-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PmjHuMA4y+sTCBUE0zVkGr341BHBEqYs/TbFuPMNsmcqqC/jthqbNGPwNd/l9myy 3rgEoSFlpPrln/nkVIgHgA== 0000899140-01-000176.txt : 20010326 0000899140-01-000176.hdr.sgml : 20010326 ACCESSION NUMBER: 0000899140-01-000176 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20010323 GROUP MEMBERS: CHAP CAP PARTNERS L P GROUP MEMBERS: CHAP-CAP PARTNERS, L.P. GROUP MEMBERS: CHAPMAN CAPITAL L.L.C. GROUP MEMBERS: DANIEL S. LOEB GROUP MEMBERS: ROBERT L. CHAPMAN, JR. GROUP MEMBERS: THIRD POINT MANAGEMENT COMPANY L.L.C. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BINDVIEW DEVELOPMENT CORP CENTRAL INDEX KEY: 0001061646 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 760306721 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-54417 FILM NUMBER: 1576974 BUSINESS ADDRESS: STREET 1: 5151 SAN FELIPE 21ST FLOOR CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 7135613000 MAIL ADDRESS: STREET 1: 5151 SAN FELIPE 21ST FLOOR CITY: HOUSTON STATE: TX ZIP: 77056 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CHAP CAP PARTNERS L P CENTRAL INDEX KEY: 0001017766 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 521965409 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: CONTINENTAL GRAND PLAZA #411 STREET 2: 300 NORTH CONTINENTAL BLVD. CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3105466701 MAIL ADDRESS: STREET 1: 725 SOUTH FIGUERORA ST STREET 2: STE 2369 CITY: LOS ANGELES STATE: CA ZIP: 90017 SC 13D 1 0001.txt INITIAL FILING ON SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 BindView Development Corporation -------------------------------- (Name of Issuer) Common Stock, no par value --------------------------- (Title of Class of Securities) 090327107 ------------------------------ (CUSIP Number of Class of Securities) Robert L. Chapman, Jr., Chapman Capital L.L.C. Continental Grand Plaza, 300 N. Continental Blvd. El Segundo, California 90245 (310) 563-6900 -------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Jack H. Nusbaum, Esq., Willkie Farr & Gallagher 787 Seventh Avenue New York, NY 10019 (212) 728-8000 March 13, 2001 ------------------------------------------------------- (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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *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). SCHEDULE 13D CUSIP Number: 090327107 Page 2 of 15 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Chap-Cap Partners, L.P. 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) WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER 0 8 SHARED VOTING POWER 1,185,000 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 1,185,000 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,185,000 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.3% 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN SCHEDULE 13D CUSIP Number: 090327107 Page 3 of 15 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Chapman Capital L.L.C. 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) N/A 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER 0 8 SHARED VOTING POWER 1,185,000 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 1,185,000 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,185,000 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.3% 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO SCHEDULE 13D CUSIP Number: 090327107 Page 4 of 15 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Robert L. Chapman, Jr. 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a)[x] (b)[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS N/A 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION United States NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER 0 8 SHARED VOTING POWER 1,185,000 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 1,185,000 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,185,000 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.3% 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN SCHEDULE 13D CUSIP Number: 090327107 Page 5 of 15 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Third Point Management Company L.L.C. I.D. #13-3922602 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) N/A 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER 0 8 SHARED VOTING POWER 2,384,000 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 2,384,000 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,384,000 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.6% 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) OO SCHEDULE 13D CUSIP Number: 090327107 Page 6 of 15 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Daniel S. Loeb 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) N/A 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION United States NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER 0 8 SHARED VOTING POWER 2,384,000 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 2,384,000 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,384,000 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.6% 14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN This Schedule 13D is being filed on behalf of Chap-Cap Partners, L.P., a Delaware limited partnership ("Chap-Cap"), Chapman Capital L.L.C., a Delaware limited liability company ("Chapman Capital"), Robert L. Chapman, Jr., an individual ("Mr. Chapman" and, together with Chap-Cap and Chapman Capital, the "Chapman Reporting Persons"), Third Point Management Company L.L.C., a Delaware limited liability company ("Third Point") and Daniel S. Loeb, an individual ("Mr. Loeb" and, together with Third Point, the "Third Point Reporting Persons"). The Chapman Reporting Persons and the Third Point Reporting Persons are together referred to herein as the "Chapman-Third Point Group." This Schedule 13D relates to the common stock, no par value per share, of BindView Development Corporation, a Texas corporation (the "Company"). Unless the context otherwise requires, references herein to the "Common Stock" are to such common stock of the Company. Chapman Capital is the investment manager and adviser to, and general partner of, Chap-Cap. Chap-Cap directly owns the Common Stock beneficially owned by the Chapman Reporting Persons and to which this Schedule 13D relates, and the Chapman Reporting Persons may be deemed to have beneficial ownership over such Common Stock by virtue of the authority granted to them by Chap-Cap to vote and to dispose of the securities held by Chap-Cap, including the Common Stock. Third Point is the investment manager or adviser to a variety of hedge funds and managed accounts (such funds and accounts, collectively, the "Third Point Funds"). The Third Point Funds directly own the Common Stock beneficially owned by the Third Point Reporting Persons and to which this Schedule 13D relates, and the Third Point Reporting Persons may be deemed to have beneficial ownership over such Common Stock by virtue of the authority granted to them by the Third Point Funds to vote and to dispose of the securities held by the Third Point Funds, including