Exhibit (a)(1)

DECORATOR INDUSTRIES, INC.

OFFER TO EXCHANGE CERTAIN OUTSTANDING OPTIONS HAVING AN EXERCISE PRICE OF $7.00
OR MORE FOR NEW OPTIONS UNDER THE 1995 INCENTIVE STOCK OPTION PLAN

This offer and the right to withdraw from this offer expire at 9:00 p.m.,
Eastern Standard Time, on March 22, 2002 unless this offer is extended

February 22, 2002

DECORATOR INDUSTRIES, INC.

February 22, 2002

Offer to Exchange Certain Outstanding Options for New Options
(the "Offer toExchange")

This offer and the right to withdraw from this offer expire at 9:00 p.m.,
Eastern Standard Time, on March 22, 2002 unless this offer is extended.

Decorator Industries, Inc. ("Decorator") is offering eligible employees the
opportunity to exchange certain outstanding options to purchase shares of
Decorator common stock with an exercise price greater than or equal to $7.00 per
share for new options which we will grant under the Decorator Industries, Inc.
1995 Incentive Stock Option Plan, as such plan may be amended from time to time
(the "1995 Plan"). We are making the offer upon the terms and conditions
described in (1) this Offer to Exchange (the "Offer to Exchange"); (2) the
related letter from William A. Bassett dated February 22, 2002 (the "Bassett
letter"); (3) the Election Form; and (4) the Notice to Withdraw from the Offer
(which together, as they may be amended from time to time, constitute the
"offer" or "program").

Each eligible employee who accepts the offer will receive new options in
replacement of existing options to purchase shares of Decorator Common Stock.
The actual number of shares for which each new option will be exercisable have
been determined with respect to each employee individually. Subject to the terms
and conditions of this offer, we will grant the new options no earlier than the
first business day which is at least six months and one day after the date we
cancel the options accepted for exchange. Assuming we do not extend the
Expiration Date (as defined below) or the date of grant of the new options, we
presently expect to grant the new options no earlier than September 24, 2002 and
no later than December 31, 2002. You may only tender options for all or none of
the outstanding, unexercised shares subject to option grant with an exercise
price greater than or equal to $7.00 per share. All tendered options accepted by
Decorator through the offer will be cancelled as promptly as practicable after
9:00 p.m. Eastern Standard Time on the date the offer ends. The offer is
presently scheduled to expire on March 22, 2002 (the "Expiration Date") and we
expect to cancel options on March 23, 2002, or as soon as possible thereafter
(the "Cancellation Date").

The offer is not conditioned on a minimum number of options being tendered.
Participation in the offer is completely voluntary. The offer is subject to
conditions that we describe in Section 7 of this Offer to Exchange.

You may participate in the offer if you are an otherwise eligible employee
of Decorator as of the date the offer commences and through the Cancellation
Date.

The members of our Board of Directors and our executive officers are listed
on Schedule A to this Offer to Exchange. Other than William A. Bassett, who is
also an executive officer, members of our Board of Directors are not eligible to
participate. In order to receive a new option pursuant to this offer, you must
continue to be an eligible employee as of the date on which the new options are
granted, which will be at least six months and one day after the Cancellation
Date.

If you tender options for exchange as described in the offer, and we accept
your tendered options, then, subject to the terms of this offer, we will grant
you new options under the 1995 Plan, which will be subject to the terms and
conditions of the 1995 Plan.

For eligible employees, the exercise price per share of the new options
will be 100% of the fair market value of Decorator common stock, as determined
by the closing price reported on the American Stock Exchange ("AMEX") on the
date of grant of the new options.

Each new option granted will vest as follows:

o sixty percent (60%) will be fully vested on the date of grant of
the new options;

o an additional twenty percent (20%) will be fully vested on the
first anniversary of the date of grant of the new options; and

o the remaining twenty percent (20%) will be fully vested on the
second anniversary of the date of grant of the new options.

Although our Board of Directors has approved the offer, neither we nor our
Board of Directors makes any recommendation as to whether you should tender or
not tender your options for exchange. You must make your own decision whether or
not to tender your options.

We recommend that you evaluate current market quotes for our common stock,
among other factors, before deciding whether or not to tender your options.

Shares of Decorator common stock are traded on the AMEX under the symbol
"DII." On February 20, 2002, the closing price of our common stock reported on
the AMEX was $5.00 per share.

This Offer to Exchange has not been approved or disapproved by the
Securities and Exchange Commission (the "SEC") or any State Securities
Commission nor has the SEC or any State Securities Commission passed upon the
accuracy or adequacy of the information contained in this Offer to Exchange. Any
representation to the contrary is a criminal offense.

You should direct questions about the offer or requests for assistance or
for additional copies of (1) this Offer to Exchange; (2) the Bassett letter; (3)
the Election Form; and (4) the Notice to Withdraw from the Offer to Michael K.
Solomon, Vice President and Treasurer at Decorator Industries, Inc., 10011 Pines
Blvd., Pembroke Pines, Florida 33024 (telephone: (954) 436-8909).

IMPORTANT

If you wish to tender your options for exchange, you must complete and sign
the Election Form in accordance with its instructions, and fax, courier, express
mail or hand deliver it and any other required schedules to Michael K. Solomon,
Vice President and Treasurer at fax number (954) 436-1778, at Decorator
Industries, Inc., 10011 Pines Blvd., Pembroke Pines, Florida 33024, on or before
9:00 p.m. Eastern Standard Time on March 22, 2002.

We are not making the offer to, and we will not accept any tender of
options from or on behalf of, optionholders in any jurisdiction in which the
offer or the acceptance of any tender of options would not be in compliance with
the laws of that jurisdiction. However, we may, at our discretion, take any
actions necessary for us to make the offer to optionholders in any of these
jurisdictions.

We have not authorized any person to make any recommendation on our behalf
as to whether you should tender or not tender your options through the offer.
You should rely only on the information in this document or to which we have
referred you. We have not authorized anyone to give you any information or to
make any representation in connection with the offer other than the information
and representations contained in this document and in the related letter from
William A. Bassett dated February 22, 2002, the Election Form and the Notice to
Withdraw from the Offer. If anyone makes any recommendation or representation to
you or gives you any information, you must not rely upon that recommendation,
representation or information as having been authorized by Decorator.

TABLE OF CONTENTS
Page
----

SUMMARY TERM SHEET 1

CERTAIN RISKS OF PARTICIPATING IN THE OFFER 8

ECONOMIC RISKS 8

TAX-RELATED RISKS 9

BUSINESS-RELATED RISKS 9

INTRODUCTION 10

THE OFFER 11

1. Eligibility 11

2. Number of options; expiration date 11

3. Purpose of the offer 12

4. Procedures for tendering options 13

5. Withdrawal Rights 14

6. Acceptance of options for exchange and issuance of new options 15

7. Conditions to the offer 16

8. Price range of shares underlying the options 17

9. Source and amount of consideration; terms of new options 18

10. Information concerning Decorator 21

11. Interests of directors and officers; transactions and arrangements concerning the options 22

12. Status of options acquired by us in the offer; accounting consequences of the offer 22

13. Legal matters; regulatory approvals 22

14. Material U.S. Federal Income Tax Consequences 23

15. Extension of offer; termination; amendment 25

16. Fees and expenses 26

17. Additional information 26

18. Summary Financial Information 27

19. Miscellaneous 28

SCHEDULE A Information Concerning the Directors and Executive Officers of Decorator
Industries, Inc A-1

iii

SUMMARY TERM SHEET

The following are answers to some of the questions that you may have about
the offer. We urge you to read carefully the remainder of this Offer to
Exchange, the accompanying letter from William A. Bassett dated February 22,
2002 (the "Bassett letter"), the Election Form and the Notice to Withdraw from
the Offer because the information in this summary is not complete, and
additional important information is contained in the remainder of this Offer to
Exchange, the Bassett letter, the Election Form and the Notice to Withdraw from
the Offer. We have included page references to the relevant sections of this
Offer to Exchange where you can find a more complete description of the topics
in this summary.

What securities is Decorator offering to exchange?

For eligible employees we are offering to exchange outstanding, unexercised
options to purchase shares of common stock of Decorator with an exercise price
greater than or equal to $7.00 per share which are held by eligible employees
and issued under the Decorator Industries, Inc. 1995 Incentive Stock Option
Plan, as such plan may be amended from time to time (the "1995 Plan").

Who is eligible to participate?

You may participate in the offer if you are an otherwise eligible employee
of Decorator as of the date the offer commences and through the Cancellation
Date, and are not subject to the tax laws in any other country.

Members of our Board of Directors and our executive officers are listed on
Schedule A to this Offer to Exchange. Other than William A. Bassett, who is also
an executive officer, members of our Board of Directors are not eligible to
participate.

In order to receive a new option, you must remain an eligible employee as
of the date the new options are granted, which will be at least six months and
one day after the Cancellation Date. If we do not extend the offer period beyond
March 22, 2002, the new options will be granted no earlier than September 24,
2002 and no later than December 31, 2002. (Page 11)

Why is Decorator making the offer?

We believe that granting stock options motivates high levels of performance
and provides an effective means of recognizing contributions to the success of
our company. The offer provides an opportunity for us to offer eligible
employees a valuable incentive to stay with our company. Some of our outstanding
options, whether or not they are currently exercisable, have exercise prices
that are significantly higher than the current market price of our shares. We
believe these options are unlikely to be exercised in the foreseeable future. By
making this offer to exchange outstanding options for new options that will have
an exercise price at least equal to the fair market value of the shares on the
grant date, we intend to provide our eligible employees with the benefit of
owning options that over time may have a greater potential to increase in value,
create better performance incentives for eligible employees and thereby maximize
stockholder value. (Page 12)

What are the conditions to the offer?

The offer is not conditioned on a minimum number of options being tendered.
Participation in the offer is completely voluntary. However, partial tenders
will not be accepted. Eligible employees that desire to participate in the offer
must tender all existing unexercised options with an exercise price greater than
or equal to $7.00 per share. The conditions to the offer are described in
Section 7 of this Offer to Exchange. (Page 16)

Are there any eligibility requirements that I must satisfy after the expiration
date of the offer to receive the new options?

If you are an employee, in order to receive a grant of new options through
the offer and under the terms of the 1995 Plan, you must continue to be employed
by Decorator as of the date the new options are granted.

As discussed below, subject to the terms of this offer, we will not grant
the new options until on or after the first business day which is at least six
months and one day after the date we cancel the options accepted for exchange.
If, for any reason, you do not remain an eligible employee of Decorator through
the date we grant the new options, you will not receive any new options or other
consideration in exchange for your tendered options that have been accepted for
exchange. (Page 11)

How many new options will I receive in exchange for my tendered options?

