sec document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 4)(1)
Adaptec, Inc.
----------------
(Name of Issuer)
Common Stock, $0.001 Par Value
------------------------------
(Title of Class of Securities)
00651F108
---------
(CUSIP Number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 26, 2007
----------------
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of 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 for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 34 Pages)
----------------
(1) 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 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).
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 2 of 34 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
STEEL PARTNERS II, L.P.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 18,076,884
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
18,076,884
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
18,076,884
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 3 of 34 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
STEEL PARTNERS, L.L.C.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 18,076,884
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
18,076,884
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
18,076,884
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 4 of 34 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WARREN G. LICHTENSTEIN
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 18,076,884
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
18,076,884
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
18,076,884
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.9%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 5 of 34 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JACK L. HOWARD
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
- 0 -
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 6 of 34 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JOHN J. QUICKE
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
- 0 -
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 7 of 34 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JOHN MUTCH
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
- 0 -
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 8 of 34 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
HOWARD M. LEITNER
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
- 0 -
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 9 of 34 Pages
---------------------- ----------------------
================================================================================
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
ANTHONY BERGAMO
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / /
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY - 0 -
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
- 0 -
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
- 0 -
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 10 of 34 Pages
---------------------- ----------------------
The following constitutes Amendment No. 4 ("Amendment No. 4") to the
Schedule 13D filed by the undersigned. This Amendment No. 4 amends the
Schedule 13D as specifically set forth.
Item 2. IDENTITY AND BACKGROUND.
Item 2 is hereby amended to add the following:
In connection with the Settlement Agreement described and defined in Item
4, Steel Partners II is no longer seeking the election of Howard M. Leitner and
Anthony Bergamo as directors of the Issuer at its 2007 annual meeting of
stockholders (the "2007 Annual Meeting"). Accordingly, Messrs. Leitner and
Bergamo are no longer members of the Section 13(d) group and shall cease to be
Reporting Persons immediately after the filing of this Statement. The remaining
Reporting Persons will continue filing as a group statements on Schedule 13D
with respect to their beneficial ownership of securities of the Issuer, to the
extent required by applicable law.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is hereby amended and restated to read as follows:
The aggregate purchase price of the 18,076,884 Shares owned by Steel
Partners II is approximately $67,337,960, including brokerage commissions. The
Shares owned by Steel Partners II were acquired with partnership funds.
Item 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended to add the following:
On October 26, 2007 (the "Effective Date"), Steel Partners II and Partners
LLC (the "Steel Parties") entered into a settlement agreement with Adaptec, Inc.
(the "Settlement Agreement"). Pursuant to the Settlement Agreement, the Steel
Parties agreed to withdraw their nomination of Jack L. Howard, John J. Quicke,
John Mutch, Anthony Bergamo and Howard M. Leitner for election at the 2007
Annual Meeting and to terminate their pending proxy solicitation with respect to
the 2007 Annual Meeting. Prior to the 2007 Annual Meeting, the Board will
increase its size from eight (8) to nine (9) members and current directors
Judith M. O'Brien and Charles J. Robel will not stand for re-election to the
Board at the 2007 Annual Meeting. The Issuer agreed to nominate, recommend,
support and solicit proxies for the election of Messrs. Howard, Quicke and Mutch
(the "Steel Nominees") at the 2007 Annual Meeting and appoint each of them to
the Board's Nominating and Governance, Compensation and Audit Committees,
respectively, if they are elected. The Steel Parties agreed that they and their
affiliates and associates will vote their Shares for the election of each of the
incumbent directors nominated for election at the 2007 Annual Meeting and
against any proposal made by a third party at the meeting if such proposal is
opposed by a majority of the incumbent directors. The Board will not exceed nine
(9) members prior to the Issuer's 2008 annual meeting of stockholders.
Pursuant to the Settlement Agreement, the Issuer agreed that the 2007
Annual Meeting will be held and concluded no later than December 13, 2007 or
within thirty (30) days thereafter and the only matters the Issuer will propose
and recommend for approval at the meeting will be the election of directors and
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 11 of 34 Pages
---------------------- ----------------------
the ratification of the appointment of the Issuer's independent registered
public accounting firm. The Issuer also agreed that between the Effective Date
and immediately following the 2007 Annual Meeting it will not enter into any
binding agreement or arrangement relating to any acquisition or purchase of
assets (except for assets purchased in the ordinary course of the Issuer's
business) or a business by it that constitutes 20% or more of the net revenues,
net income or assets of the Issuer and its subsidiaries, taken as a whole, or
20% or more of any class or series of the Issuer's securities unless either (i)
the binding agreement or arrangement requires the Issuer to seek and obtain the
approval of its stockholders with respect to such proposed transaction or (ii)
the Steel Parties provide their prior written approval with respect to such
proposed transaction. The Issuer and the Steel Parties furthermore agreed that
as soon as practicable following the 2007 Annual Meeting, the Issuer and the
Steel Nominees will (i) review the Issuer's business, financial condition,
results of operations and outlook, (ii) use commercially reasonable efforts to
develop a set of mutually agreeable goals for improving the Issuer's performance
(the "Mutual Goals") and (iii) use commercially reasonable efforts to engage as
soon as reasonably practicable, but in any event within 60 days after developing
the Mutual Goals, a third-party consultant satisfactory to the Issuer and the
Steel Nominees for the purpose of assisting the Issuer in making recommendations
to achieve the Mutual Goals.
