GrafTech Board Sends Letter to Nathan Milikowsky, Says Has Made Four Separate Settlement Offers

GrafTech International Ltd.'s

(“GrafTech”) Chief Executive Officer and President, Joel Hawthorne, today sent a letter to Nathan Milikowsky to set the record straight in response to the incomplete and misleading statements made by the Milikowsky Group in its letter dated April 13, 2014. The full text of Mr. Hawthorne's letter is included here: Nathan Milikowsky 822 Boylston Street, Suite 106 Chestnut Hill, MA 02467 Nathan: It is unfortunate that you are mischaracterizing our settlement proposal in order to distract GrafTech stockholders from the key issues. Most importantly, your proposed strategy for the Company is flawed and is not in the best interest of all stockholders. In contrast, we are confident that we have the right Board and management team with the right strategy to deliver value to all GrafTech stockholders. The GrafTech Board continues to demonstrate its commitment to working with the Daniel and Nathan Milikowsky Group to reach a reasonable agreement and avoid a proxy contest. That commitment was reaffirmed through GrafTech's third settlement proposal, which I presented to you on April 9, 2014. With respect to the counter-proposal you presented on April 11, 2014, the GrafTech Board found one key aspect of it – namely that you immediately be reinstated to the Board prior to a review of your qualifications and eligibility to serve – to be unacceptable due to your prior governance breaches and conduct that demonstrated you were not a qualified candidate. Later that same day, we made a very reasonable counter-proposal on substantially the same terms as those in your proposal, which addressed that one key aspect in a method we believe is fair. Attached is a side-by-side comparison of our proposals. I want to make very clear that, as I've indicated to you in our conversations, the GrafTech Board stands behind its prior investigation, process and findings. The Board's initial investigation was thorough and thoughtful and conducted with the assistance of well-recognized, highly experienced, independent investigatory counsel, Morris, Nichols, Arsht & Tunnell LLP, which reported to a Special Committee of the Board comprised entirely of independent directors. Counter to the rationale outlined in your letter, our Board remains resolute in its position that you are not qualified. Accordingly, we could not accept your proposal as presented. We are, however, open to allowing you the chance to answer the questions that stockholders are asking me - did Nathan Milikowsky really breach his fiduciary responsibilities as a board member? As a result, we are willing to undertake another review – engaging another independent law firm that is deemed to be acceptable to both parties, as you proposed – for one reason only; to attempt to reach a mutually agreeable resolution. As communicated, the review that you proposed is limited in scope and not designed to comprehensively address the reasons why you were not re-nominated to the Board. Although there is no need for a review, we are willing to accept a review to help resolve our differences; however under the circumstances, what you proposed was insufficient for a governance matter of this import. While we are willing to engage in another investigation, you should be aware that we firmly believe any subsequent review will validate the previous findings and conclusions of our Board. As you might suspect, we would require your full cooperation, as you did not fully cooperate in the last investigation and, as uncovered by the investigator and disclosed in our proxy, you intentionally withheld information from the Board. For the reasons mention above, we could not immediately appoint you to the GrafTech Board. However, we proposed a proceeding under which you would answer all of the questions raised in connection with the prior independent investigation. In our proposal, you and the Company would jointly commence an expedited proceeding, either through a court or arbitration process, with full investigatory power. These proceedings would review your qualifications to serve as a director under the Company's corporate governance guidelines, code of conduct and nominating committee charter, the breach of your fiduciary duties and the breach of the Stockholders Agreement found in the prior investigation. Assuming full cooperation of all parties, if that proceeding concludes that you met those qualifications and did not breach your fiduciary duties, and the Milikowskys did not breach the Stockholders Agreement, then you would promptly be invited to join the Board. In our estimation, this process could be accomplished in three to six months. The April 11, 2014 GrafTech proposal would have resulted in four of nine directors being newly appointed at the 2014 Annual Meeting. Further evidence of our openness is the option of either you or a mutually agreed upon director joining the Board as a tenth director – and fifth new director – following completion of the review process described above. In addition, two long-serving GrafTech Directors would retire from the Board at the 2014 Annual Meeting. The fact that GrafTech is willing to give you a level of representation on the Board more than double your ownership speaks volumes about our commitment to resolving this matter. You open your letter to me with a reference to questions that you believe have recently been answered. I believe there are more significant questions to which GrafTech stockholders deserve answers: * Why, unlike every other member of the Board and management team, did you refuse to fully cooperate with the Board's initial independent investigation, especially when you yourself approved the special committee for the investigation? * Why, unlike every other current member of the Board and management team, did you refuse to sign the legal hold? * Why did you not disclose conflicts of interest you had with another Board member? * Why did you misrepresent your interactions with third parties, in clear violation of the Stockholders Agreement, to the Board? * Why did you present an agenda to take operational control of GrafTech, which was in clear breach of the Stockholders Agreement and your fiduciary responsibilities under Delaware law, to members of the Board? * What, if you truly believe the prior investigation reached the wrong conclusion, do you have to lose by cooperating? Why wouldn't you take advantage of this opportunity? Unfortunately, you continue to reject GrafTech's good-faith efforts to resolve this proxy contest and instead persist in your campaign for control of GrafTech without paying stockholders a premium. GrafTech has a strong track record of success and the right board oversight and management team to deliver long-term growth and drive stockholder value creation. The Board and management team are focused on creating value for all GrafTech stockholders through continued implementation of our strategy of improving operating efficiencies, enhancing global competitiveness and driving increased profitability and cash flows in 2014 and beyond. Your personal quest to reinstate yourself to GrafTech's Board in spite of your clear breaches of good corporate governance and ethics is at the heart of the issue. We believe we have made a number of good faith efforts to resolve this matter. While we do not believe it is in our stockholders' interest to have a proxy contest at our Annual Meeting, your continued inflexibility prevents us from finding a resolution. GrafTech does not believe your strategy will drive value for all stockholders and, more importantly, GrafTech's Board and management will not compromise on good corporate governance and ethics, plain and simple. It is unfortunate that you continue to mischaracterize our settlement offers and refuse to acknowledge the key issues. Best regards, Joel L. Hawthorne GRAFTECH INTERNATIONAL LTD. SETTLEMENT PROPOSAL April 11, 2014