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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ---------------------

                                   FORM 10-K

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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

                          COMMISSION FILE NO. 1-13394

                             CHASE INDUSTRIES INC.
             (Exact name of Registrant as specified in its charter)

<Table>
<S>                                            <C>
                   DELAWARE                                      51-0328047
           (State of Incorporation)                 (I.R.S. Employer Identification No.)

            14212 COUNTY ROAD M-50
               MONTPELIER, OHIO                                    43543
   (Address of principal executive offices)                      (Zip Code)
</Table>

                                 (419) 485-3193
              (Registrant's telephone number, including area code)

          Securities Registered Pursuant to Section 12(b) of the Act:

<Table>
<S>                                            <C>
                                                           NAME OF EACH EXCHANGE
             TITLE OF EACH CLASS                            ON WHICH REGISTERED
---------------------------------------------- ----------------------------------------------

    Common Stock, par value $.01 per share                New York Stock Exchange

      Rights to Purchase Series A Junior                  New York Stock Exchange
                Participating
  Preferred Stock, par value $.01 per share
</Table>

          Securities Registered Pursuant to Section 12(g) of the Act:

                                      NONE

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

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [ ]

<Table>
<S>                                                            <C>
Aggregate market value of outstanding Common Stock held by
  non-affiliates of the Registrant, as of March 21, 2002....   $63,283,971
Number of shares of Common Stock outstanding as of March 21,
  2002......................................................    15,298,045
Number of shares of Nonvoting Common Stock outstanding as of
  March 21, 2002............................................             0
</Table>

                      DOCUMENTS INCORPORATED BY REFERENCE

                                      None

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                             CHASE INDUSTRIES INC.

                          2001 FORM 10-K ANNUAL REPORT

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                            PAGE
                                                                            ----
<S>          <C>                                                            <C>
PART I
  Item 1.    Business....................................................     1
  Item 2.    Properties..................................................     5
  Item 3.    Legal Proceedings...........................................     6
  Item 4.    Submission of Matters to a Vote of Security Holders.........     7

PART II
  Item 5.    Market for Registrant's Common Equity and Related Matters...     8
  Item 6.    Selected Financial Data.....................................     9
  Item 7.    Management's Discussion and Analysis of Financial Condition
             and Results of Operations...................................    10
  Item 7A.   Quantitative and Qualitative Disclosures About Market
             Risk........................................................    21
  Item 8.    Financial Statements and Supplementary Data.................    21
  Item 9.    Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure....................................    42

PART III
  Item 10.   Directors and Executive Officers of the Registrant..........    43
  Item 11.   Executive Compensation......................................    45
  Item 12.   Security Ownership of Certain Beneficial Owners and
             Management..................................................    57
  Item 13.   Certain Relationships and Related Transactions..............    58

PART IV
  Item 14.   Exhibits, Financial Statements, Schedules and Reports on
             Form 8-K....................................................    60
</Table>

                                        i
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

GENERAL

     Chase Industries Inc. (the "Company"), through its wholly-owned subsidiary
Chase Brass & Copper Company, Inc. ("CBCC"), is a leading manufacturer of brass
rod. The Company's principal executive offices are located at 14212 County Road
M-50, Post Office Box 152, Montpelier, Ohio 43543, and its telephone number is
(419) 485-3193.

     CBCC is an ISO 9002 certified manufacturer and supplier of free-machining
and forging brass rod in the United States, Canada and Mexico. Free-machining
and forging brass rod, which CBCC estimates represent approximately 85% and 10%,
respectively, of annual brass rod shipments by U.S. mills, are the two primary
types of brass rod used in the United States and Canada. CBCC is one of the
largest manufacturers and suppliers in the United States and Canada of
free-machining brass rod. CBCC's diverse customer base of more than 250
companies uses its "Blue Dot" trademark brass rod to produce a variety of
products, such as faucets, plumbing fittings, heating and air conditioning
components, industrial valves, automotive parts and numerous hardware
components.

     CBCC traces its roots to a brass button-making business started in 1837 in
Waterbury, Connecticut ("Old Chase"), which began brass rod operations in 1917.
The Company was formed in 1990 by Martin V. Alonzo, who retired as the Company's
Chairman, President and Chief Executive Officer in September 2001, and Citicorp
Venture Capital Ltd. ("CVC") and certain affiliates of CVC for the purpose of
acquiring the assets and operations of the brass rod division of Old Chase, then
a subsidiary of BP America, Inc. (the "CBCC Acquisition"). The CBCC Acquisition
was consummated August 24, 1990, at which time the Company began operations.

DISCONTINUED OPERATIONS

     On August 30, 1996, the Company acquired, through its wholly-owned
subsidiary Leavitt Tube Company, Inc. ("Leavitt"), the assets and operations of
the steel tube division ("Old Leavitt") of UNR Industries, Inc. ("UNR") (the
"Leavitt Acquisition"). Upon consummation of the Leavitt Acquisition, Leavitt
continued operations in the manufacture and sale of structural and mechanical
steel tubing and structural pipe and is a leading producer and supplier in the
United States. Structural steel tubing is used in farm equipment,
non-residential construction and other commercial applications. Mechanical steel
tubing is used in a broad range of consumer and commercial products, including
furniture and fixtures, lawn-care products, storage racks, exercise equipment,
bicycles and machine tools. Structural pipe is used for handrails, scaffolding
and communications towers.

     The competitive environment in the welded steel tube industry became
increasingly difficult as a result of the Asian crisis in June 1997 and its
aftermath combined with new production capacity being introduced. Consequently,
tubing shipments and margins came under severe pressure and Leavitt's returns on
invested capital consistently fell short of expectations. In 1999 and 2000, with
the help of outside consultants, the Company conducted an analysis of methods to
increase profitability by restructuring Leavitt and reducing its costs. While
cost reductions and improvements were implemented, the Company concluded that
Leavitt could not achieve acceptable rates of return on invested capital for the
foreseeable future. On March 15, 2001, the Company signed a definitive agreement
to sell the assets and operations of Leavitt to privately-held Pinkert
Industrial Group, LLC, headquartered in Chicago. The sale closed on March 30,
2001. The Company received $31.7 million in cash, before closing costs and fees
of $1.9 million. In fourth quarter 2000, the Company recorded an estimated loss
on the sale of Leavitt of $36.0 million, including income tax benefit of $11.3
million. In fourth quarter 2001, the Company recorded an additional $0.2 million
loss on the sale of Leavitt, which resulted from the additional costs associated
with certain post-closing liabilities maintained by the Company. The disposal of
the assets and operations of Leavitt represented the disposal of a business
segment. Consequently, the consolidated financial statements reflect Leavitt as
a discontinued operation. For

                                        1
<PAGE>

discontinued operations information see Note 13 of Notes to Consolidated
Financial Statements included in Item 8.

PRODUCTS

     CBCC principally produces round and hexagonal shaped brass rod in sizes
ranging from 5/16 inch to 4 inches in diameter, which are the primary shapes and
sizes used by consumers of free-machining and forging brass rod. The main
attributes of brass rod are its excellent corrosion resistance, the ease with
which it can be machined or forged into a variety of shapes and its moderate
strength. Free-machining brass rod is used to produce brass products, such as
valves and fittings, by a machining process during which the brass rod is
formed, drilled and cut. Forging brass is used to produce brass products by a
process during which a heated slug cut from a rod is pressed in an impression
die and then machined.

CAPITAL INVESTMENT AND CONTINUING PRODUCTIVITY IMPROVEMENT PROGRAMS

     CBCC is committed to identifying and implementing programs designed to
increase plant utilization, productivity and profitability. Since the CBCC
Acquisition, certain aspects of the manufacturing process have been improved
through reallocation of employee responsibilities and in-house modifications of
the manufacturing operations. The Company also has completed capital
improvements which have improved the reliability and enhanced the production
capacity and productivity of CBCC's manufacturing facility.

     In 1996, CBCC launched the "Project 400" capital expansion project. The
project is designed to increase foundry, extrusion and finishing capabilities
with an ultimate goal of increasing finished brass rod production capability by
one-third to more than 400 million pounds annually. The first phase of the
project was completed in early 1998 with the installation of three new billet
heaters that increased finished brass rod capacity by about 17 percent. The new
billet heaters have increased productivity and improved quality. The total cost
of the first phase of the project was approximately $12 million and was financed
through a six-year operating lease.

     In second quarter 1998, the Company announced Phase II of Project 400,
which was a $30 million multi-year investment to construct an additional brass
foundry enabling CBCC to increase casting capacity and to provide customers with
multiple alloys. The new brass foundry began producing billets on a trial basis
in February 2000, and is now producing billets at expected production rates. The
new foundry has reduced metal costs and increased production capacity.

     In fourth quarter 1999, the Company announced Phase III of Project 400,
which is a $50 million multi-year investment for a second extrusion press and
additional finishing equipment. This investment, in addition to those in the
earlier initiative, as discussed above, comprises a $92 million expansion
through Project 400. When Phase III comes on line, which is expected to occur in
second quarter 2002, CBCC's production capacity will increase by about one-third
to more than 400 million pounds annually. The new equipment has been installed,
some is already in production and the remainder is at varying stages of
commissioning. The Company anticipates that capital projects will be paid for
with cash flows provided by operating activities, cash on hand and the revolving
credit facility, as necessary.

     ISO 9002 Certification.  CBCC has significant quality procedures and
controls in place in all aspects of its operations. Effective February 11, 1996,
CBCC became the first U.S. brass rod mill to receive an ISO 9002 quality system
certification. ISO 9002 is a quality system standard for manufacturers that has
been adopted by at least 74 nations. The ISO 9002 quality system certification
signifies a quality system's adherence to the internationally recognized ISO
standards.

MARKETING AND DISTRIBUTION

     The Company markets its products through a direct sales force whose
territory covers the United States, Canada and Mexico. Management believes that
its experienced sales force provides an important link with its customers and
increases the quality of its service. The Company distributes its products to a
diverse customer base of over 250 companies in North America. The Company's
customers include original equipment

                                        2
<PAGE>

manufacturers, independent fabricators and distributors. CBCC's original
equipment manufacturing customers primarily are in the construction and
remodeling, industrial machinery and equipment, electrical and electronic,
transportation and consumer durable goods industries. Independent fabricators
produce products for sale to original equipment manufacturers, while
distribution and service centers supply products to original equipment
manufacturers and independent fabricators. The Company's products are
distributed either by direct shipment from the manufacturing facilities or by
shipment from CBCC's warehouse in Los Angeles. See "Item 2. Properties."

COMPETITION

     The industries in which the Company operates are highly competitive. Based
on available industry data, the Company estimates that it supplied approximately
one-third of the brass rod shipped by U. S. mills in 2001. In addition to CBCC,
there currently are five U.S. companies operating a total of six U.S. brass rod
mills, all of which produce both free-machining and forging brass rod. These
competitors are Cerro Metal Products Company, Inc., Mueller Brass Co., Inc.,
Extruded Metals Inc., Chicago Extruded Metals Company and Ansonia Copper &
Brass, Inc. Although the Company competes with other manufacturers, the Company
is unable to determine the extent to which these competitors' product lines
compete directly with the Company's products because the competitors also
produce products that the Company does not produce.

     The Company also is subject to competition from imported products and
alternative materials, such as ceramics, plastics and steel. The principal
competitive factors in the Company's business are price, quality, on-time
delivery and service. The Company believes that it is an industry leader as a
result of its ability to consistently provide a broad range of high-quality
products, on-time delivery and superior service at competitive prices. See "Item
7. Management's Discussion and Analysis of Financial Condition and Results of
Operations -- General -- General Economic and Industry Conditions."

RAW MATERIALS AND SUPPLIES

     The principal raw material used by the Company is brass scrap. The Company
believes adequate supplies of this raw material are available to the Company.
The Company does not rely on any one supplier of raw materials and it does not
believe that the loss of any one source would have a material impact on its
business. See "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- General -- Operations."

CUSTOMERS

     During 2001, 2000 and 1999, no customer or any affiliated group of
customers accounted for more than 10% of the Company's net sales, and the
Company does not anticipate that any customer or affiliated group of customers
will account for more than 10% of the Company's net sales in 2002. The Company
does business with several companies owned by the Masco Corporation. As
individual companies, none of these account for more than 10% of the total
pounds shipped by CBCC in 2001. However, in aggregate, 18% of total pounds
shipped by CBCC in 2001 were to Masco companies. Also, in aggregate, the Masco
companies do not account for more than 10% of the Company's net sales, primarily
due to the fact that most of these sales are made on a tolling basis, where the
customer consigns brass scrap to CBCC and is only charged a fabrication price
for processing the brass scrap into finished rod.

BACKLOG ORDERS

     As of March 21, 2002 and 2001, CBCC had backlog orders totaling $12.6
million and $12.8 million, respectively. The slight decrease from 2001 was the
result of a 4% decrease in the brass metal price partially offset by an
improvement in customer demand that has slowly built throughout first quarter
2002. See "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations -- General -- General Economic and Industry
Conditions." The Company anticipates that all current backlog orders will be
filled during 2002, but is unable to estimate the amount of backlog that will
exist as of year end 2002.

                                        3
<PAGE>

TRADEMARKS

     The Company owns the registered trademarks CHASE and a centaur design
(which is CBCC's logo) in the United States and Canada, and the registered
trademark "BLUE DOT" and its design in the United States and Mexico, for use in
connection with CBCC's products. The Company also owns the registered trademarks
CHASE BRASS & COPPER CO. and a centaur design in Mexico. Because of the
recognition of these trademarks in the industries in which CBCC operates, the
Company considers these intellectual property rights important to its business.

EMPLOYEES

     At December 31, 2001, CBCC had approximately 300 full-time employees, of
whom approximately 100 were salaried and approximately 200 were hourly. The
Company believes that its relations with its employees are good and currently
does not anticipate any work stoppages.

ENVIRONMENTAL REGULATION

     The Company's operations are subject to federal, state and local pollution
control laws and regulations relating to the discharge of hazardous or regulated
materials into the environment, the transport and sale of hazardous materials
and the disposal of certain materials and wastes. These laws and related
regulations are changing constantly and, as a consequence, are subject to
differing interpretations by the agencies that administer them. Moreover,
increasingly stringent regulations often result in the mandatory implementation
of additional and/or modified pollution control procedures and processes which
may result in material increases in compliance costs.

     For the above reasons, the Company cannot predict with certainty its
aggregate future capital expenditures for pollution control. However, the
Company currently estimates that it will incur capital expenditures for
pollution control of approximately $2.5 million in 2002. Estimates of capital
expenditures for pollution control purposes beyond 2002 are even more uncertain.
However, assuming no significant manufacturing process changes and no
significant changes in applicable laws or regulations, the Company currently
anticipates that its capital expenditures for pollution control purposes during
the period of 2003-2005 will aggregate approximately $1.5 million. These
estimates are exclusive of expenditures associated with on-site remediation
activities as more fully discussed below. The Company believes that expenditures
for pollution control equipment will continue to be required in the future for
continued compliance with applicable environmental laws and regulations.

     Any capital expenditures for pollution control will affect earnings to some
degree since funds expended for this purpose generally provide minimal, if any,
monetary return on investment and may divert capital from income-producing
activities. However, the Company does not believe that the current anticipated
capital expenditures for this purpose will have a material impact on the
Company's earnings or consolidated financial position.

     Preliminary studies conducted immediately prior to the CBCC Acquisition
indicated that certain areas of the site upon which CBCC's manufacturing
facility is located had been contaminated by certain volatile organic compounds
("VOCs") as well as total petroleum hydrocarbons and certain metals associated
with historical operating practices. As described in Note 11 of Notes to
Consolidated Financial Statements included in Item 8, under the terms of a
Remediation Agreement entered into in 1990 in connection with the CBCC
Acquisition between the Company and certain affiliates of BP America, Inc., as
the owners of the brass rod division of Old Chase prior to the CBCC Acquisition
(collectively, "BP"), BP was responsible for certain remediation activities
attributable to contamination resulting from operations prior to the CBCC
Acquisition. BP also is obligated under the Asset Purchase Agreement pursuant to
which the Company acquired the assets and operations of CBCC from BP (the "CBCC
Purchase Agreement") to indemnify the Company for certain liabilities arising
out of certain environmental conditions that existed as of the CBCC Acquisition
date.

     CBCC completed remediation activities for a portion of its site in 1998 and
completed additional remedial actions for other portions of its site in fourth
quarter 2000. CBCC also is in the process of developing

                                        4
<PAGE>

a remediation plan for two additional areas of its site. Based on preliminary
cost estimates provided by CBCC's independent environmental consultant, and
subject to the development by the consultant of a remediation plan for these
areas of the site and the receipt of bids for the remediation activities
required under such plan, the Company estimates that the costs for this project
will be approximately $3 million, based upon capital and operating costs for a
period of five years. However, subject to pilot testing and operating
experience, costs may increase or decrease depending on the scale and operating
period. As described in Note 11 of Notes to Consolidated Financial Statements
included in Item 8, claims asserted by the Company against BP under the
Remediation Agreement and the CBCC Purchase Agreement for, among other things,
costs incurred and anticipated to be incurred by the Company for these
environmental remediation activities were settled pursuant to a Settlement
Agreement and Mutual Release entered into in February 2001. In conjunction with
the BP settlement, the Company recorded an additional $4.8 million environmental
reserve. The Company had remediation spending of $0.6 million for the twelve
months ended December 31, 2001. The environmental reserve totaled $8.2 million
at December 31, 2001.

     Based on currently available data, the Company believes that, upon
completion of the remediation activities described above, CBCC will have
substantially completed the remediation activities at its site that are
necessary to address contamination of which CBCC currently is aware. However,
until completion of these remedial and associated investigatory activities and
approval from the Ohio EPA of CBCC's activities to remediate this contamination,
as well as remediation activities previously conducted, the Company cannot be
certain that further remediation activities will not be required at CBCC's site.
To the extent regulatory agencies require additional remediation at those areas
of CBCC's site where CBCC previously has undertaken remediation activities, or
require excavation of soil at the two areas for which CBCC currently is
developing a remediation plan for in situ remediation, as a part of the
settlement of the litigation with BP in first quarter 2001, BP has retained
financial responsibility for such remediation activities.

     The Company expects to fund cleanup costs related to the remaining
remediation activities at its manufacturing facility with cash on hand and
borrowings under its existing revolving credit facility. Therefore, the Company
does not believe that costs that may be incurred in connection with the
investigation and cleanup associated with the environmental matters discussed
above will have a material adverse effect on the Company's financial position,
results of operations or liquidity. For additional information regarding the
environmental matters referenced above, see "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Environmental
Matters" and Note 11 of Notes to Consolidated Financial Statements included in
Item 8.

ITEM 2.  PROPERTIES

     The Company owns all of its facilities except as indicated below. The
Company believes its plants are suitable for their purposes, are well maintained
and are adequately insured.

     CBCC's manufacturing facility and the Company's executive and general
offices are located on a 75-acre site owned by the Company in Montpelier, Ohio,
near the Indiana and Michigan borders. CBCC's manufacturing facility in
Montpelier consists of one plant of approximately 265,000 square feet. The plant
was originally constructed in 1965 expressly for the purpose of producing
free-machining brass rod and the Company believes that it is the most modern
brass rod facility in the United States.

     CBCC also leases a warehouse in Los Angeles, California, that contains
approximately 47,000 square feet of storage space. The Los Angeles warehouse
lease expires in 2006. The Los Angeles warehouse lease contains a five-year
renewal provision.

     CBCC manufactures substantially all of the brass rod it ships. CBCC's
manufacturing facility has operated seven days a week, 24 hours a day, since
1981 (except for downtime relating to regular maintenance, capital improvements
and minor mechanical failures). CBCC's "Project 400" capital expansion program
is designed to further increase finished brass rod capacity by one-third to more
than 400 million pounds annually. See "Item 1. Business -- Capital Investment
and Continuing Productivity Improvement Programs."

                                        5
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     CBCC and/or other entities named "Chase Brass & Copper Co." (which may
include Old Chase or divisions of Old Chase) have been named by governmental
agencies and/or private parties as a potentially responsible party ("PRP") under
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA") and/or state laws with respect to four sites, and may have been
identified as PRP at one additional site, as described in the following
paragraphs.

     CBCC has been named one of over 130 defendants in a CERCLA Section 107
action styled Ashland Oil, Inc. v. Acme Scrap Iron & Metal Corp., et. al. (Case
No. I:94 CV 1592), which seeks recovery of response costs previously spent and
proposed to be spent by the plaintiff Ashland Oil at the Huth Oil Services
Company site located in Cleveland, Ohio. A waste oil reclamation facility was
operated at the site from 1938 until 1990. Beginning in 1983, and at various
other times until 1990, both the U.S. EPA and the Ohio EPA conducted inspections
and sampling at this site. In October 1990, the U.S. EPA ordered the plaintiffs,
Ashland Chemical Company (a division of Ashland Oil, Inc.), The Cleveland
Electric Illuminating Company and Huth Oil Services Company, to remediate the
site. As a result thereof, the plaintiff has alleged that between 1990 and 1993
it and the other ordered parties have incurred response costs in excess of $10
million. The complaint alleges that the defendants are each strictly, as well as
jointly and severally, liable. The Company believes, however, that CBCC has had
no contact with the site and has no knowledge as to what, if any, share of
response costs has been allocated to CBCC. BP has assumed the defense of this
suit because alleged events giving rise to CERCLA liability occurred prior to
the CBCC Acquisition.

     CBCC has been notified by a group of private parties of its potential
identification as a PRP at a site in Tifton, Georgia, commonly known as the
"SoGreen" site. According to the notice, a flue dust and flyash recycling
facility was operated at the site from approximately 1976 until 1993. Pursuant
to a consent order entered into between Atlantic Steel Industries, Inc., Florida
Steel Corporation, Georgetown Steel Corporation, Owen Electric Steel Company of
South Carolina and U.S. Foundry & Manufacturing Corporation (collectively, the
"Steel Companies") and the Georgia Department of Natural
Resources -- Environmental Protection Division, the Steel Companies have been
engaged in removing a flue dust pile, and also have undertaken an assessment of
groundwater, at this site. In addition, pursuant to a U.S. EPA unilateral order,
the Steel Companies apparently are engaged in a removal action to remediate
contaminated soils, and are undertaking the cleanup of non-metal contaminants,
at the site. The notice also indicates that the Steel Companies settled, for
approximately $3 million, a class action brought by residents of the area near
the site alleging property damage due to the proximity of the residents'
neighborhood to the site. The notice alleges that CBCC may be liable for
contribution with respect to prior cleanup costs incurred by the Steel Companies
and may be required to participate in funding future cleanup costs at the site.
According to the notice, the Steel Companies currently have expended or are
committed to expend approximately $17 million (including settlement of the class
action) on matters related to the site. The Company believes that CBCC has had
no contact with this site and that this site received waste materials from an
entity named "Chase Brass & Copper Co.," which may have been a division of Old
Chase (not related to the brass rod division acquired by the Company), located
in North Carolina. BP has assumed defense of this matter.

     The Jack's Creek, or Sitkin Smelting & Refining, site located in Mifflin
County, Pennsylvania, was placed on the U.S. EPA's National Priorities List in
1989. While CBCC has not received any formal notification from the U.S. EPA or
any third party, the Company believes that Old Chase has been identified by the
U.S. EPA as a PRP. To the Company's knowledge, however, neither CBCC nor the
brass rod division of Old Chase directly disposed of hazardous waste at this
site. Nevertheless, BP has been notified by the Company of CBCC's (or Old
Chase's) apparent identification as a PRP and BP's responsibility for any
liability associated with this site as it relates to periods prior to the date
of the CBCC Acquisition. Based on information available to the Company, it
appears that if CBCC or Old Chase were determined to be liable, liability would
be allocated on the basis of 0.5828% of cleanup costs (or approximately
$376,000).

     In March 1998, CBCC received a notice from the U.S. EPA of its potential
identification as a PRP at two sites, one in Kansas City, Kansas, and one in
Kansas City, Missouri. According to the notice, the sites were operated by waste
disposal companies from 1982 until 1987, during which time over 1500 parties
sent

                                        6
<PAGE>

materials containing polychlorinated biphenyls ("PCBs") to the site. Based on
information provided by the notice, it appears that a third party firm employed
by Old Chase to dispose of PCB-containing materials delivered PCB-containing
materials to these sites for treatment and/or disposal, and certain of such
materials came from Old Chase. Pursuant to an Administrative Order on Consent
with the U.S. EPA, a group of PRPs at the sites are performing an Engineering
Evaluation/Cost Analysis ("EE/CA") to evaluate and compare different cleanup
alternatives at these sites. In addition to the EE/CA, the notice indicates that
the U.S. EPA is planning to conduct removal activities at both facilities, which
activities may include a range of possibilities from cleaning up the
contamination inside the buildings and in the surrounding soils to demolition of
the buildings, and to perform follow-through activities to monitor, operate and
maintain the completed removal action. As noted above, the alleged activities
with respect to these sites occurred between 1982 and 1987 and, therefore, CBCC
has had no contact with these sites. Based on information provided with the
notice, the Company believes that the brass rod division of Old Chase may have
generated waste materials that were treated and/or disposed of at these sites,
and BP has assumed the defense of this matter.

