EXHIBIT 10(y)



                              GUILFORD MILLS, INC.
                      EXECUTIVE DEFERRED COMPENSATION PLAN









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                                TABLE OF CONTENTS
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Article I            Purpose And Administration.........................................................1

           SECTION 1.1.             Name of Plan........................................................1

           SECTION 1.2.             Effective Date......................................................1

           SECTION 1.3.             Purpose.............................................................1

           SECTION 1.4.             Administration......................................................1

Article II           Definitions........................................................................3

           SECTION 2.1.             Affiliate...........................................................3

           SECTION 2.2.             Code................................................................3

           SECTION 2.3.             Compensation........................................................3

           SECTION 2.4.             Deferred Compensation Account.......................................4

           SECTION 2.5.             Deferral Election...................................................4

           SECTION 2.6.             Distribution Date...................................................4

           SECTION 2.7.             Early Retirement Date...............................................4

           SECTION 2.8.             Employee............................................................4

           SECTION 2.9.             Employer............................................................4

           SECTION 2.10.            ERISA...............................................................4

           SECTION 2.11.            Normal Retirement Date..............................................5

           SECTION 2.12.            Participant.........................................................5

           SECTION 2.13.            Plan Administrator..................................................5

           SECTION 2.14.            Plan Year...........................................................5

           SECTION 2.15.            Unforeseeable Financial Emergency...................................5

           SECTION 2.16.            Valuation Date......................................................5

           SECTION 2.17.            Other Definitions...................................................5

Article III          Eligibility, Participation, Deferral Elections, and Employer Contributions.........6

           SECTION 3.1.             Eligibility and Participation.......................................6

           SECTION 3.2.             Rules for Deferral Elections........................................6

           SECTION 3.3.             Amounts Deferred....................................................7

           SECTION 3.4.             Employer Discretionary Contributions................................8

Article IV           Deferred Compensation Accounts.....................................................9

           SECTION 4.1.             Deferred Compensation Accounts......................................9


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           SECTION 4.2.             Deferral Account Adjustments and Investment Options.................9

           SECTION 4.3.             Vesting.............................................................9

           SECTION 4.4.             Investment Options.................................................10

Article V            Payment of Benefits...............................................................12

           SECTION 5.1.             Time and Method of Payment.........................................12

           SECTION 5.2.             Payment Upon Disability............................................12

           SECTION 5.3.             Payment Upon Death of a Participant................................12

           SECTION 5.4.             Beneficiary........................................................12

           SECTION 5.5.             Withholding of Taxes...............................................13

           SECTION 5.6.             Unforeseeable Financial Emergency..................................13

Article VI           Miscellaneous.....................................................................14

           SECTION 6.1.             ...................................................................14

           SECTION 6.2.             Rights.............................................................14

           SECTION 6.3.             Interests Not Transferable.........................................14

           SECTION 6.4.             Forfeitures and Unclaimed Amounts..................................14

           SECTION 6.5.             Controlling Law....................................................15

           SECTION 6.6.             Number.............................................................15

           SECTION 6.7.             Action by the Employers............................................15

           SECTION 6.8.             Offset for Obligations to Employer.................................15

           SECTION 6.9.             No Fiduciary Relationship..........................................15

           SECTION 6.10.            Claims Procedures..................................................15

           SECTION 6.11.            Notice.............................................................16

Article VII          Employer Participation............................................................17

           SECTION 7.1.             Adoption of Plan...................................................17

           SECTION 7.2.             Withdrawal from the Plan by Employer...............................17

Article VIII         Amendment and Termination.........................................................18

Article IX           Change in Control.................................................................19

           SECTION 9.1.             ...................................................................19

           SECTION 9.2.             ...................................................................19

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                                   ARTICLE I

                           PURPOSE AND ADMINISTRATION

                     WHEREAS, Guilford Mills, Inc. (the "Company") previously
approved the establishment of the Guilford Mills, Inc. 401(k) Excess Benefit
Plan in September 2000; and

                     WHEREAS, the Company wishes to rename the Guilford Mills,
Inc. Excess Benefit Plan to the Guilford Mills, Inc. Executive Deferred
Compensation Plan;

                     NOW, THEREFORE, the Company hereby renames and adopts the
Guilford Mills, Inc. Executive Deferred Compensation Plan as follows:

                     SECTION 1.1. Name of Plan. Guilford Mills, Inc., located in
Greensboro, NC and with employer tax identification number 13-1995928, hereby
adopts the Guilford Mills Executive Deferred Compensation Plan (the "Plan"), as
set forth herein including the variable provisions selected and agreed to by the
Company.

                     SECTION 1.2. Effective Date. The effective date of this
Plan is April 1, 2000.