The Steel Parties agreed that during the period beginning on the Effective
Date and ending immediately following the 2007 Annual Meeting, they will not,
and will cause each of their affiliates and associates not to, take certain
actions, including the following:
o effect, seek, offer, propose (whether publicly or otherwise) or cause
or participate in, or assist, encourage or seek to persuade, any other
person to effect, seek, offer or propose (whether publicly or
otherwise) or participate in:
o any tender offer or exchange offer involving the Issuer's voting
securities ("Voting Securities"), except to the extent a third
party which is not an affiliate or associate of the Steel Parties
commences a hostile tender offer or exchange offer with respect
to the Voting Securities;
o any merger, consolidation, share exchange, business combination,
sale of assets, recapitalization, restructuring, dividend,
distribution, self tender, stock repurchase, liquidation,
dissolution or other extraordinary transaction with or involving
the Issuer or any of its subsidiaries or any portion of the
business or the assets of the Issuer or any of its subsidiaries,
except that if the Issuer commences a process to complete any of
the activities set forth in this paragraph, the Steel Parties
will have the opportunity to participate in such process under
the same procedures and guidelines established for the other
participants in the process; or
o any "solicitation" of "proxies" (as such terms are used in the
proxy rules of the Securities and Exchange Commission (the
"SEC")) with respect to the Issuer or any action resulting in
such person becoming a "participant" in any "election contest"
(as such terms are used in the proxy rules of the SEC) with
respect to the Issuer;
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 12 of 34 Pages
---------------------- ----------------------
o offer, pledge, sell, contract to sell, or otherwise transfer or dispose
of any of the Voting Securities owned by the Steel Parties on the
Effective Date or enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of such securities;
o except, notwithstanding the foregoing, the Steel Parties may take
actions relating to the submission to a vote of the stockholders of the
Issuer to approve certain acquisitions or purchases of assets or a
business by the Issuer as contemplated in the Settlement Agreement.
The Issuer agreed to reimburse the Steel Parties for their reasonable
out-of-pocket fees and expenses incurred in connection with their activities
relating to the 2007 Annual Meeting, not to exceed $50,000 in the aggregate.
The foregoing description of the Settlement Agreement is not complete and
is qualified in its entirety by reference to its full text. A copy of the
Settlement Agreement is filed as an exhibit hereto and is incorporated herein by
reference.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5(a) is hereby amended and restated to read as follows:
(a) The aggregate percentage of Shares reported owned by each person named
herein is based upon 121,051,238 Shares outstanding, which is the total number
of Shares outstanding as of September 28, 2007 as reported in the Issuer's
Schedule 14A filed with the Securities and Exchange Commission on October 15,
2007.
As of the close of business on October 29, 2007, Steel Partners II
beneficially owned 18,076,884 Shares, constituting approximately 14.9% of the
Shares outstanding. As the general partner of Steel Partners II, Partners LLC
may be deemed to beneficially own the 18,076,884 Shares owned by Steel Partners
II, constituting approximately 14.9% of the Shares outstanding. By virtue of his
positions with Steel Partners II and Partners LLC, Mr. Lichtenstein may be
deemed to beneficially own the 18,076,884 Shares owned by Steel Partners II,
constituting approximately 14.9% of the Shares outstanding.
Currently, none of Messrs. Howard, Quicke, Mutch, Leitner or Bergamo
owns any Shares.
Item 5(b) is hereby amended and restated to read as follows:
(b) Mr. Lichtenstein has the sole power to vote and dispose of 18,076,884
Shares. By virtue of his positions with Steel Partners II and Partners LLC, Mr.
Lichtenstein has the sole power to vote and dispose of the 18,076,884 Shares
held by Steel Partners II and beneficially owned by Partners LLC.
Item 5(c) is hereby amended to add the following:
(c) Schedule A annexed hereto lists all transactions in the Shares during
the past sixty days by the Reporting Persons. All of such transactions were
effected in the open market.
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 13 of 34 Pages
---------------------- ----------------------
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 is hereby amended to add the following:
On October 26, 2007, Steel Partners II and Partners LLC entered into the
Settlement Agreement as discussed in further detail in Item 4.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 is hereby amended to add the following exhibit:
7. Settlement Agreement dated as of October 26, 2007 by and among Adaptec,
Inc., Steel Partners, L.L.C. and Steel Partners II, L.P.
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 14 of 34 Pages
---------------------- ----------------------
SIGNATURES
----------
After reasonable inquiry and to the best of his knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: October 30, 2007 STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C.
General Partner
By: /s/ Lauren Isenman
-----------------------------------
Lauren Isenman
As Attorney-In-Fact for Warren G.
Lichtenstein,
Managing Member
STEEL PARTNERS, L.L.C.
By: /s/ Lauren Isenman
-----------------------------------
As Attorney-In-Fact for Warren G.
Lichtenstein,
Managing Member
/s/ Lauren Isenman
---------------------------------------
LAUREN ISENMAN
As Attorney-In-Fact for Warren G.
Lichtenstein
/s/ Jack L. Howard
---------------------------------------
JACK L. HOWARD
/s/ John J. Quicke
---------------------------------------
JOHN J. QUICKE
/s/ John Mutch
---------------------------------------
JOHN MUTCH
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 15 of 34 Pages
---------------------- ----------------------
/s/ Howard M. Leitner
---------------------------------------
HOWARD M. LEITNER
/s/ Anthony Bergamo
---------------------------------------
ANTHONY BERGAMO
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 16 of 34 Pages
---------------------- ----------------------
EXHIBIT INDEX
Exhibit Page
----------------------------------------------------------------- -------------
1. Joint Filing Agreement by and among Steel Partners II,
L.P., Steel Partners, L.L.C. and Warren G.
Lichtenstein, dated March 9, 2007 (previously filed).
2. Powers of Attorney (previously filed).
3. Press Release, including text of letter to Board of
Directors of Adaptec, Inc., dated May 30, 2007
(previously filed).
4. Letter from Steel Partners II, L.P. to Adaptec, Inc.,
dated June 25, 2007, nominating directors (previously
filed).
5. Joint Filing and Solicitation Agreement by and among
Steel Partners II, L.P., Steel Partners, L.L.C.,
Warren G. Lichtenstein, Jack L. Howard, John J.
Quicke, John Mutch, Howard M. Leitner and Anthony
Bergamo, dated June 25, 2007 (previously filed).
6. Form of Indemnification Letter Agreement (previously
filed).
7. Settlement Agreement dated as of October 26, 2007 by 18 to 34
and among Adaptec, Inc., Steel Partners, L.L.C. and
Steel Partners II, L.P.
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 17 of 34 Pages
---------------------- ----------------------
SCHEDULE A
Transactions in the Shares During the Past 60 Days
--------------------------------------------------
Shares of Common Stock Price Per Date of
Purchased Share($) Purchase
--------- -------- --------
STEEL PARTNERS II, L.P.
