Elbit Systems — Major Shareholding Notification 2003

Jul 23, 2003

SC 13D 1 a03-1307_1sc13d.htm SC 13D

SEC 1746 (11-02) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

UNITED STATES	OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION	OMB Number: 3235-0145
Washington, D.C. 20549	Expires: December 31, 2005
SCHEDULE
13D	Estimated average burden
hours per response. . 11

Under the Securities Exchange Act of 1934 (Amendment No. )*

*Elbit Systems Ltd.*

(Name of Issuer)

*Ordinary Shares*

(Title of Class of Securities)

*M3760D101*

(CUSIP Number)

*Paul Weinberg, Adv.*

*Elron Electronic Industries Ltd.*

*The Triangular Tower, 42 nd Floor*

*3 Azrieli Center, Tel Aviv 67023*

*Israel*

*Tel: +972 3 6075555*

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

*May 19, 2003*

(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 §§240.13d-1(e), 249.13d-1(f) or 240.13d-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 §240.13d-7 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 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).

SEQ.=1,FOLIO='',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| CUSIP NO. M3760D101 — 1. | Names of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only) Elron Electronic Industries Ltd. | |
| --- | --- | --- |
| 2. | Check the Appropriate Box if a Member of a Group (See Instructions) | |
| | (a) | [ X
] |
| | (b) | [ ] |
| 3. | SEC Use only | |
| 4. | Source of funds (See Instructions) Not Applicable | |
| 5. | Check if disclosure
of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) | |
| 6. | Citizenship or
Place of Organization Israel | |
| Number of Shares Beneficially Owned by Each Reporting Person With: | 7. | Sole Voting Power 0 |
| | 8. | Shared Voting Power 7,815,448 () |
| | 9. | Sole Dispositive Power 0 |
| | 10. | Shared Dispositive
Power 7,815,448 |
| 11. | Aggregate Amount Beneficially Owned by Each Reporting Person 7,815,448 () | |
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) | |
| 13. | Percent of Class Represented by Amount in Row (11) 19.95% (*) | |
| 14. | Type of Reporting Person (See Instructions) CO | |

(*) Each Reporting Person may also be deemed to share voting power of, and to beneficially own, an additional 12,100,000 shares that are owned by the Federmann Group (as defined in the introductory paragraph to this Schedule 13D), representing an additional 30.88% of the Issuer’s outstanding ordinary shares, as a result of a shareholders agreement between Elron Electronic Industries Ltd. and certain members of the Federmann Group, as described in greater detail in Items 3 and 6 below.

2

SEQ.=1,FOLIO='2',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| 2. | Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only). Discount Investment Corporation Ltd. — Check the Appropriate Box if a Member of a Group (See Instructions) | |
| --- | --- | --- |
| | (a) | [ X
] |
| | (b) | [ ] |
| 3. | SEC Use only | |
| 4. | Source of funds (See Instructions) Not Applicable | |
| 5. | Check if disclosure
of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ X ] | |
| 6. | Citizenship or
Place of Organization Israel | |
| Number of Shares Beneficially Owned by Each Reporting Person With: | 7. | Sole Voting Power 0 |
| | 8. | Shared Voting Power 7,815,448 () |
| | 9. | Sole Dispositive Power 0 |
| | 10. | Shared Dispositive
Power 7,815,448 |
| 11. | Aggregate Amount Beneficially Owned by Each Reporting Person 7,815,448 () | |
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) | |
| 13. | Percent of Class Represented by Amount in Row (11) 19.95% (*) | |
| 14. | Type of Reporting Person (See Instructions) CO | |

(*) Each Reporting Person may also be deemed to share voting power of, and to beneficially own, an additional 12,100,000 shares that are owned by the Federmann Group (as defined in the introductory paragraph to this Schedule 13D), representing an additional 30.88% of the Issuer’s outstanding ordinary shares, as a result of a shareholders agreement between Elron Electronic Industries Ltd. and certain members of the Federmann Group, as described in greater detail in Items 3 and 6 below.

3

SEQ.=1,FOLIO='3',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| 2. | Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only). IDB Development Corporation Ltd. — Check the Appropriate Box if a Member of a Group (See Instructions) | |
| --- | --- | --- |
| | (a) | [ X
] |
| | (b) | [ ] |
| 3. | SEC Use only | |
| 4. | Source of funds (See Instructions) Not Applicable | |
| 5. | Check if disclosure
of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) | |
| 6. | Citizenship or
Place of Organization Israel | |
| Number of Shares Beneficially Owned by Each Reporting Person With: | 7. | Sole Voting Power 0 |
| | 8. | Shared Voting Power 7,815,448 () |
| | 9. | Sole Dispositive Power 0 |
| | 10. | Shared Dispositive
Power 7,815,448 |
| 11. | Aggregate Amount Beneficially Owned by Each Reporting Person 7,815,448 () | |
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) | |
| 13. | Percent of Class Represented by Amount in Row (11) 19.95% (*) | |
| 14. | Type of Reporting Person (See Instructions) CO | |

(*) Each Reporting Person may also be deemed to share voting power of, and to beneficially own, an additional 12,100,000 shares that are owned by the Federmann Group (as defined in the introductory paragraph to this Schedule 13D), representing an additional 30.88% of the Issuer’s outstanding ordinary shares, as a result of a shareholders agreement between Elron Electronic Industries Ltd. and certain members of the Federmann Group, as described in greater detail in Items 3 and 6 below.

4

SEQ.=1,FOLIO='4',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| 2. | Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only). IDB Holding Corporation Ltd. — Check the Appropriate Box if a Member of a Group (See Instructions) | |
| --- | --- | --- |
| | (a) | [ X
] |
| | (b) | [ ] |
| 3. | SEC Use only | |
| 4. | Source of funds (See Instructions) Not Applicable | |
| 5. | Check if disclosure
of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) | |
| 6. | Citizenship or
Place of Organization Israel | |
| Number of Shares Beneficially Owned by Each Reporting Person With: | 7. | Sole Voting Power 0 |
| | 8. | Shared Voting Power 7,815,448 () |
| | 9. | Sole Dispositive Power 0 |
| | 10. | Shared Dispositive
Power 7,815,448 |
| 11. | Aggregate Amount Beneficially Owned by Each Reporting Person 7,815,448 () | |
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) | |
| 13. | Percent of Class Represented by Amount in Row (11) 19.95% (*) | |
| 14. | Type of Reporting Person (See Instructions) CO | |

(*) Each Reporting Person may also be deemed to share voting power of, and to beneficially own, an additional 12,100,000 shares that are owned by the Federmann Group (as defined in the introductory paragraph to this Schedule 13D), representing an additional 30.88% of the Issuer’s outstanding ordinary shares, as a result of a shareholders agreement between Elron Electronic Industries Ltd. and certain members of the Federmann Group, as described in greater detail in Items 3 and 6 below.

5

SEQ.=1,FOLIO='5',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| 2. | Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only). Nochi Dankner — Check the Appropriate Box if a Member of a Group (See Instructions) | |
| --- | --- | --- |
| | (a) | [ X
] |
| | (b) | [ ] |
| 3. | SEC Use only | |
| 4. | Source of funds (See Instructions) Not Applicable | |
| 5. | Check if disclosure
of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) | |
| 6. | Citizenship or
Place of Organization Israel | |
| Number of Shares Beneficially Owned by Each Reporting Person With: | 7. | Sole Voting Power 0 |
| | 8. | Shared Voting Power 7,815,448 () |
| | 9. | Sole Dispositive Power 0 |
| | 10. | Shared Dispositive
Power 7,815,448 |
| 11. | Aggregate Amount Beneficially Owned by Each Reporting Person 7,815,448 () | |
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) | |
| 13. | Percent of Class Represented by Amount in Row (11) 19.95% (*) | |
| 14. | Type of Reporting Person (See Instructions) IN | |

(*) Each Reporting Person may also be deemed to share voting power of, and to beneficially own, an additional 12,100,000 shares that are owned by the Federmann Group (as defined in the introductory paragraph to this Schedule 13D), representing an additional 30.88% of the Issuer’s outstanding ordinary shares, as a result of a shareholders agreement between Elron Electronic Industries Ltd. and certain members of the Federmann Group, as described in greater detail in Items 3 and 6 below.

