<PAGE>

                                  Exhibit 10.7
                                  ------------

Amendment, dated as of February 26, 2000, to Employment Agreement between the
Registrant and Lewis H. Aronson dated July 29, 1992, as amended.


<PAGE>

                                                                    EXHIBIT 10.7

February 26, 2000

Mr. Lewis H. Aronson
3581 Mary Ellen Drive
Bemus Point, NY 14712

Dear Mr. Aronson:

The purpose of this letter is to formally amend in writing the Employment
Agreement between Bush Industries, Inc. and you dated July 29, 1992, to reflect
the salary and severance changes recommended and approved by the Compensation
Committee, and effective February 26, 2000, as follows:

1.   Salary: Annual Base Salary of $280,000 under Section 4(a).
     ------

2.   Severance: Under section 5(a), if terminated without good cause, the
     ---------
     severance allowance increases to eighteen (18) months, from twelve (12)
     months under the original contract. Please see the amended language in
     Section 5 attached.

3.   Profit Sharing Calculation: The formula for calculating the applicable
     ---------------------------
     profit sharing base, payable under Section 5(a) and 5(c), is clarified
     pursuant to the attached amended language in Section 5.

4.   Constructive Termination: Language has been added that further clarifies
     ------------------------
     the definition of "Constructive Termination."

5.   Attachments: Attachments A, B, and C have been updated to reflect your
     -----------
     current position and compensation package.

All other provisions of the Employment Agreement shall remain in effect.

If you have any questions or concerns about this subject, please let me know as
soon as possible.

Thank you.

Very truly yours,

BUSH INDUSTRIES, INC.

/s/ Neil A. Frederick
Neil A. Frederick
Treasurer

NAF/lm
enclosures
cc:   Mr. David Dawson

<PAGE>

                        SECTION 5 - WITH AMENDED LANGUAGE
                        ---------------------------------

5.       Termination of Employment During the Period of Employment.
         ---------------------------------------------------------

         (a)      Termination by the Company without Good Cause.  The Company
                  ---------------------------------------------
                  may terminate the Executive's employment without Good Cause
                  (as defined in Section 5(f), hereof) only upon sixty (60) days
                  prior written notice to the Executive. If the Executive's
                  employment with the Company is so terminated by the Company
                  and such termination is not a Constructive Termination (as
                  defined in Section 5(f), hereof), the Company, subject to full
                  compliance by the Executive with the provisions of Sections 7
                  and 8 below, relating to "Confidential Information" and
                  "Competition; Detrimental Conduct," shall pay the Executive,
                  as severance pay, an amount equal to the compensation and
                  benefits that would be payable to the Executive under Sections
                  4(a), 4(b), and 4(d) above during the next succeeding eighteen
                  (18) month period if such termination of employment had not
                  occurred, at the time(s), in the installment(s) and on the
                  other terms and conditions that would apply to the payment of
                  such compensation, provided, however, that for purposes of
                  determining the amount of profit sharing payable to Executive
                  under this Section 5(a), such profit sharing award shall be
                  determined based upon the four full fiscal quarters of the
                  Company immediately preceding the date of the afore-described
                  notice to the Executive of Executive's termination hereunder,
                  as described below.

