As filed with the Securities and Exchange Commission on August 19, 2010

Registration No. 333-167446

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

GRAFTECH HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware	3620	27-2496053
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

GrafTech Holdings Inc.

12900 Snow Road

Parma, Ohio 44130

Telephone: (216) 676-2000

(Address, including zip code, and telephone number including area code, of registrant’s principal executive offices)

John D. Moran

Vice President, General Counsel and Secretary

GrafTech Holdings Inc.

12900 Snow Road

Parma, Ohio 44130

Telephone: (216) 676-2000

(name, address, including zip code, and telephone number, including area code, of agent for service)

copy to:

M. Ridgway Barker

Kelley Drye & Warren LLP

400 Atlantic Street

Stamford, Connecticut 06901

Telephone: (203) 324-1400

Approximate date of commencement of proposed sale to the public: as soon as practicable after the effective date of this registration statement and all other conditions to the proposed transactions have been satisfied or waived as described in each of the agreements and plans of merger dated as of April 28, 2010 described herein.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer  x	Accelerated filer  ¨
Non-accelerated filer  ¨    (Do not check if a smaller reporting company)	Smaller reporting company  ¨

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ¨

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ¨

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective or such date as the Commission, acting pursuant to such Section 8(a), may determine.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT OFFER THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

PRELIMINARY—SUBJECT TO COMPLETION—DATED AUGUST 19, 2010

GrafTech Holdings Inc.

We are offering shares of our common stock, par value $0.01 per share, to the existing holders of common stock of our current parent company, GrafTech International Ltd. (“GrafTech”), in connection with the transactions described in this prospectus. Prior to this offering, there has been no public market for our common stock. Holders of common stock of GrafTech will receive, at no cost, one share of our common stock in exchange for each share of common stock of GrafTech held by such stockholders. At June 30, 2010, 120,530,695 shares of common stock of GrafTech were outstanding. Upon completion of the transactions described in this prospectus, shares of common stock of GrafTech held by such holders will be cancelled. We intend to apply to list our common stock, as successor to GrafTech, on the NYSE and upon the completion of the transactions described in this prospectus, our common stock will trade under the same symbol as common stock of GrafTech, “GTI.”

Investing in our common stock involves risks. See “Risk Factors” on page 18.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is                     , 2010.

TABLE OF CONTENTS

	Page
PROSPECTUS SUMMARY	1
SELECTED HISTORICAL FINANCIAL DATA OF GRAFTECH	7
SELECTED HISTORICAL FINANCIAL DATA OF SEADRIFT	12
SELECTED HISTORICAL FINANCIAL DATA OF C/G	14
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION	16
RISK FACTORS	18
FORWARD LOOKING STATEMENTS	38
TERMS OF THE TRANSACTIONS	42
GRAFTECH’S REASONS FOR THE ACQUISITIONS	63
BACKGROUND OF THE ACQUISITIONS	65
ACCOUNTING TREATMENT OF THE MERGERS	68
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS	69
FINANCIAL STATEMENTS	70
GRAFTECH AND SEADRIFT UNAUDITIED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION	71
GRAFTECH, SEADRIFT AND C/G UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION	84
CERTAIN MARKET INFORMATION WITH RESPECT TO GRAFTECH COMMON STOCK	98
DIVIDEND POLICIES AND RESTRICTIONS	98
BUSINESS OF GRAFTECH	99
BUSINESS OF SEADRIFT	115
BUSINESS OF C/G	122
GRAFTECH’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF GRAFTECH	132
SEADRIFT’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF SEADRIFT	161
C/G’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF C/G	170
NO REQUIREMENT FOR APPROVAL OF MERGERS BY GRAFTECH STOCKHOLDERS	180
GRAFTECH SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS	180
EXECUTIVE OFFICERS AND DIRECTORS OF GRAFTECH	182
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS OF GRAFTECH	184
DESCRIPTION OF NEW GRAFTECH CAPITAL STOCK	212
EXPERTS	217
WHERE YOU CAN FIND MORE INFORMATION	218
LEGAL MATTERS	218
INDEX TO FINANCIAL STATEMENTS	F-1

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PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information that may be important to you. You should carefully read the entire prospectus, including “Risk Factors” and the financial statements, before making an investment decision.

Unless the context requires otherwise, “we,” “us” and “our” refers to GrafTech Holdings Inc., the issuer of the shares offered hereby, and its future wholly-owned subsidiary, GrafTech, as well as GrafTech’s direct and indirect subsidiaries. “New GrafTech” refers solely to GrafTech Holdings Inc., the issuer of the shares offered hereby. “GrafTech” refers to GrafTech International Ltd., our current public parent company individually or collectively with its subsidiaries not formed for purposes of the acquisitions described herein, as the context may require. In addition, unless the context requires otherwise, reference to “our Board” and “our common stock” refer to the Board of Directors and the common stock of our public parent company at the relevant time. “Seadrift” refers to Seadrift Coke L.P. individually or together with its subsidiaries as the context may require. “C/G” refers to C/G Electrodes LLC individually or together with its subsidiaries as the context may require. When we use the terms “we,” “us” or “our” with respect to Seadrift, C/G or their respective businesses, or express “beliefs” with respect thereto, we have based those statements or beliefs on our general knowledge of the industries involved, the results of our due diligence investigations of Seadrift and C/G and other information provided to us by the respective managements of Seadrift and C/G.

The Companies

GrafTech International Ltd.

12900 Snow Road

Parma, Ohio 44130

(216) 676-2000

GrafTech has over 120 years of experience in the research and development of graphite and carbon-based solutions and its intellectual property portfolio is extensive. Its business was founded in 1886 by the National Carbon Company.

GrafTech is one of the world’s largest manufacturers of the broadest range of high quality graphite electrodes, products essential to the production of electric arc furnace (“EAF”) steel and various other ferrous and nonferrous metals. It also manufactures carbon, graphite and semi-graphite refractory products, which protect the walls of blast furnaces and submerged arc furnaces. It is one of the largest manufacturers of high quality natural graphite products enabling thermal management solutions for the electronics industry and fuel cell solutions for the transportation and power generation industries. It is one of the world’s largest manufacturers and providers of advanced graphite and carbon materials for the transportation, solar, and oil and gas exploration industries. GrafTech services customers in about 70 countries, including industry leaders such as Arcelor Mittal, BaoSteel, Gerdau S.A. and ThyssenKrupp Steel in steel, Samsung in electronics, Elkem Solar in the solar industry and Griffin Wheel in the transportation industry.

GrafTech currently manufactures its products in eleven manufacturing facilities strategically located on four continents. GrafTech believes that its network has the largest manufacturing capacity, one of the lowest manufacturing cost structures of all of its major competitors and delivers the highest-level quality products. It currently has the operating capability, depending on product mix, to manufacture approximately 220,000 metric tons (“MT”) of graphite electrodes. GrafTech believes that its global manufacturing network provides it with competitive advantages in product quality, proximity to customers, timely and reliable product delivery, and product costs. Given its global network, it is well positioned to serve the growing number of consolidated, global, multi-plant steel customers as well as certain smaller, regional customers and segments.

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GrafTech operates one of the premier research, development and testing facilities in the graphite and carbon industry, and believes that it is an industry leader in graphite and carbon material science and high temperature processing know-how. GrafTech believes its technological capabilities for developing products with superior thermal, electrical and physical characteristics provide it with a competitive advantage. These capabilities have enabled it to accelerate development and commercialization of our technologies to exploit markets with high growth potential.

For the year ended December 31, 2009, GrafTech had net sales of approximately $659.0 million and net income of approximately $12.6 million. For the six months ended June 30, 2010, GrafTech had net sales of approximately $470.5 million and net income of approximately $72.9 million.

In connection with the consummation of the transactions described in this prospectus, GrafTech will merge with and into a wholly owned subsidiary of New GrafTech and be renamed “GrafTech Holdings Inc.”

GrafTech Holdings Inc.

12900 Snow Road

Parma, Ohio 44130

(216) 676-2000

New GrafTech is a direct, wholly owned subsidiary of GrafTech formed solely to effect the transactions described in this prospectus and has not conducted any business. Pursuant to the Merger Agreements described in this prospectus, New GrafTech will, by operation of law, become the parent company of GrafTech, Seadrift and C/G which will all survive as wholly owned subsidiaries of New GrafTech and New GrafTech will be renamed “GrafTech International Ltd.”

GrafTech Delaware I Inc.

12900 Snow Road

Parma, Ohio 44130

(216) 676-2000

GrafTech Delaware I Inc. (“GrafTech Merger Sub”) is a direct wholly owned subsidiary of New GrafTech formed solely to effect the transactions described in this prospectus and has not conducted and will not conduct any business during any period of its existence. Pursuant to the Seadrift Merger Agreement, GrafTech Merger Sub will merge with and into GrafTech with GrafTech continuing as the surviving corporation and a wholly owned subsidiary of New GrafTech and GrafTech will be renamed GrafTech Holdings Inc.

GrafTech Delaware II Inc.

12900 Snow Road

Parma, Ohio 44130

(216) 676-2000

GrafTech Delaware II Inc. (“SD Merger Sub”) is a direct wholly owned subsidiary of New GrafTech formed solely to effect the transactions described in this prospectus and has not conducted and will not conduct any business during any period of its existence. Pursuant to the Seadrift Merger Agreement, SD Merger Sub will merge with and into Seadrift with Seadrift continuing as the surviving entity and a wholly owned subsidiary of New GrafTech.

Seadrift Coke L.P.

8618 State Highway 185 North

PO Box 192

Port Lavaca, Texas 77979

(361) 552-8887

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Seadrift is one of the world’s largest manufacturers of petroleum-based needle coke and is located in Port Lavaca, Texas. The manufacturing plant, built in 1983, has current capacity for producing approximately 160,000 MT of needle coke annually and employs approximately 150 people. Seadrift shipped approximately 148,000 MT of needle coke in 2008. In 2009, shipments declined dramatically in light of the global economic crisis to 39,000 MT.

For the year ended December 31, 2009, Seadrift had revenue of approximately $74.3 million and a net loss of approximately $1.4 million. For the six months ended June 30, 2010, Seadrift had net sales of approximately $79.1 million and net income of approximately $15.5 million.

We currently own 18.9% of the equity in Seadrift and plan to acquire the remaining 81.1% upon consummation of the Seadrift Merger.

Pursuant to the Seadrift Merger Agreement, SD Merger Sub will merge with and into Seadrift with Seadrift continuing as the surviving entity and a wholly owned subsidiary of New GrafTech.

GrafTech Delaware III Inc.

12900 Snow Road

Parma, Ohio 44130

(216) 676-2000

GrafTech Delaware III Inc. (“C/G Merger Sub”) is a direct wholly owned subsidiary of New GrafTech formed solely to effect the transactions described in this prospectus and has not conducted and will not conduct any business during any period of its existence. Pursuant to the C/G Merger Agreement described in this prospectus, C/G Merger Sub will merge with and into C/G with C/G continuing as the surviving entity and a wholly owned subsidiary of New GrafTech.

C/G Electrodes LLC

800 Theresia Street

Saint Marys, PA 15857

(814) 781-2258

C/G is a U.S.-based graphite electrode producer formed in 2003 in St. Marys, Pennsylvania. C/G employs approximately 150 people and has current capacity for producing approximately 26,500 MT of graphite electrodes annually. C/G sold approximately 26,000 MT of graphite electrodes in 2008. In 2009, shipments declined dramatically in light of the global economic crisis to 10,000 MT.

For the year ended December 31, 2009, C/G had net sales of approximately $76.4 million and net income of approximately $17.3 million. For the six months ended June 30, 2010, C/G had net sales of approximately $62.1 million and net income of approximately $10.0 million.

Pursuant to the C/G Merger Agreement, C/G Merger Sub will merge with and into C/G with C/G continuing as the surviving entity and a wholly owned subsidiary of New GrafTech.

The Transactions

In connection with a reorganization of its holding company structure and to complete the acquisitions of Seadrift and C/G, GrafTech has formed GrafTech Holdings Inc., or New GrafTech, and New GrafTech has formed GrafTech Merger Sub, SD Merger Sub and C/G Merger Sub, which will merge with and into GrafTech, Seadrift and C/G, respectively.

Upon satisfaction or waiver of the conditions to the transactions specified in the Seadrift Merger Agreement, GrafTech Merger Sub will merge with and into GrafTech with GrafTech as the surviving entity (the “GTI Merger”). As a result of the GTI Merger, GrafTech will, by operation of law, become a wholly owned subsidiary

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of New GrafTech. Upon consummation of the GTI Merger, New GrafTech will be renamed “GrafTech International Ltd.” The officers and directors of New GrafTech immediately after consummation of the GTI Merger will be the same as the officers and directors of GrafTech immediately prior to the consummation of the GTI Merger. In addition, upon consummation of the GTI Merger, the certificate of incorporation (except for certain technical matters) and by-laws of New GrafTech will be the same as the certificate of incorporation and by-laws of GrafTech immediately prior to consummation of the GTI Merger. Each share of common stock of GrafTech (“GrafTech Common Stock”) outstanding immediately prior to consummation of the GTI Merger will be converted into one share of common stock of New GrafTech (“New GrafTech Common Stock”). New GrafTech Common Stock will be listed on the NYSE and will trade under GrafTech’s current ticker symbol “GTI.” Holders of GrafTech Common Stock immediately prior to consummation of the GTI Merger will not be required to exchange their certificates representing shares of GrafTech Common Stock for certificates representing shares of New GrafTech Common Stock. The certificates representing your shares of GrafTech Common Stock will continue to represent an equal number of shares of New GrafTech Common Stock.

Upon satisfaction or waiver of the conditions to the transactions specified in the Seadrift Merger Agreement, Seadrift Merger Sub will merge with and into Seadrift with Seadrift as the surviving entity (the “Seadrift Merger”). As a result of the Seadrift Merger, Seadrift will become a wholly-owned subsidiary of New GrafTech.

Upon satisfaction or waiver of the conditions to the transactions specified in the C/G Merger Agreement, C/G Merger Sub will merge with and into C/G with C/G as the surviving entity (the “C/G Merger”). As a result of the C/G Merger, C/G will become a wholly-owned subsidiary of New GrafTech.

The C/G Merger is conditioned upon the consummation of the Seadrift Merger, but the Seadrift Merger is not conditioned upon the consummation of the C/G Merger.

The GTI Merger, the Seadrift Merger and the C/G Merger are sometimes collectively referred to as the “Mergers.”

Merger Consideration

The consideration (the “Seadrift Merger Consideration”) to be paid by New GrafTech in connection with the Seadrift Merger for the equity of Seadrift not already owned by GrafTech will consist of $78.5 million in cash less debt of Seadrift (subject to working capital adjustments), twelve million shares of New GrafTech Common Stock and non-interest bearing, senior subordinated promissory notes of New GrafTech in an aggregate face amount of $100 million.

The consideration (the “C/G Merger Consideration” and, together with the Seadrift Merger Consideration, the “Merger Consideration”) to be paid by New GrafTech for the equity of C/G in connection with the C/G Merger will consist of $152.5 million in cash less debt of C/G (subject to working capital adjustments), twelve million shares of New GrafTech Common Stock and non-interest bearing, senior subordinated promissory notes of New GrafTech in an aggregate face amount of $100 million.

Approximately $185 million of the cash portion of the Merger Consideration will be funded through borrowings under our Revolving Facility described elsewhere in this prospectus. The balance of the cash portion will be paid from cash on hand.

The senior subordinated promissory notes will mature on the fifth anniversary of their issuance and will be subordinated on a senior subordinated basis to certain of our and certain of our subsidiaries’ indebtedness for borrowed money, including the indebtedness under our Revolving Facility. Certain of our U.S. subsidiaries will guarantee the senior subordinated promissory notes on a senior subordinated basis. If and to the extent that we secure any indebtedness for borrowed money at a time when our pro forma leverage ratio exceeds 4:00 to 1:00, we will grant the holders of the senior subordinated promissory notes a security interest on a pari passu basis with such new debt.

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Ownership of New GrafTech after the Mergers

Twelve million shares of New GrafTech Common Stock are issuable to the owners of each of Seadrift and C/G, respectively (or 24,000,000 shares in the aggregate), upon consummation of the Seadrift Merger and the C/G Merger. Based upon the 120,530,695 shares of GrafTech Common Stock outstanding on June 30, 2010, a total of 132,530,695 shares of New GrafTech Common Stock would be outstanding after the Seadrift Merger and 144,530,695 shares of New GrafTech Common Stock would be outstanding after the C/G Merger. Based on such shares outstanding on June 30, 2010, the Seadrift equity holders would hold a total of approximately 9.1% of the outstanding shares of New GrafTech Common Stock immediately after the closing of the Seadrift Merger, if only the Seadrift Merger is consummated, and the Seadrift equity holders and the C/G equity holders would hold, in the aggregate, approximately 16.6% of the outstanding shares of New GrafTech Common Stock immediately after the closing of both the Seadrift Merger and the C/G Merger. The C/G Merger is conditioned upon the consummation of the Seadrift Merger, but the Seadrift Merger is not conditioned upon the consummation of the C/G Merger.

Stockholder Approval Not Required

The transactions do not require the approval of GrafTech’s stockholders.

Conditions to Completion of the Mergers

The completion of the Seadrift Merger depends upon the satisfaction or waiver of a number of conditions which are described in more detail later in this prospectus, including, among other things:

• the absence of any legal prohibition on completion of the transaction;

• the expiration or termination of the relevant waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”);

• the expiration or termination of any applicable waiting period or merger review period under the antitrust laws of any other applicable jurisdiction, including Russia and Turkey;

• the material accuracy, as of the closing, of the representations and warranties made by the parties in the Seadrift Merger Agreement and material compliance by the parties with their respective obligations under the Seadrift Merger Agreement;

• the effectiveness of the registration statement of which this prospectus is a part;

• NYSE approval for listing of the shares of New GrafTech Common Stock issuable to the equity owners of Seadrift in connection with the Seadrift Merger;

• the execution of a supply agreement between Seadrift and C/G (if the Seadrift Merger closes and the C/G Merger has not closed or is not closing simultaneously with the Seadrift Merger); and

• the absence of any change since the date of the Seadrift Merger Agreement that would reasonably be expected to have a Material Adverse Effect, subject to certain exceptions, upon either Seadrift or GrafTech.

The C/G Merger is conditioned upon the satisfaction or waiver of comparable conditions and, in addition, the prior or simultaneous consummation of the Seadrift Merger.

On June 7, 2010, the Antitrust Division of the Department of Justice (the “DOJ”) issued requests for additional information and documents relevant to each of the Seadrift Merger and the C/G Merger, respectively. These requests extend the waiting period during which the Mergers may not be consummated for 30 days from the date of receipt by the DOJ of the additional materials requested, unless that period is extended voluntarily by the parties or terminated sooner by the DOJ.

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Appraisal Rights

Under Delaware law, none of the stockholders of GrafTech or the equity holders of Seadrift or C/G have appraisal rights in connection with the Mergers.

Material U.S. Federal Income Tax Consequences (see page 69)

Subject to the limitations and qualifications described in “Material U.S. Federal Income Tax Consequences” below, the exchange by U.S. holders of shares of GrafTech Common Stock for shares of New GrafTech Common Stock pursuant to the GTI Merger will constitute an exchange to which Section 351 of the Internal Revenue Code of 1986 (the “Code”) applies. As a result, no gain or loss will be recognized by GrafTech, New GrafTech, or the stockholders of GrafTech as a result of the exchange of GrafTech shares for New GrafTech shares pursuant to the GTI Merger. In addition, no gain or loss will be recognized by GrafTech or New GrafTech as a result of the issuance of shares of New GrafTech Common Stock in exchange for the equity in Seadrift pursuant to the Seadrift Merger, and no gain or loss will be recognized by GrafTech or New GrafTech as a result of the issuance of shares of New GrafTech Common Stock in exchange for the equity in C/G pursuant to the C/G Merger. Your tax consequences will depend on your own situation. You should consult your tax advisor to fully understand the tax consequences of the Mergers to you.

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SELECTED HISTORICAL FINANCIAL DATA OF GRAFTECH

Annual and Interim Data

Set forth below is our selected historical consolidated financial and other operating data. Our selected historical consolidated financial data and other data set forth below have been derived from our audited consolidated financial statements and should be read in conjunction with “GrafTech’s Management’s Discussion and Analysis of Financial Condition and Results of Operations of GrafTech” and the Consolidated Financial Statements and Notes thereto of GrafTech set forth elsewhere in this prospectus.

	Year Ended December 31,															Six Months Ended June 30,
	2005			2006			2007			2008			2009			2009			2010
																(Unaudited)
	(Dollars in thousands except share and per share data)
Statement of Operations Data:
Net sales	$	773,028		$	855,433		$	1,004,818		$	1,190,238		$	659,044		$	291,800		$	470,518
Income (loss) from continuing operations (a)		(111,758	)		35,437			148,673			200,515			12,550			(28,622	)		72,850
Basic earnings per common share:
Income (loss) from continuing operations	$	(1.14	)	$	0.36		$	1.48		$	1.80		$	0.10		$	(0.24	)	$	0.61
Income (loss) from discontinued operations (b)		(0.05	)		0.50			(0.02	)		—			—			—			—
Net income (loss)	$	(1.19	)	$	0.86		$	1.46		$	1.80		$	0.10		$	(0.24	)	$	0.61
Weighted average common shares outstanding (in thousands)		97,689			97,965			100,468			111,447			119,707			119,402			120,395
Diluted earnings per common share:
Income (loss) from continuing operations	$	(1.14	)	$	0.36		$	1.39		$	1.74		$	0.10		$	(0.24	)	$	0.60
Income (loss) from discontinued operations (b)		(0.05	)		0.50			(0.02	)		—			—			—			—
Net income (loss)	$	(1.19	)	$	0.86		$	1.37		$	1.74		$	0.10		$	(0.24	)	$	0.60
Weighted average common shares outstanding (in thousands)		97,689			98,582			116,343			119,039			120,733			119,402			121,083
Balance sheet data (at period end):
Total assets	$	901,143		$	918,040		$	875,878		$	943,129		$	892,608		$	844,171		$	962,759
Other long-term obligations (c)		107,704			103,408			94,010			118,272			108,267			121,251			101,191
Total long-term debt		663,489			631,108			399,586			50,557			1,467			53,712			1,327
Other financial data:
Net cash provided by operating activities	$	7,989		$	64,181		$	130,772		$	248,636		$	170,329		$	60,431		$	13,935
Net cash provided by (used in) investing activities		(60,381	)		118,538			(26,525	)		(209,858	)		(60,110	)		(29,651	)		(23,953	)
Net cash provided by (used in) financing activities		36,184			(39,568	)		(199,726	)		(80,215	)		(72,875	)		(25,469	)		24,616

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(a) Income (loss) from continuing operations by period includes:

For the Year Ended December 31, 2005:

• a $9.7 million restructuring expense, pertaining primarily to a $6.1 million expense associated with the rationalization of our graphite electrode facilities, including those in Brazil, France, and Russia and a $3.2 million expense associated with the closure of our graphite electrode manufacturing operations at Caserta, Italy,

• a $0.5 million expense associated with the relocation of our corporate headquarters from Wilmington, Delaware to Parma, Ohio,

• a $0.8 million expense associated with the phase out of our graphite electrode machining operations in Clarksville, Tennessee,

• a $0.4 million expense associated with the closure of our advanced graphite machining operations in Sheffield, United Kingdom, offset by a $1.3 million benefit associated with a change in estimate pertaining to the closure of certain graphite electrode manufacturing operations,

• a $2.9 million expense for the impairment of our long-lived carbon electrode fixed assets in Columbia, Tennessee, and

• a $150.2 million provision for income taxes in 2005 primarily due to a charge resulting from a net change in the total valuation allowance for 2005 of $137.9 million. During the 2005 year end financial accounting closing process, we determined that the timing of when we will generate sufficient U.S. taxable income to realize our U.S. deferred tax assets became less certain; therefore, we recorded valuation allowances.

For the Year Ended December 31, 2006:

• a $10.0 million restructuring expense associated with the rationalization of our graphite electrode facilities, including those in France and the United States,

• a $1.8 million expense associated with the closure of our graphite electrodes manufacturing operations in Caserta, Italy,

• a $1.4 million expense associated with the relocation of our corporate headquarters from Wilmington, Delaware to Parma, Ohio,

• a $2.7 million expense for severance and other costs related to the shutdown of our carbon electrode production operations in Columbia, Tennessee,

• a $6.6 million impairment for the abandonment of capitalized costs related to our enterprise resource planning system, caused by indefinite delays in the implementation of remaining facilities,

• a $1.4 million impairment for the write-down of long-lived assets in our former Etoy, Switzerland facility, as the estimated fair value less selling costs exceeded book value,

• a $0.8 million loss for the abandonment of certain long-lived assets associated with the accelerated closing of our carbon electrode facility in Columbia, Tennessee,

• a $1.7 million loss for the abandonment of certain fixed assets related to our graphite electrode operations,

• a $2.5 million expense for the settlement of three foreign customer lawsuits associated with anti-trust lawsuits and related items, and

• a $23.3 million expense for our incentive compensation program.

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For the Year Ended December 31, 2007:

• a $1.4 million expense for restructuring, pertaining primarily to a $0.7 million expense associated with the phase out of our graphite electrode machining and warehousing operations in Clarksville, Tennessee and a $0.5 million expense associated with changes in estimates of the timing and amounts of severance and related payments to certain employees in Caserta, Italy,

• a $23.5 million expense for our incentive compensation program,

• a $23.7 million gain from the sale of our Caserta, Italy facility,

• a $1.3 million gain from the sale of our Vyazma, Russia facility,

• a $13.0 million loss on extinguishment on the repurchase of Senior Notes,

• a $2.3 million ($0.7 million, net of tax) discontinued operations gain for purchase price adjustments related to our cathodes sale that occurred in December 2006,

• a $1.5 million overstatement of income tax expense from continuing operations related to the correction of our invalid “check the box” tax election made for our Swiss entity in 2004, and

• a $4.4 million expense for the settlement of our pension obligations in South Africa.

For the Year Ended December 31, 2008:

• a $6.8 million loss on extinguishment on the repurchase of Senior Notes,

• a $4.1 million gain on derecognition of our Convertible Debentures,

• a $9.0 million expense for the make-whole provision in connection with the derecognition of our Convertible Debentures,

• a $22.1 million expense for our incentive compensation program,

• a $2.8 million benefit to our income tax provision for tax holidays, exemptions, and credits in various jurisdictions, and

• a $34.5 million write down of our investment in our non-consolidated affiliate, Seadrift, and our $1.7 million share of its losses.

For the Year Ended December 31, 2009:

• a $52.8 million write down of our investment in our non-consolidated affiliate, Seadrift, and our $2.6 million share of its losses,

• a $4.3 million gain for the derecognition of our liability for Brazil excise tax,

• a $1.0 million gain from the sale of our Caserta, Italy facility,

• a $0.4 million loss on extinguishment on the repurchase of our remaining Senior Notes outstanding,

• a $5.1 million benefit to our income tax provision for tax holidays, exemptions, and credits in various jurisdictions, and

• a $22.8 million valuation allowance expense for deferred tax assets that might not be realized.

For the Six Months Ended June 30, 2009:

• a $52.8 million write down of our investment in our non-consolidated affiliate, Seadrift, and our $2.1 million share of its net income.

For the Six Months Ended June 30, 2010:

• our $1.9 million share of the net income of our non-consolidated affiliate, Seadrift.

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(b) Income (loss) from discontinued operations is comprised of the cathode business which we sold in December 2006.

(c) Represents liabilities in connection with antitrust investigations and related lawsuits and claims (2005 and 2006), pension and post-retirement benefits and related costs and miscellaneous other long-term obligations.

Quarterly Data

The following quarterly selected consolidated financial data have been derived from the Consolidated Financial Statements of GrafTech for the periods indicated which have not been audited. The quarterly selected consolidated financial data set forth below should be read in conjunction with “GrafTech’s Management’s Discussion and Analysis of Financial Condition and Results of Operations of GrafTech” and the Consolidated Financial Statements and Notes thereto of GrafTech which appear elsewhere in this prospectus.

	First Quarter		Second Quarter			Third Quarter		Fourth Quarter
	(Dollars in thousands, except per share data)
2010
Net sales	$	215,664	$	254,854
Gross profit		68,103		74,727
Net income (a)		33,528		39,322
Basic earnings per common share	$	0.28	$	0.33
Diluted earnings per common share	$	0.28	$	0.32
2009
Net sales	$	134,026	$	157,774		$	164,879	$	202,365
Gross profit		32,126		45,688			46,533		66,758
Net income (loss) (b)		8,469		(37,091	)		6,864		34,308
Basic earnings (loss) per common share	$	0.07	$	(0.31	)	$	0.06	$	0.29
Diluted earnings (loss) per common share	$	0.07	$	(0.31	)	$	0.06	$	0.28
2008
Net sales	$	290,002	$	319,538		$	315,748	$	264,950
Gross profit		107,949		114,160			113,946		97,381
Net income (c)		36,684		45,857			83,400		34,575
Basic earnings per common share	$	0.36	$	0.43		$	0.70	$	0.29
Diluted earnings per common share	$	0.34	$	0.41		$	0.70	$	0.29

(a) Net income by quarter for 2010 includes the following:

• Equity in losses of our non-consolidated affiliate, Seadrift, of $0.8 million in the first quarter,

• Currency gains of $3.7 million due to the remeasurement of intercompany loans in the first quarter,

• Equity in earnings of our non-consolidated affiliate, Seadrift, of $1.7 in the second quarter, and

• Currency gains of $9.0 million due to the remeasurement of intercompany loans and the effect of transaction gains and losses on intercompany activities in the second quarter.

