10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended December 31, 2002

Commission file number: 333-70011

GEO Specialty Chemicals, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Ohio	34-1708689
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

GEO Specialty Chemicals, Inc.

3201 Enterprise Parkway, Suite 490

Cleveland, Ohio 44122

(Address, including Zip Code, of Principal Executive Offices)

Registrant’s telephone number, including area code: (216) 464-5564

Securities Registered Pursuant To Section 12(b) Of The Act:

None

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.  x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant cannot be computed, since the registrant’s equity is not traded on any public market.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Shares of Class A Voting Common Stock, $1.00 par value, as of April 15, 2003: 135.835

Shares of Class B Nonvoting Common Stock, $1.00 par value, as of April 15, 2003: none

PART I.

ITEM 1. BUSINESS

Introduction to GEO’s Business

GEO Specialty Chemicals, Inc., an Ohio corporation that commenced business in 1993, develops, manufactures and markets a wide variety of specialty chemicals. GEO is a leading supplier of a broad variety of niche products sold to a diverse customer and market base. GEO manufactures over 300 products sold to major industrial customers for such diverse end-use applications as water treatment, wire and cable, industrial rubber, oil and gas production, coatings, construction, and electronics.

GEO manages its products within three primary operating groups: specialty additives, performance chemicals and electronic chemicals. Specialty additives are primarily chemical components that improve the properties of customers’ products. GEO is a leading U.S. producer of a number of specialty additives that are used in a variety of construction, oil field, coating, wire and cable, and industrial rubber applications. Specialty additives represented approximately 57.1% of GEO’s total net sales for the year ended December 31, 2002.

Performance chemicals are primarily products used by customers to enhance the productivity of their operations and decrease their operating costs. GEO’s performance chemicals consist principally of chemicals used in the water treatment and oil well stimulation markets. GEO is a leading U.S. producer and marketer of several performance chemicals sold in these markets. Performance chemicals represented approximately 24.9% of GEO’s total net sales for the year ended December 31, 2002.

GEO’s electronic chemicals group was created after its 1999 acquisition of a gallium extraction and purification business from Rhodia Chimie S.A. The electronic chemicals group manufactures and sells virgin gallium to various sectors of the electronics market for applications in telecommunications and optoelectronics. These sales represented approximately 2.8% of GEO’s total net sales for the year ended December 31, 2002.

In addition to specialty additives, performance chemicals and electronic chemicals, GEO supplies numerous raw materials and intermediates to Cognis Corporation and finished products used in the paper industry under a long-term supply agreement with ONDEO Nalco Company. GEO also produces by-products, which it sells in the merchant market, and raw materials for internal consumption. These activities represented approximately 15.2% of GEO’s total net sales for the year ended December 31, 2002.

GEO was formed by George P. Ahearn and William P. Eckman to build, primarily through acquisitions, a specialty chemical business targeted in strategic markets. GEO’s initial acquisition occurred on February 3, 1993 with the purchase of Rhone-Poulenc, Inc.’s Gulf Coast aluminum sulfate business, a manufacturer and supplier of paper processing chemicals and processed clays located in the Southeastern United States, for $3.6 million. On July 15, 1994, GEO acquired the assets of Courtney Industries, Inc., a manufacturer of aluminum-based chemicals used in water treatment and industrial applications, for $5.1 million. The acquisition of Courtney Industries also provided GEO with complementary products to its existing aluminum

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sulfate business. On June 30, 1995, GEO purchased the customer list relating to the dry aluminum sulfate business of Rhone-Poulenc, Inc. for an aggregate $375,000. GEO acquired seven plants comprising the business and assets of the aluminum sulfate business of Cytec Industries Inc. on December 5, 1996 for $7.3 million. The acquisition of Cytec Industries further improved GEO’s position in the aluminum sulfate market and expanded its network of strategically located plants in the Southeastern United States.

On March 25, 1997, GEO purchased from Henkel Corporation (the relevant business of which has been spun-off as Cognis Corporation) two modern ISO 9002 certified manufacturing plants located in the United States and involved in the development, manufacture and supply of specialty paper chemicals and construction and process additive chemicals, for $54.2 million. Through the Henkel acquisition, GEO became one of the most diversified specialty chemical suppliers to the paper industry with over 200 products. The Henkel acquisition also provided GEO with over 100 products sold to the construction, oil and gas, and ceramic industries.

On July 31, 1998, GEO acquired substantially all of the assets of the TRIMET Technical Products Division of Mallinckrodt Inc. for approximately $61.1 million. As a result of the acquisition of TRIMET, GEO became the leading global supplier of dimethylolpropionic acid, marketed under the brand name DMPA^®, and trimethylolethane, marketed under the brand name TRIMET^®, specialty chemicals used primarily in the production of specialty paints and coatings.

On September 8, 1999, GEO acquired a gallium extraction and purification business from Rhodia Chimie S.A. for the French franc equivalent of approximately $23.3 million. The acquired business provides various grades of gallium to the electronics market for applications in telecommunications and optoelectronics. The acquisition included a gallium purification facility in Salindres, France and a gallium extraction facility in Stade, Germany. As part of the acquisition, GEO was also granted a three-year option to acquire a dormant gallium extraction facility near Pinjarra, Australia. GEO exercised the option in September 2002 for $1.5 million. GEO plans to keep the facility in its dormant status until the global market for gallium strengthens.

On April 15, 2001, GEO sold to ONDEO Nalco Company certain assets of its paper chemicals business for $8.5 million in cash plus the assumption of certain liabilities associated with the paper chemicals business. In addition, GEO could receive performance- related consideration of up to $2.0 million based on sales of certain products during two twelve month periods following the divestment. As of December 31, 2001, GEO had recorded a pre-tax gain of approximately $2.2 million on the sale. As part of the transaction, GEO entered into a supply agreement with Nalco, pursuant to which GEO has produced and will continue to produce specific coating products for a period of five years after the divestment. For the years ended December 31, 2001 and 2002, GEO sold $8.5 million and $7.6 million, respectively, to Nalco under the supply agreement. Prior to the divestment, GEO’s paper chemicals business recorded sales of $6.8 million in 2001 and $26.3 million in 2000. In July 2002, GEO received $1.0 million of performance- related consideration from Nalco based on the sales of the divested business during the twelve month period after the divestment.

On May 31, 2001, GEO acquired from Hercules Incorporated substantially all the assets, net of certain liabilities, of Hercules’ Peroxy Chemicals division for $ 92.2 million. The acquired

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business produces various grades of organic peroxide products derived primarily from cumene. These organic peroxide additives are used as crosslinking agents in the making of insulation for medium and high voltage wire and cable and as both a curing agent and crosslinking agent for industrial rubber used in high performance applications. As part of the acquisition, GEO purchased manufacturing facilities in Gibbstown, New Jersey and Franklin, Virginia. The acquired business is the sole producer of cumene-based organic peroxides in the United States. During fiscal 2002 and seven months of fiscal 2001, GEO recorded net sales of $33.3 million and $20.8 million, respectively, by the Peroxy Chemicals business.

Products and Markets Overview

The following table shows on a pro forma basis GEO’s principal operating groups by product line, primary end-markets and as a percentage of sales for the years 2000 through 2002. The pro forma sales percentages assume that the Hercules acquisition and Nalco disposition were each effected on January 1, 2000.

			Percentage Of Sales
Operating Group	Product Line	Primary End-Markets	2000		2001		2002
Performance Chemicals	Aluminum and Clay Products	Pulp & Paper, Water Treatment, Oil Field	20.7	%	22.1	%	24.9	%
Specialty Additives	Naphthalene Sulfonate Condensates/Other Chemicals	Construction, Oil Field	16.6		20.1		25.2
	Polyols	Coatings	12.5		10.0		11.7
	Organic Peroxides	Wire and Cable, Industrial Rubber	19.4		18.2		20.2
Total Specialty Additives			48.5		48.3		57.1
Electronic Chemicals	Gallium	Electronics	16.9		13.8		2.8
Other (1)			13.9		15.8		15.2
Total			100	%	100	%	100	%

(1) Comprised of formaldehyde, calcium formate, sales to Cognis Corporation and sales pursuant to the supply agreement with Nalco (includes sales direct to customers in 2000 and until April 15 in 2001).

Performance Chemicals

Water Treatment. The U.S. specialty chemical water treatment market is comprised of two parts: industrial water treatment and municipal water treatment. The industrial water treatment market uses specialty chemicals primarily to purify water for manufacturing processes, since the use of untreated water results in low product quality and accelerated equipment degradation. The industrial market is also required by environmental regulations to treat its wastewater. Demand in this area is therefore driven by both the level of industrial production and environmental regulations.

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The municipal water treatment market uses specialty chemicals primarily to purify water sources into a consumable form. Municipalities must also comply with environmental regulations. The following factors drive growth for specialty water treatment chemicals:

• increased industrial production;

• more stringent environmental regulations;

• increased scarcity of consumable water; and

• population growth.

Within the specialty chemical water treatment industry, GEO markets products in the following major areas: flocculants and coagulants.

Flocculants/Coagulants. GEO’s flocculants and coagulants are used in the paper formation process and the treatment of pulp and paper mill wastewater. GEO believes it is a leading seller of these products, including polyaluminum chloride and aluminum sulfate, to the U.S. pulp and paper industry.

Flocculants and coagulants remove suspended matter from water and are essential to the treatment of industrial processing water, wastewater and drinking water. Coagulants are used to achieve primary separation of fine particles. Flocculants are added after the primary coagulant to cause the separated particles to clump together and settle out more rapidly. GEO is a leading U.S. manufacturer of several flocculants and coagulants, including aluminum sulfate and polyaluminum chlorides, which are used as both a flocculant and coagulant for the treatment of water in the industrial and municipal markets. GEO markets over 70 products in this industry.

GEO derives its strong market position from the strategic location of its plants and its status as a low cost producer. The close proximity of GEO’s nine small plants to its customer base, most notably its pulp and paper customers, provides GEO with a distinct advantage over its competitors, allowing it to deliver its products in a more timely and cost effective manner. GEO’s source of kaolin clay, which is used in the production of aluminum sulfate, provides a strategic raw material enabling GEO to be a low cost supplier in the market. These factors, along with the low quality of water in the Southeastern U.S., where GEO’s performance chemicals business primarily operates, have resulted in strong market share for GEO.

In this market, GEO competes with General Chemical Corporation, Gulbrandsen Co., Inc., Summit Research Labs, Kemwater North America Company, a subsidiary of Kimera Corporation, Southern Ionics, Inc. and Delta Chemical Corp.

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Specialty Additives

Construction. GEO competes primarily in two parts of the construction industry: concrete additives and plaster board.

Concrete Additives. GEO’s naphthalene sulfonate condensates and the other specialty chemicals that it sells in this segment of the construction market are used as additives to increase the strength and workability of concrete. These products also improve the ability of concrete to withstand deterioration due to temperature variations and corrosive agents. Major markets for these products include roadway construction and repair and residential and commercial construction. GEO markets approximately 30 products in this market. GEO competes in this market with the Hampshire Division of The Dow Chemical Company and Handy Chemicals Ltd., a subsidiary of Rutgers Organics GmbH.

Plaster Board. GEO’s naphthalene sulfonate condensates and the other specialty chemicals that it sells in this segment of the construction market are used to shorten the drying time and expedite the manufacture of plaster board. Demand for GEO’s products in this market is primarily a function of the level of residential and commercial construction. GEO is the leading U.S. manufacturer of naphthalene sulfonate condensates to the plaster board market. GEO markets approximately 10 products for plaster board use. GEO developed the application of naphthalene sulfonate condensates in this market and is considered to be the technology leader. GEO is also a leading manufacturer of foaming agents and defoamers to the plaster board industry. Major customers include the four leading plaster board producers: United States Gypsum Company, Georgia-Pacific Corporation, National Gypsum and James Hardie. GEO competes primarily with the Hampshire Division of The Dow Chemical Company and Handy Chemicals Ltd., a subsidiary of Rutgers Organics GmbH.

Coatings. Primarily concentrated in the United States, Western Europe and Japan, the global market for paint and coating chemicals is split primarily into two applications: construction, primarily new home construction, and consumer durables, including motor vehicles, home furnishings, outdoor equipment and household appliances. Demand for paint and coating chemicals is largely a function of construction expenditures, motor vehicle production and general consumer spending.

In addition, environmental concerns have resulted in increased demand for more environmentally-friendly water-based paints and coatings and the specialty chemicals used in their production. This increase has been most pronounced in the construction industry, where most household paints now use water-based paint and coatings. In the 1990s, the shift towards water-based paints and coatings spread to the consumer durables sector and other industrial sectors as well, resulting in continued growth in the paint and coating chemicals market.

Within the specialty paint and coating chemicals market, GEO manufactures and supplies two products: DMPA^® and TRIMET^®.

DMPA^®. GEO’s DMPA^® is used in the production of such products as wood varnishes, leather coatings, adhesives and automotive parts. GEO believes that its DMPA^® product, with its environmentally-friendly profile and superior performance, will benefit from the worldwide

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trend towards more stringent environmental standards for many paint and coating products. GEO is the only producer of DMPA^® in the United States and supplies such major manufacturers as Avecia Corp., PPG Industries, Inc. and Reichhold Chemicals, Inc.

TRIMET^®. GEO’s TRIMET^® product is used in the production of such products as: automotive finishes, where it improves gloss and hardness; outdoor equipment, where ultra-violet resistance is enhanced; and decorative finishes for home furnishings, where it improves water resistance. TRIMET^® is also used as a surface treatment in the production of can coatings and architectural paints. GEO believes that its TRIMET^® product, with its environmentally-friendly profile and superior properties, will also benefit from the worldwide trend towards more stringent environmental standards for many paint and coating products. GEO has limited competition for its TRIMET^® product, although substitute products are available depending on the application and customer performance requirements, and supplies such major manufacturers as McWorter Corporation, Reichhold Chemicals, Inc., Cook Composites Company and Kerr-McGee Chemical Corporation.

Oilfield. The North American oilfield chemical market uses many specialty chemicals for cementing, stimulation and production. Demand for oilfield specialty chemicals is a function of exploration expenditures, oil and gas production and crude oil and gas prices. The increased exploration efforts in the Gulf of Mexico, particularly at deeper depths, and increased oil production in Canada and Mexico will drive demand in North America for oilfield specialty chemicals.

Within the oilfield specialty chemicals market, GEO markets approximately 25 products in the following major areas: cementing, stimulation and production.

Cementing. In the cementing market, GEO’s naphthalene sulfonate condensates are used to enhance the physical properties of cement used for well casings. GEO’s naphthalene sulfonate condensates allow for improved handling of cement, resulting in reduced energy requirements for pumping at greater depths. In this market, GEO competes with the Hampshire Division of The Dow Chemical Company and several alternative specialty chemicals.

Stimulation. GEO manufactures calcined clay and bauxite used as an intermediate in the manufacturing of clay proppants. Clay proppants are used in the stimulation of oil and natural gas wells. GEO markets 12 products, and competes primarily with CE Minerals, Inc. in this market.

Production. GEO also manufactures its naphthalene sulfonate condensates for oil production. These products are used primarily to facilitate the de-watering of crude-oil. GEO competes primarily with Witco Corporation in this market.

Wire and Cable. GEO’s organic peroxide products, primarily dialkyl peroxides, sold primarily under the DI-CUP^® and VUL-CUP^® brand names, are used to crosslink polymers in making the insulation for medium and high voltage wire and cable. These additives provide greater thermal stability at elevated temperatures during power transmission and thus enhance the life-span of the insulation on the power cable. The wire and cable end market represents approximately 50% of GEO’s sales of organic peroxides. Key customers in this market are The Dow

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Chemical Company, General Cable and Okonite. Competition for the wire and cable market in the United States is from imported peroxides primarily sold by NOF, a Japanese manufacturer, and Akzo, which imports products from a joint venture company in China. In Europe, the main competitors are Atofina, which sources products from Europe, and Akzo, which sources products from China.

Industrial. GEO’s organic peroxides, again primarily dialkyl peroxides, are sold under the brand names DI-CUP^®, VUL-CUP^® and ECHO^® and are used mostly as crosslinking and vulcanizing agents for high performance rubber and plastic used in automotive parts, especially under-the-hood hoses and belts. Industrial rubber and plastic applications account for approximately 40% of GEO’s sales of organic peroxides, with the majority ultimately being used in automotive parts. Key customers in this market are PolyOne, Equistar, Rhein Chemie and the distributor Hardwick Standard. The major competitors in both the United States and Europe are Akzo and Atofina for industrial and plastic applications.

Electronic Chemicals

Gallium. As a result of its 1999 acquisition of Rhodia’s gallium business, GEO is a leading producer of virgin gallium, which is used primarily in integrated circuits and chips for mobile telephones, wireless communications and optoelectronics (light emitting diodes).

Competition

GEO competes with a variety of specialty chemical manufacturers. Certain of GEO’s principal competitors are less highly leveraged and have greater financial resources than GEO. As a result, these competitors may be better able to withstand volatility within the industry or the economy as a whole while maintaining greater operating and financial flexibility than GEO. This advantage could allow these competitors to invest more resources than GEO in technological and product development, sales and marketing and other areas and, therefore, to gain market share against GEO. In addition, a number of GEO’s product applications are customized or sold into specialized markets. These specialized markets might attract additional competitors with greater financial, technological or manufacturing resources than GEO. Any entrants into these specialized markets could take market share from GEO.

Sales and Marketing

GEO markets its products through a variety of strategies, depending upon the nature of the product being sold. Performance chemicals are generally marketed through direct, on-site visits to process industry manufacturers, such as pulp and paper manufacturers. These on-site visits typically include trial applications and demonstrations of the cost-effectiveness of the performance chemicals and involve follow-up on-site visits and ongoing technical assistance. In these direct, on-site marketing efforts GEO succeeds by demonstrating the superior performance of its product.

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GEO also relies upon more traditional methods of marketing for a number of its products. GEO markets to distributors through purchasing agents for the sale of many products in its aluminum flocculants line. GEO also sells numerous products to indirect suppliers and distributors, including such products as aluminum chlorhydrate, aluminum chloride solutions and liquid and dry aluminum sulfate. The use of purchasing agents, indirect suppliers and distributors has enabled GEO to market its products on a wide geographic scale, including the West Coast and other locations where GEO has no regional sales coverage, and into smaller markets that are not economically feasible for GEO to target directly.

GEO markets certain products by participating in formal bid procedures, most commonly in connection with the supply of specialty chemicals to municipalities that operate water treatment, recirculation and effluent treatment facilities and manufacturers in the pulp and paper industry.

Specialty additives are generally marketed through a cooperative effort with customers at the research and development phase of the manufacturing process. Representatives of GEO work with customers in developing a desired product by providing up-front technical assistance. This marketing method involves GEO’s specialty additives being included in the customers’ formulations, thereby allowing GEO to establish long-term relationships with customers in this market.

GEO’s specialty additives are marketed through teams of sales and technical support personnel aligned with the three major markets served, paints and coatings, rubber and plastics and construction and industrial markets. The vice president of sales manages 10 direct salespeople located in North America and Europe and utilizes numerous distributor relationships worldwide. The technical support manager heads up a group of researchers and technicians dedicated to developing innovative products for this business.

Gallium, an inorganic specialty used primarily in electronics applications, is sold based on its purity and form. GEO markets and sells gallium worldwide through a network of agents and distributors.

GEO’s global net sales for fiscal year 2002 were $164.5 million. Domestic U.S. sales of $144.1 million represented approximately 88% of total net sales and overseas sales of $20.4 million represented approximately 12% of total net sales.

Raw Materials

GEO uses a variety of specialty and commodity chemicals in its manufacturing processes. These raw materials are generally available from several suppliers and are typically purchased by GEO under agreements negotiated annually with two or more vendors per raw material. GEO currently has in place multiple long-term supply contracts ranging in duration from 1 to 4 years for key raw materials, including fatty acids, cumene, methanol, propionaldehyde, hydrogen peroxide and sulfuric acid. GEO is vertically integrated with its own source of kaolin clay used in the manufacture of certain of its aluminum and clay products and formaldehyde used in the manufacture of DMPA^® and TRIMET^®.

At its Stade, Germany facility, GEO extracts gallium from bauxite provided under a long-term agreement with a vendor located at a neighboring facility.

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Although GEO has historically passed on raw material price increases to its customers within 90 to 120 days, GEO can provide no assurance that it will be able to do so in the future. If material price increases cannot be passed on to customers in a reasonable time, GEO’s financial condition could be adversely affected.

Intellectual Property

GEO believes that trademarks are important competitive factors in a number of the markets in which it competes. The use of trademarks often represents quality and performance as well as industry leadership. A number of GEO’s principal products are sold under registered trademarks, including liquid calcium stearate used as coatings and lubricants (except for use in the paper industry as the trademark was included in the sale of the Paper Chemicals business to Nalco pursuant to the terms of a license agreement) (NOPCOTE^®), trimethylolethane (TRIMET^®) and dimethylolpropionic acid (DMPA^®) used in the coatings and resins markets, naphthalene sulfonate condensates used as dispersants in the concrete, plaster board, oilfield and other industries (LOMAR^®), aluminum-based flocculants and coagulants used in the treatment of water (ULTRAFLOC^®), and DI-CUP^®, VUL-CUP^® and ECHO^® which are trademarks for GEO’s organic peroxides. GEO’s trademarks should remain protected under federal law as long as they are commercially used by GEO.

In the acquisition of Rhodia’s gallium business, GEO was assigned various patents relating to the extraction and purification of gallium. These patents have expiration dates ranging between 2005 and 2012. Although GEO considers these patents to be important to its gallium business, there can be no assurance that any of these patents will provide adequate protection for the process or technology that it covers.

Employees

As of December 31, 2002, GEO employed approximately 450 persons, the majority of whom are involved in production and operations, with the balance engaged in administration, research and development, sales, customer service and clerical work. Approximately 57 employees are located at the Cedartown, Georgia facility, 51 employees at the Allentown, Pennsylvania facility, 26 employees at the Bastrop, Louisiana facility, 9 employees at the Baltimore, Maryland facility, 5 employees at the Georgetown, South Carolina facility, 2 employees at the Chattanooga, Tennessee facility and 36 employees at the Gibbstown, New Jersey facility are unionized and are covered by collective bargaining agreements. These collective bargaining agreements have expiration dates ranging between August 2003 and December 2006. The unionized employees of GEO located at the Allentown, Bastrop and Baltimore facilities are represented by the International Chemical and United Food and Commercial Workers, AFLCIO, those located at the Cedartown facility by the United Food Workers, those located at the Georgetown facility by the United Paper Allied International Chemical Energy Workers International, those located at the Chattanooga facility by the United Steel Workers of America and those located at the Gibbstown facility by the Independent Union of Delaware Valley Chemical Workers. In Europe, GEO has approximately 15 employees at its Salindres, France plant and 11 employees at its Stade, Germany plant. Most of the employees at these European sites are part of national labor unions. GEO believes that its relationship with its employees is good. GEO has experienced no work stoppages at any of its facilities since its inception in 1993.

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Environmental Matters

GEO’s operations are subject to extensive laws and regulations relating to the handling and disposal of hazardous wastes, waste water discharges, air emissions, the remediation of contamination, and otherwise relating to health, safety and the protection of the environment. GEO has incurred, and will continue to incur, costs and capital expenditures in complying with these laws and regulations and to obtain and maintain all necessary environmental permits. GEO believes that its operations are currently being conducted in substantial compliance with all applicable environmental laws. GEO occasionally receives notices from environmental agencies of various potential violations of environmental laws or regulations. In such cases, GEO works with the agencies to address any issues and to implement appropriate corrective action when necessary. Based on presently known information and existing accrued environmental reserves, GEO does not expect environmental expenditures to have a material adverse effect on its business or financial condition. However, GEO’s operations entail risks in these areas, and material costs or liabilities could be incurred by GEO in the future.

In connection with its acquisitions, GEO has performed substantial due diligence to assess the environmental liabilities associated with acquired businesses and has negotiated contractual indemnifications with respect to such liabilities. These indemnifications are currently expected to cover a substantial portion of GEO’s known and foreseeable environmental liabilities relating to the acquired businesses. However, GEO cannot be certain that indemnitors will in all cases meet their indemnification obligations or that the discovery of presently unknown environmental conditions or other unanticipated events will not give rise to liabilities that are not covered by indemnification.

The expenses that GEO expects to incur in connection with environmental compliance have been accrued and are reflected in its financial statements in accordance with generally accepted accounting principles. As of December 31, 2002, GEO had reserves for environmental liabilities of $1,841,378. For more information regarding these reserves, see the section entitled “Environmental Expenditures” set forth in footnote 1 to GEO’s consolidated financial statements contained in Exhibit 99.1 to this Annual Report. Although GEO believes that its environmental reserves are adequate, it is possible that, due to the uncertainties involved in estimating environmental costs, the amount of expenses which will be required relating to remedial actions and environmental compliance will exceed the amounts reflected in GEO’s reserves or that indemnitors will not fulfill their indemnity obligations. Accordingly, currently identified environmental liabilities may not be adequately covered by GEO’s reserves.

