EMPLOYMENT AGREEMENT

                                 By and Between

                            COVOL TECHNOLOGIES, INC.

                                       And

                               Kenneth R. Frailey

                                 Effective as of

                                 January 1, 1999


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                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (this Agreement") is effective as of the
first day of January, 1999 (the "Effective Date") by and between COVOL
TECHNOLOGIES, INC. a Delaware Corporation (the "Company"), and Kenneth R.
Frailey ("Employee"). The Company and Employee are sometimes later in this
Agreement collectively referred to as the "Parties."

                                    RECITALS

         This Agreement is entered into with reference to the following facts,
definitions, and objectives:

         1.       Employee is Vice President of Operations. Employee came into
                  the employment of the Company on August 17, 1998.

         2.       Employee's services are deemed to be of value to the Company
                  and it is recognized that inducements must be offered to
                  Employee in order that the company may retain Employee's
                  services.

         NOW THEREFORE, in consideration of this Agreement and of the covenants
and conditions contained in this Agreement, the Parties agree as follows:

         1.       Employment and Positions. The Company employs Employee and
                  Employee accepts employment by the Company as an officer of
                  the Company with the title of "Vice President of Operations"
                  for the Period of Employment specified in Paragraph 3. The
                  duties of the position are generally described as to develop,
                  manage, and have accountability for the operations of the
                  Company. This includes synfuel operations, wash plants, and
                  may include future metals business operations and identifying,
                  acquiring and operating power generating facilities. Employee
                  will be responsible for the day to day and long term business
                  decisions including, but not limited to, operations,
                  maintenance, planning, economic, and human resource matters.
                  Such position and title including related duties and
                  responsibilities may be changed during the term of this
                  contract provided that such Employee continues as an officer
                  and provided further that compensation for services are not
                  reduced due to such title and/or position change.

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         2.       Services to be Rendered. The Employee shall, during the Period
                  of Employment, serve the Company in the positions set forth in
                  Paragraph 1 ("Employment and Positions") diligently,
                  competently, and in conformance with the corporate policies of
                  the Company. Employee shall have the responsibility to always
                  act in the best interest of the Company and recognizes
                  opportunities, ideas, and intellectual property relating to
                  the business of the Company that are developed as an officer
                  or employee of Covol Technologies, Inc. remain the property of
                  Company. In fulfilling his duties and responsibilities under
                  this Agreement, Employee shall report to the Senior Vice
                  President Engineered Synfuel or another senior officer
                  designated by the President.

         3.       Period of Employment. Employee's employment by the Company
                  pursuant to this Agreement shall, unless sooner terminated,
                  begin as of the Effective Date and continue for a period of
                  three (3) years from the Effective Date ("Period of
                  Employment").

         4.       Base Salary. At the commencement of the Period of Employment,
                  Employee shall be paid a minimum base salary of $80,000 for
                  the first year. In addition, the Employee shall be paid a lump
                  sum on or before January 31, 1999 of an amount that makes
                  Employee's past salary equal to the $80,000 annual rate from
                  August 17, 1998 up to the beginning of the Period of
                  Employment. Employee shall be paid a minimum base salary of
                  $100,000 for the second year, and a minimum base salary of
                  $120,000 for the third year during the Period of Employment.
                  Base salary shall be paid in equal semi-monthly installments
                  during the Period of Employment. Employee recognizes Company's
                  current financial state, and as such, accepts these minimum
                  base salary values. Company recognizes Employee's request for
                  $120,000 base salary from the beginning of this employment
                  contract and will endeavor to meet this request at the
                  earliest opportunity based upon Company's sole determination
                  of Company's financial status.

         5.       Incentive Bonus. During the Period of Employment, the Employee
                  shall be entitled to receive a bonus pursuant to the Company's
                  bonus plan, if any, as in effect from time to time. It is
                  recognized that a bonus plan, if any, is established at the
                  discretion of the Company and may be subject to variables and
                  conditions including income performance and general
                  performance evaluations.

         6.       Expense Reimbursement. The Employee shall be entitled to
                  prompt reimbursement for reasonable expenses incurred by the
                  Employee in performing services for the Company. Employee
                  shall be required to provide proof and documentation of such
                  expenditures as required by the Company.

         7.       Grant of Options. The Company may grant from time to time to
                  the Employee, in accordance with the terms of a stock option
                  agreement, the right and option to purchase shares of the
                  Company's Common Stock.

