As filed with the Securities and Exchange Commission on July 19, 2002
Registration No. 333-90370
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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GRAFTECH INTERNATIONAL LTD.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1385548
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
BRANDYWINE WEST
1521 CONCORD PIKE
SUITE 301
WILMINGTON, DELAWARE 19803
(302) 778-8227
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
KAREN G. NARWOLD
VICE PRESIDENT, GENERAL COUNSEL, HUMAN RESOURCES & SECRETARY
GRAFTECH INTERNATIONAL LTD.
BRANDYWINE WEST
1521 CONCORD PIKE
SUITE 301
WILMINGTON, DELAWARE 19803
(302) 778-8214
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
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WITH A COPY TO:
M. RIDGWAY BARKER, ESQ.
KELLEY DRYE & WARREN LLP
TWO STAMFORD PLAZA
281 TRESSER BOULEVARD
STAMFORD, CONNECTICUT 06901
(203) 324-1400
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, 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, please 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(c)
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell 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 jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 19, 2002
PROSPECTUS
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426,400 SHARES
GRAFTECH INTERNATIONAL LTD.
COMMON STOCK
We have issued and contributed 426,400 shares of our common stock to a
benefits protection trust which we adopted to assist us in providing for payment
of certain benefit plan obligations to management. We have instructed the trust
to sell these shares promptly and in an orderly fashion. We have authorized the
trust to use its discretion as to the specific timing, process and other terms
of sale of the shares. The trust may sell the shares offered hereby on any stock
exchange, market or trading facility on which the shares are traded, in block
trades or in private transactions. These sales may be at fixed or negotiated
prices. Because we may withdraw from the trust the shares contributed to the
trust and/or the proceeds received from any sales of such shares prior to a
change of control of us, sales of these shares are deemed to be sales by us for
purposes of Federal securities laws. Regardless of whether such sales are deemed
to be by the trust or by us, we expect all net proceeds from the sale of the
shares offered hereby will be used to pay benefit plan obligations to
management.
Our common stock is traded on the New York Stock Exchange, or NYSE,
under the symbol "GTI." On July 18, 2002, the closing sale price of our common
stock, as reported by the NYSE, was $9.40 per share.
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INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 11.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED 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 , 2002
WHERE YOU CAN FIND MORE INFORMATION
We are required to file periodic reports, proxy statements and other
information relating to our business, financial statements and other matters
with the SEC. Our SEC filings are available to the public over the Internet at
the SEC's web site at HTTP://WWW.SEC.GOV. You may also read and copy any
document we file at the SEC's public reference room located at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room and its copy charges. Our reports and
proxy statements and other information relating to us can also be inspected at
the NYSE located at 20 Broad Street, New York, New York 10005.
We have filed with the SEC a registration statement on Form S-3 under
the Securities Act of 1933 with respect to our common stock being offered by
this prospectus. The term "registration statement," of which this prospectus is
a part, means the original registration statement and all amendments, including
all schedules and exhibits. This prospectus does not contain all of the
information in the registration statement because we have omitted parts of the
registration statement in accordance with the rules of the SEC. Please refer to
the registration statement for any information in the registration statement
that is not included in this prospectus. The registration statement can be
inspected and copied at the locations described above. In addition, each
statement made in this prospectus concerning a document filed as an exhibit to
the registration statement is qualified in its entirety by reference to that
exhibit for a complete statement of its provisions.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made by us with
the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act
of 1934 until all of the shares offered are sold.
o Annual Report on Form 10-K for the year ended December 31, 2001
except for Items 6, 7 and 8 therein;
o Quarterly Report on Item 10-Q for the quarter ended March 31, 2002
except for Items 1, 2 and 3 therein;
o Proxy Statement on Schedule 14A, dated March 29, 2002;
o Current Report on Form 8-K, filed on January 28, 2002;
o Current Report on Form 8-K, filed on February 11, 2002;
o Current Report on Form 8-K, filed on February 19, 2002;
o Current Report on Form 8-K, filed on April 23, 2002;
o Current Report on Form 8-K, filed on May 1, 2002;
o Current Report on Form 8-K, filed on May 1, 2002;
o Current Report on Form 8-K, filed on May 2, 2002;
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o Current Report on Form 8-K, filed on May 7, 2002;
o Current Report on Form 8-K, filed on May 7, 2002;
o Current Report on Form 8-K, filed on May 9, 2002;
o Current Report on Form 8-K, filed on May 24, 2002;
o Our registration statement on Form S-4, as amended (Registration No.
333-87302);
o The description of our common stock contained in our registration
statement on Form 8-A (File No. 1-13888) dated July 28, 1995, filed
with the SEC under Section 12 of the Exchange Act; and
o The description of our preferred stock purchase rights contained in
our registration statement on Form 8-A (File No. 1-13888) dated
September 10, 1998, filed with the SEC under Section 12 of the
Exchange Act.
Any statement contained in a previously filed document incorporated by
reference in this prospectus is modified or superseded to the extent that a
statement contained in this prospectus modifies or supersedes such statement.
Any statement contained in this prospectus or in a document incorporated by
reference in this prospectus is modified or superseded to the extent that a
statement contained in any subsequently filed document which is or is deemed to
be incorporated by reference in this prospectus modifies or supersedes such
statement. Only the modified or superseded statement shall constitute a part of
this prospectus.
You may request a copy of these filings, other than their exhibits, at no
cost, by oral or written request to: GrafTech International Ltd., Brandywine
West, 1521 Concord Pike, Suite 301, Wilmington, Delaware 19803, Attention: Elise
A. Garofalo, Director of Investor Relations, Telephone (302) 778-8227.
FORWARD LOOKING STATEMENTS
This prospectus contains forward looking statements. In addition, from
time to time, we or our representatives have made or may make forward looking
statements orally or in writing. These include statements about such matters as:
future production and sales of steel, aluminum, fuel cells, electronic devices
and other products that incorporate our products or that are produced using our
products; future prices and sales of and demand for graphite electrodes and our
other products; future operational and financial performance of various
businesses; strategic plans and programs; impacts of regional and global
economic conditions; restructuring, realignment, strategic alliance, supply
chain, technology development and collaboration, investment, acquisition, joint
venture, operating, integration, tax planning, rationalization, financial and
capital projects; legal matters and related costs; consulting fees and related
projects; potential offerings, sales and other actions regarding debt or equity
securities of us or our subsidiaries; and future costs, working capital,
revenue, business opportunities, values, debt levels, cash flow, cost savings
and reductions, margins, earnings and growth. The words "will," "may," "plan,"
"estimate," "project," "believe," "anticipate," "intend," "expect," "should,"
"target," "goal" and similar expressions identify some of these statements.
