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OMB APPROVAL
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UNITED STATES
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. _____)
Level 8 Systems, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
52729M 10 2
- --------------------------------------------------------------------------------
(CUSIP Number)
Arie Kilman
Liraz Systems Ltd.
5 Hatzoref Street
Holon 58856, Israel
011-972-3-557-3434
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 31, 1998
- --------------------------------------------------------------------------------
(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 [_].
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 10 Pages)
* 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 SCHEDULE 13D Page 2 of 10 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
Liraz Systems Ltd.
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
OO
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Israel
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 2,861,863
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
2,071,257
OWNED BY
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,861,863
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
2,071,257
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,933,120
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
55.0%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
CUSIP No. 52729M 10 2 SCHEDULE 13D Page 3 of 10 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
Liraz Export (1990) Ltd.
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
WC, OO
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Isarel
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
2,071,257
OWNED BY
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING -0-
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
2,071,257
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,071,257
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.1%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
CUSIP No. 52729M 10 2 SCHEDULE 13D Page 4 of 10 Pages
________________________________________________________________________________
1 NAME OF REPORTING PERSONS
Arie Kilman
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [X]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
OO
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Israel
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 33,333
SHARES _________________________________________________________________
8 SHARED VOTING POWER
BENEFICIALLY
4,933,120
OWNED BY
_________________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 33,333
PERSON _________________________________________________________________
10 SHARED DISPOSITIVE POWER
WITH
4,933,120
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,966,453
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
55.4%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
This Schedule 13D is being filed by Liraz Systems Ltd., an Israeli
corporation ("Liraz"), Liraz Export (1990) Ltd., an Israeli corporation
("Export"), and Arie Kilman (each, individually, a "Reporting Person" and,
collectively, the "Reporting Persons"), to amend the Schedule 13G filed by the
Reporting Persons in respect of their beneficial ownership of shares of Level 8
Systems, Inc. ("Level 8" or the "Issuer").
Item 1. Security and Issuer
This Schedule 13D relates to the common stock, par value $0.01 per
share (the "Common Stock"), of the Issuer. The Issuer's principal executive
offices are located at 8000 Regency Parkway, Cary, North Carolina 27511.
Item 2. Identity and Background
(a) - (c), (f): This Schedule 13D is being filed on behalf of the Reporting
Persons. They are as follows:
(1) Liraz Systems Ltd., an Israeli corporation, with its principal
business office at 5 Hatzoref Street, Holon 58856, Israel.
Liraz is in the business of systems integration.
(2) Liraz Export (1990) Ltd., an Israeli corporation, with its
principal business office at 5 Hatzoref Street, Holon 58856,
Israel. Export is a wholly-owned subsidiary of Liraz.
The following person is a citizen of Israel and may be deemed
to control the corporations referred to in paragraphs (1) -
(2) above by reason of his interest in and relationship with
Liraz:
(3) Arie Kilman, an Israeli citizen, with his business
residence at c/o Level 8 Systems, Inc., 8000 Regency
Parkway, Cary, North Carolina 27511. Mr. Kilman
currently serves as chairman of the board and
president of Liraz and chairman of the board and
chief executive officer of Level 8.
(d) & (e): During the last five years, the Reporting Persons have not been
convicted in any criminal proceeding (excluding traffic violations or similar
misdemeanors) and have not been parties to any civil proceeding of a judicial or
administrative body of competent jurisdiction subjecting them 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
violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
Prior to August 1995, Level 8 was a wholly-owned subsidiary of Liraz. In
August 1995, Level 8 sold 1,430,000 shares of Common Stock in an initial public
offering, and, in December 1996, Level 8 and certain selling securityholders
sold in the aggregate 705,000 shares of Common Stock in a second public
offering, which included in the aggregate 220,000 shares sold by Liraz and
Export.
Page 5 of 10
<PAGE>
On March 19, 1998, Export purchased 29,118 shares of Level 8 Common Stock
for $12.00 a share from Samuel Somech, a director and president of Level 8. The
source of the funds used in the acquisition was Export's currently available
cash and cash equivalents.
See Item 5.
Item 4. Purpose of Transaction
(a) - (j): Export acquired the 29,118 shares of Common Stock referred to in
Item 3 for investment purposes, and to accommodate the seller's wish to dispose
of such shares.
