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As filed with the Securities and Exchange Commission on August 2, 1999
Registration Number 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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BINDVIEW DEVELOPMENT CORPORATION
(Exact name of Registrant as specified in its charter)
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Texas 76-0306721
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5151 San Felipe, 22nd Floor
Houston, Texas 77056
713/561-4000
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Scott R. Plantowsky
Chief Financial Officer
BindView Development Corporation
5151 San Felipe, 22nd Floor
Houston, Texas 77056
713/561-4000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPY TO:
Robert F. Gray, Jr.
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010-3095
(713) 651-5151
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Amount Proposed maximum Proposed maximum Amount of
Title of each class of to be offering price Aggregate registration
securities to be registered registered per share(1) offering price(1) fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value per share 1,154,690 shares $23.125 $26,702,206 $7,424
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457 of the Securities Act of 1933, as amended, on the
basis of the average of the high and low prices of the Common Stock as
reported by The Nasdaq Market on July 29, 1999.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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Subject to Completion, dated July 30, 1999
PROSPECTUS
1,154,690 SHARES
BINDVIEW DEVELOPMENT CORPORATION
COMMON STOCK
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The common stock of BindView Development Corporation is included in
The Nasdaq National Market under the symbol "BVEW". The last sales price of our
common stock as reported by The Nasdaq Stock Market on July 29, 1999, was
$23.19.
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THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN MATTERS
THAT YOU SHOULD CONSIDER BEFORE PURCHASING OUR COMMON STOCK.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------
The shareholders named in this Prospectus under the heading "Selling
Shareholders" are offering all of the 1,154,690 shares of common stock offered
hereby. We will not receive proceeds from the sale of these shares but will bear
certain of the expenses incident to the offering and sale of the shares.
The selling shareholders may sell these shares from time to time in
the over-the-counter market, on any stock exchange on which the common stock may
be listed at the time of sale, in private transactions or pursuant to
underwriting agreements at prices related to prices then prevailing involving
payment of customary commissions or discounts. See "Plan of Distribution".
_________, 1999
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ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a
registration statement on Form S-3 under the Securities Act of 1933 with respect
to the shares. This prospectus, which is included in the registration statement,
does not contain all of the information in the registration statement. For
further information regarding BindView and our common stock, please see the
registration statement and our filings with the SEC, which you may read without
charge at the public reference facilities maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at the regional
offices of the Commission located at 7 World Trade Center, 13th Floor, New York,
New York 10048, at Citicorp Center, 500 West Madison Street, 14th Floor,
Chicago, Illinois 60661, at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006 or through
the Commission's Web site at http:\\www.sec.gov.
We furnish holders of our common stock with annual reports containing
financial statements audited by our independent auditors in accordance with
generally accepted accounting principles following the end of each fiscal year.
We file reports and other information with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934.
Descriptions in this prospectus of documents are intended to be
summaries of the material, relevant portions of those documents, but may not be
complete descriptions of those documents. For complete copies of those
documents, please refer to the exhibits to the registration statement and other
documents filed by us with the SEC.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following, which we have filed with the SEC are incorporated herein
by reference:
(i) BindView's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, filed with the Commission on February 23,
1999 (except for the financial statements which have been restated to
reflect the pooling of interests with Netect Ltd. -- see item (v)
below);
(ii) BindView's Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 1999, filed with the Commission on May
17, 1999
(iii) BindView's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1999, filed with the Commission on July
28, 1999;
(iv) The description of BindView's Common Stock, no par value
per share, contained in the Registration Statement on Form S-1 of the
Registrant (Reg. No. 333-66941), originally filed with the Commission
on November 6, 1998; and
(v) BindView's Current Report on Form 8-K dated March 1, 1999,
filed with the Commission on March 16, 1999, as amended by Amendment
No. 1 to Form 8-K on Form 8-K/A, filed with the Commission on May 7,
1999.
All documents that we file with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
prospectus but before the termination of the offering by this prospectus shall
be deemed to be incorporated herein by reference and to be a part hereof from
the date of the filing of those documents.
We will provide, without charge, to each person to whom a copy of this
prospectus has been delivered, upon written or oral request of such person, a
copy of any or all of the documents incorporated by reference herein (other than
certain exhibits to such documents not specifically incorporated by reference).
Requests for such copies should be directed to Investor Relations, BindView
Development Corporation, 5151 San Felipe, 22nd Floor, Houston, Texas 77056,
telephone number 713/561-3000.
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PROSPECTUS SUMMARY
OUR COMPANY
BindView Development Corporation develops, markets and supports a suite
of systems and security management software products that manage the security
and integrity of complex, distributed client/server networks operating on
Microsoft Windows NT and Novell NetWare environments. Our primary product line,
BindView EMS, provides software solutions for systems administration, security
management, enterprise inventory of local area network assets and Year 2000
assessment of PC hardware and software. Network administrators, security
auditors and other information technology personnel use BindView EMS to
proactively identify, diagnose and, in many cases, fix a wide range of systems
management problems. BindView EMS enables organizations to reduce the total cost
of ownership of enterprise computing.
On March 1, 1999, BindView acquired all of the outstanding equity
interests in Netect Ltd. in a stock-for-stock exchange treated as a pooling of
interests. Netect is a provider of anti-hacker software solutions that identify
and close security holes to prevent internal and external network intrusions,
including attempts to hack into a network via the Internet.
Our principal executive offices are located at 5151 San Felipe, 22nd
Floor, Houston, Texas 77056, and our telephone number is 713/561-4000.
THE OFFERING
Securities offered................. 1,154,690 shares of common stock.
Use of proceeds.................... We will not receive any proceeds from the
sale of the shares.
Nasdaq symbol...................... The shares of Common Stock are included in
the Nasdaq National Market under the
symbol "BVEW".
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RISK FACTORS
An investment in our common stock involves a high degree of risk.
For a discussion of certain matters that should be considered by
prospective purchasers of our common stock offered hereby, see "Risk
Factors" on page 5.
RISK FACTORS
An investment in the Common stock offered by this Prospectus involves
a high degree of risk. Accordingly, you should consider carefully the following
risk factors, in addition to the other information concerning BindView and its
business contained in and incorporated into this Prospectus, before purchasing
Shares. This Prospectus contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. Actual results
could differ materially from the projections included in such statements.
Factors that could cause or contribute to such differences include those
discussed below and elsewhere in this Prospectus.
