This Employment Agreement (this "Agreement") made this 12th day of
August, 1999, by and between General Housewares Corp., a Delaware
corporation ("GHC"), and Mark S. Scales, an individual ("Scales"). Certain
capitalized terms used herein are defined in paragraph 23

                            W I T N E S S E T H:

         WHEREAS, Scales has been an employee of GHC since July 10, 1995,
and he is currently Vice President, Chief Financial Officer and Treasurer
of GHC; and

         WHEREAS, in recognition of the importance of Scales' services to
the continuity of management of GHC in the event of the potentially
disruptive circumstances of a Change of Control, GHC desires to provide for
Scales' continued employment with GHC, following a Change of Control, upon
the terms and conditions herein set forth; and

         WHEREAS, Scales desires to accept the terms and conditions of this
Agreement so that he can continue his service to GHC without fear of
disruption in the event of a Change of Control;

         NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth hereinafter, the parties hereto agree as follows:

         1. Employment. During the Employment Period, GHC shall continue to
employ Scales (if he is in GHC's employ on the date a Change of Control
shall be deemed to have occurred) and Scales shall continue his employment
with GHC, upon the terms and conditions set forth hereinafter.

         2. Term. The term of this Agreement shall commence on the date
hereof and shall expire on the date Scales' at-will employment shall end
prior to the date a Change of Control shall be deemed to have occurred;
otherwise it shall expire on the third anniversary of the date of the
Change of Control, subject to paragraphs 7, 8(a) and 9 hereof, unless
sooner terminated in accordance with paragraph 6 hereof.

         3. Compensation and Benefits. Subject to the express provisions of
Sections 8 and 9 below, as applicable, GHC shall continue to pay Base
Salary and to provide Benefits to Scales during the Employment Period.

         4. Duties. During the Employment Period, Scales shall continue to
serve in the position or positions held at the commencement of the
Employment Period.

         5. Extent of Services. Scales shall devote his best efforts to the
performance of his duties hereunder, and shall not allow any other
activities to interfere in a material fashion with his performance of such
duties.

         6. Termination Upon Death or Disability.

                  (a) This Agreement shall automatically terminate upon
Scales' death. Upon such termination, Scales' estate or beneficiaries shall
not be entitled to receive any compensation or benefits hereunder except
Base Salary and Benefits earned and accrued prior to the date of Scales'
death. Notwithstanding the foregoing, in the event Scales is receiving
benefits under Section 8 or 9 hereof at the time of his death, Scales'
estate or beneficiaries shall continue to receive such benefits after his
death.
                  (b) If Scales is unable to perform his duties hereunder
by reason of a Long Term Disability, GHC, by action of its Board of
Directors, may terminate this Agreement upon written notice to Scales. Upon
such termination, Scales shall not be entitled to any compensation or
benefits hereunder, but rather shall be entitled to such benefits as may be
provided under any GHC disability policy then in effect.

         7. Termination by GHC for Just Cause. GHC, by action of its Board
of Directors, may terminate this Agreement at any time during the
Employment Period for Just Cause upon written notice to Scales. Upon such
termination, Scales shall not be entitled to receive any compensation or
benefits hereunder except Base Salary and Benefits earned and accrued prior
to the date of termination.

         8. Other Termination by GHC.

                  (a) If, during the first twelve (12) months of the
Employment Period, GHC terminates Scales' employment hereunder for any
reason other than Disability or Just Cause, GHC shall pay Scales a lump sum
equal to three (3) years times Base Salary within seven (7) days of said
termination and provide Benefits to Scales for three (3) years following
said termination. If such termination of Scales' employment occurs during
the final twenty-four (24) month period of the Employment Period, GHC shall
pay Scales a lump sum equal to two (2) years times Base Salary within seven
(7) days of said termination and provide Benefits to Scales until the
second anniversary of the date of such termination. Payments and benefits
to Scales in accordance with this paragraph 8(a) shall constitute fair and
reasonable liquidated damages for termination of Scales' employment.