-----------------------
60,717 3.5683 08/24/07
7,000 3.6000 08/27/07
80,000 3.5998 08/28/07
200 3.6000 08/29/07
40,426 3.6400 08/30/07
41,042 3.6000 09/10/07
2,000 3.6000 09/11/07
19,691 3.6100 09/13/07
STEEL PARTNERS, L.L.C.
----------------------
None
WARREN G. LICHTENSTEIN
----------------------
None
JACK L. HOWARD
--------------
None
JOHN J. QUICKE
--------------
None
JOHN MUTCH
----------
None
HOWARD M. LEITNER
-----------------
None
ANTHONY BERGAMO
---------------
None
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 18 of 34 Pages
---------------------- ----------------------
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the "AGREEMENT") is dated as of October 26,
2007 (the "EFFECTIVE DATE") by and among Adaptec, Inc., a Delaware corporation
(the "COMPANY"), Steel Partners, L.L.C., a Delaware limited liability company
("STEEL PARTNERS"), and Steel Partners II, L.P., a Delaware limited partnership
("STEEL II" and, together with Steel Partners, "STEEL").
W I T N E S S E T H
WHEREAS, on June 25, 2007, Steel delivered to the Company a Notice of
Intention to Nominate Persons for Election as Directors (the "NOMINATION
LETTER") indicating that Steel planned to seek representation on the Company's
Board of Directors (the "BOARD OF DIRECTORS") by nominating a slate of five
candidates, specifically Jack L. Howard, John J. Quicke, John Mutch, Howard M.
Leitner and Anthony Bergamo, for election as directors at the Company's 2007
annual meeting of stockholders (the "2007 ANNUAL MEETING").
WHEREAS, on August 3, 2007, Steel delivered to the Company a demand,
pursuant to Section 220 of the Delaware General Corporation Law, to review
certain of the Company's stockholder records in connection with the 2007 Annual
Meeting (the "SECTION 220 DEMAND").
WHEREAS, on August 24, 2007, Steel filed a preliminary proxy statement on
Schedule 14A (the "STEEL PROXY") with the Securities and Exchange Commission
(the "SEC") related to the matters set forth in the Nomination Letter.
WHEREAS, the Company and Steel (each a "PARTY") desire to enter into this
Agreement, which (i) terminates the pending proxy contest for the election of
directors at the 2007 Annual Meeting, (ii) grants to Steel representation on the
Board of Directors, and (iii) provides for certain other limitations on Steel
and its Affiliates and Associates (as such terms are defined below).
NOW, THEREFORE, in consideration of the premises, covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Party, intending to be
legally bound, hereby agrees as follows:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
SECTION 1.1 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms will have the meanings specified below:
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act.
"APPLICABLE LAW" means all applicable provisions of all (a) constitutions,
treaties, statutes, laws (including common law), rules, regulations, ordinances
or codes of any Governmental Authority, and (b) orders, decisions, injunctions,
judgments, awards and decrees of any Governmental Authority.
"ASSOCIATE" has the meaning ascribed to such term in Rule 12b-2 of the
General Rules and Regulations of the Exchange Act.
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CUSIP No. 00651F108 13D Page 19 of 34 Pages
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"BUSINESS DAY" means a day other than a Saturday, a Sunday, a day on which
banking institutions in the States of New York or California are authorized or
obligated by law or required by executive order to be closed, or a day on which
The NASDAQ Global Market is closed.
"BYLAWS" means the Bylaws of the Company, as amended, restated or
supplemented from time to time.
"CERTIFICATE" means the Certificate of Incorporation of the Company, as
amended, restated or supplemented from time to time.
"COMMON STOCK" means the common stock of the Company, par value $0.001 per
share.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"GOVERNMENTAL AUTHORITY" means any federal, state, local or political
subdivision, governmental or administrative body, instrumentality, department or
agency or any court, administrative hearing body, arbitration tribunal,
commission or other similar dispute resolution panel or body, and any other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of a government.
"INCUMBENT DIRECTORS" means those individuals who, as of the date hereof,
constitute the Board of Directors; PROVIDED, HOWEVER, that any individual who
becomes a director subsequent to the date hereof whose election, or nomination
for election by the Company's stockholders, was approved by a vote of at least a
majority of the Incumbent Directors then serving on the Board of Directors will,
following such election, be an Incumbent Director. For the avoidance of doubt,
the Steel Directors will not be Incumbent Directors.
"PERSON" means an individual, a partnership, an association, a joint
venture, a corporation, a limited liability company, a business, a trust, any
entity organized under Applicable Law, an unincorporated organization or any
Governmental Authority.
"SECTION 203" means Section 203 of the Delaware General Corporation Law.
"STEEL DIRECTOR" means each of Jack L. Howard, John J. Quicke, John Mutch,
and any substitutes and successors of such individuals appointed pursuant to the
terms of Sections 3.2(e) and 3.2(f).
"VOTE" means, as to any entity, the ability to cast a vote at either a
stockholders' or comparable meeting or by written consent of such entity with
respect to the election of directors or other members of such entity's governing
body.
"VOTING SECURITIES" means the Common Stock and any other securities of the
Company having the right to Vote.
SECTION 1.2 INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT. The
definitions in Section 1.1 will apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun will
include the corresponding masculine, feminine and neuter forms. The word
"include" will be deemed to be followed by the phrase "without limitation." All
references herein to Articles, Sections, Exhibits and Schedules will be deemed
to be references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context will otherwise require. The headings of the
Articles and Sections are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement. Unless the context will otherwise require or provide, any reference
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CUSIP No. 00651F108 13D Page 20 of 34 Pages
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to any agreement or other instrument or statute or regulation is to such
agreement, instrument, statute or regulation as amended and supplemented from
time to time (and, in the case of a statute or regulation, to any successor
provision).
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 REPRESENTATION AND WARRANTIES BY STEEL. Steel Partners and
Steel II hereby represent and warrant to the Company as follows:
(a) Each of them has all requisite power and authority to execute,
deliver and perform their respective obligations under this Agreement. The
execution, delivery and performance of this Agreement by each of them and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite action on the part of each of them.
