April 24, 1995



PRIVATE AND CONFIDENTIAL

Mr. Gerry Morris
4609 Courtyard Trail
Plano, Texas 75024

         Re:      Employment Agreement

Dear Gerry:

1.     This  letter  confirms  your  employment  by  ELJER INDUSTRIES, INC. (the
       "Company") as Controller-Manufacturing Operations.  In that capacity, you
       are entitled to the following:

       a.    A minimum annual salary of $97,400;

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

       c.    An annual par bonus equal to 25% 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,  and can range
             from 0% to 50%.

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",  as determined by the  Compensation  Committee of the
                  Board of Directors (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), as determined by the Compensation  Committee
                  of the Board of  Directors,  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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Mr. Gerry Morris
Page -2-
April 24, 1995


       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 a prorated  portion of 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 9 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 9-month  period but
             would be  payable  on a  deferred  basis  (were you to be  employed
             during such 9-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 9-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.

       5.    This  Agreement  will commence on April 24, 1995, and will continue
             in effect until May 1, 1996, which shall be the "Expiration  Date."
             However, at the end of such period and, if extended,  at the end of
             each additional year  thereafter,  the term of this Agreement shall
             be extended  automatically for one additional year, unless the Vice
             President-Human  Resources  delivers  written  notice  three months
             prior to the end of such term, or extended  term, to you, that this
             Agreement will not be extended.  In such case,  this Agreement will
             terminate  at the  end of the  term,  or  extended  term,  then  in
             progress.

             The  Company's   obligation  to  pay  severance  benefits  upon  an
             employment  termination,  within the  two-year  period  following a
             "change-in-control" shall be entirely governed by the terms of your
             Executive Severance Agreement.

       6.    If a dispute arises regarding the termination of your employment or
             the interpretation or enforcement of this Agreement, and you obtain
             a  final  judgment,  in  your  favor,  from  a  court  of competent
             jurisdiction,  from  which  no appeal may be taken, whether because
             the  time  to  do  so  has  expired, or otherwise, or your claim is
             settled  by  the Company prior to the rendering of such a judgment,
             all  reasonable  legal  and  other  professional  fees and expenses
             incurred by you in contesting or disputing any such termination, or
             in seeking to  obtain  or enforce any right or benefit provided for
             in  this  Agreement,  or  in otherwise pursuing your claim, will be


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Mr. Gerry Morris
Page -3-
April 24, 1995


             promptly paid by the Company, with interest thereon, at the highest
             statutory rate of your state of domicile, for interest on judgments
             against private parties, from the date of payment thereof by you to
             the date of reimbursement to you by 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 contribution to
the success of ELJER INDUSTRIES, INC.

Sincerely,                                        ACCEPTED AND AGREED as of

ELJER INDUSTRIES, INC.                                   May 10, 1995



By: /s/ Henry W. Lehnerer                         /s/ Gerry Morris
    -------------------------------               ------------------------------
       Henry W. Lehnerer                          Gerry Morris
       Vice President-Finance & CFO