<PAGE>

                                       FORM OF
                                 EMPLOYMENT AGREEMENT

     THIS AGREEMENT, dated as of January 1, 1998, is by and between Pillowtex 
Management Services Company, a Delaware business trust ("EMPLOYER"), and 
_______ ("EMPLOYEE").

                                     WITNESSETH:

     WHEREAS, Employee desires to enter into the employment of Employer and 
Employer desires to employ Employee in the capacity and on the terms set 
forth below.

     NOW, THEREFORE, in consideration of the foregoing recital and of the 
mutual agreements contained herein, and for other valuable consideration, 
receipt of which is hereby acknowledged, the parties hereto agree as follows:

     1.   EMPLOYMENT AND SCOPE.    

          (a)  Commencing as of January 1, 1998 (the "COMMENCEMENT DATE") and 
continuing throughout the Term of this Agreement, Employer agrees to employ 
Employee and Employee agrees to serve as the employee of Employer with the 
title and capacity of Executive Vice President of Sales.  As such, Employee's 
duties shall include responsibility for sales functions of Employer and its 
affiliates, as well as such other responsibilities as are consistent with the 
office of Executive Vice President of Sales and such other responsibilities 
as may be assigned from time to time by the President of Employer's Sales and 
Marketing Division.  Employee shall report to the President of Employer's 
Sales and Marketing Division.

          (b)  Employee's performance of services under this Agreement shall 
occur primarily at Employer's principle executive offices at 4111 Mint Way, 
Dallas, Texas, subject to such travel as is consistent with the office of 
Executive Vice President of Sales.

                                       1

<PAGE>

          (c)  During the Term of Employee's employment, Employee shall 
devote Employee's full business time (at least 40 hours per week) exclusively 
to the performance of Employee's duties as stated in this Agreement and to 
the furtherance of Employer's business.

     2.   TERM.

          (a)  The term of this Agreement (the "TERM") shall begin on the 
Commencement Date and shall continue through the third anniversary thereof, 
subject to automatic extension as provided below and unless terminated 
earlier in accordance with Section 4.

          (b)  Beginning with the second anniversary date of the Commencement 
Date and continuing with each anniversary date thereafter, the Term of this 
Agreement shall automatically be extended in additional, successive one-year 
increments, with the result that the Term will have a remaining duration of 
two years upon each and every anniversary.  Notwithstanding the foregoing 
sentence, the Term shall not be extended if either party has previously given 
the other party written notice of its intent not to extend the Agreement at 
least 15 months prior to the anniversary upon which the extension would 
otherwise occur.

     3.   COMPENSATION.  During the Term of this Agreement, Employer shall 
compensate Employee as set forth below:

          (a)  Employer shall pay to Employee a base salary of $______, 
payable in accordance with Employer's payroll policies in effect from time to 
time for executive officers generally, subject to all appropriate 
withholdings.

          (b)  Employee shall be eligible to participate in Employer's 
incentive bonus plans as they may be amended from time to time to the same 
extent as executive officers generally. 

                                       2

<PAGE>

          (c)  Employee shall be entitled to the greater of three-weeks of 
paid vacation annually and that amount of vacation to which Employee would be 
entitled under Employer's vacation policy as it may be amended from time to 
time.

          (d)  Employee shall be entitled to participate in Employer's 
health, benefit and welfare plans offered by Employer as they may be amended 
from time to time to the same extent as executive officers of Employer 
generally.

          (e)  Employer shall provide Employee with a $500,000 term life 
insurance policy.

          (f)  Employee shall be eligible to participate in any supplemental 
executive retirement plan that Employer may adopt.

          (g)  Employer will acquire a club membership at a country club of 
Employee's choice for the exclusive use of Employee during the Term at an 
initiation fee of up to $25,000.  The membership shall remain the property of 
Employer subject to Employee's right to acquire it upon termination of 
Employee's employment as set forth below.  Employer will pay Employee's 
membership dues and will reimburse Employee for all expenses and charges 
incurred at the club for business purposes.  Upon termination of Employee's 
employment, Employee's privileges with respect to the membership shall cease 
and Employee shall transfer and assign all rights in the membership to 
Employer, PROVIDED, HOWEVER, that if Employee is terminated for any reason 
other than for Cause (as defined in Section 4(g)(i)), Employee shall be 
entitled to acquire the membership from Employer for an amount equal to the 
lesser of the original initiation fee or the then-prevailing market price of 
a comparable membership and Employee's assumption of all future monthly dues 
and other costs and expenses related to the membership.

                                       3

<PAGE>

          (h)  Employer will pay Employee a car allowance of $1,000 per month 
plus an additional amount equal to all federal and state income taxes arising 
with respect to any portion of the allowance taxable as income to Employee.

     4.   TERMINATION DURING TERM.  Notwithstanding anything to the contrary 
in Section 2 of this Agreement, Employee's employment under this Agreement 
may be terminated during the Term as set forth below:

          (a)  Employer may terminate Employee's employment for Cause, in 
which case the parties' rights and obligations shall be as set forth in 
Section 5(a) below.

          (b)  Employer may terminate Employee's employment in the absence of 
Cause and other than upon Employee's Retirement or Permanent Disability, in 
which case the parties' rights and obligations shall be as set forth in 
either Section 5(b) or (e) below, as applicable.