Actual future events and circumstances (including future performance,
results and trends) could differ materially from those set forth in these
statements due to various factors. These factors include:
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o the possibility that global or regional economic conditions
affecting our products may not improve or may worsen;
o the possibility that announced or anticipated additions to capacity
for producing steel in electric arc furnaces, or announced or
anticipated reductions in graphite electrode manufacturing capacity,
may not occur;
o the possibility that increased production of steel in electric arc
furnaces or reductions in graphite electrode manufacturing capacity
may not result in stable or increased demand for or prices or sales
volume of graphite electrodes;
o the possibility that economic or technological developments may
adversely affect growth in the use of graphite cathodes in lieu of
carbon cathodes in the aluminum smelting process;
o the possibility of delays in or failure to achieve widespread
commercialization of proton exchange membrane fuel cells which use
natural graphite materials and components and the possibility that
manufacturers of proton exchange membrane fuel cells using those
materials or components may obtain those materials or components or
the natural graphite used in them from other sources;
o the possibility of delays in or failure to achieve successful
development and commercialization of new or improved electronic
thermal management or other products;
o the possibility of delays in meeting or failure to meet
contractually specified development objectives and the possible
inability to fund and successfully complete expansion of
manufacturing capacity to meet growth in demand for new or improved
products, if any;
o the possibility that we may not be able to protect our intellectual
property or that intellectual property used by us infringes the
rights of others;
o the occurrence of unanticipated events or circumstances relating to
pending antitrust investigations, lawsuits or claims;
o the commencement of new investigations, lawsuits or claims relating
to the same subject matter as the pending investigations, lawsuits
or claims;
o the possibility that the lawsuit against our former parents
initiated by us could be dismissed or settled, our theories of
liabilities or damages could be rejected, material counterclaims
could be asserted against us, legal expenses and distraction of
management could be greater than anticipated, or unanticipated
events or circumstances may occur;
o the possibility that expected cost savings from our 2002 new major
cost savings plan, including our POWER OF ONE initiative and the
shutdown of certain of our facilities or other cost savings efforts,
will not be fully realized;
o the possibility that anticipated benefits from the realignment of
our businesses into two new divisions may be delayed or may not
occur;
o the possibility that the corporate realignment of our subsidiaries
may not be completed when anticipated or at all and that, as a
result, the anticipated benefits therefrom may not be achieved when
anticipated or at all;
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o the possibility that we may incur unanticipated health, safety or
environmental compliance, remediation or other costs or experience
unanticipated raw material or energy supply, manufacturing operation
or labor difficulties;
o the occurrence of unanticipated events or circumstances relating to
strategic plans or programs or relating to corporate realignment,
restructuring, strategic alliance, supply chain, technology
development, investment, acquisition, joint venture, operating,
integration, tax planning, rationalization, financial or capital
projects;
o changes in interest or currency exchange rates, changes in
competitive conditions, changes in inflation affecting our raw
material, energy or other costs, development by others of
substitutes for some of our products and other technological
developments;
o the possibility that changes in financial performance may affect our
compliance with financial covenants or the amount of funds available
for borrowing under our senior secured bank credit facilities (the
"SENIOR FACILITIES"); and
o other risks and uncertainties, including those described elsewhere
or incorporated by reference in this prospectus.
Occurrence of any of the events or circumstances described above could
also have a material adverse effect on our business, financial condition,
results of operations or cash flows.
We can give you no assurance 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 us or persons acting on our 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.
THE COMPANY
We are one of the world's largest manufacturers and providers of high
quality natural and synthetic graphite- and carbon-based products and services,
offering energy solutions to industry-leading customers worldwide. We
manufacture graphite and carbon electrodes and cathodes, used primarily in
electric arc furnace steel production and aluminum smelting. We also manufacture
other natural and synthetic graphite and carbon products used in, and provide
services to, the fuel cell power generation, electronics, semiconductor and
transportation markets. We believe that we have the leading market share in all
of our major product lines. We have over 100 years of experience in the research
and development of graphite and carbon technology, and currently hold numerous
patents related to this technology.
We are a global business, selling our products and engineering and
technical services in more than 70 countries. We have 13 manufacturing
facilities strategically located in Brazil, Mexico, South Africa, France, Spain,
Russia and the U.S., and a planned joint venture manufacturing facility located
in China, which, subject to receipt of required Chinese governmental approvals
and satisfaction of other conditions, is expected to commence operations in
2003. Our customers include industry leaders such as Nucor Corporation and
Arcelor in steel, Alcoa Inc. and Pechiney in aluminum, Ballard Power Systems in
fuel cells, Intel Corporation in electronics, MEMC Electronic Materials, Inc. in
semiconductors and The Boeing Company in transportation. In 2001, our net sales
were $654 million and our as adjusted EBITDA was $130 million. EBITDA, for this
purpose, means operating profit (loss), plus depreciation,
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amortization, impairment losses on long-lived and other assets, impairment
losses on investments, inventory write-downs and that portion of restructuring
charges (credits) applicable to non-cash asset write-offs. Adjusted EBITDA, for
this purpose, means EBITDA plus the cash portion of restructuring charges
(credits), charges (credits) for estimated potential liabilities and expenses in
connection with antitrust investigations and related lawsuits and claims,
securities class actions and stockholder derivative lawsuits, the charge related
to the withdrawn public offering by Graftech and the charges in connection with
the corporate realignment of our subsidiaries. We believe that EBITDA and
Adjusted EBITDA are generally accepted as providing useful information regarding
a company's ability to incur and service debt. EBITDA and Adjusted EBITDA should
not be considered in isolation or as a substitute for net income, cash flows
from continuing operations or other consolidated income or cash flow data
prepared in accordance with generally accepted accounting principles or as a
measure of a company's profitability or liquidity. Our method for calculating
EBITDA or Adjusted EBITDA may not be comparable to methods used by other
companies.
In June 1998, we began to implement management changes, which resulted
in a new senior management team. Since then, this management team has:
LOWERED COSTS. We have delivered total recurring annualized run rate
cost savings of $132 million by the end of 2001 under a global restructuring and
rationalization plan originally announced in September 1998 and completed at the
end of 2001. Cost saving achievements include a 15% reduction in our average
graphite electrode production cost per metric ton since the 1998 fourth quarter
and a 20% reduction in overhead since 1998. Cost of sales and overhead savings
represent about 70% of the $132 million, with the balance being interest
savings. In January 2002, we announced a new major cost savings plan that
targets more than $80 million of further total recurring annual cost savings by
2004 (for a three-year cumulative total of $200 million in cost savings under
the 2002 plan).
REDUCED DEBT. From the end of 1998 through 2001, we reduced total debt
and other long term obligations by over $200 million, $91 million of which
represents the net proceeds from our public offering of common stock in July
2001.
REALIGNED OUR BUSINESSES TO MAXIMIZE VALUE. In 2001, we realigned our
businesses into two new operating divisions, our Graphite Power Systems Division
and our Advanced Energy Technology Division. We believe that the realignment
will allow each division to develop and implement strategies uniquely designed
to maximize the value of its businesses, enter into strategic alliances and
identify and implement manufacturing and sales rationalization and cost savings
initiatives. We also believe that the realignment will allow us to identify
opportunities to improve efficiencies in intellectual property management,
global cash management and other corporate services. To reflect our new emphasis
on graphite and carbon technology, our new competitive strategy and our new
corporate vision, we requested and our stockholders approved a change in the
name of UCAR International Inc. to GrafTech International Ltd.
OUR DIVISIONS
GRAPHITE POWER SYSTEMS DIVISION
Our Graphite Power Systems Division manufactures and delivers high
quality graphite and carbon electrodes and cathodes and related services that
are key components of the conductive power systems used to produce steel,
aluminum and other non-ferrous metals. Graphite electrodes are consumed in the
production of steel in electric arc furnaces, the steel making technology used
by all "mini-mills." Graphite electrodes are also consumed in refining steel in
ladle furnaces and in other smelting processes. Carbon
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electrodes are used in the production of silicon metal, a raw material primarily
used in the manufacture of aluminum. Graphite and carbon cathodes are used in
aluminum smelting.
During 2001, net sales of this division, which represented 80% of our
total net sales, were $525 million, with gross profit of $147 million. Despite
difficult economic conditions during 2001, this division maintained a gross
profit margin of about 28%.
Because of its strong competitive position, we believe that this
division is well positioned to benefit from the expected cyclical recovery in
the production of steel and other metals.
LOW COST SUPPLIER. We believe that our graphite electrode production
cost structure is and will continue to be the lowest of all major producers. We
believe that our network of state-of-the-art manufacturing facilities in diverse
geographic regions, including Brazil, Mexico, South Africa, France, Spain and
Russia, coupled with our planned joint venture manufacturing facility located in
China, provides us with significant operational flexibility and an important
cost advantage. We have aggressively reduced our graphite electrode production
costs by closing higher cost facilities and redeploying much of that capacity to
our larger, lower cost, strategically located facilities. Completed actions
include the shutdown of graphite electrode manufacturing capacity in Canada,
Germany and the U.S., coupled with incremental expansion of graphite electrode
manufacturing capacity in Mexico, South Africa and Spain.
LEADING MARKET SHARE. We are one of only two global producers of
graphite and carbon electrodes and cathodes. We believe that this division has
the leading market share in all of its major product lines.
