Exhibit 10(b)(b)
                                                                ----------------
                               SEVERANCE AGREEMENT

         THIS SEVERANCE AGREEMENT is entered into this 27th day of September,
2000 by and between Guilford Mills, Inc., a Delaware corporation (the
"Company"), and Terrence E. Geremski, a resident of Guilford County, North
Carolina (the "Employee").

                                   WITNESSETH:
                                   -----------

         WHEREAS, the Employee is employed by the Company as its Executive Vice
President and Chief Financial Officer and the Employee also serves as a director
of the Company; and

         WHEREAS, the Employee and the Company have agreed that the Employee
will resign as an officer, employee and director of the Company as more fully
set forth below.

         NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

         1.       Resignation.

                  (a)      The Employee hereby acknowledges and agrees that his
                           resignation as an officer of the Company, and as an
                           employee, officer and director of any and all
                           subsidiaries and affiliates of the Company, shall be
                           effective as of the Effective Date, as hereinafter
                           defined. The Employee shall remain as an employee and
                           director of the Company through and until December
                           31, 2000 (the "Employment Termination Date"), at
                           which time his employment with the Company and his
                           service on the Company's Board of Directors shall
                           terminate. The Employee shall take such action and
                           execute and deliver all such documents and agreements
                           as the Company may request for purposes of
                           effectuating the Employee's resignations as an
                           officer, employee and director of the Company and its
                           subsidiaries and affiliates.

                  (b)      Prior to the Employment Termination Date, the
                           Employee shall provide such advisory and consulting
                           services within his areas of experience as may be
                           assigned or delegated to him by the Chairman of the
                           Board of the Company or the President of the Company.
                           The Employee shall furnish such consulting services
                           to the Company faithfully and to the best of his
                           ability on such dates and at such times during such
                           period as are reasonably requested by the Company.
                           The Employee shall perform all such services at, upon
                           the direction of the Chairman of the Board of the
                           Company or the President of the Company, either the
                           Employee's residence or one of the Company's offices.
                           The Company shall provide, at its sole cost and
                           during the period commencing as soon as practicable
                           after the Effective Date and ending on the Employment
                           Termination


<PAGE>

                           Date, an off premises telephone extension linking the
                           Employee's residential telephone line with the
                           Company's telephone system. The Employee shall have
                           no authority to bind or obligate the Company in any
                           manner whatsoever during the period of such
                           consulting or thereafter. Prior to the Employment
                           Termination Date, the Employee shall devote all of
                           his business time, attention, knowledge, energy and
                           skills to the performance and discharge of such
                           consulting services assigned or delegated to him and
                           agrees not to engage in any other business activity
                           whatsoever, except that the Employee shall be
                           permitted to spend a reasonable amount of time and
                           effort (i) providing services to civic and charitable
                           organizations and (ii) availing himself of the
                           outplacement services described in Section 7(a)
                           hereof and searching for a new full-time employment
                           position commencing after the Employment Termination
                           Date.

         2.       Payments.

                  (a)      The Company shall pay to the Employee the amount of
                           Twenty Nine Thousand One Hundred Sixty Six Dollars
                           and 67/100 ($29,166.67), on October 15, 2000,
                           November 15, 2000 and December 15, 2000, in each case
                           subject to applicable withholding for Federal, State
                           and local income taxes, FICA, FUTA and other legally
                           required withholding taxes and contributions
                           (collectively, "Withholdings").

                  (b)      Subject to the Employee's execution and delivery of
                           the release in accordance with Sections 8(b) and 8(c)
                           hereof, the Company shall pay to the Employee as
                           severance the amount of One Hundred Seventy Five
                           Thousand Dollars ($175,000.00), subject to
                           Withholdings, on or before the tenth day after the
                           Company's receipt of the Employee's executed release
                           pursuant to Section 8(c) hereof.

                  (c)      Subject to the Employee's execution and delivery of
                           the release in accordance with Sections 8 (b) and
                           8(c) hereof, the Company shall pay to the Employee as
                           severance the amount of Six Hundred Twenty Five
                           Thousand Dollars ($625,000.00), payable in 24 equal,
                           consecutive monthly installments during the period
                           commencing on February 15, 2001 and ending on January
                           15, 2003 (the period commencing on January 1, 2001
                           and ending on January 15, 2003 or, if payments and
                           benefits hereunder are terminated pursuant to Section
                           11(b) hereof, ending on the date of such termination,
                           hereinafter referred to as the "Severance Period"),
                           in each case subject to Withholdings.



