EMPLOYMENT AGREEMENT

     This  Employment  Agreement  (hereinafter  "Agreement") is made and entered
into  effective the 1st day of December,  2000, by and between NACO  INDUSTRIES,
INC., a Utah corporation,  whose principal place of business is in Logan,  Utah,
(hereinafter  referred to as "Company"),  and W. MICHAEL HOPKINS of North Logan,
Utah, (hereinafter referred to as "Employee"), and is based upon the following:

                                    RECITALS:

     A. Company is organized  under the laws of the State of Utah and is engaged
in the  business of  manufacturing  and selling PVC plastic  pipe  fittings  and
related products.

     B. Employee possesses unique experience,  education and skills essential to
the business of the Company.

     C.  Company has engaged  the  services of Employee on a fulltime  basis and
requires that Employee devote  substantially  his full time and attention to the
business of Company.

     NOW,  THEREFORE,  in consideration  of the mutual promises  hereinafter set
forth, and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Company and the Employee agree as follows:

                         ARTICLE I EMPLOYMENT AND DUTIES

     1.01  Employment.  The Company hereby agrees to employ the Employee and the
Employee hereby accepts  employment in the capacity of PRESIDENT of the Company,
and agrees to devote adequate business time and his best efforts to the diligent
and faithful  performance  of his duties in such capacity  hereunder,  under the
direction of the Board of Directors of the Company.

     1.02. Conflicting  Interests.  During the continuation of his employment by
the Company  hereunder,  the Employee will devote his substantial time,  energy,
attention  and skill to the services of the Company and to the  promotion of its
interests,  and  Employee  will not during such time  engage in any  activities,
without  full  disclosure  to and  approval  by the  Board of  Directors  of the
Company,   which   represent  a  conflict   of  interest   with  his  duties  or
responsibilities to the Company.

     1.03. Term. Unless sooner terminated as hereinafter  provided,  the term of
this  agreement  shall be FIVE YEARS,  commencing on the effective  date of this
agreement,  and continuing from year to year thereafter  unless  terminated upon
prior  written  notice of either  party  hereto given not later than one hundred
twenty (120) days in advance of the  expiration of the then current term of this
employment  agreement.  Employee  agrees to remain  in the  exclusive  employ of
Employer during the term, or any extended term hereof.

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                             ARTICLE II COMPENSATION

     2.01.  Basic  Salary.  For all  services  rendered by  Employee  under this
Agreement,  Company  shall pay Employee an annual base salary of NINTY  THOUSAND
DOLLARS  ($90,000.00),  payable in  semi-monthly  installments  or other periods
consistent with the payroll policy of the Company for its employees. In addition
to such base salary,  the Company  shall further pay to Employee an ANNUAL BONUS
calculated on the  percentage of the Company's net profits for each fiscal year,
or portion  thereof,  throughout  the term of this  agreement,  which net profit
figure shall be computed  before taxes to the Company upon such profits based on
the following schedule.

     Net Profits from $500,000 to $2,500,000, the Company shall pay five percent
(5%) to be calculated  before any dividends  are declared to  shareholders,  and
another  five  percent  (5%) on the same  profits  to be  calculated  after  any
dividends are declared to shareholders.

     Net Profits from $2,500,001 to $5,000,000,  the Company shall pay two and a
half percent (2 '/2 %) to be  calculated  before any  dividends  are declared to
shareholders, and another two and a half percent (2 Vi %) on the same profits to
be calculated after any dividends are declared to shareholders.

     NetProfits  from  $5,000,001  and above,  the  Company  shall pay one and a
quarter percent (1 */4 %) to be calculated  before any dividends are declared to
shareholders,  and  another  one and a  quarter  percent  (1 '/4 %) on the  same
profits to be calculated after any dividends are declared to shareholders.


Example Calculation Only: $1,000,000 Net Profit Before Taxes

$1,000,000 NPBT minus $500,000 floor = $500,000 NPBT Bonus: $500,000 @ 5%=
$25,000
          Board Declares Dividends of $200,000
          $1,000,000 NPBT subtract $200,000 Declared Dividend = $800,000 NPBT
Bonus: $800.000 (NPBT minus Dividend) minus $500.000 floor  =$300,000
@ 5% = $15,000
 ----------------------------------------------------------------------------
 Total Bonus: $25,000 plus $15,000 = $40,000


     The annual bonus shall be payable to Employee as soon as the amount thereof
may be practically determined after the close of the Company's fiscal year.

