CUSIP No. M40868107 13D
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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. 5)
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
April 14, 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:
/ /
This Amendment No. 5 (the "Amendment") amends and supplements the
Statement on Schedule 13D, dated September 29, 1998, as amended by
Amendment No. 1, dated January 15, 1999, Amendment No. 2, dated March 9,
1999, Amendment No. 3, dated March 22, 1999, and Amendment No. 4, dated
March 24, 1999 (the "Original Schedule 13D"), relating to the Ordinary
Shares, par value NIS 0.10 per share (the "Shares"), of ESC Medical Systems
Ltd., an Israeli corporation (the "Company"). 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
update the information with respect to the Reporting Persons' purposes and
intentions with respect to the Shares.
Item 4. Purpose of Transaction.
Item 4 of the Original Schedule 13D is hereby amended and
supplemented as follows:
On April 14, 1999, Messrs. Genger and Gottstein commenced
mailing solicitation materials to ADP and to shareholders of the Company
for the purposes set forth in such solicitation materials attached as
Exhibit 6, Exhibit 7 and Exhibit 8, all of which are incorporated by
reference herein. On April 15, 1999, the legal representative of Messrs.
Genger and Gottstein intends to send a letter addressed to each of the
Company's directors demanding that the Company convene an Extraordinary
GeneralMeeting pursuant to the Company's Articles of Association for the
purposes set forth in such solicitation materials. A copy of the form of
demand letter is attached hereto as Exhibit 9.
Messrs. Genger and Gottstein intend to continue to have
discussions with other shareholders of the Company regarding
their proposal and to seek shareholder support.
Other than as described above and as previously described in the
Original Schedule 13D, 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 7. Material to be Filed as Exhibits.
Item 7 of the Original Schedule 13D is hereby amended to add the
following exhibits:
Exhibit 6: Letter, dated April 12, 1999, from Messrs.
Genger and Gottstein to the shareholders of
the Company
Exhibit 7: Form of Revocable Proxy and Instrument of
Appointment
Exhibit 8: Proxy Information Statement
Exhibit 9: Form of Demand Letter, dated April 15, 1999,
from the legal representative of Messrs.
Genger and Gottstein to the 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: April 14, 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 INDEX
Exhibit
Number Title Page
------- ----- ----
6 Letter, dated April 12, 1999, 6
from Messrs. Genger and
Gottstein to the shareholders
of the Company
7 Form of Revocable Proxy and 12
Instrument of Appointment
8 Proxy Information Statement 15
9 Form of Demand Letter, dated 22
April 15, 1999, from the legal
representative of Messrs.
Genger and Gottstein to the
directors of the Company
Exhibit 6
Open Letter to Shareholders of
ESC Medical Systems Ltd. (the "Company")
April 12, 1999
IT'S TIME FOR A CHANGE
Dear Fellow ESC Shareholder:
As two of the largest shareholders of your Company and ours,
we are writing to request your support for what we believe is a much-needed
change in the direction and management of the Company. As successful
businessmen with over sixty years of collective experience with public and
private companies (please refer to the enclosed Proxy Information Statement
for a summary of our background), we have watched with amazement as the
market value of the Company has decreased from approximately $940(1) million
at the end of the second quarter of 1998 to approximately $198(2) million on
March 25, 1999.
In fact, the Company's stock price has fallen from a high of
$46.50 on June 14, 1996, to a low of $4.75 as recently as February 24,
1999, a decline of over $41.00 per share. Even more disturbing is that
during the past three quarters, earnings per share have plummeted from
$0.48(3) to $0.05(4). Such a precipitous decline in the market value of the
Company and its performance without public warning or explanation from
management until just prior to its end of the relevant period has led
certain members of the financial community to express overt concern that
management is not credible. For example, Donaldson Lufkin & Jenrette's
research report, dated October 21, 1998, states, "Indeed, institutional
sponsorship [of ESC] appears to be almost non-existent at this juncture
given management's lack of credibility after the Q3 mishap." And, to our
knowledge, after the third quarter earnings announcement, ESC's stock was
downgraded or coverage was discontinued by most, if not all, major
investment banks.