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<PAGE>

         3.       Health and Supplemental Life Insurance; Disability Insurance.
                  The Employee shall remain eligible to participate in the
                  Company's health and dental insurance, and supplemental life
                  insurance plans during the Severance Period on the same basis
                  as if he were employed with the Company. Thereafter, the
                  Employee shall have the right to convert health and dental
                  insurance coverage pursuant to the provisions of COBRA to the
                  extent permitted under the applicable plans and so long as
                  such COBRA coverage is acceptable to the insurance carriers.
                  The Company shall deduct from each payment made to the
                  Employee pursuant to Section 2 hereof the amount of the
                  Employee's cost in participating in such plans in accordance
                  with the applicable terms and provisions of such plans and on
                  the same basis as if he were employed with the Company. The
                  Company shall notify the Employee of changes in such plans at
                  the same time as it notifies its employees of such changes.
                  The Employee may elect to terminate his participation in such
                  plans at any time during the Severance Period by providing
                  written notice of such election to the Company. The Employee's
                  coverage under the Company's disability insurance plans,
                  including basic, supplemental and excess plans, will terminate
                  as of the Employment Termination Date.

         4.       Stock Options. Subject to the terms of the Company's 1991
                  Stock Option Plan, as amended, and the terms of the stock
                  option contracts previously entered into between the Company
                  and the Employee, the Employee shall be eligible and entitled
                  to exercise the options previously granted to him as follows:
                  (1) stock options to acquire 50,000 shares of Company common
                  stock at any time before March 31, 2001 at an exercise price
                  of $19.75 per share, $21.725 per share or $23.70 per share,
                  except that options to acquire no more than 18,750 shares of
                  Company common stock can be exercised at an exercise price of
                  either $23.70 per share or $21.725 per share and options to
                  acquire no more than 37,500 shares of Company common stock can
                  be exercised at an exercise price of $19.75 per share, (2)
                  stock options to acquire 30,000 shares of Company common stock
                  at any time before March 31, 2001 at an exercise price of
                  $19.53 per share, (3) stock options to acquire 12,666 shares
                  of Company common stock at any time before March 31, 2001 at
                  an exercise price of $6.03 per share and (4) stock options to
                  acquire 11,250 shares of Company common stock at any time
                  before February 6, 2001 at an exercise price of $14.87 per
                  share.

         5.       Restricted Stock. Subject to the terms of the Company's 1989
                  Restricted Stock Plan, as amended, and the terms of the
                  restricted stock agreements previously entered into between
                  the Company and the Employee, the Employee shall vest in the
                  54,000 shares of restricted Company common stock previously
                  granted to him thereunder, and all accrued dividends and
                  interest thereon, effective December 31, 2000. The vesting of
                  such shares of Company common stock shall constitute a taxable
                  event for the Employee. The Company shall send to the Employee
                  on or about December 31, 2000 a form pursuant to which the


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<PAGE>

                  Employee can elect the manner in which such tax obligation may
                  be satisfied. After the Employee's tax obligation in
                  connection with such restricted stock vesting is satisfied,
                  the Company shall send to the Employee a certificate
                  evidencing 54,000 shares of Company common stock, less any
                  shares withheld to satisfy taxes.

         6.       SERP; Life Insurance. Simultaneously with the execution and
                  delivery of this Agreement, the parties shall execute (i) the
                  First Amendment to the Senior Managers' Supplemental
                  Retirement Plan Agreement in the form attached hereto as
                  Exhibit A, (ii) the First Amendment to the Senior Managers'
                  Pre-Retirement Life Insurance Agreement in the form attached
                  hereto as Exhibit B and (iii) the First Amendment to the
                  Senior Managers' Life Insurance Plan Agreement in the form
                  attached hereto as Exhibit C. The foregoing amendments shall
                  be held by the Company in escrow, and shall not have any force
                  or effect, unless and until the Effective Date occurs at which
                  time the Company shall forward to the Employee counterpart
                  originals of such amendments. If the Employee instead
                  exercises his rights to revoke this Agreement in accordance
                  with the terms of Section 8 hereof, then the Company shall
                  destroy such amendments and they shall be given no force or
                  effect and shall be void ab initio.

         7.       Other Benefits.

                  (a)      The Company shall reimburse the Employee, upon the
                           Company's receipt of adequate supporting
                           documentation, for the cost of any reasonable
                           outplacement services directly related to the
                           Employee's search for a new full-time employment
                           position, which services the Employee obtains during
                           the one year period commencing on the date hereof,
                           provided that in no event shall the Company be
                           obligated to reimburse the Employee more than Ten
                           Thousand Dollars ($10,000.00) for such services.

