Consulting Agreement - Mohawk Industries Inc. and David L. Kolb

                               January 17, 2001

Board of Directors
Mohawk Industries, Inc.
P.O. Box 12069
Calhoun, Georgia 30703-7002

     Re:  Consulting Services

Members of the Board of Directors:

     This letter sets forth our amended and restated agreement and
understanding, effective as of January 1, 2001, concerning the provision of
consulting services to Mohawk Industries, Inc. (the "Company") following the
effective date of retirement and resignation of David L. Kolb as Chairman and
Chief Executive Officer of the Company, which is January 1, 2001. Consequently,
the terms of this letter agreement (the "Agreement") became effective on January
1, 2001, replacing the letter agreement dated August 1, 2000, as of its
effective date, and shall continue in effect, subject to paragraph 7, until
David's current term as a member of the Board of Directors of the Company (the
"Board of Directors") expires at the Annual Meeting of Stockholders in 2001.
Thereafter, this Agreement may be renewed by our mutual consent for a period
ending at any time before the expiration of his next term, if any, as a member
of the Board of Directors of the Company. As a condition to the renewal of this
Agreement, David understands that he will have to be nominated for reelection as
a member of the Board of Directors and be elected to that office. David agrees
that, if he is nominated for election to another term as a director of the
Company, he will consent to serve if re-elected.

     David agrees to continue to serve as Chairman of the Board of Directors in
a non-executive officer, non-employee capacity during his current term as a
member of the Board of Directors, and thereafter during a next term, at the
pleasure of the Board of Directors. In such capacity, he will be available for
consultation with the Chief Executive Officer and the Board on a basis which is
consistent, as to frequency and time commitment, with the normal expectations of
a non-executive officer, non-employee Chairman.

     Therefore, in light of the mutual undertakings contained in this letter
agreement and other good and valuable consideration, we agree as follows:
 
1.   Business Services. The Company hereby contracts for and, David L. Kolb (the
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"Consultant"), agree to provide from time-to-time such additional consulting
services on specific special projects to be mutually agreed upon by the
Consultant and the Chief Executive Officer or the Board of Directors as to
scope, timing and compensation (the "Additional Services"). The nature of the
Additional Services will not be inconsistent with the services the Consultant
provided to the Company as its Chairman and Chief Executive Officer. The
Consultant shall be acting in the capacity as a director in providing services
as Chairman and providing Additional Services. The Consultant shall be entitled
to indemnification on the terms provided by the Certificate of Incorporation and
Bylaws of the Company when acting in the capacity of director and providing
services as Chairman or providing Additional Services. The Consultant may

 
perform the Additional Services on the premises of the Company; however, he
shall perform the Additional Services as an independent contractor exercising
independent judgment and without direct supervision by the Company.

2.  Compensation. As compensation for his services as Chairman of the Board of
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Directors, Consultant shall be paid an annual retainer of $150,000 in lieu of
the annual retainer and meeting fees paid to non-employee directors. This amount
shall be paid monthly, and such payment shall cover his services as Chairman,
and his consultation with the Chief Executive Officer and Board on a basis which
is consistent, as to frequency and time commitment, with the normal expectations
of a non-executive officer, non-employee Chairman; provided, however, that the
Company shall not withhold taxes from these payments. The Consultant shall not
be eligible to receive a bonus for 2001 as a participant in the Company's 2001
Executive Incentive Program or in any alternative bonus plan adopted by the
Board of Directors for 2001. Any benefits to which Consultant is entitled due to
his prior service as an employee of the Company shall be governed by the terms
of the plans and agreements under which such benefits are provided, except as
specifically modified by this Agreement.

     The compensation to be paid to the Consultant for the Additional Services
shall be specifically agreed between the Consultant and the Chief Executive
Officer or the Board of Directors on a project-by-project basis.