                     SECTION 1.3. Purpose. The Company has established the Plan
primarily for the purpose of providing deferred compensation to a select group
of management or highly compensated employees of the Employers. The Plan is
intended to be a top-hat plan as described in Section 201(2), 301(a)(3) and
401(a)(1) of ERISA. The Company intends that the Plan (and each Trust under the
Plan as described in Subsection 6.1) shall be treated as unfunded for tax
purposes and for purposes of Title I of ERISA. The Plan is not intended to
qualify under Code section 401(a). An Employer's obligations hereunder, if any,
to a Participant (or to a Participant's beneficiary) shall be unsecured and
shall be a mere promise by the Employer to make payments hereunder in the
future. A Participant (or the Participant's beneficiary) shall be treated as a
general unsecured creditor of the Employer.

                     SECTION 1.4. Administration. The Plan shall be administered
by the Plan Administrator. The Plan Administrator shall serve at the pleasure of
the Company's Board of Directors and may be removed by such Board, with or
without cause. The Plan Administrator may resign upon prior written notice to
the Company's Board of Directors.

The Plan Administrator shall have the powers, rights and duties set forth in the
Plan and shall have the power, in the Plan Administrator's sole and absolute
discretion, to determine all questions arising under the Plan, including the
determination of the rights of all persons with respect to the Plan and to
interpret the provisions of the Plan and remedy any ambiguities,
inconsistencies, or omissions. Any decisions of the Plan Administrator shall be
final and binding on all persons with respect to the Plan and the benefits
provided under the Plan. The Plan Administrator may delegate the Plan
Administrator's authority under the Plan to one or more officers or directors of
the Company; provided, however, that (a) such delegation must be in writing, and


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(b) the officers or directors of the Company to whom the Plan Administrator is
delegating authority must accept such delegation in writing.

If a Participant is serving as the Plan Administrator (either individually or as
a member of a committee), the Participant may not decide or determine any matter
or question concerning such Participant's benefits under the Plan that the
Participant would not have the right to decide or determine if the Participant
were not serving as the Plan Administrator.

                               [END OF SECTION 1]













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                                   ARTICLE II

                                   DEFINITIONS

For purposes of the Plan, the following words and phrases shall have the
meanings set forth below, unless their context clearly requires a different
meaning:

                     SECTION 2.1. Affiliate. "Affiliate" means any corporation,
partnership, joint venture, association or similar organization or entity
(select one option):

                    Option 1.  [ ]      that is required to be aggregated with
                                        the Company pursuant to Code Section
                                        414(b), (c), or (in).

                    Option 2.  [X]      in which the Company owns, directly or
                                        indirectly, a majority of equity
                                        interests.

                     SECTION 2.2. Code. "Code" means the Internal Revenue Code
of 1986, as amended from time to time. Any reference to a section of the Code
includes any comparable section or sections of any future legislation that
amends, supplements or supersedes that section.

                     SECTION 2.3. Compensation. "Compensation" means (select one
option):

                    Option 1.  [ ]      Total taxable salary, bonuses and
                                        commissions paid to a Participant by the
                                        Employer (determined without regard to
                                        any amounts in the Participant's
                                        Deferred Compensation Account).

                    Option 2.  [ ]      Total taxable salary and commissions of
                                        the Participant paid or accrued by the
                                        Employer, but not including the value of
                                        any bonuses, stock options, stock
                                        appreciation rights (determined without
                                        regard to any amounts in the
                                        Participant's Deferred Compensation
                                        Account).

                    Option 3.  [X]      The total cash compensation, including
                                        bonuses and overtime, paid to a
                                        Participant by the Employer or an
                                        Affiliate during the Plan Year while a
                                        Participant in the Plan, but excluding
                                        commissions, reimbursement for expenses
                                        and Employer contributions paid under
                                        this Plan or any qualified retirement
                                        plan, deferred compensation plan or
                                        welfare plan. For any Plan Year in which
                                        a Participant was not a participant in
                                        the Plan at the beginning of the year,
                                        his Compensation shall be deemed to be
                                        remuneration as determined above for
                                        that portion of the Plan year during
                                        which he is a Participant. The inclusion
                                        of any additional compensation shall be
                                        determined by the Plan Administrator.


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                     SECTION 2.4. Deferred Compensation Account. "Deferred
Compensation Account" means the bookkeeping account maintained under the Plan in
the Participant's name to reflect amounts deferred under the Plan pursuant to
Section 3 (as adjusted under Section 4) and any Employer Discretionary
Contributions made on behalf of the Participant (as adjusted under Section 4).
The Deferred Compensation Account shall be hypothetical in nature and shall be
maintained for bookkeeping purposes only. Neither the Plan nor any of the
Deferred Compensation Accounts shall hold any actual funds or assets.

                     SECTION 2.5. Deferral Election. "Deferral Election" means a
written notice filed by the Participant with the Employer specifying the
Compensation or bonus to be deferred by the Participant.

                     SECTION 2.6. Distribution Date. "Distribution Date" means
(select one option):

                        [X]   the date a Participant terminates employment or
                              association with the Company or Affiliates for
                              whatever reason, unless such termination of
                              employment is for Good Cause.

