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                                                                   Exhibit 10.33

                         CARBIDE/GRAPHITE GROUP, INC.

                             ANNUAL INCENTIVE PLAN

I.   Purpose. The purpose of the Carbide/Graphite Group, Inc. Annual Incentive 
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Plan (the "Plan") is to provide a means whereby Carbide/Graphite Group, Inc.
And its designated subsidiaries may (i) provide incentives and rewards to
designated key employees by making part of each such individual's pay dependent
upon the financial success of the Company, as defined below, (ii) attract and
retain persons of outstanding executive ability as key employees of the Company
and motivate such key employees to exert their best efforts on behalf of the
Company, and (iii) make the Company's compensation programs competitive with
those of other similar employers.

II.  Administration. The Plan shall be administered by the Committee. The 
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Committee shall have full power and authority to interpret the Plan, make 
factual determinations, and to prescribe, amend and rescind any rules, forms or 
procedures as it deems necessary or appropriate for the proper administration of
the Plan and to make any other determinations and take such other actions as it 
deems necessary or advisable in carrying out its duties under the Plan. Any
determinations, decisions, actions or interpretations to be made under the Plan
by the Committee shall be made in its sole discretion, not in any fiduciary
capacity and need not be uniformly applied to similarly situated individuals.
All decisions and determinations by the Committee shall be final, conclusive and
binding on the Company, all Participants, and any other persons having or
claiming an interest hereunder.

III. Definitions.
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3.1  "Award" means the actual percentage of Compensation that a Participant 
earns for a Plan Year as determined in accordance with Article V.

3.2  "Board" means the Board of Directors of Carbide/Graphite Group, Inc.

3.3  "Company" means Carbide/Graphite Group, Inc. and each of its subsidiaries 
designated by the Board, which has elected to cover its Employees hereunder by 
resolution of its board of directors.

3.4  "Compensation" means an Executive's base salary rate as in effect on the 
last day of a Plan Year without regard to any deferral of base salary under any 
type of plan maintained by the Company.

3.5  "Committee" means the Compensation Committee of the Board.

3.6  "Effective Date" means August 1, 1996.
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3.7  "Executive" means any executive employee of the Company employed on a 
regular, full-time basis. Individuals employed by the Company in a causal or 
temporary capacity (i.e., those hired for a specific job of limited duration) 
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and individuals characterized as "leased employees," within the meaning of 
Section 414 of the Internal Revenue Code of 1986, as amended, or persons 
characterized by the Company as "independent contractors," no matter how 
characterized by the Internal Revenue Service, other governmental agency or a 
court, shall not be considered "Executives" for the purpose of the Plan. Any 
change of characterization of an individual shall, unless determined otherwise 
by the Board, take effect on the actual date of such change without regard to 
any retroactive recharacterization. For the purposes of Section 6.3, only an 
individual who is a member of select group of management or highly compensated 
employees within the meaning of Sections 201, 301 and 401 of the Employee 
Retirement Income Security Act of 1974, as amended shall be treated as an 
"Executive."

3.8  "Participant" means an Executive that the Committee has designated as 
eligible to participate in the Plan under Article IV.

3.9  "Plan" means the Carbide/Graphite Group, Inc. Annual Incentive Plan as set 
forth herein and as it may be amended from time to time.

3.10 "Plan Year" means the calendar year commencing on January 1, 1997 and each 
calendar year thereafter.

3.11 "Separates from Employment" means the Executive's termination of employment
from the Company for any reason other than death, retirement under a retirement 
plan of the Company or disability as defined in the Company's long-term 
disability plan. Except as otherwise provided herein, a Separation from 
Employment shall be deemed to have occurred on the last day of the Employee's 
service to the Company not taking into account any compensation continuation 
arrangement or severance benefit arrangement that may be applicable.

3.12 "Target Award" means the theoretical percentage of Compensation that the 
Committee determines a Participant may receive if the Company achieves exactly 
its financial goals for a Plan Year.

IV.  Participation. For each Plan Year, the Committee shall designate, taking 
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into account the recommendation of the Chief Executive Officer of the Company, 
each Executive who will participate in the Plan. In determining whether to 
recommend that an Executive become a Participant under the Plan, the Committee 
shall take into consideration the Executive's present and potential contribution
to the success of the Company and such other factors as the Committee may deem 
proper and relevant. The Committee may determine to recommend that an Executive 
become a Participant after the beginning of a Plan Year in which case the 
Executive shall be eligible for a prorated Award based on the number of complete
quarters



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during which the Participant was eligible for an Award, but all other terms of 
the Plan shall apply.

V.   Determination of Award.
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     5.1  Financial Criteria. As soon as practicable, but in any event within 90
days after the start of each Plan Year, the Committee shall determine the
financial criteria which shall be the basis for determining the Awards for such
Plan Year and communicate such criteria to all Participants. The financial
criteria will be based on the Company's level of "earnings before interest,
taxes, depreciation and amortization" (such level shall be deemed to be achieved
only after taking into account the total amount of Awards to be paid under the
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Plan for such Plan Year) unless the Committee determines and announces to
Participants, that different criteria will be utilized. The financial criteria
and the method for determining individual Awards based upon that criteria will
be set forth on Exhibit A hereto. The Committee shall also announce the
threshold achievement of financial criteria below which no Award shall be paid
and the maximum Award, which shall not exceed 200% of a Participant's Target
Award.

     5.2  Calculation of Award. For each Plan Year, the Committee shall 
calculate the amount of aggregate Awards based upon the financial criteria and 
the actual financial results.