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                  (1)      Stock Options Pursuant to Stock Option Plan. Any
                           Stock Options ("Stock Option") issued shall be issued
                           pursuant and subject to the provisions of the Company
                           Employee Stock Option Plan (the "Stock Option Plan")
                           or as approved by the Board of Directors. Number of
                           options, purchase price, exercise periods and vesting
                           requirements shall be included in the stock option
                           document.

                  (b)      Vesting of Options in Event of Full and Complete
                           Disability or Death. In the event of the full and
                           complete disability or the death of the employee any
                           unvested Stock Options shall vest effective as of the
                           date of the full and complete disability or the death
                           of Employee. In the event of Employee's full and
                           complete disability or death, the Employee, heirs or
                           estate of Employee, as the case may be, may exercise
                           any unexecuted options at any time subject to the
                           time limitations within which exercise of option must
                           occur.

                  (c)      Vesting of Options in Event of Ownership Change. In
                           the event of a change in control, all non-vested
                           Stock Options shall vest immediately prior to such
                           change in control. A change in control shall be
                           deemed to have taken place if, as the result of a
                           tender offer, merger, consolidation, sale of
                           substantially all assets, a third party purchase of a
                           controlling interest of the total outstanding shares
                           of the Company, contested election, or any
                           combination of the foregoing transactions, the
                           persons who were directors of the Company immediately
                           before the transaction shall cease to constitute a
                           majority of the board of directors of the Company or
                           any successor to the Company. The intent of this
                           section is to allow the Employee to exercise any
                           unexecuted options at the Employees discretion.

                  (4)      Stock Options Granted. As of the Effective Date, the
                           Company has granted Employee Stock Options to acquire
                           50,000 shares of Company common stock at a strike
                           price of [just higher than 12/29 closing bid] vesting
                           an equal amount each month during the Period of
                           Employment and otherwise subject to this Paragraph 7.

         8.       Other Benefits. In addition to the benefits previously set
                  forth in this Agreement, Employee shall, during the Period of
                  Employment, be entitled to the benefits described below, and
                  as concerns all such benefit programs where years of service
                  are a factor, to the extent permitted by law, Employee shall
                  be given credit for his years of service with Covol
                  Technologies, Inc. prior to the implementation of any benefit
                  program.

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                  (1)      Vacation. During the Period of Employment, Employee
                           shall be entitled to not less than four (4) weeks of
                           paid vacation during each calendar year occurring
                           during the Period of Employment. Upon termination of
                           Employee's employment under this Agreement, Employee
                           shall be paid for any unused vacation in the year in
                           which the termination occurred, proportionate to the
                           amount of time employed that year.

                  (1)      Sick Leave. Leave time will be granted to the
                           Employee that is reasonable under the circumstances
                           and that is consistent with the Company's policies
                           and procedures, as the same may be changed, modified
                           or terminated for all participants from time to time.

                  (2)      Insurance. Participation in the group insurance
                           program of the Company as concerns life, disability,
                           medical and dental insurance currently available to
                           other employee's as the same may be implemented,
                           changed, modified or terminated for all participants
                           from time to time. Employee shall be required to pay
                           that portion of the premiums for coverage under such
                           insurance that is payable by other employees of the
                           Company for their insurance coverage.

                  (3)      Retirement Plan. The Employee shall participate in
                           the Company's Retirement Plans in accordance with the
                           terms and provisions and applicable laws as the same
                           may be implemented, changed, amended, or terminated
                           from time to time. Employee shall become eligible to
                           participate in the Company's Retirement Plans at date
                           of hire or as of the effective date of the
                           implementation of such plans, whichever is later.

                  (4)      Automobile Allowance. The Company will provide the
                           Employee a monthly automobile allowance. This
                           allowance is to compensate the Employee for the use
                           of his personal automobile in the amount of $550.00
                           per month beginning on the Effective Date with an
                           appropriate annual inflation adjustment each January
                           during the Employment Period.

                  (1)      Disability Insurance. The Company shall reimburse the
                           Employee for any disability insurance that is
                           currently being paid by the Employee until such time
                           that the Company implements a disability insurance
                           program for which the Employee would be covered.

                  (2)      Other Miscellaneous Benefits. The Company shall pay
                           or reimburse Employee for the following miscellaneous
                           benefits:

                  (1)      Annual dues for association membership for relevant
                           professional groups.

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                           (ii)     Subscription and purchase of books,
                                    journals, and publications which relate to
                                    job duties and responsibilities.

