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                         EXECUTIVE EMPLOYMENT AGREEMENT

    EXECUTIVE EMPLOYMENT AGREEMENT, effective July 1, 1997, by and between 
SPORT-HALEY, INC., a Colorado corporation (the "Company") and CATHERINE B. 
BLAIR (the "Executive").

    WHEREAS, the Company has, prior to the date of this Agreement, employed 
the Executive as the Company's Vice President of Merchandising and Design; and

    WHEREAS, the Company desires to continue to employ the Executive on a 
full-time basis, and the Executive desires to be so employed by the Company, 
from and after the date of this Agreement.

    NOW, THEREFORE, in consideration of the mutual covenants contained 
herein, the parties agree as follows:
                                       
                                  ARTICLE I
                        EMPLOYMENT DUTIES AND BENEFITS

    SECTION 1.1  EMPLOYMENT.  The Company hereby employs the Executive in the 
position described on Schedule 1 hereto as an executive officer of the 
Company. The Executive accepts such employment and agrees to perform the 
duties and responsibilities assigned to her pursuant to this Agreement.

    SECTION 1.2  DUTIES AND RESPONSIBILITIES.  The Executive shall hold the 
position with the Company which is specified on Schedule 1, which is attached 
hereto and incorporated herein by reference.  The Executive is employed 
pursuant to the terms of this Agreement and agrees to devote full-time to the 
business of the Company.  The Executive shall perform the duties set forth on 
Schedule 1 while employed as an executive officer, and such further duties as 
may be determined and assigned to her from time-to-time by the Chief 
Executive Officer or the Board of Directors of the Company.

    SECTION 1.3  WORKING FACILITIES.  The Executive shall be furnished with 
facilities and services suitable to the position and adequate for the 
performance of the Executive's duties under this Agreement.  The Executive's 
duties shall be rendered at the Company's offices, or at such other place or 
places as the Executive may designate with the Company's approval, which 
shall not be unreasonably withheld.

    SECTION 1.4  VACATIONS.  The Executive shall be entitled each year to a 
reasonable vacation of not less than two weeks in accordance with the 
established practices of the Company now or hereafter in effect for executive 
personnel, during which time the Executive's compensation shall be paid in 
full. Should the Company from time-to-time require the Executive to perform 
job duties during vacation periods, the Executive shall be entitled to 
compensatory vacation time at a mutually agreeable time.

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    SECTION 1.5  EXPENSES.  The Executive is authorized to incur reasonable 
expenses for promoting the domestic and international business of the Company 
in all respects, including expenses for entertainment, travel and similar 
items. The Company will reimburse the Executive for all such expenses upon 
the presentation by the Executive, from time-to-time, of an itemized account 
of such expenditures.
                                       
                                  ARTICLE II
                                 COMPENSATION

    SECTION 2.1  BASE SALARY.  The Company shall pay to the Executive a base 
salary of not less than the amount specified on Schedule 1, subject to annual 
review and raises in such base salary.  The base salary may be raised by 
action of the Board of Directors, and such raises shall thereafter be 
included in the Executive's base salary as defined for purposes of this 
Agreement and the Company's bonus plan.

    SECTION 2.2  BONUS AND BONUS PLAN PARTICIPATION.  The Executive shall be 
entitled to receive a bonus at such time or times as may be determined by the 
Board of Directors of the Company.  The Executive shall also be entitled to 
receive bonuses of up to 30% of the Executive's base salary in accordance 
with the provisions of the Company-wide bonus plan as in effect from time to 
time.

                                 ARTICLE III
                      TERM OF EMPLOYMENT AND TERMINATION

    SECTION 3.1  TERM.  This Agreement shall be for a term which is specified 
on Schedule 1, commencing on its effective date, subject, however, to 
termination during such period as provided in this Article.  Provided that 
the Executive is in compliance with all of her obligations hereunder, the 
term of the Executive's employment shall be extended automatically for one 
additional year at the end of each year of the term or extended term of this 
Agreement on the same terms and conditions as contained in this Agreement, 
unless either the Company or the Executive shall, at least 90 days prior to 
the expiration of the initial term or of any renewal term, give written 
notice of the intention not to renew this Agreement.  If the Company gives 
such written notice of non-renewal, the provisions of Section 3.3 shall 
apply; if the Executive gives such written notice of non-renewal, the 
provisions of Section 3.5 shall apply.  Automatic renewals shall be effective 
in subsequent years on the same day of the same month as the original 
effective day and month of this Agreement.