     5.3  Announcement of Award. Annual results will be announced by the 
Committee to all Participants immediately following the announcement of the 
Company's financial results for the Plan Year, normally 60 days following the 
end of such Plan Year.

VI.  Payment of Award
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     6.1  Awards. The Committee shall authorize Awards to be made for a Plan 
Year if the financial criteria have been satisfied for the full Plan Year. 
Except as provided in Section 6.3, any Award due shall be paid to each 
Participant promptly after authorization.

     6.2  Withholding Tax. Notwithstanding any other provision of this Plan, the
Company shall be entitled to withhold from, or in respect of, any Award to be
made an amount sufficient to satisfy all federal, state and local tax
withholding requirements relating thereto.

     6.3  Deferrals. Each Executive may elect, in accordance with the terms of 
the Company's Deferred Compensation Plan, to defer the receipt of an Award 
hereunder if a timely election is made in accordance with the terms of that 
plan.

VII. Separation from Employment. If prior to the date scheduled by the Committee
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for payment of an Award for a Plan Year, a Participant incurs a Separation from 
Employment, no payments shall be made in respect of that Participant's Award 
unless the Committee



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determines otherwise; provided, however, that in the event the Participant 
Separates from Employment in a Plan Year in which a Change of Control of the 
Company occurs, a percentage of the Award payments, if any, for the full Plan 
Year shall be made to such Participant equal to the percentage of the Plan Year 
during which the Participant was in the employ of the Company. For the purposes 
hereof, a "Change of Control of the Company" shall be deemed to have taken place
if an person, together with all affiliates and associates of such person 
acquires more than 50% of the voting power of the Company's outstanding voting 
securities, the Company liquidates or sells substantially all of its assets or a
merger in which the Company's then stockholders do not, immediately after the 
merger, own or control at least 50% of the voting power of the Company's 
outstanding voting securities.

VIII. General Provisions.
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      8.1  Transferability. No Award under this Plan shall be transferred, 
assigned, pledged or encumbered by the Participant and any attempt to do so 
shall be void. In addition, a Participant's rights hereunder are not subject, in
any manner, to attachment or garnishment by creditors of the Participant or the 
Participant's estate. In the event of a Participant's death during employment 
with the Company, payments of any unpaid Award(s) shall be made to the 
Participant's estate.

      8.2  Unfunded Arrangement. The Plan is an unfunded incentive compensation 
arrangement. Nothing contained in the Plan, and no action taken pursuant to the 
Plan, shall create or be construed to create a trust of any kind. A 
Participant's right to receive an Award shall be no greater than the right of an
unsecured general creditor of the Company. All Awards shall be paid from the 
general funds of the Company, and no special or separate fund shall be 
established and no segregation of assets shall be made to assure payment of such
Awards.

      8.3  No Rights to Employment. Nothing in this Plan, and no action taken 
pursuant hereto, shall confer upon any Participant the right to continue in the 
employ of the Company, or affect the right of the Company to terminate the 
Participant's employment at any time for cause or for no cause whatsoever.

      8.4  Adjustment for Non-Recurring Items, Etc. Notwithstanding anything 
herein to the contrary, if the Company's financial performance is affected by 
any event that is of a non-recurring nature, the Committee may make such 
adjustments in the financial criteria as it shall determine to be equitable and 
appropriate in order to make the calculations of Awards, as nearly as may be 
practicable, equivalent to the calculation that would have been made without 
regard to such event. In the event of a significant change of the business or 
assets of the Company under circumstances involving an acquisition or a merger, 
consolidation or similar transaction, the Committee shall, in good faith, 
recommend to the Board for approval such revisions to the financial criteria and
the other terms and conditions used in calculating Awards



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for the then current Plan Year as it reasonably deems appropriate in light of 
any such change.

      8.5  Notices. Any notice hereunder to be given to the Company shall be in 
writing and shall be delivered in person to the Secretary of the Company, or 
shall be sent by registered mail, return receipt requested, to the Secretary of 
the Company at the Company's executive offices, and any notice hereunder to be 
given to the Participant shall be in writing and shall be delivered in person to
the Participant, or shall be sent by registered mail, return receipt requested, 
to the Participant at his last address as shown in the employment records of the
Company. Any notice duly mailed in accordance with the preceding sentence shall
be deemed given on the date postmarked.

      8.6  Applicable Law. The Plan shall be construed and governed in 
accordance with the laws of the Commonwealth of Pennsylvania.

      8.7  Termination and Amendment of the Plan. The Board reserves the right 
to amend, suspend, or terminate the Plan at any time; provided, however, that 
any amendment, suspension or termination shall not adversely affect the rights 
of Participants to receive Awards calculated for a completed Plan Year.

      8.8  Miscellaneous.

      (a)  If the Company shall find that any person to whom any payment is 
payable under this Plan is unable to care for his affairs because of illness or 
accident, or is a minor, any payment due (unless a prior claim therefor shall 
have been made by a duly appointed guardian, committee or other legal 
representative) may be paid to the spouse, a child, a parent, or a brother or 
sister, or to any person deemed by the Company to have incurred expense for such
person otherwise entitled to payment, in such manner and proportions as the 
Company may determine. Any such payment shall be a complete discharge of the 
liabilities of the Company under this Plan.

      (b)  This Plan shall be binding upon and inure to the benefit of the 
Company, its successors and assigns and the Participant and his heirs, 
executors, administrators and legal representatives.




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