<PAGE>   1





                                                                    EXHIBIT 10.3





                              EMPLOYMENT AGREEMENT

                                 by and between

                       CHASE BRASS & COPPER COMPANY, INC.

                                      and

                               DUANE R. GROSSETT

                             dated effective as of

                                OCTOBER 28, 1996
<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>     <C>                                                                                    <C>
1.      Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

2.      Duties and Restrictions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
                 (a)     Duties as Employee of the Company . . . . . . . . . . . . . . . . .   1
                 (b)     Other Duties  . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
                 (c)     Non-Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
                 (d)     Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . .   2

3.      Compensation and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . .   2
                 (a)     Base Salary . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
                 (b)     Bonus Payments  . . . . . . . . . . . . . . . . . . . . . . . . . .   3
                 (c)     Expenses and Other Benefits . . . . . . . . . . . . . . . . . . . .   3
                 (d)     Vacations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
                 (e)     Perquisites . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
                 (f)     Proration . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
                 (g)     Relocation Expenses . . . . . . . . . . . . . . . . . . . . . . . .   3
                 (h)     Temporary Living Expenses . . . . . . . . . . . . . . . . . . . . .   4
                 (i)     Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . .   4

4.      Termination  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
                 (a)     Death/Disability  . . . . . . . . . . . . . . . . . . . . . . . . .   4
                 (b)     Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
                 (c)     Termination by Executive  . . . . . . . . . . . . . . . . . . . . .   5

5.      Compensation Upon Termination Prior to a Change in Control of the Company  . . . . .   6
                 (a)     Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
                 (b)     Disability  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
                 (c)     Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
                 (d)     Breach by the Company or for Good Reason  . . . . . . . . . . . . .   7

6.      Compensation Upon Termination After a Change in Control of the Company . . . . . . .   8

7.      Other Provisions Relating to Termination . . . . . . . . . . . . . . . . . . . . . .   8
                 (a)     Notice of Termination . . . . . . . . . . . . . . . . . . . . . . .   8
                 (b)     Date of Termination . . . . . . . . . . . . . . . . . . . . . . . .   8
                 (c)     Good Reason . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
                 (d)     Cause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
                 (e)     Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . .   9
                 (f)     Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
</TABLE>





                                      (i)
<PAGE>   3
<TABLE>

<S>     <C>                                                                                   <C>
8.      Successors and Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

9.      Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11

10.     Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
                 (a)     Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
                 (b)     Specific Enforcement  . . . . . . . . . . . . . . . . . . . . . . .  12

11.     Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

12.     Miscellaneous  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

13.     Attorney Fees  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

14.     Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

</TABLE>





                                      (ii)
<PAGE>   4
                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is effective as of the
28th day of October 1996, by and between Chase Brass & Copper Company, Inc., a
Delaware corporation (the "Company"), and Duane R. Grossett (the "Executive").

         1.      Employment.  The Company hereby employs Executive as its
President and Chief Operating Officer, and Executive hereby accepts such
employment, on the terms and conditions set forth herein, for the period
commencing on the date hereof and expiring on January 4, 2000 (unless sooner
terminated as hereinafter set forth) (the "Term").

         2.      Duties and Restrictions.

                 (a)      Duties as Employee of the Company.  Executive shall,
subject to the authority and supervision of the Chief Executive Officer of the
Company, have general powers of supervision and management of the business,
affairs and property of the Company in the ordinary course of its business
usually vested in a President and Chief Operating Officer, with all such powers
with respect to such general management as may be reasonably incident to such
responsibilities, and shall have such additional or substitute duties as from
time to time designated by the Chief Executive Officer.  Executive will devote
his full time, attention, and energies to the business of the Company and shall
not, without the consent of the Chief Executive Officer, either directly or
indirectly, engage in any other business or activity which would necessitate
Executive giving an appreciable portion of his time to such activity.

                 (b)      Other Duties.  Executive agrees to serve as a
director of the Company, and of any Subsidiary of the Company or Chase Brass
Industries, Inc. ("CBI"), and in one or more executive offices of any such
Subsidiary, in each case if elected or appointed to any such positions;
provided, however, that Executive is indemnified for serving in any and all
such capacities in a manner acceptable to the Company and Executive.  Executive
agrees that he shall not be entitled to receive any compensation for serving as
a director of the Company, or in any capacity with respect to any Subsidiary of
CBI, other than the compensation to be paid to Executive pursuant to this
Agreement or any other written agreement between the Company or any of its
Subsidiaries and Executive.