6

SEQ.=1,FOLIO='6',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| 2. | Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only). Shelly Dankner-Bergman — Check the Appropriate Box if a Member of a Group (See Instructions) | |
| --- | --- | --- |
| | (a) | [ X
] |
| | (b) | [ ] |
| 3. | SEC Use only | |
| 4. | Source of funds (See Instructions) Not Applicable | |
| 5. | Check if disclosure
of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) | |
| 6. | Citizenship or
Place of Organization Israel | |
| Number of Shares Beneficially Owned by Each Reporting Person With: | 7. | Sole Voting Power 0 |
| | 8. | Shared Voting Power 7,815,448 () |
| | 9. | Sole Dispositive Power 0 |
| | 10. | Shared Dispositive
Power 7,815,448 |
| 11. | Aggregate Amount Beneficially Owned by Each Reporting Person 7,815,448 () | |
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) | |
| 13. | Percent of Class Represented by Amount in Row (11) 19.95% (*) | |
| 14. | Type of Reporting Person (See Instructions) IN | |

(*) Each Reporting Person may also be deemed to share voting power of, and to beneficially own, an additional 12,100,000 shares that are owned by the Federmann Group (as defined in the introductory paragraph to this Schedule 13D), representing an additional 30.88% of the Issuer’s outstanding ordinary shares, as a result of a shareholders agreement between Elron Electronic Industries Ltd. and certain members of the Federmann Group, as described in greater detail in Items 3 and 6 below.

7

SEQ.=1,FOLIO='7',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| 2. | Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only). Ruth Manor — Check the Appropriate Box if a Member of a Group (See Instructions) | |
| --- | --- | --- |
| | (a) | [ X
] |
| | (b) | [ ] |
| 3. | SEC Use only | |
| 4. | Source of funds (See Instructions) Not Applicable | |
| 5. | Check if disclosure
of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) | |
| 6. | Citizenship or
Place of Organization Israel | |
| Number of Shares Beneficially Owned by Each Reporting Person With: | 7. | Sole Voting Power 7,000 |
| | 8. | Shared Voting Power 7,815,448 () |
| | 9. | Sole Dispositive Power 7,000 |
| | 10. | Shared Dispositive
Power 7,815,448 |
| 11. | Aggregate Amount Beneficially Owned by Each Reporting Person 7,822,448 () | |
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) | |
| 13. | Percent of Class Represented by Amount in Row (11) 19.97% (*) | |
| 14. | Type of Reporting Person (See Instructions) IN | |

(*) Each Reporting Person may also be deemed to share voting power of, and to beneficially own, an additional 12,100,000 shares that are owned by the Federmann Group (as defined in the introductory paragraph to this Schedule 13D), representing an additional 30.88% of the Issuer’s outstanding ordinary shares, as a result of a shareholders agreement between Elron Electronic Industries Ltd. and certain members of the Federmann Group, as described in greater detail in Items 3 and 6 below.

8

SEQ.=1,FOLIO='8',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| 2. | Names of Reporting Persons. I.R.S. Identification Nos. of above
persons (entities only). Avraham Livnat — Check the Appropriate Box if a Member of a Group (See Instructions) | |
| --- | --- | --- |
| | (a) | [ X
] |
| | (b) | [ ] |
| 3. | SEC Use only | |
| 4. | Source of funds (See Instructions) Not Applicable | |
| 5. | Check if disclosure
of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) | |
| 6. | Citizenship or
Place of Organization Israel | |
| Number of Shares Beneficially Owned by Each Reporting Person With: | 7. | Sole Voting Power 0 |
| | 8. | Shared Voting Power 7,815,448 () |
| | 9. | Sole Dispositive Power 0 |
| | 10. | Shared Dispositive
Power 7,815,448 |
| 11. | Aggregate Amount Beneficially Owned by Each Reporting Person 7,815,448 () | |
| 12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) | |
| 13. | Percent of Class Represented by Amount in Row (11) 19.95% (*) | |
| 14. | Type of Reporting Person (See Instructions) IN | |

(*) Each Reporting Person may also be deemed to share voting power of, and to beneficially own, an additional 12,100,000 shares that are owned by the Federmann Group (as defined in the introductory paragraph to this Schedule 13D), representing an additional 30.88% of the Issuer’s outstanding ordinary shares, as a result of a shareholders agreement between Elron Electronic Industries Ltd. and certain members of the Federmann Group, as described in greater detail in Items 3 and 6 below.

9

SEQ.=1,FOLIO='9',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

This statement on Schedule 13D amends and replaces the statement on Schedule 13D, as amended, previously filed with the Securities and Exchange Commission by Elron Electronic Industries Ltd., a corporation organized and existing under the laws of the State of Israel (“Elron”) with respect to the ordinary shares, par value New Israeli Shekel 1.0 per share (the “Ordinary Shares”), of Elbit Systems Ltd. (the “Issuer”). Michael Federmann, for and on behalf of himself, Yekutiel Federmann, Federmann Enterprises Ltd., Heris Finanz Aktiengesellschaft, Beit Federmann Ltd., Beit Bella Ltd. and Beit Yekutiel Ltd. (the “Federmann Group”) has previously filed a statement on Schedule 13D jointly with Elron in respect of the Issuer’s Ordinary Shares. The Reporting Persons will not file a Schedule 13D jointly with the Federmann Group in the future.

Item 1.	Security and Issuer
The class of securities to which this Statement relates is the
Ordinary Shares of the Issuer, an Israeli corporation whose principal
executive offices are located at Advanced Technology Center, Haifa, Israel
31053.
The Ordinary Shares are traded on the NASDAQ National Market System
and the Tel Aviv Stock Exchange.
The CUSIP number for the Ordinary Shares is M3760D101.
Item 2.	Identity and
Background
	(a), (b) and
(c): The
Reporting Persons.
On May 19, 2003, companies controlled by Oudi Recanati, Leon
Recanati, Judith Yovel Recanati and Elaine Recanati, completed a sale of all
the shares (constituting approximately 51.7% of the outstanding share
capital) of IDB Holding Corporation Ltd. then owned by such companies to a
group comprising a private company controlled by Nochi Dankner and Shelly
Dankner-Bergman, a private company controlled by Ruth Manor and a private
company controlled by Avraham Livnat. As a result, from such date the
following are the names of the Reporting Persons, the place of organization,
principal business, and address of principal business of each Reporting
Person that is a corporation, and the residence or business address and
present principal occupation of each Reporting Person who is a natural
person:
(1) Elron
Electronic Industries Ltd., an Israeli public corporation (“Elron”), with its
principal office at the Triangular Tower, 42nd Floor, 3 Azrieli Center, Tel
Aviv 67023, Israel. Elron is a multinational high technology operational
holding company, and is engaged through affiliates with a group of high
technology operating companies in the fields of advanced defense electronics,
communication, software, information technology, medical devices,
semiconductors and amorphous metals. The outstanding shares of Elron are
traded on the NASDAQ National Market System and on the Tel Aviv Stock
Exchange. Elron owns directly 7,815,448 Ordinary Shares, representing 19.95%
of the outstanding Ordinary Shares, and may be deemed to beneficially own an
additional 12,100,000 Ordinary Shares owned by the Federmann Group,
representing an additional 30.88% of the outstanding Ordinary Shares, as a
result of the shareholders agreement between Elron and certain members of the
Federmann Group, described in Items 3 and 6 below.
(2) Discount
Investment Corporation Ltd., an Israeli public corporation (“DIC”), with its
principal office at the Triangular Tower, 43rd floor, 3 Azrieli Center, Tel
Aviv 67023,