OUR QUARTERLY REVENUES, EXPENSES AND OPERATING RESULTS MAY FLUCTUATE
SIGNIFICANTLY. These fluctuations may be due to a number of factors, including:
- demand for our products;
- size and timing of significant orders and their fulfillment;
- our ability to develop and upgrade our technology;
- changes in our level of operating expenses;
- our ability to compete in a highly competitive market;
- undetected software errors and other product quality problems;
- changes in our sales incentive plans and staffing of sales territories;
and
- changes in the mix of domestic and international revenues and the level of
international expansion.
Generally, we do not operate with a backlog because we ship our products and
recognize revenue shortly after orders are received. At the time we ship our
products we have satisfied all of the criteria of Statement of Position No. 97-2
"Software Revenue Recognition," and therefore we recognize the related license
revenue. As a result, orders booked throughout a quarter substantially impact
product revenues in that quarter. Our sales also fluctuate throughout the
quarter as a result of customer buying patterns. We base our expenses to a
significant extent on our expectations of future revenues. Most of our expenses
are fixed in the short term and we may not be able to quickly reduce spending if
our revenues are lower than we had projected. If our revenue levels do not meet
our projections, we expect our operating results to be adversely and
disproportionately affected.
Our quarterly operating results also are subject to certain seasonal
fluctuations. Year-end customer buying patterns and compensation policies based
on annual revenue quotas have caused our revenues to be strongest in the fourth
quarter of the year and to decrease in the first quarter of the following year.
In future periods, we expect that these seasonal trends may cause first quarter
revenues to be significantly lower than the level achieved in the preceding
fourth quarter.
Prior to January 1, 1998, we provided telephone support free of charge and sold
product upgrades separately or through subscription contracts. We now require
our customers to purchase a subscription policy in order to receive product
upgrades and technical support. Unlike software license revenues that we
generally recognize upon shipment of the product, we recognize subscription
contract revenues ratably over the life of the contract term. As a result, if we
derive a larger percentage of our revenues from subscription contracts, we will
experience an increase in deferred revenue that is likely to decrease our
operating margins. Decreased operating margins may materially adversely affect
our business, operating results and financial condition.
As a result, we believe quarter-to-quarter comparisons of our revenues, expenses
and results of operations are not necessarily meaningful. You should not rely on
our quarterly revenues, expenses and results of operations to predict our future
performance.
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WE HAVE A LIMITED OPERATING HISTORY. Although BindView was founded in 1990, we
have derived substantially all of our revenues since 1995 from sales of BindView
NCS product family, replaced in 1996 by BindView EMS. We therefore have a
limited operating history based on our primary products. An investor in our
Company must consider the risks and uncertainties frequently encountered by
software companies in the early stages of development, particularly those faced
by companies in the highly competitive and rapidly evolving systems management
software market. To compete in this market, we believe that we must devote
substantial resources to expanding our sales and marketing organization and to
continue product development. As a result, we will need to recognize significant
quarterly revenues to remain profitable. Our revenues have increased in recent
years, and revenues for recent quarters have exceeded revenues for the same
quarter for the prior year. However, we cannot be certain that we can sustain
these growth rates or that we will remain profitable on a quarterly or annual
basis in the future.
OUR MARKETS ARE HIGHLY COMPETITIVE. We face competition from different sources.
Currently, our products compete with products from the following organizations:
- providers of security analysis and audit products, such as Axent
Technologies, Inc. Security Dynamics Technologies, Inc., ISS Group, Inc.
and Network Associates Inc.;
- providers of stand-alone inventory and asset management products, such as
Tally Systems Corp.;
- providers of LAN desktop management suites, such as Intel Corporation,
Hewlett-Packard Company and Microsoft Corporation;
- providers of Year 2000 assessment products, such as Greenwich Mean
Time--UTA, L.C.;
- providers of event notification and response technology, such as Attention
Software, Inc.; and
- providers of Windows NT management and migration tools, such as Mission
Critical Software, Entevo Corp. and FastLane Technologies Inc.
- In addition, certain management features included in our products compete
with the native tools from Novell, Inc. and third-party tools from certain
vendors, such as Computer Associates, Inc. and other companies.
We expect competition in the network management software market to increase
significantly as new companies enter the market and current competitors expand
their product lines and services. Many of these potential competitors are likely
to enjoy substantial competitive advantages, including:
- greater resources that can be devoted to the development, promotion and
sale of their products;
- more established sales channels;
- greater software development experience; and
- greater name recognition.
We also believe that operating system software vendors, particularly Microsoft
and Novell, could enhance their products to include functionality that we
currently provide in our products. If these vendors include our software
functionality as standard features of their operating system software, our
products could become obsolete. Even if the functionality of the standard
software features of these vendors is more limited than ours, there is a
substantial risk that a significant number of customers would elect to keep this
limited functionality rather than purchase additional software.
To be competitive, we must respond promptly and effectively to the challenges of
technological change, evolving standards and our competitors' innovations by
continuing to enhance our products, services and sales channels. Any pricing
pressures, reduced margins or loss of market share resulting from our failure to
compete effectively could materially adversely affect our business.
OUR PRODUCTS ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE. The market for our
products is characterized by rapid technological change, frequent new product
introductions and enhancements, uncertain product life cycles, changes in
customer demands and evolving industry standards. Our products could be rendered
obsolete if new products based on new technologies are introduced or new
industry standards emerge. We rely heavily on our relationships with Microsoft
and Novell and attempt to coordinate our product offerings with the future
releases of their operating systems. These companies are competitors or ours and
may not notify us of feature enhancements prior to new releases of their
operating systems in the future. In that case, we may not be able to introduce
products on a timely basis that capitalize on new operating system releases and
feature enhancements.
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CLIENT/SERVER COMPUTING ENVIRONMENTS ARE INHERENTLY COMPLEX. As a result, we
cannot accurately estimate our software product life cycles. New products and
product enhancements can require long development and testing periods, which
depend significantly on our ability to hire and retain increasingly scarce and
technically competent personnel. Significant delays in new product releases or
significant problems in installing or implementing new product releases could
seriously damage our business. We have, on occasion, experienced delays in the
scheduled introduction of new and enhanced products and cannot be certain that
such delays will not occur again.
Our future success will depend, in part, upon our ability to enhance existing
products, develop and introduce new products, satisfy customer requirements and
achieve market acceptance. We cannot be certain that we will successfully
identify new product opportunities and develop and bring new products to market
in a timely and cost-effective manner. Further, the products, capabilities or
technologies developed by others may render our products or technologies
obsolete or shorten their life cycles.