the Common Stock. ITEM 1. Security and Issuer This statement on Schedule 13D relates to the Common Stock of the Company. The address of the principal executive officers of the Company is 5151 San Felipe, 25th Floor, Houston, Texas 77056. ITEM 2. Identity and Background (a) This statement is filed by the Chapman-Third Point Group. Chap-Cap is organized as a limited partnership under the laws of the State of Delaware. Chapman Capital is organized as a limited liability company under the laws of the State of Delaware. Mr. Chapman's present principal occupation is serving as Managing Member of Chapman Capital. Chapman Capital and Mr. Chapman each expressly disclaims equitable ownership of and pecuniary interest in any Common Stock. Daniel S. Loeb is the managing member of Third Point and controls Third Point's business activities. Third Point is organized as a limited liability company under the laws of the State of Delaware. Third Point and Mr. Loeb each expressly disclaims equitable ownership of and pecuniary interest in any Common Stock. (b) The address of the principal business and principal office of Chap-Cap, Chapman Capital and Mr. Chapman is Continental Grand Plaza, 300 N. Continental Blvd., El Segundo, California 90245. The address of the principal business and principal office of Third Point and Mr. Loeb is 277 Park Avenue, 27th Floor, New York, New York 10172. 7 (c) The principal business of Chap-Cap is investing in marketable securities. The principal business of Chapman Capital is serving as the General Partner of Chap-Cap. The principal business of Mr. Chapman is to act as the managing member of Chapman Capital. The principal business of Third Point is to serve as investment manager or adviser to the Third Point Funds, and to control the investing and trading in securities of the Third Point Funds. The principal business of Mr. Loeb is to act as the managing member of Third Point. (d) None of the Chapman Reporting Persons, nor, to the best of their knowledge, any of their directors, executive officers, general partners or members has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). None of the Third Point Reporting Persons, nor, to the best of their knowledge, any of their directors, executive officers, general partners or members has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Chapman Reporting Persons, nor, to the best of their knowledge, any of their directors, executive officers, general partners or members has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and 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. None of the Third Point Reporting Persons, nor, to the best of their knowledge, any of their directors, executive officers, general partners or members has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and 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) Mr. Chapman is a United States citizen. Mr. Loeb is a United States citizen. ITEM 3. Source and Amount of Funds or Other Consideration. Chap-Cap expended an aggregate of approximately $3,443,771.00 of its own investment capital to purchase the 1,185,000 shares of Common Stock held by it (the "Chapman Shares"). The Third Point Funds expended an aggregate of approximately $7,550,021.00 of their own investment capital to purchase the 2,384,000 shares of Common Stock held by them (the "Third Point Shares" and, together with the Chapman Shares, the "Shares"). The Third Point Funds effect purchases of securities primarily through margin accounts maintained for them with Bear, Stearns Securities Corp. which may extend margin credit to the Third Point Funds as and when required to open or carry positions in the margin accounts, subject to applicable Federal margin regulations, stock exchange rules and the firm's credit policies. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts. 8 ITEM 4. Purpose of Transaction The purpose of the acquisition of the securities of the Company beneficially owned by the Chapman-Third Point Group was to acquire such securities in the ordinary course of their trade or business of purchasing, selling, trading and investing in securities. Mr. Chapman has spoken with management of the Company regarding his desire to influence the management of the Company with respect to business strategies, joint ventures, recapitalizations, a full sale of the company, sales of assets, mergers, negotiated or open-market stock repurchases or other extraordinary corporate transactions (collectively, "Potential Transactions"). On March 8, 2001, Mr. Chapman initiated discussions with the Issuer's Chairman Eric J. Pulaski regarding Mr. Chapman's view that the Issuer's shareholders would be better served by the Issuer's being merged into another enterprise through a premium change-of-control transaction. On March 9, 2001, Mr. Chapman initiated discussions with the Issuer's Chief Executive Officer Richard P. Gardner regarding Mr. Chapman's views of the financial controls, or relative lack thereof, of the Issuer. A letter from Mr. Chapman to Messrs. Pulaski and Gardner, dated March 22, 2001, is attached hereto as Exhibit B. Mr. Loeb has also engaged in discussions with representatives of the Company, and with Mr. Chapman, with respect to Potential Transactions. Mr. Chapman and Mr. Loeb may coordinate their actions, including by voting of the Shares and by communications with other shareholders of the Company, which may have the effect of influencing, arranging or causing Potential Transactions. A letter from Mr. Loeb to Mr. Gardner, dated March 22, 2001, is attached hereto as Exhibit C. The members of the Chapman-Third Point Group may in the future consider a variety of different alternatives to achieving their goal of maximizing shareholder value, including negotiated transactions, tender offers, proxy contests, consent solicitations, or other actions. However, it should not be assumed that such members will take any of the foregoing actions. The members of the Chapman-Third Point Group reserve the right to participate, alone or with others, in plans, proposals or transactions of a similar or different nature with respect to the Company. The members of the Chapman-Third Point Group intend to review their investment in the Company on a continuing basis and, depending on various factors, including the Company's business, affairs and financial position, other developments concerning the Company, the price level of the Common Stock, conditions in the securities markets and general economic and industry conditions, as well as other investment opportunities available to them, may in the future take such actions with respect to their investment in the Company as they deem appropriate in light of the circumstances existing from time to time. Such actions may include, without limitation, the purchase of additional shares of Common Stock in the open market and in block trades, in privately negotiated transactions or otherwise, the sale at any time of all or a portion of the Common Stock now owned or hereafter acquired by them to one or more purchasers, or the distribution in kind at any time of