When will I receive my new options?

We will not grant the new options until on or after the first business day
which is at least six months and one day after the date we cancel the options
accepted for exchange. Our Board Of Directors will select the actual grant date
for the new options. If we cancel tendered options on March 23, 2002, which is
the scheduled date for the cancellation of the options (the day following the
expiration date of the offer), the new options will be granted no earlier than
September 24, 2002 and no later than December 31, 2002. However, if we extend
the offer, the new options will be granted on a later date. In addition, the
grant date for the new option may be extended to a date that is later than six
months and one day after the date of cancellation of the old options in the
event that we determine in our sole discretion that market circumstances warrant
such an extension. You must be an eligible employee on the date we are granting
the new options in order to be eligible to receive them. (Page 11)

Why can't I receive my new options immediately after the expiration date of the
offer?

If we were to grant the new options on any date which is earlier than six
months and one day after the date we cancel the options accepted for exchange,
we would be subject to onerous accounting charges. We would be required for
financial reporting purposes to treat the new options as variable awards. This
means that we would be required to record the non-cash accounting impact of
decreases and increases in the company's share price as a compensation expense
for the new options issued under this offer. We would have to continue this
variable accounting for these new options until they were exercised, forfeited
or terminated. The higher the market value of our shares, the greater the
compensation expense we would have to record. By deferring the grant of the new
options for at least six months and one day, we believe we will not have to
treat the new options as variable awards.

If I tender options in the offer, will I be eligible to receive other option
grants before I receive my new options?

No. If we accept options you tender in the offer, you may not receive any
other option grants before you receive your new options. We will defer until the
grant date of your new options any grant of other options, such as annual, bonus
or promotional options, for which you may otherwise be eligible before the new
option grant date. We may defer the grant to you of these other options if we
determine it is necessary for us to do so to avoid incurring compensation
expense against our earnings because of accounting rules that could apply to
these interim option grants as a result of the offer. (Page 15)

Will I be required to give up all my rights to the cancelled options?

Yes. Once we have accepted options tendered by you, your options will be
cancelled and you will no longer have any rights under those options. (Page 15)

What will the exercise price of the new options be?

For eligible employees, the exercise price per share of the new options
will be 100% of the fair market value of Decorator common stock, as determined
by the closing price reported by the AMEX on the date of grant of the new
options.

Accordingly, we cannot predict the exercise price of the new options.
Because we will not grant new options until on or after the first business day
that is at least six months and one day after the date we cancel the options
accepted for exchange, the new options may have a higher exercise price than
some or all of your current options. We recommend that you evaluate current
market quotes for our shares, among other factors, before deciding whether or
not to tender your options. (Page 17)

What happens if the fair market value of Decorator common stock on the date of
grant of the new options is higher than the exercise price of the cancelled
options?

THERE IS A RISK THAT THE FAIR MARKET VALUE OF OUR COMMON STOCK ON THE DATE
OF GRANT OF THE NEW OPTIONS WILL BE HIGHER THAN THE EXERCISE PRICE OF THE
CANCELLED OPTIONS. IN THAT EVENT, THE NEW OPTIONS YOU WILL BE GRANTED IN
EXCHANGE FOR THE CANCELLED OPTIONS WILL HAVE A HIGHER EXERCISE PRICE THAN THE
OLD OPTIONS YOU WILL HAVE HAD CANCELLED.

When will the new options vest?

Each new option granted will vest as follows:

o sixty percent (60%) will be fully vested on the date of grant of
the new options;

o an additional twenty percent (20%) will be fully vested on the
first anniversary of the date of grant of the new options; and

o the remaining twenty percent (20%) will be fully vested on the
second anniversary of the date of grant of the new options.

What if Decorator enters into a merger or other similar transaction?

It is possible that, prior to the grant of new options, we might effect or
enter into an agreement for a merger or other similar transaction. The Promise
to Grant Stock Option(s) that we will give you in connection with the exchange
of the cancelled options is a binding commitment, and any successor to our
company will honor that commitment, although you might receive options to
purchase shares of a successor to our company rather than an option to purchase
shares of our company as part of the terms of a proposed merger. In a merger or
similar transaction, you will receive that number of options in the successor or
such other consideration that you would have been entitled to receive in
exchange for the replacement option you would receive under this offer. If you
receive options to purchase the successor company's stock, the exercise price of
those options would likely be equal to the fair market value of that company's
stock on the date of grant, which would remain at least six months and one day
after the Cancellation Date.

You should be aware that these types of transactions could have substantial
effects on our share price, including potentially substantial appreciation in
the price of our shares. Depending on the structure of this type of transaction,
tendering optionholders might be deprived of any further price appreciation in
the shares associated with the new options. For example, if our shares were
acquired in a cash merger, the fair market value of our shares, and hence the
price at which we grant the new options, would likely be a price at or near the
cash price being paid for the shares in the transaction, yielding limited or no
financial benefit to a recipient of the new options for that transaction.
Optionholders who do not tender in their old options in connection with this
exchange offer will have their outstanding options treated in accordance with
the terms under which they are granted, and if their options are assumed by the
successor to our company in an acquisition, those options would be priced in
accordance with the terms of the acquisition transaction. This could potentially
result in a greater financial benefit for those optionholders who elected not to
participate in this exchange offer if the terms of the acquisition transaction
result in a more favorable exercise price for the assumed options which were not
tendered.

PLEASE NOTE: IF WE ARE ACQUIRED BY ANOTHER COMPANY, THAT COMPANY MAY, AS
PART OF THE TRANSACTION OR OTHERWISE, DECIDE TO TERMINATE SOME OR ALL OF OUR
EMPLOYEES PRIOR TO THE GRANT OF NEW OPTIONS UNDER THIS OPTION EXCHANGE PROGRAM.
TERMINATION FOR THIS, OR ANY OTHER, REASON BEFORE THE REPLACEMENT OPTION IS
GRANTED MEANS THAT YOU WILL NOT RECEIVE THE REPLACEMENT OPTION, NOR WILL YOU
RECEIVE ANY OTHER CONSIDERATION FOR THE OPTIONS THAT WERE CANCELLED.

Please note that although the Company has no present intention of entering
into a merger or similar transaction, it is our general policy not to comment on
market rumors or innuendo regarding strategic corporate transactions.

Are there circumstances where I would not be granted new options?

Possibly. Although we are not currently aware of any prohibitions under
applicable law, it is possible that, even if we accept your tendered options, we
will not grant new options to you if we are prohibited in the near future by
applicable law or regulations from doing so. Such a prohibition could result
from changes in the Securities and Exchange Commission rules, regulations or
policies, AMEX listing requirements, or accounting rules. We will use reasonable
efforts to avoid or remedy any such prohibitions, but if it is applicable
throughout the period after the date that is at least six months and one day
after we cancel the options accepted for exchange (the period after the date we
intend to grant the new options), you will not be granted a new option. We do
not anticipate any such prohibitions. (Page 23)

Also, if you are no longer an eligible employee on the date we grant new
options, you will not receive any new options. (Page 20)

If I choose to tender an option which is eligible for exchange, do I have to
tender all the shares in that option?

Yes. We are not accepting partial tenders of options. However, you may
tender the remaining portion of an option which you have partially exercised.
Accordingly, if you elect to participate in the offer, you must tender all of
your outstanding unexercised options with an exercise price greater than or
equal to $7.00 per share. For example, if you hold an option to purchase 1,000
shares at $7.00 per share, 700 of which you have already exercised, and an
option to purchase 1,000 shares at an exercise price of $8.00 per share, you
must tender either:

o none of your options, or

o all options with respect to the 300 remaining unexercised shares
under the first option grant, and

o all options with respect to all 1,000 shares under the second
option grant.

You may not tender options with respect to only 150 shares (or any other
partial amount) under the first option grant or less than all of the shares
under the second option grant. (Page 11)

What happens if I choose not to tender my options or they are not accepted for
exchange?

If you choose not to tender options for exchange or we do not accept your
options for exchange they will remain outstanding until they expire by their
terms and retain their current exercise price and current vesting schedule.

You should note that there is a risk that any incentive stock options you
have may be affected, even if you do not participate in the exchange. We believe
that you will not be subject to current U.S. federal income tax if you do not

elect to participate in the option exchange program. We also believe that the
option exchange program will not change the U.S. federal income tax treatment of
subsequent grants and exercises of your incentive stock options (and sales of
shares acquired upon exercises of such options) if you do not participate in
this offer to exchange options.

However, the IRS may characterize this offer to exchange options as a
"modification" of those incentive stock options, even if you decline to
participate. In 1991, the IRS issued a private letter ruling in which another
company's option exchange program was characterized as a "modification" of all
of the incentive stock options that could be exchanged. This does not
necessarily mean that our offer to exchange options will be viewed the same way.
Private letter rulings given by the IRS contain the IRS's opinion regarding only
the specific facts presented by a specific person or company. The person or
company receiving the letter may rely on it, but no other person or company may
rely on the letter ruling, nor may they assume the same opinion would apply to
their situation, even if the facts at issue are similar. While such letters do
not provide certainty, they may indicate how the IRS will view a similar
situation. We therefore do not know if the IRS will assert the position that our
offer constitutes a "modification" of incentive stock options eligible for
tender. However, a successful assertion by the IRS of this position could extend
an incentive stock options' holding period to qualify for favorable tax
treatment, by re-starting it as of the date we commence this offer to exchange
options. Accordingly, to the extent you dispose of your incentive stock option
shares prior to the lapse of the new extended holding period, your incentive
stock option could be taxed similarly to a nonstatutory stock option.

Will I have to pay taxes if I exchange my options in the offer?

If you exchange your current options for new options, you should not be
required under current law to recognize income for U.S. federal income tax
purposes. Further, at the grant date of the new options you should not be
required under current law to recognize income for U.S. federal income tax
purposes.

We recommend that you consult with your own tax advisor to determine the
tax consequences of the offer. In addition, we strongly urge you to read Section
14 of the Offer to Exchange for a discussion of tax consequences which may apply
to you as a result of participation in this offer. (Pages 23-24)

If my current options are incentive stock options, will my new options be
incentive stock options?