The Reporting Persons intend to consider various alternative courses of
action with respect to their interests in the Issuer in light of the
circumstances existing from time to time. Such actions may involve the purchase
of additional shares of Common Stock, or the sale of all or a portion of the
shares of Common Stock beneficially owned by them, in the open market or in
privately negotiated transactions.
Although the foregoing represents the range of activities presently
contemplated by the Reporting Persons with respect to Issuer's Common Stock, the
intentions of the Reporting Persons are subject to change at any time.
Except as set forth above, the Reporting Persons have no present plans or
intentions that would result in or relate to any of the transactions described
in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a): As of the date of this schedule, the Reporting Persons may be deemed
to beneficially own the following numbers and percentages of Common Stock:
Number of Shares Percentage of
Reporting Persons Beneficially Owned Beneficial Ownership
----------------- ------------------- --------------------
Liraz 4,933,120 55.0%
Export 2,071,257 23.1
Arie Kilman 4,966,453 55.4
(b): Liraz, together with its wholly-owned subsidiary, Export, beneficially
owns 4,933,120 shares of Common Stock of Level 8, which represents 55.0% of the
total outstanding shares of Common Stock of Level 8 as of the date of this
schedule.
Mr. Kilman is the president and chairman of the board of Liraz and chief
executive officer and chairman of the board of Level 8. As of December 31, 1998,
Mr. Kilman beneficially owned 1,170,670 ordinary shares of Liraz, which is
approximately 19.4% of the outstanding ordinary shares of Liraz.
Page 6 of 1O
<PAGE>
Mr. Kilman is a party to a shareholders agreement (the "Shareholders
Agreement") with PEC Israel Economic Corporation ("PEC") and Discount Investment
Corporation Ltd. ("DIC"), pursuant to which Mr. Kilman, PEC and DIC have agreed
to act together to elect directors of Liraz and for certain other purposes. The
Corporation has been advised that each of PEC and DIC beneficially owned
approximately 20.75% of the ordinary shares of Liraz as of December 31, 1998. By
virtue of the Shareholders Agreement, each party to the Shareholders Agreement
may be deemed to own beneficially the ordinary shares of Liraz owned by the
other parties. Each party to the Shareholders Agreement disclaims beneficial
ownership of the ordinary shares of Liraz owned by the other parties.
IDB Holding Corporation Ltd. ("IDB Holding") owns approximately 71.48% of
the outstanding shares of IDB Development Corporation Ltd. ("IDB Development").
IDB Development, in turn, owns approximately 81% of the outstanding PEC common
stock and approximately 54% of the outstanding DIC common stock. By reason of
IDB Holding's ownership of IDB Development voting securities, IDB Holding may be
deemed the beneficial owner of the PEC common stock and DIC common stock held by
IDB Development. By reason of their positions with, and control of voting
securities of, IDB Holding, Mr. Raphael Recanati, of New York, New York, and
Mrs. Elaine Recanati, of Haifa, Israel, who are brother-in-law and
sister-in-law, and Leon Recanati, of Tel Aviv, Israel, and Judith Yovel
Recanati, of Herzliya, Israel, who are brother and sister, may each be deemed to
share the power to direct the voting and disposition of the outstanding shares
of PEC common stock and DIC common stock owned by IDB Development and may each,
under existing regulations of the Securities and Exchange Commission, therefore
be deemed a beneficial owner of these shares. Leon Recanati and Judith Yovel
Recanati are the nephew and niece of Raphael Recanati and Elaine Recanati.
Companies the Recanati family controls hold approximately 53.2% of the
outstanding ordinary shares of IDB Holding.
Level 8 entered into an agreement dated November 23, 1998 (the "Acquisition
Agreement") with Welsh Carson Anderson & Stowe VI, L.P. ("WCAS VI") and certain
parties affiliated or associated with WCAS VI (collectively, the "WCAS
Parties"). Pursuant to the Acquisition Agreement, on December 31, 1998, Level 8
issued to the WCAS Parties an aggregate of 1,000,000 shares of Common Stock of
Level 8 (the "Acquisition Shares") and warrants to purchase an additional
250,000 shares of Common Stock of Level 8 for $12.00 a share (the "Acquisition
Warrants"), and the WCAS Parties transferred to Level 8 approximately 69% of the
outstanding voting stock of Seer Technologies, Inc.