(b) Net income (loss) by quarter for 2009 includes the following:

• A $52.8 million write down of our investment in our non-consolidated affiliate, Seadrift, in the second quarter,

• A credit of $0.8 million for the reduction of our liability for Brazilian excise taxes in the third quarter,

• A gain of $3.5 million for the derecognition of our liability for Brazilian excise taxes in the fourth quarter,

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• An expense of $0.6 million related to the early termination of our information technology outsourcing services agreement in the fourth quarter, and

• A U.S. income tax expense of $4.1 million resulting from the currency gain realized on the repayment of intercompany loans in the fourth quarter.

(c) Net income by quarter for 2008 includes the following:

• A $4.7 million loss on the extinguishment of our Senior Notes in the first quarter,

• A $4.1 million gain on derecognition of debt for our Convertible Debentures and a $9.0 million charge for the make-whole payment made in connection with the derecognition of our Convertible Debentures in the second quarter,

• A $2.0 million loss on the extinguishment of our Senior Notes in the third quarter, and

• A $36.2 million write down, net of our equity in losses, related to our investment in our non-consolidated affiliate, Seadrift, and a $2.1 million increase to our severance reserve in the fourth quarter.

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SELECTED HISTORICAL FINANCIAL DATA OF SEADRIFT

Annual and Interim Data

Set forth below is Seadrift Coke L.P.’s selected historical consolidated financial and other operating data. Except as set forth below, Seadrift Coke L.P.’s selected historical consolidated financial data and other data set forth below have been derived from its audited consolidated financial statements and should be read in conjunction with “Seadrift’s Management’s Discussion and Analysis of Financial Condition and Results of Operations of Seadrift” and the Consolidated Financial Statements and Notes thereto of Seadrift set forth elsewhere in this prospectus.

	Year Ended December 31,															Six Months Ended June 30,
	2005 (a)			2006			2007			2008			2009			2009			2010
																(Unaudited)
	(Dollars in thousands)
Statement of Operations Data:
Net sales	$	96,799		$	172,535		$	239,203		$	329,682		$	74,309		$	28,686		$	79,092
Net income (loss) (b) (c)		(6,198	)		10,723			59,165			44,961			(1,361	)		5,903			15,501
Balance sheet data (at period end):
Total assets	$	68,631		$	70,413		$	97,059		$	125,898		$	101,914		$	117,379		$	122,813
Other long-term obligations (d)		—			—			1,462			2,331			2,214			2,197			1,769
Total long-term debt		29,940			25,786			20,483			31,343			172			—			152
Other financial data:
Net cash provided by (used for) operating activities	$	(12,762	)	$	13,378		$	61,182		$	44,822		$	27,162		$	19,115		$	13,249
Net cash (used in) investing activities		(1,427	)		(7,890	)		(10,356	)		(38,371	)		(10,050	)		(9,282	)		(2,973	)
Net cash provided by (used in) financing activities		14,191			(5,450	)		(43,558	)		(13,405	)		(17,463	)		(10,116	)		(7,093	)

(a) For the period April 29, 2005 (inception) to December 31, 2005.

(b) Seadrift does not record a provision for income taxes in its financial statements because it is a partnership for income tax purposes. Its taxable income or loss is included in the individual income tax returns of its members based upon their percentage of ownership.

(c) Included in the net loss for the year ended December 31, 2009 is $11,640 of loss on the abandonment of machinery under construction.

(d) Includes interest rate swap liability, accrued environmental costs, and other.

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Quarterly Data

The following quarterly selected consolidated financial data have been derived from the Consolidated Financial Statements of Seadrift for the periods indicated, which have not been audited. The quarterly selected financial data set forth below should be read in conjunction with “Seadrift’s Management’s Discussion and Analysis of Financial Condition and Results of Operations of Seadrift” and the Consolidated Financial Statements and Notes thereto of Seadrift which appear elsewhere in this prospectus.

	First Quarter			Second Quarter			Third Quarter		Fourth Quarter
	(Dollars in thousands)
2010
Net sales	$	26,147		$	52,945
Gross margin		1,412			20,706
Net earnings (loss) attributable to partners		(1,817	)		17,318
2009
Net sales	$	23,067		$	5,619		$	17,653	$	27,970
Gross margin		13,385			(3,771	)		2,871		6,193
Net earnings (loss) attributable to partners		11,390			(5,487	)		364		(7,628	)
2008
Net sales	$	84,177		$	76,227		$	91,172	$	78,106
Gross margin		23,660			15,650			12,303		9,007
Net earnings attributable to partners		20,468			11,739			8,819		3,935

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SELECTED HISTORICAL FINANCIAL DATA OF C/G

Annual and Interim Data

Set forth below is C/G Electrodes LLC’s selected historical consolidated financial and other operating data. Except as set forth below, C/G Electrodes LLC’s selected historical consolidated financial data and other data set forth below have been derived from its audited consolidated financial statements and should be read in conjunction with “C/G’s Management’s Discussion and Analysis of Financial Condition and Results of Operations of C/G” and the Consolidated Financial Statements and Notes thereto of C/G set forth elsewhere in this prospectus.

	Year Ended December 31,															Six Months Ended June 30,
	2005			2006			2007			2008			2009			2009			2010
																(Unaudited)
	(Dollars in thousands)
Statement of Operations Data:
Net sales	$	63,904		$	99,429		$	114,283		$	142,783		$	76,420		$	42,080		$	62,101
Net income (a)		13,403			32,002			26,326			33,420			17,271			12,195			10,014
Balance sheet data (at period end):
Total assets	$	44,123		$	57,412		$	66,024		$	89,195		$	71,056		$	70,384		$	73,972
Total long-term debt (b)		26,438			24,214			16,802			113,124			86,393			93,724			81,802
Other financial data:
Net cash provided by operating activities	$	11,598		$	37,639		$	27,405		$	25,673		$	38,850		$	29,912		$	12,391
Net cash used in investing activities		(9,100	)		(10,609	)		(9,901	)		(13,343	)		(3,572	)		(2,773	)		(1,430	)
Net cash used in financing activities		(3,067	)		(22,161	)		(21,415	)		(12,242	)		(36,195	)		(27,832	)		(10,389	)

(a) C/G does not record a provision for income taxes in its financial statements because, as a limited liability company, it is treated as a partnership for income tax purposes. Its taxable income or loss is included in the individual income tax returns of its members based upon their percentage of ownership.

(b) Includes capital leases.

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Quarterly Data

The following quarterly selected consolidated financial data have been derived from the Consolidated Financial Statements of C/G for the periods indicated, which have not been audited. The quarterly selected financial data set forth below should be read in conjunction with “C/G’s Management’s Discussion and Analysis of Financial Condition and Results of Operations of C/G” and the Consolidated Financial Statements and Notes thereto of C/G which appear elsewhere in this prospectus.

	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(Dollars in thousands)
2010
Net sales	$	27,901	$	34,200
Gross margin		8,128		8,724
Net income attributable to members		4,677		5,337
2009
Net sales	$	32,108	$	9,972	$	16,719	$	17,621
Gross profit		12,898		4,391		5,808		5,464
Net income attributable to members		8,846		3,349		2,823		2,253
2008
Net sales	$	31,679	$	41,835	$	42,512	$	26,757
Gross profit		12,776		16,843		13,711		1,787
Net income (loss) attributable to members		10,327		14,712		11,462		(3,081	)

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following selected unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the acquisition of Seadrift and the acquisition of Seadrift and C/G and has been prepared for informational purposes only and should be read in conjunction with the unaudited pro forma condensed combined financial information and the accompanying notes thereto, contained elsewhere in this prospectus. The selected unaudited pro forma condensed combined financial information is based upon the historical consolidated financial statements and notes thereto of GrafTech, Seadrift and C/G and should be read in conjunction with the historical financial statements and the accompanying notes of GrafTech, Seadrift and C/G, each of which are contained in this prospectus.

The historical consolidated financial information has been adjusted in the selected unaudited pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the acquisition of Seadrift and to the acquisition of Seadrift and C/G, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the combined results of GrafTech and Seadrift or GrafTech, Seadrift and C/G. The following selected unaudited pro forma condensed combined financial information depicts the condensed combined balance sheet as of June 30, 2010 and the condensed combined statements of operations for the year ended December 31, 2009 and the six months ended June 30, 2010, as if both acquisitions had occurred. The selected unaudited pro forma condensed combined statements of operations have been prepared assuming each of the acquisitions had been completed on January 1, 2009. The selected unaudited pro forma condensed combined balance sheet has been computed assuming the acquisition of Seadrift and the acquisition of Seadrift and C/G had been completed on June 30, 2010. The selected unaudited pro forma condensed financial information has been adjusted with respect to certain aspects of the acquisition of Seadrift and the acquisition of Seadrift and C/G to reflect:

• elimination of related party transactions between Seadrift and C/G;

• changes in assets and liabilities (as disclosed in more detail elsewhere in this prospectus) to record their preliminary estimated fair values at the closing date of the acquisitions and changes in certain expenses resulting therefrom;

• additional indebtedness, including, but not limited to, interest expense; and

• income tax effect (as disclosed in more detail elsewhere in this prospectus) of recording the assets and liabilities at their estimated fair values.

The selected unaudited pro forma condensed combined financial information was prepared in accordance with the acquisition method of accounting under existing United States generally accepted accounting principles, or GAAP standards, and the regulations of the SEC, and is not necessarily indicative of the financial position or results of operations that would have occurred if the acquisition of Seadrift and the acquisition of Seadrift and C/G had been completed on the dates indicated, nor is it indicative of the future operating results or financial position of GrafTech and Seadrift and GrafTech, Seadrift and C/G. Assumptions and estimates underlying the pro forma adjustments are described in the notes accompanying the unaudited pro forma condensed combined financial information, which should be read in connection with the selected unaudited pro forma condensed combined financial information. The accounting for the acquisitions is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Due to the fact that the selected unaudited pro forma condensed combined financial information has been prepared based upon preliminary estimates, the final amounts recorded for the acquisitions may differ materially from the information presented. These estimates are subject to change pending further review of the assets acquired and liabilities assumed.

The selected unaudited pro forma condensed combined statements of operations do not reflect future events that may occur after the acquisitions, including, but not limited to, the anticipated realization of ongoing savings

16

from operating synergies. They also do not give effect to the advisory, legal, regulatory and valuation costs expected to be incurred by GrafTech, Seadrift and C/G in connection with the acquisitions.

In addition, the selected unaudited pro forma condensed combined statements of operations exclude an estimated gain resulting from remeasuring GrafTech’s previously held 18.9% equity interest in Seadrift from carrying amount to fair value. This estimated gain is reflected as a pro forma adjustment to goodwill and accumulated (deficit) earnings in the selected unaudited pro forma condensed balance sheet. See Note (P) to the Adjustments to GrafTech and Seadrift Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2010 and Note (Q) to the Adjustments to GrafTech, Seadrift and C/G Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2010.

	Pro Forma GrafTech and Seadrift				Pro Forma GrafTech, Seadrift and C/G
	Year Ended December 31, 2009		Six Months Ended June  30, 2010		Year Ended December 31, 2009		Six Months Ended June  30, 2010
	(Dollars in thousands)
Summary of Net Sales and Income:
Net sales	$	733,353	$	548,879	$	802,770	$	593,831
Net income	$	74,868	$	78,131	$	79,392	$	86,276
Net income per common share—basic	$	0.57	$	0.59	$	0.55	$	0.60
Net income per common share—diluted	$	0.56	$	0.59	$	0.55	$	0.59
Period-End Financial Position:
Total assets			$	1,321,173			$	1,788,699
Long-term debt			$	111,400			$	337,212
Shareholder’s equity			$	843,306			$	1,034,155
Outstanding Shares:
Weighted-average common shares outstanding—diluted (in thousands of shares)		132,733		133,083		144,733		145,083

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RISK FACTORS

You should carefully consider the following risks associated with the common stock covered hereby. Additional risks and uncertainties not presently known to us or which are not currently believed to be important also may adversely affect the transactions and New GrafTech following the Mergers.

Risks Relating to the Transactions

We may not be able to obtain the regulatory approvals required to consummate the Mergers.

Completion of the Mergers is conditioned upon the receipt of all required governmental consents, clearances and authorizations, including under the HSR Act and by the applicable governmental authorities of Russia and Turkey. We have received the required authorization from the applicable governmental authorities in Turkey. We are in the process of pursuing the remaining required consents and authorizations as required by and in accordance with the terms of the Merger Agreements. Complying with requests from such governmental agencies, including requests for additional information and documents, could delay consummation of either or both of the Mergers. On June 7, 2010, the Antitrust Division of the DOJ issued requests for additional information and documents relevant to each of the Seadrift Merger and the C/G Merger, respectively. These requests extend the waiting period during which the Mergers may not be consummated for 30 days from the date of receipt by the DOJ of the additional materials requested, unless that period is extended voluntarily by the parties or terminated sooner by the DOJ.

In connection with granting these consents and authorizations, governmental authorities may impose conditions on New GrafTech’s operations after completion of the Mergers. Such conditions may jeopardize or delay completion of the Mergers or may reduce the anticipated benefits of the transactions. Under the terms of the Merger Agreements, GrafTech, Seadrift and C/G are required to use reasonable best efforts to obtain all necessary governmental approvals, including agreeing to any such conditions in connection with such efforts, other than any such actions that could reasonably be expected to have a material adverse affect on GrafTech.

If we do not integrate our businesses successfully, we may lose customers and fail to achieve our financial objectives.

Achieving the benefits of the Mergers will depend in part on the successful integration of Seadrift’s and C/G’s respective businesses into our operations in a timely and efficient manner. In order for us to provide enhanced and more valuable products to our customers after the Mergers, we will need to integrate our product lines and development organizations. This may be difficult, unpredictable, and subject to delay because our businesses and products are highly complex, have been developed independently and were designed without regard to such integration. If we cannot successfully integrate our businesses and products and continue to provide customers with products and new product features in the future on a timely basis, we may lose customers and our business and results of operations may be harmed.

We may not be able to successfully vertically integrate our supply chain.

We hope to produce high quality petroleum coke and improve the efficiency of Seadrift’s manufacturing processes. Although petroleum coke is the primary raw material in our manufacturing process, in the past we have purchased our requirements of petroleum coke from third parties and have only limited prior experience in its commercial production and sale. This will represent a new business for us and this effort to vertically integrate our supply chain may not be successful. We may not be able to improve the efficiency or the quality of the petroleum coke production at Seadrift. Failure to successfully integrate Seadrift into our operations may adversely affect our financial condition.

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Integrating our companies may divert management’s attention away from our operations.

Successful integration of Seadrift and C/G into our operations, products and personnel may place a significant burden on our management and our internal resources. The diversion of management’s attention and any difficulties encountered in the transition and integration process could harm our business, financial condition and operating results.

We expect to incur significant capital costs integrating the companies into a single business.

We expect to incur significant capital costs integrating Seadrift’s and C/G’s operations and products. These costs may include costs for:

• maintenance capital;

• capital necessary for quality improvement; and

• capital and related costs and expenditures related to facility stability necessary to achieve production plans.

In addition, we expect to incur significant integration costs in connection with the consummation of the Mergers. We do not know whether we will be successful in these integration efforts or in consummating the Mergers.

The combined companies may not realize the anticipated benefits from the Mergers.

The Mergers involve the integration of three companies that have previously operated independently. We expect the combined companies to result in financial and operational benefits, including increased cost savings and other financial and operating benefits from the Mergers. There can be no assurance, however, regarding when or the extent to which the combined companies will be able to realize these increased cost savings or benefits. This integration may also be difficult, unpredictable, and subject to delay because of possible cultural conflicts and different opinions on technical decisions and product roadmaps. The companies must integrate or, in some cases, replace numerous systems, including those involving management information, purchasing, accounting and finance, sales, billing, employee benefits, payroll and regulatory compliance, many of which are dissimilar. In some instances, C/G and GrafTech serve the same customers, and some of these customers may decide that it is desirable to have additional or different suppliers. Difficulties associated with integrating Seadrift and C/G could have a material adverse effect on the combined companies and the market price of New GrafTech Common Stock.

The market price of New GrafTech Common Stock may be volatile, and the market price of New GrafTech Common Stock may decline in value following the Mergers.

The market price of New GrafTech’s Common Stock could be subject to significant fluctuations following the Mergers. Market prices for securities of companies that have undergone significant acquisitions may be volatile. Some of the factors that may cause the market price of New GrafTech’s Common Stock to fluctuate include, without limitation: general stock market and general economic conditions in the United States and abroad, not directly related to the combined companies or their business; the entry into, or termination of, material agreements; the initiation of, material developments in, or conclusion of litigation to enforce or defend any of the combined companies’ intellectual property rights; issues in manufacturing the combined companies’ products; the introduction of technological innovations or new commercial products by competitors of the combined companies; changes in estimates or recommendations by securities analysts, if any, who cover New GrafTech’s Common Stock; future sales of New GrafTech’s securities; fluctuations in the combined companies’ financial results, including its cash, cash equivalents and short-term investment balance, operating expenses, cash burn rate or revenues; and other potentially negative financial announcements, including delisting of New

19

GrafTech’s Common Stock from the NYSE, changes in accounting treatment or restatement of previously reported financial results, delays in the combined companies’ filings with the SEC or the combined companies’ failure to maintain effective internal control over financial reporting.

We will incur significant transaction and merger-related costs in connection with the Mergers and will remain liable for significant transaction costs whether or not we successfully close the Mergers, including legal, accounting and other costs.

We expect to incur a number of non-recurring costs associated with combining the operations of the three companies which cannot be estimated accurately at this time. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction and transaction-related costs over time, this net benefit may not be achieved in the near term, or at all. Also, speculation regarding the likelihood of the closing of the Mergers could increase the volatility of GrafTech’s and New GrafTech’s share price in the interim.

We have agreed to restrict our business conduct prior to closing.

Under the Seadrift Merger Agreement and the C/G Merger Agreement, we have agreed to operate our business in the usual, regular and ordinary course. In addition, we have agreed not to, and not to permit our affiliates to, perform certain actions including, without limitation, to the extent provided in the Merger Agreements, declaring dividends, issuing securities, encumbering our capital stock, making material acquisitions or disposing of assets. Our agreement not to, and not to permit our affiliates to, take these actions could adversely affect our ability to take actions beneficial to GrafTech or its stockholders.

Our incurrence of additional debt to pay the cash portion of the Merger Consideration will significantly increase our interest expense, leverage and debt service requirements following the Mergers.

We anticipate borrowing approximately $185 million in order to pay the cash portion of the Merger Consideration and acquisition related transaction costs. The borrowing amount at closing may increase if the closing of the Mergers is delayed. This amount excludes additional borrowings we may need to finance integration, capital expenditures or restructuring activities. Incurrence of this new debt will significantly increase the combined companies’ leverage. In addition, we anticipate issuing $200 million in non-interesting bearing senior subordinated notes which will mature five years after they are issued to the equity holders of Seadrift and C/G as part of the Merger Consideration which will further contribute to the significant increase in our leverage and debt service requirements. While management believes our cash flows will be adequate to service this debt, there may be circumstances in which required payments of principal or interest on this new debt could adversely affect our cash flows and operating results, and therefore the market price of New GrafTech Common Stock.

We purchase a majority of our requirements for petroleum coke, our principal raw material, from ConocoPhillips, a direct competitor of Seadrift. The Seadrift Merger may have a negative effect on our relationship with this supplier.

We purchase a majority of our requirements for petroleum coke, our principal raw material, from two plants of a single supplier under a supply agreement containing customary terms and conditions, including price renegotiation, dispute resolution and termination provisions. There are currently 11 firms in the world producing ultra-high power (“UHP”) grade needle coke. The current producers of high quality needle coke are Seadrift, ConocoPhillips, Petrocokes, Mitsubishi Chemical Company, Baosteel, C-Chem, Indian Oil, Hongte Chemical, Nippon Oil, Jingzhou and Sinosteel. The Seadrift Merger will provide us with control over a direct competitor to ConocoPhillips. The completion of the Seadrift Merger may negatively affect our relationship with ConocoPhillips and other suppliers of needle coke who may elect not to sell to us or reduce their volume of sales to us.

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Natural gas drilling and extraction activities conducted on the C/G site as permitted, subject to certain conditions, by the C/G Merger Agreement may result in liability or other costs to us.

Pursuant to the C/G Merger Agreement, the holders of equity in C/G immediately prior to the C/G merger are entitled to enter into arrangements for exploration, drilling and extraction of natural gas on the C/G site and to retain the economic benefit therefrom. Such holders are required to provide indemnification by financially responsible indemnitors to us against all loss, cost and expense (including increased insurance costs) arising out of such activities. However, there can be no assurance that such indemnity will be adequate to cover such costs or that the indemnitor will remain financially responsible. Insurance and bonds acceptable to us must also be provided, but there can be no assurance that such insurance and bonds will be adequate to cover applicable losses. All activities are to be conducted in accordance with applicable law, with such holders and their gas production contractors being liable for all violations, but there can be no assurance as to such compliance or that we, as the owner of the site, will not be held liable for noncompliance.

General customer uncertainty related to the Mergers could harm GrafTech, Seadrift and C/G.

GrafTech’s, Seadrift’s or C/G’s customers may, in response to the announcement of the proposed Mergers, delay or defer purchasing decisions or switch suppliers. If GrafTech’s, Seadrift’s or C/G’s customers delay or defer purchasing decisions or switch suppliers, the revenues of GrafTech, Seadrift and C/G, respectively, and the revenues of the combined companies, could materially decline or anticipated increases in revenue could be lower than expected.

Failure to complete the Mergers may result in certain costs that could negatively affect the financial condition and results of operations of GrafTech.

GrafTech may be required to pay termination fees of up to $30 million under the terms of the Merger Agreements if the Merger Agreements are terminated under certain circumstances. In addition, GrafTech will incur significant transaction and merger-related costs whether or not GrafTech receives the benefits associated with successfully closing the Mergers. Moreover, the market price of GrafTech Common Stock may decline as a result of GrafTech’s failure to close the Mergers.

The Mergers could cause GrafTech, Seadrift and C/G to lose key personnel, which could materially affect the respective companies’ businesses and require the companies to incur substantial costs to recruit replacements for lost personnel.

As a result of the Mergers, current and prospective GrafTech, Seadrift and C/G employees could experience uncertainty about their future roles within the combined company. This uncertainty may adversely affect our ability to attract and retain key management, sales, marketing and technical personnel. Any failure to attract and retain key personnel could have a material adverse effect on the business of GrafTech now and New GrafTech after completion of the Mergers.

Risks Relating to Us

A prolonged downturn in global economic conditions may materially adversely affect our business.

Our business and results of operations are affected by international, national and regional economic conditions. Financial markets in the United States, Europe and Asia experienced extreme disruption in the second half of 2008 and much of 2009, including, among other things, extreme volatility in security prices, severely diminished liquidity and credit availability, ratings downgrades of certain investments and declining values of others. The global economy was in a recession. Slowing, or declining, economic growth in the United States and

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elsewhere caused our customers to delay or reduce purchases which, in turn, resulted in reductions in sales of our products, longer sales cycles and increased price competition, materially and adversely affecting our financial position and results of operations.

We believe that in the graphite electrode markets in which we compete, the capacity utilization rate was over 95% in the first nine months of 2008, but, as a result of the financial crisis and the global economic slowdown, fell dramatically in the fourth quarter of 2008 and we estimate they were less than 50% at the end of the year. We believe capacity utilization rates averaged 50% for the full year 2009. These lower capacity utilization rates adversely affected our financial position and results of operations in 2009.

Although certain economists are forecasting that the worldwide recession has begun to ease as a result of wide-ranging government stimulus programs and intervention, the consensus of economists is that the pace of recovery will be slow, as high unemployment continues. Thus, while stabilization appears to have begun, the global economy remains fragile and market demand remains far below pre-crisis levels. The expected slow pace of recovery, and the possibility of a return of recessionary conditions, will continue to have an adverse effect upon our business in 2010.

We are dependent on the global steel industry and also sell products used in the transportation, semiconductor, solar, petrochemical, electronics, and other industries which are susceptible to global and regional economic downturns.

We sell our industrial materials products, which accounted for about 82% of our total net sales in 2009, primarily to the EAF steel production industry. Many of our other products are sold primarily to the transportation, solar, oil and gas exploration industries. These are global basic industries, and they are experiencing various degrees of contraction, growth and consolidation. Customers in these industries are located in every major geography. As a result, our customers are affected by changes in global and regional economic conditions. This, in turn, affects overall demand and prices for our products sold to these industries. As a result of changes in economic conditions, demand and pricing for our products sold to these industries has fluctuated and in some cases declined significantly.

Demand for our products sold to these industries may be adversely affected by improvements in our products as well as in the manufacturing operations of customers, which reduce the rate of consumption or use of our products. Our customers, including major steel producers, are experiencing and may continue to experience downturns or financial distress that could adversely impact our ability to collect our accounts receivable or to collect them on a timely basis.

Sales volumes and prices of our products sold to these industries are impacted by the supply/demand balance as well as overall changes in demand, and growth of and consolidation within, the end markets for our products. In addition to the factors mentioned above, the supply/demand balance is affected by factors such as business cycles, rationalization, and increases in capacity and productivity initiatives within our industry and the end markets for our products, some of which factors are affected by decisions by us.

The steel industry, in particular, has historically been highly cyclical and is affected significantly by general economic conditions. Significant customers for the steel industry include companies in the automotive, construction, appliance, machinery, equipment and transportation industries, all of which continue to be affected by the general economic downturn and the deterioration in financial markets, including severely restricted liquidity and credit availability.

In addition, a continuation of the current difficult economic conditions may lead current or potential customers of our Engineered Solutions business to delay or reduce technology purchases or slow their adoption

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of new technologies. This may result in a continued reduction, or slower rate of recovery, of sales of our Engineered Solutions products and increased price competition, which could materially and adversely affect our financial position and results of operations.

We are subject to restrictive covenants under our Revolving Facility and expect to be subject to restrictive covenants under any renewal or refinancing thereof. These covenants could significantly affect the way in which we conduct our business. Our failure to comply with these covenants could lead to an acceleration of our debt.

On April 28, 2010, we successfully completed the refinancing of the Revolving Facility that was due to expire on July 15, 2010. The refinancing provides for, among other things, an extension of the maturity of the Revolving Facility until April 29, 2013, an increase in the principal amount thereof to $260 million, additional flexibility for investments and acquisitions and, subject to certain conditions, an “accordion feature” that permits us to establish additional credit facilities thereunder in an aggregate amount, together with such $260 million, of up to $390 million.

The Revolving Facility contains a number of covenants that, among other things, restrict our ability to: sell assets; incur, repay or refinance indebtedness; create liens; make investments or acquisitions; engage in mergers or acquisitions; pay dividends; repurchase stock; or make capital expenditures.

The Revolving Facility also requires us to comply with specified financial covenants, including minimum interest coverage and maximum senior secured leverage ratios. We cannot borrow under our Revolving Facility if the additional borrowings would cause us to breach the financial covenants.

Our ability to continue to comply with applicable covenants may be affected by events beyond our control. The breach of any of the covenants contained in our Revolving Facility, unless waived, would be a default under our Revolving Facility. This would permit the lenders to terminate their commitments to extend credit under, and accelerate the maturity of, our Revolving Facility. The acceleration of our debt could have a material adverse effect on our financial condition and liquidity. If we were unable to repay our debt to the lenders and holders or otherwise obtain a waiver from the lenders and holders, we could be forced to reduce or delay capital expenditures; sell assets or businesses; limit or discontinue, temporarily or permanently, business plans regarding operations; obtain additional debt or equity financing; seek protection under applicable debtor protection statutes, or restructure or refinance debt.

We expect that any renewal or refinancing of our Revolving Facility will contain covenants that may be as restrictive, or more restrictive, than the covenants contained in our Revolving Facility and would extend to the lenders thereunder remedies, in the event of any default, similar to those provided to the lenders under our Revolving Facility described above.

We are subject to risks associated with operations in multiple countries.

A substantial majority of our net sales are derived from sales outside the U.S., and a substantial majority of our operations and our total property, plant and equipment and other long-lived assets are located outside the U.S. As a result, we are subject to risks associated with operating in multiple countries, including:

• currency devaluations and fluctuations in currency exchange rates, including impacts of transactions in various currencies, impact on translation of various currencies into dollars for U.S. reporting and financial covenant compliance purposes, and impacts on results of operations due to the fact that costs of our foreign subsidiaries are primarily incurred in local currencies while their products are primarily sold in dollars and Euros;

• imposition of or increase in customs duties and other tariffs;

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• imposition of or increase in currency exchange controls, including imposition of or increases in limitations on conversion of various currencies into dollars, Euros, or other currencies, making of intercompany loans by subsidiaries or remittance of dividends, interest or principal payments or other payments by subsidiaries;

• imposition of or increase in revenue, income or earnings taxes and withholding and other taxes on remittances and other payments by subsidiaries;

• imposition of or increases in investment or trade restrictions or export controls by the U.S. or by non-U.S. governments or trade sanctions adopted by the U.S.;

• inability to definitively determine or satisfy legal requirements, inability to effectively enforce contract or legal rights and inability to obtain complete financial or other information under local legal, judicial, regulatory, disclosure and other systems; and

• nationalization or expropriation of assets, and other risks which could result from a change in government or government policy, or from other political, social or economic instability.