                  (b) If GHC terminates Scales' employment prior to and at
the request of any third party in connection with a Change of Control
(other than for Disability or Just Cause), GHC shall within seven (7) days
of such termination pay Scales a lump sum equal to three (3) times his Base
Salary and to provide Benefits to Scales through the third anniversary of
the date of such termination, and such payments and benefits shall
constitute fair and reasonable liquidated damages for termination of
Scales' employment. Accordingly, Scales shall not be entitled to any other
compensation, benefits or damages on account of such termination.

         9. Termination by Scales for Good Reason. If, during the first
twelve (12) months of the Employment Period, Scales terminates his
employment with GHC for Good Reason, provided he has given GHC at least
thirty (30) days' prior written notice of such termination, GHC shall pay
Scales a lump sum equal to three (3) years Base Salary within seven (7)
days of said termination and provide Benefits until the third anniversary
of such termination. If Scales terminates his employment for Good Reason
during the final twenty-four (24) month period of the Employment Period,
provided he has given GHC at least thirty (30) days prior written notice of
such termination, GHC shall pay Scales a lump sum equal to two (2) years
Base Salary within seven (7) days of such termination and provide Benefits
to Scales until the second anniversary of such termination.

         10. Certain Reductions. Notwithstanding any other provisions of
this Agreement, in the event that any payment or benefit received or to be
received by Scales pursuant to this Agreement would not be deductible (in
whole or in part) by GHC or any affiliate or person making such payment or
providing such benefit, as a result of Section 280G of the Code, then, to the
extent necessary to make any such payment or benefit deductible, the cash
payments or benefits shall first be reduced (if necessary, to zero), and
all other payments and benefits shall thereafter be reduced (if necessary,
to zero); provided, however, that Scales may elect to have the noncash
payments and benefits reduced (or eliminated) prior to any reduction of the
cash payments and benefits. 11.
Payments; Mitigation.

                  Following termination of Scales' employment, Scales shall
not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise. Further, the amount of
any payment or Benefit provided for in this Agreement shall not be reduced
by any compensation earned by Scales as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to
be owed by Scales to GHC, or otherwise; provided, however, Benefits
otherwise receivable by Scales hereunder shall be reduced to the extent
benefits of the same type are received by or made available to Scales by a
new employer during the period that he is entitled to Benefits under this
Agreement and any such Benefits received by or made available to Scales
shall be reported to GHC by Scales; provided further, that GHC shall
reimburse Scales for the excess, if any, of the cost of such Benefits to
Scales during the applicable period over such cost immediately prior to the
date of termination.

         12.      Successors; Binding Agreement.

                  (a) GHC shall require any successor to all or
substantially all of the business and/or assets of GHC (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to assume and
agree to perform this Agreement in the same manner and to the same extent
that GHC would be required to perform it if no such succession had taken
place. Subject thereto, this Agreement may not be assigned by GHC without
the prior written consent of Scales.

                  (b) This Agreement is a personal contract and the rights
and interests of Scales hereunder may not be sold, transferred, assigned,
pledged, encumbered, or hypothecated by him, except as otherwise expressly
permitted by the provisions of this Agreement. This Agreement shall inure
to the benefit of and be enforceable by Scales and his personal or legal
representatives, executors, administrators, heirs, distributees, devisees
and legatees.

         13. Amendment; Waiver. No provision of this Agreement may be
amended or waived, unless in writing signed by the party against whom
enforcement may be made.

         14. Severability. If, for any reason, any provision of this
Agreement is held to be invalid, such invalidity shall not affect the other
provisions of this Agreement not held to be invalid, and each such other
provision shall, to the full extent consistent with applicable law,
continue in full force and effect.

         15. Headings. The headings of the paragraphs herein are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.

         16. Governing Law. This Agreement has been executed and delivered
in the State of Indiana and its validity, interpretation, performance, and
enforcement shall be governed by the laws of the State of Indiana without
regard to any such laws relating to choice or conflict of laws.

