EXHIBIT 10

                              EMPLOYMENT AGREEMENT


                  THIS  EMPLOYMENT  AGREEMENT  is  made  as of the  10th  day of
November 1999 between Desa International, Inc. whose principal place of business
is located at 2701 Industrial Drive, Bowling Green,  Kentucky 42101 (hereinafter
called  the  "Corporation"),  and  W.  MICHAEL  CLEVY  (hereinafter  called  the
"Employee"),  residing at 9104 Heritage  Drive,  Brentwood,  Tennessee 37027 and
2175 South Berry's Chapel Road, Franklin, Tennessee
37069.
                               W I T N E S S E T H

                  The  Corporation,  as  directed  by the  Board  of  Directors,
desires to secure the services of the  Employee in an  executive  capacity for a
period commencing on November 10, 1999 (the "Effective  Date"), on the terms and
conditions  hereinafter  set  forth,  and the  Employee  is  willing  to  accept
employment on such terms and conditions.

                  In consideration of the premises and of the mutual  agreements
hereinafter  set forth,  the parties  hereto have agreed and do hereby  agree as
follows:

                  1. Employment.  The Corporation hereby employs the Employee in
the  capacity  of  President  and Chief  Executive  Officer  (with  the  duties,
responsibilities  and  authority  as are normal for such  offices and as further
defined  by the  current  By-Laws of the  Corporation,  a copy of which has been
provided  to the  Employee),  reporting  only to the Board of  Directors  of the
Corporation,   and  the  Employee   hereby  accepts  and  agrees  to  serve  the
Corporation, its divisions, and subsidiaries,  if any, on a full time basis, and
to perform such duties of an executive nature, including any reasonable business
travel  incident  thereto,  as Employee is directed by the Board of Directors to
perform on behalf of the Corporation,  for a period  commencing on the Effective
Date and ending on the third  anniversary of the Effective Date (as the same may
be renewed as provided in the next sentence,  the "Employment  Period"),  unless
earlier  terminated in accordance with Section 8 of this  Agreement.  Unless the
Board of Directors  shall give written notice of termination of the Agreement in
person to the


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Employee at least six (6) months prior to its termination,  this Agreement shall
automatically  renew for  successive  one year terms.  Employee  shall have such
powers  and  duties  as may be from  time to time  prescribed  by the  Board  of
Directors.  Employee's rights, duties and responsibilities shall be commensurate
with his  position.  Prior to the  close of each  fiscal  year  during  the term
hereof,  the Board of Directors shall establish and deliver to Employee  written
performance  goals  for  the  Employee  for  the  succeeding  fiscal  year  (the
"Performance Goals"). Employee's performance of his duties hereunder,  including
the determination of whether the Performance Goals have been achieved,  shall be
subject  to  review  only by the  Board of  Directors.  Such a  review  shall be
conducted  in good faith at least  annually.  Employee  agrees to serve  without
additional compensation, if elected or appointed thereto, in one or more offices
and as a  director  of  the  Corporation's  parent,  Desa  Holdings  Corporation
("Holdings") and any of the Corporation's subsidiaries,  provided, however, that
the  Employee  shall not be  required  to serve as an officer or director of any
subsidiary if such service would expose him to adverse financial, legal or other
consequences;  and  provided,  further,  that  Employee  acknowledges  that  the
Corporation  shall not be  deemed  to be in  breach of this  Section 1 or of the
final  sentence  of  Section 8 if  Employee  declines  to serve as an officer or
director of any subsidiary.

                  Employee shall not be required to relocate his residence,  and
the corporate  headquarters of the  Corporation  will be moved, on a decision by
the Employee,  to a location in the  Nashville,  Tennessee  area selected by the
Employee and reasonably acceptable to the Board of Directors.

