ISS Reiterates Support FOR All Three “Save
GrafTech” Nominees
Former Director Sues GrafTech for
Defamation
Save GrafTech, an investor group led by Nathan Milikowsky, a
holder of over 11.2% of the common stock of GrafTech International
Ltd. (NYSE: GTI), today commented on the proxy alert issued by
leading proxy advisory firm Institutional Shareholder Services Inc.
(“ISS”) in response to a letter it received from GrafTech.
On May 2, 2014, ISS recommended that GrafTech shareholders vote
the BLUE proxy card FOR Karen Finerman, David Jardini and Nathan
Milikowsky at GrafTech’s 2014 Annual Meeting of Stockholders to be
held on May 15, 2014. ISS has recommended that GrafTech
stockholders specifically “DO NOT VOTE" on the Company's white
proxy card.
On May 6, 2014, GrafTech sent a letter to ISS, which requested
ISS "immediately publicly correct certain material misstatements
and omissions included in ISS’s report." ISS responded to the
Company on May 7, 2014 in a proxy alert, which refuted and debunked
the points raised in GrafTech’s letter and reiterated ISS’s
recommendation that GrafTech’s shareholders vote the BLUE proxy
card FOR all three Save GrafTech nominees, Karen Finerman, David
Jardini and Nathan Milikowsky.
ISS’s response also referenced a lawsuit filed on May 7, 2014
against GrafTech by former GrafTech director Michael Nahl, alleging
the company in its proxy statement "defames and disparages Mr. Nahl
by falsely accusing him of corruption, dishonesty,
conflict-of-interest, and breaches of fiduciary duty in discharging
his duties as a director of GrafTech."
On behalf of Save GrafTech, Nathan Milikowsky said, “It is no
surprise that GrafTech would publicly attack the only impartial
proxy advisory firm that met with both sides in this contest for
not supporting its long-serving, incumbent directors in this
contested election. GrafTech’s latest action confirms what we have
believed and tried to present to our fellow shareholders all along
– that the incumbent Board is focused on a campaign of obfuscation,
rather than on improving GrafTech’s operations and delivering value
to its shareholders. It seems as if their approach is to attack any
person or entity that doesn't agree with them, even shareholders,
directors and completely impartial advisory firms who have
carefully weighed the facts.”
Mr. Milikowsky added, “GrafTech’s Board has a history of
launching public smear campaigns against individuals who disagree
with them, and we are pleased that Mr. Nahl’s lawsuit is seeking to
hold them accountable for their actions. We strongly urge
shareholders to follow ISS’s recommendation by voting for all three
Save GrafTech nominees and finally unseating three GrafTech
directors who have overseen massive value destruction and are
willing to attack any person or organization who threatens their
continued entrenchment. It is time for your Board to represent you,
the owners of the business, and cease wasting your money on
personal attacks unrelated to the performance of the business.”
ISS’s response to GrafTech’s letter noted*:
In response to GrafTech’s assertion that
it is "highly misleading for ISS to refer to the Company as
underperforming or as a troubled company":
- “The TSR analysis demonstrated
underperformance versus the median of GrafTech's graphite electrode
peers by 169 percentage points (ppts), 36 ppts, and 32 ppts,
respectively, over the 10-, 5- and 3-year periods through the date
[Save GrafTech] announced they would run a proxy contest. The
11-paragraph analysis of operating and financial performance, which
begins with the observation that ‘The decline of the company's
profitability, notably EBIT, EPS, Cash Flow, ROA and ROE, since
2008 is apparent,’ walks the reader through a trend analysis of
these and other key performance metrics. The M&A Edge report to
which the company's letter specifically refers also prominently
features two tables summarizing key financial metrics and ratios,
drawn from Bloomberg data, to illustrate this analysis.”
In response to GrafTech’s assertion that
it “has not stated that Nathan Milikowsky has deep understanding of
the industry or could bring significant strengths as a director”
and that the Company’s acknowledgement of Mr. Milikowsky’s
“financial acumen and deep understanding the
industry” is “blatantly false and wrongly attributed to the
Company”:
- “These statements in the ISS report
were based on comments from GrafTech directors during the
engagement meeting with ISS, and were recorded in contemporaneous
notes taken by the research analyst during that engagement meeting.