                  The aggregate amount of such profit sharing payable every
                  three (3) months under this Section 5(a) shall equal the (i)
                  the average (the "Average") of the Company's return on sales
                  percentage (calculated before tax or any profit-sharing award)
                  for the above four fiscal quarters (determined by adding the
                  Company's return on sales percentage for each of the above
                  four fiscal quarters and dividing said sum by four), and (ii)
                  multiplied by the Executive's multiple, as set forth in
                  Attachment B, used in calculating the Executive's profit
                  sharing award during the last full fiscal quarter of the
                  Company prior to the date of the above-described notice of
                  termination, (iii) multiplied by the Executive's annual gross
                  base salary as of the date such notice is given hereunder,
                  (iv) with the resulting product multiplied by 1.5. By way of
                  illustration and not limitation, in the event on July 15, the
                  Company gives the Executive the afore-described sixty day
                  notice of termination, the profit sharing award the Executive
                  would be entitled to hereunder would be the Average of the
                  return on sales percentage for the Company for the four full
                  fiscal quarters ending immediately prior to July 15.
                  Accordingly, if the return on sales percentage for quarter one
                  was 7%, quarter two, 11%, quarter 3, 15% and quarter four, 7%,
                  the Average would be determined by adding the return on sales
                  percentage for each of such fiscal quarters (which would
                  result in the sum of 40%), divided by 4, with a resulting
                  Average percentage of 10%. If the Executive's multiple in the
                  last full fiscal quarter of the Company immediately preceding
                  the date of notice of termination was 7, for example, the
                  Average percentage would be multiplied by 7, resulting in a
                  product of 70%, multiplied by the Executive's annual gross
                  base salary as of the date of such notice. If such gross base
                  annual salary, for example, was $100,000, the profit sharing
                  would equal $70,000, multiplied by 1.5 (the equivalent of
                  eighteen months in years) or $105,000, which would be paid in
                  six equal installments over the 18 month period, as part of
                  the severance compensation hereunder. In said example, the
                  Executive would, therefore, be entitled hereunder to an
                  aggregate severance compensation payable over said eighteen
                  month period equal to his annual gross base salary during said
                  eighteen month period, or $100,000 multiplied by 1.5 or
                  $150,000, plus the above-determined profit sharing award of
                  $105,000, for a total of $255,000, plus the other benefits and
                  entitlements the Executive is to receive hereunder.

<PAGE>

                  For the purposes of this Agreement, a termination of
                  employment by the Executive that occurs after the Executive is
                  assigned (without his written consent) duties,
                  responsibilities or reporting relationships not contemplated
                  by Section 3 and not consistent with his position as a senior
                  officer, or after his duties or responsibilities contemplated
                  by Section 3 above are limited in any respect materially
                  detrimental to him, which situation is not remedied within
                  thirty (30) days after the Company receives written notice
                  from the Executive of the situation, shall be deemed a
                  termination by the Company without Good Cause under this
                  Section 5(a).

         (b)      Termination by the Company for Good Cause or by the Executive.
                  -------------------------------------------------------------
                  The Company may terminate the Executive's employment with the
                  Company with Good Cause, or the Executive may elect to
                  terminate his employment with the Company for any reason, upon
                  thirty (30) days prior written notice to the other party
                  hereto. If Executive's employment by the Company is so
                  terminated by the Company with Good Cause or is terminated by
                  the Executive, and such termination is not a Constructive
                  Termination, the Executive shall not be entitled to receive
                  any compensation or benefits under Sections 4(a), 4(b), or
                  4(d) accruing after the date of such termination or any
                  payment under Section 5(a), or otherwise, and Executive shall
                  continue to be bound by Sections 7 and 8.

         (c)      Constructive Termination. If, during the period of employment,
                  ------------------------
                  the Executive's employment by the Company is subject to a
                  Constructive Termination, or in the event that portion of the
                  Company's business with respect to which primarily the
                  Executive's duties relate, is sold, liquidated, or otherwise
                  ceased to be operated, then the Company shall pay the
                  Executive, as a severance payment, an amount equal to the
                  compensation and benefits that would have been payable to the
                  Executive under Sections 4(a), 4(b), and 4(d), hereof during
                  the next succeeding thirty-six (36) month period if such
                  termination of employment had not occurred, such sum to be
                  paid in a lump sum on or before the tenth day following the
                  date of termination, provided, however, that for the purposes
                  of this Section 5(c), such profit sharing award shall be
                  determined based upon the four full fiscal quarters of the
                  Company immediately preceding the date of the termination, as
                  described below. Notwithstanding the foregoing, in the event
                  the Executive's employment with the Company is terminated
                  within three months prior to an event which otherwise would
                  have give rise to a termination with respect to which the
                  provisions of this Section 5(c) would have been applicable,
                  then the provisions of this Section 5(c) shall control.