                           Employee shall obtain authorization for payment or
                           purchases referred to in (i) and (ii) above from the
                           Chief Financial Officer of the Company before
                           incurring such costs.

         9.       Terms of Employment.

                  (1)      Term. The Company hereby agrees to continue the
                           Employee in its employ, and the Employee hereby
                           agrees to remain in the employ of the Company, in
                           accordance with the terms and provisions of this
                           Agreement, for the Period of Employment in Paragraph
                           3 above, thus terminating on the third anniversary of
                           the Effective Date of this Agreement, upon thirty
                           (30) days prior written notice from the Company to
                           the Employee. If such written notice of termination
                           is not given, then the Employee's employment under
                           this Agreement shall continue under the terms of this
                           Agreement, until the Employee is terminated by the
                           Company upon thirty (30) days prior written notice.

                  (b)      During the Period of Employment. The Employee's
                           services shall be performed at the location where the
                           Employee was employed immediately preceding the
                           Effective Date or at any office which is the
                           headquarters of the Company.

         10.      Termination of Agreement.

                  (a)      Termination of Employment by Employer. Anything in
                           this Agreement to the contrary notwithstanding, the
                           Company shall have the following rights with respect
                           to termination of Employee's employment.

                  (1)      Disability. The Company may terminate Employee's
                           employment under this Agreement if Employee shall
                           become unable to fulfill his duties under this
                           Agreement, as measured by the Company's usual
                           business activities, by reason of any medically
                           determinable physical and/or mental disability.

                           (ii)     Cause. Employee's employment may be
                                    terminated for Cause. For purpose of the
                                    Agreement, "Cause" shall mean and refer to a
                                    determination made in good faith by the
                                    Company's Board of Directors that:

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                  (1)      Employee has been convicted of or has entered a plea
                           of guilty or nolo contendere to a felony or to any
                           other crime, which other crime is punishable by
                           incarceration for a period of one (1) year or longer,
                           or which is a crime involving moral turpitude; or

                  (2)      there has been a theft, embezzlement, or other
                           criminal misappropriation of funds by Employee,
                           whether from Company or any other person; or

                  (3)      Employee has willfully failed to follow reasonable
                           written policies or directives established by the
                           Board of Directors of the Company, or Employee has
                           willfully failed to attend to material duties or
                           obligations of Employee's office (other than any such
                           failure resulting from Employee's incapacity due to
                           physical or mental illness, which is a cause or
                           manifestation of Employee's disability), which
                           failure or refusal continues for thirty (30) days
                           following delivery of a written demand from the
                           Company's Chief Executive Officer for performance to
                           Employee identifying the manner in which Employee has
                           failed to follow such policies or directives or to
                           perform such duties.

                           (iii)    Termination pursuant to this Paragraph 10
                                    shall be effective as of the effective date
                                    of the notice by the Board of Directors,
                                    Chief Executive Officer, or President or to
                                    Employee that it has made the required
                                    determination, or at such other subsequent
                                    date, if any specified in such notice.

                           (iv)     Death. If Employee dies during the Period of
                                    Employment, Employee's employment shall be
                                    terminated effective as of the end of the
                                    calendar month during which Employee died.

                  (b)      Termination by Employee.

                  (i)      With Good Reason. Employee shall have the right to
                           terminate his employment under this Agreement at any
                           time for Good Reason, provided Employee has delivered
                           written notice to the Company which briefly describes
                           the facts underlying Employee's belief that "Good
                           Reason" exists and the Company has failed to cure
                           such situation within thirty (30) days after
                           effective date of such notice. For purposes of the
                           Agreement, "Good Reason" shall mean and consist of:

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                  (1)      a material breach by the Company of its obligations
                           under this Agreement;

                  (2)      the assignment to Employee of duties that are
                           materially inconsistent with, or that constitute a
                           material alteration in the status of his
                           responsibilities set forth in Paragraph 1 of this
                           Agreement, as an employee of the Company;

                  (3)      a reduction by the Company of Employee's base salary
                           below the base salary set forth in Paragraph 4 above;

                  (4)      without Employee's prior written consent, the
                           transfer or relocation of Employee's place of
                           employment to any place other than the Salt Lake
                           City/Provo metropolitan area, except for reasonable
                           travel on the business of the Company; or

                  (5)      upon a change of control as defined in Paragraph 7(c)
                           above.