Aluminum Sulfate Facilities. Seven of GEO’s facilities use aluminum-bearing clay as the basic raw material in the manufacture of aluminum sulfate. These facilities generate a by-product known as process silica. GEO has historically managed this by-product in on-site impounds. These impounds have impacted groundwater quality by affecting the level and flow of groundwater, and by producing elevated levels of aluminum, sulfates and acidity in the groundwater. GEO currently operates seven of these impounds and is addressing the groundwater issues at each of these facilities. Most of these facilities are working with their

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respective state environmental protection agencies to address the potential groundwater contamination through periodic monitoring.

The cost of closing these impounds varies by facility, depending on state requirements, the size and age of the facilities, the extent of the contamination, and whether impounded water must be transported off-site. Estimates for the closure of an impound range from $200,000 to $700,000. Monitoring and reporting typically would be required for twenty to fifty years following closure, and the associated costs range from $10,000 to $25,000 annually per facility. As of April 15, 2003, GEO had completed the closure of one such impound, at a cost of $674,000.

Former Henkel Facilities. GEO’s Harrison, New Jersey facility is subject to a 1994 declaration of environmental restrictions. This deed restriction relates to a portion of the facility that has been capped due to contamination from prior operations. As of April 15, 2003, GEO had not incurred any material costs in connection with this matter.

Former operators of GEO’s Cedartown, Georgia facility buried at the facility approximately 1,500 gallons of tall oil and 700 drums of obsolete products and raw materials. As a result, in 1990 a portion of the Cedartown facility was listed as a “Superfund” site on the National Priorities List pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980. Henkel Corporation and the U.S. Environmental Protection Agency entered an administrative order on consent related to the Superfund site. On behalf of Henkel, GEO conducts all groundwater and surface water monitoring and complies with the reporting obligations under the administrative order. Under the asset purchase agreement between the parties, Henkel is responsible for paying, and is required to indemnify GEO for, all such compliance costs. Pursuant to its indemnification obligation, Henkel had either paid or reimbursed GEO for all expenses arising from the Cedartown’s status as a Superfund site as of April 15, 2003.

GEO’s Cedartown, Georgia facility is also subject to a 1993 corrective action consent order between Henkel and the Georgia Department of Natural Resources. The consent order relates to the remediation of surface and groundwater contamination from prior operations at the facility. The facility is listed in the State of Georgia Master Sites List for Hazardous Waste Sites. On behalf of Henkel, GEO conducts the groundwater and surface water remediation and also complies with the monitoring and reporting requirements under the consent order. Under the asset purchase agreement between the parties, Henkel is responsible for paying, and is required to indemnify GEO for, these compliance costs. Pursuant to its indemnification obligation, Henkel had either paid or reimbursed GEO for all such compliance costs as of April 15, 2003.

Little Rock Mining Facility. Upon completion of mining activities at GEO’s Little Rock, Arkansas facility, two impounded pits must be reclaimed. GEO will comply with all reclamation requirements, but does not anticipate that it will incur material costs in connection with these requirements.

TRIMET Properties. In the acquisition of TRIMET, GEO acquired approximately 95 acres of an approximately 385 acre site. Mallinckrodt Inc. continues to own the larger site, of which GEO leases a very small portion, consisting of a warehouse and wastewater treatment

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system. There is groundwater and soil contamination on the larger site from former explosive manufacturing operations. The larger site has at times been the subject of federal and state investigations. The site that GEO owns is subject to extensive air, water, solid waste and hazardous substance regulations. Prior to the acquisition, Mallinckrodt installed modern pollution control equipment throughout the smaller site to comply with these requirements. Mallinckrodt has agreed to indemnify GEO for all pre-closing environmental liabilities associated with the larger site.

Former Hercules Facility. GEO has identified issues regarding potential historic releases in connection with the underground sewers at its Gibbstown, New Jersey facility. Under the asset purchase agreement between the parties, Hercules is responsible for paying, and is required to indemnify GEO for, all costs relating to this issue. On December 18, 2001, GEO made a claim for indemnification with respect to these releases against Hercules. The parties are currently in negotiations to bring the underground sewer system above ground, and Hercules has agreed to indemnify GEO for any releases from the underground system. GEO expects to pay approximately $283,000 in connection with the installation of the aboveground system, which represents 25% of the expected total cost of the project. Hercules has agreed to pay the remaining 75% of the total cost of the project.

The Gibbstown facility is the subject of ongoing remediation under the auspices of state and federal authorities and is listed as a “Superfund” site on the National Priorities List. Under the asset purchase agreement between the parties, Hercules is responsible for paying, and is required to indemnify GEO for, all costs relating to this issue. On behalf of Hercules, GEO operates and maintains the groundwater monitoring and extraction system under the applicable administrative order. Pursuant to its indemnification obligation, Hercules had either paid or reimbursed GEO for all expenses arising from the Gibbstown’s status as a Superfund site as of April 15, 2003. Hercules is also responsible for remediating the site under the New Jersey Industrial Site Recovery Act.

ITEM 2. PROPERTIES

GEO’s manufacturing operations are conducted at the facilities described below.

Location	Products Manufactured	Approximate Capacity Tons/Year	Owned/Leased
Allentown, Pennsylvania	DMPA(R), TRIMET(R), formaldehyde and calcium formate	79,140	Owned	(1)
Baltimore, Maryland	Aluminum chlorhydrate, aluminum chloride solutions and polyaluminum chloride	28,000	Owned
Bastrop, Louisiana	Aluminum sulfate – liquid, dry and anhydrous, rubidium salts, aluminum chloride, aluminum chlorohydrate and polyaluminum chloride	70,500	Owned
Cedartown, Georgia	Over 200 formulated products	66,500	Owned
Chattanooga, Tennessee	Aluminum sulfate	25,000	Owned
Coosa Pines, Alabama	Aluminum sulfate	40,000	Owned	(2)
Counce, Tennessee	Aluminum sulfate	20,000	Owned

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Demopolis, Alabama	Aluminum sulfate	22,000	Owned
DeRidder, Louisiana	Aluminum sulfate	45,000	Owned	(3)
Franklin, Virginia	Bis-peroxide	2,500	Leased	(4)
Gibbstown, New Jersey	Dicumyl peroxide and hydroperoxides	10,000	Owned
Georgetown, South Carolina	Aluminum sulfate	42,000	Owned
Harrison, New Jersey	Calcium stearate and defoamers	18,000	Owned
Lake Charles, Louisiana	Sodium aluminate	200,000	Leased	(5)
Little Rock, Arkansas	Calcined bauxite and kaolin	100,000	Owned	(6)
Monticello, Mississippi	Aluminum sulfate	25,000	Owned
Naheola, Alabama	Aluminum sulfate	25,000	Owned	(3)
Plymouth, North Carolina	Aluminum sulfate	30,000	Owned
Salindres, France	Gallium purification, gallium oxide	48	Owned
Stade, Germany	Gallium extraction	24	Owned	(7)

(1) Although GEO owns the 95.56 acres on which the Allentown facility is located, it leases a warehouse and a sludge processing facility on an adjacent parcel (apart from the real property on which it is located).

(2) The Coosa Pines facility is held 4.9 acres in fee and 15.8 acres in leasehold.

(3) The DeRidder and Naheola facilities are located on leased land.

(4) The Franklin facility is located on leased real property.

(5) The Lake Charles facility is leased from the Port Authority of Lake Charles.

(6) The Little Rock facility is held 512 acres in fee and 29.9 acres under land contract.

(7) The Stade, Germany facility is located on leased real property.

GEO’s executive offices are located in Cleveland, Ohio. GEO maintains sales offices in Little Rock, Arkansas; Baltimore, Maryland; Gibbstown, New Jersey; Ambler, Pennsylvania; Cheltenham, England; Potters Bar, England; and Paris, France. GEO also has financial and treasury staff located in Lafayette, Indiana, administrative and technical support facilities located in Ambler, Pennsylvania and a sales and administrative office in Paris, France. GEO believes that its facilities are in good operating condition and adequate to meet anticipated requirements in the near future.

ITEM 3. LEGAL PROCEEDINGS

In the ordinary course of business, GEO is periodically named as a defendant in a variety of lawsuits. GEO believes that its pending cases will not have a material adverse effect on its business or financial condition.

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

There were no matters submitted to a vote of security holders in the fourth quarter of 2002.

PART II

ITEM 5. MARKET FOR GEO’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

There is no established public trading market for GEO’s equity securities.

GEO has not paid any dividends on its common shares since its inception and does not expect to pay any dividends in the near future. GEO’s senior credit facility and the indenture that

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governs GEO’s senior subordinated notes limit GEO’s ability to pay dividends. GEO’s senior credit facility prohibits GEO from paying any dividends to its shareholders other than in the form of its capital stock. The indenture prohibits GEO from paying any cash dividend at any time that its fixed charge coverage ratio is less than 2.0 to 1.0 or any default exists under the indenture. In addition, GEO may not pay cash dividends in an amount exceeding 50% of its cumulative net income from the date of issuance of the notes plus 100% of the proceeds received by GEO from the sale of its capital stock or an equity contribution by its shareholders. GEO may, under the indenture, pay dividends in the form of its capital stock.

As of April 15, 2003, there were eight holders of GEO’s class A voting common stock and no holders of its class B nonvoting common stock.

ITEM 6. SELECTED FINANCIAL DATA

The table shown on the next page includes the following summary financial data of GEO:

• historical operating and other data of GEO for the years ended December 31, 1998, 1999, 2000, 2001 and 2002; and

• balance sheet data as of December 31, 1998, 1999, 2000, 2001 and 2002.

The period-to-period comparability of the summary financial data shown below is materially affected by the three acquisitions and one disposition that GEO has completed from 1998 through 2002. See “Introduction to GEO’s Business.”

The summary financial data shown below for the years ended December 31, 2000, 2001 and 2002 and as of December 31, 2001 and 2002 has been derived from the financial statements of GEO which are included in Exhibit 99.1 to this Annual Report. The summary financial data for the years ended December 31, 1998 and 1999 and as of December 31, 1998, 1999 and 2000 has been derived from the financial statements of GEO which are not included in this Annual Report.

You should read the summary financial data presented below along with the financial statements of GEO and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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Selected Historical Financial Data

(dollars in thousands)

	Years Ended Dec. 31,
	1998			1999			2000			2001			2002
Operating Data:
Net sales	$	126,560		$	147,080		$	188,216		$	185,152		$	164,474
Cost of sales		101,638			112,669			138,952			142,968			136,512
Gross profit		24,922			34,411			49,264			42,184			27,962
Selling, general and administrative expenses		14,092			18,906			24,542			23,539			17,137
Other (income) expense		118			27			1,348			1,899			(1,290	)
(Gain) on sale of paper chemicals business		—			—			—			(2,200	)		(859	)
Income before interest and taxes		10,712			15,478			23,374			18,946			12,974
Net interest expense		9,097			13,376			14,806			17,501			19,847
Income (loss) before income taxes		1,615			2,102			8,568			1,445			(6,873	)
Provision (benefit) for income taxes		667			1,023			3,484			(280	)		(2,936	)
Income (loss) before extraordinary loss		948			1,079			5,084			1,725			(3,937	)
Extraordinary loss on early extinguishment of debt, net		1,496			—			—			—			—
Net income (loss)	$	(548	)	$	1,079		$	5,084		$	1,725		$	(3,937	)
Other Financial Data:
Capital expenditures	$	6,755		$	6,223		$	9,443		$	7,708		$	3,357
Net cash from operating activities		9,606			11,608			25,751			15,769			5,528
Net cash from investing activities		(67,861	)		(29,448	)		(9,443	)		(94,286	)		(5,088	)
Net cash from financing activities		59,204			21,683			(13,000	)		90,369			(8,802	)
Depreciation, depletion and amortization		7,905			11,315			14,781			19,859			15,330
Ratio of earnings to fixed charges (1)		1.2	x		1.2	x		1.6	x		1.1	x		—
	As of December 31,
	1998			1999			2000			2001			2002
Balance Sheet Data:
Cash and cash equivalents	$	1,645		$	4,696		$	7,930		$	19,782		$	11,420
Total assets		164,525			198,166			190,034			286,503			269,676
Total debt, excluding current portion		120,000			143,000			130,000			223,950			215,550
Shareholders’ equity		21,842			22,305			26,186			28,857			24,363

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(1) For purposes of calculating the ratio of earnings to fixed charges, earnings represent income (loss) before income taxes plus fixed charges. Fixed charges consist of net interest expense and the portion of operating rental expense which management believes is representative of the interest component of rent expense, less amounts that represent amortization of deferred financing fees and debt issuance costs. This ratio is not shown for 2002 since the earnings are a loss.

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

Sales and Cost of Sales

GEO’s fiscal 2002 net sales were generated by a mix of sales to various industries, including:

• construction-related applications (15%);

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• water treatment (24%);

• wire and cable (20%);

• oil and gas production (4%);

• coatings (12%);

• electronics (3%); and

• miscellaneous (22%), which includes sales to Cognis Corporation (7%) and sales of paper chemical products to Nalco pursuant to the Nalco supply agreement (5%).

GEO’s cost of sales is primarily comprised of:

• the cost of raw materials (53%);

• freight (7%);

• depreciation (8%); and

• normal operating expenses (32%), which include personnel costs, ongoing maintenance materials and services, utilities, operating supplies, property and casualty insurance, property taxes and leasing expenses.

The raw materials required to produce GEO’s products are generally available from several suppliers and are typically purchased under agreements negotiated annually with two or more vendors per raw material. The raw materials which comprise a majority of these purchases include sulfuric acid, naphthalene, formaldehyde, paraffin oils, glycols, aluminum/aluminas, fatty acids, methanol, cumene and propionic acid. Additionally, GEO has an agreement with Cognis to purchase various products previously purchased by the acquired business from Cognis plants not included in the acquisition. Purchases under the supply agreement, depending upon the particular product, are made at market prices or at prices tied to standard costs. Purchases under this agreement were less than 10% of GEO’s total raw material costs in fiscal 2002.

GEO’s selling, general and administrative expenses include all operating costs unrelated to plant operations. Approximately 17% of these expenses reflect non-cash amortization and depreciation expenses. Also part of these expenses are the compensation and business costs of the sales, marketing, technical support, customer service, research and development and management of the various business groups. These expenses also include typical corporate expenses such as office rent, general management, finance and accounting, information systems, human resources, legal, purchasing, certain types of corporate liability insurance and amortization of deferred charges.

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Results of Operations

The following table shows certain income statement data for GEO expressed in millions of dollars and as a percentage of net sales for the fiscal years 2000, 2001 and 2002.

	2000				2001				2002
	%		$		$		%		$			%
Net sales	$	188.2	100.0	%	$	185.2	100.0	%	$	164.5		100.0	%
Cost of sales		138.9	73.8			143.0	77.2			136.5		83.0
Gross profit		49.3	26.2			42.2	22.8			28.0		17.0
S,G & A		24.5	13.0			23.5	12.7			17.1		10.4
Net income (loss)		5.1	2.7			1.7	0.9			(3.9	)	(2.4	)

Fiscal 2002 Compared to Fiscal 2001

Net Sales. Net sales for fiscal 2002 were $164.5 million, representing a $20.7 million or 11.2% decrease compared to fiscal 2001 net sales of $185.2 million. The most significant decrease was a $23.1 million decline in the sale of gallium, a product sold to the wireless telecommunication and optoelectronics markets. Gallium sales were lower due to a sharp decrease in both sales volume and selling prices, reflecting depressed end market demand that started in the second half of fiscal 2001. Another major decrease, $6.8 million, was attributable to the divestment of the paper chemicals business in April 2001. Sales of performance products, mostly clay proppants sold to the oil and gas market, declined by $3.5 million. Partially offsetting these decreases was a full year of organic peroxide sales, $33.3 million, which represents an increase of approximately $12.5 million of sales of these products compared to fiscal 2001.

Cost of Sales. Cost of sales in fiscal 2002 was $136.5 million, representing a $6.5 million or a 4.5% decrease compared to fiscal 2001 cost of sales of $143.0 million. The additional sales volume from a full year of organic peroxide sales resulted in an $8.0 million increase in the cost of sales. The most significant decrease in cost of sales, $5.4 million, was related to the decline in sales volume to the paper industry, as a one year supply contract with Nalco for products sourced from GEO’s plant in Cedartown, Georgia expired. The reduced sales volume of gallium resulted in a $4.1 million decrease in cost of sales, approximately 32% of which was attributable to lower production expenses resulting from staffing reductions and 68% of which was attributable to lower variable costs (i.e., freight and raw materials). Cost of sales for performance chemicals declined by $4.9 million, due mostly to lower raw material costs, particularly natural gas and alumina.

Gross Profit. Gross Profit for 2002 was $28.0 million, representing a $14.2 million or 33.6% decrease compared to fiscal 2001 gross profit of $42.2 million. The decline in gallium sales accounted for $19.1 million of the decline. Partially offsetting the unfavorable gallium impact was the increase compared to 2001 in gross profit from the organic peroxide business of $3.1 million. Most all of this increase was attributable to owning the organic peroxide business for the full year of 2002 versus seven months in 2001. The remaining difference was attributable to lower raw material costs relative to sales in construction additives and performance products.

Selling, General and Administrative Expenses. S,G & A expenses for fiscal 2002 were $17.1 million, representing a $6.4 million or a 27.2% decrease compared to fiscal 2001 S,G & A expenses of $23.5 million. The most significant reduction, $4.4 million, resulted from the cessation of goodwill amortization due to the adoption of new accounting standards. The full year impact of divesting the paper chemical business accounted for $1.9 million of the decrease in S,G & A expenses, while the full year

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impact of the organic peroxide business resulted in a $1.2 million increase. The remaining difference in S,G & A expenses was mostly attributable to lower employee benefit costs and the favorable settlement of a contractual claim in the coating additives business.

Net Interest Expense. Net interest expense in fiscal 2002 was $19.8 million, representing a $2.3 million or 13.1% increase compared to fiscal 2001 net interest expense of $17.5 million. The increase in interest expense incurred for the senior and subordinated debt was $1.9 million, reflecting a full year of senior debt interest, offset partially by lower interest rates and the benefit of interest rate swap contracts. The remaining difference was attributable to a full year of amortization of deferred financing expenses related to the senior debt.

Other (Income) Expense. Other income in fiscal 2002 was ($2.1 million) reflecting a $1.8 million decrease compared to fiscal 2001 other expense of ($0.3 million). The decrease in other income reflects a performance payment received by GEO in 2002 related to the divestment of the paper chemicals business, contract settlements and currency exchange gains.

Net Income. Net Income for fiscal 2002 was ($3.9) million, representing a $5.6 million decrease in net income compared to fiscal 2001 of $1.7 million. The decrease was attributable to lower gross profit of $14.2 million and a $2.3 million increase in interest expense. Partially offsetting these reductions to net income were lower selling, general and administration expenses of $6.4 million, due mostly to a reduction in amortization and the divestment of the paper chemicals business, an increase in other income, and a $2.7 million reduction in income taxes, as GEO had a pre-tax loss in fiscal 2002 versus pre-tax income in 2001.

Fiscal 2001 Compared to Fiscal 2000

Net Sales. Net sales for fiscal 2001 were $185.2 million, representing a decrease of $3.0 million or 1.6% compared to fiscal 2000 net sales of $188.2 million. Organic peroxide products, the business acquired from Hercules Incorporated in May 2001, generated a $20.8 million increase in sales. Also, sales of additives to the construction industry increased by $3.0 million due mostly to greater sales volumes and the introduction of new products. These increases in net sales were more than offset by the divestment of the paper chemicals business ($9.2 million) and lower sales of gallium ($10.2 million) and coating additives ($7.1 million). The decrease in gallium sales, 26.9%, reflects a sharp drop in demand during the second half of 2001 after very strong demand and higher prices during the first half of the year. The decrease in coating additives, 21.2%, was due primarily to the weakness in the coatings industry, especially in Europe.

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Cost of Sales. Cost of sales in fiscal 2001 was $143.0 million, an increase of $4.1 million or 3.0% compared to the cost of sales in fiscal 2000 which was $138.9 million. The increase in cost of sales was attributable to the recently acquired organic peroxide business, $13.5 million, and the increase in sales of construction additives, approximately $3.0 million. These increases in cost of goods sold were partially offset by a decline in gallium sales volume which resulted in a $9.9 million reduction in cost of sales, and lower sales volumes of coating additives and paper chemicals to ONDEO Nalco under the post-divestment supply agreements. Overall, excluding the organic peroxide and paper chemicals transactions, variable costs as a percent of net sales declined slightly from 49.2% to 48.5% due mostly to a reduction in freight costs.

Gross Profit. Gross profit for fiscal 2001 was $42.2 million, representing a $7.1 million or a 14.4% decrease compared to fiscal 2000 gross profit of $49.3 million. The organic peroxide activities generated $7.4 million of gross profit, which was partially offset by the impact of the divestment of the paper chemicals business of $4.5 million. Excluding the effect of these two transactions, gross profit decreased by $10.0 million. The decline in net sales, especially of coating additives, generated a $7.3 million decline in gross profit. The remaining decrease in gross profit was due largely to $1.6 million of less favorable plant overhead absorption and a special depreciation charge of $1.1 million.

Selling, General and Administrative Expenses. S,G & A expenses in fiscal 2001 were $23.5 million, a decrease of $1.0 million or 4.1% compared to $24.5 million in fiscal 2000. The organic peroxide business added $3.4 million of S,G & A expenses, $1.7 million of direct costs and $2.7 million of amortization charges related mostly to goodwill. The divestment of the paper chemicals business resulted in a $4.6 million reduction in S,G & A expenses. The remaining increase of $0.2 million was due to additional staffing in the aluminum products or water treating unit.

Net Interest Expense. Net interest expense for fiscal 2001 was $17.5 million, a $2.7 million or an 18.2% increase compared to fiscal 2000 net interest expense of $14.8 million. Most of the increase, $2.3 million, was attributable to the additional debt incurred to acquire the organic peroxides business from Hercules Incorporated at the end of May 2001. The net debt balance at the end of fiscal 2001 was $205.2 million compared to a net debt balance of $122.1 million at the end of fiscal 2000.

Other (Income) Expense. Other expense for fiscal 2001 was ($0.3 million), representing a $1.6 million decrease compared to fiscal 2000 when net other expenses were $1.3 million. A major part of the decrease was attributable to the $2.2 million gain on the sale of the paper chemicals business to ONDEO Nalco. The remaining difference was attributable to lower foreign exchange losses.

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Net Income. Net income for fiscal 2001 was $1.7 million, representing a $3.4 million decrease compared to fiscal 2000 net income of $5.1 million. The decrease was attributable to a $7.1 million decline in gross profit and a $2.7 million increase in interest expense, mostly related to the additional debt incurred for the organic peroxide acquisition. The gain on the sale of the paper business in 2001 of $2.2 million and lower income taxes, due to lower taxable income, of $3.8 million in 2001 compared to 2000 partially offset the unfavorable impact on net income of the lower gross profit and increased interest expense.

Liquidity and Capital Resources

GEO’s primary cash needs are working capital, capital expenditures and debt service. GEO has financed, and intends to continue to finance, these needs from internally generated cash flow, in addition to periodic draws on its senior credit facility. Net cash from operations for the year ended December 31, 2002 was $5.5 million, for the year ended December 31, 2001 was $15.8 million, and for the year ended December 31, 2000 was $25.8 million.

Net cash used in investing activities for the year ended December 31, 2002 was $5.1 million, for the year ended December 31, 2001 was $94.3 million, and for the year ended December 31, 2000 was $9.4 million. Capital expenditures, included in the amounts above, for the same periods were $3.4 million, $7.7 million, and $9.4 million, respectively. GEO currently has no material commitments for capital expenditures.

In September 2002, GEO exercised its option to acquire 100% of the shares of Rhodia Pinjarra Ltd. in Australia, an option granted as part of GEO’s purchase of Rhodia Chimie S.A.’s gallium business in September 1999. The total value of the shares acquired was $1.5 million, the payment for which included $0.5 million of net cash. The remaining amount of $1.0 million was the result of the settlement of several outstanding claims of GEO and Rhodia related to several acquisition and post-acquisition matters associated with the original acquisition of the gallium business in September 1999. The facility owned by Rhodia Pinjarra Ltd. was dormant at the time GEO acquired the shares. GEO has opted to keep the facility dormant until there is improvement in the global market for gallium sufficient to support the investment needed to operate the plant. As part of GEO’s activities at the Pinjarra site, GEO entered into a long term contract with Alcoa’s Australian subsidiary for access to and the use of its Bayer liquor stream for the extraction of gallium.