10

SEQ.=1,FOLIO='10',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| Israel. DIC
organizes, acquires interests in, finances and participates in the management
of companies. The outstanding shares of DIC are listed for trading on the Tel
Aviv Stock Exchange. As of May 19, 2003, DIC owned approximately 38.5% the
outstanding shares of Elron. By reason of DIC’s ownership interest in Elron,
DIC may be deemed beneficial owner of, and to share the power to vote and
dispose of, the Ordinary Shares owned directly by Elron and may be deemed
beneficial owner of, and to share the power to vote, the 12,100,000 shares
owned by the Federmann Group as a result of the shareholders agreement
between Elron and certain members of the Federmann Group, as described in greater
detail in Items 3 and 6 below. |
| --- |
| (3) IDB
Development Corporation Ltd., an
Israeli public corporation (“IDB Development”), with its principal office at
the Triangular Tower, 44th floor, 3 Azrieli Center, Tel Aviv 67023, Israel.
IDB Development, through its subsidiaries, organizes, acquires interests in,
finances and participates in the management of companies. The outstanding
shares of IDB Development are listed for trading on the Tel Aviv Stock
Exchange. As of May 19, 2003 IDB Development owned approximately 71.5% of the
outstanding shares of DIC. By reason of IDB Development’s control of DIC, IDB
Development may be deemed beneficial owner of, and to share the power to vote
and dispose of, the Ordinary Shares owned directly by Elron and may be deemed
beneficial owner of, and to share the power to vote, the 12,100,000 shares
owned by the Federmann Group as a result of the shareholders agreement
between Elron and certain members of the Federmann Group, as described in
greater detail in Items 3 and 6 below. |
| (4) IDB
Holding Corporation Ltd., an Israeli public corporation (“IDB Holding”), with
its principal office at the Triangular Tower, 44th floor, 3 Azrieli Center,
Tel Aviv 67023, Israel. IDB Holding is a holding company that, through IDB
Development, organizes, acquires interests in, finances and participates in
the management of companies. The outstanding shares of IDB Holding are listed
for trading on the Tel Aviv Stock Exchange. As of May 19, 2003, IDB Holding
owned approximately 58% of the outstanding shares of IDB Development. By
reason of IDB Holding’s control (through IDB Development) of DIC, IDB Holding
may be deemed beneficial owner of, and to share the power to vote and dispose
of, the Ordinary Shares owned directly by Elron and may be deemed beneficial
owner of, and to share the power to vote, the 12,100,000 shares owned by the
Federmann Group as a result of the shareholders agreement between Elron and
certain members of the Federmann Group, as described in greater detail in
Items 3 and 6 below. |
| The following persons may, by reason of their interests in, and
relationships among them with respect to, IDB Holding, be deemed to control
the corporations referred to in paragraphs (1) - (4) above: |
| (5) Mr.
Nochi Dankner, whose address is 46 Rothschild Blvd., 22 nd floor,
Tel-Aviv 66883, Israel. His present principal occupation is businessman and
director of companies. |
| (6) Mrs.
Shelly Dankner-Bergman, whose address is 12 Recanati Street, Ramat Aviv
Gimmel, Tel Aviv, Israel. Her present principal occupation is director of
companies. |
| (7) Mrs.
Ruth Manor, whose address is 26 Hagderot Street, Savyon, Israel. Her present
principal occupation is director of companies. |
| (8) Mr.
Avraham Livnat, whose address is Taavura Junction, Ramle, Israel. His present
principal occupation is Managing Director of Taavura Holdings Ltd., an
Israeli private company. |

11

SEQ.=1,FOLIO='11',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| Nochi Dankner (together with a private company controlled by him) and
Shelly Dankner-Bergman own approximately 41.1% and 15.6% respectively of the
outstanding shares of, and control, Ganden Holdings Ltd. (“Ganden Holdings”),
a private Israeli corporation, which owns through intermediary private
companies all the outstanding shares of Ganden Investments I.D.B. Ltd. (“Ganden”),
a private Israeli corporation which in turn owns since May 19, 2003
approximately 31.02% of the outstanding shares of IDB Holding. Nochi Dankner
and Shelly Dankner-Bergman, who are brother and sister, entered into a
memorandum of understanding dated May 5, 2003 setting forth, among other
things, agreements between them as to how they will vote their shares of
Ganden Holdings at its shareholders’ meetings, who will they appoint as
directors of such corporation, and first refusal and tag along rights
available to each one of them in connection with sales of shares of such
corporation owned by the other. In addition, pursuant to an Investment and
Shareholders Agreement dated February 9, 2000, as amended, among Ganden
Holdings and all its shareholders, Nochi Dankner has an option exercisable
from time to time until February 15, 2005 to acquire from Ganden Holdings
shares constituting up to 9% of the outstanding shares of such corporation.
Furthermore, Nochi Dankner granted to two of the other shareholders of Ganden
Holding a put option which is exercisable at any time until the earlier of an
initial public offering of Ganden Holdings’ shares or June 7, 2006, whereby
Nochi Dankner may be required to acquire from such other shareholders certain
shares of Ganden Holdings constituting in the aggregate at the date hereof
approximately 10% of its outstanding shares. Also, Nochi Dankner granted to
such shareholders and to one other shareholder of Ganden Holdings a tag along
right to participate in certain sales of Ganden Holdings’ shares by Nochi
Dankner, and such shareholders agreed to vote all their shares of Ganden
Holdings, constituting in the aggregate at the date hereof approximately
13.7% of Ganden Holdings’ outstanding shares, in accordance with Nochi Dankner’s
instructions. Nochi Dankner is the Chairman of the Boards of Directors, and
Shelly Dankner-Bergman is a director, of IDB Holding, IDB Development and
DIC. |
| --- |
| Ruth Manor controls a private Israeli corporation which in turn
controls Manor Investments - IDB Ltd. (“Manor”), a private Israeli
corporation owning since May 19, 2003 approximately 10.34% of the outstanding
shares of IDB Holding. Ruth Manor’s husband, Isaac Manor, and their son, Dori
Manor, are directors of IDB Holding, IDB Development and DIC. |
| Avraham Livnat controls a private Israeli corporation which owns all
the outstanding shares of Avraham Livnat Investments (2002) Ltd. (“Livnat”),
a private Israeli corporation owning since May 19, 2003 approximately 10.34%
of the outstanding shares of IDB Holding. Avraham Livnat’s son, Zvi Livnat,
is a director of IDB Holding, IDB Development and DIC. |
| Ganden, Manor and Livnat entered into a Shareholders Agreement dated
May 23, 2002 (the “IDB Shareholders Agreement”) with respect to their
ownership of shares of IDB Holding, constituting in the aggregate
approximately 51.7% of the outstanding shares of IDB Holding, for the purpose
of maintaining and exercising control of IDB Holding as one single group of
shareholders. The IDB Shareholders Agreement provides, among other things,
that Ganden will be the manager of the group as long as Ganden and its
permitted transferees will be the largest shareholder of IDB Holding among
the parties to the IDB Shareholders Agreement; that the parties to the IDB
Shareholders Agreement will vote together at shareholders’ meetings of IDB
Holding as shall be determined according to a certain mechanism set forth
therein; and that they will exercise their voting power in IDB Holding for
electing their designees as directors of IDB Holding and its direct and
indirect subsidiaries and other investee companies. Other provisions of the
IDB Shareholders Agreement relate, among other things, to proposed
transactions in shares of IDB Holding by any party thereto, including (i) a
limitation whereby no party may sell its shares of IDB |