          (c)  Employee's employment shall be terminated upon Employee's 
Permanent Disability, in which case the parties' rights and obligations shall 
be as set forth in Section 5(c) below.

          (d)  Employee's employment shall be terminated upon Employee's 
Retirement, in which case the parties' rights and obligations shall be as set 
forth in Section 5(d) below.

          (e)  In the event of a Change in Control of Employer, Employee may 
terminate Employee's employment (i) for any reason, for up to six months 
after the Change in Control of Employer, or (ii) for Good Reason, in which 
case the parties' rights and obligations shall be as set forth in Section 
5(e) below.

          (f)  Employee may terminate Employee's employment at any time for 
any reason not heretofore enumerated, in which case the parties' rights and 
obligations shall be as set forth in Section 5(f) below.

                                       4

<PAGE>

          (g)  The following definitions shall apply for purposes of the 
early termination of the Term of this Agreement:

               (i)  "CAUSE" shall mean the occurrence of any of the 
following: (A) Employee's engagement in any personal misconduct involving 
willful dishonesty, illegality, or moral turpitude that is demonstrably and 
materially detrimental or injurious to the business interests, reputation or 
goodwill of Employer or its affiliates; (B) Employee's engagement in any act 
involving willful dishonesty, disloyalty, or infidelity against Employer or 
its affiliates; (C) Employee's willful and continued breach of or failure 
substantially to perform under any of the material terms and covenants of 
this Agreement; and (D) Employee's willful and continued breach of or failure 
substantially to perform under any material policy established by the Company 
with respect to the operation of the Company's business and affairs, or the 
conduct of the Company's employees.  For purposes of this Section 4(g)(i), no 
act, or failure to act, on Employee's part shall be considered "willful" 
unless done, or omitted to be done, by Employee in bad faith and without 
reasonable belief that Employee's action or omission was in the best interest 
of Employer. Prior to asserting any action or failure to act as Cause for 
Employee's termination as set forth above, Employer shall provide Employee a 
written notice referencing this Section 4(g)(i), setting out with specificity 
the conduct asserted to constitute Cause.  Any disputes arising as to whether 
Cause existed for Employee's termination shall be resolved through binding 
arbitration in accordance with Section 9 of this Agreement.

               (ii) "CHANGE IN CONTROL OF EMPLOYER" means the occurrence 
during the Term of any of the following events:

                    (A)  Pillowtex Corporation, a Texas corporation 
("PILLOWTEX"), is merged, consolidated or reorganized into or with another 
corporation or other legal person, and as a 

                                       5

<PAGE>

result of such merger, consolidation or reorganization less than a majority 
of the combined voting power of the then-outstanding securities entitled to 
vote generally in the election of directors ("VOTING STOCK") of such 
corporation or person immediately after such transaction are held in the 
aggregate by the holders of Voting Stock of Pillowtex immediately prior to 
such transaction;

                    (B)  Pillowtex sells or otherwise transfers all or 
substantially all of its assets to another corporation or other legal person, 
and as a result of such sale or transfer less than a majority of the combined 
voting power of the then-outstanding Voting Stock of such corporation or 
person immediately after such sale or transfer is held in the aggregate by 
the holders of Voting Stock of Pillowtex immediately prior to such sale or 
transfer;

                    (C)  There is a report filed on Schedule 13D or Schedule 
14D-1 (or any successor schedule, form or report), each as promulgated 
pursuant to the Securities Exchange Act of 1934, as amended (the "EXCHANGE 
ACT"), disclosing that any person (as the term "person" is used in Section 
13(d)(3) or Section 14(d)(2) of the Exchange Act) other than an "Excluded 
Person" as defined below has become the beneficial owner (as the term 
"beneficial owner" is defined under Rule 13d-3 or any successor rule or 
regulation promulgated under the Exchange Act) of securities representing 35% 
or more of the combined voting power of the then-outstanding Voting Stock of 
Pillowtex; or

                    (D)  If, during any period of 24 consecutive months, 
individuals who at the beginning of any such period constitute the Directors 
of Pillowtex cease for any reason to constitute at least a majority thereof; 
provided, however, that for purposes of this clause (D) each Director who is 
first elected, or first nominated for election by Pillowtex's stockholders, 
by a vote of at least two-thirds of the Directors of Pillowtex (or a 
committee thereof) then still in office who were 

                                       6

<PAGE>

Directors of Pillowtex at the beginning of any such period will be deemed to 
have been a Director of Pillowtex at the beginning of such period.

               (iii) "EXCLUDED PERSON" shall mean any of (A) Charles M. 
Hansen, Jr., Mary R. Silverthorne or the John H. Silverthorne Estate or any 
person for which any of Charles M. Hansen, Jr., Mary R. Silverthorne or the 
John H. Silverthorne Estate are deemed to hold beneficial ownership of 
securities of Pillowtex registered in the name of such person; (B) Pillowtex; 
(C) any entity in which Pillowtex directly or indirectly owns 50% or more of 
the outstanding Voting Stock (a "SUBSIDIARY"); or (D) any employee benefit 
sponsored by Pillowtex or any Subsidiary.

