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     
|                               | Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 
|PART III                      
|                               | 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                     
|                               | Signatures                                                                                   
|EX-10.27 Lease Agreement      
|EX-21 List of Subsidiaries    
|EX-23 Consent of Ernst & Young
|EX-24 Power of Attorney       



---



SECURITIES AND EXCHANGE COMMISSION







FORM 10-K





| |                                                                                                     
| | ----------------------------------------------------------------------------------------------------
| | 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, 2000





| |                                                                                                             
| | ------------------------------------------------------------------------------------------------------------
| | 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    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 5, 2001 was
approximately $1,252,000,000.

As of March 5, 2001, there were 23,929,418
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 8, 2001 are incorporated by
reference.



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##### Table of Contents



Table of Contents

|          |  |                                                                                                           |  |      |    | 
|--------- |  | --------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|          |  |                                                                                                           |  | Page
|          |  |                                                                                                           |  |     
|         
|         
|         
|         
|PART I   
|         
|         
|         
|         
|Item  1.  |  | Business                                                                                                  |  |      | 2  | 
|         
|         
|         
|         
|Item 2.   |  | Properties                                                                                                |  |      | 5  | 
|         
|         
|         
|         
|Item 3.   |  | Legal Proceedings                                                                                         |  |      | 7  | 
|         
|         
|         
|         
|Item 4.   |  | Submission of Matters to a Vote of Security Holders                                                       |  |      | 7  | 
|         
|         
|         
|         
|PART II  
|         
|         
|         
|         
|Item  5.  |  | Market for Registrants Common Equity and Related
	Stockholder Matters                                    |  |      | 7  | 
|         
|         
|         
|         
|Item 6.   |  | Selected Financial Data                                                                                   |  |      | 8  | 
|         
|         
|         
|         
|Item 7.   |  | Managements Discussion and Analysis of Financial Condition
	and Results of Operations                    |  |      | 8  | 
|         
|         
|         
|         
|Item 7a   |  | Quantitative and Qualitative Disclosures about Market Risk                                                |  |      | 12 | 
|Item 8.   |  | Financial Statements and Supplementary Data                                                               |  |      |    | 
|         
|         
|         
|         
|          |  | Report of Independent Auditors                                                                            |  |      | 13 | 
|         
|         
|         
|         
|          |  | Consolidated Balance Sheets as of December 31,
	2000 and 1999                                             |  |      | 14 | 
|         
|         
|         
|         
|          |  | Statements of Consolidated Income for the years
	ended
	   December 31, 2000, 1999 and 1998               |  |      | 15 | 
|         
|         
|         
|         
|          |  | Statements of Consolidated Stockholders Equity
	for the years ended
	   December 31, 2000, 1999 and 1998 |  |      | 16 | 
|         
|         
|         
|         
|          |  | Statements of Consolidated Cash Flows for the years
	ended
	   December 31, 2000, 1999 and 1998           |  |      | 17 | 
|         
|         
|         
|         
|          |  | Notes to Consolidated Financial Statements                                                                |  |      | 18 | 
|         
|         
|         
|         
|Item 9.   |  | Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure                     |  |      | 29 | 
|         
|         
|         
|         
|PART III 
|         
|         
|         
|         
|Item  10. |  | Directors and Executive Officers of the Registrant                                                        |  |      | 30 | 
|         
|         
|         
|         
|Item  11. |  | Executive Compensation                                                                                    |  |      | 30 | 
|         
|         
|         
|         
|Item  12. |  | Security Ownership of Certain Beneficial Owners and Management                                            |  |      | 30 | 
|         
|         
|         
|         
|Item  13. |  | Certain Relationships and Related Transactions                                                            |  |      | 30 | 
|         
|         
|         
|         
|PART IV  
|         
|         
|         
|         
|Item  14. |  | Exhibits, Financial Statement Schedules and Reports on
	Form  8-K                                         |  |      | 31 | 
|         
|         
|         
|         
|          |  | Signatures                                                                                                |  |      | 34 | 

1



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##### Table of Contents






PART I




Item 1.  Business

General




In April 2000 the Company acquired Outokumpu Nickel Oy
(OKN). OKN manufacturers, distributes and sells a broad range of
nickel products, principally plating and alloy-grade cathodes
and briquettes. The Company believes that the acquisition will
enhance its current technologies of refining and processing
nickel-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 organic than with
inorganic, powder and metal products. Inorganic, powder and
metal products prices respond almost immediately to changes in
the raw material base metal prices.

2



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##### Table of Contents



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



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 76 full time persons
conducts organics, inorganics and powders research and
development at the Companys laboratories located in
Cleveland, Ohio; Westlake, Ohio; Research Triangle Park, North
Carolina; Newark, New Jersey; and Kokkola, Finland. The
Companys Kokkola facility also maintains a research
agreement with Outokumpu Research Oy.

Patents and Trademarks



Environmental Matters



3



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##### Table of Contents





Annual environmental compliance costs were approximately
$5.0 million in 2000. 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 2000 in connection with
environmental compliance. The Company anticipates that capital
expenditure levels for such purposes will increase to
approximately $3.1 million in 2001, 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 Company believes that the ultimate aggregate
cost to the Company of environmental remediation as well as
other legal proceedings arising in the normal course of
business, will not result in a material adverse effect upon its
financial condition or results of operations.

Employees



International Operations



The Companys products are manufactured at facilities
located in Belleville, Canada; Lubumbashi, Democratic Republic
of the Congo; Harjavalta, Finland; Kokkola, Finland; Ezanville,
France; Kuching, Malaysia; Bangkok, Thailand; Newark, New
Jersey; Research Triangle Park, North Carolina; Franklin,
Pennsylvania; Johnstown, Pennsylvania; Singapore and St. George,
Utah. The Company conducts its marketing and sales primarily
from its offices in Espoo, Finland; 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

4



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##### Table of Contents








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. The
Companys Harjavalta, Finland production facility is
situated on land owned by Outokumpu Harjavalta Metals Oy. OKN
and Outokumpu Harjavalta Metals Oy also share certain physical
facilities and have contracts in place for waste disposal,
tolling, utilities, laboratory services and raw material supply
with varying expiration dates.

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

|                |  |                                       |  |             |         |               |  |  |                    |  |  | 
|--------------- |  | ------------------------------------- |  | ----------- | ------- | ------------- |  |  | ------------------ |  |  | 
|                |  |                                       |  | Approximate |         | Leased/Owned/
|Location        |  | Facility Function                     |  | Square Feet |         | Joint Venture
|                |  |                                       |  |             |         |              
|Africa:         |  |                                       |  |             |         |               |  |  |                    |  |  | 
|Lubumbashi, DRC |  | Manufactures cobalt raw material feed |  |             | 116,000 |               |  |  | joint venture(55%) | 

5



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##### Table of Contents



|                        |  |                                               |           |             |         |               |        |  |                    |  |        | 
|----------------------- |  | --------------------------------------------- | --------- | ----------- | ------- | ------------- | ------ |  | ------------------ |  | ------ | 
|                        |  |                                               |           | Approximate |         | Leased/Owned/
|Location                |  | Facility Function                             |           | Square Feet |         | Joint Venture
|                        |  |                                               |           |             |         |              
|Americas:               |  |                                               |           |             |         |               |        |  |                    |  |        | 
|Newark, New Jersey      |  | Manufactures inorganics                       |           |             | 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 |             |         |               | 40,000 |  |                    |  | leased | 
|Research Triangle Park, |  | Manufactures inorganics and 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                         |           |             | 15,300  |               |        |  | leased             | 
|                        |  | Pilot plant facility                          |           |             | 3,100   |               |        |  | leased             | 
|                        |  | Research and development facility             |           |             | 10,000  |               |        |  | leased             | 
|                        |  | Storage facility                              |           |             | 10,300  |               |        |  | leased             | 
|Westlake, Ohio          |  | Research and development facility             |           |             | 27,500  |               |        |  | owned              | 
|                        |  | Marketing and administration offices          |           |             | 10,000  |               |        |  | owned              | 
|Belleville, Ontario     |  | Manufactures organics                         |           |             | 38,000  |               |        |  | owned              | 
|Franklin, Pennsylvania  |  | Manufactures organics and inorganics          |           |             | 318,200 |               |        |  | owned              | 
|                        |  | Administration office                         |           |             | 13,300  |               |        |  | owned              | 
|Johnstown, Pennsylvania |  | Manufactures inorganics and powders           |           |             | 168,000 |               |        |  | owned              | 
|St. George, Utah        |  | Manufactures inorganics and powders           |           |             | 189,000 |               |        |  | owned              | 
|                        |  | Administration office                         |           |             | 4,000   |               |        |  | owned              | 
|                       
|                       
|                       
|                       
|                       
|Asia-Pacific:           |  |                                               |           |             |         |               |        |  |                    |  |        | 
|Tokyo, Japan            |  | Marketing and administration office           |           |             | 2,300   |               |        |  | leased             | 
|Kuching, Malaysia       |  | Manufactures inorganics                       |           |             | 20,000  |               |        |  | owned              | 
|                        |  | Marketing and administration offices          |           |             | 5,000   |               |        |  | owned              | 
|Taipei, Taiwan          |  | Marketing and administration offices          |           |             | 4,000   |               |        |  | leased             | 
|Bangkok, Thailand       |  | Manufactures organics                         |           |             | 105,000 |               |        |  | owned              | 
|                        |  | Marketing and administration offices          |           |             | 2,400   |               |        |  | owned              | 
|Singapore               |  | Manufacturers powders                         |           |             | 2,100   |               |        |  | joint venture(70%) | 
|                       
|                       
|                       
|                       
|                       
|Europe:                 |  |                                               |           |             |         |               |        |  |                    |  |        | 
|Espoo, Finland          |  | Marketing and administration offices          |           |             | 3,000   |               |        |  | leased             | 
|Harjavalta, Finland     |  | Manufactures metal products                   |           |             | 272,000 |               |        |  | owned              | 
|                        |  | Administration office                         |           |             | 8,900   |               |        |  | owned              | 
|Kokkola, Finland        |  | Manufactures organics, inorganics and powders |           |             | 470,000 |               |        |  | owned              | 
|Ezanville, France       |  | Manufactures organics                         |           |             | 50,000  |               |        |  | owned              | 
|Düsseldorf, Germany     |  | Marketing and administration offices          |           |             | 4,800   |               |        |  | leased             | 