                 (c)      Non-Compete.  Executive agrees that he will not, for
a period of one year following the termination of his employment with the
Company, (i) employ, associate in any business relationship with, endeavor to
entice away from the Company, CBI or any Subsidiary or otherwise interfere with
any person who was an employee of or consultant to the Company, CBI or any
Subsidiary of CBI during the three (3) month period preceding such termination
or (ii) be employed by, associated with or have any interest in, directly or
indirectly (whether as principal, director, officer, employee, consultant,
partner, stockholder, trustee, manager or otherwise), any company in the
business of manufacturing or producing copper alloy rod which is directly
competitive with the Company or any of its Subsidiaries, or any company which
otherwise is directly competitive with the Company or any of its Subsidiaries,
in any geographical area in which the Company or its Subsidiaries engage in
business at the time of such termination or in which any of them, prior to
termination of Executive's employment, evidenced in writing, at any time during
the six month period prior to such termination, its intention to engage in such
business (any such company, a "Competing Business"); provided,
<PAGE>   5
however, that the provisions of this Section 2(c) shall not apply in the event
(i) the Company terminates Executive's employment with the Company other than
for "Cause" (as herein defined) or otherwise in violation of this Agreement or
(ii) Executive terminates this Agreement for Good Reason (as hereinafter
defined).  Notwithstanding the foregoing, Executive shall not be prohibited
from owning one percent or less of the outstanding equity securities of any
Competing Business whose equity securities are listed on a national securities
exchange or publicly traded in any over-the-counter market.

                 (d)      Confidentiality.  Executive shall not, directly or
indirectly, at any time during or following termination of his employment with
the Company, reveal, divulge or make known to any person or entity, or use for
Executive's personal benefit (including without limitation for the purpose of
soliciting business, whether or not competitive with any business of the
Company or any of its Subsidiaries), any information acquired during the course
of employment hereunder with regard to the financial, business or other affairs
of the Company, CBI or any Subsidiary of CBI (including without limitation any
list or record of persons or entities with which the Company, CBI or any
Subsidiary of CBI has any dealings), other than (i) information already in the
public domain, (ii) information of a type not considered confidential by
persons engaged in the same business or a business similar to that conducted by
the Company, CBI, or any Subsidiary of CBI, (iii) information that Executive is
required to disclose under the following circumstances: (A) at the express
direction of any authorized governmental entity; (B) pursuant to a subpoena or
other court process; (C) as otherwise required by law or the rules,
regulations, or orders of any applicable regulatory body; or (D) as otherwise
necessary, in the opinion of counsel for Executive, to be disclosed by
Executive in connection with any legal action or proceeding involving Executive
and the Company, CBI or any Subsidiary of CBI in his capacity as an employee,
officer, director, or stockholder of the Company, CBI or any Subsidiary of CBI,
or (iv) during the period of his employment hereunder, Executive may disclose
such confidential information to another employee of the Company, CBI or any
Subsidiary of CBI or to representatives or agents of the Company, CBI or any
Subsidiary of CBI (such as independent accountants and legal counsel) when such
disclosure is reasonably necessary or appropriate in connection with the
performance by Executive of his duties as an executive officer of the Company.
Executive shall, at any time requested by the Company (either during or within
one year after the termination of his employment with the Company), promptly
deliver to the Company all memoranda, notes, reports, lists and other documents
(and all copies thereof) relating to the business of the Company, CBI or any
Subsidiary of CBI which he may then possess or have under his control.

         3.      Compensation and Related Matters.

                 (a)      Base Salary.  Executive shall receive a base salary
paid by the Company ("Base Salary") at the annual rate of $190,000 during each
calendar year of the Term, payable in substantially equal monthly installments
(or such other more frequent times as executives of the Company normally are
paid).  The Base Salary shall be reviewed by the Compensation Committee of the
Board of Directors of CBI (the "Compensation Committee") at least as often as
the compensation of other senior officers of the Company is reviewed, and may
be increased (but not decreased) at any time in the sole discretion of the
Compensation Committee, provided





                                       2
<PAGE>   6
that the first review of Executive's Base Salary shall occur in 1998 with
respect to Base Salary for 1998.

                 (b)      Bonus Payments.  Executive shall be entitled to
receive, in addition to the Base Salary, such bonus payments, if any, as the
Compensation Committee may specify; provided, that Executive shall first be
entitled to receive a bonus payment in 1998 for services rendered during 1997.

                 (c)      Expenses and Other Benefits.  Executive shall be (i)
reimbursed for all reasonable expenses incurred by him in performing services
hereunder, provided that Executive properly accounts therefor in accordance
with Company policy, and (ii) entitled to participate in or receive benefits
under any employee benefit plan or other arrangement made available by the
Company now or in the future to its senior executive officers and key
management employees, other than the Company's Chief Executive Officer, subject
to and on a basis consistent with the terms, conditions, and overall
administration of such plan or arrangement.