                  2.  Employment  Service.  During the  Employment  Period,  the
Employee shall devote his business time, energy and skill (reasonable  vacations
and  reasonable  absences  because  of  sickness  and other  personal  necessity
excepted)  to  render   services  for  the  Corporation  or  its  divisions  and
subsidiaries, if any, and in the promotion of their collective interests. During
the Employment Period, the Employee shall not engage in any other

                                       -2-

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business  activities,  duties,  or pursuits which  interfere with his employment
hereunder or  detrimentally  affect the  performance of his employment  services
hereunder.  Upon the reasonable  request of the Corporation,  the Employee shall
cease any business,  activities,  duties or pursuits detrimentally affecting the
Employee's   performance  of  his  duties  hereunder  or  interfering  with  his
employment  hereunder.  This  provision  shall  not be deemed  to  prohibit  the
Employee  from   engaging  in  a  reasonable   amount  of  activities  in  trade
associations  and   professional   organizations  or  participating  in  private
investments provided such activities do not interfere with Employee's employment
hereunder or materially  adversely  affect the performance of Employee's  duties
hereunder.  During the Employment  Period and subject to Section 11 hereof,  the
Employee  shall not own or hold any  securities  in, or be employed by or render
any  consulting  or similar  services  to, any company  directly  or  indirectly
competing  with the business of the  Corporation  or any division or  subsidiary
thereof,  as such business is  constituted on the date of  determination,  in an
amount which, in the reasonable  judgment of the Corporation,  would result in a
conflict of interest.  For  purposes of this  Section 2,  ownership of less than
five  percent (5%) of the issued and  outstanding  stock of a  corporation,  the
securities of which are listed upon a national  securities exchange or regularly
included in a national  list of  over-the-counter  securities  as it may be from
time to time  published  in a  newspaper  of general  publication,  shall not be
deemed to create a conflict of interest.

                  3.       Compensation.

                    (a) From and after the Effective Date, the Employee shall be
entitled to receive by way of remuneration for his services a salary of not less
than Four Hundred  Forty-Five  Thousand Dollars  ($445,000) per year, payable in
bimonthly  installments  ("Regular  Remuneration").  Salary, bonus and all other
payments to Employee  pursuant to the Agreement  shall be subject to withholding
and other applicable taxes. Annual increases in Regular  Remuneration will be at
the discretion of the Board of Directors of the Corporation;  provided, however,
that in the absence of adverse factors, circumstances or information

                                       -3-

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relating to Employee's performance of his duties or the Corporation, the general
principle  by which the  Board  will be guided  in  setting  Employee's  Regular
Remuneration  shall be to achieve general parity with executives  having similar
responsibilities  for similarly situated businesses.  In addition,  the Board of
Directors of the Corporation  shall review  Employee's  Regular  Remuneration no
less  frequently  than annually  beginning  one year after the  Effective  Date,
taking  into  account  increases  in the  profitability  of the  Corporation  or
increased  responsibilities  occasioned by growth in the size and  complexity of
the  Corporation's  business,  whether  caused by growth  in  existing  business
operations  or by  acquisition  or creation of additional  operations,  and such
other factors as the Board of Directors deems appropriate, in order to determine
whether Employee's then-effective Regular Remuneration is adequate.

                    (b) For each fiscal year (and for partial fiscal years under
certain circumstances,  as provided hereinbelow) during the Employment Period, a
cash executive  bonus pool (the "EBP") will be  established  for the Employee if
the Corporation  achieves (as determined by the Board of Directors) in excess of
90% of the EBITDA target for such year as set forth in the Corporation's  annual
management  plan,  as approved by the Board of  Directors  (the  "Annual  EBITDA
Target").  Such bonus pool will equal 0.0% of Employee's Regular Remuneration if
the  Corporation  has achieved 90% of the Annual EBITDA Target for such year and
will increase on a linear basis at 5.0% of Employee's  Regular  Remuneration for
each 1% of  Annual  EBITDA  Target in  excess  of 90%,  up to 50% of  Employee's
Regular  Remuneration  if the Corporation has achieved 100% of the Annual EBITDA
Target.  If the  Corporation  has achieved  more than 100% of the Annual  EBITDA
Target,  the bonus pool will  increase on a linear  basis at 2.5% of  Employee's
Regular Remuneration for each 1% of Annual EBITDA Target in excess of 100%.1 The
calculation  of the EBP for each full fiscal year shall be  determined  promptly
after the delivery of the audited, consolidated financial

--------
1 Thus, for example, if in a given year the Corporation's  actual EBITDA exceeds
the Annual EBITDA Target by 20%, the  Employee's  EBP for that year will be 100%
of his Regular Remuneration.

