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                                                                    EXHIBIT 10.1


                              EMPLOYMENT AGREEMENT


         This Agreement is effective as of the 21st day of June, 1999, by and
between Robert L. Macdonald, (hereinafter referred to as "Employee"), and Decora
Industries, Inc., a Delaware Corporation, (hereinafter referred to as the
"Company").

         WHEREAS, the Company wishes to employ Employee and Employee wishes to
accept such employment on the terms and conditions set forth herein;

         NOW, THEREFORE, the parties agree as follows:

         1.   TERM OF EMPLOYMENT: The Company hereby employs Employee and
Employee hereby accepts employment on the terms and conditions of this Agreement
for a term of three years commencing June 21, 1999 (the "Term"), subject to the
provisions of paragraph 8 below.

         2.   DUTIES: Employee shall have the title of Chief Financial Officer
and be responsible for duties customarily associated with such position, which
shall include, without limitation, those of Principal Financial Officer.
Employee shall report to, and take direction from, the Chairman and CEO of the
Company. Employee shall also perform such other duties pertaining to the
operations of the Company as the Board of Directors of the Company (the "Board")
may from time to time direct.

         3.   NECESSARY SERVICES:

              (a) Performance of Duties. Employee agrees that he will at all
times faithfully, industriously and to the best of his ability, experience and
talents, perform to the reasonable satisfaction of the Company all of the duties
that may be assigned to him hereunder and shall devote such time to the
performance of these duties as may be reasonably necessary therefor.

              (b) Full-Time Service. During the term of the Agreement, Employee
shall be available on a full-time basis, to perform the duties assigned him, in
accordance with the prevailing policies of the Company. Expenditures of
reasonable amounts of time for personal, business, charitable and other
activities shall not be deemed a breach of this Agreement, provided that such
activities do not interfere with the services required to be rendered to the
Company hereunder.

              (c) Exclusive Services. Employee agrees that during the period of
his employment, Employee shall provide services exclusively pursuant to this
Agreement, and Employee will not, without the prior written consent of the
Company (which consent may be granted or withheld in the sole and absolute
discretion of the Company), directly or indirectly:


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                  i)    plan or organize any business activity competitive with
the business or planned business of the Company or its affiliates, or combine,
participate, or conspire with other employees of the Company or its affiliates
or other persons or entities for the purpose of organizing any such competitive
business activity; or

                  ii)   divert or take away, or attempt to divert or take away,
any of the customers or potential customers of the Company or its affiliates,
either for himself or for any other person, firm, partnership, corporation or
other business entity.

         4.   THE COMPANY'S AUTHORITY: Employee agrees to observe and comply
with the Company's rules and regulations as adopted by the Company's board of
directors regarding performance of his duties and to carry out and to perform
orders, directions, and policies stated by the Company to him periodically,
either orally or in writing.

         5.   COMPENSATION: Subject to such deductions as the Company may from
time to time be required to make pursuant to law, governmental regulation or
order, the Company agrees to pay to Employee during the term hereof, and
Employee agrees to accept as payment in full for all services rendered by him to
or for the benefit of the Company, the following compensation:

              (a) Base Salary. Base salary in an amount equal to a yearly rate
of $290,000 payable in installments in accordance with the general practice of
the Company. Such base salary will be subject to annual review and may be
increased in the sole and absolute discretion of the Board or the Compensation
Committee of the Board, as applicable.

              (b) Performance Based Compensation. Employee shall be entitled
during each year to performance based compensation not to exceed 60% of
Employee's base salary. For the first year of this Agreement, $30,000 of such
incentive compensation will be paid with the closing of the first acquisition
made by the Company with a market value exceeding $60 million; with the
remaining incentive performance based compensation to be contingent upon
achieving goals which the parties use their best efforts in good faith to agree
upon not later than 30 days following the effective date of this Agreement,
subject to the understanding that 50% of such remaining performance based
compensation will be based on reaching or exceeding an agreed upon EBITDA target
for the Company's fiscal year ending March 31, 2000. For the years following the
first year of this Agreement, the parties shall use their best efforts in good
faith to agree not later than 30 days prior to the commencement of each such
year upon a set of criteria pursuant to which performance based compensation for
such year shall be based.

