EMPLOYMENT AGREEMENT
                                Michael D. Sturch


This  Agreement,  is made and dated as of April 1, 1998,  by and  between  Bryan
Steam Corporation, a New Mexico corporation ("Employer"), and Michael D. Sturch,
a resident of Miami County, Indiana ("Employee").


                                   WITNESSETH

         WHEREAS,  Employee has been  employed by Employer and has made valuable
contributions to the profitability and financial strength of Employer;

         WHEREAS,  Employer  desires to  encourage  Employee to continue to make
valuable  contributions  to Employer's  business  operations  and not to seek or
accept employment elsewhere;

         WHEREAS,  Employee  desires to be assured  of a secure  reasonable  and
commensurate compensation from Employer for his services over a defined term;

         WHEREAS,  Employer desires to assure the continued services of Employee
on  behalf  of  Employer  on  an  objective  and  impartial  basis  and  without
distraction  or  conflict  of  interest  in the event of a change of  control of
Employer;

         WHEREAS,  Employer  desires to provide fair and reasonable  benefits to
Employee on the terms and subject to the conditions set forth in this Agreement;

         WHEREAS,  Employer  desires  reasonable  protection of its confidential
business  and  customer  information  which it has  developed  over the years at
substantial  expense and assurance  that Employee will not compete with Employer
for a  reasonable  period  of time  after  termination  of his  employment  with
Employer, except as otherwise provided herein.

         NOW,  THEREFORE,   in  consideration  of  these  premises,  the  mutual
covenants and  undertakings  herein  contained  and the continued  employment of
Employee by Employer,  each intending to be legally bound, covenant and agree as
follows:

         1.       Upon the terms and subject to the conditions set forth in this
                  Agreement,   Employer  employs  Employee  as  Employer's  Vice
                  President of Production or another position  commensurate with
                  Employee's  experience and ability,  and Employee accepts such
                  employment.

         2.       Employee  agrees  to serve as  Employer's  Vice  President  of
                  Production or such other position,  and to perform such duties
                  in that office as may be prescribed by the  Employer's  Bylaws
                  and as may reasonably be assigned to him by Employer's

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<PAGE>



                  President or Board of Directors and those generally associated
                  with  the  office  held  by  Employee  as  determined  by  the
                  President or Board of Directors from time to time.

                  Employer shall not,  without the written  consent of Employee,
                  relocate or transfer Employee to a location more than 30 miles
                  from  his  current  employment  location.  While  employed  by
                  Employer, Employee shall devote substantially all his business
                  time and efforts to  Employer's  business  and the business of
                  its subsidiaries.

         3.       The term of this Agreement shall be for an initial term of two
                  (2) years commencing on April 1, 1998 (the "Effective  Date"),
                  (such term shall herein be referred to as the "Term").

         4.       Employee  shall  receive an annual  salary of  $59,520  ("Base
                  Compensation"),  payable at regular  intervals  in  accordance
                  with Employer's  normal payroll  practices now or hereafter in
                  effect.  Employer  may  consider and declare from time to time
                  increases in the salary it pays Employee and thereby  increase
                  his Base Compensation.

         5.       So long as Employee  is employed by Employer  pursuant to this
                  Agreement,  he  shall  be  included  as a  participant  in all
                  present  and  future   employee   benefit,   retirement,   and
                  compensation   plans  generally   available  to  employees  of
                  Employer,  consistent  with  his  Base  Compensation  and  his
                  position with Employer,  including,  without  limitation,  any
                  401(k) plan, stock incentive plan,  employee stock purchase or
                  ownership  plan,  bonus  plan,  and group life and  disability
                  insurance plans.

         6.       So long as Employee  is employed by Employer  pursuant to this
                  Agreement,   Employee  shall  receive  reimbursement,   either
                  directly  or through  use of an  Employer  credit  card,  from
                  Employer for all reasonable  business expenses incurred in the
                  course of his  employment  by  Employer,  upon  submission  to
                  Employer of written vouchers and statements for reimbursement.
                  So long as Employee  is  employed by Employer  pursuant to the
                  terms of this  Agreement,  Employer  shall  continue in effect
                  vacation  policies  applicable  to Employee no less  favorable
                  from his point of view than those written vacation policies in
                  effect on the date hereof.  So long as Employee is employed by
                  Employer  pursuant  to  this  Agreement,   Employee  shall  be
                  entitled  to  office  space  and  working  conditions  no less
                  favorable than those in effect for him on the date hereof.