    SECTION 3.2  TERMINATION BY THE COMPANY WITH CAUSE.  The Company may 
terminate the Executive, at any time, upon ten days' written notice and 
opportunity for the Executive to remedy any non-compliance with the terms of 
this Agreement, by reason of fraud or gross negligence of the Executive or 
the conviction of the Executive of a felony which is not appealed and 
subsequently 

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reversed or vacated.  In such event, the Board of Directors shall provide in 
writing to the Executive an opinion of the Board of Directors, signed by each 
member voting in favor of termination of the Executive, which shall specify 
with particularity the basis for such termination.  Upon the date of 
termination of this Agreement pursuant to this Section 3.2, the Company's 
obligation to pay any compensation shall terminate, at which time the Company 
shall be responsible for compensating the Executive for any vacation time not 
taken.  Subject to this exception and the obligation of the Company to 
compensate the Executive through the notice period, no other compensation 
shall be payable to the Executive should this Agreement be terminated 
pursuant to this Section 3.2.

    SECTION 3.3  TERMINATION BY THE COMPANY WITHOUT CAUSE.  The Company may 
terminate the Executive's services without cause at any time upon 90 days' 
written notice.  In such event, in addition to compensating the Executive 
during such 90-day notice period, the Company shall be obligated to 
compensate the Executive with severance pay equal to 90 days' compensation as 
of the date of such termination.  Accordingly, in the event the Company 
terminates this Agreement without cause or chooses not to renew this 
Agreement upon its expiration, the Executive shall receive an aggregate of 
six months' salary from and after the date of the Executive's receipt of a 
notice of termination through and including the date of termination.  In 
addition to the foregoing, the Executive shall receive a bonus which shall be 
equivalent to 50% of the annual bonus last received by the Executive.  In the 
event the Executive received no annual bonus within the 12 months preceding 
the date of termination, the Executive shall be entitled to receive a minimum 
bonus of $15,000 on the date of termination by the Company without cause.  
Such bonus provision shall be in addition to the compensation and severance 
package hereinabove specified.

    SECTION 3.4  TERMINATION BY THE EXECUTIVE WITH CAUSE.  The Executive may 
terminate her employment with the Company at any time, upon ten days' written 
notice and opportunity for the Company to remedy any non-compliance, by 
reason of (i) the Company's material failure to perform its duties pursuant 
to this Agreement, or (ii) any material diminishment in the duties and 
responsibilities, working facilities, or benefits as described in Article I 
of this Agreement. The Executive shall not be entitled to the severance 
compensation and other benefits described in Section 3.7 below in the event 
of termination of this Agreement pursuant to this Section 3.4, except as 
otherwise provided in Section 3.7(a), but shall be entitled to the 
compensation provided in Section 3.3 upon a determination that the Company 
has failed to perform its duties pursuant to this Agreement and that such 
failure is material or a determination that the duties and responsibilities, 
working facilities, or benefits as described herein have been materially 
diminished. Such determination shall be made by the Board of Directors in 
their best good faith.

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    SECTION 3.5  TERMINATION BY THE EXECUTIVE WITHOUT CAUSE.  The Executive, 
without cause, may terminate this Agreement upon 90 days' written notice to 
the Company.  In such event, the Executive shall not be required to render 
the services required under this Agreement following such 90-day period. 
Compensation for vacation time not taken by the Executive shall be paid to 
the Executive at the date of termination.  The Executive shall not be 
entitled to the severance compensation and other benefits described in 
Section 3.7 below in the event of termination of this Agreement pursuant to 
this Section 3.5, except as described in Section 3.7(a), but shall be 
entitled to the compensation provided in Section 3.3.

    SECTION 3.6  TERMINATION UPON DEATH OF THE EXECUTIVE.  In addition to any 
other provision relating to termination, this Agreement shall terminate upon 
the Executive's death.  In such event, all unpaid compensation and bonuses, 
compensation for vacation time not taken by the Executive and all expense 
reimbursements due to the Executive shall be paid to the Executive's estate.

    SECTION 3.7  SEVERANCE COMPENSATION AND CONTINUATION OF BENEFITS.

    (a)  Notwithstanding any other provisions hereof, in the event of a 
non-negotiated change in control of the Company and either the Executive or 
the Company terminate this Agreement within 60 days of such non-negotiated 
change in control, the Executive shall receive severance compensation, 
payable in a lump sum within 30 days of such non-negotiated change in 
control, equal to three times her annual salary and incentive or bonus 
payments, if any, as shall have been paid to the Executive during the most 
recent 12-month period concluded prior to the date of her termination or 
resignation.  If the total amount of the non-negotiated change of control 
compensation were to exceed three times the Executive's base compensation 
(the average annual taxable compensation of the Executive for the five years 
preceding the year in which the change of control occurs), the Company and 
the Executive will reduce the lump sum compensation to be received by the 
Executive in order to avoid the imposition of the golden parachute tax as 
provided in the Tax Reform Act of 1984, as amended by the Tax Reform Act of 
1986.