     The Company believes that CBCC has no liability for the cleanup costs
related to these sites because (a) such liability is attributable to an entity
that had the same or similar name to that of CBCC, such as a division or
subsidiary of BP (other than the brass rod division of Old Chase), or (b) such
liability arose from acts that occurred prior to the CBCC Acquisition and,
therefore, BP retained such liability under the CBCC Purchase Agreement and is
contractually obligated to indemnify the Company for such liabilities. To the
extent CBCC incurs any cleanup costs with respect to these sites, it intends to
enforce its rights under the CBCC Purchase Agreement to recover such amounts
from BP.

     The Company also is a party to other litigation incidental to its business
involving claims for damages not in excess of 10% of its current assets, and
other matters, none of which claims or the liability resulting therefrom the
Company believes to be material.

     On January 7, 1998, a lawsuit entitled Ken-Chas Reserve Company and BP
Exploration (Alaska) Inc. and The Standard Oil Company v. Chase Industries Inc.
and Chase Brass & Copper Company, Inc. was filed in the Court of Common Pleas in
Cuyahoga County, Ohio. The Company and BP entered into a Settlement Agreement
and Mutual Release dated February 22, 2001 (the "Settlement Agreement"),
pursuant to which the Company and BP resolved and settled the claims between
them that were the subject of the lawsuit. Pursuant to the Settlement Agreement,
(1) the Company paid to BP $2 million, (2) the $20 million promissory note
issued to Old Chase as part of the consideration for the CBCC Acquisition (the
"BP Note") was deemed paid in full, (3) the Company retained responsibility and
financial liability for completing in situ remediation at the two remaining
areas of CBCC's site where additional remediation activities currently are
contemplated to be required and (4) BP retained financial liability for (A)
excavation activities that may be required by regulatory agencies at these two
remaining sites and (B) additional remediation activities that may be required
by regulatory agencies at the remaining areas of CBCC's site, including areas
where remediation activities previously have been conducted. BP also retained
and reaffirmed its obligations under the CBCC Purchase Agreement to indemnify
the Company and CBCC for any claim made against the Company or CBCC in respect
of any liability or obligation of BP which was not assumed by the Company or
CBCC as part of the CBCC Acquisition, including without limitation claims
related to off-site contamination and third party claims.

     At the time of the BP settlement, the Company had a $21.8 million
receivable from BP, a note payable of $20.0 million and accrued interest on the
BP Note aggregating $8.6 million. In February 2001, these amounts were settled
with a payment of $2.0 million to BP. As a result of the settlement and the
obligations retained by the Company, an additional environmental liability
totaling $4.8 million was accrued.

     For additional information regarding the legal proceedings referenced
above, see Note 11 of Notes to Consolidated Financial Statements included in
Item 8.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the year
ended December 31, 2001.

                                        7
<PAGE>

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED MATTERS

     As of March 21, 2002, the Company had outstanding 15,298,045 shares of
Common Stock and no shares of Nonvoting Common Stock.

     The Company's Common Stock is listed and traded on the New York Stock
Exchange (the "NYSE") under the symbol "CSI." The Common Stock began trading on
the NYSE on November 4, 1994.

     The following table sets forth, for the periods shown, the high and low
sales prices for the Common Stock as reported by the NYSE. No cash dividends
were paid or declared during such periods.

<Table>
<Caption>
                                                            2001             2000
                                                       --------------   --------------
                                                        HIGH     LOW     HIGH     LOW
                                                       ------   -----   ------   -----
<S>                                                    <C>      <C>     <C>      <C>
First quarter........................................  $11.80   $9.80   $10.31   $7.75
Second quarter.......................................  $11.40   $8.90   $ 9.75   $8.25
Third quarter........................................  $ 9.80   $8.80   $10.81   $8.13
Fourth quarter.......................................  $ 9.29   $8.25   $10.50   $6.38
</Table>

     As of March 21, 2002, the last reported sales price of the Company's Common
Stock, as reported by the NYSE, was $11.16 per share, and the Common Stock was
held of record by approximately 121 holders.

     The Company has not paid or declared any cash dividends on shares of its
Common Stock. The Company has no current plans to pay cash dividends on its
Common Stock and anticipates that future earnings will be retained to finance
operations, expansion and acquisitions. The payment of future cash dividends
will be at the sole discretion of the Company's Board of Directors and will
depend upon the Company's profitability, financial condition, cash requirements,
future earnings prospects and other factors deemed relevant by the Company's
Board of Directors.

     The Bank Credit Facility (as hereinafter defined) also contains certain
restrictions on the Company's ability to pay dividends. See "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources -- Bank Credit Facility."

                                        8
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA (UNAUDITED; IN THOUSANDS, EXCEPT PER SHARE
         DATA)

<Table>
<Caption>
                                                        YEAR ENDED DECEMBER 31,
                                          ----------------------------------------------------
                                            2001       2000       1999       1998       1997
                                          --------   --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>
INCOME STATEMENT DATA:
  Net sales.............................  $231,892   $289,918   $272,920   $292,738   $337,158
  Cost of goods sold (exclusive of
     depreciation shown separately
     below).............................   199,568    244,476    225,724    247,705    288,876
  Lower of cost-or-market inventory
     writedowns.........................     1,840         --         --      3,174         --
                                          --------   --------   --------   --------   --------
     Gross profit.......................    30,484     45,442     47,196     41,859     48,282
  Selling, general and administrative
     expenses...........................     6,400      7,159     10,625      8,398      8,139
  Tender offer and other expenses.......     4,397        381         --         --         --
  Depreciation..........................     7,047      6,544      6,219      5,759      4,995
                                          --------   --------   --------   --------   --------
     Operating income...................    12,640     31,358     30,352     27,702     35,148
  Other non-operating expenses..........       385         --         --         --         --
  Interest (income) expense, net........      (343)     1,409      1,136      3,111      4,602
                                          --------   --------   --------   --------   --------
     Income before income taxes.........    12,598     29,949     29,216     24,591     30,546
  Provision for income taxes............     4,472     10,872     11,103      9,345     11,608
                                          --------   --------   --------   --------   --------
  Income from continuing operations.....     8,126     19,077     18,113     15,246     18,938
  Discontinued operations:
       Income (loss), net of taxes......        79        (10)       502        514      4,884
       Loss on disposal, net of taxes...      (193)   (36,000)        --         --         --
                                          --------   --------   --------   --------   --------
  Net income (loss).....................  $  8,012   $(16,933)  $ 18,615   $ 15,760   $ 23,822
                                          ========   ========   ========   ========   ========
BASIC PER SHARE INFORMATION:*
  Average shares outstanding............    15,296     15,263     15,234     15,216     15,141
  Income from continuing operations.....  $   0.53   $   1.25   $   1.19   $   1.01   $   1.25
  Income from discontinued operations...        --         --       0.03       0.03       0.32
  Loss on disposal of discontinued
     operations.........................     (0.01)     (2.36)        --         --         --
                                          --------   --------   --------   --------   --------
  Net income (loss).....................  $   0.52   $  (1.11)  $   1.22   $   1.04   $   1.57
                                          ========   ========   ========   ========   ========
DILUTED PER SHARE INFORMATION:*
  Average shares outstanding............    15,467     15,377     15,336     15,561     15,483
  Income from continuing operations.....  $   0.53   $   1.24   $   1.18   $   0.98   $   1.22
  Income from discontinued operations...        --         --       0.03       0.03       0.32
  Loss on disposal of discontinued
     operations.........................     (0.01)     (2.34)        --         --         --
                                          --------   --------   --------   --------   --------
  Net income (loss).....................  $   0.52   $  (1.10)  $   1.21   $   1.01   $   1.54
                                          ========   ========   ========   ========   ========
BALANCE SHEET DATA (AT YEAR END):
  Working capital.......................  $ 37,550   $ 21,988   $ 18,353   $ 29,741   $ 23,687
  Total assets..........................   174,288    197,203    214,771    182,250    192,554
  Total debt............................        --     20,000     27,000     27,000     47,578
  Stockholders' equity..................   124,386    117,494    134,046    115,420     98,713
OTHER DATA:
  Operating cash flow...................  $ 23,303   $ 21,547   $ 31,009   $ 37,423   $ 14,637
  Capital expenditures..................    39,032     20,066     31,078     11,516     11,611
</Table>

---------------

* Adjusted for the three-for-two stock split effective June 6, 1998

                                        9
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

GENERAL

  Sale of Leavitt Tube

     In fourth quarter 2000, the Company decided to divest Leavitt. On March 15,
2001, the Company signed a definitive agreement to sell the assets and
operations of Leavitt to privately-held Pinkert Industrial Group, LLC,
headquartered in Chicago. The sale closed on March 30, 2001. The Company
received $31.7 million in cash, before closing costs and fees of $1.9 million.
In fourth quarter 2000, the Company recorded an estimated loss on the sale of
Leavitt of $36.0 million, including income tax benefit of $11.3 million. In
fourth quarter 2001, the Company recorded an additional $0.2 million, net of
taxes, loss on the sale of Leavitt, which resulted from the additional costs
associated with certain post-closing liabilities maintained by the Company. The
disposal of the assets and operations of Leavitt represented the disposal of a
business segment. Consequently, the consolidated financial statements reflect
Leavitt as a discontinued operation.

  Operations

     The Company has a brass products segment operated by CBCC and prior to
March 30, 2001, had a steel products segment operated by Leavitt. CBCC is an ISO
9002 certified manufacturer and supplier of free-machining and forging brass rod
in the United States, Canada and Mexico. The assets and operations of Leavitt
were disposed of on March 30, 2001 and are classified as a discontinued
operation for all periods presented.

     CBCC's net sales represent gross sales of brass rod less sales discounts.
The gross sales price of brass rod consists of a metal price charged to
customers and a fabrication price as separate components. Cost of goods sold
includes freight delivery costs, the cost of brass scrap, which is the principal
raw material used in the manufacturing process and the primary component of cost
of goods sold, as well as the costs of labor, energy and other materials and
supplies used in fabricating the brass scrap into finished rod. Therefore,
CBCC's profit levels depend primarily on the amount of finished rod shipped,
fabrication prices and the difference between the metal price charged to
customers and CBCC's cost of brass scrap.

     CBCC obtains approximately 75% of the brass scrap used in its operations
from its customers through purchase and tolling arrangements. The metal price
charged to customers (the "Metal Selling Price") has been eight cents per pound
higher than the price that brass scrap is purchased from customers (the "Metal
Buying Price") since September 1999. CBCC also purchases approximately 25% of
its brass scrap from scrap dealers at prevailing free-market prices. Free-market
prices of brass scrap fluctuate based on the supply of and demand for brass
scrap and the prices for copper and zinc (the major components of brass), and
generally are less than the Metal Buying Price. Since 1990, free-market prices,
as compared to Metal Buying Prices, have been favorable to CBCC by historical
standards and the supply of brass scrap in the United States has been readily
available. Although the supply of brass scrap has resulted in continued
favorable free-market scrap prices through December 2001, there can be no
assurance that such discounts will continue. Decreasing imports of brass rod and
increasing demand for brass scrap could cause free-market brass scrap prices to
increase, and increased pressure from customers to purchase brass scrap directly
from them at the Metal Buying Price could reduce CBCC's ability to take
advantage of free-market discounts.

     As noted above, CBCC's pricing structure consists of the Metal Selling
Price and the fabrication price as separate components. The Metal Selling Price
is determined at the time of shipment based on the then-current Metal Buying
Price and is not directly affected by fluctuations in free-market brass scrap
prices. As a result of this pricing structure, increases and decreases in the
Metal Selling Price will affect net sales levels and gross profit as a
percentage of sales, even in the absence of an increase or decrease in shipments
or the fabrication prices charged to customers, but will have little impact on
gross profit levels. However, the quantity of free-market brass scrap purchased
by CBCC and changes in the difference between the free-market prices paid for
brass scrap and the Metal Buying Price will affect gross profit, even in the
absence of an increase or a decrease in shipments or net sales levels.

                                        10
<PAGE>

     In addition to sales made under the pricing structure described above,
approximately 11% of pounds sold are made on a tolling basis, where the customer
consigns brass scrap to CBCC and is charged a fabrication price for processing
the brass scrap into finished rod. Tolling transactions affect net sales by the
Metal Selling Price that otherwise would be charged to the customer in a sale of
finished brass rod. To a lesser degree, tolling transactions also affect gross
profit to the extent CBCC is unable to take advantage of the pricing
differential on brass scrap purchased and sold. To partially offset the effect
of tolling transactions on gross profit, CBCC requires tolling customers to
deliver additional pounds of brass scrap in exchange for each pound of finished
rod shipped.

  General Economic and Industry Conditions

     The demand for the Company's products generally is dependent upon business
conditions in the industries which use products made from brass rod.
Manufacturers of products used in building and construction and manufacturers of
industrial machinery and equipment are the primary users of brass rod.
Therefore, the Company's operating results during any given period depend
significantly on business conditions in these industries. These industries, in
turn, are sensitive to fluctuations in overall economic activity, movement in
interest rates and availability of short-and long-term financing. The Company's
operating results also depend on its manufacturing capacity, as well as industry
production levels and other market factors.

     Beginning in third quarter 2000, the brass rod industry experienced a
recession with six consecutive quarters of decline. During 2001, total apparent
consumption of brass rod declined by 24% to approximately 862 million pounds,
which included industry shipments of 800 million pounds plus 62 million pounds
of net imports. Industry shipments decreased from 2000 by approximately 183
million pounds, or 19%, while net imports decreased by 87 million pounds, or
58%. The downturn reached its low point in second quarter 2001 with industry
shipments down 22% compared with second quarter 2000, which followed a decline
in industry shipments of 19% in first quarter 2001 compared with the prior year.
The decline in industry shipments was 17% in the second half 2001 compared with
second half 2000. Net imports also declined as the domestic brass mills
recaptured a portion of total apparent consumption. Net imports represented only
7% of total apparent consumption in 2001 as compared to 13% in 2000. With the
overall economy in a recession in 2001 and the manufacturing sector of the
economy experiencing over one year of declines and dramatic inventory
liquidations throughout the supply chain, customers in all end-use market
categories saw softening in 2001. While the total apparent consumption weakened
by 24% during 2001, CBCC's shipments only declined by 11% during 2001.

     2002 Outlook.  Based on the anticipated overall economic recovery, strong
housing and remodeling activity, and inventory reductions in 2001 throughout the
supply-chain, the Company is forecasting a 10% increase in total apparent
consumption of brass rod for 2002. The Company expects that net imports will
continue at levels similar to 2001, as domestic brass producers should have
adequate capacity to meet the anticipated 2002 customer demand. The Company is
anticipating a mild recovery in brass rod shipments during first quarter 2002
with demand continuing to build as the economy improves and the year progresses.
However, the Company sees continued pressure on gross margins in 2002, which
would dampen the impact of increased shipments on earnings. To the extent the
end use markets for the products manufactured from brass rod remain depressed or
experience further weakening, or consumer confidence is weakened by further
terrorist activities and military and other responses to terrorist activity, the
Company expects that demand for its brass rod and unit margins will be adversely
affected.

     Forecasts of future industry consumption, future levels of imports and
future shipments by the Company are forward-looking and are subject to risks and
uncertainties, including without limitation those identified below, which could
cause actual results to differ materially from historical results or those
anticipated. There can be no assurance that the Company's projection of apparent
consumption will occur. The general economic and industry conditions discussed
above will affect actual results and developments in those areas. Foreign
economic activity and the relationship of the U.S. dollar to other currencies
also affect import levels and exports of U.S. manufactured products containing
parts made from brass rod. The Company's 2002 shipments

                                        11
<PAGE>

also will be affected by its ability to maintain manufacturing operations
without significant interruption and successfully implement its capacity
expansion program.

  Inventories

     Inventories are stated at the lower of cost-or-market, with cost determined
on the last-in, first-out (LIFO) basis. Inventories have been written down to
lower of cost-or-market and such amounts are considered cost for subsequent
years. In October 2001, Chase reduced brass metal prices to the lowest levels in
14 years. This decrease resulted in a lower of cost-or-market inventory
writedown of $1.8 million in fourth quarter 2001. If the first-in, first-out
(FIFO) method for determining cost had been used, inventories would have been
approximately $1.0 million lower at December 31, 2001 and $0.4 million higher at
December 31, 2000.

     The Company experienced an inventory reduction in 2001, which resulted in a
liquidation of LIFO inventory quantities carried at higher costs prevailing in
prior years. The effect of this non-cash inventory reduction decreased operating
income by $562,000 in 2001. There were no LIFO liquidations in 2000 or 1999.

RESULTS OF OPERATIONS (UNAUDITED; IN MILLIONS)

<Table>
<Caption>
                                                            YEAR ENDED DECEMBER 31,
                                                           --------------------------
                                                            2001      2000      1999
                                                           ------   --------   ------
<S>                                                        <C>      <C>        <C>
Net sales................................................  $231.9   $  289.9   $272.9
Cost of goods sold.......................................   199.6      244.5    225.7
Lower of cost-or-market inventory writedown..............     1.8         --       --
                                                           ------   --------   ------
  Gross profit...........................................    30.5       45.4     47.2
Selling, general and administrative expenses.............     6.4        7.1     10.7
Tender offer and other expenses..........................     4.4        0.4       --
Depreciation.............................................     7.1        6.5      6.2
                                                           ------   --------   ------
  Operating income.......................................    12.6       31.4     30.3
Other non-operating expenses.............................     0.4         --       --
Interest (income) expense, net...........................    (0.4)       1.4      1.1
                                                           ------   --------   ------
  Income before income taxes.............................    12.6       30.0     29.2
Provision for income taxes...............................     4.5       10.9     11.1
                                                           ------   --------   ------
  Income from continuing operations......................     8.1       19.1     18.1
Discontinued operations:
  Income from discontinued operation, net of tax.........     0.1         --      0.5
  Loss on disposal, net of tax...........................    (0.2)     (36.0)      --
                                                           ------   --------   ------
Net income (loss)........................................  $  8.0   $  (16.9)  $ 18.6
                                                           ======   ========   ======
</Table>

  2001 Compared with 2000

     Net sales decreased $58.0 million, or 20.0%, to $231.9 million in 2001. Net
sales decreased mainly as a result of an 11% decrease in brass rod shipments and
a 10% decrease in the brass rod Metal Selling Price. As previously discussed
above under "General Economic and Industry Conditions," the brass rod industry
has experienced a recession with six consecutive quarters of shipment declines.
However, CBCC's shipments only declined by 11% while the industry shipments were
off 19%. Also, net imports declined by 58%. Customers across all market sectors
experienced softening.

     Gross profit decreased $14.9 million, or 32.8%, to $30.5 million in 2001.
Lower brass rod shipments and lower unit profit margins adversely affected gross
profit. Fabrication prices decreased due to competitive pressures in the market.
Also, gross profit decreased in 2001 due to the $1.8 million lower of
cost-or-market

                                        12
<PAGE>

inventory writedown caused by declining brass metal prices. In response to lower
profitability, the Company implemented cost controls in 2001, including the
significant curtailment of overtime and discretionary spending, which resulted
in a decrease of 6% in manufacturing costs. These cost reductions were achieved
despite contractual labor rate increases and higher utility rates and medical
costs.

     Selling, general and administrative ("SG&A") expenses decreased by $0.7
million, or 9.9%, to $6.4 million in 2001. The decrease was due to spending
controls and cost reductions, which included reduced professional and consulting
expenses, lower management incentives and decreased franchise taxes. Also, legal
fees were lower in 2001 due to the settlement, in February 2001, of the
litigation with BP.

     Tender offer and other expenses aggregating $4.4 million and $0.4 million
in 2001 and 2000, respectively, were attributable to costs associated with
incremental consulting and legal expenses resulting from activities related to
an unsolicited tender offer, which expired on January 31, 2001, and an executive
severance package.

     Depreciation expense increased by $0.6 million, or 9.2%, to $7.1 million,
due to depreciation on the new brass foundry capitalized in 2000 and the initial
depreciation on the Phase III buildings and infrastructure.

     As a result of the above factors, operating income from continuing
operations decreased $18.8 million, or 59.9%, to $12.6 million in 2001.

     Other non-operating expenses of $0.4 million consisted of the Company's
write-off of its investment in MetalSpectrum LLC, a consortium of major
metals-related companies that provided business-to-business internet services.
MetalSpectrum ceased operations in June due to low demand for its services and
economic conditions.

     Interest income of $0.4 million in 2001 compares with interest expense of
$1.4 million in 2000. This $1.8 million difference primarily resulted from the
elimination of $20 million of debt in conjunction with the settlement of the
litigation with BP and the sale of Leavitt in first quarter 2001.

     As a result of the above factors, income before income taxes decreased
$17.4 million, or 58.0%, to $12.6 million in 2001 from $30.0 million in 2000.

     Income tax expense decreased $6.4 million, or 58.7%, to $4.5 million as a
result of the decrease of $17.4 million, or 58.0%, in income before income taxes
and a reduction in the effective tax rate from 36.3% in 2000 to 35.5% in 2001.
The effective tax rate was lower in 2001 due to the state tax consequences
resulting from the sale of Leavitt and other state tax planning initiatives
including tax incentives related to CBCC's Project 400 capital investment.

     Based on the preceding explanations, income from continuing operations
decreased by $11.0 million, or 57.6%, to $8.1 million in 2001, from $19.1
million in 2000. Excluding the impact, net of taxes, of the lower of
cost-or-market inventory writedown, the unsolicited tender offer expenses and
the write-off of the Company's investment in MetalSpectrum, income from
continuing operations was $12.4 million, a decrease of $6.9 million, or 35.8%,
from $19.3 million in 2000.

     Income from discontinued operations, net of taxes, of $0.1 million, prior
to the sale of Leavitt on March 30, 2001, compares to basically break-even in
2000.

     Loss on disposal of discontinued operations, net of taxes, was $0.2 million
in 2001 as compared to $36.0 million in 2000. The additional loss recorded in
2001 was the result of additional costs associated with certain post-closing
liabilities maintained by the Company. The sale of Leavitt was previously
discussed above under "General -- Sale of Leavitt Tube."

     As a result of the above factors, net income for 2001 was $8.0 million, or
$0.52 per diluted share, compared with a net loss for 2000 of $16.9 million, or
$1.10 per diluted share.

  2000 Compared With 1999

     Net sales increased $17.0 million, or 6.2%, to $289.9 million in 2000. Net
sales increased mainly as a result of a 9% increase in the brass rod Metal
Selling Price. Partially offsetting this increase was a 1% decline

                                        13
<PAGE>

in brass rod shipment pounds. The shipment gains earlier in 2000 were offset by
a fourth quarter decline. In the fourth quarter 2000, an economic slowdown
adversely impacted incoming order rates from customers across all market
segments.

     Gross profit decreased $1.8 million, or 3.8%, to $45.4 million in 2000 due
to slightly lower unit profit margins and lower brass rod shipments. Increased
costs for electricity, natural gas and fuel were partially offset by improved
profitability of brass purchased on the free-market.

     SG&A expenses decreased $3.2 million, or 29.9%, to $7.5 million for 2000.
The decrease was due to reduced professional and consulting expenses, lower
management incentives and decreased franchise taxes, partially offset by higher
legal fees in 2000, which were due mainly to the BP litigation.

     Depreciation expense increased by $0.3 million, or 4.8%, to $6.5 million
due to the new brass foundry.

     As a result of the above factors, operating income increased $1.1 million,
or 3.6%, to $31.4 million in 2000.

     Net interest expense increased by $0.3 million, or 27.3%, to $1.4 million
for 2000. The increase was primarily the result of $0.4 million less capitalized
interest expense on the brass rod extrusion and finishing expansion in 2000 than
on the new brass rod foundry in 1999 due to the stage of completion of each
project.

     As a result of the above factors, income before income taxes increased by
$0.8 million, or 2.7%, to $30.0 million in 2000 from $29.2 million in 1999.

     Income tax expense decreased by $0.2 million, or 1.8%, to $10.9 million as
a result of a reduction in the effective tax rate from 38% in 1999 to 36.3%
partially offset by the tax on an increase of $0.8 million in income before
taxes. The lower effective tax rate in 2000 was primarily the result of state
tax planning initiatives including tax incentives related to CBCC's Project 400
capital investment. In first quarter 2000, the Internal Revenue Service (the
"IRS") completed an examination of the federal income tax return filed by the
Company for year ended December 31, 1996. In July 2000, the Company received a
refund in the amount of $1.1 million from the IRS resulting from the treatment
of settled issues for that year.

     As a result of the above factors, income from continuing operations
increased by $1.0 million, or 5.5%, to $19.1 million, or $1.24 per diluted
share, in 2000 from $18.1 million, or $1.18 per diluted share, in 1999.

     Income from discontinued operations, net of taxes, decreased to basically
break-even in 2000 from $0.5 million of income, net of taxes, in 1999. Leavitt's
results decreased in 2000 due to lower steel tubing shipments and lower unit
margins. Despite higher selling prices, flat-rolled steel prices increased more
than Leavitt was able to pass along to its customers due to competitive
pressures, thereby resulting in lower unit margins. Leavitt's 1999 results also
included a $0.9 million lower of cost-or-market inventory writedown.

     Loss on disposal of discontinued operations, net of taxes, was $36.0
million. In March 2001, the Company signed a definitive sale agreement for the
assets and certain liabilities of Leavitt Tube. Additional discussion on the
sale of Leavitt was previously discussed above under "General -- Sale of Leavitt
Tube."