WE ARE DEPENDENT UPON CONTINUED GROWTH OF THE MARKET FOR WINDOWS NT AND NOVELL
NETWARE OPERATING SYSTEMS. We depend upon the success of Microsoft's Windows NT
and Novell's NetWare operating systems. In particular, market acceptance of our
products depends on the increasing complexity of these operating systems and the
lack of effective tools to simplify system administration and security
management for these environments. Although demand for Windows NT and NetWare
operating systems has grown in recent years, this market is still emerging and
we cannot be certain that it will continue to grow. If the market does continue
to grow, we cannot be certain that the market for our products will continue to
develop or that our products will be widely accepted. If the markets for our
products fail to develop or develop more slowly than we anticipate, our business
could be materially adversely affected.
The percentages of our revenues attributable to software licenses for particular
operating system platforms can change from time to time. A number of factors
outside our control can cause these changes, including changing market
acceptance and penetration of the various operating system platforms which we
support and the relative mix of development and installation by value-added
resellers ("VARs") of application software operating on such platforms.
PRODUCT CONCENTRATION. Substantially all of our revenues are derived from sales
of the NOSadmin and NETinventory products from the BindView EMS product family.
We anticipate that these products along with products additions as a result of
the Curasoft and Netect acquisitions will account for majority all of our
revenues for the foreseeable future. Our future operating results will depend on
continued market acceptance of NOSadmin and NETinventory, introduction of new
products from the Curasoft and Netect acquisitions, enhancements to these
products and the continued development of additional snap-in modules for our
Enterprise Console product. Competition, technological change or other factors
could reduce demand for, or market acceptance of any or all of our products and
could substantially damage our business. Although we currently plan to broaden
our product line, we cannot be certain that we will be able to reduce our
product concentration or that we will be able to generate material revenues from
products acquired as a result of the Curasoft and Netect acquisitions.
RISKS ASSOCIATED WITH LENGTH OF SALES CYCLE. We have sold our products to
customer workgroups and corporate divisions. As a result, our sales cycle has
ranged from three to six months. Recently, we have focused more of our selling
effort on products for the customer's entire enterprise and have found that our
sales cycle to enterprises has ranged from six to twelve months. The sales cycle
to enterprises is typically longer for a number of reasons, including:
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- the significant resources committed to an evaluation of network management
software by an enterprise require us to expend substantial time, effort
and money educating them on the value of our products and services; and
- decisions to license and deploy enterprise-wide software generally involve
an evaluation of our software by a significant number of personnel of the
enterprise in various functional and geographic areas, each often having
specific and conflicting requirements.
As a result, we cannot predict the timing and amount of specific sales. Our
inability to complete one or more enterprise-wide sales in a particular quarter
or calendar year could materially adversely affect our business and could cause
our operating results to vary significantly from quarter to quarter. For more
information, see "-- Our Quarterly Financial Results are Subject to Significant
Fluctuations".
NEED TO MANAGE CHANGING OPERATIONS. We have expanded our operations rapidly in
recent years. We intend to continue to expand in the foreseeable future to
pursue existing and potential market opportunities. This rapid growth places a
significant demand on management and operational resources. In order to manage
growth effectively, we must implement and improve our operational systems,
procedures and controls on a timely basis. If we fail to implement and improve
these systems, our business, operating results and financial condition will be
materially adversely affected.
DEPENDENCE ON KEY PERSONNEL. Our success depends largely on the efforts of our
executive officers, particularly Eric J. Pulaski, the President and Chief
Executive Officer of BindView. We do not have an employment contract requiring
Mr. Pulaski to continue his employment for any period of time. We do not
maintain key man life insurance policies on any of our executive officers.
We believe that our future success will depend in large part upon our ability to
attract and retain highly skilled research and development, technical support
and sales and marketing personnel. We face intense competition for qualified
personnel, and we cannot be certain that we will successfully attract and retain
additional qualified personnel in the future. The loss of the services of one or
more of our key individuals or the failure to attract and retain additional
qualified personnel could substantially damage our business.
RISKS ASSOCIATED WITH INTERNATIONAL SALES AND OPERATIONS. During 1998, 1997 and
1996, we derived approximately 10%, 13% and 10% of our revenues, respectively,
from sales outside North America. We only recently opened direct telesales
offices outside the United States. We have historically generated revenues
outside North America through indirect channels, including VARs and other
distributors. We are in the early stages of developing our indirect distribution
channels in certain markets outside the United States. We cannot be certain that
we will be able to attract third parties that will be able to market our
products effectively or to provide timely and cost-effective customer support
and service. Our reseller arrangements generally provide that resellers may
carry competing product offerings. We cannot be certain that any distributor or
reseller will continue to represent our products. The inability to recruit, or
the loss of, important sales personnel, distributors or resellers could
materially and adversely affect our business.
As we expand our sales and support operations internationally, we anticipate
that international revenues will grow as a percentage of our total revenues. To
successfully expand international sales, we must:
- establish additional international direct telesales offices;
- expand the management and support organizations for our international
sales channel;
- hire additional personnel;
- customize our products for local markets;
- recruit additional international resellers where appropriate; and
- expand the use of our direct telesales model.
If we are unable to generate increased sales through a direct telesales model,
we will incur higher personnel costs without corresponding increases in revenue,
resulting in lower operating margins for our international operations. In
addition, employment policies vary among countries outside the United States,
which may reduce our flexibility in managing headcount and, in turn, managing
personnel-related expenses. If we do not address the risks associated
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with international sales in a cost-effective and timely manner, our
international sales growth will be limited, operating margins could be reduced
and our business could be materially adversely affected. However, even if we are
able to successfully expand our international operations, we cannot be certain
that we will be able to maintain or increase international market demand for our
products.
LIMITED PROTECTION OF PROPRIETARY TECHNOLOGY; RISKS OF INFRINGEMENT. Our success
depends to a significant degree upon our software and other proprietary
technology. The software industry has experienced widespread unauthorized
reproduction of software products. We rely on a combination of trademark, trade
secret, and copyright law and contractual restrictions to protect our
technology. These legal protections provide only limited protection and such
protection is generally lower outside of the United States. However, as our
products are more globally distributed, this associated with the unauthorized
reproduction of software products could increase. The steps we have taken may
deter competitors from misappropriating our proprietary information. However, we
may not be able to detect unauthorized use or take appropriate steps to enforce
our intellectual property rights. If we litigated to enforce our rights,
litigation would be expensive, would divert management resources and may not be
adequate to protect our business. We also could be subject to claims alleging
infringement of third-party intellectual property rights. In addition, we may be
required to indemnify our distribution partners and end-users for similar claims
made against them. Any claims against us could require us to spend significant
time and money in litigation, pay damages, develop non-infringing intellectual
property or acquire licenses to intellectual property that is the subject of the
infringement claims. As a result, claims against us could materially adversely
affect our business.