all or a portion of the Common Stock now owned or hereafter acquired by them. The members of the Chapman-Third Point Group are engaged in the investment business. In pursuing this business, the members analyze the 9 operations, capital structure and markets of companies, including the Company, on a continuous basis through analysis of documentation and discussions with knowledgeable industry and market observers and with representatives of such companies (often at the invitation of management). From time to time, one or more of such members may hold discussions with third parties or with management of such companies in which the Reporting Person may suggest or take a position with respect to potential changes in the operations, management or capital structure of such companies as a means of enhancing shareholder value. Such suggestions or positions may relate to one or more of the transactions specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Exchange Act, including, without limitation, such matters as disposing of or selling all or a portion of the Company or acquiring another Company or business, changing operating or marketing strategies, adopting or not adopting certain types of anti-takeover measures and restructuring the company's capitalization or dividend policy. Except as set forth above and in Exhibits B and C, the members of the Chapman-Third Point Group do not have any present plans or proposals that relate to or would result in any of the actions required to be described in Item 4 of Schedule 13D. Each of such members may, at any time, review or reconsider its position with respect to the Company and formulate plans or proposals with respect to any of such matters, but has no present intention of doing so. ITEM 5. Interest in Securities of the Issuer (a) As of the date of this Schedule 13D, Chap-Cap beneficially owns 1,185,000 shares of Common Stock. Chap-Cap shares voting and dispositive power over such holdings with Mr. Chapman and with Chapman Capital. As of December 31, 2000, the Chapman Shares represented 2.3% of the total 52,297,591 shares of Common Stock outstanding as reported in the Company's Form 10K for the year ended December 31, 2000 (the "Outstanding Shares"). As of the date of this Schedule 13D, Third Point beneficially owns 2,384,000 shares of Common Stock. Third Point shares voting and dispositive power over such holdings with Mr. Loeb and with the Third Point Funds. As of December 31, 2000, the Third Point Shares represented 4.6% of the Outstanding Shares. None of the individual Third Point Funds owns a number of shares of Common Stock equal to or greater than 5% of the Outstanding Shares. (b) Chapman Capital and Mr. Chapman share voting and dispositive power over the 1,185,000 shares of Common Stock held directly by Chap-Cap. Third Point and Mr. Loeb share voting and dispositive power over the 2,384,000 shares of Common Stock held directly by the Third Point Funds. (c) Schedule A hereto sets forth certain information with respect to transactions by the Chap-Cap, at the direction of Chapman Capital, in the Common Stock during the past sixty (60) days. The transactions set forth on Schedule A were effected by the Chapman Reporting Persons on the NASDAQ National Market. Schedule B hereto sets forth certain information with respect to transactions by the Third Point Funds, at the direction of Third Point, in the Common Stock during the past sixty (60) days. 10 The transactions set forth on Schedule B were effected by the Third Point Reporting Persons on the NASDAQ National Market. Except as set forth above, during the last sixty days there were no transactions in the Common Stock effected by the Chapman Reporting Persons, nor, to the best of their knowledge, any of their directors, executive officers, general partners or members. Except as set forth above, during the last sixty days there were no transactions in the Common Stock effected by the Third Point Reporting Persons, nor, to the best of their knowledge, any of their directors, executive officers, general partners or members. (d) Except as set forth in this Item 5, no person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares. (e) Not applicable. ITEM 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the members of the Chapman-Third Point Group have entered into an agreement with respect to the joint filing of this statement, and any amendment or amendments hereto. Mr. Chapman and Mr. Loeb have an informal oral arrangement to coordinate their actions (and to direct the actions of the Chapman Reporting Persons and the Third Point Reporting Persons, respectively) with respect to the voting of the Chapman Shares and the Third Point Shares, and with respect to other actions, which may influence the management, structure or capitalization of the Company, as set forth in Item 4 herein. This arrangement can be terminated at any time by either party and neither party is bound to obtain the concurrence of the other with respect to any actions taken which respect to any of the Shares such party beneficially owns. By virtue of the informal oral arrangement set forth above, the Chapman Reporting Persons and the Third Point Reporting Persons may be deemed to be a "group" under the Federal securities laws. By virtue of the relationships among Chapman Capital, Mr. Chapman and Chap-Cap, as described in Item 2, these persons may be deemed to be a "group" under the Federal securities laws. By virtue of the relationships among Third Point, Mr. Loeb and the Third Point Funds, as described in Item 2, these persons may be deemed to be a "group" under the Federal securities laws. Except as otherwise set forth in this Schedule 13D, each member of the Chapman-Third Point Group expressly disclaims beneficial ownership of any of the shares of Common Stock beneficially owned by any other member, or the Third Point Funds, and the filing of this Statement shall not be construed as an admission, for the purposes of Sections 13(d) and 13(g) or under any provision of the Exchange Act or the rules promulgated thereunder or for any other purpose, that any such member is a beneficial owner of any such shares. 11 Except as set forth herein, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 or between such persons and any other person with respect to any securities of the Company. ITEM 7. Material to be Filed as Exhibits A. Joint Filing Agreement, dated as of March 23, 2001, by and among the members of the Chapman-Third Point Group. B. Letter from Robert L. Chapman, Jr., as Managing Member of Chapman Capital L.L.C., to Mr. Eric J. Pulaski, Chairman of the Company, and Mr. Richard P. Gardner, Chief Executive Officer and President of the Company, dated March 22, 2001. C. Letter from Daniel S. Loeb, as Managing Member of Third Point Management Company L.L.C., to Mr. Richard P. Gardner, Chief Executive Officer and President of the Company, dated March 22, 2001. 