TABLE OF CONTENTS




|         |                                                                                               |                                                 |  |  |  |  |  | 
|-------- | --------------------------------------------------------------------------------------------- | ----------------------------------------------- |  |  |  |  |  | 
|PART I  
|         | Item 1. Business                                                                             
|         | Item 2. Properties                                                                           
|         | Item 3. Legal Proceedings                                                                    
|         | Item 4. Submission of Matters to a Vote of Security Holders                                  
|PART II 
|         | Item 5. Market for Registrants Common Equity and Related Stockholder Matters                
|         | Item 6. Selected Financial Data                                                              
|         | Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
|         | Item 7a. Quantitative and Qualitative Disclosures About Market Risk                          
|         | Item 8. Financial Statements and Supplementary Data                                          
|         |                                                                                               | Report of Independent Auditors                 
|         |                                                                                               | Consolidated Balance Sheets                    
|         |                                                                                               | Statements of Consolidated Income              
|         |                                                                                               | Statements Of Consolidated Stockholders Equity
|         |                                                                                               | Statements Of Consolidated Cash Flows          
|         |                                                                                               | Notes to Consolidated Financial Statements     
|PART III
|         | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|         | Item 10. Directors and Executive Officers of the Registrant                                  
|         | Item 11. Executive Compensation                                                              
|         | Item 12. Security Ownership of Certain Beneficial Owners and Management                      
|         | Item 13. Certain Relationships and Related Transactions                                      
|PART IV 
|         | Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K                     



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SECURITIES AND EXCHANGE COMMISSION







FORM 10-K


(Mark One)

|    |                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------
|[X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 1999

OR



|      |                                                                                                             
|----- | ------------------------------------------------------------------------------------------------------------
|[   ] | TRANSITION REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE
	SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from  to

Commission file number 0-22572

OM GROUP, INC.

(Exact name of Registrant as specified in
charter)


|                                                       |  |                    
|------------------------------------------------------ |  | -------------------
|                                                      
|                                                      
|                                                      
|                                                      
|Delaware                                               |  | 52-1736882         
|(State or other jurisdiction of                        |  | (I.R.S. Employer   
|Incorporation or organization)                         |  | Identification No.)
|                                                      
|                                                      
|                                                      
|                                                      
|                                                      
|50 Public Square
	3500 Terminal Tower
	Cleveland, Ohio |  | 44113-2204         
|(Address of principal executive offices)               |  | (Zip Code)         

216-781-0083

Registrants telephone number, including area
 code


Securities registered pursuant to Section 12 (b) of
the Act:

|                                        |  |                                          
|--------------------------------------- |  | -----------------------------------------
|Title of each class                     |  | Name of each exchange on which registered
|                                        |  |                                          
|Common Stock, par value $0.01 per share |  | New York Stock Exchange                  

Securities registered pursuant to Section 12 (g) of
the Act:

None

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by
 Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past 90 days. Yes [X]   No [   ]

The aggregate market value of
Common Stock, par value $.01 per share, held by non-affiliates
(based upon the closing sale price on the NYSE) on March 16,
 2000 was approximately $923,456,000.

As of March 16, 2000, there
were 23,831,117 shares of Common Stock, par value $.01 per share,
 outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the annual meeting of
stockholders to be held on May 9, 2000 are incorporated by
reference.



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##### Table of Contents



Table of Contents

|          |  |                                                                                        |  |      |    | 
|--------- |  | -------------------------------------------------------------------------------------- |  | ---- | -- | 
|          |  |                                                                                        |  | Page
|          |  |                                                                                        |  |     
|         
|         
|         
|         
|PART I   
|         
|         
|         
|         
|Item  1.  |  | Business                                                                               |  |      | 2  | 
|         
|         
|         
|         
|Item 2.   |  | Properties                                                                             |  |      | 4  | 
|         
|         
|         
|         
|Item 3.   |  | Legal Proceedings                                                                      |  |      | 5  | 
|         
|         
|         
|         
|Item 4.   |  | Submission of Matters to a Vote of Security Holders                                    |  |      | 5  | 
|         
|         
|         
|         
|PART II  
|         
|         
|         
|         
|Item  5.  |  | Market for Registrants Common Equity and Related
	Stockholder Matters                 |  |      | 6  | 
|         
|         
|         
|         
|Item 6.   |  | Selected Financial Data                                                                |  |      | 6  | 
|         
|         
|         
|         
|Item 7.   |  | Managements Discussion and Analysis of Financial Condition
	and Results of Operations |  |      | 6  | 
|         
|         
|         
|         
|Item  7a. |  | Quantitative and Qualitative Disclosures about Market Risk                             |  |      | 11 | 
|Item 8.   |  | Financial Statements and Supplementary Data                                            |  |      |    | 
|         
|         
|         
|         
|          |  | Report of Independent Auditors                                                         |  |      | 12 | 
|         
|         
|         
|         
|          |  | Consolidated Balance Sheets as of December 31, 1999
	and 1998                          |  |      | 13 | 
|          |  | Statements of Consolidated Income for the years ended                                  |  |      |    | 
|         
|         
|         
|         
|          |  | December 31, 1999, 1998 and 1997                                                       |  |      | 14 | 
|          |  | Statements of Consolidated Stockholders Equity
	for the years ended                   |  |      |    | 
|         
|         
|         
|         
|          |  | December 31, 1999, 1998 and 1997                                                       |  |      | 15 | 
|          |  | Statements of Consolidated Cash Flows for the years
	ended                             |  |      |    | 
|         
|         
|         
|         
|          |  | December 31, 1999, 1998 and 1997                                                       |  |      | 16 | 
|         
|         
|         
|         
|          |  | Notes to Consolidated Financial Statements                                             |  |      | 17 | 
|         
|         
|         
|         
|PART III 
|         
|         
|         
|         
|Item  9.  |  | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure  |  |      | 27 | 
|         
|         
|         
|         
|Item  10. |  | Directors and Executive Officers of the Registrant                                     |  |      | 27 | 
|         
|         
|         
|         
|Item  11. |  | Executive Compensation                                                                 |  |      | 27 | 
|         
|         
|         
|         
|Item  12. |  | Security Ownership of Certain Beneficial Owners and Management                         |  |      | 27 | 
|         
|         
|         
|         
|Item  13. |  | Certain Relationships and Related Transactions                                         |  |      | 27 | 
|         
|         
|         
|         
|PART IV  
|         
|         
|         
|         
|Item  14. |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                        |  |      | 28 | 
|         
|         
|         
|         
|          |  | Signatures                                                                             |  |      | 31 | 

1



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##### Table of Contents






PART I




Item 1.  Business

General




The Company operates in a single business segment with product
lines comprised of metal-based specialty chemicals.

Competition



The Company believes that its focus on metal-based specialty
chemicals as a core business is an important competitive
advantage. Competition in the metal-based specialty chemicals
market is based primarily on product quality, supply reliability,
 price, service and technical support capabilities.

Generally, the Company is able to pass through to its customers
increases and decreases in raw material prices by increasing or
decreasing, respectively, the prices of its products. The degree
of profitability of the Company depends, in part, on the
Companys ability to maintain the differential between its
product prices and raw material prices. The timing and amount of
such adjustments in its product prices depends upon the type of
product sold and the inventories and market share positions of
the Company and its competitors.

The Companys flexibility with respect to the timing of its
price adjustments is greater with respect to carboxylates than
with inorganic salts and powders. Inorganic salt and powder
prices respond almost immediately to changes in the raw material
base metal prices.

Customers



While customer demand for the Companys products is
generally non-seasonal, supply/demand and price perception
dynamics of key raw materials do periodically cause customers to
either accelerate or delay purchases of the Companys
products, generating short-term results that may not be
indicative of longer-term trends.

Raw Materials



2



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##### Table of Contents





Raw material cost increases and/or contractual commitments can
result in higher working capital needs. The Company has had
sufficient cash availability and borrowing capacity to finance
higher working capital as needed.

Research and Development



The Companys research staff of 79 full time persons
conducts carboxylate, metal salts and powders research and
development at the Companys laboratories located in
Westlake, Ohio; Research Triangle Park, North Carolina; Newark,
New Jersey; and Kokkola, Finland. The Companys Finnish
facility also maintains a research agreement with Outokumpu
Research Oy.

Patents and Trademarks



Environmental Matters



Annual environmental compliance costs were approximately
$3.2 million in 1999. Such ongoing expenses include costs
relating to waste water analysis and disposal, hazardous and
non-hazardous solid waste analysis and disposal, sea water
control, air emissions control, soil and groundwater clean-up and
 monitoring and related staff costs. The Company anticipates that
 it will continue to incur costs and make expenditures at
moderately increasing levels for the foreseeable future in light
of the fact that environmental laws and regulations are becoming
increasingly stringent, including the likely lowering of
permissible discharge limits.

The Company has also incurred capital expenditures of
approximately $2.1 million in 1999 in connection with
environmental compliance. The Company anticipates that capital
expenditure levels for such purposes will increase to
approximately $2.8 million in 2000, as it continues to
modify on an ongoing, regular basis, certain of its processes
which may have an environmental impact.

Due to the ongoing development and understanding of facts and
remedial options and due to the possibility of unanticipated
regulatory developments, the amount and timing of future
environmental expenditures could vary significantly from those
currently anticipated. Although it is difficult to quantify the
potential impact of compliance with or liability under
environmental protection laws, based on presently available
information, the

3



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##### Table of Contents





Employees



International Operations



The Companys products are manufactured at facilities
located in Belleville, Canada; Kokkola, Finland; Ezanville,
France; Kuching, Malaysia; Bangkok, Thailand; Newark, New Jersey;
 Research Triangle Park, North Carolina; Franklin, Pennsylvania;
Johnstown, Pennsylvania; and St. George, Utah. The Company
conducts its marketing and sales primarily from its offices in
Düsseldorf, Germany; Research Triangle Park, North Carolina;
 Westlake, Ohio; Newark, New Jersey; Taipei, Taiwan; and Tokyo,
Japan.

Although most of the Companys raw material purchases and
product sales are transacted in U.S. Dollars, liabilities for
non-U.S. operating expenses and income taxes are denominated in
local currencies. Accordingly, fluctuations in currency prices
may affect the Companys operating results and net income.
Specifically, when the euro has weakened against the U. S.
Dollar, there has been a net favorable effect on the Company due
to lower operating expenses and lower net balance sheet
liabilities when translated into U. S. Dollars. The reverse has
been true when the euro strengthened against the U. S. Dollar.
During 1999, in order to partially hedge the balance sheet
exposure to fluctuating rates, the Company entered into forward
contracts to purchase euros.




Item 2.  Properties



The Companys Kokkola, Finland production facility
(KCO) is situated on property owned by Outokumpu Zinc Oy.
KCO and Outokumpu Zinc Oy share certain physical facilities,
services and utilities under agreements with varying expiration
dates. Utilities and raw material purchase assistance contracts
provide that KCO jointly purchase with, or pay a fee to,
affiliates of Outokumpu Oy for assistance in negotiating
contracts and securing bulk quantity discounts.

4



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##### Table of Contents



Certain information regarding the Companys primary offices,
 research and product development and manufacturing facilities is
 set forth below:

|                        |                |                                              |                                      |             |         |         |        |  |        |       |        |  | 
|----------------------- | -------------- | -------------------------------------------- | ------------------------------------ | ----------- | ------- | ------- | ------ |  | ------ | ----- | ------ |  | 
|                        |                |                                              |                                      | Approximate |         | Leased/
|Location                |                | Facility Function                            |                                      | Square Feet |         | Owned  
|                        |                |                                              |                                      |             |         |        
|Americas:               |                |                                              |                                      |             |         |         |        |  |        |       |        | 
|Newark, New Jersey      |                | Manufactures salts                           |                                      |             | 21,000  |         |        |  | owned  |      
|                        |                | Marketing and administration offices         |                                      |             | 6,000   |         |        |  | owned  |      
|                        |                | Research and development facility            |                                      |             | 5,000   |         |        |  | owned  |      
|Edison, New Jersey      |                | Administration office                        |                                      |             | 7,000   |         |        |  | leased |      
|                        |                |                                              | Warehouse                            |             |         |         | 88,000 |  |        |       | leased | 
|Research Triangle Park, |                | Manufactures powders                         |                                      |             | 105,100 |         |        |  | owned  |      
|                        | North Carolina |                                              | Marketing and administration offices |             |         | 15,500  |        |  |        | owned |       
|                        |                | Research and development facility            |                                      |             | 27,900  |         |        |  | owned  |      
|Cleveland, Ohio         |                | Corporate headquarters                       |                                      |             | 14,700  |         |        |  | leased |      
|                        |                | Administration office                        |                                      |             | 4,800   |         |        |  | leased |      
|                        |                | Pilot plant facility                         |                                      |             | 11,400  |         |        |  | leased |      
|                        |                | Storage facility                             |                                      |             | 10,000  |         |        |  | leased |      
|Westlake, Ohio          |                | Research and development facility            |                                      |             | 27,500  |         |        |  | owned  |      
|                        |                | Marketing and administration offices         |                                      |             | 10,000  |         |        |  | owned  |      
|Belleville, Ontario     |                | Manufactures carboxylates                    |                                      |             | 38,000  |         |        |  | owned  |      
|Franklin, Pennsylvania  |                | Manufactures carboxylates and salts          |                                      |             | 230,000 |         |        |  | owned  |      
|Johnstown, Pennsylvania |                | Manufactures powders                         |                                      |             | 173,000 |         |        |  | owned  |      
|St. George, Utah        |                | Manufactures salts and powders               |                                      |             | 78,000  |         |        |  | owned  |      
|                       
|                       
|                       
|                       
|                       
|Europe:                 |                |                                              |                                      |             |         |         |        |  |        |       |        | 
|Kokkola, Finland        |                | Manufactures carboxylates, salts and powders |                                      |             | 470,000 |         |        |  | owned  |      
|Ezanville, France       |                | Manufactures carboxylates                    |                                      |             | 50,000  |         |        |  | owned  |      
|Düsseldorf, Germany     |                | Marketing and administration offices         |                                      |             | 4,800   |         |        |  | leased |      
|                       
|                       
|                       
|                       
|                       
|Asia-Pacific:           |                |                                              |                                      |             |         |         |        |  |        |       |        | 
|Tokyo, Japan            |                | Marketing and administration offices         |                                      |             | 2,300   |         |        |  | leased |      
|Kuching, Malaysia       |                | Manufactures salts                           |                                      |             | 20,000  |         |        |  | owned  |      
|                        |                | Marketing and administration offices         |                                      |             | 5,000   |         |        |  | owned  |      
|Taipei, Taiwan          |                | Marketing and administration offices         |                                      |             | 4,000   |         |        |  | leased |      
|Bangkok, Thailand       |                | Manufactures carboxylates                    |                                      |             | 105,000 |         |        |  | owned  |      
|                        |                | Marketing and administration offices         |                                      |             | 2,400   |         |        |  | leased |      