                        [ ]   the April 1 following the Plan year in which the
                              Participant terminates employment or association
                              with the Company or Affiliates for whatever
                              reason, unless such termination of employment is
                              for Good Cause.

                     SECTION 2.7. Early Retirement Date. "Early Retirement Date"
means (select one option):

                        [ ]   The date the Participant attains ___________ years
                              of age

                        [ ]   The date the Participant attains __________ years
                              of age and has been employed by the Company or
                              its Affiliates for at least _________ years.

                     SECTION 2.8. Employee. "Employee" means an employee of an
Employer who meets the eligibility criteria set forth in Subsection 3.1 of the
Plan and who is a member of a select group of management or highly compensated
employees as defined under ERISA or the regulations thereunder.

                     SECTION 2.9. Employer. "Employer" means, individually, the
Company and each Affiliate of the Company that adopts the Plan in accordance
with Subsection 7.1. The Company and any Affiliates that adopt the Plan are
sometimes collectively referred to herein as the "Employers."

                     SECTION 2.10. ERISA. "ERISA" means the Employee Retirement
Income Security Act of 1974, as amended from time to time. Any reference to a


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section of ERISA includes any comparable section or sections of any future
legislation that amends, supplements or supersedes that section.

                     SECTION 2.11. Normal Retirement Date. "Normal Retirement
Date" means (select one option).

                          [X]  The date the participant attains 65 years of age.

                          [ ]  The date the Participant attains ______ years of
                               age and has been employed by the Company or its
                               Affiliates for at least ______ years.

                     SECTION 2.12. Participant. "Participant" means an Employee
who meets the eligibility criteria set forth in Subsection 3.1 and who has made
a Deferral Election in accordance with the terms of the Plan.

                     SECTION 2.13. Plan Administrator. The "Plan Administrator"
means a committee of at least 3 members appointed by the Company.

                     SECTION 2.14. Plan Year. "Plan Year" means the twelve
consecutive month period ending each September 30. However, if the Effective
Date of the Plan is other than October 1 of a year, the initial Plan Year shall
be a short Plan Year, beginning on the Effective Date and ending on the
following September 30.

                     SECTION 2.15. Unforeseeable Financial Emergency
"Unforeseeable Financial Emergency" means a severe financial hardship of the
Participant resulting from:

                    (a)       A sudden and unexpected illness or accident of the
                              Participant or of a dependent of the Participant.

                    (b)       Loss of Participant's principal residence due to
                              casualty; or

                    (c)       Such other similar extraordinary and unforeseeable
                              circumstances resulting from events beyond the
                              control of the Participant.

Whether a Participant has an Unforeseeable Financial Emergency shall be
determined in the sole discretion of the Plan Administrator.

                     SECTION 2.16. Valuation Date. "Valuation Date" means each
business day the financial markets and First Union are open, unless the
underlying investment requires a less frequent valuation.

                     SECTION 2.17. Other Definitions. In addition to the terms
defined in this Section 2, other terms are defined when first used in Sections
of this Plan.

                               [END OF SECTION 2]


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                                  ARTICLE III

   ELIGIBILITY, PARTICIPATION, DEFERRAL ELECTIONS, AND EMPLOYER CONTRIBUTIONS

                     SECTION 3.1. Eligibility and Participation. Subject to the
conditions and limitations of the Plan, the following persons are eligible to
participate in the Plan (select and complete options(s) after consultation with
legal counsel):

                          [ ]  All Employees with a rank of__________ (insert
                               title) or above and with total earnings of at
                               least $________ per Plan Year.

                          [ ]  The following Employees of the Employers:

                               (Attach a separate sheet f necessary)

                          [X]  Such Employees as the Plan Administrator may
                               select from time to time, in its sole discretion.

Any individuals specified above by an Employer may be changed by action of the
Employer. An Employee eligible to participate in the Plan shall become a
Participant upon the execution and filing with the Plan Administrator of a
written election to defer a portion of the Employee's Compensation, in a form
acceptable to the Plan Administrator. A Participant shall remain a Participant
until the entire balance of the Participant's Deferred Compensation Account has
been distributed, subject to the following restriction, if chosen:

                               [X]   Provided, however, the Plan Administrator
                                     may, in its sole discretion, determine that
                                     the Participant is no longer an eligible
                                     Employee and upon prior notice require that
                                     the Participant cease Deferral Elections to
                                     the Plan.