12 Schedule A -------------- (Transactions by Chap-Cap) Amount of Approximate Price per Shares Date Security Shares Bought (inclusive of commissions) - ---- -------- ------------- ------------------------ 03/07/01 Common Stock 25,000 $2.94 03/07/01 Common Stock 10,000 $3.03 03/08/01 Common Stock 390,000 $3.18 03/08/01 Common Stock 100,000 $3.03 03/08/01 Common Stock 30,000 $3.00 03/12/01 Common Stock 104,000 $3.18 03/13/01 Common Stock 46,000 $3.03 03/13/01 Common Stock 100,000 $3.03 03/14/01 Common Stock 50,000 $2.88 03/16/01 Common Stock 200,000 $2.56 03/19/01 Common Stock 60,000 $2.25 03/20/01 Common Stock 50,000 $2.25 03/20/01 Common Stock 40,000 $2.25 Amount of Approximate Price per Shares Date Security Shares Sold (inclusive of commissions) - ---- -------- ----------- -------------------------- 03/09/01 Common Stock 20,000 $3.66 Schedule B ------------- (Transactions by Third Point Funds) Amount of Approximate Price per Shares Date Security Shares Bought (inclusive of commissions) - ---- -------- ------------- -------------------------- 03/08/01 Common Stock 25,000 $3.125 03/08/01 Common Stock 75,000 $3.125 03/08/01 Common Stock 500,000 $3.2469 03/08/01 Common Stock 31,500 $3.25 03/08/01 Common Stock 450,000 $3.2674 03/09/01 Common Stock 250,000 $3.40625 03/09/01 Common Stock 50,000 $3.73440 03/09/01 Common Stock 140,000 $3.71380 03/09/01 Common Stock 12,500 $3.438 03/09/01 Common Stock 19,300 $3.80 03/12/01 Common Stock 100,000 $3.375 03/13/01 Common Stock 219,000 $3.0598 03/14/01 Common Stock 272,400 $3.00 03/16/01 Common Stock 165,800 $2.5771 03/20/01 Common Stock 25,000 $2.25 03/21/01 Common Stock 145,000 $2.5216 03/21/01 Common Stock 8,000 $2.50 03/21/01 Common Stock 2,000 $2.25 03/22/01 Common Stock 4,000 $2.3125 Amount of Approximate Price per Shares Date Security Shares Sold (inclusive of commissions) - ---- -------- ----------- -------------------------- 03/09/01 Common Stock 10,000 $3.625 03/13/01 Common Stock 100,000 $3.03125 03/13/01 Common Stock 500 $3.00 SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: March 23, 2001 CHAP-CAP PARTNERS, L.P. By: Chapman Capital L.L.C., as General Partner By: /s/ Robert L. Chapman, Jr. ------------------------------ Name: Robert L. Chapman, Jr. Title: Managing Member Dated: March 23, 2001 CHAPMAN CAPITAL L.L.C. By: /s/ Robert L. Chapman, Jr. ------------------------------ Name: Robert L. Chapman, Jr. Title: Managing Member Dated: March 23, 2001 /s/ Robert L. Chapman, Jr. ------------------------------ Robert L. Chapman, Jr. Dated: March 23, 2001 THIRD POINT MANAGEMENT COMPANY, L.L.C. By: /s/ Daniel S. Loeb ------------------------------ Name: Daniel S. Loeb Title: Managing Member Dated: March 23, 2001 /s/ Daniel S. Loeb ------------------------------ Daniel S. Loeb EX-99.1 2 0002.txt JOINT FILING AGREEMENT Exhibit A --------- Joint Filing Agreement The undersigned hereby acknowledge and agree that, pursuant to and in accordance with the provisions of 13d-1(k) under the Securities Exchange Act of 1934, as amended, the foregoing statement on Schedule 13G is filed on behalf of each of the undersigned and that all subsequent amendments to this statement on Schedule 13G shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. The undersigned acknowledge that each shall be responsible for the timely filing of such amendments, and for the completeness and accuracy of the information concerning it contained therein, but shall not be responsible for the completeness and accuracy of the information concerning the others, except to the extent that it knows or has reason to believe that such information is inaccurate. This Agreement may be executed in any number of counterparts and all of such counterparts taken together shall constitute one and the same instrument. Dated: March 23, 2001 CHAP-CAP PARTNERS, L.P. By: Chapman Capital L.L.C., as General Partner By: /s/ Robert L. Chapman, Jr. ------------------------------ Name: Robert L. Chapman, Jr. Title: Managing Member Dated: March 23, 2001 CHAPMAN CAPITAL L.L.C. By: /s/ Robert L. Chapman, Jr. ------------------------------ Name: Robert L. Chapman, Jr. Title: Managing Member Dated: March 23, 2001 /s/ Robert L. Chapman, Jr. ------------------------------ Robert L. Chapman, Jr. Dated: March 23, 2001 THIRD POINT MANAGEMENT COMPANY, L.L.C. By: /s/ Daniel S. Loeb ------------------------------ Name: Daniel S. Loeb Title: Managing Member Dated: March 23, 2001 /s/ Daniel S. Loeb ------------------------------ Daniel S. Loeb EX-99.2 3 0003.txt LETTER FROM ROBERT L. CHAPMAN, JR. Exhibit B --------- CHAPMAN CAPITAL L.L.C. LETTERHEAD Robert L. Chapman, Jr. Managing Member March 22, 2001 Mr. Eric J. Pulaski Chairman Mr. Richard P. Gardner CEO & President BindView Corporation 5151 San Felipe, 21st Floor Houston, TX 77056 Phone: (713) 561-4028 & 4124 Via Facsimile and U.S. Postal Service - ------------------------------------- Dear Messrs. Pulaski and Gardner, BindView Corporation employs some of the finest code writers in the world, both here in the United States as well as in India. The result of their hard work is an impressive array of systems management and vulnerability assessment programs, making the company a leading provider of IT risk management solutions in the world. With the right leadership and without half of every revenue dollar evaporating into sales & marketing, BindView's intellectual property and customer relationships are worth multiples of the company's current valuation. As a result, Chapman Capital L.L.C., an investment advisor specializing in Takeovers & Turnarounds, feels strongly that the time has come for the two of you to sacrifice your unjustifiably-resilient egos and do what is best for your employees and shareholders: maximize shareholder value by selling BindView to one of several strategic bidders that can synergistically incorporate your applications into its own portfolio of enterprise tools. Almost one year ago on April 4, 2000, the first opportunity arose for Chapman Capital to appraise BindView for Chap-Cap Partners, L.P. ("CCP"), a Delaware limited partnership that invests in distressed public companies. This opportunity availed itself after BindView stock plummeted 65% upon pre-announcing a 15-20% sales shortfall and net losses under Mr. Gardner's first quarter as chief executive. In what would become a company trademark, rather than acknowledging an execution problem BindView attempted to blame the debacle on the proverbial "lengthening sales cycle" among other things. With the stock being pummeled into the single digits, apparently the market didn't buy into that story. On the surface, BindView's problems appeared to be the liability of its unseasoned Chairman Mr. Pulaski, especially given Mr. Gardner's description at the time of his arrival as the "Top BMC Executive to Lead BindView Into Second Decade of Growth." Our predisposition was to grant Mr. Gardner latitude for the stock's tumultuous fall from $25/share at the time of his appointment to $9/share only three months later despite Wall Street's growing misgivings about his ability to manage the company. Donaldson Lufkin & Jenrette's April 4, 2000 comment that BindView's markets "may in fact require a different set of skills to exploit ... skills, quite frankly, which were supposed