6



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##### Table of Contents






Item 3.  Legal Proceedings






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



Executive Officers of the Registrant



James P. Mooney  53

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

Edward W. Kissel  59

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

James M. Materna  55

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




PART II




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



7



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##### Table of Contents






Item 6.  Selected Financial Data

|                                                |  |                         |         |      |  |      |         |      |  |      |       |   |  |   |       |   |  |   |       |  
|----------------------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ----- | - |  | - | ----- | - |  | - | ----- | -
|                                                |  |                        
|                                                |  | Year Ended December 31,
|                                                |  |                        
|                                                |  | 2000                    |         | 1999 |  | 1998 |         | 1997 |  | 1996
|(in millions, except per share data)            |  |                         |         |      |  |      |         |      |  |     
|                                                |  |                         |         |      |  |      |         |      |  |     
|                                               
|                                               
|                                               
|                                               
|Income Statement Data:                          |  |                         |         |      |  |      |         |      |  |      |       |   |  |   |       |   |  |   |       |  
|                                               
|                                               
|                                               
|                                               
|Net sales                                       |  | $                       | 887.7   |      |  | $    | 507.0   |      |  | $    | 521.2 |   |  | $ | 487.3 |   |  | $ | 388.0 |  
|                                               
|                                               
|                                               
|                                               
|Gross profit                                    |  |                         | 213.9   |      |  |      | 159.5   |      |  |      | 145.0 |   |  |   | 117.4 |   |  |   | 84.0  |  
|                                               
|                                               
|                                               
|                                               
|Selling, general and administrative expenses    |  |                         | 75.4    |      |  |      | 60.8    |      |  |      | 58.1  |   |  |   | 46.8  |   |  |   | 32.6  |  
|                                               
|                                               
|                                               
|                                               
|Income from operations                          |  |                         | 138.5   |      |  |      | 98.7    |      |  |      | 86.9  |   |  |   | 70.6  |   |  |   | 51.4  |  
|                                               
|                                               
|                                               
|                                               
|Other expense  net                             |  |                         | (38.5   | )    |  |      | (18.4   | )    |  |      | (15.6 | ) |  |   | (12.6 | ) |  |   | (7.0  | )
|                                               
|                                               
|                                               
|                                               
|Net income                                      |  | $                       | 71.5    |      |  | $    | 55.8    |      |  | $    | 48.4  |   |  | $ | 38.4  |   |  | $ | 30.0  |  
|                                               
|                                               
|                                               
|                                               
|Net income per common share                     |  | $                       | 2.99    |      |  | $    | 2.35    |      |  | $    | 2.11  |   |  | $ | 1.84  |   |  | $ | 1.61  |  
|                                               
|                                               
|                                               
|                                               
|Net income per common share  assuming dilution |  | $                       | 2.95    |      |  | $    | 2.30    |      |  | $    | 2.05  |   |  | $ | 1.78  |   |  | $ | 1.56  |  
|                                               
|                                               
|                                               
|                                               
|Dividends declared and paid per common share    |  | $                       | 0.44    |      |  | $    | 0.40    |      |  | $    | 0.36  |   |  | $ | 0.32  |   |  | $ | 0.28  |  
|                                               
|                                               
|                                               
|                                               
|Balance Sheet Data:                             |  |                         |         |      |  |      |         |      |  |      |       |   |  |   |       |   |  |   |       |  
|                                               
|                                               
|                                               
|                                               
|Total assets                                    |  | $                       | 1,357.5 |      |  | $    | 1,012.5 |      |  | $    | 870.7 |   |  | $ | 601.1 |   |  | $ | 443.5 |  
|                                               
|                                               
|                                               
|                                               
|Long-term debt (excluding current portion)      |  |                         | 551.1   |      |  |      | 384.9   |      |  |      | 310.0 |   |  |   | 170.3 |   |  |   | 109.3 |  

On April 4, 2000 the Company acquired Outokumpu Nickel Oy
(OKN) for a purchase price of $188.1 million,
including related financing and transaction costs. (See Note
C to the consolidated financial statements).






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



Set forth below is summary consolidated information of the
Company for the years ended December 31, 2000, 1999 and
1998.

|                                             |  |                         |         |      |  |      |         |   |  |   |         |  
|-------------------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                             |  |                        
|                                             |  | Year Ended December 31,
|                                             |  |                        
|                                             |  | 2000                    |         | 1999 |  | 1998
|(Thousands of dollars)                       |  |                         |         |      |  |     
|                                             |  |                         |         |      |  |     
|                                            
|                                            
|                                            
|                                            
|Income Statement Data:                       |  |                         |         |      |  |      |         |   |  |   |         |  
|                                            
|                                            
|                                            
|                                            
|Net sales                                    |  | $                       | 887,743 |      |  | $    | 506,955 |   |  | $ | 521,226 |  
|                                            
|                                            
|                                            
|                                            
|Gross profit                                 |  |                         | 213,866 |      |  |      | 159,505 |   |  |   | 144,952 |  
|                                            
|                                            
|                                            
|                                            
|Selling, general and administrative expenses |  |                         | 75,373  |      |  |      | 60,768  |   |  |   | 58,028  |  
|                                             |  |                         |         |      |  |      |         |   |  |   |         |  
|Income from operations                       |  |                         | 138,493 |      |  |      | 98,737  |   |  |   | 86,924  |  
|                                            
|                                            
|                                            
|                                            
|Other expense  net                          |  |                         | (38,517 | )    |  |      | (18,444 | ) |  |   | (15,600 | )
|                                            
|                                            
|                                            
|                                            
|Income taxes                                 |  |                         | (28,476 | )    |  |      | (24,468 | ) |  |   | (22,966 | )
|                                             |  |                         |         |      |  |      |         |   |  |   |         |  
|Net income                                   |  | $                       | 71,500  |      |  | $    | 55,825  |   |  | $ | 48,358  |  
|                                             |  |                         |         |      |  |      |         |   |  |   |         |  
|Products Sold(millions of pounds):           |  |                         |         |      |  |      |         |   |  |   |         |  
|                                            
|                                            
|                                            
|                                            
|Organics                                     |  |                         | 76.5    |      |  |      | 70.2    |   |  |   | 60.5    |  
|                                            
|                                            
|                                            
|                                            
|Inorganics                                   |  |                         | 105.6   |      |  |      | 96.1    |   |  |   | 89.3    |  
|                                            
|                                            
|                                            
|                                            
|Powders                                      |  |                         | 46.9    |      |  |      | 43.1    |   |  |   | 40.4    |  
|                                            
|                                            
|                                            
|                                            
|Metals                                       |  |                         | 78.2    |      |  |      | 0.0     |   |  |   | 0.0     |  
|                                             |  |                         |         |      |  |      |         |   |  |   |         |  
|Total                                        |  |                         | 307.2   |      |  |      | 209.4   |   |  |   | 190.2   |  
|                                             |  |                         |         |      |  |      |         |   |  |   |         |  

8



---



##### Table of Contents



Results of Operations

2000 Compared to 1999




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,      
|                     |  |                              
|                     |  | 2000                          |                 | 1999
|                     |  |                               |                 |     
|Cobalt  99.3% Grade |  | $                             | 10.68 to $15.25 |      |  | $ | 6.70 to $20.00 | 
|                    
|                    
|                    
|                    
|Nickel               |  | $                             | 3.25 to $ 4.75  |      |  | $ | 1.81 to $ 3.81 | 
|                    
|                    
|                    
|                    
|Copper               |  | $                             | 0.75 to $ 0.92  |      |  | $ | 0.61 to $ 0.85 | 

The Company sold 307.2 million pounds of product during
2000, an increase of 46.7% compared to 209.4 million pounds
in 1999. The increase in physical volume of organic products
sold was primarily due to generally stronger cobalt catalyst
sales in all geographic regions and increased sales of plastic
additives in Asia Pacific. In the inorganics category, the
increase in physical volume of products sold reflects increased
volume of electronics chemicals, strong demand for nickel
catalyst products in the United States and higher sales of
battery grade chemicals in Asia Pacific. The increase in
physical volume of powder products reflects increases in sales
of cobalt powder to the Asia Pacific battery industry, and
increased sales of cobalt extra fine, cobalt briquettes and
tungsten powders to the hard metal and alloy markets, offsetting
a decrease in copper powders used in automotive applications.
The increase in physical volume of metal products sold is a
result of the acquisition of OKN and the resulting sales of
nickel briquettes and cathodes to the European steel industry.

Gross profit increased to $213.9 million in 2000, a 34.1%
increase from 1999. The increase in gross profit was primarily
the result of the acquisition of OKN and the increased volumes
of product sold. Cost of products sold increased to 75.9% of net
sales for the year ended 2000 from 68.5% of net sales in 1999 as
a result of the acquisition of OKN with lower value-added nickel
products and higher sales of lower value-added cobalt containing
products.

Selling, general and administrative expenses increased by
$14.6 million in 2000 from 1999, resulting primarily from
general increases in administrative costs due to the
Companys growth and the OKN acquisition. Due to the
relatively low incremental selling, general and administrative
expenses required to support OKN and relatively high nickel
prices, selling, general and administrative expenses decreased
to 8.5% of net sales in 2000 compared to 12.0% of net sales in
1999.

Other expense-net was $38.5 million in 2000 compared to
$18.4 million in 1999 due primarily to increased interest
expense on higher outstanding borrowings, primarily as a result
of the OKN acquisition, and higher interest rates.

Income taxes as a percentage of income before income taxes
decreased to 28.5% in 2000 from 30.5% in 1999. The lower
effective tax rate was due primarily to a higher percentage of
income earned in the relatively low statutory tax country of
Finland and a tax holiday in Malaysia.

Net income for 2000 was $71.5 million, an increase of
$15.7 million from 1999, primarily due to the
aforementioned factors.

9



---



##### Table of Contents



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 organic products sold was primarily the result of an
increase in sales of cobalt organics and PVC plastic additives,
both in Europe and Asia Pacific. In the inorganic 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.

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 a higher percentage of
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.



Liquidity and Capital Resources



In conjunction with the acquisition of OKN, the Company entered
into a $675 million senior credit facility with a group of
financial institutions including a $30 million limit for
issuance of letters of credit. This senior secured

10



---



##### Table of Contents





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. Subject to several limitations in
its credit facilities, the Company may incur additional
borrowings under this line 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 $60 million in 2001.

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 pages 4 and 5  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. The Companys
supply of cobalt has historically been sourced primarily from
the Democratic Republic of Congo, Australia, Finland and Zambia.
Nickel has been sourced primarily from Australia and Chile.
Copper is a worldwide commodity and generally available.
Although the Company has never experienced a significant
shortage of raw materials, production problems and political and
civil instability in certain supplier countries may affect their
supply and market price. 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 from other
sources as would be necessary to satisfy the Companys
requirements or 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. In addition, in order to hedge the
purchase of nickel raw material and the sale of nickel products,
the Company enters into commodity forward contracts. The degree
of profitability of the Company principally depends on the
Companys ability to maintain the differential between its
product prices and product costs.

