SEVERANCE AGREEMENT

            This SEVERANCE AGREEMENT ("Agreement") effective the 31st day of
August, 2007 (the "Effective Date"), by and between UNIFI, INC., a New York
corporation (hereinafter referred to as "UNIFI" or the "Company"), and BENNY L.
HOLDER (hereinafter referred to as "EMPLOYEE");

W I T N E S S E T H:

            WHEREAS, EMPLOYEE has been employed by UNIFI or one of its
subsidiary or affiliated companies; and

            WHEREAS, the Company and EMPLOYEE have determined that the
EMPLOYEE'S employment with the Company will be terminated on the Effective Date
under the terms of this Agreement; and

            WHEREAS, under the terms set forth in this Agreement, EMPLOYEE and
UNIFI agree to settle any and all claims, obligations and/or causes of action
that one may have against the other arising from EMPLOYEE'S employment with the
Company; and

WHEREAS, EMPLOYEE HEREBY ACKNOWLEDGES THAT HE WAS UNDER NO OBLIGATION WHATSOEVER
TO ACCEPT THE TERMS OF THIS AGREEMENT, AND THAT PRIOR TO EXECUTING THIS
AGREEMENT HE WAS GIVEN THE OPPORTUNITY TO REQUEST A COPY OF THIS AGREEMENT AND
DELAY HIS DECISION WHETHER OR NOT TO ACCEPT THE TERMS OF THIS AGREEMENT FOR UP
TO FORTY-FIVE (45) DAYS FOR ANY REASON, INCLUDING TO CONFER WITH ANY LAWYER OR
OTHER ADVISOR HE MAY WISH TO CONSULT; and

            WHEREAS, EMPLOYEE also acknowledges that he has received a document
identifying the job title and age of each employee in his decisional unit, and
whether or not each employee was selected for termination. 

            NOW, THEREFORE, in consideration of these premises and mutual
agreements herein contained, and intending to be legally bound hereby, the
Parties agree as follows:

Section 1.      Consideration - UNIFI agrees to pay EMPLOYEE the sum of One
Hundred Sixty Eight Thousand Seven Hundred Fifty 00/100 Dollars ($168,750.00) as
severance due to termination of his employment with Unifi (the "Severance
Payment").  The Severance Payment shall be paid to EMPLOYEE in equal bi-weekly
installments of Nine Thousand Three Hundred Seventy-five Dollars and 00/100
($9,375.00) (the "Bi-Weekly Payments") beginning on the first regular payroll
date for salaried employees of UNIFI after expiration of the EMPLOYEE'S "Right
to Revoke" the Agreement set forth in Section 20. Each such Bi-Weekly Payment
will be subject to all applicable federal and state taxes.  The Parties agree
that the Company has

 

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 no prior legal obligation to make the Severance Payment or to provide any of
the other benefits set forth in this Agreement to the EMPLOYEE.

Section 2.        Medical and Dental Insurance - UNIFI will continue to provide
EMPLOYEE medical and dental coverage similar to the medical and dental coverage
at that time being provided to regular employees covered by the terms of the
Unifi, Inc. Employee Welfare Benefit Plan then in effect (the "Medical Plan")
until such time as EMPLOYEE has began new employment, including gainful
self-employment (as determined by Unifi in its sole discretion), or until May
31, 2008, whichever comes first.  EMPLOYEE shall be eligible to receive such
medical and dental benefits in order that he may obtain coverage for himself and
his dependents, as the term "dependent" is defined in the medical plan, so that
the following shall apply to coverage of EMPLOYEE and his dependents.

                        (A)       As a condition of coverage of EMPLOYEE, he
must pay for each month of coverage an amount equal to the premium paid for such
month by an active employee for coverage under the Medical Plan.  Such premiums
shall be paid by deductions from such Bi-Weekly Payments unless UNIFI in its
sole discretion determines otherwise.  The premiums shall be due on the first
day of the month to which they apply, and the medical and dental coverage shall
be terminated unless such premiums are received when due, without any grace
period.

                        (B)       As a condition of coverage of a Dependent,
EMPLOYEE must pay for each month of coverage an amount equal to the premium paid
for such month by any active employee for coverage of a Dependent under the
Medical Plan.  Such premiums shall be paid by deductions from such Bi-Weekly
Payments unless UNIFI in its sole discretion determines otherwise.  The premiums
shall be due on the first day of the month to which they apply, and the medical
and dental coverage shall be terminated unless such premiums are received when
due, without any grace period.

