<PAGE>   1
                                                                    EXHIBIT 10.5


                              EMPLOYMENT AGREEMENT

                                 BY AND BETWEEN

                       CHASE BRASS & COPPER COMPANY, INC.

                                      AND

                                JOHN H. STEADMAN

                             DATED EFFECTIVE AS OF

                                OCTOBER 12, 1999

<PAGE>   2

                               TABLE OF CONTENTS
<TABLE>
                                                                                    Page
                                                                                    ----
<S>  <C>  <C>                                                                       <C>
1.   Employment..................................................................     1

2.   Duties......................................................................     1
     (a)  Duties as Employee of the Company......................................     1
     (b)  Other Duties...........................................................     1

3.   Non-Compete.................................................................     1
     (a)  Covenant...............................................................     1
     (b)  Tolling of Non-Competition Term........................................     2
     (c)  Reasonableness of Restrictions.........................................     2
     (d)  Separate Covenants.....................................................     2

4.   Confidentiality.............................................................     3

5.   Compensation and Related Matters............................................     3
     (a)  Base Salary............................................................     3
     (b)  Bonus Payments.........................................................     3
     (c)  Expenses and Other Benefits............................................     4
     (d)  Vacations..............................................................     4
     (e)  Perquisites............................................................     4
     (f)  Proration..............................................................     4
     (g)  Relocation Expenses....................................................     4
     (h)  Temporary Living Expenses..............................................     5
     (i)  Stock Options..........................................................     5

6.   Termination.................................................................     5
     (a)  Death Disability.......................................................     5
     (b)  Cause..................................................................     6
     (c)  Termination by Executive...............................................     7

7.   Compensation Upon Termination Prior to a Change in Control of the Company...     7
     (a)  Death..................................................................     7
     (b)  Disability.............................................................     8
     (c)  Cause or Without Good Reason...........................................     8
     (d)  Breach by the Company or for Good Reason...............................     8

8.   Compensation Upon Termination After a Change in Control of the Company......     9

9.   Other Provisions Relating to Termination; Definitions.......................    10
     (a)  Notice of Termination..................................................    10
     (b)  Date of Termination....................................................    10
     (c)  Good Reason............................................................    10

                                      (i)

</TABLE>
<PAGE>   3
<TABLE>

                                                                                    Page
                                                                                    ----
<S>  <C>  <C>                                                                       <C>
     (d)  Cause................................................................      10
     (e)  Certain Definitions..................................................      10
     (f)  Affiliate............................................................      12

10.  Successors and Assignments................................................      12

11.  Notice....................................................................      13

12.  Disputes..................................................................      13
     (a)  Arbitration..........................................................      13
     (b)  Specific Enforcement.................................................      15

13.  Severability..............................................................      15

14.  Miscellaneous.............................................................      15

15.  Reimbursement by Executive................................................      16
     (a)  Reimbursement.........................................................     16
     (b)  Special Provisions for Reimbursement.................................      16

16.  Attorney Fees.............................................................      16

17.  Counterparts..............................................................      16
</TABLE>

                                      (ii)
<PAGE>   4
                              EMPLOYMENT AGREEMENT

     This Employment Agreement (this "Agreement") is effective as of the 12th
day of October 1999, by and between Chase Brass & Copper Company, Inc., a
Delaware Corporation (the "Company"), and John H. Steadman (the "Executive").

     1.   Employment.  The Company hereby employs Executive for the period
commencing on the date hereof and expiring on October 12, 2000 (the "Term")
during which Term the Executive will serve as the Company's Executive Vice
President for the period commencing on the date hereof and expiring on January
4, 2000, at which time the Executive will assume the position of President and
Chief Operating Officer for the period commencing on January 4, 2000, and
expiring on October 12, 2000 (unless sooner terminated as hereinafter set
forth), and Executive hereby accepts such employment, on the terms and
conditions set forth herein; provided, however, that commencing on the first
anniversary of the date hereof, and each anniversary of the date hereof
thereafter, the Term of this Agreement shall be extended for one additional year
unless at least sixty days prior to any such date the Company or Executive shall
have given written notice that it or he, as applicable, does not wish to extend
this Agreement.

     2.   Duties.

          (a)  Duties as Employee of the Company.  Executive shall, subject to
the authority and supervision of the Chairman of the Board of Directors of the
Company (the "Board"), 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 (i) from October 12, 1999, until January 4, 2000, an
Executive Vice President and (ii) from and after January 4, 2000, for the
remainder of the Term, a President and Chief Operating Officer, in each case
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 Chairman of the
Board. Executive will devote his full time, attention, and energies to the
business of the Company and shall not, without the consent of the Chairman of
the Board, 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 Industries Inc. ("CSI"),
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 CSI, 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.