12

SEQ.=1,FOLIO='12',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| Holding for
a period of two years from May 19, 2003 other than to certain permitted
transferees of such party, (ii) a right of “first opportunity” whereby any
party wishing to sell any of its shares of IDB Holding, other than to certain
permitted transferees of such party, must first offer such shares to the
other parties, (iii) a “tag along” right whereby in case of sale of any
shares of IDB Holding owned by the manager of the group, other than to
certain permitted transferees thereof, the other parties may join such sale,
(iv) a “drag along” right whereby in case of sale of all of the shares of IDB
Holding owned by the manager of the group, it may obligate the other parties
to sell all their shares of IDB Holding together with such sale by the
manager of the group to the same purchaser, at the same time and on terms as
set forth in the IDB Shareholders Agreement, (v) an obligation of any party
to offer its shares of IDB Holding to the other parties upon certain changes
in the control of such party, and (vi) a right of participation in future
acquisitions of shares of IDB Holding whereby any party acquiring additional
shares of IDB Holding from third parties must offer the other parties the
opportunity to participate in such acquisition on a pro rata basis. No party
may sell shares of IDB Holding to any purchaser (including permitted
transferees of such party) unless such purchaser joins the IDB Shareholders Agreement
and assumes the rights and obligations of the selling party thereunder with
respect to the shares sold by it. The term of the IDB Shareholders Agreement
is twenty years from May 19, 2003 which may be extended by agreement of all
parties thereto, and may be terminated as to any party in certain
circumstances as set forth therein. |
| --- |
| Ganden, Manor and Livnat pledged their shares of IDB Holding to
certain financial institutions as collateral for the repayment of certain
loans in an aggregate principal amount of $219 million borrowed by Ganden,
Manor and Livnat to finance part of the price which they paid for the shares
of IDB Holding purchased by them. The scheduled repayment dates of these
loans are spread over a period of 12 years ending in May 2015. The pledges
will be in effect until the loans are fully repaid, and include, among other
things, certain restrictions relating to the disposition of, and the exercise
of the voting rights attached to, the pledged shares. The lenders may realize
the pledges and also may accelerate the repayment dates of the loans, in
several different events (some of which will not be considered for such
purpose to have occurred if rectified as provided for in the agreements
relating to the loans) including, among others, default by the borrowers in
performing their obligations under the agreements relating to these loans;
the occurrence of events that entitle a third party to accelerate the
repayment of other debts of the borrowers, or certain debts of IDB Holding or
any of several specified companies held by it; if the borrowers or IDB
Holding or certain of its major subsidiaries enter into certain extraordinary
transactions such as a merger or reorganization, or sale or acquisition of
major assets, or resolve to be voluntarily wound up, without the lenders’
consent; if any of such entities becomes subject to insolvency, receivership
or certain other similar proceedings; if certain financial ratios with
respect to IDB Holding, or a certain minimum ratio between the value of the collateral
and the outstanding balance of the loans, are not met; if the shares of IDB
Holding or certain of its major subsidiaries are delisted from trading on the
Tel Aviv Stock Exchange; if the IDB Shareholders Agreement is amended without
the lenders’ consent, or the control of the borrowers is changed; and the
occurrence of a material adverse change in the financial condition of IDB
Holding, which in the lenders’ opinion may jeopardize the repayment of the
loans, or an adverse change in the financial condition of certain entities
and persons controlling the
borrowers, which in the lenders’ opinion may jeopardize the payment of
certain contingent financial liabilities of such entities and persons in
connection with the loans. |
| By reason of the control of IDB Holding by Nochi Dankner, Shelly
Dankner-Bergman, Ruth Manor and Avraham Livnat, and the relations among them,
as set forth above, Nochi Dankner, Shelly Dankner-Bergman, Ruth Manor and
Avraham Livnat may each be deemed beneficial owner of, and to share the power
to vote and dispose of, the Ordinary Shares owned directly by Elron and may
be deemed beneficial owner of, and to share the power to vote, the |

13

SEQ.=1,FOLIO='13',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| 12,100,000
shares owned by the Federmann Group as a result of the shareholders agreement
between Elron and certain members of the Federmann Group, as described in
greater detail in Items 3 and 6 below. | |
| --- | --- |
| The name, citizenship, residence or business address and present
principal occupation of the directors and executive officers of (i) Elron,
(ii) DIC, (iii) IDB Development and (iv) IDB Holding are set forth in
Schedules A, B, C and D attached hereto, respectively, and incorporated
herein by reference. | |
| (d) None
of the Reporting Persons, or, to the knowledge of the Reporting Persons, any
director or executive officer named in Schedules A, B, C and D to this
Statement, has, during the last five years, been convicted in any criminal
proceeding, excluding traffic violations and similar misdemeanors, except as
provided below. | |
| In February 2002, following a criminal trial in the Tel Aviv
Magistrate’s Court, DIC, several past executive officers of DIC and one of
its other officerswere convicted of criminal offenses under the Israeli
Securities Act, 1968, regarding the inclusion of a misleading detail in DIC’s
annual and quarterly financial statements in order to mislead a reasonable
investor by not attaching the financial statements of certain companies to
DIC’s financial statements in respect of the financial reporting periods from
1990 through the first quarter of 1995 filed with the Tel Aviv Stock Exchange
and the Israeli Registrar of Companies.
In May 2002, DIC was fined NIS800,000 (then approximately $160,000).
DIC and all the convicted persons filed an appeal in the Tel Aviv District
Court against their conviction. The appeal has not yet been heard. None of
the activities underlying the conviction, which activities ended in May 1995,
relate to or involve the Issuer or its business in any way. | |
| (e) None
of the Reporting Persons, or, to the knowledge of the Reporting Persons, any
director or executive officer named in Schedules A, B, C and D to this
Statement, has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
which as a result of such proceeding 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 violation
with respect to such laws. | |
| (f) The
Reporting Persons referred to in (5), (6), (7) and (8) above are citizens of
Israel. | |
| Item 3. | Source and Amount
of Funds or Other Consideration |
| Elron acquired 8,575,448 Ordinary Shares in November 1996 as a result
of a Plan of Arrangement (the “Plan”), under Sections 233 and 237 of the
Israeli Companies Ordinance, undertaken by Elbit Ltd. (“Elbit”) pursuant to
which Elbit was divided into three separate companies, one of which was the
Issuer. | |
| On December 19, 1999, the Issuer, Federmann Enterprises Ltd. (“FEL”),
Heris Finanz Aktienggesellschaft (“HF” and together with FEL, the “Federmann
Shareholders”), Rehovot Instruments Ltd. and Elop Electro-Optics Industries
Ltd. (“Elop”) entered into a Merger Agreement (the “Merger Agreement”),
pursuant to which Elop would be merged into and become a subsidiary of the
Issuer in exchange for the issuance by the Issuer of an aggregate of
12,100,000 Ordinary Shares to the Federmann Shareholders, then shareholders
of Elop, subject to adjustment as provided in the Merger Agreement. The
merger transaction contemplated under the Merger Agreement (the | |

