Exhibit 10.2

WORLD HEADQUARTERS

2556 Wagener Road

Aiken. SC 29801

803.648 8351 tel

803. 643. 1180 fax

www. agy. com

May 4, 2010

Mr. Steven Smoot

7220 New Forest Lane

Wake Forest, NC 27587

Dear Steve:

On behalf of the Board of Directors of KAGY Holdings, Inc. (“AGY” or the “Company”), I am pleased to extend to you this offer of employment on the following terms and conditions:

Title.   Chief Financial Officer.

Base Salary.       Annual salary of $225,000, paid in accordance to the Company’s customary payment schedule. The salary will be subject to annual review by the Compensation Committee of the Board. Recommendations for salary increases by the Compensation Committee will be based on measuring results against goals mutually agreed upon by the Board and CEO.

Bonus.   Target annual bonus equal to 40% of base salary, with a range of 0% to 80% of base salary, subject to performance targets and other provisions of the Company’s management incentive plan (the “Bonus Plan”). Bonus plan years begin January 1 and end December 31. As such, for the first period of your employment corresponding to the remaining plan year, you will be paid an amount based upon the salary earned for that period.

Incentive Stock Option Plan.   You will be granted an option to acquire 70,000 shares of stock with an initial strike price of approximately $6.70 per share, according to the terms of the Company’s Incentive Stock Option Plan (the “Option Plan”). The Option Plan calls for a three-year vesting schedule in equal annual installments, beginning on the first anniversary of employment, and acceleration in the event of a change in control. The vesting is 50% performance-based according to pre-established EBITDA targets and 50% time based. We will confirm the precise strike price around the time of your acceptance.

Health, Welfare and Retirement Benefits.   You will be entitled to participate in all the Company’s Salaried benefits including medical, dental, 401K and insurance plans as described in materials sent to you under separate cover.

Other Benefits.   AGY will reimburse you for the reasonable expenses of your relocation to the Aiken, SC vicinity. We would ask that you develop a cost estimate and relocation plan for my approval within ninety days after you start your employment. You will be provided a monthly car allowance for a vehicle with a value of up to $30,000.

Severance Plan.   You have been provided with a copy of AGY’s Severance Plan. We ask that you acknowledge your acceptance of that Plan by signing the Confidentiality, Non-solicitation and Non-compete Agreement and the Release of Claims Agreement.

WORLD HEADQUARTERS

2556 Wagener Road

Aiken. SC 29801

803.648 8351 tel

803. 643. 1180 fax

www. agy. com

At Will Employment.   The terms of this letter notwithstanding, you will be an at will employee of the Company.

Employment Date.   Your target employment date will be May 24, 2010, or such other date as we might mutually agree.

If you are in agreement with the contents of this letter, please execute both copies in the space below and return one copy to me, retaining the other copy for your files. Under separate cover, we will send you copies of the relevant other agreements, including the Stock Option Plan, the Bonus Plan, the Severance Policy and the Benefit Plans. If you have any questions or comments, please do not hesitate to contact me.

Steve, we fully expect that AGY is going to benefit from your results-driven leadership. I look forward to the opportunity to work together to accelerate the profitable growth of the company.