     Net loss for 2000 was $16.9 million, or $1.10 per diluted share, compared
with net income for 1999 of $18.6 million, or $1.21 per diluted share.

LIQUIDITY AND CAPITAL RESOURCES

  General

     Cash and cash equivalents totaled $18.2 million, increasing from $4.0
million at year end 2000. At December 31, 2001, the Company had no debt, a $20
million decrease from December 31, 2000.

     The Company currently is meeting its operational and liquidity needs with
cash on hand, internally generated funds and amounts available under the
revolving credit facility.

                                        14
<PAGE>

  Working Capital

     At December 31, 2001, working capital was $37.6 million, increasing from
$22.0 million at December 31, 2000. Working capital at December 31, 2000,
included a $21.6 million receivable from BP and the BP Note payable of $20.0
million and interest accrued on the BP Note aggregating $8.3 million. These
amounts were settled in February 2001 with a CBCC payment of $2 million to BP.
See further discussion of the BP settlement at Note 11 of Notes to Consolidated
Financial Statements included in Item 8. Working capital at December 31, 2001,
was $37.6 million, a $8.9 million, or 31.0%, increase from $28.7 million at
December 31, 2000, excluding the BP related amounts. Increases in cash and cash
equivalents of $14.2 million and deferred income taxes and income taxes
receivable totaling $4.1 million and decreases in accounts payable of $3.6
million and accrued liabilities of $0.9 million were partially offset by
decreases in accounts receivable of $2.2 million and inventory of $11.6 million.

     Accounts receivable decreased from the prior year due to a 19% reduction in
net sales in fourth quarter 2001 compared with 2000. Offsetting this reduction
was an increase in the Company's accounts receivable days outstanding from the
prior year, partially due to certain customers electing not to take advantage of
prompt payment discounts in 2001 coupled with the slowing of the economy. The
decrease in inventory was due to management's efforts to reduce finished goods
and to match inventory levels with current reduced shipment rates. Also,
inventory decreased from the prior year due to the lower of cost-or-market
inventory writedown caused by declining metal prices. The increase in deferred
taxes and income tax receivable was primarily attributable to the $2.8 million
income tax refund that was the result of a net operating loss arising from the
divestiture of Leavitt, which is expected to be carried back to 1999. The
decrease in accounts payable primarily was due to reduced metal purchases
resulting from lower production requirements and the inventory reductions
discussed above. Partially offsetting the decrease in accounts payable and
accrued liabilities was an increase in accrued capital expenditures due to Phase
III nearing completion in fourth quarter 2001.

     The Company's current ratio follows:

<Table>
<Caption>
                                                              DECEMBER 31,
                                                              ------------
                                                              2001    2000
                                                              ----    ----
<S>                                                           <C>     <C>
Current ratio...............................................  2.32    1.36
Current ratio excluding cash................................  1.68    1.29
</Table>

  Cash Flow Provided by Operating Activities

     In 2001 net cash provided by operating activities was $23.3 million
compared to $21.5 million in 2000. The primary sources of cash from operating
activities in 2001 were income from continuing operations of $8.1 million,
depreciation of $7.0 million, a deferred tax expense of $7.2 million and a
reduction in assets and liabilities, excluding cash, debt and deferred taxes of
$2.0 million. The change in working capital for 2001 was explained above in
"Working Capital." These were partially offset by the settlement of the
litigation with BP for $2.0 million. Cash provided by continuing operations of
$24.8 million was partially offset by cash used in discontinued operations of
$1.5 million.

     In 2000, net cash provided by operating activities was $21.5 million
compared to $31.0 million in 1999. The primary sources of cash from operating
activities in 2000 were income from continuing operations of $19.1 million,
depreciation of $6.5 million, and a deferred tax expense of $6.9 million
partially offset by an increase in assets and liabilities, excluding cash, debt
and deferred taxes of $14.6 million. An increase in inventory of $10.6 million
and a decrease in current liabilities of $3.4 million were partially offset by a
decrease in prepaid expenses of $3.2 million. In addition to cash provided by
continuing operations of $17.9 million, cash provided by discontinued operations
totaled $3.6 million.

     At December 31, 2000, working capital was $22.0 million, a $3.6 million, or
19.6%, increase from $18.4 million at December 31, 1999. Working capital at
December 31, 2000, included a $21.6 million receivable from BP and the BP Note
payable of $20.0 million and interest accrued on the BP Note aggregating $8.3
million. These amounts were long-term assets and liabilities at December 31,
1999, and were settled in February 2001 with a CBCC payment of $2.0 million to
BP. See further discussion of the BP

                                        15
<PAGE>

settlement at Note 11 of Notes to Consolidated Financial Statements included in
Item 8. Excluding the BP related amounts, working capital at December 31, 2000,
was $28.7 million, a $10.3 million increase from 1999. Decreases in cash and
cash equivalents of $5.1 million and prepaid expenses of $3.2 million were
offset by an increase in inventory of $10.6 million and a decrease in current
liabilities of $3.4 million. The increase in inventory was partially due to an
increase in brass rod accumulated in advance of maintenance outages in fourth
quarter 2000, which was not needed as shipments slowed in fourth quarter 2000.
Additionally, inventory increased due to the timing of brass scrap purchases.
The decrease in current liabilities was the result of the timing of metal
purchases and payment of accrued environmental costs.

     In 1999, net cash provided by operating activities was $31.0 million
compared to $37.4 million in 1998. The primary sources of cash from operating
activities in 1999 were income from continuing operations of $18.1 million,
depreciation of $6.2 million, a deferred tax expense of $1.1 million and a
reduction in assets and liabilities, excluding cash, debt and deferred taxes of
$2.2 million. In addition to cash provided by continuing operations of $27.6
million, cash provided by discontinued operations totaled $3.4 million.

     At December 31, 1999, working capital was $18.4 million which decreased
$11.3 million from $29.7 million at December 31, 1998. A decrease in inventory
of $5.1 million, and an increase in accounts payable and accrued liabilities of
$11.5 million were partially offset by an increase in accounts receivable of
$2.1 million and an increase in prepaid expenses of $3.8 million. The decline in
inventory was due to timing of metal receipts and management's efforts to reduce
inventory levels. The increase in accounts payable and accrued liabilities was
mainly due to the timing of metal purchases, increased capital expenditures
payable due to the status of the foundry project in 1999 compared to the billet
heater project in 1998, and the accrued environmental costs of $6.6 million at
December 31, 1999. Accounts receivable increased primarily due to an increase in
net sales in December 1999 compared to December 1998.

  Cash Flow (Used in) Investing Activities

     The proceeds from the sale of Leavitt provided cash flow from investing
activities of $31.7 million, before closing costs and fees of $1.9 million.
Capital expenditures were $39.0 million, $20.1 million and $31.1 million in
2001, 2000 and 1999, respectively. Capital expenditures included equipment and
construction costs for a second extrusion press and additional finishing lines
in 2001; final installation and equipment costs for the new foundry and initial
capital equipment and construction costs of Phase III of Project 400 in 2000;
and equipment and construction costs for the new CBCC foundry in 1999.

  Cash Flow Provided by (Used in) Financing Activities

     Cash provided by financing activities of $0.1 million during 2001 resulted
from stock option exercises. During 2000, the Company prepaid the remaining $7.0
million on the Term Loan (as hereinafter defined). The Term Loan was paid off in
June 2000, three years ahead of schedule. In addition, the Company received $0.4
million upon the exercise of stock options. Cash provided by financing
activities during 1999 resulted from stock option exercises.

  Capital Resources

     In 1996, CBCC launched a capital project referred to as "Project 400." The
project is designed to increase foundry, extrusion and finishing capabilities
with an ultimate goal of increasing finished brass rod production capability by
one-third to more than 400 million pounds annually. The first phase of the
project was completed in early 1998 with the installation of three new billet
heaters that increased finished brass rod capacity by about 17 percent. The new
billet heaters have increased productivity and improved quality. The total cost
of the first phase of the project was approximately $12 million and was financed
through a six-year operating lease.

     In second quarter 1998, the Company announced Phase II of Project 400,
which was a $30 million multi-year investment to construct an additional brass
foundry enabling CBCC to increase casting capacity and to provide customers with
multiple alloys. The new brass foundry began producing billets on a trial basis
in

                                        16
<PAGE>

February 2000 and is now producing billets at expected production rates. The new
foundry has reduced metal costs and increased production capacity.

     In fourth quarter 1999, the Company announced Phase III of Project 400,
which is a $50 million multi-year investment for a second extrusion press and
additional finishing equipment. When Phase III comes on line, which is expected
to occur in second quarter 2002, CBCC's production capacity will increase by
about one-third to more than 400 million pounds annually. The new equipment has
been installed, some is already in production, and the remainder is at varying
stages of commissioning. The Company anticipates that capital projects will be
paid for with cash flows provided by operating activities, cash on hand, and the
revolving credit facility, as necessary.

  Bank Credit Facility

     In connection with the Leavitt Acquisition, the Company entered into a
credit facility (the "Bank Credit Facility") of $100 million agented by PNC
Bank, National Association ("PNC Bank"). The Bank Credit Facility originally
included a $60 million term loan ("Term Loan") and a $40 million revolving
credit facility ("Revolving Credit Facility"). Prior to second quarter 2000, the
Company had prepaid all amounts on the Term Loan originally due through April
2001. The remaining balance of $7 million on the Term Loan was prepaid in second
quarter 2000. Effective September 8, 1999, the Company and PNC Bank agreed on an
amendment to the Bank Credit Facility which increased the Revolving Credit
Facility by $10 million, to $50 million. On September 1, 2000, the Company and
PNC Bank agreed on an extension to August 30, 2002, on the Revolving Credit
Facility.

     Advances under the Bank Credit Facility bear interest at alternative
variable rates based on certain percentages, as provided in the agreement, in
excess of the PNC Bank's prime rate, the Federal funds rate or LIBOR, with
interest payable quarterly or as of the end of each LIBOR borrowing period,
whichever is shorter. There were no borrowings outstanding on the Bank Credit
Facility at December 31, 2001 and 2000.

     The Bank Credit Facility contains certain covenants that, among other
things, limit the Company's ability to incur additional debt or pay dividends.
The covenants also require the Company to maintain a minimum interest coverage
ratio and level of net worth and restrict the Company from exceeding a maximum
ratio of debt to cash flow from operations. The Bank Credit Facility also
requires the Company to maintain CBCC as a wholly-owned subsidiary.

     As of December 31, 2001, no amount was outstanding under the Revolving
Credit Facility. Total availability under the Revolving Credit Facility was
$47.1 million as of December 31, 2001.

  Average Revolving Credit Facility Borrowings

     There was no outstanding balance under the Revolving Credit Facility during
2001. The average outstanding balance under the Revolving Credit Facility in
2000 was $0.7 million. As of March 21, 2002, the Company had available $47.6
million under the Revolving Credit Facility. For a discussion of long-term
borrowings under the Bank Credit Facility, see Note 5 of Notes to Consolidated
Financial Statements.

CONTINGENCIES -- ENVIRONMENTAL MATTERS

     As discussed in "Item 1.  Business -- Environmental Regulation" and Note 11
of Notes to Consolidated Financial Statements included in Item 8, CBCC is
subject to certain contingent liabilities relating to environmental conditions
at its manufacturing facility.

     CBCC is in the process of developing a remediation plan for in situ
remediation at two areas of its site contaminated with certain VOCs. Based on
preliminary cost estimates provided by CBCC's independent environmental
consultant, and subject to the development by the consultant of a remediation
plan for these areas of the site and the receipt of bids for the remediation
activities required under such plan, the Company estimates that the costs for
this project will be approximately $3 million, based upon capital and operating
costs for a period of five years. A reserve for this amount previously has been
established. However, subject to

                                        17
<PAGE>

pilot testing and operating experience, costs may increase or decrease depending
on the scale and operating period.

     In first quarter 2001, the Company settled certain matters with BP which
are discussed in Note 11 of Notes to Consolidated Financial Statements included
in Item 8. In conjunction with the BP settlement, the Company recorded a $4.8
million environmental reserve. The Company had remediation spending of $0.6
million during 2001. The environmental reserve totaled $8.2 million at December
31, 2001.

     Based on currently available data, the Company believes that, upon
completion of the remediation activities described above, CBCC will have
substantially completed the remediation activities at its site that are
necessary to address contamination of which CBCC currently is aware. However,
until completion of these remedial and associated investigatory activities and
receipt of approval from the Ohio EPA of CBCC's activities to remediate this
contamination, as well as remediation activities previously conducted, the
Company cannot be certain that further remediation activities will not be
required at CBCC's site. To the extent regulatory agencies require additional
remediation at those areas of CBCC's site where CBCC previously has undertaken
remediation activities, or require excavation of soil at the two areas for which
CBCC currently is developing a remediation plan for in situ remediation, as a
part of the settlement of the litigation with BP in first quarter 2001, BP has
retained financial responsibility for such remediation activities.

     The Company expects to fund cleanup costs related to the remaining
remediation activities at its manufacturing facility with cash on hand and
borrowings under its existing Bank Credit Facility. Therefore, the Company does
not believe that funding these remediation activities will have a material
adverse effect on the Company's financial condition, results of operations or
liquidity.

     The statements set forth herein regarding anticipated expenditures for
environmental matters are forward looking, are based on sampling results
currently available to the Company, remediation plans in the process of being
developed by independent consultants of CBCC (which plans are subject to
assumptions regarding applicable cleanup standards and methodologies) and
preliminary cost estimates for completion of the remediation activities. Actual
costs required to be expended by the Company with respect to such matters may
differ materially from current expectations depending on the final resolution of
known uncertainties, including finalization of remediation plans for the two
remaining areas of CBCC's site as discussed above, completion of proposed
remediation activities, acceptance by applicable governmental agencies of
cleanup standards relied upon in developing remediation plans and conducting
remediation activities, discovery of additional contaminants during remediation,
and any change in CBCC's proposed use of its property which affects any
applicable cleanup standard.

CONTINGENCIES -- LEGAL PROCEEDINGS

     As discussed in "Item 3. Legal Proceedings" and Note 11 of Notes To
Consolidated Financial Statements included in Item 8, in February 2001 the
Company and CBCC settled a lawsuit with BP, originally filed in January 1998,
regarding amounts payable under the BP Note.

CRITICAL ACCOUNTING POLICIES

     The Company's consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America. In the preparation of these financial statements, management has made
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses and the disclosure of contingent assets and
liabilities. As the application of these accounting polices involves the
exercise of judgment and use of assumptions as to future uncertainties and, as a
consequence, actual results could differ from these estimates. The following
represents the Company's critical accounting policies in which significant
judgment and the use of assumptions have been made, see

                                        18
<PAGE>

Note 1 of the Notes to Consolidated Financial Statements included in Item 8 for
additional accounting policies:

  Allowance for doubtful accounts and claims

     The Company's allowance for doubtful accounts and claims of $916,000 and
$990,000, at December 31, 2001 and 2000, respectively, represents an estimate of
the amount of trade receivables at each year end that may become uncollectible.
Management specifically analyzes individual customers' credit-worthiness and the
Company's credit exposure, current economic trends, changes in customer payment
terms, aging of accounts receivables, and historical bad debts when evaluating
the adequacy of the allowance for doubtful accounts and claims. If unforeseen
adverse circumstances occurred, such as a large customer unable to meet its
financial commitment to the Company, the allowance for doubtful accounts and
claims could be inadequate. Over the last three years, the Company has written
off accounts receivable totaling $159,000.

  Inventory valuation

     Inventories are stated at lower of cost-or-market with cost being
determined on the last-in, first-out (LIFO) basis. As demonstrated in 2001, the
price of brass fluctuates with brass metal prices hitting a 14-year low. As a
result, the Company recorded a $1.8 million lower of cost-or-market inventory
writedown. If the market value for brass rod were one cent per pound lower at
December 31, 2001, then inventory writedown would have been approximately
$250,000 greater. The Company's inventory obsolescence cost is nominal due to
the nature of its products. If the first-in, first-out (FIFO) method for
determining cost had been used, inventories would have been approximately $1.0
million lower at December 31, 2001 and $0.4 higher at December 31, 2000.

  Deferred Taxes

     Deferred tax assets and liabilities are recognized on the differences
between the financial statement carrying amounts and the tax basis of assets and
liabilities. The Company has a $4.3 million valuation allowance as of December
31, 2001, due to the uncertainties related to the Company's ability to utilize
the capital loss carryforward from the disposal of Leavitt before it expires in
2006. If the Company should determine that it would be able to utilize the
capital loss carryforward in the future, an adjustment to deferred tax assets
would increase income in the period such determination was made.

  Retirement Plans

     The determination of the Company's obligation and expense for its defined
benefit retirement plans are dependent on the Company's selection of certain
assumptions used by the actuary in calculating such amounts. Those assumptions
are described in Note 6 of the Notes to Consolidated Financial Statements
included in Item 8, and include among others, the discount rate and expected
long-term rate of return on plan assets. In addition, the Company's actuarial
consultants also use subjective factors such as withdrawal and mortality rates
to estimate such amounts. In accordance with accounting principles generally
accepted in the United States of America, actual results that differ from the
Company's assumptions are accumulated and amortized over future periods and
therefore, generally affect expense and recorded obligations in future periods.
While the Company believes that the assumptions are appropriate, significant
differences in actual experience or significant changes in the Company's
assumptions may materially affect pension obligations and future expense.

  Environmental Liability

     The Company is subject to certain contingent liabilities with respect to
CBCC's facility. CBCC is in the process of developing a remediation plan for in
situ remediation at two areas of its site that are contaminated with certain
VOCs. Based on preliminary cost estimates provided by CBCC's independent
environmental consultant, and subject to the development by the consultant of a
remediation plan for these areas of the site and the receipt of bids for the
remediation activities required under such plan, the Company estimates the cost

                                        19
<PAGE>

for this project to approximate $3 million, based upon capital and operating
costs for a period of five years. However, subject to pilot testing and
operating experience, costs may increase or decrease depending on the scale and
operating period. Liabilities related to environmental matters are further
discussed in Note 11 of Notes to Consolidated Financial Statements included in
Item 8.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

     The timing of contractual obligations and commercial commitments of the
Company, at December 31, 2001, related to operating leases, purchases of capital
equipment and stand-by letters of credit, is as follows (in thousands):

<Table>
<Caption>
                                                  2002     2003    2004   2005   2006
                                                 ------   ------   ----   ----   ----
<S>                                              <C>      <C>      <C>    <C>    <C>
Operating leases:
  Six-year operating lease*....................  $1,053   $1,027   $ 42   $ --   $ --
  Other........................................     264      230    224    224    112
Purchases of capital equipment.................   9,300
Stand-by letters of credit.....................   2,852
</Table>

---------------

* In March 2002, the Company purchased all of the equipment subject to the
  six-year operating lease for $10.4 million. For additional discussion
  regarding the six-year operating lease see Note 10 of the Notes to
  Consolidated Financial Statements included in Item 8.

INFLATION

     The Company does not believe that its operations have been significantly
affected by inflation.

SAFE HARBOR

     This document contains forward-looking statements regarding the operations
of the Company and the industries in which it operates. These statements are
identified by the use of words such as "believe," "expects," "anticipates,"
"will," "should" and other words referring to events to occur in the future.
Management uses estimates and assumptions in forming the basis for such
forward-looking statements. Such estimates and assumptions, including forecasts
regarding demand and pricing for the Company's products, are subject to risks
and uncertainties which could cause actual results to differ materially from
historical results or those anticipated, as described in forward-looking
statements. Actual results will be affected by general economic and industry
conditions in the end use markets for the Company's products as well as the
impact of competitive products and pricing, including without limitation the
impact of imports. Foreign economic activity and the relationship of the U. S.
dollar to other currencies also affect import levels and exports of U.S.
manufactured products containing parts made from brass rod. The Company's
shipments also will be affected by its ability to maintain manufacturing
operations at its current levels without significant interruption and
successfully implement its capacity expansion program.

                                        20
<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company has no financial instruments or agreements that require
disclosure pursuant to this item.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                             CHASE INDUSTRIES INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                       AND FINANCIAL STATEMENT SCHEDULES

<Table>
<Caption>
                                                               PAGE
                                                               -----
<S>                                                            <C>
Consolidated Financial Statements:

  Report of Independent Accountants.........................      22

  Consolidated Balance Sheet as of December 31, 2001 and
     2000...................................................      23

  Consolidated Statement of Income for the Years Ended
     December 31, 2001, 2000 and 1999.......................      24

  Consolidated Statement of Changes in Stockholders' Equity
     for the Years Ended December 31, 2001, 2000 and 1999...      25

  Consolidated Statement of Cash Flows for the Years Ended
     December 31, 2001, 2000 and 1999.......................      26

  Notes to Consolidated Financial Statements................   27-42

Financial Statement Schedule:

  Valuation and Qualifying Accounts.........................      64
</Table>

                                        21
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of Chase Industries Inc.:

     In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of Chase Industries Inc. and its subsidiaries at December 31, 2001 and
2000, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2001 in conformity with accounting
principles generally accepted in the United States of America. In addition, in
our opinion, the financial statement schedule listed in the accompanying index
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
These financial statements and financial statement schedule are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan
February 13, 2002

                                        22
<PAGE>

                             CHASE INDUSTRIES INC.

                           CONSOLIDATED BALANCE SHEET
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
                                     ASSETS
Current assets:
  Cash and cash equivalents.................................  $ 18,206   $  3,993
  Receivables, net of allowance for doubtful accounts and
     claims of $916 and $990 in 2001 and 2000,
     respectively...........................................    22,044     24,214
  Inventories...............................................    17,491     29,072
  Prepaid expenses..........................................       880      1,253
  Deferred income taxes.....................................     4,524      3,251
  Other assets..............................................     2,831     21,600
                                                              --------   --------
          Total current assets..............................    65,976     83,383
Net assets of discontinued operations.......................        --     38,161
Property, plant and equipment, net..........................   107,644     75,659
Pension intangible asset....................................       668         --
                                                              --------   --------
          Total assets......................................  $174,288   $197,203
                                                              ========   ========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................  $ 19,755   $ 23,447
  Accrued compensation and benefits.........................     3,907      4,170
  Accrued income taxes......................................     2,638      2,692
  Other accrued liabilities.................................     2,126      2,741
  Current portion of long-term debt.........................        --     20,000
  Interest payable -- Seller's note.........................        --      8,345
                                                              --------   --------
          Total current liabilities.........................    28,426     61,395
Environmental and other related liabilities.................     8,230      3,960
Deferred income taxes.......................................    10,693     14,354
Other liabilities...........................................     2,553         --
                                                              --------   --------
          Total liabilities.................................    49,902     79,709
                                                              --------   --------
Commitments and contingencies...............................        --         --
                                                              --------   --------
Stockholders' equity:
  Common stock, $.01 par value, 36,310,000 shares
     authorized; 15,297,745 and 9,135,802 shares issued and
     outstanding in 2001 and 2000, respectively.............       153         92
  Nonvoting common stock, $.01 par value, 12,300,000 shares
     authorized; 0 and 6,150,118 shares issued and
     outstanding in 2001 and 2000, respectively.............        --         61
  Additional paid-in capital................................    31,980     31,884
  Retained earnings.........................................    93,469     85,457
  Accumulated other comprehensive loss......................    (1,216)        --
                                                              --------   --------
          Total stockholders' equity........................   124,386    117,494
                                                              --------   --------
          Total liabilities and stockholders' equity........  $174,288   $197,203
                                                              ========   ========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                        23
<PAGE>

                             CHASE INDUSTRIES INC.

                        CONSOLIDATED STATEMENT OF INCOME
                  (IN THOUSANDS, EXCEPT PER SHARE INFORMATION)

<Table>
<Caption>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net sales...................................................  $231,892   $289,918   $272,920
Cost of goods sold (exclusive of depreciation shown
  separately below).........................................   199,568    244,476    225,724
Lower of cost-or-market inventory writedown.................     1,840         --         --
                                                              --------   --------   --------
  Gross profit..............................................    30,484     45,442     47,196
Selling, general and administrative expenses................     6,400      7,159     10,625
Tender offer and other expenses.............................     4,397        381         --
Depreciation................................................     7,047      6,544      6,219
                                                              --------   --------   --------
  Operating income..........................................    12,640     31,358     30,352
Other non-operating expenses................................       385         --         --
Interest (income) expense, net..............................      (343)     1,409      1,136
                                                              --------   --------   --------
  Income before income taxes................................    12,598     29,949     29,216
Provision for income taxes..................................     4,472     10,872     11,103
                                                              --------   --------   --------
Income from continuing operations...........................     8,126     19,077     18,113
Discontinued operations (Note 13):
  Income (loss), net of income taxes........................        79        (10)       502
  Loss on disposal, net of income taxes.....................      (193)   (36,000)        --
                                                              --------   --------   --------
          Net income (loss).................................  $  8,012   $(16,933)  $ 18,615
                                                              ========   ========   ========
Earnings per share -- Basic:
  Income from continuing operations.........................  $   0.53   $   1.25   $   1.19
  Income from discontinued operations.......................        --         --       0.03
  Loss on disposal of discontinued operations...............     (0.01)     (2.36)        --
                                                              --------   --------   --------
          Net income (loss).................................  $   0.52   $  (1.11)  $   1.22
                                                              ========   ========   ========
Earnings per share -- Diluted:
  Income from continuing operations.........................  $   0.53   $   1.24   $   1.18
  Income from discontinued operations.......................        --         --       0.03
  Loss on disposal of discontinued operations...............     (0.01)     (2.34)        --
                                                              --------   --------   --------
          Net income (loss).................................  $   0.52   $  (1.10)  $   1.21
                                                              ========   ========   ========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                        24
<PAGE>

                             CHASE INDUSTRIES INC.