     3.   Non-Compete.

          (a)  Covenant. 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, CSI or any Subsidiary or

                                       1
<PAGE>   5
otherwise interfere with any person who was an employe of or consultant to the
Company, CSI or any Subsidiary of CSI during the six (6) month period preceding
such termination: (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 or any other
products manufactured, distributed, licensed, sold or marketed by the Company
or any Subsidiary of the Company during the Term (collectively, "Products"), 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 (6) month period prior to such termination, its
intention to engage in such business (any such company, a "Competing
Business"); (iii) induce, request, advise, attempt to influence, or solicit,
directly or indirectly, any person or business enterprise to purchase Products
from any person or business enterprise other than the Company if the Company
provides, or negotiated to provide, Products to that person or business
enterprise during the Term (any such person or Business Enterprise, a
"Customer"), or (iv) induce, request, advise, attempt to influence, or solicit,
directly or indirectly, any Customer with whom Executive had personal contact in
connection with performing his duties as an employee of the Company to purchase
Products from any person or business enterprise other than the company;
provided, however, that the provisions of this Section 3(a) 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.

          (b)  Tolling of Non-Competition Term. If, during any calendar month
after the termination of Executive's employment by the Company in which the
provisions of Section 3(a) are applicable.  Executive is not in compliance with
the terms of Section 3(a), the Company shall be entitled to, among other
remedies, compliance by Executive with the terms of Section 3(a) for an
additional number of months that equals the number of calendar months during
which such noncompliance occurred.

          (c)  Reasonableness of Restrictions. Executive acknowledges that the
geographic boundaries, scope of prohibited activities, and time duration of the
provisions of Section 3(a) are reasonable and are no broader than are necessary
to maintain and to protect the legitimate business interests of the Company, the
Company's Subsidiaries and CSI.

          (d)  Separate Covenants. The parties hereto intend that the covenants
contained in each of subsections 3(a)(i), (ii), (iii), and (iv) of this
Agreement be construed as a series of separate covenants, one for each county
or other defined province in each geographic area in which the Company or any
Subsidiary of the Company conducts its business or otherwise manufactures,
distributes, licenses, sells, or markets Products.  Except for geographic
coverage, each such separate covenant shall be deemed identical in terms to the
applicable covenant contained in subsections 3(a)(i), (ii), (iii), and (iv)
hereof.  Furthermore, each of the covenants in subsections 3(a)(i), (ii),
(iii), and (iv) hereof shall be deemed a separate and independent covenant,
each being enforceable


                                       2
<PAGE>   6
irrespective of the enforceability (with or without reformation) of the other
covenants contained in subsections 3(a)(i), (ii), (iii), and (iv) hereof.

     4. 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,
CSI or any Subsidiary of CSI (including without limitation any list or record of
persons or entities with which the Company, CSI or any Subsidiary of CSI 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, CSI or any
Subsidiary of CSI; (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, CSI or any
Subsidiary of CSI in his capacity as an employee, officer, director, or
stockholder of the Company, CSI or any Subsidiary of CSI; or (iv) during the
period of his employment hereunder, Executive may disclose such confidential
information to another employee of the Company, CSI or any Subsidiary of CSI or
to representatives or agents of the Company, CSI or any Subsidiary of CSI (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, CSI or any Subsidiary of CSI
which he may then possess or have under his control.

     5. Compensation and Related Matters.

         (a) Base Salary. Executive shall receive a base salary paid by the
Company ("Base Salary") at the annual rate of $225,000 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 CSI (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 that the first review of Executive's Base Salary shall occur in 2001,
if this Agreement is extended pursuant to Section 1, with respect to Base Salary
for 2001.

         (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. Each bonus payment may be in an amount of up to 50% of Executive's
Base Salary for the period to which such bonus relates; provided, that Executive
shall first be entitled to receive a bonus payment in 2001 for services rendered
during 2000. Factors to be considered by the Compensation Committee

                                       3
<PAGE>   7


in determining Executive's bonus for any given calendar year will include the
financial and operating performance of the Company and Executive's contribution
to profitability of the Company.

         (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 Chairman of the Board, 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 15 paid vacation days
during each year of the Term. For purposes of this Section 5(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. Unused vacation
days for a calendar year shall expire as of such calendar year end if not used
during that calendar year.