Substantial, sustained reductions in the price of raw materials,
particularly cobalt and nickel, could also result in the
Companys inventory being written down to a lower market
value.

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

11



---



##### Table of Contents





|                                           |                       |                        |   |        |   |      |   |        |   |      |   |        |   |       |   |        |   |  |   |        |   |  |   |         |   |  |   |         |  |  |   |         | 
|------------------------------------------ | --------------------- | ---------------------- | - | ------ | - | ---- | - | ------ | - | ---- | - | ------ | - | ----- | - | ------ | - |  | - | ------ | - |  | - | ------- | - |  | - | ------- |  |  | - | ------- | 
|                                           |                       |                       
|                                           |                       | Expected Maturity Date
|                                           |                       |                       
|                                           |                       |                        |   |       
|                                           |                       | December 31, 2000      |   |       
|                                           |                       |                        |   | There- |   |      |   | Fair  
|                                           |                       | 2001                   |   | 2002   |   | 2003 |   | 2004   |   | 2005 |   | after  |   | Total |   | Value 
|(Thousands of dollars)                     |                       |                        |   |        |   |      |   |        |   |      |   |        |   |       |   |       
|                                           |                       |                        |   |        |   |      |   |        |   |      |   |        |   |       |   |       
|Long-term debt,
	including current portion |                       |                        |   |        |   |      |   |        |   |      |   |        |   |       |   |        |   |  |   |        |   |  |   |         |   |  |   |         |  |  |   |        
|                                          
|                                          
|                                          
|                                          
|                                           | Fixed rate            |                        | $ | 115    |   |      | $ | 30     |   |      | $ | 84     |   |       | $ | 210    |   |  | $ | 208    |   |  | $ | 397     |   |  | $ | 1,044   |  |  | $ | 1,044   | 
|                                          
|                                          
|                                          
|                                          
|                                           | Average interest rate |                        |   | 2.1    | % |      |   | 4.3    | % |      |   | 2.2    | % |       |   | 1.5    | % |  |   | 1.5    | % |  |   | 1.3     | % |  |   |         |  |  |   |         | 
|                                          
|                                          
|                                          
|                                          
|                                           | Variable rate         |                        | $ | 20,750 |   |      | $ | 29,500 |   |      | $ | 39,500 |   |       | $ | 45,750 |   |  | $ | 13,250 |   |  | $ | 422,150 |   |  | $ | 570,900 |  |  | $ | 570,900 | 
|                                          
|                                          
|                                          
|                                          
|                                           | Average interest rate |                        |   | 8.8    | % |      |   | 8.8    | % |      |   | 8.8    | % |       |   | 8.8    | % |  |   | 8.8    | % |  |   | 8.8     | % |  |   |         |  |  |   |         | 

|                                           |                       |                        |   |        |   |      |   |      |   |      |   |       |   |       |   |       |   |  |   |         |   |  |   |        |   |  |   |         |  |  |   |         | 
|------------------------------------------ | --------------------- | ---------------------- | - | ------ | - | ---- | - | ---- | - | ---- | - | ----- | - | ----- | - | ----- | - |  | - | ------- | - |  | - | ------ | - |  | - | ------- |  |  | - | ------- | 
|                                           |                       |                       
|                                           |                       | Expected Maturity Date
|                                           |                       |                       
|                                           |                       |                        |   |       
|                                           |                       | December 31, 1999      |   |       
|                                           |                       |                        |   | There- |   |      |   | Fair
|                                           |                       | 2000                   |   | 2001   |   | 2002 |   | 2003 |   | 2004 |   | after |   | Total |   | Value
|(Thousands of dollars)                     |                       |                        |   |        |   |      |   |      |   |      |   |       |   |       |   |      
|                                           |                       |                        |   |        |   |      |   |      |   |      |   |       |   |       |   |      
|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    | % |  |   |        |   |  |   |         |  |  |   |         | 

In addition to the United States, the Company has manufacturing
and other facilities in Africa, 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. The OKN
acquisition increased the Companys exposure to changes in
foreign currency exchange rates through additional euro
operating expenses (see pages 4 and 5 
International Operations).

Cautionary Statement for Safe Harbor Purposes
Under the Private Securities Litigation Reform Act of 1995






Item 7a.  Quantitative and Qualitative Disclosures
About Market Risk



12



---



##### 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, 2000 and 1999, and the
related statements of consolidated income, stockholders
equity, and cash flows for each of the three years in the period
ended December 31, 2000. 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, 2000
and 1999, and the consolidated results of its operations and its
cash flows for each of the three years in the period ended
December 31, 2000, in conformity with accounting principles
generally accepted in the United States.

/s/ Ernst & Young LLP

Cleveland, Ohio



13



---



##### Table of Contents






Consolidated Balance Sheets

|                                           |                                                                                                             |             |           |         |   |   |           |         |  
|------------------------------------------ | ----------------------------------------------------------------------------------------------------------- | ----------- | --------- | ------- | - | - | --------- | ------- | -
|                                           |                                                                                                             |            
|                                           |                                                                                                             | December 31
|                                           |                                                                                                             |            
|                                           |                                                                                                             | 2000        |           | 1999   
|(Thousands of dollars, except share data)  |                                                                                                             |             |           |        
|Assets                                     |                                                                                                             |             |           |         |   |   |           |        
|                                          
|                                          
|                                          
|                                          
|Current assets:                            |                                                                                                             |             |           |         |   |   |           |        
|                                          
|                                          
|                                          
|                                          
|                                           | Cash and cash equivalents                                                                                   |             | $         | 13,482  |   |   | $         | 9,433   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Accounts receivable, less allowance of $2,404 in 2000 and $1,131
	in 1999                                   |             |           | 147,618 |   |   |           | 100,492 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Inventories                                                                                                 |             |           | 393,849 |   |   |           | 332,810 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Other current assets                                                                                        |             |           | 56,792  |   |   |           | 52,321  |  
|                                           |                                                                                                             |             |           |         |   |   |           |        
|Total current assets                       |                                                                                                             |             | 611,741   |         |   |   | 495,056   |        
|                                          
|                                          
|                                          
|                                          
|Property, plant and equipment:             |                                                                                                             |             |           |         |   |   |           |        
|                                          
|                                          
|                                          
|                                          
|                                           | Land                                                                                                        |             |           | 6,794   |   |   |           | 6,099   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Buildings and improvements                                                                                  |             |           | 128,152 |   |   |           | 93,819  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Machinery and equipment                                                                                     |             |           | 481,548 |   |   |           | 317,388 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Furniture and fixtures                                                                                      |             |           | 12,860  |   |   |           | 14,419  |  
|                                           |                                                                                                             |             |           |         |   |   |           |        
|                                           |                                                                                                             |             | 629,354   |         |   |   | 431,725   |        
|                                          
|                                          
|                                          
|                                          
|                                           | Less accumulated depreciation                                                                               |             |           | 144,002 |   |   |           | 112,910 |  
|                                           |                                                                                                             |             |           |         |   |   |           |        
|                                           |                                                                                                             |             | 485,352   |         |   |   | 318,815   |        
|                                          
|                                          
|                                          
|                                          
|Other assets:                              |                                                                                                             |             |           |         |   |   |           |        
|                                          
|                                          
|                                          
|                                          
|                                           | Goodwill and other intangible assets, less accumulated
	amortization of $26,683 in 2000 and $19,125 in 1999 |             |           | 192,063 |   |   |           | 183,974 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Other assets                                                                                                |             |           | 68,306  |   |   |           | 14,683  |  
|                                           |                                                                                                             |             |           |         |   |   |           |        
|Total assets                               |                                                                                                             | $           | 1,357,462 |         |   | $ | 1,012,528 |        
|                                           |                                                                                                             |             |           |         |   |   |           |        
|Liabilities and stockholders equity       |                                                                                                             |             |           |         |   |   |           |        
|                                          
|                                          
|                                          
|                                          
|Current liabilities:                       |                                                                                                             |             |           |         |   |   |           |        
|                                          
|                                          
|                                          
|                                          
|                                           | Current portion of long-term debt                                                                           |             | $         | 20,865  |   |   | $         | 25      |  
|                                          
|                                          
|                                          
|                                          
|                                           | Accounts payable                                                                                            |             |           | 103,570 |   |   |           | 77,037  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Deferred income taxes                                                                                       |             |           | 37,776  |   |   |           | 25,897  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Other accrued expenses                                                                                      |             |           | 45,044  |   |   |           | 23,599  |  
|                                           |                                                                                                             |             |           |         |   |   |           |        
|Total current liabilities                  |                                                                                                             |             | 207,255   |         |   |   | 126,558   |        
|                                          
|                                          
|                                          
|                                          
|                                           | Long-term debt                                                                                              |             |           | 551,079 |   |   |           | 384,888 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Deferred income taxes                                                                                       |             |           | 29,116  |   |   |           | 24,339  |  
|                                          
|                                          
|                                          
|                                          
|                                           | Other long-term liabilities                                                                                 |             |           | 14,333  |   |   |           | 6,977   |  
|                                          
|                                          
|                                          
|                                          
|                                           | Minority interest                                                                                           |             |           | 49,549  |   |   |           | 20,538  |  
|                                          
|                                          
|                                          
|                                          
|                                           | 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                                                                              |             |           | 258,913 |   |   |           | 258,815 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Retained earnings                                                                                           |             |           | 256,183 |   |   |           | 198,047 |  
|                                          
|                                          
|                                          
|                                          
|                                           | Treasury stock (105,065 shares in 2000 and 165,161 shares in
	1999, at cost )                               |             |           | (4,853  | ) |   |           | (5,537  | )
|                                          
|                                          
|                                          
|                                          
|                                           | Accumulated other comprehensive loss                                                                        |             |           | (3,967  | ) |   |           | (1,837  | )
|                                          
|                                          
|                                          
|                                          
|                                           | Unearned compensation                                                                                       |             |           | (386    | ) |   |           | (500    | )
|                                           |                                                                                                             |             |           |         |   |   |           |        
|Total stockholders equity                 |                                                                                                             |             | 506,130   |         |   |   | 449,228   |        
|                                           |                                                                                                             |             |           |         |   |   |           |        
|Total liabilities and stockholders equity |                                                                                                             | $           | 1,357,462 |         |   | $ | 1,012,528 |        
|                                           |                                                                                                             |             |           |         |   |   |           |        

See accompanying notes to consolidated financial
statements.

