SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G/A
Rule 13d-102
Under the Securities Exchange Act of 1934
(Amendment No. 3)(*)
Level 8 Systems, Inc.
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(Name of Issuer)
Common Stock, $.01 par value per share
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(Title of Class of Securities)
52729M 10 2
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(CUSIP Number)
December 31, 1998
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(Date of Event which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which
this Schedule is filed:
|_| Rule 13d-1 (b)
|_| Rule 13d-1 (c)
|X| Rule 13d-1 (d)
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(*) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
CUSIP No. 52729M-10-2 Page 2 of 15 pages
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(1) Names and I.R.S. Identification Nos.(entities only) of reporting persons.
PEC Israel Economic Corporation
EIN 13-1143528
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(2) Check the appropriate box if a member of a group (see instructions) (a)|X|
(b)|_|
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(3) SEC use only.
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(4) Citizenship or place of organization.
Maine
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Number of shares beneficially owned by each reporting person with:
(5) Sole voting power:
-0-
(6) Shared voting power:
4,933,120
(7) Sole dispositive power:
-0-
(8) Shared dispositive power:
4,933,120
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(9) Aggregate amount beneficially owned by each reporting person.
4,933,120
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(10) Check if the aggregate amount in Row (9) excludes certain shares |_|
(see instructions).
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(11) Percent of class represented by amount in Row 9.
55.38%
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(12) Type of reporting person (see instructions).
CO
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<PAGE>
CUSIP No. 52729M-10-2 Page 3 of 15 pages
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(1) Names and I.R.S. Identification Nos.(entities only) of reporting persons.
DIC Loans Ltd.
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(2) Check the appropriate box if a member of a group (see instructions) (a)|X|
(b)|_|
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(3) SEC use only.
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(4) Citizenship or place of organization.
Israel
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Number of shares beneficially owned by each reporting person with:
(5) Sole voting power:
-0-
(6) Shared voting power:
4,933,120
(7) Sole dispositive power:
-0-
(8) Shared dispositive power:
4,933,120
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(9) Aggregate amount beneficially owned by each reporting person.
4,933,120
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(10) Check if the aggregate amount in Row (9) excludes certain shares |_|
(see instructions).
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(11) Percent of class represented by amount in Row 9.
55.38%
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(12) Type of reporting person (see instructions).
CO
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<PAGE>
CUSIP No. 52729M-10-2 Page 4 of 15 pages
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(1) Names and I.R.S. Identification Nos.(entities only) of reporting persons.
Discount Investment Corporation Ltd.
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(2) Check the appropriate box if a member of a group (see instructions) (a)|X|
(b)|_|
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(3) SEC use only.
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(4) Citizenship or place of organization.
Israel
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Number of shares beneficially owned by each reporting person with:
(5) Sole voting power:
-0-
(6) Shared voting power:
4,933,120
(7) Sole dispositive power:
-0-
(8) Shared dispositive power:
4,933,120
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(9) Aggregate amount beneficially owned by each reporting person.
4,933,120
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(10) Check if the aggregate amount in Row (9) excludes certain shares |_|
(see instructions).
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(11) Percent of class represented by amount in Row 9.
55.38%
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(12) Type of reporting person (see instructions).
CO
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<PAGE>
CUSIP No. 52729M-10-2 Page 5 of 15 pages
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(1) Names and I.R.S. Identification Nos.(entities only) of reporting persons.
IDB Development Corporation Ltd.
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(2) Check the appropriate box if a member of a group (see instructions) (a)|X|
(b)|_|
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(3) SEC use only.
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(4) Citizenship or place of organization.
Israel
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Number of shares beneficially owned by each reporting person with:
(5) Sole voting power:
-0-
(6) Shared voting power:
4,933,120
(7) Sole dispositive power:
-0-
(8) Shared dispositive power:
4,933,120
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(9) Aggregate amount beneficially owned by each reporting person.
4,933,120
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(10) Check if the aggregate amount in Row (9) excludes certain shares |_|
(see instructions).
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(11) Percent of class represented by amount in Row 9.
55.38%
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(12) Type of reporting person (see instructions).
CO
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<PAGE>
CUSIP No. 52729M-10-2 Page 6 of 15 pages
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(1) Names and I.R.S. Identification Nos.(entities only) of reporting persons.