GEO completed the acquisition of Hercules Incorporated’s organic peroxides business in 2001 for a purchase price of approximately $93.5 million. The acquisition of the organic peroxides business was financed through an amendment to GEO’s credit facility to include a senior secured term loan totaling $105.0 million. The amendment to the credit facility included a revolving credit line of $40.0 million. The revolving credit facility expires on June 30, 2005 and the term loan expires on December 31, 2007. The revolving credit facility has no interim amortization requirements. The term loan required amortization payments of $1.1 million on June 30, 2002 and June 30, 2003. Beginning June 30, 2004, the term loan required amortization payments of $5.0 million every six months until December 31, 2007 when the entire outstanding balance is due.

In May 2002 the senior credit facility was amended. As part of the amendment, GEO repaid $7.5 million of the senior secured loan and agreed to the reduction of its revolving credit

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line to $20.0 million. Other significant provisions of the amendment included the reduction of the amount of the term loan amortization for June 30, 2002 and June 30, 2003 from $1.1 million to $1.0 million, modification of the net leverage ratio and net interest coverage covenants for the eight successive quarters beginning with the first quarter of 2002, an increase in the interest rate margins paid on both the term loan and revolving facility, and restrictions on capital expenditures, including capital expenditures related to the gallium facility in Pinjarra, Australia, and additional restrictions on GEO’s ability to make acquisitions.

On April 14, 2003, the senior credit facility was further amended. As part of the amendment, the ability to GEO to draw up to the full $20.0 million under its current revolving credit facility is subject to compliance with a tiered senior leverage ratio requirement during the term of the facility. Depending on GEO’s senior leverage ratio, amounts available for drawing by GEO may be less that $20.0 million. The revolving credit facility also became subject to further additional collateral requirements provided by Charter Oak Partners and Charter Oak Capital Partners, L.P., GEO’s majority shareholders. The shareholder collateral has been provided in the form of a support agreement in favor of the senior lenders, that includes a commitment from Charter Oak to provide letters of credit or cash collateral in increments of $1.0 million up to the maximum amount of $10.0 million for the purpose of securing extensions of credit under the revolving credit facility to the extent that extensions of credit exceed $5.0 million. If there is an event of default under the credit agreement, the letters of credit may be drawn or proceeds of cash collateral applied by the banks to reduce the amount drawn on the revolving credit facility to $5.0 million. If there is a draw on any letter of credit provided by Charter Oak a reimbursement obligation will arise on the part of GEO in favor of Charter Oak under the terms of a reimbursement agreement entered into between the parties. The reimbursement agreement also covers costs and expenses of Charter Oak that may arise in connection with the shareholder support provided.

In addition, under the amendment, the applicable margin for the term loan was increased by 100 basis points until March 31, 2004. The amendment also provides that the proceeds from any asset sale triggering a mandatory prepayment of the senior debt shall be applied to the scheduled term loan repayments due and owing for the next twenty four months from the date of receipt of proceeds and then equally to the remaining scheduled term loan repayments. There are also new restrictions on the ability of GEO to keep the proceeds of assets sales and insurance proceeds above certain limits and reducing the amount GEO may spend on capital expenditures. Some of the financial covenants in the senior credit facility, including the interest coverage ratio and the senior leverage ratio, have been temporarily relaxed to provide relief to GEO for the remainder of 2003 and the first quarter of 2004.

As of December 31, 2002, GEO had $20.0 million available for borrowing under the revolving credit facility. Borrowings under the revolving credit facility bear interest, at GEO’s option, at:

• 3.75% above the higher of the Federal Funds Effective Rate plus 0.5% or the prime lending rate of Bankers Trust Company; or

• an adjusted Eurodollar rate plus 4.50%.

The term loan under the senior credit agreement bears interest, at GEO’s option, at:

• 4.75% above the higher of the Federal Funds Effective Rate plus 0.5% or the prime lending rate of Banker’s Trust Company; or

• an adjusted Eurodollar rate plus 6.00%.

The base rate margin and the Eurodollar rate margin for both the revolving credit facility and the term loan can vary from fiscal quarter to fiscal quarter depending on GEO’s net leverage ratio at the end of the preceding quarter.

As of December 31, 2002, GEO’s interest rate for the term loan was 7.00%. The senior credit facility contains customary covenants, which include the maintenance of certain financial ratios.

Net interest expense for the year ended December 31, 2002 was $19.8 million, which includes $1.5 million of amortization of deferred financing expenses. Net interest expense for the year ended December 31, 2001 was $17.5 million, which includes $1.1 million of amortization of deferred financing expenses. For the year ended December 31, 2000 net interest expense was $14.8 million.

GEO’s cash paid for income taxes for the year ended December 31, 2002 was $3.5 million, for the year ended December 31, 2001 was $3.8 million, and for the year ended December 31, 2000 was $0.6 million.

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GEO believes that cash generated from operations, together with amounts available under its senior credit facility, will be adequate to meet its debt service requirements, capital expenditures and working capital needs for the foreseeable future, although no assurance can be given in this regard.

GEO has the following contractual and commercial commitment obligations as of December 31, 2002 that can impact its liquidity:

Contractual Obligations (in thousands)	Principal Payments Due by Period
	Total		Less than 1 Year	1-3 Years	4-5 Years	After 5 Years
Long-Term Debt	$	216,525	975	19,543	76,007	120,000
Line of Credit		—	—	—	—	—
Operating Leases		2,865	1,098	1,597	170	—
Total Contractual Cash Obligations	$	219,390	2,073	21,140	76,177	120,000

Other Commercial Commitments (in thousands)	Amount of Commitment Expiration per Period
	Total Amounts Committed		Less Than 1 Year	1-3 Years	4-5 Years	Over 5 Years
Lines of Credit	$	20,000	—	—	20,000	—
Standby Letters of Credit		—	—	—	—	—
Total Commercial Commitments	$	20,000	—	—	20,000	—

The overall effects of inflation on GEO’s business during the periods discussed have not been significant. GEO monitors the prices it charges for its products on an ongoing basis and believes that it will be able to adjust those prices to take into account any future changes in the rate of inflation, although no assurance can be given in this regard.

Limits Imposed on GEO’s Acquisition Strategy by the Indenture and Senior Credit Facility

GEO’s senior credit facility and the indenture that governs its senior subordinated notes limit GEO’s ability to make acquisitions and to incur indebtedness in connection with acquisitions. The senior credit facility provides that GEO may not make acquisitions until its leverage ratio falls below 4.5 to 1.0. GEO does not anticipate that its leverage ratio will fall below such level in the near term. The senior credit facility allows GEO to incur only permitted indebtedness, which includes its senior subordinated notes, up to

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$5.0 million pursuant to GEO’s obligations under its shareholders agreement, and up to $15.0 million of additional general indebtedness. The indenture limits the amount of acquisition debt that GEO may incur to: $25.0 million under its senior credit facility; amounts that would allow it to maintain a fixed charge coverage ratio greater than 2.0 to 1.0; and other debt not to exceed $10.0 million at any time outstanding. The senior credit facility and indenture also restrict GEO’s ability to:

• acquire businesses different than GEO’s existing business;

• merge or consolidate with other entities;

• enter into transactions with its affiliates;

• create or incur liens on its assets; and

• make investments.

If GEO is unable to complete additional acquisitions because of the restrictions imposed by its senior credit facility and the indenture, it might not otherwise be able to increase its product offerings or revenue base. Such a result could place GEO at a competitive disadvantage and could threaten its ability to make payments on the senior credit facility or senior subordinated notes.

Limits Imposed on GEO by Interest Coverage and Maximum Leverage Requirements in its Senior Credit Facility

GEO’s senior credit facility requires it to maintain a minimum interest coverage ratio and a maximum leverage ratio. The interest coverage ratio is the ratio, for the most recent quarterly period, of GEO’s earnings before interest expense, taxes, depreciation and amortization to GEO’s total interest expense minus total interest income for the same period. The interest coverage ratio that GEO is required to maintain is currently 1.25 to 1.00 and will increase periodically until March 31, 2007 when it will remain fixed at 3.25 to 1.00. The leverage ratio is the ratio, for the most recent quarterly period, of GEO’s total indebtedness to GEO’s earnings before interest expense, taxes, depreciation and amortization for the most recent four quarters. The leverage ratio was suspended as of March 31, 2002 until March 31, 2004. The senior leverage ratio is the ratio for the most recent quarterly period of GEO’s consolidated senior indebtedness to GEO’s EBITDA for the most recent four quarters. The senior leverage ratio that GEO may not exceed is currently 4.35 to 1.00 and will be lowered periodically until March 31, 2004 when the covenant will cease to apply and the leverage ratio will again become effective. At that time, the leverage ratio that GEO may not exceed will be 4.00 to 1.00 and it will be lowered periodically until March 31, 2005 when it will remain fixed at 3.50 to 1.00.

GEO’s failure to maintain these financial ratios could result in a default under its senior credit facility. Such a default would permit the lenders to declare all amounts outstanding under the senior credit facility to be immediately due and payable and terminate any commitments to extend additional credit. In addition, GEO’s non-compliance with these ratios could prevent it from making acquisitions and capital improvements. GEO’s ability to comply with such ratios and tests may be affected by events beyond its control, including prevailing economic, financial and industry conditions.

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Market Risk Exposure

GEO is subject to commodity price risk relative to the purchase of commodity chemicals as raw materials in its manufacturing processes. These raw materials are generally available from several suppliers and are purchased under agreements negotiated annually with two or more vendors per raw material. In certain instances, GEO mitigates its risk by entering into agreements with customers that give GEO the ability to pass along future price increases. GEO seeks to manage its commodity price risk through these customer agreements, although no assurance can be given that this strategy will be successful.

Foreign Operations

GEO’s foreign operations are subject to the usual risks that may affect such operations. These include, among other things, exchange controls and currency restrictions, currency fluctuations, changes in local economic conditions, unsettled political conditions, and foreign government-sponsored boycotts of GEO’s products or services for noncommercial reasons. Most of the identifiable assets associated with foreign operations are located in countries where GEO believes such risks to be minimal. In addition, GEO does not consider the market risk exposure relating to currency exchange to be material. For certain financial information regarding GEO’s international operations, see Note 17 of GEO’s consolidated financial statements contained in Exhibit 99.1 to this Annual Report, which is hereby incorporated by reference.

Forward-Looking Statements

Some of the statements made in this Annual Report, including statements containing the words “believes,” “intends,” “expects” or similar words, constitute forward-looking statements under the federal securities laws. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of GEO or its industry to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Some of the factors that could cause or contribute to such a difference include:

• GEO’s inability to make required interest or principal payments under its existing long-term debt due to decreased sales and financial performance;

• GEO’s loss of access to its revolving credit facility due to a covenant violation, which could hinder its ability to obtain working capital or make required interest or principal payments under its existing long-term debt;

• GEO’s inability to repay or refinance its existing long-term debt at such time as the principal amounts thereof become payable or are accelerated;

• the refusal of GEO’s lenders to make accommodations or extend additional credit in the event of a covenant violation by GEO or GEO’s failure to make required interest or principal payments;

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• GEO’s inability to generate sufficient cash flow, or to cut operating costs, to allow it to meet its working capital and other payment obligations;

• the further worsening of general economic or specific market conditions that cause further declines in the demand for GEO’s products;

• the increased risk during economic downturns that GEO’s customers may declare bankruptcy or experience payment difficulties;

• GEO’s inability to effect additional acquisitions or dispositions; and

• GEO’s failure to effectively integrate, or maintain or grow the sales of, acquired businesses, or its incurrence of greater than expected expenses in connection with operating acquired businesses.

ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a result of GEO’s global operating activities, GEO is exposed to market risks from changes in interest rates and foreign currency exchange rates which may adversely affect GEO’s operating results and financial position. GEO’s goal is to minimize its risks from interest and foreign currency exchange rate fluctuations through its normal operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. GEO does not use derivative financial instruments for trading or other speculative purposes and does not use leveraged derivative financial instruments.

GEO’s exposure to market risk for changes in foreign currency exchange rates arises from financing activities between subsidiaries and firm commitments arising from international transactions. GEO attempts to have such transaction exposure hedged with internal natural offsets to the fullest extent possible and, once these opportunities have been exhausted, through foreign currency option agreements with third parties. During 2001, GEO entered into option contracts that collared the Australian dollar between .47 and .53 in relation to the U.S. dollar, in anticipation of capital project expenditures in Pinjarra, Australia, which expenditures have been delayed pending improvement in the global market for gallium. GEO entered into these contracts at no cost. These contracts matured through December 31, 2002. During the year ended December 31, 2002, GEO realized a gain of approximately $1.0 million upon the settlement of these contracts.

On November 15, 2001, GEO entered into two interest rate derivative contracts with Citibank N.A. The purpose of the contracts was to hedge GEO’s interest expense by availing itself of the prevailing interest rate conditions reflected by a steep yield curve and GEO’s tax situation. Both derivative contracts were for a notional amount of $90.0 million.

Under one contract, the “floating to fixed” contract, GEO agreed to pay Citibank the equivalent of 3.67% annually through August 1, 2004, with payments being made on each February 1 and August 1 during the contract period. Citibank agreed to pay GEO the six-month LIBOR rate, reset on the first day of each semi-annual payment date during the contract period. This contract corresponds to GEO’s term loan floating rate debt.

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Under the other contract, the “fixed to floating” contract, GEO agreed to pay Citibank the equivalent of the six month LIBOR rate as of the last business day prior to the payment date plus 5.05%. Citibank agreed to pay GEO during the same period 10.125%. The payment dates are February 1 and August 1 of each year until August 1, 2008. As part of this transaction, GEO sold to Citibank the right to cancel the contract on any payment date commencing with August 1, 2004. This contract corresponds to the senior subordinated notes, which have a fixed interest rate of 10.125%. Due to the timing of the cancellation provision of the swap contract, the contract is not considered to be 100% effective.

GEO has accounted for these interest rate derivative contracts pursuant to FAS 133. The “floating to fixed” contract has been treated as a cash flow hedge with 100% effectiveness. As of December 31, 2002, the contract had a fair market value of ($3.5) million. This amount was considered in Other Comprehensive Loss and was offset by an increase in the Other Long Term Liabilities on GEO’s balance sheet.

The “fixed to floating” contract has been treated as a fair value hedge. As of December 31, 2002, the contract had a fair market value of $2.9 million and was considered to be 92.7% effective. The accounting treatment of marking to market the fair value hedge was as follows: (1) the ineffective portion of the hedge was reflected in Other (Income) Expense on GEO’s income statement, (2) the change in value, $2.9 million, was reflected in an increase in the value of the senior subordinated notes, and (3) the Other Long Term Liabilities were decreased by $2.9 million, the change in value of the hedge contract.

In January 2003, GEO was notified by Citibank that it was terminating these agreements. GEO is disputing the termination clause cited by Citibank and has retained legal counsel to assist in resolving this matter. Due to this fact, GEO has not reflected any interest savings associated with these agreements in its financial statements since the last settlement date in August 2002.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

GEO’s financial statements are included in Exhibit 99.1 to this Annual Report and are hereby incorporated by reference.

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

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF GEO

The following table shows certain information regarding each of GEO’s directors, officers and operating management.

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Name	Age	Position
George P. Ahearn	67	President, Chief Executive Officer and Director
William P. Eckman	51	Executive Vice President, Chief Financial Officer, Treasurer, Secretary and Director
Dennis S. Grandle	53	Vice President, Aluminum Products
David B. Heller, Jr.	49	Vice President, Sales, Specialty Additives
Robert S. Zacker	45	Vice President, Specialty Additives
Terry L. Guckes	53	Vice President, Electronic Chemicals
Anthony J. Dowd	48	Director
George W. Rapp, Jr.	70	Director
A. Elliott Archer	58	Director

George P. Ahearn has been President, Chief Executive Officer and Director of GEO since its inception in 1993. Prior to that time, Mr. Ahearn was President and Chief Operating Officer of Hall Chemical Company, a maker of specialty metal-based chemicals. Prior to that, Mr. Ahearn was employed for 28 years by Exxon Corporation and Exxon Chemical, holding various executive positions including Division Manager of Exxon Chemical’s Energy Chemicals Business and Worldwide Manager of Exxon Chemical’s Specialty Chemicals Technology Organization. Mr. Ahearn was also a founder, owner and director of Pharmaceutical Fine Chemicals, S.A., a Luxembourg fine chemicals company built through acquisition. Mr. Ahearn divested his interest in Pharmaceutical Fine Chemicals, S.A. when the business was sold to DLJ Merchant Banking Fund Group, an affiliate of Donaldson Lufkin & Jenrette Securities Corporation, in September 1997. Mr. Ahearn was formerly a director of Chemtech Industries of St. Louis, Missouri, President of SSC Industries of Atlanta, Georgia, and a director of The Flood Company of Hudson, Ohio, a privately-held company in the coatings and wood stains and preservatives business. Mr. Ahearn received his B.A. in chemistry from the City University of New York and M.S. and Ph.D. in chemistry from Rutgers University.

William P. Eckman has been Executive Vice President, Chief Financial Officer, Treasurer, Secretary and Director of GEO since its inception in 1993. Prior to that time, Mr. Eckman was involved in acquisitions, joint venture development, product management and strategic planning for Exxon Chemical’s specialty chemical business in Latin America and Mexico. Mr. Eckman was also a corporate treasurer for Exxon Chemical Americas with responsibility for Latin America. Mr. Eckman also served in the Controller’s department at Exxon Chemical’s Baton Rouge, Louisiana plant. Mr. Eckman was a founder and owner of Pharmaceutical Fine Chemicals, S.A. and a director of certain of its affiliates. Mr. Eckman divested his interest to DLJ Merchant Banking Fund Group in September 1997. Mr. Eckman received his B.A. in business administration from Marian College and M.B.A. and economics degrees from New York University. Mr. Eckman also pursued studies in international economics at the University of Paris.

Dennis S. Grandle has been Vice President, Aluminum Products of GEO since 1996. Mr. Grandle has over 25 years of experience in the chemical and oil industries, primarily at Exxon Chemical, where he worked in the specialty chemicals area in sales and product management, both in the United States and overseas. Mr. Grandle also has considerable

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overseas experience with ARAMCO in oil field chemicals. Mr. Grandle received his B.S. in chemistry from the University of California.

David B. Heller, Jr. has been Vice President, Sales for GEO’s Specialty Additives business since 2002 and, prior to that, had been Vice President/General Manager, Process Industries of GEO since 1997. With more than 20 years of experience in the chemicals industry, Mr. Heller has held various management positions at Henkel Corporation, D.B. Western, Melamine Chemicals, W.R. Grace and Johnson Matthey. Mr. Heller received his B.S. in chemistry from Bucknell University and his M.B.A. from the University of Pennsylvania.

Robert S. Zacker has been Vice President, Specialty Additives since 2002 and, prior to that, had been Vice President/General Manager, TRIMET Products since July 1998 and General Manager of the TRIMET facility in Allentown, Pennsylvania since 1996. From 1981 to 1996, Mr. Zacker held various positions with Mallinckrodt Chemical, Inc., including Process Engineer, Regional Sales Representative, Senior Product Engineer, Production Supervisor and Plant Manager. Mr. Zacker received his B.S. in chemical engineering from Clemson University.

Terry L. Guckes has been Vice President, Electronic Chemicals since June 2001. Prior to joining GEO, Mr. Guckes was a corporate officer and business development executive with OMG, Inc. where he was involved with several acquisitions and joint ventures related to specialty metals and specialty chemicals. Mr. Guckes is a Director of The Flood Company of Hudson, Ohio. Mr. Guckes has more than 30 years of experience in the specialty chemicals and the oil and gas industries. In addition to his tenure with OMG, he has worked for the Lubrizol Company, W.R. Grace and Exxon-Mobil. Mr. Guckes received his B.S.E. degree in chemical engineering from Princeton in 1971, his Ph.D. in chemical engineering from the University of Wisconsin in 1974 and his M.B.A. from the University of Pennsylvania in 1984.

Anthony J. Dowd was reappointed as a Director in 2002, having served as Director from March 1997 until August 1998. In 1991, Mr. Dowd became affiliated with Charter Oak Partners and was appointed Director of Private Investments in May 1992. In 1997 he became a founding General Partner of Charter Oak Capital Partners, L. P. He serves on the Board of Directors of Metal Powder Products, LLC, Brass Eagle, Inc. and Integrated DisAbility Resources, Inc. Mr. Dowd graduated with distinction from the U.S. Military Academy at West Point in 1981 with a B.S. degree in Engineering. From 1981 to 1986 he served as an officer in the U.S. Army. In 1988, Mr. Dowd graduated from the Wharton School of the University of Pennsylvania with an M.B.A. degree in finance. Subsequently, Mr. Dowd was a Senior Associate with James D. Wolfensohn, Inc., a New York investment banking firm.

George W. Rapp, Jr. has been a Director of GEO since 1997. Mr. Rapp is currently a member of the Management Committee of Metal Powder Products, LLC. In the past, Mr. Rapp has held such positions as Vice President of Marketing & Sales of Brinly Hardy Company, Advanced Process Systems and Anaconda Aluminum, Senior Vice President of Arco Metals, President of American Brass and Vice Chairman of the Board of Simcala, Inc. Mr. Rapp received his B.S. in industrial administration from Yale University and his M.B.A. from the University of Louisville.

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A. Elliott Archer has been a Director of GEO since 1997. Mr. Archer is currently the President and Chief Executive Officer of Metal Powder Products, LLC and the President and Chief Executive Officer of Archer Industries Group, a company formed by him to provide equity capital to businesses. In the past, Mr. Archer held such positions as President of the Chemicals Division of Church and Dwight Company, Inc., Manager of Strategic Planning for Mobil Chemical Company, General Manager of the Styrenics business of United States Steel Corp. and Analytical Chemist for Mobay Chemical Company. Mr. Archer received his B.S. in chemistry from Marshall University and in 1986 completed the executive program at Stanford University.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table shows certain information concerning the compensation paid by GEO during the last three fiscal years to its Chief Executive Officer and its four other most highly compensated executive officers and managers.

Name and Principal Position	Year	Salary		Bonus		All Other Compensation (1)
George P. Ahearn President and Chief Executive Officer	2002 2001 2000	$	323,124 323,124 293,750	$	—   —   147,500	$	40,816 5,000 56,351
William P. Eckman Executive Vice President, Treasurer, Secretary and Chief Financial Officer	2002 2001 2000	$	252,588 252,588 229,625	$	—   —   115,000	$	25,513 5,000 23,565
Dennis S. Grandle Vice President, Aluminum Products	2002 2001 2000	$	140,259 140,566 134,188	$	—   25,200 25,200	$	13,843 13,288 12,309
Terry L. Guckes (2) Vice President, Electronic Chemicals	2002 2001 2000	$	160,000 93,333 —	$	5,444 —   —	$	10,999 1,600 —
Robert S. Zacker Vice President, Specialty Additives	2002 2001	$	150,000 142,263	$	—   23,365	$	13,786 5,000

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2000 124,145 23,300 11,557

(1) Includes contributions made by GEO to its 401(k) retirement plan and defined contribution retirement plan and, in the case of Messrs. Ahearn and Eckman, life insurance premiums paid by GEO on behalf of each executive officer.

(2) Mr. Guckes was hired on June 4, 2001.

Employment Agreements

GEO has entered into employment agreements with George P. Ahearn, the President and Chief Executive Officer of GEO, and William P. Eckman, the Executive Vice President, Chief Financial Officer, Treasurer and Secretary of GEO. Each of these agreements was executed on March 25, 1997, and provided for a term of five years from that date with automatic extensions for additional one year periods after the initial term. The respective employment agreements provide that Mr. Ahearn will be the Chairman, and Mr. Eckman will be a member, of the Board of Directors of GEO.

Mr. Ahearn’s employment agreement entitles him to a base salary of $250,000 per year, which is subject to annual increase based upon the review of the Board of Directors, bonus compensation determined by the Board of Directors, and certain other benefits, including medical and life insurance and participation in GEO’s standard retirement plans. If Mr. Ahearn is terminated by GEO other than for “cause,” he is entitled to receive his annual base salary and benefits for the remainder of the employment term or one year, whichever period is greater. Mr. Ahearn is prohibited by certain non-competition provisions, for the duration of the employment term or one year after termination of his employment, whichever period is greater, from either soliciting business from or competing with GEO for the business of any customer of GEO or becoming involved in any business that competes with GEO.

The terms of Mr. Eckman’s employment agreement are substantially identical to the terms of Mr. Ahearn’s employment agreement, except that Mr. Eckman is entitled to receive an initial base salary of $190,000 per year.