If your current options are incentive stock options, your new options will
be granted as incentive stock options to the maximum extent they qualify as
incentive stock options under the tax laws on the date of the grant. For options
to qualify as incentive stock options under the current tax laws, the value of
shares subject to options that first become exercisable by the optionholder in
any calendar year cannot exceed $100,000, as determined using the option
exercise price. The excess value is deemed to be a nonstatutory stock option,
which is an option that is not qualified to be an incentive stock option under
the current tax laws. (Page 15)

If my current options are nonstatutory stock options, will my new options be
incentive stock options or nonstatutory stock options?

If your current options are nonstatutory stock options, your new options
will be granted as incentive stock options to the maximum extent they qualify as
incentive stock options under the tax laws on the date of the grant. For options
to qualify as incentive stock options under the current tax laws, the value of
shares subject to options that first become exercisable by the optionholder in
any calendar year cannot exceed $100,000, as determined using the option
exercise price. The excess value is deemed to be a nonstatutory stock option.

When will my new options expire?

Your new options will expire in accordance with the terms of the 1995 Plan
on the earlier of:

o ten (10) years from the grant date of the new options; or

o upon termination of your employment with Decorator. (Page 18)

When does the offer expire? Can the offer be extended, and if so, how will I be
notified if it is extended?

The offer expires on March 22, 2002, at 9:00 p.m., Eastern Standard Time,
unless we extend it. We may, in our discretion, extend the offer at any time,
but we cannot assure you that the offer will be extended or, if extended, for
how long. If the offer is extended, we will make a public announcement of the
extension no later than 6:00 a.m., Eastern Standard Time, on the next business
day following the previously scheduled expiration of the offer period. (Page 25)

How do I tender my options?

If you decide to tender your options, you must deliver, before 9:00 p.m.,
Eastern Standard Time, on March 22, 2002 (or such later date and time as we may
extend the expiration of the offer), a properly completed and executed Election
Form and any other schedules required by the Election Form via facsimile (fax #
(954) 436-1778), courier, express mail or hand delivery to Michael K. Solomon,
Vice President and Treasurer at Decorator Industries, Inc., 10011 Pines Blvd.,
Pembroke Pines, Florida 33024. This is a one-time offer, and we will strictly
enforce the tender offer period. We reserve the right to reject any or all
tenders of options that we determine are not in appropriate form or that we
determine are unlawful to accept. Subject to our rights to extend, terminate and
amend the offer, we presently expect that we will accept all properly tendered
options promptly after the expiration of the offer. (Page 13)

During what period of time may I withdraw previously tendered options?

You may withdraw your tendered options, and reject our offer, at any time
before the offer expires at 9:00 p.m., Eastern Standard Time, on March 22, 2002.
If we extend the offer beyond that time, you may withdraw your tendered options
at any time until the extended expiration of the offer. In addition, although we
presently intend to accept and cancel validly tendered options promptly after
the expiration of this offer, if we have not accepted and cancelled your
tendered options by April 19, 2002, you may withdraw your tendered options at
any time after April 19, 2002. To withdraw tendered options, you must deliver to
us via facsimile (fax # (954) 436-1778), courier, express mail or hand delivery
to Michael K. Solomon, Vice President and Treasurer at Decorator Industries,
Inc., 10011 Pines Blvd., Pembroke Pines, Florida 33024, a signed Notice to
Withdraw from the Offer, with the required information while you still have the
right to withdraw the tendered options. Once you have withdrawn options, you may
re-tender options only by again following the delivery procedures described
above. (Page 14)

Please note that if you submit a Notice to Withdraw from the Offer, you
will no longer participate in the offer. If you do not wish to withdraw all your
tendered options from the Offer, you should not submit a Notice to Withdraw from
the Offer. Please read the following question and answer regarding a change in
election.

Can I change my election regarding particular options I tendered?

You must elect to tender all your old option grants with an exercise price
greater than or equal to $7.00 per share in order to receive new options. No
partial tenders will be accepted. You may change your mind about tendering your
old options for exchange at any time before the Expiration Date. If the Company
extends the Offer beyond that time, you may change your election regarding all,
but not less than all, option grants you tendered at any time until the extended
expiration of the Offer. To change your election you must complete a Notice to
Withdraw in accordance with the instructions set forth therein.

What do Decorator and the Board of Directors think of the offer?

Although our Board of Directors has approved Decorator's decision to make
the offer, neither Decorator nor our Board of Directors makes any recommendation
as to whether you should tender or not tender your options. You must make your
own decision whether or not to tender options. For questions regarding tax
implications or other investment-related questions, you should talk to your own
legal counsel, accountant and/or financial advisor.

Whom can I talk to if I have questions about the offer?

For additional information or assistance, you should contact:
Michael K. Solomon, Vice President, Treasurer and Chief Financial Officer
Decorator Industries, Inc.
10011 Pines Boulevard
Pembroke Pines, FL 33024
Phone: (954) 436-8909

CERTAIN RISKS
OF PARTICIPATING IN THE OFFER

Participation in the offer involves a number of potential risks, including
those described below. This list highlights the material risks of participating
in this offer. Eligible participants should carefully consider these risks and
are encouraged to speak with an investment and tax advisor as necessary before
deciding to participate in the offer. In addition, we strongly urge you to read
the section in this Offer to Exchange discussing U.S. federal income tax
consequences as well as the rest of this Offer to Exchange, along with the
letter from William A. Bassett dated February 22, 2002, the Election Form, and
the Notice to Withdraw from the Offer, for a fuller discussion of the risks
which may apply to you before deciding to participate in the exchange offer.

ECONOMIC RISKS

Participation in the offer will make you ineligible to receive any option
grants until September 24, 2002 at the earliest.

Employees are generally eligible to receive option grants at any time that
the Board of Directors or Stock Option Committee chooses to make them. However,
if you participate in the offer, you will not be eligible to receive any option
grants until September 24, 2002 at the earliest. In addition, the grant date for
the new options may be extended to a date that is later than six months and one
day after the date of cancellation of the old options in the event that we
determine in our sole discretion that market circumstances warrant such an
extension.

If the stock price increases after the date your tendered options are cancelled,
your cancelled options could be worth more than the replacement options that you
received in exchange for them.

For example, if you cancel options with a $7.00 exercise price, and
Decorator's stock appreciates to $10.00 when the replacement grants are made,
your replacement option will have a higher exercise price than the cancelled
option.

If you elect to exchange any options, you will receive less shares under the new
options than you had under the cancelled options.

If your employment terminates prior to the grant of the replacement option, you
will receive neither a replacement option nor the return of your cancelled
option.

Once your option is cancelled, it has been eliminated completely.
Accordingly, if your employment terminates for any reason prior to the grant of
the replacement option, you will have the benefit of neither the cancelled
option nor the replacement option.

If your employment terminates as part of a reduction-in-force prior to the grant
of the replacement option, you will receive neither a replacement option nor the
return of your cancelled option.

Decorator's revenues are dependent on the health of the economy and the
growth of its customers and potential future customers. If the economic
conditions in the United States remain stagnant or worsen or if a wider or
global economic slowdown occurs, Decorator may experience a material adverse
impact on its business, operating results, and financial condition and may
undertake various measures to reduce its expenses including, but not limited to,
a reduction-in-force of certain of its employees. Should your employment be

terminated as part of any such reduction-in-force, you will have the benefit of
neither the cancelled option nor the replacement option.

If your employment terminates as a result of an acquisition or merger of
Decorator prior to the grant of the replacement option, you will receive neither
a replacement option nor the return of your cancelled option.

If Decorator is acquired by another company, that company may, as part of
the transaction or otherwise, decide to terminate some or all of our employees
prior to the grant of new options under this option exchange program.
Termination for this, or any other, reason before the replacement option is
granted means that you will not receive the replacement option, nor will you
receive any other consideration for the options that were cancelled. Please note
that although the Company has no present intention of entering into a merger or
similar transaction, it is our general policy not to comment on market rumors or
innuendo regarding strategic corporate transactions.

TAX-RELATED RISKS

Even if you elect not to participate in the option exchange program, your
incentive stock options may be affected.

We believe that you will not be subject to current U.S. federal income tax
if you do not elect to participate in the option exchange program. We also
believe that the option exchange program will not change the U.S. federal income
tax treatment of subsequent grants and exercises of your incentive stock options
(and sales of shares acquired upon exercises of such options) if you do not
participate in this offer to exchange options. However, the IRS may characterize
this offer to exchange options as a "modification" of those incentive stock
options, even if you decline to participate. In 1991, the IRS issued a private
letter ruling in which another company's option exchange program was
characterized as a "modification" of all of the incentive stock options that
could be exchanged. This does not necessarily mean that our offer to exchange
options will be viewed the same way. Private letter rulings given by the IRS
contain the IRS's opinion regarding only the specific facts presented by a
specific person or company. The person or company receiving the letter may rely
on it, but no other person or company may rely on the letter ruling, nor may
they assume the same opinion would apply to their situation, even if the facts
at issue are similar. While such letters do not provide certainty, they may
indicate how the IRS will view a similar situation. We therefore do not know if
the IRS will assert the position that our offer constitutes a "modification" of
incentive stock options eligible for tender. A successful assertion by the IRS
of this position could extend an incentive stock option's holding period to
qualify for favorable tax treatment, by re-starting it as of the date we
commence this offer to exchange options. Accordingly, to the extent you dispose
of your incentive stock option shares prior to the lapse of the new extended
holding period, your incentive stock option could be taxed similarly to a
nonstatutory stock option.

We strongly recommend that you consult with your personal tax advisor prior
to participating in the option exchange program.

BUSINESS-RELATED RISKS

For a description of risks related to Decorator's business, please see
Section 19 of this Offer to Exchange.

INTRODUCTION

Decorator Industries, Inc. ("Decorator") is offering to exchange certain
outstanding, unexercised options to purchase shares of common stock of Decorator
with an exercise price greater than or equal to $7.00 per share issued under the
Decorator Industries, Inc. 1995 Incentive Stock Option Plan, as such plan may be
amended from time to time (the "1995 Plan") which are held by eligible employees
for new options we will grant under the 1995 Plan.

An "eligible employee" refers to an otherwise eligible employee of
Decorator Industries, Inc. who is an employee as of the date the offer commences
and through the Cancellation Date.

Members of our Board of Directors, executive officers and other officers
are listed on Schedule A to this Offer to Exchange. Members of our Board of
Directors other than William A. Bassett who is also an executive officer are not
eligible to participate in the exchange offer. We are making the offer upon the
terms and the conditions described in this Offer to Exchange and in the related
letter from William A. Bassett dated February 22, 2002 (the "Bassett letter"),
the Election Form and the Notice to Withdraw from the Offer (which together, as
they may be amended from time to time, constitute the "offer" or "program").