SIGNIFICANT BARRIERS TO ENTRY. We believe that the barriers to entrants
in the graphite and carbon electrode industries are high. There have been no
significant entrants since 1950. We estimate that our average capital investment
to incrementally increase our annual graphite electrode manufacturing capacity
would be less than 10% of the initial investment for "greenfield" capacity. We
also believe that production of these materials requires a significant amount of
expertise and know-how, which we believe is difficult for entrants to replicate
in order to compete effectively.
GRAPHITE ELECTRODES ARE USED IN THE HIGHER LONG TERM GROWTH SECTOR OF
THE STEEL INDUSTRY. Graphite electrodes accounted for about 79% of this
division's net sales during 2001. Graphite electrodes are consumed in the
production of steel in "mini-mills." "Mini-mills" constitute the higher long
term growth sector of the steel industry. Worldwide electric arc furnace steel
production grew from about 14% of total steel production in 1970 to about 33% of
total steel production in 2001.
To maintain our strong competitive position, we have instituted a number
of strategic initiatives to improve the cost structure, increase the revenues
and maximize the cash flow generated by this division. These strategic
initiatives include:
PURSUING COST SAVINGS. We are focused on continuous cost improvement. We
believe that key actions identified under our new major cost savings plan will
enable us to reduce our average graphite electrode production cost by an
additional 15% by 2004 as compared to 2001. These actions include:
o the mothballing of our graphite electrode manufacturing capacity in
Caserta, Italy, completed during the 2002 first quarter, ahead of
schedule, combined with the redeployment of much of that capacity to
our larger, lower cost graphite electrode manufacturing facilities
in Mexico, France and Spain; and
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o the delivery of the balance of the full benefits from the completed
closure of our U.S. graphite electrode manufacturing operations.
LEVERAGING OUR GLOBAL PRESENCE WITH INDUSTRY LEADING CUSTOMERS.
Capitalizing on our global leadership position and the continuing consolidation
within the steel and other metals industries, we are prioritizing our sales and
marketing efforts toward the world's larger global steel and other metals
producers. These efforts focus on offering consistently high quality electrodes
and technical services on a global basis at competitive prices.
We believe that, as a result of these efforts and our diverse geographic
locations, we are the producer of graphite electrodes best positioned to serve
the global graphite electrode purchasing requirements of these steel producers.
We believe that we have increased our market share of graphite electrodes sold
to the ten largest electric arc furnace steel producers by about 4 percentage
points in 2001 as compared to 2000. In 2001, six of our top ten graphite
electrode customers were among the ten largest purchasers of graphite electrodes
worldwide. To further strengthen our competitive advantage and expand our global
manufacturing presence, we have entered into and begun performance under an
agreement with Jilin Carbon Joint Stock Company, Ltd. ("JILIN") to form a joint
venture, which, subject to receipt of required Chinese governmental approval and
satisfaction of other conditions, is expected to produce and sell high quality
graphite electrodes in China.
We have a strategic alliance with Pechiney in the cathode business,
which has allied us with the recognized world leader in aluminum smelting
technology and which we believe positions us as the quality leader in the low
cost production of high quality graphite cathodes. We believe that our graphite
cathode technology will enable us to incrementally increase our market share of
graphite cathodes sold upon the commencement of operation of the new, more
efficient aluminum smelting furnaces that are being built, even as older
furnaces are being shut down. Our cathode capacity is sold out for balance of
2002 and into the beginning of 2003.
DELIVERING EXCEPTIONAL AND CONSISTENT QUALITY AND SERVICE. We believe
that our products are among the highest quality available. We continue to work
diligently to improve the quality and uniformity of our products on a worldwide
basis, providing significant production efficiencies for our customers and the
flexibility to source most orders from the facility that optimizes our
profitability. We have a strong commitment to provide a high level of technical
service to our customers, with more technical service engineers located in more
countries than any of our competitors. We believe that we have the most
extensive technical and customer service organization in our industry, which we
use strategically to service key customers to our competitive advantage.
ADVANCED ENERGY TECHNOLOGY DIVISION
Our Advanced Energy Technology Division develops, manufactures and sells
high quality, highly engineered natural and synthetic graphite- and carbon-based
energy technologies, products and services for both established and
high-growth-potential markets. We currently sell these products primarily to the
transportation, chemical, petrochemical, fuel cell power generation and
electronic thermal management markets. In addition, we provide cost effective
technical services for a broad range of markets and license our proprietary
technology in markets where we do not anticipate engaging in manufacturing
ourselves. During 2001, net sales of this division were $129 million, with gross
profit of $38 million and gross profit margin of 29.6%.
We are the world's leading manufacturer of natural graphite-based
products, including flexible graphite. Flexible graphite is an excellent gasket
and sealing material that to date has been used primarily in high temperature
and corrosive environments in the automotive, chemical and
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petrochemical markets. Advanced flexible graphite can be used in the production
of materials, components and products for proton exchange membrane fuel cells
and fuel cell systems, electronic thermal management applications, industrial
thermal management applications and battery and supercapacitor power storage
applications. Our synthetic graphite- and carbon-based products range from
established products, such as graphite and carbon refractories, graphite molds
and rocket nozzles and cones, to new carbon composites used in the fuel cell
power generation and electronic thermal management markets.
We believe that the strengths of this division include:
o developing intellectual property;
o developing and commercializing prototype and next generation
products and services; and
o establishing strategic alliances with leading customers and
suppliers as well as key technology focused companies.
We are leveraging our strengths to build the value of this division
through the development and commercialization of proprietary technologies into
high-growth-potential markets. We believe that our two largest growth
opportunities are in the fuel cell power generation and electronic thermal
management markets.
Since December 2000, this division has entered into strategic alliances
with Ballard Power Systems, the world's leader in fuel cell development, and two
leading chip makers in electronic thermal management. This division has also
entered into a strategic alliance with Conoco Inc. for carbon fiber technology
and manufacturing services.
RECENT DEVELOPMENTS
NEW MAJOR COST SAVINGS PLAN. In January 2002, we announced a new major
cost savings plan designed to generate cost savings to strengthen our balance
sheet. The key elements of the 2002 plan include:
o the rationalization of graphite electrode manufacturing capacity at
our higher cost facilities and the incremental expansion of capacity
at our lower cost facilities;
o the redesign and implementation of changes in our U.S. benefit plans
for active and retired employees, which has been completed;
o the implementation of work process changes, including consolidating
and streamlining order fulfillment, purchasing, finance and
accounting, and human resource processes, along with the
identification and implementation of outsourcing opportunities;
o additional plant and corporate overhead cost reductions; and
o the corporate realignment of our subsidiaries, consistent with the
operational realignment of our divisions, to generate significant
tax savings.
We estimate that the 2002 plan will generate cumulative cost savings of
about $45 million by the end of 2002, $120 million by the end of 2003 and $200
million by the end of 2004, and recurring annual cost savings of $80 million by
the end of 2004. We expect that cost of sales and overhead savings will
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account for about 75% of the $80 million, with the balance being interest and
tax savings. These savings are additive to those which we achieved by the end of
2001 under the global restructuring and rationalization plan that we originally
announced in September 1998 and that is now completed. We delivered total
recurring annualized run rate cost savings of $132 million by the end of 2001
under the 1998 plan. We estimate that the aggregate cash cost to implement the
cost savings initiatives of the 2002 plan will be about $20 million. We estimate
that the capacity expansion will cost an additional $15 million.
ANNOUNCED ASSET SALES. We intend to sell real estate, non-strategic
businesses and certain other non-strategic assets over the next two years. We
estimate that the pre-tax, cash proceeds from these sales will total $75 million
by the end of 2003. The non-strategic businesses contributed net sales of about
$25 million in 2001.
ISSUANCE OF INITIAL SENIOR NOTES. In February 2002, UCAR Finance Inc.,
our wholly owned special purpose finance subsidiary, issued $400 million
aggregate principal amount of its 10 1/4% Senior Notes due 2012 (the "SENIOR
NOTES"). We used $314 million of the net proceeds to repay term loans under the
Senior Facilities and the balance of the net proceeds to reduce the outstanding
balance under our revolving credit facility. After such repayment, the aggregate
principal amount due on the term loans are: no payments in 2002, 2003 or 2004,
$26 million in 2005, $26 million in 2006 and $164 million in 2007.