GEO has also entered into an employment agreement with Dennis S. Grandle, the Vice President, Aluminum Products of GEO. Mr. Grandle’s employment agreement was executed on May 20, 1996, extended for an initial two year term from such date and was automatically renewed thereafter for an indefinite period, subject to either party’s right to terminate the agreement upon thirty days notice. Mr. Grandle’s employment agreement entitles him to a base salary of $115,000 per year, bonus compensation in an amount determined annually in accordance with GEO’s Management Incentive Program and the right to participate in the general employee benefit programs of GEO. If Mr. Grandle is terminated by GEO without “cause,” he is entitled to receive three months base salary and certain moving benefits as severance pay. Mr. Grandle is prohibited by certain proprietary information and non-competition provisions from disclosing any confidential information of GEO during the employment term and within five years thereafter and from competing with GEO or soliciting GEO’s customers or employees for a period of one year after termination of the employment term.

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GEO has also entered into an employment agreement with Terry L. Guckes, Vice President, Electronic Chemicals. Mr. Guckes’ employment agreement was executed as of June 1, 2001, extended for an initial one year term from such date and was automatically renewed thereafter for additional one year periods, subject to either party’s right to terminate the agreement upon ninety days notice. Mr. Guckes’ employment agreement entitiles him to a base salary of $160,000 per year, bonus compensation in an amount determined annually in accordance with GEO’s Management Incentive Program, deferred compensation payable based upon the earnings of the Electronic Chemicals business, and the right to participate in the general employee benefits programs of GEO. If Mr. Guckes is terminated by GEO without “cause,” he is entitled to receive twelve months base salary and certain other benefits as severance pay. Mr. Guckes is prohibited by certain proprietary information and non-competition provisions from disclosing any confidential information of GEO during the employment term and at any time thereafter and from competing with GEO or soliciting GEO’s customers or employees for a period of one year after termination of the employment term.

Report of the Board of Directors on Executive and Management Compensation

The Board of Directors is responsible for the following compensation matters:

• determination of the compensation and bonus arrangements of Messrs. Ahearn and Eckman;

• approval of the compensation policies and programs for the operating management and other employees of GEO; and

• administration of the benefit plans in which the executive officers, operating management and other employees of GEO participate.

The Board of Directors believes that GEO’s compensation program should support the goals and objectives of GEO. These goals and objectives seek to balance the importance of annual financial performance with long-term growth and profitability. The Board believes that executive compensation should be strongly correlated with the overall performance of GEO as well as the compensation paid by comparable companies. The Board currently uses salary, bonus and various benefit plans to compensate and motivate its executive officers. The manner of application of these compensation tools by the Board for individual executive officers and operating management is based upon the nature and scope of the particular employee’s responsibilities.

The compensation arrangements of Messrs. Ahearn and Eckman are governed by employment agreements approved by the Board of Directors in 1997. These employment agreements provided for (a) annual base salary for Mr. Ahearn in the amount of $250,000 and for Mr. Eckman in the amount of $190,000, subject in each case to annual increase based upon the review of the Board, and (b) bonus compensation for Messrs. Ahearn and Eckman in amounts established annually by the Board. During 1998, the Board increased Mr. Ahearn’s annual base salary to $268,750 and Mr. Eckman’s annual base salary to $209,625. These salaries remained in effect throughout 1999. During 2000, the Board increased Mr. Ahearn’s annual base salary to

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$293,750 and Mr. Eckman’s base salary to $229,625. For 1998 and 1999, Mr. Ahearn was paid $92,428 and $100,000 and Mr. Eckman was paid $72,089 and $77,500, respectively, in bonus compensation. In setting these bonus amounts, the Board took into account GEO’s 1998 and 1999 earnings, which on a pro forma basis exceeded both 1997 and 1998 earnings and the 1998 and 1999 budgets, the individual contributions of Messrs. Ahearn and Eckman to those earnings and the overall performance of the officers. During 2001, the Board increased Mr. Ahearn’s annual base salary to $323,124 and Mr. Eckman’s base salary to $252,588. For 2000, Mr. Ahearn was paid $147,500 and Mr. Eckman was paid $115,000 in bonus compensation. Neither Mr. Ahearn or Mr. Eckman received an increase in base salary or a bonus in 2002.

The base salary and bonus compensation arrangements of Messrs. Ahearn and Eckman are determined based upon the compensation history of these employees, their expected individual contribution to GEO and the compensation paid to the executive officers of similar companies. The compensation arrangements of the operating management of GEO are determined by GEO in accordance with these same factors.

The bonus compensation payable to the operating management of GEO is determined in accordance with GEO’s Management Incentive Program. The Management Incentive Program provides for the payment of certain ranges of bonus compensation depending upon corporate, business unit and individual performance levels during the applicable year. GEO awards bonuses when the pre-tax earnings of GEO and an individual manager’s business unit exceed the prior year’s pre-tax earnings. The size of the manager’s award is determined by the manager’s contribution to corporate and business unit earnings and achievement of specific position requirements. The contributions and achievements of GEO’s managers, for purposes of the Management Incentive Program, are determined by the President and Executive Vice President of GEO based upon the recommendations of each manager’s immediate supervisor. Under the Management Incentive Program, the managers of GEO are eligible to receive bonus compensation in ranges from 5%-10% to as high as 10%-30% of base salary. GEO did not pay bonus compensation to its managers in 2002 under the Management Incentive Program.

The Board administers a number of other benefit plans for its executive officers and operating management, including a 401(k) retirement plan (which includes profit sharing features). The Board monitors the benefits provided to GEO’s officers and managers under these plans in order to further the goals and objectives of GEO’s compensation program.

Members of the Board of Directors:

George P. Ahearn

William P. Eckman

Anthony J. Dowd

George W. Rapp, Jr.

A. Elliott Archer

April 10, 2003

Indemnification of Directors and Officers

GEO’s Code of Regulations requires GEO to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement in connection with any proceeding,

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whether civil, criminal, administrative or investigative, arising by reason of the fact that such person is or was a director or officer of GEO. These indemnification provisions apply only where the director or officer acted in good faith and in a manner that the director or officer reasonably believed to be in or not opposed to GEO’s best interests. Indemnification is not required if the actions of the director or officer were taken with intent to cause injury to GEO. Indemnification is also not required if there is a finding of negligence or misconduct on the part of the director or officer. In criminal actions, indemnification is required only if the director or officer had no reasonable cause to believe his conduct was unlawful.

GEO’s Code of Regulations further provides that GEO will pay in advance of the final determination of any such proceeding any expenses incurred by the director or officer in their defense. However, upon any such advance the director or officer must provide an undertaking to GEO that such director or officer will repay the amount of the advance if it is ultimately determined that the director or officer is not entitled to be indemnified by GEO. GEO’s Code of Regulations also allows GEO to purchase liability insurance covering any liability that might be asserted against any director or officer of GEO as a result of their status as such. Accordingly, GEO maintains director’s and officer’s liability insurance in favor of each of the directors and officers of GEO.

Key Person Life Insurance

GEO currently maintains two term life insurance policies on the life of George P. Ahearn in the aggregate amount of $2,000,000, and one term life insurance policy on the life of William P. Eckman in the amount of $600,000. GEO is the sole beneficiary under each of these insurance policies.

Compensation of Directors

GEO pays directors who are not employees of GEO or Charter Oak Partners, which currently includes George W. Rapp, Jr. and A. Elliott Archer, a fee of $10,000 per year for service on the Board of Directors. GEO reimburses each of its directors for reasonable out-of-pocket expenses incurred in connection with their travel to and attendance at meetings of the Board of Directors.

Board of Director Interlocks and Insider Participation

The Board of Directors of GEO determines the salaries and bonus compensation of GEO’s executive officers. George P. Ahearn, the President and Chief Executive Officer of GEO, and William P. Eckman, the Executive Vice President and Chief Financial Officer of GEO, are members of the Board of Directors and participate in the deliberations concerning executive compensation. However, Messrs. Ahearn and Eckman do not vote with respect to the determination of their own compensation. See also “Certain Relationships and Related Transactions” below.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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The following table shows the number and percent of GEO’s common shares beneficially owned by each shareholder of GEO as of April 15, 2003. GEO believes that the persons and entities listed in the table have sole voting and investment power as to all common shares shown as beneficially owned by them, subject to community property laws, where applicable.

Name and Address of Beneficial Owner	Beneficial Ownership of GEO’s Common Shares
	Number of Shares	Percent
Charter Oak Partners (1) 10 Wright Street, Suite 210 Westport, Connecticut 06880	85.198	62.72%
Charter Oak Capital Partners, L.P. (2) 10 Wright Street, Suite 210 Westport, Connecticut 06880	21.420	15.77%
GEO Chemicals, Ltd. (3) 3201 Enterprise Parkway, Suite 490 Cleveland, Ohio 44122	25.994	19.14%
George P. Ahearn 3201 Enterprise Parkway, Suite 490 Cleveland, Ohio 44122	2.146	1.58%
George W. Rapp, Jr. 10 Wright Street, Suite 210 Westport, Connecticut 06880	0.608	0.45%
Paul E. Roughan 10 Wright Street, Suite 210 Westport, Connecticut 06880	0.211	0.16%
A. Elliott Archer 10 Wright Street, Suite 210 Westport, Connecticut 06880	0.178	0.13%
Anatole G. Penchuk 10 Wright Street, Suite 210 Westport, Connecticut 06880	0.080	0.06%
Directors and executive officers as a group (4 persons) (4)	28.926	21.30%

(1) Charter Oak Partners is a Connecticut partnership with four partners, each of which is an individual. Mr. Jerrold N. Fine is the Managing Partner of and holds a majority interest in Charter Oak Partners. Mr. Fine’s business address is 10 Wright Street, Suite 210, Westport, Connecticut 06880.

(2) Charter Oak Capital Partners, L.P. is a Delaware limited partnership with 42 partners, none of which holds an interest in the limited partnership greater than 17.5%. The general partner of Charter Oak Capital Partners, L.P. is North Fairfield LLC, which has five members. Mr. Jerrold N. Fine is the Managing Member of and holds a majority interest in North Fairfield LLC. Mr. Fine’s business address is 10 Wright Street, Suite 210, Westport, Connecticut 06880.

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(3) George P. Ahearn and William P. Eckman are the sole members of GEO Chemicals, Ltd., which is an Ohio limited liability company. Mr. Ahearn holds a percentage interest in GEO Chemicals, Ltd. of approximately 62%, and Mr. Eckman holds a percentage interest in GEO Chemicals, Ltd. of approximately 38%.

(4) Includes the shares beneficially owned by Messrs. Ahearn and Eckman as the sole members of GEO Chemicals, Ltd.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Shareholders Agreement

GEO’s shareholders are bound by a shareholders agreement which governs the relationships between the shareholders and GEO. Under the shareholders agreement, the shareholders may not transfer their shares to any third-party unless they first offer such shares to the existing shareholders. In no case may shares be transferred to any of GEO’s competitors. Upon the death, disability or termination of employment of Messrs. Ahearn or Eckman, GEO has the right to repurchase the shares held by these employees directly or indirectly through GEO Chemicals, Ltd. Upon their death, disability or termination without cause, Messrs. Ahearn and Eckman have the right to require GEO to repurchase the shares held by them. GEO’s ability to make such repurchases is limited by both the indenture that governs its senior subordinated notes and its senior credit facility. The indenture provides that such repurchases may not exceed $750,000 in any calendar year plus the aggregate cash proceeds from any applicable life insurance policies for which GEO is the beneficiary. The senior credit facility provides that GEO may not issue more than $5.0 million of promissory notes to Messrs. Ahearn and Eckman in connection with all such repurchases.

The shareholders agreement provides that Charter Oak Partners may not transfer more than 50% of GEO’s stock without the approval of four of the five directors of GEO. If Charter Oak Partners obtains such approval, it can compel the other shareholders to transfer their shares as part of the same transaction on the same terms. If Charter Oak Partners obtains such approval but does not invoke its “drag-along” rights, the other shareholders may elect to sell their shares in the same transaction as Charter Oak Partners.

If GEO decides to sell any stock in a public offering under the federal securities laws, the shareholders have the right to have their shares registered as part of the offering. Upon the issuance of any new stock by GEO, the shareholders have the right to purchase a portion of such stock equal to their percentage ownership of GEO.

The shareholders agreement provides that GEO’s Board of Directors shall consist of five members. Three members are to be designees of Charter Oak Partners. The remaining two members are to be Mr. Ahearn, for as long as he is an employee of GEO or a shareholder after being terminated without cause, and Mr. Eckman, for as long as he is employed by GEO. Mr. Ahearn may designate his successor on the board as long as he remains President and Chief Executive Officer of GEO. The current designees of Charter Oak Partners serving on the Board are Anthony J. Dowd, George W. Rapp, Jr. and A. Elliott Archer.

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Warrants

On March 25, 1997, GEO issued to Charter Oak Partners and Chemical Specialties Enterprises, Inc. (whose successor-in-interest by merger is GEO Chemicals, Ltd.) warrants to purchase common shares of GEO. The warrant granted to Charter Oak Partners allowed it to purchase over four years, upon the failure of GEO to achieve certain specified earnings targets in such years, common shares in an amount equal to a maximum of 8% of the outstanding equity of GEO. The warrant held by GEO Chemicals, Ltd. (the owners of which are George P. Ahearn and William P. Eckman) allows it to purchase, upon the achievement by Charter Oak Partners of a certain rate of return on its investment in GEO, common shares in an amount equal to a maximum of 5% of the outstanding equity of GEO. The agreements underlying these warrants were amended and restated on July 31, 1998.

ITEM 14. CONTROLS AND PROCEDURES

As of January 31, 2003, an evaluation of the effectiveness of the design and operation of GEO’s disclosure controls and procedures was performed under the supervision and with the participation of GEO’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based on this evaluation, GEO’s CEO and CFO concluded that GEO’s disclosure controls and procedures were effective as of January 31, 2003.

Subsequent to this evaluation, there were no significant changes in internal controls or other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 10-K

Financial Statements

The financial statements included in this Annual Report are listed under the heading “Contents” which appears in Exhibit 99.1 of this Annual Report and is hereby incorporated by reference.

Financial Statement Schedules

Schedule II Valuation and Qualifying Accounts

Exhibits

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2.1	Asset Purchase Agreement, dated June 29, 1998, by and among GEO Specialty Chemicals, Inc., Mallinckrodt Inc. (a Delaware corporation) and Mallinckrodt Inc. (a New York corporation) (incorporated by reference to Exhibit 2.1 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
2.2	Asset Sale and Purchase Agreement, dated February 10, 1997, by and among GEO Specialty Chemicals, Inc., Henkel Corporation and Henkel Canada Limited (incorporated by reference to Exhibit 2.2 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
2.3	Asset Purchase Agreement, dated December 5, 1996, by and between GEO Specialty Chemicals, Inc. and Cytec Industries Inc. (incorporated by reference to Exhibit 2.3 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
2.4	Amended and Restated Asset Sale Agreement, dated July 15, 1994, by and among GEO Specialty Chemicals, Inc., Courtney Industries, Inc. and C Associates (incorporated by reference to Exhibit 2.4 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
2.5	Asset Purchase Agreement, dated June 5, 1992, by and between GEO Specialty Chemicals, Inc. and Rhone-Poulenc Basic Chemicals Co. (incorporated by reference to Exhibit 2.5 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
2.6	Stock Purchase Agreement, dated August 6, 1999, by and between GEO Specialty Chemicals, Inc. and Rhodia Chimie S.A. (incorporated by reference to Exhibit 2.1 of GEO’s Current Report on Form 8-K filed with the SEC on September 23, 1999)
2.7	Sale and Purchase Agreement, dated March 27, 2001, by and between GEO Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by reference to Exhibit 2.1 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
2.8	Asset Purchase Agreement, dated April 10, 2001, by and between GEO Specialty Chemicals, Inc. and ONDEO Nalco Company (incorporated by reference to Exhibit 2.2 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
3.1	Amended Articles of Incorporation of GEO Specialty Chemicals, Inc. (incorporated by reference to Exhibit 3.1 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
3.2	Amended Code of Regulations of GEO Specialty Chemicals, Inc. (incorporated by reference to Exhibit 3.2 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
4.1	Indenture, dated July 31, 1998, by and between GEO Specialty Chemicals, Inc. and Chase Manhattan Trust Company, National Association, as the trustee (incorporated by reference to Exhibit 4.1 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)

39

4.2	Form of Senior Subordinated Note (included in Exhibit 4.1)
10.1	Share Purchase Agreement, dated March 25, 1997, by and between GEO Specialty Chemicals, Inc. and Charter Oak Partners (incorporated by reference to Exhibit 10.1 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.2	Amended and Restated Shareholders Agreement, dated July 31, 1998, by and among GEO Specialty Chemicals, Inc., Charter Oak Partners, Charter Oak Capital Partners, L.P., GEO Chemicals, Ltd., George P. Ahearn, William P. Eckman, George W. Rapp, Jr. and A. Elliott Archer (incorporated by reference to Exhibit 10.2 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.3	Amended and Restated Warrant Agreement, dated July 31, 1998, by and between GEO Specialty Chemicals, Inc. and Charter Oak Partners (incorporated by reference to Exhibit 10.3 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.4	Amended and Restated Warrant Agreement, dated July 31, 1998, by and between GEO Specialty Chemicals, Inc. and GEO Chemicals, Ltd. (incorporated by reference to Exhibit 10.4 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.5	Employment Agreement, dated March 25, 1997, by and between GEO Specialty Chemicals, Inc. and George P. Ahearn (incorporated by reference to Exhibit 10.5 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.6	Employment Agreement, dated March 25, 1997, by and between GEO Specialty Chemicals, Inc. and William P. Eckman (incorporated by reference to Exhibit 10.6 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.7	Employment Agreement, dated May 20, 1996, by and between GEO Specialty Chemicals, Inc. and Dennis S. Grandle (incorporated by reference to Exhibit 10.7 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.8	Supply Agreement (Supply to Buyer), dated March 25, 1997, by and between GEO Specialty Chemicals, Inc. and Henkel Corporation (incorporated by reference to Exhibit 10.8 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.9	Supply Agreement (Supply to Henkel), dated March 25, 1997, by and between GEO Specialty Chemicals, Inc. and Henkel Corporation (incorporated by reference to Exhibit 10.9 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.10	Purchase Agreement, dated July 31, 1998, by and between GEO Specialty Chemicals, Inc. and BT Alex.Brown Incorporated (incorporated by reference to Exhibit 10.10 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)

40

10.11	Registration Rights Agreement, dated July 31, 1998, by and between GEO Specialty Chemicals, Inc. and BT Alex.Brown Incorporated (incorporated by reference to Exhibit 10.11 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.12	Provisional Lease Agreement, dated July 29, 1998, by and between GEO Specialty Chemicals, Inc. and Mallinckrodt Inc. (a Delaware corporation) (incorporated by reference to Exhibit 10.12 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.13	Lease Agreement, dated July 29, 1998, by and between GEO Specialty Chemicals, Inc. and Mallinckrodt Inc. (a Delaware corporation) (incorporated by reference to Exhibit 10.13 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.14	Amended and Restated Credit Agreement, dated May 31, 2001, by and among GEO Specialty Chemicals, Inc. and Bankers Trust Company, Salomon Smith Barney Inc. and various other financial institutions (incorporated by reference to Exhibit 10.1 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
10.15	First Amendment to Amended and Restated Credit Agreement, dated as of May 14, 2002, by and among GEO Specialty Chemicals, Inc., Deutsche Bank Trust Company Americas, as administrative agent, Salomon Smith Barney Inc., as syndication agent, US Bank National Association, as documentation agent, and certain other financial institutions (incorporated by reference to Exhibit 10.1 of GEO’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002 filed with the SEC on May 15, 2002)
10.16	Second Amendment to Amended and Restated Credit Agreement, dated as of April 14, 2003, by and among GEO Specialty Chemicals, Inc., Deutsche Bank Trust Company Americas, as administrative agent, and US Bank National Association, as documentation agent, and certain other financial institutions
10.17	Support Agreement, dated April 14, 2003, by and among Charter Oak Partners, Charter Oak Capital Partners, L.P., Deutsche Bank Trust Company Americas, as administrative agent, and GEO Specialty Chemical, Inc.
10.18	Reimbursement Agreement, dated April 14, 2003, by and among Charter Oak Partners, Charter Oak Capital Partners, L.P. and GEO Specialty Chemicals, Inc.
10.19	GEO Specialty Chemicals, Inc. 1997 Management Incentive Program (incorporated by reference to Exhibit 10.15 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.20	Lease Agreement (Franklin, Virginia), dated May 31, 2001, by and between GEO Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by reference to Exhibit 10.2 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
10.21	Lease Agreement (Gibbstown, New Jersey), dated May 31, 2001, by and between GEO Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by reference to Exhibit 10.3 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
10.22	Plant Operating Agreement, dated May 31, 2001, by and between GEO Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by reference to Exhibit 10.4 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
10.23	Supply Agreement, dated April 19, 2001, by and between GEO Specialty Chemicals, Inc. and ONDEO Nalco Company (incorporated by reference to Exhibit 10.5 to GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
10.24	Employment Agreement, dated June 1, 2001, by and between GEO Specialty Chemicals, Inc. and Terry L. Guckes (incorporated by reference to Exhibit 10.20 of GEO’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 filed with the SEC on March 22, 2002)
12.1	Computation of ratio of earnings to fixed charges

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21.1	Subsidiaries of GEO Specialty Chemicals, Inc.
24.1	Power of Attorney
99.1	Financial Statements Required by Item 8 of Part II of this Annual Report
99.2	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code
99.3	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

Reports on Form 8-K

            GEO filed no Current Reports on Form 8-K with the SEC during 2002.

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SIGNATURE

Pursuant to the requirements of Sections 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.

GEO SPECIALTY CHEMICALS, INC.
By:	/s/    WILLIAM P. ECKMAN
	William P. Eckman Executive Vice President and Chief Financial Officer April 15, 2003

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 date indicated.

GEORGE P. AHEARN, President, Chief Executive Officer and Director (principal executive officer); WILLIAM P. ECKMAN, Executive Vice President, Chief Financial Officer and Director (principal financial and accounting officer); ANTHONY J. DOWD, Director; GEORGE W. RAPP, JR., Director; and A. ELLIOTT ARCHER, Director.

