EMPLOYMENT AGREEMENT



      AGREEMENT, made and entered into as of the 11th day of November, 2002, by

and between Metallurg, Inc., a Delaware corporation (together with its

successors and assigns permitted under this Agreement, the "Company"), and Heinz

C. Schimmelbusch (the "Executive").



                              W I T N E S S E T H :



      WHEREAS, the Executive is the Chief Executive Officer of Metallurg

Holdings, Inc., the immediate parent of the Company ("MHI"); and



      WHEREAS, as of the Effective Date (as defined below), the Executive was

appointed Chief Executive Officer of the Company; and



      WHEREAS, the Company desires to enter into an employment agreement (the

"Agreement") embodying the terms of such employment; and



      WHEREAS, the Executive desires to enter into the Agreement and to accept

such employment, subject to the terms and provisions of the Agreement; and



      NOW, THEREFORE, in consideration of the premises and mutual covenants

contained herein and for other good and valuable consideration, the receipt of

which is mutually acknowledged, the Company and the Executive (individually a

"Party" and together the "Parties") agree as follows:



      1. Definitions.



            (a) "Base Salary" shall mean the Executive's base salary in

accordance with Section 4 below.



            (b) "Board" shall mean the Board of Directors of the Company.



            (c) "Business Day" shall mean any day other than a Saturday, Sunday

or any other day on which commercial banks in New York, New York are required or

authorized to be closed.



            (d) "Cause" shall mean:



                  (1)   the Executive is convicted of (or pleads nolo contendere

                        to) a felony or crime of moral turpitude, dishonesty,

                        breach of trust or unethical business conduct involving

                        the Company;



                  (2)   the Executive engages in willful misconduct, willful or

                        gross neglect, fraud, insubordination, misappropriation

                        or embezzlement to the material and demonstrable

                        detriment of the Company; or



                  (3)   the Executive breaches in any material respect the terms

                        and provisions of this Agreement and fails to cure such

                        breach within 20 days following written notice from the

                        Company specifying such breach.



            (e) "Code" shall mean the Internal Revenue Code of 1986, as amended

from time to time, including applicable regulations thereunder.





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            (f) "Competitive Activity" shall mean any activity engaged in by the

Executive, whether as an employee, principal, sole proprietor, consultant,

agent, officer, director, partner or shareholder (except as a less than

one-percent shareholder of a publicly traded company or a less than five-percent

shareholder of a privately held company), which directly competes with the

Company or any Subsidiary. For this purpose, an activity which directly competes

with the Company or any Subsidiary shall mean a business that was being

conducted by the Company or any Subsidiary during the Term of Employment.

Notwithstanding anything to the contrary in this Section 1(f), an activity shall

not be deemed to be a Competitive Activity (x) solely as a result of the

Executive's being employed by or otherwise associated with a business of which a

unit is in competition with the Company or any Subsidiary but as to which unit

the Executive does not have direct or indirect responsibilities for the products

or product lines involved or (y) if the activity contributes less than 5 percent

of the revenues for the fiscal year in question of the business by which the

Executive is employed or with which he is otherwise associated.



            (g) "Disability" shall mean a disability as determined under the

Company's long-term disability plans, programs and/or arrangements in effect on

the date such disability first occurs.



            (h) "Effective Date" shall mean November 11, 2002.



            (i) "Exchange Act" shall mean the Securities Exchange Act of 1934,

as amended from time to time, including applicable regulations thereunder.



            (j) "Good Reason" shall mean the occurrence of any of the following

events:



                  (1)   the material change of the Executive's authority, duties

                        and responsibilities, or the assignment to the Executive

                        of duties materially different from the Executive's

                        position or positions with the Company;



                  (2)   a reduction in Annual Salary of the Executive;



                  (3)   the failure by the Company to obtain an agreement in

                        form and substance reasonably satisfactory to the

                        Executive from any successor to the business of the

                        Company to assume and agree to perform this Agreement;

                        or



                  (4)   the Company breaches in any material respect the terms

                        and provisions of this Agreement and fails to cure such

                        breach within 20 days following written notice from the

                        Executive specifying such breach.



            (k) "Subsidiary" of the Company shall mean any corporation of which

the Company owns, directly or indirectly, more than 50 percent of the Voting

Stock or any other business entity in which the Company directly or indirectly

has an ownership interest of more than 50 percent.



            (l) "Term of Employment" shall mean the period specified in Section

2 below.



            (m) "Voting Stock" shall mean capital stock of any class or classes

having general voting power under ordinary circumstances, in the absence of

contingencies, to elect the directors of a corporation.



      2. Term of Employment.



            The Company hereby employs the Executive, and the Executive hereby

accepts such employment, for the period commencing on the Effective Date and

ending on the second anniversary of





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the Effective Date (the "Term of Employment"), subject to earlier termination of

the Term of Employment in accordance with the terms of the Agreement. The Term

of Employment shall be automatically renewed for a one-year period on the second

anniversary of the Effective Date and on each anniversary of the Effective Date

thereafter, unless either Party has notified the other Party in writing in

accordance with Section 25 below at least 90 days prior to the expiration of the

then Term of Employment that he or it does not want the Term of Employment to so

renew.



      3. Position, Duties and Responsibilities.



            The Executive, in his capacity as Chief Executive Officer, shall

faithfully perform for the Company the duties of said office and shall perform

such other duties of an executive, managerial or administrative nature as shall

be specified and designated from time to time by the Board consistent with such

office. The Executive, in carrying out his duties under this Agreement, shall

report to the Board. Notwithstanding anything in this Section 3 to the contrary,

nothing shall preclude the Executive from:



                  (1)   serving on the boards of directors of a reasonable

                        number of other corporations or the boards of a

                        reasonable number of trade associations and/or

                        charitable organizations;



                  (2)   managing the affairs of Safeguard International Fund,

                        L.P. and its portfolio companies in substantially the

                        same manner as existing on the Effective Date;



                  (3)   engaging in charitable activities and community affairs;

                        and



                  (4)   managing his personal investments and affairs;



provided, however, that such activities do not materially interfere with the

proper performance of his duties and responsibilities hereunder.

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