                     SECTION 3.2. Rules for Deferral Elections. Any Employee
identified in Subsection 3.1 may make a Deferral Election to defer receipt of
Compensation he or she otherwise would be entitled to receive for a Plan Year in
accordance with the rules set forth below:

                    (a)       All Deferral Elections must be made in writing on
                              the form prescribed by the Plan Administrator and
                              will be effective only when filed with the Plan
                              Administrator no later than the date specified by
                              the Plan Administrator. In no event may a Deferral
                              Election be made later than the last day of the
                              Plan Year preceding the Plan Year in which the
                              Compensation being deferred is earned and is made
                              available to the Participant. However, in the case
                              of a Participant's initial year of employment or
                              association with an Employer, the Participant may
                              make a Deferral Election with respect to
                              compensation for services to be performed
                              subsequent to such Deferral Election, provided
                              such election is made no later than 30 days after
                              the date the Participant first becomes eligible


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                              for the Plan. Furthermore, in the case of a short
                              initial Plan Year, each Participant may make a
                              Deferral Election with respect to compensation for
                              services to be performed subsequent to such
                              Deferral Election, provided such election is made
                              no later than 30 days after the Effective Date.

                    (b)       With respect to Plan years following the
                              Participant's initial Plan Year of participation
                              in the Plan, failure to complete a subsequent
                              Deferral Election shall constitute a waiver of the
                              Participant's right to elect a different amount of
                              Compensation to be deferred for each such Plan
                              Year and shall be considered an affirmation and
                              ratification to continue the Participant's
                              existing Deferral Election. However, a Participant
                              may, prior to the beginning of any Plan Year,
                              elect to increase or decrease the amount of
                              Compensation to be deferred for the next following
                              Plan Year by filing another Deferral Election with
                              the Plan Administrator in accordance with
                              paragraph (a) above.

                    (c)       A Deferral Election in effect for a Plan Year may
                              not be modified during the Plan Year, except that
                              the Plan Administrator shall terminate the
                              Participant's Deferral Election during a Plan Year
                              in the event of an Unforeseeable Financial
                              Emergency.

                     SECTION 3.3. Amounts Deferred. (select one option):

                    Option 1.   [X]     Deferral of a percentage of Compensation
                                        plus Bonus. Commencing on the Effective
                                        Date, a Participant may elect to defer
                                        (a) up to 25% of the Participant's
                                        Compensation (including compensation and
                                        bonus) attributable to services
                                        performed in the Plan Year. The amount
                                        of Compensation and Bonus deferred by a
                                        Participant shall be credited to the
                                        Participant's Deferred Compensation
                                        Account as of the Valuation Date
                                        coincident with or immediately following
                                        the date such Compensation and Bonus
                                        would, but for the Participant's
                                        Deferral Election, be payable to the
                                        Participant.


                    Option 2.   [ ]     Deferral of Bonus Only.

                                        Commencing on the Effective Date, a
                                        Participant may elect to defer up to
                                        _____% of any Bonus awarded to the
                                        Participant attributable to services
                                        performed in the Plan Year. The amount
                                        of Bonus deferred by a Participant shall
                                        be credited to the Participant's
                                        Deferred Compensation Account as of the
                                        Valuation Date coincident with or


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                                        immediately following such the date such
                                        Bonus would, but for the Participant's
                                        Deferral Election, be payable to the
                                        Participant.


                     Option 3.   [ ]    Deferral of Fixed Amount. Commencing on
                                        the Effective Date, a Participant may
                                        elect to defer a specific amount, not to
                                        exceed $____, of Compensation payable to
                                        the Participant during a Plan Year. Such
                                        amount shall be credited to the
                                        Participant's Deferred Compensation
                                        Account as of the Valuation Date
                                        coincident with or immediately following
                                        the date such amount would, but for the
                                        Participant's Deferral Election, be
                                        payable to the Participant.

                     SECTION 3.4. Employer Discretionary Contributions. An
Employer may, in its sole discretion, credit to the Deferred Compensation
Account of any Participant employed by that Employer an amount determined by the
Employer in its sole discretion (an "Employer Discretionary Contribution") for a
Plan Year. Any Employer Discretionary Contribution for a Plan Year will be
credited to a Participant's Deferred Compensation Account as of the Valuation
Date specified by the Employer.

                     In the Employer's discretion, an Employer Discretionary
Contribution for a Plan Year may also be determined for each Participant, to be
an amount equal to the sum of the amount that Participant elects to defer for
the Plan Year multiplied by a matching contribution rate chosen by the Employer
for the Plan Year.

                               [END OF SECTION 3]









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                                   ARTICLE IV

                         DEFERRED COMPENSATION ACCOUNTS

                     SECTION 4.1. Deferred Compensation Accounts. All amounts
deferred pursuant to one or more Deferral Elections under the Plan and any
Employer Discretionary Contributions shall be credited to a Participant's
Deferred Compensation Account and shall be adjusted under Subsection 4.2.

