Employment Agreement: CEO

PARAGON TRADE BRANDS, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT


CHIEF EXECUTIVE OFFICER


This Agreement, made as of the 5th day of August, 1997, by and between Paragon Trade Brands, Inc., a Delaware corporation (the "Company"), and Bobby V. Abraham ("Employee").


W I T N E S S E T H :


WHEREAS, the Company desires to continue to employ Employee and Employee desires to continue to be employed by the Company upon the terms and conditions set forth herein; and


WHEREAS, the Company desires to amend and restate the provisions of that certain Employment Agreement made as of the 2nd day of February 1993 (the "Original Agreement"), by and between the Company and Employee;


NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed as follows:


1. EMPLOYMENT. The Company hereby employs Employee as chief executive officer of the Company and Employee hereby accepts such employment, upon the terms and conditions set forth herein.


2. TERM. Except as otherwise noted in this Agreement or the Schedules attached hereto, the term of this Agreement shall commence on the Effective Date and shall expire on the date which the Employee's employment by the Company terminates. For purposes of this Agreement, the term "Effective Date" means the date first written above.


3. DUTIES. Employee will, during the term hereof: (a) faithfully, diligently and capably do and perform all such acts and duties, and furnish such services, as the board of directors of the Company shall direct or as is customary for the chief executive officer of a publicly held company, and do and perform all acts in the ordinary course of the Company's business (subject to such limitations as the board of directors of the Company may prescribe) necessary and conducive to the Company's best interests; (b) devote such time, energy and skill to the business of the Company and to the promotion of the Company's best interests as is reasonably required of an individual whose employment as the chief executive officer of the Company is the individual's principal occupation and employment; and (c) comply with any and all Company announced policies and procedures governing conduct in the workplace.


4. COMPENSATION.


(a) The Company shall compensate Employee for all services to be performed by Employee during the term of this Agreement as follows:


(i) pay salary at a salary rate to be determined annually
by the compensation committee of the board of directors of the Company
("Salary Rate") in


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periodic installments in accordance with Company practices for other
executive employees; and


(ii) grant awards of stock options and restricted stock ("stock
awards") to be determined annually by the compensation committee of the
board of directors of the Company;


(iii) provide a deferred compensation plan as set forth on
Schedule A hereto;


(iv) provide a supplemental severance plan as set forth on
Schedule B hereto; and


(v) provide such additional or special compensation as the board of
directors of the Company shall approve after receipt of recommendations
from the compensation committee of the board of directors, it being
understood by Employee that except with respect to compensation
contemplated by Schedules A and B, Employee's compensation by the Company
shall be only such compensation as shall have been approved by the board
of directors of the Company.


(b) In addition to compensation as provided for in Section 4(a), the Company agrees that Employee shall be entitled to participate in such life insurance, medical, dental, pension, retirement and other benefits plans as are made available from time to time by the Company for the benefit of its salaried employees generally.


5. TERMINATION OF EMPLOYMENT.


(a) For purposes of this Agreement (1) Employee's employment by the Company shall terminate (A) by reason of Employee's death, voluntary resignation, retirement or disability (as the terms "retirement" and "disability" are defined in Article 1 of the Paragon Trade Brands, Inc. Deferred Compensation Plan adopted effective April 1, 1997), or (B) at the request of the Company's board of directors ("Board Requested Termination"); or (C) for cause; and (2) "cause" shall be deemed to exist if (i) Employee engages in acts of dishonesty or fraud in connection with his services hereunder; or (ii) during his employment, Employee is in breach of his obligations under Sections 3, 6 or 7, or the confidentiality agreement contemplated by Section 7;


(b) If Employee's employment with the Company is terminated by reason of Employee's death, retirement or disability, the Company's obligations hereunder shall be satisfied by providing the benefits provided for under the Company's other benefits plans applicable in the case of an employee's death, retirement or permanent disability;


(c) If Employee's employment with the Company is terminated (i) for cause or (ii) by Employee's voluntary resignation for a reason other than one enumerated in Section 5(d), all obligations of the Company under this Agreement shall terminate with such termination of employment, and Employee shall not be entitled to any compensation under this Agreement except for compensation fully earned and unpaid, and vested benefits under stock options and restricted stock granted Employee, as of the date of termination of employment.


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(d) If Employee's employment with the Company is terminated as a result of a Board Requested Termination, Employee shall be entitled to payment of a sum equal to two times the Employee's annualized Salary Rate in effect at the time of notification of termination, in addition to all compensation earned but unpaid and benefits vested unconditionally to the date of termination, which cash sum shall be payable in twenty-four (24) equal monthly installments, as applicable, subject to such deductions as may be required by law, beginning on the 15th day of the month following the month in which termination of employment occurs. Payment of the appropriate amount in cash shall be deemed to be liquidated damages for purposes of any suit brought by or on behalf of Employee for damages for breach of this Agreement.


6. RESTRICTIVE COVENANT. During Employee's employment with the Company, and for a period of two (2) years following termination of Employee's employment with the Company for any reason, as long as the Company meets its obligations under this Agreement, Employee shall not,


(a) directly or indirectly be employed or retained by, serve as an officer or director of, act as a consultant or advisor to, engage in, or be financially interested in, any person or persons, firm, association, venture, entity, partnership, corporation or sole proprietorship that competes, directly or indirectly, with the Company, or any business of the Company, as the Company is conducting its business at the time of termination of his employment; or


(b) assist financially or in any other manner, directly or through any other person or persons, firm, association, venture, entity, partnership, corporation or sole proprietorship, whether as a partner, shareholder in excess of 5% of the issued and outstanding shares, agent, owner, advisor or material financial backer, any person or entity to enter into, develop, or carry on any business that competes with the Company, or any business of the Company, as the Company is conducting its business at the time of termination of his employment; or


(c) recruit or hire, or attempt to recruit or hire, directly or indirectly, any member of the key management team who is employed by the Company at the time of termination of Employee's employment (for purposes of this Section 6(c), the Company's key management team shall include those employees eligible to receive either stock option grants or awards of stock appreciation rights under any of the Company's incentive compensation plans); or


(d) directly or indirectly, orally or in writing, disparage the Company, its products or employees in any way or interfere to the detriment of the Company with any existing business relationship of the Company and any of its employees, agents or representatives; or


(e) directly or indirectly divert or attempt to divert from the Company any business in which the Company is engaged.


