chemicals Holdings Ltd. (all of which
are directly or indirectly controlled by Mr. Genger, being collectively
called the "TRI Entities")) to work together to achieve certain of these
purposes, with the result that the Reporting Persons may be deemed to have
formed a "group" with the TRI Entities. The Reporting Persons expressly
disclaim any such "group" membership between the Reporting Persons and the
TRI Entities.
Item 1. Security and issuer.
Item 1 of the Original Schedule 13D is hereby amended and restated
as follows:
This Statement on Schedule 13D relates to the Ordinary Shares,
par value NIS 0.10 per share (the "Shares"), of ESC Medical Systems Ltd.,
an Israeli corporation (the "Company"). The principal executive offices of
the Company are located at P.O. Box 240, Yokneam Industrial Park, Yokneam,
Israel 20692.
Item 2. Identity and Background.
Item 2 of the Original Schedule 13D is hereby amended and
supplemented as follows:
On March 9, 1999, Mr. Gottstein and Mr. Genger reached an
understanding to cooperate with each other in attempting to achieve a
change in the composition of the Company's Board of Directors, which they
believe is necessary in order for the Company to grow and prosper (as more
fully described in Item 4 hereof). Notwithstanding this cooperation on
certain strategic objectives, the Reporting Persons and the TRI Entities
each retain complete, independent economic control over their respective
investments in the Shares, and have not signed any agreement regarding
voting or disposition of their Shares. Nevertheless, the Reporting Persons
may be deemed to have become members of a "group" with the TRI Entities,
although the Reporting Persons disclaim any such "group" membership with
the TRI Entities or any beneficial ownership of the TRI Entities' Shares.
Pursuant to Rule 13d-1(f)(2), the Reporting Persons and the TRI Entities
will each continue to make their own filings on Schedule 13D (and
amendments thereto) with respect to the Shares, rather than a single joint
filing.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Original Schedule 13D is hereby amended and
supplemented as follows:
The 215,000 Shares acquired between January 19, 1999 and February
23, 1999 were acquired for approximately $1,340,781 through the use of
personal funds of Barnard J. Gottstein.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 of the Original Schedule 13D is hereby amended as follows:
As disclosed in the Original Schedule 13D, the Reporting Persons had
acquired the Shares which were reflected in the Original Schedule 13D for
investment purposes. After the filing of the Original Schedule 13D and as
reflected in several of the Company's public announcements, the Company
continued to experience disappointing performance. During January and
February 1999, the market price of the Shares declined to new lows.
On or about February 26, 1999, Mr. Gottstein's counsel made a
telephone call to Mr. Genger, inquiring whether, in light of the erosion
in the Company's shareholder value, Mr. Gottstein and Mr. Genger, as
significant shareholders, might wish to discuss their investments in the
Company. On March 4, 1999, Mr. Gottstein and Mr. Genger participated in
preliminary telephone conferences, and on March 6, 1999, met in Anchorage,
Alaska. Mr. Gottstein and Mr. Genger explored the possibility of working
together to affect the policies of the Company in order to reverse its
recent setbacks and begin restoring its long-term potential value. After
reviewing their impressions of the March 6 meeting with their respective
counsel, on March 9, 1999, Mr. Gottstein and Mr. Genger reached an
understanding to cooperate in encouraging the Company to take certain
actions which Mr. Gottstein and Mr. Genger believe are necessary in order
for the Company to grow and prosper as an independent public company;
formulated a strategic proposal which they determined to promptly
communicate to the Company's Board of Directors; and considered possible
further action if their proposal was not acted upon by the Company's Board
of Directors. On March 11, 1999, Mr. Gottstein and Mr. Genger sent a joint
letter (the "Letter"), a copy of which is annexed hereto as Exhibit 1, to
each of the Company's directors (addressed to the Company's Chairman of
the Board and Chief Executive Officer (the "Chairman")), setting forth Mr.
Gottstein's and Mr. Genger's proposal. The Letter stated, among other
things, that Mr. Gottstein and Mr. Genger believed that the composition of
the Company's Board of Directors needed to be restructured to include
capable individuals who have established themselves in the business and/or
scientific community; that such action would instill a new sense of
direction and give credibility to the Company's plans and prospects; and
that the newly restructured Board would provide a valuable resource to
management to help rebuild the profitability of the Company and restore
shareholder value which had been significantly eroded over the past
several months.
Specifically, the Letter proposed that rather than simply expanding
the Board to include new members (which could make the size of the Board
unwieldy), the two management directors, other than the Chairman, together
with one non-management director (other than the representative of
Trans-Resources, Inc.), be replaced with four new directors to be
identified by Mr. Gottstein and Mr. Genger. After this restructuring, a
majority of the Company's' Board would be unaffiliated with either
management or Mr. Gottstein and Mr. Genger.
The further possible action being considered by Mr. Gottstein and
Mr. Genger, if the proposal set forth in the Letter is not favorably acted
upon by the Company's Board, reflects the fact that, as holders,
collectively, of more than 10% of the paid up share capital of the Company,
Mr. Gottstein and Mr. Genger would have the right to require that the
Company's Board convene an extraordinary general meeting of the Company's
shareholders in accordance with Section 109 of the Israel Companies
Ordinance in order to effectuate the changes that Mr. Gottstein and Mr.
Genger are asking the Board (by the Letter) to voluntarily take.
As substantial shareholders of the Company and in light of the
Company's disappointing recent performance, in addition to the strategic
initiative with Mr. Genger reflected in the Letter, the Reporting Persons
may otherwise become more active in attempting to affect the policies of
the Company, with or without the cooperation of Mr. Genger and possibly
with the cooperation of as yet uncontacted shareholders other than Mr.
