

AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
171 MONROE AVENUE, N.W., SUITE 600
GRAND RAPIDS, MI 49503


Mr. Charles R. Foley
Ameriwood Industries International Corporation
171 Monroe Avenue, N.W.
Grand Rapids, MI 49503

Re:  Management Retention Agreement

Dear Mr. Foley:

      Ameriwood  Industries International  Corporation  (the
"Corporation") considers it essential to the best  interests
of  its shareholders to foster the continuous employment  of
key management personnel.  In this connection, the Board  of
Directors of the Corporation (the "Board") recognizes  that,
as  is  the  case with many publicly held corporations,  the
possibility  of  a change in control of the Corporation  may
exist  and  that  such possibility, and the uncertainty  and
questions which it may raise among management, may result in
the  departure or distraction of management personnel to the
detriment of the Corporation and its shareholders.

The  Board  has determined that appropriate steps should  be
taken to reinforce and encourage the continued attention and
dedication of members of management, including you, to their
assigned   duties  without  distraction  in  the   face   of
potentially  disturbing  circumstances  arising   from   the
possibility of a change in control of the Corporation.

In  order  to  induce you to remain in  the  employ  of  the
Corporation, and as consideration for your execution of  the
release  described in Subsection 4(C) hereof, which  release
is  an  integral  part  of this Agreement,  the  Corporation
agrees that you shall receive the benefits set forth in this
letter agreement ("Agreement").

1.  Term of Agreement.  This Agreement shall commence on the
date  hereof and shall continue in effect while you continue
to  be  employed  by the Corporation, and for  such  further
period as may be required for the Corporation to perform its
obligations  hereunder in the event of  the  termination  of
your   employment  in  circumstances  giving  rise  to  your
entitlement to benefits as provided in this Agreement.

2.   Change  in  Control.   No  benefits  shall  be  payable
hereunder  unless there shall have been a Change in  Control
of  the  Corporation, as set forth below.  For  purposes  of
this  Agreement, a "Change in Control" shall  be  deemed  to
have occurred if:

(A)   Any  "Person" (as such term is used in Sections  13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended
(the  "Exchange Act")), is or becomes the "Beneficial Owner"
(as  defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing
25%   or   more  of  the  combined  voting  power   of   the
Corporation's   then   outstanding   securities;   provided,
however,  in  determining whether a Change  in  Control  has
occurred, the Corporation's outstanding securities that  are
acquired  in  a  "Non-Control Acquisition"  (as  hereinafter
defined)  shall  not constitute an acquisition  which  would
cause  a  Change  in  Control.  A "Non-Control  Acquisition"
shall  mean  an acquisition by (i) an employee benefit  plan
(or  a  trust forming a part thereof) maintained by (a)  the
Corporation or (b) any corporation or other Person of  which
a  majority  of  its  voting  power  or  its  voting  equity
securities   or  equity  interest  is  owned,  directly   or
indirectly,  by  the  Corporation  (for  purposes  of   this
definition,  a  "Subsidiary") (ii) the  Corporation  or  its
Subsidiaries, or (iii) any Person in connection with a "Non-
Control Transaction" (as hereinafter defined).

(B)    During  any  period  of  twelve  consecutive  months,
individuals  who  are members of the Board  (the  "Incumbent
Board"),  cease  for  any reason to constitute  at  least  a
majority  of  the  members of the Board; provided,  however,
that  if  the  election, or nomination for election  by  the
Corporation's common shareholders, of any new directors  was
approved  by a vote of at least a majority of the  Incumbent
Board,  such  new  director  shall,  for  purposes  of   the
Agreement, be considered as a member of the Incumbent Board;
provided  further,  however, that  no  individual  shall  be
considered  a  member  of  the  Incumbent  Board   if   such
individual initially assumed office as a result of either an
actual  or  threatened "Election Contest" (as  described  in
Rule  14a-11  promulgated under the Exchange Act)  or  other
actual or threatened solicitation of proxies or consents  by
or  on behalf of a Person other than the Incumbent Board  (a
"Proxy  Contest")  including  by  reason  of  any  agreement
intended  to avoid or settle any Election Contest  or  Proxy
Contest;

(C)   The  shareholders of the Corporation approve a merger,
consolidation, or reorganization of the Corporation with any
other   corporation   or   entity,   unless   such   merger,
consolidation,   or   reorganization   is   a   "Non-Control
Transaction."   A  "Non-Control Transaction"  shall  mean  a
merger,  consolidation or reorganization of the  Corporation
where:

(i)   the shareholders of the Corporation immediately before
such  merger, consolidation or reorganization, own  directly
or    indirectly   immediately   following   such    merger,
consolidation or reorganization, at least seventy-five (75%)
of  the  combined  voting  power of the  outstanding  voting
securities  of the corporation resulting from  such  merger,
consolidation    or    reorganization    (the     "Surviving
Corporation") in substantially the same proportion as  their
ownership   of  the  Corporation's  outstanding   securities
immediately    before   such   merger,   consolidation    or
reorganization; and

(ii)   the  individuals who were members  of  the  Incumbent
Board  immediately prior to the execution of  the  agreement
providing  for  such merger, consolidation or reorganization
constitute at least a majority of the members of  the  board
of  directors of the Surviving Corporation, or a corporation
beneficially directly or indirectly owning a majority of the
outstanding  voting securities of the Surviving Corporation;
and

(iii)   no  Person  was  a Beneficial Owner  of  twenty-five
percent  (25%) or more of the combined voting power  of  the
Surviving  Corporation's then outstanding voting securities,
except  the  following:   (i)  the  Corporation,  (ii)   any
Subsidiary,  (iii) any employee benefit plan (or  any  trust
forming  a part thereof) maintained by the Corporation,  the
Surviving Corporation, or any Subsidiary, or (iv) any Person
who,  immediately  prior  to such merger,  consolidation  or
reorganization was a Beneficial Owner of twenty-five percent
(25%)  or more of the then outstanding voting securities  of
the Corporation.

