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                                                                      Exhibit 10

                              EMPLOYMENT AGREEMENT

         AGREEMENT, made and entered into as of the 1st day of June, 1999, by
and between Metallurg, Inc., a Delaware corporation (together with its
successors and assigns permitted under this Agreement, the "Company"), and
Dennis P. Kelly (the "Executive").

                              W I T N E S S E T H :


         WHEREAS, the Company desires to enter into an employment agreement (the
"Agreement") embodying the terms of employment between the Executive and the
Company; and

         WHEREAS, the Executive desires to enter into the Agreement and to
accept such employment, subject to the terms and provisions of the Agreement;

         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 a 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) "CEO" shall mean the chief executive officer of the
Company.

                  (f) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, including applicable regulations thereunder.

                  (g) "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

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Employment. Notwithstanding anything to the contrary in this Section 1(g), 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.

                  (h) "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.

                  (i) "Effective Date" shall mean June 1, 1999.

                  (j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time, including applicable regulations thereunder.

                  (k) "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 Base 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.

                  (l) "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.

                  (m) "Term of Employment" shall mean the period specified in
Section 2 below.

                  (n) "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 first anniversary of 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 two-year period on the first anniversary of the
Effective Date and thereafter, the Term of Employment shall be automatically
renewed for a one-year period on each anniversary of the Effective Date
thereafter, unless, in each case, either Party has notified the other Party in
writing in accordance

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with Section 26 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 Vice President, Group
Strategic Development of the Company 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 CEO consistent with such office. The Executive shall devote
substantially all of his business time and effort to the performance of his
duties hereunder. The Executive, in carrying out his duties under this
Agreement, shall report to the CEO. 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)      engaging in charitable activities and
                                    community affairs; and

                           (3)      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.

         4.       Base Salary.

                  During the Term of Employment, the Executive shall be paid an
annual Base Salary, payable in accordance with the regular payroll practices of
the Company, of $220,000. The Base Salary may be increased (but not decreased)
at any time and from time to time by action of the Board or by any committee
thereof or any individual having authority to take such action in accordance
with the Company's regular practices. Once increased, any reference to Base
Salary herein shall be a reference to such increased amount.

         5.       Bonus.

                  During the Term of Employment, in addition to the Base Salary,
for each fiscal year of the Company ending during the Term of Employment, the
Executive shall have the opportunity to receive an annual bonus (an "Annual
Bonus") in an amount of between 30 and 50 percent of Base Salary, as determined
by the CEO, in consultation with the Chairman of the Board. Payment of Annual
Bonus shall be made at the same time that other senior-level executives receive
their annual incentive compensation awards.

         6.       Long-Term Incentive Compensation Programs.

                  The Executive shall be eligible to participate in the
Company's stock option plans applicable to senior-level executives, the terms,
conditions and eligibility of such plans to be determined by the Board.

         7.       [Intentionally omitted]



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         8.       Employee Benefit Programs.

                  (a) During the Term of Employment, the Executive, to the
extent he is eligible, shall be entitled to participate in those employee
pension and welfare benefit plans, programs and/or arrangements applicable to
the Executive and made available to the Company's senior-level executives or to
its employees generally, as such plans, programs and/or arrangements may be in
effect from time to time, including, without limitation, pension,
profit-sharing, savings, medical, dental, hospitalization, short-term
disability, long-term disability, life insurance, accidental death and
dismemberment protection, travel accident insurance, and other employee pension
and welfare benefit plans, programs and/or arrangements that may be sponsored by
the Company from time to time.

                  (b) During the Term of Employment, the Company shall provide
the Executive with term life insurance with a death benefit of at least two
times Base Salary. The Company shall pay all premiums with respect to such life
insurance. Such life insurance may be provided either through the Company's
group life insurance programs, by an individual policy, or by a combination of
both group and individual policies.

         9.       Reimbursement of Business Expenses.

                  The Executive is authorized to incur ordinary and reasonable
business expenses in carrying out his duties and responsibilities under the
Agreement, and the Company shall reimburse him for all such ordinary and
reasonable business expenses incurred in connection with carrying out the
business of the Company, subject to documentation in accordance with the
Company's policy.

         10.      Perquisites.

                  (a) During the Term of Employment, the Executive shall be
entitled to participate in the Company's executive fringe benefits applicable to
the Company's senior-level executive in accordance with the terms and conditions
of such arrangements as are in effect from time to time.

                  (b) During the Term of Employment, the Company shall provide a
car to the Executive.

