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                                                                    EXHIBIT 10.3

                             EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
May 1, 1997, by and between TIVOLI INDUSTRIES, INC., a California corporation 
whose principal place of business is located in Santa Ana, California 92705 
("Employer"), and TERRENCE C. WALSH, an individual residing in the State of 
California ("Executive").

     WHEREAS, Employer desires to retain the services of Executive on the terms 
and conditions herein provided, and Executive is willing to provide such 
services on such terms and conditions;

     NOW THEREFORE, in consideration of the foregoing premises and the mutual 
covenants of the parties contained herein, the parties agree as follows:

     1. Term. This Agreement shall continue in full force and effect for a 
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period which shall commence as of the date hereof and shall continue until April
30, 2000 (the "Term"), unless sooner terminated as hereinafter provided or 
extended by the mutual agreement of the parties.

     2. Employment. Executive shall serve as the Chief Executive Officer of 
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Employer, subject to the reasonable directions of Employer's Board of Directors,
and as such shall have day-to-day responsibility for the management of all of 
Employer's affairs and operations, subject to the reasonable directions of 
Employer's Board of Directors. In addition, Executive shall serve as a member of
Employer's Board of Directors, and on one or more committees thereof, but 
without compensation other than as provided for in paragraph 3 below. Executive 
shall devote his full executive time, energies and abilities to the proper and 
efficient performance of his duties provided herein.
Executive shall at all times perform his duties and obligations faithfully and 
diligently and to the best of Executive's ability.

     3. Compensation.
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            (a) As compensation for the services provided by Executive 
hereunder, during the Term of this Agreement Employer shall pay Executive an 
annual salary of not less than $140,000 per year. Executives' salary shall be 
reviewed by Employer's Board of Directors from time to time at its discretion 
but not less often than annually, and Executive shall receive such salary
increases as Employer's Board of Directors shall determine; provided that
Employee's annual salary payable for the ensuing twelve (12) month period shall
in all events be increased at the end of each succeeding twelve (12) month
period at a rate equal to the greater of 5% per annum or the increase, if any,
in the Consumer Price Index for Urban Wage Earners and Clerical Workers (Los
Angeles-Long Beach-Anaheim), as published by the Bureau of Labor Statistics of
the U.S. Department of Labor, during the preceding twelve (12) months. All such
salary shall be payable in equal installments in conformity with Employer's
normal payroll period.

            (b) In addition to the minimum salary payable to Executive as 
provided in subparagraph 3(a) above, Executive shall be entitled to receive, for
each full or partial calendar year during the Term hereof, a bonus, if any, as 
determined by Employer's Compensation Committee.

            (c) In addition to salary and bonus payment (if any), Executive 
shall be entitled to receive stock options and/or warrants, if any, as 
determined by the Employer's Compensation Committee. Such awards will be awarded
on an annual basis.

     4. Benefits and Vacations.
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            (a) Executive shall be entitled to participate in or receive 
benefits under Employer's health insurance plans or arrangements as in effect on
the date hereof for such period of time as such plans and arrangements shall 
remain in effect. In addition, Executive shall be entitled to participate in or 
receive benefits under any pension plan, profit-sharing plan, life insurance, 
health-and-accident plan or arrangement made available in the future by Employer
to its executives and key management employees, subject to and on a basis 
consistent with the terms, conditions and overall administration of such plans 
and arrangements. Nothing paid to Executive under any such plan or arrangement 
presently in effect or made available in the future shall be deemed to be in 
lieu of any compensation payable to Executive hereunder.

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            (b)  Executive shall be entitled to the number of paid vacation days
in each calendar year, and to compensation for earned but unused vacation days,
determined by Employer from time to time for its executives and key management
employees, but not less than four (4) weeks in each year of the Term hereof.
Executive shall also be entitled to all paid holidays given by Employer to its
executives and key management employees.

     5.  Expenses.  During the Term hereof, Executive shall be entitled to 
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receive prompt reimbursement of all reasonable expenses incurred by Executive 
(in accordance with the policies and procedures from time to time adopted by 
Board of Directors of Employer for its senior officers) in performing the 
services contemplated hereunder, provided that Executive properly accounts 
therefore in accordance with Employer's policy.

     6.  Termination.  
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            (a)  Executive's employment hereunder shall terminate immediately
upon death.

            (b)  In the event that Executive shall be unable to perform the 
services contemplated hereunder by reason of disability, illness or other 
incapacity, such failure to so perform such duties shall not be grounds for 
terminating the employment of Executive by Employer; provided, however, that
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Employer may terminate Executive's employment hereunder should the period of 
such incapacity exceed six (6) consecutive months.  Any such termination shall 
not be considered to be for "Cause" as defined in subparagraph (c) immediately 
below.