They are consistent with other company statements which are part of
the public record, as when during the Q1 2010 earnings call the
company's former CEO and current executive Chair, Craig Shular,
observed to analysts and investors that Milikowsky ‘is a very
experienced steel industry executive who brings very valuable
business experience to our Board.’”
In response to GrafTech’s assertions that
the statement that Save GrafTech “nominees Milikowsky and Jardini
were responsible, as ‘…co-founders and managers of C/G Electrodes
and Seadrift Coke, [for] growing that company from an initial
investment of $6 million in 2003 to a valuation of $850 million at
its sale to GrafTech seven years later’ is "materially
misleading.”:
- “That two of the [Save GrafTech]
nominees built a $6 million investment into a company they sold to
GrafTech seven years later for $850 million is material to the
credentials of these nominees, regardless of whether their growth
strategy included strategic acquisitions. That the business itself
was apparently so valuable these nominees were able, in the midst
of the financial crisis, to secure additional loans from investors,
also speaks to the credibility of their industry knowledge and
experience.”
In response to GrafTech’s assertion that
Mr. Milikowsky’s review proposal included a provision that he
“could not be removed from the Board if – once again – he did not
like or disagreed with the results of such review.”:
- “In an April 13, 2014 letter to current
GrafTech CEO Joel Hawthorne outlining his offer, subsequently filed
with the SEC and is available to all shareholders, Milikowsky
stated unequivocally that "Should the law firm conclude that I do
not [meet GrafTech's standards for membership on the Board of
Directors], I would promptly resign."
In response to GrafTech’s criticism that
ISS’s commentary on the Special Committee investigation and
subsequent settlement proposals "conspicuously omits any
description, timeline, or discussion of key events.":
- “ISS elected not to reproduce chapter
and verse of the company's version of events. Instead, as the ISS
reports made clear, ISS elected to highlight for clients the
proposals each side has made to resolve this impasse through
independent third party review, and what the details of those
proposals suggest about the relative confidence each side has in
what the evidence will show.”
Save GrafTech’s proxy statement and presentation are available
at www.sec.gov and www.SaveGrafTech.com. Save GrafTech urges
shareholders to vote the BLUE proxy card FOR all three of Save
GrafTech’s director nominees today.
* Permission to use quotations neither sought nor obtained
Your Vote Is Important, No Matter How Many
Shares You Own.
If you have questions about how to vote your
shares on the BLUE proxy card,
or need additional assistance, please contact
the firm assisting us in the proxy solicitation:
D.F. King & Co., Inc.
Shareholders Call Toll-Free: (800) 628-8532
Banks and Brokers Call Collect: (212)
269-5550
Email: savegraftech@dfking.com
IMPORTANT
WE URGE YOU NOT
TO SIGN ANY WHITE PROXY CARD SENT TO YOU BY GRAFTECH
On April 15, 2014 Nathan Milikowsky, Daniel Milikowsky, NM GTI
Investments LLC, The Daniel Milikowsky Family Holdings, LLC, The
Daniel and Sharon Milikowsky Family Foundation, Inc., and The
Rebecca and Nathan Milikowsky Family Foundation (collectively,
“Save GrafTech”) filed with the Securities and Exchange Commission
(the “SEC”) and began distributing to the stockholders of GrafTech
International, Ltd. (the “Company”) a definitive proxy statement
and form of proxy (the “Proxy Statement”) in connection with the
Company’s 2014 annual meeting of stockholders. SAVE GRAFTECH
STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO REFER TO THE
PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION,
INCLUDING INFORMATION RELATING TO THE SAVE GRAFTECH’S PARTICIPANTS
IN SUCH PROXY SOLICITATION. SAVE GRAFTECH’S PROXY STATEMENT, AS
FILED, AND ANY FURTHER AMENDMENTS, SUPPLEMENTS OR OTHER RELEVANT
PROXY SOLICITATION DOCUMENTS ARE AVAILABLE AT NO CHARGE ON THE
SEC’S WEB SITE AT WWW.SEC.GOV, OR BY CONTACTING D.F. KING &
CO., INC. BY TELEPHONE AT THE FOLLOWING NUMBERS: BANKS AND BROKERS
CALL COLLECT: (212) 269-5550 AND ALL OTHERS, INCLUDING
SHAREHOLDERS, CALL TOLL-FREE: (800) 628-8532.
Media:George Sard/Renée Soto/Jared LevySard Verbinnen &
Co(212) 687-8080