RISKS ASSOCIATED WITH COMPLETED AND POTENTIAL ACQUISITIONS. We have made and may
continue to make investments in complementary companies, technologies, services
or products if we find appropriate opportunities. If we buy a company, we could
have difficulty assimilating the personnel and operations of the acquired
company. If we make other types of acquisitions, assimilating the technology,
services or products into our operations could be difficult. Acquisitions can
disrupt our ongoing business, distract management and other resources and make
it difficult to maintain our standards, controls and procedures. We may not
succeed in overcoming these risks or in any other problems we might encounter in
connection with any future acquisitions. We may be required to incur debt or
issue equity securities to pay for any future acquisitions. In addition, there
can be no assurance that we will be able to successfully integrate our recent
acquisitions of Curasoft and Netect or we will be able to integrate the products
and technology we acquired into our sales model or product offerings.
RISKS OF UNDETECTED SOFTWARE ERRORS. Our software products are complex and may
contain certain undetected errors, particularly when first introduced or when
new versions or enhancements are released. We have previously discovered
software errors in certain of our new products after their introduction. We
cannot be certain that, despite our testing, such errors will not be found in
current versions, new versions or enhancements of our products after
commencement of commercial shipments. Such undetected errors could result in
adverse publicity, loss of revenues, delay in market acceptance or claims
against us by customers, all of which could materially adversely affect our
business.
YEAR 2000 RISKS
Background. Some computers, software and other equipment include programming
code in which calendar year data is abbreviated to only two digits. As a result
of this design decision, some of these systems could fail to operate or fail to
produce correct results if "00" is interpreted to mean 1900 or some other
default condition, rather than 2000. These problems are widely expected to
increase in frequency and severity as the year 2000 approaches and are commonly
referred to as the "Millennium Bug" or "Year 2000 Problem".
Assessment. The Year 2000 Problem could affect computers, software and other
equipment that we and our customers and suppliers use. Accordingly, we have
reviewed our internal computer programs and systems to ensure that they will be
Year 2000 compliant. We presently believe that our computer systems will be Year
2000 compliant in a timely manner. However, while the estimated cost of these
efforts is not expected to be material to our financial position or any year's
results of operations, there can be no assurance to this effect.
Customers. Although the latest versions of BindView EMS are designed to be Year
2000 compliant, releases of BindView EMS before version 5.2a have not been
tested for Year 2000 compliance and/or are not Year 2000 compliant. Customers of
BindView EMS before version 5.2a under subscription contracts have been provided
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upgrades to versions of BindView EMS that are designed to be Year 2000
compliant. Customers that have not upgraded to Year 2000 compliant versions of
BindView EMS will have to either i) enter into a subscription agreement with the
Company and upgrade to a compliant version or ii) purchase the latest Year 2000
compliant version of BindView EMS. We believe that it is not possible to
determine with complete accuracy that all Year 2000 Problems affecting our
software products have been identified or corrected due to the complexity of our
products and the fact that these products interact with other third party vendor
products and operate on computer systems that are not under our control. Because
of the Year 2000 Problem, we have and may continue to encounter potential
customer sites that are unwilling to purchase any additional software for their
computing environments until after the millennium. If a significant amount of
our customers lock down their computing environments because of the Year 2000
Problem, this may have an adverse effect on the Company's revenues.
Internal Infrastructure. We believe that we have identified substantially all of
the major computers, software applications and related equipment used in
connection with our internal operations that must be modified, upgraded or
replaced to minimize the possibility of a material disruption to our business.
We commenced the process of modifying, upgrading and replacing the systems that
have been identified as potentially being adversely affected and completed this
process during the first quarter of 1999. The costs associated with upgrading
and replacing these systems did not exceed $1.0 million and substantially all of
these costs have been capitalized.
Systems Other Than Information Technology Systems. In addition to computers and
related systems, the operation of office and facilities equipment, such as fax
machines, photocopiers, telephone switches, security systems, elevators and
other common devices may be affected by the Year 2000 Problem. We have recently
replaced our primary telephone switch with equipment that provides additional
capacity to meet the Company's growth needs and is believed to be Year 2000
compliant. We believe non-information technology equipment failures that could
occur because of the Year 2000 Problem are not likely to have a material adverse
effect on our business.
We estimate that our total cost of completing any required modifications,
upgrades or replacements of these internal systems will not have a material
effect on our business, financial condition or results of operations.
Suppliers. We have been gathering information from vendor web sites and
available compliance statements and have initiated communications with
third-party suppliers of our major computers, software and other equipment used,
operated or maintained by us to identify and, to the extent possible, resolve
issues involving the Year 2000 Problem. However, we have limited or no control
over the actions of such third-party suppliers. Thus, while we expect that we
will be able to resolve any significant Year 2000 Problems with such systems,
there can be no assurance that our suppliers will resolve any or all Year 2000
Problems with such systems before the occurrence of a material disruption to our
business or any of our suppliers. Any failure of these third-parties to resolve
Year 2000 problems with their systems in a timely manner could have a material
adverse effect on our business, financial condition or results of operation.
MOST LIKELY CONSEQUENCES OF YEAR 2000 PROBLEMS. We expect to identify and
resolve all Year 2000 Problems that could materially adversely affect our
business, financial condition or results of operations. However, we believe that
it is not possible to determine with complete certainty that all Year 2000
Problems affecting us have been identified or corrected. The number of devices
that could be affected and the interactions among these devices are simply too
numerous. In addition, we cannot accurately predict how many failures related to
the Year 2000 Problem will occur or the severity, duration or financial
consequences of such failures. As a result, we expect that we could possibly
suffer the following consequences:
- - a significant number of operational inconveniences and inefficiencies for us
and our customers that may divert our time and attention and financial and
human resources from our ordinary business activities; and
- - a lesser number of serious system failures that may require significant
efforts by us or our customers to prevent or alleviate material business
disruptions.
Should these possibilities actually occur, we could experience operating expense
levels higher then currently budgeted or reductions in our expected growth
rates.