         11.      Vacation.

                  The Executive shall be entitled to paid vacation in accordance
with the Company's vacation policy; provided, however, that the Executive shall
be entitled to not less than four weeks of vacation each year.

         12.      Termination of Employment.

                  (a) Termination of Employment Due to Death. In the event of
the Executive's death during the Term of Employment, the Term of Employment
shall end as of the date of the Executive's death and his estate and/or
beneficiaries, as the case may be, shall be entitled to the following:

                           (1)      Base Salary earned but not paid prior to the
                                    date of his death;

                           (2)      Annual Bonus with respect to any year prior
                                    to the year of his death which has been
                                    earned but not paid;

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                           (3)      any amounts earned, accrued or owing to the
                                    Executive but not yet paid under Section 6,
                                    8, 9, 10 or 11 above; and

                           (4)      other or additional benefits in accordance
                                    with applicable plans, programs and/or
                                    arrangements of the Company.

                  (b) Termination of Employment Due to Disability. If the
Executive's employment is terminated due to Disability during the Term of
Employment, either by the Company or by the Executive, the Term of Employment
shall end as of the date of the Executive's termination of employment and the
Executive shall be entitled to the following (but in no event shall the
Executive be entitled to less than the benefits due him under any disability
program of the Company for which he becomes eligible):

                           (1)      Base Salary earned but not paid prior to the
                                    date of the termination of the Executive's
                                    employment;

                           (2)      Annual Bonus with respect to any year prior
                                    to the year of the termination of the
                                    Executive's employment which has been earned
                                    but not paid;

                           (3)      an amount equal to the sum of 50 percent of
                                    Base Salary, at the annual rate in effect on
                                    the date of the termination of the
                                    Executive's employment, payable in monthly
                                    installments for a period ending on the
                                    first day of the month following the month
                                    in which the Executive attains age 65 or
                                    recovers from his Disability, whichever
                                    occurs earlier, less the amount of any
                                    disability benefits provided to the
                                    Executive under the Company's disability
                                    program;

                           (4)      any amounts earned, accrued or owing to the
                                    Executive but not yet paid under Section 6,
                                    8, 9, 10 or 11 above;

                           (5)      continued participation, as if the Executive
                                    were still an employee, in the Company's
                                    medical, dental, hospitalization and life
                                    insurance plans, programs and/or
                                    arrangements and in those other employee
                                    plans, programs and/or arrangements in which
                                    he was participating on the date of the
                                    termination of his employment until he
                                    attains age 65 or recovers from his
                                    Disability, whichever occurs earlier;

                                    provided, however, that:

                                    (X)     if the Executive is precluded from
                                            continuing his participation in any
                                            employee benefit plan, program or
                                            arrangement as provided in this
                                            Section 12(b)(5), he shall be
                                            provided with the after-tax economic
                                            equivalent of the benefits provided
                                            under the plan, program or
                                            arrangement in which he is unable to
                                            participate for the period specified
                                            in this Section 12(b)(5); and

                                    (Y)     the economic equivalent of any
                                            benefit foregone shall be deemed to
                                            be the lowest cost that would be
                                            incurred by the Executive in
                                            obtaining such benefit himself on an
                                            individual basis; and

                           (6)      other or additional benefits in accordance
                                    with applicable plans, programs and/or
                                    arrangements of the Company.



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                  In no event shall a termination of the Executive's employment
for Disability occur unless the Party terminating his employment gives written
notice to the other Party in accordance with Section 26 below.

                  (c) Termination of Employment by the Company for Cause. A
termination of the Executive's employment by the Company for Cause shall not
take effect unless the provisions of this Section 12(c) are complied with and
the Board issues a written determination that the Executive's employment should
be terminated for Cause (a "Determination").

                           (1)      In accordance with Section 26 below, the CEO
                                    shall give the Executive a written notice
                                    stating his intention to terminate the
                                    Executive's employment for Cause (the "Cause
                                    Notice"). The Cause Notice shall:

                                    (A)     state in detail the particular act
                                            or acts or failure or failures to
                                            act that constitute the grounds on
                                            which the proposed termination of
                                            employment for Cause is based; and

                                    (B)     be given within four months of the
                                            CEO learning of such act or acts or
                                            failure or failures to act.

                           (2)      The CEO may temporarily relieve the
                                    Executive of his duties and responsibilities
                                    described in Section 3 above during the
                                    period commencing on the date the Cause
                                    Notice is issued by the CEO and ending on
                                    the date the Determination is issued by the
                                    Board (the "Determination Period").