                                       -4-

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statements  of  Holdings,  and  EBP  bonus  payments  shall  be  paid as soon as
practicable  after  such  determination.  In the event that the  Corporation  or
Holdings disposes of a material  operating  subsidiary or division or separately
identifiable  business unit, the EBP shall be reviewed by the Board of Directors
and revised to the extent  necessary to provide  Employee with a bonus plan that
is  substantially  equivalent in format and provides a substantially  equivalent
benefit in light of such disposition. Employee acknowledges that in the event of
such a disposition,  the bonus payable under the EBP may decrease.  In the event
that the Corporation or Holdings acquires,  directly or indirectly, the stock or
substantially  all of the assets of another  corporation or other entity, or any
division or  separately  identifiable  business  unit  thereof,  the EBP will be
amended by mutual agreement of Employee and the Corporation,  as directed by the
Board of Directors,  to adjust the EBITDA  targets and bonus pool to reflect the
effects of such transaction on the Corporation. With respect to any EBP bonus to
which  Employee  may be  entitled  for a portion of a fiscal  year  pursuant  to
Section 7, 8 or 9 below,  such EBP for such  portion of the fiscal year shall be
determined in the same manner set forth  hereinabove as if the Employee had been
employed for the full fiscal year;  provided,  however,  that (i) the applicable
EBITDA target shall be the Corporation's  annual management plan for the portion
of such fiscal year as Employee was employed by the Corporation  (fiscal year to
date through the month end preceding the Employee's  termination of employment),
(ii) the bonus pool will be  proportionate  to the percentage of the year during
which the Employee was  employed by the  Corporation,  and (iii) for fiscal year
2000 only, the  applicable  EBITDA target shall be the full fiscal year's target
measured   against  full  fiscal  year  results  (with  the  bonus  pool  to  be
proportionate as set forth in clause (ii) above). The calculation of the EBP and
payment of any EBP bonus owing on account of a portion of a fiscal year shall be
completed as soon as reasonably  practicable  after the  employment  termination
event giving rise thereto.

                                       -5-

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                    (c) In addition to the compensation  payable to the Employee
as set forth  hereinabove,  the  Employee  shall be entitled to receive  certain
stock options,  the fundamental terms of such options in respect of the Employee
are outlined on Exhibit A hereto.

                  4. Expenses and Fringe Benefits.

                    (a)   The   Employee    shall   be   reimbursed    for   the
business-related  expenses  incurred by the Employee in the  performance  of his
duties hereunder.

                    (b) The  Employee  shall also be  entitled  to  receive  the
Fringe  Benefits  set forth on Exhibit B hereto.  The  Corporation  agrees that,
without the Employee's written consent, it will not make any material changes in
such benefits which would  materially  adversely  affect the Employee's right to
receive or  eligibility  to  participate  in such benefit  plans or the amounts,
timing or terms of such benefits;  provided,  however, the Corporation shall not
be in breach of this provision if it institutes an alternative  benefits plan or
program with substantially equivalent benefits.

                  5. Trade Secrets and Confidentiality. The Employee agrees that
he will not at any time,  while he is employed by the Corporation or for two (2)
years after  termination of such  employment,  knowingly  divulge to any person,
firm or corporation any confidential or privileged  information  received by him
during the course of his employment, or prior to the date hereof, with regard to
the financial,  business or other affairs of the Corporation,  its predecessors,
its  officers,  directors,  or  stockholders,  or any  subsidiary,  customer  or
supplier of the Corporation, and all such information shall be kept confidential
and shall not, in any manner be revealed to anyone  except as may  otherwise  be
required by law and provided  further that nothing  herein shall be construed to
prohibit the Employee from divulging  information in the ordinary  course of the
business of the Corporation.  The Employee further agrees,  while he is employed
by the  Corporation or for two (2) years after  termination of such  employment,
that he will not knowingly divulge to any person, firm or corporation, either

                                       -6-

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during the term of this Agreement or thereafter,  or make known either  directly
or through  another,  to any person,  firm or  corporation,  any trade secret or
confidential knowledge or privileged procedures of the Corporation except as may
be otherwise  required by law and provided  further that nothing herein shall be
construed  to prohibit  the  Employee  from  divulging  (i)  information  in the
ordinary course of the business of the Corporation or (ii) information which was
or has become or hereafter becomes generally available to the public. Any breach
of the terms of this  paragraph  or of  Section  11 hereof  shall be a  material
breach of this Agreement.

