January 16, 1992



PRIVATE AND CONFIDENTIAL

Ms. Nancy J. Duricic
1820 Greenway Drive
Plano, Texas 75075

       Re:   Employment Agreement

Dear Nancy:

1.     This  letter  confirms  your  employment  by  ELJER INDUSTRIES, INC. (the
       "Company") as Director-Compensation & Benefits, Eljer Industries. In that
       capacity, you are entitled to the following:

       a.    A minimum annual salary of $75,000;

       b.    Benefits  as  described  in,  and in accordance with, the Company's
             benefit plans; and

       c.    An annual par bonus equal to 15% of your annual salary.  The amount
             of bonus that you  actually  receive,  if any,  will  depend on the
             achievement of Corporate and your individual goals.

2.     During your employment  with the Company,  you will devote your full time
       and  energies to the  faithful  and  diligent  performance  of the duties
       inherent in, and implied by, your executive position.

3.     In consideration of your continued employment with the Company, it is
       mutually agreed that:

       a.    In the event your  employment with the Company is terminated by the
             Company  during the term of this  Agreement,  for any reason  other
             than:

             i.   "Cause",  for  this  purpose,  "cause"  shall  mean:  (a) your
                  willful and continued  failure to  substantially  perform your
                  duties hereunder (other than any such failure resulting from a
                  "disability",  as defined  herein;  or (b) your conviction for
                  committing an act of fraud, embezzlement,  theft, or other act
                  constituting a felony; or (c) your willful engagement in gross
                  misconduct which is materially and  demonstrably  injurious to
                  the Company; or

             ii.  Inability, for reasons of "disability",  reasonably to perform
                  your duties for six consecutive  calendar months (for purposes
                  of this  Agreement,  "disability"  shall mean a permanent  and
                  total disability,  within the meaning of Internal Revenue Code
                  Section 22(e)(3), in the exercise of good faith and reasonable
                  judgment,  upon  receipt  of and  in  reliance  on  sufficient
                  competent medical advice from a qualified  physician  selected
                  by the Compensation Committee); or




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Ms. Nancy J. Duricic
Page -2-
January 16, 1992


       b.    In the event that during the term of this Agreement you resign your
             position with the Company because:

              i.   You  are  assigned to a position of lesser rank or status; or

             ii.   Your annual  salary, annual par bonus, level of participation
                   in management  incentive plans, or your benefits are reduced;
                   or

            iii.   You  are reassigned to a geographical area more than 50 miles
                   from your present residence;

             the  Company  shall be  required,  and hereby  agrees,  to continue
             paying  your  then  salary,  to pay your then  annual  bonus at par
             level,  and  to  provide  all  pension,  profit  sharing,  deferred
             compensation,   medical  and  life  insurance  benefits  under  the
             Company's benefit plans, or the economic equivalent thereof,  for a
             period  of  6  months  from  the  date  of  such   termination   or
             resignation. If, pursuant to the terms of a benefit plan, a benefit
             would be earned or accrued  during such 6-month period but would be
             payable on a deferred  basis (were you to be  employed  during such
             6-month period) the benefit similarly shall be deferred  hereunder;
             provided,  however,  that the Company reserves the right to pay the
             present  value  of such  benefit  to you in cash at the end of such
             6-month period.

       4.    You are not  required to mitigate  the amount of any payments to be
             made by the Company,  pursuant to this Agreement,  by seeking other
             employment,  or  otherwise,  nor shall the  amount of any  payments
             provided  for in this  Agreement  be  reduced  by any  compensation
             earned by you, as the result of  self-employment or your employment
             by  another  employer,  after  the  date  of  termination  of  your
             employment with the Company.

Please acknowledge your acceptance of the terms and provisions of this Agreement
by signing  in the space  indicated  below.  We look  forward to your  continued
contribution to the success of ELJER INDUSTRIES, INC.


Sincerely,                                           ACCEPTED AND AGREED as of

ELJER INDUSTRIES, INC.                               January 20, 1992



By: /s/Charles R. Wackenhuth                         /s/ Nancy J. Duricic
   -----------------------------------               ---------------------------
       Charles R. Wackenhuth                         Nancy J. Duricic