    (b)  In the event the Executive is required to hire counsel to negotiate 
on her behalf in connection with her termination or a change in control of 
the Company, or in order to enforce the rights and obligations as provided 
herein, the Company shall reimburse to the Executive all reasonable 
attorney's fees which may be expended by the Executive in seeking to enforce 
the terms hereof. Such reimbursement shall be paid by the Company every 30 
days after the Executive provides to the Company copies of invoices from the 
Executive's counsel.  Such invoices may be redacted to preserve the 
attorney-client privilege or attorney-client confidentiality.

    (c)  So long as the Executive is receiving severance compensation 
pursuant to this Section 3.7, the Executive shall be entitled to continue to 
participate, at the Company's cost, in all existing 

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benefit plans provided to the Company's executive employees at the time of 
the Executive's termination or resignation. Such plans shall include, but are 
not limited to, then-existing medical, health, dental, vision, disability, 
life insurance and death benefit plans.  If the terms of such plans expressly 
prohibit the Executive from continuing as a participant in such plans 
following the date of resignation or termination, the Company will provide 
the Executive with benefits equivalent to, or exceeding, those offered by the 
then-existing benefit plans offered to the Company's executive employees, all 
at the Company's cost, for the duration of the Executive's right to severance 
compensation hereunder.

    Any compensation to be paid to the Executive under the foregoing 
provisions of this Section 3.7 shall be subject to the Executive complying 
with the non-compete provisions of Section 4.1(c) below.  In the event the 
Executive does not so comply, the Company shall be released from any 
obligations to the Executive under this Section 3.7.

    SECTION 3.8  OPTIONS.  Any options granted to the Executive to purchase 
stock of the Company shall become fully vested on the date of termination of 
this Agreement, except in the event termination is by the Company for reasons 
specified in Section 3.3 of this Agreement.  This provision shall serve as a 
contractual modification of any option grants or agreements between the 
Executive and the Company, whether such grants or agreements shall pre-date 
or postdate this Agreement, and is hereby incorporated by reference into each 
such option grant or agreement.

                                  ARTICLE IV
                       CONFIDENTIALITY AND COMPETITION

    SECTION 4.1  FURTHER OBLIGATIONS OF THE EXECUTIVE DURING AND AFTER 
EMPLOYMENT.

    (a)  The Executive agrees that during the term of her employment under 
this Agreement, she will engage in no other business activities which are or 
may be competitive with, or which might place her in a competing position to 
that of, the Company or any subsidiary of the Company.

    (b)  The Executive realizes that during the course of her employment, the 
Executive will have produced and/or have access to confidential business 
plans, information, business opportunity records, notebooks, data, formula, 
specifications, trade secrets, customer lists, account lists and inventions 
of the Company and its affiliates.  Therefore, during or subsequent to her 
employment by the Company, or by an affiliate, the Executive agrees to hold 
in confidence and not to directly or indirectly disclose or use or copy or 
make lists of any such information, except to the extent authorized by the 
Company in writing.  All records, files, business plans, documents, equipment 
and the like, or copies thereof, relating to Company's business, or the 
business of an affiliated company, which the Executive shall prepare, or use, 
or come into contact with, shall remain the sole property 

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of the Company, or of an affiliated company, and shall not be removed from 
the Company's or the affiliated company's premises without its written 
consent, and shall be promptly returned to the Company upon termination or 
resignation of employment with the Company or its affiliated companies.

    (c)  Because of her employment by the Company, the Executive will have 
access to trade secrets and confidential information about the Company, its 
business plans, its business accounts, its business opportunities, its 
expansion plans into other geographic areas and its methods of doing 
business.  The Executive agrees that for a period of one (1) year after 
termination or resignation of her employment (except if the Executive 
terminates this Agreement for cause under Section 3.5 hereof), she will not, 
directly or indirectly, compete with the Company or its affiliates in the 
business of designing, merchandising, marketing or contracting for the 
manufacture of men's and women's golf apparel, golf outerwear or golf 
headwear within the United States.  This non-compete agreement shall be void 
and of no further force or effect in the event termination occurs under 
Section 3.3 or Section 3.7 hereof and the Company fails to pay the Executive 
amounts required under Section 3.3 or Section 3.7 hereof.