14

SEQ.=1,FOLIO='14',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| “Merger”)
was completed on July 5, 2000. Elron
and the other Reporting Persons may be deemed to have acquired beneficial
ownership of the 12,100,000 Ordinary Shares owned by the Federmann Group when
Elron entered into a shareholders agreement with the Federmann Shareholders
more fully described in Item 6 below (the “Shareholders Agreement”) effective
concurrently with the closing of the Merger. | |
| --- | --- |
| Item 4. | Purpose of
Transaction |
| The Reporting Persons acquired the Ordinary Shares directly owned by
them for investment purposes. Except
as set forth in Item 5, none of the Reporting Persons, nor, to the best of
their knowledge, any of their directors or executive officers, has any
present plans or proposals which relate to or would result in any of the
actions described in subsections (a) through (j) of Item 4 of Schedule 13D. | |
| If the Reporting Persons believe it to be in their interest, the
Reporting Persons may sell all or any portion of the Ordinary Shares held by
them. | |
| Item 5. | Interest in
Securities of the Issuer |
| | (a)-(c) |
| As of May 19, 2003: | |
| Elron owned directly 7,815,448 Ordinary Shares, or approximately
19.95%, of the outstanding Ordinary Shares. By virtue of the Shareholders
Agreement, Elron shares the power to vote these Ordinary Shares with the
Federmann Group, and shares voting power of, and may be deemed to be the
beneficial owner of, the Federmann Group’s 12,100,000 Ordinary Shares,
representing approximately an additional 30.88% of the outstanding Ordinary
Shares of the Issuer. | |
| DIC, IDB Development, IDB Holding and the Reporting Persons who are
natural persons may each be deemed beneficial owner of, and to share the
power to vote and dispose of, the 7,815,448 Ordinary Shares directly owned by
Elron, and may be deemed beneficial owner of, and to share the power to vote,
the 12,100,000 shares owned by the Federmann Group as a result of the
Shareholders Agreement. In addition, Ruth Manor owned (jointly with Isaac
Manor, her husband) 7,000 Ordinary Shares, or approximately 0.02% of the
outstanding Ordinary Shares. Ruth Manor and Isaac Manor have sole power to
vote and dispose of these 7,000 Ordinary Shares. | |
| The Issuer advised the Reporting Persons that there were 39,175,069
outstanding Ordinary Shares as of July 1, 2003. The percentages of the
outstanding Ordinary Shares set forth above are based on this number. | |
| None of the Reporting Persons purchased or sold any Ordinary Shares
from March 15, 2003 through May 19, 2003. | |
| Information provided to the Reporting Persons indicates that the
executive officers and directors of IDB Holding, IDB Development, DIC and
Elron beneficially owned as of May 19, 2003 an aggregate of 11,087 Ordinary
Shares including 4,000 Ordinary Shares that may be acquired pursuant to
options to purchase such shares from the Issuer, exercisable within 60 days
from July 1, 2003. According to the information provided to the Reporting
Persons, none of such executive officers and directors purchased or sold any
Ordinary Shares from March 15, 2003 through May 19, 2003. | |

15

SEQ.=1,FOLIO='15',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| Item 6. | Contracts,
Arrangements, Undertakings or Relationships With Respect to Securities of the
Issuer |
| --- | --- |
| (1) | Shareholders
Agreement. |
| | The
Shareholders Agreement provides, among other things, for the following: |
| | Corporate
Governance: |
| Elron and
the Federmann Shareholders agreed that following the Merger, so long as each
holds at least 15% of the Issuer’s issued share capital, the following will
apply. | |
| (i) The
parties agreed to vote in order to cause the Issuer’s Board to have 11
members, consisting of four directors nominated by Elron, four directors
nominated by the Federmann Shareholders, the two External Directors and the
President of the Issuer. All Board committees will be comprised of an equal
number of Board nominees of each of Elron and the Federmann Shareholders.
Should the holdings of the Issuer’s issued share capital of only one of the
parties fall below 15%, but not below 5%, the number of directors that party will have the right to nominate to
the Board will be reduced proportionally. The other party will have the right
to nominate all other members of the Board and to designate the Chairman of
the Board and the President and Chief Executive Officer of the Issuer. | |
| (ii) The
Federmann Shareholders have the right to nominate a candidate to replace the
first of the two External Directors (as such term is defined under the
Israeli Companies Law, 1999) who vacates his appointment. Elron has the right
to nominate a candidate to replace the second of the two External Directors
who vacates his appointment. This arrangement will continue as long as the
Issuer is required to have External Directors. | |
| (iii) The
Issuer’s President and Chief Executive Officer will be elected as a director,
provided that he may not vote on any Board resolution if his vote determines
whether the resolution passes. | |
| (iv) The
Chairman of the Board is elected by the shareholders from among the Board
members. The Federmann Shareholders nominate a candidate for the office of
Chairman of the Board after they have consulted with Elron. Michael Federmann
was elected as Chairman beginning on the Merger closing date and is currently
the Chairman of the Issuer. | |
| (v) Following
termination of employment of the present President and Chief Executive
Officer of the Issuer (Mr. Joseph Ackerman), Elron will nominate a candidate
for the office of President and Chief Executive Officer, after consulting
with the Federmann Shareholders. The President and Chief Executive Officer
will be elected by the Board, and his appointment is subject to shareholder
approval. | |
| (vi) Elron
and the Federmann Shareholders coordinate in advance on how they will vote
their Ordinary Shares at any Issuer shareholders meeting. Except as provided above, the parties will
vote their shares against any proposed resolution at any Issuer’s
shareholders meeting, unless they agree in writing in advance to vote in
favor. | |
| | Restrictions on sales and purchases of the
Issuer’s Ordinary Shares: |

16

SEQ.=1,FOLIO='16',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| Following the Merger, as long as one of the parties holds at least
15%, and the other party at least 5%, of the Issuer’s issued share capital,
no transfer of the Ordinary Shares by either party will be valid unless made
in accordance with the following: |
| --- |
| (i) During
the period beginning on January 1, 2003 and ending on December 31, 2004, neither
party will transfer Ordinary Shares of the Issuer if, as a result of the
transfer, the transferring party’s holdings fall below 15% of the Issuer’
issued share capital, unless: |
| - shares constituting at least 15% of the Issuer’s
issued share capital are transferred; and |
| - all of the obligations and rights of the
transferring party under the Shareholders Agreement have been assigned and
transferred to the buyer, with the buyer’s assumption of all such
obligations, and written notice to this effect signed by both the transferor
and the buyer has been given to the other party before the transfer. |
| (ii) After
January 1, 2005, no party will transfer, as part of a single transaction, 15%
or more of the Issuer’s issued share capital unless all of the obligations
and rights of the transferring party under the Shareholders Agreement have
been assigned and transferred to the buyer, with the buyer’s assumption of
all such obligations, and written notice to this effect signed by both the
transferor and the buyer has been given to the other party to the
Shareholders Agreement before the transfer. |
| First Refusal and Tag Along Rights: |
| The Shareholders Agreement provides for rights of first refusal if a
party wants to transfer its Ordinary Shares to a third party buyer. The party
intending to sell its Ordinary Shares must first offer them to the other
party on the same terms offered by the buyer. The Shareholders Agreement also
provides for tag along rights if a party wants to transfer Ordinary Shares to
a third party buyer. The party wishing to sell its Ordinary Shares must
enable the other party to participate in the sale to a third party buyer,
unless the selling party wishes to: |
| (i) sell
more than 15% of the Issuer’s issued share capital, and |
| (ii) the
third party buyer assumes the obligations of the selling party under the
Shareholders Agreement. |
| The above provisions do not apply to any transfer by a party to a
person or entity that it controls or that controls such party or that is
under common control with such party. The right of first refusal and tag
along rights will also apply to any transfer of Ordinary Shares by FEL or HF,
respectively, if the Ordinary Shares held by such entity at any time
constitute in excess of 90% of the total assets of that entity. |
| Participation Rights: |
| The Shareholders Agreement also provides for purchase participation
rights. If a party purchases Ordinary Shares, the other party may participate
in this purchase on the same terms as the first party on a pro-rata basis,
based on the number of the Ordinary Shares held by the parties. However, this
participation right shall not apply to any purchases made by Elron until
Elron’s share holdings in the Issuer equal those of the Federmann
Shareholders. |