(b) This Agreement has been duly executed and delivered by each of
them and constitutes a legal, valid and binding obligation of each of them,
enforceable against each of them in accordance with its terms, except to the
extent that enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors rights generally or by general principles of
equity.
(c) No governmental consent, approval, authorization, license or
clearance, or filing or registration with any governmental or regulatory
authority, is required to permit either of them to perform its respective
obligations under this Agreement, except for such as have been obtained.
(d) The performance of the terms of this Agreement shall not
conflict with, constitute a violation of, or require any notice or consent
under, the partnership agreement, membership agreement and/or any of the other
governing instruments of Steel Partners or Steel II or any agreement or
instrument to which Steel Partners or Steel II is a party or by which Steel
Partners or Steel II is bound, and shall not require any consent, approval or
notice under Applicable Law
(e) The shares of Common Stock set forth on SCHEDULE 2.1(E) attached
hereto represent all of the shares of Voting Securities of the Company, if any,
which are beneficially owned by either or both of them on the date hereof (the
"STEEL SHARES"). The Steel Shares are owned free and clear of any charge, claim,
equitable interest, lien, option, pledge, security interest, right of first
refusal, encumbrance or similar restriction. Neither of them has the right to
Vote shares of Voting Securities of the Company other than the Steel Shares, and
neither of them has granted any other Person the right to Vote or acquire the
Steel Shares. Other than the Steel Shares, neither of them is the beneficial
owner of, or has any right to acquire, any other Voting Securities or other
securities of the Company.
(f) Each of Jack L. Howard, John J. Quicke and John Mutch (i)
satisfies the eligibility requirements for members of the Board of Directors
established by (A) the Company's publicly disclosed corporate governance
documents and (B) The Nasdaq Stock Market, as in effect on the date of this
Agreement, and (ii) qualifies as an "independent director" under Rule
4200(a)(15) of The Nasdaq Stock Market for purposes of service on the Board of
Directors. John Mutch qualifies to serve on the Audit Committee of the Board of
Directors under Rule 4350(d)(2) of The Nasdaq Stock Market, including meeting
the criteria for "independence" set forth in Rule 10A-3(b)(1) of the Exchange
Act. Each of Jack L. Howard and John J. Quicke may be deemed to be Affiliates of
Steel and "affiliates" for purposes of Section 10A(m)(3) of the Exchange Act.
Each of Jack L. Howard, John J. Quicke and John Mutch has completed and returned
to the Company a Director and Officer Questionnaire, in the form provided by the
Company.
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CUSIP No. 00651F108 13D Page 21 of 34 Pages
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SECTION 2.2 REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to Steel as follows:
(a) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate action on the part of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforceability may be limited by bankruptcy, insolvency or similar
laws affecting creditors rights generally or by general principles of equity.
(c) No governmental consent, approval, authorization, license or
clearance, or filing or registration with any governmental or regulatory
authority, is required in order to permit the Company to perform its obligations
under this Agreement, except for such as have been obtained.
(d) The performance of the terms of this Agreement shall not
conflict with, constitute a violation of, or require any notice or consent
under, the Certificate or Bylaws or any agreement or instrument to which the
Company is a party or by which the Company is bound, and shall not require any
consent, approval or notice under Applicable Law.
ARTICLE III
COVENANTS AND OTHER LIMITATIONS
SECTION 3.1 STEEL COVENANTS. On the Effective Date, Steel shall
irrevocably withdraw the Nomination Letter, shall irrevocably withdraw the
Section 220 Demand and shall terminate the pending proxy contest with respect to
the election of directors at the 2007 Annual Meeting as described in the Steel
Proxy. Within two (2) Business Days of the date of this Agreement, Steel will
file, or cause to be filed on their behalf, with the SEC an amendment to its
Schedule 13D with respect to the Company disclosing the material contents of
this Agreement. In addition to the foregoing, Steel agrees that during the
period beginning on the Effective Date and ending immediately following the 2007
Annual Meeting, that it will not, and it will cause each of its Affiliates and
Associates not to, directly or indirectly, alone or in concert with others, take
any of the actions set forth below (other than such actions relating to the
submission to a vote of the stockholders of the Company to approve certain
acquisitions or purchases of assets or a business by the Company as contemplated
in Section 3.9(1) of this Agreement):
(a) effect, seek, offer, propose (whether publicly or otherwise) or
cause or participate in, or assist, encourage or seek to persuade, any other
Person to effect, seek, offer or propose (whether publicly or otherwise) or
participate in:
(i) any tender offer or exchange offer involving Voting
Securities; PROVIDED, HOWEVER, that this clause (i) will be inoperative to the
extent a third party which is not an Affiliate or Associate of Steel commences a
hostile tender offer or exchange offer with respect to Voting Securities;
(ii) any merger, consolidation, share exchange, business
combination, sale of assets, recapitalization, restructuring, dividend,
distribution, self tender, stock repurchase, liquidation, dissolution or other
extraordinary transaction with or involving the Company or any of its
subsidiaries or any portion of the business or the assets of the Company or any
of its subsidiaries; PROVIDED, HOWEVER, that if the Company commences a process
to complete any of the activities set forth in this subsection (ii), Steel will
have the opportunity to participate in such process under the same procedures
and guidelines established for the other participants in the process; or
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CUSIP No. 00651F108 13D Page 22 of 34 Pages
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(iii) any "solicitation" of "proxies" (as such terms are used
in the proxy rules of the SEC) with respect to the Company or any action
resulting in such Person becoming a "participant" in any "election contest" (as
such terms are used in the proxy rules of the SEC) with respect to the Company.
(b) propose any matter for submission to a vote of stockholders of
the Company;
(c) grant any proxy or rights with respect to any Voting Securities
to any Person not designated by the Company;
(d) execute any written consent, waiver or demand with respect to
any Voting Securities;
(e) call or seek to have called any meeting of the holders of the
Common Stock;
(f) initiate or seek to initiate any solicitation of the holders of
Common Stock;
(g) take any action to seek to amend any provision of the
Certificate or the Bylaws;
(h) offer, pledge, sell, contract to sell, or otherwise transfer or
dispose of, directly or indirectly, any of the Steel Shares or enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Steel Shares;
(i) submit any demand under Section 220 of the Delaware General
Corporation Law to review the Company's books and records;
(j) take any action that could reasonably be expected to force the
Company to make any public disclosure with respect to any of the types of
matters described in clauses (a) through (i), or announce any intention to take
any action of the type described in clauses (a) through (i); or
(k) enter into any discussions, negotiations, arrangements or
understandings with any Person other than the Company with respect to any of the
foregoing, or advise, assist, encourage or seek to persuade others to take any
action with respect to any of the foregoing.