         11.      Confidential Information. The Employee shall hold in a
                  fiduciary capacity for the benefit of the Company all secret
                  or confidential information, knowledge or data relating to the
                  Company or any of its affiliated companies and their
                  respective businesses, which has been obtained by the Employee
                  during the Employee's employment by the Company or any of its
                  affiliated companies and which shall not be or become public
                  knowledge (other than by acts by the Employee or
                  representatives of the Employee in violation of this
                  Agreement). After termination of the Employee's employment
                  with the Company, the Employee shall not, without prior
                  written consent of the Company or as may otherwise be required
                  by law or legal process, communicate or divulge any such
                  information, knowledge or data to anyone other than the
                  Company and those designated by the Company. In no event shall
                  an asserted violation of the provisions of this Section
                  constitute a basis for deferring or withholding any amounts
                  otherwise payable to the Employee under the provisions of this
                  Agreement.

         12.      Inventions.

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                  (1)      Assignment. Without further consideration, the
                           Employee shall fully and promptly report to the
                           Company all ideas, writings, concepts, inventions,
                           discoveries, formulas, designs, and know-how
                           conceived or produced by the Employee at any time
                           during the Period of Employment relating to the
                           Company's trade or business, whether alone or with
                           others and whether or not patentable or subject to
                           copy or service rights or trademark (collectively,
                           "Inventions" pertaining directly or indirectly to the
                           business of the Company as conducted by the Employee
                           at any time during the Employment Period) and shall
                           assign and hereby does assign to the Company or its
                           nominee the Employee's entire right, title and
                           interest in and to all such Inventions.

                  (2)      Cooperation. The Employee shall take all reasonable
                           action requested by the Company to protect or obtain
                           title to any and all United States and/or foreign
                           patents on any such Inventions, including execution
                           and delivery of all applications, assignments and
                           other documents deemed necessary or desirable by the
                           Company, provided the Company shall reimburse the
                           Employee for all expenses incurred by the Employee in
                           connection with such execution and delivery.

         13.      Non-Competition after Termination.

                  (1)      Acknowledgment. The Employee acknowledges that his
                           services and responsibilities are of a particular
                           significance to the Company and that his position
                           with the Company does and will continue to give him
                           an intimate knowledge of its business. Because of
                           this, it is important to the Company that the
                           Employee be restricted from competing with the
                           Company in the event of the termination of his
                           employment.

                  (2)      Agreement. The Employee agrees that, in addition to
                           any other limitations, for a period of two (2) years
                           after the termination of his employment under this
                           Agreement, the Employee will not directly or
                           indirectly compete with the Company or its business.

         14.      Severance Pay. Except for termination (1) for Cause under
                  Paragraph 10(a)(ii) above or (2) upon 30 days notice at the
                  end of the three year Period of Employment under Paragraph 3
                  above, if the Employee does not continue in the employ of the
                  Company after the termination of this Agreement, whether or
                  not the Employee is offered continued employment by the
                  Company, Company shall pay to Employee, no later than thirty
                  (30) days, the sum of one year's annual base wages. The
                  Employee shall not be required to mitigate the amount of the
                  payment provided for in this section by seeking other
                  employment or otherwise; nor shall the amount of the payment
                  be reduced by any compensation earned by the Employee as the
                  result of employment by another employer after termination or
                  otherwise.

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         15.      Indemnification. Subject to the Company's Certificate of
                  Incorporation, as amended, the Company shall release,
                  indemnify and hold harmless the Employee against and from any
                  and all loss, claims, actions or suits, including costs and
                  attorney's fees, both at trial and on appeal, resulting from,
                  or arising out of or in any way connected with the Employee's
                  acts as an employee of the Company.

         16.      Miscellaneous. Any notice or other communications required or
                  permitted to be given to the parties hereto shall be deemed to
                  have been given when received, addressed as follows (or at
                  such other address as the party addressed may have substituted
                  by notice pursuant to this Section):

                  (a)      If to the Company:

                           3280 North Frontage Road
                           Lehi, Utah 84043
                           Attention: President or CEO

                  (b)      If to Employee:

                           Kenneth R. Frailey
                           263 North First East
                           Tooele, Utah  84074

         17.      Governing Law. This Agreement shall in all respects be
                  interpreted, construed and governed by and in accordance with
                  the laws of the State of Utah.

                  Effective the first day of January, 1999.

                  Covol Technologies, Inc.:             Employee

                  /s/ Brent M. Cook                     /s/ Kenneth R. Frailey
                  -----------------                     ----------------------
                  By: Brent M. Cook                     Kenneth R. Frailey
                  Title: President

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