We cannot assure you that such risks will not have a material adverse effect on us or that we would be able to mitigate such material adverse effects in the future.

In addition to the factors noted above, our results of operations and financial condition are affected by inflation, deflation and stagflation in each country in which we have a manufacturing facility. We cannot assure you that future increases in our costs will not exceed the rate of inflation or the amounts, if any, by which we may be able to increase prices for our products.

Our ability to grow and compete effectively depends on protecting our intellectual property. Failure to protect our intellectual property could adversely affect us.

We believe that our intellectual property, consisting primarily of patents and proprietary know-how and information, is important to our growth. Failure to protect our intellectual property may result in the loss of the exclusive right to use our technologies. We rely on patent, trademark, copyright and trade secret laws and confidentiality and restricted use agreements to protect our intellectual property. Some of our intellectual property is not covered by any patent or patent application or any such agreement.

Patents are subject to complex factual and legal considerations. Accordingly, there can be uncertainty as to the validity, scope and enforceability of any particular patent. Therefore, we cannot assure you that:

• any of the U.S. or foreign patents now or hereafter owned by us, or that third parties have licensed to us or may in the future license to us, will not be circumvented, challenged or invalidated;

• any of the U.S. or foreign patents that third parties have non-exclusively licensed to us, or may non-exclusively license to us in the future, will not be licensed to others; or

• any of the patents for which we have applied or may in the future apply will be issued at all or with the breadth of claim coverage sought by us.

Moreover, patents, even if valid, only provide protection for a specified limited duration.

We cannot assure you that agreements designed to protect our proprietary know-how and information will not be breached, that we will have adequate remedies for any such breach, or that our strategic alliance suppliers and customers, consultants, employees or others will not assert rights to intellectual property arising out of our relationships with them.

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In addition, effective patent, trademark and trade secret protection may be limited, unavailable or not applied for in the U.S. or in any of the foreign countries in which we operate.

Further, we cannot assure you that the use of our patented technology or proprietary know-how or information does not infringe the intellectual property rights of others.

Intellectual property protection does not protect against technological obsolescence due to developments by others or changes in customer needs.

The protection of our intellectual property rights may be achieved, in part, by prosecuting claims against others whom we believe have misappropriated our technology or have infringed upon our intellectual property rights, as well as by defending against misappropriation or infringement claims brought by others against us. Our involvement in litigation to protect or defend our rights in these areas could result in a significant expense to us, adversely affect the development of sales of the related products, and divert the efforts of our technical and management personnel, regardless of the outcome of such litigation.

If necessary, we may seek licenses to intellectual property of others. However, we can give no assurance to you that we will be able to obtain such licenses or that the terms of any such licenses will be acceptable to us. Our failure to obtain a license from a third party for its intellectual property that is necessary for us to make or sell any of our products could cause us to incur substantial liabilities and to suspend the manufacture or shipment of products or use of processes requiring the use of such intellectual property.

Our current and former manufacturing operations are subject to increasingly stringent health, safety and environmental requirements.

We use and generate hazardous substances in our manufacturing operations. In addition, both the properties on which we currently operate and those on which we have ceased operations are and have been used for industrial purposes. Further, our manufacturing operations involve risks of personal injury or death. We are subject to increasingly stringent environmental, health and safety laws and regulations relating to our current and former properties, neighboring properties, and our current raw materials, products, and operations. These laws and regulations provide for substantial fines and criminal sanctions for violations and sometimes require evaluation and registration of the installation of costly pollution control or safety equipment or costly changes in operations to limit pollution or decrease the likelihood of injuries. It is also possible that the impact of such regulations on our suppliers could affect the availability and cost of our raw materials. In addition, we may become subject to potential material liabilities for the investigation and cleanup of contaminated properties, for claims alleging personal injury or property damage resulting from exposure to or releases of hazardous substances, or for personal injury as a result of an unsafe workplace. Further, alleged noncompliance with or stricter enforcement of, or changes in interpretations of, existing laws and regulations, adoption of more stringent new laws and regulations, discovery of previously unknown contamination or imposition of new or increased requirements could require us to incur costs or become the basis of new or increased liabilities that could be material.

We may face risks related to greenhouse gas emission limitations and climate change.

There is growing scientific, political and public concern that emissions of greenhouse gases (“GHG”) are altering the global atmosphere in ways that are affecting, and are expected to continue to affect, global climate. Legislators, regulators and others, as well as many companies, are considering ways to reduce GHG emissions. The U.S. Environmental Protection Agency (“EPA”) has already issued rules requiring certain facilities to report their GHG emissions and, on May 13, 2010, EPA finalized the “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule”, which would subject GHG emissions at certain facilities to Clean Air Act Title V and Prevention of Significant Deterioration (“PSD”) pre-construction permitting requirements and, in the case of facilities subject to PSD pre-construction requirements, Best Available Control Technology (“BACT”)

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requirements. Such requirements will become effective on a phased-basis, beginning in January and July of 2011. Having to comply with BACT requirements with respect to GHGs could materially increase the cost of constructing new or modifying existing facilities.

It is also possible that some form of additional regulation of GHG emissions will be forthcoming in the U.S. and other countries. EPA has already announced that it will continue to consider regulation of sources of GHGs other than those addressed in the above discussed rule. Regulation of GHG emissions could impose costs on us, including increased energy, environmental and other costs, necessary to comply with any limitations which may be imposed. To the extent that similar limitations are not imposed globally, such regulation may impact our ability to compete with companies located in countries which do not impose such limitations. The impact of any future GHG regulatory requirements on our global business will be dependent upon the design of the regulatory schemes that are ultimately adopted and, as a result, we are unable to predict their significance to our operations at this point.

EAF steel production is less energy intensive than production of steel in basic oxygen furnaces. As a result, to the extent that limitations are imposed on GHG emissions, this may encourage further growth in EAF steel production which, in turn, could lead to increased demand for our graphite electrodes. Any resultant increase in sales of electrodes may partially offset the additional costs that compliance with GHG emission regulations may impose on us.

It is possible that the physical impacts of climate change could affect our operations. These may include changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and changing temperature levels. For instance, the Seadrift facility, and facilities supplying it, are located in a geographic area less than 100 feet above sea level and, as a result, rising sea levels could have an adverse impact on their operations. We currently own approximately 18.9% of the equity in Seadrift, and plan to acquire the remaining 81.1% upon consummation of the Seadrift Merger.

We face certain litigation and legal proceedings risks that could harm our business.

We are involved in various product liability, occupational, environmental, and other legal claims, demands, lawsuits and other proceedings arising out of or incidental to the conduct of our business. The results of these proceedings are difficult to predict. Moreover, many of these proceedings do not specify the relief or amount of damages sought. Therefore, as to a number of the proceedings, we are unable to estimate the possible range of liability that might be incurred should these proceedings be resolved against us. Certain of these matters involve types of claims that, if resolved against us, could give rise to substantial liability, which could have a material adverse effect on our financial position, liquidity and results of operations.

We are dependent on supplies of raw materials and energy. Our results of operations could deteriorate if that supply is substantially disrupted for an extended period.

We purchase raw materials and energy from a variety of sources. In many cases, we purchase them under short term contracts or on the spot market, in each case at fluctuating prices. We currently purchase a majority of our requirements for petroleum coke, our principal raw material, from two plants of a single supplier under a supply agreement, containing customary terms and conditions, including price renegotiation, dispute resolution and termination provisions. The availability and price of raw materials and energy may be subject to curtailment or change due to:

• limitations which may be imposed under new legislation or regulation;

• supplier’s allocations to meet demand of other purchasers during periods of shortage (or, in the case of energy suppliers, extended cold weather);

• interruptions or cessations in production by suppliers; and

• market and other events and conditions.

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Petroleum and coal products, including petroleum coke and pitch, our principal raw materials, and energy, particularly natural gas, have been subject to significant price fluctuations.

We have in the past entered into, and may continue in the future to enter into, natural gas derivative contracts and short duration fixed rate purchase contracts to effectively fix some or all of our natural gas cost exposure.

A substantial increase in raw material or energy prices which cannot be mitigated or passed on to customers or a continued interruption in supply, particularly in the supply of petroleum coke or energy, would have a material adverse effect on us.

There may be significant risks associated with acquisition activities that we may elect to pursue.

We may seek to acquire other companies or product lines which are additive or complementary to our existing businesses and product lines or to add new businesses and product lines. Any such future acquisitions that we may elect to pursue will be accompanied by the risks commonly encountered in such transactions. Such risks include, among others:

• the difficulty of identifying appropriate acquisition candidates;

• the difficulty of assimilating the operations and personnel of the acquired entities;

• the potential disruption of our ongoing business;

• the potential incurrence of new debt or the issuance of new equity that could increase our leverage or dilute our existing stockholders’ equity;

• our inability to capitalize on the opportunities presented by acquisitions; and

• our failure to implement and maintain uniform standards, controls, procedures and policies at any acquired businesses.

Further, to the extent that any such transaction may involve businesses located outside the United States, the transaction would involve the additional risks associated with international operations described above. We cannot assure you that we will be successful in overcoming these risks or any other problems encountered with any acquisitions we may pursue. Any failure to overcome these risks and successfully integrate acquired businesses could have a material adverse effect on our financial position, liquidity and results of operations. See “We are subject to risks associated with operations in multiple countries.”

Our results of operations could deteriorate if our manufacturing operations were substantially disrupted for an extended period.

Our manufacturing operations are subject to disruption due to extreme weather conditions, floods and similar events, major industrial accidents, strikes and lockouts, adoption of new laws or regulations, changes in interpretations of existing laws or regulations or changes in governmental enforcement policies, civil disruption, riots, terrorist attacks, war, and other events. We cannot assure you that no such events will occur. If such an event occurs, it could have a material adverse effect on us.

Our Clarksburg, West Virginia collective bargaining agreement with the United Steel Workers (the “USW”) expired by its terms in June 2010. Our Clarksburg facility manufactures specialty graphite products. Our bargaining unit team members have continued to work without a contract. We continue to meet and negotiate in good faith with the USW. To date, there has been no disruption in our operations or ability to meet delivery targets as a result of the negotiations. There is, however, the possibility of a work stoppage or other disruption in our Clarksburg operations. Any work stoppage or disruption could adversely impact our specialties graphite business.

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We have significant non-dollar-denominated intercompany loans and have had in the past, and may in the future have, foreign currency financial instruments and interest rate swaps and caps. The related gains and losses have in the past been, and may in the future be, significant.

As part of our cash management, we have non-dollar denominated intercompany loans between our subsidiaries. These loans are deemed to be temporary and, as a result, remeasurement gains and losses on these loans are recorded as currency gains / losses in other income (expense), net, on our Consolidated Statements of Operations.

Additionally, we have in the past entered into, and may in the future enter into, interest rate swaps and caps to attempt to manage interest rate expense. We have also in the past entered into, and may in the future enter into, foreign currency financial instruments to attempt to hedge global currency exposures, net, relating to Euro- denominated debt and identifiable foreign currency receivables, payables and commitments held by our foreign and domestic subsidiaries. We may purchase or sell these financial instruments, and open and close hedges or other positions, at any time. Changes in currency exchange rates or interest rates have in the past resulted, and may in the future result, in significant gains or losses with respect thereto. These instruments are marked-to-market monthly and gains and losses thereon are recorded in Other Comprehensive Income in our Consolidated Balance Sheets.

There may be volatility in our results of operations between quarters.

Sales of our products fluctuate from quarter to quarter due to such factors as changes in economic conditions, changes in competitive conditions, scheduled plant shutdowns by customers, national vacation practices, changes in customer production schedules in response to seasonal changes in energy costs, weather conditions, strikes and work stoppages at customer plants and changes in customer order patterns including those in response to the announcement of price increases or price adjustments. We have experienced, and expect to continue to experience, volatility with respect to demand for and prices of our industrial material products, specifically graphite electrodes, both globally and regionally. We have also experienced volatility with respect to prices of raw materials and energy, and we expect to experience volatility in such prices in the future. Accordingly, results of operations for any quarter are not necessarily indicative of the results of operations for a full year.

The graphite and carbon industry is highly competitive. Our market share, net sales or net income could decline due to vigorous price and other competition.

Competition in the graphite and carbon products industry (other than, generally, with respect to new products) is based primarily on price, product differentiation and quality, delivery reliability, and customer service. Electrodes, in particular, are subject to rigorous price competition. In such a competitive market, changes in market conditions, including customer demand and technological development, could adversely affect our competitiveness, sales and/or profitability.

Competition with respect to new products is, and is expected to be, generally based primarily on product innovation, price, performance and cost effectiveness as well as customer service.

Competition could prevent implementation of price increases, require price reductions or require increased spending on research and development, marketing and sales that could adversely affect us.

We have significant deferred income tax assets in multiple jurisdictions, and we may not be able to realize any benefits from those assets.

At December 31, 2009 we had $165.7 million of gross deferred income tax assets, of which $106.8 million required a valuation allowance. In addition, we had $69.3 million of gross deferred income tax liabilities. Our

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valuation allowance means that we do not believe that these assets are more likely than not to be realized. Until we determine that it is more likely than not that we will generate sufficient taxable income to realize our deferred income tax assets, income tax benefits in each current period will be fully reserved.

Our valuation allowance, which is predominantly in the U.S. tax jurisdiction, does not affect our ability and intent to utilize the deferred income tax assets as we generate sufficient future profitability. We are executing current strategies and developing future strategies, to improve sales, reduce costs and improve our capital structure in order to improve U.S. taxable income of the appropriate character to a level sufficient to fully realize these benefits in future years.

Risks Relating to Our Securities

To the extent that outstanding options to purchase shares of our common stock are exercised or other equity awards are granted under our incentive plans, the ownership interests of our other stockholders will be diluted.

Our stock price may be volatile due to the nature of our business as well as the nature of the securities markets, which could affect the value of an investment in our common stock.

Companies that have experienced volatility in the market price of their stock have been the subject of securities class action litigation which involves substantial costs and a diversion of those companies’ management’s attention and resources. Many factors may cause the market price for our common stock to decline or fluctuate, perhaps substantially, including:

• failure of net sales, results of operations or cash flows from operations to meet the expectations of securities analysts or investors;

• recording of additional restructuring, impairment or other charges or costs;

• downward revisions in revenue, earnings or cash flow estimates of securities analysts;

• downward revisions or announcements that indicate possible downward revisions in the ratings on debt instruments that we may have outstanding from time to time, if any;

• speculation in the press or investor perception concerning our industry or our prospects; and

• changes in general capital market conditions.

Risks Relating to Seadrift

Additional adverse changes in global economic conditions may continue to impact Seadrift’s business and financial condition in ways that Seadrift currently cannot predict.

The economic recession, including declines in consumer and business confidence and spending as well as increased unemployment and reduced demand continues to adversely affect the business and economic environment in which Seadrift operates. These conditions increase the risks associated with the creditworthiness of Seadrift’s suppliers, customers and business partners. The consequences of such adverse effects could include interruptions or delays in Seadrift’s suppliers’ performance of Seadrift’s contracts, reductions and delays in customer purchases, delays in or the inability of customers to obtain financing to purchase Seadrift’s products, and bankruptcy of customers. Any of these events may adversely affect Seadrift’s cash flow, profitability and financial condition.

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Meeting the requirements of evolving environmental, health and safety laws and regulations including those related to climate change could adversely affect Seadrift’s performance.

Consistent with the experience of other producers of petroleum-based products, environmental laws and regulations have raised operating costs and required significant capital investments at Seadrift’s facility. We believe that Seadrift’s existing physical facilities and the modifications that it has planned and accrued for are substantially adequate to maintain compliance with existing applicable laws and regulatory requirements. However, Seadrift may be required to incur material costs to address certain existing environmental conditions and any other environmental conditions that may be discovered in the future. Also, potentially material expenditures could be required as a result of environmental, health and safety, and energy laws, regulations or requirements that may be adopted or imposed in the future. Future developments in federal and state laws and regulations governing environmental, health and safety and energy matters are especially difficult to predict.

Currently, various legislative and regulatory measures to address greenhouse gas emissions (including carbon dioxide, methane and nitrous oxides) are in various phases of discussion or implementation. These include requirements effective in January 2010 to report emissions of greenhouse gases to the EPA, which apply to Seadrift’s Port Lavaca, Texas facility, and the “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule”, which EPA finalized on May 13, 2010, and which will go into effect on a phased-basis in January and July 2011. That rule would subject GHG emissions at certain facilities, including Seadrift’s facility, to Clean Air Act Title V permitting requirements, and, in the case of any facility modification resulting in emissions exceeding certain thresholds, PSD pre-construction permitting requirements for GHGs, including, BACT requirements. The extent to which having to comply with these new requirements with respect to GHGs would materially increase the cost of modifying the Seadrift facility or Seadrift’s costs of compliance is not clear at this time. In addition, proposed federal legislation and additional regulation by EPA as well as state actions to develop statewide or regional programs, may also require reductions in Seadrift’s GHG emissions. Requiring reductions in Seadrift’s greenhouse gas emissions could result in increased costs to (i) operate and maintain Seadrift’s facilities, (ii) install new emissions controls at Seadrift’s facilities and (iii) administer and manage any greenhouse gas emissions programs, including acquiring emissions credits or allotments.

Seadrift’s operations are subject to operational hazards that could expose it to potentially significant losses.

Seadrift’s operations are subject to potential operational hazards and risks inherent in petroleum-based operations and in transporting and storing decant oil and other petroleum-based products, such as fires, major accidents, severe weather, natural disasters, explosions, security breaches, spills and mechanical failure of equipment at Seadrift’s or third party facilities, any of which can result in business interruptions or shutdowns and damage to Seadrift’s properties and the properties of others. A serious accident at its facilities could also result in serious injury or death to Seadrift employees or contractors and could expose Seadrift to significant liability for personal injury claims and reputational risk. Any such event or unplanned shutdown could have a material adverse effect on Seadrift’s business, financial condition and results of operations.

While Seadrift carries property, casualty, environmental pollution liability and business interruption insurance, it does not maintain insurance coverage against all potential losses. Seadrift could also suffer losses for uninsurable or uninsured risks or in amounts in excess of existing insurance coverage. The occurrence of an event that is not fully covered by insurance or failure by one or more insurers to honor its coverage commitments for an insured event could have a material adverse effect on Seadrift’s business, financial condition and results of operations.

Seadrift’s business is impacted by environmental risks inherent in industrial operations involving petroleum products.

The operation of facilities like Seadrift’s is inherently subject to the risks of spills, discharges or other releases of petroleum or hazardous substances. Seadrift could be liable under federal, state and local

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environmental laws, or common law, for all costs and penalties associated with these releases, and the remediation thereof, whether the releases occurred in the past, were caused by others or occur in the future at Seadrift’s facility or at any facilities to which Seadrift sent or sends wastes or by-products for treatment or disposal. Seadrift also could be liable for property damage to third parties caused by contamination from releases. While indemnities may be in place to cover certain releases, there is no assurance that Seadrift would prevail in an action or actions based on such indemnities. The penalties and clean-up costs that Seadrift may have to pay for releases or the amounts that Seadrift may have to pay to third parties for damages to their property, could be significant and the payment of these amounts could have a material adverse effect on Seadrift’s business, financial condition and results of operations.

Seadrift is impacted by the limited availability of low sulfur decant oil and the pricing of needle coke feedstocks.

Seadrift uses low sulfur decant oil in the manufacture of needle coke. Only a limited number of refineries on the Texas Gulf Coast produce decant oil suitable for use by Seadrift. At times when it is operating at increased capacity, Seadrift has purchased decant oil from other regions at a higher cost than if obtained from local refineries. There is no assurance that Seadrift will always be able to obtain an adequate quantity of suitable feedstocks or that capital would be available to install equipment to allow for utilization of higher sulfur decant oil, which is more readily available in the United States.

Seadrift purchases approximately two million barrels of low sulfur decant oil annually. The prices paid by Seadrift for such feedstocks are governed by the market for heavy fuel oils, which prices can fluctuate widely for various reasons including, among other things, worldwide oil shortages and cold winter weather. The substantial majority of Seadrift’s needle coke is used in the manufacture of graphite electrodes, the price of which is subject to rigorous industry competition thus restricting Seadrift’s ability to pass through raw material price increases. Needle coke sales to third parties are made at prices that are generally fixed for an entire contract year, subject to adjustment for material changes in feedstock prices. Seadrift attempts to mitigate the impact of increased decant oil prices by holding in inventory a substantial quantity of feedstocks (up to 60 days).

Seadrift is dependent on its customers, who are in turn dependent on the global steel industry and the transportation, semiconductor, solar, petrochemical, electronics, and other industries which are susceptible to global and regional economic downturns.

Seadrift’s customers sell their products primarily to the EAF steel production industry and other global basic industries, which are experiencing various degrees of contraction, growth and consolidation. Customers in these industries are located in every major geography. As a result, Seadrift’s customers are affected by changes in global and regional economic conditions. This, in turn, affects overall demand and prices for Seadrift’s customers’ products sold to these industries and thus Seadrift’s products also. As a result of changes in economic conditions, demand and pricing for Seadrift’s products sold to suppliers to these industries has fluctuated and in some cases declined significantly.

Seadrift is dependent on supplies of raw materials. Seadrift’s results of operations could deteriorate if that supply is substantially disrupted for an extended period.

Seadrift purchases decant oil and other raw materials from a variety of sources. In many cases, Seadrift purchases them under short term contracts or on the spot market, in each case at fluctuating prices. The availability and price of raw materials may be subject to curtailment or change due to:

• limitations which may be imposed under new legislation or regulation;

• supplier’s allocations to meet demand of other purchasers during periods of shortage;

• interruptions or cessations in production by suppliers, and

• market and other events and conditions.

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Petroleum products, including Seadrift’s raw materials, have been subject to significant price fluctuations.

A substantial increase in raw material prices which cannot be mitigated or passed on to customers or a continued interruption in supply, particularly in the supply of decant oil, would have a material adverse effect on Seadrift.

Seadrift’s results of operations could deteriorate if its manufacturing operations were substantially disrupted for an extended period.

Seadrift’s manufacturing operations are potentially subject to disruption due to extreme weather conditions, floods and similar events, major industrial accidents, adoption of new laws or regulations, changes in interpretations of existing laws or regulations or changes in governmental enforcement policies, civil disruption, riots, terrorist attacks, war, and other events. We cannot assure you that no such events will occur. If such an event occurs, it could have a material adverse effect on Seadrift.

Severe weather could have a material adverse impact on Seadrift’s business.

Seadrift’s business could be materially and adversely affected by severe weather. Repercussions of severe weather conditions may include:

• curtailment of services;

• weather-related damage to facilities and equipment resulting in suspension of operations;

• inability to deliver materials to customers in accordance with contract schedules; and

• loss of productivity or products.

Seadrift’s facilities are located near the Gulf of Mexico, which region has from time to time been adversely affected by floods, hurricanes and tropical storms, resulting in damage to businesses and properties.

Certain of Seadrift’s customers or suppliers may discontinue or reduce their business with Seadrift due to its affiliation with GrafTech.

Some of GrafTech’s competitors or other entities affiliated or associated with its competitors have chosen or may choose to limit or reduce their business with or exposure to GrafTech-related businesses. If Seadrift’s suppliers or customers opted to discontinue or reduce their level of business with Seadrift as a result of such concerns, it could adversely affect the financial condition and results of operations of Seadrift.

Seadrift may face certain litigation and legal proceedings risks that could harm its business.

Seadrift may be subject from time to time to various product liability, occupational, environmental, and other legal claims, demands, lawsuits and other proceedings arising out of or incidental to the conduct of its business. The results of any such proceedings are difficult to predict. Moreover, such proceedings may not specify the relief or amount of damages sought. Therefore, we are unable to estimate the possible range of liability that might be incurred should any proceedings be resolved against Seadrift. Certain of these matters may involve types of claims that, if resolved against Seadrift, could give rise to substantial liability, which could have a material adverse effect on its financial position, liquidity and results of operations.

Terrorist attacks and threats or actual war may negatively impact Seadrift’s business.

Seadrift’s business is affected by global economic conditions and fluctuations in consumer confidence and spending, which can decline as a result of numerous factors outside of its control, such as actual or threatened

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terrorist attacks and acts of war. Terrorist attacks, as well as events occurring in response to or in connection with them, including future terrorist attacks against U.S. targets, rumors or threats of war, actual conflicts involving the United States or its allies, or military or trade disruptions impacting Seadrift’s suppliers or its customers or energy markets in general, may adversely impact Seadrift’s operations. As a result, there could be delays or losses in the delivery of supplies and raw materials to Seadrift, delays in its delivery of products, decreased sales of its products and extension of time for payment of accounts receivable from its customers. Strategic targets such as energy-related assets (which could include refineries such as Seadrift’s) may be at greater risk of future terrorist attacks than other targets in the United States. In addition, significant increases in energy prices could result in government-imposed price controls. Any one, or a combination, of these occurrences could have a material adverse effect on Seadrift’s business, financial condition and results of operations.

There may be volatility in Seadrift’s results of operations between quarters.

Sales of Seadrift’s products fluctuate from quarter to quarter due to such factors as changes in economic conditions, changes in competitive conditions, scheduled plant shutdowns by customers, national vacation practices, changes in customer production schedules in response to seasonal changes in energy costs, weather conditions, strikes and work stoppages at customer plants and changes in customer order patterns including those in response to the announcement of price increases or price adjustments. Seadrift has experienced, and expects to continue to experience, volatility with respect to demand for and prices of its products, both globally and regionally. Seadrift has also experienced volatility with respect to prices of raw materials and energy, and it expects to experience volatility in such prices in the future. Accordingly, results of operations for any quarter are not necessarily indicative of the results of operations for a full year.

Risks Relating to C/G

A prolonged downturn in global economic conditions may materially adversely affect C/G’s business.

C/G’s business and results of operations are affected by international, national and regional economic conditions. Financial markets in the United States, Europe and Asia experienced extreme disruption in the second half of 2008 and much of 2009, including, among other things, extreme volatility in security prices, severely diminished liquidity and credit availability, ratings downgrades of certain investments and declining values of others. The global economy was in a recession. Slowing, or declining, economic growth in the United States and elsewhere caused C/G’s customers to delay or reduce purchases which, in turn, resulted in reductions in sales of its products, longer sales cycles and increased price competition, materially and adversely affecting its financial position and results of operations.

We believe that in the graphite electrode markets in which C/G competes, the capacity utilization rate was over 95% in the first nine months of 2008, but, as a result of the financial crisis and the global economic slowdown, fell dramatically in the fourth quarter of 2008 and we estimate they were less than 50% at the end of the year. We believe capacity utilization rates averaged 50% for the full year 2009. These lower capacity utilization rates adversely affected C/G’s financial position and results of operation in 2009.

Although certain economists are forecasting that the worldwide recession has begun to ease as a result of wide-ranging government stimulus programs and intervention, the consensus of economists is that the pace of recovery will be slow, as high unemployment continues. Thus, while stabilization appears to have begun, the global economy remains fragile and market demand remains far below pre-crisis levels. The expected slow pace of recovery, and the possibility of a return of recessionary conditions, will continue to have an adverse effect upon C/G’s business in 2010.

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C/G is dependent on the global steel industry and other industries which are susceptible to global and regional economic downturns.

C/G sells its products primarily to the EAF steel production industry. As a result, C/G’s customers are affected by changes in global and regional economic conditions. This, in turn, affects overall demand and prices for C/G’s products sold to these industries. As a result of changes in economic conditions, demand and pricing for C/G’s products have fluctuated and in some cases declined significantly.

Demand for C/G’s products may be adversely affected by improvements in its products as well as in the manufacturing operations of customers, which reduce the rate of consumption or use of its products. C/G’s customers, including major steel producers, are experiencing and may continue to experience downturns or financial distress that could adversely impact its ability to collect its accounts receivable or to collect them on a timely basis.

Sales volumes and prices of C/G’s products are impacted by the supply/demand balance as well as overall changes in demand, and growth of and consolidation within, the end markets for C/G’s products. In addition to the factors mentioned above, the supply/demand balance is affected by factors such as business cycles, rationalization, and increases in capacity and productivity initiatives within C/G’s industry and the end markets for its products, some of which factors are affected by decisions by C/G.

The steel industry, in particular, has historically been highly cyclical and is affected significantly by general economic conditions. Significant customers for the steel industry include companies in the automotive, construction, appliance, machinery, equipment and transportation industries, all of which continue to be affected by the general economic downturn and the deterioration in financial markets, including severely restricted liquidity and credit availability.

C/G is subject to risks associated with operations in multiple countries.

A substantial portion of C/G’s net sales are derived from sales outside the U.S. As a result, C/G is subject to risks associated with operating in multiple countries, including:

• currency devaluations and fluctuations in currency exchange rates, including impacts of transactions in various currencies, impact on translation of various currencies into dollars for U.S. reporting and financial covenant compliance purposes;

• imposition of or increase in customs duties and other tariffs;

• imposition of or increase in revenue, income or earnings taxes and withholding and other taxes on remittances and other payments by subsidiaries;

• imposition of or increases in investment or trade restrictions by the U.S. or by non-U.S. governments or trade sanctions adopted by the U.S.;

• inability to definitively determine or satisfy legal requirements and inability to effectively enforce contract or legal rights; and

• other risks which could result from a change in government or government policy or from other political, social or economic instability.