                           (3)      The Executive shall have 20 days after the
                                    date the Cause Notice is actually received
                                    by him in which to cure his conduct on which
                                    the termination of employment for Cause is
                                    based, to the extent such cure is possible.
                                    If the Executive fails to cure such conduct,
                                    he shall then be entitled to a hearing
                                    before the Board. Such hearing shall be held
                                    during the 20-day period following the date
                                    the Executive receives the Cause Notice;
                                    provided, however, that the Executive
                                    requests such hearing during the 10-day
                                    period following the date the Executive
                                    receives the Cause Notice. Within five days
                                    following the completion of such hearing,
                                    the Board shall issue a Determination
                                    stating whether, in its judgment, grounds
                                    for Cause as detailed in the Cause Notice
                                    exist. If the Determination states that such
                                    grounds exist, the Executive's employment
                                    shall be immediately terminated for Cause
                                    and the Term of Employment shall end as of
                                    the date of the termination of the
                                    Executive's employment.

                           (4)      If the Company terminates the Executive's
                                    employment for Cause, the Executive shall be
                                    entitled to the following:

                                    (A)      Base Salary earned but not paid
                                             prior to the date of the
                                             termination of his employment;

                                    (B)     any amounts earned, accrued or owing
                                            to the Executive but not yet paid
                                            under Section 6, 8, 9, 10 or 11
                                            above; and

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                                    (C)     other or additional benefits in
                                            accordance with applicable plans,
                                            programs and/or arrangements of the
                                            Company.

                           (5)      Notwithstanding anything herein to the
                                    contrary, if, following a termination of the
                                    Executive's employment by the Company for
                                    Cause based upon the conviction of the
                                    Executive for a felony, such conviction is
                                    overturned in a final determination on
                                    appeal, the Executive shall be entitled to
                                    the payments and the economic equivalent of
                                    the benefits the Executive would have
                                    received if his employment had been
                                    terminated by the Company without Cause.

                  (d) Termination of Employment by the Company Without Cause. If
the Executive's employment is terminated by the Company without Cause, other
than due to death or Disability, the Executive shall be entitled to the
following:

                           (1)      Base Salary earned but not paid prior to the
                                    date of the termination of his employment;

                           (2)      Annual Bonus with respect to any year prior
                                    to the year of the termination of the
                                    Executive's employment which has been earned
                                    but not paid;

                           (3)      an amount equal to the aggregate Base Salary
                                    (based on the Base Salary in effect on the
                                    date of the termination of the Executive's
                                    employment) (the "Salary Continuation
                                    Benefits") with respect to a period equal to
                                    eighteen months, payable in equal monthly
                                    installments over such period;

                           (4)      continued accrual of credited service
                                    through a period ending on that date that
                                    would have been the end of the Term of
                                    Employment for the purpose of any Company
                                    pension plan, program or arrangement;

                           (5)      the right to purchase, at fair market value,
                                    the Executive's automobile (if any) provided
                                    to him by the Company under the Company's
                                    automobile perquisite program for
                                    senior-level executives; however, other than
                                    the foregoing, all rights to continue to
                                    participate in such program shall terminate
                                    on the date of termination of employment;

                           (6)      any amounts earned, accrued or owing to the
                                    Executive but not yet paid under Section 6,
                                    8, 9, 10 or 11 above;

                           (7)      continued participation, as if he were still
                                    an employee, in the Company's medical,
                                    dental, hospitalization and life insurance
                                    plans, programs and/or arrangements and in
                                    other employee benefit plans, programs
                                    and/or arrangements (excluding long-term
                                    disability programs) in which he was
                                    participating on the date of the termination
                                    of his employment until the earlier of:

                                    (A)      the end of the period used to
                                             determine the Salary Continuation
                                             Benefits; or

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                                    (B)     the date, or dates, he receives
                                            equivalent coverage and benefits
                                            under the plans, programs and/or
                                            arrangements of a subsequent
                                            employer (such coverage and benefits
                                            to be determined on a
                                            coverage-by-coverage or
                                            benefit-by-benefit basis);

                                    provided, however, that:

                                    (X)     if the Executive is precluded from
                                            continuing his participation in any
                                            employee benefit plan, program or
                                            arrangement as provided in Section
                                            12(d)(7) above, he shall be provided
                                            with the after-tax economic
                                            equivalent of the benefits provided
                                            under the plan, program or
                                            arrangement in which he is unable to
                                            participate for the period specified
                                            in this Section 12(d)(7); and

                                    (Y)     the economic equivalent of any
                                            benefit foregone shall be deemed to
                                            be the lowest cost that would be
                                            incurred by the Executive in
                                            obtaining such benefit himself on an
                                            individual basis; and

                           (8)      other or additional benefits in accordance
                                    with applicable plans, programs and/or
                                    arrangements of the Company.

