sec document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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. 1)(1)
Adaptec, Inc.
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(Name of Issuer)
Common Stock, $0.001 Par Value
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(Title of Class of Securities)
00651F108
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(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
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 25, 2007
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(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 12 Pages)
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(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).
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CUSIP No. 00651F108 13D Page 2 of 12 Pages
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================================================================================
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) / /
(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 15,381,052
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
15,381,052
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
15,381,052
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 00651F108 13D Page 3 of 12 Pages
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================================================================================
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) / /
(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 15,381,052
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
15,381,052
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
15,381,052
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 00651F108 13D Page 4 of 12 Pages
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================================================================================
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) / /
(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 15,381,052
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH - 0 -
-----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
15,381,052
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
15,381,052
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.0%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP No. 00651F108 13D Page 5 of 12 Pages
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The following constitutes Amendment No. 1 ("Amendment No. 1") to
the Schedule 13D filed by the undersigned. This Amendment No. 1 amends the
Schedule 13D as specifically set forth.
Item 3 is hereby amended and restated to read as follows:
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The aggregate purchase price of the 15,381,052 Shares owned by Steel
Partners II is $57,103,675, including brokerage commissions. The Shares owned by
Steel Partners II were acquired with partnership funds.
Item 4 is hereby amended to add the following:
On May 30, 2007, Steel Partners II issued a press release announcing
that it had delivered a letter to the board of directors of the Issuer (the
"Board") in which Steel Partners II expressed concerns over the Issuer's
performance and acquisition strategy. The press release further stated that (i)
Steel Partners II requested that the Board agree not to commence any further
acquisitions until Steel Partners II is granted representation on the Board,
(ii) Steel Partners II plans to nominate a full slate of directors for election
to the Board at the 2007 annual meeting of shareholders unless the Board commits
itself to a turnaround and (iii) Steel Partners II reserves the right to
immediately commence a consent solicitation to remove the Board.
A copy of the press release, including the text of the letter to the
Board, is attached hereto as Exhibit 3 and is incorporated herein by reference.
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 118,343,553 Shares outstanding, which is the total
number of Shares outstanding as reported in the Issuer's quarterly report on
Form 10-Q for the quarter ended December 31, 2006 filed with the Securities and
Exchange Commission on February 6, 2007.
As of the close of business on May 30, 2007, Steel Partners II
beneficially owned 15,381,052 Shares, constituting approximately 13.0% of the
Shares outstanding. As the general partner of Steel Partners II, Partners LLC
may be deemed to beneficially own the 15,381,052 Shares owned by Steel Partners
II, constituting approximately 13.0% of the Shares outstanding. As the sole
executive officer and managing member of Partners LLC, which in turn is the
general partner of Steel Partners II, Mr. Lichtenstein may be deemed to
beneficially own the 15,381,052 Shares owned by Steel Partners II, constituting
approximately 13.0% of the Shares outstanding. Mr. Lichtenstein has sole voting
and dispositive power with respect to the 15,381,052 Shares owned by Steel
Partners II by virtue of his authority to vote and dispose of such Shares.
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CUSIP No. 00651F108 13D Page 6 of 12 Pages
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Item 5(c) is hereby amended and restated to read as follows:
(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.
Item 7 is hereby amended to add the following exhibit:
3. Press Release, including text of letter to Board of Directors of
Adaptec, Inc., dated May 30, 2007.
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CUSIP No. 00651F108 13D Page 7 of 12 Pages
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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: May 31, 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
-----------------------------------------------
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
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CUSIP No. 00651F108 13D Page 8 of 12 Pages
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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.
-----------------------
574,928 3.7110 05/22/07
317,876 3.7912 05/23/07
55,528 3.7500 05/24/07
974,148 3.8198 05/25/07
366,130 3.8776 05/29/07
374,855 4.0306 05/30/07
STEEL PARTNERS, L.L.C.
----------------------
None
WARREN G. LICHTENSTEIN
----------------------
None
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CUSIP No. 00651F108 13D Page 9 of 12 Pages
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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 10 to 12
of Adaptec, Inc., dated May 30, 2007
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CUSIP No. 00651F108 13D Page 10 of 12 Pages
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STEEL PARTNERS II DELIVERS LETTER TO ADAPTEC, INC. STATING
CONCERNS OVER COMPANY DIRECTION
REQUESTS TALKS WITH ADAPTEC TO OBTAIN MINORITY REPRESENTATION ON
BOARD OF DIRECTORS
NEW YORK - (BUSINESS WIRE) - Steel Partners II, L.P. ("the Fund")
announced today that it sent a letter to Adaptec, Inc. (Nasdaq: ADPT) ("the
Company") expressing concerns over the Company's performance and acquisition
strategy and is requesting talks on Steel Partners II's immediate representation
on Adaptec's Board.