We cannot assure you that such risks will not have a material adverse effect on C/G or that it would be able to mitigate such material adverse effects in the future.

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C/G’s ability to grow and compete effectively depends on protecting its intellectual property. Failure to protect its intellectual property could adversely affect C/G.

We believe that C/G’s intellectual property, consisting primarily of proprietary know-how and information, is important to its growth. Failure to protect its intellectual property may result in the loss of the exclusive right to use its technologies. C/G relies on copyright and trade secret laws and confidentiality and restricted use agreements to protect its intellectual property. In general, its intellectual property is not covered by any patents or patent applications.

We cannot assure you that agreements designed to protect C/G’s proprietary know-how and information will not be breached, that C/G will have adequate remedies for any such breach, or that C/G’s strategic alliance suppliers and customers, consultants, employees or others will not assert rights to intellectual property arising out of C/G’s relationships with them.

Further, we cannot assure you that the use of C/G’s proprietary technology or proprietary know-how or information does not infringe the intellectual property rights of others.

Intellectual property protection does not protect against technological obsolescence due to developments by others or changes in customer needs.

The protection of C/G’s intellectual property rights may be achieved, in part, by prosecuting claims against others whom C/G believes have misappropriated its technology or have infringed upon its intellectual property rights, as well as by defending against misappropriation or infringement claims brought by others against C/G. C/G’s involvement in litigation to protect or defend its rights in these areas could result in a significant expense to C/G, adversely affect the development of sales of the related products, and divert the efforts of C/G’s technical and management personnel, regardless of the outcome of such litigation.

If necessary, C/G may seek licenses to intellectual property of others. However, we can give no assurance that C/G will be able to obtain such licenses or that the terms of any such licenses will be acceptable to it. C/G’s failure to obtain a license from a third party for intellectual property that is necessary for C/G to make or sell any of its products could cause it to incur substantial liabilities and to suspend the manufacture or shipment of products or use of processes requiring the use of such intellectual property.

C/G’s manufacturing operations are subject to increasingly stringent health, safety and environmental requirements.

C/G uses and generates hazardous substances in its manufacturing operations. In addition, the property on which C/G operates is and has been used for industrial purposes. Further, C/G’s manufacturing operations involve risks of personal injury or death. C/G is subject to increasingly stringent environmental, health and safety laws and regulations relating to its property, and its current raw materials, products, and operations. These laws and regulations provide for substantial fines and criminal sanctions for violations. It is also possible that the impact of such regulations on C/G’s suppliers could affect the availability and cost of its raw materials. In addition, C/G may become subject to potential material liabilities for the investigation and cleanup of contaminated properties, for claims alleging personal injury or property damage resulting from exposure to or releases of hazardous substances, or for personal injury as a result of an unsafe workplace. Further, alleged noncompliance with or more aggressive enforcement of, or changes in interpretations of, existing laws and regulations, adoption of more stringent new laws and regulations, discovery of previously unknown contamination or imposition of new or increased requirements could require C/G to incur costs or become subject to new or increased liabilities that could be material.

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C/G may face risks related to greenhouse gas emission limitations and climate change.

There is growing scientific, political and public concern that emissions of greenhouse gases (“GHG”) are altering the global atmosphere in ways that are affecting, and are expected to continue to affect, global climate. Legislators, regulators and others, as well as many companies, are considering ways to reduce GHG emissions. EPA has already issued rules requiring certain facilities to report their GHG emissions and recently finalized a rule that would subject GHG emissions at certain facilities, facilities with greater GHG emissions than C/G, to Clean Air Act Title V and PSD pre-construction permitting requirements. The latter requirements will become effective on a phased-basis, beginning in January and July of 2011.

It is also possible that some form of additional regulation of GHG emissions will be forthcoming in the U.S. and other countries. EPA has already announced that it will continue to consider regulation of sources of GHGs other than those addressed in the above discussed permitting rule. Regulation of GHG emissions could impose costs on C/G, including increased energy, environmental and other costs, necessary to comply with any limitations which may be imposed. To the extent that similar limitations are not imposed globally, such regulation may impact C/G’s ability to compete with companies located in countries which do not impose such limitations. The impact of any future GHG regulatory requirements on C/G’s business will be dependent upon the design of the regulatory schemes that are ultimately adopted and, as a result, C/G is unable to predict their significance to its operations at this point.

EAF steel production is less energy intensive than production of steel in basic oxygen furnaces. As a result, to the extent that limitations are imposed on GHG emissions, this may encourage further growth in EAF steel production which, in turn, could lead to increased demand for C/G’s graphite electrodes. Any resultant increase in sales of electrodes may partially offset the additional costs that compliance with GHG emission regulations may impose on C/G.

It is possible that the physical impacts of climate change could affect C/G’s operations. These may include changes in rainfall patterns, water shortages, changing sea levels, changing storm patterns and changing temperature levels.

C/G may face certain litigation and legal proceedings risks that could harm its business.

C/G may be subject from time to time to various product liability, occupational, environmental, and other legal claims, demands, lawsuits and other proceedings arising out of or incidental to the conduct of its business. The results of any such proceedings are difficult to predict. Moreover, such proceedings may not specify the relief or amount of damages sought. Therefore, we are unable to estimate the possible range of liability that might be incurred should any proceedings be resolved against C/G. Certain of these matters may involve types of claims that, if resolved against C/G, could give rise to substantial liability, which could have a material adverse effect on its financial position, liquidity and results of operations.

C/G is dependent on supplies of raw materials and energy. C/G’s results of operations could deteriorate if that supply is substantially disrupted for an extended period.

C/G purchases raw materials and energy from a variety of sources. In many cases, C/G purchases them under short term contracts or on the spot market, in each case at fluctuating prices. C/G purchases all of its requirements for needle coke, its principal raw material, from two suppliers. The availability and price of raw materials and energy may be subject to curtailment or change due to:

• limitations which may be imposed under new legislation or regulation;

• supplier’s allocations to meet demand of other purchasers during periods of shortage (or, in the case of energy suppliers, extended cold weather);

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• interruptions or cessations in production by suppliers, and

• market and other events and conditions.

Petroleum and coal products, including needle coke and pitch, C/G’s raw materials, and energy, particularly natural gas, have been subject to significant price fluctuations.

A substantial increase in raw material or energy prices which cannot be mitigated or passed on to customers or a continued interruption in supply, particularly in the supply of petroleum coke or energy, would have a material adverse effect on C/G.

C/G’s results of operations could deteriorate if its manufacturing operations were substantially disrupted for an extended period.

C/G’s manufacturing operations are subject to disruption due to extreme weather conditions, floods and similar events, major industrial accidents, adoption of new laws or regulations, changes in interpretations of existing laws or regulations or changes in governmental enforcement policies, civil disruption, riots, terrorist attacks, war, and other events. We cannot assure you that no such events will occur. If such an event occurs, it could have a material adverse effect on C/G.

There may be volatility in C/G’s results of operations between quarters.

Sales of C/G’s products fluctuate from quarter to quarter due to such factors as changes in economic conditions, changes in competitive conditions, scheduled plant shutdowns by customers, national vacation practices, changes in customer production schedules in response to seasonal changes in energy costs, weather conditions, strikes and work stoppages at customer plants and changes in customer order patterns including those in response to the announcement of price increases or price adjustments. C/G has experienced, and expects to continue to experience, volatility with respect to demand for and prices of its products, specifically graphite electrodes, both globally and regionally. C/G has also experienced volatility with respect to prices of raw materials and energy, and it expects to experience volatility in such prices in the future. Accordingly, results of operations for any quarter are not necessarily indicative of the results of operations for a full year.

The graphite and carbon industry is highly competitive. C/G’s market share, net sales or net income could decline due to vigorous price and other competition.

Competition in the graphite and carbon products industry (other than, generally, with respect to new products) is based primarily on price, product differentiation and quality, delivery reliability, and customer service. Electrodes, in particular, are subject to rigorous price competition. In such a competitive market, changes in market conditions, including customer demand and technological development, could adversely affect C/G’s competitiveness, sales and/or profitability.

Competition with respect to new products is, and is expected to be, generally based primarily on product innovation, price, performance and cost effectiveness as well as customer service.

Competition could prevent implementation of price increases, require price reductions or require increased spending on research and development, marketing and sales that could adversely affect C/G.

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FORWARD LOOKING STATEMENTS

This prospectus contains forward looking statements. In addition, we or our respective representatives have made or may make forward looking statements on telephone or conference calls, by webcasts or emails, in person, in presentations or written materials, or otherwise. These include statements about such matters as: expected future or targeted operational and financial performance; growth rates and future production and sales of products that incorporate or that are produced using GrafTech, Seadrift or C/G products; changes in production capacity in GrafTech’s, Seadrift’s or C/G’s operations and GrafTech’s, Seadrift’s or C/G’s competitors’ or customers’ operations and the utilization rates of that capacity; growth rates for, future prices and sales of, and demand for GrafTech’s, Seadrift’s or C/G’s products and GrafTech’s, Seadrift’s or C/G’s customers’ products; costs of materials and production, including anticipated increases or decreases therein, GrafTech’s, Seadrift’s or C/G’s ability to pass on any such increases in GrafTech’s, Seadrift’s or C/G’s product prices or surcharges thereon, or customer or market demand to reduce GrafTech’s, Seadrift’s or C/G’s prices due to such decreases; changes in customer order patterns due to changes in economic conditions; productivity, business process and operational initiatives, and their impact on GrafTech, Seadrift or C/G; GrafTech’s, Seadrift’s or C/G’s position in markets we serve; financing and refinancing activities; investments and acquisitions that we have made or may make in the future and the performance of the businesses underlying such acquisitions and investments; employment and contributions of key personnel; employee relations and collective bargaining agreements covering many of our operations; tax rates; capital expenditures and their impact on GrafTech, Seadrift or C/G; nature and timing of restructuring charges and payments; strategic plans and business projects; regional and global economic and industry market conditions, the timing and magnitude of changes in such conditions and the impact thereof; interest rate management activities; currency rate management activities; deleveraging activities; rationalization, restructuring, realignment, strategic alliance, raw material and supply chain, technology development and collaboration, investment, acquisition, venture, operational, tax, financial and capital projects; legal proceedings, contingencies, and environmental compliance including any regulatory initiatives with respect to greenhouse gas emissions which may be proposed; consulting projects; potential offerings, sales and other actions regarding debt or equity securities of GrafTech, Seadrift or C/G or their subsidiaries; and costs, working capital, revenues, business opportunities, debt levels, cash flows, cost savings and reductions, margins, earnings and growth. The words “will,” “may,” “plan,” “estimate,” “project,” “believe,” “anticipate,” “expect,” “intend,” “should,” “would,” “could,” “target,” “goal,” “continue to,” “positioned to” and similar expressions, or the negatives thereof, identify some of these statements.

The expectations and targets of GrafTech, Seadrift or C/G are not predictors of actual performance and historically actual performance has deviated, often significantly, from expectations and targets. Actual future events and circumstances (including future results and trends) could differ materially, positively or negatively, from those set forth in these statements due to various factors. These factors include:

• the possibility that the challenging global economic conditions which continue to prevail may continue to depress or further depress demand for EAF steel which may, in turn, result in a slower than expected increase, or even a further decrease, in the demand for graphite electrodes;

• the possibility that additions to capacity for producing EAF steel, increases in overall EAF steel production capacity, and increases or other changes in steel production may not occur or may not occur at the rates that GrafTech or C/G anticipate or may not be as geographically disbursed as they anticipate;

• the possibility that increases or decreases in graphite electrode manufacturing capacity (including growth by producers in developing countries), competitive pressures (including changes in and the mix, distribution, and pricing of their products), reduction in specific consumption rates, increases or decreases in customer inventory levels, or other changes in the graphite electrode markets may occur, which may impact demand for, prices or unit and dollar volume sales of graphite electrodes and growth or profitability of GrafTech’s and C/G’s graphite electrodes business;

• the possible failure of changes in EAF steel production or graphite electrode production to result in stable or increased, or offset decreases in, graphite electrode demand, prices, or sales volume;

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• the possibility that, for all of GrafTech’s, Seadrift’s and C/G’s product lines, capital improvement and expansion in their respective customers’ operations and increases in demand for their respective customers’ products may not occur or may not occur at the rates that GrafTech, Seadrift and C/G anticipate or the demand for their respective customers’ products may decline, which may affect their demand for the products GrafTech, Seadrift and C/G sell or supply to them;

• the possibility that continued global consolidation of the world’s largest steel producers could impact GrafTech’s, Seadrift’s and C/G’s business or industry;

• the possibility that a determination by the U.S. government that GrafTech, Seadrift or C/G failed to comply with one or more export controls or trade sanctions to which they are subject with respect to products exported from the U.S. or otherwise subject to U.S. jurisdiction could result in civil or criminal penalties, including imposition of significant fines, denial of export privileges and loss of revenues from certain customers;

• the possibility that average graphite electrode revenue per metric ton in the future may be different than current spot or market prices due to changes in product mix, changes in currency exchange rates, changes in competitive market conditions or other factors;

• the possibility that price increases, adjustments or surcharges may not be realized or that price decreases may occur;

• the possibility that current challenging economic conditions and economic demand reduction may continue to impact GrafTech’s, Seadrift’s and C/G’s revenues and costs;

• the possibility that decreases in prices for energy and raw materials may lead to downward pressure on prices for GrafTech’s, Seadrift’s and C/G’s products and delays in customer orders for their respective products as customers anticipate possible future lower prices;

• the possibility that increases in prices for GrafTech’s, Seadrift’s and C/G’s raw materials and the magnitude of such increases, global events that influence energy pricing and availability, increases in GrafTech’s, Seadrift’s and C/G’s energy needs, or other developments may adversely impact or offset their productivity and cost containment initiatives;

• the possibility that current economic disruptions may result in idling or permanent closing of blast furnace capacity or delay of blast furnace capacity additions or replacements which may affect demand and prices for GrafTech’s refractory products;

• the possibility that reductions in customers’ production, increases in competitors’ capacity, competitive pressures, or other changes in other markets GrafTech, Seadrift and C/G serve may occur, which may impact demand for, prices of or unit and dollar volume sales of GrafTech’s and Seadrift’s other products, or growth or profitability of GrafTech’s and Seadrift’s other product lines, or change our position in such markets;

• the possibility that GrafTech, Seadrift or C/G not be able to hire and retain key personnel or to renew or extend collective bargaining or similar agreements on reasonable terms as they expire or to do so without a work stoppage or strike, including at GrafTech’s Clarksburg, West Virginia facility, where its primary collective bargaining agreement with the United Steel Workers expired by its terms in June 2010, although the bargaining unit members have thus far continued to work without a contract while negotiations continue;

• the possibility of delays in or failure to achieve successful development and commercialization of new or improved engineered solutions or that such solutions could be subsequently displaced by other products or technologies;

• the possibility that GrafTech or C/G will fail to develop new customers or applications for GrafTech’s or C/G’s engineered solutions products;

• the possibility that GrafTech’s, Seadrift’s or C/G’s manufacturing capabilities may not be sufficient or that they may experience delays in expanding or fail to expand their manufacturing capacity to meet demand for existing, new or improved products;

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• the possibility that the investments and acquisitions that they make or may make in the future may not be successfully integrated into their respective businesses or provide the performance or returns expected;

• the possibility that challenging conditions or changes in the capital markets will limit GrafTech’s, Seadrift’s or C/G’s ability to obtain financing for growth and other initiatives, on acceptable terms or at all;

• the possibility that conditions or changes in the global equity markets may have a material impact on GrafTech’s future pension funding obligations and liabilities on its balance sheets;

• the possibility that the amount or timing of GrafTech’s, Seadrift’s or C/G’s anticipated capital expenditures may be limited by their financial resources or financing arrangements or that their ability to complete capital projects may not occur timely enough to adapt to changes in market conditions or changes in regulatory requirements;

• the possibility that the actual outcome of uncertainties associated with assumptions and estimates using judgment when applying critical accounting policies and preparing financial statements may have a material impact on GrafTech’s, Seadrift’s or C/G’s results of operations or financial position;

• the possibility that GrafTech, Seadrift and C/G may be unable to protect their intellectual property or may infringe the intellectual property rights of others, resulting in damages, limitations on their ability to produce or sell products or limitations on their ability to prevent others from using that intellectual property to produce or sell products;

• the occurrence of unanticipated events or circumstances or changing interpretations and enforcement agendas relating to legal proceedings or compliance programs;

• the occurrence of unanticipated events or circumstances or changing interpretations and enforcement agendas relating to health, safety or environmental compliance or remediation obligations or liabilities to third parties or relating to labor relations;

• the possibility that new or expanded regulatory initiatives with respect to greenhouse gas emissions, if implemented, could have an impact on GrafTech’s, Seadrift’s or C/G’s facilities, increase the capital intensive nature of their businesses, and add to their costs of production of their products;

• the possibility that GrafTech’s provision for income taxes and effective income tax rate or cash tax rate may fluctuate significantly due to changes in applicable tax rates or laws, changes in the sources of its income, changes in tax planning, new or changing interpretations of applicable regulations, or changes in profitability, estimates of future ability to use foreign tax credits, and other factors;

• the possibility of changes in interest or currency exchange rates, in competitive conditions, or in inflation or deflation;

• the possibility that GrafTech’s, Seadrift’s or C/G’s outlook could be significantly impacted by, among other things, changes in United States or other monetary or fiscal policies or regulations in response to the capital markets crisis and its impact on global economic conditions, developments in the Middle East, North Korea, and other areas of concern, the occurrence of further terrorist acts and developments (including increases in security, insurance, data back-up, energy and transportation and other costs, transportation delays and continuing or increased economic uncertainty and weakness) resulting from terrorist acts and the war on terrorism;

• the possibility that GrafTech’s, Seadrift’s or C/G’s outlook could be significantly impacted by changes in demand as a result of the effect on customers of the volatility in global credit and equity markets;

• the possibility that interruption in GrafTech’s, Seadrift’s or C/G’s major raw materials, energy or utility supplies due to, among other things, natural disasters, process interruptions, actions by producers and capacity limitations, may adversely affect their ability to manufacture and supply their products or result in higher costs;

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• the possibility of interruptions in production at GrafTech’s, Seadrift’s or C/G’s facilities due to, among other things, critical equipment failure, which may adversely affect their ability to manufacture and supply their products or result in higher costs;

• the possibility that GrafTech may not achieve the earnings or other financial or operational metrics that it provides as guidance from time to time;

• the possibility that the anticipated benefits from organizational and work process redesign, changes in GrafTech’s, Seadrift’s and C/G’s information systems, or other system changes, including operating efficiencies, production cost savings and improved operational performance, including leveraging infrastructure for greater productivity and contributions to their continued growth, may be delayed or may not occur or may result in unanticipated disruption;

• the possibility that disclosure or internal controls may become inadequate because of changes in conditions or personnel, that the degree of compliance with policies and procedures related to those controls may deteriorate or that those controls may not operate effectively and may not prevent or detect misstatements or errors;

• the possibility that delays may occur in the financial statement closing process due to a change in internal control environment or personnel;

• the possibility of changes in performance that may affect financial covenant compliance or funds available for borrowing;

• the possibility that GrafTech will not be able to complete either or both of the Mergers in view of the various closing conditions described in this prospectus, including those conditions related to antitrust regulations;

• the possibility that GrafTech, Seadrift or C/G will not be able to achieve business plans and cost efficiencies and grow existing sales and volume profitably due to the high levels of competitive activity in the businesses on which the combined companies have chosen to focus;

• the possibility that GrafTech, Seadrift or C/G will not be able to better maintain and manage key customer and partner relationships and the benefits such customers and partners will enjoy as a result of the Mergers; and

• other risks and uncertainties, including those described elsewhere in GrafTech’s SEC filings, as well as future decisions by us.

Occurrence of any of the events or circumstances described above could also have a material adverse effect on GrafTech’s, Seadrift’s or C/G’s business, financial condition, results of operations, cash flows or the market price of GrafTech Common Stock or New GrafTech’s Common Stock.

No assurance can be given that any future transaction about which forward looking statements may be made will be completed or as to the timing or terms of any such transaction.

All subsequent written and oral forward looking statements by or attributable to GrafTech, Seadrift or C/G or persons acting on their behalf are expressly qualified in their entirety by these factors. Except as otherwise required to be disclosed in periodic reports required to be filed by public companies with the SEC pursuant to the SEC’s rules, we have no duty to update these statements.

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TERMS OF THE TRANSACTIONS

General

The following summary describes the material provisions of the Seadrift Merger Agreement and the C/G Merger Agreement and is qualified in its entirety by reference to the complete texts of the Merger Agreements, copies of which are attached as Appendices A and B, respectively, to this prospectus and which are incorporated herein by reference. The provisions of the Merger Agreements are extensive and not easily summarized. Accordingly, this summary may not contain all of the information about the Merger Agreements that is important to you. We encourage you to read each of the Merger Agreements carefully in its entirety for a more complete understanding of the Merger Agreements.

The Merger Agreements and this summary of their terms have been included with this prospectus to provide you with information regarding the terms of the Merger Agreements and are not intended to modify or supplement any factual disclosures about GrafTech or New GrafTech in our public reports filed with the SEC. In particular, the Merger Agreements and related summary are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to GrafTech, New GrafTech, Seadrift or C/G. The representations and warranties contained in the Merger Agreements have been negotiated with the principal purpose of establishing the circumstances in which a party may have the right not to close the Mergers if the representations and warranties of the other party prove to be untrue due to a change of circumstances or otherwise, and allocate risk between the parties, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to public disclosures.

Structure of the Transaction

In connection with a reorganization of its holding company structure, and to complete the acquisitions of Seadrift and C/G, pursuant to the Seadrift Merger Agreement and C/G Merger Agreement and Section 251(g) of the General Corporation Law of the State of Delaware, GrafTech has formed New GrafTech, and New GrafTech has formed GrafTech Merger Sub, which will merge with and into GrafTech, and two other subsidiaries, SD Merger Sub and C/G Merger Sub, which will merge with and into Seadrift and C/G, respectively.

Upon satisfaction or waiver of the conditions to the transactions specified in the Seadrift Merger Agreement, GrafTech Merger Sub will merge with and into GrafTech with GrafTech as the surviving entity. As a result of the GTI Merger, GrafTech will, by operation of law, become a wholly owned subsidiary of New GrafTech. Upon consummation of the GTI Merger, New GrafTech will be renamed “GrafTech International Ltd.” The officers and directors of New GrafTech immediately after consummation of the GTI Merger will be the same as the officers and directors of GrafTech immediately prior to consummation of the GTI Merger. In addition, upon consummation of the GTI Merger, the certificate of incorporation (except for certain technical matters) and by-laws of New GrafTech will be the same as the certificate of incorporation and by-laws of GrafTech immediately prior to consummation of the GTI Merger. Each share of GrafTech Common Stock outstanding immediately prior to consummation of the GTI Merger will be converted into one share of New GrafTech Common Stock. New GrafTech Common Stock will be listed on the NYSE and will trade under GrafTech’s current ticker symbol “GTI.” Holders of GrafTech Common Stock immediately prior to consummation of the GTI Merger will not be required to exchange their certificates representing shares of GrafTech Common Stock for certificates representing shares of New GrafTech Common Stock. The certificates representing your shares of GrafTech Common Stock will continue to represent an equal number of shares of New GrafTech Common Stock.

Upon satisfaction or waiver of the conditions to the transactions specified in the Seadrift Merger Agreement, Seadrift Merger Sub will merge with and into Seadrift with Seadrift as the surviving entity. As a result of the Seadrift Merger, Seadrift will become a wholly owned subsidiary of New GrafTech.

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Upon satisfaction or waiver of the conditions to the transactions specified in the C/G Merger Agreement, C/G Merger Sub will merge with and into C/G with C/G as the surviving entity. As a result of the C/G Merger, C/G will become a wholly owned subsidiary of New GrafTech.

The C/G Merger is conditioned upon the consummation of the Seadrift Merger, but the Seadrift Merger is not conditioned upon the consummation of the C/G Merger.

On June 7, 2010, the Antitrust Division of the DOJ issued requests for additional information and documents relevant to each of the Seadrift Merger and the C/G Merger, respectively. These requests extend the waiting period during which the Mergers may not be consummated for 30 days from the date of receipt by the DOJ of the additional materials requested, unless that period is extended voluntarily by the parties or terminated sooner by the DOJ.

GrafTech Stock Options, Restricted Stock and Other Equity Benefits or Compensation

Upon consummation of the GTI Merger, each stock option under any compensation or benefit agreement, plan or arrangement of GrafTech then outstanding, whether or not then vested or exercisable, shall cease to represent a right to acquire shares of GrafTech Common Stock and shall be converted automatically into a right to acquire the same number of shares of New GrafTech Common Stock, on substantially the same terms and conditions as were applicable under such GrafTech stock option. Upon consummation of the GTI Merger, each share of GrafTech restricted stock, each restricted stock unit of GrafTech and each other form of equity benefit or compensation then outstanding issuable thereafter under any compensation or benefit agreement, plan or arrangement of GrafTech shall cease to represent or relate to a share of GrafTech Common Stock and shall be converted automatically to represent or relate to a share of New GrafTech Common Stock, on substantially the same terms and conditions as were applicable to such GrafTech restricted stock, restricted stock unit or other form of equity benefit or compensation. To accomplish the foregoing, effective as of the initial effective time of the GTI Merger, the parties intend that GrafTech shall assign, and New GrafTech shall assume, all of its rights and obligations under each such agreement, plan and arrangement pursuant to which any such stock, unit or equity benefit or compensation is granted, including the GrafTech International Ltd. 2005 Equity Incentive Plan and all agreements thereunder.

Merger Consideration

Seadrift

The consideration to be paid by New GrafTech in connection with the Seadrift Merger for the equity of Seadrift not already owned by GrafTech will consist of $78.5 million in cash less debt of Seadrift (subject to working capital adjustments as provided in the Seadrift Merger Agreement), twelve million shares of New GrafTech Common Stock (subject to adjustments for stock splits, reverse stock splits or similar transactions) and non-interest bearing, senior subordinated promissory notes of New GrafTech in an aggregate face amount of $100 million.

C/G

The consideration to be paid by New GrafTech for C/G in connection with the C/G Merger will consist of $152.5 million in cash less debt of C/G (subject to working capital adjustments as provided in the C/G Merger Agreement), twelve million shares of New GrafTech Common Stock (subject to adjustments for stock splits, reverse stock splits or similar transactions) and non-interest bearing, senior subordinated promissory notes of New GrafTech in an aggregate face amount of $100 million.

Senior Subordinated Promissory Notes

The senior subordinated promissory notes will mature on the fifth anniversary of their issuance and will be subordinated on a senior subordinated basis to certain of our and certain of our subsidiaries’ indebtedness for borrowed money, including the indebtedness under our Revolving Facility. Certain of our U.S. subsidiaries will

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guarantee the senior subordinated promissory notes on a senior subordinated basis. If and to the extent that we secure any indebtedness for borrowed money at a time when our pro forma leverage ratio exceeds 4:00 to 1:00, we will grant the holders of the senior subordinated promissory notes a security interest on a pari passu basis with such new debt. The $200 million in senior subordinated promissory notes expected to be issued by New GrafTech in connection with the Mergers will represent new long-term indebtedness. For a detailed description of the Senior Subordinated Promissory Notes, see “Terms of the Transactions—Description of the Senior Subordinated Promissory Notes.”

Sources of Cash Consideration

Approximately $185 million of the cash portion of the Merger Consideration will be funded through borrowings under our Revolving Facility. The balance of the cash portion will be paid from cash on hand.

Exchange of Seadrift and C/G Equity

As provided for in each of the Seadrift Merger Agreement and the C/G Merger Agreement, New GrafTech will appoint an agent (the “Paying Agent”) for each Merger for the purpose of:

• determining in accordance with the Seadrift Merger Agreement or C/G Merger Agreement, as applicable, the Merger Consideration to be received by each holder of equity in Seadrift and C/G, respectively; and

• exchanging the applicable Merger Consideration for certificates representing equity in Seadrift (the “Seadrift Certificates”) and equity in C/G (the “C/G Certificates”) or for uncertificated equity in Seadrift (the “Seadrift Uncertificated Units”) and uncertificated equity in C/G (the “C/G Uncertificated Units”), as the case may be.

Promptly after the closing dates of the Seadrift Merger and the C/G Merger, respectively, the Paying Agent will send to each record holder of Seadrift equity or C/G equity, as applicable, entitled to receive Merger Consideration, a letter of transmittal and instructions for exchanging equity in Seadrift or C/G, as applicable, for the applicable Merger Consideration.

No Fractional Shares

New GrafTech will not issue fractional shares of New GrafTech Common Stock in connection with either the Seadrift Merger or C/G Merger. Instead, all fractional shares of New GrafTech Common Stock that a former owner of Seadrift or C/G would otherwise be entitled to receive as a result of the Seadrift Merger or the C/G Merger, respectively, will be aggregated, with any fraction remaining after such aggregation being exchanged for a cash amount, without interest, equal to the fractional share remaining multiplied by the closing price of GrafTech Common Stock or New GrafTech Common Stock, as applicable, on the trading day immediately preceding the closing of the applicable Merger.

