FORM 10-K                                    Page 211

Exhibit 10.1(b)

                   SECOND AMENDMENT TO THE

                 EMPLOYEES' RETIREMENT PLAN

                             OF

                   CONE MILLS CORPORATION
         (As Amended and Restated December 1, 1994)


     SECOND AMENDMENT, dated as of December 5, 1995, to the
Employees' Retirement Plan of Cone Mills Corporation, As
Amended and Restated December 1, 1994 (the "Plan").

                          RECITALS

     A.   The Board of Directors desires to amend the Plan
          effective January 1, 1996, to implement the
          provisions of the Retirement Protection Act of 1994
          with respect to the determination of the present
          value of a Member's Accrued Benefit and to provide
          a death benefit to an active or Suspended Member
          who dies with ten or more Years of Service, but
          before reaching age 55 and without a Surviving
          Spouse.

     B.   The Plan presently provides that any act required
          or permitted to be taken by Cone shall be taken by
          the Board of Directors.  For clarification and to
          facilitate plan administration, the Board of
          Directors desires to amend the Plan to provide
          that, in general, any action required or permitted
          to be taken by Cone under the Plan shall be taken
          by the Board of Directors, the Executive Committee
          of the Board of Directors or a committee appointed
          by the Board of Directors pursuant to Plan Section
          9.06 to which the authority to take such action has
          been granted.

     C.   The Board of Directors also desires to update and
          clarify certain other provisions of the Plan and
          correct certain drafting errors and thereby to
          facilitate plan administration.

     NOW, THEREFORE, the Plan be and hereby is amended as
follows, effective January 1, 1996:




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FORM 10-K                                    Page 212

Exhibit 10.1(b)   (continued)

     (1)  By deleting Plan Section 1.01 in its entirety and
          inserting in lieu thereof the following:

          "1.01     Accredited Service for benefit
                    accrual means the years and
                    months of a Member's service on
                    and after his Participation
                    Date excluding the following:

               (a)  any period of suspended membership;

               (b)  any period of ineligibility under Section
                    1.18(a);

               (c)  any period excluded under Sections
                    1.42(b), (c) or (d);

               (d)  any period of absence following an
                    Employee's Severance from Service
                    Date and prior to his next
                    Employment Commencement Date;

               (e)  any period for which such Member
                    receives benefit credits under any
                    other pension plan of any of the
                    Companies; and

               (f)  any period  of service prior to
                    January 1, 1976 that did not
                    constitute accredited service
                    under the Plan as then in
                    effect."

               Accredited Service shall include service
               with a previous employer to the extent
               determined under Section 1.18(b)."

     (2)  By deleting the last paragraph of Plan Section 1.02
          and inserting in lieu thereof the following:

          "This paragraph applies only to those Members
          as of December 31, 1993, whose retirement
          benefit under Article VI is affected by the
          $150,000 compensation limit set forth in Code
          Section 401(a)(17) and incorporated in Plan
          Section 1.08(a).  The frozen Accrued Benefit
          for each such Member as of December 31, 1993,
          shall be the pension computed as of that date


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FORM 10-K                                    Page 213

Exhibit 10.1(b)   (continued)

          under Method 1 for purposes of Article VI or
          Article VII of the Plan, and such frozen Accrued
          Benefit shall be subject to increase under the
          fresh start formula with extended wear-away as
          described in Regulation 1.401(a)(4)-13(c). 
          Accordingly, the Accrued Benefit as of any date
          after December 31, 1993, for any Member to whom
          this paragraph applies shall be equal to the
          greater of:

          (a)  the frozen Accrued Benefit as
               of December 31, 1993, plus the
               Accrued Benefit determined
               under the formula applicable to
               benefit accruals in the current
               Plan Year as applied to the
               Member's Accredited Service
               after December 31, 1993; or

          (b)  the Member's Accrued Benefit determined
               under the formula applicable to benefit
               accruals in the current Plan Year as
               applied to the Member's total Accredited
               Service before and after December 31,
               1993."