(D)   The shareholders of the Corporation approve a plan  of
complete liquidation of the Corporation or an agreement  for
the  sale  or  disposition by the  Corporation  of  all,  or
substantially all, of the Corporation's assets (other than a
transfer to a Subsidiary).

3.Termination Following Change in Control.  After  a  Change
in Control of the Corporation shall have occurred, you shall
be entitled to the benefits

(A)   provided in Subsection 4(C), (D) and (F)  hereof  upon
the subsequent termination of your employment within two (2)
years following the effective date of such Change in Control
of  the  Corporation, unless such termination is (i) because
of  your death, Disability or voluntary Retirement, (ii)  by
the  Corporation for Cause, or (iii) by you other  than  for
Good Reason (except during the Window Period as provided  in
Section 3(B)); or

(B)   provided in Subsection 4(G) hereof upon the subsequent
termination  of  your employment by you  during  the  30-day
period  commencing on the first anniversary of the effective
date of such Change in Control (the "Window Period").

3.1   Disability; Voluntary Retirement.  If, as a result  of
your incapacity due to physical or mental illness, you shall
have  been  absent  from the full-time performance  of  your
duties  with the Corporation for six (6) consecutive months,
and  within thirty (30) days after written notice you  shall
not  have  returned  to the full-time  performance  of  your
duties (provided a Change in Control had not occurred  prior
to  said notice), your rights under this Agreement shall  be
terminated due to "Disability".  Termination of your  rights
under  this  Agreement  shall  not  impair  any  rights   to
reinstatement  that you may have under  any  other  plan  or
policy   maintained  by  the  Corporation,  but   any   such
reinstatement  would  not  revive  your  rights  under  this
Agreement.  Termination by you of your employment  based  on
voluntary  "Retirement" shall mean termination in accordance
with  the  Corporation's retirement  policy  (including  any
early  retirement policy adopted before a Change in Control)
generally  applicable  to  its  salaried  employees  or   in
accordance with any retirement arrangement established  with
your consent with respect to you.

3.2    Cause.   Termination  by  the  Corporation  of   your
employment for "Cause" shall mean termination upon:

(A)   The  reckless and continued failure by you  to  remedy
deficiencies  and  resume  substantial  performance  of  the
duties  associated with your employment by  the  Corporation
within  thirty (30) days following the date a written demand
for  substantial  performance is delivered  to  you  by  the
Board,  which demand specifically identifies the  manner  in
which  the  Board  believes that you have not  substantially
performed your duties; provided that you need not respond to
such demand in respect of:

(i)  any such failure resulting from your incapacity due  to
physical or mental illness, or

(ii)   any  such  actual or anticipated  failure  after  the
issuance  of a Notice of Termination by you for Good  Reason
as defined in Subsections 3.4 and 3.3, respectively; or

(B)   The  reckless  engaging by you  in  conduct  which  is
demonstrably  and  materially injurious to the  Corporation,
monetarily  or  otherwise,  including  but  not  limited  to
embezzlement,  theft,  fraud or other felony  involving  the
Corporation or its assets.

Notwithstanding the foregoing, you shall not  be  deemed  to
have  been terminated for Cause unless and until there shall
have  been  delivered  to you a copy of  a  resolution  duly
adopted  by the affirmative vote of a majority of the  Board
at  a  meeting of the Board called and held for such purpose
(after  at  least 15 business days' notice  to  you  and  an
opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of
the  Board  you  were guilty of conduct set forth  above  in
clauses  (A) or (B) of the first sentence of this Subsection
3.2  and specifying the particulars thereof in detail.   For
purposes of this Subsection 3.2, no act, or failure to  act,
on  your  part  shall be deemed "reckless" unless  done,  or
omitted  to  be done, by you not in good faith  and  without
reasonable  belief that your action or omission was  in  the
best interest of the Corporation.