to have been introduced by recent management upgrades" seemed to typify Mr. Gardner's falling grades within the investment community. However, we became troubled by industry reports surrounding Mr. Gardner's departure as S.V.P. of global field operations at BMC Software. Mr. Gardner's suspiciously-timed parting with BMC came just after it had produced fiscal third quarter sales so disappointing that its stock immediately cratered almost 40%, wiping out some $7 billion in shareholder wealth. Though Mr. Gardner had moved back down the food chain to a much smaller company where he could not cause such massive destruction of wealth, our concerns over management dilution were elevated by further due diligence into Mr. Gardner's career. Numerous field operatives conveyed to us their beliefs that Mr. Gardner had not been discouraged from finding other employment following what was BMC's second consecutive warning under his management. Additionally, we were worried by reports that Mr. Gardner was in the process of "throwing money" at BindView's problems, advocating a profit-crushing headcount buildup that could quintuple the number of field salespeople by year-end. I wondered if Mr. Gardner, who like another high-maintenance BindView hire Bill Miller spent most of his career working with IBM during its glory days, had matured to the point where retirement had been the more sensible career move vs. heading a young technology company. In the year since Chapman Capital deemed the management risks inherent to BindView stock unpalatable, it appears that you have proven many of my fears well founded. BindView seems to have failed to broaden its product and service base sufficiently to remain as competitive in the large enterprise market against the likes of Quest/Fast Lane, NetIQ/Mission Critical and Symantec/AXENT. On January 26, 2000, BindView agreed to pay $125 million in stock for cross-platform directory management specialist Entevo Corporation, creating what you described as "an unrivaled solution for the administration and management of the security, configuration and availability of Windows NT, Windows 2000, and Active Directory, some of the underlying cores of the present and future e-business infrastructure." With BindView stock closing over $28/share (split adjusted), Mr. Gardner professed excitement about "leveraging BindView's sales machine." However, one year later Entevo's highly regarded CEO/Co-founder Amir Hudda has resigned and Entevo's business appears stillborn, with competitors picking off its prospects like tigers ripping flesh from a maimed wildebeest. As for BindView's stock price, it has fallen 90% to under $3/share, leaving the market capitalization of the entire company at a level close to the purchase price of Entevo alone. Indeed, hearing Mr. Gardner's bravado-laced comment on the most recent conference call that he "would not want to be one of [BindView's] competitors facing BindView's wrath right now" only reinforced what we believe is his clear leadership in the area of denial. A public company's restatement of its financials is a cataclysmic event. Yet it is this very shipwreck that has your shareholders furiously swimming away for solid ground. On January 23, 2001, BindView reported "record fourth quarter revenues" of $27.4 million, which according to your press release "continued growth trends established during the first three quarters of the year." Nowhere in such release did BindView make any reference to these sales being subject to a 30-day return policy, which according to our sources is almost unheard of in the non-shrink wrap, contractual software business. Moreover, since you have professed that you "do not anticipate any adverse customer reaction" to the recent elimination of the contractual return option, your shareholders must share our bewilderment as to why you would have offered such a privilege in the first place. Our accounting consultants believe that under GAAP, a reputable management team would not have recognized revenues that were subject to such a return contingency until after the 30-day period had lapsed. This more conservative approach to accounting might also serve to discourage jamming of product into a customer base which may create the appearance that growth trends actually "continued." I find dubious your recent claim that "up until [the March 3-4 weekend, there was] no evidence within BindView to indicate any other outlook than meeting the business plan ..." when you had experienced massive fourth quarter product returns (estimated at 10 times the average rate) in January at latest. Thus, over a month had passed since you should have stumbled across this "fresh information that needs to be understood by the investment community at large." Simple arithmetic dictates that a competent Chairman and CEO would have raised the curtain on this accounting abomination by late January (when all fourth quarter returns by definition would have been effected), and only that late if most of the returned product had been shipped into customer's "receiving docks" at the end of the quarter. Making the returns problem more conspicuous, BindView's accounts receivables ballooned coincidentally with this supposedly unpredictable deluge of product returns. One can only imagine that you both spent the month of February praying that an act of God would reverse customers' deluge of returns, something that by early March even a CEO and his "Boy Wonder" must have realized was nothing more than a pipe dream. The March 6, 2001 conference call arranged to discuss BindView's restatements was truly insulting to your audience's collective intelligence. It was transparent from the start of the call that you sought to divert attention away from any possible managerial malfeasance or negligence by pointing toward "economic uncertainties," "countless reassessments of business outlooks" and the "continuing deteriorating economic theme." Not once can I recall any repentance for not replacing respected CFO Scott Plantowsky ahead of his January 23, 2001 departure (though I am not surprised this remains unaccomplished some two months later given Mr. Gardner's incredibly insensitive public reference to Mr. Plantowsky's decision to accompany his dying father as a "fishing schedule"). Nor can I remember any apology for Mr. Pulaski's belated and apparently ill-conceived replacement of himself as CEO, or what appears to some to be his "buddies and brother" executive selection policy. Your March 2, 2001 attempt to "dig into the issues, the backlog, the sales forecast, the receivables, the market conditions and customer budgets," or as you so articulately summarized it, "all that stuff," was something that should have been completed before you released overstated financial information on January 23, 2001. Moreover, one could argue that only dementia would drive a CEO to require "a number of items to convince him that [BindView] is not immune ... to the general slowdown of activity or lengthening of sales cycles that many companies have experienced," as seems to have been the case in your