Accordingly, we have concluded that the Company lacks the
professional expertise and the appropriate oversight by a board of
directors that a public company of its size and potential requires. During
the past months, we have had numerous conversations with management and
members of the Board with regard to ways to improve management and the
Board in order to restore credibility and shareholder value. On almost
every occasion that we have discussed these matters, we have been assured
that needed changes would be forthcoming. In fact, our representative on
the Board, Tom Hardy, the president and chief operating officer of
Trans-Resources, Inc. and former principal of McKinsey & Co. (a well-known
international management consulting firm), sent a letter several months ago
to Shimon Eckhouse, the chief executive officer of the Company, detailing
these and other concerns. He recommended a course of action to address
these issues. The letter, however, was apparently to no avail.
Even after a majority of outside directors indicated their
desire to pursue certain corrective actions, these changes were never
implemented. For example, it was agreed that an executive committee would
be established, with Mr. Hardy as chairman, to more effectively monitor
management and revitalize the Board's supervisory role. However, such a
committee has never been formed.
In addition, management has taken actions, which in our
experience are normally reserved for the Board, without its prior approval.
For example, management issued a press release stating that the Company had
determined to retain a financial advisor to assist the Board in studying
strategic alternatives and to enhance shareholder value. When Mr. Hardy, in
his role as a director of ESC asked to see a copy of the engagement letter
or to get an explanation of its scope, purpose, and cost, he was advised
that that information was not yet available for Board review.
While we, like all other shareholders, would like to
maximize shareholder value, we believe that certain decisions should be
made only after full consideration and review by the Board of Directors. We
do not believe that a board of directors exists simply in order to give
after-the-fact-rubber stamps to management's wishes. Management's
unilateral actions and the Board's non-reaction provide further evidence to
us of the existing directors' inability to act independently of management.
Such actions taken and such statements made by management on
behalf of the Company only serve to reinforce our view that fundamental
changes are needed. This can only begin with the restructuring of the Board
of Directors of the Company so that it will properly monitor management's
conduct. Specifically, we propose adding truly independent representatives
who are in no way beholden to management. Indeed, we believe a new board
should have as one of its first agenda items the question of whether
changes and/or additions to management are necessary or desirable. In our
opinion, such review should include consideration of the need for a change
of the chief executive officer. We are concerned that the present Board may
be unwilling to consider such a change at a time when we believe a truly
independent Board would give such a course of action serious thought. We
are not necessarily recommending removal of Dr. Eckhouse from any role in
the Company. Rather, we seek a truly independent Board of Directors to make
an honest and objective evaluation of the strengths and weaknesses of
current management and to end what we perceive as one-man rule of the
Company.
Perhaps as a result of our actions, the Company has
indicated that it may be willing to add directors and is retaining a search
firm at considerable expense to find them. Clearly this effort, if serious,
is too little, too late. A new board which consists of a majority of the
present directors or their nominees would not in our judgment represent a
significant improvement. Also, while management and the Board have both
recognized the need for a chief operating officer and have indicated that
they would actively seek to install one, that assurance can also be counted
as another unfulfilled promise. Moreover, even if a chief operating officer
were recruited, we question whether that person would be vested with any
real authority. That is why we are recommending that a majority of
independent directors named by shareholders rather than by the current
Board or management be put in place to address these and other critical
issues facing the Company.
The time for change has come and is perhaps long overdue. We
believe the individuals we have proposed as new directors will enable the
Company to benefit from the level of professionalism and proper corporate
governance expected of a public company, both of which are essential for
the Company's future success. Also, we believe that, if appropriate, a
restructured Board could better pursue strategic alternatives. If it did,
maximizing shareholder value, rather than entrenching the present Board
and/or management, would be the driving force behind their decision-making
process. We feel strongly that the individuals we have proposed bring
together the necessary experience, dedication and impeccable credentials
for the task at hand.
Our intention is not to acquire control of the Company.
Rather, we, like you, want to see the value of our investment in the
Company restored and its growth and development potential materialize.