                     SECTION 4.2. Deferral Account Adjustments and Investment
Options. As of each Valuation Date, the Plan Administrator shall adjust amounts
in a Participant's Deferred Compensation Account to reflect earnings (or losses)
in the Investment Options (as defined in Subsection 4.4) attributable to the
Participant's Deferred Compensation Account. Earnings (or losses) on amounts in
a Participant's Deferred Compensation Account shall accrue commencing on the
date the Deferred Compensation Account first has a positive balance and shall
continue to accrue until the entire balance in the Participant's Deferred
Compensation Account has been distributed. Earnings (or losses) shall be
credited to a Participant's Deferred Compensation Account based on the realized
rate of return on the Investment Options attributable to the Participant's
Deferred Compensation Account.

                     SECTION 4.3. Vesting. A Participant shall be fully vested
in the amounts in the Participant's Deferred Compensation Account attributable
to the Participant's Deferral Elections. If Employer Discretionary Contributions
are made under the Plan, a Participant shall be vested in the amount in the
Participant's Deferred Compensation Account attributable to Employer
Discretionary Contributions in accordance with the following (select Options 1,
2, or 3 and, if desired, Option 4):

                     Option 1.  [ ]       100% Vested.

                     Option 2.  [X]       Three Year Cliff Vesting Schedule

                     Vesting for Participants will be determined by (select
                     one):

                          [ ]     Years of Service.
                          [X]     Years of Service.

                                  Nonforfeitable Percentage
                                  -------------------------

                     Less than 3 years    0%
                     3 or more years      100%

                     Option 3.   [ ]      Seven Year Graded Vesting Schedule

                     Vesting for Participants will be determined by (select
                     one):

                          [ ]     Years of Service.
                          [ ]     Years of Participation in this Plan.



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                     Nonforfeitable Percentage
                     -------------------------

                     Less than 3 years.............................0%
                     3 years......................................20%
                     4 years......................................40%
                     5 years......................................60%
                     6 years......................................80%
                     7 years.....................................100%

                     Option 4.  [ ]     Notwithstanding the foregoing vesting
                                        schedule, the balance in a Participant's
                                        Deferred Compensation Account
                                        attributable to Employer Discretionary
                                        Contributions will be fully vested upon
                                        the Participant's Early Retirement Date.

For the purpose of determining a Participant's vested benefit with respect to
Employer Discretionary Contributions, a "Year of Service" means each
twelve-month period of employment or association with the Company and the
Affiliates, and a "Year of Participation" means each twelve-month period of
active participation in the Plan. Notwithstanding the foregoing, a Participant
shall be fully vested in the entire balance in the Participant's Deferred
Compensation Account upon the Participant's Normal Retirement Date or death,
provided the date on which the Participant dies is while the Participant is
actively employed by or associated with the Employers. The portion of a
Participant's Deferred Compensation Account in which the Participant is not
fully vested shall be forfeited to the Employer by the Participant.

Notwithstanding the vesting schedule selected in Option 1, 2, or 3 above, the
balance in a Participant's Deferred Compensation Account attributable to
Employer Discretionary contributions will be forfeited (and neither the
Participant nor the Participant's beneficiaries will have any rights thereto) if
the Participant's employment with the Employer is terminated for Good Cause.
"Good Cause" means the Participant's gross negligence, fraud, dishonesty, or
willful violation of any law or significant policy of the Employer that is
committed in connection with the Participant's employment by or association with
the Company or Affiliate. Whether a Participant has been terminated for Good
Cause shall be determined by the Plan Administrator.

                     SECTION 4.4. Investment Options. Participant fund
selections must be made to the Plan Administrator or designated agent. Fund
selections will be effective within a reasonable period of time as determined by
the means used to communicate such selections and generally accepted business
practices.

Transfers between Investment Options shall be administered in accordance with
the following:


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The Plan Administrator or its designated agent may take investment instructions
from a Participant for transfers as of any business day between Investment
Options.

                     (Optional) [X]     Transfer instructions may be accepted
                                        via telephone.

The Plan Administrator shall designate the Investment Options available for
selection under this Section 4.4 and shall establish procedures regarding
elections of Investment Options. Investment Options are selected solely for
purposes of determining hypothetical gains and/or losses to a Participant's
bookkeeping account. Neither the Plan nor any of the deferred compensation
accounts shall hold any actual funds or assets.

                               [END OF SECTION 4]












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                                   ARTICLE V

                               PAYMENT OF BENEFITS

                     SECTION 5.1. Time and Method of Payment. Payment of the
vested portion of a Participant's Deferred Compensation Account shall be made as
soon as practicable following the last business day of the month in which the
Participant's Distribution Date occurs. Payment of the vested portion of a
Participant's Deferred Compensation Account shall be made as follows (select one
option):

                     Option 1.  [ ]     A single, lump sum payment.

                     Option 2.  [X]     A single lump sum or monthly, quarterly,
                                        or annual installment payments up to a
                                        maximum of 15 years.

