EXHIBIT 10(u)
                                GUILFORD FABRIC
                         Guilford Mills Greensboro, N.C.
             P.O. Box 26969 Greensboro, NC 27419-6969 (336) 316-4000



August 8, 2002

((LastName))
((Address1))
((City)), ((State)), ((PostalCode))

Dear ((First_Name)):

As you know so well, Guilford is going through a most challenging period in our
history as well as contending with global economic and competitive issues.

The restructuring of the last two years, the filing of bankruptcy, the
preparation of our reorganization plan, and the successful running of our core
businesses has required exceptional leadership, hard work, and personal
sacrifices on your part.

The challenge ahead is two fold: 1) move the reorganization plan forward on a
timely basis so we can emerge from bankruptcy before the end of our fiscal year;
2) focus on all aspects of our businesses to maximize cash flow, sale of assets
and strengthen our relationship with our customers, and other key business
partners to insure our short-term as well as long-term profitability.

You have played a key role in helping the Company meet its restructuring goals
and I am confident that with the continued efforts of key managers such as
yourself, Guilford will meet the remaining challenges ahead. Therefore, I am
pleased to inform you that you have been selected as a participant in a Key
Manager Retention Emergence Bonus Plan filed as part of our reorganization. This
program requires approval of the bankruptcy court and others. The purpose of the
plan is to:

|X|    Recognize key associates who have provided leadership and stayed with the
       Company through the  restructuring  of the past two (2) years and who are
       critical  to our  emergence  from  bankruptcy  which is expected to be by
       September 30, 2002.

|X|    Retain  associates who are intimately  familiar with Guilford's  business
       and  industry  and who have the  experience,  knowledge,  and  leadership
       ability necessary to revitalize  Guilford's  profitability once we emerge
       from bankruptcy.

The Retention Emergence Bonus Plan will operate as follows:

|X|    ((Percent))of  your base salary as of May 1, 2002 will be your  Retention
       Emergence Award.

|X|    50% of your Retention  Emergence Award will be paid within 7 working days
       of the date by which the Plan of Reorganization is confirmed and 50% will
       be paid 90 days thereafter.


<PAGE>
|X|    As an incentive  to quickly  move  through the courts,  the amount of the
       permitted  retention  pool that will  actually  be paid which will affect
       your award will be dependent upon the date of emergence  from  bankruptcy
       as follows:

           Date by which Plan of                    Percent of
           Reorganization is Confirmed              Permitted Pool
           ---------------------------              --------------

           September 30, 2002                       100%
           October 31, 2002                          90%
           November 30, 2002                         75%
           December 31, 2002                         50%
           Beyond December 31, 2002                   0%

The following are additional considerations:

Confidentiality and Non-Competition
-----------------------------------
a.     You acknowledge  that during your  employment with the Company,  you have
       acquired   sensitive   information,   trade  secrets,   confidential  and
       proprietary information of Guilford Mills, Inc. and you will not disclose
       or use  such  information  or  trade  secrets  in any  way,  directly  or
       indirectly, in the future to adversely impact Guilford.

b.     You  agree  for a period  of one (1) year  from  date of  emergence  from
       bankruptcy not to: 1) Provide services (whether as an agent,  employee or
       otherwise) to any enterprise which competes with Guilford's Business,  as
       defined below, or 2) Solicit,  hire, or retain any person who is employed
       or  retained  by  Guilford  on the date  you  terminate  employment  with
       Guilford or who has been employed by Guilford  during the 12 month period
       preceding  such  date.  The  term   "Business"   means  the  business  of
       developing,   knitting,  dyeing  and  finishing,   designing,   printing,
       marketing   or   selling   fabrics.   The   Covenant   Not  to   Compete;
       Confidentiality  provision,  paragraph 9 in your  existing  Stock  Option
       Agreement  is the  governing  language  which  would apply to the section
       above.  You shall promptly notify the Company if you engage in any of the
       above activities.

c.     Since this Agreement has been designed especially for you personally, the
       existence of this Agreement and the provisions  contained  herein require
       that strict confidentiality be maintained. Knowledge should be limited to
       immediate family, as well as financial,  tax, and legal advisors,  all of
       whom shall be bound by your confidentiality obligations. All questions or
       correspondence  regarding this Retention Emergence Award,  including your
       acceptance  or rejection  of this Award,  must be directed to Rich Novak,
       Vice President - Human Resources. Failure to maintain confidentiality may
       result in forfeiture of the Award.

Taxes and other amounts. All payments to be made to you under this Award will be
subject to required withholding of income tax and other amounts under federal,
state, and local law.

Termination of participation
----------------------------
a.     Termination of employment  for cause will result in all remaining  unpaid
       amounts being forfeited.


<PAGE>
b.     If you  voluntarily  terminate  your  employment,  all  remaining  unpaid
       amounts will be forfeited.

Death, disability, or involuntary termination without cause.
------------------------------------------------------------
In event you are not able to perform your duties due to death, disability due to
mental or physical illness, or termination without cause, you (your estate) will
receive the award on the established payment dates.

Successors
----------
The Company agrees that any successor, joint venture, or acquirer of any
business segment, if any, will be required to honor all Award commitments.

OtherRights.  The Award shall not affect or impair the rights or  obligations of
the Company or a  participant  under any other  written  arrangement,  or profit
sharing or other  compensation  plan,  and all amounts  payable  under the Award
shall be  characterized  as special  bonuses  and not as  additional  salary for
purposes of such other contracts, arrangements or plans.

No Employment Rights.  Neither the establishment nor the terms of the Plan shall
be held or construed to confer upon any associate the right to a continuation of
employment by the Company.  Subject to any applicable employment agreement,  the
Company reserves the right to dismiss any associate,  or otherwise deal with any
associate to the same extent as though the Plan had not been adopted.

Binding  Authority.  The  decisions  of the  Compensation  Committee or its duly
authorized  delegate shall be final and conclusive for all purposes of the Plan,
and shall not be subject to any appeal or review.

I believe we have a bright future. In advance, I want to thank you for your
continued effort and support.

Please indicate your acceptance of this Award by signing and dating where
indicated below and return the original to Rich Novak in the attached certified
envelope.






                                                             -------------------
                                                             John Emrich
                                                             President and CEO


Agreed this _________ day of ________________, 2002.


Name: ____________________________



cc:  Rich Novak