            (c)  Executive's employment hereunder may be terminated by Employer
prior to the expiration of the Term with or without "Cause" (as defined in
subparagraph 6(e) below), immediately upon delivery by Employer of a written
notice of termination; provided, however, that if Employer shall not have Cause
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to terminate Executive's employment hereunder, then upon any such termination,
and as a condition of the effectiveness thereof, Employer shall pay to Executive
as severance pay, in one lump sum in cash, an amount equal to (i) the amount of
the base salary that would have been payable over the remainder of the term of
this Agreement had Executive not been terminated (subject to a minimum amount
equal to 24 months base salary, such 24 month period being a "Minimum Severance
Period"), and (ii) the amount of annual bonus that would have been payable for
the Minimum Severance for Executive, which is deemed to be equal to the average
annual bonus received by Executive during the last year(s) (up to a maximum of
three) preceding the date of termination in which a bonus was paid (collectively
the "Severance Amount"). Following payment of the Severance Amount, Employer
shall have no further obligation to Executive.

            (d)  In the event that Executive is terminated for Cause, Employer 
shall pay Executive's salary through the date of termination, after deducting 
any amounts lawfully owing from Executive to Employer, and shall thereafter have
no further obligation to Executive.

            (e)  For the purposes of this Agreement, "Cause" means (i) the 
willful and continued failure by Executive to substantially perform Executive's 
duties hereunder, other than any such failure resulting from Executive's 
incapacity due to physical or mental illness, after a demand for substantial 
performance is delivered to Executive by the Board of Directors of Employer (the
"Board") which specifically identifies the manner in which the Board believes 
that Executive has not substantially performed such duties, or (ii) the willful 
engaging by Executive in gross misconduct materially and demonstrably injurious 
to Employer.  For purposes of this subparagraph, no act, or failure to act, on 
Executive's part shall be considered "willful" merely because it was the result 
of bad judgment or negligence; rather, such act or failure to act must have been
done, or omitted to have been done, by Executive other than in good faith and 
without reasonable belief that Executive's action or omission was in the best 
interests of the Employer.  Notwithstanding the foregoing, Executive's 
employment shall not be deemed to have been terminated for "Cause" unless and 
until there shall have been delivered to Executive a copy of a resolution duly 
adopted by the affirmative vote of Employer's Board of Directors at a meeting of
the Board called and held for such purpose (after reasonable notice to Executive
and an opportunity for Executive, together with Executive's counsel, to be heard
before the Board), finding that in the good faith opinion of the Board Executive
was guilty of conduct described above in clauses (i) or (ii) of this 
subparagraph and specifying the particulars thereof in detail.  In the event 
that Executive is terminated for cause, Employer shall pay Executive's salary 
through date of termination, any bonuses which have been earned by Executive 
through the date of termination after deducting any amounts lawfully owing from 
Executive to Employer, and shall thereafter have not further obligation to 
Executive, expect to the extent the Executive may be entitled to exercise any of
the options granted to Executive as contemplated in paragraph 3(c) above.

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         (f)  Executive shall be entitled to terminate his employment with 
Employer hereunder for "Good Reason." Within five (5) business days of such 
termination, Employer shall pay Executive in one lump sum the Severance Amount 
provided above. For purposes of this Agreement, any termination of employment 
under any one or more of the following circumstances shall be for "Good Reason":

              (i)   Without Executive's express written consent, the assignment
to Executive of any duties inconsistent with Executive's positions, duties,
responsibilities and status with Employer, or a change in Executive's reporting
responsibilities, titles or offices as in effect upon the execution hereof, or
any removal of Executive from or any failure to re-elect Executive to any such 
positions, except in connection with the termination of Executive's employment 
for Cause, Disability, Retirement or as a result of death;

              (ii)  The reduction by Employer in Executive's base salary, as the
same may thereafter be increased from time to time, the failure by Employer to 
increase such base salary each successive year, as specified in subparagraph 
3(a) hereof, or the failure by Employer to otherwise pay Executive the base 
salary provided for herein;

              (iii) The failure by Employer to continue Executive's 
participation in the bonus and other compensation plans and incentive plans 
specified in subparagraph 3(b) hereof;

              (iv)  The failure by Employer to continue Executive's 
participation in any benefit plan, pension plan, qualified retirement plan, life
insurance plan, vacation plan, holiday plan, car lease plan, medical expense, 
health and accident plan or disability plan, or expense reimbursement 
arrangement specified in paragraphs 4 and 5 hereof, or the taking of any action 
by Employer (prompt notice of which shall be provided to Executive) which would 
adversely affect Executive's participation in (including materially increasing 
Executive's costs of such participation), or materially reduce Executive's 
benefits under, any of such plans, or which would deprive Executive of any other
fringe or personal benefits under any of such plans; provided, however, that
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notwithstanding the provisions of this subparagraph 6(f)(iv), Employer's
providing benefits of a type or amount different than as provided for
hereinabove shall not be deemed a violation of this subparagraph if required by
law;

              (v)   Any action by Employer that would require Executive to 
relocate his principal residence or office to a location more than 50 miles from
Employer's current principal executive offices.