Under the Acquisition Agreement, prior to January 1, 2001, (i) at any
meeting of shareholders of Level 8, each WCAS Party is required to grant a proxy
to one or more individuals named by Level 8 to vote all that WCAS Party's Level
8 Common Stock, and (ii) no WCAS Party may sell, exchange or otherwise assign or
transfer any Level 8 Common Stock they beneficially own without prior written
consent of Level 8, subject to certain exceptions. As of the date of this
Schedule, Liraz and Level 8 may be deemed to share voting power and/or
investment power with respect to the Level 8 Common Stock beneficially owned by
the WCAS Parties and, therefore, Liraz may be deemed beneficially to own a
majority of the Common Stock of Level 8.
Mr. Kilman may be deemed to have sole voting power and dispositive power
with respect to 33,333 shares of Common Stock of Level 8 issuable upon exercise
of certain stock options and therefore may be deemed to be the beneficial owner
of such shares. Also, Mr. Kilman may, by reason of his ownership interest in and
relationship with Liraz, be deemed to share voting power and dispositive power
with respect to the 4,933,120 shares of Common Stock owned by Liraz and Export
and therefore may be deemed to be the beneficial owner of such shares.
(c): See Item 5 (b).
Page 7 of 10
<PAGE>
(d): Not applicable.
(e): Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Except as described herein, the Reporting Persons do not have any
contracts, arrangements, understandings or relationships (legal or otherwise)
with respect to any securities of the Issuer, including, but not limited to any
agreements concerning (i) transfer or voting of any securities of the Company,
(ii) finder's fees, (iii) joint ventures, (iv) loan or option arrangements, (v)
puts or calls, (vi) guarantees of profits, (vii) division of profits or loss or
(viii) the giving or withholding of proxies.
Item 7. Material to Be Filed as Exhibits
1 Agreement of Liraz Systems Ltd, Liraz Export (1990) Ltd. and Arie Kilman
dated March 9, 1999
2 Agreement, dated November 23, 1998, between Level 8, on one hand, and Welsh
Carson Anderson & Stowe VI, L.P. ("WCAS VI") and certain parties
affiliated or associated with WCAS VI is incorporated by reference to
Exhibit 2.1 of Level 8's Report on Form 8-K filed with the Securities
and Exchange Commission on January 15, 1999.
Page 8 of 10
<PAGE>
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 9, 1999
LIRAZ SYSTEMS LTD.
LIRAZ EXPORT (1990) LTD.
ARIE KILMAN
By: LIRAZ SYSTEMS LTD.
By: /s/ Arie Kilman
-----------------------
Arie Kilman
President
For itself and on behalf of Liraz Systems
Ltd., Liraz Export (1990) Ltd. and Arie Kilman
pursuant to the agreement annexed hereto as
Exhibit 1.
Page 9 of 10
<PAGE>
Exhibit Index
Exhibit 1 Agreement of Liraz Systems Ltd, Liraz Export (1990) Ltd. and
Arie Kilman dated March 9, 1999
Exhibit 2 Agreement, dated November 23, 1998, between Level 8, on one hand,
and Welsh Carson Anderson & Stowe VI, L.P. ("WCAS VI") and
certain parties affiliated or associated with WCAS VI is
incorporated by reference to Exhibit 2.1 of Level 8's Report
on Form 8-K filed with the Securities and Exchange Commission
on January 15, 1999.
Page 10 of 10
Exhibit 1
AGREEMENT OF LIRAZ SYSTEMS LTD.,
LIRAZ EXPORT (1990) LTD.
AND ARIE KILMAN
Pursuant to Rule 13d-1(k)
The undersigned hereby agree that the Statement on Schedule 13D to which
this Agreement is annexed as Exhibit 1 may be filed by Liraz Systems Ltd. on
behalf of each of them in accordance with the provisions of Rule 13d-1(k) under
the Securities Exchange Act of 1934.
Dated: March 9, 1999
LIRAZ SYSTEMS LTD.
By: /s/ Arie Kilman
--------------------------
Arie Kilman
President
LIRAZ EXPORT (1990) LTD.
By: /s/ Arie Kilman
---------------------------
Arie Kilman
President
/s/ Arie Kilman
---------------------------
Arie Kilman