                  6.  Property  of the  Corporation.  The  Corporation  shall be
entitled to the sole benefit and exclusive  ownership of any  trademarks,  trade
names,  marketing or advertising concept or strategy, any design patents, or any
inventions or improvements in plant, machinery,  processes, or other things used
in the business of the Corporation that may be developed, made, or discovered by
the  Employee  while he is in the service of the  Corporation,  and the Employee
shall do all acts and things  necessary or required to give the  Corporation the
benefit of this Section.  The Employee  agrees that he will not use any property
of the Corporation except in furtherance of his duties hereunder.

                  7.  Death or  Disability.  If the  Employee  dies  during  the
Employment  Period,  all  obligations  of the  Corporation  under this Agreement
(other than obligations for accrued Regular Remuneration hereunder) shall cease,
except that the  Employee's  estate shall be entitled (i) to continue to receive
the  Regular  Remuneration  set forth in  Paragraph  3(a) hereof for a period of
twelve (12) months after  death,  and (ii) to the  Employee's  EBP bonus for the
portion of the fiscal year prior to his death as determined  pursuant to Section
3(c) as and when such bonus is otherwise payable in accordance with such Section
3(c). If during the Employment  Period,  the Employee shall become physically or
mentally  disabled  to the  extent  that he is, in the  reasonable  opinion of a
recognized  medical expert selected by the  Corporation,  unable to continue the
proper performance of his duties hereunder for a

                                       -7-

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continuous  period of one hundred eighty (180) days,  the Employee's  employment
hereunder  shall  thereupon  cease  and  terminate;   provided,   that  (i)  the
Corporation's  obligation  under  Paragraph  3(a) hereof with respect to Regular
Remuneration  shall  continue  in full force and effect for twelve  (12)  months
after determination of disability (such remuneration to be offset by any amounts
received  by the  Employee  from  insurance  or other  benefits  provided by the
Corporation other than pursuant to this Agreement),  and (ii) the Employee shall
be  entitled  to his EBP bonus for the  portion of the fiscal  year prior to his
termination  of employment  as  determined  pursuant to Section 3(c) as and when
such bonus is payable in accordance with Section 3(c).

                  8.  Termination  of  Services.  The Board of  Directors of the
Corporation  shall have the right on behalf of the  Corporation to terminate the
Employee's  employment for Cause (as hereinafter  defined in clauses (a) and (b)
of this sentence)  during the  Employment  Period (a)  immediately  upon and the
Corporation shall have no further  obligation  hereunder after the conviction or
admission of Employee of a felony or a crime involving moral turpitude under the
laws of any state in the United States or the federal laws of the United States,
or fraud,  misappropriation  or embezzlement of the assets of the Corporation or
any  subsidiary  thereof;  or (b) upon not less than thirty  (30) days'  written
notice  specifying in  reasonable  detail (i) any failure by Employee to fulfill
his duties and  responsibilities  set out in Sections 1 and 2 of this  Agreement
(other  than due to death or  disability),  or failure to perform in  accordance
with the Performance Goals in any material respect as determined by the Board of
Directors,  which has not been cured within 60 days after Employee's  receipt of
written  notice of such failure;  or (ii) the  intentional  or knowing breach by
Employee of his  obligations  under Sections 5, 6, or 11 of this  Agreement.  If
Cause as defined in clause (b) of the preceding  sentence  continues to exist 60
days after written notice,  Employee's  employment  hereunder shall  immediately
cease and  terminate,  and the  Corporation  shall have no  further  obligations
hereunder.  The Employee may voluntarily  leave the employ of the Corporation at
any time,