17

SEQ.=1,FOLIO='17',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

Permitted sales:
Despite the above restrictions on sales of the Issuer’s shares, each
party may sell Ordinary Shares on the Tel Aviv Stock Exchange (TASE) in
quantities not more, in any calendar quarter, than 1% of the Issuer’s issued
share capital.
Termination of the Shareholders Agreement:
The parties agreed that if the Merger Agreement becomes void, the
Shareholders Agreement will also become void. After the Merger, the
Shareholders Agreement will remain in effect until the earlier of:
(i) December
18, 2014; or
(ii) the
date any party’s holdings fall below 5% of the Issuer’s issued share capital, provided that all the
rights and obligations of that party under the Shareholders Agreement have
not been previously transferred or transferred concurrently with such
reduction to a new party, in which case the Shareholders Agreement will not
terminate but will bind the new party.
(2) Registration
Rights Agreement between the Issuer, Elron and the Federmann Shareholders
effective as of July 5, 2000 (“Registration Rights Agreement’).
The Registration Rights Agreement provides, among other things, for
the following:
(a) Elron
and the Federmann Shareholders each may twice require the Issuer to register
their Ordinary Shares for sale in the United States. No shareholder may
demand registration of Ordinary Shares less than 180 days following the
effective date of any registration statement previously filed by the Issuer
under a demand registration. The Issuer has the right to delay filing of a
registration statement in specific circumstances.
(b) At
any time that the Issuer proposes to file a registration statement in
connection with any public offering of any ordinary shares in the United
States, whether for the account of
the Issuer or any Issuer shareholder, Elron and the Federmann
Shareholders each may require the Issuer to include its Ordinary Shares in
that offering.
(c) The
respective registration rights of Elron and the Federmann Shareholders
terminate if such shareholder and its affiliates collectively cease to own at
least 5% of the then issued and outstanding Ordinary Shares of the Issuer or
such shares of any successor corporation. In addition, the Federmann
Shareholders agreed not to exercise their registration rights during the TASE
restriction period applicable to the Ordinary Shares the Federmann
Shareholders received as consideration in the Merger.
Item 7.	Material to be
filed as Exhibits
Exhibit 1	-	Shareholders
Agreement entered into between Elron Electronic Industries Ltd., Federmann
Enterprises Ltd. and Heris Finanz A.G., dated December 19, 1999, incorporated
by reference to Issuer’s Report on Form 6-K for February 2000, furnished to
the Securities and Exchange Commission on March 6, 2000.

18

SEQ.=1,FOLIO='18',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| Exhibit 2 | - | Registration
Rights Agreement effective as of July 5, 2000 among the Issuer, Elron,
Federmann Enterprises Ltd., and Heris Finanz A.G., incorporated by reference
to Issuer’s Report on Form 6-K., furnished to the Securities and Exchange
Commission on March 6, 2000. |
| --- | --- | --- |
| Exhibit 3 | | Letter
Agreement dated July 17, 2003 between Elron and IDB Holding authorizing IDB
Holding to file this Amendment and any amendments hereto on behalf of Elron |
| Exhibit 4 | - | Letter
Agreement dated July 7, 2003 between DIC and IDB Holding authorizing IDB
Holding to file this Amendment and any amendments hereto on behalf of DIC. |
| Exhibit 5 | - | Letter
Agreement dated June 23, 2003 between IDB Development and IDB Holding
authorizing IDB Holding to file this Amendment and any amendments hereto on
behalf of IDB Development. |
| Exhibit 6 | - | Letter
Agreement dated June 18, 2003 between Nochi Dankner and IDB Holding
authorizing IDB Holding to file this Amendment and any amendments hereto on
behalf of Nochi Dankner. |
| Exhibit 7 | - | Letter
Agreement dated June 23, 2003 between Shelly Dankner-Bergman and IDB Holding
authorizing IDB Holding to file this Amendment and any amendments hereto on
behalf of Shelly Dankner-Bergman. |
| Exhibit 8 | - | Letter
Agreement dated June 19, 2003 between Ruth Manor and IDB Holding authorizing
IDB Holding to file this Amendment and any amendments hereto on behalf of
Ruth Manor. |
| Exhibit 9 | - | Letter
Agreement dated June 22, 2003 between Avraham Livnat and IDB Holding
authorizing IDB Holding to file this Amendment and any amendments hereto on
behalf of Avraham Livnat. |

19

SEQ.=1,FOLIO='19',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

Signature

After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this Schedule 13D is true, complete and correct.

| Date: July
22, 2003 |
| --- |
| BY: IDB
HOLDING CORPORATION LTD. |
| (signed) |
| BY: |
| Rina Cohen
and Arthur Caplan, authorized signatories of IDB Holding Corporation Ltd.,
for itself and on behalf of Elron Electronic Industries Ltd., Discount
Investment Corporation Ltd., IDB Development Corporation Ltd., Nochi Dankner,
Shelly Dankner-Bergman, Ruth Manor and Avraham Livnat, pursuant to agreements
annexed to this Schedule 13D as Exhibits 3 through 9. |

20

SEQ.=1,FOLIO='20',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

*Schedule A*

Directors and Executive Officers o f *Elron Electronic Industries Ltd.* (as of June 23, 2003)

Citizenship is the same as country of address, unless otherwise noted.

| Name &
Address | Position | Current Principal Occupation |
| --- | --- | --- |
| Ami Erel 3 Azrieli Center, The Triangular Tower 43 rd floor, Tel-Aviv 67023, Israel | Chairman of
the Board of Directors | President
& Chief Executive Officer of Discount Investment Corporation Ltd. |
| Avraham
Asheri 12 Yoshpe Street, Apt. 7, Mevasseret Zion 90805, Israel | Director | Director of
Companies |
| Yaacov
Goldman 39 Nachlieli Street, Hod Hasharon, Israel | External
Director | CPA |
| Prof.
Gabriel Barbash 14 Zisman Street, Ramat Gan, Israel | Director | Director
General of the Tel Aviv Sourasky
Medical Center. |
| Dr. Chen
Barir 26 Harav Amiel Street, Tel Aviv, Israel | Director | Chairman of
Galil Medical Ltd. |
| Michael F.
Kaufmann 25 Nahmani Street, Tel Aviv, Israel | Director | General
Manager of D.S Ltd. & Kibernetics Ltd. |
| Oren Lieder 3 Azrieli Center,The Triangular Tower 43 rd floor, Tel-Aviv 67023, Israel | Director
& Chief Financial Officer | Senior Vice
President & CFO of Discount Investment Corporation Ltd. |
| Dr. Dalia
Megiddo Globus Communication Center, Suite 220, Neve Ilan 90850, Israel | Director | Managing
Partner of InnoMed Ventures L.P |
| Itzhak Ravid Raveh-Ravid, 32A Habarzel Street, Tel Aviv 69710, Israel | Director | CPA. |