              (c) Stock Options.

                  (i)   Immediately Vesting.  Concurrently with the execution
hereof, the Company shall grant to Employee, effective as of the date hereof,
the right and option to purchase 41,666 theretofore authorized but unissued
common shares of the Company at an exercise price equal to the market value of
such shares as of the date hereof.


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                  (ii)  Deferred Vesting.  Concurrently with the execution
hereof, the Company shall grant to Employee, the right and option to purchase
83,334 theretofore authorized but unissued common shares of the Company at an
exercise price equal to the market value of such shares as of the date hereof.
One-third of such options shall vest, if at all, and be immediately exercisable
by Employee, on the first, second and third anniversary, respectively, of the
date hereof, provided that Employee is then an employee of the Company as of the
date of such vesting.

                  (iii) Stock Option Plan.  The stock options to be granted to
Employee shall be granted pursuant to the Company's 1999 Stock Option Plan, and
shall be subject to all of the terms and conditions thereof.

         6. EMPLOYEE BENEFITS: In addition to the compensation set forth above,
Employee agrees to grant Employee the following benefits for the Term:

              (a) Annual accrued vacation in accordance with prevailing policies
of the Company, but not less than three (3) weeks per year;

              (b) Sick leave and personal leave with pay in accord with the
prevailing policies of the Company;

              (c) Health and medical benefit insurance as granted by the Company
to employees performing similar services;

              (d) Car allowance of $500.00 a month;

              (e) Any other benefits not specifically set forth herein as may be
granted by the Company, in its sole and absolute discretion, to employees
performing similar services.

         7.   BUSINESS EXPENSES: Employee may incur, on behalf of and for the
convenience of the Company, certain reasonable business expenses including
travel and entertainment and other miscellaneous expenses. Expenses of Employee
incurred on behalf of the Company will be reimbursed by the Company and it shall
be the responsibility of Employee to retain vouchers and other proof of proper
expenditures. The decision as to whether an expense incurred by Employee is for
the benefit of the Company shall be in the sole discretion of the Company, and
all expenses not deemed to be incurred for the benefit of the Company shall be
paid by Employee.

         8.   TERMINATION:

              (a) This Agreement shall terminate at the option of the Company:

                  i)    Immediately upon the death or permanent disability of
Employee, "permanent disability" being defined as the inability of Employee to
perform his duties as required


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hereunder as a result of physical or mental illness for a continuous period in
excess of ninety (90) days.

                  ii)   At the election of the Company, immediately upon the
dismissal of Employee by the Company for cause. "Cause", as used in this
section, shall include, without limitation, any one or more of the following:

                        (1)  The breach by Employee of any material term or
condition of this Agreement;

                        (2)  The refusal or failure to perform duties assigned
in accordance with the terms of this Agreement, if such refusal shall continue
after written instructions to perform such duties have been given under the
authority of the Board of Directors of the Company.

                        (3)  Engaging in one or more acts constituting a felony;

                        (4)  Engaging in one or more acts involving fraud or
serious moral turpitude;

                        (5)  Engaging in acts of insubordination towards any
officer or duly authorized representative of the Company;

                        (6)  Misappropriating the Company's assets or engaging
in gross misconduct materially injurious to the Company or its affiliates or
subsidiaries; or

                        (7)  Breach of any Trade Secrets and Confidentiality
Agreement with the Company, including without limitation the agreement dated
concurrently herewith.

                  iii)  Without Cause, upon not less than twelve (12) months
prior written notice of termination by the Company to Employee (provided,
however that the effective date of termination pursuant to such notice shall in
no event be prior to June 21, 2002).

         Notwithstanding the expiration of the initial three year term of this
Agreement, this Agreement shall automatically be extended, and shall continue in
full force and effect in accordance with its terms unless and until terminated
as provided this subsection (a).