ISSUANCE OF ADDITIONAL SENIOR NOTES. On May 6, 2002, UCAR Finance issued
$150 million of additional Senior Notes. $75 million of the net proceeds from
the offering of the additional Senior Notes was used to reduce the outstanding
balance under our revolving credit facility and the balance was used to repay
term loans under the Senior Facilities. After such repayment, the aggregate
principal payments due on the term loans are: no payments in 2002, 2003, 2004,
2005, 2006 and $131 million in 2007.
RECENT BANK AMENDMENTS. In connection with the February 2002 issuance of
the Senior Notes, the Senior Facilities were amended to, among other things,
permit us to issue the Senior Notes and use the net proceeds as described above.
In connection with this amendment, our maximum permitted leverage ratio
substantially increased, our minimum required interest coverage ratio
substantially decreased and the manner in which those ratios are calculated was
changed to provide us more flexibility (with full availability of our revolving
credit facility) with respect to, among other things, the lawsuit initiated by
us against our former parents and the provision of security for antitrust fines.
In connection with the issuance of the additional Senior Notes in May
2002, the Senior Facilities were amended to, among other things, permit us to
issue the additional Senior Notes and use the net proceeds as described above.
In connection with this amendment, our financial covenants were changed to
provide us with more flexibility and the maximum amount available under our
revolving credit facility will be reduced from (euro)250 million to (euro)200
million. At March 31, 2002, on an as adjusted basis after giving effect to the
offering of the additional Senior Notes and the application of the estimated net
proceeds, the outstanding balance under our revolving credit facility would have
been nil.
OTHER MATTERS. We believe that satisfactory progress is being made on
the planned asset sales, which are part of the 2002 plan, and that successful
completion of those asset sales would strengthen our balance sheet. We maintain
our aggressive net debt (total debt less cash, cash equivalents and short-term
investments) goal of $500 million by the end of 2004 and have a nearer term
target of $600 million by the end of 2003 or earlier, pending planned asset
sales.
10
In addition, as previously announced, we are implementing interest rate
management initiatives to seek to minimize our interest expense and optimize our
portfolio of fixed and variable interest rate obligations. In connection with
those initiatives, we recently entered into a ten year interest rate swap for a
notional amount of $200 million to effectively convert that amount of fixed rate
debt to variable rate debt. We are targeting interest expense of $60 million for
2002, essentially the same as 2001.
In January 2002, we finalized discussions with the U.S. Department of
Justice to restructure the payment schedule for the remaining amount due on our
1998 antitrust fine (an aggregate of $57.5 million at April 30, 2002).
Previously, we were scheduled to make payments of $18 million in the 2002 second
quarter and $21 million in both the 2003 and 2004 second quarters. The revised
payment schedule requires a $2.5 million payment in 2002 (which has been timely
made), a $5.0 million payment in 2003 and, beginning with the 2004 second
quarter, quarterly payments ranging from $3.25 million to $5.375 million through
the 2007 first quarter. Interest will begin to accrue on the unpaid balance,
commencing with the 2004 second quarter, at the statutory rate of interest then
in effect. In January 2002, the statutory rate of interest was 2.13% per annum.
We are a Delaware corporation. Our principal executive offices are
located at Brandywine West, 1521 Concord Pike, Suite 301, Wilmington, Delaware
19803, and our telephone number at that location is (302) 778-8227. We maintain
a web site at http://www.graftechinternational.com, our subsidiary, Graftech,
maintains a web site at http://www.graftech.com and our High Tech High Temp
business unit maintains a web site at http://www.HT2.com. The information
contained on these web sites is not part of this prospectus.
On May 7, 2002, we changed our name from UCAR International Inc. to
GrafTech International Ltd.
RISK FACTORS
AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE RISKS AND UNCERTAINTIES DESCRIBED BELOW, IN
ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS, BEFORE
PURCHASING OUR COMMON STOCK. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT
THE ONLY ONES FACING US. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN
TO US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR FINANCIAL
CONDITION, RESULTS OF OPERATIONS, CASH FLOWS OR BUSINESS. IF ANY OF THE
FOLLOWING RISKS OR UNCERTAINTIES ACTUALLY OCCUR, OUR FINANCIAL CONDITION,
RESULTS OF OPERATIONS, CASH FLOWS OR BUSINESS COULD BE HARMED. IN THAT CASE, THE
TRADING PRICE OF OUR COMMON STOCK COULD DECLINE AND YOU COULD LOSE ALL OR PART
OF YOUR INVESTMENT.
WE ARE DEPENDENT ON THE GLOBAL STEEL AND OTHER METALS INDUSTRIES. OUR RESULTS OF
OPERATIONS MAY DETERIORATE DURING GLOBAL AND REGIONAL ECONOMIC DOWNTURNS.
Our principal product, graphite electrodes, which accounted for about
63% of our total net sales in 2001, is sold primarily to the electric arc
furnace steel production industry. Many of our other products are sold primarily
to other metals industries and the transportation industry. These are global
basic industries, and customers in these industries are located in every major
geographic market. As a result, our customers are affected by changes in global
and regional economic conditions. This, in turn, affects demand for, and prices
of, our products sold to these industries. Accordingly, we are directly affected
by changes in global and regional economic conditions.
In addition, demand for our products sold to these industries may be
adversely affected by improvements in those products as well as in the
manufacturing operations of customers, which reduce the rate of consumption or
use of our products for a given level of production by our customers. We
11
estimate that the average rate of consumption of graphite electrodes per metric
ton of steel produced (called "SPECIFIC CONSUMPTION") declined from about 4.3
kilograms of graphite electrodes per metric ton of steel produced in 1990 to
about 2.4 kilograms per metric ton in 2001. While we believe that the rate of
decline of specific consumption over the long term has become lower, we believe
that there was a slightly more significant decline in 2001 than would otherwise
have been the case due to the shutdown of older, less efficient electric arc
furnaces due to the severe downturn affecting the steel industry.
As a result of global and regional economic conditions, reductions in
rates of consumption and other factors, demand for our graphite electrodes and
some of our other products sold to these industries has fluctuated significantly
and prices have declined since 1998. These circumstances reduced our net sales
and net income.
Throughout 1998 and the 1999 first quarter, electric arc furnace steel
production declined as a result of adverse global and regional economic
conditions. A recovery began in the 1999 second quarter that lasted through
mid-2000. Beginning in mid-2000, economic conditions began to weaken in North
America, becoming more severe in the 2000 fourth quarter.
The economic weakening in North America became more severe in 2001. In
addition, the impact of the economic weakness in North America on other regional
economies became more severe during 2001. This global economic weakness was
exacerbated by the impact on economic conditions of the terrorist acts in the
U.S. in September 2001. We believe that worldwide electric arc furnace steel
production declined in 2001 by 2% as compared to 2000 (to a total of 275 million
metric tons, about 33% of total steel production). This weakness continued into
the 2002 second quarter.
These fluctuations in electric arc furnace steel production resulted in
corresponding fluctuations in demand for graphite electrodes. Overall pricing
worldwide was weak. Although we implemented increases in local currency selling
prices of our graphite electrodes in 2000 and early 2001 in Europe, the Asia
Pacific region, the Middle East and South Africa, we have not been able to
maintain all of these price increases. We continue to face pricing pressures
worldwide.
Demand and prices for most of our other products sold to other metals
and the transportation industries were adversely affected by the same global and
regional economic conditions that affected graphite electrodes.
We believe that business conditions for most of our products (other than
cathodes) will remain challenging through 2002 and that a recovery in the metals
and transportation industries will not occur until the 2002 second half, at the
earliest.
We cannot assure you that the electric arc furnace steel production
industry will continue to be the higher long term growth sector of the steel
industry or that the other metals or transportation industries served by us will
experience stability, growth or recovery from current economic conditions
affecting them. Accordingly, we cannot assure you that there will be stability
or growth in demand for or prices of graphite electrodes or our other products
sold to these industries. An adverse change in global or certain regional
economic conditions could materially adversely affect us.