                 (d)      Vacations.  Executive shall be entitled to 20 paid
vacation days during each year of the Term.  For purposes of this Section 3(d),
weekends shall not count as vacation days and Executive shall also be entitled
to all paid holidays given by the Company to its senior executive officers.

                 (e)      Perquisites.  Executive shall be entitled to receive
the perquisites and fringe benefits appertaining to the offices of President
and Chief Operating Officer of the Company in accordance with any practice
established by the Company.  Notwithstanding, and in addition to, any
perquisites to which Executive is entitled pursuant to the preceding sentence,
during the Term the Company shall pay for Executive's membership at one country
club, located within 60 miles of Executive's principal residence (as relocated
as contemplated in Section 3(g) below) or the Company's operating headquarters,
to which Executive is or may become a member as of or after the date hereof;
provided that in the event Executive terminates his membership in any such
country club, either during the Term or thereafter, the Company shall be
entitled to any amounts that may be payable as a refund of Executive's
initiation fee or monthly dues paid by the Company.

                 (f)      Proration.  Any payments or benefits payable to
Executive hereunder in respect of any calendar year during which Executive is
employed by the Company for less than the entire year, unless otherwise
provided in the applicable plan or arrangement, shall be prorated in accordance
with the number of days in such calendar year during which he is so employed.

                 (g)      Relocation Expenses.  The Company shall reimburse
Executive for all moving expenses incurred by Executive in connection with the
relocation of Executive's current principal residence to a location within 60
miles of the Company's operating headquarters in Montpelier, Ohio, including
the expenses incurred by Executive in moving the personal property of Executive
and his immediate family to Executive's new principal residence.  The Company
also will reimburse Executive for (i) any loss, up to $25,000, realized on the
sale of his current principal residence in connection with such relocation,
computed as the amount, if any, by which (A) Executive's aggregate investment
in such residence exceeds (B) the actual sales price of the





                                       3
<PAGE>   7
residence (without reduction for any broker's or agent's commissions or any
other expenses of the sale), (ii) all reasonable and customary closing expenses
incurred or paid by Executive in connection with the purchase of a new
principal residence in connection with such relocation; and (iii) all broker's
and agent's commissions and other expenses incurred by Executive in connection
with the sale of such residence ("Expenses"); provided, however, that if no
reimbursement is required under clause (i) of this Section 3(g), then the
reimbursement provided under this clause (iii) shall be limited to the amount,
if any, by which (A) Executive's aggregate investment in such residence exceeds
(B) the net sales proceeds received by Executive after deducting all Expenses.
If, as a result of providing the reimbursement provided for under this Section
3(g), Executive shall incur any federal income tax liability that otherwise
would not have been incurred, then, in addition to the amounts otherwise
payable to Executive under this Section 3(g), the Company shall pay to
Executive cash in an amount necessary to discharge any additional federal
income tax liability incurred by Executive as a result of the receipt of the
benefits provided for under this Section 3(g) (including the tax gross-up
provided by this sentence).

                 (h)      Temporary Living Expenses.  Until Executive Procures
a principal residence within 60 miles of the Company's headquarters, subject to
such period not exceeding a reasonable time for such relocation as determined
by the Company (with a relocation occurring prior to May 15, 1997, hereby
deemed to be reasonable), the Company shall reimburse Executive for all travel,
hotel and related living expenses incurred by Executive as a result of
Executive's not having a principle residence within such proximity.

                 (i)      Stock Options.  As of the effective date of this
Agreement, CBI will grant to Executive stock options to purchase 50,000 shares
of common stock of CBI at a per share exercise price equal to the closing price
of CBI's common stock as reported on the New York Stock Exchange on the
effective date of this Agreement (the "Stock Options").  The Stock Options will
be subject to the applicable terms and conditions set forth in the Company's
1994 Long-Term Incentive Plan (the "Plan"), and the Stock Options will vest and
become exercisable with respect to 10,000 shares of CBI common stock on each of
the first five anniversaries of the date of grant, subject to the provisions of
the Plan.