SECTION 3.2 STEEL DIRECTORS.
(a) Prior to the 2007 Annual Meeting (i) the Board of Directors
shall increase the size of the Board of Directors from eight (8) to nine (9)
members, and (ii) Judith M. O'Brien and Charles J. Robel shall not stand for
re-election at the 2007 Annual Meeting.
(b) The Company agrees to nominate, recommend, support and solicit
proxies for the Steel Directors for election at the 2007 Annual Meeting.
(c) Each Steel Director has entered into an agreement with Steel and
the Company in the form attached hereto as EXHIBIT A.
(d) Following the completion of the 2007 Annual Meeting, the Board
shall appoint John Mutch to the Company's Audit Committee, John J. Quicke to the
Company's Compensation Committee and Jack L. Howard to the Company's Nominating
and Governance Committee. Each Steel Director shall meet the membership
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CUSIP No. 00651F108 13D Page 23 of 34 Pages
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eligibility requirements, as then in effect, established by (i) the Company's
publicly disclosed corporate governance documents, (ii) the SEC and (iii) The
Nasdaq Stock Market for each committee of the Board of Directors to which each
such Steel Director has been appointed. The Board shall also appoint one of the
Steel Directors to any new committee of the Board formed after the Effective
Date, provided that such Steel Director shall meet the membership eligibility
requirements, as then in effect, established by (i) the Company's existing
publicly disclosed corporate governance documents, (ii) the SEC and (iii) The
Nasdaq Stock Market for appointment to such committee.
(e) Should any of Messrs. Howard, Quicke and Mutch be unable to
serve as a director at the time of the 2007 Annual Meeting, Steel shall have the
right to designate a substitute deemed qualified by the Company's Nominating and
Governance Committee.
(f) In the case of any vacancy occurring among any of the Steel
Directors serving on the Board prior to the 2008 annual meeting of stockholders
of the Company, Steel will have the right to recommend an individual deemed
qualified by the Company's Nominating and Governance Committee (and the right to
recommend alternates to the extent such individual is not deemed qualified by
the Company's Nominating and Governance Committee) as a representative for
appointment as a successor to hold office for the unexpired term of the Steel
Director whose place will be vacant. After the Company's Nominating and
Governance Committee deems such individual to be qualified in its reasonable
business judgment, the Company's Board of Directors shall promptly take all
reasonable steps to cause such individual to be appointed to fill the vacancy.
(g) After the 2007 Annual Meeting, the size of the Board of
Directors shall not exceed nine (9) members prior to the 2008 annual meeting of
stockholders of the Company.
SECTION 3.3 2007 ANNUAL MEETING; VOTING OF THE COMPANY'S VOTING
SECURITIES.
(a) The 2007 Annual Meeting shall be held and concluded on a date
not later than December 13, 2007 or within thirty (30) days thereafter. The only
matters that the Company shall propose and recommend to its stockholders that
they vote to approve at the 2007 Annual Meeting shall be the election of
directors, as provided herein, and the ratification of the appointment of its
independent registered public accounting firm.
(b) Steel and its Affiliates and Associates shall vote their shares
of Voting Securities for the election of each of the Incumbent Directors
nominated for election at the 2007 Annual Meeting.
(c) Steel and its Affiliates and Associates shall vote their shares
of Voting Securities against any proposal made by a third party at the 2007
Annual Meeting if such proposal is opposed by a majority of the Incumbent
Directors. The Company is not aware of any proposals made by third parties to be
presented at the 2007 Annual Meeting.
SECTION 3.4 SECTION 203. Each Party acknowledges and agrees that by
entering into this Agreement, the Company is not, and shall not be deemed to
have, opted out of or waived the provisions of Section 203 as they may apply to
Steel.
SECTION 3.5 QUORUM. Steel will use its best efforts to ensure that it will
be present, and will use its best efforts to cause its Affiliates and Associates
owning Voting Securities to be present, in each case, in person or by proxy, at
the 2007 Annual Meeting so that all Voting Securities beneficially owned by
Steel and its Affiliates and Associates will be counted for purposes of
determining the presence of a quorum at the 2007 Annual Meeting.
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CUSIP No. 00651F108 13D Page 24 of 34 Pages
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SECTION 3.6 PRESS RELEASES, ETC.
(a) Promptly after the execution of this Agreement, the Company and
Steel shall issue a joint press release in the form attached as SCHEDULE 3.6 to
this Agreement.
(b) Each Party (including, for purposes of this Section 3.6, Steel's
Affiliates and Associates) may make required filings with regulatory agencies in
the ordinary course relating to the matters covered by this Agreement; PROVIDED,
HOWEVER, that prior to making any such filings, each Party will provide the
other Party a reasonable opportunity to review and comment on any such filings.
Without limiting the generality of the foregoing, the Company agrees to provide
Steel an opportunity to review and comment on the portions of all proxy
materials to be filed by the Company in connection with the 2007 Annual Meeting
containing statements relating to Steel, the Steel Directors and this Agreement.
(c) Neither the Company, Steel or Steel's Affiliates or Associates,
nor any of their respective partners, members, directors, officers, employees or
agents, will publicly disparage any other Party to this Agreement nor any of
their respective partners, members, directors, officers, employees or agents.