12
ANY SUBSTANTIAL GROWTH IN NET SALES, CASH FLOW FROM OPERATIONS OR NET INCOME OF
OUR ADVANCED ENERGY TECHNOLOGY DIVISION DEPENDS PRIMARILY ON SUCCESSFULLY
DEVELOPING, INTRODUCING AND SELLING GRAPHITE AND CARBON TECHNOLOGY AND PRODUCTS
FOR EMERGING APPLICATIONS ON A PROFITABLE BASIS. IF WE ARE NOT SUCCESSFUL, WE
WILL NOT ACHIEVE OUR PLANNED GROWTH.
Our planned growth depends on successful and profitable development and
sale of:
o materials and components for proton exchange membrane fuel cells and
fuel cell systems;
o electronic thermal management products, including thermal interface
products, heat spreaders, heat sinks and heat pipes, for computer,
communications, industrial, military, office equipment and
automotive electronic applications;
o fire retardant products for transportation applications and building
and construction materials applications;
o industrial thermal management products for high temperature process
applications; and
o conductive products for battery and supercapacitor power storage
applications.
Successful and profitable commercialization of technology and products
is subject to various risks, including risks beyond our control, such as:
o the possibility that we may not be able to develop viable products
or, even if we develop viable products, that our products may not
gain commercial acceptance;
o the possibility that our commercially accepted products could be
subsequently displaced by other technologies or products;
o the possibility that, even if our products are incorporated in new
products of our customers, our customers' new products may not
become viable or commercially accepted or may be subsequently
displaced;
o the possibility that a mass market for commercially accepted
products, or for our customers' products which incorporate our
products, may not develop;
o restrictions under our agreement with Ballard Power Systems on sales
of our fuel cell materials and components to, and collaboration
with, others; and
o failure of our customers, including Ballard Power Systems, to
purchase our products in the quantities that we expect.
These risks could be impacted by adoption of new laws and regulations,
changes in governmental programs, failure of necessary supporting systems (such
as a fuel delivery infrastructure for fuel cells) to be developed, and consumer
perceptions about costs, benefits and safety.
OUR FINANCIAL CONDITION COULD SUFFER IF WE EXPERIENCE UNANTICIPATED COSTS AS A
RESULT OF ANTITRUST INVESTIGATIONS, LAWSUITS AND CLAIMS.
Since 1997, we have been subject to antitrust investigations, lawsuits
and claims. We recorded a pre-tax charge of $340 million against results of
operations for 1997 and an additional pre-tax charge
13
of $10 million against results of operations for the 2001 second quarter as a
reserve for estimated potential liabilities and expenses in connection with
antitrust investigations and related lawsuits and claims. We cannot assure you
that remaining liabilities and expenses in connection with antitrust
investigations, lawsuits and claims will not materially exceed the remaining
uncommitted balance of the reserve or that the timing of payment thereof will
not be sooner than anticipated. At March 31, 2002, $101 million remained in this
unfunded reserve. The balance of this reserve is available for the remaining
balance of the fine payable by us to the U.S. Department of Justice that was
imposed in 1998 (excluding imputed interest thereon), the fines assessed against
us by the antitrust authorities of the European Union and Korea and other
matters. The aggregate amount of remaining committed payments payable to the
U.S. Department of Justice for imputed interest at March 31, 2002 was about $9
million. Our insurance has not and will not materially cover liabilities that
have or may become due in connection with antitrust investigations or related
lawsuits or claims.
If such liabilities or expenses materially exceed the remaining
uncommitted balance of this reserve or if the timing of payment thereof is
sooner than anticipated, we may not be able to comply with the financial
covenants under the Senior Facilities. A failure to so comply, unless waived by
the lenders thereunder, would be a default thereunder. This would permit the
lenders to accelerate the maturity of the Senior Facilities. It would also
permit the lenders to terminate their commitments to extend credit under our
revolving credit facility. This would have an immediate material adverse effect
on our liquidity. An acceleration of maturity of the Senior Facilities would
permit the holders of our Senior Notes to accelerate the maturity of the Senior
Notes. 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 experience the
consequences or be forced to take the actions described in the two following
risk factors and the lenders and holders could proceed against the collateral
securing the Senior Facilities and the Senior Notes, respectively, and exercise
all other rights available to them. We cannot assure you that we would be able
to obtain any such waiver on acceptable terms or at all.
WE ARE HIGHLY LEVERAGED AND OUR SUBSTANTIAL DEBT AND OTHER OBLIGATIONS COULD
LIMIT OUR FINANCIAL RESOURCES, OPERATIONS AND ABILITY TO COMPETE AND MAY MAKE US
MORE VULNERABLE TO ADVERSE ECONOMIC EVENTS.
We are highly leveraged, and we have substantial obligations in
connection with antitrust investigations, lawsuits and claims. At December 31,
2001, we had total debt of $638 million and a stockholders' deficit of $332
million. At March 31, 2002, we had a total debt of $696 million and a
stockholders deficit of $343 million. A substantial portion of our debt has
variable interest rates. In addition, we typically discount or factor a
substantial portion of our accounts receivable. During 2001, certain of our
subsidiaries sold receivables totaling $223 million, of which we estimate that
$45 million was outstanding at December 31, 2001. During the 2002 first three
months, certain of our subsidiaries sold receivables totaling $42 million, of
which we estimate that $38 million was outstanding at March 31, 2002. We are
dependent on our revolving credit facility, the availability of which depends on
continued compliance with the financial covenants under the Senior Facilities,
for liquidity.
Our high leverage and our antitrust related obligations could have
important consequences, including the following:
o our ability to restructure or refinance our debt or obtain
additional debt or equity financing for payment of these
obligations, or for working capital, capital expenditures,
acquisitions, strategic alliances or other general corporate
purposes, may be impaired in the future;
14
o a substantial portion of our cash flow from operations must be
dedicated to debt service and payment of these antitrust related
obligations, thereby reducing the funds available to us for other
purposes;
o an increase in interest rates could result in an increase in the
portion of our cash flow from operations dedicated to servicing our
debt, in lieu of other purposes;
o we may have substantially more leverage and antitrust related
obligations than certain of our competitors, which may place us at a
competitive disadvantage; and
o our leverage and our antitrust related obligations may hinder our
ability to adjust rapidly to changing market conditions or other
events and make us more vulnerable to insolvency, bankruptcy or
other adverse consequences in the event of a downturn in general or
certain regional economic conditions or in our business or in the
event that these obligations are greater, or the timing of payment
is sooner, than expected.
OUR ABILITY TO SERVICE OUR DEBT AND MEET OUR OTHER OBLIGATIONS DEPENDS ON
CERTAIN FACTORS BEYOND OUR CONTROL.
Our ability to service our debt and meet our other obligations as they
come due is dependent on our future financial and operating performance. This
performance is subject to various factors, including certain factors beyond our
control such as, among other things, changes in global and regional economic
conditions, developments in antitrust investigations, lawsuits and claims
involving us, changes in our industry, changes in interest or currency exchange
rates and inflation in raw materials, energy and other costs.
If our cash flow and capital resources are insufficient to enable us to
service our debt and meet these obligations as they become due, we could be
forced to:
o reduce or delay capital expenditures;
o sell assets or businesses;
o limit or discontinue, temporarily or permanently, business plans,
activities or operations;
o obtain additional debt or equity financing; or
o restructure or refinance debt.
We cannot assure you as to the timing of such actions or the amount of
proceeds that could be realized from such actions. Accordingly, we cannot assure
you that we will be able to meet our debt service and other obligations as they
become due or otherwise.
WE ARE SUBJECT TO RESTRICTIVE COVENANTS UNDER OUR SENIOR FACILITIES AND THE
INDENTURE RELATING TO OUR SENIOR NOTES. 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.
The Senior Facilities and the indenture relating to our Senior Notes
(the "INDENTURE") contain a number of covenants that, among other things,
significantly restrict our ability to:
15
o dispose of assets;
o incur additional indebtedness;
o repay or refinance other indebtedness or amend other debt
instruments;
o create liens on assets;
o enter into leases or sale/leaseback transactions;
o make investments or acquisitions;
o engage in mergers or consolidations;
o make certain payments and investments, including dividend payments;
and
o make capital expenditures or engage in certain transactions with
subsidiaries and affiliates.