                        (C)      The terms of medical and dental coverage for
EMPLOYEE and his Dependents at any given time shall be the terms applicable to
active employees and their Dependents at such time.  It is explicitly understood
and agreed that any amendments to or alteration of the Medical Plan (including
any amendment terminating the Medical Plan) may be applicable to EMPLOYEE and
his Dependents without regard to whether the amendment or alteration was adopted
or made before or after the Effective Date, and/or the date EMPLOYEE entered
into this Agreement and/or chose not to revoke this Agreement. It is explicitly
understood and agreed that a Dependent will lose medical and dental coverage on
the earlier of May 31, 2008, or such time as EMPLOYEE has began new employment,
including gainful self-employment (as determined by Unifi in its sole
discretion).  It is explicitly understood and agreed that no benefits under the
Employee Welfare Plan will be provided (including, without limitation, benefits
under the portions of the Welfare Benefit Plan that provide benefits in the
event of

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 disability, life insurance coverage, and accidental death and dismemberment
coverage) except as specifically provided herein. 

Section 3.        COBRA, etc. - It is understood that this Agreement does not
waive or abrogate EMPLOYEE'S entitlement to health insurance benefits under
COBRA or to vested retirement funds in UNIFI'S retirement plans.  Any retirement
benefits to which EMPLOYEE is entitled shall be governed by the terms of such
retirement plans.

 

Section 4.      Other Benefits and Agreements -

           

A.     EMPLOYEE has elected the outplacement services of Right Management
Associates, which UNIFI has agreed to provide EMPLOYEE for a period equal to the
lesser of nine (9) months or until such time as EMPLOYEE has obtained new
employment.

B.     EMPLOYEE is entitled to receive the benefits in his "Account" under the
terms of the Unifi, Inc. Supplemental Key Employee Retirement Plan, effective
July 26, 2006 (the "Plan"), as is specifically set forth in the Plan.  This
Agreement in no way affects the benefits or obligations of the Parties under the
Plan. 

C.     EMPLOYEE previously executed a Promissory Note dated May 1, 2002 in the
principal amount of $3,307.50 to UNIFI (the "Promissory Note", the terms of
which are incorporated herein by reference).  All amounts due by EMPLOYEE to the
Company under the terms of the Promissory Note shall be paid by EMPLOYEE to the
Company as set forth in the Promissory Note and this Agreement in no way affects
the benefits or obligations of the Parties under the Promissory Note. 

D.     EMPLOYEE agrees that except as specifically set forth in this Agreement
no other provision is granted for continued vacation pay, automobile allowance,
education renewal, tuition reimbursement, mobile telephone service or other
benefits of any nature, type or kind after the Effective Date, and that he will
return to UNIFI or any subsidiary or affiliate of UNIFI all Company property,
documents, notes, software, programs, data and any other materials (including
any copies thereof) in his possession.  EMPLOYEE does hereby consent and agree
that he shall have no other right, claim, demand or interest of any nature, type
or kind or commence any type of legal action (including administrative charges
or lawsuits) against UNIFI, its subsidiaries or affiliates, and any of their
officers, directors, shareholders, representatives, counsel, or agents.

Section 5.        Taxes - EMPLOYEE will be responsible for any federal, state or
local taxes which may be owed by him by virtue of the receipt of any portion of
the consideration herein provided.

Section 6.        Cooperation - EMPLOYEE agrees to fully cooperate with and
assist UNIFI in transitioning his work assignments to others in the Company and
understands that he may be needed by the Company as a witness in certain
arbitration and/or litigation matters that the Company is or may in the future
be involved in that

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 involve matters of which he participated in while in the employment of the
Company, including but not limited to arbitration(s)/litigation(s) proceedings
and the EMPLOYEE agrees that he will provide reasonable assistance to the
Company in such arbitrations/litigations and testify for the Company as
reasonably requested by the Company.  The Company agrees to reimburse EMPLOYEE
for his reasonable out of pocket costs and expenses (including travel expenses,
and lost wages or other compensation) incurred for his cooperation as set forth
in this provision of the Agreement.

