EXHIBIT 10.5

March 31, 1997




Dennis C. Hood
Morgan Products Ltd.
469 McLaws Circle
Williamsburg, VA  23185

Dear Dennis:

         This letter sets forth our  discussions  regarding  your  separation of
employment from Morgan  Products Ltd. and its  subsidiaries  (collectively,  the
"Company") and represents the entire agreement  between you and the Company with
respect to any and all  severance  benefits to which you are  entitled  from the
Company.  This  agreement  incorporates  the terms and provisions of the Special
Severance/Retention  Plan for  Executive  officers,  dated  March 30,  1994 (the
"Plan"),  including the  modifications/enhancements  dated April 13, 1994, which
shall be incorporated herein by reference.

         1. In  consideration  of the  benefits set forth  herein,  you agree to
forfeit your right to any and all  payments and benefits  under the terms of the
Plan.  Notwithstanding the preceding sentence,  except as specifically  provided
herein to the  contrary,  you shall be  entitled  to the  benefits  set forth in
Section 3.3(c) (including the modifications/enhancements to the Plan dated April
13, 1994) and Article 5 of the Plan (except that the cap under  Article 5 of the
Plan shall be 12.5% of your base salary). In addition,  the terms and provisions
of Articles 4, 6, 7, 8, and 9 (with the  exception  of sections  9.4 and 9.8) of
the Plan shall apply for the purposes of this Agreement.

         2. Monday,  March 31, 1997 shall serve as your date of notice under the
Plan. The effective date of your termination will be Friday, May 30, 1997.

         3. Effective  March 31, 1997 you are being placed on paid leave at your
current  bi-weekly rate of pay. During such leave, you will have no authority to
act for or on behalf of the Company. Notwithstanding the foregoing, you agree to
make  yourself  available  to consult  with the Company as needed.  Outplacement
services are being made available to you effective immediately, and you are free
to begin to seek new employment or to pursue other self interests.

         4. In addition to the Company's  obligations in respect of Article 5 of
the Plan,  as referred  to in the second  sentence  of  paragraph  1 above,  the
Company  agrees to reimburse you, in an amount not to exceed  $15,000,  for your
reasonable  travel and lodging expenses incurred in connection with outplacement
services provided by the Thompson Group in Milwaukee, Wisconsin.


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Dennis C. Hood
March 31, 1997
Page 2


         5. The Company will  continue to pay you on a bi-weekly  basis  through
May 30, 1997. You will receive your final regular  paycheck on June 6, 1997. The
total balance of your Deferred  Compensation Account will be paid to you on June
20, 1997.

         6. On May 30,  1997 you will  become  eligible  for  certain  severance
payouts  which  shall be  determined  according  to  section  3.3(a) of the Plan
(including the  modification/enhancement  to the Plan dated April 13, 1994). You
and the Company  agree that the amount  payable to you  hereunder  is  $428,278,
which amount shall be aid to you in two equal  installments  of $214,139 on each
of June 30, 1997 and January 3, 1998.  This amount is inclusive of the amount of
vacation  payable to you in respect of Section 3.3 (c) of the Plan and  referred
to in the second sentence of paragraph 1 above.

         7. Short-term and long-term disability  coverage,  and participation in
the Company's  401(k) plan and Deferred  Compensation  plan,  will  terminate on
Friday, May 30, 1997.

         8. The Company also agrees to provide you with an  additional  lump sum
payment  of  $51,090,  which  will be paid to you in two equal  installments  of
$25,545 on each of June 30, 1997 and January 3, 1998.

         9.  You  agree  to be  available  at such  reasonable  times  as may be
requested  by the Company  over the next six months to provide the Company  with
general  consulting  services,  to include,  without  limitation,  consulting in
connection  with  upcoming  labor  negotiations.  The Company  agrees to pay you
$25,000 for such consulting  services,  which amount shall be paid to you in two
equal installments of $12,500 on each of June 30, 1997 and January 3, 1998.

         10.      In consideration of 3, 4, and 8 above you agree as follows:

         (a) You will not directly or indirectly use, attempt to use,  disclose,
         or  otherwise  make  known to any  person or entity  any  knowledge  or
         information,  including  without  limitation,  lists  of  customers  or
         suppliers,  trade  secrets,  know-how,  inventions,   discoveries,  and
         processes,  as well as any data and records pertaining  thereto,  which
         you  may  have  acquired  in the  course  of  your  employment;  or any
         knowledge  or  information  of a  confidential  nature  (including  all
         unpublished  matters)  relating to, without  limitation,  the business,
         properties, accounting, books and records, trade




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Dennis C. Hood
March 31, 1997
Page 3

secrets,  or  memoranda  of the  Company or its  affiliates,  unless the Company
agrees in advance in writing to allow you to do so.

         (b) You agree that you will not disparage, either orally or in writing,
         the company or its Officers, Directors and employees, and that you will
         not  in any  way  assist,  aid or  participate  in the  pursuit  of any
         investigations,  claims or charges  brought  against or with respect to
         the  Company  or its  Officers,  Directors  and  employees,  except  in
         response to a lawfully issued subpoena.

         (c) With the exception of obligations  set forth in this letter and the
         fulfillment  of same by the  Company,  you hereby waive and release the
         Company,  its successors and assigns,  their Officers,  Directors,  and
         employees from all liabilities, obligations, damages, claims, causes of
         action and demands,  whatsoever, and agree not to sue or file any claim
         against  the Company or the  Company's  successors  or  assigns,  their
         Officers, Directors, and employees which you now have or hereafter can,
         shall or may have,  including  but not  limited to any claims or rights
         under federal,  state or local laws  prohibiting age (including but not
         limited to all claims or rights  arising under any statutes,  including
         but not limited to the Age  Discrimination  in Employment  Act),  race,
         sex, national origin,  religion, or other forms of discrimination,  any
         common law contract, tort or other claims. In the waiver of your rights
         arising  under  the  Age   Discrimination  in  Employment  Act,  it  is
         understood  that you are not waiving  any right that arises  after this
         agreement is executed.

         11. In the event of inquiry  from  prospective  employers,  the Company
will respond to such reference  inquiries and will refrain from making  negative
comments about you or your performance.

         12. It is understood  that the terms of my letter to you dated November
2, 1994 in regard to  relocation  to the  Midwest  will be  honored  at any time
during the twenty-four month period following your termination.

         13. It is  understood  that,  upon  expiration  of the  fringe  benefit
continuation  period set forth in  Section  3.3 (c) of the Plan  (including  the
modifications/enhancements to the Plan dated April 13, 1994), and referred to in
the  second  sentence  of  paragraph  1 above,  you will,  to the extent you are
eligible  under the terms of  relevant  benefit  plans,  be  considered  to have
retired.




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Dennis C. Hood
March 31, 1997
Page 4

         14. You agree that you have read this agreement carefully, and that you
were  given a period of at least 21 days from its date of  issuance  in which to
execute  this  agreement,  and that you  understand  you  also may  revoke  this
agreement at any time during a seven-day  period following the date of execution
in which case this agreement will have no force and effect.

         15.  You are advised to consult  with an attorney  prior to  executing 
this agreement, and you acknowledge you have been given a reasonable opportunity
to do so.

MORGAN PRODUCTS LTD.


By:      /s/ Larry R. Robinette
         ---------------------------
         Larry R. Robinette
         President and Chief Executive Officer


ACCEPTED AND AGREED:

         /s/ Dennis Hood                     March 31, 1997
         ---------------------------        --------------------
         Dennis C. Hood                              Date

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