GEO SPECIALTY CHEMICALS, INC.
By:	/s/    WILLIAM P. ECKMAN
	William P. Eckman Attorney-in-fact April 15, 2003

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CERTIFICATIONS

I, George P. Ahearn, certify that:

1. I have reviewed this annual report on Form 10-K of GEO Specialty Chemicals, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

(c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 15, 2003	By:	/s/    GEORGE P. AHEARN
		George P. Ahearn President and Chief Executive Officer

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I, William P. Eckman, certify that:

1. I have reviewed this annual report on Form 10-K of GEO Specialty Chemicals, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

(a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

(c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

(a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 15, 2003	By:	/s/    WILLIAM P. ECKMAN
		William P. Eckman Executive Vice President and Chief Financial Officer

45

	EXHIBIT INDEX
2.1	Asset Purchase Agreement, dated June 29, 1998, by and among GEO Specialty Chemicals, Inc., Mallinckrodt Inc. (a Delaware corporation) and Mallinckrodt Inc. (a New York corporation) (incorporated by reference to Exhibit 2.1 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
2.2	Asset Sale and Purchase Agreement, dated February 10, 1997, by and among GEO Specialty Chemicals, Inc., Henkel Corporation and Henkel Canada Limited (incorporated by reference to Exhibit 2.2 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
2.3	Asset Purchase Agreement, dated December 5, 1996, by and between GEO Specialty Chemicals, Inc. and Cytec Industries Inc. (incorporated by reference to Exhibit 2.3 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
2.4	Amended and Restated Asset Sale Agreement, dated July 15, 1994, by and among GEO Specialty Chemicals, Inc., Courtney Industries, Inc. and C Associates (incorporated by reference to Exhibit 2.4 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
2.5	Asset Purchase Agreement, dated June 5, 1992, by and between GEO Specialty Chemicals, Inc. and Rhone-Poulenc Basic Chemicals Co. (incorporated by reference to Exhibit 2.5 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
2.6	Stock Purchase Agreement, dated August 6, 1999, by and between GEO Specialty Chemicals, Inc. and Rhodia Chimie S.A. (incorporated by reference to Exhibit 2.1 of GEO’s Current Report on Form 8-K filed with the SEC on September 23, 1999)
2.7	Sale and Purchase Agreement, dated March 27, 2001, by and between GEO Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by reference to Exhibit 2.1 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
2.8	Asset Purchase Agreement, dated April 10, 2001, by and between GEO Specialty Chemicals, Inc. and ONDEO Nalco Company (incorporated by reference to Exhibit 2.2 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
3.1	Amended Articles of Incorporation of GEO Specialty Chemicals, Inc. (incorporated by reference to Exhibit 3.1 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
3.2	Amended Code of Regulations of GEO Specialty Chemicals, Inc. (incorporated by reference to Exhibit 3.2 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
4.1	Indenture, dated July 31, 1998, by and between GEO Specialty Chemicals, Inc. and Chase Manhattan Trust Company, National Association, as the trustee (incorporated by

	reference to Exhibit 4.1 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
4.2	Form of Senior Subordinated Note (included in Exhibit 4.1)
10.1	Share Purchase Agreement, dated March 25, 1997, by and between GEO Specialty Chemicals, Inc. and Charter Oak Partners (incorporated by reference to Exhibit 10.1 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.2	Amended and Restated Shareholders Agreement, dated July 31, 1998, by and among GEO Specialty Chemicals, Inc., Charter Oak Partners, Charter Oak Capital Partners, L.P., GEO Chemicals, Ltd., George P. Ahearn, William P. Eckman, George W. Rapp, Jr. and A. Elliott Archer (incorporated by reference to Exhibit 10.2 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.3	Amended and Restated Warrant Agreement, dated July 31, 1998, by and between GEO Specialty Chemicals, Inc. and Charter Oak Partners (incorporated by reference to Exhibit 10.3 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.4	Amended and Restated Warrant Agreement, dated July 31, 1998, by and between GEO Specialty Chemicals, Inc. and GEO Chemicals, Ltd. (incorporated by reference to Exhibit 10.4 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.5	Employment Agreement, dated March 25, 1997, by and between GEO Specialty Chemicals, Inc. and George P. Ahearn (incorporated by reference to Exhibit 10.5 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.6	Employment Agreement, dated March 25, 1997, by and between GEO Specialty Chemicals, Inc. and William P. Eckman (incorporated by reference to Exhibit 10.6 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.7	Employment Agreement, dated May 20, 1996, by and between GEO Specialty Chemicals, Inc. and Dennis S. Grandle (incorporated by reference to Exhibit 10.7 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.8	Supply Agreement (Supply to Buyer), dated March 25, 1997, by and between GEO Specialty Chemicals, Inc. and Henkel Corporation (incorporated by reference to Exhibit 10.8 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.9	Supply Agreement (Supply to Henkel), dated March 25, 1997, by and between GEO Specialty Chemicals, Inc. and Henkel Corporation (incorporated by reference to Exhibit 10.9 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)

10.10	Purchase Agreement, dated July 31, 1998, by and between GEO Specialty Chemicals, Inc. and BT Alex.Brown Incorporated (incorporated by reference to Exhibit 10.10 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.11	Registration Rights Agreement, dated July 31, 1998, by and between GEO Specialty Chemicals, Inc. and BT Alex.Brown Incorporated (incorporated by reference to Exhibit 10.11 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.12	Provisional Lease Agreement, dated July 29, 1998, by and between GEO Specialty Chemicals, Inc. and Mallinckrodt Inc. (a Delaware corporation) (incorporated by reference to Exhibit 10.12 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.13	Lease Agreement, dated July 29, 1998, by and between GEO Specialty Chemicals, Inc. and Mallinckrodt Inc. (a Delaware corporation) (incorporated by reference to Exhibit 10.13 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.14	Amended and Restated Credit Agreement, dated May 31, 2001, by and among GEO Specialty Chemicals, Inc. and Bankers Trust Company, Salomon Smith Barney Inc. and various other financial institutions (incorporated by reference to Exhibit 10.1 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
10.15	First Amendment to Amended and Restated Credit Agreement, dated as of May 14, 2002, by and among GEO Specialty Chemicals, Inc., Deutsche Bank Trust Company Americas, as administrative agent, Salomon Smith Barney Inc., as syndication agent, US Bank National Association, as documentation agent, and certain other financial institutions (incorporated by reference to Exhibit 10.1 of GEO’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002 filed with the SEC on May 15, 2002)
10.16	Second Amendment to Amended and Restated Credit Agreement, dated as of April 14, 2003, by and among GEO Specialty Chemicals, Inc., Deutsche Bank Trust Company Americas, as administrative agent, and US Bank National Association, as documentation agent, and certain other financial institutions
10.17	Support Agreement, dated April 14, 2003, by and among Charter Oak Partners, Charter Oak Capital Partners, L.P., Deutsche Bank Trust Company Americas, as administrative agent, and GEO Specialty Chemicals, Inc.
10.18	Reimbursement Agreement, dated April 14, 2003, by and among Charter Oak Partners, Charter Oaks Capital Partners, L.P. and GEO Specialty Chemicals, Inc.
10.19	GEO Specialty Chemicals, Inc. 1997 Management Incentive Program (incorporated by reference to Exhibit 10.15 of GEO’s Registration Statement on Form S-1 filed with the SEC on December 31, 1998)
10.20	Lease Agreement (Franklin, Virginia), dated May 31, 2001, by and between GEO Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by reference to Exhibit 10.2 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
10.21	Lease Agreement (Gibbstown, New Jersey), dated May 31, 2001, by and between GEO Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by reference to Exhibit 10.3 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
10.22	Plant Operating Agreement, dated May 31, 2001, by and between GEO Specialty Chemicals, Inc. and Hercules Incorporated (incorporated by reference to Exhibit 10.4 of GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
10.23	Supply Agreement, dated April 19, 2001, by and between GEO Specialty Chemicals, Inc. and ONDEO Nalco Company (incorporated by reference to Exhibit 10.5 to GEO’s Current Report on Form 8-K filed with the SEC on June 15, 2001)
10.24	Employment Agreement, dated June 1, 2001, by and between GEO Specialty Chemicals, Inc. and Terry L. Guckes (incorporated by reference to Exhibit 10.20 of GEO’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001 filed with the SEC on March 22, 2002)

12.1	Computation of ratio of earnings to fixed charges
21.1	Subsidiaries of GEO Specialty Chemicals, Inc.
24.1	Power of Attorney
99.1	Financial Statements Required by Item 8 of Part II of this Annual Report
99.2	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code
99.3	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

EX-10.16

Exhibit 10.16

SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 14, 2003 (this “Agreement”), is by and among GEO SPECIALTY CHEMICALS, INC. (“Borrower”), certain financial institutions party to the Credit Agreement referred to below (the “Lenders”), DEUTSCHE BANK TRUST COMPANY AMERICAS f/k/a BANKERS TRUST COMPANY, in its capacity as administrative agent (the “Administrative Agent”), and US BANK NATIONAL ASSOCIATION, in its capacity as documentation agent (“Documentation Agent”).

BACKGROUND

A. Borrower, the Lenders, the Administrative Agent, and Documentation Agent are parties to that certain Amended and Restated Credit Agreement dated as of May 31, 2001, as amended by that certain First Amendment to Amended and Restated Credit Agreement dated as of May 14, 2002 (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Credit Agreement”).

B. Borrower has requested the Administrative Agent and the Lenders amend the Credit Agreement in certain respects as set forth herein and the Administrative Agent and the Lenders are agreeable to the same, subject to the terms and conditions set forth herein.

AGREEMENT

NOW THEREFORE, in consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows:

SECTION 1. DEFINED TERMS. Unless otherwise defined herein, all capitalized terms used herein shall have the meanings given them in the Credit Agreement.

SECTION 2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is, as of the Second Amendment Effective Date (as defined below), hereby amended as follows:

(a) Subsection 1.01(a) of the Credit Agreement is hereby amended by adding a new paragraph (iv) thereto as follows:

“(iv) Notwithstanding anything herein to the contrary, no Lender shall be obligated to make any Revolving Loans, Swingline Loans or issue any Letter of Credit if (x) the Senior Leverage Ratio of the Borrower is greater than 2.5 to 1.0 (as evidenced by the certificate most recently delivered prior to the date of the proposed borrowing or issuance pursuant to Section 7.01(c)) and after giving effect to such Revolving Loans, Swingline Loans or L/C Obligations, the aggregate amount of all Revolving Loans, Swingline Loans and L/C Obligations then outstanding shall exceed $15,000,000, or (y) after giving effect to such Revolving Loans, Swingline Loans or L/C Obligations, the aggregate amount of cash and Cash Equivalents (excluding foreign cash and Foreign Cash Equivalents in an aggregate amount not to exceed $3,500,000 at any time) held by the Borrower and its Subsidiaries shall exceed $5,000,000 (as evidenced by a certificate of an Authorized Officer of the Borrower, in form and substance satisfactory to the Administrative Agent), or (z) after giving effect to such Revolving Loans, Swingline Loans or L/C Obligations, the aggregate amount of all Revolving Loans, Swingline

Loans and L/C Obligations then outstanding shall exceed $5,000,000 and such Obligations shall not have been secured by a letter of credit as required by the terms of the Support Agreement, provided, that this clause (z) shall be inapplicable if, concurrently with any Borrowing or request for Letter of Credit, the Borrower shall have delivered to the Administrative Agent, a certificate of an Authorized Officer of the Borrower, in form and substance satisfactory to the Administrative Agent, demonstrating that the Senior Leverage Ratio of the Borrower is less than 2.5 to 1.0 for each of the Test Periods ending with the immediately preceding two consecutive fiscal quarters.”

(b) Subsections 1.03(a) and (d), 1.06 and 1.09(a) are hereby amended by deleting in its entirety the following parenthetical in each instance it appears therein: “(or telephonic notice promptly confirmed in writing).”

(c) Subsection 4.02(d) of the Credit Agreement is hereby amended by deleting in its entirety the number “$5,000,000” where it appears in the first proviso of such subsection and substituting therefor the number “$1,000,000.”

(d) Subsection 4.02(h) of the Credit Agreement is hereby amended by deleting in its entirety the number “$15,000,000” where it appears in clause (2) of the proviso in the first paragraph therein and where it appears in paragraph (i) therein and substituting therefor the number “$5,000,000.”

(e) Subsection 4.02(i) of the Credit Agreement is hereby amended by adding the following proviso at the end of clause (iv) therein as follows:

“ ; provided, however, that prepayments of principal pursuant to Section 4.02(d) shall be applied first to any Scheduled Term B Repayments due and owing within the twenty four month period following the date of receipt of such proceeds and thereafter pro rata to any remaining Scheduled Term B Repayments.”

(f) Subsection 7.01(e) of the Credit Agreement is hereby amended by numbering the first paragraph therein “(i)” and adding a new paragraph (ii) thereto as follows:

“ (ii) Notwithstanding anything herein to the contrary, for the fiscal quarters ending June 30, 2003 and December 31, 2003, respectively, as soon as practicable and in any event no later than 25 days after the close of such fiscal quarters, a certificate of the chief financial officer, controller or other Authorized Officer of the Borrower to the effect that no Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof, which certificate shall set forth the calculations required to establish whether the Borrower and its Subsidiaries were in compliance with the Senior Leverage Ratio as at the end of such fiscal quarters, it being understood that such calculations shall be based solely upon the Borrower’s internal, unreviewed and unaudited financial statements prepared on or before the date of such certificate.”

(g) Subsection 8.05(a) of the Credit Agreement is hereby amended by deleting the table therein in its entirety and substituting therefor the following table:

“Fiscal Year Ending	Amount
December 31, 2002	$	10,000,000
December 31, 2003	$	7,000,000

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December 31, 2004	$	8,000,000
December 31, 2005
and each fiscal year
thereafter	$	10,000,000”

(h) Section 8.10 of the Credit Agreement is hereby amended by deleting the table therein in its entirety and substituting therefor the following table:

“Fiscal Quarter	Ratio
March 31, 2003	1.15:1.00
June 30, 2003	1.10:1.00
September 30, 2003	1.15:1.00
December 31, 2003	1.20:1.00
March 31, 2004	2.50:1.00
June 30, 2004	2.50:1.00
September 30, 2004	2.50:1.00
December 31, 2004	2.50:1.00
March 31, 2005	2.75:1.00
June 30, 2005	2.75:1.00
September 30, 2005	2.75:1.00
December 31, 2005	2.75:1.00
March 31, 2006	3.00:1.00
June 30, 2006	3.00:1.00
September 30, 2006	3.00:1.00
December 31, 2006	3.00:1.00
March 31, 2007	3.25:1.00
June 30, 2007	3.25:1.00
September 30, 2007	3.25:1.00
December 31, 2007	3.25:1.00”

(i) Subsection 8.11(b) of the Credit Agreement is hereby amended by deleting the table therein in its entirety and substituting therefor the following table:

“Fiscal Quarter	Ratio
March 31, 2003	4.35:1.00
June 30, 2003	4.30:1.00
September 30, 2003	4.00:1.00
December 31, 2003	3.85:1.00”

(j) Subsection 9.03 of the Credit Agreement is hereby amended by restating in its entirety clause (a) therein as follows:

“ (a) default in the due performance or observance by it of any term, covenant or agreement contained in Sections 7.01(e)(ii), 7.01(f)(x), 7.09 or 8,”

(k) Section 9 of the Credit Agreement is hereby amended by adding the word “or” at the end of subsection 9.10 and adding a new subsection 9.11 thereto as follows:

“9.11 Support Agreement. The Support Agreement or any provision thereof shall cease to be in full force or effect (other than pursuant to the terms thereof), or any

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Obligor (as defined therein) or any Person acting by or on behalf of any Obligor shall deny or disaffirm such Obligor’s obligations under such Support Agreement or any Obligor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Support Agreement.”

(l) Section 10 of the Credit Agreement is hereby amended as follows:

(ii) The proviso in the definition of “Base Rate Margin” is hereby deleted in its entirety and replaced as follows:

“; provided, however, notwithstanding the applicable percentages set forth in the above table with respect to the Term B Loans, for the period from April 1, 2003 through and inclusive of March 31, 2004, such applicable percentages shall be deemed to be 100 basis points above the applicable percentages set forth therein; and provided, further, however, for the period from the Second Amendment Effective Date until the date of receipt by the Administrative Agent of the certificate required to be delivered by the Borrower pursuant to Section 7.01(e) for the fiscal quarter ended March 31, 2003, the Base Rate Margin shall be 5.25% for Term B Loans.”

(iii) The definition therein of “Consolidated Net Senior Indebtedness” is hereby deleted in its entirety.

(iv) The proviso in the definition therein of “Eurocurrency Margin” is hereby deleted in its entirety and replaced as follows:

“; provided, however, notwithstanding the applicable percentages set forth in the above table with respect to the Term B Loans, for the period from April 1, 2003 through and inclusive of March 31, 2004, such applicable percentages shall be deemed to be 100 basis points above the applicable percentages set forth therein; and provided, further, however, for the period from the Second Amendment Effective Date until the date of receipt by the Administrative Agent of the certificate required to be delivered by the Borrower pursuant to Section 7.01(e) for the fiscal quarter ended March 31, 2003, the Eurocurrency Margin shall be 6.00% for Term B Loans.”

(v) The definition therein of “Senior Leverage Ratio” is hereby amended and restated in its entirety as follows:

“ ‘Senior Leverage Ratio’ shall mean, at any date of determination, the ratio of (i) Consolidated Senior Indebtedness on such date to (ii) Consolidated EBITDA for the Test Period most recently ended (taken as one accounting period).”

(vi) New definitions of “Consolidated Senior Indebtedness,” “Foreign Cash Equivalents” and “Support Agreement” are hereby added to Section 10 in appropriate alphabetical order as follows:

“ ‘Consolidated Senior Indebtedness’ shall mean, at any date of determination, an amount equal to the amount of Consolidated Indebtedness at such time less (x) any Indebtedness evidenced by the Senior Subordinated Notes and (y) any Indebtedness evidenced by any Revolving Loans, Swingline Loans and L/C Obligations outstanding to the extent such Obligations shall have been secured by letters of credit as required by the terms of the Support Agreement.”

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“ ‘Foreign Cash Equivalents’ means any investment rated P-1 or A-1 or better by Moody’s or S&P, respectively, (a) in direct obligations issued by, or guaranteed by, the government of a country that is a member of the Office for Economic Co-operation and Development or any agency or instrumentality thereof (“OECD”), provided that, such obligations mature within 180 days of the date of acquisition thereof, and (b) in time deposits or negotiable certificates of deposit or money market securities, payable on demand or maturing within 180 days of the acquisition thereof and issued by any commercial banking institution that is a member of an applicable central bank of a country that is a member of the OECD having surplus of at least the equivalent of $500 million in the aggregate at all times, provided that, with respect to such time deposits, negotiable certificates of deposit and money market securities, the Required Lenders shall have at any time the right, upon notice to the Borrower, to reject any such bank as a bank in which such Foreign Cash Equivalents may be made.”

“ ‘Support Agreement’ shall mean that certain Support Agreement dated as of April 11, 2003 among the Administrative Agent, on behalf of the Revolving Lenders, Charter Oak and the Borrower, as the same may be amended from time to time.”

SECTION 3. SUPPORT AGREEMENT. In the event of any Payment Default, any Support Agreement Default or any Insolvency Event (each as defined in the Support Agreement), the Administrative Agent shall be entitled to draw on any letters of credit issued pursuant to the Support Agreement and shall apply the proceeds therefrom solely to reduce outstanding Revolving Loans, Swingline Loans and L/C Obligations in accordance with the terms thereof.

SECTION 4. AMENDMENT FEE. (a) Borrower agrees to pay a fee to the Administrative Agent on or prior to the Second Amendment Effective Date on behalf of each Lender which has executed and delivered this Agreement on or prior to 5:00 p.m. C.S.T. on April 11, 2003 equal to 0.25% times the sum of the Total Revolving Loan Commitment and the outstanding Term B Loan of such Lender as in effect under the Credit Agreement on the Second Amendment Effective Date.

(b) Borrower also agrees to pay all reasonable costs and expenses of the Administrative Agent in connection with the negotiation, preparation, printing, typing, reproduction, execution and delivery of this Agreement and all other documents furnished pursuant hereto or in connection herewith, including without limitation, the reasonable fees and disbursements of Winston & Strawn, special counsel to the Administrative Agent, as well as the reasonable fees and disbursements of counsel, independent public accountants and other outside experts retained by the Administrative Agent in connection with the administration of this Agreement.

SECTION 5. CHANGES IN INTEREST RATES AND FEES. Borrower, the Lenders and the Administrative Agent acknowledge and agree that any increases in any interest rates or fees resulting from the effectiveness of this Agreement shall be effective as of the Second Amendment Effective Date.

SECTION 6. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT. This Agreement shall become effective upon the date (the “Second Amendment Effective Date”) each of the following conditions have been satisfied:

(a) Second Amendment. Borrower, the Administrative Agent and the Required Lenders shall have executed and delivered this Agreement.

(b) No Defaults. No Default or Event of Default under the Credit Agreement (as amended hereby) shall have occurred and be continuing.

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(c) Representations and Warranties. The representations and warranties of Borrower contained in this Agreement, the Credit Agreement (as amended hereby) and the other Credit Documents shall be true and correct in all material respects as of the Second Amendment Effective Date, with the same effect as though made on such date, except to the extent that any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty shall be true and correct in all material respects as of such earlier date.

(d) Payment of Amendment Fee. Borrower shall have paid in full to the Administrative Agent, on behalf of each Lender, the fees set forth in Section 3 hereof and any other separately agreed upon fees.

(e) Support Agreement; Subordination and Intercreditor Agreement. Borrower, the Administrative Agent and Charter Oak shall have executed and delivered a Support Agreement and a Subordination and Intercreditor Agreement, each in form and substance satisfactory to the Administrative Agent.

(f) Perfection Certificate. Borrower shall have executed and delivered a duly completed perfection certificate in form and substance reasonably satisfactory to the Administrative Agent.

(g) Reaffirmation of Guaranty. Each Subsidiary Guarantor shall have executed and delivered a Reaffirmation of Guaranty in the form attached as Exhibit A hereto.

(h) Other. Such other documents, instruments and certificates as the Administrative Agent or any Lender may reasonably request.

SECTION 7. REPRESENTATIONS AND WARRANTIES.

(a) Borrower represents and warrants (i) that it has full corporate power and authority to enter into this Agreement and perform its obligations hereunder in accordance with the provisions hereof, (ii) that this Agreement has been duly authorized, executed and delivered by Borrower and (iii) that this Agreement constitutes the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting creditors’ rights and by equitable principles.

(b) Borrower represents and warrants that the following statements are true and correct, in each case after giving effect to this Agreement:

(i) The representations and warranties contained in the Credit Agreement and each of the other Credit Documents are and will be true and correct in all material respects on and as of the Second Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties expressly relate to an earlier date, in which case they were true and correct in all material respects on and as of such earlier date.

(ii) No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this Agreement that would constitute an Event of Default or a Default.

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(iii) The execution, delivery and performance of this Agreement by Borrower do not and will not violate any provision of the certificate of incorporation or by-laws, any applicable law, statute, rule, regulation, order, writ, injunction or decree of any court or Governmental Authority having jurisdiction over it or any contractual provision to which it is a party or to which it or any of its property is subject.

(iv) No material order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any foreign or domestic governmental or public body or authority, or any subdivision thereof, is required to authorize or is required in connection with its execution, delivery and performance of this Agreement and all agreements, documents and instruments executed and delivered pursuant to this Agreement.

SECTION 8. REFERENCES TO AND EFFECT ON THE CREDIT AGREEMENT.

(a) On and after the Second Amendment Effective Date each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import, and each reference to the Credit Agreement in the Credit Documents and all other documents (the “Ancillary Documents”) delivered in connection with the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby.

(b) Except as specifically amended above, the Credit Agreement, the Credit Documents and all other Ancillary Documents shall remain in full force and effect and are hereby ratified and confirmed.

(c) The execution, delivery and effectiveness of this Agreement shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders or the Administrative Agent under the Credit Agreement, the Credit Documents or the Ancillary Documents.

SECTION 9. EXECUTION IN COUNTERPARTS. This Agreement may be executed in counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE INTERNAL CONFLICTS OF LAWS PROVISIONS THEREOF.

SECTION 11. HEADINGS. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purposes.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the date above first written.

GEO SPECIALTY CHEMICALS, INC.

By:

Name:

Tilte:

DEUTSCHE BANK TRUST COMPANY

AMERICAS (F/K/A BANKERS TRUST

COMPANY), individually and as

Administrative Agent

By:

Name:

Tilte:

US BANK NATIONAL ASSOCIATION,

individually and as Documentation Agent

By:

Name:

Tilte:

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EXHIBIT A

REAFFIRMATION OF GUARANTY

The undersigned acknowledges receipt of the Amended and Restated Credit Agreement dated as of May 31, 2001, as amended by the First Amendment to Credit Agreement dated as of May 14, 2002 and the Second Amendment to Credit Agreement dated as of April     , 2003 (as so amended, the “Credit Agreement”), by and among GEO Specialty Chemicals, Inc. (“Borrower”), certain financial institutions party thereto, Deutsche Bank Trust Company Americas f/k/a Bankers Trust Company, in its capacity as administrative agent, Salomon Smith Barney Inc., in its capacity as syndication agent and US Bank National Association, in its capacity as documentation agent and the undersigned consents to the Credit Agreement (as so amended) and each of the amendments, referenced therein, and hereby reaffirms its obligations under the Subsidiary Guaranty (as such term is defined in the Credit Agreement) executed by the undersigned.

Dated as of April     , 2003

GEO SPECIALTY CHEMICALS LIMITED

By: GEO SPECIALTY CHEMICALS, INC.,

its Sole Member

By:

Name:

Title:

EX-10.17

Exhibit 10.17

SUPPORT AGREEMENT

THIS SUPPORT AGREEMENT (this “Agreement”) is made as of April 14, 2003, by Charter Oak Partners, a Connecticut partnership, and Charter Oak Capital Partners, L.P., a Delaware limited partnership (individually, an “Obligor” and collectively, the “Obligors”), for the benefit of the Revolving Lenders (individually a “Revolving Lender” and collectively, the “Revolving Lenders”) party to the Credit Agreement (as defined below) and Deutsche Bank Trust Company Americas f/k/a Bankers Trust Company, as administrative agent for the Revolving Lenders (the “Agent”). Capitalized terms used herein without definitions shall have the meanings given to them in the Credit Agreement.

RECITALS

WHEREAS, the Revolving Lenders have provided revolving credit facilities to GEO Specialty Chemicals, Inc., an Ohio corporation (the “Borrower”), pursuant to that certain Amended and Restated Credit Agreement dated as of May 31, 2001 (as amended, restated or supplemented from time to time including by the Amendment described below, the “Credit Agreement”).

WHEREAS, the Obligors are the legal and beneficial owners of substantially all of the issued and outstanding capital stock of the Borrower.

WHEREAS, the Borrower has requested that the Agent and the Revolving Lenders enter into an amendment to the Credit Agreement of even date herewith (the “Amendment”).

WHEREAS, as a condition to the Agent and the Revolving Lenders entering into the Amendment, each Obligor has agreed to enter into this Agreement and to deliver letters of credit to the Agent as required herein.

AGREEMENT

NOW, THEREFORE, in consideration of the premises, and to induce the Agent and the Revolving Lenders to enter into the Amendment, the Obligors jointly and severally agree as follows:

1. Each Obligor hereby acknowledges and agrees that it will benefit from the Agent’s and the Revolving Lenders’ entering into the Amendment and the Revolving Lenders’ continued extension of revolving credit facilities to the Borrower under the Credit Agreement, and that such benefit is sufficient consideration for it to enter into this Agreement.