3.3   Good Reason.  You shall be entitled to terminate  your
employment for Good Reason.  For purposes of this Agreement,
"Good  Reason"  shall  mean, without your  express,  written
consent,  the  occurrence  of  any  of  the  following   cir
cumstances unless, in the case of paragraphs (A), (E),  (F),
(G) or (H) , such circumstances are fully corrected prior to
the   Date  of  Termination  specified  in  the  Notice   of
Termination,  as  defined  in  Subsections  3.5   and   3.4,
respectively, given in respect thereof:

(A)   The assignment to you of any duties inconsistent  with
your status as Chief Executive Officer of the Corporation or
such  other executive officer position to which you  may  in
the  future be appointed by the Board (and which you accept)
or  a substantial alteration in the nature or status of your
responsibilities from those in effect immediately  prior  to
the Change in Control;

(B)   A  reduction  by the Corporation in your  annual  base
compensation or target incentive compensation as  in  effect
on the date hereof or as the same may be increased from time
to  time,  except  for  across-the-board  salary  reductions
similarly   affecting   all  salaried   personnel   of   the
Corporation  and  all salaried personnel of  any  person  in
control of the Corporation;

(C)   The  Corporation's requiring you to be based  anywhere
other than the Corporation's principal executive offices; or
the  relocation of such offices from their location  on  the
date  hereof  to  a  location which increases  your  one-way
commute  from  your principal residence (measured  over  the
shortest reasonable route) by more than 50 miles;

(D)   The  failure by the Corporation, without your consent,
to  pay  to  you  any  portion of  your  base  or  incentive
compensation;

(E)   The  failure by the Corporation to continue in  effect
any compensation or retirement plan in which you participate
immediately prior to the Change in Control which is material
to  your total compensation, including, but not limited  to,
the  Annual  Incentive Plan, the 1993 Stock Incentive  Plan,
and  the  Ameriwood Affiliated Employee Stock Ownership  and
Savings  Plan  (the "ESOP-Savings Plan") or  any  substitute
plans  adopted  prior to the Change in  Control,  unless  an
equitable arrangement (embodied in an ongoing substitute  or
alternative  plan) has been made with respect to  such  plan
that  is no less favorable to you than the plan(s) replaced,
or   the  failure  by  the  Corporation  to  continue   your
participation therein (or in such substitute or  alternative
plan) on a basis not materially less favorable, in terms  of
(i)  the amount of benefits provided, (ii) the level of your
participation relative to other participants, or  (iii)  (if
applicable) funding or vesting when compared to the relevant
plan  provisions which existed at the time of the Change  in
Control;

(F)   The  failure by the Corporation to continue to provide
you  with  benefits substantially similar to those currently
provided  to  you  under  any  of  the  Corporation's   life
insurance,  medical,  health  and  accident,  or  disability
plans,  the  taking  of any action by the Corporation  which
would  directly or indirectly materially reduce any of  such
benefits  or  deprive  you  of any material  fringe  benefit
currently provided to you, or the failure by the Corporation
to  provide  you  with the number of paid vacation  days  to
which  you are entitled on the basis of years of service  or
position  with  the  Corporation  in  accordance  with   the
Corporation's current vacation policy, or the failure of the
Corporation  to  provide  you  with  a  working  environment
(including office accommodations, staff and location)  which
is  substantially equivalent to that currently  provided  to
you,  except  in  each case for across-the-board  reductions
similarly   affecting   all  salaried   personnel   of   the
Corporation  and  all salaried personnel of  any  person  in
control of the Corporation;

(G)  The failure of the Corporation to obtain a satisfactory
agreement from any successor to assume and agree to  perform
this Agreement, as contemplated in Section 7 hereof; or

(H)   Any purported termination of your employment which  is
not  effected pursuant to a Notice of Termination satisfying
the   requirements  of  Subsection  3.4   below   (and,   if
applicable,  the requirements of Subsection 3.2 above);  for
purposes  of  this Agreement, no such purported  termination
shall be effective.

Your  right  to terminate your employment pursuant  to  this
Subsection 3.3 shall not be affected by your incapacity  due
to  physical  or mental illness.  Your continued  employment
shall not constitute consent to, or a waiver of rights  with
respect  to,  any  circumstance  constituting  Good   Reason
hereunder.

3.4   Notice  of Termination.  Any purported termination  of
your  employment  by  the Corporation or  by  you  shall  be
communicated by written Notice of Termination to  the  other
party  hereto  in  accordance with Section  9  hereof.   For
purposes of this Agreement, a "Notice of Termination"  shall
mean  a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set  forth
in  reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the
provision so indicated.

3.5   Date of Termination.  "Date of Termination" shall mean
thirty (30) days after Notice of Termination is given.

4.   Compensation  Upon  Termination or  During  Disability.
Following a Change in Control, as defined by Section 2, upon
termination  of  your  employment  or  during  a  period  of
disability you shall be entitled to the following benefits:

(A)   During  any  period  that you  fail  to  perform  your
full-time  duties  with  the  Corporation  as  a  result  of
incapacity  due  to  physical or mental illness,  you  shall
continue  to  receive your base compensation, together  with
prorated incentive compensation in accordance with the terms
of  the  governing  plan,  at the  rate  in  effect  at  the
commencement  of  any  such  period,  as  reduced   by   any
compensation or benefits payable to you under any disability
plan of the Corporation, until your employment is terminated
in  accordance  with  the terms of the  applicable  plan  or
policy   maintained  by  the  Corporation  or   until   your
reinstatement  in  accordance  with  such  plan  or  policy;
provided  that  your  rights  under  this  Agreement  remain
subject  to  termination in accordance with  Subsection  3.1
hereof.  In the event your employment shall be terminated by
reason  of  your  voluntary Retirement or your  death,  your
benefits   shall  be  determined  under  the   Corporation's
retirement,  insurance and other compensation programs  then
in effect in accordance with the terms of such programs.