         7.       Employee's  employment  with the  Employer  may be  terminated
                  prior to the expiration of the Term as follows:

                  (A)      The Employer  may  immediately  upon  written  notice
                           terminate  Employee  for  cause.   "Cause"  shall  be
                           defined  as (i)  personal  dishonesty,  (ii)  willful
                           misconduct,  (iii) breach of fiduciary duty involving
                           personal profit,  (iv) intentional failure to perform
                           stated duties, (v) conviction of a violation of any

                                                        -2-

<PAGE>



                           law,   rule,  or   regulation   (other  than  traffic
                           violations or similar  offenses) or  cease-and-desist
                           order, (vi) moral turpitude  reflecting  adversely on
                           the reputation of the Employer, or (vii) any material
                           breach of any term,  condition  or  covenant  of this
                           Agreement.   The  Employer   shall  have  no  further
                           liability to Employee  under this  Agreement  for any
                           period subsequent to the termination for Cause.

                  (B)      Either party may terminate this Agreement  during the
                           Term  without  Cause,  upon  thirty  (30) days  prior
                           written  notice to the other  party.  If the Employer
                           terminates  the  Employee  without  Cause (as defined
                           above), or if Employee  terminates his employment for
                           Good Reason (as defined below):

                           (i)      Compensation  provided for herein (including
                                    Base  Compensation)  shall  continue  to  be
                                    paid,   and  Employee   shall   continue  to
                                    participate   in   the   employee   benefit,
                                    retirement, and compensation plans and other
                                    perquisites  as provided in Sections 5 and 6
                                    hereof,  through  the  date  of  termination
                                    specified in the notice of termination;  and
                                    any  benefits   payable   under   insurance,
                                    health,  retirement  and  bonus  plans  as a
                                    result of Employee's  participation  in such
                                    plans  through  such date shall be paid when
                                    due under those plans;

                           (ii)     In  addition,  the  Employer  shall  pay the
                                    Employee a lump sum severance  payment equal
                                    to fifty percent  (50%) of Employee's  total
                                    salary and bonus compensation (excluding any
                                    transaction  bonus under  Section 9) for the
                                    immediately preceding calendar year plus, if
                                    a Change of Control has occurred, any unpaid
                                    installment  of any  transaction  bonus  due
                                    under  Section 9 (or which  would  otherwise
                                    later become due under Section 9); and

                           (iii)    In  addition,  for  one (1)  year  following
                                    termination,  Employer will maintain in full
                                    force and effect for the  continued  benefit
                                    of Employee and his dependents each employee
                                    medical and life  benefit plan (as such term
                                    is defined in the Employee Retirement Income
                                    Security  Act of 1974,  as amended) in which
                                    Employee   was   entitled   to   participate
                                    immediately   prior   to  the  date  of  his
                                    termination,     unless    an    essentially
                                    equivalent  benefit is  provided  by another
                                    source. If the terms of any employee medical
                                    and  life   benefit   plan  of  Employer  or
                                    applicable  laws  do  not  permit  continued
                                    participation  by  Employee,  Employer  will
                                    arrange  to  provide  to  Employee a benefit
                                    substantially   similar   to,  and  no  less
                                    favorable  than, the benefit he was entitled
                                    to receive under such plan at the end of the
                                    period of coverage. The right of Employee to
                                    continued  coverage  under  the  health  and
                                    medical insurance plans of Employer pursuant
                                    to  Section  4980B of the  Internal  Revenue
                                    Code

                                                        -3-

<PAGE>



                                    of  1986,  as  amended  (the  "Code")  shall
                                    commence upon the expiration of such period;
                                    and

                           (iv)     Employer will engage at  Employer's  cost an
                                    out  placement  firm to assist  Employee  to
                                    locate an alternative  position for Employee
                                    for a period of one (1) year; provided, that
                                    Employer   may    terminate    such   firm's
                                    engagement  if Employee  fails to attend two
                                    or more interviews  arranged by such firm or
                                    if  Employee is offered  any  position  that
                                    would  provide  a  base  compensation  of at
                                    least 80% of Employee's Base Compensation on
                                    the date of termination.  Employer will make
                                    available   reasonable   office   space  and
                                    telephone  usage for a period  not to exceed
                                    ninety (90) days after terminations.