14



---



##### Table of Contents








Statements Of Consolidated Income


|                                                |  |                        |         |      |  |      |         |   |  |   |         |  
|----------------------------------------------- |  | ---------------------- | ------- | ---- |  | ---- | ------- | - |  | - | ------- | -
|                                                |  |                       
|                                                |  | Year Ended December 31
|                                                |  |                       
|                                                |  | 2000                   |         | 1999 |  | 1998
|(Thousands of dollars, except per share data)   |  |                        |         |      |  |     
|Net sales                                       |  | $                      | 887,743 |      |  | $    | 506,955 |   |  | $ | 521,226 |  
|                                               
|                                               
|                                               
|                                               
|Cost of products sold                           |  |                        | 673,877 |      |  |      | 347,450 |   |  |   | 376,274 |  
|                                                |  |                        |         |      |  |      |         |   |  |   |         |  
|                                                |  |                        | 213,866 |      |  |      | 159,505 |   |  |   | 144,952 |  
|                                               
|                                               
|                                               
|                                               
|Selling, general and administrative expenses    |  |                        | 75,373  |      |  |      | 60,768  |   |  |   | 58,028  |  
|                                                |  |                        |         |      |  |      |         |   |  |   |         |  
|Income from operations                          |  |                        | 138,493 |      |  |      | 98,737  |   |  |   | 86,924  |  
|Other income (expense)                          |  |                        |         |      |  |      |         |   |  |   |         |  
|                                               
|                                               
|                                               
|                                               
|Interest expense                                |  |                        | (39,829 | )    |  |      | (19,081 | ) |  |   | (15,560 | )
|                                               
|                                               
|                                               
|                                               
|Interest income                                 |  |                        | 2,435   |      |  |      | 181     |   |  |   | 223     |  
|                                               
|                                               
|                                               
|                                               
|Foreign exchange (loss) gain                    |  |                        | (1,123  | )    |  |      | 456     |   |  |   | (263    | )
|                                                |  |                        |         |      |  |      |         |   |  |   |         |  
|                                                |  |                        | (38,517 | )    |  |      | (18,444 | ) |  |   | (15,600 | )
|                                                |  |                        |         |      |  |      |         |   |  |   |         |  
|Income before income taxes                      |  |                        | 99,976  |      |  |      | 80,293  |   |  |   | 71,324  |  
|                                               
|                                               
|                                               
|                                               
|Income taxes                                    |  |                        | 28,476  |      |  |      | 24,468  |   |  |   | 22,966  |  
|                                                |  |                        |         |      |  |      |         |   |  |   |         |  
|Net income                                      |  | $                      | 71,500  |      |  | $    | 55,825  |   |  | $ | 48,358  |  
|                                                |  |                        |         |      |  |      |         |   |  |   |         |  
|Net income per common share                     |  | $                      | 2.99    |      |  | $    | 2.35    |   |  | $ | 2.11    |  
|                                                |  |                        |         |      |  |      |         |   |  |   |         |  
|Net income per common share  assuming dilution |  | $                      | 2.95    |      |  | $    | 2.30    |   |  | $ | 2.05    |  
|                                                |  |                        |         |      |  |      |         |   |  |   |         |  
|Cash dividends paid per common share            |  | $                      | .44     |      |  | $    | .40     |   |  | $ | .36     |  
|                                                |  |                        |         |      |  |      |         |   |  |   |         |  

See accompanying notes to consolidated financial
statements.

15



---



##### 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, 1998                                    |  | $      | 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 |  
|                                                             
|                                                             
|                                                             
|                                                             
|Net income                                                    |  |        |     |           |  |          |         |          |  |               | 71,500  |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 71,500  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Translation adjustment                                        |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   | (2,130 | ) |  |   |      |   |  |   | (2,130  | )
|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  
|                                                             
|Total comprehensive income                                    |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 69,370  |  
|                                                             
|                                                             
|                                                             
|                                                             
|Non-employee directors compensation                          |  |        |     |           |  |          | 98      |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   | 98      |  
|                                                             
|                                                             
|                                                             
|                                                             
|Restricted stock compensation                                 |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   | 114  |   |  |   | 114     |  
|                                                             
|                                                             
|                                                             
|                                                             
|Dividends paid                                                |  |        |     |           |  |          |         |          |  |               | (10,491 | )            |  |       |        |   |  |   |        |   |  |   |      |   |  |   | (10,491 | )
|                                                             
|                                                             
|                                                             
|                                                             
|Treasury stock purchased                                      |  |        |     |           |  |          |         |          |  |               |         |              |  |       | (9,650 | ) |  |   |        |   |  |   |      |   |  |   | (9,650  | )
|                                                             
|                                                             
|                                                             
|                                                             
|Issuance of shares under benefit plans, including tax benefit |  |        |     |           |  |          |         |          |  |               | (2,873  | )            |  |       | 10,334 |   |  |   |        |   |  |   |      |   |  |   | 7,461   |  
|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  
|Balance at December 31, 2000                                  |  | $      | 240 |           |  | $        | 258,913 |          |  | $             | 256,183 |              |  | $     | (4,853 | ) |  | $ | (3,967 | ) |  | $ | (386 | ) |  | $ | 506,130 |  
|                                                              |  |        |     |           |  |          |         |          |  |               |         |              |  |       |        |   |  |   |        |   |  |   |      |   |  |   |         |  

See accompanying notes to consolidated financial
statements.

16



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##### Table of Contents








Statements Of Consolidated Cash Flows


|                                                             |                                     |                        |          |         |   |      |         |         |   |   |          |         |  
|------------------------------------------------------------ | ----------------------------------- | ---------------------- | -------- | ------- | - | ---- | ------- | ------- | - | - | -------- | ------- | -
|                                                             |                                     |                       
|                                                             |                                     | Year Ended December 31
|                                                             |                                     |                       
|                                                             |                                     | 2000                   |          | 1999    |   | 1998
|(Thousands of dollars)                                       |                                     |                        |          |         |   |     
|Operating activities                                         |                                     |                        |          |         |   |      |         |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|Net income                                                   |                                     | $                      | 71,500   |         |   | $    | 55,825  |         |   | $ | 48,358   |        
|                                                            
|                                                            
|                                                            
|                                                            
|Items not affecting cash:                                    |                                     |                        |          |         |   |      |         |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Depreciation and amortization       |                        |          | 39,298  |   |      |         | 26,864  |   |   |          | 25,435  |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Foreign exchange loss (gain)        |                        |          | 1,123   |   |      |         | (456    | ) |   |          | 263     |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Deferred income taxes               |                        |          | 184     |   |      |         | 13,327  |   |   |          | 17,309  |  
|                                                            
|                                                            
|                                                            
|                                                            
|Changes in operating assets and liabilities:                 |                                     |                        |          |         |   |      |         |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Accounts receivable                 |                        |          | 40,044  |   |      |         | (19,586 | ) |   |          | 5,139   |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Inventories                         |                        |          | (4,296  | ) |      |         | (49,521 | ) |   |          | (75,976 | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Accounts payable and other accruals |                        |          | (25,461 | ) |      |         | (4,850  | ) |   |          | (11,387 | )
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Prepayments, advances and other     |                        |          | (41,436 | ) |      |         | (9,247  | ) |   |          | (10,283 | )
|                                                             |                                     |                        |          |         |   |      |         |         |   |   |          |        
|Net cash provided by (used in) operating activities          |                                     |                        | 80,956   |         |   |      | 12,356  |         |   |   | (1,142   | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Investing activities                                         |                                     |                        |          |         |   |      |         |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|Expenditures for property, plant and equipment  net         |                                     |                        | (55,033  | )       |   |      | (70,150 | )       |   |   | (91,942  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Acquisitions of businesses                                   |                                     |                        | (192,689 | )       |   |      | (1,765  | )       |   |   | (103,253 | )      
|                                                             |                                     |                        |          |         |   |      |         |         |   |   |          |        
|Net cash used in investing activities                        |                                     |                        | (247,722 | )       |   |      | (71,915 | )       |   |   | (195,195 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Financing activities                                         |                                     |                        |          |         |   |      |         |         |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|Dividend payments                                            |                                     |                        | (10,491  | )       |   |      | (9,517  | )       |   |   | (8,246   | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Short-term borrowings                                        |                                     |                        |          |         |   |      |         |         |   |   | 2,000    |        
|                                                            
|                                                            
|                                                            
|                                                            
|Long-term borrowings                                         |                                     |                        | 223,750  |         |   |      | 74,808  |         |   |   | 197,773  |        
|                                                            
|                                                            
|                                                            
|                                                            
|Payments of short-term debt                                  |                                     |                        |          |         |   |      | (2,000  | )       |   |   |          |        
|                                                            
|                                                            
|                                                            
|                                                            
|Payments of long-term debt                                   |                                     |                        | (37,600  | )       |   |      |         |         |   |   | (63,569  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Purchase of treasury stock                                   |                                     |                        | (9,650   | )       |   |      | (4,744  | )       |   |   | (7,070   | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Proceeds from exercise of stock options                      |                                     |                        | 6,811    |         |   |      | 2,755   |         |   |   | 719      |        
|                                                            
|                                                            
|                                                            
|                                                            
|Issuance of common stock                                     |                                     |                        |          |         |   |      |         |         |   |   | 68,689   |        
|                                                             |                                     |                        |          |         |   |      |         |         |   |   |          |        
|Net cash provided by financing activities                    |                                     |                        | 172,820  |         |   |      | 61,302  |         |   |   | 190,296  |        
|                                                            
|                                                            
|                                                            
|                                                            
|Effect of exchange rate changes on cash and cash equivalents |                                     |                        | (2,005   | )       |   |      | (60     | )       |   |   | 598      |        
|                                                             |                                     |                        |          |         |   |      |         |         |   |   |          |        
|Increase (decrease) in cash and cash equivalents             |                                     |                        | 4,049    |         |   |      | 1,683   |         |   |   | (5,443   | )      
|                                                            
|                                                            
|                                                            
|                                                            
|Cash and cash equivalents at beginning of year               |                                     |                        | 9,433    |         |   |      | 7,750   |         |   |   | 13,193   |        
|                                                             |                                     |                        |          |         |   |      |         |         |   |   |          |        
|Cash and cash equivalents at end of year                     |                                     | $                      | 13,482   |         |   | $    | 9,433   |         |   | $ | 7,750    |        
|                                                             |                                     |                        |          |         |   |      |         |         |   |   |          |        

See accompanying notes to consolidated financial
statements.

17



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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, which represents the excess of the purchase price of
businesses acquired over the estimated fair value of the net
assets acquired, is amortized on a straight-line basis over 20
to 40 years. Other intangibles represent principally
patents, trademarks, technology acquired and capitalized
software and are being amortized on a straight-line basis over
five to seventeen 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 its fair value.