                     SECTION 5.2. Payment Upon Disability. In the event a
Participant becomes disabled (as defined below) while the Participant is
employed by or associated with an Employer, payment of the Participant's
Deferred Compensation Account shall be made in a single lump sum payment as soon
as practicable following the date on which the Plan Administrator determines
that the Participant is disabled. For purposes of this Subsection 5.2, a
Participant shall be considered disabled if the Participant is unable to engage
in any substantially gainful activity by reason of any medically determined
physical or mental impairment that can be expected to result in death or that
has lasted or can be expected to last for a continuous period of not less than
twelve months. Whether a Participant is disabled for purposes of the Plan shall
be determined by the Plan Administrator, and in making such determination, the
Plan Administrator may rely on the opinion of a physician(s) selected by the
Plan Administrator for such purpose.

                     SECTION 5.3. Payment Upon Death of a Participant. A
Participant's Deferred Compensation Account shall be paid to the Participant's
beneficiary (designated in accordance with Subsection 5.4) in a single lump sum
payment as soon as practicable following the Valuation Date coincident with or
next following the Participant's death.

                     SECTION 5.4. Beneficiary. The Participant may name a
beneficiary or beneficiaries to receive the balance of the Participant's
Deferred Compensation Account in the event of the Participant's death prior to
the payment of the Participant's entire Deferred Compensation Account. To be
effective, any beneficiary designation must be filed in writing with the Plan
Administrator in accordance with rules and procedures adopted by the Plan
Administrator for that purpose. A Participant may revoke an existing beneficiary
designation by filing another written beneficiary designation with the Plan
Administrator. The latest beneficiary designation received by the Plan
Administrator shall be controlling. If no beneficiary is named by a Participant,
or if the Participant survives all of the Participant's named beneficiaries and
does not designate another beneficiary, the Participant's Deferred Compensation
Account shall be paid in the following order of precedence:


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          (a)       The Participant's Spouse;

          (b)       The Participant's children (including adopted children) per
                    stirpes; or

          (c)       The Participant's estate.

                     SECTION 5.5. Withholding of Taxes. In connection with the
Plan, the Employers shall withhold any applicable Federal, state or local income
tax and employment taxes, including Social Security taxes, at such time and in
such amounts as is necessary to comply with applicable laws and regulations.

                     SECTION 5.6. Unforeseeable Financial Emergency. If the Plan
Administrator determines that a Participant has incurred an Unforeseeable
Financial Emergency, the Participant may receive in cash the portion of the
balance of the Participant's Deferred Compensation Account needed to satisfy the
Unforeseeable Financial Emergency, but only if the Unforeseeable Financial
Emergency may not be relieved (a) through reimbursement or compensation by
insurance or otherwise or (b) by liquidation of the Participant's assets to the
extent the liquidation of such assets would not itself cause severe financial
hardship. A payment on account of an Unforeseeable Financial Emergency shall not
be in excess of the amount needed to relieve such Unforeseeable Financial
Emergency and shall be made as soon as practicable following the date on which
the Plan Administrator approves such payment.

                               [END OF SECTION 5]










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                                   ARTICLE VI

                                  MISCELLANEOUS


                     SECTION 6.1. The assets of the Trust or custodial account
with respect to benefits payable to the Participants employed by or associated
with an Employer shall remain the assets of such Employer subject to the claims
of its general creditors. Any payments by a Trust or custodial account of
benefits provided to a Participant under the Plan shall be considered payment by
the applicable Employer and shall discharge such Employer from any further
liability under the Plan for such payments.

Each Employer under the Plan shall establish and maintain one or more

                     Option 1.  [X]       grantor trusts

                     Option 2.  [ ]       custodial accounts to hold assets
                                          to be used for payment of benefits
                                          under the Plan.

                     SECTION 6.2. Rights. Establishment of the Plan shall not be
construed to give any Employee the right to be retained by the Employers or to
any benefits not specifically provided by the Plan. Any liability of the Company
to any Participant, former Participant, or Participant's beneficiary with
respect to a right to payment under the Plan shall be based solely upon
contractual obligations created by the Plan.

                     SECTION 6.3. Interests Not Transferable. Except as to
withholding of any tax under the laws of the United States or any state or
locality and the provisions of Subsection 5.4, no benefit payable at any time
under the Plan shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, or any other encumbrance of any kind or to any
attachment, garnishment, or other legal process of any kind. Any attempt by a
person (including a Participant or a Participant's beneficiary) to anticipate,
alienate, sell, transfer, assign, pledge, or otherwise encumber any benefits
under the Plan, whether currently or thereafter payable, shall be void. If any
person shall attempt to, or shall alienate, sell, transfer, assign, pledge or
otherwise encumber such person's benefits under the Plan, or if by any reasons
of such person's bankruptcy or other event happening at any time, such benefits
would devolve upon any other person or would not be enjoyed by the person
entitled thereto under the Plan, then the Plan Administrator, in the Plan
Administrator's sole discretion, may terminate the interest in any such benefits
of the person otherwise entitled thereto under the Plan and may hold or apply
such benefits in such manner as the Plan Administrator may deem proper.