We would challenge anyone to claim that the proposed
nominees are not independent. With their expertise and diverse backgrounds,
we are confident that an honest evaluation of management's strengths and
weaknesses can be undertaken, and that the Company's credibility can be
restored. Without the replacement of the current Board, however, we have
little confidence that the needed changes to increase profitability and
restore credibility can occur. Promises have been made too many times and
not kept for us to have any confidence that the current Board and
management can solve the problems at hand.
Pursuant to Section 109 of the Israel Companies Ordinance,
we, as shareholders with an interest in excess of 15% of the Company's
ordinary shares currently outstanding, have the right to require an
extraordinary general meeting of shareholders which must then be held
between 7 and 21 days after our formal request. It is our intention to make
such a request shortly. Accordingly, we are soliciting your proxy to vote
at this extraordinary general meeting for the purpose of replacing all
current directors other than Shimon Eckhouse and Tom Hardy with six
nominees identified in the enclosed Proxy Information Statement. As stated
above, we believe the individuals we have proposed to constitute the
restructured Board include prominent, highly qualified individuals in the
business community in the United States and Israel. The enclosed Proxy
Information Statement summarizes their experience.
We hope we can count on your support. If you wish to support
our efforts, please execute the enclosed proxy, and please return it in the
accompanying self-addressed, postage-paid envelope at your earliest
convenience.
We thank you for your consideration.
Sincerely,
/s/ Barnard J. Gottstein /s/ Arie Genger
Any questions or requests for assistance or additional copies of
this Open Letter to Shareholders, the Revocable Proxy and Instrument of
Appointment, the Proxy Information Statement and any other related
materials may be directed to the Information Agent at the address and
telephone number set forth below. Shareholders may also contact their
broker, dealer, commercial bank, trust company or other nominee for
assistance concerning Mr. Genger's and Mr. Gottstein's proposal (the
"Proposal").
The Information Agent for the Proposal is:
MacKenzie
Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll-free: (800) 322-2885
ENDNOTES
1. Reflects a closing price of $33.75 and approximately 27.8 million
shares outstanding (represents the weighted average number of
shares outstanding during the quarter ended June 30, 1998
(diluted)) on June 30, 1998.
2. Reflects a closing price of $7.25 and approximately 27.3 million
shares outstanding on March 25, 1999 (based upon the list of
shareholders provided to us by the Company, dated March 25, 1999).
This closing price includes a significant increase following our
letter requesting a change in the Board of Directors.
3. For the quarter ended June 30, 1998 (represents EPS (diluted) from
operating income, excluding merger expenses).
4. For the quarter ended December 31, 1998 (represents EPS (diluted)
from operating income, excluding merger expenses and R&D in process
write-off).
Exhibit 7
THIS PROXY IS SOLICITED ON BEHALF OF
ARIE GENGER AND BARNARD J. GOTTSTEIN
ESC MEDICAL SYSTEMS LTD.
REVOCABLE PROXY
The undersigned shareholder of ESC MEDICAL SYSTEMS LTD., an
Israeli corporation (the "Company"), hereby appoints Michael Zellermayer
and Yoram Ashery (of Zellermayer & Pelossof, Advocates, Tel Aviv, Israel),
or either of them, as proxies for the undersigned, each with full power of
substitution to act at any Extraordinary General Meeting (as such term is
defined under Section 109 of the Israel Companies Ordinance) of the Company
and at any adjournment(s) or postponement(s) thereof called for the purpose
of removing any or all of the then-current directors from the Board of
Directors of the Company (the "Board") (other than Thomas Hardy and Shimon
Eckhouse) and electing the nominees set forth below to the Board, and for
the purpose of electing any additional nominees selected by Mr. Zellermayer
and/or Mr. Ashery (up to a maximum number of six additional nominees) to
fill any and all vacancies created by the then-current Board from the date
hereof through the date of any such Extraordinary General Meeting, and to
transact such other business as may properly come before such Meeting or
any adjournment(s) or postponement(s) thereof. The undersigned further
agrees that, at any such Extraordinary General Meeting and at any
adjournment(s) or postponement(s) thereof, Mr. Zellermayer and Mr. Ashery
shall be entitled to cast on behalf of the undersigned all votes that the
undersigned is entitled to cast at such Extraordinary General Meeting and
otherwise to represent the undersigned at the Extraordinary General
Meeting, with the same effect as if the undersigned were present. The
undersigned hereby revokes any proxy previously given with respect to such
shares for such Meeting. This proxy will be voted FOR proposal 1 and
proposal 2 set forth as follows, and, in the event that any matters
properly come before such Meeting, it is the intention of Mr. Zellermayer
and Mr. Ashery to vote such proxies in accordance with their, or either of
their, discretionary authority to act in their, or either of their, best
judgment:
1. To remove all directors of the Board of Directors of the Company
(other than Thomas Hardy and Shimon Eckhouse) and to elect the
following six directors to serve until the next annual general
meeting and until their successors are duly elected and qualify.