Stockholder Approval Not Required

The transactions do not require the approval of GrafTech’s stockholders.

Appraisal Rights

Under applicable Delaware law, none of the stockholders of GrafTech or the equity holders of Seadrift or C/G will have appraisal rights in connection with the Mergers.

Ownership of New GrafTech after the Mergers

Twelve million shares of New GrafTech Common Stock are issuable to the owners of each of Seadrift and C/G, respectively (or 24,000,000 shares in the aggregate), upon consummation of the Seadrift Merger and the

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C/G Merger. Based upon the 120,530,695 shares of GrafTech Common Stock outstanding on June 30, 2010, a total of 132,530,695 shares of New GrafTech Common Stock would be outstanding after the Seadrift Merger and 144,530,695 shares of New GrafTech Common Stock would be outstanding after the C/G Merger. Based on such shares outstanding on June 30, 2010, the Seadrift equity holders would hold a total of approximately 9.1% of the outstanding shares of New GrafTech Common Stock immediately after the closing of the Seadrift Merger, if only the Seadrift Merger is consummated, and the Seadrift equity holders and the C/G equity holders would hold, in the aggregate, approximately 16.6% of the outstanding shares of New GrafTech Common Stock immediately after the closing of both the Seadrift Merger and the C/G Merger.

Terms of the Merger Agreements

General

The Seadrift Merger Agreement and the C/G Merger Agreement are substantially identical. Accordingly, the following description of the terms of the Merger Agreements covers both Merger Agreements. Where there are material differences between the Merger Agreements, those differences are described below.

For purposes of the following description, Seadrift and C/G are called, respectively, the “Acquired Company” and the Key Partners of Seadrift and the Key Members of C/G are called, respectively, the “Key Owners”.

Representations and Warranties

Each Merger Agreement contains representations and warranties made by GrafTech, the Acquired Company and certain Key Owners of the Acquired Company that are customary for transactions of this type. In the case of Seadrift, the Key Owners are NMSD LLC and Seadrift Coke LLC, which are entities controlled by Nathan Milikowsky and Daniel Milikowsky. In the case of C/G, the Key Owners are NMCG Holdings, LLC, the Rebecca and Nathan Milikowsky Foundation and the Daniel and Sharon Milikowsky Foundation. Certain of these representations and warranties are qualified by “materiality” or “Material Adverse Effect.” For purposes of each Merger Agreement, “Material Adverse Effect” means with respect to any person, a material adverse effect on the financial condition, business or results of operations of such person and its subsidiaries, taken as a whole, provided, that in determining whether or not a Material Adverse Effect has occurred no adverse effects resulting from certain matters including any of the following will be taken into account:

• the outbreak or escalation of hostilities, acts of terrorism, military action or any escalation or worsening thereof;

• any changes in the condition of the industry in which the Acquired Company operates (including without limitation any change or proposed change in law generally affecting such industry);

• any change in general economic conditions, including the capital markets in the United States or elsewhere;

• any changes in generally accepted accounting principles;

• any changes in applicable law;

• the taking of any action contemplated by such Merger Agreement or the agreements contemplated thereby or otherwise consented to by the relevant person;

• any adverse effect (including any loss of employees, any cancellation of or delay in customer orders, any litigation or any disruption in supplier, distributor, partner or similar relationships) resulting from or arising out of the execution, delivery, announcement or performance of the obligations under such Merger Agreement or the announcement, pendency or anticipated consummation of the Merger contemplated by such Merger Agreement; and

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• the failure to meet internal or third party projections or forecasts or any revenue or earnings projections for any period.

Except for those representations and warranties made by the Key Owners in the Merger Agreements, which survive indefinitely, the representations and warranties made in the Merger Agreements do not survive the effective time of the applicable Merger thereunder. The following is a brief summary of certain of the principal representations and warranties made by the respective Key Owners in each of the Merger Agreements;

• representations regarding (a) the Acquired Company’s authority to execute and deliver such Merger Agreement and the other agreements contemplated thereby and to consummate the transactions contemplated thereby, (b) the due execution by the Acquired Company of such Merger Agreement and the other agreements contemplated thereby and (c) the enforceability of such Merger Agreement and the other agreements contemplated thereby against the Acquired Company;

• the execution and delivery by the Acquired Company of such Merger Agreement and the other agreements contemplated thereby would not contravene, conflict with or result in any violation or breach of any provision of its governing documents or the law under which it has been formed;

• (a) the Acquired Company disclosed in the schedules to such Merger Agreement the holders of all of the issued and outstanding equity of the Acquired Company and (b) except as otherwise disclosed, there are no agreements or commitments of any character obligating the Acquired Company to issue or sell any equity or outstanding contractual obligations of the Acquired Company to repurchase, redeem or otherwise acquire any equity or make any investment in any other person;

• the Acquired Company and its subsidiaries have good and marketable title to all tangible properties and assets which are, individually or in the aggregate, material to the business and the Acquired Company;

• no holder of any equity of the Acquired Company had or will have any dissenters’ or similar rights in connection with the applicable Merger;

• except for Barclays Capital, no other intermediary has been retained by or is authorized to act on behalf of the Acquired Company or its equity holders who might be entitled to any fee or commission in connection with the transactions contemplated by such Merger Agreement;

• such Key Owner (a) holds of record and owns beneficially and holds good and marketable title to, and rightful possession of, free and clear of any liens, the equity in the Acquired Company disclosed in schedules to such Merger Agreement, (b) is not a party to any contract or commitment that could require such Key Owner to sell, transfer, or otherwise dispose of any of such equity and (c) is not a party to any agreement or understanding with respect to the voting of any of such equity;

• (a) such Key Owner’s authority to execute and deliver such Merger Agreement and the other agreements contemplated thereby and to consummate the transactions contemplated thereby, (b) the due execution by such Key Owner of such Merger Agreement and the other agreements contemplated thereby and (c) the enforceability of such Merger Agreement and the other agreements contemplated thereby against such Key Owner;

• the execution and delivery by such Key Owner of such Merger Agreement and other agreements contemplated thereby (a) would not contravene, conflict with or result in any violation or breach of any provision of its constituent documents or any applicable law and (b) would not require any consent of any governmental authority;

• neither such Key Owner nor any of its affiliates has retained any intermediary in connection with the transactions contemplated in such Merger Agreement that would give rise to any claim against the Acquired Company, GrafTech or their respective affiliates for any compensation;

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• except for rights specifically provided for in such Merger Agreement and the other agreements contemplated thereby, such Key Owner has no claim, rights or causes of action against the Acquired Company;

• such Key Owner has not, and to its actual knowledge, no other Key Owner, affiliate, equity holder, director, officer, agent or employee of the Acquired Company or any of its subsidiaries at the direction of or on behalf of the Acquired Company or any of its subsidiaries has directly or indirectly (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity or for the business of the Acquired Company or any of its subsidiaries, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977 or (iii) otherwise participated in any activity that such Key Owner had actual knowledge with no requirement of due inquiry of being an illegal activity at such time, in each case, that has had or would reasonably be expected to have a material adverse effect on the Acquired Company;

• except as otherwise disclosed in schedules to such Merger Agreement, none of the Key Owners, Nathan Milikowsky or Daniel Milikowsky, or any of their affiliates or related parties, beneficially own any GrafTech Stock; and

• such Key Owner has not, and to the actual knowledge of such Key Owner, no other Key Owner, affiliate, equity holder, director, officer, agent or employee of the Acquired Company or any of its subsidiaries at the direction of or on behalf of the Acquired Company or any of its subsidiaries has, directly or indirectly, engaged in any conduct that such Key Owner actually knew at such time to be fraudulent conduct or willful misconduct in connection with the operation of the business of Seadrift or in connection with the transactions contemplated in such Merger Agreement or the other agreements contemplated by such Merger Agreement.

Except for the representations and warranties described in the first six bullets above, such representations and warranties are made severally by each Key Owner.

Conduct of the Business of the Acquired Company Prior to Closing

The Acquired Company has agreed to conduct its business, and to cause each of its subsidiaries to conduct its business, in the ordinary course consistent with past practices, to use reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relationships with its customers, suppliers, distributors and others having business dealings with it, and to not engage in specified material transactions. In general, the Acquired Company must conduct its business in all material respects to keep substantially intact the business, properties and assets of the Acquired Company and its subsidiaries. Subject to certain limited exceptions described in the applicable Merger Agreement, the Acquired Company has agreed that it will not, without the consent of GrafTech, during the period prior to the effective time of the Merger thereunder:

• authorize amendments to its organizational documents;

• declare, set aside or pay any dividends on, or make any other distributions in respect of any of its equity interests or enter into any agreement with respect to the voting of its equity interests or any equity interests of its subsidiaries;

• split, combine or reclassify any of its equity interests;

• issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, any of its equity interests;

• purchase, redeem or otherwise acquire or issue or sell any of its equity interests or any other securities thereof or any rights, options, warrants or calls to acquire or sell any such shares or other securities;

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• acquire an interest in any corporation or business organization or any assets that are material, individually or in the aggregate, to the Acquired Company;

• grant any increases in compensation to any executive officer, director or employee;

• grant any increase in severance or termination pay to any executive officer, director or employee;

• enter into any employment, consulting, indemnification, severance or termination agreement with any executive officer, director or employee;

• establish, adopt, enter into or amend in any material respect any collective bargaining agreement or benefit plan;

• take any action to accelerate any rights or benefits, or make any material determinations under any collective bargaining agreement or benefit plan;

• make any material tax election or any change in accounting methods;

• enter into, modify or amend in a material respect any lease of material property or enter into any sublease or assignment thereof;

• incur, assume or guarantee any debt or obligation of another person or enter into any agreement to maintain any financial statement condition of another person;

• make any loans, advances or capital contributions to, or investments in, any other person;

• enter into, modify, amend or terminate any contract or waive, release or assign any rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned with any affiliate or related or interested party, would, or could reasonably be expected to, impair the ability of the Acquired Company to perform its obligations under such Merger Agreement or agreements related thereto in any material respect, prevent or materially delay the consummation of the Merger or Mergers, as the case may be, contemplated by such Merger Agreement, take any action intended to or that would reasonably be expected to, individually or in the aggregate, impede, interfere with, prevent or materially delay the consummation of such Merger or Mergers or other transactions contemplated by such Merger Agreement or agreements relating thereto or exceed a value of $250,000;

• pay, discharge or satisfy any material debt, claims, liabilities or obligations, cancel any material indebtedness or waive any claims or rights of substantial value or waive the benefits of, or agree to modify in any manner, any exclusivity, standstill or similar agreement benefiting the Acquired Company or any of its subsidiaries;

• allow any permit issued to the Acquired Company to lapse or terminate;

• make any material change in the practices, operations and policies of the Acquired Company with respect to the method for manufacturing, marketing and selling products or services, the standard terms and conditions of the sale of products or services, including standard prices and standard terms regarding returns and discounts other than in the ordinary course of business, the maintenance of inventory levels, the conduct of accounts receivable collection and accounts payable payment activities (or similar cash management or working capital activities and practices) or the method and level of sourcing products;

• adopt a plan or agreement of complete or partial liquidation, dissolution or reorganization;

• institute, settle or agree to settle any material proceedings pending or threatened;

• agree to any exclusivity, confidentiality, standstill or non-competition provision or covenant binding the Acquired Company or any of its subsidiaries;

• grant or permit or allow a lien, other than permitted liens (as defined in such Merger Agreement), on any of its assets other than in connection with any renewals, amendments or restatements of its existing indebtedness;

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• make (or fail to make) capital expenditures;

• incur any additional indebtedness; or

• authorize any of, or commit or agree to take any of, the foregoing actions.

Exclusivity and No Solicitation

In each Merger Agreement, the applicable Acquired Company and its respective Key Owners have agreed that they will not, and will not authorize or permit any of their respective affiliates, including any subsidiaries, or any of its or their respective officers, representatives or agents, to, directly or indirectly:

• solicit, initiate, consider, facilitate or encourage the submission of a proposal to acquire the Acquired Company, or any of its equity or any material portion of its assets, by a third party;

• engage or participate in discussions or negotiations with, furnish material non-public information relating to the Acquired Company to, or provide access to the material business records of the Acquired Company to, any third party that has submitted, or is seeking to submit, such a proposal; or

• enter into a contract with any third party that has submitted, or is seeking to submit, such a proposal.

A proposal includes any request, solicitation or proposal to abandon, terminate or fail to consummate any of the transactions contemplated by such Merger Agreement. Upon executing such Merger Agreement, the Acquired Company agreed to immediately cease and cause to be terminated, and cause its affiliates and all of its and their officers to immediately cease and cause to be terminated, all then-existing discussions or negotiations with any persons conducted theretofore with respect to, or that could lead to, such a proposal.

Conduct of the Business of GrafTech Prior to Closing

In each Merger Agreement, GrafTech has agreed to conduct its business in the ordinary course consistent with past practices, to use reasonable efforts to preserve intact its current business organization, keep available the services of its current officers and employees and maintain its relationships with its customers, suppliers, distributors and others having business dealings with them, and to not engage in specified material transactions. In general, GrafTech must conduct its business in all material respects to keep substantially intact the business, properties and assets of GrafTech. Subject to certain limited exceptions described in the respective Merger Agreement, GrafTech agreed that it would not, without the consent of the Acquired Company, during the period prior to the effective time of the Merger thereunder:

• authorize any amendments to its organizational documents that would be reasonably expected to prevent or delay or impede the consummation of such Merger;

• declare, set aside or pay any dividends on, or make any other distributions in respect of its equity interests (other than dividends paid by a direct or indirect wholly owned subsidiary of GrafTech to its parent); split, combine or reclassify any of its equity interests; issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, any of its equity interests or purchase, redeem or otherwise acquire any of its equity interests or any other securities thereof or any rights, options, warrants or calls to acquire any such shares or other securities, unless appropriate corresponding adjustments are made to the Merger Consideration to the reasonable satisfaction of the Acquired Company;

• issue, deliver, sell, grant, pledge or otherwise encumber or subject to any lien any shares of its capital stock, any other GrafTech voting securities or any securities convertible into GrafTech capital stock, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units thereon, including pursuant to contracts as in effect on the date thereof (other than (i) the issuance of shares of GrafTech Common Stock upon the exercise of GrafTech options in accordance with their

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terms on the date of such Merger Agreement, (ii) grants or deferrals under any plans, arrangements or contracts existing on the date of such Merger Agreement between GrafTech or any of its subsidiaries and any director or employee of GrafTech or any of its subsidiaries (to the extent complete and accurate copies thereof had been theretofore delivered to the Acquired Company) and (iii) issuances and sales of equity securities which would not require stockholder approval under NYSE rules);

• acquire or agree to acquire, by merging or consolidating with, or by purchasing a substantial equity interest in or portion of the assets of, or by any other manner, (i) any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (ii) any assets that are material, individually or in the aggregate, to GrafTech or its subsidiaries, as applicable, except purchases of inventory or capital expenditures in each case in the ordinary course of business consistent with past practice, other than acquisitions that would not constitute acquisition of a “significant subsidiary” within the meaning of Regulation S-X of the SEC;

• sell, lease, license, mortgage, sell and leaseback or otherwise encumber or subject to any lien or otherwise dispose of any properties or other assets or any interests therein, except for sales of inventory and used equipment in the ordinary course of business consistent with past practice, or enter into, modify or amend in a material respect any lease of material property, other than in the ordinary course of business consistent with past practice and those that are not material to GrafTech and its subsidiaries taken as a whole;

• enter into, modify, amend or terminate any contract or waive, release or assign any rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would be reasonably likely to (i) impair the ability of GrafTech to perform its obligations under such Merger Agreement or the other agreements related thereto in any material respect, (ii) prevent or materially delay the consummation of such Merger, or (iii) take any other action intended to or that would reasonably be expected to, individually or in the aggregate, impede, interfere with, prevent, or materially delay the consummation of such Merger or the other transactions contemplated by such Merger Agreement or the other agreements related thereto; and

• authorize any of, or commit or agree to take any of, the foregoing actions.

Notwithstanding anything above to the contrary, nothing in either Merger Agreement prevents GrafTech or any of its subsidiaries from taking any of the following actions:

• undertaking purchases of its equity interests under any previously publicly announced stock repurchase program;

• reinstating GrafTech’s stockholder rights plan or adopting an equivalent new plan;

• granting any lien, or taking any other action, as may be required under our Revolving Facility;

• undertaking any action previously authorized under any of GrafTech’s employee benefit plans;

• undertaking any action previously authorized under any equity incentive plan, including any 401(k) matching or similar benefit plan;

• reorganizing or recapitalizing any subsidiary as deemed necessary or appropriate by GrafTech;

• performance of any obligation under any contract to which GrafTech or any of its subsidiaries is a party;

• canceling or retiring any treasury shares held by GrafTech or transferring any or all of such treasury shares to New GrafTech; or

• undertaking any acquisition or divestiture not involving individually or in the aggregate in excess of $200 million.

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Reasonable Best Efforts to Close

Except for approvals or requirements under applicable antitrust laws, each of the parties to each of the respective Merger Agreements agreed to use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws to consummate the Merger thereunder and the other transactions contemplated thereby and other agreements related thereto as promptly as practicable after the date of such Merger Agreement, including using reasonable best efforts to:

• cause the conditions precedent to such Merger to be satisfied;

• obtain all necessary waivers, consents, approvals, permits, orders or authorizations from governmental authorities and the making of all necessary registrations, declarations and filings and take all steps as may be necessary to avoid, or have terminated if begun, any proceedings by any governmental authority;

• obtain all necessary waivers, consents, approvals, permits, orders or authorizations from third parties;

• defend any investigations or proceedings; and

• execute and deliver additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, such Merger Agreement and the other agreements related thereto.

Notwithstanding the foregoing, subject to the requirements of applicable antitrust laws, GrafTech and the Acquired Company agreed in each Merger Agreement to cooperate and to use their reasonable best efforts to obtain, as promptly as practicable following the date of such Merger Agreement, any regulatory approvals required for the closing of such Merger under applicable antitrust laws and to respond to any government requests for information thereunder, to contest and resist in good faith any action thereunder, and use reasonable best efforts to have lifted or overturned, any governmental order that restricts, prevents, or prohibits the consummation of the transactions contemplated by such Merger Agreement. Each of GrafTech and the Acquired Company agreed in each Merger Agreement to use its reasonable best efforts to make any filings required under the HSR Act within ten business days from the date of such Merger Agreement and all other notifications, filings, or registrations required under applicable antitrust and competition laws as soon as reasonably practicable from the date thereof.

Notwithstanding the foregoing, the parties agreed in each Merger Agreement that, in the event any such litigation, negotiation or other action is not reasonably capable of being resolved by December 31, 2010, in the case of Seadrift, and April 30, 2011, in the case of C/G, respectively, GrafTech will propose, negotiate, offer to commit and effect (and if such offer is accepted, commit to and effect), by consent decree, hold separate order or otherwise, the sale, divestiture or disposition of such assets or businesses of GrafTech, the Acquired Company or their respective subsidiaries or otherwise offer to take or offer to commit to take any action which it is capable of taking and if the offer is accepted, take or commit to take such action that limits its freedom of action with respect to, or its ability to retain, any of the businesses, services or assets of GrafTech, the Acquired Company or their respective subsidiaries, in order to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order, or other order in any suit or proceeding, which would have the effect of preventing or delaying the effective time of such Merger beyond December 31, 2010, in the case of Seadrift, and April 30, 2011, in the case of C/G, respectively, other than such actions that could reasonably be expected to have a Material Adverse Effect on GrafTech.

Each of GrafTech and the Acquired Company agreed in each Merger Agreement to use its reasonable best efforts to “substantially comply” as promptly as practicable with any request for additional information or documentary material issued by a governmental authority under 15 U.S.C. Sec. 18(e) and in conjunction with the transactions contemplated by such Merger Agreement.

Each of GrafTech and the Acquired Company agreed in each Merger Agreement to cooperate regarding, and keep the other reasonably apprised of the status of, matters relating to the completion of the transactions

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contemplated by such Merger Agreement and work cooperatively in connection (i) with obtaining all required approvals or consents of any governmental authority and (ii) all other communications with any governmental authority with respect to such Merger.

Voting in Favor of the Mergers

Each respective Key Owner agreed in the respective Merger Agreement that, until either the effective time of the Merger or termination of such Merger Agreement, such Key Owner would cause its equity in the Acquired Company to vote in favor of, or consent to, such Merger and other actions contemplated by such Merger Agreement.

Director and Officer Indemnification Post-Closing

GrafTech agreed in each Merger Agreement that following consummation of the Merger thereunder it would cause the Acquired Company thereunder to continue to honor existing indemnification obligations to, and existing indemnification agreements with, persons who were officers or directors of such Acquired Company or its general partner prior to consummation of such Merger for their actions related to the business of such Acquired Company. In addition, subject to certain limitations and conditions, GrafTech agreed that it would cause such Acquired Company to maintain in effect for the benefit of such persons, for a period of six years, the existing policy of directors’ and officers’ liability insurance maintained by such Acquired Company as of the date of such Merger Agreement.

Public Announcements Prior to Closing

GrafTech agreed in each Merger Agreement to consult with the Acquired Company therunder before issuing any press release or other public statement with respect to such Merger Agreement or the transactions contemplated thereby and not to issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable law, court process or obligations pursuant to any listing agreement with any national securities exchange. The applicable Acquired Company agreed in each Merger Agreement to obtain the approval of GrafTech before issuing any press release or other public statement with respect to such Merger Agreement or the transactions contemplated thereby and not to issue any such press release or make any such public statement prior to such approval, except as may be required by applicable law, court process or obligations pursuant to any listing agreement with any national securities exchange.

Certain Tax Matters

Each of GrafTech, New GrafTech and the respective Acquired Company agreed in each Merger Agreement to report, and cause its affiliates to report, the exchanges of GrafTech Common Stock and equity in such Acquired Company for New GrafTech Common Stock as an exchange described in Section 351 of the Code for all income tax purposes and to otherwise use its reasonable best efforts to, and cause its affiliates to, cause such exchanges to qualify as exchanges described in Section 351 of the Code and to not take any action reasonably likely to cause the exchanges not to so qualify. Without limitation of the foregoing, New GrafTech agreed to not cause, in connection with the transactions provided for in such Merger Agreement, such Acquired Company to be a subsidiary of GrafTech or cause GrafTech not to be recognized as an entity whose separate existence from New GrafTech is regarded for federal income tax purposes.

New GrafTech Common Stock Listing

New GrafTech and GrafTech agreed in each Merger Agreement to use their respective best efforts to cause the shares of New GrafTech Common Stock to be issued in connection with the transactions contemplated thereby to be approved for listing on the NYSE, subject to official notice of issuance, prior to the effective time of the applicable Merger.

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Registration Rights and Stockholders’ Agreement

In each Merger Agreement, New GrafTech agreed to, and the Key Owners agreed to cause the other parties thereto to, enter into a Registration Rights and Stockholders’ Agreement to be effective as of the closing thereunder substantially in the form attached to such Merger Agreement. For a detailed description of the Registration Rights and Stockholders’ Agreement, see “Terms of the Transactions—Description of the Registration Rights and Stockholders’ Agreement.”

Product Supply Agreement

Under each Merger Agreement, if the Seadrift Merger and the C/G Merger are not consummated simultaneously, Seadrift and C/G will enter into a Product Supply Agreement, to be effective as of the closing of the Seadrift Merger, substantially in the form attached to each Merger Agreement. For a detailed description of the Product Supply Agreement, see “Terms of the Transactions—Description of the Product Supply Agreement.”

Non-Competition After Closing

In each Merger Agreement, each of Nathan Milikowsky and Daniel Milikowsky agreed that, subject to certain conditions, they would not, and would not permit their affiliates to, directly or indirectly, for a period of five (5) years following consummation of the Merger thereunder, (i) engage in or assist others in engaging in the development, production, distribution, marketing or sale of needle coke or its by-products (in the case of the Seadrift Merger Agreement), or graphite electrodes (in the case of the C/G Merger Agreement), (ii) have an interest in any person that engages directly or indirectly in the applicable business or (iii) cause, induce or encourage any material clients, customers, suppliers, vendors, licensees or licensors of the respective Acquired Company to terminate their relationships with such Acquired Company. Nathan Milikowsky and Daniel Milikowsky also agreed, for the same five (5) year period, not to hire or solicit any employee or consultant to such Acquired Company (i) who is offered employment by New GrafTech or its subsidiaries or (ii) who is or was employed by New GrafTech or its subsidiaries during the same five (5) year period, or encourage any such employee or consultant to leave employment with New GrafTech or its subsidiaries.

Guarantee

In each Merger Agreement, each of Nathan Milikowsky and Daniel Milikowsky agreed to jointly and severally guarantee the full and punctual payment when due of all obligations of each Key Owner thereunder.

Conditions to Completion of the Mergers

The respective obligation of each party to the respective Merger Agreement to effect the GTI Merger and Seadrift Merger (in the case of the Seadrift Merger Agreement) or the C/G Merger (in the case of the C/G Merger Agreement) is subject to the satisfaction or waiver on or prior to the applicable closing date of the following conditions:

• all authorizations, consents, orders or approvals of, or declarations or filings with, and all expirations of waiting periods required from, any governmental authority under applicable antitrust laws shall have been filed, have occurred or been obtained, and all such requisite regulatory approvals shall be in full force and effect;

• no provision of any applicable antitrust laws and no judgment, injunction, order or decree shall prohibit the consummation thereof under applicable antitrust laws;

• in the case of the Seadrift Merger, this registration statement shall have been declared effective, no stop order suspending the effectiveness of this registration statement shall be in effect and no proceedings for such purpose shall be pending before or threatened by the SEC; and

• no provision of any applicable law (other than antitrust laws) and no judgment, injunction, order or decree shall prohibit the consummation thereof.

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In addition, the obligation of GrafTech is subject to the following conditions:

• each of certain fundamental representations and warranties of the Acquired Company shall be true and correct as of the date of such Merger Agreement and as of the closing date of such Merger, as if made on such date (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be accurate as of such earlier date and except in certain limited circumstances), each of the other representations and warranties of the Acquired Company, shall be true and correct (without regard to any qualifications as to materiality or Material Adverse Effect contained in such representation and warranty) as of the date of such Merger Agreement and as of the closing date of such Merger, as if made on such date (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be accurate as of such earlier date), except where the failure to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect on the Acquired Company, each of the fundamental representations and warranties of the Key Owners thereunder shall be true and correct as of the date of such Merger Agreement and as of the closing date of such Merger, as if made on such date (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be accurate as of such earlier date) and each of the non-fundamental representations and warranties of the Key Owners thereunder, shall be true and correct (without regard to any qualifications as to materiality or Material Adverse Effect contained in such representation and warranty) as of the date of such Merger Agreement and as of the closing date of such Merger, as if made on such date (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be accurate as of such earlier date), except where the failure to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect on the Acquired Company;

• the Acquired Company shall have performed and complied in all material respects with all agreements, covenants and conditions required under such Merger Agreement to be performed or complied with by it at or prior to the closing date of such Merger;

• the Key Owners thereunder shall have performed and complied in all material respects with all agreements, covenants and conditions required under such Merger Agreement to be performed or complied with by the Key Owners at or prior to the closing date of such Merger;

• there shall not be pending or threatened by any governmental authority any proceeding, other than in connection with any antitrust law or antitrust order, challenging or seeking to restrain or prohibit the Mergers contemplated by such Merger Agreement or any other transaction contemplated by such Merger Agreement or the other agreements contemplated thereby or seeking to obtain from GrafTech or any of its subsidiaries or the Acquired Company in connection with the Mergers contemplated by such Merger Agreement any damages that are material in relation to GrafTech and its subsidiaries or the Acquired Company taken as whole;

• except as already disclosed in schedules thereto, since the date of such Merger Agreement there shall not have been any event, change, effect or development that, individually or in the aggregate, has had a Material Adverse Effect on the Acquired Company;

• there shall be no coke supply contract, commitment, understanding or arrangement between Seadrift and C/G other than the Product Supply Agreement;

• each of the parties thereto (other than New GrafTech) shall have entered into the Registration Rights and Stockholders’ Agreement; and

• the Acquired Company and the Key Owners thereof shall have delivered or caused to be delivered the documentation required to be delivered by them pursuant to such Merger Agreement, including certain opinions and certificates, including officer and Key Owner certificates confirming that certain conditions have been satisfied.

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In addition, the obligation of the Acquired Company is subject to the following conditions:

• each of the fundamental representations and warranties of GrafTech shall be true and correct as of the date of such Merger Agreement and as of the closing date of such Merger, as if made on such date (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be accurate as of such earlier date) and each of the other representations and warranties of GrafTech shall be true and correct (without regard to any qualifications as to materiality or Material Adverse Effect contained in such representation and warranty) as of the date of such Merger Agreement and as of the closing date, as if made on such date (except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be accurate as of such earlier date), except where the failure to be true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect on GrafTech;

• GrafTech shall have performed and complied in all material respects with all agreements, covenants and conditions required under such Merger Agreement to be performed or complied with by it at or prior to the closing date of such Merger;

• there shall not be pending or threatened by any governmental authority any proceeding, other than in connection with any antitrust law or antitrust order, challenging or seeking to restrain or prohibit the Mergers contemplated by such Merger Agreement or any other transaction contemplated by such Merger Agreement or the other agreements contemplated thereby or seeking to obtain from the Acquired Company and its subsidiaries in connection with the Mergers contemplated by such Merger Agreement any damages that are material in relation to the Acquired Company and its subsidiaries taken as whole;

• except as already disclosed in schedules, since the date of such Merger Agreement there shall not have been any event, change, effect or development that, individually or in the aggregate, has had a Material Adverse Effect on GrafTech;

• the shares of New GrafTech Common Stock to be issued in the Mergers contemplated by such Merger Agreement shall have been approved for listing on the NYSE, subject to official notice of issuance; and

• New GrafTech shall have executed and delivered the Registration Rights and Stockholders’ Agreement.