21

SEQ.=1,FOLIO='21',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| Professor
Daniel Sipper 3 Kadesh Barnea Street, Apt. 39 Tel Aviv 69986, Israel | External
Director | Professor -
Department of Engineering, Tel Aviv University |
| --- | --- | --- |
| Doron Birger 3 Azrieli Center, The Triangular Tower 42 nd floor, Tel-Aviv 67023, Israel | President
& Chief Executive Officer | President
& Chief Executive Officer of Elron Electronic Industries Ltd. |
| Moshe
Fourier 3 Azrieli Center, The Triangular Tower 42 nd floor, Tel-Aviv 67023, Israel | Vice
President & Chief Technology Officer | Vice
President & Chief Technology Officer of Elron Electronic Industries Ltd. |
| Tal Raz 3 Azrieli Center, The Triangular Tower 42 nd floor, Tel-Aviv 67023, Israel | Vice
President, Chief Financial Officer | Vice
President, Chief Financial Officer of Elron Electronic Industries Ltd. |
| Shmuel
Kidron (1) 3 Azrieli Center, The Triangular Tower 42 nd floor, Tel-Aviv 67023, Israel | Vice
President | Vice
President of Elron Electronic Industries Ltd. |

(1) Mr. Kidron owned, as of May 19, 2003, 87 Ordinary Shares.

Based on information provided to the Reporting Persons, during the past five years, none of the persons listed above has been convicted, or is subject to a judgment, decree or final order, in any of the legal proceedings enumerated in Items 2 (d) and 2 (e) of Schedule 13D.

22

SEQ.=1,FOLIO='22',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

*Schedule B*

Directors and Executive Officers o f *Discount Investment Corporation Ltd.* (as of June 23, 2003)

Citizenship is the same as country of address, unless otherwise noted.

| Name &
Address | Position | Current Principal Occupation |
| --- | --- | --- |
| Nochi Dankner 46 Rothschild Blvd., 22 nd floor, Tel-Aviv 66883, Israel | Chairman of
the Board of Directors | Business
Manager; Chairman and Director of companies; Attorney. |
| Shelly
Dankner-Bergman 12 Recanati Street, Ramat-Aviv Gimmel, Tel-Aviv 69494, Israel | Director | Director of
companies. |
| Zvi Livnat Taavura Junction, Ramle 72102, Israel | Director | Vice
President of Taavura Holdings Ltd.; Co-Chief Executive Officer of Clal
Industries and Investments Ltd. |
| Avi Fischer 11 Beit Zuri Street, Ramat Aviv, Tel-Aviv, Israel | Director | Partner in
Fischer, Behar, Chen & Co. law firm; Chairman of Ganden Tourism &
Aviation Ltd.; Vice-Chairman of Ganden Holdings Ltd.; Co-Chief Executive
Officer of Clal Industries and Investments Ltd.; Director of companies. |
| Lior Hannes 46 Rothschild Blvd., 22 nd floor, Tel-Aviv 66883, Israel | Director | Chief
Executive Officer of Ganden Tourism & Aviation Ltd.; Director of
companies. |
| Refael
Bisker 46 Rothschild Blvd., 22 nd floor, Tel-Aviv 66883, Israel | Director | Chief
Executive Officer of Ganden Real Estate Ltd.; Chairman and Director of
companies. |
| Jacob
Schimmel 54-56 Euston Street, London NW1, United Kingdom | Director | Chairman
& Chief Executive Officer of UKI Investments. |
| Shaul
Ben-Zeev Taavura Junction, Ramle 72102, Israel | Director | Chief
Executive Officer of Avraham Livnat Ltd. |

23

SEQ.=1,FOLIO='23',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| Eliahu Cohen 3 Azrieli Center, The Triangular Tower 44 th floor, Tel-Aviv 67023, Israel | Director | Chief
Executive Officer of IDB Development Corporation Ltd. |
| --- | --- | --- |
| Gideon Lahav 124 Ehad Ha-Am Street, Tel-Aviv 65208, Israel | Director | Director of
companies. |
| Nahum Admoni 26 Ben Josef Street, Ramat Aviv Gimel, Tel-Aviv 69125, Israel | External
Director | Director of
companies. |
| Isaac Manor
() (1) 26 Hagderot Street, Savion, Israel | Director | Chairman of
the boards of directors of automobile companies. |
| Dori Manor
() 18 Hareches Street, Savion, Israel | Director | Chief
Executive Officer of automobile companies, |
| Darko Horvat
(**) 20 Kensington Park Gardens, London W113HD, United Kingdom | Director | Owner &
president of Aktiva group. |
| Avraham
Drenger 105 Ha-Hashmonaim Street, Tel- Aviv 67133, Israel | External
Director | Chief
Executive Officer of L.Y.A Ltd. |
| Ami Erel 3 Azrieli Center, The Triangular Tower 43 rd floor, Tel-Aviv 67023, Israel | President
& Chief Executive Officer | President
& Chief Executive Officer of Discount Investment Corporation Ltd. |
| Oren Lieder 3 Azrieli Center, The Triangular Tower 43 rd floor, Tel-Aviv 67023, Israel | Senior Vice
President & Chief Financial Officer | Senior Vice
President & CFO of Discount Investment Corporation Ltd. |
| Joseph Douer 3 Azrieli Center, The Triangular Tower 43 rd floor, Tel-Aviv 67023, Israel | Senior Vice
President | Senior Vice
President of Discount Investment Corporation Ltd. |
| Raanan Cohen 3 Azrieli Center, The Triangular Tower 43 rd floor, Tel-Aviv 67023, Israel | Vice
President | Vice
President of Discount Investment Corporation Ltd. |

24

SEQ.=1,FOLIO='24',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

Michel Dahan 3 Azrieli Center, The Triangular Tower 43 rd floor, Tel-Aviv 67023, Israel Comptroller Comptroller of Discount Investment Corporation Ltd.

(*) Dual citizen of Israel and France.

(**) Citizen of Slovenia.

(1) Mr. Isaac Manor jointly owned with his wife, Ruth Manor, as of May 19, 2003, 7000 Ordinary Shares.

Based on information provided to the Reporting Persons, during the past five years, none of the persons listed above has been convicted, or is subject to a judgment, decree or final order, in any of the legal proceedings enumerated in Items 2 (d) and 2 (e) of Schedule 13D.

