"In claiming the Board's independent financial advisor has called for ˜selling the business operations,' Steel has once again attempted to shade the truth. The advisor made no such recommendation, and in fact has yet to present an analysis of the best ways to create value for stockholders," said Joseph S. Kennedy, Adaptec's Board Chairman. "This misrepresentation typifies Steel's campaign, which has offered up creative distortions in press releases at the expense of presenting a clear vision of prudent strategies to create value for stockholders.

"Steel's distortion relates to the Board's strategic review process. The Board asked its advisor to evaluate a number of alternatives, a subset of which were alternatives for separating the Company's assets, ranging from a spin-off to a split of the corporation into multiple entities. The advisor found that, within that subset of alternatives, a sale was the best -- but the advisor did not compare the separation of assets against other alternatives, nor did the advisor determine that a sale of the business was the best way to create value for stockholders. The advisor is also considering other scenarios outside of that subset," added Mr. Kennedy.

"While the Board majority is open to all options to maximize value, and has tried on several occasions over the years to find buyers for the business, the Board recognizes that the success of such strategic actions depends on timing to get the best value," he noted. "In the meantime, the Board majority is committed to a significant cash dividend to stockholders after taking into account Adaptec's needs for working capital and for other strategic opportunities. A cash dividend is an alternative Steel has consistently resisted.

"Steel's vague plan suggests value-destroying approaches similar to those followed by CoSine Communications, of which Steel has been an investor at least since 2005. The Company ceased its technology customer service operations in 2006 and has been pursing an ˜opportunistic, value-focused investment strategy and is not targeting any specific industries.' To date, CoSine has made no acquisition nor has it returned cash to stockholders, as would be the case in a properly structured SPAC (Special Purpose Acquisition Company).