10
<PAGE> 12
Contingency Plans. We have developed contingency plans as part of our efforts to
identify and correct Year 2000 Problems affecting our internal systems. These
plans include (i) accelerated replacement of affected equipment or software,
(ii) short to medium-term use of backup equipment and software, (iii) increased
work hours for our personnel or use of contract personnel to correct on an
accelerated schedule any Year 2000 Problems which arise or to provide manual
workarounds for information systems (iv) divert attention from other critical
ongoing business initiatives and (v) and other similar approaches. If we are
required to implement any of these contingency plans, such plans could have a
material adverse effect on our business, financial condition or results of
operations. However, based on the activities described above, the Company does
not believe that the Year 2000 Problem will have a material adverse effect on
the Company's business, financial condition or results of operations.
The discussion of the Company's efforts and expectations relating to Year 2000
compliance are forward-looking statements. The Company's ability to achieve Year
2000 compliance and the level of incremental costs associated therewith, could
be adversely impacted by, among other things, the availability and cost of
programming and testing resources, vendors' ability to modify proprietary
software and unanticipated problems identified in the Company's ongoing
compliance review.
The foregoing statements are intended to be and are hereby designated "Year 2000
Readiness Disclosure" within the meaning of the Year 2000 Information and
Readiness Act.
RISK OF PRODUCT LIABILITY CLAIMS. Because our product design provides critical
network management services, we may receive significant liability claims. Our
agreements with customers typically contain provisions intended to limit our
exposure to liability claims. These limitations may not, however, preclude all
potential claims. Liability claims could require us to spend significant time
and money in litigation or to pay significant damages. As a result, any such
claims, whether or not successful, could seriously damage our reputation and our
business.
CONTROL BY OFFICERS AND DIRECTORS. As of June 30, 1999, the officers, directors,
five percent or greater shareholders and their affiliates in the aggregate
beneficially owned approximately 46.5% of the outstanding common stock. These
shareholders will continue to control BindView and, if they act together, could
elect all of the directors, appoint management and control all matters submitted
to our stockholders for a vote.
ANTI-TAKEOVER PROVISIONS. Incumbent management and our Board of Directors could
use certain provisions of our certificate of incorporation and Texas law to make
it more difficult for a third party to acquire control of our company, even if
the change in control might be beneficial to our stockholders. This could
discourage potential takeover attempts and could adversely affect the market
price of our common stock.
POTENTIAL VOLATILITY OF STOCK PRICE. The market price of our common stock has
fluctuated in the past and is likely to fluctuate in the future. In addition,
the securities markets have experienced significant price and volume
fluctuations. Investors may be unable to resell their shares of our common stock
at or above the offering price. In the past, companies that have experienced
volatility in the market price of their stock have been the object of securities
class action litigation. If we were the object of securities class action
litigation, it could result in substantial costs and a diversion of management's
attention and resources.
11
<PAGE> 13
SELLING SHAREHOLDERS
All of the 1,154,690 shares of common stock offered by this prospectus
were issued on March 1, 1999 in connection with our acquisition of Netect Ltd.
We have filed the registration statement of which this prospectus forms a part
to fulfill our obligations under a Registration Rights Agreement entered into in
connection with our acquisition of Netect Ltd. The following table sets forth
the names of the selling shareholders, together with the number of shares of our
common stock that may be offered and sold by this prospectus. All of the selling
shareholders were shareholders of Netect before our acquisition of Netect. The
beneficial ownership shown below includes an aggregate of 109,224 shares of our
common stock held in an escrow account. The shares in this escrow account cannot
be sold until March 1, 2000, and we may assert claims against this account until
March 1, 2000 for matters related to the acquisition. For purposes of this
offering, we have assumed that all of the shares of our common stock held by the
selling shareholders will be sold, and that the selling shareholders will not
hold any shares after this offering.
<TABLE>
<CAPTION>
NAME SHARES
- ---- ------
<S> <C>
David Allouch.......................................................... 47,845
Noam Sabo.............................................................. 28,357
Dan Kaminski........................................................... 34,720
Kost Levary & Forer Trust Company (1992) Ltd........................... 10,937
Advocate Ziv Ironi, FBO David Allouch.................................. 7,636
W.S.P. Capital Holdings Ltd............................................ 83,479
Lamont Ltd............................................................. 83,479
David Binamowitch...................................................... 29,432
Michael Safra.......................................................... 27,283
Noga Electrotechnica Ltd............................................... 30,743
Ravaya - Aspackat Mime Be'er Yaacov Ltd................................ 17,102
Phillipe Cahen......................................................... 12,767
Yona Hollander......................................................... 21,476
Jacob Lif.............................................................. 27,800
Eli Simon.............................................................. 31,777
Ofer Segev (as a trust of David Bauminger)............................. 2,062
Ofer Segev (as a trust of Guy Hudara).................................. 65
Zalman Aberman......................................................... 36,390
Delta Capital Ltd...................................................... 47,447
Marc Caminetsky........................................................ 1,631
I.J.T. Technologies Ltd. .............................................. 39,308
XDL Netect Holdings, Inc............................................... 22,611
Charlie Federman....................................................... 30,003
Paul E. Blondin........................................................ 4,387
Paul E. Blondin, Charitable Remainder Unit Trust Dated 12/5/96......... 8,698
Genesis Partners L.P.................................................. 35,879
Genesis Partner (Cayman) L.P........................................... 15,948
Integral Capital Partners I, L.P....................................... 72,485
Integral Capital Partners International III, L.P....................... 17,311
Lamont Ltd............................................................. 13,814
W.S.P. Capital Holdings Ltd............................................ 13,814
</TABLE>
12
<PAGE> 14
<TABLE>
<CAPTION>
NAME SHARES
- ---- ------
<S> <C>
Nir Barkat Holdings Ltd................................................ 16,857
Eli Barkat Holdings Ltd................................................ 16,857
Yuval 63 Holdings (1995) Ltd........................................... 16,857
Moore Global Investments, Ltd.......................................... 114,990
Remington Investments Strategies, L.P.................................. 25,243
Albert Amato........................................................... 807
First Marathon Capital Corporation..................................... 8,068
Lionel Robins.......................................................... 4,034
Rubin Osten............................................................ 1,008
Anna DeCristofaro...................................................... 1,008
CIBC Wood Gundy Capital (SFC) Inc...................................... 16,135
Fairwater Capital Corporation.......................................... 8,068
Chalet Capital Corporation............................................. 4,034
Opeongo Investments Limited............................................ 4,034
3060357 Canada Inc..................................................... 12,102
Amaranth Resources Limited............................................. 6,050
BGT XDL Partnership.................................................... 4,034
Robert Grundleger...................................................... 8,068
Fallbrook Holdings Limited............................................. 4,034
Harrowston Inc......................................................... 4,034
Grosvenor Park Equities Ltd............................................ 4,034
Jordan Levy............................................................ 1,008
Nir Shafrir............................................................ 1,008
984081 Ontario Limited................................................. 1,210
677345 Ontario Limited................................................. 4,034
1203332 Ontario Inc.................................................... 4,034
XDL Capital Corp....................................................... 6,354
Total.................................................................. 1,154,690
</TABLE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock offered by the selling shareholders pursuant to this prospectus. The
Company will incur the costs related to this offering and estimates that these
costs will not exceed $85,000. The Company will charge these costs to expense as
they are incurred.