                (iv) "GOOD REASON" shall mean termination of Employee's 
employment by Employee after a Change in Control of Pillowtex upon the 
occurrence of any of the following:

                    (A)  the assignment to Employee of any duties 
inconsistent with Employee's position, duties and status with Employer as 
existing immediately prior to a Change in Control of Employer; a substantial 
alteration in the nature or status of Employee's responsibilities from those 
in effect immediately prior to a Change in Control of Employer; the failure 
to provide Employee with substantially the same perquisites which Employee 
had immediately prior to a Change in Control of Employer, including but not 
limited to an office and appropriate support services; or a change in 
Employee's titles or offices as in effect immediately prior to a Change in 
Control of Employer, or any removal of Employee from or failure to re-elect 
Employee to any such positions;

                    (B)  a reduction by Employer in Employee's base salary in 
effect immediately prior to a Change in Control of Employer;

                    (C)  the requirement by Employer that Employee be based 
anywhere other than the metropolitan area in which Employee's office is 
located immediately prior to a Change in Control of Employer, except for 
required travel on Employee's business to an extent 

                                       7

<PAGE>

substantially consistent with Employee's business travel obligations 
immediately prior to a Change in Control of Employer; or

                    (D)  the taking of any action by Employer which would (1) 
materially and adversely affect Employee's participation in or materially 
reduce Employee's benefits under any employee benefit or compensation plan in 
which Employee participates immediately prior to a Change in Control of 
Employer, or (2) deprive Employee of any material fringe benefit enjoyed by 
Employee, or to which Employee is entitled, as existing immediately prior to 
a Change in Control of Employer

               (v)  "PERMANENT DISABILITY" shall mean any physical or mental 
impairment rendering Employee unable to perform the essential functions of 
Employee's job (as determined by Employer), with or without reasonable 
accommodation that does not constitute undue hardship to Employer, and such 
impairment is permanent or is likely to continue for a period exceeding six 
consecutive months.  If Employee fails to notify Employer of Employee's need 
for accommodation, Employer is not required to accommodate Employee and may 
hold Employee to the same standards as persons without a disability.  The 
determination of whether Employee has a Permanent Disability shall be made as 
set forth below.  During any period in which the existence of a Permanent 
Disability is being determined, Employee shall continue to receive Employee's 
full base salary at the rate then in effect and all compensation and benefits 
paid during such period until a Permanent Disability is conclusively 
determined and this Agreement is terminated in accordance with Section 8 
hereof, provided Employee (and Employee's personal and legal representatives) 
act in good faith and with reasonable diligence in pursuing a determination.  
This definition is not intended to either expand or limit any rights and 
protections granted to Employee by law.  Employer may require Employee to be 
examined by a physician, at Employee's own expense, in order to determine 
whether 

                                       8

<PAGE>

Employee has a Permanent Disability.  If Employer disagrees with the written 
opinion of this physician ("FIRST PHYSICIAN"), it may engage, at its own 
expense, another physician ("SECOND PHYSICIAN") to examine Employee.  If the 
First and Second Physicians agree in writing that Employee has not suffered a 
Permanent Disability, their written opinion shall, except as otherwise set 
forth in this Section 4(g)(v), be conclusive on the issue of Permanent 
Disability.  If the First and Second Physicians disagree on whether Employee 
has suffered a Permanent Disability, they shall choose a third consulting 
physician (whose expense shall be shared equally by Employer and Employee) 
and the written opinion of a majority of these three physicians shall be 
conclusive as to the issue of Permanent Disability.  In connection with a 
Permanent Disability determination, Employee hereby consents to any required 
medical examination and agrees to furnish any medical information requested 
by any examining physician and to waive any applicable physician-patient 
privilege that may arise because of such examination.  All physicians must be 
board-certified in the specialty most closely related to the nature of the 
Permanent Disability alleged to exist.

               (vi) "RETIREMENT" shall mean termination by Employer or 
Employee in accordance with Employer's retirement policy (including early 
retirement, if included in such policy and elected by Employee in writing) 
generally applicable to its senior executive employees, or in accordance with 
any other retirement agreement entered into by and between Employee and 
Employer.

     5.   COMPENSATION UPON TERMINATION.  If Employee's employment is 
terminated during the Term of this Agreement, Employee shall be entitled to 
compensation as set forth below:

          (a)  If Employer terminates Employee's employment for Cause, 
Employer shall pay Employee's undiscounted base salary through the date of 
Employee's termination at the rate then 

                                       9

<PAGE>

in effect and all amounts to which Employee is entitled upon termination of 
employment under Employer's employee benefit plans.

          (b)  If Employer terminates Employee's employment without Cause, 
then Employer shall pay Employee, not later than the fifth day following the 
date of termination, a lump sum severance payment equal to the sum of (i) 
Employee's undiscounted base salary through the date of Employee's 
termination at the rate then in effect and all amounts to which Employee is 
entitled upon termination of employment under Employer's employee benefit 
plans; (ii) Employee's undiscounted base salary through the remaining 
duration of the Term or, if greater, for a period of 24 months, at the 
highest rate in effect during the 12 months immediately preceding the date of 
Employee's termination; and (iii) the product obtained by multiplying the 
greater of (A) (1) the highest annual amount paid to Employee (or awarded to 
Employee, if such amount has not yet been paid) as bonus compensation during 
or in respect of any of the three calendar years preceding the year in which 
the termination occurs and (2) Employee's Bonus Opportunity Level under the 
Pillowtex Corporation Management Incentive Plan (or functionally similar 
target award level under any successor plan or program) as of the date of 
Employee's termination by (B) a proration factor (the "BONUS PRORATION 
FACTOR") equal to the quotient obtained by dividing the number of months (but 
in no event less than 24 months) in the period from the beginning of the most 
recent plan year for which a bonus has not been paid (but is anticipated to 
be paid as of the date of the Employee's termination) to the expiration of 
the Term, by 12.  Notwithstanding the foregoing, the provisions of this 
Section 5(b) shall not apply if Employer terminates Employee's employment 
without Cause subsequent to a Change in Control of Employer.