Termination and Termination Fees

Each Merger Agreement provides that it may be terminated and the Mergers and other transactions contemplated thereby may be abandoned at any time before the closing:

• by the mutual written agreement of GrafTech and the Acquired Company;

• by the Acquired Company or GrafTech if the following closing conditions have not been satisfied by December 31, 2010 (April 30, 2011, in the case of the C/G Merger Agreement), unless the failure of any such condition is the result of a breach of such Merger Agreement by the party seeking to terminate such Merger Agreement—(i) all authorizations, consents, orders or approvals of, or declarations or filings with, and all expirations of waiting periods required from, any governmental authority under applicable antitrust laws shall have been filed, shall have occurred or been obtained, and all such requisite regulatory approvals shall be in effect and (ii) no provision of any applicable antitrust laws and no judgment, injunction, order or decree (whether temporary, preliminary or permanent) shall prohibit the consummation of the Mergers contemplated by such Merger Agreement under applicable antitrust laws;

• in the case of the Seadrift Merger Agreement, by Seadrift or GrafTech if the following conditions have not been satisfied by December 31, 2010, unless the failure of such condition is the result of a breach of

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the Seadrift Merger Agreement by the party seeking to terminate the Seadrift Merger Agreement—the registration statement of which this prospectus forms a part shall have been declared effective, no stop order suspending the effectiveness of such registration statement shall be in effect and no proceedings for such purpose shall be pending before or threatened by the SEC;

• by GrafTech if any of the conditions to the obligations of GrafTech to effect the Merger or Mergers contemplated by such Merger Agreement shall not be satisfied by December 31, 2010 (April 30, 2011, in the case of the C/G Merger Agreement), GrafTech shall have delivered to the Acquired Company written notice of such non-satisfaction and at least fifteen business days shall have elapsed since the date of delivery of such written notice to the Acquired Company and such non-satisfaction shall not have been cured in all material respects, except where such non-satisfaction is the result of a violation of such Merger Agreement by GrafTech; or

• by the Acquired Company if any of the conditions to the obligations of the Acquired Company to effect the Merger or Mergers contemplated by such Merger Agreement shall not be satisfied, the Acquired Company shall have delivered to GrafTech written notice of such non-satisfaction and at least fifteen business days shall have elapsed since the date of delivery of such written notice to GrafTech and such non-satisfaction shall not have been cured in all material respects, except where such non-satisfaction is caused by a breach of such Merger Agreement by the Acquired Company or the Key Owners thereof.

In the event the Seadrift Merger Agreement is terminated pursuant to the termination terms in the second bullet point in the list above, then GrafTech shall pay to Seadrift within ten business days following delivery of the notice of termination by Seadrift or GrafTech, as applicable, an amount equal to $15.0 million; provided, however, that no fee shall be payable by GrafTech if, on the date of delivery of such notice of termination, Seadrift has not complied with certain of its obligations to exercise reasonable best efforts to consummate the Mergers contemplated by the Seadrift Merger Agreement or GrafTech would not otherwise be required to close due to the non-satisfaction of any condition to GrafTech’s obligations to close.

In the event the C/G Merger Agreement is terminated pursuant to the termination terms in the second bullet point in the list above, then GrafTech shall pay to C/G within ten business days following delivery of the notice of termination by C/G or GrafTech, as applicable, an amount equal to $15.0 million dollars; provided, however, that no fee shall be payable by GrafTech if, on the date of delivery of such notice of termination, C/G has not complied with certain of its obligations to exercise reasonable best efforts to consummate the Merger contemplated by the C/G Merger Agreement or GrafTech would not otherwise be required to close due to the non-satisfaction of any condition to its obligations to close or the Seadrift Merger has been terminated, if the failure of the Seadrift Merger to close or such termination was due to the failure to satisfy the following conditions in the Seadrift Merger Agreement—(i) all authorizations, consents, orders or approvals of, or declarations or filings with, and all expirations of waiting periods required from, any governmental authority under applicable antitrust laws shall have been filed, have occurred or been obtained, and all such requisite regulatory approvals shall be in full force and effect or (ii) no provision of any applicable antitrust laws and no judgment, injunction, order or decree shall prohibit the consummation of the Mergers contemplated by the Seadrift Merger Agreement under applicable antitrust laws.

Amendments and Waivers

Any provision of either Merger Agreement may be amended or waived prior to the effective time if such amendment or waiver is in writing and is signed, in the case of an amendment, by each party thereto or, in the case of a waiver, by each party against whom the waiver is to be effective.

Natural Gas Deposits

In the C/G Merger Agreement, subject to certain terms and conditions, the parties agreed that the holders of certain equity interests in C/G prior to the C/G Merger would have the right to extract natural gas from beneath

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C/G’s real property in Saint Marys, Pennsylvania and that the net proceeds therefrom would inure to the benefit of such holders notwithstanding the consummation of the C/G Merger. Such rights will be created by instruments approved by us and may include formation of a new entity owned by such holders to hold and exercise such rights. Such instruments shall include requirements for:

• indemnification against all loss, cost and expense incurred by GrafTech (including increased insurance costs) as a result of such activities by financially responsible indemnitors and for insurance and bonds reasonably acceptable to GrafTech;

• all natural gas exploration and extraction to be performed in accordance with applicable law and not to interfere with GrafTech’s operation of C/G’s business or the other business activities at the site;

• the site to be returned to its original condition when drilling and extraction are complete; and

• parties extracting natural gas to be responsible for compliance with environmental laws and any required remediation and closure requirements.

In addition, extraction activities will be limited in certain ways, including: (i) limiting such activities to extraction of natural gas and no other minerals; (ii) prohibiting use of the site for above-ground or underground storage of natural gas, carbon sequestration, secondary recovery of natural gas, disposal wells, or a compressor station; (iii) limiting the number of wells, the number of acres for the drilling site, and the final well site; (iv) requiring all pipeline to be buried; and (v) requiring GrafTech’s approval of the specifications for any access road. All extraction and other taxes will be paid by the producer.

Description of the Senior Subordinated Promissory Notes

As part of the consideration for the acquisition of Seadrift, New GrafTech will issue $100 million of senior secured promissory notes (the “Promissory Notes”) to holders of equity in Seadrift upon consummation of the Seadrift Merger and, as part of the consideration for the acquisition of C/G, New GrafTech will issue $100 million of Promissory Notes to holders of equity in C/G upon consummation of the C/G Merger. The Promissory Notes issued as consideration for each Merger will be substantially identical with the exception that, if the C/G Merger does not occur on the same day as the Seadrift Merger, they will have different maturity dates. Each Promissory Note will mature on the fifth anniversary of its issuance.

The Promissory Notes will be non-interest bearing and will be subordinated on a senior subordinated basis to senior debt of New GrafTech and certain of its subsidiaries (including Seadrift and C/G). Senior debt includes: (i) indebtedness, obligations and guarantees under our Revolving Facility in an aggregate principal amount of up to $390 million; (ii) indebtedness and obligations under foreign liquidity facilities in an aggregate principal amount of up to $145 million; and (iii) other indebtedness for borrowed money (and related guarantees of subsidiaries) if, on the date of incurrence (or, if earlier, the date of entry into the agreement with respect to such indebtedness or guarantee) and after giving pro forma effect thereto, New GrafTech’s leverage ratio (its ratio of consolidated net debt to consolidated EBITDA) would exceed 4:00 to 1:00. If any indebtedness for borrowed money described in clause (iii) of the preceding sentence is incurred and after giving pro forma effect thereto New GrafTech’s leverage ratio would exceed 4:00 to 1:00, New GrafTech and its subsidiaries will grant the holders of the Promissory Notes a security interest on a pari passu basis with any security interest granted to the holders of such indebtedness.

New GrafTech’s significant U.S. subsidiaries (“Subsidiary Guarantors”), including, after the respective Mergers, Seadrift and C/G, will provide senior subordinated guarantees of the Promissory Notes, which will be subordinated and secured to the same extent as New GrafTech’s obligations under the Promissory Notes.

New GrafTech may redeem the Promissory Notes at any time, upon 30 days’ notice, at 100% of the principal amount of the Promissory Notes.

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The Promissory Notes may be accelerated upon the occurrence of certain events of default and the Promissory Notes are automatically accelerated upon an insolvency event of default with respect to New GrafTech or any of the Subsidiary Guarantors. A majority of the holders of the Promissory Notes may accelerate the Promissory Notes upon the occurrence of the following events of default: the failure of New GrafTech or any of the Subsidiary Guarantors to comply with any term under the Promissory Notes for 30 days’ after written notice of default; the acceleration of Senior Debt of New GrafTech, any significant subsidiary or any Subsidiary Guarantor in excess of $50,000,000; or a change in control.

For purposes of the Promissory Notes, a change in control generally occurs on the date on which:

• any person or group becomes the beneficial owner of more than 35% of our outstanding common stock or voting securities (not including securities held by our employee benefit plans or related trusts);

• any person or group acquires the right to vote on any matter, by proxy or otherwise, with respect to more than 35% of our outstanding common stock or voting securities (not including securities held by our employee benefit plans or related trusts);

• our stockholders approve a plan of dissolution or complete or substantially complete liquidation or our Board approves such a plan other than in connection with a reorganization, recapitalization or similar transaction following which all or a majority of the business of New GrafTech and its subsidiaries (taken as a whole) shall be continued by New GrafTech or any successor thereto; or

• any consummation of a merger or other business combination unless, following such business combination, the beneficial owners of the common stock and the voting securities of New GrafTech prior to such business combination beneficially own more than 50% of the common equity and voting securities of the surviving entity in substantially the same proportions as prior to such business combination, no person or group (excluding our employee benefit plans or related trusts) beneficially owns more than 50% of the common equity or voting securities of the surviving entity and at least a majority of the members of the board of directors of the surviving entity were members of our Board prior to such business combination; or

• any consummation of a sale, lease or other transfer of all or substantially all of the assets of New GrafTech, whether held directly or indirectly through one or more subsidiaries (excluding a grant of security interest, sale-leaseback or similar transaction in the ordinary course of business, or in connection with a credit facility or other financing, but including any foreclosure sale).

A change in control will not be deemed to have occurred, however, to the extent that the Milikowsky Holders (as defined under “Description of the Registration Rights and Stockholders’ Agreement,” below) and their related parties initiate or participate in an event or circumstance prescribed by the standstill provisions of the Registration Rights and Stockholders Agreement, regardless of whether it would be permitted thereby.

The majority holders of the Promissory Notes have the sole right to waive any default and any such waiver is binding on all holders. No holder of a Promissory Note may institute against or join with or assist any person in instituting against New GrafTech any bankruptcy or similar action.

Description of the Registration Rights and Stockholders’ Agreement

In the Merger Agreements we agreed to enter into, and the Key Owners agreed to enter into and cause the other partners of Seadrift and members of C/G, respectively, who would receive shares of New GrafTech Common Stock in connection with the Seadrift Merger or the C/G Merger, respectively, to enter into, a Registration Rights and Stockholders’ Agreement upon the consummation of the such Mergers substantially in the form attached to the Merger Agreements. The Registration Rights and Stockholders’ Agreement will contain

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lock-up and standstill provisions, transfer restrictions, director nomination rights and registration rights with respect to shares of New GrafTech Common Stock issued to holders of equity of Seadrift and C/G which are described below. As used herein, the term “Milikowsky Holders” means Nathan Milikowsky, Daniel Milikowsky, The Rebecca and Nathan Milikowsky Family Foundation, Daniel and Sharon Milikowsky Family Foundation, Inc., NMCG Holdings, LLC, NMSD LLC and Seadrift Coke, LLC.

Lock-up and Standstill Provisions

Each of the Milikowsky Holders will agree, for two (2) years following the Seadrift Merger and thereafter until six (6) months after the later of (i) the termination of the Milikowksy Holders’ right to nominate an individual for election as a director of New GrafTech and (ii) the date on which any such nominated director ceases to be a member of our Board, that:

• it will not enter into, and will not permit any of its controlled affiliates or related parties to enter into, any contract to purchase, sell, borrow, lend, pledge, or otherwise acquire or transfer, directly or indirectly, any securities of New GrafTech; or

• it will not enter into, and will not permit any of its controlled affiliates or related parties to enter into, any economic or voting derivative, swap or other contract that transfers to or acquires from any other person, any of the voting rights or economic consequences of ownership of any securities of New GrafTech or the value of which is measured or determined, by or with respect to the value of any securities of New GrafTech.

The foregoing lock-up terminates upon (i) a change in control as described below (except that the percentage thresholds in the first two bullets of the definition of change in control shall be 50% (and not 35%)); (ii) bankruptcy of New GrafTech or any of its significant subsidiaries; (iii) New GrafTech’s failure to comply in any material respect with the board nomination rights; (iv) the delisting of New GrafTech Common Stock on the NYSE (other than in connection with relisting on another national or international exchange); or (v) the transfer by the Milikowsky Holders and their related parties of at least 90% of the New GrafTech Common Stock owned by them to persons other than related parties.

Each of the Milikowsky Holders will agree not to take any of the following actions for a period of two (2) years following the Seadrift Merger and thereafter until six (6) months after the later of (i) the termination of the Milikowksy Holders’ right to nominate an individual for election as a director of New GrafTech and (ii) the date on which any such nominated director ceases to be a member of our Board (the “standstill”):

• initiate or participate in any solicitation of proxies to vote any securities of New GrafTech;

• advise or influence any person (other than a related party) with respect to the voting of any securities of New GrafTech;

• take any action to change, control or influence the management (including the composition of our Board) or policies of New GrafTech (except in connection with the exercise of the fiduciary duties of the board nominee of the Milikowsky Holders if he is then serving as a member of our Board) or to obtain representation on our Board (except for the board designation rights in the Registration Rights and Stockholders’ Agreement);

• make any public announcement with respect to, submit a public proposal for or make any public offer as to any extraordinary transaction involving New GrafTech;

• form, assist or participate in a group in connection with any of the foregoing;

• enter into any discussions, arrangements or contracts with any other person regarding any of the foregoing; or

• take any action that would require New GrafTech under applicable laws, due to fiduciary duties, or otherwise to make any public announcement relating to any of the foregoing or any extraordinary transaction.

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The standstill provisions terminate upon (i) a change in control as described below (except that the percentage thresholds in the first two bullets of the definition of change in control shall be 50% (and not 35%)); (ii) bankruptcy of New GrafTech or any of its significant subsidiaries; (iii) New GrafTech’s failure to comply in any material respect with the board nomination rights; (iv) the delisting of New GrafTech Common Stock on the NYSE (other than in connection with relisting on another national or international exchange); or (v) upon the termination of the C/G Merger Agreement without the consummation of the C/G Merger.

Notwithstanding the lock-up and standstill provisions, at any time after six (6) months following the Seadrift Merger, each of Nathan Milikowksy (and his affiliates and related parties) and Daniel Milikowsky (and his affiliates and related parties) may sell New GrafTech Common Stock in transactions exempt from registration under the Securities Act under Rule 144 or otherwise or in a public offering; provided, that the aggregate amount of shares each such group may sell in any three (3) month period may not exceed one percent (1%) of the outstanding shares of New GrafTech Common Stock.

Notwithstanding the lock-up and standstill provisions, (a) if New GrafTech issues additional shares of New GrafTech Common Stock or securities convertible into or exercisable or exchangeable for shares of New GrafTech Common Stock, each of the Milikowsky Holders shall have the right to purchase, in connection with the offering thereof or thereafter in the open market, up to such additional number of shares of New GrafTech Common Stock or such securities so that its relative percentage of beneficial ownership of Common Stock is the same, after giving effect to such purchase, as it was immediately prior to such issuance and (b) each Seadrift equity holder and C/G equity holder who receives shares of New GrafTech Common Stock in the Seadrift Merger or C/G Merger, respectively, shall have the right to transfer shares of New GrafTech Common Stock (i) in connection with the consummation of, or otherwise pursuant to, a merger, tender offer, exchange offer or other business combination, so long as such transaction has been approved or recommended by our Board, (ii) as required pursuant to any law or order, or (iii) two (2) years following the Seadrift Merger.

For purposes of the Registration Rights and Stockholder Agreement, a change in control generally occurs on the date on which:

• any person or group becomes the beneficial owner of more than 35% of the then outstanding common stock or voting securities of New GrafTech (not including securities held by our employee benefit plans or related trusts);

• any person or group acquires the right to vote on any matter, by proxy or otherwise, with respect to more than 35% of the then outstanding common stock or voting securities of New GrafTech (not including securities held by our employee benefit plans or related trusts);

• our stockholders approve a plan of dissolution or complete or substantially complete liquidation of New GrafTech or our Board approves such a plan other than in connection with a reorganization, recapitalization or similar transaction following which all or a majority of the business of New GrafTech and its subsidiaries (taken as a whole) shall be continued by New GrafTech or any successor thereto; or

• any consummation of a merger or other business combination unless, following such business combination, the beneficial owners of the common stock and the voting securities of New GrafTech prior to such business combination beneficially owns more than 50% of the common equity and voting securities of the surviving entity in substantially the same proportions as prior to such business combination, no person or group (excluding our employee benefit plans or related trusts) beneficially owns more than 50% of the common equity or voting securities of the surviving entity and at least a majority of the members of the board of directors of the surviving entity were members of our Board prior to such business combination; or

• any consummation of a sale, lease or other transfer of all or substantially all of the assets of New GrafTech, whether held directly or indirectly through one or more subsidiaries (excluding a grant of security interest, sale-leaseback or similar transaction in the ordinary course of business or in connection with a credit facility or other financing, but including any foreclosure sale).

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Registration Rights

New GrafTech will grant customary registration rights to the Seadrift equity holders (and C/G equity holders, if the C/G Merger is consummated), which will include up to four (4) demand registrations (two (2) of which may be underwritten offerings) exercisable at any time after sixty (60) days prior to the second anniversary of the closing of the Seadrift Merger Agreement, and piggyback rights on certain registrations by New GrafTech (whether for its own account or for the account of other stockholders). New GrafTech will agree to (a) within six (6) months following the Seadrift Merger, include in any shelf registration statement which it may file to register resales of New GrafTech Common Stock by directors and officers of New GrafTech, shares of New GrafTech Common Stock issued in connection with the Seadrift Merger to the Milikowsky Holders (and their related parties and affiliates), (b) within five (5) days following the Seadrift Merger, file a registration statement covering the shares of New GrafTech Common Stock issued in connection with the Seadrift Merger to the other equity holders of Seadrift, and each such other equity holders will agree to use best efforts to limit sales under such registration statement to not more than (i) 50,000 shares per week (to the extent such equity holder holds less than 200,000 shares of New GrafTech Common Stock) and (ii) 125,000 shares per week (to the extent such equity holder holds at least 200,000 shares of New GrafTech Common Stock) and (c) within five (5) days following the C/G Merger, file a registration statement covering the shares of New GrafTech Common Stock issued in connection with the C/G Merger to the other equity holders of C/G, and each such other equity holders will agree to use best efforts to limit sales under such registration statement to not more than (i) 50,000 shares per week (to the extent such equity holder holds less than 200,000 shares of New GrafTech Common Stock) and (ii) 125,000 shares per week (to the extent such equity holder holds at least 200,000 shares of New GrafTech Common Stock). The Registration Rights and Stockholders’ Agreement will contain customary registration procedures and indemnification provisions relating to the registration rights, and New GrafTech will agree to pay all expenses (other than commissions, discounts and stock transfer taxes) relating to such registrations. The registration rights provisions (other than the indemnification provisions) terminate on the earlier of (a) the date that the Seadrift equity holders (and the C/G equity holders, if the C/G Merger is consummated) no longer beneficially own any registrable securities and (b) the consummation of a change in control unless New GrafTech (or any successor thereof as a result of the change in control) is a reporting company under the Exchange Act.

Board Nomination Rights

Following both the Seadrift Merger and the C/G Merger, and provided the Milikowsky Holders (and their related parties and affiliates) continue to hold at least twelve million shares of New GrafTech Common Stock (subject to adjustments for stock splits, reverse stock splits and similar transactions), we will (i) increase the size of our Board by one (1) and appoint a representative of the Milikowsky Holders (and their related parties and affiliates) to our Board, and (ii) nominate such representative for re-election in subsequent years. Mr. Nathan Milikowsky has been designated to be the initial representative on our Board. If at least three years have passed since the representative was elected to our Board or, if prior to such three year period, the representative ceases to serve due to death, disability or mandatory retirement, the Milikowsky Holders (and their related parties and affiliates) may designate a different representative to be nominated to our Board, provided, that such replacement representative is reasonably acceptable to our Board. The representative of the Milikowsky Holders (and their related parties and affiliates) must meet the requirements of an “independent director” under the listing rules of the NYSE and must otherwise satisfy the requirements of our corporate policies relating to directors. Our obligations with respect to the board nomination rights shall terminate upon the consummation of a change in control (except that the percentage thresholds in the first two bullets of the definition of change in control shall be 67% (and not 35%)).

Description of the Product Supply Agreement

Under each Merger Agreement, if the Seadrift Merger and the C/G Merger are not consummated simultaneously, Seadrift and C/G will enter into the Product Supply Agreement. If executed, the initial term of the Product Supply Agreement will commence on the date of the Seadrift Merger and continue through December 31, 2017 (or, if earlier, until the C/G Merger is consummated).

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Pursuant to the Product Supply Agreement, Seadrift will sell to C/G, and C/G will purchase from Seadrift, certain minimum quantities of calcined petroleum needle coke specified therein (“Coke”). C/G will also be entitled to purchase certain additional quantities of Coke in excess of the minimum quantities specified in the Product Supply Agreement. The Coke sold by Seadrift to C/G under the Product Supply Agreement will be used by C/G solely to make graphite electrodes and other graphite products at C/G’s St. Marys plant, and not for redistribution to other persons or entities or for the manufacture of other products or manufacture of graphite electrodes at other facilities; provided, however, that a small percentage of the Coke could be used by C/G for other purposes. Seadrift will pay to C/G a specified amount in the event Seadrift fails to deliver to C/G the minimum amount of Coke that Seadrift will be obligated to deliver to C/G pursuant to the terms of the Product Supply Agreement. Similarly, C/G will pay to Seadrift a specified amount in the event C/G fails to purchase from Seadrift the minimum amount of Coke that C/G will be obligated to purchase from Seadrift pursuant to the terms of the Product Supply Agreement. The Coke will be sold to C/G at a mutually agreed price that is consistent with market prices.

Seadrift will warrant to C/G that the Coke delivered to C/G under the Product Supply Agreement will have physical properties that conform to certain product specifications; provided, however, that in no event will Seadrift’s liability for failure of Coke to conform to the product specifications exceed C/G’s purchase price for the Coke that is the subject of the applicable claim.

Both Seadrift and C/G will have the right to terminate the Product Supply Agreement if the other party breaches in any material respect the terms and conditions of the Agreement and such breach remains unremedied for a period of sixty (60) days after the delivery of written notice of such breach. Additionally, C/G will have the right to terminate the Product Supply Agreement if Seadrift fails to deliver the quarterly requirement of Coke for more than two (2) consecutive quarters. In the event the Product Supply Agreement is terminated by C/G as a result of such failure on Seadrift’s part, the parties have agreed that the liability for such breach will not exceed a specified amount.

Material Federal Income Tax Consequences

Subject to the limitations and qualifications described in “Material U.S. Federal Income Tax Consequences” below, the exchange by U.S. holders of shares of GrafTech Common Stock for shares of New GrafTech Common Stock pursuant to the GTI Merger will constitute an exchange to which Section 351 of the Code applies. As a result, no gain or loss will be recognized by GrafTech, New GrafTech, or the stockholders of GrafTech as a result of the exchange of GrafTech shares for New GrafTech shares pursuant to the GTI Merger. In addition, no gain or loss will be recognized by GrafTech or New GrafTech as a result of the issuance of shares of New GrafTech Common Stock in exchange for the equity interests in Seadrift pursuant to the Seadrift Merger Agreement, and no gain or loss will be recognized by GrafTech or New GrafTech as a result of the issuance of shares of New GrafTech Common Stock in exchange for the equity interests in C/G pursuant to the C/G Merger Agreement. Your tax consequences will depend on your own situation. You should consult your tax advisor to fully understand the tax consequences of the Mergers to you.

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GRAFTECH’S REASONS FOR THE ACQUISITIONS

In reaching its decisions to approve the acquisitions, GrafTech’s Board of Directors consulted with GrafTech’s management, as well as with legal and financial advisors, and considered a number of factors, including the following:

Seadrift Acquisition

• Strategic, industrial, commercial and financial rationales for the acquisition.

• Its knowledge of GrafTech’s business, operations, financial condition, earnings and prospects.

• The knowledge of Seadrift’s business, operations, financial condition, earnings and prospects which GrafTech’s Board of Directors and GrafTech’s management gained as a result of GrafTech’s existing 18.9% limited partnership interest in Seadrift, including contractual rights associated with such ownership as supplemented by the results of GrafTech’s due diligence review of Seadrift.

• The prevailing macroeconomic conditions, and the economic environment of the industries in which GrafTech and Seadrift operate.

• The fact that Seadrift is the only known quality petroleum-based needle coke producer not integrated into a refinery.

• The estimates of significant recurring and non-recurring operating synergies resulting from the acquisition presented to GrafTech’s Board of Directors at the time of its approval of the acquisition.

• The fact that the vertical integration provided by the Seadrift acquisition would provide GrafTech with a synchronized and steady source for the production of needle coke, helping to assure it of a stable supply of a majority of its primary raw material in the production of graphite electrodes.

• The fact that control of Seadrift should allow GrafTech the ability to reduce the relative cost of a significant portion of its supply of needle coke, the primary raw material in the manufacture of graphite electrodes.

• The belief that the application of GrafTech’s proprietary carbon and graphite science to Seadrift’s current operations could improve the quality of Seadrift’s coke, which is a critical factor in production of high quality graphite electrodes.

• The fact that control of a needle coke production facility would enable GrafTech to better serve its global steel customers, by helping to ensure its ability to supply its customers and allowing it to design unique solutions for the EAF steel industry by engineering graphite electrodes from the raw material stage through final production.

• The fact that control of Seadrift would provide GrafTech with the resources to engineer cokes for use in its graphite specialties business, which today are limited in availability.

• The fact that Seadrift has an experienced management team which should assist in the integration of Seadrift’s operations into GrafTech’s business.

• The fact that the ability to use GrafTech Common Stock as a significant portion of the consideration to be delivered to Seadrift equity owners would limit GrafTech’s need for debt financing for this transaction and preserve debt financing capacity for other corporate purposes.

C/G Acquisition

• Strategic, industrial, commercial and financial rationales for the acquisition.

• Its knowledge of GrafTech’s business, operations, financial condition, earnings and prospects.

• The knowledge of C/G’s business, operations, financial condition, earnings and prospects which GrafTech’s Board of Directors and GrafTech’s management understand as a result of GrafTech’s activities in the same business, as supplemented by the results of GrafTech’s due diligence review of C/G.

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• The prevailing macroeconomic conditions and the economic environment of the industries in which GrafTech and C/G operate.

• The estimates of significant operating synergies resulting from the acquisition of C/G presented to GrafTech’s Board of Directors at the time of its approval of the acquisition.

• The fact that the acquisition would enable GrafTech to control a modern mill, mix and forming facility in the industry with capacity to supply certain of GrafTech’s facilities, helping to enable GrafTech to improve product quality and performance.

• The fact that the acquisition would provide GrafTech with a large diameter graphite electrode manufacturing facility in the U.S. which would allow GrafTech to respond to customer orders more quickly and reduce freight cost and transit time for North American shipments.

• The belief that the application of each party’s proprietary carbon and graphite science to the other party’s operations should allow it to upgrade existing technology and capabilities for both GrafTech’s and C/G’s graphite electrode production facilities, yielding better graphite electrode performance for each party’s customers and accelerating product and process development.

• The fact that the ability to use GrafTech’s Common Stock as a significant portion of the consideration to be delivered to C/G equity owners would allow GrafTech to limit the need for debt financing for this transaction and preserve debt financing capacity for other corporate purposes.

Risks

In addition to the factors described above, GrafTech’s Board of Directors identified and considered a variety of risks and potentially negative factors concerning the acquisitions, including:

• The possibility that either or both acquisitions may not be completed, or that completion of either or both may be unduly delayed, for reasons beyond the control of GrafTech, Seadrift or C/G.

• The risk that regulatory agencies may not approve the Seadrift or C/G acquisitions, or may impose terms and conditions upon their approvals that would either materially impair the business operations of GrafTech following either or both acquisitions, or adversely affect the ability of GrafTech to realize the synergies and benefits that are expected to result from either or both acquisitions.

• The potential for diversion of management and employee attention and for increased employee attrition during the period (which may be substantial) prior to consummation of each acquisition and the potential effect of the acquisitions on GrafTech’s, Seadrift’s or C/G’s businesses and relations with their respective customers, suppliers and other third parties with which they maintain business relationships.