     2.02.  Employee  Benefits.  Employee  shall  be  entitled  to  sick  leave,
vacation,  and other  employee  benefits in  accordance  with the  policies  and
programs made available by the Company for its full-time  employees.  Throughout
the  term of this  agreement,  Employee  shall  also be  entitled  to a  vehicle
allowance commensurate with his title and responsibilities.

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     2.03. Stock Options.  In consideration of the terms hereof,  upon execution
of this  agreement  (or as soon  thereafter as shall be possible for the Company
without  violating  contract  covenants  or other rules of law binding  upon the
Company)  the Company  shall issue to Employee  options to purchase  ONE HUNDRED
THOUSAND  (100,000)  SHARES of the Company's common stock, at the exercise price
of TWO DOLLARS PER SHARE.  Rights to exercise such shares shall vest in Employee
at the rate of Twenty  Percent  (20%) per year,  such that Employee may exercise
all or part of the  first 20% of such  options  on or after a date one year from
the date of this  agreement,  with the right to exercise up to an additional 20%
of such options on or after each  succeeding  anniversary  date hereof,  until a
date five  years  from the date of this  agreement,  after  which any  remaining
options not yet  exercised by Employee may be exercised.  Non-exercised  options
shall  expire  upon  termination  of  employment.  Moreover,  the grant of these
options shall not affect  Employee's  eligibility to participate in the grant of
any  further  stock  options  which may be  granted  by the  Company  to its key
employees, whether as incentive stock bonuses or otherwise.

                             ARTICLE III TERMINATION

     3.01.  Termination by Company.  The Company reserves the right to terminate
Employee's term of employment  under this Agreement  should any of the following
occur:

                  (a)  Employee's  commission  of a  felony  or  any  other  act
         abhorrent to the  community  which a reasonable  person would  consider
         materially  damaging to the reputation of the Company or its successors
         or assigns.

                  (b)  Employee's  material  breach of or failure to perform his
         obligations  in  accordance  with  the  terms  and  conditions  of this
         Agreement.

                  (c)  Employee  shall  commit any fraud,  embezzlement,  theft,
         misappropriation or breach of fiduciary duty or other act of dishonesty
         against the Company;

                  (d) Employee  shall perform an act of gross  negligence in the
         performance  of his duties  hereunder  or shall  willfully  neglect his
         duties hereunder.

         3.02. Effect on Other Provisions.  Termination of Employee's employment
under this  Agreement,  and  pursuant to this  paragraph,  will  terminate  only
Employee's  obligations  to act as Employee for the Company under this Agreement
and shall also terminate Company's obligation of compensation to the Employee as
set forth in Article II hereof.  Employee's  obligation to perform under any and
all of the remaining  paragraphs herein shall remain in full force and effect as
set forth in this Agreement after the termination of the Employee's employment.

         3.03.  Termination  by Employee.  Employee may terminate  employment by
giving one hundred twenty (120) days written notice of intent to terminate. Upon
receipt of  termination  employee  agrees that all stock options and bonuses for
the current fiscal year in which termination is given are forfeited.

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                            ARTICLE IV MISCELLANEOUS

         4.01.  Records  and Files.  All  records,  charts and files  concerning
customers  or  suppliers  of Company  shall belong to and remain the property of
Company.  Upon  termination of his employment  hereunder,  Employee shall not be
entitled  to keep or  reproduce  Company's  records  or  charts  related  to any
customer or supplier.

         4.02. Rights and Obligations of Successors. This Agreement shall not be
assignable or transferable by the Company or Employee.

         4.03.  Remedies.  Employee  understands that the Company would not have
any adequate remedy at law for the material  breach or threatened  breach by him
of any one or more of the covenants set forth in this  Agreement and agrees that
in the event of any such material breach or threatened  breach, the Company may,
in  addition to the other  remedies  which may be  available  to it in law or in
equity:


                  (a) File a suit in  equity to  enjoin  him from the  breach or
         threatened breach of such covenants.