          (c)  If Employee's employment is terminated upon Employee's 
Permanent Disability, Employer shall pay Employee's undiscounted base salary 
through the date of Employee's 

                                       10

<PAGE>

termination at the rate then in effect and all amounts to which Employee is 
entitled upon termination of employment under Employer's employee benefit 
plans.  Employee's additional compensation and benefits, if any, shall be 
determined in accordance with Employer's employee benefit plans or other 
insurance programs then in effect.

          (d)  If Employee's employment is terminated upon Employee's 
Retirement, Employer shall pay Employee's undiscounted base salary through 
the date of Employee's termination at the rate then in effect and all amounts 
to which Employee is entitled upon termination of employment under Employer's 
employee benefit plans.  Employee's additional compensation and benefits 
shall be determined in accordance with Employer's retirement policy 
applicable to its senior executive employees or in accordance with any other 
retirement agreement entered into by and between Employee and Employer.

          (e)  If, after a Change in Control of Employer, Employee's 
employment (x) is terminated by Employee for any reason during a period of 
six months beginning on the date of the Change in Control of Employer, or if 
less, during the remaining duration of the Term; (y) is terminated by 
Employee for Good Reason; or (z) is terminated by Employer without Cause (and 
not by reason of Employee's Permanent Disability Retirement, or death), 
Employee shall be entitled to the compensation and benefits provided below:

               (i)   Employer shall pay Employee's undiscounted base salary 
through the date of Employee's termination at the rate then in effect;

               (ii)  Employer shall pay all amounts to which Employee is 
entitled upon termination of employment under Employer's employee benefit 
plans;

               (iii) Employer shall pay as severance pay to Employee, not 
later than the fifth day following Employee's termination, a lump sum 
severance payment (together with the 

                                       11

<PAGE>

payments described in Sections 5(e)(iv) and (v), the "SEVERANCE PAYMENTS") 
equal to the sum of (A) the product obtained by multiplying Employee's 
undiscounted annual base salary at the highest rate in effect during the 12 
months immediately preceding Employee's termination by the number of years or 
fractions thereof (but in no event less than two years) remaining in the Term 
and (B) the product obtained by multiplying the greater of (1) the highest 
annual amount paid to Employee (or awarded to Employee, if such amount has 
not yet been paid) as bonus compensation during or in respect of any of the 
three calendar years preceding the year in which the termination occurs and 
(2) Employee's Bonus Opportunity Level under the Pillowtex Corporation 
Management Incentive Plan (or functionally similar target aware level under 
any successor plan or program) based upon Employee's annual salary at the 
highest rate in effect during the 12 months immediately preceding Employee's 
termination, by the Bonus Proration Factor (as defined in Section 5(b) above);

               (iv) in lieu of shares of common stock, $0.01 par value, of 
Pillowtex (the "SHARES") issuable upon the exercise of options ("OPTIONS"), 
if any, granted to Employee under any stock option plan of Pillowtex (which 
Options shall be canceled upon the making of the payment referred to below), 
Employer shall pay Employee in one sum in cash, not later than the fifth day 
following the date of Employee's termination, an aggregate amount equal to 
the product of (A) the difference (to the extent that such differences are a 
positive number) obtained by subtracting the per Share exercise price of each 
Option held by Employee, whether or not then fully exercisable, from the 
higher of (1) the closing price of the Shares, as reported on the New York 
Stock Exchange on the Date of Termination (or the last trading date prior 
thereto) or (2) the highest price per Share actually paid in connection with 
any Change in Control of Employer, and (B) the number of shares covered by 
each such Option;

                                       12

<PAGE>

               (v)   Employer shall pay Employee the retirement benefits to 
which Employee is entitled under Employee's retirement policy or other 
retirement agreement;

               (vi)  Employer shall reimburse Employee for all legal fees and 
expenses incurred by Employee as a result of such termination (including all 
such fees and expenses, if any, incurred in successfully contesting or 
disputing any such termination or seeking to obtain or enforce any right or 
benefit provided by this Agreement); and