                  The aggregate amount of such profit sharing payable under this
                  Section 5(a) shall equal the (i) the Average of the Company's
                  return on sales percentage (calculated before tax or any
                  profit-sharing award) for the above four fiscal quarters
                  (determined by adding the Company's return on sales percentage
                  for each of the above four fiscal quarters and dividing said
                  sum by four), and (ii) multiplied by the Executive's multiple,
                  as set forth in Attachment B hereto, used in calculating the
                  Executive's profit sharing award during the last full fiscal
                  quarter of the Company prior to the date of the
                  above-described termination, (iii) multiplied by the
                  Executive's annual gross base salary as of the date of
                  termination, (iv) with the resulting product multiplied by 3.
                  By way of illustration and not limitation, in the event on
                  July 15, the Executive `s employment is terminated, the profit
                  sharing award the Executive would be entitled to hereunder
                  would be the Average of the return on sales percentage for the
                  Company for the four full fiscal quarters ending immediately
                  prior to July 15. Accordingly, if the return on sales
                  percentage for quarter one was 7%, quarter two, 11%, quarter
                  3, 15% and quarter four, 7%, the Average would be determined
                  by adding the

                                       2

<PAGE>

                  return on sales percentage for each of such fiscal quarters
                  (which would result in the sum of 40%), divided by 4, with a
                  resulting Average percentage of 10%. If the Executive's
                  multiple in the last full fiscal quarter of the Company
                  immediately preceding the date of termination was 7, for
                  example, the Average percentage would be multiplied by 7,
                  resulting in a product of 70%, multiplied by the Executive's
                  annual gross base salary as of the date of such termination.
                  If such gross base annual salary, for example, was $100,000,
                  the profit sharing would equal $70,000, multiplied by 3 or
                  $210,000, which would be paid in the lump sum payment
                  described above. In said example, the Executive would,
                  therefore, be entitled hereunder to an aggregate severance
                  compensation payable in a lump sum equal to his annual gross
                  base salary during said three year period, or $100,000
                  multiplied by 3 or $300,000, plus the above-determined profit
                  sharing award of $210,000, for a total of $510,000, plus the
                  other benefits and entitlements the Executive is to receive
                  hereunder.

                  If the lump sum payment under this Section 5(c), either alone
                  or together with other payments which the Executive has the
                  right to receive from the Company, would constitute a
                  parachute payment (as defined in Section 280G of the Internal
                  Revenue Code of 1986, as amended, (the "Code"), such lump sum
                  severance payment shall be reduced to the largest amount as
                  will result in no portion of the lump sum severance payment
                  under this Section 5(c) being subject to the excise tax
                  imposed by Section 4999 of the Code. The determination of any
                  reduction in the lump sum severance payment under this Section
                  5(c) pursuant to the foregoing provision shall be made by
                  independent counsel to the Company in consultation with the
                  independent certified public accountants of the Company.

         (d)      Continuation of Insurance upon Termination.
                  ------------------------------------------

                  (i)      Upon the termination of the employment of the
                           Executive pursuant to Sections 5(a), or 5(c), hereof,
                           the Executive shall be entitled to continuation of
                           coverage under the group health, life, and disability
                           plans then in effect covering the Executive, or such
                           similar plans as the Company may provide for its
                           executives from time to time thereafter, but in no
                           event shall such coverages be less favorable than the
                           group health, life, and disability coverages provided
                           by the Company as of the date hereof. The Company
                           shall be responsible for paying all of the costs of
                           such coverages that it would have paid if the
                           Executive was still in the employ of the Company.
                           Such coverages shall continue until the earlier of
                           the following dates: (i) the date that the Executive
                           is eligible for similar employer-sponsored group
                           coverage from a subsequent employer, or (ii) the date
                           the Executive attains age 65. The group health
                           coverage shall cover the Executive and his spouse and
                           dependents. The life insurance policy covering the
                           life of the Executive shall name as beneficiary the
                           person or persons designated from time to time by the
                           Executive.