In keeping with our normal compensation practices, option grants are
awarded to employees based on a number of factors, including, but not limited
to, title, tenure, salary grade and job performance. Accordingly, the actual
number of shares for which each new option will be exercisable have been
determined with respect to each employee individually.

Subject to the terms and conditions of this offer, we will grant the new
options no earlier than the first business day which is at least six months and
one day after the date we cancel the options accepted for exchange. The grant
date for the new options is expected to be no earlier than September 24, 2002
but not later than December 31, 2002, unless the offer is extended, in which
case the grant date of the new options will be at least six months and one day
after the cancellation of the options accepted for exchange. Moreover, the grant
date for the new options may be extended to a date that is later than six months
and one day after the date of cancellation of the old options in the event that
we determine in our sole discretion that market circumstances warrant such an
extension. If you elect to participate in the offer, you must tender all of your
outstanding unexercised options with an exercise price greater than or equal to
$7.00 per share. No partial tenders will be accepted. All tendered options
accepted by us through the offer will be cancelled on the business day following
the date the offer expires or as soon as possible thereafter (the "Cancellation
Date").

The offer is not conditioned on a minimum number of options being tendered.
The offer is subject to conditions that we describe in Section 7 of this Offer
to Exchange.

If you tender options for exchange as described in the offer and we accept
your tendered options, then, subject to the terms of this offer, we will grant
you new options under the 1995 Plan, which will be subject to the terms and
conditions of the 1995 Plan.

Each new option granted will vest as follows:

o sixty percent (60%) will be fully vested on the date of grant of
the new options;

o an additional twenty percent (20%) will be fully vested on the
first anniversary of the date of grant of the new options; and

o the remaining twenty percent (20%) will be fully vested on the
second anniversary of the date of grant of the new options.

As of February 22, 2002, options to purchase 502,386 of our shares were
issued and outstanding, of which options to purchase approximately 232,812 of
our shares, constituting approximately 46.3%, were held by eligible employees.

THE OFFER

1. Eligibility.

Eligible employees may participate in this offer. An "eligible employee"
refers to any employee as of the date the offer commences and through the
Cancellation Date.

Members of our Board of Directors, executive officers and other officers
are listed on Schedule A to this Offer to Exchange. Other than William A.
Bassett, who is also an executive officer, members of our Board of Directors are
not eligible to participate.

In order to receive a new option, you must continue to be an eligible
employee as of the date the new options are granted, which will be no earlier
than six months and one day after the Cancellation Date. If Decorator does not
extend the offer period, we expect to grant the new options no earlier than
September 24, 2002 and no later than December 31, 2002. However, the grant date
for the new options may be extended to a date that is later than six months and
one day after the date of cancellation of the old options in the event that we
determine in our sole discretion that market circumstances warrant such an
extension.

Every eligible outstanding, unexercised option granted at an exercise price
greater than or equal to $7.00 per share pursuant to the Decorator Industries,
Inc. 1995 Incentive Stock Option Plan, as such plan may be amended from time to
time (the "1995 Plan"), may be tendered for exchange. If you elect to
participate in the offers you must tender all of your outstanding unexercised
options with an exercise price greater than or equal to $7.00 per share. No
partial tenders will be accepted.

2. Number of options; expiration date.

Subject to the terms and conditions of the offer, we will exchange all
outstanding, unexercised options with an exercise price greater than or equal to
$7.00 per share granted pursuant to the 1995 Plan held by eligible employees
that are properly tendered and not validly withdrawn in accordance with Section
5 before the "expiration date," as defined below, in return for new options. We
will not accept partial tenders of option grants. Therefore, if you elect to
participate in the offers you must tender all of your outstanding unexercised
options with an exercise price greater than or equal to $7.00 per share. No
partial tenders will be accepted.

If your eligible options are properly tendered and accepted for exchange,
these options will be cancelled and, subject to the terms of this offer, you
will be entitled to receive new options to purchase shares of common stock in
exchange for share subject to the options tendered by you and accepted for
exchange. In keeping with our normal compensation practices, option grants are
awarded to employees based on a number of factors, including, but not limited
to, title, tenure, and job performance. Accordingly, the actual number of shares
for which each new option will be exercisable have been determined with respect
to each employee individually. All new options will be subject to the terms of
our 1995 Plan, and to a new option agreement between you and us.

If, for any reason, you do not remain an eligible employee of Decorator
through the date we grant the new options, you will not receive any new options
or other consideration in exchange for your tendered options that have been
accepted for exchange. This means that if you quit, with or without a good
reason, or die or we terminate your employment, with or without cause, prior to
the date we grant the new options, you will not receive anything for the options
that you tendered and we cancelled.

The term "expiration date" means 9:00 p.m., Eastern Standard Time, on March
22, 2002, unless and until we, in our discretion, have extended the period of
time during which the offer will remain open, in which event the term
"expiration date" refers to the latest time and date at which the offer, as so
extended, expires. See Section 15 of this Offer to Exchange for a description of
our rights to extend, delay, terminate and amend the offer.

If we decide to take any of the following actions, we will publish notice
or otherwise inform you in writing of such action:

o we increase or decrease the amount of consideration offered for
the options,

o we decrease the number of options eligible to be tendered in the
offer, or

o we increase the number of options eligible to be tendered in the
offer by an amount that exceeds 2% of the shares issuable upon
exercise of the options that are subject to the offer immediately
prior to the increase.

If the offer is scheduled to expire at any time earlier than the tenth
(10th) business day from, and including, the date that notice of the increase or
decrease is first published, sent or given in the manner specified in Section 15
of this Offer to Exchange, we will extend the offer so that the offer is open at
least ten (10) business days following the publication, sending or giving of
notice.

We will also notify you of any other material change in the information
contained in this Offer to Exchange.

For purposes of the offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, Eastern Standard Time.

3. Purpose of the offer.

We issued the options outstanding to:

o provide our eligible employees with additional incentives and to
promote the success of our business, and

o encourage our eligible employees to continue their employment
with us.

One of the keys to our continued growth and success is the retention of our
most valuable asset, our employees. The offer provides an opportunity for us to
offer our eligible employees a valuable incentive to stay with Decorator. Some
of our outstanding options, whether or not they are currently exercisable, have
exercise prices that are significantly higher than the current market price of
our shares. We believe these options are unlikely to be exercised in the
foreseeable future. By making this offer to exchange outstanding options for new
options that will have an exercise price at least equal to the market value of
the shares on the grant date, we intend to provide our eligible employees with
the benefit of owning options that over time may have a greater potential to
increase in value, create better performance incentives and thereby maximize
stockholder value. It should be noted, however, that because we will not grant
new options until at least six months and one day after the date we cancel the
options accepted for exchange, the new options may have a higher exercise price
than some or all of our current outstanding options.

From time to time we engage in strategic transactions with business
partners, customers and other third parties. We may engage in transactions in
the future with these or other companies which could significantly change our
structure, ownership, organization or management or the make-up of our Board of
Directors, and which could significantly affect the price of our shares. If we
engage in such a transaction or transactions before the date we grant the new
options, our shares could increase (or decrease) in value, and the exercise
price of the new options could be higher (or lower) than the exercise price of
options you elect to have cancelled as part of this offer. You will be at risk
of any such increase in our share price before the grant date of the new options
for these or any other reasons. The exercise price per share of the new options
will be 100% of the fair market value of Decorator common stock, as determined
by the closing price reported on the AMEX on the date of grant of the new
options.

Of course, it is possible that, prior to the grant of new options, we might
effect or enter into an agreement such as a merger or other similar transaction.
The Promise to Grant Stock Option(s) which we will give you is a binding
commitment, and any successor to our company will honor that commitment,
although you might receive options to purchase shares of a successor to our
company rather than an option to purchase shares of our company as part of the
terms of a proposed merger. In such a merger or similar transaction, you will
receive that number of options in the successor or such other consideration that
you would have been entitled to receive in exchange for the replacement option
you would receive under this offer. If you receive options to purchase the
successor company's stock, the exercise price of those options would likely be
equal to the fair market value of that company's stock on the date of grant,
which would remain at least six months and one day after the Cancellation Date.
Please note that although the Company has no present intention of entering into
a merger or similar transaction, it is our general policy not to comment on
market rumors or innuendo regarding strategic corporate transactions.

Neither we nor our Board of Directors makes any recommendation as to
whether you should tender or not tender your options, nor have we authorized any
person to make any such recommendation. You are urged to evaluate carefully all
of the information in this Offer to Exchange, the Bassett letter, the Election
Form, and the Notice to Withdraw from the Offer and to consult your own
investment and tax advisors. You must make your own decision whether or not to
tender your options for exchange.

4. Procedures for tendering options.

Proper Tender of Options.

To validly tender your options through the offer, you must, in accordance
with the terms of the Election Form, properly complete, execute and deliver the
Election Form to us via facsimile (fax # (954) 436-1778), courier, express mail
or hand delivery to Michael K. Solomon, Vice President and Treasurer at
Decorator Industries, Inc., 10011 Pines Blvd., Pembroke Pines, Florida 33024,
along with any other required documents. Michael K. Solomon, Vice President and
Treasurer must receive all of the required documents before the expiration date.
The expiration date is 9:00 p.m. Eastern Standard Time on March 22, 2002, unless
we extend the offer period.

The delivery of all documents, including Election Forms and any Notice to
Withdraw from the Offer and any other required schedules, is at your risk.

Determination of Validity; Rejection of Options; Waiver of Defects; No
Obligation to Give Notice of Defects.

We will determine, in our discretion, all questions as to the form of
documents and the validity, form, eligibility, including time of receipt, and
acceptance of any tender of options. Our determination of these matters will be
final and binding on all parties. We reserve the right to reject any or all
tenders of options that we determine are not in appropriate form or that we
determine are unlawful to accept. Otherwise, we will accept properly and timely
tendered options that are not validly withdrawn. We also reserve the right to
waive any of the conditions of the offer or any defect or irregularity in any
tender of any particular options or for any particular optionholder. No tender
of options will be deemed to have been properly made until all defects or
irregularities have been cured by the tendering optionholder or waived by us.
Neither we nor any other person are obligated to give notice of any defects or
irregularities in tenders, nor will anyone incur any liability for failure to
give any notice. This is a one-time offer, and we will strictly enforce the
offer period, subject only to an extension which we may grant in our sole
discretion.

Our Acceptance Constitutes an Agreement.

Your tender of options pursuant to the procedures described above
constitutes your acceptance of the terms and conditions of the offer. Our
acceptance for exchange of the options tendered by you through the offer will
constitute a binding agreement between us and you upon the terms and subject to
the conditions of the offer.

