EXHIBIT 10.6

March 31, 1997



Douglas H. MacMillan
Morgan Products Ltd.
469 McLaws Circle
Williamsburg, VA  23185

Dear Doug:

        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.  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.  In lieu of the payment to
which you would be entitled  under Article 5 of the Plan,  the Company will make
to you a cash payment of $19,750 in two equal  installments of $9,875 on each of
June 30, 1997 and January 3, 1998.

        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.


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Douglas H. MacMillan
March 31, 1997
Page 2


        4.  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.

        5.  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  $543,043,
which amount shall be paid to you in two equal  installments  of  $271,521.50 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.

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

        7.  The Company also agrees to provide you with an  additional  lump sum
payment of $68,658.00,  which will be paid to you in two equal  installments  of
$34,329 on each of June 30, 1997 and January 3, 1998.

        8.  In consideration of the agreements  contained in paragraphs 1, 3 and
7 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  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.


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Douglas H. MacMillan
March 31, 1997
Page 3

        (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.

        9.  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.

        10.  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.

        11. 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/ Douglas H. MacMillan             March 31, 1997
        --------------------------          ---------------------
        Douglas H. MacMillan                         Date



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