                  (b)      The Employee's recent account balances in the
                           Company's Salaried Associate Retirement
                           Profit-Sharing Plan, Employee Stock Ownership Plan
                           and Excess Benefit Plan (collectively, the
                           "Retirement Plans"), together with information and
                           instructions concerning distribution alternatives,
                           are set forth on Exhibit D hereto. The Employee shall
                           be eligible to receive a contribution to his accounts
                           under the Retirement Plans with respect to the
                           Company's 2000 fiscal year ending October 1, 2000 on
                           the same basis as other participants in such plans,
                           if and to the extent any contributions are made by
                           the Company to such plans.

                  (c)      The Employee shall be permitted to retain after the
                           Effective Date the following items of Company office
                           equipment: (i) the personal computer, printer and
                           scanner which the Employee has been using at his
                           residence, (ii) the cellular phone, Palm Pilot and


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<PAGE>

                           dictaphone which are in the Employee's possession;
                           and (iii) Toshiba laptop computer, model no. Tecra
                           700CT.

                  (d)      Within five business days after the Effective Date,
                           the Company shall pay to the Employee the amount of
                           any accrued, but unused vacation with respect to the
                           2000 calendar year in accordance with the Company's
                           vacation policy.

                  (e)      The change-in-control severance agreement, dated June
                           1, 2000, between the Company and the Employee will
                           continue and expire in accordance with its terms.

                  (f)      The Employee expressly acknowledges and agrees that
                           the payment or extension of benefits provided or
                           described in this Agreement shall constitute the sole
                           and entire compensation and benefits due or to become
                           due to him in connection with his employment by the
                           Company and his service on the Company's Board of
                           Directors (and the termination thereof). The Employee
                           further acknowledges and agrees that the Company
                           shall have no obligation to provide to the Employee
                           any wages, salary, bonuses, vacation pay, stock
                           options or other stock awards, benefits or
                           compensation of any kind or nature whatsoever, except
                           as specifically provided for or described in this
                           Agreement. Without limiting the generality of the
                           foregoing, the Employee expressly waives any rights
                           he might otherwise have to participate in any manner
                           whatsoever in the 401(k) retirement plan which the
                           Company intends to adopt. Except as otherwise
                           expressly provided, the Company shall have no
                           obligation to maintain or continue any particular
                           benefit plan.

         8.       Release.

                  (a)      The Employee specifically acknowledges the following:
                           (i) the Employee has been given at least 21 days
                           within which to consider this Agreement; (ii) the
                           Employee is advised to consult with an attorney
                           before executing this Agreement, and the Employee
                           acknowledges that he has had the opportunity to
                           consult an attorney; (iii) the Employee has seven
                           days following the execution of this Agreement to
                           revoke the Agreement; this Agreement, and the rights
                           and obligations of the parties hereunder, will become
                           effective upon the eighth day (the "Effective Date")
                           following the date hereof, provided the Employee does
                           not earlier revoke this Agreement by notifying the
                           Company in writing of his election to revoke; (iv)
                           the Employee recognizes that he is specifically
                           releasing, among other claims, any claims he may have
                           arising under the Age Discrimination in Employment
                           Act of 1967 and all amendments thereto; (v) the
                           Employee is not waiving any rights or claims that he


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<PAGE>

                           may have which arise after the date of this Agreement
                           is executed; and (vi) the Employee also acknowledges
                           that this Agreement is intended by the parties to
                           comply with the terms and provisions of the Older
                           Workers' Benefit Protection Act of 1990 and all
                           amendments thereto.