SECTION 3.7 NO PUBLIC INFORMATION. In connection with discussions between
Steel and their representatives and the Company and its representatives, the
Company or its representatives may disclose orally or in writing to Steel or its
representatives information that is confidential to the Company. To protect the
confidentiality of such information, and as a condition to the furnishing of
such information, Steel agrees, as set forth below, to treat confidentially all
such information furnished to or otherwise received by Steel or its
representatives from the Company or on its behalf (herein collectively referred
to as the "CONFIDENTIAL INFORMATION"). For purposes of this Agreement, the
phrase "Confidential Information" will not include information which (a) becomes
lawfully available to the public other than as a result of a disclosure by Steel
or its representatives, (b) was lawfully available to Steel on a
non-confidential basis prior to its disclosure to the Company or its
representatives by the Company or on its behalf or (c) lawfully becomes
available to Steel on a non-confidential basis from a source other than the
Company or the Company's representatives or agents, provided that such source is
not bound by a confidentiality agreement with the Company of which Steel has
been made aware. The Company has no obligation to furnish Confidential
Information to Steel or its representatives by virtue of this Agreement except
for Confidential Information provided to Steel Directors in their capacity as
directors of the Company. The Company shall use its reasonable efforts not to
provide Confidential Information to Steel unless requested or consented to by
Steel; provided that the Parties acknowledge that the provision of Confidential
Information to Steel representatives serving on the Board of Directors shall not
violate this provision. The Confidential Information will not be disclosed by
Steel or its representatives, except to the extent the Company has given its
prior written consent. Notwithstanding anything to the contrary contained
herein, Steel and its representatives shall be permitted to disclose any
Confidential Information to the extent the disclosure of such information is
required in any court proceeding, by any Governmental Authority or by Applicable
Law; provided, however, that Steel and its representatives shall use their best
efforts to give the Company reasonable advance notice of such required
disclosure to enable the Company, at its sole expense, to prevent or limit such
disclosure. This Section 3.7 will survive the termination of this Agreement.
SECTION 3.8 THIRD PARTY CONSULTANT. As soon as practicable following the
2007 Annual Meeting, the Company and the Steel Directors shall review the
Company's business, financial condition, results of operations and outlook and
shall use commercially reasonable efforts to develop a set of mutually agreeable
goals for improving the Company's performance (the "MUTUAL GOALS"). The Company
and the Steel Directors shall then use commercially reasonable efforts to engage
as soon as reasonably practicable, but in any event within 60 days after
developing the Mutual Goals, a third-party consultant satisfactory to the
Company and the Steel Directors for the purpose of assisting the Company in
making recommendations to achieve the Mutual Goals.
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CUSIP No. 00651F108 13D Page 25 of 34 Pages
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SECTION 3.9 SIGNIFICANT TRANSACTIONS. The Company shall not enter into any
binding agreement or arrangement relating to any acquisition or purchase of
assets (except for assets purchased in the ordinary course of the Company's
business) or a business by it that constitutes 20% or more of the net revenues,
net income or assets of the Company and its subsidiaries, taken as a whole, or
20% or more of any class or series of Company securities unless either (1) the
binding agreement or arrangement shall require the Company to seek and obtain
the approval of its stockholders with respect to such proposed transaction or
(2) Steel provides its prior written approval with respect to such proposed
transaction.
ARTICLE IV
TERM AND TERMINATION
SECTION 4.1 TERMINATION. Except with respect to Sections 3.2(d), 3.2(f),
3.2(g), 3.7 and 3.8, Article IV and Article V, the provisions of this Agreement
will terminate immediately following the 2007 Annual Meeting.
SECTION 4.2 TERMINATION FOR BREACH. The provisions of this Agreement may
also be terminated by the non-breaching Party in the event of a material breach
by any Party of any of the terms of this Agreement; PROVIDED, HOWEVER, that the
non-breaching Party shall first provide written notice to the breaching party of
the facts and circumstances giving rise to such breach, after which the
non-breaching party shall have ten (10) Business Days from receipt of the notice
to cure such breach. Any termination of this Agreement as provided herein will
be without prejudice to the rights of any Party arising out of the breach by any
other Party of any provision of this Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 NOTICES. All notices, requests and other communications to any
Party hereunder will be in writing (including prepaid overnight courier,
facsimile transmission or similar writing) and will be given to such Party at
its address or facsimile number set forth in this Section 5.1 or at such other
address or facsimile number as such Party may hereafter specify in writing. Each
such notice, request or other communication will be effective (a) if given by
facsimile, when transmitted to the facsimile number specified in this Section
5.1, (b) if given by mail, upon the earlier of actual receipt or three (3)
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, properly addressed and with proper postage
prepaid, (c) one (1) Business Day after deposit with an internationally
reputable overnight courier properly addressed and with all charges prepaid or
(d) when received, if by any other means. Communications by facsimile will also
be sent concurrently by internationally reputable overnight courier properly
addressed and with all charges prepaid, but will in any event be effective as
stated above.
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CUSIP No. 00651F108 13D Page 26 of 34 Pages
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The Company:
Adaptec, Inc.
691 South Milpitas Boulevard
Milpitas, California 95035
Attn: Chief Executive Officer
Facsimile No.: (408) 957-5630
with a copy to:
Fenwick & West LLP
801 California Street
Mountain View, California 94041
Attn: Dennis R. DeBroeck, Esq.
Facsimile No.: (650) 938-5200
Steel:
Steel Partners II, L.P.
590 Madison Avenue, 32nd Floor
New York, New York 10022
Attn: Mr. Warren G. Lichtenstein
Facsimile No.: (212) 520-2331
with a copy to:
Olshan Grundman Frome Rosenzweig & Wolosky LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
Attn: Steven Wolosky, Esq.
Facsimile No.: (212) 451-2222
The Parties will promptly notify each other in the manner provided in this
Section 5.1 of any change in their respective addresses. A notice of change of
address will not be deemed to have been given until received by the addressee.
SECTION 5.2 EXPENSES. Within five (5) Business Days following receipt of
reasonably satisfactory documentation thereof, the Company will reimburse Steel
for its reasonable out-of-pocket fees and expenses incurred through the date of
the execution and performance of this Agreement in connection with its
activities relating to the 2007 Annual Meeting, including without limitation,
the nomination and election of directors, the solicitation of proxies, any acts
or filings in connection therewith, and the negotiation and execution of this
Agreement, provided such reimbursement shall not exceed $50,000 in the
aggregate, and Steel hereby agrees that such payment shall be in full
satisfaction of any claims or rights it may have for fees, expenses or costs
related to its activities relating to the 2007 Annual Meeting.