         4.      Termination.  Executive's employment hereunder may be
terminated by the Company or Executive, as applicable, without any breach of
this Agreement only under the following circumstances:

                 (a)      Death/Disability.  Executive's employment hereunder
shall terminate (i) automatically upon Executive's death or (ii) upon the good
faith determination by the Board of Directors of CBI (the "CBI Board") that, as
a result of Executive's incapacity due to physical or mental illness, Executive
shall have been unable to perform his material managerial duties and
responsibilities hereunder on a full time basis for 120 consecutive calendar
days, and within 30 days after written notice of termination is given (which
may occur no sooner than 30 days prior to the end of such 120 day period)
Executive shall not have returned to the performance of his material managerial
duties and responsibilities hereunder on a full time basis; provided, however,
that during any period of Executive's disability the Company may assign
Executive's duties to any other employee of the Company or may engage or hire a
third party to perform such duties





                                       4
<PAGE>   8
and any such action shall not be deemed "Good Reason" for Executive to
terminate this Agreement pursuant to Section 4(c)(i) hereof.

                 (b)      Cause.  The Company may terminate Executive's
employment hereunder for Cause.  For purposes of this Agreement, the Company
shall have "Cause" to terminate Executive's employment hereunder upon:

                      (i)         the continued failure by Executive to
                 substantially perform his duties hereunder (other than any
                 such failure resulting from Executive's incapacity due to
                 physical or mental illness) after written demand for
                 substantial performance is delivered by the Company
                 specifically identifying the manner in which the Company
                 believes Executive has not substantially performed his duties;

                      (ii)        dishonesty by Executive of a material nature
                 that relates to the performance of the Executive's duties
                 hereunder or the commission by Executive of an act of fraud
                 upon, or willful misconduct toward, the Company, as reasonably
                 determined by the CBI Board after a hearing following ten
                 days' notice to Executive of such hearing;

                      (iii)       criminal conduct by Executive (other than
                 minor infractions and traffic violations) or the conviction of
                 Executive, by a court of competent jurisdiction, of any felony
                 (or plea of nolo contendere thereto);

                      (iv)        a material violation by Executive of his duty
                 of loyalty to the Company which results or may result in
                 material injury to the Company;

                      (v)         Executive's addiction to alcohol, drugs or
                 any other controlled substances;

                      (vi)        Executive's material breach of any of the
                 covenants contained in Sections 2(c) or 2(d) of this
                 Agreement; or

                      (vii)       the failure of Executive to cease any conduct
                 determined by the Chief Executive Officer of the Company to be
                 detrimental to the well-being or morale, or otherwise not in
                 the best interest, of the Company after written demand
                 directing Executive to cease such conduct is delivered by the
                 Company specifically identifying such conduct and demanding
                 cessation thereof.

         If the effect of the occurrence of the event described in clauses (i)
through (vi) of Section 4(b) may be cured, Executive shall have the opportunity
to cure any such effect for a period of 30 days following receipt of the
Company's Notice of Termination.

                 (c)      Termination by Executive.  At his option, Executive
may terminate his employment hereunder (i) for Good Reason or (ii) if his
health should become impaired to an extent that makes the continued performance
of his duties hereunder hazardous to his physical or mental health or his life.





                                       5
<PAGE>   9
         For purposes of this Agreement, the termination of Executive's
employment hereunder by Executive because of the occurrence of any one or more
of the following events shall be deemed to have occurred for "Good Reason":

                          (A)  a material change in the nature or scope of
                 Executive's authorities, powers, functions, duties, or
                 responsibilities that is not consented to or approved by
                 Executive;

                          (B)  any other failure by the Company to comply with
                 Section 3 hereof that is not consented to or approved by
                 Executive; or

                          (C)  failure by the Company to comply with any other
                 material term or provision hereof.

         If the effect of the occurrence of the event described in clauses (A)
through (C) of this Section 4(c) may be cured, the Company shall have the
opportunity to cure any such effect for a period of 30 days following receipt
of Executive's Notice of Termination.

         5.      Compensation Upon Termination Prior to a Change in Control of
the Company.  Prior to the occurrence of a Change in Control of the Company,
Executive shall be entitled to the following compensation from the Company upon
the termination of his employment.

                 (a)      Death.  If Executive's employment shall be terminated
by reason of his death, the Company shall pay to such person as shall have been
designated in a notice filed with the Company prior to Executive's death, or,
if no such person shall be designated, to his estate as a death benefit, his
Base Salary to the date of his death in addition to any payments Executive's
spouse, beneficiaries, or estate may be entitled to receive pursuant to any
pension or employee benefit plan or other arrangement or group life insurance
policy maintained by the Company.

