Oct. 26, 2009 (Business Wire) -- Adaptec, Inc. (Nasdaq:ADPT), the global leader in I/O innovation, today commented on the efforts by Steel Partners II L.P., a hedge fund and minority stockholder in Adaptec, to prevent the Adaptec Board from taking further steps toward the payment of a significant cash dividend to stockholders.

Steel publicly revealed its latest threat in its Oct. 22 news release, which stated: “Steel Partners warned that if the Legacy Directors attempt to take such action [to distribute cash], that each director would be held personally accountable for any diminution of stockholder value.” This public comment came within days of Steel’s Board representatives learning that Adaptec’s investment advisor would be making a presentation to the Board on the use of the Company’s significant cash balances.

“Steel specifically stated that no action should be taken until after its consent solicitation is concluded. It appears clear to us that Steel took this position because it believes that, if it succeeds in its consent solicitation, it will control the Board and thus be able to block any distribution of cash,” said Joseph Kennedy, Chairman of Adaptec’s Board. “Adaptec stockholders should understand that Steel has demonstrated, once again, that Steel’s first step toward its secret plan appears to be to hoard Adaptec’s cash – and intimidate the majority of the Board into inaction – until it can gain control.”

Mr. Kennedy added, “We also remain troubled by the repeated breaches of Board confidentiality. The Steel designees serving on the Board have continued to share confidential Board materials with Steel, which has on several occasions issued news releases that quote portions of confidential Board deliberations utterly out of context.”

The Board majority urges stockholders to follow the recommendation of proxy advisor Glass, Lewis & Co. that they revoke consent for Steel’s proposals, and the Board majority urges stockholders to ignore the recommendations of Risk Metrics which, the Company noted, did not take into consideration Steel’s failure to be forthright about its plans for the Company and its cash. In its Oct. 9 report Glass, Lewis & Co. said it “is not convinced that Steel is the appropriate candidate to address the Company’s performance challenges.