           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<Table>
<Caption>
                                              ADDITIONAL
                                     COMMON    PAID-IN     RETAINED   ACCUMULATED OTHER
                                     STOCK     CAPITAL     EARNINGS   COMPREHENSIVE LOSS    TOTAL
                                     ------   ----------   --------   ------------------   --------
<S>                                  <C>      <C>          <C>        <C>                  <C>
Balances, January 1, 1999..........   $152     $31,493     $ 83,775        $    --         $115,420
  Net income.......................     --          --       18,615             --           18,615
  Exercised stock options..........     --          11           --             --               11
                                      ----     -------     --------        -------         --------
Balances, December 31, 1999........   $152     $31,504     $102,390        $    --         $134,046
  Net loss.........................     --          --      (16,933)            --          (16,933)
  Exercised stock options..........      1         380           --             --              381
                                      ----     -------     --------        -------         --------
Balances, December 31, 2000........   $153     $31,884     $ 85,457        $    --         $117,494
  Net income.......................     --          --        8,012             --            8,012
  Other comprehensive loss:
     Pension adjustment, net of tax
       benefit of $669.............     --          --           --         (1,216)          (1,216)
  Exercised stock options..........     --          96           --             --               96
                                      ----     -------     --------        -------         --------
Balances, December 31, 2001........   $153     $31,980     $ 93,469        $(1,216)        $124,386
                                      ====     =======     ========        =======         ========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                        25
<PAGE>

                             CHASE INDUSTRIES INC.

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Operating activities:
  Income from continuing operations.........................  $  8,126   $ 19,077   $ 18,113
  Adjustments to reconcile income from continuing operations
     to net cash provided by operating activities:
     Depreciation...........................................     7,047      6,544      6,219
     Deferred income tax expense............................     7,228      6,887      1,078
     Lower of cost-or-market inventory writedown............     1,840         --         --
     LIFO liquidation expense...............................       562         --         --
     BP Settlement..........................................    (2,000)        --         --
     Changes in assets and liabilities:
       Decrease (increase) in receivables...................     2,170        (18)    (2,083)
       Decrease (increase) in inventories...................     9,179    (10,649)     5,144
       Decrease (increase) in prepaid expenses..............       373      3,181     (3,792)
       (Increase) in other assets...........................    (2,831)    (3,718)    (8,627)
       (Decrease) increase in accounts payable..............    (3,992)      (732)     4,415
       (Decrease) increase in accrued liabilities...........    (2,884)    (2,686)     7,096
                                                              --------   --------   --------
       Net cash provided by operating activities of
          continuing operations.............................    24,818     17,886     27,563
                                                              --------   --------   --------
  Discontinued operations:
     Loss on disposal of discontinued operations............      (193)   (36,000)        --
     Non-cash items from discontinued operations............       193     36,000         --
     Cash (used in) provided by discontinued operations.....    (1,515)     3,661      3,446
                                                              --------   --------   --------
       Net cash (used in) provided by discontinued
          operations........................................    (1,515)     3,661      3,446
                                                              --------   --------   --------
          Net cash provided by operating activities.........    23,303     21,547     31,009
                                                              --------   --------   --------
Investing activities:
  Proceeds from sale of subsidiary..........................    29,846         --         --
  Expenditures for property, plant and equipment............   (39,032)   (20,066)   (31,078)
                                                              --------   --------   --------
          Net cash (used in) investing activities...........    (9,186)   (20,066)   (31,078)
                                                              --------   --------   --------
Financing activities:
  Principal payments on bank term loan......................        --     (7,000)        --
  Other, net................................................        96        381         11
                                                              --------   --------   --------
          Net cash provided by (used in) financing
            activities......................................        96     (6,619)        11
                                                              --------   --------   --------
Net increase (decrease) in cash and cash equivalents........    14,213     (5,138)       (58)
Cash and cash equivalents, beginning of year................     3,993      9,131      9,189
                                                              --------   --------   --------
Cash and cash equivalents, end of year......................  $ 18,206   $  3,993   $  9,131
                                                              ========   ========   ========
Supplemental disclosures:
  Interest paid.............................................  $    269   $    475   $    647
                                                              ========   ========   ========
  Income taxes paid.........................................  $    162   $    519   $ 11,703
                                                              ========   ========   ========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                        26
<PAGE>

                             CHASE INDUSTRIES INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SIGNIFICANT ACCOUNTING POLICIES:

  Principles of Consolidation and Organization

     The consolidated balance sheet as of December 31, 2001 and 2000, and the
consolidated statements of income, changes in stockholders' equity, and cash
flows for the years ended December 31, 2001, 2000 and 1999, include the accounts
of Chase Industries Inc. (the "Company"), a Delaware corporation, and its
wholly-owned subsidiary, Chase Brass & Copper Company, Inc. ("CBCC"), a Delaware
corporation. All significant intercompany transactions have been eliminated in
consolidation. The Company, through its wholly-owned subsidiary CBCC, is a
leading manufacturer of brass rod.

     In fourth quarter 2000, the Company decided to divest Leavitt Tube Company,
Inc. ("Leavitt"), a Delaware corporation. On March 15, 2001, the Company signed
a definitive agreement to sell the assets and operations of Leavitt, including
the stock of Holco Corporation ("Holco"), an Illinois corporation and wholly-
owned subsidiary of Leavitt, to privately-held Pinkert Industrial Group, LLC,
headquartered in Chicago, for $31.7 million, before closing costs and fees of
$1.9 million. The sale closed on March 30, 2001. Leavitt has been reflected in
the consolidated financial statements as a discontinued operation. For
additional discussion on the discontinued operation, see Note 13, Discontinued
Operations.

     On August 24, 1990, the Company acquired, through CBCC, the assets and
operations of a Delaware corporation formerly named Chase Brass & Copper
Company, Incorporated ("Old Chase"), pursuant to the Asset Purchase Agreement
("CBCC Purchase Agreement") dated May 10, 1990, by and between the Company,
CBCC, Old Chase, BP Exploration (Alaska) Inc. ("BPE") and The Standard Oil
Company (the "CBCC Acquisition"). BPE and The Standard Oil Company own all the
stock of Old Chase. BPE, The Standard Oil Company and Old Chase are sometimes
referred to herein collectively as "BP." The CBCC Acquisition was accounted for
as a purchase.

     On August 30, 1996, the Company acquired, through Leavitt, the assets and
operations of the steel tube division of UNR Industries, Inc., including all the
outstanding stock of Holco (the "Leavitt Acquisition"). Upon consummation of the
Leavitt Acquisition, Leavitt continued operations in the manufacture and sale of
structural and mechanical steel tubing and structural pipe. The Leavitt
Acquisition was accounted for as a purchase.

  Revenue Recognition

     Net sales represent gross sales of brass rod and are recorded at the time
of shipment. The gross sales price of brass rod consists of a metal price
charged to the customers and a fabrication price as separate components. In
addition, approximately 11% of pounds sold by CBCC are made on a "tolling"
basis, where the customer consigns brass scrap to CBCC and is only charged a
fabrication price for processing the brass scrap into finished rod. For tolling
sales, the brass metal value is not included in net sales or cost of goods sold.

  Use of Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

  Inventories

     Inventories are stated at the lower of cost-or-market, with cost determined
on the last-in, first-out (LIFO) basis. Inventories have been written down to
lower of cost-or-market and such reduced amounts are

                                        27
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

considered cost for subsequent years. During 2001, the Company recorded a
non-cash inventory writedown totaling $1.8 million due to reductions in the
brass metal price.

     If the first-in, first-out (FIFO) method for determining cost had been
used, inventories would have been approximately $1.0 million lower and $0.4
million higher at December 31, 2001 and 2000, respectively.

     The Company experienced an inventory reduction in 2001, which resulted in a
liquidation of LIFO inventory quantities carried at higher costs prevailing in
prior years. The effect of this non-cash inventory reduction decreased operating
income by $562,000 in 2001. There were no LIFO liquidations in 2000 or 1999.

  Property, Plant and Equipment

     Property, plant and equipment are stated at cost. Depreciation is primarily
computed by the straight-line method based on estimated useful lives of the
assets. Upon retirement or disposal, the cost and accumulated depreciation are
removed from the accounts, and any gain or loss is included in income.
Maintenance and repair costs are charged to expense as incurred. Long-lived
assets are reviewed for impairment whenever events or changes in circumstances
indicate that their carrying amounts may not be recoverable.

  Cash Flows

     For purposes of the consolidated statement of cash flows, the Company
considers all highly liquid investments, with a maturity of three months or less
when purchased, to be cash equivalents. The carrying value of these financial
instruments approximates market value.

  Concentration of Credit Risk

     Accounts receivable is the principal financial instrument, which subjects
the Company to concentration of credit risk. Credit is extended based upon an
evaluation of the customer's financial condition and, generally, collateral is
not required. Concentrations of credit risk with respect to receivables are
somewhat limited due to the Company's large number of customers, the diversity
of these customers' businesses and the dispersion of such customers throughout
the continental United States, parts of Canada and Mexico. All sales are
denominated in U. S. dollars. The Company maintains an allowance for doubtful
accounts and claims based upon the expected collectibility of all trade
receivables.

  Recently Issued Accounting Pronouncements

     The Company adopted Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"), as
amended, effective January 1, 2001. This statement requires that all derivatives
be recognized on the balance sheet at fair value. The adoption of SFAS 133, as
amended, did not have a material effect on the Company's financial position or
results of operations.

     In September 2000, the FASB issued Statement of Financial Accounting
Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities" ("SFAS 140"). SFAS 140 replaces Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishment of Liabilities" ("SFAS 125") and is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after June 30, 2001. The adoption of SFAS 140 during 2001
did not have any effect on the Company's financial position or results of
operations.

     In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 141, "Business Combinations" ("SFAS 141"). SFAS 141 requires that all
business combinations be accounted for under the purchase method. Use of the
pooling-of-interests method is no longer permitted. The adoption of SFAS 141, in
third quarter 2001, did not have any effect on the Company's financial position
or results of operations.

                                        28
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In July 2001, the FASB issued Statement of Financial Accounting Standards
No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). This statement
eliminates the amortization of goodwill, among other things, and replaces it
with an annual goodwill impairment test. The adoption of SFAS 142, effective
January 1, 2002, did not have any effect on the Company's financial position or
results of operations.

     In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS 143
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs. It applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development
and/or, the normal operation of a long-lived asset, except for certain
obligations of lessees. The adoption of FAS 143, effective January 1, 2002, did
not have any effect on the Company's financial position or results of
operations.

     In August 2001, the FASB issued Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"). SFAS 144 requires that one accounting model be used for long-lived assets
to be disposed of by sale, whether previously held and used or newly acquired,
and broadens the presentation of discontinued operations to include more
disposal transactions. The adoption of FAS 144, effective January 1, 2002, did
not have any effect on the Company's financial position or results of
operations.

  Reclassifications

     Certain prior year information has been reclassified to be comparable to
the current year presentation.

2.  INVENTORIES:

     Inventories consisted of the following (in thousands):

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                               2001        2000
                                                              -------     -------
<S>                                                           <C>         <C>
Raw materials...............................................  $ 3,026     $ 5,703
Work in progress............................................    8,613      11,224
Finished goods..............................................    7,218      13,699
                                                              -------     -------
                                                               18,857      30,626
Tolling metal due customers.................................   (1,366)     (1,554)
                                                              -------     -------
                                                              $17,491     $29,072
                                                              =======     =======
</Table>

3.  PROPERTY, PLANT AND EQUIPMENT:

     Property, plant and equipment and the related depreciable lives consisted
of the following (in thousands):

<Table>
<Caption>
                                                                DECEMBER 31, 2001
                                                              ---------------------
                                                                2001         2000
                                                              --------     --------
<S>                                                           <C>          <C>
Land and land improvements (15-20 years)....................  $    624     $    635
Buildings and improvements (10-39 years)....................    30,167       19,319
Machinery and equipment (3-25 years)........................    97,042       78,763
Construction in progress....................................    23,529       14,011
                                                              --------     --------
                                                               151,362      112,728
Accumulated depreciation....................................   (43,718)     (37,069)
                                                              --------     --------
                                                              $107,644     $ 75,659
                                                              ========     ========
</Table>

                                        29
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4.  OTHER ASSETS:

     Income tax receivable.  At December 31, 2001, a $2.8 million income tax
receivable was recorded as a result of a net operating loss arising from the
divestiture of Leavitt that is expected to be carried back to 1999.

     Receivable from BP.  The receivable from BP, at December 31, 2000,
represented the amounts from claims by the Company against BP under the CBCC
Purchase Agreement and a Remediation Agreement (as hereinafter defined). See
Note 11, Commitments and Contingencies, for further discussion of the receivable
from BP. The receivable from BP consisted of the following (in thousands):

<Table>
<S>                                                            <C>
Certain environmental remediation costs.....................   $16,430
Post-closing adjustments per CBCC Purchase Agreement........     1,292
Environmental-related capital expenditures..................     1,518
Other costs and claims......................................     2,360
                                                               -------
Receivable from BP..........................................   $21,600
                                                               =======
</Table>

5.  FINANCING ARRANGEMENTS:

     Debt consisted of the following at December 31, 2000 (in thousands):

<Table>
<S>                                                           <C>
BP note.....................................................  $20,000
                                                              -------
Total debt..................................................   20,000
Current portion of long-term debt...........................   20,000
                                                              -------
Long-term debt..............................................  $    --
                                                              =======
Interest payable -- Seller's note:
  Contingent interest.......................................  $   254
  Interest on BP note.......................................    7,429
  Accrued interest on BP note...............................      662
                                                              -------
Current interest payable -- Seller's note...................  $ 8,345
                                                              =======
</Table>

     The Company had no debt outstanding at December 31, 2001.

     In connection with the CBCC Acquisition, the Company issued to BP a
promissory note in the original principal amount of $20.0 million as partial
consideration for the CBCC Acquisition (the "BP Note"). The BP Note was recorded
at the CBCC Acquisition date at a discount using a 10.4% effective interest
rate. The BP Note initially matured in August 1996, and the Company, at its
option, extended the maturity date for three additional years to August 1999
with interest payable annually at 9.28%. The BP Note contained a contingent
interest payment based upon average Company earnings (defined in the BP Note)
for the years ended December 31, 1990 through 1995. The contingent interest,
totaling $254,000 and due August 1996, and the annual interest of $1,856,000 due
August 1997 and 1998, were offset against the receivable from BP. As of the
August 24, 1999, due date of the BP Note, the Company also offset the $1,856,000
in accrued and unpaid interest due August 24, 1999, and the full principal
balance of the BP Note against the receivable from BP and other amounts claimed
by the Company to be owed by BP to the Company as a result of BP's breach of the
CBCC Purchase Agreement and the Remediation Agreement. However, for financial
statement reporting purposes, pursuant to Statement of Financial Accounting
Standards No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilities" ("SFAS 125"), at December 31, 2000, the
Company continued to record the full principal balance of the BP Note as a
liability. SFAS 125 requires that in order to extinguish a liability, the debtor
must be legally released from the obligation by either the creditor

                                        30
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

or judicially. The Company maintained the debt on its books and continued to
accrue interest at 9.28% until February 2001, when the matter was settled. See
Note 11, Commitments and Contingencies, for further discussion of the BP Note.

     In connection with the Leavitt Acquisition, the Company entered into a
credit facility (the "Bank Credit Facility") of $100 million agented by PNC
Bank, National Association ("PNC Bank"). The Bank Credit Facility originally
included a $60 million term loan ("Term Loan") and a $40 million revolving
credit facility ("Revolving Credit Facility"). In June 2000, the Company prepaid
the remaining $7 million outstanding under the Term Loan. The Term Loan was
repaid three years ahead of schedule. Effective September 8, 1999, the Company
and PNC Bank agreed on an amendment to the Bank Credit Facility which increased
the Revolving Credit Facility by $10 million, to $50 million. On September 1,
2000, the Company and PNC Bank agreed on an extension to August 30, 2002, on the
Revolving Credit Facility.

     Advances under the Bank Credit Facility bear interest at alternative
variable rates based on certain percentages, as provided in the agreement, in
excess of the lending bank's prime rate, the Federal funds rate or LIBOR, with
interest payable quarterly or as of the end of each LIBOR borrowing period,
whichever is shorter. No borrowings were outstanding on the Bank Credit Facility
at December 31, 2001 and 2000.

     The Bank Credit Facility contains certain covenants that, among other
things, limit the Company's ability to incur additional debt or pay dividends.
The covenants also require the Company to maintain a minimum interest coverage
ratio and level of net worth and restrict the Company from exceeding a maximum
ratio of debt to cash flow from operations. The Bank Credit Facility also
requires the Company to maintain CBCC as a wholly-owned subsidiary.

     The Company capitalized interest expense on major capital projects totaling
$261,000 and $384,000 for the years ended December 31, 2001 and 2000,
respectively.

6.  RETIREMENT PLANS:

     The Company provides various contributory and noncontributory benefit plans
covering substantially all of its employees, including profit sharing plans,
employee savings plans under Section 401(k) of the Internal Revenue Code and
defined benefit pension plans.

     For plans to which the Company contributes, the contributions become fully
vested after three years of service. The amount of Company contributions to the
employee savings plans are based on formulas outlined in the plans. Company
contributions under the noncontributory qualified profit sharing plans are based
on a percentage of eligible employees' compensation. Contributions to the trust
fund of the profit sharing plans are discretionary, and the Company has the
right to amend, modify or terminate the plans, but in no event will any portion
of vested contributions revert to the Company. Charges to expense under the
defined contribution plans, for the years ended December 31, 2001, 2000 and
1999, were $481,000, $459,000 and $454,000, respectively.

     The defined benefit retirement plans provide benefits based on a
participant's years of service and stated monthly benefit amounts based on the
date of retirement. The Company's policy is to make periodic contributions as
required by contract or applicable regulations.

                                        31
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following tables provide a reconciliation, for the years ended December
31, 2001 and 2000, of the changes in the defined benefit retirement plans'
benefit obligations and fair value of assets (in thousands):

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              ------------------
                                                               2001       2000
                                                              -------    -------
<S>                                                           <C>        <C>
Change in plan assets:
  Fair value at beginning of year...........................  $11,791    $11,004
  Actual (loss) return on plan assets.......................   (1,369)       549
  Employer contributions....................................    1,685        548
  Benefit payments..........................................     (331)      (310)
                                                              -------    -------
  Fair value at end of year.................................  $11,776    $11,791
                                                              =======    =======
</Table>

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              ------------------
                                                               2001       2000
                                                              -------    -------
<S>                                                           <C>        <C>
Change in benefit obligation:
  Obligation at beginning of year...........................  $13,555    $10,697
  Service cost..............................................      221        343
  Interest cost.............................................      907        907
  Plan amendments...........................................       --        919
  Assumption changes........................................       --        533
  Actuarial (gain) loss.....................................     (232)       466
  Effect of curtailment.....................................     (893)        --
  Benefit payments..........................................     (331)      (310)
                                                              -------    -------
  Obligation at end of year.................................  $13,227    $13,555
                                                              =======    =======
</Table>

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              ------------------
                                                               2001       2000
                                                              -------    -------
<S>                                                           <C>        <C>
  Underfunded status at end of year.........................  $(1,451)   $(1,764)
  Unrecognized net actuarial loss...........................    1,885        184
  Unrecognized prior service cost...........................      668      1,572
  Additional minimum liability..............................   (2,553)        --
                                                              -------    -------
  Accrued benefit cost......................................  $(1,451)   $    (8)
                                                              =======    =======
  Pension intangible asset..................................  $   668    $    --
                                                              =======    =======
  Accumulated other comprehensive loss......................  $(1,885)   $    --
                                                              =======    =======
</Table>

     For the year ended December 31, 2001, the discount rate used in determining
the projected benefit obligation was 7.25% and the expected long-term rate of
return on assets ranged from 8.0% to 8.5%. For the year ended December 31, 2000,
the discount rate used in determining the projected benefit obligation ranged
from 7.25% to 7.38% and the expected long-term rate of return on assets ranged
from 8.0% to 8.5%.

                                        32
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The defined benefit retirement plans' net periodic pension expense was as
follows (in thousands):

<Table>
<Caption>
                                                             YEAR ENDED DECEMBER 31,
                                                             -----------------------
                                                              2001     2000    1999
                                                             -------   -----   -----
<S>                                                          <C>       <C>     <C>
Service cost...............................................  $   221   $ 343   $ 357
Interest cost..............................................      907     907     766
Actual loss (return) on plan assets........................    1,369    (585)   (819)
Net amortization and deferral..............................   (2,155)   (207)    119
Curtailment charge.........................................      648      --      --
                                                             -------   -----   -----
Net periodic pension expense...............................  $   990   $ 458   $ 423
                                                             =======   =====   =====
Amount recognized in other comprehensive...................  $ 1,885   $  --   $  --
                                                             =======   =====   =====
</Table>

     During 2001, a pension plan was curtailed as a result of the divestiture of
Leavitt.

7.  INCOME TAXES:

     The consolidated provision for income taxes for income from continuing
operations consisted of the following (in thousands):

<Table>
<Caption>
                                                            YEAR ENDED DECEMBER 31,
                                                          ---------------------------
                                                           2001      2000      1999
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Current taxes:
  Federal...............................................  $(2,818)  $ 3,793   $ 8,823
  State.................................................       62       192     1,502
                                                          -------   -------   -------
Total current taxes (benefit) expense...................   (2,756)    3,985    10,325
Deferred tax expense....................................    7,228     6,887       778
                                                          -------   -------   -------
Provision for income taxes..............................  $ 4,472   $10,872   $11,103
                                                          =======   =======   =======
</Table>

     Deferred income taxes are recorded to reflect the tax consequences on
future years of differences between the financial statement and tax bases of
assets and liabilities and were composed of the following (in thousands):

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              ------------------
                                                               2001       2000
                                                              -------    -------
<S>                                                           <C>        <C>
Net current deferred tax asset:
  Inventory reserves........................................  $ 1,434    $   958
  Accrued employee benefits.................................      461        510
  Allowance for doubtful accounts and claims................      264        248
  Capital loss carryforward.................................    4,272      4,272
  Valuation allowance.......................................   (4,272)    (4,272)
  Other, net................................................    2,365      1,535
                                                              -------    -------
                                                              $ 4,524    $ 3,251
                                                              =======    =======
Net long-term deferred tax liability:
  Depreciation and basis differences........................  $10,638    $ 8,847
  Other, net................................................       55      5,507
                                                              -------    -------
                                                              $10,693    $14,354
                                                              =======    =======
</Table>

                                        33
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The disposal of Leavitt in 2001 generated a capital loss carryforward in
the amount of $12.0 million. The capital loss carryforward was offset with a
valuation allowance because the Company's ability to realize the amount carried
forward was uncertain. The capital loss carryforward expires in 2006.

     A reconciliation of the provision for income taxes compared with the
amounts at the federal statutory tax rate follows (in thousands):

<Table>
<Caption>
                                                            YEAR ENDED DECEMBER 31,
                                                           --------------------------
                                                            2001     2000      1999
                                                           ------   -------   -------
<S>                                                        <C>      <C>       <C>
Tax provision at statutory rate of 35%...................  $4,409   $10,482   $10,226
State taxes..............................................      41       116       854
Other, net...............................................      22       274        23
                                                           ------   -------   -------
Provision for income taxes...............................  $4,472   $10,872   $11,103
                                                           ======   =======   =======
Effective tax rate.......................................    35.5%     36.3%     38.0%
</Table>

8.  STOCK OPTIONS:

     In November 1994, the Company implemented its 1994 Long-Term Incentive Plan
(the "1994 Plan"). Under the 1994 Plan, as amended, 2,250,000 shares of Common
Stock are reserved for options granted or available for grant. Stock options
granted on or before December 31, 2001, become exercisable over five years from
the grant date (subject to acceleration under certain circumstances), expire
after ten years and have an exercise price equal to the closing market price on
the grant date.

     In May 1997, the Company implemented its 1997 Non-Employee Director Stock
Option Plan (the "Director Plan") which provides for the granting of stock
options to non-employee directors upon their election to the Board of Directors
and, at the election of each non-employee director, in lieu of all or a portion
of their annual retainer and meeting fees. Under the Director Plan, 150,000
shares of Common Stock are reserved for options granted or available for grant.
Stock options granted upon election to the Board become exercisable in 20%
increments on each of the first five anniversaries of the date of grant, have an
exercise price equal to the average closing market price of common stock for the
five trading days preceding the date of election to the Board, and expire after
ten years. Stock options granted in lieu of the annual retainer and meeting fees
are granted quarterly at the end of each quarter, become exercisable immediately
upon grant, have an exercise price equal to one-half of the average closing
market price of Common Stock for the last five trading days of the quarter to
which the grant relates, and expire after ten years.