                 (b)      Disability.  During any period that Executive fails
to perform his material managerial duties and responsibilities hereunder as a
result of incapacity due to physical or mental illness, Executive shall
continue to receive his Base Salary and any bonus payments until Executive's
employment is terminated pursuant to Section 4(a) hereof or until Executive
terminates his employment pursuant to Section 4(c)(ii) hereof, whichever first
occurs.  After such termination, Executive shall be entitled to receive, and
the Company agrees to pay, the following compensation:

                      (i)         the remainder, if any, of Executive's Base
                 Salary which was earned but not paid prior to the Date of
                 Termination (hereinafter defined); plus

                      (ii)        any disability payments otherwise payable to
                 Executive by or pursuant to group plans provided by the
                 Company.





                                       6
<PAGE>   10
                 (c)      Cause.  If Executive's employment shall be terminated
for Cause, the Company shall pay Executive his Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given.
Such payments shall fully discharge the Company's obligations hereunder.

                 (d)      Breach by the Company or for Good Reason.  If (A) the
Company shall terminate Executive's employment other than for Cause or (B)
Executive shall terminate his employment for Good Reason, then the Company
shall pay Executive:

                      (i)         his Base Salary through the Date of
                 Termination at the rate in effect at the time Notice of
                 Termination is given;

                      (ii)        in lieu of any further salary payments to
                 Executive for periods subsequent to the Date of Termination,
                 the Company shall (A) pay as severance pay to Executive on or
                 before the fifteenth day following the Date of Termination, a
                 lump sum in cash equal to Executive's annual Base Salary at
                 the rate in effect at the time the Notice of Termination is
                 given and (B) maintain in full force and effect, for the
                 continued benefit of Executive (and, if applicable,
                 Executive's spouse and minor children) for a one-year period
                 beginning upon the Date of Termination, all medical and dental
                 insurance coverages as in effect and in which such persons
                 were participating immediately prior to the Date of
                 Termination, provided that the continued participation of such
                 persons is possible under the general terms and provisions of
                 such plans and arrangements; if the participation of any of
                 such persons in any such plan or arrangement is barred, the
                 Company shall arrange to provide such persons with insurance
                 coverage substantially similar to those which such persons
                 would otherwise have been entitled to receive under such plans
                 and arrangements from which such persons' continued
                 participation is barred; provided, however, that in either
                 case, to the extent applicable, Executive pays to the Company
                 an amount equal to the premiums, or portion thereof, that
                 Executive was required to pay to maintain such insurance
                 coverage for such persons prior to the Date of Termination;
                 and provided, further, that any insurance coverage provided
                 pursuant hereto shall be limited and reduced to the extent
                 such coverage otherwise is provided by (or available from or
                 under), at no direct out of pocket cost to the recipient, any
                 other employer of Executive or Executive's spouse or minor
                 children, or Social Security, medicare, medicaid or any
                 similar or substitute plans available to such persons; and

                    (iii)         all benefits payable under the terms of all
                 employee benefit plans or other arrangements as of the Date of
                 Termination.

Executive shall not be required to mitigate the amount of any payment provided
for in this Section 5(d) by seeking other employment or otherwise, nor shall
the amount of any payment provided for in this Section 5(d) be reduced by any
compensation earned by Executive as the result of employment by another
employer after the Date of Termination, or otherwise.





                                       7
<PAGE>   11
         6.      Compensation Upon Termination After a Change in Control of the
Company.  If, after the occurrence of a Change in Control of the Company,
Executive's employment is terminated by the Company or by Executive, as the
case may be, for any of the reasons described in Section 4 above, then
Executive shall be entitled to (a) the same compensation benefits from the
Company as set forth in Section 5 above to which he would have been entitled if
the termination of his employment had occurred prior to the occurrence of a
Change in Control of the Company plus (b) in the event the termination occurs
as described in Section 5(d) above within one year after the occurrence of the
Change of Control, then Executive also shall be entitled to a lump sum in cash
equal to the bonus, if any, paid or awarded to Executive for the most recent
calendar year ended prior to the date of the Change in Control or, if bonuses
for such calendar year have not been determined for such calendar year as of
the Date of Termination, the prior calendar year.

         7.      Other Provisions Relating to Termination; Definitions.

                 (a)      Notice of Termination.  Any termination of
Executive's employment by the Company or by Executive (other than termination
because of the death of Executive) shall be communicated by written Notice of
Termination to the other party hereto.  For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated.

                 (b)      Date of Termination.  For purposes of this Agreement,
"Date of Termination" shall mean (i) if Executive's employment is terminated by
his death, the date of his death; (ii) if Executive's employment is terminated
because of a disability pursuant to Section 4(a), then 30 days after Notice of
Termination is given (provided that Executive shall not have returned to the
performance of his duties on a full-time basis during such 30 day period);
(iii) if Executive's employment is terminated by the Company for Cause or by
Executive for Good Reason, then the date specified in the Notice of Termination
(which date shall be a date between the date Notice of Termination is given and
30 days thereafter (inclusive)); and (iv) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given.

