Corporate Roadshow Q497

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(No Transcript)
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Emulex Corporation

• Robin Schnug
• Public Relations Manager

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Emulex Corporation
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Emulex Hoax

• Sequence of Events
• Steps We Took
• Top 10 Questions Asked
• Lessons Learned

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EMULEX HOAX - What Happened?

• August 25, 2000
• 630 a.m. PDT - Press Release Disseminated via
  Internet Wire
• Alleged Emulex was Revising Earnings, its CEO had
  Resigned and the Company was Under SEC
  Investigation
• Release Unnoticed by Emulex, Investment Community
  and the Stock Market
• 713 a.m. PDT - Bloomberg Publishes Fictitious
  Story Without Confirming Facts
• Shortly after, CBS MarketWatch and CNBC Discover
  the Story
• Stock Plummets to low 40s
• 2.5B Market Value lost

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Emulex Hoax - How Did We React?

• 715 a.m. - Emulex Employee Faxes Bogus Press
  Release to Corporate Office in CA
• Meanwhile, Executives in CA See Stock Falling on
  Internet
• CEO Paul Folino Contacted in his Car
• 725 a.m. - Emulex Executives Arrive at Office
• Paul Folino Immediately Calls the Authorities
• NASDAQ Surveillance and SEC
• Appx. 730 a.m. NASDAQ Halts Trading on EMLX

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EMULEX HOAX - How Did We React?

• 8 a.m. - Emulex Drafts Press Release to Rebut
  Hoax
• Key action was to communicate truth to press,
  analysts, shareholders and institutional
  investors
• Specific tasks delegated to each senior executive
• Assigned all TV interviews to CEO
• Newspaper/radio reporters to Senior VP
• Institutional investors and shareholders to VP of
  Business Development
• With trading halted, we had time to to work
• 9 a.m. - Paul interviewed live on CNBC. Other
  interviews arranged

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EMULEX HOAX - How Did We React?

• 945 a.m. - Rebuttal Press Release Distributed
  via Business Wire
• 1030 a.m. - NASDAQ Resumes Trading on Emulex
  Stock
• Share Price Immediately Regains Momentum
• Market Value Restored
• 1035 - 630 p.m. - Multiple Interviews Scheduled
  with Nationwide Media
• Intended to Reinforce Key Messages
• CEO is Still at Emulex
• Business Has Never Been Better Reported Record
  Earnings Previous Qtr.

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Emulexs Stock Fluctuation on Aug. 25
Eastern Standard Time
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Elements of Our Communications Strategy

• Communicate Internally Notify Employees of
  Situation and Advise Them to Direct All
  Press/Investor Inquiries to Appropriate Persons
• Take the High Ground
• Remain Open/Accessible to All Press
• Key Part of Corporate Culture is to be
  Connected
• Cell Phones, Pagers, Laptops

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Emulex Hoax - The Saga Continues . . .

• Saturday, August 26, 2000 -
• Paul Agrees to Interview on Good Morning America
  at 4 a.m. PDT Monday
• Sunday, August 27, 2000 -
• CBS Calls at 630 a.m. Requesting an Interview
  with Paul on Bryant Gumbels Morning Show.
• All day negotiations resulted in no-go
• Monday, August 28, 2000 -
• 200 a.m. Arrive at Office for TV Crew Set Up
• 415 a.m. Paul Interviews Live with Diane Sawyer
• 5 a.m. - 5 p.m. Field More Press Calls and
  Prepare for the Suspects Apprehension
• Tuesday and Wednesday -
• Business as Usual

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EMULEX HOAX - Suspect Apprehended

• Thursday, August 31, 2000 -
• 845 a.m. Emulex Learns FBI Arrested Suspect
• 9 a.m. Bombarded with Calls from Media - Emulex
  Schedules Press Conference at 2 p.m.
• 930 - 6 p.m.
• Emulex Drafts and Releases Statement on Suspects
  Apprehension
• Prepare for Press Conference
• Draft Paul Folinos Speech
• Concluded Interviews . . .

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Top 10 Questions

• Who did this?
• What connection did this person have to Emulex?
• Was it a former employee?
• Will the stock trades be cancelled?
• What will Emulex do to make investors whole?
• Are you going to sue?
• Is there any truth to the bogus release?
• How is your business?
• Do you blame Bloomberg?
• What is Fibre Channel?

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LESSONS LEARNED

• Always Take the High Ground
• Be Accessible to Media
• Stay Connected
• Act Quickly!
• Have a Crisis PR Plan Prepared

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