Item 3.  Legal Proceedings






Item 4.  Submission of Matters to a Vote of Security
 Holders



5



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##### Table of Contents



Executive Officers of the Registrant



James P. Mooney  52

|  |                                           
|- | ------------------------------------------
| | Chairman and Chief Executive Officer, 1994

Edward W. Kissel  58

|  |                                                           
|- | ----------------------------------------------------------
| | President and Chief Operating Officer, 1999               
| | Chief Executive Officer, RotoCast Technologies, Inc., 1993
| | Chief Executive Officer, Kissel Group, Ltd., 1993         

James M. Materna  54

|  |                              
|- | -----------------------------
| | Chief Financial Officer, 1992




PART II




Item 5.  Market for Registrants Common Equity
and Related Stockholder Matters






Item 6.  Selected Financial Data

|                                                |  |                         |         |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|----------------------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | - |  | - | ----- | -
|                                                |  |                        
|                                                |  | Year Ended December 31,
|                                                |  |                        
|                                                |  | 1999                    |         | 1998 |  | 1997 |       | 1996 |  | 1995
|(in millions, except per share data)            |  |                         |         |      |  |      |       |      |  |     
|Income Statement Data:                          |  |                         |         |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|                                               
|                                               
|                                               
|                                               
|Net sales                                       |  | $                       | 507.0   |      |  | $    | 521.2 |      |  | $    | 487.3 |   |  | $ | 388.0 |   |  | $ | 361.0 |  
|                                               
|                                               
|                                               
|                                               
|Gross profit                                    |  |                         | 159.5   |      |  |      | 145.0 |      |  |      | 117.4 |   |  |   | 84.0  |   |  |   | 74.6  |  
|                                               
|                                               
|                                               
|                                               
|Selling, general and administrative expenses    |  |                         | 60.8    |      |  |      | 58.1  |      |  |      | 46.8  |   |  |   | 32.6  |   |  |   | 30.6  |  
|                                               
|                                               
|                                               
|                                               
|Income from operations                          |  |                         | 98.7    |      |  |      | 86.9  |      |  |      | 70.6  |   |  |   | 51.4  |   |  |   | 44.0  |  
|                                               
|                                               
|                                               
|                                               
|Other expense  net                             |  |                         | (18.4   | )    |  |      | (15.6 | )    |  |      | (12.6 | ) |  |   | (7.0  | ) |  |   | (5.5  | )
|                                               
|                                               
|                                               
|                                               
|Net income                                      |  | $                       | 55.8    |      |  | $    | 48.4  |      |  | $    | 38.4  |   |  | $ | 30.0  |   |  | $ | 25.9  |  
|                                               
|                                               
|                                               
|                                               
|Net income per common share                     |  | $                       | 2.35    |      |  | $    | 2.11  |      |  | $    | 1.84  |   |  | $ | 1.61  |   |  | $ | 1.39  |  
|                                               
|                                               
|                                               
|                                               
|Net income per common share  assuming dilution |  | $                       | 2.30    |      |  | $    | 2.05  |      |  | $    | 1.78  |   |  | $ | 1.56  |   |  | $ | 1.36  |  
|                                               
|                                               
|                                               
|                                               
|Dividends declared and paid per common share    |  | $                       | 0.40    |      |  | $    | 0.36  |      |  | $    | 0.32  |   |  | $ | 0.28  |   |  | $ | 0.24  |  
|                                               
|                                               
|                                               
|                                               
|Balance Sheet Data:                             |  |                         |         |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|                                               
|                                               
|                                               
|                                               
|Total assets                                    |  | $                       | 1,017.9 |      |  | $    | 870.7 |      |  | $    | 601.1 |   |  | $ | 443.5 |   |  | $ | 358.0 |  
|                                               
|                                               
|                                               
|                                               
|Long-term debt (excluding current portion)      |  |                         | 384.9   |      |  |      | 310.0 |      |  |      | 170.3 |   |  |   | 109.3 |   |  |   | 89.8  |  




Item 7.  Managements Discussion and Analysis
of Financial Condition and Results of Operations



6



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##### Table of Contents



Set forth below is summary consolidated information of the
Company for the years ended December 31, 1999, 1998, and
1997.

|                                             |  |                         |         |      |  |      |         |   |  |   |         |  
|-------------------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                             |  |                        
|                                             |  | Year Ended December 31,
|                                             |  |                        
|                                             |  | 1999                    |         | 1998 |  | 1997
|(Thousands of dollars)                       |  |                         |         |      |  |     
|Income Statement Data:                       |  |                         |         |      |  |      |         |   |  |   |         |  
|                                            
|                                            
|                                            
|                                            
|Net sales                                    |  | $                       | 506,955 |      |  | $    | 521,226 |   |  | $ | 487,296 |  
|                                            
|                                            
|                                            
|                                            
|Gross profit                                 |  |                         | 159,505 |      |  |      | 144,952 |   |  |   | 117,363 |  
|                                            
|                                            
|                                            
|                                            
|Selling, general and administrative expenses |  |                         | 60,768  |      |  |      | 58,028  |   |  |   | 46,791  |  
|                                             |  |                         |         |      |  |      |         |   |  |   |         |  
|Income from operations                       |  |                         | 98,737  |      |  |      | 86,924  |   |  |   | 70,572  |  
|                                            
|                                            
|                                            
|                                            
|Other expense  net                          |  |                         | (18,444 | )    |  |      | (15,600 | ) |  |   | (12,595 | )
|                                            
|                                            
|                                            
|                                            
|Income taxes                                 |  |                         | (24,468 | )    |  |      | (22,966 | ) |  |   | (19,534 | )
|                                             |  |                         |         |      |  |      |         |   |  |   |         |  
|Net income                                   |  | $                       | 55,825  |      |  | $    | 48,358  |   |  | $ | 38,443  |  
|                                             |  |                         |         |      |  |      |         |   |  |   |         |  
|Products Sold(millions of pounds):           |  |                         |         |      |  |      |         |   |  |   |         |  
|                                            
|                                            
|                                            
|                                            
|Carboxylates                                 |  |                         | 70.2    |      |  |      | 60.5    |   |  |   | 50.3    |  
|                                            
|                                            
|                                            
|                                            
|Salts                                        |  |                         | 96.1    |      |  |      | 89.3    |   |  |   | 61.0    |  
|                                            
|                                            
|                                            
|                                            
|Powders                                      |  |                         | 43.1    |      |  |      | 40.4    |   |  |   | 38.6    |  
|                                             |  |                         |         |      |  |      |         |   |  |   |         |  
|Total                                        |  |                         | 209.4   |      |  |      | 190.2   |   |  |   | 149.9   |  
|                                             |  |                         |         |      |  |      |         |   |  |   |         |  

Results of Operations

1999 Compared to 1998




The following table summarizes market price fluctuations on the
primary raw materials used by the Company in manufacturing its
products:

|                     |  |                               |                |      |  |   |                | 
|-------------------- |  | ----------------------------- | -------------- | ---- |  | - | -------------- | 
|                     |  |                              
|                     |  | Market Price Ranges per Pound
|                     |  | Year Ended December 31,      
|                     |  |                              
|                     |  | 1999                          |                | 1998
|                     |  |                               |                |     
|Cobalt  99.3% Grade |  | $                             | 6.70 to $20.00 |      |  | $ | 8.85 to $21.18 | 
|                    
|                    
|                    
|                    
|Nickel               |  | $                             | 1.81 to $3.81  |      |  | $ | 1.71 to $2.69  | 
|                    
|                    
|                    
|                    
|Copper               |  | $                             | 0.61 to $0.85  |      |  | $ | 0.65 to $0.85  | 

Pounds of product sold by the Company were 209.4 million
pounds during 1999, an increase of 10.1% compared to
190.2 million pounds in 1998. The increase in physical
volume of carboxylate products sold was primarily the result of
an increase in sales of cobalt carboxylates and PVC plastic
additives, both in Europe and Asia Pacific. In the salts
category, the increase in physical volume of products sold
reflects higher sales of memory disk and battery grade chemicals
in Asia Pacific. The increase in physical volume of powder
products reflects continued strong growth in sales of cobalt fine
 powder to the hard metal tool industry, coarse grade powders to
the rechargeable battery market and stainless steel alloy powders
 in automotive applications.

Gross profit increased to $159.5 million in 1999, a 10.0%
increase from 1998. The improvement in gross profit was primarily
 the result of increased volumes and an improved product mix
increasing contribution from higher value-added products. Cost of
 products sold decreased to 68.5% of net sales for the year ended
 1999 from 72.2% of net sales in 1998 as a result of lower cobalt
 pricing and improved product mix.

Selling, general and administrative expenses increased to 12.0%
of net sales in 1999 from 11.1% of net sales in 1998, resulting
from general increases in administrative costs due to the
Companys growth.

Other expense-net was $18.4 million in 1999 compared to
$15.6 million in 1998 due primarily to increased interest
expense on higher outstanding borrowings, primarily as a result
of provisional payments made on cobalt-copper concentrate and
capital expenditures.

7



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##### Table of Contents



Income taxes as a percentage of income before income taxes
decreased to 30.5% in 1999 from 32.2% in 1998. The lower
effective tax rate was due primarily to higher income earned in
the relatively low statutory tax country of Finland and a tax
holiday in Malaysia.

Net income for 1999 was $55.8 million, an increase of
$7.5 million from 1998, primarily due to the aforementioned
factors.

1998 Compared to 1997



The following table summarizes market price fluctuations on the
primary raw materials used by the Company in manufacturing its
products:

|                     |  |                               |                |      |  |   |                 | 
|-------------------- |  | ----------------------------- | -------------- | ---- |  | - | --------------- | 
|                     |  |                              
|                     |  | Market Price Ranges per Pound
|                     |  | Year Ended December 31,      
|                     |  |                              
|                     |  | 1998                          |                | 1997
|                     |  |                               |                |     
|Cobalt  99.3% Grade |  | $                             | 8.85 to $21.18 |      |  | $ | 17.50 to $22.23 | 
|                    
|                    
|                    
|                    
|Nickel               |  | $                             | 1.71 to $2.69  |      |  | $ | 2.66 to $3.66   | 
|                    
|                    
|                    
|                    
|Copper               |  | $                             | 0.65 to $0.85  |      |  | $ | 0.77 to $1.20   | 

The Company generally passes through to its customers increases
and decreases in raw material prices by increasing and
decreasing, respectively, the prices of its products. Cobalt
99.3% market prices (per pound) dropped from approximately $18 at
 September 30, 1998, to $8.85 by December 31, 1998, and
 then rebounded to approximately $17 during the first quarter of
1999. When raw material prices decrease precipitously, the
Companys LIFO inventory value may exceed the value at which
 the inventory can be sold (i.e., LIFO inventory costs may exceed
 market). Consequently, the Company evaluates its inventory
carrying value to state it at the lower of cost or market. At
December 31, 1998, no adjustment to carrying value was
needed, as the market value of the inventory exceeded LIFO cost.

Pounds of product sold by the Company were 190.2 million
pounds during 1998 compared to 149.9 million pounds in 1997.
 The increase in carboxylate products sold was primarily the
result of the acquisition of Dussek Campbell Limited (Dussek) and
 increases in sales of cobalt carboxylates and PVC additives. In
the salts category, the increase was due to the acquisition of
Fidelity as overall nickel salt volumes, excluding Fidelity,
declined due primarily to a decrease in the sales of lower margin
 nickel sulfate products. The increase in physical volume of
powder products reflects the introduction of tungsten powders
during 1998 and overall growth in cobalt extra fine powders,
which offset a decrease in copper powder volumes related to
slowness in the aerospace and agricultural equipment business
areas.

Gross profit increased to $145.0 million in 1998, a 23.5%
increase from 1997. The improvement in gross profit was primarily
 the result of the acquisitions of Fidelity and Dussek, an
increased contribution from higher value-added products, and
higher physical volume excluding the decrease in lower margin
nickel sulfate products. Cost of products sold decreased to 72.2%
 of net sales for the year ended 1998 from 75.9% of net sales in
1997 primarily because of lower cobalt, nickel and copper market
prices, which declined more rapidly than selling prices, improved
 product mix and the acquisitions of Fidelity and Dussek.

Selling, general and administrative expenses increased to 11.1%
of net sales in 1998 from 9.6% of net sales in 1997, due to the
acquisition of Fidelity and its relatively higher selling,
administrative, and research expenses per dollar of sales, and to
 the decline in net sales resulting from lower cobalt, nickel and
 copper prices.

Other expense-net was $15.6 million in 1998 compared to
$12.6 million in 1997 due primarily to increased interest
expense on higher outstanding borrowings, primarily as a result
of the acquisitions of Fidelity and Dussek.

8



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##### Table of Contents



Income taxes as a percentage of income before income taxes
decreased to 32.2% in 1998 from 33.7% in 1997. The lower
effective tax rate was due primarily to higher income earned in
the relatively low statutory tax country of Finland and a tax
holiday in Malaysia, offsetting the impact of non-tax deductible
goodwill related to the acquisitions of Fidelity and Dussek.

Net income for 1998 was $48.4 million, an increase of
$9.9 million from 1997, primarily due to the aforementioned
factors.

Liquidity and Capital Resources



In January, 1999, the Companys revolving credit facility
was revised to increase available credit to $325 million,
and to expand its sources of capital by adding three new
institutions. The Company may also borrow up to $15 million
under a demand note agreement expiring March 31, 2000. At
December 31, 1999, the Company had no outstanding borrowings
 under this demand note agreement.

The Company believes that it will have sufficient cash generated
by operations and through its credit facilities to provide for
its future working capital and capital expenditure requirements,
and to pay quarterly dividends on its common stock, subject to
the Boards discretion. In February, 2000 the Board of
Directors authorized an increase in quarterly dividends to $.11
per share. Subject to several limitations in its credit
facilities, the Company may incur additional borrowings to
finance working capital and certain capital expenditures,
including, without limitation, the purchase of additional raw
materials.

The Company has ongoing capital expenditure programs to improve
its processing technology and plant and equipment, and to expand
capacity to accommodate future growth. The Company anticipates
that capital spending, exclusive of acquisitions or joint
ventures, will approximate $25 million for 2000.

Although most of the Companys raw material purchases and
product sales are transacted in U.S. Dollars, liabilities for
non-U.S. operating expenses and income taxes are denominated in
local currencies. Accordingly, fluctuations in currency prices
will affect the Companys operating results and net income
(see page 4  International Operations).