                  (b)      The Employee, for himself, his heirs, executors,
                           administrators, successors and assigns (collectively
                           hereinafter referred to as "Releasors") hereby
                           releases without recourse and forever discharges the
                           Company, together with any subsidiary or affiliated
                           corporations, organizations or entities, and their
                           respective associates, employees, directors,
                           officers, agents, representatives, heirs, personal
                           representatives, successors and assigns (collectively
                           hereinafter referred to as "Releasees") from any and
                           all claims, actions, causes of action and demands for
                           money, losses, damages, costs, expenses or otherwise,
                           which Releasors have, or may have, against Releasees,
                           arising out of, involving, or connected to the
                           Employee's employment with the Company (or the
                           termination thereof) and the matters and things
                           referred to in this Agreement or otherwise,
                           including, without limitation, any claims arising out
                           of any of the terms and conditions of the Employee's
                           employment with the Company such as hiring,
                           promotion, compensation (including bonuses, shares of
                           stock, fringe benefits or other remuneration or
                           compensation however denominated), demotion, breach
                           of contract, tort or any adverse personnel action
                           taken against the Employee by the Company, and
                           Releasors understand and agree that this Agreement
                           represents a compromise of any and all claims, known
                           or unknown, and is a full and complete accord and
                           satisfaction with Releasees, as to all claims, known
                           and unknown, which Releasors have, or may have,
                           against Releasees through the date of this Agreement,
                           without the provisions hereof being construed to be
                           an admission of liability. Without limiting the
                           generality of the foregoing, Releasors further agree
                           that they will not institute or be a party to,
                           whether directly or indirectly, any civil action
                           against Releasees, under any Federal, State, or local
                           authority or any common law theory (whether founded
                           in tort or contract), including but not limited to 42
                           U.S.C.ss.1981, Title VII of the Civil Rights Act of
                           1964, the Equal Pay Act of 1963, the Civil Rights Act
                           of 1991, the Age Discrimination in Employment Act,
                           the Americans With Disabilities Act, the Employee
                           Retirement Income Security Act of 1974 (except as to
                           any claim with respect to any vested benefits or
                           rights under any of the Company's employee benefit
                           plans in which the Employee is a participant), or any
                           similar legislation, constitutional provision,
                           executive order or regulation, or any common law
                           theory (whether founded in tort or contract) in
                           connection with any act, state of facts, or
                           occurrence or omission, whether or not previously


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<PAGE>

                           asserted, either occurring before or existing on the
                           date of execution of this Agreement. Notwithstanding
                           anything in the foregoing to the contrary, the
                           foregoing release shall not apply to the executory
                           provisions of this Agreement.

                  (c)      As soon as practicable after the Employment
                           Termination Date, the Employee shall execute and
                           deliver to the Company a release, effective December
                           31, 2000, in the same form as the release set forth
                           in Section 8(b).

         9.       Confidentiality; No Solicitation; No Disparagement.

                  (a)      The Employee acknowledges that given the senior
                           executive positions he has held with the Company, he
                           has had access to and acquired (and may, in
                           connection with the provision of the consulting
                           services described in Section 1(b) hereof or
                           otherwise, in the future acquire) sensitive,
                           confidential, proprietary and non-public information
                           relating to the Company, including, without
                           limitation, information concerning the Company's
                           business; operations; affairs; plans; policies;
                           business methods; systems; trade secrets; know-how;
                           employees, officers and directors and their
                           performance and personalities; customers and
                           manufacturing processes (collectively, the
                           "Information"). The Employee acknowledges the
                           confidentiality of the Information and that the
                           Company has a legitimate and significant business
                           interest in preventing the unauthorized disclosure of
                           the Information. The Employee shall not divulge, in
                           any manner whatsoever, any Information to any third
                           party or entity, except that this duty of
                           confidentiality shall not apply to Information that:
                           (i) is, or becomes, generally known to the public,
                           other than by reason of the Employee's breach of his
                           confidentiality obligations hereunder; (ii) was known
                           by the Employee at the time of the Company's
                           disclosure to him as evidenced by the Employee's
                           written records in existence prior to the Company's
                           disclosure thereof to him; (iii) is disclosed to the
                           Employee by a third party who, to the Employee's
                           knowledge, has a legal right to make such disclosure;
                           or (iv) is required to be disclosed by law or a court
                           of competent jurisdiction (it being acknowledged and
                           agreed that in such event, the Employee shall
                           promptly notify the Company of such requirement and
                           provide the Company an opportunity (if it so elects)
                           to contest such law or court order and the Employee
                           shall cooperate with the Company in any efforts to
                           contest such law or court order). Except as expressly
                           set forth in Section 7(c) hereof, the Employee shall
                           deliver to the Company (i) on or before the Effective
                           Date all documents, notes, programs, data and any
                           other materials of the Company (including any copies
                           thereof) in the Employee's possession or under his
                           control as of such date, and (ii) on or before the


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                           Employment Termination Date, all documents, notes,
                           programs, data and any other materials of the Company
                           (including any copies thereof) which the Employee
                           acquires possession or control of after the Effective
                           Date and which are in his possession or under his
                           control as of the Employment Termination Date