Nominees: Aharon Dovrat, Philip Friedman, Darrell S. Rigel,
M.D., S.A. Spencer, Mark H. Tabak and Professor Zehev
Tadmor.
2. To elect any other director nominated by Mr. Zellermayer and/or Mr.
Ashery (up to a maximum number of six additional directors) to fill
any and all vacancies created by the then-current Board from the
date hereof through the date of any such Extraordinary General
Meeting.
3. To transact such other business as may properly come before the
Meeting or any adjournment(s) or postponement(s) thereof.
The undersigned may revoke his or her instrument appointing
a proxy at any time before voting by filing a notice of revocation with Mr.
Zellermayer or Mr. Ashery, by filing a later dated instrument appointing a
proxy with Mr. Zellermayer or Mr. Ashery or by voting in person at the
Extraordinary General Meeting. This proxy will be revoked automatically if
the Extraordinary General Meeting for which this proxy is being executed
has not been held within 120 days from the date hereof.
In furtherance of this proxy, the undersigned is executing
an Instrument of Appointment in accordance with Section 33 of the Articles
of Association of the Company.
Signature ________________________
Signature if held jointly ____________________________
Dated ______________________ 1999.
Please sign exactly as your name appears hereon and date. If the shares are
held jointly, each holder should sign. When signing as an attorney,
executor, administrator, trustee, guardian or as an officer, signing for a
corporation or other entity, please give full title under signature.
SOLICITED ON BEHALF OF ARIE GENGER AND BARNARD J. GOTTSTEIN
ESC MEDICAL SYSTEMS LTD.
INSTRUMENT OF APPOINTMENT
I __________________________ of _________________________________
(Name of Shareholder) (Address of Shareholder)
being a member of ESC Medical Systems Ltd. hereby appoint Michael
Zellermayer and Yoram Ashery of Zellermayer & Pelossof Advocates, Europe
House, 37 King Shaul Boulevard, Tel-Aviv, Israel 64928, or either of them,
as my proxy to vote for me and on my behalf, each with full power of
substitution to act at the Extraordinary General Meeting of the Company to
be held on a date to be specified by the Company or Messrs. Genger and
Gottstein, and at any adjournment(s) or postponement(s) thereof.
This Instrument of Appointment may be revoked at any time before
voting by filing a notice of revocation with Mr. Zellermayer and/or Mr.
Ashery, by filing a later dated Instrument of Appointment with Mr.
Zellermayer and/or Mr. Ashery or by voting in person at the Extraordinary
General Meeting.
Signed this _____ day of ____________________, 1999.