Quantitative and Qualitative Disclosures About Market Risk



The primary raw materials used by the Company in manufacturing
its products are cobalt, nickel and copper. While nickel and
copper are worldwide commodities and generally available, cobalt
availability can be more uncertain. The Companys supply of
cobalt has historically been sourced primarily from the
Democratic Republic of Congo, Australia, Finland and Zambia.
Although the Company has never experienced a material shortage of
 cobalt, production problems and political and civil instability
in certain supplier countries may affect the supply and market
price of cobalt. If a substantial interruption should occur in
supply from a primary source, there is no assurance that the
Company would be able to obtain as much cobalt from other sources
 as would be necessary to satisfy the Companys requirements
 at prices comparable to its current arrangements. The Company
attempts to mitigate changes in prices and availability by
maintaining adequate inventories and long-term supply
relationships with a variety of producers. The cost of raw
materials fluctuates due to both actual and perceived changes in
supply and demand. Generally, the Company is able to pass through
 to its customers increases and decreases in raw material prices
by increasing or decreasing, respectively, the prices of its
products. The degree of profitability

9



---



##### Table of Contents



Results of Operations, 1998 Compared to 1997).


The Company is exposed to interest rate risk primarily through
its borrowing activities. The Company predominantly utilizes U.S.
 Dollar denominated borrowings to fund its working capital and
investment needs. The majority of the Companys borrowings
are in variable rate instruments. The Company enters into
interest rate swap agreements to convert a portion of the
variable rate instruments to fixed rate contracts over typically
a three year period. There is an inherent rollover risk for
borrowings as they mature and are renewed at current market
rates. The extent of this risk is not quantifiable or predictable
 because of the variability of future interest rates and business
 financing requirements (see Note C). The following table
presents principal cash flows and related weighted-average
interest rates by expected maturity dates of the Companys
long term-debt.

|                                                      |                       |                        |    |      |   |      |    |      |   |      |    |            |   |       |    |       |   |  |     |         |   |   |        |     |   |   |        |         |  |   |        |         | 
|----------------------------------------------------- | --------------------- | ---------------------- | -- | ---- | - | ---- | -- | ---- | - | ---- | -- | ---------- | - | ----- | -- | ----- | - |  | --- | ------- | - | - | ------ | --- | - | - | ------ | ------- |  | - | ------ | ------- | 
|                                                      |                       |                       
|                                                      |                       | Expected Maturity Date
|                                                      |                       |                       
|                                                      |                       |                        |    |     
|                                                      |                       | December 31, 1999      |    |     
|                                                      |                       |                        |    |      |   | Fair
|(Thousands of dollars)                                |                       | 2000                   |    | 2001 |   | 2002 |    | 2003 |   | 2004 |    | Thereafter |   | Total |    | Value
|                                                      |                       |                        |    |      |   |      |    |      |   |      |    |            |   |       |    |      
|Long-term debt,
	including current portion Fixed rate |                       | $                      | 25 |      |   | $    | 24 |      |   | $    | 20 |            |   | $     | 20 |       |   |  | $20 |         |   | $ | 60,054 |     |   | $ | 60,163 |         |  | $ | 60,163 |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Average interest rate |                        |    | 4.4  | % |      |    | 4.3  | % |      |    | 4.0        | % |       |    | 4.0   | % |  |     | 4.0     | % |   |        | 7.1 | % |   |        |         |  |   |        |         | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Variable rate         |                        |    |      |   |      |    |      |   |      |    |            |   |       |    |       |   |  | $   | 324,750 |   |   |        |     |   |   | $      | 324,750 |  |   | $      | 324,750 | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Average interest rate |                        |    |      |   |      |    |      |   |      |    |            |   |       |    |       |   |  |     | 7.38    | % |   |        |     |   |   |        |         |  |   |        |         | 

|                                                      |                       |                        |   |      |   |      |    |      |   |      |    |            |   |       |    |       |   |   |    |     |   |   |        |         |   |   |        |         |  |   |        |         | 
|----------------------------------------------------- | --------------------- | ---------------------- | - | ---- | - | ---- | -- | ---- | - | ---- | -- | ---------- | - | ----- | -- | ----- | - | - | -- | --- | - | - | ------ | ------- | - | - | ------ | ------- |  | - | ------ | ------- | 
|                                                      |                       |                       
|                                                      |                       | Expected Maturity Date
|                                                      |                       |                       
|                                                      |                       |                        |   |     
|                                                      |                       | December 31, 1998      |   |     
|                                                      |                       |                        |   |      |   | Fair
|(Thousands of dollars)                                |                       | 1999                   |   | 2000 |   | 2001 |    | 2002 |   | 2003 |    | Thereafter |   | Total |    | Value
|                                                      |                       |                        |   |      |   |      |    |      |   |      |    |            |   |       |    |      
|Long-term debt,
	including current portion Fixed rate |                       |                        |   |      |   | $    | 20 |      |   | $    | 20 |            |   | $     | 20 |       |   | $ | 20 |     |   | $ | 60,124 |         |   | $ | 60,204 |         |  | $ | 60,204 |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Average interest rate |                        |   |      |   |      |    | 4.0  | % |      |    | 4.0        | % |       |    | 4.0   | % |   |    | 4.0 | % |   |        | 7.1     | % |   |        |         |  |   |        |         | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Variable rate         |                        | $ | 141  |   |      |    |      |   |      |    |            |   |       |    |       |   |   |    |     |   |   | $      | 249,760 |   |   | $      | 249,901 |  |   | $      | 249,901 | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Average interest rate |                        |   | 1.0  | % |      |    |      |   |      |    |            |   |       |    |       |   |   |    |     |   |   |        | 6.1     | % |   |        |         |  |   |        |         | 

In addition to the United States, the Company has manufacturing
and other facilities in Canada, Europe and Asia-Pacific, and
markets its products worldwide. Although most of the
Companys raw material purchases and product sales are
transacted in U.S. Dollars, liabilities for non-U.S. operating
expenses and income taxes are denominated in local currencies.
Accordingly, fluctuations in currency prices may affect the
Companys operating results and net income (see page 4
 International Operations).

Year 2000



This project has been completed using a combination of existing
internal and external resources. The total cost of the Year 2000
project was $2.5 million and was funded through operating
cash flows. Of the total project cost, approximately
$.8 million was attributable to a new software purchase,
which has been capitalized. The remaining $1.7 million,
which was expensed as incurred, did not have a material effect on
 the results of operations of the Company.

Euro Conversion



10



---



##### Table of Contents



Cautionary Statement for Safe Harbor Purposes
Under the Private Securities

Litigation Reform Act of 1995


The Company is making this statement in order to satisfy the
safe harbor provisions contained in the Private
Securities Litigation Reform Act of 1995. The foregoing
discussion includes forward-looking statements relating to the
business of the Company. Such forward-looking statements are
subject to uncertainties and factors relating to the
Companys operations and business environment, all of which
are difficult to predict and many of which are beyond the control
 of the Company, that could cause actual results of the Company
to differ materially from those matters expressed in or implied
by such forward-looking statements. The Company believes that the
 following factors, among others, could affect its future
performance and cause actual results of the Company to differ
materially from those expressed in or implied by forward-looking
statements made by or on behalf of the Company: (a) the
price and supply of raw materials, particularly cobalt, copper
and nickel; (b) demand for metal-based specialty chemicals
in the mature markets in the United States and Europe;
(c) demand for metal-based specialty chemicals in
Asia-Pacific and other less mature markets; and (d) the
effect of non-currency risks of investing in and conducting
operations in foreign countries, including those relating to
political, social, economic and regulatory factors, together with
 fluctuations in currency exchange rates upon the Companys
international operations.




Item 7a.  Quantitative and Qualitative Disclosures
About Market Risk



11



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##### Table of Contents






Item 8.  Financial Statements and Supplementary Data






Report of Independent Auditors


Board of Directors and Stockholders



We have audited the accompanying consolidated balance sheets of
OM Group, Inc. as of December 31, 1999 and 1998, and the
related statements of consolidated income, stockholders
equity, and cash flows for each of the three years in the period
ended December 31, 1999. These financial statements are the
responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
 about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of OM Group, Inc. at December 31, 1999
and 1998, and the consolidated results of its operations and its
cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles
generally accepted in the United States.

/s/ Ernst & Young LLP

Cleveland, Ohio



12



---



##### Table of Contents






Consolidated Balance Sheets

|                                           |                                                                                                               |              |           |         |   |   |         |         |  
|------------------------------------------ | ------------------------------------------------------------------------------------------------------------- | ------------ | --------- | ------- | - | - | ------- | ------- | -
|                                           |                                                                                                               |             
|                                           |                                                                                                               | December 31,
|                                           |                                                                                                               |             
|                                           |                                                                                                               | 1999         |           | 1998   
|(Thousands of dollars, except share data)  |                                                                                                               |              |           |        
|Assets                                     |                                                                                                               |              |           |         |   |   |         |        
|                                          
|                                          
|                                          
|                                          
|Current assets:                            |                                                                                                               |              |           |         |   |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Cash and cash equivalents                                                                                     |              | $         | 9,433   |   |   | $       | 7,750   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Accounts receivable, less allowance of $1,131 in 1999 and $1,390
	in 1998                                     |              |           | 100,492 |   |   |         | 80,906  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Inventories                                                                                                   |              |           | 332,810 |   |   |         | 283,264 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Refundable taxes                                                                                              |              |           | 794     |   |   |         | 15,673  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Other current assets                                                                                          |              |           | 53,495  |   |   |         | 32,648  |  
|                                           |                                                                                                               |              |           |         |   |   |         |        
|Total current assets                       |                                                                                                               |              | 497,024   |         |   |   | 420,241 |        
|                                          
|                                          
|                                          
|                                          
|Property, plant and equipment:             |                                                                                                               |              |           |         |   |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Land                                                                                                          |              |           | 6,099   |   |   |         | 4,241   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Buildings and improvements                                                                                    |              |           | 93,819  |   |   |         | 80,148  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Machinery and equipment                                                                                       |              |           | 317,388 |   |   |         | 242,137 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Furniture and fixtures                                                                                        |              |           | 14,419  |   |   |         | 12,242  |  
|                                           |                                                                                                               |              |           |         |   |   |         |        
|                                           |                                                                                                               |              | 431,725   |         |   |   | 338,768 |        
|                                          
|                                          
|                                          
|                                          
|                                           | Less accumulated depreciation                                                                                 |              |           | 112,910 |   |   |         | 93,423  |  
|                                           |                                                                                                               |              |           |         |   |   |         |        
|                                           |                                                                                                               |              | 318,815   |         |   |   | 245,345 |        
|                                          
|                                          
|                                          
|                                          
|Other assets:                              |                                                                                                               |              |           |         |   |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Goodwill and other intangible assets, less accumulated
	amortization of
	$19,125 in 1999 and $13,510 in 1998. |              |           | 183,974 |   |   |         | 188,486 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Other assets                                                                                                  |              |           | 18,108  |   |   |         | 16,647  |  
|                                           |                                                                                                               |              |           |         |   |   |         |        
|Total assets                               |                                                                                                               | $            | 1,017,921 |         |   | $ | 870,719 |        
|                                           |                                                                                                               |              |           |         |   |   |         |        
|Liabilities and stockholders equity       |                                                                                                               |              |           |         |   |   |         |        
|                                          
|                                          
|                                          
|                                          
|Current liabilities:                       |                                                                                                               |              |           |         |   |   |         |        
|                                          
|                                          
|                                          
|                                          
|                                           | Current portion of long-term debt                                                                             |              | $         | 25      |   |   | $       | 141     |  
|                                          
|                                          
|                                          
|                                          
|                                           | Short-term debt                                                                                               |              |           |         |   |   |         | 2,000   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Accounts payable                                                                                              |              |           | 77,037  |   |   |         | 76,412  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Deferred income taxes                                                                                         |              |           | 27,865  |   |   |         | 20,271  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Other accrued expenses                                                                                        |              |           | 19,929  |   |   |         | 20,743  |  
|                                           |                                                                                                               |              |           |         |   |   |         |        
|Total current liabilities                  |                                                                                                               |              | 124,856   |         |   |   | 119,567 |        
|                                          
|                                          
|                                          
|                                          
|                                           | Long-term debt                                                                                                |              |           | 384,888 |   |   |         | 309,964 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Deferred income taxes                                                                                         |              |           | 31,434  |   |   |         | 29,950  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Other long-term liabilities                                                                                   |              |           | 27,515  |   |   |         | 7,095   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Stockholders equity:                                                                                         |              |           |         |   |   |         |         |  
|                                           | Preferred stock, $.01 par value:
	Authorized 2,000,000 shares; no shares issued or outstanding                |              |           |         |   |   |         |         |  
|                                          
|                                          
|                                          
|                                          
|                                           | Common stock, $.01 par value:
	Authorized 60,000,000 shares; issued 23,959,346 shares                         |              |           | 240     |   |   |         | 240     |  
|                                          
|                                          
|                                          
|                                          
|                                           | Capital in excess of par value                                                                                |              |           | 258,815 |   |   |         | 258,085 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Retained earnings                                                                                             |              |           | 198,047 |   |   |         | 155,691 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Treasury stock (165,161 shares in 1999 and 234,847 shares in
	1998, at cost)                                  |              |           | (5,537  | ) |   |         | (8,494  | )
|                                          
|                                          
|                                          
|                                          
|                                           | Accumulated other comprehensive loss                                                                          |              |           | (1,837  | ) |   |         | (1,379  | )
|                                          
|                                          
|                                          
|                                          
|                                           | Unearned compensation                                                                                         |              |           | (500    | ) |   |         |         |  
|                                           |                                                                                                               |              |           |         |   |   |         |        
|Total stockholders equity                 |                                                                                                               |              | 449,228   |         |   |   | 404,143 |        
|                                           |                                                                                                               |              |           |         |   |   |         |        
|Total liabilities and stockholders equity |                                                                                                               | $            | 1,017,921 |         |   | $ | 870,719 |        
|                                           |                                                                                                               |              |           |         |   |   |         |        

See accompanying notes to consolidated financial statements.