Section 7.        Disclosure of Confidential Information -      EMPLOYEE agrees
that:

A.        For a period of five (5) years from the date of this Agreement, he
will not disclose or make available to any person or other entity any trade
secrets, confidential information, as hereinafter defined, or "know-how"
relating to UNIFI'S, its affiliates' and subsidiaries', businesses without
written authority from UNIFI'S General Counsel, unless he is compelled to
disclose it by judicial process.

                        Confidential Information - shall mean all information
about UNIFI, its affiliates or subsidiaries, or relating to any of their
products or any phase of their operations, not generally known to their
competitors or which is not public information, which EMPLOYEE knows or acquired
knowledge of during the term of his employment.

B.         Documents - under no circumstances shall EMPLOYEE remove from UNIFI'S
offices any of UNIFI'S books, records, documents, files, computer discs or
information, reports, presentations, customer lists, or any copies of such
documents without UNIFI'S written consent, nor shall he make any copies of
UNIFI'S books, records, documents, or customer lists for use outside of UNIFI,
except as specifically authorized in writing by UNIFI'S General Counsel.

Section 8.        Non-Compete -

A.        EMPLOYEE agrees that for a period of nine (9) months from the
Effective Date he will not, in a capacity which actually competes with UNIFI,
seek employment or consulting arrangements with or offer advice, suggestions, or
input to any company, entity or person, which may be construed to be UNIFI'S
competitor, and

B.         EMPLOYEE agrees that he will not directly or indirectly, for a period
of nine (9) months from the Effective Date, own any interest in, other than
ownership of less than two percent (2%) of any class of stock of a publicly held
corporation, manage, operate, control, be employed by, render advisory services
to, act as a consultant to, participate in, assess or be connected with any
competitor, as hereinafter defined, in a capacity which actually competes with
Unifi, unless approved by the General Counsel of UNIFI.

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                Competitor - shall mean any company (incorporated or
unincorporated), entity or person engaged, with respect to EMPLOYEE'S
employment, in the business of developing, producing, or distributing a product
similar to any product produced by UNIFI, its affiliates or subsidiaries, prior
to the Effective Date.

                       

Section 9.        Breach - EMPLOYEE understands and agrees that UNIFI'S
obligation to perform under this Agreement is conditioned upon EMPLOYEE'S
covenants and promises to UNIFI as set forth herein.  In the event EMPLOYEE
breaches any such covenants and promises, or causes any such covenants or
promises to be breached, UNIFI in its sole and absolute discretion shall have
the option to terminate its performance of its obligations under this Agreement,
and UNIFI shall have no further liability or obligation to EMPLOYEE. EMPLOYEE
acknowledges that compliance with Sections 7 and 8 of this Agreement is
necessary to protect UNIFI'S businesses and goodwill; a breach of said paragraph
will do irreparable and continual damage to UNIFI and an award of monetary
damages would not be adequate to remedy such harm; therefore, in the event he
breaches or threatens to breach this Agreement, UNIFI shall be entitled to both
a preliminary and permanent injunction in order to prevent the continuation of
such harm.  Nothing in this Agreement however, shall prohibit UNIFI from also
pursuing any other remedies.

Section 10.      Releases and Waivers of Each Party - The parties hereto agree
as follows:

A.        EMPLOYEE hereby fully, completely and unconditionally releases and
forever discharges any and all claims, rights, demands, actions, obligations,
liabilities, and causes of action of any and every kind, which he or his heirs,
personal representatives or assigns ever had, or now have, or hereafter may have
(based on events transpiring on or before the Effective Date) against UNIFI, its
subsidiaries and affiliates and their respective officers, directors,
shareholders, representatives, counsel and agents, in each case past or present,
of whatsoever kind and nature, in law, equity or otherwise, arising out of or in
any way connected with his employment, association or other involvement or any
type, nature and kind with UNIFI.  This release and waiver includes but is not
limited to claims arising under federal, state or local laws prohibiting
employment discrimination (including the Age Discrimination in Employment Act,
Title VII of the Civil Rights Act of 1964, and the American With Disabilities
Act) or claims growing out of any legal restrictions on the Company's rights to
terminate its employees.