__________________________________________________________________________
(Signature of Appointer)
Exhibit 8
PROXY INFORMATION STATEMENT
This Proxy Information Statement is being furnished by Mr. Arie
Genger and Mr. Barnard J. Gottstein to the shareholders of ESC Medical
Systems Ltd., an Israeli corporation (the "Company"), in connection with
the solicitation of proxies in the form enclosed herewith for use at the
Extraordinary General Meeting (as such term is defined under the Company's
Articles of Association) of the Company (the "Meeting") to be called for
the purposes of (i) removing any or all of the then-current directors from
the Board of Directors of the Company (the "Board") (other than Mr. Thomas
Hardy and Dr. Shimon Eckhouse) and electing the nominees set forth below
under the Section "Proxy Information Statement Concerning the Nominees to
the Board of Directors of the Company," (ii) electing any additional
nominees (up to a maximum number of six additional nominees) selected by
the individuals to be appointed as proxies, Mr. Michael Zellermayer and/or
Mr. Yoram Ashery (of Zellermayer & Pelossof, Advocates, Tel Aviv, Israel),
or either of them, to fill any and all vacancies created by the
then-current Board from the date hereof through the date of any such
Meeting and (iii) transacting such other business that may properly come
before the Meeting or any adjournment(s) or postponement(s) thereof. This
Proxy Information Statement should be read in conjunction with the
accompanying materials, all of which is incorporated by reference herein.
Holders of record of the Ordinary Shares of the Company (the
"Ordinary Shares") as of the close of business on the record date (to be
set by the Company) are entitled to receive notice of, and to vote at, the
Meeting. Pursuant to the Company's Articles of Association, the holders of
a majority of the voting power represented at a General Meeting in person
or by proxy and voting thereon at such Meeting shall be entitled to remove
any director(s) from office, to elect directors instead of directors so
removed or to fill any vacancy, however created, in the Board of Directors.
Shares represented by proxies in the form enclosed, if the proxies
are properly executed and returned and not revoked, will be voted as
specified. When no specification is made on a properly executed and
returned proxy, the shares will be voted FOR the removal of all directors
of the Board of Directors of the Company (other than Thomas Hardy and
Shimon Eckhouse) and FOR the election of all of the nominees for directors
listed below under the Section "Proxy Information Statement Concerning the
Nominees to the Board of Directors of the Company" and, if applicable, FOR
the election of any other director nominated by Mr. Zellermayer and/or Mr.
Ashery (up to a maximum number of six additional directors) to fill any and
all vacancies created by any new directorships added to the current Board
from the date hereof through the date of any such Meeting (thereby avoiding
the possibility of management's disfranchising shareholders by increasing
the number of directors and filling vacancies with management's nominees).
Neither Mr. Zellermayer nor Mr. Ashery has been informed of any matters to
come before the Meeting other than the matters referred to in this Proxy
Information Statement. If, however, any matters properly come before the
Meeting, it is the intention of each of Mr. Zellermayer and Mr. Ashery to
vote such proxies in accordance with their, or either of their,
discretionary authority to act in their, or either of their, best judgment.
To be voted, proxies must be filed with Mr. Zellermayer or Mr. Ashery prior
to voting through a proxy solicitation service or otherwise. Proxies may be
revoked before voting by filing a notice of revocation with Mr. Zellermayer
or Mr. Ashery, by filing a later dated instrument appointing a proxy with
Mr. Zellermayer or Mr. Ashery or by voting in person at the Meeting. In
addition, a proxy will be revoked automatically if the Meeting for which
such proxy is being executed has not been held within 120 days from the
date on which such proxy is executed.
Your vote is important. Please complete, date, sign and return the
enclosed proxy and Instrument of Appointment as promptly as possible in
order to ensure your representation at the Meeting. A return envelope
(which is postage-prepaid) is enclosed for that purpose. Even if you have
given your proxy and Instrument of Appointment, you may still vote in
person if you attend the Meeting. Please note, however, that if your shares
are held of record by a broker, bank or other nominee and you wish to vote
at the Meeting, you must obtain from the record holder a proxy issued in
your name.
PROXY INFORMATION STATEMENT CONCERNING
THE NOMINEES TO THE BOARD OF DIRECTORS OF THE COMPANY
The nominees for membership on the Board, named in the table below,
have furnished to Mr. Genger and Mr. Gottstein the following information
concerning their principal occupations, business addresses and other
matters. The nominees are Aharon Dovrat, Philip Friedman, Darrell S. Rigel,
M.D., S.A. Spencer, Mark H. Tabak and Professor Zehev Tadmor (collectively,
the "Nominees"). Other than Mr. Dovrat, all of the nominees are United
States citizens or residents and, as a result, the Company may become
subject to the U.S. securities laws in the same manner as U.S. companies.