3.   Payment of Taxes. Consultant acknowledges that he will have sole
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responsibility for the payment of all federal, state and local estimated,
withholding and employment taxes arising out of his relationship with the
Company and the performance of the Additional Services. Consultant acknowledges
and agrees that the Company will not withhold on his behalf any sums for income
tax, unemployment insurance, Social Security or any other withholding pursuant
to any law or requirement of any governmental body. Each and every one of such
payments and withholdings is the sole responsibility of Consultant. Consultant
agrees to indemnify and hold the Company harmless from any and all loss or
liability arising with respect to the failure of Company to withhold or make
such payments and withholdings but not in excess of (i) the amounts included in
any assessment by the applicable governmental agencies of the income tax that
the Company would have been required to withhold pursuant to Section 3402 of the
Internal Revenue Code (the "Code") and of the FICA tax that the Company would
have been required to withhold pursuant to Section 3102 of the Code, and (ii)
any interest accruing on such amounts. In the event the United States Internal
Revenue Service ("IRS") should question or challenge the worker status of
Consultant under this agreement, Consultant shall notify the Company of any such
inquiry or challenge. Consultant and the Company agree that both parties shall
have the right to participate in any discussion or negotiation occurring with
the IRS, regardless of who initiates such discussions or negotiations, and each
party shall notify the other in advance of any planned meeting or discussion.

4.   Reimbursement of Expenses. Consultant shall be entitled to be reimbursed in
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accordance with the policies of the Company, as adopted and amended from time to
time, for all reasonable and necessary travel and living expenses incurred by
him in connection with the performance of the duties of Chairman of the Board
and the Additional Services; provided, however, Consultant shall, as a condition
of such reimbursement, submit verification of the

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nature and amount of such expenses in excess of $2,500.00 in advance of
incurring the expense and in accordance with the reimbursement policies adopted
by the Company from time to time.

5.   Calculation of SERP Benefits. On the effective date of this Agreement,
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Consultant will no longer be considered an active employee of the Company and
shall have retired for purposes of the Mohawk Industries, Inc. Supplemental
Executive Retirement Plan (the "SERP"). In calculating Consultant's benefits
under the SERP, the Company agrees and acknowledges that (i) Consultant's entire
bonus payment under the Mohawk Industries, Inc. 2000 Executive Incentive Program
("2000 EIP") will be included as compensation under the SERP for the 60 months
ending December 31, 2000, despite the fact that all or a portion of such bonus
payment will not be paid to Consultant until after December 31, 2000, and that a
portion of such bonus payment may not yet be vested and (ii) Consultant's entire
bonus payment under the Mohawk Industries, Inc. 1995 Executive Incentive Plan
("1995 EIP") will be excluded as compensation under the SERP for the 60 months
ending December 31, 2000, despite the fact that all or a portion of such bonus
payment was paid to the Consultant during the 60 months ending December 31,
2000. In addition, the Consultant's SERP benefits as of the date of his
retirement shall be secured by the Mohawk Industries, Inc. Benefit Security
Trust (the "Benefit Security Trust") attached hereto as Exhibit A in the manner
set forth in such Exhibit.

6.   Calculation of Bonus under the EIP. For purposes of the 2000 EIP, the
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Company agrees that Consultant shall be entitled to receive the entire
calculated bonus amount for the plan year ending December 31, 2000,
notwithstanding Consultant's retirement from the Company and without any
downward adjustment by the Compensation Committee of the Board of Directors
except that Consultant's calculated bonus amount under the 2000 EIP will be
reduced by the same percentage or amount if the calculated bonus amounts for all
Corporate participants are reduced by a fixed percentage or amount by the
Compensation Committee. Further, the Company agrees that Consultant shall be
entitled to retain any Company stock that he receives under the 2000 EIP or that
he has received under similar programs applicable to earlier fiscal years of the
Company notwithstanding his retirement from the Company. 

7.   Termination.
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     (a)  This Agreement shall be terminated at the earliest of the following:

          (1)  At any time by the Company upon fifteen (15) days prior written
     notice of termination delivered to the Consultant in accordance with the
     provisions of Section 9 hereof;

          (2)  By Consultant upon a breach of this Agreement by the Company and
     failure by the Company to remedy such breach within thirty (30) days after
     receipt of notification thereof delivered in accordance with the provisions
     of Section 9 hereof.