IDB Holding Corporation Ltd.
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(2) Check the appropriate box if a member of a group (see instructions) (a)|X|
(b)|_|
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(3) SEC use only.
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(4) Citizenship or place of organization.
Israel
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Number of shares beneficially owned by each reporting person with:
(5) Sole voting power:
-0-
(6) Shared voting power:
4,933,120
(7) Sole dispositive power:
-0-
(8) Shared dispositive power:
4,933,120
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(9) Aggregate amount beneficially owned by each reporting person.
4,933,120
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(10) Check if the aggregate amount in Row (9) excludes certain shares |_|
(see instructions).
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(11) Percent of class represented by amount in Row 9.
55.38%
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(12) Type of reporting person (see instructions).
CO
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<PAGE>
CUSIP No. 52729M-10-2 Page 7 of 15 pages
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(1) Names and I.R.S. Identification Nos.(entities only) of reporting persons.
Raphael Recanati
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(2) Check the appropriate box if a member of a group (see instructions) (a)|X|
(b)|_|
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(3) SEC use only.
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(4) Citizenship or place of organization.
Israel
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Number of shares beneficially owned by each reporting person with:
(5) Sole voting power:
-0-
(6) Shared voting power:
4,933,120
(7) Sole dispositive power:
-0-
(8) Shared dispositive power:
4,933,120
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(9) Aggregate amount beneficially owned by each reporting person.
4,933,120
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(10) Check if the aggregate amount in Row (9) excludes certain shares |_|
(see instructions).
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(11) Percent of class represented by amount in Row 9.
55.38%
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(12) Type of reporting person (see instructions).
IN
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<PAGE>
CUSIP No. 52729M-10-2 Page 8 of 15 pages
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(1) Names and I.R.S. Identification Nos.(entities only) of reporting persons.
Elaine Recanati
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(2) Check the appropriate box if a member of a group (see instructions) (a)|X|
(b)|_|
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(3) SEC use only.
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(4) Citizenship or place of organization.
United States
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Number of shares beneficially owned by each reporting person with:
(5) Sole voting power:
-0-
(6) Shared voting power:
4,933,120
(7) Sole dispositive power:
-0-
(8) Shared dispositive power:
4,933,120
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(9) Aggregate amount beneficially owned by each reporting person.
4,933,120
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(10) Check if the aggregate amount in Row (9) excludes certain shares |_|
(see instructions).
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(11) Percent of class represented by amount in Row 9.
55.38%
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(12) Type of reporting person (see instructions).
IN
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<PAGE>
CUSIP No. 52729M-10-2 Page 9 of 15 pages
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(1) Names and I.R.S. Identification Nos.(entities only) of reporting persons.
Leon Y. Recanati
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(2) Check the appropriate box if a member of a group (see instructions) (a)|X|
(b)|_|
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(3) SEC use only.
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(4) Citizenship or place of organization.
Israel
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Number of shares beneficially owned by each reporting person with:
(5) Sole voting power:
-0-
(6) Shared voting power:
4,933,120
(7) Sole dispositive power:
-0-
(8) Shared dispositive power:
4,933,120
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(9) Aggregate amount beneficially owned by each reporting person.
4,933,120
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(10) Check if the aggregate amount in Row (9) excludes certain shares |_|
(see instructions).
- --------------------------------------------------------------------------------
(11) Percent of class represented by amount in Row 9.
55.38%
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(12) Type of reporting person (see instructions).
IN
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<PAGE>
CUSIP No. 52729M-10-2 Page 10 of 15 pages
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(1) Names and I.R.S. Identification Nos.(entities only) of reporting persons.
Judith Yovel Recanati
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(2) Check the appropriate box if a member of a group (see instructions) (a)|X|
(b)|_|
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(3) SEC use only.
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(4) Citizenship or place of organization.
Israel
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Number of shares beneficially owned by each reporting person with:
(5) Sole voting power:
-0-
(6) Shared voting power:
4,933,120
(7) Sole dispositive power:
-0-
(8) Shared dispositive power:
4,933,120
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(9) Aggregate amount beneficially owned by each reporting person.
4,933,120
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(10) Check if the aggregate amount in Row (9) excludes certain shares |_|
(see instructions).
- --------------------------------------------------------------------------------
(11) Percent of class represented by amount in Row 9.