Research and Development Selling, general and
administrative expenses include research and development costs
of $13,308, $11,332 and $10,367 in 2000, 1999 and 1998,
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 subsidiaries and related
African operations is the U.S. Dollar since a majority of their
purchases and sales are 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.

18



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


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.

Revenue Recognition Revenues are recognized
when unaffiliated customers take title and assume ownership of
product(s) specified in their purchase agreements with the
Company, which generally occurs upon shipment of product or
usage of consignment inventories. Shipping and handling are
included in cost of product sold and are included in the sales
price when billed to 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 adopted SFAS No. 133 effective
January 1, 2001; adoption of this statement did not have a
material effect on earnings or the financial position of the
Company.

Financial Presentation Changes Certain
amounts for prior years have been reclassified to conform to the
current year presentations.

B.  Inventories



|                           |                   |             |         |         |  |   |         |         | 
|-------------------------- | ----------------- | ----------- | ------- | ------- |  | - | ------- | ------- | 
|                           |                   |            
|                           |                   | December 31
|                           |                   |            
|                           |                   | 2000        |         | 1999   
|                           |                   |             |         |        
|Raw materials and supplies |                   | $           | 168,750 |         |  | $ | 137,337 |        
|                          
|                          
|                          
|                          
|Finished goods             |                   |             | 156,159 |         |  |   | 138,417 |        
|                           |                   |             |         |         |  |   |         |        
|                           |                   |             | 324,909 |         |  |   | 275,754 |        
|                          
|                          
|                          
|                          
|LIFO reserve               |                   |             | 68,940  |         |  |   | 57,056  |        
|                           |                   |             |         |         |  |   |         |        
|                           | Total inventories |             | $       | 393,849 |  |   | $       | 332,810 | 
|                           |                   |             |         |         |  |   |         |        

C.  Acquisition and Pro Forma Earnings Per Share



The assets acquired and liabilities assumed were recorded at
estimated fair values as determined by the Companys
management based on information currently available and on
current assumptions as to future operations. The

19



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


Company has obtained independent appraisals of the fair values
of the acquired property, plant and equipment, and identified
intangible assets, and their remaining useful lives. The Company
is also completing the review and determination of the fair
values of the other assets acquired and liabilities assumed,
including its responsibility for any environmental matters at
the date of acquisition. In addition, the Company is resolving
certain matters with the seller related to the net assets
acquired, which may ultimately impact the final purchase price.
Accordingly, the allocation of the purchase price is subject to
revision, which is not expected to be material, based on the
final determination of fair values, and finalization of the
purchase price.

Pro forma net sales, net income and net income per share, for
the years ended December 31, 2000 and 1999, as if the
acquisition had occurred as of January 1, 2000 and 1999,
respectively, were as follows:

|                                                |  |                        |           |      |  |   |         | 
|----------------------------------------------- |  | ---------------------- | --------- | ---- |  | - | ------- | 
|                                                |  |                       
|                                                |  | Year Ended December 31
|                                                |  |                       
|                                                |  | 2000                   |           | 1999
|                                                |  |                        |           |     
|Net sales                                       |  | $                      | 1,038,000 |      |  | $ | 848,455 | 
|                                               
|                                               
|                                               
|                                               
|Net income                                      |  | $                      | 81,600    |      |  | $ | 44,925  | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share                     |  | $                      | 3.42      |      |  | $ | 1.89    | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share  assuming dilution |  | $                      | 3.36      |      |  | $ | 1.85    | 

The pro forma results include estimates and assumptions which
the Companys management believes are reasonable. However,
the pro forma results are not necessarily indicative of the
results which would have occurred if the acquisition had
occurred on the dates indicated, or which may result in the
future.

The aforementioned pro forma information reflects additional
amortization of goodwill on a straight-line basis over
20 years; additional amortization of financing costs over
6 years; depreciation for the write-up of property, plant
and equipment over 10 years; and an interest cost on the
funds borrowed to finance the acquisition.

D.  Financial Instruments



|                                        |                      |             |         |         |  |   |         |         | 
|--------------------------------------- | -------------------- | ----------- | ------- | ------- |  | - | ------- | ------- | 
|                                        |                      |            
|                                        |                      | December 31
|                                        |                      |            
|                                        |                      | 2000        |         | 1999   
|                                        |                      |             |         |        
|Notes payable to financial institutions |                      | $           | 570,900 |         |  | $ | 324,750 |        
|                                       
|                                       
|                                       
|                                       
|Notes payable to insurance companies    |                      |             |         |         |  |   | 60,000  |        
|                                       
|                                       
|                                       
|                                       
|Other                                   |                      |             | 1,044   |         |  |   | 163     |        
|                                        |                      |             |         |         |  |   |         |        
|                                        |                      |             | 571,944 |         |  |   | 384,913 |        
|                                       
|                                       
|                                       
|                                       
|Less: Current portion                   |                      |             | 20,865  |         |  |   | 25      |        
|                                        |                      |             |         |         |  |   |         |        
|                                        | Total long-term debt |             | $       | 551,079 |  |   | $       | 384,888 | 
|                                        |                      |             |         |         |  |   |         |        

In conjunction with the acquisition of OKN (see note C), the
Company entered into a $675 million senior credit facility
with a group of financial institutions including a
$30 million limit for issuance of letters of credit. These
senior secured credit facilities were comprised of a
$325 million revolving credit facility, a $150 million
five-year term loan and a $200 million seven-year term
loan. Scheduled maturities on the term loans amounted to
$12.75 million in 2000. The facilities have variable
interest rates based upon either the agent banks prime
lending rate plus a 0% to 1.5% margin or LIBOR plus a 1.25% to
3.0% margin at the Companys option. The margin paid is
based upon a defined financial leverage ratio. Under this credit
agreement, the Company must meet various financial covenants,
and there are restrictions on investments and dividend payments.
Further

20



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


investments in Weda Bay Minerals, Inc. (see Note H) are limited
to $18 million. Annual dividends are limited to the greater
of $12 million or 25% of consolidated net income.

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 1.25% to 2.5% for a three year period
ending February 9, 2001. The Company has also entered into
several interest rate swap agreements to convert the variable
interest rates on an aggregate contract amount of
$120 million to an average fixed rate of 6.88% plus 1.25%
to 2.5% for a three year period ending April 25, 2002.

At December 31, 2000, the combined effective rate of the
Companys bank borrowings and the related swap agreements
was 8.82%. The net interest paid or received on interest rate
swaps is included in interest expense. The counterparties to the
interest rate swaps are international commercial banks. At
December 31, 2000, the fair values of the Companys
interest rate swaps approximated $1,558 payable.

Aggregate annual maturities of long-term debt for the five years
following December 31, 2000 are as follows:
2001  $20,865; 2002  $29,530;
2003  $39,584 and 2004  $45,960; and
2005  $13,458. Interest paid, net of capitalized
amounts, was $39,752, $19,112 and $15,660 for the years ended
December 31, 2000, 1999 and 1998, respectively. Interest
capitalized as part of construction of major fixed assets was
$10,972 in 2000, $7,057 in 1999 and $1,605 in 1998. At
December 31, 2000, 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, 2000, the notional value of these forward
contracts approximated $4,712. The fair value of the forward
contracts, based on the current settlement price at
December 31, 2000, approximated $349 receivable, which was
recorded in results of operations.

The Company also enters into forward contracts to hedge the
purchase of nickel raw material and the sale of nickel products.
Realized gains and losses on these forward contracts are
included as a component of purchases and net sales, as
appropriate, and are recognized when the related raw material is
purchased or product is sold. At December 31, 2000, the
notional value of open contracts approximated $7,300. The fair
value of the unrealized gain/loss on these contracts, based on
current settlement prices at December 31, 2000,
approximated $1,800 payable.

E.  Income Taxes



|                          |  |                        |         |      |  |      |        |   |  |   |        | 
|------------------------- |  | ---------------------- | ------- | ---- |  | ---- | ------ | - |  | - | ------ | 
|                          |  |                       
|                          |  | Year Ended December 31
|                          |  |                       
|                          |  | 2000                   |         | 1999 |  | 1998
|                          |  |                        |         |      |  |     
|United States             |  | $                      | (32,986 | )    |  | $    | (2,715 | ) |  | $ | 17,998 | 
|                         
|                         
|                         
|                         
|Outside the United States |  |                        | 132,962 |      |  |      | 83,008 |   |  |   | 53,326 | 
|                          |  |                        |         |      |  |      |        |   |  |   |        | 
|                          |  | $                      | 99,976  |      |  | $    | 80,293 |   |  | $ | 71,324 | 
|                          |  |                        |         |      |  |      |        |   |  |   |        | 

21



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##### Table of Contents



Notes to Consolidated Financial Statements Continued


Income taxes are summarized as follows:

|          |                           |                        |        |         |   |      |        |        |       |   |        |        |       | 
|--------- | ------------------------- | ---------------------- | ------ | ------- | - | ---- | ------ | ------ | ----- | - | ------ | ------ | ----- | 
|          |                           |                       
|          |                           | Year Ended December 31
|          |                           |                       
|          |                           | 2000                   |        | 1999    |   | 1998
|          |                           |                        |        |         |   |     
|Current:  |                           |                        |        |         |   |      |        |        |       |   |        |       
|         
|         
|         
|         
|          | United States:            |                        |        |         |   |      |        |        |       |   |        |        |      
|         
|         
|         
|         
|          |                           | Federal                |        |         |   |      |        | $      | 1,281 |   |        | $      | 1,634 | 
|         
|         
|         
|         
|          |                           | State and local        |        |         |   |      |        |        | 88    |   |        |        | 860   | 
|         
|         
|         
|         
|          | Outside the United States |                        | $      | 28,292  |   |      |        | 9,772  |       |   |        | 3,163  |      
|          |                           |                        |        |         |   |      |        |        |       |   |        |       
|          |                           |                        | 28,292 |         |   |      | 11,141 |        |       |   | 5,657  |       
|         
|         
|         
|         
|Deferred: |                           |                        |        |         |   |      |        |        |       |   |        |       
|         
|         
|         
|         
|          | United States             |                        |        | (11,414 | ) |      |        | 2,817  |       |   |        | 5,426  |      
|         
|         
|         
|         
|          | Outside the United States |                        |        | 11,598  |   |      |        | 10,510 |       |   |        | 11,883 |      
|          |                           |                        |        |         |   |      |        |        |       |   |        |       
|          |                           |                        | 184    |         |   |      | 13,327 |        |       |   | 17,309 |       
|          |                           |                        |        |         |   |      |        |        |       |   |        |       
|          |                           | $                      | 28,476 |         |   | $    | 24,468 |        |       | $ | 22,966 |       
|          |                           |                        |        |         |   |      |        |        |       |   |        |       