                                       -8-

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but the Corporation shall have no further  obligations  hereunder.  The Board of
Directors of the  Corporation  shall have the right to terminate the  Employee's
employment without Cause at any time, effective immediately.  If the Corporation
terminates  the Employee's  employment  without Cause prior to expiration of the
Employment  Period,  the Corporation shall pay Employee (i) for the remainder of
the  Employment  Period  (but in no  event  for  less  than 12  months)  Regular
Remuneration  which shall continue to be payable in  installments  in accordance
with Section 3 hereof;  (ii) for the remainder of the Employment  Period (but in
no event for less than 12 months)  all  damages  for loss of Fringe  Benefits or
benefits  under any  "employee  benefit plan" (as defined in Section 3 of ERISA)
sponsored  by the  Corporation  which the  Employee  would have  received if the
Corporation had not terminated the Employee  without Cause;  provided,  however,
that in lieu thereof, the Corporation shall have the right to continue providing
Fringe Benefits (or substantially  equivalent benefits) to the Employee for such
period, if reasonably acceptable to Employee;  (iii) legal fees and expenses, if
any, incurred as a result of such termination; and (iv) his share of the EBP for
the portion of the fiscal year in which such  termination  occurs as  determined
pursuant  to  Section  3(c) as and when  such  bonus  is  otherwise  payable  in
accordance  with Section  3(c).  Employee  shall not be required to mitigate the
amount of any  payment  due him under  this  Section by  seeking  employment  or
otherwise;  provided,  however,  that  compensation  and  benefits  received  by
Employee  after  termination  without Cause will offset  Employee's  termination
benefits and damages payable under this Section 8 on account of such termination
without  Cause.  The  Corporation  shall use its best  efforts to  maintain  all
employee  benefit  plans and  programs  in which the  Employee  was  entitled to
participate  immediately  prior  to  his  termination  without  Cause.  If  such
participation  cannot be maintained with the exercise of the Corporation's  best
efforts,  Employee  shall be entitled to receive an amount  necessary to provide
the Employee and his  dependents  equivalent  benefits for the  remainder of the
Employment Period. For purposes of this Section, termination without Cause shall
include, but not be limited to: (i)

                                       -9-

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any  material  change in  Employee's  duties as  President  and Chief  Executive
Officer or assignment of the Employee to duties materially inconsistent with the
position  of  President  and Chief  Executive  Officer;  (ii) any removal of the
Employee  from or any failure to re-elect the  Employee to any of the  positions
indicated  in Section 1 hereof;  (iii) a reduction in the  Employee's  salary or
Fringe  Benefits,  or adverse change in the terms of  participation  or benefits
under the EBP  provided,  that no  termination  without Cause shall be deemed to
have  occurred  if the  Corporation  provides  benefits  that are  substantially
equivalent to the Fringe Benefits provided at the time of determination; or (iv)
any  breach  of this  Agreement  by the  Corporation  which is not  cured by the
Corporation  within  thirty  (30) days after  receiving  written  notice of such
breach.

                  9.  Change  in  Control  or  Sale of the  Corporation.  If the
Corporation shall undergo a Change in Control (as hereinafter defined) or a Sale
of the Corporation (as hereinafter defined,  and, in such event, the Corporation
fails to  obtain  the  assumption  of this  Agreement  by any  successor  to the
Corporation under Section 14 hereof prior to the date of such succession) during
the Employment  Period,  Employee shall be entitled to receive for the remainder
of the  Employment  Period  (but in no event  for less than 12  months)  (i) all
future  installments  due for Regular  Remuneration,  which shall continue to be
payable in installments  in accordance  with Section 3 hereof;  (ii) all damages
for loss of Fringe  Benefits or benefits  pursuant to any employee  benefit plan
sponsored by the Corporation which the Employee would have received if there had
been  no  Change  in  Control  or  Sale  of  the  Corporation,   and  (iii)  his
proportionate  share of the EBP for the portion of the fiscal year in which such
Change in Control or Sale of the Corporation occurs, as determined  according to
Section 3(b). The obligations of the Corporation in the preceding sentence shall
not  apply to any  Change in  Control  or Sale of the  Corporation  in which the
Employee  receives  a  realized  return  on his  personal  investment  in equity
securities of Holdings (including,  without limitation, any such investment made
pursuant to either Section 3(c) or Section 12 hereof) equal to three times the