(B)    If  your  employment  shall  be  terminated  by   the
Corporation  for Cause or by you (except during  the  Window
Period  as  provided in Section 3(B)) other  than  for  Good
Reason,  Disability,  death  or  voluntary  Retirement,  the
Corporation shall pay you your full base compensation and  a
pro-rated   share  of  your  target  incentive  compensation
(determined in a manner not less favorable to you than  that
used   in   the  determination  of  such  target   incentive
compensation  for  1996), and continue to provide  you  with
life,  disability,  accident,  health  insurance  and  other
benefits,  through the Date of Termination at  the  rate  in
effect at the time Notice of Termination is given, plus  all
other   amounts  to  which  you  are  entitled   under   any
compensation  plan  of  the Corporation  at  the  time  such
payments are due, and the Corporation shall have no  further
obligations to you under this Agreement.

(C)   If  your  employment  by  the  Corporation  shall   be
terminated within two (2) years following the effective date
of  a Change in Control, either (a) by the Corporation other
than  for  Cause, voluntary Retirement, death or Disability,
(b)  by  you for Good Reason, then you shall be entitled  to
the benefits provided below:

(i)   The  Corporation  shall (a) pay  you  your  full  base
compensation and a pro-rated share of your target  incentive
compensation  (determined in a manner not less favorable  to
you  than  that  used in the determination  of  such  target
incentive  compensation for 1996 and only to the extent  not
paid  at  the effective date of a Change in Control pursuant
to  Section 5(C)), (b) reimburse you for all reasonable  and
necessary  expenses  incurred on behalf of  the  Corporation
during  the  period ending on the Date of  Termination,  (c)
compensate you for all accrued but unused vacation and  sick
leave and (c) continue to provide you with life, disability,
accident,  health insurance and all other benefits,  through
the  Date  of  Termination at the rate in effect immediately
prior  to the occurrence of the circumstance giving rise  to
the  Notice of Termination, plus all other amounts to  which
you   are  entitled  under  any  compensation  plan  of  the
Corporation, at the time such payments are due.

(ii)   In  lieu of any further salary payments  to  you  for
periods   subsequent  to  the  Date  of   Termination,   the
Corporation  shall pay as severance pay to you  a  lump  sum
severance  payment (the "Severance Payments") equal  to  two
(2)  times  the  sum  of (a) your annual  base  compensation
(including   any  amounts  contributed   by   you   to   the
ESOP-Savings  Plan or any successor plan,  and  any  amounts
otherwise  deferred)  in  effect immediately  prior  to  the
occurrence of the circumstance giving rise to the Notice  of
Termination  given in respect thereof, plus (b) your  target
incentive  compensation for the calendar year in which  such
Notice of Termination is given, plus (c) an amount equal  to
9.5%  of your total base and incentive compensation for such
calendar year (up to the applicable limit imposed by Section
415  of  the Internal Revenue Code of 1986, as amended  (the
"Code"))  representative of the Corporation's  matching  and
discretionary  contributions to the ESOP-Savings  Plan.   To
the  extent permitted by the ESOP-Savings Plan, all or  part
of the amount described in (c) shall be contributed directly
to  said  Plan,  provided the Corporation's total  liability
under this Agreement would not thereby be increased.   As  a
condition precedent to said lump sum payment, you  shall  be
required  to  execute  a release in  the  form  attached  as
Exhibit  A,  or  in  such revised form as the  Corporation's
legal  counsel may prepare to conform to intervening changes
in applicable law.

(iii)   The  payments provided for in paragraph (ii)  above,
shall  be  made  not later than the fifteenth  business  day
following the Date of Termination (or such later date as may
be  required  for observation of time periods prescribed  in
the release required by paragraph (C)(ii), above).

(iv)   The  Corporation also shall pay to you all reasonable
legal fees and expenses incurred by you as a result of  such
termination, not to exceed, however, Fifty Thousand  Dollars
($50,000)  (including all such fees and  expenses,  if  any,
incurred in contesting or disputing any such termination  or
in  seeking  to  obtain  or enforce  any  right  or  benefit
provided  by  this Agreement or in connection with  any  tax
audit  or  proceeding  to  the extent  attributable  to  the
application  of section 4999 of the Code to any  payment  or
benefit  provided hereunder).  Such payments shall  be  made
within   five  (5)  days  after  your  request  for  payment
accompanied with such evidence of fees and expenses incurred
as the Corporation reasonably may require.

(D)   If  your  employment shall be terminated  (i)  by  the
Corporation  other than for Cause, voluntary  Retirement  or
Disability, or  (ii) by you for Good Reason, then for  a  24
month  period after such termination, the Corporation  shall
arrange to provide you with life, disability, accident,  and
health  insurance  benefits substantially similar  to  those
which   you   are  receiving  immediately   prior   to   the
circumstance  giving  rise  to the  Notice  of  Termination.
Should  you die prior to expiration of said 24 month period,
coverage  which  had  been  provided  for  your  spouse  and
dependents  shall be continued at no cost to  them  for  the
remainder of such period (or for such shorter period as they
are eligible for benefits under the terms of the plan(s)  in
question).  Benefits otherwise receivable by you pursuant to
this   Subsection  4(D)  shall  be  reduced  to  the  extent
comparable benefits are actually received by you during  the
24  month  period following your termination, and  any  such
benefits actually received by you shall be reported  to  the
Corporation.   The conclusion of such 24 month period  shall
be  defined the "qualifying event" in respect of the  rights
of  you,  your  spouse  and/or your dependents  to  purchase
"continuation  coverage"  during  a  subsequent  "period  of
coverage,"  in  accordance with   601-608  of  the  Employee
Retirement Income Security Act of 1974, as amended.