         (e) Perquisites. Executive shall be entitled to receive the
perquisites and fringe benefits appertaining to the offices of the Company held
by Executive 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 (i) the Company
shall pay for Executive's membership at one country club, located within 25
miles of Executive's principal residence (as relocated as contemplated in
Section 5(g) below) or the Company's operating headquarters, to which Executive
is or may become a member as of or after the date hereof, with the selection of
the country club subject to prior approval by the Chairman of the Board, which
consent shall not be unreasonably withheld; 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 and
(ii) the Company shall provide Executive with the use of an automobile, make
and model to be agreed upon between Executive and the Chairman of the Board, and
shall reimburse Executive for all reasonable expenses related to maintenance of
the automobile, in accordance with Internal Revenue Service rulings.

         (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
moving expenses incurred by Executive in connection with the relocation of
Executive's current principal residence to a location within 70 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, in accordance with, and
subject to, the following terms and restrictions: (i) the Company will reimburse
Executive for 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; (ii) the Company will reimburse Executive for
all broker's and agent's commissions and other closing expenses and fees
incurred by Executive

                                        4

<PAGE>   8

in connection with the sale of Executive's current principal residence
in Seal Beach, California: (iii) the Company will reimburse Executive for
reasonable expenses incurred by Executive and Executive's family in connection
with up to two trips to the Montpelier, Ohio, area for house-hunting
purposes, such reimbursable expenses to include airfare for Executive and
Executive's immediate family, hotel expenses meals, and auto rental during the
course of such trips; and (iv) the Company will pay Executive a one-time lump
sum cash payment of up to $10,000, to be used at Executive's discretion to
cover incidental costs associated with relocating Executive's principle
residence as provided herein, which amount will not be deducted from or applied
towards any expenses referred to in clauses (i) through (iii) of this Section
5(g) or in Section 5(h). If, as a result of providing the reimbursement provided
for under this Section 5(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 5(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 5(g) (including the tax gross-up
provided by this sentence).

         (h) Temporary Living Expenses. Until Executive procures a principle
residence within 70 miles of the Company's headquarters, or from the period
commencing as of the effective date of this Agreement until April 12, 2000,
whichever period is shorter, the Company shall reimburse Executive for all local
travel, hotel and related living expenses incurred by Executive as a result of
Executive's not having a principle residence within such proximity. In addition,
during this period the Company shall reimburse Executive for transportation
costs incurred by Executive returning to his principle residence, prior to
relocation as contemplated by Section 5(g), up to two trips per month. Expenses
reimbursed pursuant to this Section 5(h) shall not be duplicative of the
expenses reimbursed pursuant to Section 5(g) hereof.

         (i) Stock Options. As of the effective date of this Agreement, CSI has
granted to Executive stock options to purchase 50,000 shares of common stock
of CSI at a per share exercise price equal to the closing price of CSI'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 CSI common stock on each of the
first five anniversaries of the date of grant, subject to the provisions of
the Plan. Executive hereby acknowledges receipt of the Stock Options.

     6. 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 CSI (the "CSI Board") that, as a
result of Executive's incapacity or disability due to physical or mental
illness, Executive shall have been unable to perform hereunder with or without
reasonable accommodation 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


                                       5

<PAGE>   9

any period of Executive's incapacity or 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 and any such action shall not be deemed "Good
Reason" for Executive to terminate this Agreement pursuant to Section 6(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 or disability 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 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 CSI 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, CSI or any other Subsidiary of CSI;

                  (v) Executive's material breach of any of the covenants
         contained in Section 3(a) or 4 of the Agreement;

                  (vi) notwithstanding the provisions of Section 6(a), the use
         by Executive of alcohol which renders Executive unable to perform the
         essential functions of his position under this Agreement or the use by
         Executive of illegal or controlled drugs or other substances; or

                  (vii) the failure of Executive to cease any conduct determined
         by the Chairman of the Board to be detrimental to the well-being or
         morale, or otherwise not in the best interest, of the Company, CSI or
         any other Subsidiary of CSI 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 (iv) or
(v) of Section 6(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.

                                       6
<PAGE>   10



            (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.