• The risks of potential disruptions to our ongoing business as a result of the difficulty of assimilating the operations and personnel of the businesses to be acquired.

• The difficulties of integrating the business, including implementing and maintaining uniform standards, controls, procedures and policies at the businesses to be acquired.

• The potential impact and sensitivity of the combined businesses to further recessionary pressures and rising oil prices.

• The cyclicality of the graphite and needle coke businesses and the inability to exercise control over various elements that contribute to volatility.

• The anticipated amount and timing of capital expenditures for the acquired businesses.

• The risks associated with matters reviewed during due diligence, including ongoing environmental proceedings, executory contracts, and employment matters.

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• Potential loss of Seadrift’s and/or C/G’s customers or suppliers by reason of GrafTech’s ownership.

• The risks of the type and nature described under “Risk Factors” beginning on page 18 of this prospectus, and the matters discussed under “ Forward Looking Statements” beginning on page 38 of this prospectus.

In view of the wide variety of factors considered in connection with its evaluation of each acquisition and the complexity of those matters, GrafTech’s board did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights to these factors.

In addition, GrafTech’s Board of Directors did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to its ultimate determination, but rather GrafTech’s Board of Directors conducted an overall analysis of the factors applicable to such acquisitions described above, including discussions with GrafTech’s management and legal and financial advisors. In considering the factors described above, individual members of GrafTech’s Board of Directors may have given different weight to different factors.

BACKGROUND OF THE ACQUISITIONS

In November 2007, Erick Asmussen, the Director of Corporate Development, initiated discussions with Falcon Mezzanine Investments, LP (“Falcon”) regarding their interest in selling the limited partnership interests which its subsidiary, Falcon-Seadrift Holdings, Inc. (“Falcon-Seadrift”), held in Seadrift, representing 18.9% of Seadrift’s equity interests. Mr. Asmussen later learned that an auction was proposed to be held for the sale of both Seadrift and C/G and at that time suspended conversations with Falcon.

GrafTech decided to participate in the auction process for a possible business combination with Seadrift and C/G and, on December 7, 2007, GrafTech executed a Confidentiality Agreement with Lehman Brothers Inc. (“Lehman”) on behalf of C/G, which was extended to cover Seadrift by an Acknowledgment executed by GrafTech. Lehman acted as financial advisors to Seadrift and C/G and managed the auction process. GrafTech engaged Goldman Sachs as its financial advisor to assist in its review of the possible business combination. On January 15, 2008, GrafTech submitted an indicative non-binding bid for a business combination involving both Seadrift and C/G.

From January 15, 2008 through late March 2008, GrafTech conducted due diligence on the two companies with the assistance of Goldman Sachs and GrafTech’s legal advisors, Kelley Drye & Warren LLP (“Kelley Drye”). On March 12, 2008, GrafTech submitted its refreshed non-binding bid to Lehman for a possible business combination involving both Seadrift and C/G. On the basis of that refreshed bid, GrafTech commenced negotiations with Nathan Milikowsky and Daniel Milikowsky, on behalf of Seadrift and C/G, and their financial advisors and legal advisors, McDermott Will & Emery LLP (“McDermott Will”). Craig Shular, our Chief Executive Officer, Mark Widmar, our Chief Financial Officer, Gary Whitaker, our then General Counsel, John Moran, our current General Counsel, and Mr. Asmussen participated in negotiations with Messrs. Milikowsky, Daniel Bejarano, a member of the Board of Directors of Seadrift Coke LLC, the General Partner of Seadrift (“Seadrift Coke”), and the legal and financial advisors to Seadrift, C/G and GrafTech, on the terms of a possible business combination involving both Seadrift and C/G. We also conducted further due diligence through the rest of the month of March. On March 31, 2008, Mr. Shular informed Mr. Nathan Milikowsky that we would not continue discussions on a possible business combination. Subsequently, at the request of Lehman, and in accordance with the terms of the Confidentiality Agreement, GrafTech and its representatives destroyed the copies of confidential information of C/G and Seadrift in their possession. Our management reported to our Board of Directors on the process and the opportunities presented, the due diligence findings, the status of negotiations and related matters at numerous meetings and calls held prior to and during the negotiations. Our Board asked questions of management and discussed these matters in detail. Our legal and financial advisors participated in numerous meetings held prior to and during the negotiations.

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In May 2008, Mr. Asmussen recommenced conversations with Falcon concerning a possible acquisition of its limited partnership interests in Seadrift and on May 27, 2008, GrafTech and Falcon entered into a Confidentiality Agreement in connection therewith. Mr. Asmussen held discussions with Eric Rogoff, John Schabel and other members of the Falcon team and, during June 2008, Mr. Asmussen commenced negotiations with Falcon on possible terms for the acquisition of Falcon-Seadrift and, with assistance of our legal advisors, conducted due diligence on Falcon-Seadrift. On June 25, 2008, GrafTech and Falcon executed a letter of intent for the acquisition of Falcon-Seadrift. On June 27, 2008, Falcon’s legal advisors, Proskauer Rose LLP (“Proskauer”), provided a draft Stock Purchase Agreement for the acquisition of Falcon-Seadrift, which GrafTech, with Kelley Drye, and Falcon, with Proskauer, negotiated over the period from June 27 through June 30, 2008. Our management reported to our Board of Directors on the opportunities presented, the due diligence findings, the status of negotiations, management’s recommendation to approve the acquisition and related matters at meetings held on June 16 and June 26, 2008. Our Board of Directors asked questions of management and discussed these matters in detail. Our legal advisors participated in the latter meeting. Our Board of Directors approved the acquisition on June 26. On June 30, 2008, we executed a Stock Purchase Agreement and acquired Falcon-Seadrift, which was subsequently renamed GrafTech Seadrift Holdings Inc (“GSHI”).

Other than purchases of needle coke from Seadrift in the ordinary course of business (which were immaterial after 2000), there was no material relationship between us, on the one hand, and Falcon, Falcon-Seadrift or Seadrift, on the other hand, prior to the purchase.

The purchase price of Falcon-Seadrift was $135 million, and we paid the purchase price in cash, of which $100 million was funded through borrowings under our Revolving Facility. The balance of the purchase price was paid from cash on hand.

Falcon-Seadrift has certain rights related to Seadrift. These include the right to one of five seats on Seadrift Coke’s Board of Directors (or, at our election, board observation rights in lieu thereof), a right of approval with respect to certain mergers and other transactions involving Seadrift, the right to veto Seadrift’s repurchase of its own equity (other than from former employees), and customary tag along rights permitting us to participate in any proposed sale of the majority owners’ interests on the same terms and conditions. Falcon-Seadrift is subject to customary drag along obligations requiring us, in the event that the majority owners sell their interests, to sell our interests on the same terms and conditions. Falcon-Seadrift has the right to require Seadrift to buy its equity interests in Seadrift (a “put” to Seadrift) at then fair market value, beginning May 1, 2011. Upon exercise of the put, the fair market value would be determined assuming a sale of Seadrift as a going concern and without applying a discount for lack of liquidity, lack of marketability or lack of control.

Falcon’s designee on Seadrift Coke’s Board of Directors resigned upon our acquisition of Falcon-Seadrift, and we nominated Mr. Shular as our representative to Seadrift Coke’s Board of Directors. He joined the Board of Directors of Seadrift Coke as of July 1, 2008. In connection with Mr. Shular’s election as a member of Seadrift Coke’s Board of Directors, GrafTech and Seadrift, with participation of their respective legal counsel, established procedures to ensure that competitively sensitive information would not be shared between the parties. Subsequent to that time, Mr. Shular has served on Seadrift Coke’s Board of Directors and, in such position, has participated in board meetings and held deliberations with other board members. Mr. Moran and Mr. Widmar were present at virtually all of such meetings and deliberations. We are entitled, under the agreements in effect between Falcon-Seadrift (now GrafTech Seadrift Holding Corp. or “GSHC”) and Seadrift, to request certain information from Seadrift and, subject to such procedures, have from time to time requested and received such information. Such information was requested in order to monitor our investment in Seadrift and not in furtherance of a business combination. Mr. Shular’s conversations were in furtherance of his duties as a director of Seadrift and to monitor our investment and not in furtherance of a business combination. Our management reported to our Board of Directors and our Audit and Finance Committee on material developments relating to our investment at each meeting thereof.

In June 2009, because of adverse economic conditions, Seadrift anticipated that it would not be able to comply with certain covenants under its credit agreement. The lenders agreed to amend the credit agreement on the condition that additional equity or subordinated debt was injected into Seadrift. In June 2009, Seadrift’s

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principal equity owners agreed to extend loans and negotiated the terms thereof with Seadrift. Our management reported to our Board of Directors on the request, the status of negotiations, management’s recommendation to approve the request and related matters at a meeting held on June 26. Our Board asked questions of management and discussed these matters in detail. Our legal advisors participated in this meeting. Our Board approved the loan on June 26. In late June and early July 2009, Seadrift entered into agreements to borrow up to $17.0 million from certain of its equity owners, including GrafTech. We agreed to loan up to $8.5 million. On July 2, 2009, we loaned $6.0 million. Seadrift borrowed $6.0 million from other equity owners as of July 30, 2009.

Borrowings under these agreements were evidenced by Senior Subordinated Non-Negotiable Demand Notes (the “Demand Notes”) that were subordinated to Seadrift’s revolving credit agreement. Seadrift’s revolving credit agreement provided that the Demand Notes could not be repaid until all indebtedness thereunder had been paid in full and the obligation to make any further loans or advances had ceased and terminated. The Demand Notes bore interest at 10%, payable quarterly in arrears. Seadrift also paid a 1% servicing fee to each lender under a Demand Note at the time of a borrowing. Seadrift was able to repay all outstanding principal and interest on the Demand Notes in March 2010.

In January 2010, Nathan Milikowsky, in his capacity as President of Seadrift, requested to have a meeting with Mr. Shular, in his capacity as our chief executive, to discuss whether we would increase our purchases of coke from Seadrift. The meeting was held on January 11, 2010. Messrs. Moran, Widmar and Asmussen participated in the meeting. At the meeting, Mr. Shular indicated that GrafTech did not have an interest in increasing its purchases of coke from Seadrift but that it would be willing to engage in discussions concerning a possible business combination with Seadrift and C/G. On January 21, 2010, at a meeting that was held in connection with a meeting of the Seadrift Board of Directors, the possibility of a business combination was discussed. Messrs. Milikowsky, Shular, Moran, Asmussen and Widmar, John Bassett, Chief Executive Officer of Seadrift, Arnold Wasser, Seadrift’s Chief Financial Officer, and David Goldman, a member of Seadrift Coke’s Board of Directors and a McDermott Will partner, and members of the Seadrift business team participated in the discussions.

On February 19, 2010, the parties executed confidentiality agreements regarding such a combination and agreed to conduct due diligence.

Following execution of the confidentiality agreements, preliminary due diligence information requests regarding Seadrift and C/G were submitted to McDermott Will. Certain information was provided pursuant to those requests.

Our management reported to our Audit and Finance Committee on the opportunities presented, the status and negotiations, potential acquisition financing alternatives and related matters at a meeting held on March 17. Our Committee asked questions of management and discussed these matters in detail.

On March 24, Messrs. Shular, Asmussen, Widmar and Moran met with Mr. Nathan Milikowsky, Mr. Daniel Milikowsky and Mr. Goldman to discuss the terms on which the business combination could be effected.

Our management reported to our Board of Directors on the opportunities presented, the due diligence findings, the status of negotiations and related matters at a meeting held on March 25. Our Board of Directors asked questions of management and discussed these matters in detail.

On March 29, 2010, Messrs. Shular, Asmussen, Widmar and Moran met with Mr. Nathan Milikowsky, Mr. Daniel Milikowsky and representatives of Barclays Capital and McDermott Will and at that meeting they presented our proposal for the terms for a proposed acquisition of Seadrift and C/G by us. The parties discussed a mix of consideration including a combination of GrafTech Common Stock, promissory notes and cash. No price was agreed. The parties also discussed the terms of a standstill and lock-up and the election of a nominee of Mr. Milikowsky and his related parties to our Board.

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On March 31, the parties reconvened to discuss potential terms of a business combination. While the consideration for the business combination was not agreed by the parties, and no letter of intent was executed, the parties agreed to have their legal representatives draft and negotiate definitive agreements while the parties continued due diligence.

On April 5, the parties discussed a protocol which would permit due diligence on sales information without disclosing pricing and other sensitive information. A protocol was agreed to restrict access to sensitive information. From April 5 through April 23, the parties conducted extensive due diligence, which included multiple conference calls, reviews of documents, and site visits to Seadrift’s and C/G’s facilities and to GrafTech’s facility in Monterrey, Mexico.

On April 7, McDermott Will submitted to us a proposed structure for the business combination, which was substantially the structure that is embodied in the Merger Agreements. On April 9, Mr. Moran provided to McDermott Will an initial draft of the Promissory Notes and, from such date through April 23, the parties exchanged initial and revised drafts of the definitive agreements for the proposed business combination as well as issues lists and other materials and the parties, in consultation with their advisors, reviewed and negotiated definitive agreements.

On April 23, Barclays Capital, as financial advisor to C/G and Seadrift, informed Mr. Asmussen that Mr. Milikowsky was no longer interested in pursuing a business combination involving C/G, but would still consider a business combination involving Seadrift. The proposal was not acceptable to GrafTech, which in turn submitted a counter proposal that day for a business combination involving both Seadrift and C/G.

On April 25, Mr. Shular met with Mr. Nathan Milikowsky and Mr. Daniel Milikowsky, and subsequently with a representative of Barclays Capital and later with such advisor, Mr. Asmussen, Mr. Widmar and our legal advisor. At the end of such meetings, the parties agreed to recommence negotiations for a business combination involving both Seadrift and C/G and agreed in principle on the terms of the transactions. Due diligence and negotiation recommenced, and further meetings were held with legal representatives and financial advisors to negotiate the terms of the transactions.

Our management reported to our Board of Directors on the opportunities and risks presented, the due diligence findings, the status of negotiations, the proposed terms of the acquisitions, management’s recommendation to approve the acquisitions and related matters at a meeting held on April 27. Our Board of Directors asked questions of management and discussed these matters in detail. Our legal and financial advisors participated in this meeting. Our Board of Directors approved the Mergers on April 27.

On April 28, the Seadrift Coke Board of Directors met, with Mr. Shular recusing himself, and approved the Seadrift Merger, and the C/G Board of Directors met and approved the C/G Merger.

On April 28, the parties finalized and executed the Merger Agreements.

ACCOUNTING TREATMENT OF THE MERGERS

We will account for the Mergers of Seadrift and C/G using the acquisition method of accounting which is based on Accounting Standards Codification Topic 805, Business Combinations. The acquisition method of accounting requires that all assets acquired and liabilities assumed of the acquired businesses, including tangible property and equipment, intangible assets, and contingent liabilities, be recorded at their fair value on the acquisition date. The excess of the consideration transferred (purchase price) over the fair value of the net assets acquired will be recognized as goodwill.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGERS

The following discussion summarizes the material U.S. federal income tax consequences of the Mergers that are expected to apply generally to U.S. holders (as defined below) of GrafTech Common Stock. For purposes of this discussion, a “U.S. holder” is a beneficial owner of a share of GrafTech Common Stock that is:

• a citizen or individual resident of the United States;

• a corporation or other entity taxable as a corporation, created or organized in or under the laws of the United States or any political subdivision thereof;

• an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

• a trust if it (1) is subject to the primary supervision of a court within the United States and one or more United States persons has the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person.

This discussion is based on the Code, applicable Treasury regulations, administrative interpretations and court decisions as in effect as of the date of this prospectus, all of which may change, possibly with retroactive effect. This discussion assumes that the Mergers will be completed in accordance with the terms of the Merger Agreements. No ruling has been or will be sought from the Internal Revenue Service (the “IRS”) as to the U.S. federal income tax consequences of the Mergers, and the following summary is not binding on the IRS or the courts. As a result, the IRS could adopt a contrary position, and such a contrary position could be sustained by a court.

This discussion only addresses U.S. holders who hold shares of GrafTech Common Stock (and will hold shares of New GrafTech Common Stock) as capital assets and does not purport to be a complete analysis of all potential tax effects of the Mergers. In addition, this discussion does not address the tax consequences of transactions effectuated prior to or after the Mergers (whether or not such transactions occur in connection with the Mergers), including, without limitation, any exercise of a GrafTech option or the acquisition or disposition of shares of GrafTech Common Stock other than pursuant to the Mergers. It does not address the U.S. federal income tax considerations applicable to holders of options or warrants to purchase GrafTech Common Stock, or holders of debt instruments convertible into GrafTech Common Stock. It also does not address all aspects of U.S. federal income taxation that may be important to a U.S. holder in light of that holder’s particular circumstances or to a U.S. holder subject to special rules, such as:

• U.S. holders subject to special treatment under U.S. federal income tax laws (for example, brokers or dealers in securities, financial institutions, mutual funds, insurance companies, or tax-exempt organizations);

• a U.S. holder that holds GrafTech Common Stock as part of a hedge, appreciated financial position, straddle, conversion transaction or other risk reduction strategy;

• a U.S. holder whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

• a U.S. holder that is a partnership or other entity classified as a partnership for U.S. federal income tax purposes;

• a U.S. holder that holds GrafTech Common Stock through a pass-through entity;

• a U.S. holder liable for the alternative minimum tax;

• a U.S. holder who acquired GrafTech Common Stock pursuant to the exercise of options or rights or otherwise as compensation or through a tax-qualified retirement plan; or

• a U.S. holder who actually or constructively owns an interest in Seadrift or C/G (other than any interest in Seadrift or C/G that is currently owned, directly or indirectly, by GrafTech).

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This discussion of material U.S. federal income tax consequences is not a complete analysis or description of all potential U.S. federal income tax consequences of the Mergers. This discussion does not address tax consequences that may vary with, or are contingent on, individual circumstances. In addition, it does not address any non-income tax or any foreign, state or local tax consequences of the Mergers, or the consequences under any proposed Treasury regulations that have not taken effect as of the date of this prospectus. Accordingly, we strongly urge each GrafTech stockholder to consult his or her own tax advisor to determine the particular U.S. federal, state or local or foreign income or other tax consequences to him or her of the Mergers.

Consequences of Exchange to U.S. Holders

The exchange by U.S. holders of shares of GrafTech Common Stock for shares of New GrafTech Common Stock pursuant to the GTI Merger will be treated as an exchange described in Section 351 of the Code, or the GTI Merger will be treated as a reorganization within the meaning of Section 368(a) of the Code, or both. A U.S. holder will not recognize any gain or loss for U.S. federal income tax purposes upon its exchange of shares of GrafTech Common Stock for shares of New GrafTech Common Stock. Such holder will have a tax basis in the New GrafTech Common Stock received in the GTI Merger equal to the tax basis of the GrafTech Common Stock surrendered therefor (assuming that no election to reduce such basis is made). The holding period for New GrafTech Common Stock received in the GTI Merger will include the holding period for the GrafTech Common Stock surrendered therefor.

Consequences to GrafTech and New GrafTech

Neither GrafTech nor New GrafTech will recognize any gain or loss for U.S. federal income tax purposes as a result of the exchange of GrafTech shares for New GrafTech shares pursuant to the GTI Merger. In addition, no gain or loss will be recognized by GrafTech or New GrafTech as a result of the issuance of shares of New GrafTech Common Stock in exchange for the equity interests in Seadrift pursuant to the Seadrift Merger, and no gain or loss will be recognized by GrafTech or New GrafTech as a result of the issuance of shares of New GrafTech Common Stock in exchange for the equity interests in C/G pursuant to the C/G Merger.

Information on Mergers to Be Filed with GrafTech Stockholders’ Returns

A U.S. holder that qualifies as a “significant transferor” and certain U.S. shareholders of a foreign corporation that qualifies as a significant transferor will be required to attach statements to their tax returns for the year in which the Mergers are consummated that contain the information listed in Treasury Regulation Section 1.351-3. A significant transferor includes a person that transfers property to a corporation and receives stock of the transferee corporation in an exchange described in Section 351 of the Code if, immediately after the exchange, such person owns at least five percent (by vote or value) of the total outstanding stock of the transferee corporation and the stock owned by such person is publicly traded. The statement must include the significant transferor’s tax basis in and the fair market value of the GrafTech Common Stock that it exchanges for New GrafTech Common Stock.

FINANCIAL STATEMENTS

See the Index to Financial Statements at page F-1 of this prospectus for a complete list of the historical financial statements of GrafTech, Seadrift and C/G included in this prospectus.

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GRAFTECH AND SEADRIFT UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The unaudited pro forma condensed combined balance sheet combines the historical consolidated balance sheets of GrafTech and Seadrift as if the merger took place on June 30, 2010.

The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2009 and for the six months ended June 30, 2010 combine the historical consolidated statements of operations for GrafTech and Seadrift as if the merger took place on January 1, 2009.

The historical consolidated financial information has been adjusted in the unaudited condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the merger; (2) factually supportable; and (3) with respect to the statements of operations, expected to have a continuing impact on the combined company’s results. The pro forma adjustments are described in the accompanying footnotes.

The unaudited pro forma condensed combined financial information was based on and should be read in conjunction with the following historical consolidated financial statements and accompanying notes of GrafTech and Seadrift for the applicable periods, which are included in this document:

• Separate unaudited financial statements of GrafTech as of and for the six months ended June 30, 2010;

• Separate historical financial statements of GrafTech as of and for the year ended December 31, 2009;

• Separate unaudited financial statements of Seadrift as of and for the six months ended June 30, 2010; and

• Separate historical financial statements of Seadrift as of and for the year ended December 31, 2009.

The unaudited pro forma condensed combined financial information is presented for information purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the acquisitions been completed as of the date and for the periods presented, and should not be taken as representative of our consolidated results of operations or financial condition following completion of the acquisitions. In addition, the unaudited pro forma condensed combined financial information is not intended to project the future financial position or results of operations of the combined company. Sales of product from Seadrift to GrafTech during the six months ended June 30, 2010 have been eliminated; there were no sales of product from Seadrift to GrafTech during the year 2009. In the future, to the extent the combined company uses Seadrift coke to manufacture any products, Seadrift’s profit will not be recognized until the coke is used to produce a finished product and the associated finished product is sold to our end customer. Given the manufacturing process time for graphite electrodes, for example, this could result in Seadrift’s profits being delayed 3 to 6 months versus Seadrift product sales to third parties.

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting under existing U.S. generally accepted accounting principles (“GAAP”). GrafTech has been treated as the acquirer. The acquisition accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited condensed combined financial information. Differences between these preliminary management estimates (for example estimates as to value of acquired property and equipment and intangibles) and the final acquisition accounting will occur and these differences could have a material impact on the accompanying unaudited pro forma condensed combined financial statements and the combined company’s future results of operations and financial position.

The unaudited pro forma combined financial information does not reflect any cost savings, operational synergies or revenue enhancements that the combined company may achieve as a result of the merger or the costs to combine the operations or the costs necessary to achieve cost savings, operating synergies and revenue enhancements.

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GrafTech International Ltd. and Seadrift Coke L.P.

Pro Forma Unaudited Condensed Combined Statement of Operations

For the Year Ended December 31, 2009

	GrafTech			Seadrift			Pro Forma Adjustments			Pro Forma Combined
	(dollars in thousands, except per share information)
Net sales	$	659,044		$	74,309					$	733,353
Cost of sales		467,939			55,632		$	12,940	(b)		536,511
Gross profit		191,105			18,677			(12,940	)		196,842
Research and development		10,168									10,168
Selling and administrative expenses		82,325			7,045			(26	)(c)		89,344
Operating income		98,612			11,632			(12,914	)		97,330
Equity in losses of non-consolidated affiliates		55,488						(55,488	)(d)		0
Other (income), net		1,868			11,038			602	(e)		13,508
Interest expense		5,609			1,956			5,653	(f)		13,218
Interest income		(1,047	)								(1,047	)
Income (loss)before provision for income taxes		36,694			(1,362	)		36,319			71,651
Provision for income taxes		24,144			0			(27,361	)(g)		(3,217	)
Net income (loss)	$	12,550		$	(1,362	)	$	63,680		$	74,868
Basic income per common share:
Net income per share	$	0.10								$	0.57
Weighted average common shares outstanding (in thousands)		119,707						12,000	(h)		131,707
Diluted income per common share:
Net income per share	$	0.10								$	0.56
Weighted average common shares outstanding (in thousands)		120,733						12,000	(h)		132,733

See the accompanying notes to the unaudited pro forma condensed combined financial statements which are an integral part of these statements. The pro forma adjustments are explained in Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations for the Year Ended December 31, 2009 and for the Six Months Ended June 30, 2010.

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GrafTech International Ltd. and Seadrift Coke L.P.

Pro Forma Unaudited Condensed Combined Statement of Operations

For the Six Months Ended June 30, 2010

	GrafTech			Seadrift		Pro Forma Adjustments			Pro Forma Combined
	(dollars in thousands, except per share information)
Net sales	$	470,518		$	79,092	$	(731	)(a)	$	548,879
Cost of sales		327,688			56,974		4,216	(b)		388,878
Gross profit		142,830			22,118		(4,947	)		160,001
Research and development		5,726								5,726
Selling and administrative expenses		54,819			5,247		(7,694	)(c)		52,372
Operating income		82,285			16,871		2,747			101,903
Equity in (earnings) of non-consolidated affiliates		(910	)		0		910	(d)		0
Other (income), net		(11,855	)		707					(11,148	)
Interest expense		2,202			663		3,142	(f)		6,007
Interest income		(1,068	)		0					(1,068	)
Income (loss)before provision for income taxes		93,916			15,501		(1,305	)		108,112
Provision for income taxes		21,066			0		8,915	(g)		29,981
Net income (loss)	$	72,850		$	15,501	$	(10,220	)	$	78,131
Basic income per common share:
Net income per share	$	0.61							$	0.59
Weighted average common shares outstanding (in thousands)		120,395					12,000	(h)		132,395
Diluted income per common share:
Net income per share	$	0.60							$	0.59
Weighted average common shares outstanding (in thousands)		121,083					12,000	(h)		133,083

See the accompanying notes to the unaudited pro forma condensed combined financial statements which are an integral part of these statements. The pro forma adjustments are explained in Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations for the Year Ended December 31, 2009 and for the Six Months Ended June 30, 2010.

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GrafTech International Ltd. and Seadrift Coke L.P.

Pro Forma Unaudited Condensed Combined Balance Sheet

As of June 30, 2010

	GrafTech			Seadrift		Pro Forma Adjustments			Pro Forma Combined
	(dollars in thousands)
Assets
Current assets
Cash and cash equivalents	$	63,376		$	3,187	$	(50,000	)(A)	$	16,563
Accounts and notes receivable		153,837			30,384					184,221
Inventories, net		267,463			17,135		15,742	(B)		300,340
Prepaid expenses and other current assets		11,305			445		3,259	(C)		15,009
Total current assets		495,981			51,151		(30,999	)		516,133
Property, plant and equipment, net		359,998			71,516		178,484	(D)		609,998
Deferred income taxes		21,790					(17,585	)(E)		4,205
Goodwill		8,687					99,091	(F)		107,778
Other assets		11,692			145		70,836	(G)		82,673
Investment in nonconsolidated affiliate		64,225					(64,225	)(H)		0
Restricted cash		386								386
Total assets	$	962,759		$	122,812	$	235,602		$	1,321,173
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	42,622		$	1,152				$	43,774
Short-term debt		0			7,953	$	(7,912	)(I)		41
Accrued income and other taxes		43,784			0		4,317	(J)		48,101
Supply chain financing liability		44,008			0					44,008
Other accrued liabilities		93,071			14,982		(6,370	)(K)		101,683
Total current liabilities		223,485			24,087		(9,965	)		237,607
Long-term debt		1,230			152		110,018	(L)		111,400
Interest rate swaps		0			0					0
Other long-term obligations		101,191			969					102,160
Deferred income taxes		24,473					1,427	(M)		25,900
Contingencies					800					800
Stockholders’ equity
Preferred stock		0								0
Common stock/capital		1,246			9,781		(9,661	)(N)		1,366
Additional paid-in capital		1,306,920					192,480	(N)		1,499,400
Accumulated other comprehensive (loss)		(348,844	)							(348,844	)
Accumulated (deficit) earnings		(232,352	)		87,023		(48,697	)(O)		(194,026	)
Common stock/capital held in treasury and in employee trusts		(114,590	)							(114,590	)
Total stockholders’ equity		612,380			96,804		134,122			843,306
Total liabilities and stockholders’ equity	$	962,759		$	122,812	$	235,602		$	1,321,173

See the accompanying notes to the unaudited pro forma condensed combined financial statements which are an integral part of these statements. The pro forma adjustments are explained in Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2010.

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GRAFTECH AND SEADRIFT NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Description of Transaction

On April 28, 2010, we, and certain of our subsidiaries, entered into an agreement and plan of merger with Seadrift Coke, L.P. (“Seadrift”), a Delaware limited partnership, and certain of its partners, to acquire all of the equity interests of Seadrift that we do not already own. We currently own limited partnership units constituting approximately 18.9% of the equity interests in Seadrift.