(E)   Subject to Subsection 4(D), you shall not be  required
to  mitigate the amount of any payment provided for in  this
Section  4  by  seeking other employment or  otherwise,  nor
shall  the amount of any payment or benefit provided for  in
this Section 4 be reduced by any compensation earned by  you
as   the  result  of  employment  by  another  employer,  by
retirement benefits, by offset against any amount claimed to
be  owed by you to the Corporation, or otherwise, except  as
specifically provided in this Section 4.

(F)   In addition to all other amounts payable to you  under
this  Section  4,  you  shall be  entitled  to  receive  all
benefits payable to you under the ESOP-Savings Plan and  any
other plan or agreement relating to retirement benefits.

(G)   If  your  employment  by  the  Corporation  shall   be
terminated by you during the Window Period, then  you  shall
be  entitled  to the payments and benefits provided  for  in
Subsection  4(C)(i); the payments and benefits provided  for
in  Subsection  4(C)(ii), except that the Severance  Payment
shall  be the sum of (a), (b) and (c) of Subsection 4(C)(ii)
instead  of  two  times the sum of (a),  (b)  and  (c);  the
payments  and benefits provided for in Subsection  4(C)(iv);
the  payment  and benefits provided for in Subsection  4(D),
except that the period such benefits will be provided  shall
be  12  months  instead of 24 months; and  the  payment  and
benefits provided for in Subsection 4(F).

(H)  If your employment is terminated by the Corporation  or
by  you  for  Good Reason during a nine month period  ending
with a Change in Control, provided such termination was  not
for  Cause,  then you shall be entitled to the payments  and
benefits  provided  for in (C) (ii) and (iv),  (D)  and  (F)
above  as  if the Corporation had terminated your employment
on  the  first  business day after such  Change  in  Control
occurs.

5.Other  Effects of a Change in Control.   Upon a Change  in
Control

(A)   Immediately upon the effective date of the  Change  in
Control, the restrictions on any outstanding options,  stock
appreciation  rights  or awards granted  to  you  under  any
compensation or retirement plan, including, but not  limited
to,  the  Annual   Incentive Plan, the 1993 Stock  Incentive
Plan,  and the Ameriwood Affiliated Employee Stock Ownership
and  Savings Plan, or any substitute plans adopted prior  to
the  Change  in Control, shall lapse and such  awards  shall
become 100% vested.

(B)   Immediately upon the effective date of the  Change  in
Control,  if  the  Change  in Control  event  is  a  merger,
consolidation or reorganization of the Corporation  with  or
into another corporation, other than a merger, consolidation
or  reorganization in which the Corporation is the surviving
corporation,  each outstanding option to acquire  securities
(the  "Underlying  Securities")  of  the  Corporation  shall
automatically be converted into options to receive, in  lieu
of  the Underlying Securities to be issued pursuant to  such
options,  the  kind  and amount of stock, other  securities,
money,   and   property   receivable   upon   such   merger,
consolidation or reorganization by holders of the Underlying
Securities   with  respect  to  the  Underlying   Securities
outstanding  immediately prior to such merger, consolidation
or reorganization.

(C)   Immediately upon the effective date of the  Change  in
Control, the Corporation shall pay to you an amount equal to
the pro-rated Bonus (as hereinafter defined).  The pro-rated
Bonus   is   an  amount  equal  to  your  target   incentive
compensation  for the calendar year in which the  Change  in
Control  occurred (determined in a manner not less favorable
to  you  than that used in the determination of such  target
incentive compensation for 1996) (the "Bonus") multiplied by
a  fraction the numerator of which is the number of days  in
such  calendar year through the effective date of the Change
in Control and the denominator of which is 365.

(D)   At  the end of the year in which the Change in Control
is  effective,  the Corporation shall pay to you  an  amount
equal  to  the greater of  (i) the balance of the Bonus  not
paid  pursuant to subsection (C) above, or (ii) if  any  new
incentive compensation plan is made effective for you during
such  year, the amount to be paid pursuant to such incentive
compensation plan.

(E)   Immediately upon the effective date of the  Change  in
Control,  you  shall  be entitled to  the  benefits  of  the
Supplemental  Executive Retirement Plan ("SERP").   Benefits
to  be  paid  pursuant to the SERP will be fully earned  and
100%  vested.  Benefits to be paid pursuant to the SERP will
be based on (i) your term of employment with the Corporation
as  of  the effective date of the Change in Control  (giving
credit  to you for the full year of employment in which  the
Change  in  Control is effective), (ii) the continuation  of
your  employment term after the Change in Control, (iii)  in
the event your employment is terminated within two (2) years
following the effective date of a Change in Control,  either
(a)  by  the  Corporation other than  for  Cause,  voluntary
Retirement, death or Disability (b) by you for Good  Reason,
you  shall be given credit for an additional two full  years
of  employment,  and  (iv) in the event your  employment  is
terminated  by you during the Window Period,  you  shall  be
given  credit for an additional one full year of employment.
Upon  the effective date of the Change in Control,  a  Trust
shall  be created for your benefit and the benefit of  other
employees entitled to participate in the SERP, and shall  be
funded.   The Trust shall be funded in accordance  with  the
provisions of the SERP .