                  (e) Termination of Employment by the Executive for Good
Reason. The Executive may terminate his employment for Good Reason, but only if:

                           (1)      the Executive notifies the Board during the
                                    60-day period following the date of the
                                    first occurrence of an event which
                                    constitutes Good Reason (the "Good Reason
                                    Event Date") of his intention to terminate
                                    his employment for Good Reason;

                           (2)      the Executive terminates his employment for
                                    Good Reason during the 120-day period
                                    following the Good Reason Event Date;

                           (3)      the termination of employment for Good
                                    Reason does not occur during a Determination
                                    Period described in Section 12(c)(2) above;
                                    and

                           (4)      the Good Reason first occurs before or after
                                    a Determination Period, or, if the Good
                                    Reason first occurs during a Determination
                                    Period, such event constituting Good Reason
                                    continues to occur after the Determination
                                    Period.

Upon a termination by the Executive of his employment for Good Reason, the
Executive shall be entitled to the same payments and benefits as provided in
Section 12(d) above; provided, however, that if the Executive terminates his
employment for Good Reason based on a reduction in Base Salary under Section
1(k)(2) above, then the Base Salary to be used in determining the Salary
Continuation Benefits in accordance with Section 12(d)(3) above shall be the
Base Salary in effect immediately prior to such reduction.

                  (f) Termination of Employment by the Executive Without Good
Reason. If the Executive terminates his employment without Good Reason, other
than a termination of employment due to death or retirement or Disability, the
Executive shall have the same entitlements as provided in Section 12(c)(4)
above. A termination of the Executive's employment under this Section 12(f)
shall be effective upon 30 days prior written notice to the Company and shall
not be deemed a breach of this Agreement.

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                  (g) Non Renewal of Agreement by Company. If the Company
notifies the Executive, pursuant to Section 2 above, that it does not want the
Term of Employment to renew, the Executive shall have the same entitlements as
provided in Section 12(d) above as if the Executive had been terminated without
cause as of the last day of the then Term of Employment.

                  (h) Termination of Employment by Executive due to Relocation
of Work Location. In the event that the Executive's principal work location is
moved outside of the States of New York, New Jersey, Connecticut, Pennsylvania,
Delaware, Maryland or the District of Columbia, the Executive may terminate his
employment with the Company. If the Executive terminates his employment pursuant
to this Section 12(h), he shall have the same entitlements as provided in
Section 12(d) above; provided, that all such benefits, including, without
limitation, the Salary Continuation Benefits, shall be provided for a period
equal to the corresponding severance period listed on Schedule A, attached
hereto and made a part hereof, payable in equal monthly installments during such
period.

                  (i) No Mitigation; No Offset. If the Executive's employment
terminates under this Section 12, the Executive shall be under no obligation to
seek other employment and there shall be no offset against amounts due the
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that he may obtain except as specifically provided in
this Section 12.

                  (j) Nature of Payments. Any amounts due under this Section 12
are in the nature of severance payments considered to be reasonable by the
Company and are not in the nature of a penalty.

         13.      Confidentiality: Assignment of Rights.

                  (a) During the Term of Employment and thereafter, the
Executive shall not disclose to anyone or make use of any trade secret or
proprietary or confidential information of the Company, including such trade
secret or proprietary or confidential information of any customer or other
entity to which the Company owes an obligation not to disclose such information,
which he acquires during the Term of Employment, including but not limited to
records kept in the ordinary course of business, except (i) as such disclosure
or use may be required or appropriate in connection with his work as an employee
of the Company, (ii) when required to do so by a court of law, by any
governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) with apparent jurisdiction to order him to divulge, disclose or make
accessible such information, or (iii) as to such confidential information that
1becomes generally known to the public or trade without violation of this
Section 13(a).