                  (b) Bring suit for damages  incurred as a result of any breach
         or  threatened  breach  of any  one or more  of the  covenants  of this
         Agreement.

         4.04.  Equitable  Remedy and  Liquidated  Damages:  The parties  hereto
acknowledge  that  Employee has  established  a home in the  community,  and has
worked to acquire  skills and  experience  for the benefit of Company,  and that
Employee  anticipates  that employment with Company shall  constitute his career
employment. Moreover, in the event that Company should wrongfully terminate said
employment  of  Employee  during  the  term  of  this  agreement,  it  would  be
impractical  and  extremely  difficult  to  accurately  determine  the amount of
damages  suffered by  Employee  therefrom.  Therefore,  in addition to any other
rights or remedies of  Employee  hereunder  or pursuant to law in the event of a
wrongful  termination by Company, the parties acknowledge that Employee shall be
entitled to the equitable remedy of specific  performance of this contract;  or.
Employee  shall be entitled to an immediate  payment equal to the greater of ONE
HUNDRED  THOUSAND  DOLLARS,  ($100,000.00)  or the annual  base  salary plus the
amount of the annual bonus for the fiscal year of termination  (annualized based
on net profits to date of termination),  as liquidated  damages therefor,  which
amount the parties  acknowledge to be their best good-faith  estimate of damages
and not as a penalty.

         4.05. Waiver. A waiver by any party of any provision hereof, whether in
writing  or by  course  of  conduct  or  otherwise,  shall be valid  only in the
instance for which it is given,  and shall not be deemed a continuing  waiver of
said  provision,  nor shall it be construed  as a waiver of any other  provision
hereof.

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         4.06. Paragraph Headings.  The paragraph headings of this Agreement are
inserted only for convenience and in no way define,  limit or describe the scope
or intent of this Agreement nor affect its terms and provisions.

         4.07. Number and Gender. As used in this Agreement,  the term "Company"
shall  include  all  Companies,  and  the  term  "Employee"  shall  include  all
Employees,  and the masculine  shall include the feminine,  and the feminine the
masculine, when the context so requires.

         4.08.  Governing Law. This Agreement,  and all matters relating hereto,
including  any  matter  or  dispute  arising  out of  the  Agreement,  shall  be
interpreted,  governed, and enforced according to the laws of the State of Utah,
and the parties hereto consent to the  jurisdiction of any appropriate  court in
the State of Utah to resolve such disputes.

         4.09.  Severability.  In the event any  provision of this  Agreement is
found by a court of competent  jurisdiction to be inconsistent  with or contrary
to any applicable  law,  ordinance or regulation,  the latter shall be deemed to
control and the Agreement shall be regarded as modified accordingly, giving full
force and effect, to the extent possible,  of the remaining terms and provisions
of this Agreement.

         4.10.  Amendments.  This  Agreement  may be  amended  at any time  upon
unanimous  agreement of the parties hereto which  amendments  must be reduced to
writing and signed by all parties in order to become effective.

         4.11. Entire Agreement.  This Agreement  constitutes and represents the
entire  agreement  of the  parties  hereto with  respect to the  subject  matter
hereof,  and all other prior  agreements,  covenants,  promises and  conditions,
verbal or written,  between  these  parties are  incorporated  herein.  No party
hereto has relied upon any other promise, representation or warranty, other than
those contained herein, in executing this Agreement.

         4.12.  Further  Instruments.  The parties  hereto  agree that they will
execute any and all other documents or legal  instruments  that may be necessary
or required to carry out and effectuate all of the provisions hereof.

         4.13.  Attorney's  Fees.  In the  event any  party  hereto  shall be in
default or breach of this Agreement,  said party shall pay and be liable for all
reasonable  attorney's fees, court costs and costs of collection incurred by the
non-defaulting  or  non-breaching  party in  prosecuting  and/or  protecting its
rights hereunder.

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         IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as
of the day and year first above written.


                                COMPANY:


                                 By: /s/ Verne E. Bray
                                 ---------------------
                                         Verne E. Bray
                                         Its  Chairman of the Board,
                                         Secretary and Chief Executive Officer


                                           EMPLOYEE:


                                           /s/ W. Michael Hopkins
                                           ----------------------
                                               W. Michael Hopkins

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