                           For  purposes of this  Agreement,  "Good  Reason" for
                           Employee to terminate  his  employment  with Employer
                           means:  a material  breach of any term,  condition or
                           covenant of Employer under this Agreement.

                  (C)      Employee's  employment  with Employer shall terminate
                           in the event of Employee's  death or disability.  For
                           purposes  hereof,  "disability"  shall be  defined as
                           Employee's  inability  by reason of  illness or other
                           physical or mental  incapacity  to perform the duties
                           required by his employment for a consecutive  180 day
                           period,  provided that notice of any  termination  by
                           Employer  because of  Employee's  "disability"  shall
                           have  been  given  to  Employee  prior  to  the  full
                           resumption by him of the performance of such duties.

         8.       To induce  Employer  to enter  into this  Agreement,  Employee
                  hereby agrees as follows:

                  (A)      Unless otherwise  required to do so by law, including
                           the order of a court or governmental agency, Employee
                           shall not  divulge or furnish  any trade  secrets (as
                           defined in IND.  CODEss.24-2-3-2)  of Employer or any
                           confidential   information   acquired  by  him  while
                           employed by Employer concerning the policies,  plans,
                           procedures  or  customers  of Employer to any person,
                           firm,  corporation  or  other  entity  ,  other  than
                           Employer or upon its written request, or use any such
                           trade secrets or confidential information directly or
                           indirectly  for  Employee's  own  benefit  or for the
                           benefit of any  person,  firm,  corporation  or other
                           entity  other  then  Employer,   because  such  trade
                           secrets and confidential information are confidential
                           and  shall  at  all  times  remain  the  property  of
                           Employer.

                  (B)      For a period of six (6) months after  termination  of
                           Employee's  employment  with Employer for any reason,
                           Employee   shall  not  (a)   compete,   directly   or
                           indirectly,  in any state or  province of the U.S. or
                           Canada where Employer has a sales  representative  or
                           sold products within the 12 months prior to

                                                        -4-

<PAGE>



                           Employee's termination, with the business of Employer
                           as conducted during the term of this Agreement (which
                           business shall include the manufacture or sale of any
                           products  manufactured or sold by Employer during the
                           12 months prior to Employee's  termination),  or have
                           any significant  interest  (including any interest or
                           association,  including  but not  limited to, that of
                           owner, part owner,  partner,  shareholder,  director,
                           officer,  employee,  agent,  consultant,   lender  or
                           advisor) in any person, firm or entity which competes
                           with Employer's  business in the area described above
                           (each such  person,  firm or entity is referred to as
                           "Competitor");  (b) solicit or accept business for or
                           on behalf of any Competitor;  or (c) solicit,  induce
                           or  persuade,  or  attempt  to  solicit,   induce  or
                           persuade,  any person to work for or provide services
                           to  or   provide   financial   assistance   to,   any
                           Competitor.

                  (C)      If  Employee's  employment  by Employer is terminated
                           for any reason,  Employee will turn over  immediately
                           thereafter  to Employer all business  correspondence,
                           letters, papers, reports, customers' lists, financial
                           statements, records, drawings, credit reports, credit
                           cards, or other confidential information or documents
                           of Employer or its  affiliates  in the  possession or
                           control of  Employee,  all of which  writings are and
                           will continue to be the sole and  exclusive  property
                           of Employer or its affiliates.

                  (D)      Employee  acknowledges  that  the  covenants  of this
                           Section 8 are  reasonable  in scope and  duration and
                           reasonably  necessary and  appropriate to protect the
                           goodwill and other appropriate  interests of Employer
                           following   Employee's   termination   and  that  any
                           violation of such  covenants by Employee would result
                           in irreparable harm to Employer, for which any remedy
                           at law would be inadequate.  In addition to any other
                           remedy to which it may be entitled, Employer shall be
                           entitled  to  equitable  relief,  including  specific
                           performance, for any violation of Section 8.

                  (E)      Employee shall,  and hereby  authorizes  Employer to,
                           inform  any  successor  or  prospective  employer  of
                           Employee  of the  terms of this  Section  8. Any such
                           disclosure  by Employer and any effort by Employer to
                           seek Employee's  compliance with this covenant,  even
                           if such effort shall  require that  Employee  perform
                           different duties for such successor employer or delay
                           his employment by such employer,  is hereby expressly
                           authorized  by  Employee  and  shall  not be deemed a
                           violation of any "blacklisting" or similar law.