13
<PAGE> 15
DESCRIPTION OF CAPITAL STOCK
The following summarizes the material provisions of our capital stock.
COMMON STOCK
Our authorized capital stock consists of 100,000,000 shares of common
stock, no par value. As of June 30, 1999, there were 23,040,051 shares of common
stock outstanding.
The holders of common stock are entitled to one vote per share on all
matters to be voted upon by the shareholders. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of common stock are
entitled to receive ratably such dividends, if any, as may be declared from time
to time by our Board of Directors out of funds legally available therefor. In
the event of the liquidation, dissolution, or winding up of the company, the
holders of common stock are entitled to share ratably in all assets remaining
after payment of liabilities, subject to prior distribution rights of preferred
stock, if any, then outstanding. Our common stock has no preemptive or
conversion rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to the common stock. All outstanding shares
of common stock are fully paid and nonassessable, and the shares of common stock
to be issued upon completion of this offering will be fully paid and
nonassessable.
PREFERRED STOCK
Our Board of Directors has the authority to issue the preferred stock
in one or more series and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any series or the designation
of such series, without further vote or action by the shareholders. The issuance
of preferred stock may have the effect of delaying, deferring or preventing a
change in control of the company without further action by the shareholders and
may adversely affect the voting and other rights of the holders of common stock.
The issuance of preferred stock with voting and conversion rights may adversely
affect the voting power of the holders of common stock, including the loss of
voting control to others. At present, we have no plans to issue any of the
preferred stock.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE ARTICLES OF INCORPORATION, BYLAWS AND
TEXAS LAW
Articles of Incorporation and Bylaws
Our Articles of Incorporation provide that our Board of Directors is
divided into three classes of directors, with each class serving a staggered
three-year term. The classification of our Board of Directors has the effect of
generally requiring at least two annual shareholder meetings, instead of one, to
replace a majority of our board members. Our Articles of Incorporation also
provide that all shareholder actions must be effected at a duly called meeting
and not by a consent in writing. Further, provisions of our Bylaws and Articles
of Incorporation provide that our shareholders may amend our Bylaws or certain
provisions of our Articles of Incorporation only with the affirmative vote of
80% of our entire outstanding capital stock. These provisions of our Articles of
Incorporation and Bylaws could discourage potential acquisition proposals and
could delay or prevent a change in control of our company. These provisions are
intended to enhance the likelihood of continuity and stability in the
composition of our Board of Directors and in the policies formulated by our
Board of Directors and to discourage certain types of transactions that may
involve an actual or threatened change of control of our Company. These
provisions are designed to reduce the vulnerability of the company to an
unsolicited acquisition proposal. The provisions also are intended to discourage
certain tactics that may be used in proxy fights. However, these provisions
could have the effect of discouraging others from making tender offers for the
Company's shares and, as a consequence, they also may inhibit fluctuations in
the market price of the Company's shares that could result from actual or
rumored takeover attempts. These provisions also may have the effect of
preventing changes in the management of the Company. See "Risk Factors --
Anti-Takeover Provisions."
14
<PAGE> 16
Texas Takeover Statute
The Company is subject to Article 13.03 of the Texas Business
Corporations Act, which, subject to certain exceptions, prohibits a Texas
corporation from engaging in any business combination with any affiliated
shareholder, as defined in the Statute, for a period of three years following
the date that the shareholder became an affiliated shareholder, unless: (i)
prior to such date, the board of directors of the corporation approved either
the business combination or the transaction that resulted in the shareholder
becoming an affiliated shareholder or (ii) the business combination is approved
and authorized by the affirmative vote of at least two-thirds of the outstanding
voting stock that is not owned or controlled by the interested shareholder, at a
meeting of shareholders and not by written consent, duly called for that purpose
not less than six months after the date that the affiliated shareholder first
became an affiliated shareholder of the corporation.
Article 13.02 of the Texas statute defines a business combination to
include:
o any merger, share exchange or conversion involving the
corporation and the affiliated shareholder,
o any sale, lease, exchange, mortgage, transfer, pledge or other
disposition of 10% or more of the assets of the corporation
involving the affiliated shareholder,
o subject to certain exceptions, any transaction that results in
the issuance or transfer by the corporation of any stock of the
corporation to the interested shareholder,
o the adoption of a plan or proposal for the liquidation or
dissolution of the corporation pursuant to an agreement with an
affiliated shareholder,
o any transaction involving the corporation that has the effect
of increasing the proportionate share of the stock of any class
or series of the corporation beneficially owned by the
interested shareholder or
o the receipt by the affiliated shareholder of the benefit of any
loans, advances, guarantees, pledges, tax credits or other
financial benefits provided by or through the corporation.
In general, Article 13.02 defines an affiliated shareholder as any entity or
person beneficially owning 20% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.
REGISTRATION RIGHTS
The holders of approximately 11 million shares of common stock are
entitled to certain rights with respect to the registration of our shares under
the Securities Act. If we propose to register any of our securities under the
Securities Act for our own account, these holders are entitled to notice of the
registration and are entitled to include their shares of common stock therein.
Additionally, these holders are also entitled to certain demand registration
rights pursuant to which they may require us to file a registration statement
under the Securities Act at our expense with respect to their shares of common
stock, and we are required to use our best efforts to effect a registration of
these shares. Further, holders may require us to file additional registration
statements on Form S-3 at our expense. All of these registration rights are
subject to certain conditions and limitations, including the right of the
underwriters of an offering to limit the number of shares included in a
registration and our right not to effect a requested registration within six
months following an offering of our securities, including this offering.
15
<PAGE> 17
PLAN OF DISTRIBUTION
The 1,154,690 shares of common stock offered pursuant to this
prospectus are being offered for the account of the selling shareholders.