Subject to our right to extend, terminate and amend the offer, we presently
expect that we will accept all properly tendered options that have not been
validly withdrawn promptly after the expiration of the offer.

5. Withdrawal Rights.

You may only withdraw your tendered options in accordance with the
provisions of this Section.

You may withdraw your tendered options at any time before 9:00 p.m.,
Eastern Standard Time, on March 22, 2002. If we extend the offer beyond that
time, you may withdraw your tendered options at any time until the extended
expiration of the offer. We expect to accept and cancel all properly tendered
options promptly after the expiration of the offer. However, if we have not
accepted and cancelled your tendered options for exchange by 9:00 p.m., Eastern
Standard Time, on April 19, 2002, you may withdraw your tendered options at any
time after April 19, 2002.

To validly withdraw tendered options, you must deliver via facsimile (fax #
(954) 436-1778), courier, express mail or hand delivery to Michael K. Solomon,
Vice President and Treasurer at Decorator Industries, Inc., 10011 Pines Blvd.,
Pembroke Park, Florida 33024, in accordance with the procedures listed in
Section 4 above, a signed and dated Notice to Withdraw from the Offer, with the
required information, while you still have the right to withdraw the tendered
options.

Except as described in the following sentence, the Notice to Withdraw from
the Offer must be executed by the optionholder who tendered the options to be
withdrawn exactly as the optionholder's name appears on the option agreement or
agreements evidencing such options. If the optionholder's name has legally been
changed since the signing of the option agreement, the optionholder must submit
proof of the legal change. If the signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or another
person acting in a fiduciary or representative capacity, the signer's full title
and proper evidence of the authority of such person to act in that capacity must
be indicated on the notice of withdrawal.

You may not rescind any withdrawal, and any options you withdraw will
thereafter be deemed not properly tendered for purposes of the offer, unless you
properly re-tender those options before the expiration date by following the
procedures described in Section 4.

Neither we nor any other person are obligated to give notice of any defects
or irregularities in any Notice to Withdraw from the Offer, nor will anyone
incur any liability for failure to give any notice. We will resolve, in our
discretion, all questions as to the form and validity, including time of
receipt, of any Notices to Withdraw from the Offer. Our determination of these
matters will be final and binding.

6. Acceptance of options for exchange and issuance of new options.

Upon the terms and conditions of the offer and as promptly as practicable
following the expiration date, we will accept for exchange and will cancel those
options that are properly tendered and not validly withdrawn before the
expiration date. Once the options are cancelled, you will no longer have any
rights with respect to those options. Subject to the terms and conditions of
this offer, if your options are properly tendered and accepted for exchange,
these options will be cancelled as of the date of our acceptance, which we
anticipate to be March 23, 2002, and you will be granted new options no earlier
than the first business day that is at least six months and one day after the
date we cancel the options accepted for exchange.

Regardless of whether your tendered options are incentive stock options or
nonstatutory stock options, your newly-granted options will be granted as
incentive stock options to the maximum extent they qualify as incentive stock
options under U.S. tax laws on the date of the grant. For options to qualify as
incentive stock options under the current U.S. tax laws, the value of shares
subject to options that first become exercisable by the optionholder in any
calendar year cannot exceed $100,000, as determined using the option exercise
price. The excess value is deemed to be a nonstatutory stock option, which is an
option that is not qualified to be an incentive stock option under the current
tax laws. Thus, subject to the terms and conditions of this offer, if your
options are properly tendered by March 22, 2002 (the scheduled expiration date
of the offer) and are accepted for exchange and cancelled on March 23, 2002 you
will be granted new incentive stock options to the maximum extent possible, and
nonstatutory stock options if required, no earlier than September 24, 2002 and
no later than December 31, 2002, unless this offer is extended.

If we accept and cancel options properly tendered for exchange after March
22, 2002, the period in which the new options will be granted will be similarly
delayed. As promptly as practicable after we accept and cancel options tendered
for exchange, we will issue to you a Promise to Grant Stock Option(s), by which
we will commit to grant stock options to you on a date no earlier than September
24, 2002 and no later than December 31, 2002, provided that you remain an
eligible employee on the date on which the grant is to be made.

If we accept options you tender in the offer, we will defer any grant to
you of other options, such as annual, bonus, or promotional options, for which
you may be eligible before the new option grant date, so that you are granted no
new options for any reason until at least six months and one day after any of
your tendered options have been cancelled. We will defer the grant to you of
these other options in order to avoid incurring compensation expense against our
earnings as a result of accounting rules that could apply to such interim option
grants as a result of the offer.

Of course, it is possible that, prior to the grant of new options, we might
effect or enter into an agreement such as a merger or other similar transaction,
in which case you might receive options to purchase shares of a successor to our
company rather than an option to purchase shares of our company as part of the
terms of a proposed merger. Please note that although the Company has no present
intention of entering into a merger or similar transaction, it is our general
policy not to comment on market rumors or innuendo regarding strategic corporate
transactions.

In keeping with our normal compensation practices, option grants are
awarded to employees based on a number of factors, including, but not limited
to, title, tenure and job performance. Accordingly, the actual number of shares
for which each new option will be exercisable have been determined with respect
to each employee individually. If, for any reason, you are not an employee of
Decorator through the date we grant the new options, you will not receive any
new options or any other consideration in exchange for your tendered options
which have been cancelled pursuant to this offer.

We will not accept partial tenders of your eligible option grants. However,
you may tender the remaining portion of an option which you have partially
exercised. Accordingly, eligible employees that desire to participate in the
offer must tender all, but not less than all, existing unexercised options with
an exercise price greater than or equal to $7.00 per share.

Within two (2) business days of the receipt of your Election Form or your
Notice to Withdraw from the Offer, Decorator intends to e-mail, mail or fax a
Confirmation of Receipt. However, this is not by itself an acceptance of your
options for exchange. For purposes of the offer, we will be deemed to have
accepted your options for exchange that are validly tendered and not properly
withdrawn as of when we give oral or written notice to Michael K. Solomon, or to
the optionholders generally of our acceptance for exchange of such options,
which notice may be made by press release. Subject to our rights to extend,
terminate and amend the offer, we presently expect that we will accept all
properly tendered options that are not validly withdrawn promptly after the
expiration of the offer. Options accepted for exchange will be cancelled on the
Cancellation Date, which we presently expect to be March 23, 2002.

7. Conditions to the offer.

Notwithstanding any other provision of the offer, we will not be required
to accept any options tendered for exchange, and we may terminate or amend the
offer, or postpone our acceptance and cancellation of any options tendered for
exchange, in each case, subject to Rule 13e-4(f)(5) under the Securities
Exchange Act, if at any time on or after February 22, 2002, and prior to the
expiration date, any of the following events has occurred, or has been
determined by us to have occurred, and, in our reasonable judgment in any case
and regardless of the circumstances giving rise to the event, including any

action or omission to act by us, the occurrence of such event or events makes it
inadvisable for us to proceed with the offer or with such acceptance and
cancellation of options tendered for exchange:

o there shall have been threatened or instituted or be pending any
action or proceeding by any governmental, regulatory or
administrative agency or authority that directly or indirectly
challenges the making of the offer, the acquisition of some or
all of the tendered options pursuant to the offer, or the
issuance of new options, or otherwise relates in any manner to
the offer, or that, in our reasonable judgment, could materially
and adversely affect our business, condition, income, operations
or prospects or materially impair the contemplated benefits of
the offer to Decorator;

o there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment,
order or injunction threatened, proposed, sought, promulgated,
enacted, entered, amended, enforced or deemed to be eligible to
the offer or Decorator, by any court or any authority, agency or
tribunal that, in our reasonable judgment, would or might
directly or indirectly:

(1) make the acceptance for exchange of, or issuance of new
options for, some or all of the tendered options illegal or
otherwise restrict or prohibit consummation of the offer or
that otherwise relates in any manner to the offer;

(2) delay or restrict our ability, or render us unable, to
accept for exchange, or issue new options for, some or all
of the tendered options;

(3) materially impair the contemplated benefits of the offer to
Decorator; or

(4) materially and adversely affect Decorator's business,
condition, income, operations or prospects or materially
impair the contemplated benefits of the offer to Decorator;

o there shall have occurred any change, development, clarification
or position taken in generally accepted accounting standards that
could or would require us to record compensation expense against
our earnings in connection with the offer for financial reporting
purposes;

o a tender or exchange offer for some or all of our shares, or a
merger of or acquisition proposal for Decorator, shall have been
proposed, announced or made by another person or entity or shall
have been publicly disclosed; or

o any change or changes shall have occurred in Decorator's
business, condition, assets, income, operations, prospects or
stock ownership that, in our reasonable judgment, is or may be
material to Decorator or may materially impair the contemplated
benefits of the offer to Decorator.

The conditions to the offer are for Decorator's benefit. We may assert them
in our discretion regardless of the circumstances giving rise to them before the
expiration date. We may waive them, in whole or in part, at any time and from
time to time prior to the expiration date, in our discretion, whether or not we
waive any other condition to the offer. Our failure at any time to exercise any
of these rights will not be deemed a waiver of any such rights. The waiver of
any of these rights with respect to particular facts and circumstances will not
be deemed a waiver with respect to any other facts and circumstances. Any
determination we make concerning the events described in this Section 7 will be
final and binding upon all persons.

8. Price range of shares underlying the options.

The shares underlying your options are currently traded on the AMEX under
the symbol "DII". The following table shows, for the periods indicated, the high
and low sales prices per share of our common stock as reported on the AMEX, as
adjusted for stock dividends and stock splits.

High Low
---- ---

Fiscal Year 2002 (through February 20, 2002)
First Quarter $ 5.30 $ 3.86

Fiscal Year 2001
First Quarter 3.25 2.15
Second Quarter 3.00 2.30
Third Quarter 3.65 2.90
Fourth Quarter 4.60 2.96

Fiscal Year 2000
First Quarter 5.38 4.44
Second Quarter 5.13 4.56
Third Quarter 4.75 3.38
Fourth Quarter 4.25 2.50

As of February 20, 2002, the closing price of our common stock, as reported
on the AMEX, was $5.00 per share.

We recommend that you evaluate current market quotes for our common stock,
among other factors, before deciding whether or not to tender your options.

9. Source and amount of consideration; terms of new options.

Consideration.