The Senior Facilities also require us to comply with specified financial
covenants, including minimum interest coverage and maximum leverage ratios. In
addition, pursuant to the Senior Facilities, we cannot borrow under our
revolving credit facility:
o if the aggregate amount of our payments made (excluding certain
imputed interest) and additional reserves created in connection with
antitrust, securities and stockholder derivative investigations,
lawsuits and claims exceed $340 million by more than $75 million
(which $75 million is reduced by the amount of certain debt, other
than the Senior Notes, incurred by us that is not incurred under the
Senior Facilities, $24 million of which debt was outstanding at
March 31, 2002); or
o if the additional borrowings would cause us to breach the financial
covenants contained therein.
Further, substantially all of our assets in the U.S. are pledged to
secure guarantees of the Senior Facilities by our domestic subsidiaries. In
addition, our principal foreign operating subsidiaries are obligors under
intercompany term notes and guarantees of those notes issued to UCAR Finance
that are pledged to secure the Senior Notes. Our Swiss subsidiary is an obligor
under an intercompany revolving note and our principal foreign subsidiaries are
guarantors of that note. Such note and guarantees are pledged to secure the
Senior Facilities. Most of the assets of the obligors under that intercompany
revolving note and the related guarantees, which constitute a majority of our
assets outside the U.S., are pledged to secure that note and those guarantees.
We are currently in compliance with the covenants contained in the
Senior Facilities and the Indenture. However, our ability to continue to comply
may be affected by events beyond our control. The breach of any of the covenants
contained in the Senior Facilities, unless waived by the lenders, would be a
default under the Senior Facilities. This would permit the lenders to accelerate
the maturity of the Senior Facilities. It would also permit the lenders to
terminate their commitments to extend credit under our revolving credit
facility. This would have an immediate material adverse effect on our liquidity.
An acceleration of maturity of the Senior Facilities would permit the holders of
the Senior Notes to accelerate the maturity of the Senior Notes. A breach of the
covenants contained in the Indenture would also permit the holders of the Senior
Notes to accelerate the maturity of the Senior Notes. Acceleration of maturity
of the Senior Notes would permit the lenders to accelerate the maturity
16
of the Senior Facilities and terminate their commitments to extend credit under
our revolving credit facility. 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 take the actions described in the preceding risk factor
and the lenders and holders could proceed against the collateral securing the
Senior Facilities and the Senior Notes, respectively, and exercise all other
rights available to them. We cannot assure you that we would have sufficient
funds to make these accelerated payments or that we would be able to obtain any
such waiver on acceptable terms or at all.
WE ARE SUBJECT TO RISKS ASSOCIATED WITH OPERATIONS IN MULTIPLE COUNTRIES.
We have significant international operations. In 2001, about 70% of our
net sales was derived from sales outside of the U.S., and, at December 31, 2001,
about 74% of our total property, plant and equipment and other long-lived assets
was located outside the U.S. In addition, we have entered into and begun
performance under an agreement with Jilin to form a joint venture which, subject
to receipt of Chinese governmental approval and satisfaction of other
conditions, is expected to produce and sell high quality graphite electrodes. As
a result, we are subject to risks associated with operating in multiple
countries, including:
o currency devaluations and fluctuations in currency exchange rates,
including impacts of transactions in various currencies, translation
of various currencies into dollars for U.S. reporting purposes, and
impacts on results of operations due to the fact that costs of our
foreign subsidiaries for our principal raw material, petroleum coke,
are incurred in dollars even though their products are primarily
sold in other currencies;
o imposition of or increases in customs duties and other tariffs;
o imposition of or increases in currency exchange controls, including
imposition of or increases in limitations on conversion of various
currencies into dollars or euros, making of intercompany loans by
subsidiaries or remittance of dividends, interest or principal
payments or other payments by subsidiaries;
o imposition of or increases in revenue, income or earnings taxes and
withholding and other taxes on remittances and other payments by
subsidiaries;
o imposition or increases in investment restrictions and other
restrictions or requirements by non-U.S. governments;
o 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
o nationalization and other risks which could result from a change in
government or other political, social or economic instability.
We cannot assure you that such risks will not have a material adverse
effect on us in the future.
In general, our results of operations and financial condition are
affected by inflation in each country in which we have a manufacturing facility.
We maintain operations in Brazil, Russia and Mexico, countries which have had in
the past, and may have now or in the future, highly inflationary economies,
defined as cumulative inflation of about 100% or more over a three calendar year
period.
17
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, INCLUDING THAT RELATING TO FUEL CELL POWER GENERATION,
ELECTRONIC THERMAL MANAGEMENT AND OTHER IDENTIFIED OPPORTUNITIES. FAILURE TO
PROTECT OUR INTELLECTUAL PROPERTY COULD ADVERSELY AFFECT OUR PLANNED 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 and
trade secret law to protect our intellectual property. Our issued patents
relating to fuel cell power generation and electronic thermal management
applications, which we believe are particularly important to our planned growth,
will expire at various times between 2004 and 2018. Some of our intellectual
property is not covered by any patent or patent application. Our patents are
subject to complex factual and legal considerations, and there can be
uncertainty as to the validity, scope and enforceability of any particular
patent. Accordingly, we cannot assure you that:
o 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;
o any of the U.S. or foreign patents that third parties have licensed
to us or may license to us in the future will not be licensed to
others; or
o any of our pending or future patent applications will be issued at
all or with the breadth of claim coverage sought by us.
In addition, effective patent, trademark and trade secret protection may be
unavailable, limited or not applied for in some foreign countries in which we
operate.
Our ability to maintain our proprietary intellectual property may be
achieved in part by prosecuting claims against others whom we believe are
infringing upon our rights and by defending against claims of intellectual
property infringement brought by others against us. Our involvement in
intellectual property litigation could result in significant expense to us,
adversely affecting development of sales of the related products and diverting
the efforts of our technical and management personnel, regardless of the outcome
of such litigation.
We also seek to protect our proprietary intellectual property, including
intellectual property that may not be patented or patentable, in part by
confidentiality agreements and, if applicable, inventors' rights agreements with
our strategic partners and employees. We cannot assure you that these agreements
will not be breached, that we will have adequate remedies for any such breach or
that such partners or employees will not assert rights to intellectual property
arising out of these relationships.
If necessary or desirable, we may seek licenses to intellectual property
of others. However, we can give no assurance that we will obtain such licenses
or that the terms of any such licenses will be acceptable to us.
The failure to obtain a license from a third party for its intellectual
property that is necessary 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 our use of processes requiring the use of such intellectual
property.
18
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 and
neighboring properties and our current operations. These laws and regulations
provide for substantial fines and criminal sanctions for violations and
sometimes require the installation of costly pollution control or safety
equipment or costly changes in operations to limit pollution and decrease the
likelihood of injuries. In addition, we may become subject to potentially
material liabilities for the investigation and cleanup of contaminated
properties and to claims alleging personal injury or property damage resulting
from exposure to or releases of hazardous substances or personal injury as a
result of an unsafe workplace. In addition, noncompliance with or stricter
enforcement 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 ARE DEPENDENT ON SUPPLIES OF RAW MATERIALS AND ENERGY AT AFFORDABLE PRICES.
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. The availability and price of raw materials and
energy may be subject to curtailment or change due to:
o limitations which may be imposed under new legislation or
governmental regulations;
o suppliers' allocations to meet demand of other purchasers during
periods of shortage (or, in the case of energy suppliers, extended
cold weather);
o interruptions in production by suppliers; and
o market and other events and conditions.
Petroleum products, including petroleum coke, our principal raw
material, and energy, particularly natural gas, have been subject to significant
price fluctuations. Over the past several years, we have mitigated the effect of
price increases on our results of operations through our cost reduction efforts.
We cannot assure you that such efforts will successfully mitigate future
increases in the price of petroleum coke or other raw materials or energy. 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.
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, 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.