Sales of the shares of common stock by the selling shareholders may be
made from time to time in the over-the-counter market, on any stock exchange on
which the common stock may be listed at the time of sale or in private
transactions at prices then prevailing. The shares of common stock offered
hereby may be sold by any one or more of the following methods:
o a block trade (which may involve crosses) in which the broker
or dealer so engaged will attempt to sell the securities as
agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker or dealer as principal;
o ordinary brokerage transactions in which the broker solicits
purchasers; and
o privately negotiated transactions.
The selling shareholders and any broker-dealers that participate in the
distribution of the shares of common stock may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with sales, and any
profit on the sale of shares of common stock by it and any fees and commissions
received by any such broker-dealers may be deemed to be underwriting discounts
and commissions. The shares of common stock also may be sold pursuant to Rule
144 of the Securities Act to the extent such sales may be made in compliance
with the requirements of Rule 144.
At the time a particular offering of the common stock is made
hereunder, to the extent required by law, a prospectus supplement will be
distributed which will set forth the amount of common stock being offered and
the terms of the offering, including the purchase price, the name or names of
any dealers or agents, the purchase price paid for the common stock purchased
from the selling shareholders and any items constituting compensation from the
selling shareholders.
On July 29, 1999, the last sales price of the common stock, as
reported by The Nasdaq Stock Market was $23.19 per share.
LEGAL MATTERS
Certain legal matters with respect to the common stock were passed
upon for the company by Fulbright & Jaworski L.L.P., Houston, Texas, counsel to
the company.
EXPERTS
The consolidated financial statements of BindView Development
Corporation incorporated by reference in this Prospectus by reference to the
audited consolidated financial statements included in Exhibit 99.3 to the
BindView Development Corporation Amendment No. 1 of Current Report to Form 8-K
on Form 8-K/A dated May 7, 1999 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
The consolidated financial statements of BindView Development
Corporation appearing in BindView Development Corporation's Annual Report (Form
10-K) for the year ended December 31, 1996, have been audited by Grant Thornton
LLP, independent auditors, as set forth in their report included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
16
<PAGE> 18
The consolidated financial statements of Netect Ltd. appearing in
BindView Development Corporation's Current Report (Form 8-K) dated March 1, 1999
for the years ended December 31, 1998 and December 31, 1997 and the five months
ended December 31, 1996, have been audited by Kost, Forer and Gabbay,
independent auditors, as set forth in their report included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon
authority of such firm as experts in accounting and auditing.
On March 6, 1998, the Company notified Grant Thornton LLP that they
were dismissed as the Company's independent auditor. The decision to change
accountants was approved by the Company's Audit Committee of the Board of
Directors.
The report of Grant Thornton on the Company's financial statements for
the year ended December 31, 1996 did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles. The Company and Grant Thornton had not, in
connection with the audit of the Company's financial statements for the year
ended December 31, 1996, or in connection with the period from December 31,
1996, through March 6, 1998, had any disagreement on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreement, if not resolved to Grant Thornton's satisfaction,
would have caused Grant Thornton to make reference to the subject matter of the
disagreement in connection with its report.
On March 6, 1998, PricewaterhouseCoopers LLP was engaged by the
Company to act as its new independent auditors. During the two most recent
fiscal years and any subsequent interim periods prior to engaging
PricewaterhouseCoopers LLP, neither the Company nor anyone on its behalf
consulted PricewaterhouseCoopers LLP regarding either (i) the application of
accounting principles to a specified transaction, whether completed or proposed
or (ii) the type of audit opinion that might be rendered on the Company's
financial statements. The Company was neither provided with a written report nor
oral advice that PricewaterhouseCoopers LLP concluded was an important
consideration by the Company in reaching a decision as to the acceptance of its
engagement as the independent auditors of the Company, relating to accounting,
auditing or financial reporting matters, or any matter that was the subject of
either a disagreement or an event described in the paragraph immediately above.
17
<PAGE> 19
================================================================================
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME
DOES NOT IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
-----------------
TABLE OF CONTENTS
Page
----
Additional Information............................2
Incorporation of Certain Information
By Reference.....................................3
Prospectus Summary................................4
Risk Factors......................................5
Selling Shareholders.............................12
Use of Proceeds..................................13
Description of Capital Stock.....................14
Plan of Distribution.............................16
Legal Matters....................................16
Experts..........................................16
================================================================================
================================================================================
1,154,690 SHARES
BINDVIEW DEVELOPMENT
CORPORATION
COMMON STOCK
PROSPECTUS
_________, 1999
================================================================================
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses solely in connection with the proposed sale of the
1,154,690 shares of Common Stock offered by the Selling Shareholders hereby are:
Securities and Exchange Commission Registration Fee.................... $ 7,424
Nasdaq Listing Fees.................................................... 17,500
Accounting Fees and Expenses........................................... 30,076
Legal Fees and Expenses................................................ 10,000
Printing Expenses...................................................... 20,000
Miscellaneous.......................................................... 0
-------
TOTAL $85,000
=======
All of such expenses are being paid by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02-1 of the Texas Business Corporation Act ("Article 2.02-1")
provides that any director or officer of a Texas corporation may be indemnified
against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by him in connection with or in defending any action, suit or
proceeding in which he is a party by reason of his position. With respect to any
proceeding arising from actions taken in his official capacity as a director or
officer, he may be indemnified so long as it shall be determined that he
conducted himself in good faith and that he reasonably believed that his conduct
was in the corporation's best interests. In cases not concerning conduct in his
official capacity as a director or officer, a director or officer may be
indemnified as long as he reasonably believed that his conduct was not opposed
to the corporation's best interests. In the case of any criminal proceeding, a
director or officer may be indemnified as long as he had no reasonable cause to
believe his conduct was unlawful. The Registrant's Bylaws provide for
indemnification of its present and former directors to the fullest extent
provided by Article 2.02-1. The Registrant currently maintains directors' and
officers' insurance to reimburse the Registrant in the event that
indemnification of a director or officer is required.
The Registrant's Bylaws further provide for indemnification of directors
and officers against reasonable expenses incurred in connection with the defense
of any such action, suit or proceeding in advance of the final disposition of
the proceeding.
The Registrant's Articles of Incorporation eliminate the liability of
directors for monetary damages for an act or omission committed in the
director's capacity as a director, except to the extent a director is found
liable for (i) a breach of such director's duty of loyalty to the Registrant or
its shareholders, (ii) an act or omission not in good faith that constitutes a
breach of duty of such director to the Registrant or an act or omission that
involves intentional misconduct or a knowing violation of the law, (iii) a
transaction from which such director received an improper
<PAGE> 21
benefit, whether or not the benefit resulted from an action taken within the
scope of the director's office or (iv) an act or omission for which the
liability of a director is expressly provided by an applicable statute.