We will issue new options to purchase shares of common stock under our 1995
Plan in exchange for the outstanding options properly tendered and accepted for
exchange by us which will be cancelled. In keeping with our normal compensation
practices, option grants are awarded to employees based on a number of factors,
including, but not limited to, title, tenure, salary grade and job performance.
Accordingly, the actual number of shares for which each new option will be
exercisable have been determined with respect to each employee individually. If
we receive and accept tenders of all outstanding options from eligible
employees, subject to the terms and conditions of this offer we will grant new
options to purchase a maximum of approximately 199,750 shares of common stock.
The shares issuable upon exercise of these new options would equal approximately
7.1% of the total shares of our common stock outstanding as of February 20,
2002.

Terms of New Options.

The new options will be granted under our 1995 Plan. A new option agreement
will be entered into between Decorator and each optionholder who has tendered
options in the offer for every new option granted. The terms and conditions of
the new options may vary from the terms and conditions of the options tendered
for exchange, but generally will not substantially or adversely affect the
rights of optionholders.

Please read "U.S. Federal Income Tax Consequences" later in this section,
as well as Section 14 for a discussion of the potential tax consequences for
United States employees. In addition, you should note that because we will not
grant new options until at least six months and one day after the date we cancel
the options accepted for exchange, the new options may have a higher exercise
price than some or all of the cancelled options. The following description
summarizes the material terms of the 1995 Plan and the options granted under the
1995 Plan.

The maximum number of shares of Decorator's common stock which may be
issued over the term of the 1995 Plan may not exceed 520,830 shares. Our 1995
Plan permits the granting of options intended to qualify as incentive stock
options under the Internal Revenue Code and options that do not qualify as
incentive stock options, referred to as nonstatutory stock options.

Administration.

The 1995 Plan is administered by the Stock Option Committee of the Board of
Directors (the "Administrator"). The Administrator is composed of two or more
directors of the Company appointed by the Board. The Administrator is
authorized, in its discretion but within the parameters set forth in the 1995
Plan, to recommend to the Board those officers and employees who shall receive
awards, the number of shares to be optioned and the time or times when awards
shall be made. The Administrator is also authorized to interpret the terms and
provisions of the awards. The Administrator's interpretations of the awards are
final and conclusive as to all interested parties. The Administrator has general
authority to interpret the 1995 Plan and to establish rules and regulations for
its administration, subject to the power of the Board to rescind or overrule any
action taken by the Administrator. As of the date of this Prospectus, the
members of the Administrator were Joseph N. Ellis (Chairman) and Jerome B.
Lieber. It is expected that Ellen Downey will be appointed as an additional
member of the Administrator in the near future. The Administrator serves at the
pleasure of the Board.

Term.

The term of the options are determined by the Administrator and evidenced
in each individual option agreement. Options granted prior to February 22, 2002
generally have a maximum term of ten (10) years from the date of grant. New
options granted after February 22, 2002 pursuant to this exchange offer
generally will also have a maximum term of ten (10) years from the date of
grant.

Termination.

The effect of your termination of employee status on your new options will
be determined in accordance with your new option agreement. In the event your
employment is terminated for any reason (other than death or disability) after
you shall have been continuously employed by the Company for at least one year
after the granting of the option, the option may be exercised within 90 days
after such termination, but only to the extent the option was exercisable at the
date of such termination. In the event that the termination of your employment
is by reason of death, or if you die within 90 days following termination of
employment, your executors, administrators, legatees or distributees of your
estate, generally may exercise any option held by you at the date of your death,
to the extent that it was exercisable at the time of death, within twelve (12)
months after the date of death. In the event that the termination of your
employment is by reason of disability, or if you become disabled within 90 days
following termination of employment, the Board may extend the time within which
you or your legal representative may exercise any option held by you at the date
of your employment termination, to the extent that it was exercisable
immediately before such termination.

The termination of your option under the circumstances specified in this
section will result in the termination of your interests in the 1995 Plan. In
addition, your option may terminate, together with our stock option plan and all
other outstanding options issued to other employees, following the occurrence of
certain corporate events, as described below.

Exercise Price.

The Administrator determines the exercise price at the time the option is
granted. The exercise price per share of the new options will be 100% of the
fair market value on the date of grant, as determined by the closing price of
Decorator's common stock reported on the AMEX on the date of grant.

Vesting and Exercise.

Each stock option agreement specifies the term of the option and the date
when the option becomes exercisable. Unless the stock option agreement otherwise
provides, options are exercisable in whole or at any time or in part from time
to time prior to expiration. The terms of vesting are determined by the
Administrator. Options granted by us pursuant to the 1995 Plan generally vest in
annual increments of 20%, commencing on the date of grant, or in some cases, on
the first anniversary of the date of grant, provided the employee remains
continuously employed by Decorator.

Each new option granted in the exchange offer will vest as follows:

o sixty percent (60%) will be fully vested on the date of grant of
the new options;

o an additional twenty percent (20%) will be fully vested on the
first anniversary of the date of grant of the new options; and

o the remaining twenty percent (20%) will be fully vested on the
second anniversary of the date of grant of the new options.

Payment of Exercise Price.

Stock options may be exercised by giving written notice of exercise to the
Company specifying the number of shares to be purchased. The notice of exercise
must be accompanied by payment in full of the exercise price in cash or by check
or by delivering to the Company shares of common stock having a fair market
value equal to the required purchase price.

The Board, on the recommendation of the Administrator, may accept surrender
of the right to exercise an option in whole or in part and authorize a payment
in consideration therefor of an amount equal to the excess of the fair market
value of the shares over the option exercise price, such payment to be in shares
of common stock valued at their fair market value on the date of surrender of
the option, or in cash, or partly common stock shares and partly in cash.

Adjustments Upon Certain Events.

In the event there is a sale of all or substantially all of our assets or a
merger in which Decorator is not the surviving entity that occurs before new
options are granted pursuant to this offer, the surviving entity will honor any
Promises to Grant Stock Option(s), provided that you might receive options to
purchase shares of a successor to Decorator rather than an option to purchase
shares of Decorator as part of the terms of a proposed merger. In such a merger
or similar transaction, you will receive that number of options in the successor
or such other consideration that you would have been entitled to receive in
exchange for the replacement option you would receive under this offer. If you
receive options to purchase the successor company's stock, the exercise price of
those options would likely be equal to the fair market value of that company's
stock on the date of grant, which would remain no earlier than six months and
one day after the Cancellation Date.

In the event that we are acquired by merger or asset sale after the new
options have been granted, the 1995 Plan provides that the holder of any then
outstanding option shall be entitled to receive, upon exercise of the
unexercised portion of the option, the same number and kind of shares,
securities or other property (including cash) as such holder would have received
had he or she exercised the unexercised portion of the option immediately prior
to such merger, consolidation or reorganization. Notwithstanding the foregoing,
any such holder may agree to the assumption of his or her option by a successor
to the Company, or the substitution of a stock option of a successor to the
Company for his or her option.

Termination of Employment.

If, for any reason, you are not an eligible employee of Decorator from the
date you tender options through the date we grant the new options, you will not
receive any new options or any other consideration in exchange for your tendered
options that have been accepted for exchange. This means that if you quit, with
or without good reason, or die, or we terminate your employment, with or without
cause, before the date we grant the new options, you will not receive anything
for the options that you tendered and which we cancelled.

Transferability of Options.

New options generally may not be transferred, other than by will or the
laws of descent and distribution. In the event of your death, options may be
exercised by a person who acquires the right to exercise the option by bequest
or inheritance.

Registration of Option Shares.

520,830 shares of common stock issuable upon exercise of options under our
1995 Plan have been registered under the Securities Act on registration
statements on Form S-8 filed with the SEC. All the shares issuable upon exercise
of all new options to be granted before the offer will be registered under the
Securities Act. Unless you are one of our affiliates, you will be able to sell
your option shares free of any transfer restrictions under applicable U.S.
securities laws.

Conditions to delivery of shares.

Decorator will not be obligated to deliver any shares upon the exercise of
an option unless and until, in the opinion of the Decorator's counsel, all
applicable federal, state and other laws and regulations have been complied
with. No delivery will be made unless and until the shares to be delivered have
been listed or authorized for listing upon official notice of issuance on such
exchange. Nor will delivery be made until all other legal matters in connection
with the issuance and delivery of shares have been approved by Decorator's
counsel. In this regard, and without limiting the generality of the foregoing,
Decorator may require from you or your legal representative such investment
representation or such agreement, if any, as counsel for Decorator may consider
necessary in order to comply with the Securities Act of 1933, as amended, the
securities laws of any state and the regulations thereunder, certificates
evidencing the shares may be required to bear a restrictive legend, a stop
transfer order may be placed with the transfer agent, and there may be
restrictions as to the number of shares that can be resold during a given period
of time and the manner of sale. You or your legal representatives must take any
action reasonably requested by Decorator in order to effect compliance with all
applicable securities laws and regulations and any listing requirements.

U.S. Federal Income Tax Consequences.

You should refer to Section 14 of this Offer to Exchange for a discussion
of the U.S. federal income tax consequences of the new options and the options
tendered for exchange, as well as the consequences of accepting or rejecting the
new options under this offer to exchange.

Our statements in this Offer to Exchange concerning our 1995 Plan and the
new options are merely summaries and do not purport to be complete. The
statements are subject to, and are qualified in their entirety by reference to,
all provisions of 1995 Plan and the forms of option agreements under the 1995
Plan. Please contact Michael K. Solomon, Vice President and Treasurer, at
Decorator Industries, Inc., 10011 Pines Blvd., Pembroke Pines, Florida 33024
(telephone: (954) 436-8909), to receive a copy of the 1995 Plan and the forms of
option agreements thereunder. We will promptly furnish you copies of these
documents at our expense.

10. Information concerning Decorator.

Our principal executive offices are located at 10011 Pines Blvd., Pembroke
Pines, Florida 33024, and our telephone number is (954) 436-8909.

Decorator is engaged in the design, manufacture and sale of window
coverings, bedspreads and complementary products. These products are sold to
original equipment manufacturers of recreational vehicles and manufactured
housing and to the hospitality industry (motels/hotels) either through
distributors or directly to the customers.

Decorator has one industry segment and one class of products. The business
in which Decorator is engaged is very competitive, and Decorator competes with
manufacturers located through the country. However, no reliable information is
available to enable Decorator to determine its relative position among its
competitors. The principal methods of competition are price, design and service.

The financial information included in our annual report on Form 10-K for
the fiscal year ended December 30, 2000 and in our quarterly reports on Form
10-Q for the quarterly periods ending March 31, 2001, June 30, 2001 and
September 29, 2001, respectively, is incorporated herein by reference. See
"Summary Financial Information" in Section 18 for certain financial information
about us. See "Additional Information" in Section 17 for instructions on how you
can obtain copies of our SEC filings, including filings that contain our
financial statements.