     (3)  By deleting Plan Sections 1.03(c) and 1.03(d) in
          their entirety and inserting in lieu thereof the
          following:

          "(c) The present value of an Accrued Benefit
               shall be determined by using the
               assumptions set forth in paragraph 1 of
               Appendix A.

           (d) If this Section 1.03 is amended,
               then, to the extent required by Code
               Section 411(d)(6), the Actuarial
               Equivalent of a Member's Accrued
               Benefit on or after the date of
               change shall be determined as the
               greater of (1) the Actuarial
               Equivalent of the Accrued Benefit as
               of the date of change computed on
               the old basis, or (2) the Actuarial
               Equivalent of the total Accrued
               Benefit computed on the new basis."



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FORM 10-K                                    Page 214

Exhibit 10.1(b)   (continued)

     (4)  By deleting Plan Section 1.13 in its entirety and
          inserting in lieu thereof the following:

          "Companies or Cone means Cone Mills
          Corporation, a North Carolina corporation, the
          Plan sponsor and its Affiliates.  Any action
          required or permitted to be taken by Cone
          under or pursuant to the Plan shall be taken
          by the Board of Directors, the Executive
          Committee of the Board of Directors or a
          committee appointed by the Board of Directors
          pursuant to Plan Section 9.06 to which the
          authority to take such action has been
          granted; provided, however, that only the
          Board of Directors may amend or terminate the
          Plan."

     (5)  By deleting the first sentence of Plan Section 1.19
          and inserting in lieu thereof the following: 
          "Employee is an individual who renders personal
          services for an Employer or an Affiliate and who is
          classified as an employee by the Employer or
          Affiliate."

     (6)  By adding the following sentence to Plan Section
          1.28(b):  "Any period of unpaid leave under The
          Family and Medical Leave Act of 1993 shall not be
          treated as or counted toward a Break in Service for
          purposes of vesting and eligibility to participate
          in the Plan."

     (7)  By deleting Plan Section 4.04 in its entirety and
          inserting in lieu thereof the following:

          "4.04     Postponed Retirement.  If a
                    Member continues his employment
                    by the Companies after age
                    sixty-five (65), payment of his
                    normal retirement benefit shall
                    be suspended and he shall be
                    given notice of the suspension
                    in accordance with ERISA
                    Section 203(a)(3)(B) and
                    regulations thereunder, but
                    such Member shall receive
                    credit for service because of
                    employment after age sixty-five
                    (65) and the percentages and  

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FORM 10-K                                    Page 215

Exhibit 10.1(b)   (continued)

                    other factors used in determining his
                    benefits under the available options
                    shall include his service, compensation,
                    age and other appropriate factors
                    applicable to his employment after age
                    sixty-five (65).  The payment of such
                    Member's retirement benefit shall be
                    subject to the provisions of Sections
                    4.06 and 5.05."

     (8)  By deleting Plan Sections 5.06(b) and 5.06(c) in
          their entirety and inserting in lieu thereof the
          following:

          "(b) A Member may elect to waive the normal
          form of benefit described in paragraph (a)
          during the 90-day period ending on his Annuity
          Starting Date; provided, however, that no
          election to waive the Qualified Joint and
          Survivor Annuity form of benefit shall be
          effective unless accompanied by a spousal
          consent as described in paragraph (e) below. 
          During the aforesaid election period, a Member
          may revoke any election to waive the normal
          form of benefit described in paragraph (a)
          and, subject to any required spousal consent,
          may elect, revoke and elect again during the
          election period.  If a Member effectively
          waives the normal form of benefit described in
          paragraph (a), he may elect to have the vested
          portion of his Accrued Benefit, subject to any
          required spousal consent, distributed in
          accordance with Plan Sections 5.01 and 5.02.