         17. No Other Rights; Prior Agreements. Nothing in this Agreement
shall be construed or interpreted to create any rights or obligations
between the parties except those rights and obligations expressly set forth
in this Agreement. This Agreement contains the entire understanding between
the parties hereto and supersedes all agreements previously entered into
with respect to the matters referred to herein, except that letter
agreement dated September 23, 1998 between the parties shall continue in
full force and effect in the respect and to the extent that any provision
therein is not inconsistent with or covered by this Agreement. The
Severance Compensation Plan dated September 27, 1985 is hereby superseded
by this Agreement, and accordingly, insofar as Scales may be concerned, is
of no further force and effect. Further, it is expressly recognized and
agreed that prior to the Employment Period, except as set forth in this
Agreement and subject to the terms of the letter agreement dated September
23, 1998 between the parties, Scales' employment is "at will" and either
GHC or Scales can terminate the relationship at will, with or without cause
at any time.

         18. Notices. Any notice or other communication in writing that is
required or permitted pursuant to this Agreement shall be deemed delivered
if delivered personally or by facsimile transmission or deposited in the
United States mail, postage prepaid, by certified mail, addressed as
follows:


To Scales:               Mark S. Scales
                         7413 S. Westwood Lane
                         Terre Haute, IN 47802
                         Telephone: 812-299-4585

To GHC:                  General Housewares Corp.
                         1536 Beech Street
                         Terre Haute, IN  47804
                         Attention:  Paul A. Saxton
                         Telephone: 812-232-1000
                         Facsimile:   812-232-7016

With a copy to:          Raymond J. Kulla
                         General Counsel
                         General Housewares Corp.
                         1536 Beech Street
                         Terre Haute, IN 47804
                         Telephone: 812-232-1000
                         Facsimile:   812-232-7016

         19. Miscellaneous. All references to sections of the Code shall be
deemed also to refer to any successor provisions to such sections. GHC
shall withhold from the payments provided for hereunder any and all amounts
required to be withheld under applicable federal, state or local law.

         20. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be conclusively settled by arbitration
in Chicago, Illinois, by a panel of three arbitrators (selected in
accordance with this paragraph 20) in accordance with the rules of the
American Arbitration Association then in effect. The panel of arbitrators
shall be selected as follows: each of GHC and Scales shall select one (1)
arbitrator and the two (2) arbitrators selected by the parties shall select
the third arbitrator. GHC shall pay all fees and expenses of the panel of
arbitrators. If the arbitrators determine that Scales has prevailed, GHC
shall reimburse Scales for all legal fees and costs incurred in pursuing
such arbitration. Judgment may be entered on the arbitrators' award in any
court having jurisdiction.

         21. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

         22. Source of Benefits. It is expressly understood and agreed that
any and all payments and benefits which become payable or due under this
Agreement directly by GHC shall be satisfied exclusively from the general
assets of GHC. No separate trust fund or other segregated account under
which Scales is the beneficiary shall be required to be established or
procured by GHC for purposes of funding any such payments or benefits
hereunder.

         23.      Definitions.

                  (a) "Base Salary" shall mean Scales' annual salary at the
rate in effect on the day immediately prior to the effective date of the
Change of Control or Scales' annual salary at the rate in effect on the day
immediately prior to the date of termination of his employment, whichever
is greater.

                  (b) "Benefits" shall mean life, disability, accident and
health insurance, 401(k) plan, retirement benefits (including Scales' SERP
Benefit) and other benefits substantially similar to those which Scales is
receiving on the day immediately prior to the effective date of the Change
of Control or date of termination of Scales' employment, whichever is more
beneficial to Scales. For purposes of determining Scales' benefit under the
SERP, he will be deemed to have received his Base Salary and to have earned
Pension Years under the SERP (subject to the limitation on the maximum
number of years specified in the SERP) during the period in which his
Benefits are continued. If Scales is precluded from participating in a
benefit plan because he is no longer an employee of GHC, GHC shall provide
a substantially similar benefit outside the plan.