vulnerability assessment of BindView itself. Leading Wall Street to become even more convinced of your apparent cluelessness was ridiculously wide 2001 revenue guidance (20-40% growth, which at the low end is 40% below Street estimates a year ago) and an absurd claim to astonishment that "BindView's stock price is down nearly 50% since our last conference call on no BindView news." Despite admitting that "valuations are not understood" and that "no one really knows what's ahead," unsound judgment plagued you in February just after outsized product returns backed up an apparently stuffed pipeline. At that time, your reality deprived "view of our stock as undervalued" led you to sink precious corporate funds into the shares at approximately $7 each, some 200% above current prices, in a period when insider Mr. Pulaski coincidentally was selling shares totaling into the six figures. While BindView's aggressive accounting and your hollow explanations thereof provided enough fodder for years worth of shareholder ire, our final straw was your extraordinary arrogance and inexplicable insouciance in the face of overseeing $2 billion in shareholder losses in only one year's time. In an environment wherein you plan on eliminating 7% of the company's hardworking employees, one would not expect such deportment from a chairman who reportedly just finished a house larger than that of neighbor President George Bush. Though Mr. Gardner promised to be "frugal," I personally would like to know which company perks and how much compensation you both have carved out of your own packages in the name of boosting the stock price. Despite obvious execution mistakes, you defiantly continue to blame "near-term softness that [you] are seeing in the economy" and "economic uncertainty" for the company's ills. Rubbing more salt into shareholders' wounds, Mr. Pulaski appalled his audience on the last conference call with his incredible boast that "we looked pretty smart when the stock was in the teens and we had bought the stock at seven or eight bucks a share." It is unfortunate that neither University of Texas nor Louisiana State University offered a course in Accountability, though based on recent corporate transgressions it doesn't seem that either of you mastered one in conservative accounting either. BindView's shares are currently trading under one time's this year's expected sales (when backing out $1/share in net cash), a valuation typically reserved only for Wall Street's most despised software companies. In attempting to find an explanation for this exceptionally harsh treatment, several weeks ago both Chapman Capital and Third Point Management Company L.L.C. made numerous attempts to contact you as the company's senior statesmen. Upon finally receiving return phone calls from both of you, the mystery of your depressed stock price was solved. Based solely on our conversations with the coy Mr. Pulaski and evasive Mr. Gardner, we would have to categorize your treatment of shareholders as nothing short of abusive and extraordinarily disrespectful. My March 8, 2001 conversation with Mr. Pulaski was littered with stockholder-insensitive commentary, forcing me to vehemently remind him that while he may have founded the company, he does not own it. When BindView sold 13.5 million shares in two public offerings, Mr. Pulaski lost his right to full control and to the luxury of selecting his partners. Chapman Capital will not tolerate Mr. Pulaski's labeling as "trivial" and "irrelevant" its valid questions, including one regarding Entivo's dilutive effects on ownership (Pulaski: "Why is that important? ... it was a year ago") or the valuation implications of industry mergers such as Quest/Fastlane, Symantec/AXENT, and NetIQ/Mission Critical (Pulaski: "I don't understand how that is relevant to BindView analysis"). If Mr. Pulaski has become accustomed to getting away with this kind of shareholder abuse in the past, he is in for a very rude awakening. My conversation with BindView's CEO the following day proved equally irritating. After leaving Mr. Gardner five messages in which I identified CCP as part of an association owning one of the largest stakes in BindView, I finally received a return phone call. However, in response to my request for an explanation for a March disclosure of massive product returns that occurred over a month earlier in January, Mr. Gardner replied, "Why does it matter?" When I responded that such a display of ignorance, feigned or otherwise, would only serve to turn Chapman Capital hostile, Mr. Gardner suggested an alternative that would seem to explain the massive selling that has fed our share accumulation: "You should divest the stock then." I then explained to Mr. Gardner that, contrary to his suggestion, I intended to "hang up the phone and double my position." Given BindView's poor performance and its management's irreverent abuse of shareholders, it seemed to me that Chapman Capital would have no problem finding enough shareholders to force Mr. Gardner's overdue "resignation." I imagine that after reading this letter, you might reply with the knee-jerk response of "You must think we're capable or you wouldn't have invested in BindView." Presuming that I'm on the mark, let me head you off at the pass immediately - Chapman Capital L.L.C. specializes in making activist investments in asset-rich companies that are worth far more to strategic buyers who can strip the company of confidently incompetent management and poorly executed growth strategies. As you honestly reflect on these components of BindView Corporation, I feel confident you will understand how its shares have become a core component of my Fund. Without a competent CEO and an intelligently-assembled sales force, even the best software won't stay un-returned if foisted on customers. With every passing month of slipping traction, your strategic options and share value diminish as the risk of secular decline to certain products becomes more probable. BindView has shipped over 10 million licenses to 5000 companies worldwide, a customer base for which I believe numerous enterprise software peers would pay well in excess of the company's IPO price of $5.00 per share. I would encourage you to realize that Mr. Gardner's seeming obsession with "winning the battle" against competitors may amount to no more than a Pyrrhic victory; for Mr. Gardner I prescribe the cure to his "foot-in-mouth" disease of glancing outside the window of his office and onto Wall Street, where BindView shareholders are getting slaughtered like Mad Cows. The public owners of BindView are no longer buying the "growing pains" excuse but instead have you diagnosed with managerial brain cancer. Rather than attempt to "earn your way out of it" as Mr. Pulaski suggested in our conversation, you would be well advised to find a buyer for BindView now before your shareholders find someone to do it for you. Very truly yours, /s/ Robert L. Chapman, Jr. Robert L. Chapman, Jr. EX-99.3 4 0004.txt LETTER FROM DANIEL S. LOEB Exhibit C --------- THIRD POINT MANAGEMENT COMPANY L.L.C. LETTERHEAD