55.38%
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(12) Type of reporting person (see instructions).
IN
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<PAGE>
This Amendment No. 3 to Schedule 13G is filed by the Reporting
Persons who, by reason of their direct or indirect ownership of outstanding
shares of Liraz Systems Ltd. ("Liraz"), which has filed a Schedule 13G, as
amended, in respect of its beneficial ownership of shares of the Level 8
Systems, Inc. (the "Issuer"), may be deemed to share the power to vote or
dispose of such shares of the Issuer. Unless otherwise defined in this Amendment
No. 3 to Schedule 13G, capitalized terms used in this Amendment No. 3 are
defined in this Statement on Schedule 13G, as previously filed.
The following amends Items 2 and 4 of this Statement on Schedule
13G, as previously filed.
Item 2. Reporting Persons and Class of Securities.
(a), (b) and (c): On December 31, 1998, DIC transferred all of its
ordinary shares of Liraz to DIC Loans Ltd., an Israeli corporation ("DIC Loans")
and a wholly-owned subsidiary of DIC. DIC Loans is hereby added as a Reporting
Person. The principal offices of DIC Loans are located at 14 Beth Hashoeva Lane,
Tel Aviv, Israel.
As of December 31, 1998, IDB Development owned approximately 81.35%
of PEC and 54.3% of DIC.
Companies controlled by Raphael Recanati, Elaine Recanati, Leon Y.
Recanati and Judith Yovel Recanati together beneficially owned 53.16% of equity
and voting power of IDB Holding as of December 31, 1998. Mr. Raphael Recanati is
the Chairman of the Board of Directors of IDB Holding and IDB Development. Mr.
Leon Y. Recanati is the Co-Chief Executive Officer of IDB Holding and is the
Vice Chairman and a director of IDB Development.
(e) In connection with the change of name of the Issuer to Level 8
Systems, Inc. in 1996 as reported in Amendment No. 1 to this Schedule 13G, the
CUSIP Number changed from 005018-10-6 to 52729M-10-2.
Page 11 of 15 pages
<PAGE>
Item 4. Ownership.
None of the Reporting Persons owns directly any shares of Common
Stock. The Reporting Persons are advised by Liraz that as of December 31, 1998
Liraz and its wholly-owned subsidiary, Liraz Export (1990) Ltd. ("Liraz
Export"), beneficially owned 3,683,120 shares of Common Stock, of which Liraz
owned 2,861,863 shares and Liraz Export owned 821,257 shares, representing a
total of 42.54% of the 8,658,231 outstanding shares of Common Stock. Reference
is made to Item 4 of the Schedule 13G filed by Liraz and Liraz Export, as
amended.
Pursuant to an agreement between the Issuer and a shareholder of the
Issuer (the "Shareholder"), the Shareholder has granted the Issuer the right to
vote at all times prior to January 1, 2001 the Shareholder's 1,000,000
outstanding shares of Common Stock and any shares of Common Stock issued upon
exercise of a warrant held by the Shareholder for 250,000 shares of Common
Stock. In addition, subject to certain limited exceptions, prior to January 1,
2001, the Shareholder cannot transfer its shares of Common Stock without the
consent of the Issuer. By reason of Liraz's direct 42.54% ownership of Common
Stock, the fact that the Chairman of the Board and President of Liraz is the
Chairman of the Board and Chief Executive Officer of the Issuer as described
below, and that three of the Issuer's seven directors are officers of Liraz or
of Liraz's principal shareholders, Liraz may be deemed to share with the Issuer
the power to vote and dispose of the 1,250,000 shares of Common Stock owned by,
or issuable upon exercise of the warrant to, the Shareholder. Liraz may,
therefore, be deemed to share the power to vote a total of 4,933,120 shares of
Common Stock, or 55.38% of the 8,908,231 shares of Common Stock deemed to be
outstanding (the 8,658,231 outstanding shares and 250,000 shares that may be
issued upon exercise of the Shareholder's warrant).
