SHAREHOLDERS

Exhibit 10.3

THIS SHAREHOLDERS’ AGREEMENT (this “ Agreement ”) is made the 10th day of June, 2009 (the “ Effective Date ”).

BETWEEN:

WHEREAS:

NOW IT IS HEREBY AGREED as follows:

In this Agreement, including the Recitals, the following expressions shall, except where the context otherwise requires, have the following meanings:

“Affiliate(s)” means in relation to any specified body corporate or Person, any other body corporate, unincorporated entity or Person directly or indirectly Controlling, directly or indirectly Controlled by or under direct or indirect common Control with such specified body corporate or Person;

“Articles” means the Articles of Association of the Company, as amended from time to time;

“ Asia ” means the commercial and business territory defined by the primary yarn consuming countries between the western coast of the Pacific Ocean and 100°E Longitude. Notwithstanding anything in the foregoing sentence to the contrary, (a) Asia includes, without limitation, PRC, Hong Kong, Japan, South Korea, Singapore, Malaysia, Indonesia, Macau, Brunei, Cambodia, Laos, Mongolia, Australia, New Zealand, the Philippines, Thailand, and Vietnam; and (b) Asia excludes, without limitation, North and South America, Europe, Africa, India, the Middle East, Russia, North Korea, Burma, and Taiwan; provided that Taiwan will be included in the definition of Asia at such time that the Company is permitted to sell to customers in Taiwan under all applicable laws and regulations;

“Basic Documents” means the documents agreed by the Parties to be of essential importance to the arrangements contemplated herein, being the Framework Agreement, Share Sale Agreement, Option Agreement, Intellectual Property Licence Agreement, Intercompany Agreement, Mutual Distributorship Agreement, Supply Agreement, Local Site Services Agreement, and the Technical Services Agreement (each as defined in the Framework Agreement) and all other documents incidental to the consummation of the transactions contemplated under the aforesaid documents;

“Big 4 Accounting Firm” means KPMG, PricewaterhouseCoopers, Deloitte Touche Tohmatsu or Ernst & Young, or any other internationally recognized accounting firm as may be agreed to by the Parties from time to time;

“Board” means the Board of Directors of the Company;

“Business” means manufacturing electronic grade direct melt E-Glass glass yarn and selling such products as conducted by the PRC Affiliate and the Company and as proposed to be conducted as of the Effective Date in accordance with the Basic Documents, and as otherwise may be determined by the Board following the Effective Date;

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the PRC or

Hong Kong are required or authorized by law or executive order to be closed or on which a tropical cyclone warning no. 8 or above or a “black” rainstorm warning signal is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m. Hong Kong time;

“Competing Business” means any business competing with the Business, including producing or selling glass fibre;

“Completion” has the meaning set forth in the Share Sale Agreement;

“ Completion Date ” has the meaning set forth in the Share Sale Agreement;

“ Confidential Information ” has the meaning set forth in the Framework Agreement;

“ Control ” means, in relation to a specified body corporate or Person, the power of any other Person directly or indirectly to secure that the affairs of such specified body corporate or Person are conducted in accordance with the wishes of that other Person:

“ Deferred Consideration Payment Notice ” means the Deferred Consideration Payment Notice under the Share Sale Agreement.

“Director” means any director of the Company and where applicable, any alternate director;

“Encumbrance” means any mortgage, charge, pledge, lien (otherwise than arising by statute or operation of law), hypothecation, equities, adverse claims, or other encumbrance, priority or security interest, over or in any property, assets or rights of whatsoever nature or interest or any agreement for any of the same and “Encumber” shall be construed accordingly;

“Equity Securities” means, with respect to any Person, such Person’s capital stock, membership interests, partnership interests, registered capital, joint venture or other ownership interests or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or exchangeable for, such capital stock, membership interests, partnership interests, registered capital or joint venture or other ownership interests (whether or not such derivative securities are issued by such Person);

“ Governmental Authority” means any government or political subdivision thereof; any department, agency or instrumentality of any government or political subdivision thereof; any court or arbitral tribunal; and the governing body of any securities exchange, in each case having competent jurisdiction;

“Grace Fabric” means Shanghai Grace Fabric Co., Ltd;

“Grace Holdings” means Grace THW Holding Limited, a company incorporated in the Cayman Islands, being the parent company of Grace;

“Group Companies” means the Company and the PRC Affiliate and “Group Company” means any of them;

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC;

“Inter-Company Funding” has the meaning ascribed to it in the Share Sale Agreement.

“ New Funding Arrangements ” means the New Funding Arrangements under the Share Sale Agreement.

“ New Funding Notice ” means the New Funding Notice under the Share Sale Agreement.

“Memorandum” means the Memorandum of Association of the Company, as amended from time to time;

“Options” has the meaning set forth in the Option Agreement;

“Option Agreement” means the Option Agreement made between AGY, Grace and the Company pursuant to which Grace has agreed to grant AGY a call option and AGY has agreed to grant Grace a put option, in respect of the Remaining Grace Interest in the Company;

“Option Exercise Date” means the date on which AGY exercises its call option or Grace exercises its put option in accordance with the terms of the Option Agreement;

“Party” means one of the parties to this Agreement;

“Person” means any natural person, firm, company, Governmental Authority, joint venture, partnership, association or other entity (whether or not having separate legal personality);

“PRC” means the People’s Republic of China and for the purposes of this Agreement excludes Taiwan and the Special Administrative Regions of Hong Kong and Macau;

“PRC Affiliate” means Shanghai Grace Technology Co., Ltd