                     SECTION 6.4. Forfeitures and Unclaimed Amounts. Unclaimed
amounts shall consist of the amounts in the Deferred Compensation Account of a
Participant that cannot be distributed because of the Plan Administrator's
inability, after a reasonable search, to locate a Participant or the
Participant's beneficiary, as applicable, within a period of two years after the
Distribution Date upon which the payment of benefits became due. Unclaimed


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<PAGE>
amounts shall be forfeited at the end of such two-year period. These forfeitures
will reduce the obligations of the Employers, if any, under the Plan. After an
unclaimed amount has been forfeited, the Participant or beneficiary, as
applicable, shall have no further right to amounts in the Participant's Deferred
Compensation Account.

                     SECTION 6.5. Controlling Law. The law of the state of North
Carolina shall be controlling in all matters relating to the Plan to the extent
not preempted by Federal Law.

                     SECTION 6.6. Number. Words in the plural shall include the
singular, and the singular shall include the plural.

                     SECTION 6.7. Action by the Employers. Except as otherwise
specifically provided herein, any action required of or permitted to be taken by
an Employer under the Plan shall be by resolution of its Board of Directors or
by resolution of a duly authorized committee of its Board of Directors or by
action of a person or persons authorized by resolution of such Board of
Directors or such committee.

                     SECTION 6.8. Offset for Obligations to Employer. If, at
such time as a Participant or a Participant's beneficiary becomes entitled to
benefit payments hereunder, the Participant has any debt, obligation or other
liability representing an amount owing to an Employer or an Affiliate of the
Employer, and if such debt, obligation, or other liability is due and owing at
the time benefit payments are payable hereunder, the Employer may offset the
amount owing it or an Affiliate against the amount of benefits otherwise
distributable hereunder.

                     SECTION 6.9. No Fiduciary Relationship. Nothing contained
in this Plan, and no action taken pursuant to its provisions by either the
Employers or the Participants shall create, or be construed to create a
fiduciary relationship between the Employer and the Participant, a designated
beneficiary, other beneficiaries of the Participant, or any other person.

                     SECTION 6.10. Claims Procedures. Any person (hereinafter
referred to as a "Claimant") who believes that he or she is being denied a
benefit to which he or she may be entitled under the Plan may file a written
request for such benefit with the Plan Administrator. Such written request must
set forth the Claimant's claim and must be addressed to the Plan Administrator,
at the Company's principal place of business. Upon receipt of a claim, the Plan
Administrator shall advise the Claimant that a reply will be forthcoming within
ninety days and shall deliver a reply within ninety days. The Plan Administrator
may, however, extend the reply period for an additional ninety days for
reasonable cause. If the claim is denied in whole or in part, the Plan
Administrator shall issue a written determination, using language calculated to
be understood by the Claimant, setting forth:

          (a)       The specific reason or reasons for such denial;


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<PAGE>
          (b)       The specific reference to pertinent provisions of the Plan
                    upon which such denial is based;

          (c)       A description of any additional material or information
                    necessary for the Claimant to perfect the Claimant's claim
                    and an explanation why such material or such information is
                    necessary; and

          (d)       Appropriate information as to the steps to be taken if the
                    Claimant wishes to submit the claim for review, and the time
                    limits for requesting such a review.

                     Within sixty days after the receipt by the Claimant of the
written determination described above, the Claimant may request in writing, that
the Plan Administrator review the Plan Administrator's determination. The
request must be addressed to the Plan Administrator, at the Company's principal
place of business. The Claimant or the Claimant's duly authorized representative
may, but need not, review the pertinent documents and submit issues and comments
in writing for consideration by the Plan Administrator. If the claimant does not
request a review of the Plan Administrator's determination within such sixty day
period, the Claimant shall be barred and estopped from challenging the Plan
Administrator's determination. Within sixty days after the Plan Administrator's
receipt of a request for review, the Plan Administrator will review the
determination. After considering all materials presented by the Claimant, the
Plan Administrator will render a written determination, written in a manner
calculated to be understood by the Claimant setting forth the specific reasons
for the decision and containing specific references to the pertinent provisions
of the Plan on which the decision is based. If special circumstances require
that the sixty day time period be extended, the Plan Administrator will so
notify the Claimant and will render the decision as soon as practicable, but no
later than one hundred twenty days after receipt of the request for review.

                     SECTION 6.11. Notice. Any notice required or permitted to
be given under the provisions of the Plan shall be in writing, and shall be
signed by the party giving or making the same. If such notice, consent or demand
is mailed to a party hereto, it shall be sent by United States certified mail,
postage prepaid, addressed to such party's last known address as shown on the
records of the Employers. Notices to the Plan Administrator should be sent in
care of the Company at the Company's principal place of business. The date of
such mailing shall be deemed the date of notice. Either party may change the
address to which notice is to be sent by giving notice of the change of address
in the manner set forth above.