13



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##### Table of Contents






Statements of Consolidated Income

|                                                |  |                         |         |      |  |      |         |   |  |   |         |  
|----------------------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                                |  |                        
|                                                |  | Year Ended December 31,
|                                                |  |                        
|                                                |  | 1999                    |         | 1998 |  | 1997
|(Thousands of dollars, except per share data)   |  |                         |         |      |  |     
|Net sales                                       |  | $                       | 506,955 |      |  | $    | 521,226 |   |  | $ | 487,296 |  
|                                               
|                                               
|                                               
|                                               
|Cost of products sold                           |  |                         | 347,450 |      |  |      | 376,274 |   |  |   | 369,933 |  
|                                                |  |                         |         |      |  |      |         |   |  |   |         |  
|                                                |  |                         | 159,505 |      |  |      | 144,952 |   |  |   | 117,363 |  
|                                               
|                                               
|                                               
|                                               
|Selling, general and administrative expenses    |  |                         | 60,768  |      |  |      | 58,028  |   |  |   | 46,791  |  
|                                                |  |                         |         |      |  |      |         |   |  |   |         |  
|Income from operations                          |  |                         | 98,737  |      |  |      | 86,924  |   |  |   | 70,572  |  
|Other income (expense)                          |  |                         |         |      |  |      |         |   |  |   |         |  
|                                               
|                                               
|                                               
|                                               
|Interest expense                                |  |                         | (19,081 | )    |  |      | (15,560 | ) |  |   | (13,410 | )
|                                               
|                                               
|                                               
|                                               
|Interest income                                 |  |                         | 181     |      |  |      | 223     |   |  |   | 100     |  
|                                               
|                                               
|                                               
|                                               
|Foreign exchange gain (loss)                    |  |                         | 456     |      |  |      | (263    | ) |  |   | 715     |  
|                                                |  |                         |         |      |  |      |         |   |  |   |         |  
|                                                |  |                         | (18,444 | )    |  |      | (15,600 | ) |  |   | (12,595 | )
|                                                |  |                         |         |      |  |      |         |   |  |   |         |  
|Income before income taxes                      |  |                         | 80,293  |      |  |      | 71,324  |   |  |   | 57,977  |  
|                                               
|                                               
|                                               
|                                               
|Income taxes                                    |  |                         | 24,468  |      |  |      | 22,966  |   |  |   | 19,534  |  
|                                                |  |                         |         |      |  |      |         |   |  |   |         |  
|Net income                                      |  | $                       | 55,825  |      |  | $    | 48,358  |   |  | $ | 38,443  |  
|                                                |  |                         |         |      |  |      |         |   |  |   |         |  
|Net income per common share                     |  | $                       | 2.35    |      |  | $    | 2.11    |   |  | $ | 1.84    |  
|                                                |  |                         |         |      |  |      |         |   |  |   |         |  
|Net income per common share  assuming dilution |  | $                       | 2.30    |      |  | $    | 2.05    |   |  | $ | 1.78    |  
|                                                |  |                         |         |      |  |      |         |   |  |   |         |  
|Cash dividends paid per common share            |  | $                       | .40     |      |  | $    | .36     |   |  | $ | .32     |  
|                                                |  |                         |         |      |  |      |         |   |  |   |         |  

See accompanying notes to consolidated financial statements

14



---



##### Table of Contents






Statements Of Consolidated Stockholders Equity

|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  
|------------------------------------------------------------- |  | ------ | --- | --------- |  | -------- | ------- | -------- |  | ------------- | ------- | ------------ |  | ----- | ------ | - |  | - | ------ | - |  | - | ---- | - |  | - | ------- | -
|                                                              |  |        |     | Capital   |  |          |         |          |  | Accumulated   |         |              |  |      
|                                                              |  |        |     | in Excess |  |          |         |          |  | Other         |         |              |  |      
|                                                              |  | Common |     | of Par    |  | Retained |         | Treasury |  | Comprehensive |         | Unearned     |  |      
|                                                              |  | Stock  |     | Value     |  | Earnings |         | Stock    |  | Loss          |         | Compensation |  | Total
|(Thousands of dollars)                                        |  |        |     |           |  |          |         |          |  |               |         |              |  |      
|Balance at January 1, 1997                                    |  | $      | 188 |           |  | $        | 102,125 |          |  | $             | 85,871  |              |  | $     | (2,621 | ) |  | $ | (241   | ) |  |   |      |   |  | $ | 185,322 |  
|                                                             
|                                                             
|                                                             
|                                                             
|Net income                                                    |  |        |     |           |  |          |         |          |  |               | 38,443  |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 38,443  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Translation adjustment                                        |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   | (657   | ) |  |   |      |   |  |   | (657    | )
|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  
|                                                             
|Total comprehensive income                                    |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 37,786  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Non-employee directors compensation                          |  |        |     |           |  |          | 198     |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 198     |  
|                                                             
|                                                             
|                                                             
|                                                             
|Dividends paid                                                |  |        |     |           |  |          |         |          |  |               | (6,792  | )            |  |       |        |   |  |   |        |   |  |   |      |   |  |   | (6,792  | )
|                                                             
|                                                             
|                                                             
|                                                             
|Treasury stock purchased                                      |  |        |     |           |  |          |         |          |  |               |         |              |  |       | (4,173 | ) |  |   |        |   |  |   |      |   |  |   | (4,173  | )
|                                                             
|                                                             
|                                                             
|                                                             
|Issuance of shares under benefit plans, including tax benefit |  |        |     |           |  |          |         |          |  |               | (57     | )            |  |       | 1,965  |   |  |   |        |   |  |   |      |   |  |   | 1,908   |  
|                                                             
|                                                             
|                                                             
|                                                             
|Sale of common stock                                          |  |        | 34  |           |  |          | 86,958  |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 86,992  |  
|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  
|Balance at December 31, 1997                                  |  |        | 222 |           |  |          | 189,281 |          |  |               | 117,465 |              |  |       | (4,829 | ) |  |   | (898   | ) |  |   |      |   |  |   | 301,241 |  
|                                                             
|                                                             
|                                                             
|                                                             
|Net income                                                    |  |        |     |           |  |          |         |          |  |               | 48,358  |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 48,358  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Translation adjustment                                        |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   | (481   | ) |  |   |      |   |  |   | (481    | )
|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  
|                                                             
|Total comprehensive income                                    |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 47,877  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Non-employee directors compensation                          |  |        |     |           |  |          | 133     |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 133     |  
|                                                             
|                                                             
|                                                             
|                                                             
|Dividends paid                                                |  |        |     |           |  |          |         |          |  |               | (8,246  | )            |  |       |        |   |  |   |        |   |  |   |      |   |  |   | (8,246  | )
|                                                             
|                                                             
|                                                             
|                                                             
|Treasury stock purchased                                      |  |        |     |           |  |          |         |          |  |               |         |              |  |       | (7,070 | ) |  |   |        |   |  |   |      |   |  |   | (7,070  | )
|                                                             
|                                                             
|                                                             
|                                                             
|Issuance of shares under benefit plans, including tax benefit |  |        |     |           |  |          |         |          |  |               | (1,886  | )            |  |       | 3,405  |   |  |   |        |   |  |   |      |   |  |   | 1,519   |  
|                                                             
|                                                             
|                                                             
|                                                             
|Sale of common stock                                          |  |        | 18  |           |  |          | 68,671  |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 68,689  |  
|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  
|Balance at December 31, 1998                                  |  |        | 240 |           |  |          | 258,085 |          |  |               | 155,691 |              |  |       | (8,494 | ) |  |   | (1,379 | ) |  |   |      |   |  |   | 404,143 |  
|                                                             
|                                                             
|                                                             
|                                                             
|Net income                                                    |  |        |     |           |  |          |         |          |  |               | 55,825  |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 55,825  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Translation adjustment                                        |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   | (458   | ) |  |   |      |   |  |   | (458    | )
|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  
|                                                             
|Total comprehensive income                                    |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 55,367  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Non-employee directors compensation                          |  |        |     |           |  |          | 160     |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 160     |  
|                                                             
|                                                             
|                                                             
|                                                             
|Restricted stock grants                                       |  |        |     |           |  |          | 570     |          |  |               |         |              |  |       |        |   |  |   |        |   |  | $ | (570 | ) |  |   |         |  
|                                                             
|                                                             
|                                                             
|                                                             
|Restricted stock compensation                                 |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   | 70   |   |  |   | 70      |  
|                                                             
|                                                             
|                                                             
|                                                             
|Dividends paid                                                |  |        |     |           |  |          |         |          |  |               | (9,517  | )            |  |       |        |   |  |   |        |   |  |   |      |   |  |   | (9,517  | )
|                                                             
|                                                             
|                                                             
|                                                             
|Treasury stock purchased                                      |  |        |     |           |  |          |         |          |  |               |         |              |  |       | (4,744 | ) |  |   |        |   |  |   |      |   |  |   | (4,744  | )
|                                                             
|                                                             
|                                                             
|                                                             
|Issuance of shares under benefit plans, including tax benefit |  |        |     |           |  |          |         |          |  |               | (3,952  | )            |  |       | 7,701  |   |  |   |        |   |  |   |      |   |  |   | 3,749   |  
|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  
|Balance at December 31, 1999                                  |  | $      | 240 |           |  | $        | 258,815 |          |  | $             | 198,047 |              |  | $     | (5,537 | ) |  | $ | (1,837 | ) |  | $ | (500 | ) |  | $ | 449,228 |  
|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  

See accompanying notes to consolidated financial statements.

15



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##### Table of Contents






Statements Of Consolidated Cash Flows

|                                                             |                                     |                        |         |         |   |      |          |         |   |   |          |         |  
|------------------------------------------------------------ | ----------------------------------- | ---------------------- | ------- | ------- | - | ---- | -------- | ------- | - | - | -------- | ------- | -
|                                                             |                                     |                       
|                                                             |                                     | Year Ended December 31
|                                                             |                                     |                       
|                                                             |                                     | 1999                   |         | 1998    |   | 1997
|(Thousands of dollars)                                       |                                     |                        |         |         |   |     
|Operating activities                                         |                                     |                        |         |         |   |      |          |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|Net income                                                   |                                     | $                      | 55,825  |         |   | $    | 48,358   |         |   | $ | 38,443   |        
|                                                            
|                                                            
|                                                            
|                                                            
|Items not affecting cash:                                    |                                     |                        |         |         |   |      |          |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Depreciation and amortization       |                        |         | 26,864  |   |      |          | 25,435  |   |   |          | 21,225  |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Foreign exchange (gain) loss        |                        |         | (456    | ) |      |          | 263     |   |   |          | (715    | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Deferred income taxes               |                        |         | 13,327  |   |      |          | 17,309  |   |   |          | 5,108   |  
|                                                            
|                                                            
|                                                            
|                                                            
|Changes in operating assets and liabilities:                 |                                     |                        |         |         |   |      |          |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Accounts receivable                 |                        |         | (19,586 | ) |      |          | 5,139   |   |   |          | (9,435  | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Inventories                         |                        |         | (49,521 | ) |      |          | (75,976 | ) |   |          | 15,520  |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Accounts payable and other accruals |                        |         | (4,850  | ) |      |          | (11,387 | ) |   |          | (40,837 | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Other                               |                        |         | (9,247  | ) |      |          | (10,283 | ) |   |          | 637     |  
|                                                             |                                     |                        |         |         |   |      |          |         |   |   |          |        
|Net cash provided by (used in) operating activities          |                                     |                        | 12,356  |         |   |      | (1,142   | )       |   |   | 29,946   |        
|                                                            
|                                                            
|                                                            
|                                                            
|Investing activities                                         |                                     |                        |         |         |   |      |          |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|Expenditures for property, plant and equipment  net         |                                     |                        | (70,150 | )       |   |      | (91,942  | )       |   |   | (34,785  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Acquisitions of businesses                                   |                                     |                        | (1,765  | )       |   |      | (103,253 | )       |   |   | (123,718 | )      
|                                                             |                                     |                        |         |         |   |      |          |         |   |   |          |        
|Net cash used in investing activities                        |                                     |                        | (71,915 | )       |   |      | (195,195 | )       |   |   | (158,503 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Financing activities                                         |                                     |                        |         |         |   |      |          |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|Dividend payments                                            |                                     |                        | (9,517  | )       |   |      | (8,246   | )       |   |   | (6,792   | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Short-term borrowings                                        |                                     |                        |         |         |   |      | 2,000    |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|Long-term borrowings                                         |                                     |                        | 74,808  |         |   |      | 197,773  |         |   |   | 172,315  |        
|                                                            
|                                                            
|                                                            
|                                                            
|Payments of short-term debt                                  |                                     |                        | (2,000  | )       |   |      |          |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|Payments of long-term debt                                   |                                     |                        |         |         |   |      | (63,569  | )       |   |   | (114,643 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Purchase of treasury stock                                   |                                     |                        | (4,744  | )       |   |      | (7,070   | )       |   |   | (4,173   | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Proceeds from exercise of stock options                      |                                     |                        | 2,755   |         |   |      | 719      |         |   |   | 708      |        
|                                                            
|                                                            
|                                                            
|                                                            
|Issuance of common stock                                     |                                     |                        |         |         |   |      | 68,689   |         |   |   | 86,992   |        
|                                                             |                                     |                        |         |         |   |      |          |         |   |   |          |        
|Net cash provided by financing activities                    |                                     |                        | 61,302  |         |   |      | 190,296  |         |   |   | 134,407  |        
|                                                            
|                                                            
|                                                            
|                                                            
|Effect of exchange rate changes on cash and cash equivalents |                                     |                        | (60     | )       |   |      | 598      |         |   |   | (475     | )      
|                                                             |                                     |                        |         |         |   |      |          |         |   |   |          |        
|Increase (decrease) in cash and cash equivalents             |                                     |                        | 1,683   |         |   |      | (5,443   | )       |   |   | 5,375    |        
|                                                            
|                                                            
|                                                            
|                                                            
|Cash and cash equivalents at beginning of year               |                                     |                        | 7,750   |         |   |      | 13,193   |         |   |   | 7,818    |        
|                                                             |                                     |                        |         |         |   |      |          |         |   |   |          |        
|Cash and cash equivalents at end of year                     |                                     | $                      | 9,433   |         |   | $    | 7,750    |         |   | $ | 13,193   |        
|                                                             |                                     |                        |         |         |   |      |          |         |   |   |          |        

See accompanying notes to consolidated financial statements.

16



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##### Table of Contents






Notes to Consolidated Financial Statements

(Thousands of dollars, except per share amounts)

A.  Significant Accounting Policies

Principles of Consolidation 


Inventories Inventories are principally stated
 at the lower of cost or market and valued using the last-in,
first-out (LIFO) method.

Long-Lived Assets Property, plant and
equipment is recorded at historical cost less accumulated
depreciation. Depreciation of plant and equipment is provided by
the straight-line method over the useful lives ranging from 5 to
40 years for buildings and improvements and 3 to 15 years
for other depreciable assets.

Goodwill represents the excess of the purchase price of
businesses acquired over the estimated fair market value of the
net assets acquired. Other intangibles represent principally
patents, trademarks and technology acquired. Goodwill, other
intangible assets and capitalized software are being amortized on
 a straight-line basis over their respective useful lives (five
to forty years).

Long-lived assets are assessed for impairment when operating
profits for the related business indicate that the carrying value
 may not be recoverable. The asset would be considered impaired
when the future net undiscounted cash flows generated by the
asset are less than its carrying value. An impairment loss would
be recognized based on the amount by which the carrying value of
the asset exceeds it fair value.