                 (c)      Good Reason.  If Executive does not give a Notice of
Termination to the Company within 30 days after learning of the occurrence of
an event giving rise to Good Reason, then this Agreement will remain in effect;
provided, however, that the failure of Executive to terminate this Agreement
for Good Reason shall not be deemed a waiver of Executive's right to terminate
his employment for Good Reason upon the occurrence of a subsequent event
described in clauses (A) through (C) of Section 4(c) in accordance with the
terms of this Agreement.  Notwithstanding the foregoing, the right of Executive
to terminate his employment for Good Reason under Section 4(c) shall not limit
the Company's right to terminate Executive's employment for Cause under Section
4(b) if Cause is determined to exist prior to the time Good Reason is
determined to exist.





                                       8
<PAGE>   12
                 (d)      Cause.  If the Company does not give a Notice of
Termination to Executive within 30 days after learning of the occurrence of an
event giving rise to Cause, then this Agreement will remain in effect;
provided, however, that the failure of the Company to terminate this Agreement
for Cause shall not be deemed a waiver of the Company's right to terminate
Executive's employment for Cause upon the occurrence of a subsequent event
described in clauses (i) through (vi) of Section 4(b) in accordance with the
terms of this Agreement.  Notwithstanding the foregoing, the right of the
Company to terminate Executive's employment for Cause under Section 4(b) shall
not limit Executive's right to terminate his employment for Good Reason under
Section 4(c) if Good Reason is determined to exist prior to the time Cause is
determined to exist.

                 (e)      Certain Definitions.

                      (i)         Acquiring Person:  shall mean any individual,
                 group, partnership, corporation, association, trust, or other
                 entity or organization (a "Person") other than (a) Executive
                 or any Executive Affiliate, (b) CBI, any of CBI's
                 Subsidiaries, any employee benefit plan of CBI or of a
                 Subsidiary of CBI or of a corporation owned directly or
                 indirectly by the stockholders of CBI in substantially the
                 same proportions as their ownership of stock of CBI, or any
                 trustee or other fiduciary holding securities under an
                 employee benefit plan of CBI or of a Subsidiary of CBI or of a
                 corporation owned directly or indirectly by the stockholders
                 of CBI in substantially the same proportions as their
                 ownership of stock of CBI, or (c) Citicorp Venture Capital,
                 Ltd., a New York corporation ("CVC"), or any Affiliate of CVC
                 that is directly controlled by Citicorp or Citibank, N.A., or
                 otherwise is in the same tier as CVC of Affiliates under the
                 control of such entities ("Direct Affiliates"), but shall not
                 include any entities that may be deemed an Affiliate of CVC as
                 a result of the investment by any Direct Affiliate in such
                 entity.

                      (ii)        Change in Control:  shall be deemed to have
                 occurred if:

                                  (1)      any Acquiring Person is or becomes
                          the "beneficial owner" (as defined in Rule 13d-3
                          under the Securities Exchange Act of 1934, as amended
                          (the "Exchange Act"), directly or indirectly, of
                          securities of CBI representing fifty percent or more
                          of the combined voting power of the then outstanding
                          Voting Securities of the Company; or

                                  (2)      a public announcement is made of a
                          tender or exchange offer by any Acquiring Person for
                          fifty percent or more of the outstanding Voting
                          Securities of CBI or the Company, and the Board of
                          Directors of CBI or the Company, respectively,
                          approves or fails to oppose that tender or exchange
                          offer in its statements in Schedule 14D-9 under the
                          Exchange Act; provided, however, that the benefits
                          payable to Executive under Section 6(a) hereof shall
                          not be payable solely as a result of an event
                          described in this clause (2) unless, within one year
                          after the occurrence of such event, an event
                          described in clauses (1), (3) or (4) hereof shall
                          have





                                       9
<PAGE>   13
                          occurred, in which case such benefits payable under
                          Section 6(a) hereof shall be payable within fifteen
                          days after the occurrence of such event; or

                                  (3)      the stockholders of CBI or the
                          Company approve a merger or consolidation of CBI or
                          the Company, respectively, with any other corporation
                          or partnership (or, if no such approval is required,
                          the consummation of such a merger or consolidation of
                          CBI or the Company), other than a merger or
                          consolidation that would result in the Voting
                          Securities of CBI or the Company, as applicable,
                          outstanding immediately prior to the consummation
                          thereof continuing to represent (either by remaining
                          outstanding or by being converted into Voting
                          Securities of the surviving entity or of a parent of
                          the surviving entity) a majority of the combined
                          voting power of the Voting Securities and Convertible
                          Voting Securities (on a fully- diluted basis assuming
                          full conversion thereof) of the surviving entity (or
                          its parent) outstanding immediately after that merger
                          or consolidation; or