     In May 1997, the Company implemented its 1997 Executive Deferred
Compensation Stock Option Plan (the "Executive Plan") which provides for the
granting of stock options to eligible executives of the Company and its
subsidiaries who elect to participate in the Executive Plan and receive stock
options in lieu of all or a portion of their annual cash bonus. Under the
Executive Plan, 450,000 shares of Common Stock are reserved for options granted
or available for grant. Stock options granted under the Executive Plan are
granted on the date of determination of a participant's annual cash bonus,
become exercisable immediately upon grant and expire after ten years. The stock
options related to each annual bonus amount deferred are granted in four series
of equal numbers of options, with each series attributed to a calendar quarter
in the calendar year to which the bonus relates. Stock options granted in each
series have an exercise price equal to one-half of the average closing market
price of Common Stock for the last five trading days of the calendar quarter to
which such series relates.

                                        34
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following summary includes stock options granted under all the Plans as
of December 31:

<Table>
<Caption>
                                 2001                   2000                   1999
                         --------------------   --------------------   --------------------
                                     WEIGHTED               WEIGHTED               WEIGHTED
                          NUMBER     AVERAGE     NUMBER     AVERAGE     NUMBER     AVERAGE
                            OF       EXERCISE      OF       EXERCISE      OF       EXERCISE
                          SHARES      PRICES     SHARES      PRICES     SHARES      PRICES
                         ---------   --------   ---------   --------   ---------   --------
<S>                      <C>         <C>        <C>         <C>        <C>         <C>
Outstanding at
  beginning of year....  1,737,478    $10.71    1,666,516    $11.19    1,586,793    $11.42
Granted................     47,261      4.78      179,337      6.58      111,583      8.15
Exercised..............    (11,825)     6.67      (50,925)     6.67       (1,425)     6.67
Canceled / Forfeited...   (307,935)    12.47      (57,450)    15.35      (30,435)    11.75
                         ---------    ------    ---------    ------    ---------    ------
Outstanding at end of
  year.................  1,464,979    $10.19    1,737,478    $10.71    1,666,516    $11.19
                         =========    ======    =========    ======    =========    ======
Exercisable at end of
  year.................  1,280,619    $ 9.93    1,312,268    $ 9.91    1,044,896    $ 9.05
                         =========    ======    =========    ======    =========    ======
</Table>

     The following table summarizes information about employee stock options
outstanding at December 31, 2001:

<Table>
<Caption>
                                          OPTIONS OUTSTANDING            OPTIONS EXERCISABLE
                                   ----------------------------------   ----------------------
                                                 WEIGHTED   WEIGHTED                  WEIGHTED
                                                 AVERAGE     AVERAGE                  AVERAGE
                                     NUMBER      EXERCISE   REMAINING     NUMBER      EXERCISE
RANGE OF EXERCISE PRICES           OUTSTANDING    PRICE       LIFE      EXERCISABLE    PRICE
------------------------           -----------   --------   ---------   -----------   --------
<S>                                <C>           <C>        <C>         <C>           <C>
$ 4.00 to $ 8.67.................     827,796     $ 6.54       3.9         767,156     $ 6.40
  8.68 to  15.17.................     307,183      11.59       4.4         238,663      12.00
 17.34 to  21.67.................     330,000      18.03       3.7         274,800      18.01
                                    ---------     ------                 ---------     ------
  4.00 to  21.67.................   1,464,979     $10.19       4.0       1,280,619     $ 9.93
                                    =========     ======                 =========     ======
</Table>

     Effective January 1, 1996, the Company adopted the disclosure requirements
of Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123"). However, as permitted under SFAS 123,
the Company has elected to continue accounting for the Plan in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"), which is an intrinsic value based method of accounting.
Had stock option compensation for the Plan been determined based on the fair
value of the stock options on the respective grant dates consistent with the
methodology of SFAS 123, the pro forma reduction to the Company's net income and
basic earnings per share would have been $746,000, $1,117,000 and $853,000, and
$.05, $.07 and $.06 in 2001, 2000 and 1999, respectively.

     The fair value of each stock option grant was estimated as of the grant
date using the Black-Scholes option-pricing model with the following assumptions
used for stock options granted in:

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               2001     2000     1999
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Estimated fair value per share of options granted during the
  year......................................................  $6.73    $4.78    $4.26
Assumptions:
  Annualized dividend yield.................................     --       --       --
  Common stock price volatility.............................   36.2%    38.0%    32.6%
  Risk-free rate of return..................................    4.8%     6.6%     6.0%
  Expected option term (in years)...........................      6        6        6
</Table>

                                        35
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9.  COMMON STOCK AND EARNINGS PER SHARE:

     The following is a reconciliation of the denominator used in the
computation of basic and diluted earnings per share. Average shares are as
follows:

<Table>
<Caption>
                                                         YEAR ENDED DECEMBER 31,
                                                   ------------------------------------
                                                      2001         2000         1999
                                                   ----------   ----------   ----------
<S>                                                <C>          <C>          <C>
Basic............................................  15,295,848   15,263,403   15,234,413
Stock options....................................     170,888      114,054      101,883
                                                   ----------   ----------   ----------
Diluted..........................................  15,466,736   15,377,457   15,336,296
                                                   ==========   ==========   ==========
</Table>

     All shares of Common Stock and Nonvoting Common Stock are identical, except
that holders of Nonvoting Common Stock have no voting rights. All of the
6,150,118 shares of Nonvoting Common Stock outstanding at December 31, 2000 were
converted into 6,150,118 shares of Common Stock in 2001. As of December 31,
2001, there were no shares of Nonvoting Common Stock outstanding.

     At December 31, 2001 and 2000, the Company had no preferred stock issued or
outstanding. In conjunction with the initial public offering in November 1994,
the Company authorized 1,000,000 shares of preferred stock, none of which has
been issued. The preferences and rights of such preferred stock may be
determined by the Board of Directors at any time prior to issuance. Of the
1,000,000 shares of authorized preferred stock, 36,310 have been designated
Series A Junior Participating Preferred Stock, which are reserved for issuance
pursuant to the rights as described below.

     On December 26, 2000, the Board of Directors declared a dividend
distribution of one preferred share purchase right (a "right") for each share of
the Company's common stock outstanding on January 5, 2001. Each right would
entitle shareholders to purchase from the Company one one-thousandth of a share
of Series A Junior Participating Preferred Stock, $.01 par value, of the Company
at a price of $30 per one one-thousandth of a Preferred Share, subject to
adjustment. The rights are not currently exercisable, but would become
exercisable if certain events occurred relating to a person or group acquiring
or attempting to acquire 20 percent or more of the outstanding shares of common
stock. The rights expire on December 26, 2010, unless the expiration date is
extended or the rights are redeemed or exchanged by the Company earlier.

10.  OPERATING LEASE OBLIGATIONS:

     Rental expense under operating leases was $1,384,000, $1,710,000 and
$1,575,000 for the years ended December 31, 2001, 2000 and 1999, respectively.
As of December 31, 2001, the minimum rental commitments under long-term
operating leases were as follows: $1,317,000 in 2002, $1,257,000 in 2003,
$266,000 in 2004, $224,000 in 2005 and $112,000 in 2006.

     In December 1997, CBCC entered into a six-year operating lease agreement
for certain manufacturing equipment. There are several options available to the
Company during or at the end of the lease term, which includes renewal of the
lease, purchase of the equipment by CBCC or sale of the equipment. In March
2002, the Company intends to purchase this leased equipment for approximately
$10.4 million.

11.  COMMITMENTS AND CONTINGENCIES:

     The Company is subject to certain contingent environmental liabilities with
respect to CBCC's facility. CBCC is in the process of developing a remediation
plan for in situ remediation at two areas of its site that are contaminated with
certain volatile organic compounds ("VOCs"). Based on preliminary cost estimates
provided by CBCC's independent environmental consultant, and subject to the
development by the consultant of a remediation plan for these areas of the site
and the receipt of bids for the remediation activities required under such plan,
the Company estimates the cost for this project to approximate $3 million, based
upon

                                        36
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

capital and operating costs for a period of five years. However, subject to
pilot testing and operating experience, costs may increase or decrease depending
on the scale and operating period.

     As of December 31, 2000, the reserve for remediation activities was $4.0
million, including $3.0 million for the in situ remediation plan, $0.6 million
for environmental consulting and $0.4 million for final payments to be made on
remediation activities completed in 2000. In first quarter 2001, as a result of
the settlement of the Company's litigation with BP discussed below, the Company
recorded an additional $4.8 million of environmental reserves relating to
obligations retained by the Company. The Company had remediation spending of
$0.6 million for the twelve months ended December 31, 2001, including the
payment of the $0.4 million for activities completed in 2000. As a result of the
foregoing, the environmental reserve totaled $8.2 million at December 31, 2001.

     Based on currently available data, the Company believes that upon
completion of the remediation activities at the two areas described above, CBCC
will have substantially completed the remediation activities that the Company
believes are necessary to address contamination at its site. However, until the
completion of these remedial and associated investigatory activities and
approval from the Ohio Environmental Protection Agency ("EPA") of CBCC's
activities to remediate this contamination, as well as remediation activities
previously conducted, the Company cannot be certain that further remediation
activities will not be required at its site. To the extent regulatory agencies
require additional remediation at those areas of CBCC's site where CBCC
previously has undertaken remediation activities, or require excavation of soil
at the two areas for which CBCC currently is developing a remediation plan for
in situ remediation, as part of the settlement of litigation with BP in first
quarter 2001 discussed below, BP has retained responsibility for such
remediation activities.

     The Company believes it will be able to fund cleanup costs related to
anticipated future remediation activities at its manufacturing facility with
cash on hand and borrowings under its existing Bank Credit Facility. Therefore,
the Company does not believe that funding these remediation activities will have
a material effect on the Company's financial condition, results of operations or
liquidity.

     Other than as described above, no reserves have been established regarding
the aforementioned matters. Additionally, the Company expects no material impact
on its financial position, results of operations or liquidity as a result of the
existence of any other environmental conditions related to CBCC.

     CBCC and/or other entities named "Chase Brass & Copper Co." (which may
include Old Chase or divisions of Old Chase) have been named by governmental
agencies and/or private parties as a potentially responsible party ("PRP") under
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA") and/or state laws with respect to four sites (and possibly a fifth
site). The Company believes that CBCC has no liability for the cleanup costs
related to these sites because (a) such liability is attributable to an entity
that had the same or similar name to that of CBCC, such as a division or a
subsidiary of BP (other than the brass rod division of Old Chase), or (b) such
liability arose from acts that occurred prior to the CBCC Acquisition and,
therefore, BP retained such liability under the CBCC Purchase Agreement and is
contractually obligated to indemnify the Company for such liabilities. To the
extent CBCC incurs any cleanup costs with respect to these sites, it intends to
enforce its rights under the CBCC Purchase Agreement to recover such amounts
from BP.

     On January 7, 1998, a lawsuit entitled Ken-Chas Reserve Company and BP
Exploration (Alaska) Inc. and The Standard Oil Company v. Chase Industries Inc.
and Chase Brass & Copper Company, Inc. was filed in the Court of Common Pleas in
Cuyahoga County, Ohio. The Company and BP entered into a Settlement Agreement
and Mutual Release dated February 22, 2001 (the "Settlement Agreement"),
pursuant to which the Company and BP resolved and settled the claims between
them that were the subject of the lawsuit. Pursuant to the Settlement Agreement,
(1) the Company paid to BP $2 million, (2) the $20 million promissory note
issued to Old Chase as part of the consideration for the CBCC Acquisition (the
"BP Note")

                                        37
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

was deemed paid in full, (3) the Company retained responsibility and financial
liability for completing in situ remediation at the two remaining areas of
CBCC's site where additional remediation activities currently are contemplated
to be required and (4) BP retained financial liability for (A) excavation
activities that may be required by regulatory agencies at these two remaining
sites and (B) additional remediation activities that may be required by
regulatory agencies at the remaining areas of CBCC's site, including areas where
remediation activities previously have been conducted. BP also retained and
reaffirmed its obligations under the CBCC Purchase Agreement to indemnify the
Company and CBCC for any claim made against the Company or CBCC in respect of
any liability or obligation of BP which was not assumed by the Company or CBCC
as part of the CBCC Acquisition, including without limitation claims related to
off-site contamination and third party claims.

     At the time of the BP settlement, the Company had a $21.8 million
receivable from BP, a note payable of $20.0 million and accrued interest on the
BP Note aggregating $8.6 million. In February 2001, these amounts were settled
with a payment of $2.0 million to BP. As a result of the settlement and the
obligations retained by the Company, an additional environmental liability
totaling $4.8 million was accrued.

     In addition to the above, the Company has outstanding purchase commitments
for capital equipment and installation costs totaling approximately $9.3 million
at December 31, 2001.

                                        38
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED; IN THOUSANDS, EXCEPT PER SHARE
     AMOUNTS)

<Table>
<Caption>
                                                                 2001*
                                                 -------------------------------------
                                                  FIRST    SECOND     THIRD    FOURTH
                                                 QUARTER   QUARTER   QUARTER   QUARTER
                                                 -------   -------   -------   -------
<S>                                              <C>       <C>       <C>       <C>
Net sales......................................  $66,207   $56,846   $56,503   $52,336
Gross profit...................................  $ 8,418   $ 8,186   $ 7,423   $ 6,457
Income from continuing operations..............  $ 1,624   $ 2,469   $ 2,490   $ 1,543
Discontinued operations:
  Income, net of taxes.........................       79        --        --        --
  Loss on disposal, net of taxes...............       --        --        --      (193)
                                                 -------   -------   -------   -------
Net income.....................................  $ 1,703   $ 2,469   $ 2,490   $ 1,350
                                                 =======   =======   =======   =======
Average shares outstanding:
  Basic........................................   15,290    15,298    15,298    15,298
  Diluted......................................   15,488    15,478    15,461    15,435
Basic earnings per share:
  Continuing operations........................  $  0.11   $  0.16   $  0.16   $  0.10
  Discontinued operations:
     Income, net of taxes......................       --        --        --        --
     Loss on disposal, net of taxes............       --        --        --     (0.01)
  Net income...................................     0.11      0.16      0.16      0.09
Diluted earnings per share:
  Continuing operations........................  $  0.10   $  0.16   $  0.16   $  0.10
  Discontinued operations:
     Income, net of taxes......................     0.01        --        --        --
     Loss on disposal, net of taxes............       --        --        --     (0.01)
  Net income...................................     0.11      0.16      0.16      0.09
</Table>

---------------

* The fourth quarter of 2001 included a lower of cost-or-market inventory
  writedown of $1,840,000.

                                        39
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                                 2000
                                                --------------------------------------
                                                 FIRST    SECOND     THIRD     FOURTH
                                                QUARTER   QUARTER   QUARTER   QUARTER
                                                -------   -------   -------   --------
<S>                                             <C>       <C>       <C>       <C>
Net sales.....................................  $81,635   $73,835   $70,010   $ 64,438
Gross profit..................................  $13,346   $12,673   $10,981   $  8,442
Income from continuing operations.............  $ 5,813   $ 5,359   $ 4,250   $  3,655
Discontinued operations:
  Income (loss), net of taxes.................     (136)     (428)      (89)       643
  Estimated loss on disposal, net of taxes....                                 (36,000)
                                                -------   -------   -------   --------
Net income (loss).............................  $ 5,677   $ 4,931   $ 4,161   $(31,702)
                                                =======   =======   =======   ========
Average shares outstanding:
  Basic.......................................   15,235    15,258    15,276     15,284
  Diluted.....................................   15,347    15,391    15,407     15,365
Basic earnings per share:
  Continuing operations.......................  $  0.38   $  0.35   $  0.28   $   0.24
  Discontinued operations:
       Income (loss), net of taxes............    (0.01)    (0.03)    (0.01)      0.04
       Estimated loss on disposal, net of
          taxes...............................       --        --        --      (2.35)
  Net income (loss)...........................     0.37      0.32      0.27      (2.07)
Diluted earnings per share:
  Continuing operations.......................  $  0.38   $  0.35   $  0.28   $   0.24
  Discontinued operations:
     Income (loss), net of taxes..............    (0.01)    (0.03)    (0.01)      0.04
     Estimated loss on disposal, net of
       taxes..................................       --        --        --      (2.34)
  Net income (loss)...........................     0.37      0.32      0.27      (2.06)
</Table>

                                        40
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                                 1999
                                                 -------------------------------------
                                                  FIRST    SECOND     THIRD    FOURTH
                                                 QUARTER   QUARTER   QUARTER   QUARTER
                                                 -------   -------   -------   -------
<S>                                              <C>       <C>       <C>       <C>
Net sales......................................  $72,744   $66,805   $66,624   $66,747
Gross profit...................................  $12,869   $11,772   $11,080   $11,475
Income from continuing operations..............  $ 5,238   $ 4,553   $ 4,066   $ 4,256
Income (loss) discontinued operations, net of
  taxes........................................     (826)      504       226       598
                                                 -------   -------   -------   -------
Net income.....................................  $ 4,412   $ 5,057   $ 4,292   $ 4,854
                                                 =======   =======   =======   =======
Average shares outstanding:
  Basic........................................   15,234    15,234    15,234    15,235
  Diluted......................................   15,357    15,326    15,324    15,335
Basic earnings per share:
  Continuing operations........................  $  0.34   $  0.30   $  0.27   $  0.28
  Discontinued operations:
     Income (loss), net of taxes...............    (0.05)     0.03      0.01      0.04
Net income.....................................     0.29      0.33      0.28      0.32
Diluted earnings per share:
  Continuing operations........................  $  0.34   $  0.30   $  0.27   $  0.28
  Discontinued operations:
     Income (loss), net of taxes...............    (0.05)     0.03      0.01      0.04
  Net income...................................     0.29      0.33      0.28      0.32
</Table>

13.  DISCONTINUED OPERATIONS

     In fourth quarter 2000, the Company decided to divest Leavitt. On March 15,
2001, the Company signed a definitive agreement to sell the assets and
operations of Leavitt to privately-held Pinkert Industrial Group, LLC,
headquartered in Chicago. The sale closed on March 30, 2001. The Company
received $31.7 million in cash, before closing costs and fees of $1.9 million.
In fourth quarter 2000, the Company recorded an estimated loss on the sale of
Leavitt of $36.0 million, including income tax benefit of $11.3 million. In
fourth quarter 2001, the Company recorded an additional $0.2 million loss on
sale of Leavitt, which resulted from the additional costs associated with
certain post-closing liabilities maintained by the Company. The disposal of the
assets and operations of Leavitt represented the disposal of a business segment.
Consequently, the consolidated financial statements reflect Leavitt as a
discontinued operation.

     The operating results of discontinued operations were as follows (in
thousands):

<Table>
<Caption>
                                                           YEAR ENDED DECEMBER 31,
                                                        -----------------------------
                                                         2001       2000       1999
                                                        -------   --------   --------
<S>                                                     <C>       <C>        <C>
Net sales.............................................  $23,251   $118,787   $127,792
Income (loss) before taxes............................  $   123   $    (16)  $    809
Loss on disposal......................................     (300)   (47,300)        --
Provision for income (taxes) benefit..................       63     11,306       (307)
                                                        -------   --------   --------
Net income (loss).....................................  $  (114)  $(36,010)  $    502
                                                        =======   ========   ========
</Table>

                                        41
<PAGE>
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     A portion of the Company's interest expense has been allocated to
discontinued operations based on the debt outstanding on Leavitt's balance
sheet. Income taxes on results of the discontinued operations have been
allocated using the same overall rate incurred by the Company in each year
presented.

     As of December 31, 2000, the assets and liabilities of the discontinued
operations were as follows (in thousands):

<Table>
<S>                                                            <C>
Assets:
  Receivables, net..........................................   $  7,521
  Inventories, net..........................................     29,194
  Other current assets......................................        815
  Property, plant and equipment, net........................     56,040
  Impairment of discontinued operations.....................    (36,000)
  Other assets..............................................      2,637
                                                               --------
       Total assets.........................................     60,207
                                                               --------
Liabilities:
  Accounts payable..........................................      9,101
  Accrued liabilities.......................................      5,006
  Noncurrent liabilities....................................      7,939
                                                               --------
       Total liabilities....................................     22,046
                                                               --------
Net assets of discontinued operations.......................   $ 38,161
                                                               ========
</Table>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     None.

                                        42
<PAGE>

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

GENERAL

     The Board of Directors currently consists of one person who is an employee
of the Company and seven persons who are not employees of the Company (i.e.,
outside directors). Set forth below are the names, ages and positions of the
Company's current directors and executive officers.

<Table>
<Caption>
NAME                                    AGE                POSITION(S)
----                                    ---                -----------
<S>                                     <C>   <C>
John H. Steadman......................  52    President, Chief Executive Officer and
                                              Director of the Company; President,
                                              Chief Operating Officer and Director
                                              of CBCC*

Todd A. Slater........................  38    Chief Financial Officer, Vice
                                              President Secretary of the Company;
                                              Chief Financial Officer and Director
                                              of CBCC*

Martin V. Alonzo......................  70    Director of the Company

Raymond E. Cartledge..................  72    Director of the Company

Charles E. Corpening..................  36    Director of the Company

John R. Kennedy.......................  71    Director of the Company

Robert D. Kennedy.....................  69    Director of the Company

Thomas F. McWilliams..................  59    Director of the Company

William R. Toller.....................  71    Director of the Company
</Table>

---------------

* Chase Brass & Copper Company, Inc. ("CBCC"), is a wholly-owned subsidiary of
  the Company through which the Company conducts its operations.

     The current term of office of each director will expire at the next annual
meeting. At the next annual meeting, successors to the directors will be elected
to serve until the next annual meeting of stockholders and until their
successors are elected and qualified. Executive officers of the Company are
appointed by and serve at the discretion of the Board of Directors.

     There are no family relationships among the directors or executive officers
and there are no arrangements or understandings between any director or
executive officer and any other person pursuant to which his selection as a
director or an executive officer was made, except that the Company's existing
bank credit facility requires Mr. Alonzo to continue to serve on the Board of
Directors as long as he is physically able to do so.

     Set forth below is certain biographical information regarding the executive
officers and directors of the Company.

     John H. Steadman.  Mr. Steadman has served as President and Chief Executive
Officer ("CEO") of the Company since September 2001 and as a director of the
Company since October 2001. Also since October 2001, he has served as President
and as a director of LTC Reserve Corp. Mr. Steadman has also served as President
and Chief Operating Officer of CBCC since January 2000. He joined CBCC in
October 1999 and served as Executive Vice President until being appointed
President and Chief Operating Officer. Prior to joining CBCC, Mr. Steadman was
employed by Noranda Aluminum, Inc. from 1979 to 1999. Over the course of his
career with Noranda, Mr. Steadman served as president of its aluminum road wheel
subsidiary, American Racing Equipment, from 1996 through 1999 and as president
of its rolled products subsidiary, Norandal USA, from 1989 through 1996. Prior
to that he held various administrative and financial positions with Noranda
Aluminum, R. J. Reynolds and RCA Corporation.

                                        43
<PAGE>

     Todd A. Slater.  Mr. Slater has served as Chief Financial Officer ("CFO"),
Vice President and Secretary of the Company since October 2001. Also since
October he has served as Vice President and CFO of CBCC. He joined the Company
in 1992 as Controller of CBCC. Prior to joining CBCC, Mr. Slater was employed by
Price Waterhouse, a predecessor of PricewaterhouseCoopers LLP, from 1986 to
1992.

     Martin V. Alonzo.  Mr. Alonzo has served as a member of the Board since the
Company began operations in August 1990. Mr. Alonzo served as Chairman of the
Board, President and Chief Executive Officer of the Company from August 1990
until his retirement in September 2001. From 1987 until 1990, Mr. Alonzo pursued
entrepreneurial opportunities, which included advising the Maxxam Group in
connection with its acquisition of Kaiser Aluminum Corporation and, in
conjunction with Citicorp Venture Capital Ltd. ("CVC"), analyzing prospective
acquisitions, primarily of metals related companies. From 1967 until 1987, Mr.
Alonzo was employed by AMAX, Inc., a large mining and integrated aluminum
company, in various capacities, including senior vice president and
president -- industrial minerals division, executive vice president and
president -- specialty and light metals operations and, from 1984 until July
1987, executive vice president and chief financial officer. Mr. Alonzo also
served as a director of Alumax Inc., an integrated aluminum company, from 1974
to 1987 and currently serves as a trustee of the IPO Plus Aftermarket Mutual
Fund.

     Raymond E. Cartledge.  Mr. Cartledge was elected as a director of the
Company in May 1995. Mr. Cartledge served as chairman of the board and chief
executive officer of Union Camp Corporation, a paper and packaging company, from
1986 until 1994, and as chairman of the board of Savannah Foods & Industries,
Inc., until his retirement in 1997. Mr. Cartledge also serves as a director of
each of UCAR International, Inc., Delta Air Lines Inc., Sunoco, Inc. and Formica
Corporation.