11. Interests of directors and officers; transactions and arrangements
concerning the options.

A list of our directors, executive officers and other officers is attached
to this Offer to Exchange as Schedule A. As of February 22, 2002, our executive
officers, as a group beneficially owned options outstanding under the 1995 Plan
to purchase a total of 145,414 of our shares, which represented 30.8% of the
shares subject to all options outstanding under that plan as of that date.

In the sixty (60) days prior to and including February 22, 2002, the
executive officers and directors of Decorator had the following transaction(s)
in Decorator shares:

In December 2001, Decorator awarded an aggregate of 3,448 shares of
Decorator common stock to Jerome B. Lieber, Ellen Downey, Thomas L. Dusthimer
and Joseph N. Ellis under the Non-Employee Director Stock Compensation Plan.

Except as otherwise described above, there have been no transactions in
options to purchase our shares or in our shares which were effected during the
60 days prior to February 22, 2002 by Decorator or, to our knowledge, by any
executive officer, director or affiliate of Decorator.

12. Status of options acquired by us in the offer; accounting consequences
of the offer.

Options we acquire through the offer which were originally granted under
the 1995 Plan will be cancelled and the shares subject to those options will be
returned to the pool of shares available for grants of new options under the
1995 Plan. To the extent these shares are not fully reserved for issuance upon
exercise of the new options to be granted in connection with the offer, the
shares will be available for future awards to employees and other eligible plan
participants without further stockholder action, except as required by
applicable law or the rules of the AMEX or any other securities quotation system
or any stock exchange on which our shares are then quoted or listed.

We believe that we will not incur any compensation expense solely as a
result of the transactions contemplated by the offer because:

o we will not grant any new options to participants in the exchange
offer until a business day that is no earlier than six months and
one day after the date that we accept and cancel options tendered
for exchange, and

o the exercise price of all new options will at least equal the
market value of the shares of common stock on the date we grant
the new options.

13. Legal matters; regulatory approvals.

We are not aware of any license or regulatory permit that appears to be
material to our business that might be adversely affected by our exchange of
options and issuance of new options as contemplated by the offer, or of any
approval or other action by any government or governmental, administrative or
regulatory authority or agency, domestic or foreign, that would be required for
the acquisition or ownership of our options as contemplated herein. Should any
such approval or other action be required, we presently contemplate that we will
seek such approval or take such other action. We cannot assure you that any such
approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that the failure to obtain any such approval
or other action might not result in adverse consequences to our business. Our
obligation under the offer to accept tendered options for exchange and to issue
new options for tendered options is subject to the conditions described in
Section 7.

If we are prohibited by applicable laws or regulations from granting new
options during the period beginning immediately after the day that is 6 months
and 1 day from the date that we cancel the options accepted for exchange, in
which period we presently expect to grant the new options, we will not grant any
new options. We are unaware of any such prohibition at this time, and we will
use reasonable efforts to effect the grant, but if the grant is prohibited
throughout the period we will not grant any new options and you will not get any
other consideration for the options you tendered.

14. Material U.S. Federal Income Tax Consequences.

The following is a general summary of the material U.S. federal income tax
consequences of the exchange of options pursuant to the offer. This discussion
is based on the Internal Revenue Code, its legislative history, Treasury
Regulations thereunder and administrative and judicial interpretations thereof
as of the date of the offer, all of which are subject to change, possibly on a
retroactive basis. This summary does not discuss all of the tax consequences
that may be relevant to you in light of your particular circumstances, nor is it
intended to be applicable in all respects to all categories of optionholders.

Optionholders who exchange outstanding options for new options should not
be required to recognize income for federal income tax purposes at the time of
the exchange. We believe that the exchange will be treated as a non-taxable
exchange. We strongly advise all optionholders considering exchanging their
options to meet with their own tax advisors with respect to the federal, state
and local tax consequences of participating in the offer.

Incentive Stock Options

Under current law, an optionholder will not realize taxable income upon the
grant of an incentive stock option under our 1995 Plan. In addition, an
optionholder generally will not realize taxable income upon the exercise of an
incentive stock option. However, an optionholder's alternative minimum taxable
income will be increased by the amount that the aggregate fair market value of
the shares underlying the option, which is generally determined as of the date
of exercise, exceeds the aggregate exercise price of the option. Except in the
case of an optionholder's death or disability, if an option is exercised more
than three months after the optionholder's termination of employment, the option
ceases to be treated as an incentive stock option and is subject to taxation
under the rules that apply to non-qualified stock options.

If an optionholder sells the option shares acquired upon exercise of an
incentive stock option, the tax consequences of the disposition depend upon
whether the disposition is qualifying or disqualifying. The disposition of the
option shares is qualifying if it is made:

o at least two years after the date the incentive stock option was
granted, and

o at least one year after the date the incentive stock option was
exercised.

If the disposition of the option shares is qualifying, any excess of the
sale price of the option shares, over the exercise price of the option will be
treated as long-term capital gain taxable to the optionholder at the time of the
sale. Any such capital gain will be taxed at the long-term capital gain rate in
effect at the time of sale. If the disposition is not qualifying, which we refer
to as a "disqualifying disposition," the excess of the fair market value of the
option shares on the date the option was exercised, over the exercise price will
be taxable income to the optionholder at the time of the disposition.

Of that income, the amount up to the excess of the fair market value of the
shares at the time the option was exercised over the exercise price will be
ordinary income for income tax purposes and the balance, if any, will be
long-term or short-term capital gain, depending upon whether or not the shares
were sold more than one year after the option was exercised.

Unless an optionholder engages in a disqualifying disposition, we will not
be entitled to a deduction with respect to an incentive stock option. If an
optionholder engages in a disqualifying disposition, we will be entitled to a
deduction equal to the amount of compensation income taxable to the
optionholder.

Regardless of whether you tender incentive stock options or non-qualified
stock options, if those options are accepted for exchange, the new options will
be granted as incentive stock options to the maximum extent they qualify. For
options to qualify as incentive stock options, the value of shares subject to
options that first become exercisable in any calendar year cannot exceed
$100,000, as determined using the option exercise price. The excess value is
deemed to be a non-qualified stock option. You should note that if the new
options have a higher exercise price than some or all of your current options,
the new options may exceed the limit for incentive stock options.

Please note: the IRS may characterize this offer to exchange options as a
"modification" of your current incentive stock options, even if you decline to
participate in this exchange offer. In 1991, the IRS issued a private letter
ruling in which another company's option exchange program was characterized as a
"modification" of all of the incentive stock options that could be exchanged.
This does not necessarily mean that our offer to exchange options will be viewed
the same way. Private letter rulings given by the IRS contain the IRS's opinion
regarding only the specific facts presented by a specific person or company. The
person or company receiving the letter may rely on it, but no other person or
company may rely on the letter ruling, nor may they assume the same opinion
would apply to their situation, even if the facts at issue are similar. While
such letters do not provide certainty, they may indicate how the IRS will view a
similar situation. We therefore do not know if the IRS will assert the position
that our offer constitutes a "modification" of incentive stock options eligible
for tender. A successful assertion by the IRS of this position could extend an
incentive stock options' holding period to qualify for favorable tax treatment,
by re-starting it as of the date we commence this offer to exchange options.
Accordingly, to the extent you dispose of your incentive stock option shares
prior to the lapse of the new extended holding period, your incentive stock
option could be taxed similarly to a nonstatutory stock option.

Non-Qualified Stock Options.

Under current law, an optionholder will not realize taxable income upon the
grant of an option which is not qualified as an incentive stock option, also
referred to as a nonstatutory stock option. However, when an optionholder
exercises the option, the difference between the exercise price of the option,
and the fair market value of the shares subject to the option on the date of
exercise will be compensation income taxable to the optionholder.

We will be entitled to a deduction equal to the amount of compensation
income taxable to the optionholder if we comply with eligible reporting
requirements.

Please note that if you tender nonstatutory stock options and those options
are accepted for exchange, your new options will be granted as incentive stock
options to the maximum extent they qualify. For options to qualify as incentive
stock options, the value of shares subject to options that first become
exercisable in any calendar year cannot exceed $100,000, as determined using the
option exercise price. The excess value is deemed to be a non-qualified stock
option. Please see the immediately preceding section entitled "Incentive Stock
Options" for certain income tax information concerning incentive stock options.

We recommend that you consult your own tax advisor with respect to the
federal, state, local and foreign tax consequences of participating in the
offer.

15. Extension of offer; termination; amendment.

We expressly reserve the right, in our discretion, at any time and from
time to time, and regardless of whether or not any event listed in Section 7 has
occurred or is deemed by us to have occurred, to extend the period of time
during which the offer is open and thereby delay the acceptance for exchange and
cancellation of any options by giving oral or written notice of such extension
to the optionholders or making a public announcement thereof.

We also expressly reserve the right, in our reasonable judgment, prior to
the expiration date to terminate or amend the offer and to postpone our
acceptance and cancellation of any options tendered for exchange upon the
occurrence of any of the events listed in Section 7, by giving oral or written
notice of such termination or postponement to you or by making a public
announcement thereof. Our reservation of the right to delay our acceptance and
cancellation of options tendered for exchange is limited by Rule 13e-4(f)(5)
promulgated under the Securities Exchange Act, which requires that we must pay
the consideration offered or return the options tendered promptly after
termination or withdrawal of a tender offer.

Subject to compliance with applicable law, we further reserve the right, in
our discretion, and regardless of whether any event listed in Section 7 has
occurred or is deemed by us to have occurred, to amend the offer in any respect,
including, without limitation, by decreasing or increasing the consideration
offered in the offer to optionholders or by decreasing or increasing the number
of options being sought in the offer.

Amendments to the offer may be made at any time and from time to time by
public announcement of the amendment. In the case of an extension, the amendment
must be issued no later than 6:00 a.m., Eastern Standard Time, on the next
business day after the last previously scheduled or announced expiration date.
Any public announcement made through the offer will be disseminated promptly to
optionholders in a manner reasonably designated to inform optionholders of the
change. Without limiting the manner in which we may choose to make a public
announcement, except as required by applicable law, we have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a press release to PR Newswire.

If we materially change the terms of the offer or the information
concerning the offer, or if we waive a material condition of the offer, we will
extend the offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2)
under the Securities Exchange Act. These rules require that the minimum period
during which an offer must remain open following material changes in the terms
of the offer or information concerning the offer, other than a change in price
or a change in percentage of securities sought, will depend on the facts and
circumstances, including the relative materiality of such terms or information.