          (c)  The Pension Committee must provide each
               Member with a general written explanation
               of (i) the terms and conditions of his
               normal form of benefit under paragraph
               (a); (ii) the Member's right to make, and
               the effect of, an election not to receive
               benefits in the normal form; (iii) any
               required spousal consent; and (iv) the
               right to make and the effect of, a
               revocation under paragraph (b).  The
               explanation must be provided to the
               Member not earlier than 90 days and,
               except as otherwise permitted by the Code
               or Regulations, not later than 30 days
               before his Annuity Starting Date."

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FORM 10-K                                    Page 216

Exhibit 10.1(b)   (continued)


     (9)  By rewriting Plan Section 6.01(e) to read as
follows:

          "(e) If a Member who has become entitled to
               Retirement benefits under Article IV or
               to vested benefits under Section 7.02 has
               a Termination of Employment and is
               reemployed, the percentages used in
               determining benefits at a subsequent
               Termination of Employment or Retirement
               shall be equal to the percentages which
               would be applicable under Section 6.01(a)
               if his total Accredited Service during
               all periods of membership to the
               Termination of Employment or Retirement
               date were combined; provided, however,
               that the pension benefit so determined
               shall be reduced by the Actuarial
               Equivalent value of any lump sum
               distribution or monthly payments received
               with respect to prior period(s) of
               employment in accordance with Section
               4.07."

     (10) By deleting Plan Section 8.01 in its entirety and
          inserting in lieu thereof the following:

          "8.01 Death of a Member without a Surviving Spouse.

               (a)  Death of Active or Suspended Member
                    Before Early Retirement Age:

                    (1)  If an active or Suspended Member
                         with fewer than ten Years of Service
                         dies before reaching age 55 and does
                         not have a Surviving Spouse, no
                         benefit shall be payable under the
                         Plan on his behalf.

                    (2)  If an active or Suspended Member
                         with ten or more Years of Service
                         dies before reaching age 55 and does
                         not have a Surviving Spouse, then
                         his Beneficiary shall be entitled to
                         120 monthly installments equal to
                         50% of the monthly pension to which
                         such Member would have been entitled


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FORM 10-K                                    Page 217

Exhibit 10.1(b)   (continued)

                         had he Separated from Service as of
                         the date of his death, survived to
                         age 55, and then elected to receive
                         payment of his Accrued Benefit under
                         Method 1 beginning as of the first
                         day of the next month.  Payment of
                         the installments provided for in
                         this subparagraph (a)(2) shall begin
                         as of the first day of the month
                         following the month in which the
                         deceased Member would have attained
                         age 55.

               (b)  Death of Active or Suspended Member After
                    Early Retirement Age But Before Annuity
                    Starting Date:

                    If an active or Suspended Member who has
                    met the age and service requirements for
                    Early Retirement under Section 4.02 dies
                    before his Annuity Starting Date and he
                    does not have a Surviving Spouse, his
                    Beneficiary shall be entitled to 120
                    monthly installments equal to 50% of the
                    monthly pension to which such Member
                    would have been entitled had he Retired
                    as of the date of his death and elected
                    to receive his pension under Method 1
                    beginning as of the first day of the next
                    month.

               (c)  Death after Termination of Employment:

                    (1)  Except as provided in subparagraph
                         (c)(2) below, if a Member's
                         employment terminates before he has
                         met the age and service requirements
                         for Early Retirement under Section
                         4.02 and the Member dies before his
                         Annuity Starting Date without a
                         Surviving Spouse, no benefits shall
                         be payable under the Plan on his
                         behalf.

                    (2)  If a Member's employment is
                         involuntarily terminated and he is
                         entitled to benefits under Section
                         7.04, and if such Member survives

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FORM 10-K                                    Page 218

Exhibit 10.1(b)  (continued)

                         more than thirty (30) days after his
                         Termination of Employment but dies
                         before his Annuity Starting Date,
                         and does not have a Surviving
                         Spouse, his Beneficiary shall be
                         entitled to 120 monthly installments
                         of the monthly pension which would
                         have been payable to such Member
                         under Section 5.01 beginning the
                         first of the month following the
                         date he would have attained age
                         fifty-five or the first of the month
                         following the date of his death,
                         whichever is later.