6.  Excise Tax Payments.

(A)   If  any  payment  or benefit (within  the  meaning  of
Section 280G(b)(2) of the Internal Revenue Code of 1986,  as
amended  (the  "Code"), to you or for your benefit  paid  or
payable  or  distributed or distributable  pursuant  to  the
terms of this Agreement or otherwise in connection with,  or
arising  out of, your employment with the Corporation  or  a
change  in ownership or effective control of the Corporation
or  of  a substantial portion of its assets (a "Payment"  or
"Payments"), would be subject to the excise tax  imposed  by
Section  4999  of the Code or any interest or penalties  are
incurred by you with respect to such excise tax (such excise
tax,  together  with  any such interest and  penalties,  are
hereinafter  collectively referred to as the "Excise  Tax"),
then  you will be entitled to receive an additional  payment
(a  "Gross-Up Payment") in an amount such that after payment
by  you  of  all taxes (including any interest or penalties,
other than interest and penalties imposed by reason of  your
failure  to file timely a tax return or pay taxes shown  due
on  your return, imposed with respect to such taxes and  the
Excise Tax to the extent such failure was not caused by  the
Corporation's  failure  to  comply  with  this   Agreement),
including  an Excise Tax imposed upon the Gross-Up  Payment,
you  retain an amount of the Gross-Up Payment equal  to  the
Excise Tax imposed upon the Payments.

(B)   An  initial  determination as to  whether  a  Gross-Up
Payment  is  required  pursuant to this  Agreement  and  the
amount  of  the  Gross-Up  Payment  shall  be  made  at  the
Corporation's expense by an accounting firm selected by  the
Corporation   and   reasonably  acceptable   to   you   (the
"Accounting  Firm").  The Accounting Firm shall provide  its
determination (the "Determination"), together with  detailed
supporting calculations and documentation to the Corporation
and  you  within  five days of the effective  date  of  your
termination  if applicable, or such other time as  requested
by  the  Corporation  or  by  you (provided  you  reasonably
believe  that  any  of the Payments may be  subject  to  the
Excise Tax).  The Accounting Firm shall furnish you with  an
opinion   reasonably   acceptable   to   you   stating   its
Determination   with  such  analysis  and  support   as   is
professionally  prudent in the circumstances.  The  Gross-Up
Payment,  if any, as determined pursuant to this  Section  6
shall be paid by the Corporation to you within five days  of
the  receipt of the Determination.  Within ten days  of  the
delivery  of  the Determination to you, you shall  have  the
right   to  dispute  the  Determination  ("Dispute").    The
existence  of the Dispute shall not in any way  affect  your
right to receive the Gross-Up Payment in accordance with the
Determination.  Upon the final resolution of a Dispute,  the
Corporation shall promptly pay to you any additional  amount
required  by  such resolution.  If there is no Dispute,  the
Determination  shall be binding, final and  conclusive  upon
the  Corporation  and  you subject  to  the  application  of
Section 6 (C) below.

(C)  Notwithstanding anything contained in this Agreement to
the   contrary,  in  the  event  that,  according   to   the
Determination, an Excise Tax will be imposed on any  Payment
or  Payments,  the Corporation shall pay to  the  applicable
government taxing authorities as Excise Tax withholding, the
amount  of the Excise Tax that the Corporation has  actually
withheld from the Payment or Payments.

7.  Successors; Binding Agreement.

(i)   The  Corporation  shall obtain the  agreement  of  any
successor (whether direct or indirect, by purchase,  merger,
consolidation or otherwise) to all or substantially  all  of
the  business and/or assets of the Corporation to  expressly
assume  and  agree  to perform this Agreement  in  the  same
manner and to the same extent that the Corporation would  be
required  to  perform  it if no such  succession  had  taken
place.  If the form of such succession is (a) an acquisition
of  the assets or securities of the Corporation by an entity
that  is owned or controlled, directly or indirectly,  by  a
third "Person" (as such term is defined in Section 2 hereof)
or  (b)  a  merger with such an entity, then the Corporation
shall  also  obtain from such Person (as well as  from  such
entity)  an  express assumption of and agreement to  perform
this  Agreement  in the same manner and to the  same  extent
that  the Corporation would be required to perform it if  no
such succession had taken place.

(ii)   This Agreement shall inure to the benefit of, and  be
enforceable  by,  your  personal or  legal  representatives,
executors,  administrators, successors, heirs, distributees,
devisees  and legatees.  If you should die while any  amount
would still be payable to you hereunder if you had continued
to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement
to  the beneficiary designated by you on a form provided  by
the   Administrator  (provided  that  you  may  change  such
beneficiary from time to time by filing a new form); or,  if
there is no such beneficiary, to your estate.