     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 reduction in the nature or scope of Executive's
     responsibilities or authorities that is not consented to or approved by
     Executive;

                (B) any failure by the Company to comply in any material respect
     with Section 5 hereof that is not consented to or approved by Executive;
     provided, that, any change in Executive's discretionary bonus as from time
     to time determined by the Compensation Committee shall not constitute Good
     Reason for resignation;

               (C) the liquidation, dissolution, merger, consolidation (other
     than resulting from a sale by CSI of the outstanding Voting Securities of
     the Company as contemplated by Section 9(e)(ii)(5)) or reorganization of
     the Company or transfer of all or substantially all of its assets in a
     transaction that constitutes a Change of Control, unless the successor (by
     liquidation, merger, consolidation, reorganization or otherwise) to which
     all or substantially all of its assets have been transferred (directly or
     by operation of law) shall have assumed all duties and obligations of the
     Company under this Agreement pursuant to Section 10 hereof or

               (D) 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 (D) of this Section 6(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.

     7. 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


                                        7

<PAGE>   11

employment is terminated pursuant to Section 6(a) hereof or until Executive
terminates his employment pursuant to Section 6(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.

        (c) Cause or Without Good Reason. If Executive's employment shall be
terminated by the Company for Cause or by Executive other than as permitted
under Section 6(a) or 6(c)(i) of this Agreement, 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. Subject to the application of Sections 6(a)
and 6(b) of this Agreement, 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 pay as
severance pay to Executive on or before the fifteenth day following the Date of
Termination, a lump sum in cash equal to one-half (1/2) of Executive's annual
Base Salary at the rate in effect at the time the Notice of Termination is
given;

             (iii) maintain in full force and effect, for the continued benefit
of Executive (and, if applicable, Executive's spouse and minor children) for a
six-month 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


                                        8

<PAGE>   12

             (iv) 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 7(d) by seeking other employment or otherwise, nor,
subject to the last proviso of clause (iii) of this Section 7(d), shall the
amount of any payment provided for in this Section 7(d) be reduced by any
compensation earned by Executive as the result of employment by another
employer after the Date of Termination, or otherwise.

     8. 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 6 above, then Executive shall be
entitled to the same compensation benefits from the Company as set forth in
Section 7 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; provided, that, in the event the termination occurs as described in
Section 7(d) above within one year after the occurrence of the Change of
Control, then Executive shall be entitled to, in lieu of the compensation
provided in Section 7(d)(ii), a lump sum in cash, which shall be paid within 30
days after the termination of employment or resignation, in an amount equal to
the sum of (a) the greater of (i) Executive's Base Salary in effect immediately
prior to the Change in Control and (ii) Executive's Base Salary in effect at the
time of termination or, if Executive resigns his employment for Good Reason,
immediately prior to the occurrence of the event giving rise to Good Reason,
plus (b) 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 the Change in Control, the prior calendar year; provided, however, that
the amount of cash paid pursuant to this Section 8 plus the value of any other
compensation paid to or deemed received by or attributed to Executive, pursuant
to this Agreement or otherwise, as a result of the Change in Control that is
subject to the provisions of Section 280G of the Code shall in no event exceed
$100 less than 3.00 times Executive's Annualized Includable Compensation and
the amount of the Company's cash payment to Executive under this Section shall
be adjusted accordingly to achieve this result. Notwithstanding the provisions
of this Section, nothing contained in this Section shall be construed to imply
that any payments to the Executive other than pursuant to this Section are
subject to the provisions of Section 280G of the Code.

     9. Other Provisions Relative 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 6(a), then 30 days

                                        9

<PAGE>   13


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 (D) of Section 6(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 6(c) shall not limit the Company's
right to terminate Executive's employment for Cause under Section 6(b) if Cause
is determined to exist prior to the time Good Reason is determined to exist.

        (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, 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 6(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 6(b) shall not limit Executive's right to terminate his
employment for Good Reason under Section 6(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) CSI, any of CSI's
Subsidiaries, any employee benefit plan of CSI or of a Subsidiary of CSI or of a
corporation owned directly or indirectly by the stockholders of CSI in
substantially the same proportions as their ownership of stock of CSI, or any
trustee or other fiduciary holding securities under an employee benefit plan of
CSI or of a Subsidiary of CSI or of a corporation owned directly or indirectly
by the stockholders of CSI in substantially the same proportions as their
ownership of stock of CSI, 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:



                                       10

<PAGE>   14

               (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 CSI
     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 CSI or the Company, and the Board of Directors of CSI 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 8 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) of this Section 9(e)(ii) shall
     have occurred, in which case such benefits payable under Section 8 hereof
     shall be payable within fifteen days after the occurrence of such event; or