Research and Development Selling, general and
administrative expenses include research and development costs of
 $11,332, $10,367, and $6,687 in 1999, 1998 and 1997,
respectively.

Income Taxes Deferred income taxes are
provided to recognize the effect of temporary differences between
 financial and tax reporting. Deferred income taxes are not
provided for undistributed earnings of foreign consolidated
subsidiaries, to the extent such earnings are reinvested for an
indefinite period of time.

Foreign Currency Translation The functional
currency for the Companys Finnish subsidiary is the U.S.
Dollar since a majority of its purchases and sales are
denominated in U.S. Dollars and it holds a significant
intercompany note payable denominated in U.S. Dollars.
Accordingly, foreign exchange gains and losses related to assets,
 liabilities and transactions which are denominated in other
currencies (principally the euro) are included in results of
operations. The Company enters into forward contracts to
partially hedge its balance sheet exposure to the euro, and
accordingly, gains or losses related to the forward contracts are
 also included in results of operations.

The functional currency for the Companys other subsidiaries
 outside of the United States is the applicable local currency.
For those operations, financial statements are translated into
U.S. Dollars at year-end exchange rates as to assets and
liabilities and weighted average exchange rates as to revenues
and expenses. The resulting translation adjustments are recorded
as a component of stockholders equity.

Cash Equivalents For purposes of the
statements of consolidated cash flows, all highly liquid
investments with a maturity of three months or less when
purchased are considered to be cash equivalents.

Stock Options and Compensation Plans The
Company grants stock options for a fixed number of shares to
certain employees with an exercise price equal to the fair value
of the shares at the date of grant and accounts for stock options
 using the intrinsic value method. Accordingly, compensation
expense is not recognized for the stock option grants.

Non-employee members of the Board of Directors are eligible to
receive their annual retainer in the form of cash, stock options,
 or restricted stock. If stock options or restricted stock are
elected, the acquisition price is 75% of the fair market value
and directors cash compensation is utilized to acquire the
options or restricted stock. Also, directors electing to receive
restricted stock receive additional restricted stock equal to 5%
of their applied cash compensation. Accordingly, compensation
expense is recognized for stock option and restricted share
grants elected by eligible directors.

17



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


Revenue Recognition Revenues are recognized
when products are shipped to unaffiliated customers.

Use of Estimates The preparation of financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions
in certain circumstances that affect the amounts reported in the
accompanying consolidated financial statements and notes. Actual
results could differ from these estimates.

Recently Issued Accounting Pronouncements In
June, 1998, SFAS No. 133 Accounting for Derivative
Instruments and Hedging Activities was issued. SFAS
No. 133 provides a comprehensive and consistent standard for
 the recognition and measurement of derivatives and hedging
activities. The Company must adopt SFAS No. 133 no later
than the first quarter of fiscal year 2001; adoption of this
statement is not expected to have a material effect on earnings
or the financial position of the Company.

B.  Inventories



|                           |                   |             |         |         |  |   |         |         | 
|-------------------------- | ----------------- | ----------- | ------- | ------- |  | - | ------- | ------- | 
|                           |                   |            
|                           |                   | December 31
|                           |                   |            
|                           |                   | 1999        |         | 1998   
|                           |                   |             |         |        
|Raw materials and supplies |                   | $           | 137,337 |         |  | $ | 99,471  |        
|                          
|                          
|                          
|                          
|Finished goods             |                   |             | 138,417 |         |  |   | 123,651 |        
|                           |                   |             |         |         |  |   |         |        
|                           |                   |             | 275,754 |         |  |   | 223,122 |        
|                          
|                          
|                          
|                          
|LIFO reserve               |                   |             | 57,056  |         |  |   | 60,142  |        
|                           |                   |             |         |         |  |   |         |        
|                           | Total inventories |             | $       | 332,810 |  |   | $       | 283,264 | 
|                           |                   |             |         |         |  |   |         |        

C.  Financial Instruments



|                                     |                      |             |         |         |  |   |         |         | 
|------------------------------------ | -------------------- | ----------- | ------- | ------- |  | - | ------- | ------- | 
|                                     |                      |            
|                                     |                      | December 31
|                                     |                      |            
|                                     |                      | 1999        |         | 1998   
|                                     |                      |             |         |        
|Notes payable to banks               |                      | $           | 324,750 |         |  | $ | 249,760 |        
|                                    
|                                    
|                                    
|                                    
|Notes payable to insurance companies |                      |             | 60,000  |         |  |   | 60,000  |        
|                                    
|                                    
|                                    
|                                    
|Other                                |                      |             | 163     |         |  |   | 345     |        
|                                     |                      |             |         |         |  |   |         |        
|                                     |                      |             | 384,913 |         |  |   | 310,105 |        
|                                    
|                                    
|                                    
|                                    
|Less: Current portion                |                      |             | 25      |         |  |   | 141     |        
|                                     |                      |             |         |         |  |   |         |        
|                                     | Total long-term debt |             | $       | 384,888 |  |   | $       | 309,964 | 
|                                     |                      |             |         |         |  |   |         |        

At December 31, 1999, the Company had a $325 million
revolving credit facility with a group of banks, including a
$10 million sublimit for issuance of letters of credit. The
five year credit facility, expiring in January, 2004, has
variable interest rates based upon either the agent banks
base lending rate or LIBOR plus a .40% to 1.50% margin at the
Companys option. Under this credit agreement, the Company
must meet certain funded debt ratios, and there are also
covenants which restrict capital expenditure, dividend paying and
 borrowing capability of the Company. Annual dividends are
limited to $12 million or 25% of consolidated net income,
whichever is greater. The Company may also borrow up to
$15 million under a demand note agreement expiring
March 31, 2000 in order to finance the completion of the
smelter construction project. At December 31, 1999, the
Company had no outstanding borrowings under this agreement.

The Company has entered into several interest rate swap
agreements to convert the variable interest rates on an aggregate
 contract amount of $60 million to an average fixed rate of
5.65% plus .40% to .80% for a three year period ending
February 9, 2001. At December 31, 1999, the combined
effective rate of the Companys bank borrowings and the
related swap agreements was 7.34%. The net interest paid or
received on interest rate swaps is

18



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##### Table of Contents



Notes to Consolidated Financial Statements Continued


included in interest expense. The counterparties to the interest
rate swaps are international commercial banks. At
December 31, 1999, the fair values of the Companys
interest rate swaps approximated $546 receivable.

During 1995 the Company borrowed $30 million from a group of
 insurance companies through a private placement. The borrowings
bear interest at 7.38% and are due August 30, 2005. During
1997, in order to convert to a fixed rate and extend the term on
a portion of its borrowings, the Company borrowed an additional
$30 million in a private placement with a group of insurance
 companies and used the proceeds to reduce borrowings under its
revolving credit facility with its banks. Borrowings amounting to
 $15 million bear interest at 6.82% and are due
October 24, 2007. The remaining borrowings bear interest at
6.99% and are due October 24, 2009. Under the terms of these
 note purchase agreements, the Company must meet certain interest
 coverage and funded debt ratios. There are also covenants which
restrict the dividend paying and borrowing capability of the
Company.

Aggregate annual maturities of long-term debt for the five years
following December 31, 1999 are as follows: 2000 
 $25; 2001  $24; 2002  $20 and 2003 -
$20; and 2004  $324,770. Interest paid, net of
capitalized amounts, was $19,112, $15,660 and $14,771 for the
years ended December 31, 1999, 1998 and 1997, respectively.
Interest capitalized as part of construction of major fixed
assets was $7,057 in 1999, $1,605 in 1998 and $0 in 1997. At
December 31, 1999, the carrying value of the Companys
debt approximated its fair value.

The Company enters into forward contracts to purchase euros to
partially hedge its balance sheet exposure and other commitments
to rate fluctuations between the euro and the U.S. Dollar. At
December 31, 1999, the notional value of these forward
contracts approximated $5,023. The fair value of the forward
contracts, based on the current settlement price at
December 31, 1999, approximated $387 payable, which was
recorded in results of operations.

D.  Income Taxes



|                          |  |                        |        |      |  |      |        |  |  |   |        | 
|------------------------- |  | ---------------------- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                          |  |                       
|                          |  | Year Ended December 31
|                          |  |                       
|                          |  | 1999                   |        | 1998 |  | 1997
|                          |  |                        |        |      |  |     
|United States             |  | $                      | (2,715 | )    |  | $    | 17,998 |  |  | $ | 7,794  | 
|                         
|                         
|                         
|                         
|Outside the United States |  |                        | 83,008 |      |  |      | 53,326 |  |  |   | 50,183 | 
|                          |  |                        |        |      |  |      |        |  |  |   |        | 
|                          |  | $                      | 80,293 |      |  | $    | 71,324 |  |  | $ | 57,977 | 
|                          |  |                        |        |      |  |      |        |  |  |   |        | 

Income taxes are summarized as follows:

|          |                           |                        |        |        |       |      |        |        |       |   |        |        |       | 
|--------- | ------------------------- | ---------------------- | ------ | ------ | ----- | ---- | ------ | ------ | ----- | - | ------ | ------ | ----- | 
|          |                           |                       
|          |                           | Year Ended December 31
|          |                           |                       
|          |                           | 1999                   |        | 1998   |       | 1997
|          |                           |                        |        |        |       |     
|Current:  |                           |                        |        |        |       |      |        |        |       |   |        |       
|         
|         
|         
|         
|          | United States:            |                        |        |        |       |      |        |        |       |   |        |        |      
|         
|         
|         
|         
|          |                           | Federal                |        | $      | 1,281 |      |        | $      | 1,634 |   |        | $      | 1,267 | 
|         
|         
|         
|         
|          |                           | State and local        |        |        | 88    |      |        |        | 860   |   |        |        | 1,166 | 
|         
|         
|         
|         
|          | Outside the United States |                        |        | 9,772  |       |      |        | 3,163  |       |   |        | 11,993 |      
|          |                           |                        |        |        |       |      |        |        |       |   |        |       
|          |                           |                        | 11,141 |        |       |      | 5,657  |        |       |   | 14,426 |       
|         
|         
|         
|         
|Deferred: |                           |                        |        |        |       |      |        |        |       |   |        |       
|         
|         
|         
|         
|          | United States             |                        |        | 2,817  |       |      |        | 5,426  |       |   |        | 1,209  |      
|         
|         
|         
|         
|          | Outside the United States |                        |        | 10,510 |       |      |        | 11,883 |       |   |        | 3,899  |      
|          |                           |                        |        |        |       |      |        |        |       |   |        |       
|          |                           |                        | 13,327 |        |       |      | 17,309 |        |       |   | 5,108  |       
|          |                           |                        |        |        |       |      |        |        |       |   |        |       
|          |                           | $                      | 24,468 |        |       | $    | 22,966 |        |       | $ | 19,534 |       
|          |                           |                        |        |        |       |      |        |        |       |   |        |       

19



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##### Table of Contents



Notes to Consolidated Financial Statements Continued


Significant components of the Companys deferred income
taxes are as follows:

|                                               |  |             |         |      |  |   |         |  
|---------------------------------------------- |  | ----------- | ------- | ---- |  | - | ------- | -
|                                               |  |            
|                                               |  | December 31
|                                               |  |            
|                                               |  | 1999        |         | 1998
|                                               |  |             |         |     
|Current asset  operating accruals             |  | $           | 1,968   |      |  | $ | 2,614   |  
|                                              
|                                              
|                                              
|                                              
|Current liability  inventories                |  |             | (27,865 | )    |  |   | (20,271 | )
|                                              
|                                              
|                                              
|                                              
|Long-term asset  employee benefits            |  |             | 3,425   |      |  |   | 3,255   |  
|                                              
|                                              
|                                              
|                                              
|Long-term liability  accelerated depreciation |  |             | (31,434 | )    |  |   | (29,950 | )
|                                               |  |             |         |      |  |   |         |  
|                                               |  | $           | (53,906 | )    |  | $ | (44,352 | )
|                                               |  |             |         |      |  |   |         |  

A reconciliation of income taxes computed at the United States
statutory rate to the effective income tax rate follows:

|                                                                          |  |                        |       |      |  |      |      |   |  |  |      |  
|------------------------------------------------------------------------- |  | ---------------------- | ----- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                                                          |  |                       
|                                                                          |  | Year Ended December 31
|                                                                          |  |                       
|                                                                          |  | 1999                   |       | 1998 |  | 1997
|                                                                          |  |                        |       |      |  |     
|Income taxes at the United States statutory rate                          |  |                        | 35.0  | %    |  |      | 35.0 | % |  |  | 35.0 | %
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|State income taxes, net of federal tax benefit                            |  |                        | .1    |      |  |      | .8   |   |  |  | 1.3  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Effective tax rate differential of earnings outside of the
	United States |  |                        | (10.6 | )    |  |      | (6.0 | ) |  |  | (2.7 | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Adjustment of worldwide tax liabilities                                   |  |                        | 4.2   |      |  |      | .1   |   |  |  | (2.0 | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Non-deductible goodwill                                                   |  |                        | 1.9   |      |  |      | 2.0  |   |  |  | 1.6  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Othernet                                                                 |  |                        | (.1   | )    |  |      | .3   |   |  |  | .5   |  
|                                                                          |  |                        |       |      |  |      |      |   |  |  |      |  
|                                                                          |  |                        | 30.5  | %    |  |      | 32.2 | % |  |  | 33.7 | %
|                                                                          |  |                        |       |      |  |      |      |   |  |  |      |  

The Company has not provided additional United States income
taxes on approximately $216,000 of undistributed earnings of
consolidated foreign subsidiaries included in stockholders
equity. Such earnings could become taxable upon the sale or
liquidation of these foreign subsidiaries or upon dividend
repatriation. The Companys intent is for such earnings to
be reinvested by the subsidiaries or to be repatriated only when
it would be tax effective through the utilization of foreign tax
credits. It is not practicable to estimate the amount of
unrecognized withholding taxes and deferred tax liability on such
 earnings.

Beginning in 1998, the Company conducts business in Malaysia,
which attracts industry by granting a holiday from
income taxes. This agreement, which expires in March, 2002,
reduced income tax expense by $1,680, or $.07 per common share
 assuming dilution and $1,051, or $.04 per common share
 assuming dilution, in 1999 and 1998, respectively. Income
tax payments were $7,355, $24,611 and $12,551 during the years
ended December 31, 1999, 1998 and 1997, respectively.