                  (c) "Change of Control" shall mean any one of the
following events:

                                            (i) if any person becomes the
                                    beneficial owner, directly or
                                    indirectly, of securities of GHC
                                    representing 30% or more of the
                                    combined voting power of GHC's then
                                    outstanding securities, excluding any
                                    person who becomes such a beneficial
                                    owner in connection with a transaction
                                    described in clause (iii) (A) below;

                                            (ii) if the following
                                    individuals cease for any reason to
                                    constitute a majority of the number of
                                    individuals then serving as directors
                                    of GHC: individuals who, on the date
                                    hereof, are serving as directors and
                                    any new director (other than a director
                                    whose initial assumption of office is
                                    in connection with an actual or
                                    threatened election contest, including
                                    but not limited to a consent
                                    solicitation, relating to the election
                                    of directors of GHC) whose appointment
                                    or election by the Board or nomination
                                    for election by GHC's stockholders was
                                    approved or recommended by a vote of at
                                    least two-thirds of the directors then
                                    still in office who either were
                                    directors on the date hereof or whose
                                    appointment, election or nomination for
                                    election was previously so approved or
                                    recommended;

                                            (iii) if there is consummated a
                                    merger or consolidation of GHC with any
                                    other corporation, other than (A) a
                                    merger or consolidation which would
                                    result in the voting securities of GHC
                                    outstanding immediately prior to such
                                    merger or consolidation continuing to
                                    represent (either by remaining
                                    outstanding or by being converted into
                                    voting securities of the surviving
                                    entity or any parent thereof), in
                                    combination with the ownership of any
                                    trustee or other fiduciary holding
                                    securities under an employee benefit
                                    plan of GHC or any subsidiary of GHC,
                                    at least 70% of the combined voting
                                    power of the securities of GHC or such
                                    surviving entity or any parent thereof
                                    outstanding immediately after such
                                    merger or consolidation, or (B) a
                                    merger or consolidation effected to
                                    implement a recapitalization of GHC (or
                                    similar transaction) in which no person
                                    is or becomes the beneficial owner,
                                    directly or indirectly, of securities
                                    of GHC (not including in the securities
                                    beneficially owned by such person any
                                    securities acquired directly from GHC
                                    or its affiliates other than in
                                    connection with the acquisition by GHC
                                    or its affiliates of a business)
                                    representing 30% or more of the
                                    combined voting power of GHC's then
                                    outstanding securities; or

                                            (iv) if the stockholders of GHC
                                    approve a plan of complete liquidation
                                    or dissolution of GHC or there is
                                    consummated an agreement for the sale
                                    or disposition by GHC of all or
                                    substantially all of GHC's assets,
                                    other than a sale or disposition by GHC
                                    of all or substantially all of GHC's
                                    assets to an entity, at least 70% of
                                    the combined voting power of the voting
                                    securities of which are owned by
                                    stockholders of GHC in substantially
                                    the same proportions as their ownership
                                    of GHC immediately prior to such sale.

         Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred by virtue of the consummation of a transaction or
series of integrated transactions immediately following which the record
holders of the common stock of GHC immediately prior to such transaction or
series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of
the assets of GHC immediately following such transaction or series of
transactions.

                  (d) "Code" shall mean the Internal Revenue Code of 1986
as amended from time to time. (e) "Long Term Disability" shall have the
meaning set forth in GHC's Long Term Disability Plan as in effect on the
date of this Agreement.