SECTION 5.3 ASSIGNMENT. No Party will assign this Agreement or any rights,
interests or obligations hereunder, or delegate performance of any of its
obligations hereunder, without the prior written consent of each of the other
Parties.
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CUSIP No. 00651F108 13D Page 27 of 34 Pages
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SECTION 5.4 ENTIRE AGREEMENT. This Agreement, including the Schedule and
Exhibit attached hereto, embodies the entire agreement and understanding of the
Parties in respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the Parties with
respect to such subject matter.
SECTION 5.5 WAIVER, AMENDMENT, ETC. This Agreement may not be amended or
supplemented, and no waivers of or consents to departures from the provisions
hereof will be effective, unless set forth in a writing signed by, and delivered
to, all the Parties. No failure or delay of any Party in exercising any power or
right under this Agreement will operate as a waiver thereof, nor will any single
or partial exercise of any right or power, or any abandonment or discontinuance
of steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.
SECTION 5.6 BINDING AGREEMENT; NO THIRD PARTY BENEFICIARIES. Except as
provided herein, this Agreement will be binding upon and inure to the benefit of
the Parties and their respective Affiliates and Associates, and successors and
permitted assigns. Nothing expressed or implied herein is intended or will be
construed to confer upon or to give to any third party any rights or remedies by
virtue hereof.
SECTION 5.7 REMEDIES. Each of the Parties acknowledges and agrees that
each Party would suffer irreparable damage in the event that any of the
provisions of this Agreement was not performed in accordance with its specific
terms or was otherwise breached and that such damage may not be compensable in
money damages. It is accordingly agreed that, in the event of a breach,
violation or threatened breach or violation of the terms of this Agreement by
any of the Parties, each of the other Parties will be entitled to seek specific
enforcement of, and injunctive relief to prevent any breach, violation or
further breach or violation of, the terms hereof, in addition to any other
remedy or relief available at law or in equity. In the event of any action
seeking injunctive relief hereunder, no Party will be required to post a bond.
SECTION 5.8 GOVERNING LAW; EXCLUSIVE JURISDICTION; SERVICE OF PROCESS.
This Agreement will be governed by and construed in accordance with the internal
laws of the State of Delaware, without regard to conflicts of laws principles.
Each Party agrees, on behalf of itself and its Affiliates and Associates, that
any actions, suits or proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby will be brought solely and exclusively
in any state or federal court in the State of Delaware (and the parties agree
not to commence any action, suit or proceeding relating thereto except in such
courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to the respective addresses set forth in
Section 5.1 will be effective service of process for any such action, suit or
proceeding brought against any party in any such court. Each Party, on behalf of
itself and its Affiliates and Associates, irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding arising
out of this Agreement or the transactions contemplated hereby, in the state or
federal courts in the State of Delaware, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an improper or inconvenient forum.
SECTION 5.9 SEVERABILITY. The invalidity or unenforceability of any
provision hereof in any jurisdiction will not affect the validity or
enforceability of the remainder hereof in that jurisdiction or the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction. To the extent permitted by Applicable Law, each Party waives any
provision of Applicable Law that renders any provision hereof prohibited or
unenforceable in any respect. If any provision of this Agreement is held to be
unenforceable for any reason, it will be adjusted rather than voided, if
possible, in order to achieve the intent of the Parties to the extent possible.
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CUSIP No. 00651F108 13D Page 28 of 34 Pages
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SECTION 5.10 FURTHER ASSURANCES. The Parties agree to execute such further
documents and instruments and to take such further actions as may be reasonably
necessary to carry out the purposes and intent of this Agreement.
SECTION 5.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which when so executed and delivered will be deemed an
original but all of which will constitute one and the same Agreement.
SECTION 5.12 FACSIMILE/PDF SIGNATURES. This Agreement may be executed and
delivered by facsimile or by email in portable document format (.pdf or similar
format) and upon delivery of the signature by such method will be deemed to have
the same effect as if the original signature had been delivered to the other
Parties.
[Signature Page Follows]
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CUSIP No. 00651F108 13D Page 29 of 34 Pages
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IN WITNESS WHEREOF, the Company and Steel have caused their respective
duly authorized officers to execute this Agreement as of the day and year first
above written.
ADAPTEC, INC.
By: /s/ Subramanian Sundaresh
--------------------------------
Name: Subramanian Sundaresh
Title: Chief Executive Officer
STEEL PARTNERS, L.L.C.
By: /s/ Warren Lichtenstein
--------------------------------
Name: Warren Lichtenstein
Title: Managing Member
STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C., its General Partner
By: /s/ Warren Lichtenstein
--------------------------------
Name: Warren Lichtenstein
Title: Managing Member
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CUSIP No. 00651F108 13D Page 30 of 34 Pages
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SCHEDULE 2.1(E)
NUMBER OF SHARES BENEFICIALLY OWNED
Steel Partners II, L.P.: 18,076,884
Steel Partners, L.L.C.: 18,076,884
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CUSIP No. 00651F108 13D Page 31 of 34 Pages
---------------------- ----------------------
SCHEDULE 3.6
FORM OF PRESS RELEASE
ADAPTEC AND STEEL PARTNERS ANNOUNCE SETTLEMENT AGREEMENT
STEEL PARTNERS AGREES TO END ELECTION CONTEST
MILPITAS, CA, Oct 26, 2007 -- Adaptec, Inc. (NASDAQ: ADPT), a global leader in
storage solutions, and Steel Partners II, L.P. ("Steel Partners"), which
beneficially owns approximately 15% of the Company's outstanding shares, today
announced that they have entered into a settlement agreement.
Under the terms of the settlement, the Company has agreed to nominate and
solicit proxies for three Steel Partners representatives for election at its
upcoming 2007 Annual Meeting of Stockholders to be held on December 13, 2007 to
join what will become a nine-member board. Steel Partners has agreed to withdraw
its preliminary proxy statement containing its opposing slate of nominees and to
end its proxy solicitation.
The Company agreed to expand its Board of Directors from eight to nine members.