E.  Pension and Other Postretirement Benefit Plans



20



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


The Company has non-contributory defined benefit pension plans
and other postretirement benefit plans, primarily health care and
 life insurance. Components of plan obligations and assets, and
the recorded asset (liability) at December 31 are as
follows:

|                                                      |                        |          |         |                      |   |      |         |       |  |   |        |        |   |   |        |       | 
|----------------------------------------------------- | ---------------------- | -------- | ------- | -------------------- | - | ---- | ------- | ----- |  | - | ------ | ------ | - | - | ------ | ----- | 
|                                                      |                        |          |         |                     
|                                                      |                        | Pension  |         | Other Postretirement
|                                                      |                        | Benefits |         | Benefits            
|                                                      |                        |          |         |                     
|                                                      |                        | 1999     |         | 1998                 |   | 1999 |         | 1998 
|                                                      |                        |          |         |                      |   |      |         |      
|Benefit obligation at beginning of year               |                        | $        | (15,318 | )                    |   | $    | (15,827 | )     |  | $ | (9,369 | )      |   | $ | (6,041 | )    
|                                                     
|                                                     
|                                                     
|                                                     
|Service cost                                          |                        |          | (189    | )                    |   |      | (158    | )     |  |   | (425   | )      |   |   | (474   | )    
|                                                     
|                                                     
|                                                     
|                                                     
|Interest cost                                         |                        |          | (977    | )                    |   |      | (991    | )     |  |   | (470   | )      |   |   | (443   | )    
|                                                     
|                                                     
|                                                     
|                                                     
|Participant contributions                             |                        |          |         |                      |   |      |         |       |  |   | (89    | )      |   |   |        |      
|                                                     
|                                                     
|                                                     
|                                                     
|Plan amendments                                       |                        |          |         |                      |   |      |         |       |  |   |        |        |   |   | (1,361 | )    
|                                                     
|                                                     
|                                                     
|                                                     
|Actuarial gain (loss)                                 |                        |          | 2,160   |                      |   |      | (1,747  | )     |  |   | 4,746  |        |   |   | (1,281 | )    
|                                                     
|                                                     
|                                                     
|                                                     
|Benefits paid                                         |                        |          | 800     |                      |   |      | 741     |       |  |   | 364    |        |   |   | 231    |      
|                                                     
|                                                     
|                                                     
|                                                     
|Curtailment gain                                      |                        |          |         |                      |   |      | 2,664   |       |  |   |        |        |   |   |        |      
|                                                      |                        |          |         |                      |   |      |         |       |  |   |        |        |   |   |        |      
|Benefit obligation at end of year                     |                        | $        | (13,524 | )                    |   | $    | (15,318 | )     |  | $ | (5,243 | )      |   | $ | (9,369 | )    
|                                                      |                        |          |         |                      |   |      |         |       |  |   |        |        |   |   |        |      
|Fair value of plan assets at beginning of year        |                        | $        | 14,767  |                      |   | $    | 13,746  |       |  | $ | 0      |        |   | $ | 0      |      
|                                                     
|                                                     
|                                                     
|                                                     
|Actual return on plan assets                          |                        |          | 944     |                      |   |      | 1,367   |       |  |   |        |        |   |   |        |      
|                                                     
|                                                     
|                                                     
|                                                     
|Employer contributions                                |                        |          | 72      |                      |   |      | 395     |       |  |   | 275    |        |   |   | 231    |      
|                                                     
|                                                     
|                                                     
|                                                     
|Participant contributions                             |                        |          |         |                      |   |      |         |       |  |   | 89     |        |   |   |        |      
|                                                     
|                                                     
|                                                     
|                                                     
|Benefits paid                                         |                        |          | (800    | )                    |   |      | (741    | )     |  |   | (364   | )      |   |   | (231   | )    
|                                                      |                        |          |         |                      |   |      |         |       |  |   |        |        |   |   |        |      
|Fair value of plan assets at end of year              |                        | $        | 14,983  |                      |   | $    | 14,767  |       |  | $ | 0      |        |   | $ | 0      |      
|                                                      |                        |          |         |                      |   |      |         |       |  |   |        |        |   |   |        |      
|Plan assets exceeding (less than) benefit obligations |                        | $        | 1,459   |                      |   | $    | (551    | )     |  | $ | (5,243 | )      |   | $ | (9,369 | )    
|                                                     
|                                                     
|                                                     
|                                                     
|Unamortized:                                          |                        |          |         |                      |   |      |         |       |  |   |        |        |   |   |        |      
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Net (gain) loss        |          |         | (443                 | ) |      |         | 1,412 |  |   |        | (2,009 | ) |   |        | 1,245 | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Prior service cost     |          |         |                      |   |      |         |       |  |   |        | 1,389  |   |   |        | 2,694 | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Employer contributions |          |         |                      |   |      |         |       |  |   |        | 69     |   |   |        |       | 
|                                                      |                        |          |         |                      |   |      |         |       |  |   |        |        |   |   |        |      
|Recorded asset (liability)                            |                        | $        | 1,016   |                      |   | $    | 861     |       |  | $ | (5,794 | )      |   | $ | (5,430 | )    
|                                                      |                        |          |         |                      |   |      |         |       |  |   |        |        |   |   |        |      

The projected benefit obligation, accumulated benefit obligation
and fair value of plan assets for pension plans with accumulated
benefit obligations in excess of plan assets were $2,885, $2,885
and $2,328, respectively, as of December 31, 1999 and
$3,063, $3,063 and $2,278, respectively, as of December 31,
1998.

The components of net periodic benefit cost (income) for the
 years ended December 31 are as follows:

|                               |  |                  |        |      |  |      |        |   |  |   |        |  
|------------------------------ |  | ---------------- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                               |  |                 
|                               |  | Pension Benefits
|                               |  |                 
|                               |  | 1999             |        | 1998 |  | 1997
|                               |  |                  |        |      |  |     
|Service cost                   |  | $                | 189    |      |  | $    | 158    |   |  | $ | 513    |  
|                              
|                              
|                              
|                              
|Interest cost                  |  |                  | 977    |      |  |      | 991    |   |  |   | 1,056  |  
|                              
|                              
|                              
|                              
|Expected return on plan assets |  |                  | (1,249 | )    |  |      | (1,182 | ) |  |   | (1,071 | )
|                               |  |                  |        |      |  |      |        |   |  |   |        |  
|                               |  |                  | (83    | )    |  |      | (33    | ) |  |   | 498    |  
|                              
|                              
|                              
|                              
|Curtailment gain               |  |                  |        |      |  |      | (2,664 | ) |  |   |        |  
|                               |  |                  |        |      |  |      |        |   |  |   |        |  
|                               |  | $                | (83    | )    |  | $    | (2,697 | ) |  | $ | 498    |  
|                               |  |                  |        |      |  |      |        |   |  |   |        |  

21



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##### Table of Contents



Notes to Consolidated Financial Statements Continued


|                 |  |                               |     |      |  |      |       |  |  |   |     | 
|---------------- |  | ----------------------------- | --- | ---- |  | ---- | ----- |  |  | - | --- | 
|                 |  |                              
|                 |  | Other Postretirement Benefits
|                 |  |                              
|                 |  | 1999                          |     | 1998 |  | 1997
|                 |  |                               |     |      |  |     
|Service cost     |  | $                             | 425 |      |  | $    | 474   |  |  | $ | 202 | 
|                
|                
|                
|                
|Interest cost    |  |                               | 470 |      |  |      | 443   |  |  |   | 332 | 
|                
|                
|                
|                
|Net amortization |  |                               | 94  |      |  |      | 90    |  |  |   |     | 
|                 |  |                               |     |      |  |      |       |  |  |   |     | 
|                 |  | $                             | 989 |      |  | $    | 1,007 |  |  | $ | 534 | 
|                 |  |                               |     |      |  |      |       |  |  |   |     | 

During 1998, the Company froze its salaried pension plan,
resulting in a curtailment gain.

Actuarial assumptions used in the calculation of the recorded
amounts are as follows:

|                                                 |  |      |      |      |  |  |      |  
|------------------------------------------------ |  | ---- | ---- | ---- |  |  | ---- | -
|                                                 |  | 1999 |      | 1998
|                                                 |  |      |      |     
|Discount rate                                    |  |      | 7.75 | %    |  |  | 6.75 | %
|                                                
|                                                
|                                                
|                                                
|Return on pension plan assets                    |  |      | 9.00 | %    |  |  | 9.00 | %
|                                                
|                                                
|                                                
|                                                
|Projected health care cost trend rate            |  |      | 8.50 | %    |  |  | 9.50 | %
|                                                
|                                                
|                                                
|                                                
|Ultimate health care trend rate                  |  |      | 5.50 | %    |  |  | 5.50 | %
|                                                
|                                                
|                                                
|                                                
|Year ultimate health care trend rate is achieved |  |      | 2006 |      |  |  | 2006 |  

Assumed health care cost trend rates have a significant effect on
 the amounts reported for other postretirement benefits. A
one-percentage-point change in the assumed health care cost trend
 rate would have the following effect:

|                                        |  |             |       |             |  |   |     | 
|--------------------------------------- |  | ----------- | ----- | ----------- |  | - | --- | 
|                                        |  | 1% Increase |       | 1% Decrease
|                                        |  |             |       |            
|1999 benefit cost                       |  | $           | 235   |             |  | $ | 208 | 
|                                       
|                                       
|                                       
|                                       
|Recorded liability at December 31, 1999 |  | $           | 1,073 |             |  | $ | 830 | 

F.  Stockholders Equity / Earnings Per Share



During 1999, the Company granted 15,000 shares of restricted
stock to an officer. One-third of these shares vest on the third
anniversary of the date of grant; the remainder vest on the fifth
 anniversary. The market value of the restricted stock awarded
was $570, and has been recorded as a separate component of
stockholders equity.

22



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


The following table sets forth the computation of net income per
common share and net income per common share  assuming
 dilution:

|                                                         |  |                        |        |      |  |      |        |  |  |   |        | 
|-------------------------------------------------------- |  | ---------------------- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                                         |  |                       
|                                                         |  | Year Ended December 31
|                                                         |  |                       
|                                                         |  | 1999                   |        | 1998 |  | 1997
|                                                         |  |                        |        |      |  |     
|Net income                                               |  | $                      | 55,825 |      |  | $    | 48,358 |  |  | $ | 38,443 | 
|                                                         |  |                        |        |      |  |      |        |  |  |   |        | 
|Weighted average shares outstanding                      |  |                        | 23,767 |      |  |      | 22,874 |  |  |   | 20,929 | 
|                                                        
|                                                        
|                                                        
|                                                        
|Dilutive effect of stock options                         |  |                        | 557    |      |  |      | 672    |  |  |   | 725    | 
|                                                         |  |                        |        |      |  |      |        |  |  |   |        | 
|Weighted average shares outstanding  assuming
	dilution |  |                        | 24,324 |      |  |      | 23,546 |  |  |   | 21,654 | 
|                                                         |  |                        |        |      |  |      |        |  |  |   |        | 
|Net income per common share                              |  | $                      | 2.35   |      |  | $    | 2.11   |  |  | $ | 1.84   | 
|                                                         |  |                        |        |      |  |      |        |  |  |   |        | 
|Net income per common share  assuming dilution          |  | $                      | 2.30   |      |  | $    | 2.05   |  |  | $ | 1.78   | 
|                                                         |  |                        |        |      |  |      |        |  |  |   |        | 

The Companys 1998 Long-Term Incentive Compensation Plan
authorizes the annual grant of options to management personnel of
 up to one and one-half percent of the total number of issued and
 outstanding shares of common stock of the Company. The
Companys 1995 Non-Employee Directors Equity
Compensation Plan has also authorized the grant of options to
non-employee members of the Board of Directors for up to 250,000
shares of the Companys common stock. All options granted
have 10-year terms and vest and become fully exercisable at the
end of the next fiscal year following the year of grant.

Pro forma information regarding net income and earnings per share
 is required by FASB Statement No. 123, Accounting for
 Stock Based Compensation, and has been determined as if
the Company had accounted for its employee and non-employee stock
 options under the fair value method of that Statement. The fair
value of these options was estimated at the date of grant using a
 Black-Scholes options pricing model with the following
weighted-average assumptions:

|                                              |  |                        |     |      |  |      |     |   |  |  |     |  
|--------------------------------------------- |  | ---------------------- | --- | ---- |  | ---- | --- | - |  |  | --- | -
|                                              |  |                       
|                                              |  | Year Ended December 31
|                                              |  |                       
|                                              |  | 1999                   |     | 1998 |  | 1997
|                                              |  |                        |     |      |  |     
|Risk-free interest rate                       |  |                        | 7.0 | %    |  |      | 5.5 | % |  |  | 6.0 | %
|                                             
|                                             
|                                             
|                                             
|Dividend yield                                |  |                        | 1.2 | %    |  |      | 1.2 | % |  |  | 1.2 | %
|                                             
|                                             
|                                             
|                                             
|Volatility factor of Company common stock     |  |                        | .25 |      |  |      | .25 |   |  |  | .19 |  
|                                             
|                                             
|                                             
|                                             
|Weighted-average expected option life (years) |  |                        | 5   |      |  |      | 5   |   |  |  | 5   |  

For purposes of pro forma disclosures, the estimated fair value
of the options is amortized to expense over the options
vesting period. The Companys pro forma information follows:

|                                                |  |      |        |      |  |      |        |  |  |   |        | 
|----------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                                |  | 1999 |        | 1998 |  | 1997
|                                                |  |      |        |      |  |     
|Net income                                      |  | $    | 53,610 |      |  | $    | 46,718 |  |  | $ | 37,352 | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share                     |  | $    | 2.26   |      |  | $    | 2.04   |  |  | $ | 1.78   | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share  assuming dilution |  | $    | 2.20   |      |  | $    | 1.98   |  |  | $ | 1.72   | 

23



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##### Table of Contents



Notes to Consolidated Financial Statements Continued


A summary of the Companys stock option activity, and
related information follows:

|                                                               |           |         |           |          |   |         |       |          |  |         |           |          |   |   |       |       |  |  |           |          |   |   |       |       | 
|-------------------------------------------------------------- | --------- | ------- | --------- | -------- | - | ------- | ----- | -------- |  | ------- | --------- | -------- | - | - | ----- | ----- |  |  | --------- | -------- | - | - | ----- | ----- | 
|                                                               |           |         |           |          |   |        
|                                                               |           | 1999    |           | 1998     |   | 1997   
|                                                               |           |         |           |          |   |        
|                                                               |           |         |           | Weighted |   |         |       | Weighted |  |         |           | Weighted
|                                                               |           |         |           | Average  |   |         |       | Average  |  |         |           | Average 
|                                                               |           |         |           | Exercise |   |         |       | Exercise |  |         |           | Exercise
|                                                               |           | Options |           | Price    |   | Options |       | Price    |  | Options |           | Price   
|                                                               |           |         |           |          |   |         |       |          |  |         |           |         
|Outstanding at January 1                                       |           |         | 1,606,534 |          |   | $       | 22.01 |          |  |         | 1,367,773 |          |   | $ | 17.89 |       |  |  | 1,243,079 |          |   | $ | 12.55 |      
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Granted   |         |           | 333,999  |   |         |       | 35.85    |  |         |           | 341,513  |   |   |       | 34.60 |  |  |           | 239,603  |   |   |       | 39.94 | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Exercised |         |           | (214,671 | ) |         |       | 12.83    |  |         |           | (102,752 | ) |   |       | 7.00  |  |  |           | (114,909 | ) |   |       | 6.15  | 
|                                                               |           |         |           |          |   |         |       |          |  |         |           |          |   |   |       |       |  |  |           |          |   |   |       |      
|Outstanding at December 31                                     |           |         | 1,725,862 |          |   | $       | 25.83 |          |  |         | 1,606,534 |          |   | $ | 22.01 |       |  |  | 1,367,773 |          |   | $ | 17.89 |      
|                                                              
|                                                              
|                                                              
|                                                              
|Exercisable at end of year                                     |           |         | 1,423,362 |          |   |         |       |          |  |         | 1,288,534 |          |   |   |       |       |  |  | 1,138,773 |          |   |   |       |      
|                                                              
|                                                              
|                                                              
|                                                              
|Weighted-average fair value of options granted during the year |           |         |           |          |   | $       | 11.39 |          |  |         |           |          |   | $ | 10.05 |       |  |  |           |          |   | $ | 10.28 |      

The weighted-average remaining contractual life of options
outstanding is approximately seven years.