Any breach of this restrictive covenant by Employee shall effect a forfeiture of Employee's rights hereunder and terminate the Company's obligations under this Agreement, and Employee shall not be entitled to any compensation contemplated by this Agreement, whether or not earned or vested as of the date of termination of the Company's obligations under this Agreement.


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7. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.


(a) Employee agrees to enter into a confidentiality agreement, in the form attached as Schedule C (the "Confidentiality Agreement"), concurrently with the execution of this agreement.


(b) Any breach by Employee of the Confidentiality Agreement shall effect a forfeiture of Employee's rights hereunder and terminate the Company's obligations under this Agreement, and Employee shall not be entitled to any compensation contemplated by this Agreement, whether or not earned or vested as of the date of termination of the Company's obligations under this Agreement.


8. ADDITIONAL REMEDIES. Employee recognizes that irreparable injury will result to the Company and to its business and properties in the event of any breach by Employee of any of the provisions of Section 6 or the Confidentiality Agreement and that Employee's continued employment is predicated on the covenants made by him pursuant thereto. In the event of any breach by Employee of his obligations under Section 6 or the Confidentiality Agreement, the Company shall be entitled, in addition to any other remedies and damages available, to injunctive relief to restrain any such breach by Employee or by any person or persons acting for or with Employee in any capacity whatsoever.


9. NONASSIGNMENT. This Agreement is personal to Employee and shall not be assigned by him. Employee shall not hypothecate, delegate, encumber, alienate, transfer or otherwise dispose of his rights and duties hereunder. This Agreement shall not be assigned by the Company without the prior written consent of Employee.


10. WAIVER. The waiver by a party of a breach by the other party of any provision of this Agreement shall not be construed as a waiver by such party of any subsequent breach by the other party.


11. SEVERABILITY. If any clause, phrase, provision or portion of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable under any applicable law, such event shall not affect or render invalid or unenforceable the remainder of this Agreement and shall not affect the application of any clause, provision or portion hereof to other persons or circumstances.


12. BENEFIT. The provisions of this Agreement shall inure to the benefit of the Company, its successors and assigns, and shall be binding upon the Company and Employee, its and his heirs, personal representatives and successors, including without limitation Employee's estate and the executors, administrators, or trustees of such estate.


13. RELEVANT LAW. This Agreement shall be construed and enforced in accordance with the laws of the State of Georgia.


14. NOTICES. All notices, requests, demands and other communications in connection with this Agreement shall be made in writing and shall be deemed to have been given when delivered by hand or facsimile transmission, or 48 hours after mailing at any general or branch United States Post Office, by registered or certified mail, postage prepaid,


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addressed as follows, or to such other address as shall have been designated in writing by the addressee:


(a) If to the Company:


Paragon Trade Brands, Inc.
Attn: Corporate Secretary
180 Technology Parkway
Norcross, Georgia 30092
Facsimile: (770) 300-3959


(b) If to Employee:


Bobby V. Abraham
435 River Glen Trace
Atlanta, Georgia


15. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding of the parties and supersedes all prior agreements, arrangements, and communications, whether oral or written, pertaining to the subject matter hereof, and this Agreement shall not be modified or amended except by written agreement of the Company and Employee.


IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first set-forth above.


PARAGON TRADE BRANDS, INC. Attest:


/S/ MELANIE Y. ZELLER By: /S/ DAVID W. COLE - --------------------- -----------------------


EMPLOYEE:


/S/ BOBBY V. ABRAHAM
--------------------
Bobby V. Abraham


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SCHEDULE A


DEFERRED COMPENSATION PLAN
PARAGON TRADE BRANDS, INC.


CHIEF EXECUTIVE OFFICER


1. GENERAL TERMS


A. AWARDS UNSECURED. The Company will pay Awards granted under this
Agreement ("Awards") from its general assets and will not set
aside any funds to pay or secure Awards at any time prior to
payment.


B. INTEREST. Interest will not be paid on Awards prior to the date
each Award becomes effective. Interest on Awards after they
become effective will accrue as described in Section 3C below.


C. TERMINATION OF EMPLOYMENT. If Employee is terminated by the
Company for willful violation of the Company rules or for gross
negligence in job performance, no portion of any Award will be
paid. In the event of Employee's death or disability, or if
Employee is terminated for reasons other than those listed above,
prior to the date an Award becomes effective, Employee (or
Employee's surviving spouse if any and, if not, Employee's legal
representative) will be paid the total amount of all Awards which
have become effective plus a pro rata portion of the current
year's Award which is not yet effective. Such pro rata portion
shall be determined by multiplying the amount of the Award by a
fraction the numerator of which is the number of months Employee
was employed by the Company during that year and the denominator
of which is twelve.


D. OTHER PLANS NOT AFFECTED. Awards under this Agreement will be in
addition to amounts paid to Employee under any other compensation
or benefit program of the Company.


E. DEFINITION OF TERMS. Capitalized terms not otherwise defined
herein are used as defined in the Amended and Restated Employment
Agreement between Paragon Trade Brands, Inc. and Bobby V. Abraham
dated August 5, 1997.


F. OWNE ...