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

|                                                                          |  |                        |      |      |  |      |       |   |  |  |      |  
|------------------------------------------------------------------------- |  | ---------------------- | ---- | ---- |  | ---- | ----- | - |  |  | ---- | -
|                                                                          |  |                       
|                                                                          |  | Year Ended December 31
|                                                                          |  |                       
|                                                                          |  | 2000                   |      | 1999 |  | 1998
|                                                                          |  |                        |      |      |  |     
|Income taxes at the United States statutory rate                          |  |                        | 35.0 | %    |  |      | 35.0  | % |  |  | 35.0 | %
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|State income taxes, net of federal tax benefit                            |  |                        | (.8  | )    |  |      | .1    |   |  |  | .8   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Effective tax rate differential of earnings outside of the
	United States |  |                        | (7.0 | )    |  |      | (10.6 | ) |  |  | (6.0 | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Adjustment of worldwide tax liabilities                                   |  |                        |      |      |  |      | 4.2   |   |  |  | .1   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Non-deductible goodwill                                                   |  |                        | 1.6  |      |  |      | 1.9   |   |  |  | 2.0  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Othernet                                                                 |  |                        | (.3  | )    |  |      | (.1   | ) |  |  | .3   |  
|                                                                          |  |                        |      |      |  |      |       |   |  |  |      |  
|                                                                          |  |                        | 28.5 | %    |  |      | 30.5  | % |  |  | 32.2 | %
|                                                                          |  |                        |      |      |  |      |       |   |  |  |      |  

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

|                                               |  |             |         |      |  |   |         |  
|---------------------------------------------- |  | ----------- | ------- | ---- |  | - | ------- | -
|                                               |  |            
|                                               |  | December 31
|                                               |  |            
|                                               |  | 2000        |         | 1999
|                                               |  |             |         |     
|Current asset  operating accruals             |  | $           | 2,505   |      |  | $ | 1,968   |  
|                                              
|                                              
|                                              
|                                              
|Current liability  inventories                |  |             | (40,281 | )    |  |   | (27,865 | )
|                                              
|                                              
|                                              
|                                              
|Long-term asset  benefit accruals             |  |             | 3,920   |      |  |   | 3,425   |  
|                                              
|                                              
|                                              
|                                              
|Long-term asset  operating loss carryforwards |  |             | 20,149  |      |  |   | 3,670   |  
|                                              
|                                              
|                                              
|                                              
|Long-term liability  accelerated depreciation |  |             | (53,185 | )    |  |   | (31,434 | )
|                                               |  |             |         |      |  |   |         |  
|                                               |  | $           | (66,892 | )    |  | $ | (50,236 | )
|                                               |  |             |         |      |  |   |         |  

22



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##### Table of Contents



Notes to Consolidated Financial Statements Continued


At December 31, 2000, certain United Sates subsidiaries had
operating loss carryforwards of $50,400. These carryforwards
expire in 2019 and 2020.

The Company has not provided additional United States income
taxes on approximately $305,000 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.

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 $2,572 or $.11; $1,680 or $.07; and $1,051 or
$.04 per common share  assuming dilution, in 2000, 1999
and 1998, respectively.

Income tax payments were $15,867, $7,355 and $24,611 during the
years ended December 31, 2000, 1999 and 1998, respectively.

F.  Pension and Other Postretirement Benefit Plans



23



---



##### 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, for certain employees in the United States.
Components of plan obligations and assets, and the recorded
asset (liability) at December 31 are as follows:

|                                                      |                        |          |         |                      |  |      |         |      |   |   |        |        |   |   |        |        |  
|----------------------------------------------------- | ---------------------- | -------- | ------- | -------------------- |  | ---- | ------- | ---- | - | - | ------ | ------ | - | - | ------ | ------ | -
|                                                      |                        |          |         |                     
|                                                      |                        | Pension  |         | Other Postretirement
|                                                      |                        | Benefits |         | Benefits            
|                                                      |                        |          |         |                     
|                                                      |                        | 2000     |         | 1999                 |  | 2000 |         | 1999
|                                                      |                        |          |         |                      |  |      |         |     
|Benefit obligation at beginning of year               |                        | $        | (13,524 | )                    |  | $    | (15,318 | )    |   | $ | (5,243 | )      |   | $ | (9,369 | )     
|                                                     
|                                                     
|                                                     
|                                                     
|Service cost                                          |                        |          | (162    | )                    |  |      | (189    | )    |   |   | (217   | )      |   |   | (425   | )     
|                                                     
|                                                     
|                                                     
|                                                     
|Interest cost                                         |                        |          | (1,022  | )                    |  |      | (977    | )    |   |   | (426   | )      |   |   | (470   | )     
|                                                     
|                                                     
|                                                     
|                                                     
|Participant contributions                             |                        |          |         |                      |  |      |         |      |   |   | (103   | )      |   |   | (89    | )     
|                                                     
|                                                     
|                                                     
|                                                     
|Actuarial (loss) gain                                 |                        |          | (91     | )                    |  |      | 2,160   |      |   |   | 433    |        |   |   | 4,746  |       
|                                                     
|                                                     
|                                                     
|                                                     
|Benefits paid                                         |                        |          | 816     |                      |  |      | 800     |      |   |   | 425    |        |   |   | 364    |       
|                                                      |                        |          |         |                      |  |      |         |      |   |   |        |        |   |   |        |       
|Benefit obligation at end of year                     |                        | $        | (13,983 | )                    |  | $    | (13,524 | )    |   | $ | (5,131 | )      |   | $ | (5,243 | )     
|                                                      |                        |          |         |                      |  |      |         |      |   |   |        |        |   |   |        |       
|Fair value of plan assets at beginning of year        |                        | $        | 14,983  |                      |  | $    | 14,767  |      |   | $ | 0      |        |   | $ | 0      |       
|                                                     
|                                                     
|                                                     
|                                                     
|Actual return on plan assets                          |                        |          | 15      |                      |  |      | 944     |      |   |   |        |        |   |   |        |       
|                                                     
|                                                     
|                                                     
|                                                     
|Employer contributions                                |                        |          | 483     |                      |  |      | 72      |      |   |   | 322    |        |   |   | 275    |       
|                                                     
|                                                     
|                                                     
|                                                     
|Participant contributions                             |                        |          |         |                      |  |      |         |      |   |   | 103    |        |   |   | 89     |       
|                                                     
|                                                     
|                                                     
|                                                     
|Benefits paid                                         |                        |          | (816    | )                    |  |      | (800    | )    |   |   | (425   | )      |   |   | (364   | )     
|                                                      |                        |          |         |                      |  |      |         |      |   |   |        |        |   |   |        |       
|Fair value of plan assets at end of year              |                        | $        | 14,665  |                      |  | $    | 14,983  |      |   | $ | 0      |        |   | $ | 0      |       
|                                                      |                        |          |         |                      |  |      |         |      |   |   |        |        |   |   |        |       
|Plan assets exceeding (less than) benefit obligations |                        | $        | 682     |                      |  | $    | 1,459   |      |   | $ | (5,131 | )      |   | $ | (5,243 | )     
|                                                     
|                                                     
|                                                     
|                                                     
|Unamortized:                                          |                        |          |         |                      |  |      |         |      |   |   |        |        |   |   |        |       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Net loss (gain)        |          |         | 972                  |  |      |         | (443 | ) |   |        | (2,023 | ) |   |        | (2,009 | )
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Prior service cost     |          |         |                      |  |      |         |      |   |   |        | 1,295  |   |   |        | 1,389  |  
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Employer contributions |          |         |                      |  |      |         |      |   |   |        | 81     |   |   |        | 69     |  
|                                                      |                        |          |         |                      |  |      |         |      |   |   |        |        |   |   |        |       
|Recorded asset (liability)                            |                        | $        | 1,654   |                      |  | $    | 1,016   |      |   | $ | (5,778 | )      |   | $ | (5,794 | )     
|                                                      |                        |          |         |                      |  |      |         |      |   |   |        |        |   |   |        |       

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 $3,137, $3,137
and $2,616, respectively, as of December 31, 2000 and
$2,885, $2,885 and $2,328, respectively, as of December 31,
1999.

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

|                               |  |                  |        |      |  |      |        |   |  |   |        |  
|------------------------------ |  | ---------------- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                               |  |                 
|                               |  | Pension Benefits
|                               |  |                 
|                               |  | 2000             |        | 1999 |  | 1998
|                               |  |                  |        |      |  |     
|Service cost                   |  | $                | 162    |      |  | $    | 189    |   |  | $ | 158    |  
|                              
|                              
|                              
|                              
|Interest cost                  |  |                  | 1,022  |      |  |      | 977    |   |  |   | 991    |  
|                              
|                              
|                              
|                              
|Expected return on plan assets |  |                  | (1,321 | )    |  |      | (1,249 | ) |  |   | (1,182 | )
|                               |  |                  |        |      |  |      |        |   |  |   |        |  
|                               |  |                  | (137   | )    |  |      | (83    | ) |  |   | (33    | )
|                              
|                              
|                              
|                              
|Curtailment gain               |  |                  |        |      |  |      |        |   |  |   | (2,664 | )
|                               |  |                  |        |      |  |      |        |   |  |   |        |  
|                               |  | $                | (137   | )    |  | $    | (83    | ) |  | $ | (2,697 | )
|                               |  |                  |        |      |  |      |        |   |  |   |        |  

24



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##### Table of Contents



Notes to Consolidated Financial Statements Continued


|                 |  |                               |     |      |  |      |     |  |  |   |       | 
|---------------- |  | ----------------------------- | --- | ---- |  | ---- | --- |  |  | - | ----- | 
|                 |  |                              
|                 |  | Other Postretirement Benefits
|                 |  |                              
|                 |  | 2000                          |     | 1999 |  | 1998
|                 |  |                               |     |      |  |     
|Service cost     |  | $                             | 217 |      |  | $    | 425 |  |  | $ | 474   | 
|                
|                
|                
|                
|Interest cost    |  |                               | 426 |      |  |      | 470 |  |  |   | 443   | 
|                
|                
|                
|                
|Net amortization |  |                               | 13  |      |  |      | 94  |  |  |   | 90    | 
|                 |  |                               |     |      |  |      |     |  |  |   |       | 
|                 |  | $                             | 656 |      |  | $    | 989 |  |  | $ | 1,007 | 
|                 |  |                               |     |      |  |      |     |  |  |   |       | 

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:

|                                                 |  |      |      |      |  |  |      |  
|------------------------------------------------ |  | ---- | ---- | ---- |  |  | ---- | -
|                                                 |  | 2000 |      | 1999
|                                                 |  |      |      |     
|Discount rate                                    |  |      | 7.75 | %    |  |  | 7.75 | %
|                                                
|                                                
|                                                
|                                                
|Return on pension plan assets                    |  |      | 9.00 | %    |  |  | 9.00 | %
|                                                
|                                                
|                                                
|                                                
|Projected health care cost trend rate            |  |      | 8.00 | %    |  |  | 8.50 | %
|                                                
|                                                
|                                                
|                                                
|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
|                                        |  |             |       |            
|2000 benefit cost                       |  | $           | 162   |             |  | $ | 139 | 
|                                       
|                                       
|                                       
|                                       
|Recorded liability at December 31, 2000 |  | $           | 1,052 |             |  | $ | 813 | 

G.  Stockholders Equity / Earnings Per Share



If a person or group acquires the threshold percentage of common
stock, each right will entitle the holder, other than the
acquiring party, to receive, upon exercise, shares of common
stock having a value equal to two times the exercise price of
the right. For example, at an exercise price of $160 per right,
each right not owned by an Acquiring Person (or by certain
related parties) following an event set forth in the preceding
paragraph would entitle its holder to purchase $320 worth of
common stock (or other consideration, as noted above) for $160.
Assuming that the common stock had a per share value of $40 at
such time, the holder of each valid right would be entitled to
purchase 8 shares of common stock for $160. If the Company is
acquired in a merger or other business combination, each right
will entitle the holder, other than the acquiring person, to
purchase securities of the surviving company having a market
value equal to twice the exercise price of the rights.