               (vii) if Severance Payments become subject to the excise tax 
(the "EXCISE TAX") imposed under section 4999 of the Internal Revenue Code of 
1986, as amended (the "CODE"), Employer shall pay to Employee an additional 
amount (the "GROSS-UP PAYMENT") such that the net amount retained by 
Employee, after deduction of any Excise Tax on the Severance Payments (and 
any federal, state and local income tax and Excise Tax upon the payment 
provided for in this Section 5(e)(vii)), shall be equal to the Severance 
Payments.  For purposes of determining whether any of the Severance Payments 
will be subject to the Excise Tax and the amount of such Excise Tax, (A) any 
other payment or benefit received or to be received by Employee in connection 
with a Change in Control of Employer and Employee's subsequent termination of 
employment (whether pursuant to the terms of this Agreement or any other 
plan, arrangement or agreement with Employer, any person whose actions 
resulted in the Change in Control of Employer or any person affiliated with 
Employer or such person) shall be treated as a "parachute payment" within the 
meaning of section 280G(b)(2) of the Code, and all "excess parachute 
payments" within the meaning of section 280G(b)(1) of the Code shall be 
treated as subject to the Excise Tax, unless in the opinion of tax counsel 
selected by Employer's independent auditors and reasonably acceptable to 
Employee such other payments or benefits (in whole or in part) do not 
constitute parachute payments, (B) the amount of the Severance Payments which 
shall be treated as subject to the Excise Tax shall be equal to the 

                                       13

<PAGE>

lesser of (1) the total amount of the Severance Payments and (2) the amount 
of excess parachute payments within the meaning of section 280(G)(b)(1) of 
the Code (after applying clause (A) above), and (C) the value of any non-cash 
benefit, deferred payment or other benefit shall be determined by Employer's 
independent auditors in accordance with the principles of sections 
280(G)(d)(3) and (4) of the Code and the applicable Treasury Regulations.  
For purposes of determining the amount of the Gross-Up Payment, Employee 
shall be deemed to pay federal income taxes at the highest marginal rate of 
federal income taxation in the calendar year in which the Gross-Up Payment is 
to be made and state and local income taxes at the highest marginal rate of 
taxation in the state and locality of Employee's residence on the date of 
Employee's termination, net of the maximum reduction in federal income taxes 
which could be obtained from deduction of such state and local taxes.  If the 
Excise Tax is subsequently determined to be less than the amount taken into 
account hereunder at the time of Employee's termination of employment, 
Employee shall repay to Employer, at the time that the amount of such 
reduction in Excise Tax is finally determined, the portion of the Gross-Up 
Payment attributable to such reduction (plus that portion of the Gross-Up 
Payment attributable to the Excise Tax and federal, state and local income 
tax imposed on the Gross-Up Payment being repaid by Employee to the extent 
that such repayment results in a reduction in Excise Tax and/or a federal, 
state or local income tax deduction) plus interest on the amount of such 
repayment at the rate provided in section 1274(b)(2)(B) of the Code.  If the 
Excise Tax is determined to exceed the amount taken into account hereunder at 
the time of the termination of Employee's employment (including by reason of 
any payment the existence or amount of which cannot be determined at the time 
of the Gross-Up Payment), Employer shall make an additional Gross-Up Payment 
in respect of such excess (plus any interest, penalties or additions payable 
by Employee with respect to such excess) at the time that the amount of such 
excess is finally determined. Employee and Employer shall each reasonably 

                                       14

<PAGE>

cooperate with the other in connection with any administrative or judicial 
proceedings concerning the existence or amount of liability for Excise Tax 
with respect to the Severance Payments.

          (f)  If Employee terminates Employee's employment under 
circumstances in which Section 5(e) does not apply, or if Employee's 
employment is terminated by reason of his death, Employer shall pay 
Employee's full base salary through the date of Employee's termination at the 
rate then in effect and all amounts to which Employee is entitled upon 
termination of employment under Employer's employee benefit plans.

     6.   INSURANCE.  If Employee's employment is terminated under the 
provisions of Section 4(e) of this Agreement, Employee shall participate, for 
a period of two years from the date of Employee's termination, in all 
employee benefit plans providing health and dental benefits in which Employee 
participated or was entitled to participate immediately prior to Employee's 
termination, provided that such participation is permitted under the general 
terms and provisions of such plans and under applicable law.  If Employee's 
participation in any such plan is not permitted for any reason, Employer 
shall arrange to provide Employee, at Employer's sole cost and expense, with 
benefits substantially similar to those which Employee is entitled to receive 
under such plans.  At the end of such two-year period, Employee will be 
entitled to take advantage of any conversion privileges applicable to the 
benefits available under any such plans.

     7.   FUTURE EMPLOYMENT.  Employee shall not be required to mitigate the 
amount of any payment provided for in Section 5 hereof by seeking other 
employment or otherwise, nor shall the amount of any payment provided for in 
Section 5 hereof be reduced by any compensation earned by Employee as a 
result of employment by another employer after the date of Employee's 
termination, or otherwise.

     8.   NOTICE OF TERMINATION.


                                       15

<PAGE>

          (a)  Any purported termination by Employer or by Employee shall be 
communicated by a written "Notice of Termination" to the other party.  A 
Notice of Termination shall mean a notice indicating the specific termination 
provision in this Agreement relied upon and setting forth in reasonable 
detail the facts and circumstances claimed to provide a basis for termination 
of Employee's employment under the provision so indicated.

          (b)  The "date of Employee's termination" shall be:  (i) if 
Employee's employment is terminated by reason of Employee's Permanent 
Disability, the date that is 30 days after the determination of Permanent 
Disability pursuant to Section 4(g)(v) of this Agreement, (ii) if Employee's 
employment is terminated for Cause, the date specified in the Notice of 
Termination, or (iii) if Employee's employment is terminated for any other 
reason, the date specified in the Notice of Termination, provided such date 
is not more than 60 days from the date such Notice of Termination is given.