B.         UNIFI hereby fully, completely and unconditionally releases and
forever discharges any and all claims, rights, demands, actions, obligations,
liabilities, and causes of action of any and every kind, which it, its
successors or assigns ever had, or now have, or hereafter may have (based on
events transpiring on or before the Effective Date) against EMPLOYEE, his heirs,
personal representatives or assigns, in each case past or present, of whatsoever
kind and nature, in law, equity

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 or otherwise, arising out of or in any way connected with his employment,
association or other involvement with UNIFI.

C.        EMPLOYEE ACKNOWLEDGES THAT HE HAS READ AND FULLY UNDERSTANDS THE
PROVISIONS OF THIS AGREEMENT, HAS HAD SUFFICENT TIME TO EVALUATE THE TERMS OF
THIS AGREEMENT, HAS BEEN ADVISED TO CONSULT WITH COUNSEL BEFORE SIGNING THIS
AGREEMENT, AND FREELY AND WITHOUT RESERVATIONS ENTERS INTO THIS AGREEMENT AND
THE WAIVERS AND RELEASES CONTAINED HEREIN.  EMPLOYEE hereby further acknowledges
that in making this Agreement and Release that he understands that he is relying
upon his own judgment, belief and knowledge of the extent and nature of said
claims and payments or that of his own advisors and expressly acknowledges and
confirms that he has not been influenced to any extent whatsoever in making this
Agreement and Release by any representations or statements regarding any
payments, claims or conditions or regarding any other matters as made by any
other person connected with or represented by any of the Parties of this
Agreement. 

D.        The Parties hereto agree that this is a compromised settlement of a
doubtful and disputed claim or right to act and the payment of the funds herein
and the performance of this Agreement shall not be construed as an admission of
liability or responsibility on the part of any of the Parties hereto other than
expressly provided for herein.  This Agreement shall be deemed to be strictly
confidential by and between these Parties and by express agreement and
understanding this Agreement shall not be deemed, referenced, cited or referred
to by the Parties hereto or any other third parties relating to EMPLOYEE'S
employment with UNIFI, nor shall this Agreement be used as evidence in any
litigation between and among the Parties to this Agreement (or any other third
parties) except to establish only between the Parties to this Agreement
specifically the terms and conditions set forth therein.  Further, the Parties
hereby covenant and agree that upon the execution of this document and prior
thereto that they have not nor will they in the future discuss with anyone the
terms and conditions of this Agreement or anything pertaining to the terms and
conditions of this Agreement, the negotiation of the terms and conditions of
this Agreement, the settlement terms and conditions of this Agreement or the
details of this Agreement, except as required by court order or with the written
consent of all parties to this Agreement.  Further, all Parties hereto agree
that upon receipt of a subpoena or any formal legal request for information
covered by or contained in this Agreement that they will as soon as practical
notify one another in writing of such pending request to the persons at the
addresses set forth herein and that the terms of this Agreement shall remain
confidential and shall only be disclosed by any Party hereto as that Party is
ordered to do so by a court of competent jurisdiction, or as required for the
preparation of any state or federal tax return.

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Section 11.      Waiver of Rights - If, in one or more instances, either Party
fails to insist that the other Party perform any of the terms of this Agreement,
such failure shall not be construed as a waiver by such Party of any past,
present, or future right granted under this Agreement, and the obligations of
both Parties under this Agreement shall continue in full force and effect.

Section 12.     Survival - Except for a termination of this Agreement by
EMPLOYEE within seven days of the execution of this Agreement as set forth in
Section 20 of this Agreement, the obligations contained in this Agreement shall
survive the termination of this Agreement.  Additionally, the EMPLOYEE
acknowledges that the restrictions and covenants contained in paragraphs 7 and 8
are reasonable and necessary to protect the legitimate business interests of the
Company and will not impose an economic hardship on the EMPLOYEE.  If any
provision of this Agreement is held to be in any respect illegal, invalid or
unenforceable under present or future law, such provisions shall be fully
severable and this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provisions had never comprised a part hereof, and the
remaining provisions hereof shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance here from.  Furthermore, in lieu of such illegal, invalid or
unenforceable provision, the same shall be reformed and modified automatically
to be as similar in terms to such illegal, invalid or unenforceable provision as
may be possible and be legal, valid and enforceable.  In addition, the
termination of this Agreement shall not affect any of the rights or obligations
of either party arising prior to, or at the time of, the termination of this
Agreement, or which may arise by any event causing the termination of this
Agreement.