     Charles E. Corpening.  Mr. Corpening was elected as a director of the
Company in May 1995. Since 1994, Mr. Corpening has been a vice president of CVC.
Mr. Corpening also serves as a vice president of Court Square Capital Limited
("CSCL"), an affiliate of CVC to whom CVC transferred all of its shares of
capital stock of the Company on December 12, 2000. Since December 2000, Mr.
Corpening also has served as a vice president and director of Chase Acquisition
Corporation ("CAC"), an affiliate of CVC and CSCL (see "Security Ownership of
Certain Beneficial Owners and Management" below). Prior to joining CVC, Mr.
Corpening was a vice president of Roundtree Capital Corp., a private investment
firm based in Stamford, Connecticut from 1990 until 1994. Mr. Corpening was
employed in the merchant banking division of the Rockefeller Group from 1988
until 1990 and worked in the mergers and acquisitions group of PaineWebber, Inc.
from January 1987 until December 1988. Mr. Corpening also serves as a director
of Royster-Clark, Inc.

     John R. Kennedy.  Mr. John Kennedy was elected as a director of the Company
in November 1994. From 1975 until his retirement in 1996, Mr. Kennedy served as
president and chief executive officer of Federal Paper Board Company, Inc. Mr.
Kennedy also serves as a director of each of International Paper Company, Holcim
(US) Inc. and Modis Professional Services, Inc.

     Robert D. Kennedy.  Mr. Robert Kennedy was appointed as a director of the
Company in February 2000. Mr. Kennedy served as chairman and chief executive
officer of Union Carbide Corporation from 1986 until 1995. Mr. Kennedy also
served as chief executive officer of UCAR International Inc. from March 1998
until July 1998, and as chairman of UCAR International from March 1998 until
September 1999. Mr. Kennedy also serves as a director of each of Sunoco, Inc.,
KMart Corporation, International Paper Company and Hercules Incorporated.

     Thomas F. McWilliams.  Mr. McWilliams has served as a director of the
Company since August 1990, and served as Vice President of the Company from July
1993 until September 1994. Since 1983, Mr. McWilliams has been affiliated with
CVC and has served as vice president and a managing director of CVC as well as a
member of CVC's investment committee. Mr. McWilliams also serves as a vice
president and managing director of CSCL and since December 2000 has served as
secretary, treasurer and a director of CAC. Mr. McWilliams also serves as a
director of each of MMI Products, Inc., Royster-Clark, Inc., Ergo Science
Corporation, Strategic Industries, Inc., and WCI Communities.

                                        44
<PAGE>

     William R. Toller.  Mr. Toller was elected as a director of the Company in
October 1996. From October 1990 until July 1996, Mr. Toller served as chairman
and chief executive officer of Witco Corporation, a specialty chemical company.
Mr. Toller currently serves as a director of Commodore Separation Technologies,
Inc., FusePlus, Inc. and Commodore Applied Technologies, Inc. Mr. Toller also is
a member of the Board of Trustees for the International Center for the Disabled
in New York City and the Whitehead Institute for Biomedical Research in Boston,
Massachusetts.

ITEM 11.  EXECUTIVE COMPENSATION

BOARD COMPENSATION

     Cash Compensation.  Each member of the Board of Directors who is not an
employee or officer of the Company or any subsidiary of the Company receives an
annual retainer of $15,000 for service as a director, plus $1,000 for each
meeting of the Board of Directors attended and $500 for each meeting of a
committee of the Board of Directors attended. In addition, each non-employee
Director is reimbursed for all ordinary and necessary expenses incurred in
attending any meeting of the Board of Directors or any committee of the Board of
Directors. Employees of the Company who also serve as members of the Board of
Directors do not receive any additional compensation for service as a director,
but are reimbursed for related expenses. Each of Messrs. Raymond Cartledge,
Robert Kennedy, John Kennedy and William Toller served on a Subcommittee of the
Board of Directors in 2001. The Subcommittee was formed in January 2001 for the
purpose of evaluating a proposed business combination transaction and other
strategic alternatives for the Company, and was disbanded in October 2001. The
Subcommittee held twenty meetings in 2001 and each Subcommittee member was paid
$1,000 for each Subcommittee meeting attended.

     Stock Option Awards.  Each non-employee Director is granted, on the date
such person is elected or appointed as a director, stock options to purchase
7,500 shares of Common Stock at an exercise price equal to the average closing
price of the Common Stock on the New York Stock Exchange for the five trading
days immediately preceding the date of grant (the "Average Fair Market Value").
All stock options granted to non-employee Directors vest in equal proportions on
each of the first five anniversaries of the date of grant, provided that the
person has been a director of the Company continuously through that date.
Non-employee Directors reelected to successive terms do not receive additional
grants of stock options upon any such reelection. Prior to May 14, 1997, these
grants of stock options were made pursuant to the Company's 1994 Long-Term
Incentive Plan (the "1994 Incentive Plan"). As of May 14, 1997, all such awards
are made pursuant to the Company's 1997 non-employee Director Stock Option Plan
(as amended, the "Director Stock Option Plan").

     Also, pursuant to the Director Stock Option Plan, each non-employee
Director may elect to defer all or a portion (in 25% increments) of such
director's annual cash retainer for a calendar year. If a non-employee Director
elects to defer all or a portion of his or her annual retainer, the non-employee
Director also may elect to defer the total amount of the fees that such director
is entitled to receive for attending board and committee meetings, and receive,
instead, stock options equal to the value of such deferred retainer and meeting
fees. Stock options granted in lieu of a director's deferred retainer and
meeting fees will be granted as of the last day of each calendar quarter (the
date on which the meeting fees for such quarter and the quarterly payments of
the annual cash retainer are paid, in arrears) in the year to which the election
relates. The number of stock options granted each quarter is determined by
dividing the sum of (i) 25% of the total annual retainer amount deferred and
(ii) if meeting fees have been deferred, the total amount of meeting fees to
which the non-employee Director is entitled for such calendar quarter, by 50% of
the Average Fair Market Value (as defined above) for the last five trading days
of that calendar quarter, and also will have an exercise price equal to 50% of
that Average Fair Market Value. Each stock option granted to the non-employee
Directors in lieu of their annual retainer and, if applicable, meeting fees
vests fully and is exercisable immediately upon grant. If a non-employee
Director is elected or appointed during a calendar year and elects to receive
stock options under the Director Stock Option Plan in lieu of such director's
pro rated annual cash retainer for the remainder of such calendar year, the
numerator of the formula will be adjusted to reflect the portion of the deferred
annual cash retainer attributable to each remaining calendar quarter (or portion
thereof) in the year to which any such initial election relates.

                                        45
<PAGE>

     In 2001, Mr. Toller elected to defer 50% of his annual retainer under the
Director Stock Option Plan, while each of Messrs. Alonzo (for the period
subsequent to his retirement as an executive officer), Cartledge, Corpening,
John Kennedy, Robert Kennedy and McWilliams elected to defer 100% of his annual
retainer pursuant to the Director Stock Option Plan. For 2002, Mr. Toller has
elected to defer 50% of his annual retainer and each of Messrs. Alonzo,
Cartledge, John Kennedy and McWilliams has elected to defer 100% of his annual
retainer pursuant to the Director Stock Option Plan. In 2001, each of Messrs.
Alonzo (for the period subsequent to his retirement as an executive officer),
Corpening, John Kennedy and McWilliams also elected to defer his meeting fees
pursuant to the Director Stock Option Plan. For 2002, each of Messrs. Alonzo,
John Kennedy and McWilliams have elected to defer his meeting fees pursuant to
the Director Stock Option Plan

     The Director Stock Option Plan provides that, upon a "change in control" of
the Company, (1) all outstanding stock options that are not exercisable will
become immediately and fully vested and exercisable in full and (2) in the
discretion of the Compensation Committee, each holder of a stock option will be
granted a corresponding stock appreciation right. For the definition of "change
in control" as used in the Director Stock Option Plan, see "Other Change in
Control Arrangements -- Stock Option Plans" below.

COMPENSATION OF EXECUTIVE OFFICERS

     The compensation paid by the Company to its executive officers is
administered by the Compensation Committee and generally consists of base
salaries, annual cash incentives, equity incentives in the form of stock
options, contributions to Company-sponsored 401(k) plans and miscellaneous
perquisites.

     The following table sets forth the total compensation awarded to, earned by
or paid by the Company to each person who served as Chief Executive Officer
during 2001, to each person who served as an executive officer (other than the
Chief Executive Officer) of the Company whose total cash compensation exceeded
$100,000 for services rendered during 2001 and to each person for whom
disclosure would have been required if the person had been serving as an
executive officer of the Company as of December 31, 2001 (the "Named Executive
Officers").

                           SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                             ANNUAL COMPENSATION(1)
                                       -----------------------------------
                                                              OTHER ANNUAL   SECURITIES    ALL OTHER
                                                              COMPENSATION   UNDERLYING   COMPENSATION
NAME AND PRINCIPAL POSITION     YEAR   SALARY($)   BONUS($)      ($)(2)       OPTIONS        ($)(3)
---------------------------     ----   ---------   --------   ------------   ----------   ------------
<S>                             <C>    <C>         <C>        <C>            <C>          <C>
John H. Steadman (4)..........  2001    240,000    140,000        --                0        19,718
  President, Chief Executive    2000    225,000     28,750(5)     --           18,785(5)    124,725(6)
  Officer and Director;
  President,                    1999     50,336     20,000        --           50,000(7)        230
  Chief Operating Officer and
  Director of CBCC
Todd A. Slater (8)............  2001    118,325     47,500        --                0        12,042
  Chief Financial Officer       2000    103,750     45,000        --           10,000(7)     10,720
                                1999     96,750     45,000        --                0        10,162
Martin V. Alonzo (9)..........  2001    284,486    350,000        --            1,322(10)    40,562
  Former Chairman of the
  Board,                        2000    350,000          0        --                0        48,256
  President and Chief
  Executive                     1999    350,000           (11)     --          59,392(11)    51,443
  Officer
Michael T. Segraves (12)......  2001    142,647     90,000        --                0       566,525(13)
  Former Chief Financial
  Officer                       2000    183,000     90,000        --           20,000(7)     19,525
                                1999    175,250     80,000        --                0        19,700
</Table>

---------------

 (1) No restricted stock awards were granted to any Named Executive Officer
     during the period reported.

 (2) While the named executive officers may have received certain perquisites in
     2001, such perquisites did not exceed the lesser of $50,000 or 10% of such
     executive's salary and bonus.

                                        46
<PAGE>

 (3) The amounts disclosed in this column for 2001 include:

      (i) premiums and imputed income paid by the Company with respect to term
          life insurance for the benefit of Messrs. Alonzo, Steadman, Slater and
          Segraves in the amounts of $10,712, $1,180, $201 and $1,271,
          respectively;

      (ii) contributions by the Company to the Company's 401(k) Profit Sharing
           Plan for the benefit of each of Messrs. Steadman and Slater in the
           amounts of $8,500 and $8,291, respectively;

     (iii) contributions by the Company to the Company's 401(k) Savings and
           Investment Plan for the benefit of Messrs. Alonzo, Steadman, Slater
           and Segraves in the amounts of $5,100, $5,100, $3,550 and $519,
           respectively; and

      (iv) contributions by the Company to the Company's supplemental retirement
           plans for the benefit of Messrs. Alonzo and Steadman in the amounts
           of $24,750 and $4,938, respectively.

 (4) Mr. Steadman was elected President and Chief Executive Officer of the
     Company in September 2001 and was appointed to the Board of Directors in
     October 2001.

 (5) Mr. Steadman was awarded a $115,000 cash bonus for his services in 2000.
     Pursuant to the Executive Stock Option Plan, Mr. Steadman elected to forego
     75% of such cash bonus and receive, in lieu thereof, options to purchase an
     aggregate of 18,785 shares of Common Stock.

 (6) Includes $101,881 to reimburse Mr. Steadman for relocation expenses he
     incurred in connection with his employment by CBCC.

 (7) Options were awarded pursuant to the 1994 Incentive Plan.

 (8) Mr. Slater was elected Chief Financial Officer of the Company on October
     26, 2001 to succeed Mr. Segraves, who resigned October 2, 2001.

 (9) Mr. Alonzo served as Chairman, President and Chief Executive Officer of the
     Company from August 1990 until his retirement in September 2001.

(10) Options were granted pursuant to the Director Stock Option Plan, in which
     Mr. Alonzo became eligible to participate upon his retirement as President
     and Chief Executive Officer on September 1, 2001.

(11) Mr. Alonzo was awarded a $250,000 cash bonus in 2000 for his services in
     1999. Pursuant to the Company's 1997 Executive Deferred Compensation Stock
     Option Plan (the "Executive Stock Option Plan"), Mr. Alonzo elected to
     forego 100% of such cash bonus and receive, in lieu thereof, options to
     purchase an aggregate of 59,392 shares of Common Stock.

(12) Mr. Segraves resigned from the Company as of October 2, 2001.

(13) Includes $564,735 paid to Mr. Segraves by the Company in connection with
     his resignation in October 2001. A partial payment of $125,000 was made to
     Mr. Segraves in 2001. The remaining amount was paid in 2002.

     The following table sets forth options granted during 2001 to the Named
Executive Officers. No stock appreciation rights were granted during 2001.

                     OPTION/SAR GRANTS IN LAST FISCAL YEAR

<Table>
<Caption>
                                          % OF TOTAL
                                         OPTIONS/SARS                  MARKET
                                          GRANTED TO                  PRICE ON                 GRANT DATE
                                         EMPLOYEES IN   EXERCISE OR     DATE                    PRESENT
                          OPTIONS/SARS      FISCAL      BASE PRICE    OF GRANT    EXPIRATION     VALUE
NAME                       GRANTED(#)      YEAR(1)       ($/SHARE)    $/SHARE        DATE       ($) (2)
----                      ------------   ------------   -----------   --------    ----------   ----------
<S>                       <C>            <C>            <C>           <C>         <C>          <C>
Martin V. Alonzo........       280(3)        --%           4.47         8.88(4)    09/30/11      1,612
                             1,042(3)        --%           4.56         9.15(5)    12/31/11      6,273
</Table>

---------------

(1) With the exception of Mr. Steadman's stock option grants that were reported
    for fiscal year 2000 but issued in fiscal year 2001, no stock options were
    granted to employees in fiscal year 2001.

                                        47
<PAGE>

(2) The grant date present value was determined by using a modified
    Black-Scholes pricing model with the following assumptions and adjustment:
    (i) stock price volatility of 36.1903%, calculated using daily stock prices
    of the Company for the period of years and prior to the grant date equal to
    the expected term of the option as specified in clause (iv) below; (ii)
    risk-free rates of return from 4.26% to 4.65%, representing the interest
    rates on 6 year U.S. Treasury securities on the date of grant; (iii) no
    dividends paid on the Company's Common Stock consistent with current Company
    practice; and (iv) an assumed exercise date of 6 years from the date of
    grant. The Company's use of this model should not be construed as an
    endorsement of its accuracy. Whether the model's assumptions will prove to
    be accurate cannot be known as of the date of this Form 10-K. The ultimate
    value of the options, if any, will depend on the future value of the
    Company's Common Stock, which cannot be forecast with reasonable accuracy,
    and the optionees' investment decisions.

(3) Options were granted pursuant to the Director Stock Option Plan, in which
    Mr. Alonzo became eligible to participate upon his retirement as President
    and Chief Executive Officer on September 1, 2001.

(4) The grant date market price reported represents the closing market price of
    the Common Stock on September 28, 2001, the last trading day prior to the
    actual date of grant.

(5) The grant date market price reported represents the closing market price of
    the Common Stock on December 31, 2001, the actual date of grant.

     The following table sets forth information with respect to options to
purchase the Company's Common Stock held by the Named Executive Officers as of
the end of fiscal year 2001. No options or stock appreciation rights were
exercised by such persons during 2001.

                      AGGREGATED OPTION EXERCISES IN 2001
                        AND 2001 YEAR-END OPTION VALUES

<Table>
<Caption>
                                                                   NUMBER OF              VALUE OF UNEXERCISED
                                                                  UNEXERCISED                 IN-THE-MONEY
                               SHARES                               OPTIONS                      OPTIONS
                             ACQUIRED ON       VALUE        AT DECEMBER 31, 2001 (#)    AT DECEMBER 31, 2001 (1)
NAME                        EXERCISE (#)    REALIZED ($)   EXERCISABLE/UNEXERCISABLE    EXERCISABLE/UNEXERCISABLE
----                        -------------   ------------   --------------------------   -------------------------
<S>                         <C>             <C>            <C>                          <C>
Mr. Alonzo................        0             N/A                  566,476/0                  1,297,810/0
Mr. Steadman..............        0             N/A              38,785/30,000                94,877/13,875
Mr. Slater................        0             N/A              16,400/11,600                 23,370/4,200
Mr. Segraves..............        0             N/A                   80,000/0                          0/0
</Table>

---------------

(1) Based on the closing price ($9.15) of the Company's Common Stock on December
    31, 2001, as reported in the New York Stock Exchange composite transactions
    listing.

EMPLOYMENT AGREEMENT AND CHANGE-IN-CONTROL ARRANGEMENTS

  Employment Agreement

     John H. Steadman.  CBCC and John H. Steadman are parties to an employment
agreement, dated as of September 1, 2001, and amended as of February 14, 2002,
which is effective through December 31, 2002, and automatically will be extended
on a year-to-year basis unless terminated by CBCC or Mr. Steadman on 60 days'
notice before the start of the following year. The employment agreement provides
for an annual salary of $280,000, and is subject to future annual increases at
the discretion of the Compensation Committee. Mr. Steadman is also entitled to
cash bonuses at the discretion of the Compensation Committee.

     Under the employment agreement, if Mr. Steadman's employment is terminated
in certain circumstances, including a termination by the Company in violation of
the agreement or a termination by Mr. Steadman for good reason (as defined in
the employment agreement), the Company will be required to pay Mr. Steadman a
severance payment in an amount equal to Mr. Steadman's then current base salary
and continue to provide medical and dental insurance coverage for one year. If
Mr. Steadman's employment is terminated by the Company in violation of the
agreement or by Mr. Steadman for good reason within one year

                                        48
<PAGE>

after a "change of control" of the Company, Mr. Steadman will be entitled to
receive continued medical and dental insurance coverage for two years and a
severance payment equal to two times the sum of (1) Mr. Steadman's base salary
immediately prior to the change of control (or, if greater, Mr. Steadman's base
salary at the time of his termination or, if applicable, at the time of the
event giving rise to his resignation for good reason), plus (2) the bonus
awarded to Mr. Steadman for the calendar year prior to the change of control or,
if such bonus has not yet been determined, the prior calendar year (or, if
greater, the average of the bonuses awarded to Mr. Steadman for the two calendar
years ended prior to the change of control or, if bonuses for the most recent
calendar year have not been determined as of the date of the change of control,
the average of the bonuses awarded to Mr. Steadman for the two calendar years
immediately preceding the calendar year in which the change of control occurs);
provided that such amount plus the value of any other compensation subject to
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code") shall
not exceed $100 less than 3.00 times Mr. Steadman's annualized includable
compensation (determined within the meaning of Code). If Mr. Steadman's
employment is terminated by Mr. Steadman other than for good reason within one
year after a "change of control" of the Company, Mr. Steadman will be entitled
to receive continued medical and dental insurance coverage for one year and a
severance payment equal to the sum of (1) and (2) described in the preceding
sentence.

     Under Mr. Steadman's employment agreement, a "change of control" occurs in
any of the following situations: (1) a person other than the Company, certain
companies affiliated with the Company, benefit plans of the Company or of
certain companies affiliated with the Company or of a company with the same
ownership as the Company acquires 50% or more of the voting power of the
Company's outstanding voting securities; (2) a person described in clause (1)
announces a tender offer for 50% or more of the Company's or CBCC's outstanding
voting securities and the Board of Directors approves or does not oppose the
tender offer, provided an event described in clause (1), (3) or (4) occurs
within one year of such tender offer; (3) the Company or CBCC merges or
consolidates with another corporation or partnership, or the Company's or CBCC's
stockholders approve such a merger or consolidation, other than mergers or
consolidations in which the Company's or CBCC's voting securities are converted
into securities having the majority of the voting power in the surviving entity
or its parent; (4) the Company or CBCC liquidates or sells all or substantially
all its assets, or the Company's or CBCC's stockholders approve such a
liquidation or sale, except sales to corporations having substantially the same
ownership as the Company or CBCC; (5) the Company ceases to own at least a
majority of the voting securities of CBCC, other than pursuant to a transaction
in which all of the voting securities of CBCC (or a company into which it is
merged) which are not owned by the Company are owned by the Company's
stockholders in the same proportion as their ownership of the Company; or (6)
members of the "Incumbent Board" cease to constitute a majority of the Board of
Directors. "Incumbent Board" is defined as current members of the Board of
Directors and other individuals who become directors and whose election,
appointment or nomination for election to the Board of Directors was approved by
a majority of the members of the Board of Directors then comprising the
Incumbent Board, excluding (A) any board members that are employees, officers or
directors of CVC or affiliates of CVC (the "Citigroup Group") or (B) any board
members nominated by such persons described in (A) or any member of the
Citigroup Group. The Company also has agreed to reimburse Mr. Steadman for
reasonable legal fees and costs that Mr. Steadman incurs in connection with the
resolution in Mr. Steadman's favor of any dispute or controversy under his
employment agreement.

Change-in-Control Arrangements

  Stock Option Plans.

     The 1994 Incentive Plan provides for the granting of incentive awards to
the Company's officers and employees in the form of stock options, stock
appreciation rights and restricted stock. Pursuant to the 1994 Incentive Plan,
upon a "change in control" of the Company, (1) in the discretion of the
Compensation Committee, each holder of a stock option will be granted a
corresponding stock appreciation right, (2) all outstanding stock appreciation
rights and stock options will become immediately and fully vested and
exercisable in full, and (3) the restriction period on any restricted stock
award will be accelerated and the restrictions will expire. In addition, if a
"change in control" occurs in connection with a merger or

                                        49
<PAGE>

consolidation of the Company pursuant to which the Company is not the surviving
corporation, then each holder of a stock option or stock appreciation right is
entitled to receive (upon payment of the exercise price, if applicable) the same
consideration to which such holder would have been entitled had they exercised
such stock option or stock appreciation right immediately prior to such
transaction.

     The Executive Stock Option Plan permits eligible employees to receive, in
lieu of all or a portion of their annual cash bonus, immediately exercisable
stock options with a value calculated based on the value of the bonus amount
deferred. Under the Executive Stock Option Plan, each eligible employee may
elect to forego all or a portion (in 25% increments) of such employee's annual
cash bonus for a calendar year (which bonus will be determined after that
calendar year end) and receive, in lieu thereof, stock options equal to the
value of the foregone cash bonus. Stock options granted in lieu of an employee's
foregone cash bonus are granted as of the date the annual cash bonus for the
year to which an election relates is determined. The stock options related to an
annual bonus amount forgone are granted in four series, with the number of stock
options granted with respect to each series determined by dividing 25% of the
cash bonus amount by 50% of the average closing price of the Common Stock on the
New York Stock Exchange for the last five trading days of each calendar quarter
(in each case, the "Average Quarter-End Price") in the calendar year to which
the bonus relates, with the stock options calculated for each calendar quarter
representing one series. Stock options granted in each series have an exercise
price equal to 50% of the Average Quarter-End Price for the calendar quarter to
which such series relates. Stock options granted under the Executive Stock
Option Plan vest fully and immediately upon grant. The Executive Stock Option
Plan provides that, upon a "change in control" of the Company, in the discretion
of the Compensation Committee each holder of a stock option may be granted a
corresponding stock appreciation right. In addition, if a "change in control"
occurs in connection with a merger or consolidation of the Company pursuant to
which the Company is not the surviving corporation, then each holder of a stock
option or stock appreciation right is entitled to receive (upon payment of the
exercise price, if applicable) the same consideration to which such holder would
have been entitled had they exercised such stock option or stock appreciation
right immediately prior to such transaction.

     The Director Stock Option Plan provides for the granting of stock options
to non-employee Directors of the Company upon their election to the Board of
Directors and, at the election of each non-employee Director, in lieu of all or
a portion of the non-employee Director's annual retainer and in lieu of all (but
not just a portion of) cash payments payable by the Company to the non-employee
Director as compensation for attending meetings of the Board of Directors and
committees thereof. The Director Stock Option Plan provides that, upon a "change
in control" of the Company, (1) all outstanding stock options become immediately
and fully vested and exercisable in full and (2) in the discretion of the
Compensation Committee, each holder of a stock option may be granted a
corresponding stock appreciation right. In addition, if a "change in control"
occurs in connection with a merger or consolidation of the Company pursuant to
which the Company is not the surviving corporation, then each holder of a stock
option or stock appreciation right is entitled to receive (upon payment of the
exercise price, if applicable) the same consideration to which such holder would
have been entitled had they exercised such stock option or stock appreciation
right immediately prior to such transaction. See "Management Compensation --
Board Compensation -- Stock Option Awards" above.

     In general, under each of the 1994 Incentive Plan, the Executive Stock
Option Plan and the Director Stock Option Plan, a "change in control" of the
Company occurs in any of the following four situations: (1) a person other than
(a) the Company, certain companies affiliated with the Company, benefit plans of
the Company or of certain companies affiliated with the Company or of a company
with the same ownership as the Company, (b) CVC or (c) certain affiliates of
CVC, acquires 50% or more of the voting power of the Company's outstanding
voting securities; (2) a person described in clause (1) announces a tender offer
for 50% or more of the Company's outstanding voting securities and the Board of
Directors approves or does not oppose the tender offer, provided an event
described in clause (1), (3) or (4) occurs within one year of such tender offer;
(3) the Company merges or consolidates with another corporation or partnership,
or the Company's stockholders approve such a merger or consolidation, other than
mergers or consolidations in which the Company's voting securities are converted
into securities having the majority of voting power in the surviving company; or
(4) the Company liquidates or sells all or substantially all its assets, or the
Company's

                                        50
<PAGE>

stockholders approve such a liquidation or sale, except sales to corporations
having substantially the same ownership as the Company.