The following table summarizes information about stock options
outstanding and exercisable at December 31, 1999:

|                          |                 |             |  |             |  |          |  |           |  |          |   |       |  |  |  |         |  |  |   |       | 
|------------------------- | --------------- | ----------- |  | ----------- |  | -------- |  | --------- |  | -------- | - | ----- |  |  |  | ------- |  |  | - | ----- | 
|                          |                 |             |  |            
|                          |                 | Outstanding |  | Exercisable
|                          |                 |             |  |            
|                          |                 |             |  | Weighted    |  |          |  |           |  |         
|                          |                 |             |  | Average     |  | Weighted |  |           |  | Weighted
|                          |                 |             |  | Remaining   |  | Average  |  |           |  | Average 
|                          |                 | Number      |  | Contractual |  | Exercise |  | Number of |  | Exercise
|                          |                 | of Shares   |  | Life        |  | Price    |  | Shares    |  | Price   
|                          |                 |             |  |             |  |          |  |           |  |         
|Range of exercise prices: |                 |             |  |             |  |          |  |           |  |          |   |       |  |  |  |         |  |  |   |      
|                         
|                         
|                         
|                         
|                          | $5.04  $13.00  |             |  | 506,378     |  |          |  | 3.4       |  |          | $ | 8.44  |  |  |  | 506,378 |  |  | $ | 8.44  | 
|                         
|                         
|                         
|                         
|                          | $17.31  $39.94 |             |  | 1,219,484   |  |          |  | 8.4       |  |          | $ | 33.01 |  |  |  | 916,984 |  |  | $ | 31.94 | 

G.  Commitments And Contingencies



The Company has contracts as a partner to build a smelter in
Lubumbashi, Democratic Republic of Congo. The expenditures for
this 58% owned joint venture are included in the Companys
consolidated financial statements. As of December 31, 1999,
approximately $71 million has been expended on the estimated
 $100 million project. The smelter is expected to be completed in
 the fourth quarter, 2000.

In April, 1998, the Company acquired the rapid carbothermal
reduction technology and related assets of Dow Chemical Company
for approximately $13,000, plus a conditional amount up to
$20,000 based upon the achievement of certain performance
targets, which would be paid at the end of five years.

The Company is a party to various legal proceedings incidental to
 its business and is subject to a variety of environmental and
pollution control laws and regulations in the jurisdictions in
which it operates. As is the case with other companies in similar
 industries, the Company faces exposure from actual or potential
claims and legal proceedings involving environmental matters.
Although it is difficult to quantify the potential impact of
compliance with or liability under environmental protection laws,
 management believes that the ultimate aggregate cost to the
Company of environmental remediation, as well as other legal
proceedings arising out of operations in the normal course of
business, will not result in a material adverse effect upon its
financial condition or results of operations.

24



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


H.  Reportable Segment and Geographic Information



|                           |                           |      |         |         |  |      |         |         |  |   |         |         | 
|-------------------------- | ------------------------- | ---- | ------- | ------- |  | ---- | ------- | ------- |  | - | ------- | ------- | 
|                           |                           | 1999 |         | 1998    |  | 1997
|                           |                           |      |         |         |  |     
|Information About Products |                           |      |         |         |  |      |         |         |  |   |         |        
|Net Sales                  |                           |      |         |         |  |      |         |         |  |   |         |        
|                          
|                          
|                          
|                          
|                           | Carboxylates              |      | $       | 127,246 |  |      | $       | 115,895 |  |   | $       | 126,697 | 
|                          
|                          
|                          
|                          
|                           | Salts                     |      |         | 215,963 |  |      |         | 247,896 |  |   |         | 214,410 | 
|                          
|                          
|                          
|                          
|                           | Powders                   |      |         | 163,746 |  |      |         | 157,435 |  |   |         | 146,189 | 
|                           |                           |      |         |         |  |      |         |         |  |   |         |        
|                           |                           | $    | 506,955 |         |  | $    | 521,226 |         |  | $ | 487,296 |        
|                           |                           |      |         |         |  |      |         |         |  |   |         |        
|Geographic Information     |                           |      |         |         |  |      |         |         |  |   |         |        
|Net Sales(1)               |                           |      |         |         |  |      |         |         |  |   |         |        
|                          
|                          
|                          
|                          
|                           | United States             |      | $       | 286,503 |  |      | $       | 295,791 |  |   | $       | 274,200 | 
|                          
|                          
|                          
|                          
|                           | Finland                   |      |         | 192,317 |  |      |         | 201,059 |  |   |         | 207,122 | 
|                          
|                          
|                          
|                          
|                           | Other                     |      |         | 28,135  |  |      |         | 24,376  |  |   |         | 5,974   | 
|                           |                           |      |         |         |  |      |         |         |  |   |         |        
|                           |                           | $    | 506,955 |         |  | $    | 521,226 |         |  | $ | 487,296 |        
|                           |                           |      |         |         |  |      |         |         |  |   |         |        
|Long-Lived Assets          |                           |      |         |         |  |      |         |         |  |   |         |        
|                          
|                          
|                          
|                          
|                           | United States             |      | $       | 121,178 |  |      | $       | 114,441 |  |   | $       | 78,570  | 
|                          
|                          
|                          
|                          
|                           | Finland                   |      |         | 118,341 |  |      |         | 95,755  |  |   |         | 72,120  | 
|                          
|                          
|                          
|                          
|                           | Other                     |      |         | 79,296  |  |      |         | 35,149  |  |   |         | 4,926   | 
|                           |                           |      |         |         |  |      |         |         |  |   |         |        
|                           |                           | $    | 318,815 |         |  | $    | 245,345 |         |  | $ | 155,616 |        
|                           |                           |      |         |         |  |      |         |         |  |   |         |        
|Net Sales(2)               |                           |      |         |         |  |      |         |         |  |   |         |        
|                          
|                          
|                          
|                          
|                           | United States             |      | $       | 223,100 |  |      | $       | 239,563 |  |   | $       | 213,541 | 
|                          
|                          
|                          
|                          
|                           | Outside the United States |      |         | 283,855 |  |      |         | 281,663 |  |   |         | 273,755 | 
|                           |                           |      |         |         |  |      |         |         |  |   |         |        
|                           |                           | $    | 506,955 |         |  | $    | 521,226 |         |  | $ | 487,296 |        
|                           |                           |      |         |         |  |      |         |         |  |   |         |        



---



|    |                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------
|(1) | Net sales are attributed to the geographic area
	based on the location of the manufacturing facility.
|   
|(2) | Net sales are attributed to the geographic area
	based on the location of the customer.              

No single customer accounts for 10% or more of the Companys
 net sales.

25



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


I. Quarterly Data (Unaudited)

|                                                |  |               |                |         |  |              |               |             |  |  |                |  |  |  |                 | 
|----------------------------------------------- |  | ------------- | -------------- | ------- |  | ------------ | ------------- | ----------- |  |  | -------------- |  |  |  | --------------- | 
|                                                |  |              
|                                                |  | Quarter Ended
|                                                |  |              
|                                                |  | March 31      |                | June 30 |  | September 30 |               | December 31
|                                                |  |               |                |         |  |              |               |            
|1999                                            |  |               |                |         |  |              |               |             |  |  |                |  |  |  |                 | 
|                                               
|                                               
|                                               
|                                               
|Net sales                                       |  |               | $114,113       |         |  |              | $123,706      |             |  |  | $132,092       |  |  |  | $137,044        | 
|                                               
|                                               
|                                               
|                                               
|Gross profit                                    |  |               | 37,109         |         |  |              | 39,462        |             |  |  | 40,885         |  |  |  | 42,049          | 
|                                               
|                                               
|                                               
|                                               
|Income from operations                          |  |               | 22,803         |         |  |              | 24,630        |             |  |  | 25,820         |  |  |  | 25,484          | 
|                                               
|                                               
|                                               
|                                               
|Net income                                      |  |               | 12,973         |         |  |              | 14,048        |             |  |  | 14,260         |  |  |  | 14,544          | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share                     |  |               | $.55           |         |  |              | $.59          |             |  |  | $.60           |  |  |  | $.61            | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share  assuming dilution |  |               | $.54           |         |  |              | $.58          |             |  |  | $.59           |  |  |  | $.60            | 
|                                               
|                                               
|                                               
|                                               
|Market price: high-low                          |  |               | 36 9/16-26 7/8 |         |  |              | 42 1/2-32 1/2 |             |  |  | 40 1/16-33 3/4 |  |  |  | 40 1/2-31 1/2   | 
|                                               
|                                               
|                                               
|                                               
|Dividends paid per share                        |  |               | $.10           |         |  |              | $.10          |             |  |  | $.10           |  |  |  | $.10            | 
|                                               
|                                               
|                                               
|                                               
|                                               
|1998                                            |  |               |                |         |  |              |               |             |  |  |                |  |  |  |                 | 
|                                               
|                                               
|                                               
|                                               
|Net sales                                       |  |               | $138,098       |         |  |              | $139,154      |             |  |  | $124,683       |  |  |  | $119,291        | 
|                                               
|                                               
|                                               
|                                               
|Gross profit                                    |  |               | 34,630         |         |  |              | 35,909        |             |  |  | 36,161         |  |  |  | 38,252          | 
|                                               
|                                               
|                                               
|                                               
|Income from operations                          |  |               | 20,533         |         |  |              | 21,650        |             |  |  | 22,143         |  |  |  | 22,598          | 
|                                               
|                                               
|                                               
|                                               
|Net income                                      |  |               | 11,169         |         |  |              | 11,536        |             |  |  | 12,724         |  |  |  | 12,929          | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share                     |  |               | $.51           |         |  |              | $.52          |             |  |  | $.54           |  |  |  | $.54            | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share  assuming dilution |  |               | $.49           |         |  |              | $.51          |             |  |  | $.53           |  |  |  | $.53            | 
|                                               
|                                               
|                                               
|                                               
|Market price: high-low                          |  |               | 46-35 5/16     |         |  |              | 45 7/8-38 3/4 |             |  |  | 40 5/8-26 7/8  |  |  |  | 36 15/16-26 1/4 | 
|                                               
|                                               
|                                               
|                                               
|Dividends paid per share                        |  |               | $.09           |         |  |              | $.09          |             |  |  | $.09           |  |  |  | $.09            | 

J.  Subsequent Events (Unaudited)



In order to develop a long-term nickel raw material source for
the OKN nickel refinery, the Company announced on
February 25, 2000 a preliminary joint agreement with Weda
Bay Minerals, Inc. (Weda). The agreement provides for the Company
 to provide financing, up to $18 million, to complete a
bankable feasibility study for the development of the Halmahera
Island, Indonesia (Halmera) nickel and cobalt laterite deposits.
The Company has agreed to purchase all production at Halmera,
which Weda has estimated to yield approximately 30,000 tons of
nickel and 3,000 tons of cobalt annually, beginning in 2004.

26



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##### Table of Contents






PART III




Item 9.  Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure






Item 10.  Directors and Executive Officers of the
Registrant






Item 11.  Executive Compensation






Item 12.  Security Ownership of Certain Beneficial
Owners and Management






Item 13.  Certain Relationships and Related
Transactions



27



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##### Table of Contents






PART IV




Item 14.  Exhibits, Financial Statement Schedules
and Reports on Form 8-K

|    |                                                                                                
|--- | -----------------------------------------------------------------------------------------------
|(a) | The following consolidated financial statements of the Company
	are included in Part II Item 8:



| |     |                                                                                                                    
| | --- | -------------------------------------------------------------------------------------------------------------------
| | (1) | The following Consolidated Financial Statements of OM Group, Inc.
	 are filed as a separate section of this report:

Consolidated Balance Sheets at December 31, 1999 and
1998  page 13.

Statements of Consolidated Income for the years ended
December 31, 1999, 1998, and 1997  page 14.

Statements of Consolidated Stockholders Equity for the
years ended December  31, 1999, 1998, and 1997 
page 15.

Statements of Consolidated Cash Flows for the years ended
December 31, 1999, 1998 and 1997  page 16.