The Registrant's Articles of Incorporation further limit a director's
liability if the Texas Business Corporation Act, the Texas Miscellaneous
Corporation Laws Act or any other applicable Texas statute is hereafter amended
to authorize the further elimination or limitation of the liability of the
directors of the Registrant. If such applicable statute does hereafter eliminate
or limit a director's liability, then the liability of a director of the
Registrant shall be limited to the fullest extent permitted by the Texas
Business Corporation Act, the Texas Miscellaneous Corporation Laws Act and such
other applicable Texas statute, as so amended, and such limitation of liability
shall be in addition to, and not in lieu of, the limitation on the liability of
a director of the Registrant provided by the Articles of Incorporation.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS:
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant's Registration Statement on Form S-1 (Reg. No.
333-52883), filed with the Commission on May 15, 1998).
4.2 Bylaws of the Registrant (incorporated by reference to Exhibit
3.2 to the Registrant's Registration Statement on Form S-1
(Reg. No. 333-52883), filed with the Commission on May 15,
1998).
4.3 Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.2 to the Registrant's Registration Statement on Form
S-1 (Reg. No. 333-52883), filed with the Commission on May 15,
1998).
5.1* Opinion of Fulbright & Jaworski L.L.P.
23.1* Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2* Consent of Grant Thornton LLP, Independent Certified Public
Accountants.
23.3* Consent of Kost, Forer and Gabbay, Independent Auditors
23.4* Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5.1 hereto).
24.1* Powers of Attorney (contained on page II-4 hereto).
- -------------------
* Filed herewith.
II-2
<PAGE> 22
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of any employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on July 30, 1999.
BINDVIEW DEVELOPMENT CORPORATION
By: /s/ Eric J. Pulaski
-------------------------------------
ERIC J. PULASKI
PRESIDENT AND CHIEF EXECUTIVE OFFICER
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints each of Eric J. Pulaski and Scott R.
Plantowsky his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same and all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission, granting said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Eric J. Pulaski Chairman of the Board, President, July 30, 1999
- ---------------------------------------- Chief Executive Officer and
ERIC J. PULASKI Director
(Principal Executive Officer)
/s/ Scott R. Plantowsky Director, Vice President and Chief July 30, 1999
- ---------------------------------------- Financial Officer
SCOTT R. PLANTOWSKY (Principal Financial and
Accounting Officer)
/s/ Peter L. Bloom Director July 30, 1999
- ----------------------------------------
PETER L. BLOOM
/s/ John J. Moores Director July 30, 1999
- ----------------------------------------
JOHN J. MOORES
/s/ Richard A. Hosley II Director July 30, 1999
- ----------------------------------------
RICHARD A. HOSLEY II
</TABLE>
<PAGE> 24
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
4.1 Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 to the
Registrant's Registration Statement on Form S-1 (Reg. No.
333-52883), filed with the Commission on May 15, 1998).
4.2 Bylaws of the Registrant (incorporated by reference to Exhibit
3.2 to the Registrant's Registration Statement on Form S-1
(Reg. No. 333-52883), filed with the Commission on May 15,
1998).
4.3 Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.2 to the Registrant's Registration Statement on Form
S-1 (Reg. No. 333-52883), filed with the Commission on May 15,
1998).
5.1* Opinion of Fulbright & Jaworski L.L.P.
23.1* Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2* Consent of Grant Thornton LLP, Independent Certified Public
Accountants.
23.3* Consent of Kost, Forer and Gabbay, Independent Auditors
23.4* Consent of Fulbright & Jaworski L.L.P. (included in Exhibit
5.1 hereto).
24.1* Powers of Attorney (contained on page II-4 hereto).
- -------------------
* Filed herewith.
<PAGE> 1
EXHIBIT 5.1
[Letterhead of Fulbright & Jaworski L.L.P.]
July 30, 1999
BindView Development Corporation
5151 San Felipe, 22nd Floor
Houston, Texas 77056
Ladies and Gentlemen:
We have acted as counsel for BindView Development Corporation, a Texas
corporation (the "Company"), in connection with the proposed offering by certain
shareholders of the Company (the "Selling Shareholders") of an aggregate of
1,154,690 shares (the "Shares") of the Company's common stock, no par value per
share (the "Common Stock") originally issued March 1, 1999.
In connection therewith, we have examined, among other things, the
Articles of Incorporation and Bylaws of the Company, the corporate proceedings
with respect to the issuance of the Shares and the Registration Statement on
Form S-3 to be filed by the Company with the Securities and Exchange Commission
for the registration of the Shares under the Securities Act of 1933 (such
Registration Statement, as amended at the time when it becomes effective, being
herein referred to as the "Registration Statement").
Based on the foregoing, and having regard for such legal considerations
as we have deemed relevant, we are of the opinion that the Shares have been
legally issued and are fully paid and non-assessable shares of Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus forming a part of the Registration Statement.
Very truly yours,
/s/ FULBRIGHT & JAWORSKI L.L.P.
Fulbright & Jaworski L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-3 of our report dated January 28, 1999, except
as to Note 14, which is as of March 1, 1999, which appears in Exhibit 99.3 to
the BindView Development Corporation Amendment No. 1 of Current Report to Form
8-K on Form 8-K/A dated May 7, 1999. We also consent to the reference to us
under the heading "Experts" in such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
Houston, Texas
July 30, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 4, 1997, accompanying the
financial statements of BindView Development Corporation included in the Annual
Report on Form 10-K of BindView Development Corporation for the year ended
December 31, 1998, which is incorporated by reference in this Registration
Statement on Form S-3 and Prospectus. We consent to the incorporation by
reference in this Registration Statement and Prospectus of the aforementioned
report. We also consent to the reference to us under the heading "Experts" in
such Registration Statement and Prospectus.
/s/ GRANT THORNTON LLP
Houston, Texas
July 30, 1999
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of BindView
Development Corporation for the registration of 1,154,690 shares of its common
stock and to the incorporation by reference therein of our report dated February
25, 1999, except as to Note 14, which is as of March 1, 1999, with respect to
the consolidated financial statements of Netect Ltd. included in the Current
Report (Form 8-K) of BindView Development Corporation filed with the Securities
and Exchange Commission.
/s/ KOST, FORER AND GABBAY
A Member of Ernst & Young International
Tel-Aviv, Israel
July 30, 1999