March 22, 2001 Sent via facsimile and U.S. Postal Service - ------------------------------------------ Mr. Richard P. Gardner Chief Executive Officer and President BindView Development Corporation 5151 San Felipe, 25th floor Houston, TX 77056 Dear Mr. Gardner: Third Point Management Company L.L.C., as investment manager of Third Point Partners L.P. ("Third Point"), and its affiliates has recently acquired over 2 million shares of BindView Development Corporation (the "Company" or "Bindview"). However, please do not be deluded into thinking that our recent purchases reflect support for you or the Chairman, Eric Pulaski. Rather, we strongly urge BindView management to take steps immediately to maximize shareholder value by selling the Company. Since CIBC Oppenheimer analyst Melissa Eisenstat heralded your joining BindView with a report titled "New Sheriff in Town: BindView Hires Top Gun From BMC Software" last year, BindView shares have dropped a staggering 90%, erasing over $2 billion in shareholder value. Although it has been convenient to blame this debacle on market conditions, BindView's poor performance has significantly outstripped the more moderate declines suffered by many of your competitors. Given your own background in marketing, we are perplexed by the costly gaffes you seem to have committed in this area. In particular, you undertook what appears to have been a poorly executed marketing plan that involved transforming the prior telesales focus into a risky, expensive direct sales force effort. Also, after paying $125 million in stock for Entevo Corporation, we understand that you eliminated significant portions of that company's sales force without ensuring that Bindview's existing team could adequately sell and support Entevo's products. We believe that this mistake resulted in a significant disappointment in sales of Entevo's entire suite of products. Meanwhile, you seem to have failed to establish BindView's presence internationally in a timely manner, which could limit future growth potential and made the Company more susceptible to an economic downturn at home. From a financial perspective, prior to the time that you joined BindView the Company was profitable and generated positive cash flow in 1999. Since your heading the Company, BindView has lost money on an earnings basis and had negative cash flow from operations. Moreover, in your recent earnings pre-announcement and restatement of past results, you stated that, due to product returns, you would restate fourth quarter revenues. Given that you had a 30-day return policy, it takes neither a financial genius nor a mathematician to figure out that you should have been aware of significant returns within 30 days of the end of the calendar year. Even if all the sales that accounted for the restatement occurred on the last business day of 2000 (December 29), you should have been aware of such returns by January 28th, 2001. (That such significant sales could have been bunched up so close to the end of your fiscal year raises separate questions about "channel stuffing" but we will not debate that possibility at this time.) I am left perplexed as to which is worse: either a) you knew of the shortfall and chose not to disclose this material event as soon as you learned of it, all the while Chairman Eric Pulaski was selling his stock into the unknowing market or, b) your financial controls are so woefully inadequate that you did not learn of the error until the days before the conference call of March 6, 2001. Either scenario does not exactly instill confidence in BindView's management team. We also question why in the last year, while your similarly sized competitors took the opportunity to merge with larger companies, you have held steadfastly to a go-it-alone strategy. AXENT's merger with Symantec Corp. (ticker symbol: SYMC) fetched selling shareholders 6.5x estimated calendar 2000 revenues, based on the Symantec share price at the time of announcement (4.5x calendar 2000 revenues based on today's stock price). Similarly, Mission Critical merged with NetIQ (ticker symbol: NTIQ) based on a valuation of more than 19x estimated calendar 2000 revenues (5.3x calendar 2000 revenues based on NetIQ's stock price today). These multiples imply that Bindview (ticker symbol: BVEW) shareholders could have been holding securities worth $8.00 to $9.50 per Bindview share today had the Company chosen at the time to enter into a change of control transaction with a strategic buyer. Just this week, one of the more astute smaller capitalization companies in the software space, Sequoia Software Corporation, announced its sale to Citrix Systems for $184 million in cash ($5.64 per share), a 200% premium over the target's recent lows under $2.00 per share. Although Sequoia operates in a different sector of the enterprise software industry, it has faced many of the same challenges as BindView. However, rather than subject its shareholders to further downside risk, Sequoia's prudent management team recognized the benefits of selling the company to a larger, more diversified peer. Emphasizing the advantages of being part of a broader enterprise, one senior executive at Sequoia said it was "time to get the technology to someone that can scale the hell out of it." Moreover the executive acknowledged that it was increasingly difficult to convince large customers to do business with a small outfit, with sales people "spending hours to get the customer comfortable." On Citrix's conference call to discuss the Sequoia deal, President Mark Templeton emphasized the strategic nature of the transaction, stating that Citrix was willing to accept dilution in the merger's first year given the advantages he saw in the long run. Specifically, Templeton cited the following synergies that drive the merger of a smaller software vendor into one many times its size: 1) More products offerings for customers; 2) Leverage of existing sales channels and customer base; 3) Strengthening partnerships with companies such as IBM, Compaq and SAP; 4) Logical progress in its existing strategic development. It is essential that management and the Board of Directors of BindView study the strategic rationale that underlies Sequoia's successful decision to seek a merger partner. We are certain that when matters of personal self-interest and ego are set aside that you and the Board will observe the same economic reality and reach the same indisputable conclusion as Sequoia's sagacious management: BindView must take immediate steps to seek out a merger partner. Sadly, based on my limited interactions with you and reports from others, I believe that your apparent self-absorption might prevent you from reading the writing on the wall and thus take actions that your role as a fiduciary would require. I can only hope that BindView's Board will be more rational and place economics over "egonomics." Unfortunately for BindView shareholders, it does not seem that your managerial deficiencies are limited to poor execution of marketing plans, setting and meeting sales forecasts or financial controls. In