                  (ii)     Upon the termination of employment of the Executive
                           pursuant to Section 5(b), hereof, the Executive shall
                           be entitled only to continuation of coverage under
                           the group health plans then in effect covering the
                           Executive and only to the extent required by the
                           provisions of (S) 4980B of the Internal Revenue Code,
                           as amended, and (S)(S) 601-608 of the Employee
                           Retirement Income Security Act of 1974, as amended.
                           As permitted under such statutes, the Executive shall
                           be responsible for paying the full cost of such
                           continuation coverage.

         (e)      Disability of Executive.  In the event of the Executive's
                  -----------------------
                  disability (as hereinafter defined) during his employment
                  under this Agreement, the employment of the Executive and this

                                       3

<PAGE>

                  Agreement may be terminated by the Company nine (9) months
                  after the commencement of such disability; provided, however,
                  that upon any such termination, the Executive shall be
                  entitled to payment of the Severance payments provided under
                  Section 5(a) hereof, reduced by any benefits he may receive
                  under any short term disability and long term disability plans
                  sponsored by the Company covering its senior management
                  employees at the time that the Executive's disability
                  commences. During the period of the Executive's disability,
                  the Executive shall continue to receive the compensation
                  provided for in this Agreement, reduced by any benefits he may
                  receive under any short term disability and long term
                  disability plans sponsored by the Company covering its senior
                  management employees at the time that the Executive's
                  disability commences. If before the end of nine months from
                  the first day of disability, the Executive's disability shall
                  have ceased, and he shall have resumed the full-time
                  performance of his duties under this Agreement, the Executive
                  shall continue to receive the compensation provided for in
                  this Agreement. Provided, however, that unless the Executive
                  shall satisfactorily perform his duties on a full-time basis
                  under this Agreement for a continuous period of at least sixty
                  (60) calendar days following a period of disability before the
                  Executive again becomes disabled, he shall not be entitled to
                  begin a new nine month period for such subsequent disability,
                  and the subsequent period of disability shall be added to the
                  first in determining whether the Executive has been disabled
                  for nine (9) months in connection with this Section. During
                  the period of his disability, the Executive shall be entitled
                  to benefits in accordance with and subject to the terms and
                  provisions of the Company's short-term disability income plan
                  and its long-term disability plan for its senior management
                  employees, as in effect at the time of the commencement of
                  disability. For purposes of this Agreement, "disability" shall
                  have the same meaning as given that term under the Company's
                  long term disability plan for its senior management employees,
                  as in effect from time to time.

         (f)      Definitions Applicable to this Section.  For the purposes of
                  --------------------------------------
                  this Agreement:

                  (i)      "Good Cause" shall mean the Executive willfully or
                           intentionally neglects to substantially perform his
                           duties with the Company, or the Executive materially
                           breaches any provision of this Agreement, including
                           Section 7 below, relating to confidential
                           information; provided, however, that such willful or
                           intentional neglect of duties or the material breach
                           hereof continues uncured by the Executive for more
                           than sixty (60) days after written notice of such
                           neglect or material breach from the Company to the
                           Executive. For purposes of this Agreement, no act, or
                           failure to act, on the Executive's part shall be
                           considered "willful" or "intentional" unless done, or
                           omitted to be done, by him in bad faith and without
                           reasonable belief that his action or omission to act
                           was in the best interest of the Company. The Company
                           shall also have "Good Cause" to terminate the
                           Executive if the Executive commits an act or acts of
                           dishonesty resulting or intended to result directly
                           or indirectly in gain or personal enrichment at the
                           expense of the Company, its affiliates, or its
                           stockholders.