                                  (4)      the stockholders of CBI or the
                          Company approve a plan of complete liquidation of CBI
                          or the Company, respectively, or an agreement for the
                          sale or disposition by CBI or the Company of all or
                          substantially all of CBI's or the Company's assets,
                          respectively, (or, if no such approval is required,
                          the consummation of such a liquidation, sale, or
                          disposition in one transaction or series of related
                          transactions) other than a liquidation, sale or
                          disposition of all or substantially all of CBI or the
                          Company's assets in one transaction or a series of
                          related transactions to a Subsidiary of CBI or any
                          other corporation owned directly or indirectly by the
                          stockholders of CBI in substantially the same
                          proportions as their ownership of stock of CBI; or

                                  (5)      CBI ceases to be the "beneficial
                          owner" (as defined in Rule 13d-3 under the Exchange
                          Act), directly or indirectly, of securities of the
                          Company representing at least a majority of the
                          combined voting power of the then outstanding Voting
                          Securities of the Company.

                    (iii)         Subsidiary:  with respect to any Person, any
                 corporation or other entity of which a majority of the voting
                 power of the voting equity securities or equity interest is
                 owned, directly or indirectly, by that Person.

                      (iv)        Voting Securities:  (i) any securities that
                 vote generally in the election of directors, in the admission
                 of general partners, or in the selection of any other similar
                 governing body and (ii) with respect to CBI, all shares of
                 CBI's nonvoting common stock, par value $.01 per share (all of
                 which are convertible into shares of common stock, par value
                 $.01 per share, of the Company).

                 (f)      Affiliate.  For purposes of this Agreement, the term
"affiliate" shall mean, with respect to any Person (including an entity), any
other Person that directly or indirectly





                                       10
<PAGE>   14
controls, is controlled by, or is under common control with the Person in
question.  As used in this definition of "affiliate," the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of Voting Securities, by contract, or otherwise.

         8.      Successors and Assignments.  This Agreement shall be binding
upon, and inure to the benefit of, the Company, Executive, and their respective
successors, assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as applicable.
This Agreement may not be assigned (either voluntarily or involuntarily) by any
party hereto without the express written consent of the other party; provided,
however, that the Company may at any time assign this Agreement to (i) any
Subsidiary of the Company or CBI, (ii) any other corporation, partnership, or
other entity that controls, is controlled by, or is under common control with
the Company or CBI or (iii) any successor (whether direct or indirect, by
purchase of securities, merger, consolidation, sale of assets, or otherwise) to
all or substantially all of the business or assets of the Company.  Any
attempted assignment in violation of this Section 8 shall be void and
ineffective for all purposes.  In the event of an assignment permitted by this
Section 8, this Agreement shall be binding upon the heirs, successors, and
assigns of the parties hereto.

         9.      Notice.  For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when (i) delivered personally; (ii) sent by
facsimile or similar electronic device and confirmed; (iii) delivered by
overnight express; or (iv) if sent by any other means, upon receipt.  Notices
and all other communications provided for in this Agreement shall be addressed
as follows:

         If to Executive:

                 Duane R. Grossett
                 Chase Brass & Copper Company, Inc.
                 State Route 15
                 Montpelier, Ohio 43543
                 Facsimile No. 419/485-8150


         If to the Company:

                 Chase Brass & Copper Company, Inc.
                 State Route 15
                 Montpelier, Ohio 43543
                 Attention: Chief Financial Officer
                 Facsimile No: 419/485-8150

or to such other address as any party may have furnished to the other in
writing in accordance herewith.





                                       11
<PAGE>   15
         10.     Disputes.