                  (f) "Good Reason" shall mean the occurrence (without
Scales' express written consent) after the Change of Control of any one of
the following acts by GHC, or failure by GHC to act, unless such act or
failure is corrected within ten (10) days immediately following the date of
the notice of termination given pursuant to paragraph 9 in respect thereof:

                                            (i) the relocation of Scales'
                                    principal place of employment to a
                                    location more than thirty (30) miles
                                    from Scales' principal place of
                                    employment immediately prior to the
                                    Change of Control or GHC's requiring
                                    Scales to be based anywhere other than
                                    such principal place of employment or
                                    permitted relocation thereof, except
                                    for required travel on GHC's business
                                    to an extent substantially consistent
                                    with Scales' present business travel
                                    obligations;

                                            (ii) a reduction in Scales'
                                    Base Salary or the failure by GHC to
                                    continue in effect any incentive
                                    compensation plan in which Scales
                                    participates immediately prior to the
                                    Change in Control which is material to
                                    Scales' total compensation unless an
                                    equitable arrangement (embodied in an
                                    ongoing substitute or alternative plan)
                                    has been made with respect to such
                                    plan, or the failure by GHC to continue
                                    Scales' participation therein (or in
                                    such substitute or alternative plan) on
                                    a basis not materially less favorable,
                                    both in terms of the amount and timing
                                    of payment of benefits provided and the
                                    level of Scales' participation relative
                                    to other participants, as existed
                                    immediately prior to the Change in
                                    Control;

                                            (iii) a reduction by GHC in
                                    Scales' Benefits; or

                                            (iv) removal by GHC of Scales
                                    from any position in which he is
                                    serving on the effective date of the
                                    Change of Control to a subordinate
                                    position, the assignment to Scales of
                                    any duties inconsistent with Scales'
                                    status as a senior executive officer of
                                    GHC or a substantial adverse alteration
                                    in the nature or status of Scales'
                                    duties, responsibilities or reporting
                                    relationships from those in effect
                                    immediately prior to the Change in
                                    Control.

Scales' continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or failure constituting Good Reason
hereunder.

                  (g)      "Just Cause" shall mean:

                                            (i) the willful and continued
                                    failure by Scales to perform
                                    substantially his duties to GHC (other
                                    than any such failure resulting from
                                    Scales' incapacity due to physical or
                                    mental illness) after a written demand
                                    for substantial performance is
                                    delivered to Scales by GHC's Board of
                                    Directors, which demand shall
                                    specifically identify the manner in
                                    which the Board believes that Scales
                                    has not substantially performed his
                                    duties;

                                            (ii) the willful engaging by
                                    Scales in conduct which is demonstrably
                                    and materially injurious to GHC or its
                                    subsidiaries, monetarily or otherwise;
                                    or

                                            (iii) the conviction of Scales
                                    of, or a plea of nolo contendere by
                                    Scales to, a felony.

For the purposes of clauses (i) and (ii) of this subparagraph, no act, or
failure to act, on Scales' part shall be deemed "willful" unless done, or
omitted to be done, by Scales not in good faith and without reasonable
belief that his act, or failure to act, was in the best interests of GHC.
Further, Scales shall not be deemed to have been terminated for Just Cause
unless there shall have delivered to him a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters (3/4) of
the entire membership of the Board at a meeting of the Board which was
called and held for the purpose of considering such termination (after
reasonable notice to Scales and an opportunity for Scales, together with
Scales' counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, Scales was guilty of conduct set forth in
clause (i) (ii) or (iii) above, and specifying the particulars thereof in
detail. If Scales shall dispute the allegations, the issues shall be
submitted promptly to arbitration in accordance with the provisions of
paragraph 20.

                  (h) "Pension Plan" shall mean General Housewares Corp.
Pension Plan for Non-Bargaining Unit Employees.

                  (i) "Employment Period" shall mean the period which
commences on the date a Change of Control shall be deemed to have occurred
and, subject to paragraphs 7, 8(a) and 9 hereof, shall end on the third
anniversary date of the Change of Control unless sooner terminated in
accordance with paragraph 6 hereof.

         IN WITNESS WHEREOF, GHC, by its duly authorized officer, and
Scales have signed this Agreement on the date and year first above written.

Attest:                             GENERAL HOUSEWARES CORP.



___________________________         By: __________________________________

                                    Its: _________________________________





Attest:

___________________________         ______________________________________
                                    Mark S. Scales