               (3) the stockholders of CSI or the Company approve a merger or
     consolidation of CSI 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 CSI or the Company),
     other than a merger or consolidation that would result in the Voting
     Securities of CSI 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 assume full conversion thereof) of the
     surviving entity (or its parent) outstanding immediately after that merger
     or consolidation; or

               (4) the stockholders of CSI or the Company approve a plan of
     complete liquidation of CSI or the Company, respectively, or an agreement
     for the sale or disposition by CSI or the Company of all or substantially,
     all of CSI'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 CSI
     or the Company's assets in one transaction or a series of related
     transactions to a Subsidiary of CSI or any other corporation owned directly
     or indirectly by the stockholders of CSI in substantially the same
     proportions as their ownership of stock of CSI; or

               (5) CSI 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 other than pursuant
     to a transaction in which, immediately after the consummation of such
     transaction, all of the outstanding Voting Securities of the Company or any
     corporation or other entity into which the

                                      11

<PAGE>   15
Company is merged or otherwise consolidated which are not owned by CSI or any
Subsidiary of CSI are owned, directly or indirectly, by the stockholders of CSI
in substantially the same proportions as their ownership of stock of CSI
immediately prior to such transaction.

          (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 CSI, all
shares of CSI'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 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 through
ownership of Voting Securities, by contract, or otherwise.

     10. 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, without the consent of Executive (a) assign this entire
Agreement to (i) any Subsidiary of the Company or CSI; or (ii) any other
corporation, partnership, or other entity that controls, is controlled by, or is
under common control with the Company or CSI; and (b) assign the Company's
rights and obligations under Sections 3, 4.12 and 13 of this Agreement to 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 10 shall be void and ineffective for all purposes. In the event of an
assignment permitted by this Section 10, this Agreement shall be binding upon
the heirs, successors, and assigns of the parties hereto.

     11. 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 this Agreement shall be addressed
as follows:

                                       12

<PAGE>   16

     If to Executive:

          John H. Steadman
          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.

     12. Disputes.

         (a) Arbitration. Subject to Section 12(b) below, in the event any
claim, demand, cause of action, dispute, controversy or other matter in question
("Claim") arises, whether or not arising out of this Agreement or the Employee's
employment (or its termination), whether arising in contract, tort or otherwise
and whether provided by statute, equity or common law, that the Company may have
against Executive or that Executive may have against the Company, CSI or any
other Subsidiary of CSI, or any of the foregoing entities' respective officers,
directors, employees or agents in their capacity as such or otherwise, and is
not resolved by the mutual written agreement between Executive and the Company,
or otherwise, 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. Claims covered by this Section 12
include, without limitation, claims by Executive for breach of this Agreement,
wrongful termination, discrimination (based on age, race, sex, disability,
national origin, sexual orientation, or any other factor), harassment and
retaliation, whether or not arising under Title VII of the Civil Rights Act of
1964, the Age Discrimination Employment Act, the Americans with Disabilities
Act, or similar state or local law. Any arbitration shall be conducted in
accordance with the Federal Arbitration Act (FAA") and, to the extent an issue
is not addressed by the FAA or the FAA does not apply, with the then-current
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association ("AAA") or other rules of the AAA as applicable to the
claims asserted. If a party refuses to honor its obligations under this Section
12, the other party may compel arbitration in either federal or state court. The
arbitrators shall apply the substantive law of Ohio (excluding Ohio
choice-of-law principles that might call for the application of some other
state's law) or federal law, or both as applicable to the claims asserted. The
arbitrators shall have exclusive authority to resolve any dispute relating to
the interpretation, applicability or enforceability of this Section 12,
including any claim that all or part of the Agreement is void or voidable and
any claim that an issue is not subject to arbitration. The results of
arbitration will be binding and conclusive on the parties hereto. Any
arbitrators' award or finding or any judgment or verdict thereon will be final
and unappealable. All parties agree that