Except as disclosed herein, (a) none of the Nominees has ever served as an
officer, director or employee of the Company, and (b) there are no
arrangements or understandings between any Nominee and any other person
pursuant to which he was selected as a Nominee or director of the Company.
Biographical Information
Aharon Dovrat. Mr. Dovrat, age 67, is the founder and chairman of
Dovrat & Company, Ltd., a privately-held investment company, and the
founder and chairman of Isal, Ltd., a publicly-traded investment company,
since their inception in January 1999. Between 1991 and December 1998, Mr.
Dovrat served as chairman of Dovrat, Shrem & Company, Ltd., a company
publicly traded on the Tel-Aviv Stock Exchange that divides its operations
into the areas of investment banking and direct investment funds
management, underwriting, securities and brokerage services, real estate
and industry. Between 1965 and 1991, Mr. Dovrat served as president and
chief executive officer of Clal (Israel) Ltd., a holding company which, by
1991, had become Israel's largest independent conglomerate, with capital of
over $400 million and aggregate annual sales in excess of $2.5 billion. Mr.
Dovrat serves as a member of the board of directors of OSHAP Technologies
Ltd., a software company, of Technomatix Technologies Ltd., a software
company, and of Delta Galil Ltd., a textile company. Mr. Dovrat's address
is c/o Dovrat & Company, Ltd., 37 Shaul Hamelech Boulevard, Tel Aviv,
Israel 64928.
Philip Friedman. Mr. Friedman, age 50, is the founder, president
and chief executive officer of Computer Generated Solutions, Inc., a
privately-held company founded by Mr. Friedman in 1984 that specializes in
providing comprehensive computer technology and business solutions to
companies across the globe in a wide variety of industries. Mr. Friedman's
address is c/o Computer Generated Solutions, Inc., 1675 Broadway, New York,
New York 10019.
Darrell S. Rigel, M.D. Dr. Rigel, age 48, has been a faculty member
at New York University Medical School ("NYU") since 1979, and is currently
a physician and Clinical Professor of Dermatology at NYU, and is also an
Adjunct Professor of Dermatology at Mt. Sinai School of Medicine in New
York City. In 1996, Dr. Rigel founded Interactive Horizons, Inc., a
privately-held company in the industry of interactive computer systems for
which Dr. Rigel serves as its president. Dr. Rigel's address is 35 East
35th Street, #208, New York, New York 10016.
S.A. Spencer. Mr. Spencer, age 67, is the founder, chief executive
officer and principal investor of Holding Capital Group, LLC, a private
LBO, MBO, venture capital and investment firm founded by Mr. Spencer in
1976. Mr. Spencer serves as a member of the board of directors of
Trans-Resources, Inc., a company founded by Mr. Arie Genger. Mr. Spencer's
address is c/o Holding Capital Group, LLC, 104 Crandon Boulevard, Suite
419, Key Biscayne, Florida 33149.
Mark H. Tabak. Mr. Tabak, age 49, is the founder, president and
chief executive officer of International Managed Care Advisors, LLC, a
company Mr. Tabak founded in 1996 that invests in and develops managed
care-type delivery systems addressing mainly primary care needs in Latin
America, Western and Central Europe and Asia, among other regions. Mr.
Tabak is also presently affiliated with Capital Z Partners, a $3 billion
fund focusing on investing in healthcare, insurance and financial services.
Between 1993 and July 1996, Mr. Tabak served as president of AIG Managed
Care, Inc., a subsidiary of American International Group. Between 1990 and
1993, Mr. Tabak served as president and chief executive officer of Group
Health Plan. Between 1986 and 1990, Mr. Tabak served as president and chief
executive officer of Clinical Pharmaceuticals, Inc., a pharmacy benefit
management company founded by Mr. Tabak in 1986. Between 1982 and 1986, Mr.