At the same time, we, and certain of our subsidiaries, entered into an agreement and plan of merger with C/G Electrodes, LLC (“C/G”), a Delaware limited liability company, and certain of its members. The acquisitions are subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The C/G merger is conditioned on the prior or simultaneous consummation of the Seadrift merger. See “GrafTech, Seadrift and C/G Unaudited Pro Forma Condensed Combined Financial Information” below for additional details.

In connection with the acquisitions, GrafTech will reorganize into a new holding company structure pursuant to the agreements and plans of merger and Section 251(g) of the General Corporation Law of the State of Delaware. The new holding company (“New GTI”) will be identical to our existing holding company, GrafTech (“Old GTI”), in all material respects, including its Board of Directors, management and capital structure. At the closing of the mergers, all outstanding shares of our common stock will automatically be converted into identical common stock representing the same percentage ownership of and voting rights in the new holding company, which will also be a Delaware corporation. Each Old GTI Share issued and outstanding immediately prior to the reorganization will convert into and be exchanged for one share, par value $0.01 per share, of common stock of the new Delaware holding company (each, a “New GTI Share”), having the same rights, powers, preferences, qualifications, limitations and restrictions as the Old GTI Shares. Immediately after the merger, the new Delaware holding company will be renamed GrafTech International Ltd. and the name of Old GTI will be changed to GrafTech Holdings Inc.

The consideration to be paid for Seadrift will consist of $78.5 million in cash (subject to working capital adjustments), 12 million New GTI Shares (subject to adjustments for stock splits, reverse stock splits or similar transactions) and non-interest bearing, senior subordinated promissory notes in an aggregate face amount of $100 million due in 2015. Approximately $42.0 million of the cash consideration to be paid in connection with the transaction will be funded through borrowings under our principal revolving credit facility, as amended and restated on April 28, 2010. The balance of the cash portion of the purchase price, approximately $50 million, will be paid from cash on hand. The New GTI Shares will be delivered on the respective date that the acquisition of Seadrift is completed. GrafTech stockholders do not and will not have dissenters’ rights or appraisal rights in connection with this reorganization.

Basis of Presentation

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting and was based on the historical financial statements of GrafTech and Seadrift. The acquisition method of accounting is based on Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, which GrafTech adopted on January 1, 2009 and uses the fair value concepts defined in ASC Topic 820, Fair Value Measurements and Disclosures, which GrafTech has adopted as required.

The acquisition method of accounting requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. Financial statements of GrafTech issued after completion of the merger will reflect such fair values, measured as of the acquisition date, which may be different than the estimated fair values included in these unaudited pro forma condensed combined financial statements. The financial statements of GrafTech issued after the completion of the merger will not be

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retroactively restated to reflect the historical financial position or results of operations of Seadrift. In addition, the consideration to be transferred is to be measured at the closing date of the merger at the then-current market price, which will likely result in the per share equity and debt components that are different from the amount reflected in these unaudited pro forma condensed combined financial statements.

ASC Topic 820 defines the term “fair value”, sets forth the valuation requirements for any asset or liability measured at fair value, expands related disclosure requirements and specifies a hierarchy of valuation techniques based on the nature of the inputs used to develop the fair value measures. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” In addition, market participants are assumed to be unrelated buyers and sellers in the principal (or most advantageous) market for the asset or liability. Fair value measurements for an asset assume the highest and best use by these market participants. As a result of these standards, GrafTech may be required to record assets which are not intended to be used or may be sold and/or to value assets at fair value measures that do not reflect GrafTech’s intended use of those assets. Many of these fair value measurements can be highly subjective and it is possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.

Acquisition costs (i.e., advisory, legal, valuation, other professional fees, etc.) are accounted for as expenses in the periods in which the costs are incurred. Total advisory, legal, regulatory and valuation costs expected to be incurred by GrafTech are estimated to be in the range of $10 to $15 million, of which $6.7 million was expensed in the six months ended June 30, 2010 and an immaterial amount in the year ended December 31, 2009. Total advisory, legal, regulatory and valuation costs expensed by Seadrift in the six months ended June 30, 2010 were $1.0 million; none were expensed in the year ended December 31, 2009.

Accounting Policies

Upon completion of the merger, GrafTech will perform a detailed review of Seadrift’s accounting policies. As a result of that review, GrafTech may identify differences between the accounting policies of the two companies that, when conformed, could have a material impact on the combined financial statements. At this time, GrafTech has identified that Seadrift uses the last-in, first-out (“LIFO”) method for costing its raw material inventory. The unaudited pro forma condensed combined financial statements have been adjusted to reflect the assumption that Seadrift will use the first-in, first-out (“FIFO”) method of valuing inventory.

Estimate of Consideration Expected to be Transferred

The following is a preliminary estimate of the consideration expected to be transferred to effect the acquisition of the remaining 81.1% of Seadrift (dollars in thousands):

Cash
Agreed amount subject to debt and working capital adjustments	$	78,500
Debt adjustments		(395	)
Net working capital adjustments		13,855
Net cash consideration		91,960
Fair value of common stock issued (based upon the August 2, 2010 closing price of our common stock—$16.05)		192,600
Fair value of non-interest bearing, five-year senior subordinated note (assuming a 8% discount rate)		68,059
Total consideration expected to be transferred	$	352,619

Our acquisition of the remaining units of Seadrift results in our obtaining control. Under ASC Topic 820 we are required to remeasure our previously held equity interest (18.9% ownership) to its fair value at the effective

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time of the merger. Our estimate of the fair value of $68.4 million of our previously held investment at June 30, 2010 is greater than its carrying value of $64.2 million by $4.2 million. GrafTech will recognize this difference as a gain in the income statement at the effective time of the merger. The unaudited pro forma condensed combined results of operations for the year ended December 31, 2009 and for the six months ended June 30, 2010 do not include this gain. The unaudited pro forma condensed combined balance sheet reflects an adjustment of retained earnings for the gain—See note (O) Adjustments to Unaudited Pro Forma Condensed Balance Sheet as of June 30, 2010. Our estimates of fair value and the gain are preliminary and subject to change and could vary materially from the actual amounts on the closing date. A change in the fair value estimates would affect goodwill.

The estimated consideration expected to be transferred reflected in these unaudited pro forma condensed combined financial statements does not purport to represent the actual consideration that will be transferred when the merger is completed. The fair value of equity securities issued is required to be measured on the closing date of the merger at the then-current market price. This requirement will likely result in a per share equity component different from the $16.05 assumed in these unaudited pro forma condensed combined financial statements and that difference may be material. GrafTech believes that an increase or decrease by as much as $1.00 in the GrafTech common stock price on the closing date of the merger from the common stock price assumed in these unaudited pro forma condensed combined financial statements is reasonably possible based on the recent history of GrafTech common stock price. A change of this magnitude would increase or decrease the consideration expected to be transferred by about $12 million which would be reflected in these unaudited pro forma condensed combined financial statements as an increase or decrease to goodwill.

In addition, the fair value of the unsecured subordinated notes issued is required to be measured using market interest rates as of the closing date. The interest rates used for pro forma purposes are based on current market rates. For each 0.125% increase or decrease in the assumed rates with respect to the credit agreement and the non-interest bearing notes to be issued in connection with the Seadrift transaction, our annual interest expense would increase or decrease by $0.1 million.

Estimate of Assets to be Acquired and Liabilities to be Assumed

The following is a preliminary estimate of the assets to be acquired and the liabilities to be assumed by GrafTech in the merger, reconciled to the estimate of consideration expected to be transferred (dollars in thousands):

Total estimated consideration expected to be transferred	$	352,619
Fair value of our equity in Seadrift held prior to acquisition (a)		68,400
Aggregate value to be allocated to identifiable net assets, with residual to goodwill		421,019
Allocation to identifiable net assets:
Cash		3,187
Accounts and notes receivable		30,384
Inventories		32,877
Other current assets		445
Property, plant and equipment		250,000
Customer relationships		43,681
Technology and know-how		27,300
Accounts payable and accrued liabilities		(9,764	)
Capital lease obligations		(194	)
Deferred income taxes—liability		(54,219	)
Other long-term liabilities		(1,769	)
Total allocated to identifiable net assets		321,928
Goodwill	$	99,091

(a) Includes an estimated gain of $4.2 million resulting from remeasuring GrafTech’s previously held equity interests in Seadrift.

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These preliminary estimates of fair value will likely differ from the amounts reported in the final acquisition accounting, and the difference could have a material impact on the accompanying unaudited pro forma condensed combined financial statements. Once GrafTech and our third party valuation advisors have full access to the specifics of Seadrift’s long-lived assets, additional insight will be gained that could impact: (i) the estimated total value assigned to long-lived assets; (ii) the estimated allocation of value between finite-lived and indefinite-lived assets and/or (iii) the estimated weighted-average useful life of each category of long-lived assets.

Following is a discussion of the adjustments made to Seadrift’s assets and liabilities in connection with the preparation of these unaudited pro forma condensed combined financial statements:

Investment in Non-consolidated Affiliate

ASC Topic 820 requires that an acquirer remeasure its previously held equity interest in an acquiree at its acquisition date fair value and recognize the resulting gain or loss in earnings. The gain is calculated based on the acquisition date fair value of our 18.9% interest in Seadrift, which will be determined by discounting the estimated cash flows of Seadrift.

Property, plant and equipment: As of the effective time of the merger, property, plant and equipment is required to be measured at fair value, unless those assets are classified as held-for-sale on the acquisition date. The acquired assets can include assets that are not intended to be used or sold, or that are intended to be used in a manner other than their highest and best use. Based on internal assessments for purposes of these unaudited pro forma condensed combined financial statements, it is assumed that all assets will be used in a manner that represents their highest and best use. This estimate of fair value is preliminary and subject to change and could vary materially from the actual adjustment on the closing date. For each $10 million change of fair value adjustment that changes property, plant and equipment, there could be an annual increase or decrease in depreciation expense of approximately $0.4 million per year, assuming a weighted-average useful life of 17.5 years.

Intangible assets: As of the effective time of the merger, identifiable intangible assets are required to be measured at fair value and these acquired assets could include assets that are not intended to be used or sold, or that are intended to be used in a manner other than their highest and best use. For purposes of these unaudited pro forma condensed combined financial statements, it is assumed that all assets will be used in a manner that represents their highest and best use.

The fair value of these intangible assets is normally determined primarily through the use of the “income approach,” which requires an estimate or forecast of all the expected future cash flows through the use of either the multi-period excess earnings method or relief-from-royalty method. At this time, GrafTech does not have sufficient information as to the amount, timing and risk of the estimated future cash flows needed to value the customer relationships/contracts and needle coke manufacturing technology and know-how. Some of the more significant assumptions in the development of estimated cash flows, from the perspective of a market participant, include: the amount and timing of projected future cash flows (including revenue, cost of goods sold, sales and marketing expenses, and working capital/contributory asset charges) and the discount rate selected to measure the risks inherent in the future cash flows. However, based on an internal revaluation of our valuation when we acquired our 18.9% ownership in Seadrift, as well as internal assessments, GrafTech has identified the following significant intangible assets: customer relationships/contracts and needle coke manufacturing technology and know-how. For purposes of these unaudited pro forma condensed combined financial statements, GrafTech management estimated the fair values of the intangible assets as follows: customer relationships/contracts—$43.7 million with a weighted average useful life of 15 years; and the needle coke manufacturing technology and know-how—$27.3 million with a weighted average useful life of 10 years. For each $10 million change of fair value adjustment that changes intangible assets, there could be an annual increase or decrease in amortization expense of approximately $0.3 million per year, assuming a weighted-average useful life of 13 years.

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Debt and other long-term obligations: Seadrift’s bank debt will be repaid with a portion of the cash consideration at the time of the merger. We have based our pro forma calculations using the balances at June 30, 2010—debt of $7.9 million. We will assume the capital lease and record its fair value at the time of the merger.

Deferred taxes: As of the effective time of the merger, GrafTech will provide deferred taxes and other tax adjustments as part of the accounting for the acquisition, primarily related to the estimated fair value adjustments made to certain assets acquired and liabilities assumed.

Other long-term liabilities and contingencies: As of the effective time of the merger, contingencies are required to be measured at fair value if the acquisition-date fair value of the asset or liability arising from the contingency can be determined. If the acquisition-date fair value of the asset or liability cannot be determined, the asset or liability would be recognized at the acquisition date if both of the following criteria are met: (i) it is probable that an asset existed or that a liability had been incurred at the acquisition date, and (ii) the amount of the asset or liability can be reasonably estimated. These criteria are to be applied using the guidance in ASC Topic 405, Contingencies. The acquisition method of accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement.

Goodwill

Goodwill is calculated as the difference between (i) the sum of the acquisition-date fair value of the consideration expected to be transferred and the fair value of the previously held equity interest and (ii) the values assigned to the assets acquired and liabilities assumed. Goodwill is not amortized but rather subject to an annual fair value impairment test.

Related Party Transactions

Interest expense on the loan from GrafTech to Seadrift and sales of product from Seadrift to GrafTech have been eliminated. There were no other material transactions between GrafTech and Seadrift during the periods presented.

Adjustments to GrafTech and Seadrift Unaudited Pro Forma Condensed Combined Statements of Operations for the Year Ended December 31, 2009 and for the Six Months Ended June 30, 2010

(a) To record the elimination of sales of product from Seadrift to GrafTech.

(b) Reflects the change in accounting for inventories from the LIFO method to the FIFO method; elimination of related party sales; and depreciation and amortization resulting from recording property, plant and equipment and intangible assets at their fair values. The components of the adjustments to cost of sales are (dollars in thousands):

	Year Ended December 31, 2009			Six Months Ended June 30, 2010
Reversal of (expense) benefit previously recognized resulting from change in accounting for inventories from LIFO method to FIFO method	$	(2,331	)	$	(2,391	)
Related party elimination					(731	)
Increased depreciation of property and equipment and amortization of identified intangible assets due to recording at fair values (1)		15,271			7,338
	$	12,940		$	4,216

(1) See Note to Adjustment (G).

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(c) The components of the adjustment to selling and administrative expenses are (dollars in thousands):

	Year Ended December 31, 2009			Six Months Ended June 30, 2010
Reversal of amortization of other assets—Seadrift	$	(26	)	$	(7	)
Elimination of transaction fees—Seadrift					(1,025	)
Elimination of transaction fees—GrafTech					(6,662	)
	$	(26	)	$	(7,694	)

(d) To eliminate the equity in (earnings) losses (including non-cash write-down of investment of $52.8 million in 2009) of non-consolidated affiliate as a result of owning 100% of Seadrift.

(e) To eliminate Seadrift’s gain on its interest rate swap for the year ended December 31, 2009.

(f) Reflects the change in interest expense (dollars in thousands):

	Year Ended December 31, 2009			Six Months Ended June 30, 2010
Reversal of interest on debt repaid at acquisition	$	(1,956	)	$	(663	)
Interest expense on new borrowings under GrafTech credit agreement and amortization of non interest bearing note issued (1)		7,609			3,805
	$	5,653		$	3,142

(1) Represents incremental interest expense related to the incurrence of additional indebtedness from (i) borrowings under our new GrafTech credit agreement of $42.0 million, bearing interest at our current interest rate of 2.91% and (ii) the issuance of $68.1 million of non-interest bearing notes with an effective interest rate of 8.0%. The interest rates used for pro forma purposes are based on current market rates.

(g) Represents the tax effect, calculated using the U.S. statutory income tax rate of 35%, of the impact of combining Seadrift’s results of operations and the adjustments to income before income taxes for the purchase accounting adjustments, primarily related to expenses associated with incremental debt to partially finance the acquisition and increased depreciation and amortization resulting from the estimated fair value adjustments for acquired property, plant and equipment and intangible assets, with the historical financial statements of GrafTech.

The pro forma statements of operations are prepared as if Seadrift were acquired as of January 1, 2009. Accordingly, the pro forma statements of operations include an adjustment to eliminate our equity in (earnings) losses and write-down of investment in a non-consolidated affiliate. Because we reversed the 2009 impairment write-down of the investment in a non-consolidated affiliate and the related tax effects, we were again in our original net deferred tax liability position. Therefore, we reversed the provision for valuation allowance of $41.4 million.

(h) The 12 million common shares to be issued, while subject to customary standstill provisions and certain restrictions on their sale, are participating shares for the calculations of basic and diluted earnings per share.

Adjustments to GrafTech and Seadrift Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2010

(A) To adjust cash and cash equivalents for amount used to fund the cash consideration paid to owners of Seadrift.

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(B) To adjust Seadrift inventories to their estimated net realizable value. GrafTech believes that fair value approximates net realizable value, which is defined as expected sales price less costs to sell plus a reasonable margin for the selling effort. The adjustment to inventory includes a $15.7 million increase to adjust LIFO inventories to a current cost basis.

(C) To record the release of $3.3 million of valuation allowance for deferred tax assets—short-term. See Note (E) and footnote (2) to (O) below for details.

(D) To adjust Seadrift property, plant and equipment to their estimated fair values (dollars in thousands):

Net book value of property, plant and equipment	$	71,516
Adjustment to record property, plant and equipment at their fair values		178,484
Estimated fair value of property, plant and equipment	$	250,000

(E) Reflects adjustment for the following (dollars in thousands):

Reversal of valuation allowance previously recognized for GrafTech deferred tax assets	$	30,400
Change in net long-term deferred tax asset position due to recording acquired assets and liabilities assumed at their fair values		(47,985	)
	$	(17,585	)

As part of accounting for the acquisition, we recorded deferred income tax liabilities for the fair value adjustments made to certain assets acquired and liabilities assumed. Certain of these deferred tax liabilities are expected to reverse during the same period that certain of our deferred tax assets are expected to reverse. As a result, we reduced our preexisting valuation allowance related to such deferred tax assets. This pro forma adjustment is reflected as an adjustment to deferred income taxes (asset) and retained earnings in the unaudited pro forma condensed combined balance sheet.

See Note (M) and footnote (2) to (O) below for additional details.

(F) Reflects adjustments for the following (dollars in thousands):

Difference between the estimated fair values of the net assets acquired and the consideration transferred	$	40,698
Recognition of gain on adjustment to fair value of GrafTech’s 18.9% ownership of Seadrift at the effective time of the merger		4,174
Net deferred tax liabilities associated with the estimated fair value adjustments of net assets acquired (1)		54,219
	$	99,091

(1) See Note (M).

Goodwill consists of the fair value of Seadrift’s assembled workforce and buyer-specific synergies.

(G) Reflects adjustments for the following (dollars in thousands):

Recognition of intangible asset—customer relationships	$	43,681
Recognition of intangible asset—technology and know-how		27,300
Write-off of Seadrift’s unamortized debt financing costs and non-compete agreements		(145	)
	$	70,836

81

Customer relationships represent the existing customers that are expected to continue to support the business. We estimated the fair values of customer relationships and technology and know-how using an income approach, that is, we determined the present value of the after-tax excess earnings attributable to each intangible asset using an appropriate risk-adjusted rate of return.

The amortization of these intangible assets was estimated using the straight-line method over their useful lives: customer relationships, 15 years; technology and know-how, 10 years.

(H) To eliminate carrying value of our 18.9% ownership of Seadrift at acquisition of the remaining ownership units.

(I) Reflects the repayment of Seadrift’s short-term debt.

(J) To record the interim pro forma current tax provision.

(K) To eliminate the accrual for the interim LIFO decrement expected to be replaced at year-end.

(L) Reflects adjustments for the following (dollars in thousands):

Borrowings under our existing revolving credit facility at our current rate of 2.91% to repay Seadrift’s short-term debt	$	41,959
Issuance of non-interest bearing, five-year senior subordinated note at its fair value using a current market rate of 8%		68,059
	$	110,018

(M) Reflects adjustments for the following (dollars in thousands):

Deferred tax liability on net assets acquired	$	54,219
Reclassification of net long-term deferred tax asset/liability position due to recording acquired assets and liabilities assumed at their fair values		(52,792	)
	$	1,427

For purposes of this unaudited pro forma condensed combined financial information, the United States federal statutory tax rate of 35% has been used in the calculations of the overall tax related to the acquisition for all periods presented. This rate does not reflect GrafTech’s effective tax rate, which includes other tax items, such as state and foreign taxes, as well as other tax charges or benefits and does not take into account any historical or possible future tax events that may impact the combined company.

(N) Reflects adjustments for the following (dollars in thousands):

	Common stock/ capital			Additional paid-in capital
Issuance of 12 million shares of common stock, $0.01 par value at fair value of $16.05 per share	$	120		$	192,480
Elimination of Seadrift’s capital account		(9,781	)		0
	$	(9,661	)	$	192,480

The fair value of the 12 million shares of common stock to be issued is based on the closing price of our common stock on August 2, 2010. An increase or decrease in the price of our common stock on the closing date of the merger of $1.00 from the stock price of $16.05 will increase or decrease the value of the shares issued by $12 million, which would be reflected as an increase or decrease in goodwill.

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(O) Reflects adjustments for the following (dollars in thousands):

Elimination of Seadrift’s retained earnings	$	(87,023	)
Recognition of gain on adjustment to fair value of GrafTech’s 18.9% ownership of Seadrift at the effective time of the merger (1)		4,174
Recognition of reversal of valuation allowances for deferred tax assets (2)		33,659
Other changes to net deferred tax assets		(2,652	)
To reverse previously established deferred tax liability upon acquisition of Seadrift		7,462
To recognize the pro forma provision for current income taxes on pro forma adjustments		(4,317	)
	$	(48,697	)

(1) Represents our estimated gain as a result of remeasuring our previously held equity interest in Seadrift. The gain will be impacted by transactional activity, such as equity income and distributions, up until the date the merger is completed. Because this pro forma adjustment will not have a continuing impact, it is excluded from the unaudited pro forma condensed combined statements of operations, but is reflected as an adjustment to goodwill and retained earnings in the unaudited pro forma condensed combined balance sheet.

(2) In the pro forma financial statements we eliminate our investment in Seadrift, our equity in its earnings, and our 2009 write-down of the investment. Our pro forma adjustment to income taxes includes the reversal of the net change of the deferred tax liability that we recognized at the acquisition of our investment and the reversal of the provision for valuation allowance ($41.4 million) that we recorded in connection with the impairment write-down of our investment.

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GRAFTECH, SEADRIFT AND C/G UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The unaudited pro forma condensed combined balance sheet combines the historical consolidated balance sheets of GrafTech, Seadrift, and C/G as if the merger took place on June 30, 2010.

The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2009 and for the six months ended June 30, 2010 combine the historical consolidated statements of operations for GrafTech, Seadrift and C/G as if the merger took place on January 1, 2009.

The historical consolidated financial information has been adjusted in the unaudited condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the merger; (2) factually supportable; and (3) with respect to the statements of operations, expected to have a continuing impact on the combined company’s results. The pro forma adjustments are described in the accompanying footnotes.

The unaudited pro forma condensed combined financial information was based on and should be read in conjunction with the following historical consolidated financial statements and accompanying notes of GrafTech, Seadrift, and C/G for the applicable periods, which are included in this document:

• Separate unaudited financial statements of GrafTech as of and for the six months ended June 30, 2010;

• Separate historical financial statements of GrafTech as of and for the year ended December 31, 2009;

• Separate unaudited financial statements of Seadrift as of and for the six months ended June 30, 2010;

• Separate historical financial statements of Seadrift as of and for the year ended December 31, 2009;

• Separate unaudited financial statements of C/G as of and for the six months ended June 30, 2010; and

• Separate historical financial statements of C/G as of and for the year ended December 31, 2009.

The unaudited pro forma condensed combined financial information is presented for information purposes only and is not intended to represent or be indicative of the combined results of operations or financial position that we would have reported had the acquisitions been completed as of the date and for the periods presented, and should not be taken as representative of our consolidated results of operations or financial condition following completion of the acquisitions. In addition, the unaudited pro forma condensed combined financial information is not intended to project the future financial position or results of operations of the combined company. Transactions between Seadrift and C/G during the periods presented have been eliminated in the unaudited pro forma condensed combined financial information. There were no material transactions between GrafTech and either Seadrift or C/G during the periods presented that are required to be eliminated. In the future, to the extent the combined company uses Seadrift coke to manufacture any products, Seadrift’s profit will not be recognized until the coke is used to produce a finished product and the associated finished product is delivered to our end customer. Given the manufacturing process time for graphite electrodes, for example, this could result in Seadrift’s profits being delayed 3 to 6 months versus Seadrift product sales to third parties.

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting under existing U.S. generally accepted accounting principles (“GAAP”). GrafTech has been treated as the acquirer. The acquisition accounting is dependent upon certain valuations and other studies that have yet to commence or progress to a stage where there is sufficient information for a definitive measurement. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited condensed combined financial information. Differences between these preliminary management estimates (for example estimates as to value of acquired property and equipment and intangibles) and the final acquisition accounting will occur and these differences could have a material impact on the accompanying unaudited pro forma condensed combined financial statements and the combined company’s future results of operations and financial position.

The unaudited pro forma combined financial information does not reflect any cost savings, operational synergies or revenue enhancements that the combined company may achieve as a result of the merger or the costs to combine the operations or the costs necessary to achieve cost savings, operating synergies and revenue enhancements.

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GrafTech International Ltd., Seadrift Coke L.P. and C/G Electrodes LLC

Pro Forma Unaudited Condensed Combined Statement of Operations

For the Year Ended December 31, 2009

	GrafTech			Seadrift			CG			Pro Forma Adjustments			Pro Forma Combined
	(dollars in thousands, except per share information)
Net sales	$	659,044		$	74,309		$	76,420		$	(7,003	)(a)	$	802,770
Cost of sales		467,939			55,632			47,860			13,783	(b)		585,214
Gross profit		191,105			18,677			28,560			(20,786	)		217,556
Research and development		10,168												10,168
Selling and administrative expenses		82,325			7,045			5,831			(439	)(c)		94,762
Operating income		98,612			11,632			22,729			(20,347	)		112,626
Equity in losses of non-consolidated affiliates		55,488									(55,488	)(d)		0
Other (income), net		1,868			11,038			(531	)		878	(e)		13,253
Interest expense		5,609			1,956			5,990			10,256	(f)		23,811
Interest income		(1,047	)											(1,047	)
Income (loss) before provision for income taxes		36,694			(1,362	)		17,270			24,007			76,609
Provision for income taxes		24,144			0			0			(26,927	)(g)		(2,783	)
Net income (loss)	$	12,550		$	(1,362	)	$	17,270		$	50,934		$	79,392
Basic income per common share:
Net income per share	$	0.10											$	0.55
Weighted average common shares outstanding (in thousands)		119,707									24,000	(h)		143,707
Diluted income per common share:
Net income per share	$	0.10											$	0.55
Weighted average common shares outstanding (in thousands)		120,733									24,000	(h)		144,733

See the accompanying notes to the unaudited pro forma condensed combined financial statements which are an integral part of these statements. The pro forma adjustments are explained in Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations for the Year Ended December 31, 2009 and for the Six Months Ended June 30, 2010.

85

GrafTech International Ltd., Seadrift Coke L.P. and C/G Electrodes LLC

Pro Forma Unaudited Condensed Combined Statement of Operations

For the Six Months Ended June 30, 2010

	GrafTech			Seadrift		CG			Pro Forma Adjustments			Pro Forma Combined
	(dollars in thousands, except per share information)
Net sales	$	470,518		$	79,092	$	62,101		$	(17,880	)(a)	$	593,831
Cost of sales		327,688			56,974		45,249			(14,301	)(b)		415,610
Gross profit		142,830			22,118		16,852			(3,579	)		178,221
Research and development		5,726			0		0			0			5,726
Selling and administrative expenses		54,819			5,247		4,433			(8,771	)(c)		55,728
Operating income		82,285			16,871		12,419			5,192			116,767
Equity in losses of non-consolidated affiliates		(910	)		0		0			910	(d)		0
Other (income), net		(11,855	)		707		(483	)		0			(11,631	)
Interest expense		2,202			663		2,888			5,706	(f)		11,459
Interest income		(1,068	)		0		0			0			(1,068	)
Income (loss) before provision for income taxes		93,916			15,501		10,014			(1,424	)		118,007
Provision for income taxes		21,066			0		0			10,665	(g)		31,731
Net income (loss)	$	72,850		$	15,501	$	10,014		$	(12,089	)	$	86,276
Basic income per common share:
Net income per share	$	0.61										$	0.60
Weighted average common shares outstanding (in thousands)		120,395								24,000	(h)		144,395
Diluted income per common share:
Net income per share	$	0.60										$	0.59
Weighted average common shares outstanding (in thousands)		121,083								24,000	(h)		145,083

See the accompanying notes to the unaudited pro forma condensed combined financial statements which are an integral part of these statements. The pro forma adjustments are explained in Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations for the Year Ended December 31, 2009 and for the Six Months Ended June 30, 2010.

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GrafTech International Ltd., Seadrift Coke L.P. and C/G Electrodes LLC

Pro Forma Unaudited Condensed Combined Balance Sheet

As of June 30, 2010

	GrafTech		Seadrift		C/G		Pro Forma Adjustments			Pro Forma Combined
	(dollars in thousands)
Assets
Current assets
Cash and cash equivalents	$	63,376	$	3,187	$	747	$	(50,000	)(A)	$	17,310
Accounts and notes receivable		153,837		30,384		14,072		(4,927	)(B)		193,366
Inventories, net		267,463		17,135		20,328		25,289	(C)		330,215
Prepaid expenses and other current assets		11,305		445		405		3,259	(D)		15,414