                               [END OF SECTION 6]


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<PAGE>
                                  ARTICLE VII

                             EMPLOYER PARTICIPATION


                     SECTION 7.1. Adoption of Plan. Any Affiliate of the Company
may, with the approval of the Company, adopt the Plan by filing with the Company
a resolution of its Board of Directors to that effect.

                     SECTION 7.2. Withdrawal from the Plan by Employer. Any
Employer shall have the right, at any time, upon the approval of, and under such
conditions as may be provided by the Plan Administrator, to withdraw from the
Plan by delivering to the Plan Administrator written notice of its election so
to withdraw. Except as provided in Section 9, upon receipt of such notice by the
Plan Administrator, the portion of the Deferred Compensation Account of
Participants and beneficiaries attributable to amounts deferred while the
Participants were employed by or associated with such withdrawing Employer shall
be distributed from the Trust at the direction of the Plan Administrator in cash
at such time or times as the Plan Administrator in the Plan Administrator's sole
discretion, may deem to be in the best interest of such Participants and their
beneficiaries. To the extent the amounts held in the Trust for the benefit of
such Participants and their beneficiaries are not sufficient to satisfy the
Employer's obligation to such Participants and their beneficiaries accrued on
account of their employment with the Employer, the remaining amount necessary to
satisfy such obligation shall be an obligation of the Employer, and the other
Employers shall have no further obligation to such Participants and
beneficiaries with respect to such amounts.

                               [END OF SECTION 7]






                                       17
<PAGE>
                                  ARTICLE VIII

                            AMENDMENT AND TERMINATION


The Company intends the Plan to be permanent, but reserves the right at any time
to modify, amend or terminate the Plan; provided however, that except as
provided below, any amendment or termination of the Plan shall not reduce or
eliminate any vested balance in a Participant's Deferred Compensation Account
accrued through the date of such amendment or termination. Upon termination of
the Plan, the Company may provide that notwithstanding the Participant's
Distribution Date, all Deferred Compensation Account balances will be
distributed on a date selected by the Company.

                               [END OF SECTION 8]













                                       18
<PAGE>
                                   ARTICLE IX

                                CHANGE IN CONTROL


                     SECTION 9.1. In the event that a Change in Control occurs,
the Participants' Deferred Compensation Accounts will become immediately 100%
vested, and if the Participant has so elected, the vested portion of the
Participant's Account, including all hypothetical gains and losses, will be paid
to the Participant, or the Participant's beneficiary, within 45 days following
the Change in Control.

                     SECTION 9.2. A Change in Control shall be deemed to have
occurred upon the happening of any of the following:

          (a)       the consummation of a plan of merger or consolidation of
                    Guilford Mills, Inc. with any other corporation or
                    association other than a subsidiary of Guilford Mills, Inc.
                    as a result of which the holders of the voting capital stock
                    of Guilford Mills, Inc. receive less than fifty-one percent
                    (51%) of the voting capital stock of the surviving or
                    resulting corporation;

          (b)       the sale, lease, exchange or other transfer (in one
                    transaction or a series of transactions contemplated or
                    arranged by any party as a single plan) of all or
                    substantially all of the assets of Guilford Mills, Inc.
                    (other than as security for the obligations of Guilford
                    Mills, Inc.);

          (c)       the approval by the shareholders of Guilford Mills, Inc. of
                    any plan or proposal for the liquidation or dissolution of
                    Guilford Mills, Inc.;

          (d)       the acquisition by any person (as such term is used in
                    Section 13(d) and 14(d) of the securities Exchange Act of
                    1934, as amended, (the "Exchange Act")), after the date this
                    plan is executed, directly or indirectly, of beneficial
                    ownership (as defined in Rule 13d-3 under the Exchange Act)
                    of securities of Guilford Mills, Inc. representing in the
                    aggregate twenty percent (20%) or more of the voting power
                    of all then outstanding securities of Guilford Mills, Inc.
                    having the right under ordinary circumstances to vote in an
                    election of the Board of Directors; or

          (e)       the failure, for any reason, during any period of two
                    consecutive years, of the individuals who, at the beginning
                    of such period, constitute the entire Board of Directors and
                    any new directors whose election by the Board, or whose
                    nomination for election by the shareholders, shall have been
                    approved by a vote of at least two-thirds (2/3) of the
                    directors of the Board then still in office who either were
                    directors at the beginning of the period or whose election
                    or nomination for election shall previously have been so


                                       19
<PAGE>
                    approved, to constitute a majority of the members of the
                    Board.


                               [END OF SECTION 9]













                                       20
<PAGE>
                     IN WITNESS WHEREOF, the Company has caused this Plan to be
executed by its duly authorized officers on this 12th day of February, 2001.


                                  Guilford Mills, Inc.

                                  By: /s/ Richard E. Novak
                                      ---------------------------------------
                                      Its: VP of Human Resources





ATTEST: /s/ Beth Mungo
        -------------------------------
        Its: Benefits Manager













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