         9.       If there is a Change of Control of Employer as defined  below,
                  Employee  shall be paid a  transaction  bonus in the amount of
                  $4,000  payable  one-half on the date of the Change of Control
                  and  one-half  on the date six (6) months  after the Change of
                  Control,  so long as Employer's  Board of Directors  shall not
                  have determined on a

                                                        -5-

<PAGE>



                  reasonable  basis and in good faith (prior to any  installment
                  date)  that  Employee  has  failed  to  comply  with the Bonus
                  Conditions. "Bonus Conditions" means:

                  (A)      Employee has  cooperated  fully with Employer and its
                           advisors and, to the extent directed by Employer, any
                           party who is engaged  or may  engage in  negotiations
                           with  Employer,  regarding  any proposed  transaction
                           involving Employer or its shareholders;

                  (B)      Employee  shall  not  have  engaged  in any  activity
                           intended to discourage any such interested party from
                           engaging in any such  transaction or disparaging  the
                           Employer, its condition,  assets or prospects, in the
                           eyes of any such party;

                  (C)      Employee  shall have  continued to perform his duties
                           for  Employer   with  at  least  the  same  level  of
                           diligence and performance as characterized Employee's
                           performance prior to the Effective Date; and

                  (D)      Employee  shall not be in breach of any  provision of
                           this Agreement.

Disclosure  or  statements  made  by  Employee  in good  faith  in  response  to
appropriate  requests  from  third  parties or  instructions  by  Employer  that
Employee  reasonably  believes  to be  truthful  shall  not  violate  the  Bonus
Conditions.

For purposes of this Agreement,  a "Change of Control" shall mean the occurrence
of any of the  following:  (i) the sale,  lease,  transfer,  conveyance or other
disposition (other than by way of merger of  consolidation),  in one or a series
of related  transactions,  of all or substantially all of the assets of Employer
and it  subsidiaries  taken as a whole to any  "person" (as such term is used in
Section  13(d)(3) of the Exchange Act), (ii) the consummation of any transaction
(including, without limitation, any merger of consolidation) the result of which
is that any "person" as defined  above,  becomes the  beneficial  owner (as such
term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange  Act),  directly
or  indirectly,  of more than 50% of the voting  stock of  Employer or (iii) the
first  day on which a  majority  of the  members  of the Board of  Directors  of
Employer are not Continuing Directors.  Notwithstanding the foregoing, a "Change
of  Control"  shall not occur and no  transaction  bonus  will be payable if the
person that acquires  assets or stock of Employer  under part (i) or (ii) of the
foregoing definition, is an Employer sponsored employee stock ownership plan, H.
Jesse  McVay,  a  management  group  led by H.  Jesse  McVay or a  person  whose
participation  in such transaction was supported or sponsored by such management
group. "Continuing Directors" means, as of any date of determination, any member
of the Board of  Directors  of  Employer  who (i) was a member of such  Board of
Directors  on the date hereof or (ii) was  nominated  for election or elected to
such  Board of  Directors  with the  approval  of a majority  of the  Continuing
Directors who were members of such Board at the time of such nomination.

         10.      Any  termination  of  Employee's  employment  with Employer as
                  contemplated by Section 7 hereof,  except in the circumstances
                  of Employee's death, shall be

                                                        -6-

<PAGE>



                  communicated   by  written  "Notice  of  Termination"  by  the
                  terminating  party to the other party  hereto.  Any "Notice of
                  Termination"  pursuant  to  Section  7 based  on Cause or Good
                  Reason  shall set  forth in  reasonable  detail  the facts and
                  circumstances claimed to provide a basis for such termination.

         11.      If a dispute  arises  regarding  the  termination  of Employee
                  pursuant  to Section 7 hereof or as to the  interpretation  or
                  enforcement of this Agreement,  said dispute shall be resolved
                  by binding arbitration in Indianapolis,  Indiana determined in
                  accordance   with  the  rules  of  the  American   Arbitration
                  Association.  Notwithstanding the foregoing, Employer shall be
                  entitled  to seek  any  remedy  in a  proceeding  at law or in
                  equity  in any court  having  jurisdiction  for any  breach of
                  Section 8.

