SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 8)*
ESC Medical Systems Ltd.
(Name of Issuer)
Ordinary Shares, NIS 0.10 par value per Share
(Title of Class of Securities)
M40868107
(CUSIP Number)
Edward Klimerman, Esq.
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza, 29th Floor
New York, New York 10112
(212) 698-7700
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 20, 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 ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. |_|
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This Amendment No. 8 (the "Amendment") amends and supplements the Schedule
13D filed on October 9, 1998, as previously amended and restated by Amendment
No. 1, filed on March 12, 1999 and further amended by Amendment No. 2 filed on
March 23, 1999, Amendment No. 3 filed on March 26, 1999, Amendment No. 4 filed
on April 15, 1999, Amendment No. 5 filed on April 20, 1999, Amendment No. 6
filed on May 11, 1999 and Amendment No. 7 filed on May 13, 1999 (the "Schedule
13D"), on behalf of Mr. Arie Genger ("Genger"), TPR Investment Associates, Inc.,
a Delaware corporation ("TPR"), TPR's subsidiary, Trans-Resources, Inc., a
Delaware corporation ("TRI"), TRI's indirect subsidiary, Haifa Chemicals
Holdings Ltd., a company incorporated in the State of Israel ("HCH"; Genger and
said corporations, all of which are directly or indirectly controlled by Genger,
being collectively called the "TRI Entities"), and Mr. Thomas G. Hardy ("Hardy";
Hardy and the TRI Entities being collectively called the "Reporting Persons")
with respect to the Ordinary Shares, par value NIS 0.10 per share (the
"Shares"), of ESC Medical Systems Ltd., a company incorporated in the State of
Israel (the "Company"). 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 Schedule 13D is hereby amended and supplemented as follows:
Messrs. Genger and Barnard J. Gottstein ("Gottstein") were informed through
a press release issued on May 18, 1999 that Asher Edelman, whose group owns
approximately 7.1% of the issued and outstanding shares of the Company, informed
the Company that he plans to vote all of his group's shares in favor of Messrs.
Genger's and Gottstein's proposal to restructure the current Board of the
Company.
In an effort to reach a compromise with respect to the pending proxy
contest for removal of certain directors of the Company, Mr. Genger met with
Shimon Eckhouse, Chairman of the Board, President and Chief Executive Officer of
the Company on May 20, 1999. In order to expedite a solution, Mr. Genger offered
that, in lieu of replacing the entire Board (with the exception of Dr. Eckhouse
and Thomas Hardy), as is now proposed, Messrs. Genger and Gottstein would agree
to the replacement of two existing management directors and one existing
non-management director (other than Thomas Hardy) with four nominated
independent directors. Alternatively, Mr. Genger suggested that Messrs. Genger
and Gottstein would be willing to agree to the removal of two current directors
(other than Thomas Hardy) to be identified by the current Board, and the
addition of five new directors from among the proposed nominees, thereby
creating an eleven-member Board. As part of the compromise, Messrs. Genger and
Gottstein also proposed that Dr. Eckhouse step down as president and chief
executive officer of the Company and that the new Board would be responsible for
creating a special search committee in order to recruit a new chief executive
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officer. Although Dr. Eckhouse indicated he would discuss the matters with his
Board of Directors, Dr. Eckhouse also stated that he would inform the Board that
he was opposed to all of the proposals.
On May 21, 1999, Mr. Genger sent a letter to Dr. Eckhouse, expressing his
disappointment with the result of his meeting with Dr. Eckhouse held on May 20,
1999. A copy of the letter is attached hereto as Exhibit 23.
On May 21, 1999, Messrs. Genger and Gottstein sent an open letter to the
shareholders of the Company, commenting on the information contained in the
Company's press release that was issued on May 17, 1999. A copy of the letter is
attached hereto as Exhibit 24.
Other than as described above and as previously described in the 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 Schedule 13D is hereby amended to add the following exhibits:
Exhibit 23: Letter, dated May 21, 1999, from Mr. Genger to Shimon Eckhouse.
Exhibit 24: Open Letter to the Shareholders of the Company, dated May 21,
1999, from Messrs. Genger and Gottstein.
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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: May 21, 1999
/s/ Arie Genger
---------------------------------------
Arie Genger
TPR INVESTMENT ASSOCIATES, INC.
By: /s/ Arie Genger
-----------------------------------
Arie Genger, President
TRANS-RESOURCES, INC.
By: /s/ Arie Genger
-----------------------------------
Arie Genger, Chairman of the Board
HAIFA CHEMICALS HOLDINGS LTD.(1)
By: /s/ Arie Genger
-----------------------------------
Arie Genger
/s/ Thomas G. Hardy
---------------------------------------
Thomas G. Hardy
- ----------
(1) pursuant to power of attorney
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EXHIBIT INDEX
Exhibit
Number Title Page
------ ----- ----
23 Letter, dated May 21, 1999, from Mr. Genger to 6
Shimon Eckhouse.