                                      -10-

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cost of such  investment.  For purposes hereof, a realized return shall mean the
(i) cash,  (ii)  market  value of  registered,  publicly  traded  and  tradeable
securities not subject to transfer  restrictions or restrictions  under Rule 144
under the  Securities  Act of 1933 , as  amended,  and/or  (iii)  fair value (as
determined by the Board of Directors of the Corporation acting in good faith) of
all other securities, in each case received by Employee in any Change of Control
or Sale of the  Corporation  transaction.  Employee  shall  not be  required  to
perform  further  duties  hereunder  and shall not be required  to mitigate  his
damages in the event a Change in Control or Sale of the Corporation  shall occur
during  the  Employment  Period.  A Change  in  Control  shall be deemed to have
occurred  if:  (i)  Holdings  shall  own  less  than 90% of all the  issued  and
outstanding   voting   securities  of  the  Corporation;   or  (ii)  a  sale  of
substantially  all the assets of the  Corporation;  provided,  that no Change in
Control shall be deemed to have  occurred in the event that,  subsequent to such
transaction,  Employee  continues to be employed by the  successor  entity under
terms,  conditions and for compensation  substantially identical to the terms of
this Agreement.  A "Sale of the Corporation" shall be deemed to have occurred if
(i) the "JWC Holders" and their  Affiliates,  the  "Management  Holders" and the
"Other  Holders"  (as  such  quoted  terms  are  defined  in the  Desa  Holdings
Corporation Amended and Restated  Stockholders  Agreement dated as of October 9,
1998)  (collectively,  the  "Control  Group")  shall  cease to own of record and
beneficially an amount of Voting Securities of Holdings equal to at least 50% of
the amount of Voting  Securities  (other than by virtue of sales  pursuant to an
initial public  offering or a reverse stock split of such Voting  Securities) of
Holdings;  (ii) any Person or related  group (as defined in Rule 13(d) under the
Exchange Act of 1934, as amended (the  "Exchange  Act")),  excluding the Control
Group,  shall be or become the  "beneficial  owner" (as defined in Rules 12(d)-3
and  13(d)-5  under the  Exchange  Act),  directly or  indirectly,  of a greater
percentage  of the  outstanding  Voting  Securities  of  Holdings  than is owned
beneficially  by the Control Group and the Control Group no longer has the right
to seat a majority of the directors of Holdings; (iii) all or

                                      -11-

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substantially  all of the assets of Holdings are sold or  otherwise  transferred
for value,  other than to a lender in a secured  transaction and other than in a
transaction following which the Control Group owns of record and beneficially at
least 50% of the Voting  Securities  of the  acquiring  Person;  or (iv) (in the
event of a merger or  consolidation)  Holdings is merged or consolidated with or
into  another  entity  and,  as a  result  thereof,  the  Control  Group  holds,
beneficially  and of  record,  less  than 50% of the  Voting  Securities  of the
surviving entity. As used herein,  "Affiliate" means as to any Person, any other
Person which, directly or indirectly,  is in control of, is controlled by, or is
under common control with, such Person;  provided,  that, as to the JWC Holders,
the term Affiliate shall include the partners, officers, directors and employees
of J.W. Childs Associates,  L.P., their spouses,  children, and other members of
their immediate family and trusts,  family limited partnerships and other estate
planning  vehicles  created  for the  benefit  of such  persons.  As used in the
preceding  sentence,  "control"  of  a  Person  means  the  power,  directly  or
indirectly,  either  to (i) vote 51% or more of the  Voting  Securities  of such
Person or (ii) direct or cause the direction of the  management  and policies of
such Person, whether by contract or otherwise. As used herein, "Person" means an
individual,  partnership,  corporation,  business  trust,  joint stock  company,
trust, unincorporated association,  joint venture, any nation or government, any
state or other political  subdivision thereof, any entity exercising  executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to  government,  or other entity of whatever  nature.  As used  herein,  "Voting
Securities" means common equity  securities (or equivalent  partnership or joint
venture  interests)  having the right to vote generally in matters coming before
common equity holders.