25



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##### Table of Contents



Notes to Consolidated Financial Statements Continued


The rights may be redeemed by the Board of Directors in whole,
but not in part, at a price of $0.01 per right. The rights have
no voting or dividend privileges and are attached to, and do not
trade separately from, the common stock. The rights expire on
November 14, 2006.

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
award was $570, and has been recorded as a separate component of
stockholders equity.

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
|                                                        |  |                       
|                                                        |  | 2000                   |        | 1999 |  | 1998
|                                                        |  |                        |        |      |  |     
|Net income                                              |  | $                      | 71,500 |      |  | $    | 55,825 |  |  | $ | 48,358 | 
|                                                        |  |                        |        |      |  |      |        |  |  |   |        | 
|Weighted average shares outstanding                     |  |                        | 23,843 |      |  |      | 23,767 |  |  |   | 22,874 | 
|                                                       
|                                                       
|                                                       
|                                                       
|Dilutive effect of stock options                        |  |                        | 408    |      |  |      | 557    |  |  |   | 672    | 
|                                                        |  |                        |        |      |  |      |        |  |  |   |        | 
|Weighted average shares outstanding  assuming dilution |  |                        | 24,251 |      |  |      | 24,324 |  |  |   | 23,546 | 
|                                                        |  |                        |        |      |  |      |        |  |  |   |        | 
|Net income per common share                             |  | $                      | 2.99   |      |  | $    | 2.35   |  |  | $ | 2.11   | 
|                                                        |  |                        |        |      |  |      |        |  |  |   |        | 
|Net income per common share  assuming dilution         |  | $                      | 2.95   |      |  | $    | 2.30   |  |  | $ | 2.05   | 
|                                                        |  |                        |        |      |  |      |        |  |  |   |        | 

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
|                                              |  |                       
|                                              |  | 2000                   |     | 1999 |  | 1998
|                                              |  |                        |     |      |  |     
|Risk-free interest rate                       |  |                        | 6.0 | %    |  |      | 7.0 | % |  |  | 5.5 | %
|                                             
|                                             
|                                             
|                                             
|Dividend yield                                |  |                        | 1.2 | %    |  |      | 1.2 | % |  |  | 1.2 | %
|                                             
|                                             
|                                             
|                                             
|Volatility factor of Company common stock     |  |                        | .25 |      |  |      | .25 |   |  |  | .25 |  
|                                             
|                                             
|                                             
|                                             
|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:

|                                                |  |      |        |      |  |      |        |  |  |   |        | 
|----------------------------------------------- |  | ---- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|                                                |  | 2000 |        | 1999 |  | 1998
|                                                |  |      |        |      |  |     
|Net income                                      |  | $    | 68,974 |      |  | $    | 53,610 |  |  | $ | 46,718 | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share                     |  | $    | 2.89   |      |  | $    | 2.26   |  |  | $ | 2.04   | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share  assuming dilution |  | $    | 2.84   |      |  | $    | 2.20   |  |  | $ | 1.98   | 

26



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


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

|                                                               |           |         |           |          |   |         |       |          |  |         |           |          |   |   |       |       |  |  |           |          |   |   |       |       | 
|-------------------------------------------------------------- | --------- | ------- | --------- | -------- | - | ------- | ----- | -------- |  | ------- | --------- | -------- | - | - | ----- | ----- |  |  | --------- | -------- | - | - | ----- | ----- | 
|                                                               |           |         |           |          |   |        
|                                                               |           | 2000    |           | 1999     |   | 1998   
|                                                               |           |         |           |          |   |        
|                                                               |           |         |           | Weighted |   |         |       | Weighted |  |         |           | Weighted
|                                                               |           |         |           | Average  |   |         |       | Average  |  |         |           | Average 
|                                                               |           |         |           | Exercise |   |         |       | Exercise |  |         |           | Exercise
|                                                               |           | Options |           | Price    |   | Options |       | Price    |  | Options |           | Price   
|                                                               |           |         |           |          |   |         |       |          |  |         |           |         
|Outstanding at January 1                                       |           |         | 1,725,862 |          |   | $       | 25.83 |          |  |         | 1,606,534 |          |   | $ | 22.01 |       |  |  | 1,367,773 |          |   | $ | 17.89 |      
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Granted   |         |           | 398,251  |   |         |       | 46.22    |  |         |           | 333,999  |   |   |       | 35.85 |  |  |           | 341,513  |   |   |       | 34.60 | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Exercised |         |           | (273,850 | ) |         |       | 24.87    |  |         |           | (214,671 | ) |   |       | 12.83 |  |  |           | (102,752 | ) |   |       | 7.00  | 
|                                                               |           |         |           |          |   |         |       |          |  |         |           |          |   |   |       |       |  |  |           |          |   |   |       |      
|Outstanding at December 31                                     |           |         | 1,850,263 |          |   | $       | 30.33 |          |  |         | 1,725,862 |          |   | $ | 25.83 |       |  |  | 1,606,534 |          |   | $ | 22.01 |      
|                                                              
|                                                              
|                                                              
|                                                              
|Exercisable at end of year                                     |           |         | 1,462,763 |          |   |         |       |          |  |         | 1,423,362 |          |   |   |       |       |  |  | 1,288,534 |          |   |   |       |      
|                                                              
|                                                              
|                                                              
|                                                              
|Weighted-average fair value of options granted during the year |           |         |           |          |   | $       | 13.69 |          |  |         |           |          |   | $ | 11.39 |       |  |  |           |          |   | $ | 10.05 |      

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, 2000:

|                          |                 |             |  |             |  |          |  |           |  |          |   |       |  |  |  |         |  |  |   |       | 
|------------------------- | --------------- | ----------- |  | ----------- |  | -------- |  | --------- |  | -------- | - | ----- |  |  |  | ------- |  |  | - | ----- | 
|                          |                 |             |  |            
|                          |                 | Outstanding |  | Exercisable
|                          |                 |             |  |            
|                          |                 |             |  | Weighted    |  |          |  |          
|                          |                 |             |  | Average     |  | Weighted |  |           |  | Weighted
|                          |                 |             |  | Remaining   |  | Average  |  |           |  | Average 
|                          |                 | Number of   |  | Contractual |  | Exercise |  | Number of |  | Exercise
|                          |                 | Shares      |  | Life        |  | Price    |  | Shares    |  | Price   
|                          |                 |             |  |             |  |          |  |           |  |         
|Range of exercise prices: |                 |             |  |             |  |          |  |           |  |          |   |       |  |  |  |         |  |  |   |      
|                         
|                         
|                         
|                         
|                          | $5.04  $13.00  |             |  | 428,118     |  |          |  | 2.3       |  |          | $ | 8.38  |  |  |  | 428,118 |  |  | $ | 8.38  | 
|                         
|                         
|                         
|                         
|                          | $17.31  $29.96 |             |  | 282,145     |  |          |  | 6.0       |  |          | $ | 23.59 |  |  |  | 282,145 |  |  | $ | 23.59 | 
|                         
|                         
|                         
|                         
|                          | $35.38  $46.75 |             |  | 1,140,000   |  |          |  | 8.5       |  |          | $ | 40.22 |  |  |  | 752,500 |  |  | $ | 36.86 | 

H.  Commitments And Contingencies



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 (Halmahera) nickel and cobalt
laterite deposits. The Company has agreed to purchase all
production at Halmahera, which Weda has estimated to yield
approximately 30,000 tons of nickel and 3,000 tons of cobalt
annually, beginning in 2004. At December 31, 2000, the
Company had invested approximately $4.6 million in Weda,
representing a 19% interest.

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

27



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


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.