Notes to Consolidated Financial Statements  pages 17
through 26.



| |     |                                                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | All schedules for which provision is made in the applicable
	accounting regulation of the Securities and Exchange Commission
	are either not required under the related instructions or are
	inapplicable and, therefore, have been omitted.
|
| | (3) | Exhibits                                                                                                                                                                                                                                    

The following exhibits are included in this Annual Report on
Form 10-K:



| |                                           
| | ------------------------------------------
| | (3)  Articles of Incorporation and by-laws

| |     |  |  |                                                                  |  |   
| | --- |  |  | ---------------------------------------------------------------- |  | --
| | 3.1 |  |  | Amended and Restated Certificate of Incorporation of the Company |  | **
| | 3.2 |  |  | Amended and Restated Bylaws of the Company                       |  | **



| |     |                                                                       
| | --- | ----------------------------------------------------------------------
| | (4) | Instruments defining rights of security holders, including
	indentures

| |     |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |   
| | --- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --
| | 4.1 |  |  | Form of Common Stock Certificate of the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | **
| | 4.2 |  |  | Amended and Restated Credit Agreement dated as of January 
	30, 1998 among National City Bank as Agent and ABN Amro Bank N.V.
	 as Co-Agent and Key Bank National Association, Mellon Bank N.A.,
	 Harris Trust and Savings Bank and NBD Bank, and OM Group, Inc.,
	as Borrower (filed as Exhibit to the Companys Annual Report
	 on Form 10-K for the fiscal year ended December 31, 1997
	and incorporated herein by reference.)                                                                                                  |  |   
| | 4.3 |  |  | Amendment No. 1 to Amended and Restated Credit Agreement
	dated as of January 13, 1999 among National City Bank as
	Agent and Letter of Credit Bank and ABN Amro Bank N.V. as
	Co-Agent and Keybank National Association, Mellon Bank N.A.,
	Harris Trust and Savings Bank, NBD Bank, The Chase Manhattan
	Bank, PNC Bank, NA and Comerica Bank and OM Group, Inc., as
	Borrower (filed as Exhibit to the Companys Annual Report on
	 Form 10-K for the fiscal year ended December 31, 1998 and
	incorporated herein by reference.) |  |   
| | 4.4 |  |  | Note Purchase Agreement among OM Group, Inc. as Seller and The
	Mutual Life Insurance Company of New York, Nationwide Life Mutual
	 Life Insurance Company of New York, Nationwide Life Insurance
	Company and Great-West Life & Annuity Insurance Company, as
	Purchaser, dated August 30, 1995 (filed as Exhibit to the
	Companys Annual Report on Form  10-K for the fiscal
	year ended December 31, 1995 and incorporated herein by
	reference).                                                                                |  |   
| | 4.5 |  |  | Stockholder Rights Agreement dated as of November 5, 1996
	between OM Group, Inc. and National City Bank (filed as
	Exhibit 1 to the Companys Current Report on
	Form 8-K filed on December 5, 1996 which exhibit is
	incorporated herein by reference).                                                                                                                                                                                                                                                                            |  |   

28



---



##### Table of Contents



| |     |  |  |                                                                                                                                                                                                                                                                                                                                          |  | 
| | --- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| | 4.6 |  |  | Certificate of Designation, Preferences and Rights of
	Series A Participatory Preferred Stock (filed as Exhibit to
	Current Report on Form 8-K filed November 27, 1996 and
	incorporated herein by reference).                                                                                                                           |  | 
| | 4.7 |  |  | Note Purchase Agreement among OM Group, Inc. as Seller and
	Nationwide Life Insurance Company and Great-West Life &
	Annuity Insurance Company as Purchaser, dated October 24,
	1997. (filed as Exhibit to the Companys Annual Report on
	Form 10-K for the fiscal year ended December 31, 1997 and
	incorporated herein by reference.) |  | 



| |                         
| | ------------------------
| | (10)  Material Contracts

| |        |  |  |                                                                                                                                                                                                                                                                                                                |  |    
| | ------ |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
| | 10.1   |  |  | Technology Agreement among Outokumpu Oy, Outokumpu Engineering
	Contractors Oy, Outokumpu Research Oy, Outokumpu Harjavalta
	Metals Oy and Kokkola Chemicals Oy dated March  24, 1993.                                                                                                                         |  | ** 
| | *10.2  |  |  | OM Group, Inc. Long-Term Incentive Compensation Plan.                                                                                                                                                                                                                                                          |  | ** 
| | *10.3  |  |  | Amendment to OM Group, Inc. Long-Term Incentive Compensation
	Plan.                                                                                                                                                                                                                                            |  | ***
| | *10.4  |  |  | Amendment to OM Group, Inc. Long-Term Incentive Compensation Plan
	 (filed as Exhibit 99 to the OM Group, Inc. Form S-8
	Registration Statement filed on July 3, 1996, and
	incorporated herein by reference).                                                                                                 |  | ** 
| | *10.5  |  |  | Mooney Chemicals, Inc. Welfare Benefit Plan.                                                                                                                                                                                                                                                                   |  | ** 
| | *10.6  |  |  | Mooney Chemicals, Inc. Profit Sharing Plan.                                                                                                                                                                                                                                                                    |  | ** 
| | *10.7  |  |  | Amendment to Mooney Chemicals, Inc. Profit Sharing Plan.                                                                                                                                                                                                                                                       |  | ** 
| | *10.8  |  |  | OMG/ Mooney Chemicals, Inc. Employee Profit Sharing Plan
	(January 1, 1994 restatement) (filed as Exhibit to the
	Companys Annual Report on Form 10-K for the fiscal
	year ended December 31, 1995 and incorporated herein by
	reference).                                                                    |  |    
| | *10.9  |  |  | OM Group, Inc. Benefit Restoration Plan, effective January 
	1, 1995 (filed as Exhibit to the Companys Annual Report on
	Form 10-K for the fiscal year ended December 31, 1995
	and incorporated herein by reference).                                                                                        |  |    
| | *10.10 |  |  | Trust under OM Group, Inc. Benefit Restoration Plan, effective
	January 1, 1995 (filed as Exhibit to the Companys
	Annual Report on Form 10-K for the fiscal year ended
	December 31, 1995 and incorporated herein by reference).                                                                             |  |    
| | *10.11 |  |  | Amendment to OMG Americas, Inc. Profit-Sharing Plan (filed as
	Exhibit 99 to the OM Group, Inc. Form S-8 Registration
	Statement filed on July 3, 1996, and incorporated herein by
	reference).                                                                                                                |  |    
| | 10.12  |  |  | OM Group, Inc. Non-employee Directors Equity Compensation
	Plan dated May 9, 1995, the date of the Annual Shareholder
	Meeting formally adopting the plan (filed as Exhibit to the
	Companys Annual Report on Form 10-K for the fiscal
	year ended December 31, 1995 and incorporated herein by
	reference). |  |    
| | *10.13 |  |  | OM Group, Inc. Bonus Program for Key Executives and Middle
	Management.                                                                                                                                                                                                                                        |  | ** 
| | *10.14 |  |  | Employment Agreement between Mooney Acquisition Corporation and
	James P. Mooney dated September 30, 1991.                                                                                                                                                                                                     |  | ** 
| | *10.15 |  |  | Amendment to Employment Agreement between OM Group, Inc. and
	James P. Mooney dated August 19, 1992.                                                                                                                                                                                                           |  | ** 
| | *10.16 |  |  | Employment Agreement between OM Group, Inc. and James M. Materna
	dated January 1, 1993.                                                                                                                                                                                                                       |  | ** 
| | *10.17 |  |  | Employment Agreement between OM Group, Inc. and Thomas E. Fleming
	 dated August 19, 1992.                                                                                                                                                                                                                     |  | ** 
| | *10.18 |  |  | Employment Agreement between OM Group, Inc. and Thomas E. Fleming
	 dated August 19, 1991.                                                                                                                                                                                                                     |  | ** 
| | *10.19 |  |  | Amendment to Employment Agreement between OM Group, Inc. and
	Thomas E. Fleming dated August 19, 1991.                                                                                                                                                                                                         |  | ** 

29



---



##### Table of Contents



| |        |  |  |                                                                                                                                                                                                                                                                                                                                                                                                     |  | 
| | ------ |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| | *10.20 |  |  | Employment Agreement between OM Group, Inc. and Michael J. Scott
	(filed as Exhibit to the Companys Annual Report on
	Form 10-K for the fiscal year ended December 31, 1994
	and incorporated herein by reference).                                                                                                                                                                                |  | 
| | +10.21 |  |  | Joint Venture Agreement among OMG B.V., Groupe George Forrest
	S.A., La Generale Des Carrieres Et Des Mines and OM Group, Inc.
	to partially or totally process the slag located in the site of
	Lubumbashi, Democratic Republic of the Congo (filed as Exhibit to
	 the Companys Annual Report on Form  10-K for the
	fiscal year ended December 31, 1997 and incorporated herein
	by reference). |  | 
| | +10.22 |  |  | Agreement for Sale of concentrate production between Kokkola
	Chemicals Oy and La Generale Des Carriers Et Des Mines dated
	April 21, 1997 (filed as Exhibit to the Companys
	Annual Report on Form 10-K for the fiscal year ended
	December 31, 1997 and incorporated herein by reference).                                                                                                       |  | 
| | +10.23 |  |  | Long term Slag Sales Agreement between la Generale Des Carriers
	Et Des Mines and J.V. Groupement Pour Le Traitement Du Terril De
	Lubumbashi (filed as an annex to Exhibit 10.33 of the
	Companys Annual Report on Form 10-K for the fiscal year
	ended December 31, 1997).                                                                                                                       |  | 
| | +10.24 |  |  | Long Term Cobalt Alloy Sales Agreement between J.V. Groupement
	Pour Le Traitement Du Terril De Lubumbashi and OMG Kokkola
	Chemicals Oy (filed as an annex to Exhibit  10.33 of the
	Companys Annual Report on Form 10-K for the fiscal year
	ended December 31, 1997).                                                                                                                           |  | 
| | +10.25 |  |  | Tolling Agreement between Groupement Pour Le Traitement Du Terril
	 De Lubumbashi and Societe De Traitement Due Terril De Lubumbashi
	 (filed as an annex to Exhibit 10.33 of the Companys
	Annual Report on Form 10-K for the fiscal year ended
	December 31, 1997).                                                                                                                              |  | 
| | +10.26 |  |  | Agreement for sale of cobalt concentrates between OM Group, Inc.
	and Metal Resources Group Limited, dated September 24, 1998.                                                                                                                                                                                                                                                                      |  | 
| | +10.27 |  |  | Agreement for sale of cobalt concentrates between OM Group, Inc.
	and Metal Resources Group Limited, dated October 20, 1998.                                                                                                                                                                                                                                                                        |  | 
| | *10.28 |  |  | OM Group, Inc. 1998 Long-Term Incentive Compensation Plan.                                                                                                                                                                                                                                                                                                                                          |  | 
| | *10.29 |  |  | Amendment of Benefits Agreement and Split Dollar Agreement,
	Eugene Bak, dated October 1, 1998.                                                                                                                                                                                                                                                                                                     |  | 
| | *10.30 |  |  | Employment Agreement between OM Group, Inc. and Edward W. Kissel
	dated June 1, 1999.                                                                                                                                                                                                                                                                                                               |  | 
| | *10.31 |  |  | Separation Agreement between OM Group, Inc. and Thomas E. Fleming
	 dated October 1, 1999.                                                                                                                                                                                                                                                                                                          |  | 
| | +      |  |  | Portions of Exhibit have been omitted and filed separately with
	the Securities and Exchange Commission in reliance on
	Rule 246-2 and the Companys request for confidential
	treatment.                                                                                                                                                                                                           |  | 
| | *      |  |  | Indicate a management contract, executive compensation plan or
	arrangement.                                                                                                                                                                                                                                                                                                                        |  | 
| | **     |  |  | These documents were filed as exhibits to the Companys
	Form S-1 Registration Statement (Registration No. 
	33-60444) which became effective on October 12, 1993, and
	are incorporated herein by reference.                                                                                                                                                                                       |  | 
| | ***    |  |  | Filed as Exhibit 99(b) to the OM Group, Inc. Form S-8
	Registration Statement filed on February 1, 1994, and
	incorporated herein by reference.                                                                                                                                                                                                                                                     |  | 



| |                                   
| | ----------------------------------
| | (21)  List of Subsidiaries        
|
| | (23)  Consent of Ernst & Young LLP
|
| | (24)  Power of Attorney           
|
| | (27)  Financial Data Schedule     

(b)  There were no reports filed on Form 8-K during the
 last quarter of 1999.

30



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##### Table of Contents



Signatures

Pursuant to the requirements of Section 13 of the Securities
 Exchange Act of 1934, the Registrant has duly caused this Annual
 Report on Form 10-K be signed on its behalf by the
undersigned, thereunto duly authorized.



| |               
| | --------------
| | OM GROUP, INC.



| |     |                     
| | --- | --------------------
| | By: | /s/  James P. Mooney

| |                                     
| | ------------------------------------
| | James P. Mooney                     
| | Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of
1934, this Annual Report on Form 10-K has been signed below
by the following persons in the capacities and on the dates
indicated.

|                                                                    |  |                                                                       |  |      |                | 
|------------------------------------------------------------------- |  | --------------------------------------------------------------------- |  | ---- | -------------- | 
|Signature                                                           |  | Title                                                                 |  | Date
|                                                                    |  |                                                                       |  |     
|/s/ James P. Mooney*
	           James
	 P. Mooney                  |  | Chairman and Chief Executive Officer                                  |  |      | March 21, 2000 | 
|                                                                   
|/s/ Edward W. Kissel*
	           Edward
	 W. Kissel                |  | President and Chief Operating Officer                                 |  |      | March 21, 2000 | 
|                                                                   
|/s/ Markku Toivanen*
	           Markku
	 Toivanen                  |  | Director                                                              |  |      | March 21, 2000 | 
|                                                                   
|/s/ Lee R. Brodeur*
	           Lee
	 R. Brodeur                    |  | Director                                                              |  |      | March 21, 2000 | 
|                                                                   
|/s/ Thomas R. Miklich*
	           Thomas
	 R. Miklich              |  | Director                                                              |  |      | March 21, 2000 | 
|                                                                   
|/s/ John E. Mooney*
	           John
	 E. Mooney                    |  | Director                                                              |  |      | March 21, 2000 | 
|                                                                   
|/s/ Frank Butler*
	           Frank
	 Butler                        |  | Director                                                              |  |      | March 21, 2000 | 
|                                                                   
|/s/ James M. Materna
	           James
	 M. Materna                 |  | Chief Financial Officer (Principal Financial and Accounting
	Officer) |  |      | March 21, 2000 | 
|                                                                   
|/s/ James P. Mooney
	           James
	 P. Mooney
	Attorney-in-Fact |  |                                                                       |  |      | March 21, 2000 | 



|  |                                                                                                                                                                                                                                           
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | James P. Mooney, by signing his name hereto signs this document
	on behalf of each of the persons so indicated above pursuant to
	powers of attorney duly executed by such persons and filed with
	the Securities and Exchange Commission.

31



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##### Table of Contents



Exhibit Index



|            |       |  |  |                                                                                           
|----------- | ----- |  |  | ------------------------------------------------------------------------------------------
|Exhibit No. |       | 
|            |       | 
|            | 10.30 |  |  | Employment Agreement between OM Group, Inc. and Edward W. Kissel
	dated June 1, 1999.     
|            | 10.31 |  |  | Separation Agreement between OM Group, Inc. and Thomas E. Fleming
	 dated October 1, 1999.
|            | 21    |  |  | List of Subsidiaries                                                                      
|            | 23    |  |  | Consent of Ernst & Young LLP                                                              
|            | 24    |  |  | Power of Attorney                                                                         
|            | 27    |  |  | Financial Data Schedule