24 Open Letter to the Shareholders of the 7
Company, dated May 21, 1999, from
Messrs. Genger and Gottstein
Page 5 of 10 Pages
Exhibit 23
Dear Dr. Eckhouse:
I was surprised and disappointed at the result of our meeting.
Since you requested the meeting, I was hopeful you would have something of
substance to discuss. On the contrary, not only did you offer no compromise, but
you have refused any suggestions for compromise offered. In addition, you
proceeded within two hours to issue a totally misleading press release regarding
our meeting. Your deceit continues.
I sincerely hope that the shareholders of ESC will soon have the opportunity to
vote at this critical time to determine the future direction of the Company and
to reverse the disastrous course being followed by the Company.
Sincerely,
/s/ Arie Genger
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Exhibit 24
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Open Letter to Shareholders of
ESC Medical Systems Ltd. (the "Company")
May 21, 1999
ESC'S DISMAL 1999 FIRST QUARTER RESULTS
SPEAK FOR THEMSELVES
Dear Fellow ESC Shareholder:
On May 17, 1999, ESC's management finally released the Company's first
quarter results for 1999. Having followed ESC's management closely during the
past year, we were not surprised, but are very concerned, about the Company's
terrible performance during the first quarter. It was our concern about
management's ability to successfully manage the operations of ESC that led us to
request the necessary changes we are proposing for ESC. We believe the 1999
first quarter results speak for themselves.
LET'S REVIEW THE NUMBERS:
* ESC reported inventory write-offs of $16.6 million, representing 27.1% of
the $61.2 million in inventory reported at December 31, 1998. It seems
impossible for ESC to have had a deterioration in Inventory of that
magnitude in just three months, which represents about 27% of the $61.2
million in Inventory reported as of December 31, 1998. Accordingly, we
believe it is likely that Inventory was overstated as of December 31, 1998
and possibly also in prior quarters. ESC already has litigation pending for
past misstatements of earnings.
* On February 11, 1999, ESC management announced that they expected to record
a charge for the first quarter ended March 31, 1999 of about $13 million to
$17 million. Recently, ESC reported actual charges for the first quarter
ended March 31, 1999 of $30.8 million (inventory write-offs plus
restructuring expenses).
* Sales decreased from $59.5 million to $31.3 million for the first quarter
ended March 31, 1999 when compared with the first quarter ended March 31,
1998 - a 47.4% decrease. After excluding "inventory write-offs" and
"restructuring expenses" of $30.8 million, ESC still reported a loss of
$9.8 million for the first quarter ended March 31, 1999, which amounts to
an annual on-going loss rate of almost $40 million, unless, miraculously,
there will be a major sale surge or reserves will be restored.
* While sales decreased by a whopping 47.4%, selling & marketing, general and
administrative expenses for the first quarter ended March 31, 1999
increased to 75.5% of sales compared with 35% for the first quarter ended
March 31, 1998!
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* We were astounded to discover in ESC's May 17, 1999 press release that
management has chosen to partly blame ESC's disastrous first quarter
results on our efforts to restructure the Board, even though we did not
unilaterally begin to act to restructure the Board until the last week of
March 1999. Obviously, our actions could not have had any effect on ESC's
results for the period ended March 31, 1999.
For your information, ESC, inconsistent with prior practice, did not host
any type of analyst meeting in connection with ESC's release of its first
quarter results of 1999, at which meeting analysts and shareholders could have
been given the opportunity to raise questions and seek explanations for ESC's
poor performance during the quarter.
THE CURRENT ESC BOARD MEMBERS CONTINUE THEIR
REORGANIZATION RUSE
Once again, the current Board is trying to mislead shareholders by
announcing a plan to restructure management. On May 17, 1999, ESC announced that
Shimon Eckhouse plans to step down as chief executive officer and has agreed to
"assume the responsibility of an active Chairman of the Board." Here again, they
have neglected to tell you that the proposed Israeli companies law, which is
expected to become effective in the year 2000, will not permit him to continue
to serve as both chairman and CEO. Furthermore, ESC said that they would
actively try to recruit a new CEO who would be part of the new "Office of the
Chairman," and who would report to Eckhouse. We ask you, what prospective chief
executive worth his salt would take the job that will require reporting to
Eckhouse? Under this proposed restructuring, is Eckhouse really relinquishing
his role as CEO?
In accordance with our right under Israeli corporate law, we have called
for an extraordinary general meeting of shareholders to be convened on June 2,
1999. Shareholders of record on May 10, 1999 will be entitled to vote and be
represented at the meeting. We encourage you to support our proposed slate of
independent directors so that the necessary steps can be taken in order to
reverse the harm that we believe is being inflicted on ESC by the current Board
and management.
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We urge you to vote the enclosed YELLOW proxy today! If you have any
questions or need assistance, please call MacKenzie Partners, Inc. at (212)
929-5500 (call collect) or call toll-free at (800) 322-2885.
Sincerely,
/s/ Barnard J. Gottstein /s/ Arie Genger
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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
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