UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __________)*
GENSYM CORP.
(Name of Issuer)
Common Stock, $.01 Par Value
(Title of Class of Securities)
37245R107
(CUSIP Number)
Austin W. Marxe, 153 East 53rd Street, New York, NY 10022
(212) 832-5300
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 1, 1999
(Date of Event Which Requires Filing Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of
S240.13d-(e), 240.13d-1(f) or 240.13d-(g), check the following
box _x_.
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See S240.13d-7(b) for other
parties to whom copies are to be sent.
*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 the disclosures provided in a prior cover page.
The information required in the remainder of the 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. 37245R107 Page 2 of 9 Pages
1. NAME OF REPORTING PERSONS
SS or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Special Situations Fund III, L.P. F13-3737427
MGP Advisers Limited Partnership * F13-3263120
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X
3. SEC USE ONLY
4. SOURCE OF FUNDS
00
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF (7) SOLE VOTING POWER See Marxe/Greenhouse
SHARES
BENEFICIALLY (8) SHARED VOTING POWER None
OWNED BY
EACH (9) SOLE DISPOSITIVE POWER See Marxe/Greenhouse
REPORTING
PERSON WITH (10) SHARED DISPOSITIVE POWER None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
380,600
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.9%
14. TYPE OF REPORTING PERSON
IV/IA
*AWM Investment Company, Inc., a Delaware corporation, is the
General Partner of this entity.
<PAGE>
CUSIP No. 37245R107 Page 3 of 9 Pages
1. NAME OF REPORTING PERSONS:
SS or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Special Situations Cayman Fund, L.P. (the "Cayman Fund") -
98-0132442
AWM Investment Company, Inc. ("AWM") 11-3086452
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X
3. SEC USE ONLY
4. SOURCE OF FUNDS
00
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
AWM - Delaware
The Cayman Fund - Cayman Islands
NUMBER OF (7) SOLE VOTING POWER See Marxe/Greenhouse
SHARES
BENEFICIALLY (8) SHARED VOTING POWER None
OWNED BY
EACH (9) SOLE DISPOSITIVE POWER See Marxe/Greenhouse
REPORTING
PERSON WITH (10) SHARED DISPOSITIVE POWER None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
137,500
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.1%
14. TYPE OF REPORTING PERSON
IV/IA
<PAGE>
CUSIP No. 37245R107 Page 4 of 9 Pages
1. NAME OF REPORTING PERSONS:
SS or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Austin W. Marxe
David M. Greenhouse
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b) X
3. SEC USE ONLY
4. SOURCE OF FUNDS
00
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF (7) SOLE VOTING POWER 518,100
SHARES
BENEFICIALLY (8) SHARED VOTING POWER None
OWNED BY
EACH (9) SOLE DISPOSITIVE POWER 518,100
REPORTING
PERSON WITH (10) SHARED DISPOSITIVE POWER None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
518,100
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.1%
14. TYPE OF REPORTING PERSON
IN
<PAGE>
Page 5 of 9 Pages
SCHEDULE 13D
Item 1. Security and Issuer.
This Schedule relates to the common stock (the "Securities")
of Gensym Corporation (the "Issuer"). The Issuer's
principal executive offices are located at 125 Cambridge
Park Drive, Cambridge, MA 02140.
Item 2. Identity and Background.
This Schedule is filed on behalf of (i) Special Situations
Fund III, L.P., a Delaware limited partnership ("SSF III");
(ii) Special Situations Cayman Fund, L.P., a Cayman Islands
limited partnership (the "Cayman Fund"); (iii) MGP Advisers
Limited Partnership, a Delaware limited partnership ("MGP");
(iv) AWM Investment Company, Inc., a Delaware corporation
("AWM"); (v) Austin W. Marxe and (vi) David Greenhouse.
Each of the foregoing is hereinafter referred to,
individually, as a "Reporting Person" and, collectively, as
the "Reporting Persons."
The principal office and business address of the Reporting
Persons, other than the Cayman Fund, is 153 East 53rd
Street, 51st floor, New York, NY 10022. The principal
office and business address of the Cayman Fund is c/o CIBC
Bank and Trust Company (Cayman) Limited, CIBC Bank Building,
P.O. Box 694, Grand Cayman, Cayman Islands, British West
Indies.
The principal business of SSF III and the Cayman Fund
(individually, a "Fund" and, collectively, the "Funds") is
to invest in equity and equity related securities. The
principal business of MGP is to act as the general partner
of and the investment adviser to SSF III. The principal
business of AWM is to act as the general partner of MGP and
as the general partner of and the investment adviser to the
Cayman Fund. MGP and AWM are referred to herein,
individually, as an "Adviser" and, collectively, as the
"Advisers." The principal occupation of Austin W. Marxe and
David Greenhouse, both of whom are United States citizens,
is to serve as officers, directors and members or principal
shareholders of the Advisers.