                  10. Coordination of Rights. In the event that Employee suffers
termination  of Employment  without Cause and a Change in Control or Sale of the
Corporation  also  occurs,  Section 8 shall be  disregarded  and Section 9 shall
apply.

                                      -12-

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                11.   Covenant Not to Compete; Non-Solicitation, etc.

                    (a) While  employed by the  Corporation  and for a period of
two years following  termination of employment,  the Employee will not, directly
or indirectly as an  individual  or as part of a partnership  or other  business
association,  or otherwise,  compete with the business of the Corporation or its
subsidiaries  in  North  America  or in any  other  jurisdiction  in  which  the
Corporation or a subsidiary thereof conducts substantial  business,  nor will he
enter the employ  of, or act as an agent for or as a  director,  consultant,  or
officer of, any person,  firm,  partnership or corporation  engaged in a line of
business in North America or in any other  jurisdiction in which the Corporation
or a  subsidiary  thereof  conducts  substantial  business  that is  directly or
indirectly  in  competition   with  the  business  of  the  Corporation  or  its
subsidiaries as the same is being conducted at such termination of employment.

                    (b) The  Employee  further  agrees  that he will not, at any
time during or within two years after the  termination of employment  under this
Agreement,  however caused, solicit,  interfere with, employ, endeavor to entice
away from the Corporation,  or any subsidiary of the Corporation,  any customer,
supplier or employee.

                    (c) With respect to any issues as to the  enforceability  of
the foregoing provisions,  the Employee agrees that the foregoing are reasonable
in terms of scope and  duration  and both  parties  agree that a court  making a
determination  on the  issue of  validity,  legality  or  enforceability  of the
foregoing, may modify the duration or scope of the provisions of this Section 11
and/or delete or modify specific words or phrases ("blue penciling"), and in its
reduced or blue-penciled  form, the foregoing shall be enforceable and enforced.
The Employee agrees that in the event of a breach of the foregoing provisions of
this Section 11 or the  provisions  of Section 5, the remedy of damages would be
inadequate and the Corporation may apply to any court of competent  jurisdiction
to enjoin any violation, as well as seek all other legal remedies available upon
ten days notice to Employee, provided that

                                      -13-

<PAGE>



Employee shall not have cured such breach within 30 days after receiving written
notice of such breach.

                  12. Stock  Purchase.  Within 30 days after the Effective Date,
the Employee will acquire  shares of common stock of Holdings at a valuation for
such  shares  of $6.50  per share for an  aggregate  investment  of  $3,000,000.
Contemporaneously,  the  Employee  will  execute the Desa  Holdings  Corporation
Amended and  Restated  Stockholders  Agreement  dated as of October 9, 1998 as a
"Management  Holder"  as  defined  therein.  Employee  will pay for  such  stock
purchase  on the  Effective  Date by  cash in the  amount  of  $1,500,000  and a
promissory note in principal  amount of $1,500,000 (the "Note").  The Note shall
bear interest,  payable at maturity, at 8.5% per annum and shall mature nine and
one-half years after the Effective Date;  provided,  however,  that any proceeds
from the sale of any Holdings common stock acquired by Employee pursuant to this
Section 12 shall be applied proportionately to reduce the Note.

                  13.  Non-Waiver of Rights.  The failure to enforce at any time
any of the provisions of this Agreement or to require at any time performance by
the other party of any of the provisions  hereof shall in no way be construed to
be a waiver of such provisions or to affect the validity of this  Agreement,  or
any part  hereof,  or the right of either party  thereafter  to enforce each and
every provision in accordance with the terms of this Agreement.

                  14.    Invalidity   of    Provisions.    The   invalidity   or
unenforceability of any particular  provision of this Agreement shall not affect
the other  provisions  hereof,  and this  Agreement  shall be  construed  in all
respects as if such invalid or unenforceable provisions were omitted.

                  15. Assignment. This Agreement shall be binding upon and shall
inure to the benefit of the  Corporation  and any  successor to the  Corporation
under the  provisions of this  Agreement.  For the purpose of this Agreement the
term "successor"  shall mean any person,  firm,  corporation,  or other business
entity which at any time, whether by merger,

                                      -14-

<PAGE>



purchase,  liquidation or otherwise,  shall acquire all or substantially  all of
the assets or business of the  Corporation.  This  Agreement  is personal to the
Employee and is not assignable by the Employee.