               (d)  If the present value of any benefit
                    payable under Section 8.01(a)(2), Section
                    8.01(b) or Section 8.01(c)(2) does not
                    exceed $3,500, the Pension Committee
                    shall direct the immediate distribution
                    of such amount to the Beneficiary.

               (e)  If a Member dies after his Annuity
                    Starting Date, subject to the rights of
                    an Alternate Payee under a Qualified
                    Domestic Relations Order, any pension
                    benefit payable under the Plan will be
                    paid in accordance with the method of
                    payment elected under Article V."

     (11) By deleting the last two paragraphs of Plan Section
          8.03(b) and inserting in lieu thereof the
          following:

          "Unless the Spouse elects a later
          starting date, the preretirement spousal
          death benefit under this Section 8.03(b)
          shall commence as of the first day of the
          first month in which the Member could
          have begun receiving a benefit under the
          Plan pursuant to Article IV, Section
          7.02(c) or Section 7.04 had he not died,
          and shall be paid to and including the
          month in which such Spouse dies.

          Notwithstanding the foregoing, if the
          present value of the preretirement
          spousal death benefit provided for in
          this Section 8.03(b) does not exceed

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FORM 10-K                                    Page 219

Exhibit 10.1(b)   (continued)

          $3,500, the Pension Committee shall direct the
          immediate distribution of such amount to the
          Spouse."

     (12) By deleting Plan Section 9.01(a) in its entirety
          and inserting in lieu thereof the following:

          "(a) Plan Fiduciaries are Cone, each Trustee
               or co-Trustee, the Pension Committee and
               any other Committee appointed pursuant to
               Plan Section 9.06.  Each Fiduciary shall
               have only those powers, duties,
               responsibilities and obligations that are
               specifically assigned under the Plan or
               Trust Agreement.  A Fiduciary may serve
               in more than one capacity with respect to
               the Plan.  Cone shall appoint the Pension
               Committee and any Trustee or successor
               Trustees or co-Trustees and any other
               Fiduciaries."

     (13) By deleting the heading and the first sentence of
          Plan Section 9.06 and inserting in lieu thereof the
          following:

          "9.06"    Pension Committee and Other
                    Committees.  The Board of
                    Directors shall appoint a
                    Pension Committee and may
                    appoint other Committees from
                    time to time, each Committee to
                    consist of at least three (3)
                    persons who may, but need not
                    be, officers, directors or
                    Employees of Cone."

     (14) By deleting paragraph 1 of Appendix A and inserting
          in lieu thereof the following:

          "1.  Lump Sums - for purposes of
               determining single lump sums
               pursuant to Sections 7.02 and
               8.03 of the Plan:

               (a)  Mortality:  The "applicable
                    mortality table", which shall
                    mean the table prescribed under



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FORM 10-K                                    Page 220

Exhibit 10.1(b)   (continued)

                    Code Section 417(e)(3) as in effect on
                    the first day of the Plan Year of
                    distribution.

               (b)  Interest:  The "applicable interest
                    rate", which shall mean the annual
                    rate of interest on 30-year Treasury
                    securities for the month of November
                    of the calendar year preceding
                    distribution.

               Factors for computations under this
               paragraph shall be redetermined
               annually and set forth in tables
               provided by the Actuary."

     IN WITNESS WHEREOF, this Second Amendment, having been
authorized by the Board of Directors of Cone Mills Corporation
at a meeting duly held on December 5, 1995, is signed by the
Vice President and Secretary of the Corporation on the 19 day
of January, 1996.


                         CONE MILLS CORPORATION


                         By:   /s/ Terry L. Weatherford    
                         Title:  Vice President and Secretary