  Change of Control Agreement

     The Company and Todd A. Slater are parties to a change of control agreement
which is effective through September 25, 2002 or, if a "change of control" of
the Company occurs, the first anniversary of the change of control. If Mr.
Slater's employment is terminated by the Company without cause (as defined in
Mr. Slater's change of control agreement) or by Mr. Slater for good reason (as
defined in Mr. Slater's change of control agreement) within one year following a
"change of control" of the Company, the Company will be required to pay to Mr.
Slater a lump sum severance payment in an amount equal to two times the sum of
(1) Mr. Slater's then current base salary (or, if greater, Mr. Slater's base
salary at the time of the change of control or, if applicable, the occurrence of
the event giving rise to Mr. Slater's right to terminate his employment for good
reason) and (2) Mr. Slater's bonus for the calendar year prior to the change of
control, or, if bonuses for such year have not been determined, for the prior
calendar year (or, if greater, the average of Mr. Slater's bonus for the two
calendar years prior to the change of control, or, if bonuses for the most
recent calendar year have not been determined, the average of Mr. Slater's bonus
for the two calendar years prior to the calendar year prior to the change of
control), and to maintain for two years health insurance for the benefit of Mr.
Slater and his family as in effect prior to the termination of his employment.
For purposes of Mr. Slater's change of control agreement, a "change of control"
occurs in any of the situations that constitutes a change of control as
described above under "Employment Agreement -- John H. Steadman." The Company
also has agreed to reimburse Mr. Slater for reasonable legal fees and costs that
Mr. Slater incurs in connection with the resolution in Mr. Slater's favor of any
dispute or controversy under his change of control agreement.

  Severance Pay Plan

     The Chase Industries Inc. Severance Pay Plan (the "Severance Plan")
provides severance benefits to certain employees of the Company and its
subsidiaries if their employment is terminated during the one year period
beginning on the first anniversary of a "change of control" (the
"Post-Protection Period"). For purposes of the Severance Plan, a "change of
control" occurs in any of the situations that constitutes a change of control as
described above under "Employment Agreement -- John H. Steadman." Pursuant to
the Severance Plan, if during the Post-Protection Period a covered employee's
employment is terminated by the Company or one of its subsidiaries without cause
(as defined in the Severance Plan) or by the employee for good reason (as
defined in the Severance Plan), the Company shall pay to the employee a lump sum
severance payment equal to 12 times the employee's then current monthly salary
(or, if greater, the employee's monthly salary at the time of the change of
control or, if applicable, the occurrence of the event giving rise to the
employee's right to terminate his employment for good reason), and to maintain
for 12 months health insurance for the benefit of the employee and his family as
in effect prior to the termination of his employment. Messrs. Steadman and
Slater are parties to an agreement with the Company pursuant to which they are
entitled to the benefits of the Severance Plan.

  Severance Agreement

     In connection with Mr. Segraves' resignation on October 2, 2001, Mr.
Segraves and the Company entered into an agreement pursuant to which (i) Mr.
Segraves was paid $564,735, (ii) the Company agreed to maintain for one year
from the date of Mr. Segraves' resignation health insurance for the benefit of
Mr. Segraves and his family as in effect prior to Mr. Segraves' resignation, and
(iii) all unvested options granted to Mr. Segraves under the 1994 Incentive Plan
were vested.

INDEMNITY AGREEMENTS

     The Company has entered into indemnity agreements with each of its
directors and executive officers. Those agreements require the Company, to the
extent permitted under applicable law, to indemnify such persons against all
expenses, judgments, fines and penalties incurred in connection with the defense
or settlement of any actions brought against them by reason of the fact that
they are or were directors or
                                        51
<PAGE>

executive officers of the Company or assumed certain responsibilities at the
direction of the Company. Each indemnification agreement also provides that,
upon a potential change in control of the Company and if the indemnified
director or executive officer so requests, the Company will create a trust for
the benefit of the indemnified director or executive officer in an amount
sufficient to satisfy payment of any liabilities and suits against which the
Company has indemnified the director or executive officer. The Company expects
to enter into similar agreements with persons selected to be directors and
executive officers in the future.

          COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     John R. Kennedy, Raymond E. Cartledge and Thomas F. McWilliams served as
members of the Compensation Committee during 2001. None of such persons are
officers or employees or former officers or employees of the Company, except for
Mr. McWilliams who served as Vice President of the Company from July 1993 until
September 1994. During the period that Mr. McWilliams served as Vice President
of the Company, he did not receive any compensation from the Company for his
service as an officer.

     None of the executive officers of the Company served as a member of the
compensation committee or board of directors of any other company during 2001.

            COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

STRATEGY AND OBJECTIVES

     The Company's executive compensation program is administered by the
Compensation Committee, which is comprised entirely of non-employee Directors.
The Compensation Committee determines any annual increase in the base salary of
the Chief Executive Officer ("CEO"), the annual bonus to be paid to the CEO,
and, based on recommendations of the CEO, the compensation to be provided to the
other executive officers. The Compensation Committee also administers the 1994
Incentive Plan pursuant to which equity incentives are provided to employees at
the discretion of the Compensation Committee and determines individuals eligible
to participate in the 1997 Executive Deferred Compensation Stock Option Plan
described below.

     In determining compensation levels and developing compensation programs for
the Company's executive officers, the Compensation Committee analyzes the
relationship between base salary, annual cash incentives, equity incentives and
benefits. The underlying objectives of the Company's compensation strategy
include the following:

     - Attract and retain superior executive talent, and motivate those
       executives to achieve optimum short-term and long-term corporate
       operating results;

     - Align the interests of executive officers with the creation of
       stockholder value and ensure long-term growth orientation through
       equity-based plans; and

     - Provide a compensation package that recognizes individual contributions
       as well as overall business results.

COMPONENTS OF COMPENSATION

     The key elements of the Company's executive compensation program are base
salary, annual cash bonuses and equity incentive compensation. These elements
are addressed separately.

     The Compensation Committee does not exclusively use quantitative methods or
mathematical formulas in setting any element of compensation. In determining
each component of compensation, the Compensation Committee considers all
elements of an executive's total compensation package, recommendations of the
CEO and other objective and subjective criteria the Compensation Committee deems
appropriate with respect to each executive officer.

     Base Salaries.  The base salary of each of the executive officers, other
than the CEO, is reviewed annually, with adjustments made based primarily on the
recommendations of the CEO. In reviewing base

                                        52
<PAGE>

salaries the CEO considers various factors, including the performance of the
executive officer with respect to specific objectives and increases in
responsibilities. The specific objectives for each executive officer are
established by such officer after consultation with the CEO, and vary for each
executive position and for each year. In addition, in the first quarter of each
year, the Board of Directors approves the Company's business plan developed by
management for the current year. The business plan establishes objectives for
the current year with respect to areas such as marketing, operations, capital
expenditures and financial performance. In reviewing annual base salaries, the
CEO and the Compensation Committee also consider each executive officer's
responsibilities related to achieving the objectives in the business plan and,
in an effort to provide competitive compensation, from time to time reviews
salaries of similarly situated employees in comparable companies.

     The financial performance of the Company, primarily operating income,
EBITDA (earnings before interest, taxes, depreciation and amortization) and net
income, also is considered in determining annual adjustments to base salaries,
but more emphasis is placed on divisional financial performance in determining
annual cash bonuses rather than base salaries. When the CEO completes his
reviews, he makes a recommendation to the Compensation Committee for its review
and approval.

     Annual Cash Bonuses.  Annual cash bonuses to executive officers, other than
the CEO, are determined by the Compensation Committee after considering the
recommendations of the CEO. The CEO in developing his bonus recommendations for
the other executive officers, as well as the Compensation Committee in
evaluating the CEO's recommendations, consider primarily the financial
performance of the Company, the performance of the division at which an
executive officer is employed and whether such division attained or exceeded the
objectives set forth in the Company's annual business plan, and the performance
of the Company and the executive's division in relation to industry conditions
and performance of comparable companies. The CEO and the Compensation Committee
also consider individual performance which contributed to the Company's
financial performance or otherwise assisted the Company's efforts to achieve the
objectives set forth in its business plan. Failure of the Company or an
executive's division to attain or exceed the objectives in the business plan
does not, however, necessarily prevent any cash bonus from being paid, although
it may affect the size of cash bonuses paid. No specific weighting was assigned
to any of the factors considered in determining annual adjustments to base
salaries and cash bonuses for the executive officers.

     Certain executive officers may elect to defer all or a portion of their
annual cash bonus and receive, in lieu thereof, stock options under the
Company's 1997 Executive Deferred Compensation Stock Option Plan as described
below under "Equity Incentive Compensation."

     Equity Incentive Compensation.  The Compensation Committee endorses the
view that equity ownership by management is beneficial in aligning management's
and stockholders' interests in the enhancement of stockholder value. The
equity-based compensation plans described below facilitate equity ownership by
management.

     1994 Incentive Plan.  Through the 1994 Incentive Plan, the Company has
utilized stock options (and has the ability to utilize stock appreciation rights
and restricted stock) as components of executive compensation to ensure external
competitiveness of the total executive compensation package, motivate executives
to improve long-term stock performance, encourage equity ownership of the
Company by executive officers and align executive interests with the enhancement
of stockholder value.

     In granting stock options or other stock-based compensation under the 1994
Incentive Plan, the Compensation Committee considers the total number of shares
available for future grants under the 1994 Incentive Plan, prior grants
outstanding and estimated requirements for future grants. Individual awards,
with the exception of grants to the CEO, generally are proposed to the
Compensation Committee by the CEO. The Compensation Committee then discusses
with the CEO his proposals and recommendations and determines individual awards,
taking into consideration the CEO's recommendations, each participant's position
and scope of responsibilities, the strategic and operational goals of the
Company, the expected future performance of each participant to achieve these
goals and unvested options, if any, held by each participant. Awards granted to
the CEO are determined separately by the Compensation Committee based on the
same criteria as grants to other employees, as well as the Compensation
Committee's perception of the CEO's expected future
                                        53
<PAGE>

contributions to the Company's achievement of its long-term performance goals.
The Compensation Committee historically has elected to grant more options in one
lump sum, rather than grant a smaller number on an annual basis, to create an
immediately meaningful incentive to enhance stockholder value in the Company at
the time of grant.

     The exercise price for awards granted under the 1994 Incentive Plan, the
term of such awards, the vesting of such awards and the other terms and
conditions of such awards are determined by the Compensation Committee, in its
discretion. All stock options previously granted to executive officers under the
1994 Incentive Plan have an exercise price equal to the market price on the date
of grant and vest in 20% increments over five years from the date of grant.
Stock options granted under the 1994 Incentive Plan must expire not more than
ten years from their date of grant.

     Executive Stock Option Plan.  In 1997, the stockholders of the Company
adopted the 1997 Executive Deferred Compensation Stock Option Plan (the
"Executive Stock Option Plan"), which provides for the granting of stock options
to eligible executive employees of the Company and its subsidiaries, at the
employee's election, in lieu of all or a portion of such employee's annual cash
bonus. Under the Executive Stock Option Plan, grants of stock options are made
only to those executive officers and key management personnel of the Company and
its subsidiaries as the Compensation Committee from time to time may designate.
The Compensation Committee designated Martin V. Alonzo and John H. Steadman as
eligible to participate in the Executive Stock Option Plan for 2001, and John H.
Steadman is eligible to participate in the Executive Stock Option Plan for 2002.
See "Compensation of Executive Officers" above. Messrs. Alonzo and Steadman
elected to participate in the Executive Stock Option Plan for 2001.

COMPENSATION OF THE CEO

     Mr. Steadman received a salary increase effective upon his becoming CEO in
September 2001. The Compensation Committee based the increase upon its review of
Mr. Steadman's existing compensation arrangements, compensation of CEOs of
companies comparable to the Company and the performance of Mr. Steadman. Mr.
Steadman's employment agreement provides that Mr. Steadman's base salary will be
reviewed annually and may be increased at the discretion of the Compensation
Committee. The Compensation Committee anticipates that any future increase in
the CEO's base salary will be based on the Compensation Committee's assessment
of the CEO's performance and its expectations as to his future contributions to
the Company and salaries provided by comparable companies.

     Under the terms of his employment agreement, Mr. Steadman is eligible for
cash bonuses at the discretion of the Compensation Committee. Mr. Steadman
received a cash bonus of $140,000. In determining Mr. Steadman's cash bonus, the
Compensation Committee considered the financial performance of the Company and
the Company's efforts to achieve its strategic objectives in its business plan.

POLICY WITH RESPECT TO $1 MILLION DEDUCTION LIMIT

     The Company's executive compensation strategy is to be cost and tax
effective. Therefore, the Company's policy is to avail itself of all proper
deductions under the Internal Revenue Code, where practical, while maintaining
the flexibility to approve compensation arrangements which it deems to be in the
best interests of the Company and its stockholders, but which may not always
qualify for full tax deductibility. Section 162(m) of the Internal Revenue Code
generally imposes a $1 million per person annual limit on the amount the Company
may deduct as compensation expense for its CEO and its four other highest paid
officers. Although the total compensation of the executive officers did not
exceed this deduction limitation in 2001, certain factors involved in the
Company's compensation program may impact on whether the deduction limitation is
exceeded in the future. The 1994 Incentive Plan is intended to permit
compensation associated with stock options and stock appreciation rights to be
excluded from the deduction limitations, but certain payments under the 1994
Incentive Plan, including grants of restricted stock, may be included as
compensation for purposes of calculating the deduction limitation, potentially
impacting the deduction limitation. In addition, under current Internal Revenue
Service regulations, income attributable to options (and stock appreciation
rights) granted under the Executive Stock Option Plan may not qualify for an
exemption from the $1 million

                                        54
<PAGE>

annual limit on deductible compensation imposed by Section 162(m) of the
Internal Revenue Code. To the extent the total non-exempt compensation paid (or
deemed paid) by the Company to such an officer for a year exceeds $1 million,
such excess is not deductible by the Company if the officer is employed by the
Company as of the end of that year.

     As the Company moves forward in its efforts to create stockholder value in
the years ahead, the Compensation Committee will continue to review, monitor and
evaluate the Company's program for executive compensation to assure that it is
internally effective in support of the Company's strategy, competitive in the
marketplace to attract, retain and motivate the talent needed to achieve the
Company's financial objectives, and appropriately rewards the creation of value
on behalf of the Company's stockholders.

     This report has been provided by the Compensation Committee, which consists
of the following members:

                           John R. Kennedy, Chairman
                              Raymond E. Cartledge
                              Thomas F. McWilliams

                                        55
<PAGE>

                               PERFORMANCE GRAPH

     Set forth below is a graph comparing the total stockholder return on the
Company's Common Stock, the Standard & Poor's 500 Composite Index, the Russell
2000 Index, the Dow Jones Industrials Index, and a group of the Company's
current peers. The peer group consists of Brush Wellman, Inc., Mueller
Industries, Inc., Olin Corporation and Wolverine Tube, Inc. The graph
illustrates total stockholder return for each of the five fiscal years ended
December 31, 2001, of $100 invested at December 31, 1996, and assumes
reinvestment of all dividends. The return of each company in the peer group has
been weighted according to its respective market capitalization and information
regarding the Company's share prices has been adjusted to give effect to the
three-for-two stock split effective June 6, 1998 (the "Stock Split").

                               TOTAL RETURN INDEX

                                    [Graph]

<Table>
<Caption>
              COMPANY NAME                  DEC-96   DEC-97   DEC-98   DEC-99   DEC-00    DEC-01
-----------------------------------------   ------   ------   ------   ------   ------   --------
<S>                                         <C>      <C>      <C>      <C>      <C>      <C>
CHASE INDUSTRIES INC.....................   100.00   128.30    78.77    61.32    78.77      69.06
S&P 500 COMP-LTD.........................   100.00   133.35   171.46   207.53   188.64     166.24
RUSSELL 2000.............................   100.00   122.36   119.30   144.87   140.49     144.08
DOW JONES INDUSTRIALS-30 STK.............   100.00   124.91   147.60   187.83   179.09     169.39
PEER GROUP INDEX.........................   100.00   132.90    87.23   115.28   109.10     103.53
</Table>

                                        56
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     To the Company's knowledge, set forth below is certain information, as of
March 21, 2002, regarding ownership of Common Stock by (i) each person who
beneficially owns 5% or more of the Common Stock, (ii) each director and Named
Executive Officer of the Company and (iii) all directors and executive officers
of the Company as a group. To the Company's knowledge, each person holds sole
voting and investment power over the shares shown unless otherwise indicated.

<Table>
<Caption>
                                                              AMOUNT AND     PERCENT OF
                                                              NATURE OF        COMMON
NAME                                                          OWNERSHIP       STOCK(1)
----                                                          ----------     ----------
<S>                                                           <C>            <C>
Citigroup Inc...............................................  7,291,945(2)      47.7%
399 Park Avenue
New York, New York 1004

Martin V. Alonzo............................................  1,643,045(3)      10.7%
c/o Chase Industries Inc.
14212 County Road M-50
Montpelier, Ohio 43543

FMR Corp....................................................    916,700(4)       5.9%
82 Devonshire Street
Boston, Massachusetts 02109

Michael T. Segraves.........................................     80,750            *

John H. Steadman............................................     39,785(5)         *

Thomas F. McWilliams........................................     26,720(6)         *

Todd A. Slater..............................................     20,950(7)         *

John R. Kennedy.............................................     30,608(8)         *

Raymond E. Cartledge........................................     26,997(9)         *

Charles E. Corpening........................................     24,665(10)        *

William R. Toller...........................................     14,025(11)        *

Robert D. Kennedy...........................................     11,928(12)        *

All directors and executive officers as a group (10
  persons)..................................................  1,919,473(13)     12.5%
</Table>

---------------

  *  Less than one percent.

 (1) Based on 15,298,045 shares of Common Stock outstanding as of March 21,
     2002.

 (2) Based on information set forth in Amendment No. 1 to Schedule 13D, dated
     September 20, 2001 (the "Citigroup Schedule 13D"), filed with the SEC by
     Citigroup, Inc., Citigroup Holdings Company, Citicorp, Citicorp Banking
     Corporation, CSCL and Chase Acquisition Corporation ("CAC"). The Citigroup
     Schedule 13D reflects that each of Citigroup Holdings Company, Citicorp,
     Citicorp Banking Corporation and CSCL has shared voting power and shared
     dispositive power for 7,289,945 shares of Common Stock and that Citigroup
     Inc. has shared voting power and shared dispositive power for 7,291,945
     shares of Common Stock.

 (3) Excludes 37,500 shares of Common Stock held by Mr. Alonzo's wife, as to
     which Mr. Alonzo disclaims beneficial ownership. Includes 450,000 shares
     subject to stock options granted under the 1994 Incentive Plan, 115,154
     shares subject to stock options granted under the Executive Stock Option
     Plan and 1,322 shares subject to stock options granted under the Director
     Stock Option Plan, all of which currently are exercisable.

                                        57
<PAGE>

 (4) Based on information set forth in Amendment No. 4 to Schedule 13G dated
     February 14, 2002 (the "Fidelity Schedule 13G"), filed with the SEC by FMR
     Corp., Edward C. Johnson 3d, and Abigail P. Johnson. The Fidelity Schedule
     13G reflects that (i) Fidelity Management & Research Company ("Fidelity"),
     a wholly owned subsidiary of FMR Corp. ("FMR"), is the beneficial owner of
     916,700 shares of Common Stock as a result of acting as investment advisor
     to the Fidelity Low-Priced Stock Fund (the "LP Fund"), an investment
     company registered under Section 8 of the Investment Company Act of 1940,
     (ii) the LP Fund holds all 916,700 shares of the Common Stock reported,
     (iii) Edward C. Johnson 3d, FMR (through its control of Fidelity), and the
     LP Fund each has sole power to dispose of the 916,700 shares owned by the
     LP Fund, and (iv) sole voting power of the shares reported resides with the
     LP Fund's board of trustees. Fidelity carries out the voting of the shares
     under written guidelines established by the LP Fund's boards of trustees.

 (5) Consists solely of 1,000 shares owned in joint tenancy with Mr. Steadman's
     wife, 20,000 shares subject to stock options granted under the 1994
     Incentive Plan and 18,785 shares subject to stock options granted under the
     Executive Stock Option Plan, all of which currently are exercisable.

 (6) Consists solely of 19,220 shares subject to stock options granted under the
     Director Stock Option Plan and 7,500 shares subject to stock options
     granted under the 1994 Incentive Plan, all of which currently are
     exercisable. Excludes 223,045 shares of Common Stock held by a trust in
     which shares Mr. McWilliams has an indirect pecuniary interest but not a
     beneficial ownership interest under Rule 13d-3 of the Securities Exchange
     Act of 1934.

 (7) Includes 20,200 shares subject to stock options granted under the 1994
     Incentive Plan, all of which currently are exercisable.

 (8) Includes 21,608 shares subject to stock options granted under the Director
     Stock Option Plan and 7,500 shares subject to stock options granted under
     the 1994 Incentive Plan, all of which currently are exercisable.

 (9) Includes 11,497 shares subject to stock options granted under the Director
     Stock Option Plan and 7,500 shares subject to stock options granted under
     the 1994 Incentive Plan, all of which currently are exercisable.

(10) Consists solely of 17,165 shares subject to stock options granted under the
     Director Stock Option Plan and 7,500 shares subject to stock options
     granted under the 1994 Incentive Plan, all of which currently are
     exercisable.

(11) Consists solely of 6,525 shares subject to stock options granted under the
     Director Stock Option Plan and 7,500 shares subject to stock options
     granted under the 1994 Incentive Plan, all of which currently are
     exercisable.

(12) Includes 8,928 shares subject to stock options granted under the Director
     Stock Option Plan that currently are exercisable.

(13) Includes 827,904 shares subject to stock options that currently are
     exercisable or that are exercisable within 60 days of the Record Date.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company and each of CVC and Mr. Alonzo are parties to a Registration
Rights Agreement (the "Registration Rights Agreement") pursuant to which each of
CVC and Mr. Alonzo are entitled to require the Company to file a registration
statement under the Securities Act of 1933 ("Securities Act") covering the sale
of some or all of the shares of Common Stock held by CVC and Mr. Alonzo, subject
to certain conditions. Pursuant to the Registration Rights Agreement, the
Company may be required to file on behalf of each of CSCL (as assignee of CVC)
and Mr. Alonzo an unlimited number of registration statements on Form S-2 or
Form S-3 under the Securities Act, when available. At any time that the Company
is not eligible to use a Form S-2 or Form S-3 registration statement, CSCL (as
assignee of CVC) and Mr. Alonzo also may require the Company to file a
registration statement on their behalf on an appropriate registration form,
provided that the Company will not be required to effect more than two such
registrations on behalf of CSCL (as assignee of CVC) or one such registration on
behalf of Mr. Alonzo during the term of the Registration Rights

                                        58
<PAGE>

Agreement. All such demand registrations require that the registration statement
relate to a minimum of, in the case of CSCL (as assignee of CVC), 5% of the
outstanding Common Stock or, in the case of Mr. Alonzo, 2% of the outstanding
Common Stock. In addition, in the event the Company proposes to register any of
its shares of Common Stock under the Securities Act, CSCL (as assignee of CVC)
and Mr. Alonzo will be entitled to require the Company to include all or a
portion of their shares in such registration, subject to certain conditions.
Each demand registration pursuant to the Registration Rights Agreement must be
at least 180 days apart.

     Generally, all fees, costs and expenses of any registration under the
Registration Rights Agreement will be borne by the Company, provided that CSCL
(as assignee of CVC) and Mr. Alonzo will be required to bear their respective
pro rata share of underwriting discounts and commissions. CSCL (as assignee of
CVC) and Mr. Alonzo may assign their respective rights under the Registration
Rights Agreement to persons to whom they transfer or otherwise assign shares of
the Common Stock that they hold, provided that the shares transferred or
assigned to that person represent five percent or more of the outstanding Common
Stock on a fully-diluted basis at the time of transfer.

            SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Based solely on a review of the copies of Forms 3, 4, and 5 required to be
filed with the Securities and Exchange Commission pursuant to Section 16(a) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
written representations from the Company's executive officers and directors, the
Company believes that all persons who were subject to Section 16(a) of the
Exchange Act during 2001 complied with the filing requirements thereof other
than Mr. Slater who had one late filing. Mr. Slater inadvertently filed his Form
3 late, reflecting that he had become an executive officer of the Company.

                                        59
<PAGE>

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

     (a) 1. For a list of Financial Statements filed as part of this Annual
            Report, see "Item 8. Financial Statements and Supplementary Data."

        2. Financial Statement Schedules

         Schedule II -- Valuation and Qualifying Accounts (page S-1)

         All other schedules are omitted because they are not applicable or not
         required or because the required information is included in the
         financial statements or notes thereto.