                  (b) The Executive hereby sells, assigns and transfers to the
Company all of his right, title and interest in and to all inventions,
discoveries, improvements and copyrightable subject matter (the "rights") which
during the Term of Employment are made or conceived by him, alone or with
others, and which are within or arise out of any general field of the Company's
business or arise out of any work he performs or information he receives
regarding the business of the Company while employed by the Company. The
Executive shall fully disclose to the Company as promptly as available all
information known or possessed by him concerning the rights referred to in the
preceding sentence, and upon request by the Company and without any further
remuneration in any form to him by the Company, but at the expense of the
Company, execute all applications for patents and for copyright registration,
assignments thereof and other instruments and do all things which the Company
may deem necessary to vest and maintain in it the entire right, title and
interest in and to all such rights.



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         14.      Noncompetition.

                  (a) The Executive covenants and agrees that during the Term of
Employment and, following the termination of the Executive's employment with the
Company, for a period of eighteen months or, in the case of a termination
pursuant to Section 12(h), a period equal to the shorter of (i) twice the
corresponding severance period listed on Schedule A and (ii) eighteen months, he
shall not at any time, without the prior written consent of the Company,
directly or indirectly, engage in a Competitive Activity.

                  (b) The Parties acknowledge that in the event of a breach or
threatened breach of Section 14(a) above, the Company shall not have an adequate
remedy at law. Accordingly, in the event of any breach or threatened breach of
Section 14(a) above, the Company shall be entitled to such equitable and
injunctive relief as may be available to restrain the Executive and any
business, firm, partnership, individual, corporation or entity participating in
the breach or threatened breach from the violation of the provisions of Section
14(a) above. Nothing in this Agreement shall be construed as prohibiting the
Company from pursuing any other remedies available at law or in equity for
breach or threatened breach of Section 14(a) above, including the recovery of
damages.

         15.      Indemnification.

                  (a) The Company agrees that if the Executive is made a party,
or is threatened to be made a party, to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason of
the fact that he is or was a director, officer or employee of the Company or is
or was serving at the request of the Company as a director, officer, member,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether or not the basis of such Proceeding is the Executive's alleged action in
an official capacity while serving as a director, officer, member, employee or
agent, the Executive shall be indemnified and held harmless by the Company to
the fullest extent legally permitted or authorized by the Company's certificate
of incorporation or bylaws or resolutions of the Company's Board of Directors
or, if greater, by the laws of the State of Delaware, against all cost, expense,
liability and loss (including, without limitation, attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by the Executive in connection
therewith, and such indemnification shall continue as to the Executive even if
he has ceased to be a director, member, employee or agent of the Company or
other entity and shall inure to the benefit of the Executive's heirs, executors
and administrators. The Company shall advance to the Executive all reasonable
costs and expenses incurred by him in connection with a Proceeding within 20
days after receipt by the Company of a written request for such advance. Such
request shall include an undertaking by the Executive to repay the amount of
such advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses.

                  (b) Neither the failure of the Company (including the Board,
independent legal counsel or stockholders) to have made a determination prior to
the commencement of any Proceeding concerning payment of amounts claimed by the
Executive under Section 15(a) above that indemnification of the Executive is
proper because he has met the applicable standard of conduct, nor a
determination by the Company (including the Board, independent legal counsel or
stockholders) that the Executive has not met such applicable standard of
conduct, shall create a presumption that the Executive has not met the
applicable standard of conduct.

                  (c) The Company agrees to continue and maintain a directors
and officers' liability insurance policy covering the Executive to the extent
the Company provides such coverage for its other executive officers.

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         16.      Effect of Agreement on Other Benefits.

                  Except as specifically provided in this Agreement, the
existence of this Agreement shall not prohibit or restrict the Executive's
entitlement to full participation in the Company's employee benefit plans,
programs and arrangements applicable to the Company's senior-level executives.

         17.      Assignability; Binding Nature.

                  This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors, heirs (in the case of the
Executive) and assigns. No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company except that such rights
or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the Company; provided,
however, that the assignee or transferee is the successor to all or
substantially all of the assets of the Company and such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale of assets or liquidation as described in the
preceding sentence, it shall take whatever action it legally can in order to
cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder or under any other plan or
benefit program referred to herein. No rights or obligations of the Executive
under this Agreement may be assigned or transferred by the Executive other than
his rights to compensation and benefits, which may be transferred only by will
or operation of law, except as provided in Section 23 below.

         18.      Representation.

                  The Company represents and warrants that it is fully
authorized and empowered to enter into this Agreement and that the performance
of its obligations under this Agreement will not violate any agreement between
it and any other person, firm or organization. The Executive represents that he
knows of no agreement between him and any other person, firm or organization
that would be violated by the performance of his obligations under this
Agreement.