     9.   ARBITRATION.  All disputes or claims arising under this Agreement 
or in connection with Employee's employment with Employer (including any 
claims under any federal, state, or local law or ordinance), except for any 
dispute or claim arising under Sections 10, 11, 12, 13, and 16 of this 
Agreement, shall be subject to binding arbitration pursuant to the Commercial 
Arbitration Rules of the American Arbitration Association, the cost of which 
shall be borne by the party against whom an arbitration award is entered.

     10.  NONDISCLOSURE AGREEMENT.  Employer, during the term of Employee's 
employment under this Agreement, shall provide Employee access to, and 
Employee shall have access to and become familiar with, various trade secrets 
and proprietary and confidential information consisting of, but not limited 
to, financial statements, processes, computer programs, compilations of 
information, records, sales procedures, customer requirements, pricing 
techniques, customer lists, 

                                       16

<PAGE>

methods of doing business and other confidential information (collectively 
referred to herein as the "TRADE SECRETS"), which are owned by Employer and 
its affiliates and are regularly used in the operation of their businesses, 
but in connection with which Employer and its affiliates take precautions to 
prevent dissemination to persons other than certain directors, officers and 
employees.  Employee acknowledges and agrees that the Trade Secrets (a) are 
secret and not known in Employer's industry; (b) are entrusted to Employee 
after being informed of their confidential and secret status by Employer or 
its affiliates and because of the fiduciary position occupied by Employee 
with Employer; (c) have been developed by Employer and its affiliates for and 
on behalf of Employer and its affiliates through substantial expenditures of 
time, effort and money and are used in their businesses; (d) give Employer 
and its affiliates an advantage over competitors who do not know or use the 
Trade Secrets; (e) are of such value and nature as to make it reasonable and 
necessary to protect and preserve the confidentiality and secrecy of the 
Trade Secrets; and (f) are valuable, special and unique assets of Employer 
and its affiliates, the disclosure of which could cause substantial injury 
and loss of profits and goodwill to Employer and its affiliates. Employee 
shall not use in any way or disclose any of the Trade Secrets, directly or 
indirectly, either during the Term of this Agreement or at any time 
thereafter, except as required in the course of Employee's employment under 
this Agreement.  All files, records, documents, information, data and similar 
items relating to the business of Employer and its affiliates, whether 
prepared by Employee or otherwise coming into Employee's possession, shall 
remain the exclusive property of Employer and its affiliates and shall not be 
removed from the premises of Employer and its affiliates under any 
circumstances without the prior written consent of the Board of Directors of 
Employer (except in the ordinary course of business during Employee's period 
of active employment under this Agreement), and in any event shall be 
promptly delivered to Employer upon termination of this Agreement.  Employee 
agrees that upon 

                                       17

<PAGE>

Employee's receipt of any subpoena, process or other request to produce or 
divulge, directly or indirectly, any Trade Secrets to any entity, agency, 
tribunal or person, Employee shall timely notify and promptly hand deliver a 
copy of the subpoena, process or other request to the Chief Executive Officer 
of Pillowtex.  For this purpose, Employee irrevocably nominates and appoints 
Employer (including any attorney retained by Employer), as Employee's true 
and lawful attorney-in-fact, to act in Employee's name, place and stead to 
perform any act that Employee might perform to defend and protect against any 
disclosure of any Trade Secrets.

     As used in this Agreement, "affiliates" shall mean persons or entities 
that directly, or indirectly through one or more intermediaries, control or 
are controlled by, or are under common control with, Employer.

     11.  NON-COMPETITION AGREEMENT.  Employee acknowledges and agrees that 
the training Employee will receive, the experience Employee will gain and the 
information Employee will acquire regarding the Trade Secrets while employed 
hereunder will enable Employee to injure Employer if Employee should compete 
with Employer in a business that is competitive with the business conducted 
or to be conducted by Employer and its affiliates.  For these reasons, 
Employee hereby agrees that, without the prior written consent of Employer, 
Employee shall not, during the period of employment with Employer, directly 
or indirectly, either as an individual, a partner or a joint venturer, or in 
any other capacity, (a) invest (other than investments in publicly-owned 
companies which constitute not more than 1% of the voting securities of any 
such company) in any business that is competitive with that of Employer or 
its affiliates, (b) accept employment with or render services to a competitor 
of Employer or any of its affiliates as a director, officer, manager or 
executive, (c) engage, for Employee's self or any other person or entity in 
the sales, marketing, design or manufacture of products competitive with any 
product sold, marketed, designed or manufactured by 

                                       18

<PAGE>

Employer or its affiliates, (d) contact, solicit or attempt to solicit or 
accept business from any customers of Employer or its affiliates or any 
person or entity whose business Employer or its affiliates is soliciting, or 
(e) take any action inconsistent with the fiduciary relationship of an 
employee to Employee's employer.  For purposes of this Agreement, a 
"competitor" specifically includes persons, firms, sole proprietorships, 
partnerships, companies, corporations, or other entities that market products 
and/or perform services in direct or indirect competition with those marketed 
and/or performed by Employer or its affiliates within the United States, 
Canada and Mexico.