    (d)  In the event a court of competent jurisdiction finds any provision 
of this Section 4.1 to be so overbroad as to be unenforceable, then such 
provision shall be reduced in scope by the court, but only to the extent 
deemed necessary by the court to render the provision reasonable and 
enforceable, it being the Executive's intention to provide the Company with 
the broadest protection possible against harmful competition.

                                  ARTICLE V
                            DISABILITY AND ILLNESS

    SECTION 5.1  DISABILITY AND SALARY CONTINUATION.

    A.   DEFINITION OF TOTAL DISABILITY.  For purposes of this Agreement, the 
terms "totally disabled" and "total disability" shall mean disability as 
defined in any total disability insurance policy or policies, if any, in 
effect with respect to the Executive.  If no insurance policy is in effect, 
"total disability" shall mean a medically determinable physical or mental 
condition which in the opinion of two independent physicians renders the 
Executive unable to perform substantially all of the duties required pursuant 
to this Agreement. Total disability shall be deemed to have occurred on the 
date of the disabling injury or onset of the disabling illness, as determined 
by the two independent physicians.

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    B.   SALARY CONTINUATION.  If the Executive becomes totally disabled 
during the term of this Agreement, her full salary shall be continued for 360 
days from the date of the disabling injury or onset of the disability illness.

    SECTION 5.2  ILLNESS.  If the Executive is unable to perform the services 
required under this Agreement by reason of illness or physical injury not 
amounting to total disability, as defined in this Article, the compensation 
otherwise payable to the Executive under this Agreement shall be continued in 
full for the remaining term or renewed term of this Agreement, but in no 
event for a period exceeding one year.

                                  ARTICLE VI
                               GENERAL MATTERS

    SECTION 6.1  GOVERNING LAW.  This Agreement shall be governed by the laws 
of the State of Colorado and shall be construed in accordance therewith.

    SECTION 6.2  NO WAIVER.  No provision of this Agreement may be waived 
except by an agreement in writing signed by the waiving party.  A waiver of 
any term or provision shall not be construed as a waiver of any other term or 
provision.

    SECTION 6.3  AMENDMENT.  This Agreement may be amended, altered or 
revoked at any time, in whole or in part, by filing with this Agreement a 
written instrument setting forth such changes, signed by each of the parties.

    SECTION 6.4  BENEFIT.  This Agreement shall be binding upon the Executive 
and the Company, and shall not be assignable by the Company without the 
Executive's written consent.

    SECTION 6.5  CONSTRUCTION.  Throughout this Agreement the singular shall 
include the plural, and the plural shall income the singular, and the 
masculine and neuter shall include the feminine, wherever the context so 
requires.

    SECTION 6.6  TEXT TO CONTROL.  The headings of articles and sections are 
included solely for convenience of reference.  If any conflict between any 
heading and the text of this Agreement exists, the text shall control.

    SECTION 6.7  SEVERABILITY.  If any provision of this Agreement is 
declared by any court of competent jurisdiction to be invalid for any reason, 
such invalidity shall not affect the remaining provisions.  On the contrary, 
such remaining provisions shall be fully severable, and this Agreement shall 
be construed and enforced as if such invalid provisions had not been included 
in the Agreement.

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    SECTION 6.8  AUTHORITY.  The officer executing this Agreement on behalf 
of the Company has been empowered and directed to do so by the Board of 
Directors of the Company.

    SECTION 6.9  EFFECTIVE DATE.  The effective date of this Agreement shall 
be July 1, 1997.

                               SPORT-HALEY, INC.

                               By: /s/ Robert G. Tomlinson
                                   --------------------------------------------
                                   Robert G. Tomlinson, Chief Executive Officer



                               EXECUTIVE:


                                   /s/ Catherine B. Blair
                                   --------------------------------------------
                                   Catherine B. Blair




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                              SPORT-HALEY, INC.

                       EXECUTIVE EMPLOYMENT AGREEMENT

                                  SCHEDULE 1

                          DUTIES AND COMPENSATION




Executive:    Catherine B. Blair

Position:     Vice President of Merchandising and Design

Base Salary:  $80,000 per year, payable bi-weekly

Bonus:        As determined by the Board of Directors and in accordance with
              Company-wide bonus plan.

Term:         June 30, 1999, subject to automatic one (1) year extensions
              described in Section 3.1 of the Executive Employment Agreement

Duties and
 Responsibilities: Supervision and coordination of all merchandising and design
                   operations of the Company.



APPROVED:

THE COMPANY:                                  EXECUTIVE:



By: /s/ Robert G. Tomlinson                   /s/ Catherine B. Blair
    -------------------------------------     ---------------------------------
     Robert G. Tomlinson, Chief Executive     Catherine B. Blair
     Officer


Date:  July 1, 1997                           Date:  July 1, 1997




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