Tabak served as president and chief executive officer of HealthAmerica
Development Corporation. Mr. Tabak serves as a director and as a member of
the audit committee of Ceres Group, a company that specializes in the
health insurance industry. Mr. Tabak's address is c/o Capital Z Partners,
One Chase Manhattan Plaza, 44th Floor, New York, New York 10005.
Professor Zehev Tadmor. Professor Tadmor, age 62, is serving as a
Distinguished Institute Professor at the Department of Chemical Engineering
at the Technion Israel Institute of Technology, Israel's major
technological scientific research university (the "Technion"), which he
joined in 1968, and has served as the chairman of the board of the S.
Neaman Institute for Advanced Studies in Science & Technology at the
Technion since October 1998. Between October 1990 and September 1998,
Professor Tadmor served as president of the Technion. Professor Tadmor
serves as a member of the board of directors of Haifa Chemicals Ltd., a
chemical and fertilizer company and a wholly-owned subsidiary of
Trans-Resources, Inc., a company founded by Mr. Genger. Professor Tadmor
also serves as a member of the Technological Advisory Council of Publicard.
Professor Tadmor's address is 62 Tishbi Street, Haifa, Israel 34523.
The Nominees have consented to serve as directors, if elected. In
the event a Nominee named in this Proxy Statement is unable to serve or
will not serve as a director of the Company, Michael Zellermayer and Yoram
Ashery, or either of them, will vote the proxies solicited hereby at the
Meeting for a substitute nominee to be selected by Mr. Zellermayer and Mr.
Ashery, or either of them, in their discretion.
Stockholdings in the Company
None of the Nominees beneficially own any ordinary shares of the
Company, except as follows:
Mr. Dovrat beneficially owns an aggregate of 20,000 ordinary
shares (less than 1% of the 27,301,339 ordinary shares issued and
outstanding as of March 25, 1999). Mr. Dovrat has sole voting and
dispositive power with respect to all of such ordinary shares.
Mr. Friedman beneficially owns an aggregate of 25,000
ordinary shares (less than 1% of the 27,301,339 ordinary shares
issued and outstanding as of March 25, 1999). Mr. Friedman shares
voting and dispositive power with his wife with respect to all of
such ordinary shares.
Mr. Spencer beneficially owns an aggregate of 11,000
ordinary shares (less than 1% of the 27,301,339 ordinary shares
issued and outstanding as of March 25, 1999). Mr. Spencer shares
voting and dispositive power with his wife with respect to all of
such ordinary shares.
Relationships and Related Transactions
Transactions with Management and Others. Except as otherwise
disclosed in this Proxy Information Statement, none of the Nominees is
currently involved, or has been involved since January 1, 1998, in any
transaction, series of transactions or proposed transactions to which the
Company or any of its subsidiaries, Mr. Gottstein or Mr. Genger (including,
without limitation, Trans-Resources, Inc. and its subsidiaries) was or is
to be a party.
Certain Business Relationships. Except as set forth below, none of
the Nominees is currently, or has been since January 1, 1998, involved in
any business relationship with the Company or any of its subsidiaries, Mr.
Gottstein or Mr. Genger (including, without limitation, Trans-Resources,
Inc. and its subsidiaries).
Mr. Spencer serves as a member of the board of directors of
Trans-Resources, Inc., a company founded by Mr. Arie Genger, for
which he receives $15,000 annually. In addition, Mr. Spencer's firm
provides investment banking advice to Trans-Resources, Inc., for
which his firm has received no compensation since January 1, 1998.
Professor Tadmor serves as a member of the board of
directors of Haifa Chemicals Ltd., a wholly-owned subsidiary of
Trans-Resources, Inc, for which he receives $15,000 annually. In
addition, Professor Tadmor is a scientific technological consultant
to Trans-Resources, Inc., for which he receives a retainer fee on a
month-to-month basis.
Indebtedness of Management. None of the Nominees has been indebted
to the Company or any of its subsidiaries, Mr. Gottstein or Mr. Genger
(including, without limitation, Trans- Resources, Inc. and its
subsidiaries) since January 1, 1998.