Current directors Judith M. O'Brien and Charles J. Robel will not stand for
re-election. Upon election at the Annual Meeting, Steel Partners' nominees John
Mutch, John J. Quicke and Jack L. Howard will be appointed to the Company's
Audit, Compensation, and Nominating and Governance Committees, respectively.
"We are pleased to reach an agreement with Steel Partners that allows us to work
together to deliver value to the Company's stockholders, while continuing to
provide quality solutions to its customers," said S. "Sundi" Sundaresh,
President and CEO of Adaptec. "We want to thank Charles and Judith for their
expertise and dedication while serving on Adaptec's Board of Directors until the
stockholder meeting."
On behalf of Steel Partners and its nominees, Jack Howard stated "We are
delighted to have reached a settlement with Adaptec on these important matters.
We look forward to working together with Sundi and the rest of the Board to
increase value for all stockholders."
ABOUT ADAPTEC, INC.
Adaptec, Inc. (NASDAQ: ADPT) provides trusted storage solutions that reliably
move, manage, and protect critical data and digital content. Adaptec's software
and hardware-based solutions are delivered through leading Original Equipment
Manufacturers (OEMs) and channel partners to provide storage connectivity, data
protection, and networked storage to enterprises, government organizations,
medium and small businesses, and consumers worldwide. More information is
available at WWW.ADAPTEC.COM.
ABOUT STEEL PARTNERS II, L.P.
Steel Partners II, L.P. is a New York-based private investment partnership.
---------------------- ----------------------
CUSIP No. 00651F108 13D Page 32 of 34 Pages
---------------------- ----------------------
SAFE HARBOR STATEMENT
This news release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking statements are
statements regarding future events or the future performance of Adaptec, and
include statements regarding Adaptec's agreement to nominate three nominees of
Steel Partners for election at its upcoming annual meeting and its agreement to
increase the size of its board to nine members in connection with these
nominations, and the expectation that the agreement with Steel Partners will
allow Adaptec to work together to deliver value to its stockholders while
continuing to provide quality solutions to its customers. These forward-looking
statements are based on current expectations, forecasts and assumptions and
involve a number of risks and uncertainties that could cause actual results to
differ materially from those anticipated by these forward-looking statements.
These risks include: if Adaptec does not meet its restructuring objectives, it
may have to continue to implement additional plans in order to reduce its
operating costs; achieving necessary support from the contract manufacturers to
which Adaptec has outsourced manufacturing, assembly and packaging of its
products; retaining key management; Adaptec's ability to launch new software
products; difficulty in forecasting the volume and timing of customer orders;
reduced demand in the server, network storage and desktop computer markets;
Adaptec's target markets' failure to accept, or delay in accepting, network
storage and other advanced storage solutions, including Adaptec's SAS, SATA and
iSCSI lines of products; decline in consumer acceptance of Adaptec's current
products; the timing and volume of orders by OEM customers for storage products;
Adaptec's ability to control and manage costs associated with the delivery of
new products; and the adverse effects of the intense competition Adaptec faces
in its business. For a more complete discussion of risks related to Adaptec's
business, reference is made to the section titled "Risk Factors" included in
Adaptec's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2007 on file with the Securities and Exchange Commission. Adaptec assumes no
obligation to update any forward-looking information that is included in this
release.
Adaptec is a registered trademark in the United States and other countries.
Other product and company names are trademarks or registered trademarks of their
respective owners.
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CUSIP No. 00651F108 13D Page 33 of 34 Pages
---------------------- ----------------------
EXHIBIT A
AGREEMENT
THIS AGREEMENT (the "AGREEMENT") is dated as of October 26, 2007 by and
among Adaptec, Inc., a Delaware corporation (the "COMPANY"), Steel Partners,
L.L.C., a Delaware limited liability company ("STEEL PARTNERS"), Steel Partners
II, L.P., a Delaware limited partnership ("STEEL II" and, together with Steel
Partners, "STEEL"), and ______________________, an individual residing at
______________________________________ (the "STEEL DIRECTOR").
W I T N E S S E T H
WHEREAS, the Company and Steel have entered into that certain Settlement
Agreement, dated as of October 26, 2007 (the "SETTLEMENT Agreement"), pursuant
to which the Company has agreed, among other things, to appoint or nominate
certain individuals designated by Steel to be directors of the Company; and
WHEREAS, as a condition to its entering into the Settlement Agreement, and
as a condition to the Board of Directors of the Company nominating or appointing
such designee to the Board of Directors, the Company requires that each
individual designated by Steel enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the Company, Steel and the Steel Director (each a
"PARTY"), intending to be legally bound, hereby agrees as follows:
1. The Steel Director has completed, signed and delivered to the Company
the Director and Officer Questionnaire (the "QUESTIONNAIRE") requested by the
Company. The information provided by the Steel Director in response to the
Questionnaire is true, complete and correct, and the Steel Director agrees to
promptly notify the Company in writing if any such information subsequently
becomes untrue, incomplete or incorrect.
2. The Steel Director agrees to serve as a member of the Board of
Directors until the earlier of his resignation or upon the expiration of his
term as a member of the Board of Directors. The Steel Director further agrees to
immediately resign all positions as a director and officer of the Company and
any subsidiary of the Company upon the written request by Steel delivered to the
Steel Director requesting the Steel Director to resign as a director of the
Company.
3. The Steel Director acknowledges, and agrees to be bound by, the terms
of the Settlement Agreement (a copy of which the Steel Director has received and
reviewed) as fully as if the Steel Director was a Party thereto.
[Signature Page Follows]
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CUSIP No. 00651F108 13D Page 34 of 34 Pages
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IN WITNESS WHEREOF, the Company, Steel and the Steel Director have caused
their respective duly authorized officers to execute this Agreement as of the
day and year first above written.
ADAPTEC, INC.
By:
--------------------------------
Name: Subramanian Sundaresh
Title: Chief Executive Officer
STEEL PARTNERS, L.L.C.
By:
--------------------------------
Name: Warren Lichtenstein
Title: Managing Member
STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C., its General Partner
By:
--------------------------------
Name: Warren Lichtenstein
Title: Managing Member
STEEL DIRECTOR
By:
--------------------------------
Name:
------------------------------