                  (b)      Notwithstanding anything to the contrary contained
                           herein, the Employee and the Company covenant and
                           agree that they will keep confidential and will not
                           disclose to anyone the terms of this Agreement except
                           (i) in an action arising out of a breach or alleged
                           breach of any provision of this Agreement; (ii) to
                           the Internal Revenue Service, the North Carolina
                           Department of Revenue, any other taxing authority, or
                           any court, tribunal or agency in which any action or
                           proceeding is pending with respect to any tax
                           liability asserted against the Employee; (iii)
                           communications to the following: (1) the attorneys,
                           accountants and financial advisors representing the
                           Employee and the Company, (2) the Employee's
                           immediate family, (3) any bank, financial institution
                           or other person from whom the Employee may seek a
                           loan or any other extension of credit or who may
                           request a financial statement from the Employee, (4)
                           the officers and directors of the Company, and (5)
                           any other person (including, without limitation, the
                           shareholders of the Company) to whom such information
                           must be furnished by law, by federal or state
                           regulation, or by order of any court, tribunal or
                           agency of competent jurisdiction.

                  (c)      During the Severance Period, the Employee shall
                           refrain, without first obtaining the written consent
                           of the Company, from directly or indirectly
                           soliciting, enticing, persuading, inducing or hiring
                           any employee, consultant, agent, independent
                           contractor or other person (other than secretarial
                           and clerical personnel) who is employed by the
                           Company on the date hereof or who has been employed
                           by the Company during the 12 month period preceding
                           such date to become employed by any person, firm,
                           entity or corporation or approach any such person for
                           any of the foregoing reasons.

                  (d)      The Employee agrees that he will not make any
                           statement, or encourage or assist any other person or
                           entity to make any statement, disparaging the
                           reputation, business, or character of the Company or
                           of any of the Company's associates, employees,
                           officers, or directors.

                  (e)      The Company acknowledges that the Employee has
                           previously entered into several stock-based benefit
                           agreements with the Company (namely, stock option
                           contracts dated February 6, 1996, May 27, 1997 and


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<PAGE>

                           June 24, 1998 and restricted stock agreements dated
                           May 27, 1997 and June 24, 1998), which agreements
                           prohibit the Employee, after certain terminations of
                           employment with the Company, from becoming employed
                           by, or providing similar services to, competitors of
                           the Company. To the extent such prohibitions by their
                           terms apply only in the event of the termination of
                           the Employee's employment by the Company for cause or
                           the Employee's voluntary termination of employment,
                           such prohibitions shall not apply to the Employee
                           after the Employment Termination Date, provided that
                           the Employee does not breach this Agreement.

         10.      Developments.

                  (a)      The Employee acknowledges that all developments,
                           including, without limitation, inventions, patentable
                           or otherwise, discoveries, improvements, patents,
                           trade secrets, designs, reports, computer software,
                           flow charts and diagrams, procedures, data,
                           documentation, ideas and writings and applications
                           thereof relating to the Company's business or planned
                           business that, alone or jointly with others, the
                           Employee may have conceived, created, made,
                           developed, reduced to practice or acquired during his
                           employment with the Company (collectively, the
                           "Developments") are works made for hire and shall
                           remain the sole and exclusive property of the Company
                           and the Employee hereby assigns to the Company all of
                           his right, title and interest in and to all such
                           Developments. If, for any reason, such Developments
                           are not deemed works for hire, the Employee shall
                           assign, and hereby assigns to the Company all of the
                           Employee's right, title and interest (including, but
                           not limited to copyright, patent, and all rights of
                           inventorship) in and to such Developments. The
                           Employee agrees that he will, at any time upon
                           request and at the expense of the Company, promptly
                           execute all instruments and papers and perform all
                           acts whatsoever, which are necessary or desired by
                           the Company to vest and confirm in the Company, and
                           its successors, assigns and nominees, fully and
                           completely, all rights created by this section and
                           which may be necessary or desirable to enable the
                           Company, and its successors, assigns and nominees, to
                           secure and enjoy the full benefits and advantages
                           thereof. The Employee shall assist and cooperate with
                           the Company or its representatives in any controversy
                           or legal proceeding relating to such Developments, or
                           to any patents, copyrights or trade secrets with
                           respect thereto. If for any reason the Employee
                           refuses or is unable to assist the Company in
                           obtaining or enforcing its rights with respect to
                           such Developments, the Employee hereby irrevocably
                           designates and appoints the Company and its duly
                           authorized agents as the Employee's agents and


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<PAGE>

                           attorneys-in-fact to execute and file any documents
                           and to do all other lawful acts necessary to protect
                           the Company's rights in the Developments. The
                           Employee expressly acknowledges that the special
                           foregoing power of attorney is coupled with an
                           interest and is therefore irrevocable and shall
                           survive the death of or incompetency of the Employee
                           as well as any termination of this Agreement.