         (g)  Any termination of Executive's employment by Employer for
Disability, Retirement or Cause, or by Executive for Good Reason, shall be
communicated by Written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provisions in this Agreement relied
upon, shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated, and shall set forth the date upon which such termination is to
become effective.

     7.  Proprietary Information. Executive acknowledges that certain
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technological and other information may from time to time be disclosed to 
Executive by Employer during the continuance hereof. Executive hereby 
acknowledges that all such information and technology, whether currently 
existing or hereafter developed by Employer through or involving the services 
and efforts of Executive hereunder, shall at all times consist of and be 
preserved by Executive as valuable trade secrets and confidential information 
which is proprietary to and owned exclusively by Employer, and that Executive 
does not have, and shall not have or hereafter acquire, any rights in or to any 
such information and technology, including without limitation any patents, 
inventions, discoveries, know-how, trademarks or tradenames used or adopted by 
Employer in connection with the design, development, manufacture, marketing, 
sale or installation of any products which at any time during the continuation 
hereof may be offered or sold or licensed by Employer. Executive further 
warrants and agrees that he shall not at any time, whether during the 
continuance of this Agreement or after its expiration or earlier termination, 
whether by Executive or by Employer, in any manner or form, directly or 
indirectly, use, disclose, duplicate, license, sell, reveal, divulge, publish or
communicate any portion of any such information or technology nor use, disclose,
duplicate, license, sell, reveal, divulge, publish or communicate any other 
confidential information concerning Employer, or any customers or other products
of Employer, to any person, firm or entity.


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     8. General Provisions.
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            (a) Any notice, request, demand or other communication required or 
permitted hereunder shall be deemed to be properly given when personally served 
in writing, when deposited in the United States mail, postage prepaid, or when 
communicated to a public telegraph company for transmittal, addressed to 
Employer or Executive at their respective last known address. Either party may 
change its address by written notice given in accordance with this subparagraph.

            (b) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective executors, administrators, successors 
and assigns; provided, however, that Executive may not assign any or all of 
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Executive's rights or duties hereunder without the prior written consent of 
Employer.

            (c) This Agreement is made and entered into, is to be performed 
primarily within, and shall be governed by and constructed in all respects in 
accordance with the laws of the State of California.

            (d) Captions and Paragraph headings used herein are for convenience 
only and are not a part of this Agreement and shall be used in construing it.

            (e) Should any provision of this Agreement for any reason be 
declared invalid, void, or unenforceable by a court of competent jurisdiction, 
the validity and binding effect of any remaining portions shall not be affected,
and the remaining provisions of this Agreement shall remain in full force as if 
this Agreement had been executed with said provision eliminated.

            (f) Employer shall indemnify Executive to the fullest extent 
permitted by applicable law with respect to any claims arising from the 
performance by Executive of his duties hereunder during the Term of this 
Agreement.

            (g) This Agreement contains the entire agreement of the parties, and
supersedes any and all other agreements, either oral or in writing, between the
parties hereto with respect to the employment of Executive of Employer. Each
party to this Agreement acknowledges that no representations, inducements,
promises or agreements, oral or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein or therein,
and that no other agreement, statement or promise not contained herein or
therein shall be relied upon or be valid or binding. This Agreement may not be
modified or amended by oral agreements, but only by an agreement in writing
signed by Employer on the one hand, and by Executive on the other hand.

            (h) In the event of any litigation between Executive and Employer 
concerning the rights or obligations of any party under this Agreement, the 
non-prevailing party shall pay the reasonable costs and expenses, including 
attorneys' fees, of the prevailing party in connection therewith.

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

APPROVED:

     "Employer"

     TIVOLI INDUSTRIES, INC.                  TIVOLI INDUSTRIES, INC.

     By:                                      By:
        -------------------------------          -------------------------------
        Stephen J. Goodman                       Gerald E. Morris 
        Director/Compensation Committee          Director/Compensation Committee


     "Executive"

     ----------------------------------
     Terrence C. Walsh

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