2. The following terms used in this Agreement shall have the meanings set forth below:

“Aggregate Revolving Credit Outstandings” means, at any time, the sum of the aggregate principal amount of all Revolving Loans and Swingline Loans outstanding at such time plus the L/C Obligations then outstanding at such time.

“Avoided Payment” has the meaning given such term in Section 5 of this Agreement.

“Charter Oak Letter of Credit” means one or more irrevocable letters of credit, issued by a bank acceptable to the Agent, for the account of either Obligor and for the benefit of the Agent on behalf of the Revolving Lenders, in form and substance satisfactory to the Agent in its sole and unlimited discretion and delivered to the Agent pursuant to Section 3 of this Agreement.

“Credit Support Obligations” means the obligations of each Obligor under Section 3 of this Agreement.

“Insolvency Event” means the occurrence of an event described in Section 9.05 of the Credit Agreement.

“Maximum Support Amount” means $10,000,000.

“Payment Default” means the occurrence of an event described in Section 9.01 of the Credit Agreement.

“Required Revolving Lenders” shall mean Non-Defaulting Lenders whose Revolving Loan Commitments (or, if after the termination thereof, outstanding Revolving Loans and Adjusted RC Percentage of outstanding Swingline Loans and L/C Obligations then outstanding) constitute greater than 50% of the Total Revolving Commitment less the aggregate Revolving Commitments of Defaulting Lenders (or, if after the Total Revolving Commitment has been terminated, the sum of the total outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate Revolving Percentage of all Non-Defaulting Lenders of the total outstanding Swingline Loans and L/C Obligations then outstanding at such time).

“Support Agreement Default” means the occurrence of an event described in Section 9.11 of the Credit Agreement.

“Supported Obligations” shall mean the aggregate amount by which the Aggregate Revolving Credit Outstandings would exceed $5,000,000 after giving effect to any Borrowing or the issuance of any Letter of Credit pursuant to the Credit Agreement.

3. (a) The Obligors hereby jointly and severally agree to deliver to the Agent a Charter Oak Letter of Credit on or prior to any date upon which the Borrower requests a Borrowing or the issuance of a Letter of Credit which, when aggregated with the Aggregate Revolving Credit Outstandings, shall exceed $5,000,000. Such Charter Oak Letters of Credit shall be in increments of not less than $1,000,000 and shall at all times be in an aggregate face amount equal to the Supported Obligations; provided, however, notwithstanding any other provision in this Agreement, the aggregate amount of all (x) drawings made by the Agent under Charter Oak Letters of Credit and (y) the undrawn amount of outstanding Charter Oak Letters of Credit delivered pursuant to this Section 3 shall not be required to exceed the Maximum Support Amount.

(b) At any time that the Supported Obligations shall have been reduced such that the aggregate face amount of all Charter Oak Letters of Credit then in effect shall exceed the Supported Obligations, the Obligors may, at their option, cancel the Charter Oak Letters of Credit in an amount sufficient to eliminate such excess and, to the extent necessary, deliver to the Agent in substitution therefor, another Charter Oak Letter of Credit dated the date of such cancellation in an increment of not less than $1,000,000 and for an amount equal to the amount to which the Supported Obligations shall have been reduced. Upon the request of the Obligors to the extent required to effectuate the cancellation permitted by the terms hereof and concurrently with the delivery by the Obligors of a substitute Charter Oak Letter of Credit if required pursuant to the terms hereof, the Agent agrees to surrender such Charter Oak Letters of Credit and, if required by the issuer, provide written confirmation of its consent to such cancellation.

(c) Without limiting the Agent’s absolute discretion to impose additional requirements, (i) any Charter Oak Letter of Credit delivered to the Agent pursuant to subsection (a) above must have an expiration date no earlier than the earlier of (A) one year from the date of issuance and (B)

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September 30, 2005 and (ii) the Agent must be able to draw up to the full undrawn amount of any Charter Oak Letter of Credit (A) immediately upon the occurrence and continuance of any Payment Default, any Insolvency Event or any Support Agreement Default in an amount (when aggregated with drawings under the other Charter Oak Letters of Credit then in effect) not to exceed the Supported Obligations then outstanding and (B) if such Charter Oak Letter of Credit is scheduled to expire within thirty (30) days and no extension or replacement satisfactory to the Agent has been provided unless at such time the Obligors are not required to provide such Charter Oak Letter of Credit pursuant to Section 3(a). At any time after the occurrence and during the continuation of any drawing conditions set forth in the applicable Charter Oak Letter of Credit, the Agent may, subject to clause (A) above, draw up to the entire undrawn amount of such Charter Oak Letter of Credit and apply the proceeds of such draw as set forth in Section 4.

Notwithstanding any other provision in this Agreement, to the extent that the Borrower prepays Aggregate Revolving Credit Outstandings in an amount sufficient to reduce the amount of Aggregate Revolving Credit Outstandings to not more than $5,000,000, any Charter Oak Letters of Credit then in effect shall be required to be in place for a period of not less than ninety (90) days after the date of such prepayment. On the 91st day following such prepayment, the Agent agrees to surrender such Charter Oak Letters of Credit for cancellation and, if required by the issuer, provide written confirmation of its consent to such cancellation.

4. The Agent shall apply the proceeds of any draw against a Charter Oak Letter of Credit to reduce Aggregate Revolving Credit Outstandings to $5,000,000. The Obligors agree that this Agreement represents a direct obligation of the Obligors to the Agent for the benefit of the Revolving Lenders and no other Person shall have any rights in the proceeds of any Charter Oak Letter of Credit.

5. In the event that any Person acting as custodian, trustee, receiver or in any similar capacity seeks to recover any payment made by the Borrower to the Revolving Lenders or the Agent on the grounds that it represents a preferential transfer or is otherwise avoidable in connection with the occurrence of an Insolvency Event, the Obligors agree that the Agent shall have the sole discretion to determine whether to disgorge to such Person all or any portion of the payments sought to be recovered (any such disgorged amount shall be referred to herein as an “Avoided Payment”). To the extent, for any reason, a Charter Oak Letter of Credit does not exist for any Avoided Payment which constitutes a Supported Obligation, the Obligors agree to provide a Charter Oak Letter of Credit in the amount of such Avoided Payment.

6. Each Obligor and the Borrower acknowledge and agree that the Credit Support Obligations are not conditioned upon the performance of any obligations, material or otherwise, by the Borrower, and that there are no obligations on the part of Borrower the failure of which to perform would excuse such Credit Support Obligations. The Credit Support Obligations shall be enforceable against each Obligor in accordance with their terms notwithstanding any bankruptcy or insolvency of the Borrower or any Subsidiary. To the extent required by the terms of this Agreement, each Obligor agrees to provide the Credit Support Obligations in full to the extent provided herein: (a) without deduction by reason of any setoff, defense (other than payment) or counterclaim of the Borrower; (b) without requiring presentment, protest or notice of nonpayment or notice of default to either Obligor, to the Borrower or to any other Person; (c) without demand for payment or proof of such demand or filing of claims with a court in the event of receivership, bankruptcy or reorganization of the Borrower; (d) without requiring Agent or the Revolving Lenders to resort first to the Borrower or to any other guarantee or any collateral which the Agent or the Revolving Lenders may hold; (e) without requiring notice of acceptance hereof or assent hereto by the Agent or the Revolving Lenders; and (f) without requiring notice that any of the Credit Support Obligations has been incurred, extended or continued or of the reliance by the Agent or Revolving Lenders upon this Agreement; all of the foregoing which each Obligor hereby waives.

7. The liability of each Obligor hereunder is exclusive and independent of any security for or other guaranty of the Aggregate Revolving Credit Obligations whether executed by such Obligor, any other Obligor, any other guarantor or by any other party, and the liability of each Obligor

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hereunder shall not be affected or impaired by (a) any direction as to application of payment by the Borrower or by any other party; (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Aggregate Revolving Credit Obligations; (c) any payment on or in reduction of any such other guaranty or undertaking; (d) any dissolution, termination or increase, decrease or change in personnel by the Borrower; (e) any payment made to any Revolving Lender on the Aggregate Revolving Credit Obligations which any Revolving Lender repays the Borrower or trustee pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Obligor waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding; (f) any action or inaction by the Revolving Lenders; or (g) any invalidity, irregularity or unenforceability of all or part of the Aggregate Revolving Credit Obligations or of any security therefor. The obligations of the Obligors hereunder shall be unconditional notwithstanding any waiver, modification or amendment of the Credit Agreement pursuant to the terms thereof.

8. The obligations of each Obligor hereunder are independent of the obligations of any other Obligor, any other guarantor or the Borrower, and a separate action or actions may be brought and prosecuted against each Obligor whether or not action is brought against any other Obligor, any other guarantor or the Borrower and whether or not any other Obligor, any other guarantor of the Borrower or the Borrower be joined in any such action or actions. Each Obligor waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by the Borrower or other circumstance which operates to toll any statute of limitations as to the Borrower shall operate to toll the statute of limitations as to each Obligor.

9. The Obligors acknowledge that the reimbursement obligations of the Borrower in connection with this Agreement now or hereafter owing to any Obligor are subordinated to the indebtedness of the Borrower to the Lenders pursuant to that certain Intercreditor and Subordination Agreement dated as of the date hereof among the Borrower, the Obligors and the Agent on behalf of the Lenders substantially in the form of Exhibit A hereto. Without limiting the generality of the foregoing, each Obligor hereby agrees with the Agent on behalf of the Revolving Lenders that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Agreement (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Obligations have been irrevocably paid in full in cash.

10. Each Obligor represents and warrants to the Agent and the Revolving Lenders that (a) such Obligor is validly existing and in good standing under the laws of its state of formation and is duly authorized to execute and deliver, and to perform its obligations under, this Agreement; (b) the obligations of such Obligor hereunder do not and will not (i) require any consent or approval of any governmental agency or authority (other than any consent or approval which has been obtained and is in full force and effect) or (ii) conflict with any provision of law, the organizational documents of such Obligor or any agreement, indenture, instrument or other document, or any judgment, order or decree, which is binding upon such Obligor or any of its properties; and (c) this Agreement constitutes a legal, valid and binding obligation of such Obligor, enforceable against such Obligor in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.

11. This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assigns of the parties hereto. Neither Obligor shall assign any of its obligations hereunder without the prior written consent of the Agent and the Required Revolving Lenders.

12. The validity, construction and enforceability of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to conflict of laws principles thereof, but giving effect to federal laws of the United States applicable to national banks.

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13. This Agreement is not, and shall not constitute, a guarantee by the Obligors of the payment of any indebtedness, liability or obligation of any kind of the Borrower. Except as expressly provided herein, the Obligors will not have any obligation or liability in any respect as a result of any Obligations of the Borrower.

14. This Agreement does not confer on any person or entity any rights as a third-party beneficiary.

15. This Agreement shall terminate, and the Agent shall release the Obligors from their respective obligations under this Agreement, on the earlier of (a) September 30, 2005 and (b) the date upon which, in conjunction with any Borrowing or request for Letter of Credit, the Borrower shall have provided the Agent with a certificate of an Authorized Officer of the Borrower, in form and substance satisfactory to the Administrative Agent, demonstrating that the Senior Leverage Ratio of the Borrower is less than 2.5 to 1.0 for each of the Test Periods ending with the two consecutive fiscal quarters immediately preceding such request. Each Obligor agrees that if at any time all or any part of any payment theretofore applied by the Agent or any Revolving Lender to any of the Supported Obligations is or must be rescinded or returned by the Agent or such Revolving Lender for any reason whatsoever (including the insolvency, bankruptcy or reorganization of the Borrower), such Supported Obligations shall, for the purposes of this Agreement, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence, notwithstanding such application by the Agent or such Revolving Lender, and this Agreement shall continue to be effective or be reinstated, as the case may be, as to such Supported Obligations, all as though such application by the Agent or such Revolving Lender had not been made.

16. This Agreement is irrevocable, and neither Obligor may cancel, terminate, amend or otherwise modify its obligations under this Agreement without the written consent of the Agent and the Required Revolving Lenders. This document constitutes a Credit Document as such term is defined in the Credit Agreement.

5

IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written.

CHARTER OAK PARTNERS

By: Fine Partners, L.P., Managing Partner

By:

Name:

Title:

CHARTER OAK CAPITAL PARTNERS, L.P.

By: North Fairfield, L.L.C., General Partner

By:

Name:

Title:

Accepted as of the date first above written:

DEUTSCHE BANK TRUST COMPANY AMERICAS

f/k/a BANKERS TRUST COMPANY, as Agent

By:

Name:

Title:

GEO SPECIALTY CHEMICALS, INC.

By:

Name:

Title:

6

EXHIBIT A

FORM OF INTERCREDITOR AND SUBORDINATION AGREEMENT

See attached.

7

EX-10.18

Exhibit 10.18

THIS REIMBURSEMENT AGREEMENT IS SUBJECT TO THE TERMS OF THE SUBORDINATION AGREEMENT MORE PARTICULARLY DESCRIBED IN SECTION 1 OF THIS REIMBURSEMENT AGREEMENT AND ANY HOLDER HEREOF SHALL TAKE POSSESSION HEREOF WITH NOTICE OF THE SUBORDINATION AGREEMENT AND SUBJECT TO ITS TERMS.

REIMBURSEMENT AGREEMENT

This Reimbursement Agreement (this “Agreement”), dated as of April             , 2003, is made by GEO Specialty Chemicals, Inc., (the “Company”) in favor of Charter Oak Capital Partners, L.P. (“COCP”) and Charter Oak Partners (“COP” and together with COCP, “Charter Oak”).

WHEREAS, the Company, to secure certain of the Company’s obligations to the Revolving Lenders pursuant to the Amended and Restated Credit Agreement, dated as of May 31, 2001, among the Company, Deutsche Bank Trust Company Americas f/k/a/ Bankers Trust Company, in its capacity as administrative agent (the “Agent”), U.S. Bank National Association in its capacity as documentation agent and certain financial institutions from time to time party thereto (as amended to date and, as it may be further amended, restated or otherwise modified, the “Credit Agreement”), has requested Charter Oak to enter into a Support Agreement dated as of the date hereof (said agreement as it may be amended, restated or otherwise modified from time to time, the “Support Agreement”);

WHEREAS, pursuant to the Support Agreement, Charter Oak may be required to obtain one or more irrevocable letters of credit (“Letters of Credit” and each a “Letter of Credit”) for the account of Charter Oak in favor of the Agent for the benefit of the Revolving Lenders to secure the obligations of the Company to the Revolving Lenders with respect to Revolving Loans in excess of $5,000,000 to a maximum of $10,000,000, as more fully described in the Support Agreement.

NOW, THEREFORE, in consideration of the premises and to induce Charter Oak to enter into the Support Agreement and obtain Letters of Credit, the Company and Charter Oak hereby agree as follows, intending to be legally bound hereby:

SECTION 1. Definitions.

(a) Capitalized terms used herein but not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement.

(b) In addition to the terms heretofore defined, the following terms shall have the meaning provided below.

“Drawing” shall mean a draw made by the Agent under any Letter of Credit as permitted by the terms of the Support Agreement.

“Event of Default” shall mean the occurrence of any of the events specified in Section 7 hereof.

“Issuing Bank” means any financial institution that issues a Letter of Credit and, initially, means JP Morgan Chase Bank, New York.

“Letters of Credit” means one or more letters of credit issued by an Issuing Bank for the account of Charter Oak as required by the Support Agreement.

“Person” means an individual, corporation, partnership, joint venture, limited liability company, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

“Prime Rate” means that rate of interest publicly announced, from time to time, in the Wall Street Journal.

“Subordination Agreement” means the Subordination Agreement, dated as of the date hereof, executed and delivered by Charter Oak in favor of the Agent, as such agreement may be amended, restated or otherwise modified from time to time in accordance with the terms thereof.

The terms “hereof”, “hereby”, “hereto”, “hereunder” and similar terms mean this Agreement, and the term “heretofore” means before, and the term “hereafter” means after, the effective date hereof.

SECTION 2. Agreement of Charter Oak. Subject to the terms and conditions of this Agreement, Charter Oak agrees to have issued one or more Letters of Credit in favor of the Agent, for the benefit of the Revolving Lenders, in such aggregate amounts as may be specified in the Support Agreement.

SECTION 3. Reimbursement Obligation.

(a) In the event of any Drawing by the Agent under any Letter of Credit, the Company shall pay to Charter Oak an amount equal to the amount of such Drawing as and when permitted by the terms of the Subordination Agreement.

(b) The Company hereby agrees to pay to Charter Oak:

(i) interest on any and all unreimbursed Drawings from the date of each such Drawing until payment in full, such interest at a rate per annum equal to the Prime Rate to accrue but not be paid until permitted pursuant to the terms of the Subordination Agreement;

(ii) on demand, any and all reasonable expenses, to the extent permitted by law, incurred by Charter Oak in enforcing their rights under this Agreement.

(c) All payments by the Company to Charter Oak hereunder shall be made in lawful currency of the United States and in immediately available funds at Charter Oak’s office at 10 Wright Street, Building B, Westport, Connecticut 06880.

2

(d) Notwithstanding the foregoing, no payment of any Drawing, interest thereon or any other amounts due hereunder may be made unless such payment is permitted under the terms of the Subordination Agreement.

SECTION 4. Obligations Absolute. The obligations of the Company under this Agreement shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement and the Subordination Agreement, under all circumstances whatsoever, including without limitation the following circumstances:

(a) any lack of validity or enforceability of this Agreement or any of the Credit Documents or any other document executed in connection with this Agreement or the Credit Documents;

(b) any amendment or waiver of or any consent to departure from all or any of the Credit Documents in the manner provided for or permitted in the Credit Documents;

(c) the existence of any claim, set-off, defense or other rights which the Company or any other Person may have at any time against the Agent, the Revolving Lenders, Charter Oak, or any successor, any beneficiary or any transferee of any Letter of Credit or any other Person, whether in connection with this Agreement or the Credit Documents or any unrelated transaction;

(d) any statement or representation contained in any draft or certificate presented to an Issuing Bank, in connection with Charter Oak’s request that such Issuing Bank issue any Letter of Credit, which proves to be untrue or inaccurate in any material respect whatsoever; or

(e) payment by an Issuing Bank under any Letter of Credit against presentation of a demand, sight draft or certificate which does not comply with the terms of such Letter of Credit, provided that such payment shall not have constituted gross negligence or willful misconduct of such Issuing Bank.

SECTION 5. Representations and Warranties. The Company represents and warrants to Charter Oak as follows:

(a) The Company is an Ohio corporation, organized and existing and in good standing under the laws of the State of Ohio and has all requisite power and authority to conduct its businesses, to own its properties and to execute and deliver, and to perform all of its obligations under this Agreement.

(b) The execution, delivery and performance by the Company of this Agreement have been duly authorized by all necessary action and do not and will not (i) require any consent or approval of the Company which has not been obtained, (ii) violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award presently in effect having applicability to the Company or of its organizational documents, including, but not limited to, its articles of incorporation

3

and code of regulations or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which the Company is a party or by which it or its properties may be bound or affected.

(c) No authorization, consent, approval or license of, or filing or registration with, any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or any specifically granted exemption from any of the foregoing which has not been obtained, is or will be necessary to the valid execution, delivery or performance by the Company of this Agreement.

(d) This Agreement is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws in effect from time to time relating to or affecting the enforcement of creditors’ rights.

SECTION 6. Affirmative Covenants. So long as any amount is due and owing to Charter Oak hereunder, the Company will, unless Charter Oak otherwise consents in writing:

(a) Preservation of Existence, Etc. Preserve and maintain its existence and its rights, franchises and privileges under the laws of the State of Ohio.

(b) Compliance with Laws, Etc. Comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, non-compliance with which would materially adversely affect the ability of the Company to perform its obligations hereunder, such compliance to include, without limitation, paying before the same become delinquent all taxes, assessments and governmental charges imposed upon it or upon its property, except to the extent compliance with any of the foregoing is then being contested in good faith and any reserves required by generally accepted accounting principles are being maintained in connection therewith.

(c) Keeping of Books. Keep proper books of record and account, in which full and correct entries shall be made of financial transactions and the assets and business of the Company in accordance with generally accepted accounting principles consistently applied.

(d) Reporting. The Company shall cause its chief financial officer, or in his absence another individual designated by the Company, to give Charter Oak prompt written notice as soon as possible and in any event within five (5) Business Days after the Company learns of the occurrence of an Event of Default (as defined in the Credit Agreement) under the Credit Agreement.

4

SECTION 7. Events of Default. The occurrence of any of the following events shall be an “Event of Default” hereunder:

(a) the Company shall fail to pay when due any amount specified in Section 3 hereof that is permitted by the terms of the Subordination Agreement to be paid and such amount shall remain unpaid for five (5) Business Days after receipt of notice from Charter Oak;

(b) the Company shall fail to perform or observe any other term, covenant or agreement contained herein and any such failure which can be remedied shall remain unremedied for thirty (30) days after written notice thereof shall have been given to the Company by Charter Oak; or

(c) the Company shall: (i) admit in writing its inability to pay its debts generally as they become due; (ii) have an order for relief entered in any case commenced by it under the federal bankruptcy laws, as now or hereafter in effect; (iii) commence a proceeding under any federal or state bankruptcy, insolvency, reorganization or similar law, or have such a proceeding commenced against it and either have an order of insolvency or reorganization entered against it or have the proceeding remain undismissed and unstayed for ninety (90) days; (iv) make an assignment for the benefit of creditors; (v) have a receiver or trustee appointed for it or for the whole or any substantial part of its property; or (vi) suffer a material adverse change in the financial condition of the Company. The declaration of an Event of Default under this subsection and the exercise of remedies upon any such declaration shall be subject to any applicable limitations of federal bankruptcy law affecting or precluding such declaration of exercise during the pendency of or immediately following any bankruptcy, liquidation, or reorganization proceedings.

Upon the occurrence of an Event of Default hereunder, subject to the terms of the Subordination Agreement, Charter Oak may, in its sole discretion, but shall not be obligated to (i) by notice to the Company, declare a default under this Agreement and (ii) pursue any other remedy permitted to Charter Oak under this Agreement or otherwise.

SECTION 8. Amendments, Etc. No amendment, waiver, modification or release of any provision of this Agreement nor consent to any departure by the Company therefrom shall in any event be effective, irrespective of any course of dealing with any of the parties hereto, unless the same shall be in writing and signed by Charter Oak, and then such amendment, waiver, modification or release shall be effective only in the specific instance and for the specific purpose for which given. So long as any Obligations (as defined in the Credit Agreement) owing by the Company under the Credit Agreement remain outstanding, this Agreement shall not be amended or modified without the consent of the Agent, which consent shall not be unreasonably withheld or delayed. The Agent shall be a third party beneficiary of this Agreement solely for the purpose of enforcing this Section.

SECTION 9. Addresses for Notices. All notices and other communications provided for hereunder shall be in writing and, if to the Company, mailed or delivered to it registered or certified mail, return receipt requested, addressed to it at 401 South Earl Avenue, Suite 3A,

5

Lafayette, Indiana 47905, Attention: CFO, or if to Charter Oak, mailed or delivered to it, addressed to it at 10 Wright Street, Building B, Westport, Connecticut, 06880, Attention: Robert Sarrazin, or such other address as shall be designated by one party in a written notice to the other party. All such notices and other communications may also be hand delivered.

SECTION 10. No Waiver; Remedies. No failure on the part of Charter Oak or the Company to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION 11. Indemnification. To the extent permitted by law and subject to the Subordination Agreement, the Company hereby indemnifies and holds harmless Charter Oak from and against any and all claims, damages, losses, liabilities, reasonable costs and expenses whatsoever (including reasonable attorneys’ fees) which Charter Oak may incur (or which may be claimed against Charter Oak by any Person whatsoever) by reason of or in connection with the execution and delivery or transfer of, or payment or failure to pay under, this Agreement, any Letter of Credit or the Support Agreement.

SECTION 12. Continuing Obligation. This Agreement is a continuing obligation and shall (a) be binding upon Charter Oak and the Company and their respective successors and assigns, and (b) inure to the benefit of and be enforceable by Charter Oak and the Company and their respective successors and, to the extent not limited herein, their assigns; provided, however, that the Company may not assign all or any part of this Agreement without the prior written consent of Charter Oak.

SECTION 13. Liability of the Bank. The Company assumes all risks of the acts or omissions of the Agent and/or the Revolving Lenders and any transferee of any Letter of Credit with respect to its or their use of any Letter of Credit or proceeds of any Drawing thereunder.

SECTION 14. Costs, Expenses and Taxes. The Company agrees to pay on demand, subject to the terms of the Subordination Agreement, all out-of-pocket costs and expenses, including but not limited to, the reasonable fees and expenses of counsel in connection with the enforcement of this Agreement and such other documents which may be delivered in connection with this Agreement. In addition, the Company shall pay any and all taxes and fees payable or determined to be payable, to governmental third parties in connection with the execution, delivery, filing and recording of this Agreement and such other documents which may be delivered in connection with this Agreement and agrees to save Charter Oak harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees.

