In Re Globe Specialty Metals, Inc. Stockholders Litigation

Frequently Asked Questions

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1. What is the case about?

On February 23, 2015, Globe and FerroAtlántica—a company which is wholly owned by Grupo VM—announced they had entered into a definitive Business Combination Agreement (as amended and restated on May 5, 2015, the “Business Combination Agreement”), pursuant to which the two companies will combine in an all-stock transaction (the “Transaction”) under a new holding company named VeloNewco, which will be renamed Ferroglobe. Following announcement of the Transaction, four class action complaints were filed in the Court of Cancery on behalf of Globe stockholders challenging the Transaction. The complaints in the Actions named as defendants: former Globe Chief Executive Officer Jeff Bradley and the following members of the Globe board of directors, Alan Kestenbaum, Stuart Eizenstat, Frank Lavin, Donald Barger, Jr., Alan Schriber, and Bruce Crockett; Globe; Grupo VM; FerroAtlántica; Ferroglobe (under its current name, VeloNewco); and Merger Sub.

The complaints, which were consolidated by the Court of Chancery under the caption In Re Globe Specialty Metals, Inc. Stockholders Litigation, C.A. No. 10865-VCG, allege that the Individual Defendants breached their fiduciary duties to Globe’s stockholders in connection with the Transaction because, among other things, they allegedly failed to engage in an adequate decision-making process as members of the Globe board of directors and their decision to recommend a stockholder vote in favor of the Transaction was unreasonable. The complaints also allege that Globe, Grupo VM, FerroAtlántica, Ferroglobe, and Merger Sub aided and abetted these purported breaches of fiduciary duty. The Actions sought, among other things, an order enjoining or rescinding the Transaction and damages.

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2. Who is included in the Class?

The Settlement Class finally certified by the Court for Settlement purposes consists of:

All record and beneficial holders of common stock of Globe who held such stock at any time during the Class Period and who were allegedly damaged as a result of Defendants’ conduct alleged in the Consolidated Complaint, excluding the “Excluded Stockholders.” The “Excluded Stockholders” consist of the Defendants; subsidiaries and controlled affiliates of Globe; any corporations, limited liability companies, partnerships, trusts or other entities of which any Defendant is a primary beneficiary or in which any Defendant holds a material equity interest between the date hereof and the Effective Date of the Settlement; and the Immediate Family Members of any Individual Defendant (other than with respect to “Designated Family Member Shares” as identified on Exhibit D to the Stipulation).

Designated Family Member Shares are shares of Globe common stock that were owned and controlled by, or held for the benefit of, the Immediate Family Members of the Individual Defendants prior to the execution of the Business Combination Agreement, as identified on Exhibit D to the Stipulation.

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3. What does the Settlement provide?

Under the terms of the Settlement, Defendants have agreed to cause a cash payment of $32.5 million (the “Cash Payment”) to be made for the benefit of the Settlement Class, which shall be deposited into an interest-bearing escrow account. The Cash Payment, together with any interest earned thereon, less any taxes (the “Net Cash Payment”), will be distributed on a pro rata basis to all Eligible Class members and to holders of Designated Family Member Shares.

The Settlement also provides various corporate benefits for the benefit of the Settlement Class, in addition to certain supplemental information provided to the Globe board of directors and shareholders prior to the Settlement as a consequence of the Litigation.

On February 10, 2016, the Settlement Hearing was held before the Court. On February 15, 2016, the Court entered the Final Order and Judgment Approving Class Action Settlement (the “Judgment”). The Judgment finally approved the Settlement, finally certified the Settlement Class for Settlement purposes only, and awarded attorneys’ fees and litigation expenses to Plaintiffs’ Counsel.

For a detailed description of the benefits provided by the Settlement, please see Part 4 of the Settlement Notice.

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4. Do I need to submit a claim form to participate in the Settlement?

If you are eligible to receive a distribution from the Net Cash Payment, you do not have to submit a claim form in order to receive your share of the Settlement proceeds. If the conditions for distribution of the Settlement proceeds are satisfied, your distribution from the Settlement proceeds will be paid to you directly in the same manner in which you receive your shares of Ferroglobe common stock in the Transaction, which closed on or about December 23, 2015. If your shares of Ferroglobe common stock received in the Transaction are deposited into your brokerage account, your pro rata share of the Net Cash Payment will be deposited into that same account.

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5. How much will my distribution from the Settlement be?

At this time, it is not possible to make any determination as to how much any individual Settlement Class Member may receive from the Settlement. The Net Cash Payment will be distributed on a pro rata basis to all Settlement Class Members whose shares of Globe common stock are exchanged for shares of Ferroglobe common stock in the Transaction (the “Eligible Class Members”) and to holders of the Designated Family Member Shares. Settlement Class Members who sell all of their shares of Globe common stock prior to the closing of the Transaction will not receive a distribution from the Settlement.

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