                  (ii)     a "Constructive Termination" shall mean a termination
                           of this Agreement by the Executive under any of the
                           following circumstances:

                           (1)      The Company is in material breach of any of
                                    its obligations under this Agreement, and
                                    the situation is not remedied within thirty
                                    (30) days after the Company receives written
                                    notice from the Executive of the situation,
                                    or

                                       4

<PAGE>

                           (2)      The Executive determines in good faith that,
                                    as a result of Change in the Control of the
                                    Company (as defined below) there is a
                                    substantial adverse alteration in the nature
                                    or status of the Executive's duties or
                                    responsibilities from those in effect
                                    immediately prior to the change in control
                                    of the Company, and the situation is not
                                    remedied within thirty (30) days after the
                                    Company receives written notice from the
                                    Executive of such determination, or

                           (3)      Any termination of the Employee's employment
                                    with the Company under Sections 5(a), or
                                    5(b) hereof, except a termination pursuant
                                    to Section 5(b) hereof by the Company with
                                    Good Cause, shall be deemed a Constructive
                                    Termination if it occurs within thirty-six
                                    (36) months following the date of a Change
                                    in Control.

                  (iii)    "Change in Control of the Company" shall mean an
                           event which shall be deemed to have occurred if:

                           (1)      any "person" as such term is used in Section
                                    13(d) and 14(d) of the Securities Exchange
                                    Act of 1934, (the "Exchange Act") (other
                                    than Paul S. Bush, the Company, any trustee
                                    or other fiduciary holding securities under
                                    any employee benefit plan of the Company, or
                                    any Company owned, directly or indirectly,
                                    by the stockholders of the Company in
                                    substantially the same proportions as their
                                    ownership of stock of the Company), is or
                                    becomes the "beneficial owner" (as defined
                                    in Rule 13d-3 under the Exchange Act),
                                    directly or indirectly, of securities of the
                                    Company representing thirty percent (30%) or
                                    more of the combined voting power of the
                                    Company's then outstanding securities;

                           (2)      during any period of two consecutive years,
                                    individuals who at the beginning of such
                                    period constitute the Board, and any new
                                    director (other than a director designated
                                    by a person who has entered into an
                                    agreement with the Company to effect a
                                    transaction described in clause (i), (iii),
                                    or (iv) herein) whose election by the Board
                                    or nomination for election by the Company's
                                    stockholders was approved by a vote of at
                                    least two-thirds (2/3) of the directors then
                                    still in office who either were directors at
                                    the beginning of the period or whose
                                    election or nomination for election was
                                    previously so approved, cease for any reason
                                    to constitute at least a majority thereof;

                           (3)      the stockholders of the Company approve a
                                    merger or consolidation of the Company with
                                    any other corporation, other than a merger
                                                           ----- ----
                                    or consolidation which would result in the
                                    voting securities of the Company outstanding
                                    immediately prior thereto continuing to
                                    represent (either by remaining outstanding
                                    or by being converted into voting securities
                                    of the surviving entity) more than eighty
                                    percent (80%) of the combined voting power
                                    of the voting securities of the Company or
                                    such surviving entity outstanding
                                    immediately after such merger or
                                    consolidation; provided, however, that a
                                    merger or consolidation effected to
                                    implement a recapitalization of the Company
                                    (or similar transaction) in which no
                                    "person" (as hereinabove defined) acquires
                                    more than twenty-five percent (25%) of the
                                    combined

                                       5

<PAGE>

                                    voting power of the Company's then
                                    outstanding securities shall not constitute
                                    a change of control of the Company; or

                           (4)      the stockholders (or if stockholder approval
                                    is not required, then the Company's Board of
                                    Directors) of the Company approve a plan of
                                    complete liquidation of the Company or an
                                    agreement for the sale or disposition by the
                                    Company of all or substantially all of the
                                    Company's assets; or

                           (5)      Paul Bush ceases to own capital stock of the
                                    Company having fifty one percent (51%) of
                                    the total voting control of the Company.

                                       6