8.   Claims  and  Disputes;  Arbitration.   (i)  Claims  for
benefits  under this Agreement shall be made in  writing  to
such person or persons (the "Administrator") as you (or,  if
applicable,  your  beneficiary) and  the  Corporation  shall
mutually  agree  upon as being qualified  and  available  to
carry  out  the  duties  of  Administrator,  as  hereinafter
described.   A  copy  of such claim shall simultaneously  be
furnished  to  the  Corporation.   The  Administrator  shall
provide a reasonable opportunity (not to exceed 30 days) for
both parties to present relevant evidence and shall schedule
a   hearing  if  required  by  applicable  law  or  if   the
Administrator otherwise determines to hold a  hearing.   The
Administrator shall, within a reasonable period of time  but
not  later  than 30 days after receipt of the claim  or  the
date  of  a  hearing,  whichever is later,  provide  written
notice  of disposition of the claim.  If the claim is denied
in whole or in part, such notice shall also set forth:

(A)  The specific reason or reasons for denial; and

(B)   Specific reference to the pertinent provisions of  the
Agreement on which the denial is based.

Unless  waived by the Corporation in writing, you  shall  be
required to exhaust your remedies under the foregoing claims
procedure  as a condition precedent to filing  a  claim  for
arbitration in accordance with Subsection 8(ii).

(ii)  Any controversy or claim arising out of or relating to
this  Agreement or the breach thereof, shall be  settled  by
binding  arbitration in Kent County, Michigan in  accordance
with the laws of the State of Michigan by three arbitrators,
one  of  whom shall be appointed by the Corporation, one  by
you  (or in the event of your prior death, your beneficiary)
and  the  third of whom shall be appointed by the first  two
arbitrators.   The arbitration shall be conducted  as  a  de
novo  review  in accordance with the Commercial  Arbitration
Rules  of  the  American Arbitration Association.   Judgment
upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof.

9.   Notice.  For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall
be  in  writing and shall be deemed to have been duly  given
when  delivered  or  mailed by United States  registered  or
certified  mail, return receipt requested, postage  prepaid,
addressed to the respective addresses set forth on the first
page  of  this Agreement, provided that all notices  to  the
Corporation shall be directed to the attention of the  Board
with  a copy to the Secretary of the Corporation, or to such
other  address  as  either party may have furnished  to  the
other  in writing in accordance herewith, except that notice
of change of address shall be effective only upon receipt.

10.   Miscellaneous.  No provision of this Agreement may  be
modified,   waived   or  discharged  unless   such   waiver,
modification or discharge is agreed to in writing and signed
by you and such officer as may be specifically designated by
the Board.  No waiver by either party hereto at any time  of
any  breach  by the other party hereto of, or in  compliance
with,  any condition or provision, of this Agreement  to  be
performed  by such other party shall be deemed a  waiver  of
similar  or dissimilar provisions or conditions at the  same
or  at any prior or subsequent time.  No oral agreements  or
representations  with respect to the subject  matter  hereof
have  been made by either party which are not expressly  set
forth  in  this  Agreement.   The validity,  interpretation,
construction  and  performance of this  Agreement  shall  be
governed by the laws of the State of Michigan, except to the
extent preempted by Federal law.  All references to sections
of  the  Exchange Act or the Code shall be  deemed  also  to
refer  to  any  successor provisions to such sections.   Any
payments  provided for hereunder shall be paid  net  of  any
applicable  withholding  required under  federal,  state  or
local  law.   Nothing contained in this Agreement  shall  be
deemed to create an employment contract between you and  the
Corporation for any fixed period of time or to change in any
respect  the nature or extent of your rights to continue  in
the  employ of the Corporation (subject to the Corporation's
obligations to perform its required obligations  under  this
Agreement).

11.   Validity.  The invalidity or unenforceability  or  any
provision of this Agreement shall not affect the validity or
enforceability  of  any other provision of  this  Agreement,
which shall remain in full force and effect.

12.   Counterparts.   This  Agreement  may  be  executed  in
several counterparts, each of which shall be deemed to be an
original but all of which together will constitute  one  and
the same instrument.

13.    Legal  Representation.   You  acknowledge  that  this
Agreement  was drafted by the law firm of Varnum, Riddering,
Schmidt  &  Howlett LLP, counsel solely to the  Corporation,
and  that  you have had the opportunity to seek  independent
legal  (including tax) advice.  You specifically  waive  any
actual   or   apparent  conflict  of  interest  of   Varnum,
Riddering, Schmidt & Howlett in connection with its services
regarding this Agreement.

If  this  letter  sets forth our agreement  on  the  subject
matter hereof, kindly sign and return to the Corporation the
enclosed copy of this letter which will then constitute  our
agreement on this subject.