                  (b)      The Employee grants to the Company all right, title
                           and interest in and to all developments, including,
                           without limitation, inventions, patentable or
                           otherwise, discoveries, improvements, patents, trade
                           secrets, designs, reports, computer software, flow
                           charts and diagrams, procedures, data, documentation,
                           ideas and writings and applications, which are not
                           within the scope of Developments as defined herein
                           but which have been conceived or made by the Employee
                           during the hours which he is employed by the Company
                           or with the use or assistance of the Company's
                           facilities or materials and personnel.

                           For purposes of Sections 9 and 10 hereof, the term
                           the "Company" shall include not only Guilford Mills,
                           Inc., but also all subsidiaries and affiliated
                           corporations, organizations or entities thereof.

                  (c)      The duties and obligations imposed on the Employee by
                           virtue of Sections 9 and 10 shall be in addition to
                           any other duties and obligations to which the
                           Employee may be subject by virtue of statutory or
                           common law including, without limitation, any duties
                           and obligations based upon the Employee's status as
                           an officer or director of the Company.

         11.      Remedies.

                  (a)      The Employee acknowledges and agrees that any breach
                           by him of the provisions of Section 9 or 10 hereof
                           will cause the Company irreparable injury and damage.
                           The Employee, therefore, expressly agrees that in
                           addition to any other remedies the Company may have
                           under this Agreement or otherwise, the Company shall
                           be entitled to injunctive and/or other equitable
                           relief to prevent an anticipatory or continuing
                           breach of Section 9 or 10 hereof and to secure its
                           enforcement.

                  (b)      If the Employee breaches the terms of this Agreement,
                           then the Company's obligation to continue payments or
                           extend benefits to him pursuant to Sections 2, 3, 4
                           and 5 hereof shall terminate and the Employee shall
                           forfeit any amounts which otherwise would be owed to
                           him thereunder, provided, however, that
                           notwithstanding the foregoing, the Company shall not
                           have the right to terminate such payments and


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<PAGE>

                           benefits unless it has afforded the Employee,
                           together with (at the Employee's option) the
                           Employee's counsel, an opportunity to be heard before
                           the Company's Board of Directors at a meeting of the
                           Board of Directors called after reasonable notice to
                           the Employee. The Company's right to cease payments
                           and benefits as set forth in the preceding sentence
                           shall be in addition to any and all other rights,
                           remedies and damages to which the Company may be
                           entitled in the event of such a breach.

         12.      Notices. All (i) notices and other communications hereunder
                  shall be given in writing by hand delivery, sent via facsimile
                  to the facsimile number below with telephone confirmation,
                  sent by overnight courier or registered or certified mail,
                  return receipt requested, postage prepaid, addressed to the
                  party to receive the same at his or its respective address set
                  forth below or at such other address as may from time to time
                  be designated by either party to the other hereunder in
                  accordance with this Section 12 and (ii) all payments payable
                  to the Employee hereunder shall be sent to the Employee's
                  account already designated by the Employee for purposes of the
                  Company's direct payroll deposit system or, upon written
                  notice furnished by the Employee to the Company in accordance
                  with this Section 12, such payments shall be sent by check to
                  the address designated by the Employee in such notice:

                           If to the Employee:
                                    Terrence E. Geremski
                                    One Loch Ridge Court
                                    Greensboro, NC  27408
                                    Fax No. 336/545-9155

                           If to the Company:
                                    Guilford Mills, Inc.
                                    4925 W. Market Street
                                    Greensboro, NC  27407
                                    Attn:  Law Department
                                    Fax No. 336/316-4057

         13.      Miscellaneous.

                  (a)      This Agreement and exhibits attached hereto describe
                           the parties' entire agreement with respect to the
                           benefits to which the Employee is entitled by virtue
                           of his employment with the Company and his service on
                           the Company's Board of Directors and the termination
                           thereof, and the Employee is entitled to no benefits
                           arising out of or in connection with such employment
                           or service (or termination thereof) other than the
                           benefits expressly described or referenced herein.



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                  (b)      All changes, additions, modifications or deletions
                           hereto must be in writing and signed by all of the
                           parties in order to be effective.