The Reporting Persons are advised by Liraz that there were 6,025,883
outstanding ordinary shares of Liraz as of December 31, 1998. As of December 31,
1998, various of the Reporting Persons shared the power to vote and dispose of
2,501,497 ordinary shares of Liraz, or approximately 41.5% of the outstanding
ordinary shares of Liraz. As of such date, PEC and DIC Loans beneficially owned
1,250,748 and 1,250,749 ordinary shares of Liraz, respectively, or approximately
20.75% each of the outstanding ordinary shares of Liraz. As of such date, DIC,
by reason of its ownership of DIC Loans, shared the power to vote and dispose of
1,250,749 ordinary shares of Liraz. As of such
Page 12 of 15 pages
<PAGE>
date, IDB Development, by reason of its ownership interests in PEC and DIC, and
IDB Holding, by reason of its ownership interest in IDB Development, shared the
power to vote and dispose of 2,501,497 ordinary shares of Liraz.
Mr. Arie Kilman, the Chairman of the Board and Chief Executive
Officer of the Issuer and the Chairman of the Board of Directors and President
of Liraz, PEC and DIC are parties to a shareholders agreement (the "Liraz
Shareholders Agreement") pursuant to which Mr. Kilman, PEC and DIC have agreed
to act together to elect directors of Liraz and for certain other purposes. The
Reporting Persons have been advised that Mr. Kilman beneficially owns 1,170,670
ordinary shares of Liraz, or approximately 19.4% of the outstanding ordinary
shares of Liraz. By virtue of the Liraz Shareholders Agreement, the Reporting
Persons may be deemed to share the power to vote and dispose of the ordinary
shares of Liraz owned by Mr. Kilman but the Reporting Persons disclaim
beneficial ownership of such ordinary shares of Liraz.
The Reporting Persons may by reason of their interest in and
relationships with Liraz be deemed to share voting power and dispositive power
with respect to the 4,933,120 shares of Common Stock of the Issuer which Liraz
and Liraz Export directly own or share the power to vote and dispose of.
EXHIBIT INDEX
Exhibit 1 Agreement dated February 4, 1999 between
DIC Loans and PEC authorizing PEC to
file this Schedule 13G and any amendment
hereto on behalf of DIC Loans.
Page 13 of 15 pages
<PAGE>
Signature
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned hereby certify that the information set forth in
this amendment to the Statement is true, complete and correct.
February 12, 1998 PEC ISRAEL ECONOMIC CORPORATION
DIC LOANS LTD.
DISCOUNT INVESTMENT CORPORATION LTD.
IDB DEVELOPMENT CORPORATION LTD.
IDB HOLDING CORPORATION LTD.
RAPHAEL RECANATI
ELAINE RECANATI
` LEON RECANATI
JUDITH YOVEL RECANATI
By: PEC ISRAEL ECONOMIC CORPORATION
By: /s/ JAMES I. EDELSON
--------------------------------------------------
James I. Edelson, Executive Vice President of PEC
Israel Economic Corporation for itself and on
behalf of Discount Investment Corporation Ltd.,
IDB Development Corporation Ltd., IDB Holding
Corporation Ltd., Raphael Recanati, Leon Recanati
and Judith Yovel Recanati pursuant to the
agreements annexed as Exhibits 1-4 and 6 and 7 to
amendment no. 1 to Schedule 13G, on behalf of
Elaine Recanati pursuant to the agreement annexed
as Exhibit 1 to amendment no. 2 to Schedule 13G
and on behalf of DIC Loans pursuant to Exhibit 1
annexed hereto.
Page 14 of 15 pages
<PAGE>
Tel Aviv, February 8, 1999
PEC Israel Economic Corporation
511 Fifth Avenue
New York, N.Y. 10017
U.S.A.
Gentlemen,
Pursuant to rule 13d-1(k)(1)((iii) promulgated under the Securities
Exchange Act of 1934, as amended, the undersigned hereby agrees that PEC Israel
Economic Corporation ("PEC") may file as necessary on behalf of the undersigned
with the Securities and Exchange Commission a Schedule 13D or a Schedule 13G and
any amendments thereto in respect of shares of Level 8 Systems, Inc. purchased,
owned or sold from time to time by the undersigned.
PEC is hereby authorized to file a copy of this letter as an exhibit
to said Schedule 13D or Schedule 13G or any amendments thereto.
Very truly yours,
DIC Loans Ltd.
By: /s/ J. BOOCK /s/ S. COHEN
---------------------------------
Agreed: PEC Israel Economic Corporation
By: /s/ JAMES I. EDELSON
-----------------------
James I. Edelson,
Executive Vice President
Page 15 of 15 pages