25

SEQ.=1,FOLIO='25',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

*Schedule C*

Directors and Executive Officers o f *IDB Development Corporation Ltd.* (as of June 23, 2003)

Citizenship is the same as country of address, unless otherwise noted.

| Name &
Address | Position | Current Principal Occupation |
| --- | --- | --- |
| Nochi
Dankner 46 Rothschild Blvd., 22 nd floor, Tel-Aviv 66883, Israel | Chairman of
the Board of Directors | Business
Manager; Chairman and Director of companies; Attorney. |
| Shelly
Dankner-Bergman 12 Recanati Street, Ramat-Aviv Gimmel, Tel-Aviv 69494, Israel | Director | Director of
companies. |
| Zvi Livnat Taavura Junction, Ramle 72102, Israel | Director | Vice
President of Taavura Holdings Ltd.; Co-Chief Executive Officer of Clal
Industries and Investments Ltd. |
| Lior Hannes 46 Rothschild Blvd., 22 nd floor, Tel-Aviv 66883, Israel | Director | Chief
Executive Officer of Ganden Tourism & Aviation Ltd.; Director of
companies. |
| Refael
Bisker 46 Rothschild Blvd., 22 nd floor, Tel-Aviv 66883, Israel | Director | Chief
Executive Officer of Ganden Real Estate Ltd.; Chairman and Director of
companies. |
| Jacob
Schimmel 54-56 Euston Street, London NW1, United Kingdom | Director | Chairman
& Chief Executive Officer of UKI Investments. |
| Shaul
Ben-Zeev Taavura Junction, Ramle 72102, Israel | Director | Chief
Executive Officer of Avraham Livnat Ltd. |
| Eliahu Cohen 3 Azrieli Center, The Triangular Tower 44 th floor, Tel-Aviv 67023, Israel | Director | Chief
Executive Officer of IDB Development Corporation Ltd. |
| Isaac Manor
(*) (1) 26 Hagderot Street, Savion, Israel | Director | Chairman of
the boards of directors of automobile companies. |

26

SEQ.=1,FOLIO='26',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| Dori Manor
() 18 Hareches Street, Savion, Israel | Director | Chief
Executive Officer of automobile companies, |
| --- | --- | --- |
| Darko Horvat
() 20 Kensington Park Gardens, London W113HD, United Kingdom | Director | Owner &
president of Aktiva group. |
| Abraham Ben
Joseph (2) 87 Haim Levanon Street, Tel-Aviv 69345, Israel | Director | Director of
companies. |
| Arnon Gafny 55 Moshe Kol Street, Jerusalem 93715, Israel | External
Director | Economist. |
| Rami
(Avraham) Mardor 33 Haoranim Street, Kfar Shmariyahu 46910, Israel | External
Director | Director of
companies. |
| Dr. Zehavit
Joseph (**) 3 Azrieli Center, The Triangular Tower 44 th floor, Tel-Aviv 67023, Israel | Executive
Vice President & Chief Financial Officer | Executive
Vice President & Chief Financial Officer of IDB Holding Corporation Ltd.
and IDB Development Corporation Ltd. |
| Avi Shani 3 Azrieli Center, The Triangular Tower 44 th floor, Tel-Aviv 67023, Israel | Vice
President, Investments & Chief Economist | Vice
President, Investments & Chief Economist of IDB Development Corporation
Ltd. |
| Rina Cohen 3 Azrieli Center, The Triangular Tower 44 th floor, Tel-Aviv 67023, Israel | Comptroller | Comptroller
of IDB Holding Corporation Ltd. and IDB Development Corporation Ltd. |

(*) Dual citizen of Israel and France.

(**) Citizen of Slovenia.

(***) Dual citizen of Israel and U.S.A.

(1) Mr. Isaac Manor jointly owned with his wife, Ruth Manor, as of May 19, 2003, 7000 Ordinary Shares.

(2) Mr. Ben Joseph owned as of May 19, 2003 options to purchase from the Issuer up to an aggregate of 4,000 Ordinary Shares at prices per share ranging between $10.61 and $12.32.

Based on information provided to the Reporting Persons, during the past five years, none of the persons listed above has been convicted, or is subject to a judgment, decree or final order, in any of the legal proceedings enumerated in Items 2 (d) and 2 (e) of Schedule 13D.

27

SEQ.=1,FOLIO='27',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

*Schedule D*

Directors and Executive Officers o f *IDB Holding Corporation Ltd.* (as of June 23, 2003)

Citizenship is the same as country of address, unless otherwise noted.

| Name &
Address | Position | Current Principal Occupation |
| --- | --- | --- |
| Nochi
Dankner 46 Rothschild Blvd., 22 nd floor, Tel-Aviv 66883, Israel | Chairman of
the Board of Directors | Business
Manager; Chairman and Director of companies; Attorney. |
| Shelly
Dankner-Bergman 12 Recanati Street, Ramat-Aviv Gimmel, Tel-Aviv 69494, Israel | Director | Director of
companies. |
| Zvi Livnat Taavura Junction, Ramle 72102, Israel | Director | Vice
President of Taavura Holdings Ltd.; Co-Chief Executive Officer of Clal
Industries and Investments Ltd. |
| Avi Fischer 11 Beit Zuri Street, Ramat Aviv, Tel-Aviv, Israel | Director | Partner in
Fischer, Behar, Chen & Co. law firm; Chairman of Ganden Tourism &
Aviation Ltd.; Vice-Chairman of Ganden Holdings Ltd.; Co-Chief Executive
Officer of Clal Industries and Investments Ltd.; Director of companies. |
| Lior Hannes 46 Rothschild Blvd., 22 nd floor, Tel-Aviv 66883, Israel | Director | Chief
Executive Officer of Ganden Tourism & Aviation Ltd.; Director of
companies. |
| Refael
Bisker 46 Rothschild Blvd., 22 nd floor, Tel-Aviv 66883, Israel | Director | Chief
Executive Officer of Ganden Real Estate Ltd.; Chairman and Director of
companies. |
| Jacob
Schimmel 54-56 Euston Street, London NW1, United Kingdom | Director | Chairman
& Chief Executive Officer of UKI Investments. |
| Shaul
Ben-Zeev Taavura Junction, Ramle 72102, Israel | Director | Chief
Executive Officer of Avraham Livnat Ltd. |

28

SEQ.=1,FOLIO='28',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'

| Eliahu Cohen 3 Azrieli Center, The Triangular Tower 44 th floor, Tel-Aviv 67023, Israel | Director | Chief
Executive Officer of IDB Development Corporation Ltd. |
| --- | --- | --- |
| Isaac Manor
() (1) 26 Hagderot Street, Savion, Israel | Director | Chairman of
the boards of directors of automobile companies. |
| Dori Manor
() 18 Hareches Street, Savion, Israel | Director | Chief
Executive Officer of automobile companies, |
| Darko Horvat
() 20 Kensington Park Gardens, London W113HD, United Kingdom | Director | Owner &
president of Aktiva group. |
| Meir Rosenne 14 Aluf Simchoni Street, Jerusalem 92504, Israel | Director | Attorney. |
| Josef Kucik (#) 35 Wingate Street, Herzliah Pituach, Israel | External
Director | Director of
companies. |
| Rolando
Eisen 2 “A” Geiger Street, Naveh Avivim, Tel Aviv 69341, Israel | External
Director | Director of
companies. |
| Dr. Zehavit
Joseph (*) 3 Azrieli Center, The Triangular Tower 44 th floor, Tel-Aviv 67023, Israel | Executive
Vice President & Chief Financial Officer | Executive
Vice President & Chief Financial Officer of IDB Holding Corporation Ltd.
and IDB Development Corporation Ltd. |
| Rina Cohen 3 Azrieli Center, The Triangular Tower 44 th floor, Tel-Aviv 67023, Israel | Comptroller | Comptroller
of IDB Holding Corporation Ltd. and IDB Development Corporation Ltd. |

(*) Dual citizen of Israel and France.

(**) Citizen of Slovenia.

(***) Dual citizen of Israel and U.S.A.

(#) Has given notice of retirement as of July 1, 2003.

(1) Mr. Isaac Manor jointly owned with his wife, Ruth Manor, as of May 19, 2003, 7000 Ordinary Shares.

Based on information provided to the Reporting Persons, during the past five years, none of the persons listed above has been convicted, or is subject to a judgment, decree or final order, in any of the legal proceedings enumerated in Items 2 (d) and 2 (e) of Schedule 13D.

29

SEQ.=1,FOLIO='29',FILE='C:\jms\khuggett\03-1307-1\task3282\1307-1-ba.htm',USER='khugget',CD='Jul 23 06:41 2003'