                  (c)      This Agreement has been executed in Guilford County,
                           North Carolina, and shall be construed, interpreted,
                           and enforced pursuant to and under the internal laws
                           of the State of North Carolina without regard to
                           principles of conflict of laws. Furthermore, the
                           parties agree to accept service of process and to
                           litigate any dispute between them arising out of or
                           related to this Agreement, in the District or
                           Superior Court Division of the General Court of
                           Justice of the State of North Carolina, Guilford
                           County, submitting to the jurisdiction of such court,
                           and they waive any right to object to or to contest
                           service of process or such jurisdiction and to
                           litigate elsewhere.

                  (d)      This Agreement may be executed in one or more
                           counterparts, each of which shall be deemed an
                           original but all of which, when taken together, shall
                           constitute the same Agreement.

                  (e)      This Agreement may be enforced by any party it is
                           intended to benefit, including without limitation,
                           the Employee's estate, heirs and personal
                           representatives and the Company's employees, officers
                           and directors.

                  (f)      In case any one or more of the provisions of this
                           Agreement should be found to be invalid, illegal or
                           unenforceable in any respect, the validity, legality
                           and enforceability of the remaining provisions
                           contained herein shall not in any way be affected or
                           impaired thereby.

                  (g)      No failure by either party hereto to exercise, and no
                           delay in exercising, any right hereunder shall
                           operate as a waiver thereof, nor shall any single or
                           partial exercise of any right hereunder by either
                           party preclude any other or future exercise of that
                           right or any other right hereunder by that party.

                  (h)      During the Severance Period, the Employee shall
                           provide from time to time, upon reasonable advance
                           notice and without any additional compensation
                           (except that the Employee shall be entitled to
                           reimbursement for reasonable and necessary expenses
                           incurred in connection therewith), additional
                           consulting services to the Company, including without
                           limitation consultation with the Company's counsel,
                           with respect to any litigation, arbitration, claim or
                           investigative proceeding involving or affecting the
                           Company, provided, however, that in no event shall
                           the Employee be required to provide consulting
                           services to the extent, and only to the extent, that
                           the provision of such services would unreasonably


                                       12
<PAGE>

                           interfere with the Employee performing full-time
                           employment services, or substantially similar
                           services, to any person, firm or entity other than
                           the Company.

                  (i)      The Employee expressly acknowledges that (1) he has
                           fully read and understands this Agreement and the
                           final and binding nature and effect hereof, (2) he is
                           executing this Agreement of his own free will and
                           volition, (3) he has had an opportunity to consult
                           with his own legal counsel and (4) he has had a
                           reasonable opportunity to review and consider this
                           Agreement.

                  (j)      The Employee expressly acknowledges that the
                           severance payments provided for hereunder are in
                           addition to any other benefits he is otherwise
                           entitled to by virtue of the termination of his
                           employment with the Company.

                  (k)      This Agreement has been jointly negotiated by the
                           parties and no part of this Agreement shall be
                           construed either in favor of or against either party
                           on the basis of a party's identity as the drafter of
                           any part of this Agreement or on some other basis.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.


Attest:                                     GUILFORD MILLS, INC.


/s/ Robert A. Emken, Jr.                    By:  /s/ Charles A. Hayes
------------------------                    -------------------------
Secretary                                   Name:  Charles A. Hayes
                                            Title:  Chairman of the Board


[CORPORATE SEAL]
                                            /s/ Terrence E. Geremski
                                            ------------------------
                                            Terrence E. Geremski




                                       13
<PAGE>
                                                                       EXHIBIT A

   FIRST AMENDMENT TO SENIOR MANAGERS' SUPPLEMENTAL RETIREMENT PLAN AGREEMENT

         THIS FIRST AMENDMENT TO SENIOR MANAGERS' SUPPLEMENTAL RETIREMENT PLAN
AGREEMENT is entered into this 27th day of September, 2000 by and between
Guilford Mills, Inc., a Delaware corporation (the "Corporation"), and Terrence
E. Geremski (the "Associate").

                                   WITNESSETH:

         WHEREAS, the Corporation and the Associate have entered into a plan
agreement, dated as of July 1, 1992 (the "Plan Agreement"), pursuant to the
terms of the Corporation's Senior Managers' Supplemental Retirement Plan; and

         WHEREAS, the parties desire to amend the terms of the Plan Agreement as
set forth below.

         NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

         1. The second sentence of Section 1 of the Plan Agreement is hereby
deleted in its entirety and the following is substituted in its place:

                  Upon attaining age 65, the Associate shall be eligible to
                  receive from the Corporation an annual amount of $125,000,
                  payable in substantially equal monthly installments, for a
                  period of ten consecutive years.