what seems to be your signature arrogant manner, when esteemed colleague and BindView shareholder Robert L. Chapman, Jr. called to speak to you in the aftermath of your most recent pre-announcement, reportedly your response was "if you don't like the way I run the company, why don't you divest your shares". This is obviously the course that most of your disillusioned shareholders have taken by liquidating their shares down to almost $2 each. This is likely why Melissa Eisenstat of CIBC, who was a fervent bull recommending purchase of the Company's shares in an April 4, 2000 research report at $25 9/16 per share, seems to have soured on your leadership; even at current low single digit prices she is no longer recommending the stock. To Eisenstat and your shareholders, your performance as the "new sheriff" has turned out decidedly more Keystone Cop than Wyatt Earp. I telephoned you recently on March 9 to introduce myself as owning, along with associate Chapman Capital, nearly 5% of the Company. Your idea of laying out the welcome mat was to literally hang up on me after saying "I don't believe that you are a shareholder". At that time, Third Point held 1.5 million shares (substantially more than your personal holdings), making it one of the five largest outside shareholders according to the Bloomberg holders list. I too deal with investors in my business, institutional fund management. In nearly six years running my firm, I have never hung up on a prospective, let alone current investor in my company. Moreover, if someone on my staff were to behave so brazenly, I would terminate that employee on the spot. I wonder what the members of your Board of Directors would do upon identifying such a loose cannon in one of their own organizations. This begs the question of how they should handle you in light of your evasive and combative approach to one of BindView's largest owners. You might wonder then why Third Point has chosen to purchase so many shares of the Company. While we have no confidence in senior management, we believe that BindView has a committed and hard working technical team as well as outstanding product offerings. In particular, the bv-Control software solution is the clear leader in its space with 50% market share of the host based vulnerability assessment market (according to a recent IDC industry report). BindView's bv-Admin software is also regarded as competitive, and if properly positioned and marketed, could drive an acquirer's revenues as the migration to Windows 2000's Active Directory offering gathers momentum. We think that shareholders' exasperation with your seemingly perpetual failure has resulted in the shares trading at fire sale levels. Indeed, at $2.25 per share, and with approximately $60 million in cash and short-term investments, your company has an equity market capitalization of only $120 million and an enterprise value of $60 million. Based on the low end of your revenue estimates of $103 million for 2001, your shares are being given away at a multiple of 2001 revenues of only 0.6 x. Even after the general decline in the valuation of software companies, your competitors still generally trade at revenue multiples of 4-7x. If the Company were to trade even at 2-3x enterprise value to revenues, your shares would trade for $5-$7 per share. Moreover, in an outright sale of the Company our analysis shows that even higher prices could be attained for BindView's long-suffering shareholders. Since you were unwilling to engage me in a business conversation when I called on March 9, allow me now to give you some background on my firm and the reasons why we will be a positive force for BindView shareholders (although not necessarily for your career). Unlike many of your other understandably frustrated shareholders, we at Third Point have the financial wherewithal, persistence and expertise to see through a successful transition of the Company. Our assets under management of approximately $350 million are almost three times BindView's market capitalization and six times the entire enterprise value of the Company. Unlike you, I have an unblemished record in identifying and realizing value for my investors; our returns have averaged gains over 35% net of fees on an annualized basis over a period of nearly six years. (This includes profits of 17% last year and 6% year to date, periods during which many of our competitors have hid behind their mama's apron of "difficult market conditions"). As an object lesson in Third Point's approach to value investing and its staunch defense of its investors' interests, may I suggest that you read Third Point's 13D filing of September 15, 2000 in which we urged Agribrands International Inc. to pursue an offer from a company not affiliated with its Chairman. (Subsequently, Agribrands was sold to Cargill for a substantial premium.) Rest assured, Third Point Management and Chapman Capital will work diligently to see that we realize significant value from our investment in the Company with or without your cooperation. If you find my approach abrasive or hostile, you may want to look into the history of my colleague from Chapman Capital. In comparison, you might find that his level of intolerance for inept management makes me look like the Dalai Lama. BindView finished the year 2000 with a strong cash balance of nearly $60 million in cash and investments and virtually no debt. We adamantly warn you against using that cash for acquisitions at this time. Your track record in the M&A department is abysmal as evidenced by the disappointing results of the $125 million Entevo acquisition. Had you utilized $125 million in cash (vs. stock) to acquire Entevo a year ago, only God knows how dire the Company's straights would be today. Furthermore, don't even think about re-pricing the Company's stock options; should that even be broached I can promise you that Third Point, Chapman Capital and the rest of your public shareholders will unleash a fury beyond your worst nightmares. In summary, your track record in taking strategic steps to enhance shareholder value has been singularly unimpressive. Why should shareholders conclude at this difficult juncture in the Company's history that BindView will prosper under your continued leadership? We are not alone in questioning your continued management of this company. Based on our informal conversations with other large shareholders who share our views, we believe that there is wide support for a sale of the Company at this time. Furthermore, we have had informal discussions with potential strategic acquirers and are confident that there would be significant interest in BindView if it were put up for sale in a fair and open process. This interest may materialize even if such a process were not initiated. Accordingly, we urge you to officially put the Company up for sale. We will shortly contact members of the BindView Board of Directors to discuss in greater detail our plans to enhance shareholder value. Very truly yours, /s/ Daniel S. Loeb Daniel S. Loeb Managing Member -----END PRIVACY-ENHANCED MESSAGE-----