19
OUR RESULTS OF OPERATIONS FOR ANY QUARTER ARE NOT NECESSARILY INDICATIVE OF OUR
RESULTS OF OPERATIONS FOR A FULL YEAR.
Sales of graphite electrodes and other products fluctuate from quarter
to quarter due to such factors as changes in global and regional 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 in
response to the announcement of price increases. We have experienced, and expect
to continue to experience, volatility with respect to demand for and prices of
graphite electrodes and other products, both globally and regionally.
We have also experienced volatility with respect to prices of raw
materials and energy, and it has frequently required several quarters of cost
reduction efforts to mitigate increases in those prices. 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
with respect to new products) is based primarily on price, product quality and
customer service. Graphite electrodes, in particular, are subject to rigorous
price competition. Price increases by us or price reductions by our competitors,
decisions by us with respect to maintaining profit margins rather than market
share, technological developments, changes in the desirability or necessity of
entering into long term fixed price supply contracts with customers, or other
competitive or market factors or strategies could adversely affect our market
share, net sales or net income.
Competition with respect to new products is, and is expected to be,
based primarily on product innovation, 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 our results of operations, cash
flows or financial condition.
WE CANNOT ASSURE YOU THAT WE WILL SUCCESSFULLY IMPLEMENT ANY STRATEGIC ALLIANCES
FOR ANY OF OUR BUSINESSES.
One of our key strategies is establishment and expansion of strategic
alliances to reduce our average cost of sales, expand our share of various
geographic markets, expand our product lines or technology, or strengthen our
businesses. We cannot assure you that any alliance will be completed or as to
the timing, terms or benefits of any alliance that may be completed.
WE MAY NOT BE ABLE TO COMPLETE OUR PLANNED ASSET SALES.
We intend to sell real estate, non-strategic businesses and certain
other non-strategic assets over the next two years. We cannot assure you if or
when we will be able to complete these sales or that we will realize proceeds
therefrom that meet our current expectations.
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WE CANNOT ASSURE YOU THAT THE CORPORATE REALIGNMENT OF OUR SUBSIDIARIES WILL BE
COMPLETED IN THE 2002 FIRST HALF.
We are currently in the process of realigning the corporate
organizational structure of our subsidiaries, which we expect to be
substantially completed in the 2002 first half. We cannot assure you that the
realignment will be completed on a timely basis or at all. If completion is
delayed or the realignment is not completed, we may not achieve some of our
targeted cost savings when anticipated or at all.
WE MAY NOT ACHIEVE THE COST SAVINGS TARGETED UNDER THE 2002 PLAN.
Our targeted cost savings under the 2002 plan are based on assumptions
regarding the costs and savings associated with the activities undertaken and to
be undertaken as part of the 2002 plan. We cannot assure you that these
assumptions are correct or that we will be able to implement these activities at
the anticipated costs, if at all. If the costs associated with these activities
are higher than anticipated or if we are unable to implement the activities as
and when we have assumed, we may not be able to meet our cost savings targets.
THERE ARE PROVISIONS IN SOME OF OUR IMPORTANT DOCUMENTS THAT COULD HAVE THE
EFFECT OF PREVENTING A CHANGE IN CONTROL OF US.
Our Certificate of Incorporation and By-Laws contain provisions
concerning voting, issuance of preferred stock, removal of officers and
directors and other matters that may have the effect of discouraging, delaying
or preventing a change in control of us. In addition, our board of directors has
adopted a stockholder rights plan that may have the same affect. Further, the
Senior Facilities restrict certain events that would constitute a change in
control and provide that certain events which would constitute a change in
control would also constitute an event of default. We cannot assure you that we
will have the financial resources necessary to repay the Senior Facilities upon
the occurrence of such an event of default.
OUR STOCK PRICE MAY BE VOLATILE DUE TO THE NATURE OF OUR BUSINESS, WHICH COULD
AFFECT THE SHORT-TERM VALUE OF YOUR INVESTMENT.
The stock market has from time to time experienced extreme price and
volume fluctuations. Many factors may cause the market price for our common
stock to decline or fluctuate, perhaps substantially, following this offering,
including:
o failure to meet product development and commercialization goals;
o quarterly fluctuations in our results of operations;
o net sales and results of operations failing to meet the expectations
of securities analysts or investors;
o downward revisions in securities analysts' revenue or earnings
estimates or changes in general market conditions;
o technological innovations or strategic actions by our competitors;
o speculation in the press or investor perception concerning our
industry or our prospects; or
21
o general economic factors unrelated to our performance.
The stock markets in general have experienced extreme volatility that
has often been unrelated to the operating performance of particular companies.
These broad market fluctuations may adversely affect the market price of our
common stock.
In the past, companies that have experienced volatility in the market
price of their stock have been the subject of securities class action
litigation. We could be involved in a securities class action litigation in the
future. Such litigation could result in substantial costs and a diversion of
management's attention and resources.
USE OF PROCEEDS AND SELLING HOLDER
We have adopted a grantor trust to assist us in providing for payment of
certain benefit plan obligations to management which are otherwise payable out
of our general assets. These obligations include accrued benefits under
nonqualified retirement plans and severance obligations under employment and
other agreements. The trust contains a benefits protection account which makes
funds available to assist plan participants and their beneficiaries in enforcing
their claims with respect to those obligations upon a change of control. We may
from time to time contribute assets to or, with the approval of a majority of
our board of directors, withdraw assets from the trust (other than from a
benefits protection account established within the trust, to which $250,000 has
been contributed), except that no withdrawal can be made after a change of
control until all such obligations are paid or discharged.
We have issued and contributed the 426,400 shares of common stock
offered hereby to an account within the trust maintained with respect to our
obligations under our nonqualified benefit plans. We have instructed the trust
to sell these shares promptly and in an orderly fashion. The net proceeds from
such sales are expected to be used to discharge and pay these obligations;
however, prior to a change of control, we may withdraw a portion or all of these
net proceeds from the trust and use them for general corporate or other
purposes. Because we may withdraw from the trust the shares contributed to the
trust and/or the proceeds received from any sales of such shares prior to a
change of control, sales of these shares are deemed to be sales by us for
purposes of Federal securities laws.
Our board of directors may amend or terminate the trust at any time
prior to a change of control. Upon a change of control, the trust becomes
irrevocable, and we are required to make contributions to the trust sufficient
to discharge and pay such obligations. Upon a change of control, no amendment of
the trust may be adopted without the written consent of a majority of the
participants and the beneficiaries who are receiving benefits thereunder.
Consistent with the requirements of applicable law, the assets of the trust are
subject to the claims of our creditors in the event of our insolvency or
bankruptcy.
PLAN OF DISTRIBUTION
We have instructed the trust to sell the shares offered hereby promptly
and in an orderly fashion. We have authorized the trust to use its discretion as
to the specific timing, process and other terms of sale of the shares. The trust
may sell the shares offered hereby on any stock exchange, market or trading
facility on which the shares are traded, in block trades or in private
transactions. These sales may be at fixed or negotiated prices. The trust may
offer the shares:
o directly to purchasers;
22
o to or through underwriters;
o through dealers, agents or institutional investors; or
o through a combination of such methods.
The trustee will receive no compensation or commissions in connection
with the sale of the shares offered hereby other than normal fees and expenses
for administering the trust. The trust will not make any direct or indirect
investment in the shares offered hereby nor induce any prospective purchaser to
make such an investment.
LEGAL MATTERS
The legality of our common stock offered hereby and certain other legal
matters will be passed upon for us by Kelley Drye & Warren LLP, New York, New
York, and Stamford, Connecticut.
EXPERTS
The consolidated financial statements of GrafTech International Ltd.
(formerly known as UCAR International Inc.) and subsidiaries as of and for the
year ended December 31, 2001 incorporated by reference in this registration
statement from our Registration Statement No. 333-87302 on Form S-4 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report incorporated by reference herein and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
The consolidated financial statements of GrafTech International Ltd.