PROXY INFORMATION STATEMENT CONCERNING
PERSONS MAKING THE PROPOSAL
Arie Genger, age 54, is the Chairman and Chief Executive Officer of
Trans-Resources, Inc. ("TRI"), a privately-owned chemical and fertilizer
company that he founded in 1985. TRI has 13 manufacturing plants in the
United States, Canada, France, Hungary, Spain and Israel. Through TRI, Mr.
Genger is one of the largest foreign private investors in the State of
Israel. In 1989, at the invitation of Laser Industries Limited's ("Laser")
management, TRI purchased the largest single block of shares in Laser. At
the time, Laser had a market capitalization of about $10 million and was
teetering on the verge of bankruptcy. Shortly after purchasing the dominant
ownership position in Laser, the new board overhauled management and
refocused it on both a sales growth and an application diversification
effort. The initiatives adopted by management enabled Laser to grow sales
and net income (loss) from $28.9 million and ($17.2) million in 1989 to
$58.7 million and $8.8 million in 1996, respectively. In the beginning of
1998, Laser merged with ESC at a valuation of about $245.1 million. Prior
to founding TRI, Mr. Genger was recruited from the United States to join
the Israeli government as both the assistant defense and economic minister
in 1981.
Barnard J. Gottstein, age 73, is a founding investor in the
Company. In addition, in 1949 and just out of college, Mr. Gottstein took
over management of J.B. Gottstein & Co., an Alaskan wholesale grocery
company founded by his father in 1915. With Mr. Gottstein as Chairman and
President, the company eventually became the largest wholesale grocery
distributor in Alaska. In 1974, Mr. Gottstein merged his wholesale business
with a grocery store chain to form Carr-Gottstein, Inc. The
wholesale/retail grocery business became the dominant food supplier in
Alaska with annual sales of $550 million and 2,600 employees. Also, the
company created Carr-Gottstein Properties, which became the largest real
estate developer and owner in Alaska. In 1990, the grocery wholesale and
retail operations were sold for $300 million, but Mr. Gottstein still owns
and remains active in Carr-Gottstein Properties. Since 1990, Mr. Gottstein
has become an investor in many publicly- and privately-held companies,
including the Company. In 1992, Mr. Gottstein began investing in the
Company, and since then has watched the Company's progress with great
interest.
Exhibit 9
April 15, 1999
By personal delivery to all directors named
in the attached list, and to the registered
office of the company named below
Dear Director,
Requisition to Convene an Extraordinary General Meeting
We, the holders of more than 10% of the Ordinary Shares, par value
NIS 0.10 per share, of ESC Medical Systems Ltd. (the "Company"), hereby
demand, by virtue of our right under Section 109 of the Companies Ordinance
[New Version], 1983 and Article 24 of the Company's Articles of
Association, to duly and immediately convene an Extraordinary General
Meeting of the shareholders of the Company (the "Meeting").
The general purpose of the Meeting is to remove from office all
current directors of the Company, with the exception of Mr. Thomas Hardy
and Dr. Shimon Eckhouse, and to elect in their stead the following nominees
(the "Nominees") as directors:
1. Aharon Dovrat
2. Philip Friedman
3. Darrell S. Rigel, M.D.
4. S.A. Spencer
5. Mark H. Tabak
6. Professor Zehev Tadmor
Attached is a proxy information statement concerning the Nominees
as customarily provided by the Company to its shareholders upon proposing
the election of directors.
Should you have any questions whatsoever with respect to the above
please contact Adv. Michael Zellermayer, of Zellermayer & Pelossof, at
Europe House, 37 King Shaul Blvd., Tel Aviv, Israel.
Very truly yours,
Barnard Jacob Gottstein TTEE
By: _________________________
Title:
Trans-Resources, Inc.
By:________________________
Title:
Haifa Chemical Holdings Ltd.
By:________________________
Title:
TPR Investment Associates, Inc.
By:________________________
Title:
Cc: Michael Zellermayer, Adv.
Joseph J. Giunta, Esq.
Edward Klimerman, Esq.
Gene Kleinhendler, Esq.
PROXY INFORMATION STATEMENT
A copy is attached as Exhibit 8 to this Schedule 13D.