     (b)  Upon termination all rights and obligations of the parties under this
Agreement will immediately cease and terminate (except for the rights and
obligations pursuant to Sections 5 and 6, which will survive such termination),
and the Company will have no further 

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obligation to Consultant with respect to this Agreement, except for compensation
and reimbursable expenses accrued and unpaid at the date of termination.

8.   Severability. This Agreement is intended to be performed in accordance
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with, and only to the extent permitted by, all applicable laws, ordinances,
rules and regulations. If any provision of this Agreement, or the application
thereof to any person or particular circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, it is the intention of the parties to
this Agreement that the remainder of this Agreement and the application of such
provisions to other persons or particular circumstances shall not be affected
thereby, but rather shall be enforced to the greatest extent permitted by law.

9.   Notices. Except as otherwise specifically provided herein, any notice
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required or permitted to be given by a party pursuant to this Agreement must be
given in writing, and personally delivered or mailed to the other party by
certified or registered mail, return receipt requested, at the address set forth
below or at such other address as such party may designate by written notice
given in accordance with this Section 9. Any notice complying with this Section
9 will be deemed received upon actual receipt by the addressee.

       Consultant:

             David L. Kolb
             247 Mount Paran Road
             Atlanta, GA  30327

       Company:

             Mohawk Industries, Inc.
             160 South Industrial Boulevard
             Calhoun, GA  30701


10.  Assignment. This Agreement, and the rights and obligations of the parties
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under this agreement may be assigned only upon the prior written approval of the
parties. The rights and obligations of the parties will inure to the benefit of,
will be binding upon and will be enforceable by the parties and their lawful
successors and representatives.

11.  Entire Agreement. Except as to the terms of the 2000 EIP, the 2001 EIP,
     ----------------                                                        
the SERP and the Benefit Security Trust, which shall be governed by separate
agreements, this Agreement, when executed, embodies the entire agreement of the
parties on the subject matter hereof; provided, that to the extent that the
terms of the 2000 EIP, the 2001 EIP, the SERP and the Benefit Security Trust
differ from the terms of this Agreement, the terms of this Agreement shall
govern. No amendment or modification of this Agreement will be valid or binding
upon the Company or Consultant unless made in writing and signed by the parties.

12.  Modification and Waiver. Any term or condition of this Agreement may be
     -----------------------                                                 
waived in writing at any time by the party hereto which is entitled to the
benefit of such term or condition. 

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Any waiver on one occasion shall not be deemed to be a waiver of the same or of
any other breach on any future occasion. This Agreement may be modified or
amended only by a writing signed by all of the parties hereto.

13.  Counterparts and Headings. This Agreement may be executed simultaneously
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in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same instrument. The headings set out
in this Agreement are for the convenience of reference only and shall not be
deemed to be a part of this Agreement.

14.  Choice of Law. The validity and effect of this Agreement shall be governed
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by and construed and enforced in accordance with the internal laws of the State
of Georgia, without giving effect to any rules regarding conflicts of law.

15.  Venue. Any action, suit or proceeding arising out of or in connection with
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this Agreement (collectively "Proceeding") shall be brought exclusively in the
U.S. District court for the Northern District of Georgia or a state court of
competent jurisdiction in Fulton County, Georgia. Each party hereto irrevocably
waives, to the fullest extent permitted by law, any objection which such party
may have to the laying of venue for any Proceeding in any such court.

16.  Attorneys' Fees. If any action or other proceeding is brought for the
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enforcement of this Agreement, or because of any alleged dispute, breach,
default or misrepresentation in connection with any of the provisions of this
Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which the party may be entitled.

     IN WITNESS WHEREOF, the Company, through its duly authorized officer, and
the Consultant have executed this Agreement, under seal, all as of the day and
year first above written.

ATTEST:                                MOHAWK INDUSTRIES, INC..

/s/ Jerry L. Melton
-----------------------------------

Title: Vice President and Corporate    By: /s/ John D. Swift
       Secretary                           --------------------------------

       [CORPORATE SEAL]                Title: Vice President of Finance


                                       CONSULTANT:


       
                                       /s/ David L. Kolb             
                                       ------------------------------[Seal]
                                       DAVID L. KOLB

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