I.  Reportable Segment and Geographic Information



|                           |                        |      |         |         |  |      |         |         |  |   |         |         | 
|-------------------------- | ---------------------- | ---- | ------- | ------- |  | ---- | ------- | ------- |  | - | ------- | ------- | 
|                           |                        | 2000 |         | 1999    |  | 1998
|                           |                        |      |         |         |  |     
|Information About Products |                        |      |         |         |  |      |         |         |  |   |         |        
|Net Sales                  |                        |      |         |         |  |      |         |         |  |   |         |        
|                          
|                          
|                          
|                          
|                           | Organics               |      | $       | 129,610 |  |      | $       | 127,246 |  |   | $       | 115,895 | 
|                          
|                          
|                          
|                          
|                           | Inorganics             |      |         | 241,466 |  |      |         | 215,963 |  |   |         | 247,896 | 
|                          
|                          
|                          
|                          
|                           | Powders                |      |         | 202,405 |  |      |         | 163,746 |  |   |         | 157,435 | 
|                          
|                          
|                          
|                          
|                           | Metals                 |      |         | 314,262 |  |      |         |         |  |   |         |         | 
|                           |                        |      |         |         |  |      |         |         |  |   |         |        
|                           |                        | $    | 887,743 |         |  | $    | 506,955 |         |  | $ | 521,226 |        
|                           |                        |      |         |         |  |      |         |         |  |   |         |        
|Geographic Information     |                        |      |         |         |  |      |         |         |  |   |         |        
|Net Sales(1)               |                        |      |         |         |  |      |         |         |  |   |         |        
|                          
|                          
|                          
|                          
|                           | United States          |      | $       | 318,621 |  |      | $       | 286,503 |  |   | $       | 295,791 | 
|                          
|                          
|                          
|                          
|                           | Finland                |      |         | 532,456 |  |      |         | 192,317 |  |   |         | 201,059 | 
|                          
|                          
|                          
|                          
|                           | Other                  |      |         | 36,666  |  |      |         | 28,135  |  |   |         | 24,376  | 
|                           |                        |      |         |         |  |      |         |         |  |   |         |        
|                           |                        | $    | 887,743 |         |  | $    | 506,955 |         |  | $ | 521,226 |        
|                           |                        |      |         |         |  |      |         |         |  |   |         |        
|Long-Lived Assets          |                        |      |         |         |  |      |         |         |  |   |         |        
|                          
|                          
|                          
|                          
|                           | United States          |      | $       | 117,303 |  |      | $       | 121,178 |  |   | $       | 114,441 | 
|                          
|                          
|                          
|                          
|                           | Finland                |      |         | 246,840 |  |      |         | 118,341 |  |   |         | 95,755  | 
|                          
|                          
|                          
|                          
|                           | Other                  |      |         | 121,209 |  |      |         | 79,296  |  |   |         | 35,149  | 
|                           |                        |      |         |         |  |      |         |         |  |   |         |        
|                           |                        | $    | 485,352 |         |  | $    | 318,815 |         |  | $ | 245,345 |        
|                           |                        |      |         |         |  |      |         |         |  |   |         |        
|Net Sales(2)               |                        |      |         |         |  |      |         |         |  |   |         |        
|                          
|                          
|                          
|                          
|                           | Americas               |      | $       | 312,486 |  |      | $       | 258,547 |  |   | $       | 271,038 | 
|                          
|                          
|                          
|                          
|                           | Europe                 |      |         | 452,749 |  |      |         | 158,676 |  |   |         | 166,792 | 
|                          
|                          
|                          
|                          
|                           | Asia Pacific and Other |      |         | 122,508 |  |      |         | 89,732  |  |   |         | 83,396  | 
|                           |                        |      |         |         |  |      |         |         |  |   |         |        
|                           |                        | $    | 887,743 |         |  | $    | 506,955 |         |  | $ | 521,226 |        
|                           |                        |      |         |         |  |      |         |         |  |   |         |        



---



|    |                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------
|(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.              

28



---



##### Table of Contents



Notes to Consolidated Financial Statements Continued


Sales to one customer were approximately 18% of the
Companys net sales in 2000.

J.  Quarterly Data (Unaudited)

|                                                |  |               |               |         |  |              |               |             |  |  |               |  |  |  |               | 
|----------------------------------------------- |  | ------------- | ------------- | ------- |  | ------------ | ------------- | ----------- |  |  | ------------- |  |  |  | ------------- | 
|                                                |  |              
|                                                |  | Quarter Ended
|                                                |  |              
|                                                |  | March 31      |               | June 30 |  | September 30 |               | December 31
|                                                |  |               |               |         |  |              |               |            
|2000                                            |  |               |               |         |  |              |               |             |  |  |               |  |  |  |               | 
|                                               
|                                               
|                                               
|                                               
|Net sales                                       |  |               | $148,285      |         |  |              | $273,522      |             |  |  | $233,384      |  |  |  | $232,552      | 
|                                               
|                                               
|                                               
|                                               
|Gross profit                                    |  |               | 42,002        |         |  |              | 55,400        |             |  |  | 56,830        |  |  |  | 59,634        | 
|                                               
|                                               
|                                               
|                                               
|Income from operations                          |  |               | 27,041        |         |  |              | 36,912        |             |  |  | 37,529        |  |  |  | 37,011        | 
|                                               
|                                               
|                                               
|                                               
|Net income                                      |  |               | 15,150        |         |  |              | 18,428        |             |  |  | 18,627        |  |  |  | 19,295        | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share                     |  |               | $.63          |         |  |              | $.77          |             |  |  | $.78          |  |  |  | $.81          | 
|                                               
|                                               
|                                               
|                                               
|Net income per common share  assuming dilution |  |               | $.63          |         |  |              | $.76          |             |  |  | $.77          |  |  |  | $.79          | 
|                                               
|                                               
|                                               
|                                               
|Market price: high-low                          |  |               | 46.250-33.750 |         |  |              | 50.875-41.500 |             |  |  | 48.500-40.250 |  |  |  | 57.000-40.130 | 
|                                               
|                                               
|                                               
|                                               
|Dividends paid per share                        |  |               | $.11          |         |  |              | $.11          |             |  |  | $.11          |  |  |  | $.11          | 

|                                                |  |  |               |  |  |  |               |  |  |  |               |  |  |  |               | 
|----------------------------------------------- |  |  | ------------- |  |  |  | ------------- |  |  |  | ------------- |  |  |  | ------------- | 
|                                               
|                                               
|                                               
|                                               
|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                          |  |  | 36.563-26.875 |  |  |  | 42.500-32.500 |  |  |  | 40.063-33.750 |  |  |  | 40.500-31.500 | 
|                                               
|                                               
|                                               
|                                               
|Dividends paid per share                        |  |  | $.10          |  |  |  | $.10          |  |  |  | $.10          |  |  |  | $.10          | 




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



29



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##### Table of Contents






PART III




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



30



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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, 2000 and
	1999  page 14.                                                                                                                                                                       
|
| |     | Statements of Consolidated Income for the years ended
	December 31, 2000, 1999 and 1998  page 15.                                                                                                                                          
|
| |     | Statements of Consolidated Stockholders Equity for the
	years ended December  31, 2000, 1999 and 1998 
	page 16.                                                                                                                          
|
| |     | Statements of Consolidated Cash Flows for the years ended
	December 31, 2000, 1999 and 1998  page 17.                                                                                                                                      
|
| |     | Notes to Consolidated Financial Statements 
	pages 18 through 29.                                                                                                                                                                          
|
| | (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  |  |  | 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).                                                                                                                                                                                  |  |  
| | 4.3  |  |  | 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).                                                                                                                                                                                                                             |  |  
| | 4.4 |  |  | Credit Agreement dated as of April 3, 2000 among OM Group,
	Inc., as borrower; the lending institutions named therein as
	lenders; DLJ Capital Funding, Inc., as lender, the syndication
	agent and a joint lead arranger; National City Bank as a lender,
	the swing line lender, the letter of credit issuer, the
	administrative agent, the collateral agent and a joint lead
	arranger; and ABN Amro Bank N.V. as documentation agent. |  |  



| |                         
| | ------------------------
| | (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.                                                                                                                    |  | §

31



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##### Table of Contents



| |        |  |  |                                                                                                                                                                                                                                                                                                                                                                                                    |  |  
| | ------ |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -
| | *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 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).                                                                                                                                                                               |  |  
| | +10.18 |  |  | 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). |  |  
| | +10.19 |  |  | 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).                                                                                                      |  |  
| | +10.20 |  |  | 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).                                                                                                                      |  |  

32



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##### Table of Contents



| |        |  |  |                                                                                                                                                                                                                                                                           |  | 
| | ------ |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| | +10.21 |  |  | 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). |  | 
| | +10.22 |  |  | 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).      |  | 
| | *10.23 |  |  | OM Group, Inc. 1998 Long-Term Incentive Compensation Plan.                                                                                                                                                                                                                |  | 
| | *10.24 |  |  | Employment Agreement between OM Group, Inc. and Edward W. Kissel
	dated June 1, 1999.                                                                                                                                                                                     |  | 
| | *10.25 |  |  | Separation Agreement between OM Group, Inc. and Thomas E.
	Fleming dated October 1, 1999.                                                                                                                                                                                 |  | 
| | #10.26 |  |  | Share Purchase Agreement as of February 23, 2000, by and
	between Outokumpu Nickel B.V., Outokumpu Oyj, OM Group, Inc. and
	OMG Kokkola Chemicals Holding B.V.                                                                                                            |  | 
| | 10.27  |  |  | Lease agreement between Outokumpu Harjavalta Metals Oy and
	Outokumpu Nickel Oy.                                                                                                                                                                                          |  | 
| |       |  |  | Filed as Exhibit 10.1 to the OM Group, Inc. Form 10-Q
	filed on May 12, 2000 and incorporated herein by reference.                                                                                                                                                        |  | 
| | *      |  |  | Indicate a management contract, executive compensation plan or
	arrangement.                                                                                                                                                                                              |  | 
| | +      |  |  | Portions of Exhibit have been omitted and filed separately with
	the Securities and Exchange Commission in reliance on
	Rule 24b-2 and the Companys request for confidential
	treatment                                                                                  |  | 
| | #      |  |  | Filed as Exhibit 2.1 to the OM Group, Inc. Form 8-K
	filed on April 18, 2000 and incorporated herein by
	reference.                                                                                                                                                       |  | 
| |       |  |  | 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           

(b)  There were no reports filed on Form 8-K during
the last quarter of 2000.

33



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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 16, 2001 | 
|                                                                   
|/s/ Edward W. Kissel*
	           Edward
	 W. Kissel                |  | President and Chief Operating Officer                                 |  |      | March 16, 2001 | 
|                                                                   
|/s/ Markku Toivanen*
	           Markku
	 Toivanen                  |  | Director                                                              |  |      | March 16, 2001 | 
|                                                                   
|/s/ Lee R. Brodeur*
	           Lee
	 R. Brodeur                    |  | Director                                                              |  |      | March 16, 2001 | 
|                                                                   
|/s/ Thomas R. Miklich*
	           Thomas
	 R. Miklich              |  | Director                                                              |  |      | March 16, 2001 | 
|                                                                   
|/s/ John E. Mooney*
	           John
	 E. Mooney                    |  | Director                                                              |  |      | March 16, 2001 | 
|                                                                   
|/s/ Frank Butler*
	           Frank
	 Butler                        |  | Director                                                              |  |      | March 16, 2001 | 
|                                                                   
|/s/ James M. Materna*
	           James
	 M. Materna                |  | Chief Financial Officer (Principal Financial and Accounting
	Officer) |  |      | March 16, 2001 | 
|                                                                   
|/s/ James P. Mooney
	           James
	 P. Mooney
	Attorney-in-Fact |  |                                                                       |  |      | March 16, 2001 | 



|  |                                                                                                                                                                                                                                           
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | 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.

34



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##### Table of Contents



EXHIBIT INDEX

|            |  |                                                                                        
|----------- |  | ---------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit                                                                                
|            |  |                                                                                        
|10.27       |  | Lease agreement between Outokumpu Harjavalta Metals Oy and
        Outokumpu Nickel Oy.
|21          |  | List of Subsidiaries                                                                   
|23          |  | Consent of Ernst & Young LLP                                                           
|24          |  | Power of Attorney