                                       13

<PAGE>   17

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; provided that (i)
Executive or the Company shall use reasonably diligent efforts to select their
respective arbitrator within 60 days after a matter is submitted to arbitration
and (ii) the parties (including arbitrators) shall not be limited to selecting
arbitrators from only the AAA's lists of arbitrators. Any arbitrator selected by
a party will not be affiliated, associated or related to the party selecting
that arbitrator in any matter whatsoever. The arbitrators may use the AAA rules
but are encouraged to adopt rules the arbitrators deem appropriate to accomplish
the arbitration quickly and inexpensively. Accordingly, the arbitrators may, (A)
dispense with any formal rules of evidence and allow hearsay testimony so as to
limit the number of witnesses required, (B) act upon their understanding or
interpretation of the law on any issue without the obligation to research the
issue or accept or act upon briefs on the issue prepared by any party, (C) limit
the time for presentation of any party's case as well as the amount of
information or number of witnesses to be presented in connection with any
hearing (provided that each party shall have the right to call at least three
witnesses), and (D) impose any other rules which the arbitrators believe
appropriate to effect a resolution of the claims quickly and inexpensively. The
types and amount of discovery shall be conducted in accordance with the Federal
Rules of Civil Procedure. The arbitration hearing shall be conducted within 60
days after the selection of the arbitrators. All privileges under state and
federal law, including attorney-client, work product and party communication
privileges, shall be preserved and protected. The decision of the majority of
the arbitrators will be binding on all parties. Arbitrations will be conducted
in a manner so that the final decision of the arbitrators will be made and
provided to Executive and the Company no later than 120 days after a matter is
submitted to arbitration. All proceedings conducted pursuant to this Section 12,
including any order decision or award of the arbitrators, shall be kept
confidential by all parties. EXECUTIVE ACKNOWLEDGES THAT BY SIGNING THIS
EMPLOYMENT AGREEMENT, EXECUTIVE IS WAIVING ANY RIGHT THAT EXECUTIVE MAY HAVE TO
A JURY TRIAL OR A COURT TRIAL.

          (b) Specific Enforcement. Executive acknowledges that the covenants of
Executive contained in Sections 3 and 4 of this Agreement are special and
unique, that a breach by Executive of any term or provision of either of
Sections 3 or 4 hereof may cause irreparable injury to the Company, CSI and/or
another Subsidiary of CSI, and that remedies at law for the breach of any terms
or provisions of Sections 3 or 4 hereof may be inadequate. Accordingly,
notwithstanding the provisions of Section 12(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 3 or 4
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 12(b) and Sections 3 and 4 hereof, CSI and each other Subsidiary of
CSI shall be deemed a third party beneficiary entitled to the benefits of such
Sections and shall be entitled to enforce Sections 3 and 4 of this Agreement in
accordance with this Section 12(b).


                                       14

<PAGE>   18

     13. 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 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 3 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.

     14. 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.

     15. Reimbursement by Executive.

         (a) Reimbursement. Subject to Section 15(b), Executive agrees that, in
the event Executive terminates his employment with Company other than for Good
Reason, or is terminated by the Company for Cause, at any time prior to October
12, 2001, Executive will reimburse the Company for amounts paid to Executive by
the Company pursuant to Section 5(g) and (h) of this Agreement in accordance
with the following formula:

                             ER = AP x ((24 - NM) / 24)
where:

     ER = amount to be reimbursed by Executive;

     AP = amounts paid by the Company to or on behalf of Executive pursuant to
          Sections 5(g) and (h) of this Agreement; and

     NM = number of months elapsed from and after October 12, 1999, to (and
          including) the Date of Termination.


                                       15

<PAGE>   19

     Executive agrees that any amounts owed by Executive pursuant to this
Section 15 may be deducted from any portion of any amounts (including
compensation payable under this Agreement) owed by the Company to the Executive
at the time of termination of Executive's employment, subject to any
limitations or restrictions imposed by applicable law. To the extent such
amounts payable by Executive pursuant to this Section 15 are not deducted from
amounts owed by the Company to the Executive, Executive agrees to pay such
excess amounts to the Company within 60 days after the Date of Termination.

         (b) Special Provisions for Reimbursement. Notwithstanding Section
15(b), if (i) the Company gives written notice pursuant to Section 1 that it
does not wish to extend the Term beyond October 12, 2000, then Executive shall
have no obligation to reimburse the Company for amounts paid to Executive as
provided in Section 15(a), and (ii) if Executive gives written notice pursuant
to Section 1 that he does not wish to extend the Term beyond October 12, 2000,
then Section 15(a) shall apply and Executive shall be obligated to reimburse the
Company for amounts paid to Executive as provided in Section 15(a).

     16. Attorney Fees. Except as otherwise provided in Section 12, 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.

     17. 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]


                                       16

<PAGE>   20

     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 9, 2000             By:/s/ MARTIN V. ALONZO
     -----------------               --------------------------------
                                         Martin V. Alonzo
                                         Chairman of the Board


                                  EXECUTIVE:

Date: December 20, 1999           By:/s/ JOHN H. STEADMAN
     -------------------             --------------------------------
                                         John H. Steadman




                                       17