         2. Section 2 of the Plan Agreement is hereby deleted in its entirety.

         3. Section 4 of the Plan Agreement is hereby deleted in its entirety.

         4. Except as otherwise expressly provided herein, the Plan Agreement
remains unmodified and in full force and effect.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.


                              GUILFORD MILLS, INC.

                              By:  ________________________________
                              Name:  ____________________________
                              Title:  _____________________________


                              ----------------------------------
                              Terrence E. Geremski



                                       14
<PAGE>

                                                                       EXHIBIT B

   FIRST AMENDMENT TO SENIOR MANAGERS' PRE-RETIREMENT LIFE INSURANCE AGREEMENT

         THIS FIRST AMENDMENT TO SENIOR MANAGERS' PRE-RETIREMENT LIFE INSURANCE
AGREEMENT is entered into this 27th day of September, 2000 by and between
Guilford Mills, Inc., a Delaware corporation (the "Corporation"), and Terrence
E. Geremski (the "Associate").

                                   WITNESSETH:

         WHEREAS, the Corporation and the Associate have entered into a Senior
Managers' Pre-Retirement Life Insurance Agreement, dated as of July 1, 1992 (the
"Insurance Agreement"); and

         WHEREAS, the parties desire to amend the terms of the Insurance
Agreement as set forth below.

         NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

                  1. The first sentence of Section 6 of the Insurance Agreement
         is hereby deleted in its entirety and the following is substituted in
         its place:

                  This Agreement shall terminate upon the last day of the month
                  in which the Associate receives his last severance payment
                  pursuant to the terms of the Severance Agreement, dated
                  September 27, 2000, between the Associate and the Corporation.

                  2. The second sentence of Section 8 of the Insurance Agreement
         is hereby deleted in its entirety and the following is substituted in
         its place:

                  The Associate shall pay such required premium to the
                  Corporation through after tax contributions withheld from his
                  salary or severance payments, as the case may be.

                  3. Section 9 of the Insurance Agreement is hereby deleted in
         its entirety.

                  4. Except as otherwise expressly provided herein, the
         Insurance Agreement remains unmodified and in full force and effect.



                                       15
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.


                              GUILFORD MILLS, INC.

                              By:  ________________________________
                              Name:  ____________________________
                              Title:  _____________________________


                              ----------------------------------
                              Terrence E. Geremski





                                       16
<PAGE>

                                                                       EXHIBIT C

        FIRST AMENDMENT TO SENIOR MANAGERS' LIFE INSURANCE PLAN AGREEMENT

         THIS FIRST AMENDMENT TO SENIOR MANAGERS' LIFE INSURANCE PLAN AGREEMENT
is entered into this 27th day of September, 2000 by and between Guilford Mills,
Inc., a Delaware corporation (the "Corporation"), and Terrence E. Geremski (the
"Participant").

                                   WITNESSETH:

         WHEREAS, the Corporation and the Participant have entered into a Senior
Managers' Life Insurance Plan Agreement, dated as of July 1, 1992 (the "Plan
Agreement"), pursuant to the terms of the Corporation's Senior Managers' Life
Insurance Plan; and

         WHEREAS, the parties desire to amend the terms of the Plan Agreement as
set forth below.

         NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

                  1. The first sentence of the fourth paragraph of the Plan
         Agreement (i.e., the first paragraph appearing under the heading
         "Termination of this Agreement Prior to Death of the Participant") is
         hereby deleted in its entirety and the following is substituted in its
         place:

                  Prior to the death of the Participant, this Agreement shall
                  terminate upon the date the Participant reaches age 65 or, if
                  earlier, upon the occurrence of any of the events set forth in
                  Sections 6.0 (A), (C), (D) or (E) of the Plan.

                  2. The first sentence of the fifth paragraph of the Plan
         Agreement (i.e., the first paragraph appearing under the heading
         "Premiums") is hereby deleted in its entirety and the following is
         substituted in its place:

                  The Participant hereby agrees that his annual premium under
                  the Policy shall be withheld by the Corporation from his
                  salary or severance payments, as the case may be, in regular
                  equal installments.

                  3. Except as otherwise expressly provided herein, the Plan
         Agreement remains unmodified and in full force and effect.


<PAGE>


         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.


                              GUILFORD MILLS, INC.

                              By:  ________________________________
                              Name:  ____________________________
                              Title:  _____________________________


                              ----------------------------------
                              Terrence E. Geremski











                                       17