Genger in order that the long-term potential value of the Company be
realized; and the Reporting Persons may buy more Shares depending upon
market conditions and other factors described below.
Subject to applicable legal requirements and the factors referred to
below, the Reporting Persons may purchase additional Shares from time to
time in open market or privately negotiated transactions. In determining
whether to purchase additional Shares, the Reporting Persons intend to
consider various factors, including, without limitation, the following:
the availability of Shares for purchase at particular price levels; the
business and prospects of the Company; the businesses and prospects of the
Reporting Persons; other business and investment opportunities available to
the Reporting Persons; economic conditions; stock market and money market
conditions; and other plans and requirements of the Reporting Persons. In
addition, depending upon, among other things, the matters referred to
above, subject to applicable legal requirements the Reporting Persons may
determine to dispose of all or a portion of their Shares.
Other than as described above, the Reporting Persons do not have any
present plans or proposals which relate to or would result in (although
they reserve the right to develop such plans or proposals) any transaction,
change or event specified in clauses (a) through (j) of Item 4 of the form
of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 of the Original Schedule 13D is hereby amended as follows:
(a) The Reporting Persons own 1,932,134 Shares in the aggregate.
The percentage of the class of such Shares beneficially owned by the
Reporting Persons is 6.72%. The percentage is based upon a total of
28,764,093 Shares outstanding, as reported on the cover page of the
Company's Form 20-F, dated May 27, 1998, for the fiscal year ended December
31, 1997.
(c) Each of the Reporting Persons effected the following open
market purchases of Shares during the past 60 days:
Amount of
Date of Securities Price
Transaction Involved per Share
----------- ---------- ---------
01/19/99 12,500 $7.3750
01/19/99 12,500 $7.3125
01/27/99 15,000 $6.2500
01/28/99 35,000 $6.2500
01/28/99 5,000 $6.1875
01/29/99 10,000 $6.2500
01/29/99 10,000 $6.1875
02/01/99 15,000 $6.1875
02/01/99 10,000 $6.2500
02/02/99 15,000 $6.1875
02/02/99 10,000 $6.2500
02/03/99 10,000 $6.2500
02/03/99 10,000 $6.2500
02/04/99 15,000 $6.2500
02/23/99 10,000 $5.2500
02/23/99 20,000 $5.3750
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 of the Original Schedule 13D is hereby amended as follows:
Except to the extent described in Item 2, Item 4 and in this Item 6,
there are no contracts, arrangements, understandings or relationships
(legal or otherwise) among the Reporting Persons and between any of such
Reporting Persons and any other person with respect to any securities of
the Company (including, but not limited to, any contract, arrangement,
understanding or relationship involving the transfer or voting of any
securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of profits, divisions of profits or loss, or
the giving or withholding of proxies), although the Reporting Persons
reserve the right to develop such in the future.
The Reporting Persons and the TRI Entities have agreed to share
in proportion to their respective ownership of Shares the costs and
expenses in connection with the actions which may be taken by them in
furtherance of the objectives described in Item 4 above and are
considering the retention of, among others, a professional proxy
solicitation firm to assist in the achievement of their common objectives
described in Item 4, whose expenses would be similarly shared.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 of the Original Schedule 13D is hereby amended to add the
following exhibit:
Exhibit 1: Letter, dated March 11, 1999, from Mr. Gottstein and
Mr. Genger to the Board of Directors of the Company
SIGNATURE
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: March 11, 1999
/s/ Barnard J. Gottstein
--------------------------------------
Barnard J. Gottstein
Individually and as Trustee of the Barnard
J. Gottstein Revocable Trust
BARNARD J. GOTTSTEIN REVOCABLE TRUST
/s/ Barnard J. Gottstein
---------------------------------------
Barnard J. Gottstein
Trustee
Exhibit 1
March 11, 1999
Dr. Shimon Eckhouse
Chairman of the Board of Directors,
President and Chief Executive Officer
ESC Medical Systems Ltd.
P.O. Box 240
Yokneam Industrial Park
Yokneam, Israel 20692
Dear Shimon:
We are writing to you in our capacity as holders of more than 10%
of the paid up share capital of ESC Medical Systems Ltd. (the "Company").
We are long-term investors in the Company who recognize the long-term
potential value of the Company. Unfortunately, the marketplace has failed
to recognize that value. This is attributable in part, we believe, to the
lack of expertise necessary to give investors confidence that the Company's
prospects can be realized. We believe that certain action must be taken by
the Company in order for it to grow and prosper as an independent public
company in the future.
Specifically, we believe that the composition of the Board of
Directors needs to be restructured to include capable individuals who have
established themselves in the business and/or scientific community. We are
convinced that such action would instill a new sense of direction into the
Company and give much needed credibility to the Company's plans and
prospects. The newly restructured Board will provide a valuable resource
to management to help rebuild the profitability of the Company and restore
shareholder value which has been significantly eroded over the past several
months.
Rather than simply expanding the Board to include such new
members (which could make the size of the Board unwieldy), we propose
replacing two management directors, other than you, together with one non-
management director (other than the representative of Trans-Resources,
Inc.), with four new directors to be identified by us. It is our intent
that after such restructuring a majority of the Board would be unaffiliated
with either management or ourselves.
Time is of the essence. We urge the Board to discuss this matter
at the earliest possible time. We believe this course of action is in the
best interest of all shareholders. We sincerely hope that we can resolve
this matter in a prompt and constructive manner and request that you
respond to us as soon as possible, but no later than March 22, 1999.
We look forward to your reply.
Very truly yours,
/s/ Arie Genger
------------------
Arie Genger
/s/ Barnard J. Gottstein
--------------------------
Barnard J. Gottstein
cc: Board of Directors
of ESC Medical Systems Ltd.