        3. Exhibits

         Exhibits followed by an (*) constitute management contracts or
         compensatory plans or arrangements.

<Table>
<Caption>
EXHIBIT
NUMBER                           DESCRIPTION
-------                          -----------
<S>      <C>
  2.1    -- Purchase and Sale Agreement, dated as of March 15, 2001,
            by and among Pinkert Industrial Group, LLC and Leavitt
            Tube Company, Inc., and joined in by Dale R. Pinkert,
            Robert Pinkert, and the Company (incorporated by
            reference to Exhibit 2.1 to the Company's Current Report
            on Form 8-K filed with the Securities and Exchange
            Commission on April 16, 2001).
  2.2    -- Amendment No. 1 to Purchase and Sale Agreement, dated as
            of March 30, 2001, by and among Pinkert Industrial Group,
            LLC and Leavitt Tube Company, Inc., and joined in by Dale
            R. Pinkert, Robert Pinkert, and the Company (incorporated
            by reference to Exhibit 2.2 to the Company's Current
            Report on Form 8-K filed with the Securities and Exchange
            Commission on April 16, 2001).
  3.1    -- Restated Certificate of Incorporation of the Company
            (incorporated by reference to Exhibit 3.1 to the
            Company's Quarterly Report on Form 10-Q for the quarter
            ended June 30, 1998), as amended by the Certificate of
            First Amendment to the Company's Restated Certificate of
            Incorporation (incorporated by reference to Exhibit 3.2
            to the Company's Current Report on Form 8-K dated May 14,
            1997, filed with the Securities and Exchange Commission
            on May 28, 1997) and Certificate of Second Amendment to
            the Company's Restated Certificate of Incorporation
            (incorporated herein by reference to Exhibit 3.2 to the
            Company's Current Report on Form 8-K dated May 26, 1998,
            filed with the Securities and Exchange Commission on June
            1, 1998).
  3.2    -- Certificate of Designation of Series A Junior
            Participating Preferred Stock (incorporated herein by
            reference to Exhibit 4.2 to the Company's Form 8-A dated
            January 5, 2001, filed with the Securities and Exchange
            Commission on January 5, 2001).
  3.3    -- By-Laws of the Company (incorporated by reference to
            Exhibit 99.5 to the Company's Current Report on Form 8-K
            dated December 26, 2000, filed with the Securities and
            Exchange Commission on January 4, 2001).
  4.1    -- Specimen Common Stock Certificate (incorporated by
            reference to Exhibit 4.1 to the Company's Registration
            Statement on Form S-1 as filed with the Securities and
            Exchange Commission on November 3, 1994, Registration No.
            33-83178).
  4.2    -- Exchange Agreement dated November 4, 1994, between the
            Company and Citicorp Venture Capital Ltd. ('CVC')
            (incorporated by reference to Exhibit 4.4 to the
            Company's Registration Statement on Form S-8 dated
            December 9, 1994, Registration No. 33-87278).
  4.3    -- Rights Agreement, dated as of December 28, 2000, between
            the Company and Mellon Investor Services LLC
            (incorporated by reference to Exhibit 99.1 to the
            Company's Current Report on Form 8-K dated January 4,
            2001, filed with the Securities and Exchange Commission
            on January 4, 2001).
+10.1    -- Credit Agreement by and among the Company, the banks
            referred to therein and PNC Bank, National Association,
            as Agent, dated as of August 30, 1996.
</Table>

                                        60
<PAGE>

<Table>
<Caption>
EXHIBIT
NUMBER                           DESCRIPTION
-------                          -----------
<S>      <C>
 10.2    -- First Amendment to Credit Agreement by and among the
            Company, the banks referred to therein and PNC Bank,
            National Association, as Agent dated June 16, 1997
            (incorporated by reference to Exhibit 10.2 to the
            Company's Annual Report on Form 10-K for the year ended
            December 31, 1998).
 10.3    -- Second Amendment to Credit Agreement by and among the
            Company, the banks referred to therein and PNC Bank,
            National Association, as Agent dated September 8, 1999
            (incorporated by reference to Exhibit 10.3 to the
            Company's Annual Report on Form 10-K for the year ended
            December 31, 1999).
 10.4    -- Third Amendment to Credit Agreement by and among the
            Company, the banks referred to therein and PNC Bank,
            National Association, as Agent dated September 1, 2000
            (incorporated by reference to Exhibit 10.4 to the
            Company's Annual Report on Form 10-K for the year ended
            December 31, 2000).
 10.5*   -- Chase Industries Inc. 1994 Long-Term Incentive Plan, as
            amended as of May 14, 1997 (incorporated by reference to
            Exhibit 10.5 to the Company's Annual Report on Form 10-K
            for the year ended December 31, 1998).
 10.6*   -- First Amendment to Chase Industries Inc. 1994 Long-Term
            Incentive Plan, as amended May 14, 1997, effective as of
            November 19, 1999 (incorporated by reference to Exhibit
            10.7 to the Company's Annual Report on Form 10-K for the
            year ended December 31, 1999).
 10.7*   -- Chase Industries Inc. 1997 Non-Employee Director Stock
            Option Plan, as amended May 26, 1998 (incorporated by
            reference to Exhibit 10.6 to the Company's Annual Report
            on Form 10-K for the year ended December 31, 1998).
 10.8*   -- First Amendment to Chase Industries Inc. 1997
            Non-Employee Director Stock Option Plan as amended May
            26, 1998, effective as of November 19, 1999 (incorporated
            by reference to Exhibit 10.9 to the Company's Annual
            Report on Form 10-K for the year ended December 31,
            1999).
 10.9*   -- Chase Industries Inc. 1997 Executive Deferred
            Compensation Stock Option Plan (incorporated by reference
            to Exhibit 10.7 to the Company's Annual Report on Form
            10-K for the year ended December 31, 1998).
 10.10*  -- First Amendment to Chase Industries Inc. 1997 Executive
            Deferred Compensation Stock Option Plan, effective as of
            November 19, 1999 (incorporated by reference to Exhibit
            10.11 to the Company's Annual Report on Form 10-K for the
            year ended December 31, 1999).
+10.11   -- Indemnification Agreement dated November 10, 1994,
            between the Company and Mr. Alonzo.
+10.12   -- Registration Rights Agreement dated November 10, 1994, by
            and among the Company, CVC and Mr. Alonzo.
 10.13   -- Asset Purchase Agreement dated May 10, 1990, as amended,
            by and among the Company, CBC Acquisition Corporation (a
            wholly-owned subsidiary of the Company now named Chase
            Brass & Copper Company, Inc. ('CBCC'), Chase Brass &
            Copper Company, Incorporated, a Delaware corporation now
            named Ken-Chas Reserve Co. ('Old Chase'), BP Exploration
            (Alaska), Inc. ('BP') and The Standard Oil Company
            ('Standard') (incorporated by reference to Exhibit 10.5
            to the Company's Registration Statement on Form S-1 as
            filed with the Securities and Exchange Commission on
            November 3, 1994, Registration No. 33-83178).
+10.14*  -- Amended and Restated CBCC Benefit Restoration Plan
            effective as of September 1, 2001.
 10.15   -- Participation Agreement dated as of December 23, 1997,
            among CBCC, as Lessee, ABN Amro Bank N.V., as Lessor, ABN
            Amro Bank N.V. and Credit Agricole IndoSuez, as
            Participants, and ABN Amro Bank N.V., as Agent, regarding
            lease of equipment at CBCC's Montpelier, Ohio, facility
            (incorporated by reference to Exhibit 10.18 to the
            Company's Annual Report on Form 10-K for the year ended
            December 31, 1997).
10 .16   -- Master Lease dated as of December 23, 1997, between ABN
            Amro Bank N.V., as Lessor, and CBCC, as Lessee, regarding
            lease of equipment at CBCC's Montpelier, Ohio, facility
            (incorporated by reference to Exhibit 10.19 to the
            Company's Annual Report on Form 10-K for the year ended
            December 31, 1997).
</Table>

                                        61
<PAGE>

<Table>
<Caption>
EXHIBIT
NUMBER                           DESCRIPTION
-------                          -----------
<S>      <C>
 10.17   -- Lease Supplement No. 1 dated as of December 23, 1997,
            between ABN Amro Bank N.V., as Lessor, and CBCC, as
            Lessee, supplementing the Master Lease filed herewith as
            Exhibit 10.16 (incorporated by reference to Exhibit 10.20
            to the Company's Annual Report on Form 10-K for the year
            ended December 31, 1997).
 10.18   -- Lease Supplement No. 2 dated as of February 2, 1998,
            between ABN Amro Bank N.V., as Lessor, and CBCC, as
            Lessee, supplementing the Master Lease filed herewith as
            Exhibit 10.16 (incorporated by reference to Exhibit 10.21
            to the Company's Annual Report on Form 10-K for the year
            ended December 31, 1997).
 10.19   -- Appendix 1 (Definitions) to Participation Agreement filed
            herewith as Exhibit 10.15 and Master Lease filed herewith
            as Exhibit 10.16 (incorporated by reference to Exhibit
            10.22 to the Company's Annual Report on Form 10-K for the
            year ended December 31, 1997).
 10.20   -- Guarantee dated as of December 23, 1997, from the
            Company, as Obligor, to ABN Amro Bank N.V., as Agent,
            guaranteeing obligations of CBCC under Participation
            Agreement filed herewith as Exhibit 10.15 and Master
            Lease filed herewith as Exhibit 10.16 (incorporated by
            reference to Exhibit 10.23 to the Company's Annual Report
            on Form 10-K for the year ended December 31, 1997).
 10.21*  -- Amended and Restated Employment Agreement, dated as of
            September 1, 2001, between the Company and John H.
            Steadman (incorporated by reference to Exhibit 10.1 to
            the Company's Quarterly Report on Form 10-Q for the
            quarter ended September 31, 2001).
 10.22   -- Change of Control Agreement, dated as of September 25,
            2001, by and between the Company and Todd A. Slater
            (incorporated by reference to Exhibit 10.2 to the
            Company's Quarterly Report on Form 10-Q for the quarter
            ended September 31, 2001).
 10.23   -- Severance Pay Agreement, dated as of September 1, 2001,
            by and between the Company and John H. Steadman
            (incorporated by reference to Exhibit 10.4 to the
            Company's Quarterly Report on Form 10-Q for the quarter
            ended September 31, 2001).
 10.24   -- Severance Pay Agreement, dated as of September 25, 2001,
            by and between the Company and Todd A. Slater
            (incorporated by reference to Exhibit 10.5 to the
            Company's Quarterly Report on Form 10-Q for the quarter
            ended September 31, 2001).
 10.25   -- Severance Agreement, dated as of September 26, 2001, by
            and between the Company and Michael T. Seagraves
            (incorporated by reference to Exhibit 10.7 to the
            Company's Quarterly Report on Form 10-Q for the quarter
            ended September 31, 2001).
 10.26   -- Schedule identifying additional documents substantially
            identical to the Indemnification Agreement included as
            Exhibit 10.11 and setting forth the material details in
            which those documents differ from that document
            (incorporated by reference to Exhibit 10.13 to the
            Company's Annual Report on Form 10-K for the year ended
            December 31, 1999).
+21      -- List of Subsidiaries of the Company.
+23      -- Consent of PricewaterhouseCoopers LLP
</Table>

---------------

+ Filed herewith

 (b) Reports on Form 8-K

     No Current Report on Form 8-K was filed by the Company during the fourth
quarter of 2001.

                                        62
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

<Table>
<S>                                           <C>
                                              CHASE INDUSTRIES INC.

                                                              By: /s/ JOHN H. STEADMAN
                                                ----------------------------------------------------
                                                                  John H. Steadman
Date: April 1, 2002                                    President and Chief Executive Officer
</Table>

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<Table>
<Caption>
                   SIGNATURE                                      TITLE                        DATE
                   ---------                                      -----                        ----
<C>                                               <S>                                      <C>




              /s/ JOHN H. STEADMAN                President, Chief Executive Officer and   April 1, 2002
------------------------------------------------    Director (Principal Executive
                John H. Steadman                    Officer)




               /s/ TODD A. SLATER                 Chief Financial Officer (Principal       April 1, 2002
------------------------------------------------    Financial Officer and Principal
                 Todd A. Slater                     Accounting Officer)




              /s/ MARTIN V. ALONZO                Director                                 April 1, 2002
------------------------------------------------
                Martin V. Alonzo




            /s/ RAYMOND E. CARTLEDGE              Director                                 April 1, 2002
------------------------------------------------
              Raymond E. Cartledge




            /s/ CHARLES E. CORPENING              Director                                 April 1, 2002
------------------------------------------------
              Charles E. Corpening




              /s/ JOHN R. KENNEDY                 Director                                 April 1, 2002
------------------------------------------------
                John R. Kennedy




             /s/ ROBERT D. KENNEDY                Director                                 April 1, 2002
------------------------------------------------
               Robert D. Kennedy




            /s/ THOMAS F. MCWILLIAMS              Director                                 April 1, 2002
------------------------------------------------
              Thomas F. Mcwilliams




             /s/ WILLIAM R. TOLLER                Director                                 April 1, 2002
------------------------------------------------
               William R. Toller
</Table>

                                        63
<PAGE>

                             CHASE INDUSTRIES INC.

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                           BALANCE AT   ADDITIONS   CHARGED TO                BALANCE AT
                                           BEGINNING    COST AND      OTHER                      END
                                           OF PERIOD    EXPENSES     ACCOUNTS    DEDUCTIONS   OF PERIOD
                                           ----------   ---------   ----------   ----------   ----------
<S>                                        <C>          <C>         <C>          <C>          <C>
YEAR ENDED DECEMBER 31, 2001
  Allowance for doubtful accounts and
     claims..............................     $990        $ 50         $ --         $124         $916
                                              ====        ====         ====         ====         ====
YEAR ENDED DECEMBER 31, 2000
  Allowance for doubtful accounts and
     claims..............................     $990        $ --         $ --         $ --         $990
                                              ====        ====         ====         ====         ====
YEAR ENDED DECEMBER 31, 1999
  Allowance for doubtful accounts and
     claims..............................     $965        $ 60         $ --         $ 35         $990
                                              ====        ====         ====         ====         ====
</Table>

                                        64
<PAGE>

                               INDEX TO EXHIBITS

     Exhibits followed by an (*) constitute management contracts or compensatory
plans or arrangements.

<Table>
<Caption>
EXHIBIT
NUMBER                                DESCRIPTION
-------                               -----------
<S>      <C>  <C>
  2.1     --  Purchase and Sale Agreement, dated as of March 15, 2001, by
              and among Pinkert Industrial Group, LLC and Leavitt Tube
              Company, Inc., and joined in by Dale R. Pinkert, Robert
              Pinkert, and the Company (incorporated by reference to
              Exhibit 2.1 to the Company's Current Report on Form 8-K
              filed with the Securities and Exchange Commission on April
              16, 2001).
  2.2     --  Amendment No. 1 to Purchase and Sale Agreement, dated as of
              March 30, 2001, by and among Pinkert Industrial Group, LLC
              and Leavitt Tube Company, Inc., and joined in by Dale R.
              Pinkert, Robert Pinkert, and the Company (incorporated by
              reference to Exhibit 2.2 to the Company's Current Report on
              Form 8-K filed with the Securities and Exchange Commission
              on April 16, 2001).
  3.1     --  Restated Certificate of Incorporation of the Company
              (incorporated by reference to Exhibit 3.1 to the Company's
              Quarterly Report on Form 10-Q for the quarter ended June 30,
              1998), as amended by the Certificate of First Amendment to
              the Company's Restated Certificate of Incorporation
              (incorporated by reference to Exhibit 3.2 to the Company's
              Current Report on Form 8-K dated May 14, 1997, filed with
              the Securities and Exchange Commission on May 28, 1997) and
              Certificate of Second Amendment to the Company's Restated
              Certificate of Incorporation (incorporated herein by
              reference to Exhibit 3.2 to the Company's Current Report on
              Form 8-K dated May 26, 1998, filed with the Securities and
              Exchange Commission on June 1, 1998).
  3.2     --  Certificate of Designation of Series A Junior Participating
              Preferred Stock (incorporated herein by reference to Exhibit
              4.2 to the Company's Form 8-A dated January 5, 2001, filed
              with the Securities and Exchange Commission on January 5,
              2001).
  3.3     --  By-Laws of the Company (incorporated by reference to Exhibit
              99.5 to the Company's Current Report on Form 8-K dated
              December 26, 2000, filed with the Securities and Exchange
              Commission on January 4, 2001).
  4.1     --  Specimen Common Stock Certificate (incorporated by reference
              to Exhibit 4.1 to the Company's Registration Statement on
              Form S-1 as filed with the Securities and Exchange
              Commission on November 3, 1994, Registration No. 33-83178).
  4.2     --  Exchange Agreement dated November 4, 1994, between the
              Company and Citicorp Venture Capital Ltd. ('CVC')
              (incorporated by reference to Exhibit 4.4 to the Company's
              Registration Statement on Form S-8 dated December 9, 1994,
              Registration No. 33-87278).
  4.3     --  Rights Agreement, dated as of December 28, 2000, between the
              Company and Mellon Investor Services LLC (incorporated by
              reference to Exhibit 99.1 to the Company's Current Report on
              Form 8-K dated January 4, 2001, filed with the Securities
              and Exchange Commission on January 4, 2001).
+10.1     --  Credit Agreement by and among the Company, the banks
              referred to therein and PNC Bank, National Association, as
              Agent, dated as of August 30, 1996.
 10.2     --  First Amendment to Credit Agreement by and among the
              Company, the banks referred to therein and PNC Bank,
              National Association, as Agent dated June 16, 1997
              (incorporated by reference to Exhibit 10.2 to the Company's
              Annual Report on Form 10-K for the year ended December 31,
              1998).
 10.3     --  Second Amendment to Credit Agreement by and among the
              Company, the banks referred to therein and PNC Bank,
              National Association, as Agent dated September 8, 1999
              (incorporated by reference to Exhibit 10.3 to the Company's
              Annual Report on Form 10-K for the year ended December 31,
              1999).
</Table>

                                        65
<PAGE>

<Table>
<Caption>
EXHIBIT
NUMBER                                DESCRIPTION
-------                               -----------
<S>      <C>  <C>
 10.4     --  Third Amendment to Credit Agreement by and among the
              Company, the banks referred to therein and PNC Bank,
              National Association, as Agent dated September 1, 2000
              (incorporated by reference to Exhibit 10.4 to the Company's
              Annual Report on Form 10-K for the year ended December 31,
              2000).
 10.5*    --  Chase Industries Inc. 1994 Long-Term Incentive Plan, as
              amended as of May 14, 1997 (incorporated by reference to
              Exhibit 10.5 to the Company's Annual Report on Form 10-K for
              the year ended December 31, 1998).
 10.6*    --  First Amendment to Chase Industries Inc. 1994 Long-Term
              Incentive Plan, as amended May 14, 1997, effective as of
              November 19, 1999 (incorporated by reference to Exhibit 10.7
              to the Company's Annual Report on Form 10-K for the year
              ended December 31, 1999).
 10.7*    --  Chase Industries Inc. 1997 Non-Employee Director Stock
              Option Plan, as amended May 26, 1998 (incorporated by
              reference to Exhibit 10.6 to the Company's Annual Report on
              Form 10-K for the year ended December 31, 1998).
 10.8*    --  First Amendment to Chase Industries Inc. 1997 Non-Employee
              Director Stock Option Plan as amended May 26, 1998,
              effective as of November 19, 1999 (incorporated by reference
              to Exhibit 10.9 to the Company's Annual Report on Form 10-K
              for the year ended December 31, 1999).
 10.9*    --  Chase Industries Inc. 1997 Executive Deferred Compensation
              Stock Option Plan (incorporated by reference to Exhibit 10.7
              to the Company's Annual Report on Form 10-K for the year
              ended December 31, 1998).
 10.10*   --  First Amendment to Chase Industries Inc. 1997 Executive
              Deferred Compensation Stock Option Plan, effective as of
              November 19, 1999 (incorporated by reference to Exhibit
              10.11 to the Company's Annual Report on Form 10-K for the
              year ended December 31, 1999).
+10.11    --  Indemnification Agreement dated November 10, 1994, between
              the Company and Mr. Alonzo.
+10.12    --  Registration Rights Agreement dated November 10, 1994, by
              and among the Company, CVC and Mr. Alonzo.
 10.13    --  Asset Purchase Agreement dated May 10, 1990, as amended, by
              and among the Company, CBC Acquisition Corporation (a
              wholly-owned subsidiary of the Company now named Chase Brass
              & Copper Company, Inc. ('CBCC'), Chase Brass & Copper
              Company, Incorporated, a Delaware corporation now named
              Ken-Chas Reserve Co. ('Old Chase'), BP Exploration (Alaska),
              Inc. ('BP') and The Standard Oil Company ('Standard')
              (incorporated by reference to Exhibit 10.5 to the Company's
              Registration Statement on Form S-1 as filed with the
              Securities and Exchange Commission on November 3, 1994,
              Registration No. 33-83178).
+10.14*   --  Amended and Restated CBCC Benefit Restoration Plan effective
              as of September 1, 2001.
 10.15    --  Participation Agreement dated as of December 23, 1997, among
              CBCC, as Lessee, ABN Amro Bank N.V., as Lessor, ABN Amro
              Bank N.V. and Credit Agricole IndoSuez, as Participants, and
              ABN Amro Bank N.V., as Agent, regarding lease of equipment
              at CBCC's Montpelier, Ohio, facility (incorporated by
              reference to Exhibit 10.18 to the Company's Annual Report on
              Form 10-K for the year ended December 31, 1997).
 10.16    --  Master Lease dated as of December 23, 1997, between ABN Amro
              Bank N.V., as Lessor, and CBCC, as Lessee, regarding lease
              of equipment at CBCC's Montpelier, Ohio, facility
              (incorporated by reference to Exhibit 10.19 to the Company's
              Annual Report on Form 10-K for the year ended December 31,
              1997).
 10.17    --  Lease Supplement No. 1 dated as of December 23, 1997,
              between ABN Amro Bank N.V., as Lessor, and CBCC, as Lessee,
              supplementing the Master Lease filed herewith as Exhibit
              10.16 (incorporated by reference to Exhibit 10.20 to the
              Company's Annual Report on Form 10-K for the year ended
              December 31, 1997).
</Table>

                                        66
<PAGE>

<Table>
<Caption>
EXHIBIT
NUMBER                                DESCRIPTION
-------                               -----------
<S>      <C>  <C>
 10.18    --  Lease Supplement No. 2 dated as of February 2, 1998, between
              ABN Amro Bank N.V., as Lessor, and CBCC, as Lessee,
              supplementing the Master Lease filed herewith as Exhibit
              10.16 (incorporated by reference to Exhibit 10.21 to the
              Company's Annual Report on Form 10-K for the year ended
              December 31, 1997).
 10.19    --  Appendix 1 (Definitions) to Participation Agreement filed
              herewith as Exhibit 10.15 and Master Lease filed herewith as
              Exhibit 10.16 (incorporated by reference to Exhibit 10.22 to
              the Company's Annual Report on Form 10-K for the year ended
              December 31, 1997).
 10.20    --  Guarantee dated as of December 23, 1997, from the Company,
              as Obligor, to ABN Amro Bank N.V., as Agent, guaranteeing
              obligations of CBCC under Participation Agreement filed
              herewith as Exhibit 10.15 and Master Lease filed herewith as
              Exhibit 10.16 (incorporated by reference to Exhibit 10.23 to
              the Company's Annual Report on Form 10-K for the year ended
              December 31, 1997).
 10.21*   --  Amended and Restated Employment Agreement, dated as of
              September 1, 2001, between the Company and John H. Steadman
              (incorporated by reference to Exhibit 10.1 to the Company's
              Quarterly Report on Form 10-Q for the quarter ended
              September 31, 2001).
 10.22    --  Change of Control Agreement, dated as of September 25, 2001,
              by and between the Company and Todd A. Slater (incorporated
              by reference to Exhibit 10.2 to the Company's Quarterly
              Report on Form 10-Q for the quarter ended September 31,
              2001).
 10.23    --  Severance Pay Agreement, dated as of September 1, 2001, by
              and between the Company and John H. Steadman (incorporated
              by reference to Exhibit 10.4 to the Company's Quarterly
              Report on Form 10-Q for the quarter ended September 31,
              2001).
 10.24    --  Severance Pay Agreement, dated as of September 25, 2001, by
              and between the Company and Todd A. Slater (incorporated by
              reference to Exhibit 10.5 to the Company's Quarterly Report
              on Form 10-Q for the quarter ended September 31, 2001).
 10.25    --  Severance Agreement, dated as of September 26, 2001, by and
              between the Company and Michael T. Seagraves (incorporated
              by reference to Exhibit 10.7 to the Company's Quarterly
              Report on Form 10-Q for the quarter ended September 31,
              2001).
 10.26    --  Schedule identifying additional documents substantially
              identical to the Indemnification Agreement included as
              Exhibit 10.11 and setting forth the material details in
              which those documents differ from that document
              (incorporated by reference to Exhibit 10.13 to the Company's
              Annual Report on Form 10-K for the year ended December 31,
              1999).
+21       --  List of Subsidiaries of the Company.
+23       --  Consent of PricewaterhouseCoopers LLP
</Table>

---------------

+ Filed herewith

                                        67