     12.  NONEMPLOYMENT AGREEMENT.  During the period of employment with 
Employer and for a period of 24 months thereafter, Employee shall not, on 
Employee's own behalf or on behalf of any other person, partnership, 
association, corporation or other entity, hire or solicit or in any manner 
attempt to influence or induce any employee of Employer or its affiliates to 
leave the employment of Employer or its affiliates, nor shall Employee use or 
disclose to any person, partnership, association, corporation or other entity 
any information obtained while an employee of Employer concerning the names 
and addresses of the employees of Employer or its affiliates.

     13.  NONDISPARAGEMENT AGREEMENT.  Employee shall not, either during the 
Term of this Agreement or at any time thereafter, make statements, whether 
orally or in writing, concerning Employer, any of its directors, officers, 
employees or affiliates or any of its business strategies, policies or 
practices, that shall be in any way disparaging, derogatory or critical, or 
in any way harmful to the reputation of Employer, any such persons or 
entities or business strategies, policies or practices.

     14.  SUCCESSORS; BINDING AGREEMENT.

          (a)  Employer will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of 

                                       19

<PAGE>

Employer, by agreement in form and substance satisfactory to Employee, to 
expressly assume and agree to perform this Agreement in the same manner and 
to the same extent that Employer would be required to perform it if no such 
succession had taken place.  Failure of Employer to obtain such agreement 
prior to the effectiveness of any succession shall be a breach of this 
Agreement and shall entitle Employee to compensation from Employer in the 
same amount and on the same terms as Employee would be entitled hereunder if 
Employee terminated Employee's employment for Good Reason, except that for 
purposes of implementing the foregoing, the date on which any such succession 
becomes effective shall be deemed the date of Employee's termination.  As 
used in this Agreement, "Employer" shall mean Employer as hereinbefore 
defined and any successor to its business and/or assets as aforesaid which 
executes and delivers the agreement provided for in this Section 14 or which 
otherwise becomes bound by all the terms and provisions of this Agreement by 
operation of law or otherwise.

          (b)  This Agreement shall inure to the benefit of and be 
enforceable by Employee's personal or legal representatives, executors, 
administrators, successors, heirs, distributees, devisees and legatees.  In 
the event of Employee's death, any amounts owed to Employer under this 
Agreement shall be paid to Employee's surviving spouse, if any, and if none, 
to  Employee's estate.

     15.  SEVERABILITY.  The parties hereto intend all provisions of Sections 
10, 11, 12, 13 and 16 hereof to be enforced to the fullest extent permitted 
by law.  Accordingly, should a court of competent jurisdiction determine that 
the scope of any provision of Sections 10, 11, 12, 13 and 16 hereof is too 
broad to be enforced as written, the parties intend that the court reform the 
provision to such narrower scope as it determines to be reasonable and 
enforceable.  In addition, however, Employee agrees that the provisions of 
each of the foregoing sections constitute separate agreements independently 
supported by good and adequate consideration and shall be severable from the 
other 

                                       20

<PAGE>

provisions of, and shall survive, this Agreement.  The existence of any claim 
or cause of action of Employee against Employer, whether predicated on this 
Agreement or otherwise, shall not constitute a defense to the enforcement by 
Employer of the covenants and agreements of Employee contained in the 
non-competition, nondisclosure, nonemployment or nondisparagement agreements. 
 If any provision of this Agreement is held to be illegal, invalid or 
unenforceable under present or future laws effective during the term hereof, 
such provision shall be fully severable and this Agreement shall be construed 
and enforced as if such illegal, invalid or unenforceable provision never 
comprised a part of this Agreement; and the remaining provisions of this 
Agreement shall remain in full force and effect and shall not be affected by 
the illegal, invalid or unenforceable provision or by its severance 
therefrom.  Furthermore, in lieu of such illegal, invalid or unenforceable 
provision, there shall be added automatically as part of this Agreement, a 
provision as similar in its terms to such illegal, invalid or unenforceable 
provision as may be possible and be legal, valid and enforceable.

     16.  INVENTIONS.  Employee shall promptly disclose, grant and assign to 
Employer for its sole use and benefit any and all inventions, improvements, 
technical information and suggestions relating in any way to the products of 
Employer or any of its affiliates or capable of beneficial use by Employer or 
any of its affiliates, which Employee has in the past conceived, developed or 
acquired, or may conceive, develop or acquire during the term hereof (whether 
or not during usual working hours), together with all patent applications, 
letters patent, copyrights and reissues thereof that may at any time be 
granted upon any such invention, improvement or technical information.  In 
connection therewith, Employee shall promptly at all times during and after 
the term hereof:

          (a)  execute and deliver such applications, assignments, 
descriptions and other instruments as may be necessary or proper in the 
opinion of Employer to vest title to such inventions, 

                                       21

<PAGE>

improvements, technical information, patent applications and patents or 
reissues thereof in Employer and to enable it to obtain and maintain the 
entire right and title thereto throughout the world; and

          (b)  render to Employer, at its expense, all such assistance as it 
may require in the prosecution of applications for said patents or reissues 
thereof, in the prosecution or defense of interferences which may be declared 
involving any said application or patents and in any litigation in which 
Employer or its affiliates may be involved relating to any such patents, 
inventions, improvements or technical information.