SECTION 15. Governing Law. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of Ohio.

SECTION 16. Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

6

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written.

GEO SPECIALTY CHEMICALS, INC.
By:
	Name:
	Title:

CHARTER OAK CAPITAL PARTNERS, L.P. By: North Fairfield, L.L.C., General Partner
By:
	Name:
	Title:

CHARTER OAK PARTNERS By: Fine Partners, L.P., Managing Partner
By:
	Name:
	Title:

[Signature page of Reimbursement Agreement]

7

EX-12.1

Exhibit 12.1

	Years Ended December 31,
	1998		1999		2000		2001		2002
Net income (loss) before taxes	1,615		2,102		8,568		1,445		(6,873	)
Fixed charges	8,439		13,376		14,095		16,221		18,148
Earnings	10,054		15,478		22,633		17,666		11,275
Fixed charges	8,439		13,376		14,095		16,221		18,148
Fixed charge coverage	1.2	x	1.2	x	1.6	x	1.1	x	—

For purposes of calculating the ratio of earnings to fixed charges, earnings represent income (loss) before income taxes plus fixed charges. Fixed charges consist of net interest expense and the portion of operating rental expense which management believes is representative of the interest component of rent expense, less amounts that represent amortization of deferred financing fees and debt issuance costs. The deficiency in the amount of earnings compared to fixed charges was $6,873 for the year ended December 31, 2002.

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF GEO SPECIALTY CHEMICALS, INC.

Name of Subsidiary	Jurisdiction of Incorporation
GEO Specialty Chemicals Limited	Ohio
GEO Holdings (Europe) SARL	France
GEO Gallium S.A.	France
Ingal Stade GmbH	Germany
GEO Gallium Australia Pty Limited	Australia

EX-24.1

Exhibit 24.1

POWER OF ATTORNEY

Each person whose name is signed hereto has made, constituted and appointed, and does hereby make, constitute and appoint, WILLIAM P. ECKMAN as his true and lawful attorney, for him and in his name, place and stead to affix, as attorney-in-fact, his signature as a director or officer or both, as the case may be, of GEO Specialty Chemicals, Inc., an Ohio corporation (“GEO”), to GEO’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002 and any and all amendments or modifications to such annual report to be filed with the Securities and Exchange Commission, giving and granting unto such attorney-in-fact full power and authority to do and perform every act and thing whatsoever necessary to be done in connection with any such filing, as fully as he might or could do if personally present, hereby ratifying and confirming all that such attorney-in-fact shall lawfully do or cause to be done by virtue hereof.

In witness whereof, this Power of Attorney, which may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same instrument, has been signed as of April 15, 2003.

/s/    GEORGE P. AHEARN	President and Chief Executive Officer; Principal Executive Officer; Director
George P. Ahearn
/s/    WILLIAM P. ECKMAN	Executive Vice President; Chief Financial Officer; Principal Financial and Accounting Officer; Director
William P. Eckman
/s/    ANTHONY J. DOWD	Director
Anthony J. Dowd
/s/    GEORGE W. RAPP, JR.	Director
George W. Rapp, Jr.
/s/    A. ELLIOTT ARCHER	Director
A. Elliott Archer

EX-99.1

Exhibit 99.1

GEO SPECIALTY CHEMICALS, INC.

AND SUBSIDIARIES

Cleveland, Ohio

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

Cleveland, Ohio

CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

CONTENTS

REPORT OF INDEPENDENT AUDITORS	1
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS	2
CONSOLIDATED STATEMENTS OF OPERATIONS	3
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY	4
CONSOLIDATED STATEMENTS OF CASH FLOWS	5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	7

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders

GEO Specialty Chemicals, Inc. and Subsidiaries

Cleveland, Ohio

We have audited the accompanying consolidated balance sheets of GEO Specialty Chemicals, Inc. and Subsidiaries as of December 31, 2002 and 2001, and the consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2002. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of GEO Specialty Chemicals, Inc. and Subsidiaries as of December 31, 2002 and 2001 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America.

As discussed in Notes 1 and 6, during 2002, the Company adopted new accounting guidance for goodwill.

Crowe Chizek and Company LLC

Oak Brook, Illinois

February 28, 2003 except for

Notes 7 and 8 as to which the date is

April 14, 2003

1.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands except share data)

December 31, 2002 and 2001

	2002			2001
ASSETS
Current assets
Cash and cash equivalents	$	11,420		$	19,782
Trade accounts receivable, net of allowance for doubtful accounts of $242 in 2002 and $556 in 2001		22,136			24,292
Other accounts receivables		608			788
Inventory		26,984			28,921
Prepaid expenses and other current assets		1,794			1,601
Deferred taxes		400			1,401
Total current assets		63,342			76,785
Property, plant, and equipment, net		98,796			108,522
Other assets
Deferred financing costs, net of amortization of $4,190 in 2002 and $2,721 in 2001		7,067			8,209
Intangible assets, net of amortization of $2,847 in 2002 and $2,016 in 2001		4,102			4,933
Goodwill		85,821			85,821
Income tax receivable and other accounts receivable		1,527			92
Deferred taxes		5,163			449
GEO Pinjarra designated assets		5,047			1,649
Other		46			43
		108,773			101,196
	$	270,911		$	286,503
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt	$	975		$	1,050
Accounts payable		13,380			14,127
Other accounts payable		106			112
Income taxes payable		—			2,927
Accrued expenses and other current liabilities		9,404			10,856
Total current liabilities		23,865			29,072
Senior subordinated notes		120,000			120,000
Fair value adjustment		2,930			(4,611	)
Fair value of senior subordinated notes		122,930			115,389
Long-term liabilities
Term B notes		95,550			103,950
Other long-term liabilities		6,148			8,983
Other accounts payable		—			252
Deferred taxes		349			—
Total long-term liabilities		224,977			228,574
Shareholders’ equity
Class A voting common stock, $1 par value, 1,035 shares authorized; 136 shares issued and outstanding at December 31, 2002 and 2001		—			—
Class B nonvoting common stock, $1 par value; 215 shares authorized; 0 shares issued and outstanding at December 31, 2002 and 2001		—			—
Additional paid-in capital		20,901			20,901
Retained earnings		4,892			8,829
Accumulated other comprehensive loss		(3,724	)		(873	)
		22,069			28,857
	$	270,911		$	286,503

See accompanying notes to consolidated financial statements.

2.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

December 31, 2002, 2001, and 2000

(In thousands)

	2002			2001			2000
Net sales	$	164,474		$	185,152		$	188,216
Cost of sales		136,512			142,968			138,952
Gross profit		27,962			42,184			49,264
Selling, general, and administrative expenses		17,137			23,539			24,542
Other (income) expense		(1,290	)		1,899			1,348
Gain on sale of paper chemical business		(859	)		(2,200	)		—
Income before interest and taxes		12,974			18,946			23,374
Net interest expense		19,847			17,501			14,806
Income (loss) before income taxes		(6,873	)		1,445			8,568
Provision (benefit) for income taxes		(2,936	)		(280	)		3,484
Net income (loss)	$	(3,937	)	$	1,725		$	5,084

See accompanying notes to consolidated financial statements.

3.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

December 31, 2002, 2001, and 2000

(In thousands except for share data information)

	Number of Class A Common Shares	Number of Class B Common Shares	Additional Paid-In Capital		Retained Earnings			Other Compre-hensive Income (Loss)			Total			Compre- hensive Income (Loss)
Balance, January 1, 2000	136	—	$	20,901	$	2,020		$	(616	)	$	22,305
Other comprehensive income
Currency translation adjustment	—	—		—		—			(1,203	)		(1,203	)	$	(1,203	)
Net income	—	—		—		5,084			—			5,084			5,084
Total comprehensive income														$	3,881
Balance, December 31, 2000	136	—		20,901		7,104			(1,819	)		26,186
Other comprehensive income
Currency translation adjustment	—	—		—		—			572			572		$	572
Unrealized gain on derivative instruments	—	—		—		—			374			374			374
Net income	—	—		—		1,725			—			1,725			1,725
Total comprehensive income														$	2,671
Balance, December 31, 2001	136	—		20,901		8,829			(873	)		28,857
Other comprehensive loss
Unrealized loss on derivative instruments	—	—		—		—			(2,668	)		(2,668	)	$	(2,668	)
Minimum pension liability	—	—		—		—			(183	)		(183	)		(183	)
Net loss	—	—		—		(3,937	)		—			(3,937	)		(3,937	)
Total comprehensive loss														$	(6,788	)
Balance, December 31, 2002	136	—	$	20,901	$	4,892		$	(3,724	)	$	22,069

See accompanying notes to consolidated financial statements.

4.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

December 31, 2002, 2001, and 2000

(In thousands)

	2002			2001			2000
Cash flows from operating activities
Net income (loss)	$	(3,937	)	$	1,725		$	5,084
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation, depletion, and amortization		15,330			19,859			14,781
Gain on sale of paper chemical business		(859	)		(2,200	)		—
Deferred taxes		(1,884	)		(4,933	)		1,260
Fair value adjustment for derivatives		304			(304	)		—
Change in assets and liabilities net of effects from acquisitions
Accounts receivable—trade		467			3,791			(221	)
Other accounts receivable and income tax receivable		(1,253	)		646			400
Inventories		1,936			(5,612	)		4,507
Prepaid expenses and other assets		(73	)		271			(263	)
Accounts payable and accrued expenses		(4,561	)		2,204			1,442
Other accounts payable and other liabilities		58			322			(1,239	)
Net cash from operating activities		5,528			15,769			25,751
Cash flows from investing activities
Purchases of property, plant, and equipment		(3,357	)		(7,708	)		(9,443	)
Project expenditures related to Pinjarra, Australia capital project		(2,080	)		(1,583	)		—
Acquisition of peroxy chemicals business from Hercules, Inc., net of assumed liabilities		—			(93,495	)		—
Acquisition of Rhodia Pinjarra from Rhodia Chimie, S.A.		(510	)		—			—
Proceeds from sale of paper chemicals business		859			8,500			—
Net cash from investing activities		(5,088	)		(94,286	)		(9,443	)
Cash flows from financing activities
Long-term debt proceeds		—			105,000			7,500
Payments made on line of credit		—			(10,000	)		(20,500	)
Long-term debt repayments		(8,475	)		—			—
Payment of deferred financing costs		(327	)		(4,631	)		—
Net cash from financing activities		(8,802	)		90,369			(13,000	)
Effect of exchange rates changes on cash and cash equivalents		—			—			(74	)
Net change in cash and cash equivalents		(8,362	)		11,852			3,234
Cash and cash equivalents at beginning of year		19,782			7,930			4,696
Cash and cash equivalents at end of year	$	11,420		$	19,782		$	7,930

(Continued)

5.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

December 31, 2002, 2001, and 2000

(In thousands)

	2002			2001			2000
Supplemental disclosures of cash flow information
Cash paid for
Interest	$	16,823		$	16,765		$	14,266
Taxes		3,485			3,831			600
Acquisition of businesses
Fair value of assets acquired	$	1,320		$	93,663		$	—
Cash paid		(510	)		(93,495	)		—
Release of certain obligations due from seller		(810	)		—			—
Liabilities assumed	$	—		$	168		$	—

See accompanying notes to consolidated financial statements.

6.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business: GEO Specialty Chemicals, Inc. (“the Company” or “GEO”) was incorporated in the state of Ohio for the purpose of owning and operating specialty chemical businesses. The Company’s manufacturing process produces a variety of specialty chemical products for use in various major chemical markets. The Company produces more than 300 products. These products are used primarily in the construction, paper, water treating, electronic, automotive, and oil field industries. The Company sells these products to customers located worldwide.

The Company operates in an environment with many financial and operating risks, including, but not limited to, intense competition, fluctuations in cost and supply of raw materials, technological changes, and environmental matters. As discussed in Notes 7 and 8, the Company has a high level of indebtedness, which creates liquidity and debt service risks.

Principles of Consolidation: The accompanying consolidated financial statements include the accounts of GEO and its wholly owned subsidiaries, GEO Specialty Chemicals Ltd., GEO Holdings (Europe) SARL, GEO Gallium S.A., Ingal Stade GmbH, and GEO Pinjarra Pty, Ltd. All significant intercompany balances and transactions have been eliminated.

Revenue Recognition: Revenues are recognized upon transfer of the goods to the customer.

Use of Estimates in the Preparation of Financial Statements: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. Reclamation reserves and mineral reserves are particularly subject to change.

Cash and Cash Equivalents: Cash and cash equivalents include cash, time deposits, and highly liquid investments with original maturities of three months or less.

Accounts Receivable: Accounts receivable is comprised of amounts billed to customers net of an allowance for uncollectible amounts. The allowance for doubtful accounts is estimated by management and is based on specific information about customer accounts, past loss experience, and general economic conditions. An account is charged off by management when deemed uncollectible, although collection efforts may continue.

Inventory: Inventories are stated at the lower of cost or market, with cost being determined on a first-in, first-out (“FIFO”) basis.

(Continued)

7.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

(Continued)

Property and Equipment: Property and equipment are depreciated on a straight-line method. Mineral reserves are depleted on a units-of-production basis. Property and equipment are being depreciated using the following estimated lives:

	Asset Lives in Years
Land improvements	20
Buildings	40
Machinery and equipment	12
Office furniture and fixtures	10
Computer equipment	6
Vehicles	6

Income Taxes: The provision for income taxes is based on income recognized for financial statement purposes and includes the effects of temporary differences between such income and that recognized for tax return purposes. The Company files a United States federal income tax return. Certain subsidiaries that are consolidated for financial reporting purposes are not eligible to be included in the United States federal income tax return, and separate provisions for income taxes have been determined for these entities. The Company accounts for its income taxes based on the amount of taxes due on its tax returns plus deferred taxes computed based on the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, using enacted tax rates.

Deferred Financing Costs: Costs incurred in connection with long-term financing are deferred and amortized over the life of the respective agreements on a straight-line basis.

Intangible Assets: Intangible assets, which consist principally of patents, licenses, and trademarks, are amortized on a straight-line basis over a period of five to seven years. The amortization expense requirement for the next five years is approximately $810 annually.

Goodwill: Goodwill has been amortized on a straight-line basis over 15 years through December 31, 2001. On January 1, 2002, the Company adopted two new accounting standards that relate to goodwill. The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations, which provides that the pooling method may no longer be used for business combinations after June 30, 2001. SFAS No. 141 also requires that in any prior business combination, if an intangible asset was recorded but was reported as goodwill, the carrying amount of the intangible asset should now be separately reported. If an intangible was recorded that does not now meet the requirement

(Continued)

8.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

(Continued)

to be an identified intangible, this amount should be included in goodwill. The FASB also issued SFAS No. 142, Goodwill and Other Intangible Assets, which eliminates the periodic amortization of goodwill from all future and prior business combinations beginning January 1, 2002. Upon adoption, goodwill is to be evaluated for impairment. The impairment test includes valuing the fair value of the reporting entity and comparing its carrying amount, including allocated goodwill, with any excess of purchase price over its new fair value estimate. The useful life of intangible assets acquired before July 1, 2001 is to be reassessed upon adoption of SFAS No. 142. Intangibles with an indefinite useful life must be tested for impairment upon adoption and annually thereafter. As of December 31, 2002, the Company has goodwill of $85,821. The Company adopted SFAS No. 142 on January 1, 2002, which resulted in the cessation of recording goodwill amortization. Goodwill amortization expense for the years ended 2001 and 2000 was approximately $5,450 and $3,820, respectively.

Foreign Currency Translation: Effective in 2001, the Company’s foreign subsidiaries have adopted the US dollar as their functional currency. In 2000, their functional currency was the French franc. During 2000, the assets and liabilities of the foreign subsidiaries were converted at exchange rates in effect at the balance sheet date and revenues and expenses were converted at average rates prevailing during the period. Translation adjustments from the year ended 2000 have been included in accumulated other comprehensive income, a separate component of shareholders’ equity.

Transaction gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved are included in the consolidated statement of operations. Transaction gains (losses) for the years ended December 31, 2002, 2001, and 2000 were $728, $(1,551), and $(1,348), respectively, and are included in other (income) expense on the consolidated statement of operations.

Environmental Expenditures: The Company accrues for environmental expenses resulting from existing conditions that relate to past operations when costs are probable and reasonably estimable.

Reclassifications: Certain prior year amounts have been reclassified to conform to the current year presentation. There is no effect on net income as a result of these reclassifications.

(Continued)

9.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

(Continued)

Financial Instruments: The Company’s financial statements are comprised of cash, trade accounts receivable, other accounts receivable, accounts payable, other accounts payable, other current liabilities, short-term debt, long-term debt, revolving line of credit, and other long-term liabilities. The carrying value of all instruments except long-term debt approximates fair value. The fair value of the Company’s senior subordinated notes as of December 31, 2002 and 2001 was $122,930 and $115,389, respectively. The remaining portion of long-term debt outstanding is floating rate debt, the carrying value of which approximates fair value.

The Company adopted SFAS No. 133, Accounting for Derivatives Instruments and Hedging Activities, on January 1, 2001. Accordingly, all interest rate swaps and foreign currency option agreements are accounted for as hedges of the related liability, firm commitment, or anticipated transaction when designated and effective of such items. The effective portion of the gain or loss on the financial instrument is reported in other comprehensive income (loss), and the ineffective portion is reported in current earnings. The Company formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives used are highly effective in offsetting changes in the cash flows or fair value of the hedged item. If derivative instruments are designated as hedges of fair values, both the change in the fair value of the hedge and the hedged item are included in current earnings. Fair value adjustments related to cash flow hedges are recorded in other comprehensive income, net of tax, and reclassified to earnings when the hedged transaction is reflected in earnings. Ineffective portions of hedges are reflected in earnings as they occur. If it becomes probable that the original hedged forecasted transaction will not occur, the net gain or loss recorded in comprehensive income (loss) shall be immediately reclassified into current earnings. The Company does not use derivative financial instruments for trading or other speculative purposes and does not use leveraged derivative instruments.

Shipping Revenues and Costs: The Company adopted Emerging Issues Task Force (“EITF”) No. 00-10, Accounting for Shipping and Handling Fees and Costs. This guidance requires that all amounts billed to a customer in a sales transaction related to shipping and handling, which represents revenue earned for goods provided, be classified as revenue and that all costs incurred be classified as cost of sales.

New Accounting Pronouncements: In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations. The Company is required to adopt SFAS No. 143 for fiscal years beginning after June 15, 2002. Thus, the Company will need to adopt SFAS No. 143 as of January 1, 2003. SFAS No. 143 requires businesses to recognize a liability for an asset retirement obligation when it is incurred. This liability should be recorded at its fair value, and a corresponding increase in the carrying amount of the related long-term asset should be

(Continued)

10.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 1 – NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

(Continued)

recorded as well. The Company believes that the adoption of SFAS No. 143 on January 1, 2003 will not have a material impact on the Company’s financial position or results of operations.

During 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The standard establishes a single accounting model, based on the framework established in SFAS No. 121 and APB Opinion No. 30, for long-lived assets to be disposed of by sale. It eliminates the practice of valuing discontinued operations at net realizable value and does not allow recognition of future operating losses before they occur. The basic presentation of discontinued operations in the income statement under APB Opinion No. 30 is retained but expanded to include presentation of a component of an entity (which describes operations and cash flows that can clearly be distinguished, both operationally and for financial reporting purposes, from the rest of the entity) rather than a segment of a business. Under this pronouncement, long-lived assets that are to be disposed of other than by sale (abandonment, exchange, distribution in spin-off, etc.) should have their depreciable lives revised in accordance with APB Opinion No. 20, Accounting Changes. An impairment loss should be recognized at the date a long-lived asset is exchanged for a similar productive asset or if the carrying amount of the asset exceeds its fair value. The provision for SFAS No. 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001. The adoption of this statement did not have a material effect on the Company’s financial statements.

NOTE 2 – DISPOSITION OF ASSETS

On April 19, 2001, the Company sold to ONDEO Nalco Company (“Nalco”) certain assets of its paper chemicals business for $8,500 in cash plus the assumption by Nalco of certain liabilities associated with the paper chemicals business. The Company recognized a pre-tax gain of approximately $2,200 on the sale. Annual revenues for the paper chemicals business for the year ended December 31, 2000 were $26,315.

The Asset Purchase Agreement with Nalco provides for the Company to receive additional consideration from Nalco if certain sales volumes are achieved by Nalco on specific products sold during the first two years following the closing. The maximum additional consideration that can be received by the Company over the two-year period is $2,000. As of December 31, 2002, the Company received additional consideration under this provision of the agreement of approximately $859, net of expenses incurred.

In connection with the sale, the Company entered into various supply agreements with Nalco, pursuant to which the Company will produce specific coating products at a cost plus arrangement over a period of five years from the sale date.

(Continued)

11.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 3 – ACQUISITIONS

On May 31, 2001, the Company purchased from Hercules Incorporated (“Hercules”) substantially all of the assets, net of certain assumed liabilities, of Hercules’ Peroxy Chemicals business. The assets acquired include accounts receivable, inventory, buildings, and machinery and equipment. The peroxy business produces various organic peroxide products used in the vulcanization, catalysis, and processing of polymers and elastrometric compounds. The purchase price was $93,495, which includes approximately $1.3 million of costs incurred directly related to the acquisition, allocated as follows:

Current assets	$	10,258
Property, plant, and equipment		21,323
Liabilities assumed		(168	)
Net assets acquired		31,413
Excess of cost over fair value		62,082
Purchase price	$	93,495

The $62,082 intangible asset has been amortized over 15 years through December 31, 2001, at which time amortization ceased upon implementation of SFAS No. 142. The goodwill will then be evaluated for impairment.

On September 8, 1999, the Company purchased from Rhodia Chimie, S.A., the former chemical unit of the French multinational corporation Rhone-Poulenc, all of the outstanding shares of its wholly owned French subsidiary. This subsidiary owns both the French operating assets of the gallium purification business and the outstanding stock of a German corporation that carries on a gallium extraction operation in Stade, Germany. These products are sold to customers worldwide.

In connection with this acquisition, the Company was also granted a three-year option to acquire a currently dormant gallium extraction facility near Pinjarra, Australia for approximately $1,600. In September 2002, the Company executed this option. The exercise price of the option of $1,596 plus engineering and equipment costs of $3,420 incurred to prepare the Pinjarra facility for production have been classified as an investment in the Pinjarra facility and included in other assets on the consolidating balance sheet.

The results from the Hercules and Rhodia Chimie, S.A. acquisitions have been included in the Company’s financial statements since the date of acquisition.

(Continued)

12.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 4 – INVENTORY

Inventory consists of the following components:

	December 31,
	2002		2001
Raw materials	$	7,047	$	8,753
Work in progress		89		59
Finished goods		19,848		20,109
	$	26,984	$	28,921

NOTE 5 – PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consist of the following major classifications:

	2002			2001
Land	$	5,192		$	5,192
Mineral reserves		2,136			2,136
Building and improvements		19,846			19,433
Equipment		120,707			116,379
Construction in progress		2,691			6,686
		150,572			149,826
Accumulated depreciation and depletion		(51,776	)		(41,304	)
	$	98,796		$	108,522

NOTE 6 – GOODWILL

The Company adopted SFAS No. 142, Goodwill and Other Intangible Assets, on January 1, 2002. This statement resulted in the cessation of goodwill amortization. Goodwill will be subject to at least an annual assessment of impairment.

As of December 31, 2002 and 2001, the Company has goodwill of $85.8 million. For the years ended December 31, 2001 and 2000, the Company recognized $5,450 and $3,820, respectively, in amortization expenses relating to goodwill amortization.

(Continued)

13.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 6 – GOODWILL (Continued)

The following adjusts reported net income (loss) to exclude goodwill amortization (net of tax):

	2002			2001		2000
Reported net income (loss)	$	(3,937	)	$	1,725	$	5,084
Add back goodwill amortization (net of tax)		—			3,106		2,177
Adjusted net income (loss)	$	(3,937	)	$	4,831	$	7,261

NOTE 7 – REVOLVING LINE OF CREDIT

At December 31, 2001, the Company had a revolving credit facility that permits borrowings up to $40,000; maturing on June 30, 2005; and bearing interest, at the Company’s option, at a Reserved Adjusted Eurocurrency Rate plus 2.25% to 3.50% or a Base Rate plus 1.25% to 2.50%. Both ranges are dependent on the Company’s leverage ratio. In May 2002, this agreement was amended to reduce the revolving credit facility borrowing from $40,000 to $20,000. The interest margins were also adjusted to Reserved Adjusted Eurocurrency Rate plus 2.25% to 4.50% or a Base Rate plus 1.25% to 3.75% depending on the Company’s leverage ratio. All tangible and intangible assets of the Company secure the Company’s obligations, and the Company must meet certain affirmative and negative covenants, as described more fully in Note 8. At December 31, 2002 and 2001, the Company had no borrowings outstanding under the revolving line of credit.