Section 13.      Notices - Any notice required or permitted to be given under
this Agreement shall be sufficient, if in writing and if sent by registered or
certified mail, postage prepaid, or telecopier to:

                        EMPLOYEE:
                        Benny L. Holder
                        6097 Bar-Mot Drive
                        Greensboro, NC  27455         
and to:

                        UNIFI:
                        Attn: Charles F. McCoy
                        7201 W. Friendly Avenue (27410)
                        P.O. Box 19109
                        Greensboro, NC  27419-9109
                        Fax: (336) 856-4364

                                                                                       
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Section 14.      Assignment - The rights and obligations of UNIFI under this
Agreement shall inure to the benefit of and be binding upon its successors and
assigns. The rights and obligations of EMPLOYEE under this Agreement shall inure
to the benefit of and be binding upon his heirs, personal representative,
successors and assigns. This Agreement may not be assigned or otherwise
transferred voluntarily or involuntarily by EMPLOYEE.

 Section 15.      Arbitration - In the event of any differences of opinion or
disputes, between EMPLOYEE and UNIFI, with respect to the construction or
interpretation of this Agreement or the alleged breach thereof, which cannot be
settled amicably by agreement of the Parties, such disputes shall be submitted
to and determined by arbitration by a single arbitrator in the City of
Greensboro, North Carolina, in accordance with the rules of the American
Arbitration Association and judgment upon the award shall be final, binding and
conclusive upon the Parties and may be entered in the highest court, state or
federal, having jurisdiction.

Section 16.      Applicable Law - This Agreement shall be interpreted and
construed under the laws of North Carolina.

Section 17.      Entire Agreement - This Agreement contains the entire agreement
of the Parties and supersedes all prior agreements and understandings, oral or
written, if any, relating to the EMPLOYEE'S employment and termination of
employment with the Company, except that any Confidentiality Agreements that
were previously executed by EMPLOYEE before or during the term of his employment
with UNIFI remain in full force and effect.  If there are any conflicts in the
terms of this Agreement and such other Confidentiality Agreements, the terms of
this Agreement shall control.  This Agreement may not be changed or altered,
except by an agreement in writing signed by the Party against whom enforcement
of any waiver, change, modification, extension or discharge is sought.

 

Section 18.      Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes and all
of which shall be deemed collectively to be one agreement, but in making proof
hereof it shall be necessary to exhibit only one such counterpart.

Section 19.      Continuing Obligations.  EMPLOYEE hereby agrees that he will
execute from time to time after the Effective Date any and all such documents,
agreements, instruments, certifications, consents, statements, waivers, and/or
releases as UNIFI shall request as is necessary to implement and institute the
intents and purposes of this Agreement.  Additionally, EMPLOYEE acknowledges and
agrees that UNIFI shall have the right to set off any obligations owed by
EMPLOYEE to UNIFI against the Severance Payment and/or Bi-Weekly Payments and
other benefits granted to EMPLOYEE by UNIFI under the terms of this Agreement. 

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Section 20.    EMPLOYEE'S RIGHT TO REVOKE - NOTWITHSTANDING OTHER PROVISIONS
HEREIN TO THE CONTRARY, EMPLOYEE HAS THE RIGHT TO REVOKE THIS AGREEMENT AND
ACCEPTANCE OF SEVERANCE PAY PROVIDED HEREIN WITHIN SEVEN (7) DAYS FROM THE DATE
EMPLOYEE EXECUTES THIS AGREEMENT.  TO EXERCISE THIS RIGHT TO REVOKE, EMPLOYEE
MUST NOTIFY THE COMPANY IN WRITING OF HIS DECISION TO REVOKE AS SET FORTH IN
SECTION 13 OF THIS AGREEMENT.

             IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under their respective hands and seals as of the day and year first above
written.

                                                            EMPLOYEE:

                                                        /s/ BENNY L. HOLDER
    (Seal)
                                                            BENNY L. HOLDER

.

                        UNIFI, INC.

                                                            BY:  /s/ CHARLES
F.MCCOY
                                                                    CHARLES F.
MCCOY
                                                                    VICE
PRESIDENT