                 (a)      Arbitration.  Subject to Section 10(b) below, in the
event any dispute or controversy arises under this Agreement and is not
resolved by the mutual written agreement between Executive and the Company
within 30 days after notice of the dispute is first given, then, upon the
written request of Executive or the Company, such dispute or controversy shall
be submitted to arbitration, which arbitration shall be conducted in accordance
with the rules of the American Arbitration Association.  Judgment may be
entered thereon and the results of arbitration will be binding and conclusive
on the parties hereto.  Any arbitrator's award or finding or any judgment or
verdict thereon will be final and unappealable.  All parties agree that venue
for arbitration will be in Williams County, Ohio, and that any arbitration
commenced in any other venue will be transferred to Williams County, Ohio, upon
the written request of any party to this Agreement.  The prevailing party will
be entitled to reimbursement for reasonable attorneys fees, reasonable costs
and other reasonable expenses pertaining to the arbitration and the enforcement
thereof and such attorneys fees, costs and other expenses shall become a part
of any award, judgment or verdict.  All arbitrations will have three
individuals acting as arbitrators: one arbitrator will be selected by
Executive, one arbitrator will be selected by the Company, and the two
arbitrators so selected will select a third arbitrator.  Any arbitrator
selected by a party will not be affiliated, associated or related to the party
selecting that arbitrator in any matter whatsoever.  The decision of the
majority of the arbitrators will be binding on all parties.

                 (b)      Specific Enforcement.  Executive acknowledges that
the covenants of Executive contained in Sections 2(c) and 2(d)  of this
Agreement are special and unique, that a breach by Executive of any term or
provision of either of Sections 2(c) or 2(d) hereof may cause irreparable
injury to the Company, CBI and/or another Subsidiary of CBI, and that remedies
at law for the breach of any terms or provisions of Sections 2(c) or 2(d)
hereof may be inadequate.  Accordingly, notwithstanding the provisions of
Section 10(a),  in addition to any other remedies it may have in the event of
breach, the Company shall be entitled to enforce specific performance of the
terms and provisions of Sections 2(c) or 2(d) hereof, to obtain temporary and
permanent injunctive relief to prevent the continued breach of such terms and
provisions without the necessity of posting bond or of proving actual damage,
and to obtain attorneys fees in respect of the foregoing if the Company
prevails in such action or proceeding.  For purposes of this Section 10(b) and
Sections 2(c) and 2(d) hereof, CBI and each other Subsidiary of CBI shall be
deemed a third party beneficiary entitled to the benefits of such Sections and
shall be entitled to enforce Sections 2(c) and 2(d) of this Agreement in
accordance with this Section 10(b).

         11.     Severability.  In the event that any provision of this
Agreement, or the application thereof to any person or circumstance, is held by
a court of competent jurisdiction to be invalid, illegal, or unenforceable in
any respect under present or future laws effective during the effective term of
any such provision, such invalid, illegal or unenforceable provision shall be
fully severable; and this Agreement shall then be construed and enforced as if
such invalid, illegal, or unenforceable provision had not been contained in
this Agreement; and the remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement.  Furthermore,
in lieu of each such illegal, invalid, or unenforceable provision, there shall
be added automatically as part of this Agreement, a provision as similar in
terms to such illegal, invalid or unenforceable





                                       12
<PAGE>   16
provision as may be possible and be legal, valid and enforceable.
Notwithstanding the above, in the event any such invalidity, illegality or
unenforceability of any portion of Section 2(c) hereof is caused by such
provision being held to be excessively broad as to time, duration, geographical
scope, activity or subject, then such provision shall, at the option of the
Company, remain a part of this Agreement and shall be construed by limiting and
reducing it so as to be enforceable to the extent compatible with the then
applicable law and shall be enforced so as to permit the Company or any of its
Subsidiaries to recover damages for any prior violation of such provision as so
limited and reduced, to the extent permitted under applicable law.

         12.     Miscellaneous.  This Agreement sets forth the entire
understandings of the parties with respect to the subject matter hereof, it
incorporates and merges any and all previous communications and understandings
with respect to the subject matter hereof, oral or written, and no provision of
this Agreement may be modified, waived, or discharged unless such waiver,
modification, or discharge is agreed to in writing signed by Executive and the
Company.  No waiver by either party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.  The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws
of the State of Ohio, excluding any choice-of-law provisions thereof.

         13.     Attorney Fees.  Except as otherwise provided in Section 10,
the prevailing party in any dispute or controversy under or in connection with
this Agreement shall be entitled to reimbursement from the non-prevailing party
for all costs and reasonable legal fees incurred by such prevailing party.

         14.     Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]





                                       13
<PAGE>   17
         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth below, to be effective as of the date first above written.

                                      THE COMPANY:

                                      CHASE BRASS & COPPER COMPANY,
                                        INC.
                                      a Delaware corporation


Date:    January 15, 1997             By: /s/ Martin V. Alonzo
                                          ---------------------------------
                                          Martin V. Alonzo
                                          Chief Executive Officer


                                      EXECUTIVE:
                                      ---------


Date:    January 15, 1997             /s/ Duane R. Grossett
                                      -------------------------------------
                                      Duane R. Grossett





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