In the letter, Steel Partners II cited Adaptec's recent history of
operating losses - over $300 million during the past five years, approximately
$188 million of which was amassed under the leadership of Sundi Sundaresh, the
Company's current Chief Executive Officer and President - and "ill-conceived
acquisitions" over the past five years that have resulted in acquired technology
intangibles and goodwill write-offs in excess of $175 million.
"As the largest shareholder in Adaptec we are disappointed and concerned
with the Company's performance and current direction. However, based on our
experience working with many other successful companies in a variety of
industries, we believe we are also in a unique position to help the Company
return to profitability over the near-term," stated Warren Lichtenstein on
behalf of Steel Partners II. "As an immediate first step towards a turnaround,
we believe that our minority representation on the Board and on the transaction
committee is vital."
To signal Adaptec's commitment to a turnaround, Steel Partners II
requested that the Board agree not to commence further acquisitions until the
Fund is granted Board representation. Steel Partners II further stated that,
without the Board's commitment, it would nominate a full slate of directors for
election to the Board at the 2007 annual meeting of shareholders. The Fund also
reserved the right to immediately commence a consent solicitation to remove the
Board.
The full text of the letter follows:
May 29, 2007
VIA OVERNIGHT COURIER AND FACSIMILE
Board of Directors
Adaptec, Inc.
691 South Milpitas Boulevard
Milpitas, CA 95035
Gentlemen:
Steel Partners II, L.P. is the largest shareholder of Adaptec, Inc. (the
"Company") owning 15,006,197 shares of the Company's common stock, or
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CUSIP No. 00651F108 13D Page 11 of 12 Pages
---------------------- ----------------------
approximately 12.7% of the outstanding shares. We are extremely concerned with
the direction in which the Company is headed. We would like to discuss immediate
minority representation on the Company's Board, including representation on the
transaction committee.
As a significant shareholder of the Company, we are concerned about the
Company's operating losses and ill-conceived acquisitions during the past five
years. During this time, the Company has accumulated over $300 million in
operating losses. The Company also made numerous acquisitions that resulted in
all of the acquired technology intangibles and goodwill in excess of $175
million being written off.
We note that during 2005 and 2006, the Company suffered total operating
losses of approximately $188.4 million under the leadership of Sundi Sundaresh
as Chief Executive Officer and President of the Company. We believe the Board
must take responsibility for these losses, particularly in view of the Board's
decision to hire Mr. Sundaresh who had no prior experience as a Chief Executive
Officer of a public company.
Given the Company's poor financial performance, we agree wholeheartedly
with Morgan Keegan analyst Brian Freed's statement in his May 11, 2007 research
report that the Board "has in our opinion not earned the right to spend
shareholder money on the acquisition of new businesses." He further says "We
believe the key to shareholder value is simple, a 100% focus on delivering the
promise of profitability in the Company's core RAID business, not spending the
Company's cash hoard on an acquisition because the task of profitability in the
RAID business proved more difficult than first believed. We believe to do
otherwise turns a deaf ear to the voice of shareholders, none of whom I have
ever spoken with (and I have spoken to many) supports a large cash acquisition
at this time."
Steel Partners with a significant stake in the Company, is in a unique
position to help assist the Company in its next steps towards profitability and
believe that our minority representation on the Board and on the transaction
committee would place the Company in the best position possible to effect a
successful turnaround. As a signal of your commitment to such success, we
request that the Board agree not to conduct any further acquisitions until our
representatives are members of the Board. Please know that without your
commitment, we plan to nominate a full slate of directors for election to the
Board at the 2007 annual meeting of shareholders. Such action on our part would
be necessary, in the face of further inaction by the Board, in order to protect
our investment as shareholders of the Company. We also must reserve the right to
commence a consent solicitation to remove the Board.
We would like to speak with the lead director, and Mr. Sundaresh, the
Company's Chief Executive Officer, as soon as possible to address our concerns
and work towards a mutually acceptable solution. We look forward to hearing from
you and hope that this matter can be resolved amicably but we will not and
cannot allow the Board to undertake any acquisition activities at this time.
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CUSIP No. 00651F108 13D Page 12 of 12 Pages
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Very truly yours,
/s/ Warren G. Lichtenstein
--------------------------------------------
Warren G. Lichtenstein
ABOUT THE FUND
Steel Partners II, L.P. is a long-term relationship/active value investor that
seeks to work with the management of its portfolio companies to increase
corporate value for all stakeholders and shareholders.
MEDIA CONTACT:
Sitrick And Company
Jason Booth / Terry Fahn, 310-788-2850