Sincerely,

AMERIWOOD INDUSTRIES
INTERNATIONAL CORPORATION


By: /s/ Neil Diver
---------------------
Neil Diver
Chairman of the Board of Directors


Agreed to this 31st day of July, 1997.
/S/ Charles R. Foley
--------------------
Charles R. Foley, Chief Executive Officer


AGREEMENT TO RELEASE ALL CLAIMS

1.   In  consideration  for a severance  payment  and  other
benefits  under the Management Retention Agreement dated  as
of  July  15,  1997  and to which I would not  otherwise  be
entitled,   and  for  other  good,  valuable  and   separate
consideration, I, Charles R. Foley, individually, on  behalf
of  myself  and  on  behalf  of my respective  heirs,  legal
representatives  and assigns, do hereby  forever  and  fully
release  and  discharge  Ameriwood Industries  International
Corporation  ("Ameriwood"), its predecessors,  subsidiaries,
successors,  affiliates, distributors,  dealers,  directors,
officers,  agents and employees (hereinafter  the  "Released
Parties")  from  all  actions,  causes  of  action,  claims,
demands,   damages   (including   compensatory,   exemplary,
statutory  and  punitive damages), attorneys'  fees,  costs,
debts,  sums  of money, bills, covenants, contracts,  liens,
controversies,  agreements, promises and executions  of  any
kind, in law, equity or otherwise, which I, individually  or
in  any representative capacity have or have ever had (as an
employee (including officer), participant in any pension  or
welfare  plan, or shareholder) against the Released  Parties
because  of  or  arising  out of any  employment-related  or
shareholder-related  matter and/or  event  occurring  on  or
before  the date I sign this Agreement to Release All Claims
(hereinafter    "Release").    This   Release   specifically
includes, by way of illustration but not limitation, any and
all  matters arising out of my employment with Ameriwood and
my   separation  from  that  employment,  including  without
limitation,  any  purported violation of federal,  state  or
local  statutory,  constitutional or common  law,  executive
order,   ordinance   or  regulation,   including   the   Age
Discrimination in Employment Act ("ADEA"), Title VII of  the
Civil  Rights  Act of 1964, The Americans with  Disabilities
Act,  Michigan's Elliott-Larsen Civil Rights Act, Michigan's
Worker's  Disability Compensation Act,  all  claims  of  any
conceivable kind for tortious conduct and claims  of  breach
of  express  or  implied contract.  This  Agreement  is  not
intended  to release any accrued claims for compensation  or
for   welfare  plan  benefits,  retirement  plan   benefits,
incentive   compensation  benefits,  option  plan  benefits,
and/or  vested pension benefits that have accrued but remain
unpaid as of the date hereof, any claim under the Management
Retention Agreement dated as of July 15, 1997,any  claim  to
indemnification  arising  under  Ameriwood's   articles   of
incorporation  or bylaws or under any express  agreement  to
which Ameriwood and I are parties, or any direct claim in  a
securities law or corporate law cause of action against  any
one  or  more  Released Parties, based on acts or  omissions
taking  place or first discovered subsequent to the date  of
this  Release,  or, if initiated before  the  date  of  this
Release, in which I am a passive party, not involved in  any
way  in the production of documents, evidence, or ideas used
in  the  development of that claim, provided my own acts  or
omissions as an employee, officer, director or agent of  any
Released Party are not in issue.

2.  In further consideration of the severance payment, other
benefits,   and   other   good,   valuable   and    separate
consideration,  I promise that I will not begin  any  legal,
equitable or administrative proceeding against any or all of
the Released Parties for any claim of the kind described  in
paragraph  1  arising  on or before the  date  I  sign  this
Release,  and that this Release will serve as a  defense  to
and  a  basis for an injunction against any legal, equitable
or   administrative  proceeding  I  or   my   heirs,   legal
representatives  or  assigns  begin  against  the   Released
Parties for any such claim arising on or before the  date  I
sign this Release.

3.  In further consideration of the severance payment, other
benefits,   and   other   good,   valuable   and    separate
consideration, I promise and agree to waive reinstatement to
any  position with any of the Released Parties  and  further
promise and agree not to apply for a position in the  future
with any Released Party that was previously my employer.

4.  In further consideration of the severance payment, other
benefits,   and   other   good,   valuable   and    separate
consideration, I promise and agree that neither I nor anyone
acting on my behalf will disclose the terms of this Release.
I   understand  that  such  nondisclosure  is   a   material
consideration for the Released Parties having  entered  into
this Release.

5.  This Release, and all of its terms and provisions, shall
be  construed  in accordance with the laws of Michigan.   If
any  provision of this Release shall for any reason be  held
invalid    or    unenforceable,    such    invalidity     or
unenforceability  shall not affect any  other  provision  in
this  Release, and this Release shall be construed as though
the invalid or unenforceable provision was never included.

6.   I  acknowledge that I have been advised to consult with
an attorney before signing this Release.

7.   I acknowledge that my employer has given me a period of
21 days within which to consider signing this Release.

8.   I  understand  that for seven days after  I  sign  this
Release  I  may revoke it, and that this Release  shall  not
become  effective or enforceable until the seven day  period
has expired.

9.   I  HAVE  CAREFULLY READ THIS RELEASE, I  HAVE  HAD  THE
OPPORTUNITY  TO DISCUSS ITS PROVISIONS WITH AN  ATTORNEY,  I
FULLY  UNDERSTAND THIS RELEASEE AND I FREELY AND VOLUNTARILY
SIGN IT.

10.I have signed this Release on: _________________

THIS IS A RELEASE      READ BEFORE SIGNING

In the presence of:

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



-----------------------
Charles R. Foley


*********************************************************


Managment  Retention Agreements in the  foregoin  form  have
been  entered  into between the registrar and the  following
persons:

Charles R. Foley
T. Scott Kearney
William J. Maddox
Ronald J. Myers
Marlan R. Smith