         19.      Entire Agreement.

                  This Agreement contains the entire understanding and agreement
between the Parties concerning the subject matter hereof and supersedes all
prior agreements, understandings, discussions, negotiations and undertakings,
whether written or oral, between the Parties, including, without limitation, the
Existing Employment Agreement, with respect thereto.

         20.      Amendment or Waiver.

                  No provision in this Agreement may be amended unless such
amendment is agreed to in writing and signed by the Executive and an authorized
officer of the Company. No waiver by either Party of any breach by the other
Party of any condition or provision contained in this Agreement to be performed
by such other Party shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or any prior or subsequent time. Any waiver
must be in writing and signed by the Executive or an authorized officer of the
Company, as the case may be.

         21.      Severability.

                  In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in whole or
in part, the remaining provisions of this Agreement

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shall be unaffected thereby and shall remain in full force and effect and such
provision or portion of this Agreement shall remain in effect to the fullest
extent permitted by law.

         22. Survivorship.

                  The respective rights and obligations of the Parties hereunder
shall survive any termination of the Executive's employment to the extent
necessary to the intended preservation of such rights and obligations.

         23. Beneficiaries/References.

                  The Executive shall be entitled, to the extent permitted under
any applicable law, to select and change a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following the Executive's
death by giving the Company written notice thereof. In the event of the
Executive's death or a judicial determination of his incompetence, reference in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.

         24. Governing Law/Submission to Jurisdiction.

                  This Agreement shall be governed by and construed and
interpreted in accordance with the laws of New York without reference to
principles of conflict of laws. Each of the Company and the Executive hereby
irrevocably and unconditionally: (i) submits for itself or himself, as
applicable, and its or his property in any legal action or proceeding relating
to this Agreement, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof; (ii) consents that any such
action or proceeding may be brought in such courts, and waives any objection
that it or he may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient forum and agrees not to plead or claim the same; (iii) agrees that
service of process in any such action or proceeding may be effected by mailing a
copy thereof by registered or certified mail (or any substantially similar form
of mail), postage prepaid, at its or his address set forth in or designated
pursuant to Section 26 hereof; and (iv) agrees that nothing herein shall affect
the right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction.

         25.      Resolution of Disputes.

                  Any disputes arising under or in connection with the
Agreement, other than disputes arising in connection with Sections 14 or 15
hereof, may, at the election of the Executive or the Company, be resolved by
binding arbitration, to be held in New York City in accordance with the rules
and procedures of the American Arbitration Association. If arbitration is
elected, the Executive and the Company shall mutually select the arbitrator. If
the Executive and the Company cannot agree on the selection of an arbitrator,
each Party shall select an arbitrator and the two arbitrators shall select a
third arbitrator, and the three arbitrators shall form an arbitration panel
which shall resolve the dispute by majority vote. Judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. Costs of the arbitration or litigation, including, without limitation,
reasonable attorneys' fees of both Parties, shall be borne by the Company;
provided, however, that, if a dispute is resolved in favor of the Company, the
Executive shall bear his own costs of the arbitration or litigation and shall
reimburse the Company for the Executive's costs of the arbitration or litigation
previously paid by the Company. Pending the resolution of any arbitration or
court proceeding, the Company shall continue payment of all amounts due the
Executive under this Agreement and all benefits to which the Executive is
entitled at the time the dispute arises.

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         26.      Notices.

                  Any notice given to a Party shall be in writing and shall be
deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the Party concerned at the address indicated below or to such changed address as
such Party may subsequently give such notice of:

If to the Company:          Metallurg, Inc.
                            6 East 43rd Street, 12th floor
                            New York, New York 10017
                            Attention: General Counsel


If to the Executive:        Dennis P. Kelly
                            c/o Metallurg, Inc.
                            6 East 43rd Street, 12th floor
                            New York, New York 10017


         27.      Headings.

                  The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.

         28.      Counterparts.

                  This Agreement may be executed in two or more counterparts.


         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.

                                             METALLURG, INC.




                                             By:_________________________
                                             Name:  Alan D. Ewart
                                             Title: President and Chief
Executive Officer


AGREED AND ACCEPTED



__________________________
Dennis P. Kelly




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                                   SCHEDULE A



           Years of Service                            Severance Period
           ----------------                            ----------------

           Up To 15                                    6 months

           More Than 15                                9 months

           More Than 20                                12 months



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