In April 2003, this agreement was amended to restrict the Company’s borrowing capacity under the revolving credit facility based on the Company’s senior leverage ratio. Depending on the Company’s senior leverage ratio, the Company’s borrowing capacity may be less than $20.0 million. The amendment also requires further additional collateral requirements provided by the majority shareholders. The shareholder collateral has been provided in the form of a support agreement in favor of the senior lenders, that includes a commitment from the shareholders to provide letters of credit or cash collateral in increments of $1.0 million up to a maximum of $10.0 million for the purpose of securing extensions of credit under the revolving credit facility to the extent the extensions of credit exceed $5.0 million.

NOTE 8 – LONG-TERM DEBT

The Company’s long-term debt obligations consist in part of $120,000 Senior Subordinated Notes with a fixed interest rate of 10.125%. The notes are unsecured and subordinated to all existing and future senior debt. The principal balance is due August 1, 2008 with semi-annual interest payments beginning February 1, 1999. The Company may redeem the notes after August 1, 2003 at redemption prices set forth in the agreement.

The credit agreement requires the Company to meet certain affirmative and negative covenants, which include certain restrictions on future indebtedness, capital expenditures, and dividend payments, as well as meeting certain interest-coverage and leverage ratios. At December 31, 2002, the Company was in compliance with these financial covenants.

(Continued)

14.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 8 – LONG-TERM DEBT (Continued)

In conjunction with the acquisition of the Peroxy Chemicals business from Hercules, as discussed in Note 3, the Company entered into a Credit Agreement with Bankers Trust Company, Salomon Smith Barney Inc., and various other financial institutions (“the Lenders”), pursuant to which the Lenders have extended credit facilities (“the Credit Facility”) to the Company, which includes a Term Loan B Facility in the amount of $105,000; maturing on December 31, 2007; and bearing interest, at the Company’s option, at a Reserved Adjusted Eurocurrency Rate plus 3.25% to 4.00% or a Base Rate plus 2.25% to 3.00% depending on the Company’s leverage ratio.

In May 2002, this agreement was amended. The interest rate was amended to bear interest at the Company’s option at a Reserved Adjusted Eurocurrency Rate plus 3.25% to 5.00% or a Base Rate plus 2.25% to 4.25% depending on the Company’s leverage ratio.

In connection with the amendment, the Company was required to make a $7.5 million principal payment on the Term B Loan. The Term B Loan Facility requires annual principal payments of $975 as of June 30, 2002 and 2003. Thereafter, semiannual payments of $4,643 are required beginning June 30, 2004 through December 31, 2007, at which time a balloon payment of the remaining principal balance will be due.

Maturities of long-term debt over the next five years are:

2003	$	975
2004		9,286
2005		9,286
2006		9,286
2007		67,692

All tangible and intangible assets of the Company, including the Company’s ownership interest in its subsidiaries, secure the Company’s obligations under the Credit Facility. The Credit Facility is senior in right of payment to the Company’s outstanding Senior Subordinated Notes. The Credit Facility requires the Company to meet certain affirmative and negative covenants, which include certain restrictions on future indebtedness, capital expenditures, and dividend payments, and to meet certain interest-coverage and leverage ratios. The May 2002 amendment was effective March 31, 2002 and changed certain covenants for the period January 1, 2002 until December 31, 2003.

(Continued)

15.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 8 – LONG-TERM DEBT (Continued)

Also amended was the maximum allowed capital expenditures covenant, which was reduced from $13,000 to $10,000 annually. In addition, restrictions were placed on capital expenditure pertaining to the Company’s Pinjarra project during the 24-month period. At December 31, 2002, the Company was in compliance with these financial covenants.

In April 2003, this agreement was amended. Effective March 31, 2003, the amendment modified certain financial ratio covenants including the interest coverage ratio through December 2007 and the senior leverage ratio through December 2003, at which time the covenant is suspended. The maximum allowed capital expenditures covenant was also reduced for fiscal 2003 and 2004 to $7,000 and $8,000, respectively.

The Term B loan pricing grid was also modified to increase all rates by 100 basis points through March 31, 2004. Also from the effective date of this agreement to the date of receipt of the first quarter 2003 loan compliance certificate the Term B loan Eurocurrency Margin Rate will be 6.00% and the Base Rate Margin will be 5.25%.

NOTE 9 – INTEREST RATE SWAP

On November 15, 2001, the Company entered into two interest rate derivative contracts with Citibank N.A. The purpose of the contracts was to hedge the Company’s interest expense by availing itself of the prevailing interest rate conditions reflected by a steep yield curve and the Company’s tax situation. Both derivative contracts were for a notional amount of $90,000.

Under one contract, the “floating to fixed” contract, the Company agreed to pay Citibank the equivalent of 3.67% annually through August 1, 2004 with payments being made on each February 1 and August 1 during the contract period. Citibank agreed to pay the Company the six-month LIBOR, reset on the first day of each semi-annual payment date during the contract period. This contract corresponds to the Company’s Term B floating rate debt.

Under the other contract, the “fixed to floating” contract, the Company agreed to pay Citibank the equivalent of the six-month LIBOR as of the last business day prior to the payment date plus 5.05%. Citibank agreed to pay the Company 10.125% during the same period. The payment dates are February 1 and August 1 of each year until August 2008. As part of this transaction, the Company sold to Citibank the right to cancel the contract on any payment date commencing with August 1, 2004. This contract corresponds to the Senior Subordinated Notes, which have a fixed interest rate of 10.125%. Due to the timing of the cancellation provision of the swap contract, the contract is not considered to be 100% effective.

The Company has accounted for these interest rate derivative contracts pursuant to SFAS No. 133. The “floating to fixed” contract has been treated as a cash flow hedge with 100% effectiveness. As of December 31, 2002 and 2001, the fair value of the hedge was $(3.5) million and $0.6 million, respectively. This amount was recorded in other comprehensive income, net of tax, and was offset by an (increase)/reduction in the other long-term liabilities in the accompanying consolidated balance sheet.

The “fixed to floating” contract has been treated as a fair value hedge. As of December 31, 2002 and 2001 the fair market value of the hedge was $2.9 and $(4.3) million, respectively, at which time, based on the change in the fair value of the risk being hedged, a portion of this hedge was deemed to be ineffective. Thus, in accordance with SFAS No. 133, the fair market value of the

(Continued)

16.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 9 – INTEREST RATE SWAP (Continued)

hedge was recorded and was reflected in the other long-term liabilities on the accompanying balance sheet. The change in the fair value of the risk being hedged was recorded and was reflected as a $2.9 and $(4.6) million increase (reduction) in the senior subordinated notes. The remaining ineffective portion is reflected in current earnings for the years ended December 31, 2002 and 2001, respectively.

In January 2003, the Company was notified by Citibank that they were terminating these agreements. The Company is disputing the termination clause provision cited by Citibank and has retained legal counsel to assist in resolving this matter.

In accordance with SFAS No. 133, when these forms of derivative instruments are terminated, hedge accounting is no longer applied. Unless an alternative resolution is reached, the fair value adjustment related to the senior subordinated notes and the balance in other comprehensive loss, associated with the derivative, will be amortized over the remaining life of the financial instrument and the remaining life of the original swap agreement, respectively.

NOTE 10 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Components of other comprehensive income (loss) consist of the following:

	Minimum Pension Liability			Foreign Currency Translation			Unrealized Gain (Loss) on Derivative Instruments			Accumulated Other Comprehensive (Loss)
January 1, 2000	$	—		$	(616	)	$	—		$	(616	)
2000 change		—			(1,203	)		—			(1,203	)
December 31, 2000		—			(1,819	)		—			(1,819	)
2001 change		—			572			374			946
December 31, 2001		—			(1,247	)		374			(873	)
2002 change		(183	)		—			(2,668	)		(2,851	)
December 31, 2002	$	(183	)	$	(1,247	)	$	(2,294	)	$	(3,724	)

(Continued)

17.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 10 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Continued)

Total other comprehensive income (loss) for 2001 includes reclassification adjustment gains of $572 from the repayment of foreign debt. There were no reclassification adjustments for the years ended December 31, 2000 and 2002. The unrealized gain (loss) on derivative instruments of $(2,668) and $374 in 2002 and 2001, respectively, is net of tax of $1,235 and $(244), respectively.

NOTE 11 – SUPPLY AND PURCHASE CONTRACTS

The Company has entered into two supply contract agreements with Henkel (now known as Cognis) effective March 25, 1997. One agreement calls for the Company to supply products to Cognis on a cost basis at prices as indicated in the supply agreement. The Company has no obligation to sell or manufacture more than one hundred ten percent (110%) of the annual sales volume to Cognis in the previous year. The cost basis of the products may be adjusted on the first day of each calendar quarter based on changes in the purchase price of raw materials used to produce the products. In addition, the overhead component may be increased annually to reflect an increase in energy costs and labor costs, as measured by a percentage of the increase in the energy component of the Producer Price Index for Finished Goods and the Employment Cost Index, respectively. In general, the price to be paid by Cognis will, at a minimum, be equal to the raw material and overhead costs associated with the production. The Company sold $11.4 million, $11.0 million, and $9.2 million to Cognis during 2002, 2001, and 2000, respectively.

In 2002, the Company was notified by Cognis that they intend to terminate the supply agreement related to Cognis’ purchase of products from the Company as of March 2003.

The second agreement calls for the Company to purchase raw materials from Cognis at market prices, and finished products that are manufactured by Cognis will be sold to the Company on a cost basis at prices as indicated in the supply agreement. Cognis has no obligation to sell or manufacture more than one hundred ten percent (110%) of the previous year’s purchases by the Company. The cost basis of the finished products may be adjusted on the first day of each calendar quarter based on changes in the purchase price of raw materials used to produce the products. In addition, the overhead component may be increased annually to reflect an increase in energy costs and labor costs, as measured by a percentage of the increase in the energy component of the Producer Price Index for Finished Goods and the Employment Cost Index, respectively. The Company purchased approximately $6.5 million, $8.9 million, and $7.4 million from Cognis during 2002, 2001, and 2000, respectively.

The agreements will remain in effect for a term of three to five years depending on the product. Upon termination of the initial contracts, both are renewable annually thereafter until written termination is provided one year in advance of either party’s intent to terminate the agreement.

(Continued)

18.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 12 – 401(k) PLAN AND DEFINED CONTRIBUTION PLAN

The Company sponsors a qualified 401(k) plan, which covers all eligible employees except those who are members of the Cedartown, Georgia and Allentown, Pennsylvania plant unions (see Note 13) and employees of the Company’s foreign subsidiaries. The Company also sponsors a qualified savings plan for the Allentown, Pennsylvania plant union employees.

The 401(k) plan includes profit sharing features for the Company to make annual profit sharing contributions. The Company’s match contribution is 100% up to the first 4% of employee contributions.

Under the terms of the savings plan for the Allentown, Pennsylvania plant union employees, eligible employees can elect to defer up to 10% of their annual after-tax salary. The Company’s percentage match ranges from 50% of the first 4% of optional contributions to 50% of the first 6% of optional contributions based upon years of service. Total 401(k) and savings plan expense for the years ended December 31, 2002, 2001, and 2000 approximated $623, $612, and $501, respectively.

NOTE 13 – UNION EMPLOYEE DEFINED BENEFIT PENSION PLAN

The Company has a defined benefit pension plan covering substantially all of its Cedartown, Georgia and Allentown, Pennsylvania union employees. The benefits are based on years of service through the date of retirement, multiplied by a predetermined amount payable in a monthly annuity for life, vested over a five-year period with reductions for early retirement. The Cedartown benefits are also reduced by the accrued benefit as of March 25, 1997 under the Henkel Corporation Consolidated Union Retirement Plan. The Company’s funding policy is to contribute amounts sufficient to satisfy regulatory funding standards.

Information about the pension plans was as follows:

	2002			2001
Change in benefit obligation
Benefit obligation at beginning of period	$	854		$	744
Service cost		129			146
Interest cost		57			50
Actuarial gain		(4	)		(71	)
Benefits paid		(18	)		(15	)
Benefit obligation at end of period	$	1,018		$	854

(Continued)

19.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 13 – UNION EMPLOYEE DEFINED BENEFIT PENSION PLAN (Continued)

	2002			2001
Change in plan assets
Fair value of plan assets at beginning of period	$	584		$	383
Actual return on plan asset		(232	)		(10	)
Employer contribution		185			226
Benefits paid		(18	)		(15	)
Fair value of plan assets at end of period	$	519		$	584
Funded status		(499	)		(270	)
Unrecognized net actuarial (gains) losses		182			(99	)
Unrecognized prior service cost		204			232
Accrued benefit cost	$	(113	)	$	(137	)

Total recognized amounts in the balance sheet consist of:

	2002			2001
Accrued benefit liabilities	$	(499	)	$	(369	)
Intangible assets		203			232
Shareholders’ equity		183			—
Net amount recognized	$	(113	)	$	(137	)

The components of pension expense and related actuarial assumptions and methods were as follows:

	2002			2001			2000
Service cost	$	129		$	146		$	139
Interest cost		57			50			28
Expected return on plan asset		(53	)		(35	)		(29	)
Amortization of prior service cost		29			29			15
Net periodic benefit cost	$	162		$	190		$	153
Discount rate on benefit obligation		6.75	%		6.75	%		6.75	%
Long-term expected rate of return on plan assets		8.00			8.00			8.00
Rate of compensation increase		N/A			N/A			N/A
Amortization method		Straight-line			Straight-line			Straight-line

(Continued)

20.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 14 – POSTRETIREMENT BENEFIT PLANS

The Company sponsors two postretirement benefit plans that cover substantially all union employees of the Cedartown, Georgia plant who have attained age 55 and have five years of service and their spouses. One plan provides medical benefits and the other provides life insurance benefits. The postretirement health care plan is contributory. The life insurance plan is noncontributory.

The Company also maintains two postretirement benefit plans that cover substantially all union employees of the Allentown, Pennsylvania plant who have attained age 55 and have five years of service and their spouses. One plan provides medical benefits and the other provides life insurance benefits. The postretirement health care plan is contributory. The life insurance plan is noncontributory.

Information about the Company’s postretirement benefit plans is as follows:

	2002			2001
Change in benefit obligation
Benefit obligation at beginning of period	$	3,277		$	2,916
Service cost		135			134
Interest cost		241			214
Actuarial loss		1,223			145
Benefits paid		(200	)		(132	)
Benefits obligation at end of period		4,676			3,277
Change in plan assets
Employer contribution		200			132
Participant benefits paid		(200	)		(132	)
Fair value of plan assets at end of period		—			—
Funded status		(4,676	)		(3,277	)
Unrecognized net actuarial loss		1,708			516
Accrued benefit cost	$	(2,968	)	$	(2,761	)

The components of postretirement health costs and related actuarial assumptions were as follows:

	2002		2001		2000
Service cost	$	135	$	134	$	158
Interest cost		241		214		216
Recognized net actuarial loss		57		21		260
Net periodic benefit cost	$	433	$	369	$	634

(Continued)

21.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 14 – POSTRETIREMENT BENEFIT PLANS (Continued)

For measurement purposes, a 7.0% and 7.5% annual rate of increase in the per capita cost of covered health care benefits was assumed for the periods ended December 31, 2002 and 2001, respectively; the rate was assumed to decrease gradually to 5.00% in 2006 and remain at that level thereafter. The health care cost trend rate assumption has a significant effect on the amounts reported. Increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation as of December 31, 2002 and 2001 by $745 and $391, respectively, and the aggregate of the service and interest cost components of postretirement expense for the years then ended by $52 and $52, respectively. Decreasing the assumed health care cost trend rates by one percentage point in 2002 and 2001 would decrease the accumulated postretirement benefit by $604 and $330, respectively, and service and interest cost components on postretirement expense for the years then ended by $43 and $43, respectively.

The weighted-average discount rate used in determining the accumulated postretirement benefit obligation was 7.0% at December 31, 2002 and 2001.

NOTE 15 – LEASE COMMITMENTS

The Company has entered into numerous noncancelable operating lease agreements for various autos, trucks, railroad cars, land, and office facilities with lease terms expiring at various dates through the year 2006. Rent expense under these leases for the years ended December 31, 2002, 2001, and 2000 approximated $994, $1,100, and $1,420, respectively. Total minimum rentals under noncancelable operating leases as of December 31, 2002 over future years are:

2003	$	1,098
2004		790
2005		460
2006		347
2007		170
	$	2,865

(Continued)

22.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 16 – INCOME TAXES

The income tax provision is comprised of the following:

	2002			2001			2000
Current payable
United States	$	—		$	—		$	—
Foreign		(1,052	)		4,653			2,224
		(1,052	)		4,653			2,224
Benefit of net operating loss carryforward
United States		(7,500	)		(5,687	)		(1,380	)
Foreign		—			—			—
		(7,500	)		(5,687	)		(1,380	)
Deferred income taxes
United States		5,340			1,004			2,142
Foreign		276			(250	)		498
		5,616			754			2,640
Total	$	(2,936	)	$	(280	)	$	3,484

The difference between the effective tax rate and the statutory rate is reconciled below:

	2002			2001			2000
Tax provision at United States statutory rate of 34%	$	(1,352	)	$	491		$	2,913
Increase (decrease) resulting from
Permanent items		(303	)		114			87
State income taxes, net of federal effect		(361	)		(1,119	)		366
Effect of foreign operations		(920	)		234			118
Total	$	(2,936	)	$	(280	)	$	3,484

(Continued)

23.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 16 – INCOME TAXES (Continued)

Significant components of the deferred tax assets and liabilities are as follows:

	December 31
	2002		2001
Deferred tax liabilities
Property, plant, and equipment	$	22,058	$	19,782
Amortization of goodwill		2,164		—
Other liabilities		1,189		707
		25,411		20,489
Deferred tax assets
Net operating loss carryforwards		26,523		19,024
Postretirement benefit		1,314		1,190
Pond closure reserve		794		803
Other assets		1,994		1,322
		30,625		22,339
Net deferred tax asset (liability)	$	5,214	$	1,850

Income tax carryforwards approximated and consisted of the following:

	December 31
	2002		2001
Net operating loss carryforward	$	61,679	$	44,056
AMT credit carryforwards	$	2	$	251

As of December 31, 2002, net operating loss carryforwards listed above expire as indicated below:

Year	Amount
2008	$	211
2009		974
2010		534
2011		954
2012		3,604
2018		13,710
2019		7,691
2020		3,137
2021		14,708
2022		16,156
	$	61,679

(Continued)

24.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 17 – GEOGRAPHIC INFORMATION

The Company sells its products throughout the United States and in other foreign markets.

Following is financial information relating to geographic areas:

	Year Ended December 31
	2002		2001		2000
Sales
United States	$	144,042	$	148,652	$	149,921
Other geographic areas		20,432		36,500		38,295
Total sales	$	164,474	$	185,152	$	188,216
	December 31
	2002		2001
Long-lived assets
United States	$	180,432	$	189,386
Other geographic areas		14,697		11,714
Total long-lived assets	$	195,129	$	201,100
Net assets of foreign operations	$	30,935	$	33,568

Long-lived assets are comprised of property, plant, and equipment; goodwill; certain intangible assets; and certain other long-term assets. No customers exceeded 10% of total Company sales in 2002, 2001, and 2000.

NOTE 18 – QUARTERLY FINANCIAL DATA (UNAUDITED)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Quarter Ended 2002
Net sales	$	40,428		$	43,509		$	42,155		$	38,382
Gross profit		6,870			8,484			6,867			5,741
(Loss) before income taxes		(2,118	)		(1,964	)		(1,925	)		(866	)
Net income (loss)		(1,482	)		(1,210	)		(1,277	)		32

(Continued)

25.

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 18 – QUARTERLY FINANCIAL DATA (UNAUDITED) (Continued)

	First Quarter		Second Quarter		Third Quarter			Fourth Quarter
Quarter Ended 2001
Net sales	$	50,534	$	50,777	$	45,981		$	37,860
Gross profit		14,320		13,727		9,481			4,656
Income (loss) before income taxes		4,967		6,740		(1,826	)		(8,436	)
Net income (loss)		2,797		3,970		(290	)		(4,752	)

NOTE 19 – COMMITMENTS AND CONTINGENCIES

Group Health and Welfare Insurance: The Company maintains a partially self-funded health and welfare insurance plan. Specific stop loss insurance limits the plan’s liability on individual claims and on aggregate claims. Per employee, the stop loss for the plan is $100 annually. The minimum and maximum aggregate amounts that the plan will pay are approximately $4,100 and $4,200, respectively, as of December 31, 2002 and $3,000 and $3,100, respectively, as of December 31, 2001. These amounts include premiums to be paid for catastrophic health coverage, other employee benefits insurance coverages, and fees paid to a third party administrator of the plan. The expense recorded under this plan was $3,780 and $2,984 for the years ended December 31, 2002 and 2001, respectively.

Contracts: Pursuant to the terms of a shareholder’s agreement and employment agreements with certain individuals who are partners in GEO Chemicals, Ltd. (“GCL”) and members of the key management of the Company, the Company has the right and, in certain cases, the obligation to repurchase specified percentages of the stock held by GCL in the event of termination of employment of these individuals. The redemption prices are based on the higher of fair value or original cost. The agreement also obligates the Company to maintain disability insurance and specified levels of life insurance coverage on these individuals to fund any such redemption. The current life insurance coverage for these management members is $2,600.

In conjunction with the purchase of the gallium business from Rhodia Chimie, SA, the Company has assumed a long-term contract for the supply of aluminate liquor from a vendor on whose property the German gallium extraction plant is located.

Litigation: In the ordinary course of business, the Company is periodically named as a defendant in a variety of lawsuits. The Company believes that the ultimate liability, if any, resulting from such suits will not have a material adverse effect on its business financial condition or results of operations.

(Continued)

GEO SPECIALTY CHEMICALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002, 2001, and 2000

(In thousands)

NOTE 19 – COMMITMENTS AND CONTINGENCIES (Continued)

As of December 31, 2001, the Company was in dispute with one of its gallium suppliers. The dispute surrounded a 2,700-kilogram shipment of gallium that was to be received by the Company in September 2001. The contractual purchase price of this order was $1,250 per kilogram. During the second half of 2001, there was a sharp decline in the demand for gallium, which drove the market price down. Since the current market price of gallium at that time was significantly less than the contractual price, the Company was claiming economic hardship under the terms of the contract. This dispute was settled in 2002.

Warrants: On March 25, 1997, the Company issued to GEO Specialties Enterprises, Inc. (whose successor-in-interest by merger is GEO Chemicals, Ltd.) warrants to purchase common shares of the Company. The warrants allow GEO Chemicals, Ltd. (the owners of which are members of the key management of the Company) to purchase, upon achievement by Charter Oak Partners (majority owner of the Company) of a certain rate of return on its investment in the Company’s common shares, an amount equal to a maximum of 5% of the outstanding equity of the Company. The agreement underlying these warrants was amended and restated on July 31, 1998. These warrants expire on March 31, 2007.

GEO Specialty Chemicals, Inc. and Subsidaries

Schedule II

Valuation and Qualifying Accounts

For the three years in the period ended December 31, 2002

Column A	Column B	Column C				Column D	Column E
Description	Balance at the beginning of the period	Additions				Write offs	Balance at the end of the period
		Charged to Costs and Expense		Charged to Other Accounts
Allowance for doubtful accounts:
Year Ended December 31, 2002	556	(294	)	—		20	242
Year Ended December 31, 2001	425	389		24	(a)	282	556
Year Ended December 31, 2000	249	226		—		50	425
Environmental Reserves:
Year Ended December 31, 2002	1,864	—		—		23	1,841
Year Ended December 31, 2001	1,913	—		—		49	1,864
Year Ended December 31, 2000	1,982	—		—		69	1,913

(a) Amount represents reserves acquired through acquisitions, net of reserves disposed of through divestments.

EX-99.2

Exhibit 99.2

CERTIFICATION

Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

I certify that, to the best of my knowledge, the Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (the “10-K”) of GEO Specialty Chemicals, Inc. (“GEO”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in the 10-K fairly presents, in all material respects, the financial condition and results of operations of GEO as of the dates and for the periods covered by the 10-K.

	GEO SPECIALTY CHEMICALS, INC.
Date: April 15, 2003	By:	/s/    GEORGE P. AHEARN
		George P. Ahearn President and Chief Executive Officer

EX-99.3

Exhibit 99.3

CERTIFICATION

Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

I certify that, to the best of my knowledge, the Annual Report on Form 10-K for the fiscal year ended December 31, 2002 (the “10-K”) of GEO Specialty Chemicals, Inc. (“GEO”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in the 10-K fairly presents, in all material respects, the financial condition and results of operations of GEO as of the dates and for the periods covered by the 10-K.

		GEO SPECIALTY CHEMICALS, INC.
Date:  April 15, 2003	By:	/s/    WILLIAM P. ECKMAN
		William P. Eckman Executive Vice President and Chief Financial Officer