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OM Group Adopts New Policy for Board Composition

Published on 2005-08-09. Author : SpecialChem

CLEVELAND -- OM Group, Inc. (NYSE: OMG) announced that the company's board of directors adopted a new policy that requires all non-executive directors meet its standards of independence. In response to these standards, John E. Mooney, a director since 1995, and Markku Toivanen, a director since 1993, have voluntarily resigned from the board, effective immediately.

"As part of our ongoing efforts to embed a stronger and comprehensive corporate governance structure into OMG's operations, the board has adopted this new policy for its directors that exceeds the requirements set forth by the New York Stock Exchange," said Joseph Scaminace, the company's president and chief executive officer. "As directors, John and Markku have served the company well and their supportive actions today will expedite our efforts to create a board that meets today's demanding definition of independence. The board members who remain possess excellent skills and provide the necessary core competencies around which we will build for the future."

The company also announced that Frank E. Butler, the company's non- executive chairman and a director since 1996, and Lee Brodeur, a director since 1993, have elected to take early retirement from the board, effective immediately. Scaminace will succeed Butler as the company's chairman of the board and Katharine L. Plourde, a director since 2002, will serve as lead director.

"As OMG enters a new era of growth under the leadership of Joe Scaminace, we all agree that the time has come to realign the board into one that is focused on creating shareholder value," said Plourde. "With the restatement process, legal matters and a significant restructuring of the company, its management and its board now behind us, we are confident this company is well- positioned to meet its longer term goals."

The company is actively engaged in finding new directors. Current plans call for one or two directors to be added on or before the company's 2005 Annual Meeting of Shareholders, which is scheduled for October of 2005. The company plans to expand its strong nucleus of directors to a full-slate of nine to eleven directors as soon as practical. The company continues to retain a leading global executive search firm to assist it in identifying and assessing possible candidates for its board vacancies.

"On behalf of the management team and its board, I wish to thank Frank, John, Markku and Lee for their loyal service over the years," said Scaminace.


OM Group is a leading, vertically integrated international producer and marketer of value-added, metal-based specialty chemicals and related materials. Headquartered in Cleveland, Ohio, OM Group operates manufacturing facilities in the Americas, Europe, Asia, Africa and Australia.

Forward-Looking Statements

This report contains statements that the Company believes may be "forward- looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are not historical facts and generally can be identified by use of statements that include phrases such as "believe," "expect," "anticipate," "intend," "plan," "foresee" or other words or phrases of similar import. Similarly, statements that describe the Company's objectives, plans or goals also are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that are difficult to predict, may be beyond the Company's control and could cause actual results to differ materially from those currently anticipated.

Important factors that may affect the Company's expectations, estimates or projections include: the completion of the settlements of the shareholder class action and derivative lawsuits filed against the Company, certain of its executives and its directors in a manner that is consistent with the definite agreement and agreement in principle reached with the lead plaintiffs in such lawsuits; the speed and sustainability of price changes in cobalt and nickel; the potential for lower of cost or market write-downs of the carrying value of inventory necessitated by decreases in the market prices of cobalt and nickel; the availability of competitively priced supplies of raw materials, particularly cobalt and nickel; the effect of the Company's inability to meet the SEC and NYSE filing obligations on a timely basis upon funding availability under the Company's credit facilities or upon debt obligations outstanding; the effect of the Company not completing the documentation and testing of its internal controls over financial reporting such that management of the Company and its independent registered public accounting firm are unable to report as to such internal control over financial reporting; the risk that new or modified internal controls, implemented in response to the 2004 investigation by the audit committee of the Company's board of directors and the Company's examination of its internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, are not effective and need to be improved, resulting in additional expense; the demand for metal-based specialty chemicals and products in the Company's markets; the effect of fluctuations in currency exchange rates on the Company's international operations; the effect of non-currency risks of investing and conducting operations in foreign countries, including political, social, economic and regulatory factors; the outcome of the previously announced SEC Division of Enforcement review of the investigation conducted by the Company's audit committee; and the general level of global economic activity and demand for the Company's products.

Source: OM Group, Inc.

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