Neither any Fund, any Adviser, Austin W. Marxe nor David
Greenhouse, during the last 5 years, has been convicted in
any criminal proceeding or was or is subject to a judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or
state securities laws or finding any violations with respect
to such laws.
Page 6 of 9 Pages
Item 3. Source and Amount of Funds or Other Consideration.
Each Fund utilized available cash assets to purchase the
Securities.
Item 4. Purpose of the Transaction.
Each of the Reporting Persons acquired his or its respective
Securities for investment purposes and not with the purpose
of changing or influencing control of the Issuer.
The Reporting Persons agreed, as of the date hereof, to form
a group for the purpose of seeking appropriate
representation on the Board of Directors of the Issuer (the
"Board") to respond to the Issuer's poor financial and
market performance. In reviewing potential responses,
Messrs. Marxe and Greenhouse, prior to the date hereof,
engaged in several conversations and communications with
certain of the current directors of the Board and the Chief
Executive Officer of the Issuer ("CEO") expressing
dissatisfaction with the Issuer's current financial and
market performance and requesting, on behalf of the
Reporting Persons, representation on the Issuer's slate of
directors to be elected at its 1999 Annual Meeting of
Shareholders (the "Annual Meeting"). As of the date hereof,
no satisfactory response has been provided by the Issuer.
By letter dated February 24, 1999, Mr. Greenhouse, on behalf
of the Reporting Persons, demanded a reconstitution of the
Board with new independent directors who would be responsive
to the interests of the Issuer's shareholders and would
strive to maximize shareholders' value. The Reporting
Persons believe that a new Board will need to address
management's ability to deliver consistently improved
operating results and to consider additional strategic
alternatives, such as a sale or merger of the Issuer. The
Reporting Persons are currently assessing the actions
available to them in the absence of a satisfactory response
from the Issuer.
The Reporting Persons intend to continually assess the
market for the Securities, as well as the Issuer's financial
position and operations. The Reporting Persons do not have
present plans to acquire additional Securities at the
present time, but may determine, subject to applicable law,
to acquire additional Securities in the future depending on,
among other things, the prevailing market price of the
Securities. The Reporting Persons may determine, from time
to time or at any time, to sell or otherwise dispose of some
or all of the Securities owned by them, depending upon a
continuing assessment and upon future developments. In
making any such determination, the Reporting Persons will
consider their goals and objectives, other business
Page 7 of 9 Pages
opportunities available to them, as well as general economic
and stock market conditions. The foregoing actions may be
taken by one or more of the Reporting Persons and, while
currently there are no plans to do so, possibly in
combination with others. The Reporting Persons may also
consider whether other shareholders of the Issuer will
become members of the group.
Except as set forth herein, the Reporting Persons have no
present plans or proposals to engage in any transactions
involving the Issuer or the Securities of the Issuer.
Item 5. Interest in Securities of the Issuer.
See pps. 2-5 of this Schedule, setting forth the aggregate
number and percentage of the Securities beneficially owned
by each Reporting Person, the number of shares as to which
there is sole or shared power to vote, or to direct the
vote, and sole or shared power to dispose or to direct the
disposition.
During the period January 1, 1999 through February 28, 1999,
the following Funds acquired Securities in open market
transactions as follows:
Common Shares Average Price
(1) Cayman Fund 30,800 2.99
(2) SSF III 69,300 2.91
See Schedule 13G filed as of December 31, 1998 for prior
positions held.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
See Item 2 of this Schedule. Based on such Item, Messrs.
Marxe and Greenhouse maintain sole voting power and sole
dispositive power with respect to the Securities.
Page 8 of 9 Pages
SIGNATURE
After reasonable inquiry and to the best of the knowledge and
belief of the undersigned, the undersigned hereby certifies that
the information set forth in this Statement is true, complete and
correct.
Dated: March 1, 1999
SPECIAL SITUATIONS FUND III, L.P.
By MGP Advisers Limited Partnership,
General Partner
By: /s/ Austin W. Marxe
Austin W. Marxe
Managing Director
SPECIAL SITUATIONS CAYMAN FUND, L.P.
By AWM Investment Company, Inc.,
General Partner
By: /s/ Austin W. Marxe
Austin W. Marxe
President
By: /s/ Austin W. Marxe
Austin W. Marxe, individually
By: /s/ David M. Greenhouse
David M. Greenhouse, individually
Page 9 of 9 Pages
JOINT FILING AGREEMENT
The Reporting Persons acknowledge and agree by certifying this
Schedule 13D that the foregoing statement on Schedule 13D is
filed on behalf of each of the Reporting Persons and that all
subsequent amendments to this statement on Schedule 13D shall be
filed on behalf of each of the Reporting Persons without the
necessity of filing additional joint acquisition statements.