     17.  AFFILIATES.  Employee will use Employee's best efforts to ensure 
that no relative of his or corporation of which Employee is an officer, 
director or shareholder, or other affiliate of his, shall take any action 
that Employee could not take without violating any provision of this 
Agreement.

     18.  REMEDIES.  Employee recognizes and acknowledges that the 
ascertainment of damages in the event of his breach of any provision of this 
Agreement would be difficult, and Employee agrees that Employer, in addition 
to all other remedies it may have, shall have the right to injunctive relief 
if there is such a breach.

     19.  NOTICES.  Any notices, consents, demands, requests, approvals and 
other communications to be given under this Agreement by either party to the 
other shall be in writing and shall be either (i) delivered in person, (ii) 
mailed by registered or certified mail, return receipt requested, postage 
prepaid, (iii) delivered by overnight express delivery service or same-day 
local courier service or (iv) delivered by facsimile transmission, to the 
addresses set forth below.

          If to Employer:     Pillowtex Management Services Company
                              4111 Mint Way
                              Dallas, Texas  75237
                              Attention:  Chief Executive Officer
                              Facsimile No. (214) 333-2244

          If to Employee:     ______________________

                                       22

<PAGE>

                              _______________________

Notices delivered personally, by overnight express delivery, local courier or 
facsimile shall be deemed communicated as of actual receipt; mailed notices 
shall be deemed communicated as of three days after mailing.

     20.  ENTIRE AGREEMENT.  This Agreement supersedes any and all other 
agreements, either oral or written, between the parties hereto with respect 
to the subject matter hereof, including without limitation the Employment 
Agreement in effect between Employee and Employer on December 31, 1997, and 
contains all of the covenants and agreements between the parties with respect 
thereto.

     21.  MODIFICATION.  No change or modification of this Agreement shall be 
valid or binding upon the parties hereto, nor shall any waiver of any term or 
condition in the future be so binding, unless such change or modification or 
waiver shall be in writing and signed by the parties hereto.

     22.  GOVERNING LAW AND VENUE.  THE PARTIES ACKNOWLEDGE AND AGREE THAT 
THIS AGREEMENT AND THE OBLIGATIONS AND UNDERTAKINGS OF THE PARTIES HEREUNDER 
WILL BE PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS.  THIS AGREEMENT SHALL BE 
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF 
TEXAS.  IF ANY ACTION IS BROUGHT TO ENFORCE OR INTERPRET THIS AGREEMENT, 
VENUE FOR SUCH ACTION SHALL BE IN DALLAS COUNTY, TEXAS.  EACH OF THE PARTIES 
HERETO HEREBY AGREES IRREVOCABLY AND UNCONDITIONALLY TO CONSENT TO SUBMIT TO 
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND OF THE 
UNITED STATES OF AMERICA LOCATED IN DALLAS, TEXAS FOR ANY ACTIONS, SUITS OR 
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND FURTHER AGREES 
THAT SERVICE OF PROCESS, SUMMONS OR NOTICE BY U.S. REGISTERED MAIL TO THE 
APPLICABLE 

                                       23

<PAGE>

ADDRESSES SET FORTH IN SECTION 19 HEREIN SHALL BE EFFECTIVE SERVICE OF 
PROCESS OF ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST SUCH PARTY IN ANY 
SUCH COURT.

     23.  COUNTERPARTS.  This Agreement may be executed in counterparts, each 
of which shall constitute an original, but all of which shall constitute one 
document.

     24.  COSTS.  If any action or law or in equity is necessary to enforce 
or interpret the terms of this Agreement, the prevailing party shall be 
entitled to reasonable attorneys' fees, costs and necessary disbursements in 
addition to any other relief to which Employee or it may be entitled.

     25.  ASSIGNMENT.  Employer shall have the right to assign this Agreement 
to its successors or assigns.  The terms "successors" and "assigns" shall 
include any person, corporation, partnership or other entity that buys all or 
substantially all of Employer's assets or all of its stock, or with which 
Employer merges or consolidates.  The rights, duties and benefits to Employee 
hereunder are personal to Employee, and no such right or benefit may be 
assigned by Employee.

     26.  BINDING EFFECT.  This Agreement shall be binding upon the parties 
hereto, together with their respective executors, administrators, successors, 
personal representatives, heirs and assigns.

     27.  NO WAIVER.  The failure by Employer to enforce at any time any of 
the provisions of this Agreement or to require at any time performance by 
Employee of any of the provisions hereof shall in no way be construed to be a 
waiver of such provisions or to affect the validity of this Agreement, or any 
part hereof, or the right of Employer thereafter to enforce each and every 
such provision in accordance with the terms of this Agreement.

                                  *       *       *

                                       24

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as 
of the date first above written.


                                       PILLOWTEX MANAGEMENT SERVICES COMPANY


                                       By: ____________________________________


                                       EMPLOYEE
                                                
                                       ________________________________________

                                      GUARANTEE

     Pillowtex Corporation unconditionally guarantees all obligations of 
Pillowtex Management Services Company to Employee as set forth in the 
foregoing Employment Agreement.


                                       PILLOWTEX CORPORATION


                                       By: ____________________________________

                                     25