         12.      Should  Employee die after  termination of his employment with
                  Employer while any amounts are payable to him hereunder,  this
                  Agreement shall inure to the benefit of and ben enforceable by
                  Employee's  executors,  administrators,  heirs,  distributees,
                  devisees and legatees and all amounts payable  hereunder shall
                  be paid in  accordance  with the  terms of this  Agreement  to
                  Employee's devisee,  legatee or other designee or, if there is
                  no such designee, to his estate.

         13.      For  purposes  of  this  Agreement,   notices  and  all  other
                  communications  provided  for herein  shall be in writing  and
                  shall be deemed to have been given when delivered or mailed by
                  United States  registered or certified  mail,  return  receipt
                  requested, postage prepaid, addressed as follows:

                  If to Employee:           Michael D. Sturch
                                            R.R. 3, Box 218A
                                            Peru, IN 46970

                  If to Employer:           Bryan Steam Corporation
                                            P.O. Box 27
                                            Peru, Indiana  46970
                                            Attn: Chairman

                  or to such address as either  party hereto may have  furnished
                  to the other party in writing in accordance  herewith,  except
                  that notices of change of address shall be effective only upon
                  receipt.

         14.      The  validity,   interpretation,   and   performance  of  this
                  Agreement  shall  be  governed  by the  laws of the  State  of
                  Indiana, regardless of the principles of conflicts of laws.

         15.      Employer  shall  require  any  successor  (whether  direct  or
                  indirect, by purchase,  merger, or consolidation or otherwise)
                  to all or  substantially  all of the  business  or  assets  of
                  Employer,  by  agreement  in  form  and  substance  reasonably
                  satisfactory to Employee

                                                        -7-

<PAGE>



                  to expressly assume and agree to perform this Agreement in the
                  same manner and same extent that Employer would be required to
                  perform it if no such  succession had taken place.  As used in
                  this Agreement, "Employer" shall mean Employer as hereinbefore
                  defined  and  any  successor  to its  business  or  assets  as
                  aforesaid.

         16.      No provision  of this  Agreement  may be  modified,  waived or
                  discharged  unless such waiver,  modification  or discharge is
                  agreed to in  writing  signed by  Employee  and  Employer.  No
                  waiver by either party hereto at any time of any breach by the
                  other party hereto of, or  compliance  with,  any condition or
                  provision  of this  Agreement  to be  performed  by such other
                  party  shall be deemed a waiver of  dissimilar  provisions  or
                  conditions  at the  same  or any  prior  subsequent  time.  No
                  agreements or  representation,  oral or otherwise,  express or
                  implied,  with respect to the subject  matter hereof have been
                  made by either party which are not set forth expressly in this
                  Agreement.

         17.      The invalidity or  unenforceability  of any provisions of this
                  Agreement shall not affect the validity or  enforceability  of
                  any other provisions of this Agreement,  which shall remain in
                  full fore and  effect.  This is the entire  agreement  between
                  Employer and Employee concerning the subject matter hereof and
                  all prior agreements, written or oral, are superseded.

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

         19.      This  Agreement is personal in nature and neither party hereto
                  shall,  without consent of the other,  assign or transfer this
                  Agreement  or any rights or  obligations  hereunder  except as
                  provided in Section 12 and Section 15 above.  Without limiting
                  the  foregoing,   Employee's  right  to  receive  compensation
                  hereunder shall not be assignable or transferable,  whether by
                  pledge,  creation of a security  interest or otherwise,  other
                  than a  transfer  by his  will or by the  laws of  descent  or
                  distribution  as set forth in Section  12  hereof,  and in the
                  event of any attempted assignment or transfer contrary to this
                  paragraph, Employer shall have no liability to pay any amounts
                  so attempted to be assigned or transferred.



                                                        -8-

<PAGE>


         IN  WITNESS  WHEREOF,  the  parties  have  caused the  Agreement  to be
executed as of the date first written above.

                                                    "Employer"

                                                     Bryan Steam Corporation

                                                     By: /s/ Jesse McVay
                                                     ---------------------------
                                                     Its: President


                                                    "Employee"

                                                     /s/ Michael D. Sturch
                                                     ---------------------------
                                                     Michael D. Sturch



                                                        -9-