(formerly known as UCAR International Inc.) and subsidiaries as of December 31,
2000, and for each of the years in the two-year period ended December 31, 2000,
have been incorporated by reference herein in reliance upon the report of KPMG
LLP, independent accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
23
YOU SHOULD RELY ONLY ON THE INFORMATION
CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. WE ARE
OFFERING TO SELL, AND SEEKING OFFERS TO
BUY, THESE SECURITIES ONLY, AND THIS
PROSPECTUS MAY BE USED ONLY, IN
JURISDICTIONS WHERE OFFERS AND SALES OF
THESE SECURITIES ARE PERMITTED. THE
INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS MAY BE
ACCURATE ONLY ON THE DATE OF THE
DOCUMENT CONTAINING THE INFORMATION.
GRAFTECH INTERNATIONAL LTD.
426,400 Shares
Common Stock
TABLE OF CONTENTS
PAGE
---- PROSPECTUS
Where You Can Find More Information..........2
Incorporation of Documents by Reference......2
Forward-Looking Statements...................3
The Company..................................5
Risk Factors................................11
Use of Proceeds and Selling Holder..........22
Plan of Distribution........................22
Legal Matters...............................23
Experts.....................................23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred in
connection with the issuance and distribution of the securities being
registered. The expenses shall be paid by the registrant.
SEC registration fee............................... $ 500
Legal fees and expenses............................ 10,000
Accounting fees and expenses....................... 5,000
Miscellaneous...................................... 4,500
---------
Total....................................... $20,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the
"Law") provides as follows:
"(a) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that the person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by the person in connection with such action, suit or proceeding if the
person acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which the person reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that the
person's conduct was unlawful.
(b) A corporation shall have the power to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
the person in connection with the defense or settlement of such action or suit
if the person acted in good faith and in a manner the person reasonably believed
to be in or not opposed to the best interests of the corporation and except that
no indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and
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(b) of this section, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because the person has
met the applicable standard of conduct set forth in subsections (a) and (b) of
this section. Such determination shall be made (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (2) if there are no such directors, or if such directors
so direct, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys' fees) incurred
by other employees and agents may be so paid upon such terms and conditions, if
any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has
II-2
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction to
hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees)."
Section 102(b)(7) of the Law provides as follows:
"(b) In addition to the matters required to be set forth in the certificate
of incorporation by subsection (a) of this section, the certificate of
incorporation may also contain any or all of the following matters:
(7) A provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director: (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders; (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under section 174 of this title; or (iv) for any
transaction from which the director derived an improper personal benefit. No
such provision shall eliminate or limit the liability of a director for any act
or omission occurring prior to the date when such provision becomes effective.
All references in this paragraph to a director shall also be deemed to refer (x)
to a member of the governing body of a corporation which is not authorized to
issue capital stock, and (y) to such other person or persons, if any, who,
pursuant to a provision of the certificate of incorporation in accordance with
Section 141(a) of this title, exercise or perform any of the powers or duties
otherwise conferred or imposed upon the board of directors by this title."
The registrant maintains a director's and officer's liability insurance
policy which indemnifies directors and officers for certain losses arising from
claims by reason of a wrongful act, as defined therein, under certain
circumstances.
In addition, in response to this Item 15, the following information is
incorporated by reference: the information included in the description of the
registrant's capital stock contained in the registrant's Registration Statement
on Form 8-A dated July 28, 1995, as updated by any amendment or report filed for
the purpose of updating such description; the description of the rights
contained in the registrant's Registration Statement on Form 8-A dated September
10, 1998, as updated by any amendment or report filed for the purpose of
updating such description; Articles Tenth and Eleventh of the Amended and
Restated Certificate of Incorporation of the registrant incorporated by
reference as Exhibit 4.1 to this registration statement; and Article V of the
Amended and Restated By-Laws of the registrant incorporated by reference as
Exhibit 4.2 to this registration statement.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The exhibits listed in the following table have been filed as part of
this registration statement.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
4.1(1) Amended and Restated Certificate of Incorporation of the
registrant.
4.1(a)(2) Certificate of Designations of Series A Junior Participating
Preferred Stock.
4.1(b)(3) Certificate of Amendment to Amended and Restated Certificate of
Incorporation of the registrant.
4.2(1) Amended and Restated By-Laws of the registrant.
4.2(a)(2) Amendment to By-Laws of the registrant.
4.3(2) Rights Agreement dated as of August 7, 1998 between the
registrant and The Bank of New York, as Rights Agent.
4.3(a)(4) Amendment No. 1 to such Rights Agreement dated as of November 1,
2000.
5.1* Opinion of Kelley Drye & Warren LLP regarding the validity
of the securities registered hereby.
23.1* Consent of Kelley Drye & Warren LLP (included in Exhibit 5.1).
23.2** Consent of KPMG LLP.
23.3** Consent of Deloitte & Touche LLP.
24.1* Powers of Attorney.
--------------
* Previously filed
** Filed herewith
(1) Incorporated by reference to the registrant's Registration Statement on
Form S-1 (Registration No. 33-94698).
(2) Incorporated by reference to the registrant's Annual Report on Form 10-K
for the year ended December 31, 1998 (File No. 1-13888).
(3) Incorporated by reference to the registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 2002 (File No. 1-13888).
(4) Incorporated by reference to the registrant's Annual Report on Form 10-K
for the year ended December 31, 2001 (File No. 1-13888).
(b) Financial Statement Schedules
All schedules are omitted as the required information is inapplicable or
the information is presented in the Consolidated Financial Statements or related
notes thereto.
II-4
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wilmington, State of Delaware on this 19th day of
July 2002.
GRAFTECH INTERNATIONAL LTD.
By: /S/ CORRADO F. DE GASPERIS
----------------------------------
Name: Corrado F. De Gasperis
Title: Vice President, Chief
Financial Officer and
Chief Information Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
* Chief Executive Officer and July 19, 2002
----------------------------------------- Director
Gilbert E. Playford (Principal Executive Officer)
/S/ CORRADO F. DE GASPERIS Vice President, Chief Financial July 19, 2002
----------------------------------------- Officer and Chief Information
Corrado F. De Gasperis Officer
(Principal Financial and
Accounting Officer)
* Director July 19, 2002
-----------------------------------------
R. Eugene Cartledge
* Director July 19, 2002
-----------------------------------------
Mary B. Cranston
* Director July 19, 2002
-----------------------------------------
John R. Hall
* Director July 19, 2002
-----------------------------------------
Thomas Marshall
* Director July 19, 2002
-----------------------------------------
Ferrell P. McClean
II-6
SIGNATURES TITLE DATE
---------- ----- ----
* Director July 19, 2002
-----------------------------------------
Michael C. Nahl
*By /S/ CORRADO F. DE GASPERIS
-----------------------------------------
Corrado F. De Gasperis
Attorney-in-Fact
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
4.1(1) Amended and Restated Certificate of Incorporation of the
registrant.
4.1(a)(2) Certificate of Designations of Series A Junior Participating
Preferred Stock.
4.1(b)(3) Certificate of Amendment to Amended and Restated Certificate of
Incorporation of the registrant.
4.2(1) Amended and Restated By-Laws of the registrant.
4.2(a)(2) Amendment to By-Laws of the registrant.
4.3(2) Rights Agreement dated as of August 7, 1998 between the
registrant and The Bank of New York, as Rights Agent.
4.3(a)(4) Amendment No. 1 to such Rights Agreement dated as of November 1,
2000.
5.1* Opinion of Kelley Drye & Warren LLP regarding the validity
of the securities registered hereby.
23.1* Consent of Kelley Drye & Warren LLP (included in Exhibit 5.1).
23.2** Consent of KPMG LLP.
23.3** Consent of Deloitte & Touche LLP.
24.1* Powers of Attorney.
--------------
* Previously filed
** Filed herewith
(1) Incorporated by reference to the registrant's Registration Statement on
Form S-1 (Registration No. 33-94698).
(2) Incorporated by reference to the registrant's Annual Report on Form 10-K
for the year ended December 31, 1998 (File No. 1-13888).
(3) Incorporated by reference to the registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 2002 (File No. 1-13888).
(4) Incorporated by reference to the registrant's Annual Report on Form 10-K
for the year ended December 31, 2001 (File No. 1-13888).
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