If we decide to take any of the following actions, we will publish notice
or otherwise inform you in writing of these actions:

o we increase or decrease the amount of consideration offered for
the options;

o we decrease the number of options eligible to be tendered in the
offer; or

If the offer is scheduled to expire at any time earlier than the tenth
(10th) business day from, and including, the date that notice of such increase
or decrease is first published, sent or given in the manner specified in this
Section 15, we will extend the offer so that the offer is open at least ten (10)
business days following the publication, sending or giving of notice.

16. Fees and expenses.

We will not pay any fees or commissions to any broker, dealer or other
person for soliciting tenders of options pursuant to this Offer to Exchange.

17. Additional information.

This Offer to Exchange is part of a Tender Offer Statement on Schedule TO
that we have filed with the SEC. This Offer to Exchange does not contain all of

the information contained in the Schedule TO and the exhibits to the Schedule
TO. We recommend that you review the Schedule TO, including its exhibits, and
the following materials which we have filed with the SEC before making a
decision on whether to tender your options:

1. Decorator's annual report on Form 10-K for our fiscal year ended
December 30, 2000, filed with the SEC on March 30, 2001;

2. Decorator's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 2001, June 30, 2001 and September 29,
2001, filed with the SEC on May 14, 2001, August 13, 2001 and
November 13, 2001, respectively;

3. Decorator's Proxy Statement pursuant to Section 14(g) with the
Securities Exchange Act of 1934 filed with the SEC on May 17,
2001; and

4. Any document that we file with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act after the date
of this offer to exchange and before the termination of this
offer. Information in these filings will be deemed to be
incorporated by reference as of the date we make the filing.

These filings, our other annual, quarterly and current reports, our proxy
statements and our other SEC filings may be examined, and copies may be
obtained, at the following SEC public reference rooms:

450 Fifth Street, N.W. 500 West Madison Street
Room 1024 Suite 1400
Washington, D.C. 20549 Chicago, Illinois 60661

You may obtain information on the operation of the public reference rooms
by calling the SEC at 1-800-SEC-0330.

Our SEC filings are also available to the public on the SEC's Internet site
at http://www.sec.gov.

Our common stock is quoted on the AMEX under the symbol "DII" and our SEC
filings can be read at the following AMEX address:

American Stock Exchange LLC
86 Trinity Place
New York, NY 10006

Each person to whom a copy of this Offer to Exchange is delivered may
obtain a copy of any or all of the documents to which we have referred you,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents) at no cost, by writing to us at
Decorator Industries, Inc., 10011 Pines Blvd., Pembroke Pines, Florida 33024, or
contacting us at (954) 436-8909.

As you read the foregoing documents, you may find some inconsistencies in
information from one document to another. If you find inconsistencies between
the documents, or between a document and this Offer to Exchange, you should rely
on the statements made in the most recent document.

The information contained in this Offer to Exchange about Decorator should
be read together with the information contained in the documents to which we
have referred you.

18. Summary Financial Information.

The following selected consolidated financial data should be read in
conjunction with the Company's audited consolidated financial statements and
related notes thereto and with Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are included in the Company's Annual
Report on Form 10-K for its fiscal year ended December 30, 2000, and with the
unaudited condensed consolidated financial statements and related notes thereto
and with Management's Discussion and Analysis of Financial Condition and Results
of Operations, which are included in the Company's Quarterly Reports on Form
10-Q for the quarterly periods ended March 31, 2001, June 30, 2001 and September
29, 2001, respectively, which are incorporated herein by reference.

The following selected consolidated financial data reflects consolidated
statement of operations data for the years ended January 1, 2000 and December
30, 2000, and consolidated balance sheet data at January 1, 2000 and December
30, 2000. The data in the columns entitled, "1999 Decorator Previously Reported"
and "2000 Decorator Previously Reported," are derived from, and is qualified by
reference to, the audited consolidated financial statements in the Company's
Annual Report on Form 10-K for its fiscal year ended December 30, 2000, which is
incorporated herein by reference.

SELECTED CONSOLIDATED FINANCIAL DATA
- -----------------------------------------------------------------------------------------------------------

(in thousands, except per share 1999 Decorator Previously 2000 Decorator Previously
data) Reported Reported
- ------------------------------------- ---------------------------------- ----------------------------------

Operating Data:
- ------------------------------------- ---------------------------------- ----------------------------------

Net Revenues $ 49,206,018 $ 42,609,584
- ------------------------------------- ---------------------------------- ----------------------------------

Costs and expenses:
- ------------------------------------- ---------------------------------- ----------------------------------

Cost of net revenues 38,055,987 33,906,006
- ------------------------------------- ---------------------------------- ----------------------------------

Sales and marketing General and 6,762,698 6,987,203
administrative
- ------------------------------------- ---------------------------------- ----------------------------------

Operating income 4,387,333 1,716,375
- ------------------------------------- ---------------------------------- ----------------------------------

Interest, net and other income 50,183 55,899
- ------------------------------------- ---------------------------------- ----------------------------------

Other investment adjustment (70,098) (114,162)
- ------------------------------------- ---------------------------------- ----------------------------------

Income before taxes 4,367,418 1,658,112
- ------------------------------------- ---------------------------------- ----------------------------------

Taxes 1,650,000 621,000
- ------------------------------------- ---------------------------------- ----------------------------------

Income from continuing Operations 2,717,418 1,037,112
- ------------------------------------- ---------------------------------- ----------------------------------

Loss from Discontinued Operations (165,140) (903,914)
- ------------------------------------- ---------------------------------- ----------------------------------

Net income 2,552,278 133,198
- ------------------------------------- ---------------------------------- ----------------------------------

Basic net income per share .76 .04
- ------------------------------------- ---------------------------------- ----------------------------------

Diluted net income per share .73 .04
- ------------------------------------- ---------------------------------- ----------------------------------

Weighted average shares outstanding 3,378,721 3,041,364
for basic net income per share
- ------------------------------------- ---------------------------------- ----------------------------------

Weighted average shares outstanding 3,517,681 3,077,260
for diluted net income per share
- ------------------------------------- ---------------------------------- ----------------------------------

- -----------------------------------------------------------------------------------------------------------

Consolidated Balance Sheet Data:
- ------------------------------------- ---------------------------------- ----------------------------------

Total current assets 11,777,241 9,952,869
- ------------------------------------- ---------------------------------- ----------------------------------

Total noncurrent assets 9,888,282 8,902,518
- ------------------------------------- ---------------------------------- ----------------------------------

Total assets 21,665,523 18,855,387
- ------------------------------------- ---------------------------------- ----------------------------------

Total current liabilities 5,130,385 4,798,222
- ------------------------------------- ---------------------------------- ----------------------------------

Long-term liabilities 1,814,169 1,709,686
- ------------------------------------- ---------------------------------- ----------------------------------

Deferred Taxes 356,000 368,000
- ------------------------------------- ---------------------------------- ----------------------------------

Total liabilities 7,300,554 6,875,908
- ------------------------------------- ---------------------------------- ----------------------------------

Total stockholders equity 14,364,969 11,979,479
- ------------------------------------- ---------------------------------- ----------------------------------

Total liabilities and stockholders' 21,665,523 18,855,387
equity
- ------------------------------------- ---------------------------------- ----------------------------------

Our earnings available for fixed charges of $1,660,476 were adequate to
cover our fixed charges of $217,876 for the fiscal year ended December 30, 2000.
Our earnings available for fixed charges of $4,337,150 were adequate to cover
our fixed charges of $158,228 for the fiscal year ended January 1, 2000. Our
book value per share was $4.43 as of February 22, 2002.

19. Miscellaneous.

This Offer to Exchange and our SEC reports referred to above include
"forward-looking statements." When used in this Offer to Exchange, the words
"anticipate," "believe," "estimate," "expect," "intend" and "plan" as they
relate to Decorator or our management are intended to identify these
forward-looking statements. All statements by us regarding our expected future
financial position and operating results, our business strategy, our financing
plans and expected capital requirements, forecasted trends relating to our
services or the markets in which we operate and similar matters are
forward-looking statements. The documents we filed with the SEC, including our
quarterly reports on Form 10-Q filed on May 14, 2001, August 13, 2001 and
November 13, 2001, respectively, discuss some of the risks that could cause our
actual results to differ from those contained or implied in the forward-looking
statements. These risks include, but are not limited to:

o future operating results and future liquidity will be affected by
the level of demand for recreational vehicles

o manufactured housing and hotel/motel accommodations and may be
affected by changes in economic conditions

o interest rate fluctuations

o competitive products and pricing pressures within the Company's
markets

o Decorator's ability to contain its manufacturing costs and
expenses

o other factors

We are not aware of any jurisdiction where the making of the offer is not
in compliance with applicable law. If we become aware of any jurisdiction where
the making of the offer is not in compliance with any valid applicable law, we
will make a good faith effort to comply with such law. If, after such good faith
effort, we cannot comply with such law, the offer will not be made to, nor will
tenders be accepted from or on behalf of, the optionholders residing in such
jurisdiction.

We have not authorized any person to make any recommendation on our behalf
as to whether you should tender or not tender your options through the offer.
You should rely only on the information in this document or documents to which
we have referred you. We have not authorized anyone to give you any information
or to make any representations in connection with the offer other than the
information and representations contained in this document, the letter from
William A. Bassett dated February 22, 2002, the Election Form and the Notice to
Withdraw from the Offer. If anyone makes any recommendation or representation to
you or gives you any information, you must not rely upon that recommendation,
representation or information as having been authorized by us.

Decorator Industries, Inc. February 22, 2002

SCHEDULE A

INFORMATION CONCERNING THE DIRECTORS,
EXECUTIVE OFFICERS AND CERTAIN OTHER OFFICERS OF DECORATOR, INC.

The directors, executive officers and certain other officers of Decorator
Industries, Inc. and their positions and offices as of February 22, 2002, are
set forth in the following table:

Name Position and Offices Held
---- -------------------------

William A. Bassett President , Director, Chief Executive Officer and Chairman of the Board

Michael K. Solomon Vice President, Treasurer and Chief Financial Officer

William A. Johnson Officer

Jerome B. Lieber Secretary and Director

Joseph N. Ellis Director

Ellen Downey Director

Thomas L. Dusthimer Director

The address of each director and executive officer is: c/o Decorator
Industries, Inc., 10011 Pines Blvd., Pembroke Pines, Florida 33024.

A-1