              (b) The Compensation paid upon termination shall be determined as
follows:

                        (1)  In the event of termination of this Agreement prior
to completion of the Term or any extension thereof as set forth in Paragraph
8(a)(i) or 8(a)(ii), Employee shall be entitled to receive only accrued, but
unpaid compensation up to the date of termination.


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                        (2)  In the event of any other termination of the
Agreement prior to the completion of the Term or any extension thereof, Employee
shall be entitled to receive his compensation and benefits as set forth in this
Agreement until the effective date of termination (taking into account any
notice period required pursuant to Paragraph 8(a)(iii) above), except that if
such termination occurs concurrently with or following a Change in Control (as
defined below), then Employee shall be entitled to receive compensation and
benefits as shall be set forth in a Supplemental Executive Compensation
Agreement to be entered into between the Company and Employee in the form of
that attached as Exhibit A to this Agreement (the "Supplemental Compensation
Agreement").

         The Company shall have the option of paying any compensation payable
pursuant to this subsection (b) in accordance with its regular payroll
practices.

              (c) For purposes of this Agreement, a "Change of Control" shall
have the meaning set forth in the Supplemental Compensation Agreement.

         9.   NOTICES. All notices or demands of any kind which either party
hereto may be required or may desire to serve upon the other party under the
terms of this Agreement, shall be in writing and shall be served upon such other
party by personal service upon such other party or by leaving a copy of said
notice or demand, addressed to such other party at the address hereafter set
forth, whereupon such service shall be deemed complete, or by mailing a copy
thereof by registered or express mail, postage prepaid with return receipt
requested, addressed as follows:

              IF TO THE COMPANY:

              Decora Industries, Inc.
              1 Mill Street
              Fort Edward, New York  12828

              WITH A COPY TO:

              Dale S. Miller, Esq.
              Miller & Holguin
              1801 Century Park East
              7th Floor
              Los Angeles, CA  90067

              IF TO EMPLOYEE:

              Mr. Robert Macdonald

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         In case of service by mail, service shall be deemed completed at the
expiration of the third day after the date of mailing. The addresses to which
notices and demands shall be delivered or sent may be changed from time to time
by written notice served as herein above provided by either party upon the other
party hereto.

         10.  ATTORNEYS' FEES: If either party sues the other to enforce any of
the terms of this Agreement, the prevailing party shall, in addition to all
other damages, be entitled to recover reasonable attorneys' fees.

         11.  LEGAL REPRESENTATION. Employee confirms that he is not represented
by Miller & Holguin and that he has been advised to seek the advice of
independent counsel in connection with the negotiation of this Agreement and the
transactions contemplated hereby.

         12.  MISCELLANEOUS:

              (a) This Agreement shall be governed and construed in accordance
with the substantive laws of the State of New York.

              (b) No change in the terms of this Agreement shall be effective
unless made in writing and signed by the Employee and a duly authorized
representative of the Company.

              (c) A waiver of any term or condition of this Agreement shall not
be construed as a general waiver by the Company and the Company shall be free to
reinstate any such term or condition with or without notice to the other party.

              (d) Employee's rights and obligations under this Agreement are
personal and not assignable.

              (e) This Agreement contains the entire Agreement and understanding
between the parties and supersedes all other agreements or understandings
between the parties concerning employment. Neither party has relied on any
representations other than those as contained herein.

              (f) This Agreement shall be binding on and inure to the benefit of
the heirs, personal representatives, successors, and assigns of the parties;
subject, however, to the restrictions on assignment contained herein.

              (g) The paragraph headings used in this Agreement are for
reference and convenience only, and shall not in any way limit or amplify the
terms and provisions hereof, nor enter into the interpretation of this
Agreement.


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         IN WITNESS WHEREOF, he Company has caused this Agreement to be signed
by their duly authorized officers and Employee has executed this Agreement
effective as of the day and year first above written.


THE COMPANY:                                               EMPLOYEE:

DECORA INDUSTRIES, INC.



By:
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                                                           ROBERT L. MACDONALD


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