                  16.  Choice of Law.  This  Agreement  shall in all respects be
governed by and construed in accordance with the laws of the State of Delaware.

                  17.  Entire  Agreement.  This  Agreement  embodies  the entire
agreement of the parties  respecting the matters  within its scope,  superseding
any and all prior  agreements  or  understandings  with  respect to the  subject
hereof and may be modified  only in a writing  signed by the party  against whom
enforcement  is sought.  The  headings  contained  in this  Agreement  have been
inserted  solely for the  convenience of the parties and shall be of no force or
effect  in  the  construction  or  interpretation  of  the  provisions  of  this
Agreement.

                  18.  Notices.  All notices  required or made  pursuant to this
Agreement  shall be made,  and shall be deemed to have been duly given when sent
by, certified mail, return receipt  requested,  to the addresses set forth above
or such other addresses later designated in writing by either of the parties.

                  IN WITNESS WHEREOF,  the Corporation has caused this Agreement
to be executed  on its behalf by an officer of the  Corporation  thereunto  duly
authorized,  and the Employee has hereunto signed this Agreement,  all as of the
date first written above.

                                             DESA INTERNATIONAL, INC.


                                             By:/s/ Adam L. Suttin
                                                 Title: Vice President



                                             EMPLOYEE

                                                 /s/ W. Michael Clevy
                                                 W. MICHAEL CLEVY

                                      -15-

<PAGE>



                                                                      EXHIBIT A
                                                        TO EMPLOYMENT AGREEMENT



                           NON-QUALIFIED STOCK OPTIONS
                                 KEY PROVISIONS


         At the Effective Date, Employee will be granted  non-qualified  options
to acquire, at $6.50 per share, an aggregate number of shares of common stock of
Holdings equal to four percent (4%) of the  outstanding  common stock and common
stock  equivalents  of Holdings,  on a fully diluted basis.  Employee's  options
shall be  subject  to  anti-dilution  protections  for the  first  $100  million
(measured  by  gross  proceeds)  of all  issuances  and  sales  by  Holdings  of
additional equity securities.

         The  above  options  will  vest  40% on the  first  anniversary  of the
Effective  Date, and 20% on each  subsequent  anniversary of the Effective Date,
until fully vested.  Unvested options shall be subject to accelerated vesting in
the case of a Change in Control or Sale of the Corporation.

         Each option shall expire, unless earlier exercised or terminated,  nine
years and six months from the date of grant.

         In the case of  termination  of Employee's  employment for Cause or his
voluntary  resignation,  his  stock  options  shall  terminate  at the  time  of
termination of employment.

         In the case of  termination  of Employee's  employment  without  Cause,
options  which  have  vested  at the time of  termination  of  employment  shall
terminate on the 91st day after the date of employment termination,  and options
which have not vested shall terminate  immediately.  If Employee's employment is
terminated due to death or disability,  options which have vested at the time of
termination/resignation  shall  terminate  on the  181st  day  after the date of
employment  termination or death and may be exercised  during such period by the
Employee or his legal  representative or estate, as the case may be, and options
which have not vested shall terminate immediately.





<PAGE>


                                                                       EXHIBIT B
                                                         TO EMPLOYMENT AGREEMENT



                         FRINGE BENEFITS FOR EXECUTIVES


         The following fringe benefits as they exist and are administered on the
Effective Date of this Agreement:

1.       Health and welfare plan coverage as provided to the  Corporation's  key
         executives

2.       Vacation (up to 30 days per year)

3.       Use of Company Car of Employee's choice

4.       Office  Facilities  and  Services,   including,  but  not  limited  to,
         secretarial   services,   telephone,   cellular  telephone,   computer,
         printers,   internet   connection,   subscriptions,   and  professional
         associations

5.       Travel and Entertainment

6.       Group Life Insurance

7.       Disability Insurance

8.       Country Club Dues

9.       Section 401(k) Plan