ALBA-WALDENSIAN, INC.

                       1997 NONQUALIFIED STOCK OPTION PLAN
                                  FOR DIRECTORS

     1.  Purpose.  This Plan is intended to provide  Directors  of the Company a
sense  of  proprietorship  and  personal  involvement  in  the  development  and
financial  success of the Company and to encourage  Directors to remain with and
to devote their best efforts to the Company.

     2.  Definitions.  Whenever  used in the Plan,  unless the  context  clearly
indicates otherwise, the following terms shall have the following meanings:

     (a) "Act" means the Securities Exchange Act of 1934, as amended.

     (b) "Board" or "Board of  Directors"  means the Board of  Directors  of the
Company.

     (c) "Common Stock" means the Common Stock,  $2.50 par value, of the Company
and any other  stock or  securities  resulting  from the  adjustment  thereof or
substitution therefor as described in Paragraph 8 below.

     (d) "Company" means Alba-Waldensian,  Inc., a Delaware corporation, and any
corporation succeeding to the Company's rights and obligations hereunder.

     (e) "Director" means a member of the Board of Directors of the Company.

     (f) "Fair Market  Value",  with respect to a share of the Common Stock on a
particular  date,  shall be (i) if such  Common  Stock is listed  on a  national
securities  exchange or a foreign securities  exchange or traded on the National
Market  System,  the closing  sale price of the Common Stock on said date on the
national  securities  exchange,  the foreign securities exchange or the National
Market System on which the Common Stock is principally  traded,  or, if no sales
occur on said date,  then on the next  preceding  date on which  there were such
sales of Common  Stock,  or (ii) if the  Common  Stock  shall not be listed on a
national  securities  exchange or a foreign securities exchange or traded on the
National  Market System,  the mean between the closing bid and asked prices last
reported  by the  National  Association  of  Securities  Dealers,  Inc.  for the
over-the-counter market on said date or, if no bid and asked prices are reported
on  said  date,  then on the  next  preceding  date on  which  there  were  such
quotations, or (iii) if at any time quotations for the Common Stock shall not be
reported  by the  National  Association  of  Securities  Dealers,  Inc.  for the
over-the-counter market and the Common Stock shall not be listed on any national
securities exchange or any foreign securities exchange or traded on the National
Market System, the fair market value based on quotations for the Common Stock by
market  makers  or  other  securities  dealers  as  determined  by the  Board of
Directors in such manner as the Board may deem reasonable.

     (g) "Grant Date" means December 17, 1997.

     (h) "Option" means a stock option granted pursuant to this Plan.

     (i) "Optionee" means the person to whom an Option is granted.

     (j) "Option Price" is defined in Section 6.

     (k) "Plan" means this 1997 Nonqualified Stock Option Plan for Directors, as
in effect from time to time.

     (l)  "Stock  Option  Agreement"  means the  written  agreement  between  an
Optionee  and the Company  evidencing  the grant of an Option under the Plan and
setting forth or incorporating the terms and conditions thereof.

          3.  Administration.  The Plan  shall be  administered  by the Board of
Directors.  The  Board  shall  have all of the  powers  necessary  to  enable it
properly to carry out its duties  under the Plan,  including  but not limited to
the power and duty to  construe  and  interpret  the Plan and to  determine  all
questions  that  shall  arise  under  the  Plan,   which   interpretations   and
determinations shall be conclusive and binding upon all persons.  Subject to the
express  provisions of the Plan,  the Board may establish from time to time such
regulations,  provisions and procedures which in its opinion may be advisable in
the administration of the Plan.

          4. Eligibility;  Option Grants.  Each Director at the Grant Date shall
automatically  be granted  Options on the Grant Date to  purchase  2,000  shares
(subject to  adjustment or  substitution  pursuant to Paragraph 8 hereof) of the
Common Stock. In addition, each Director, upon his or her initial appointment to
the Board of  Directors,  will  automatically  be granted an Option to  purchase
2,000 shares  (subject to  adjustment  or  substitution  pursuant to Paragraph 8
hereof)  of the Common  Stock.  Each  Director  shall  automatically  be granted
Options on each of December 17, 1998,  December 17, 1999, December 17, 2000, and
December 17, 2001 to purchase 500 shares  (subject to adjustment or substitution
pursuant to Paragraph 8 hereof) of Common Stock.  Provided,  however,  that such
automatic  grants  shall be made pro rata to all  Directors  if on the date of a
grant there shall not be a number of shares sufficient to make all such grants.

          5. Shares  Available for Option.  The Board of Directors shall reserve
for the purposes of the Plan,  and by adoption of the Plan does hereby  reserve,
out of the authorized but unissued  Common Stock,  40,000 shares of Common Stock
of the Company  (subject to adjustment or  substitution  pursuant to Paragraph 8
hereof).  In the event  that an Option  granted  under the Plan to any  Director
expires or is terminated  unexercised  as to any shares  covered  thereby,  such
shares shall not  thereafter  be available for the granting of Options under the
Plan and the reserve for such shares shall be terminated.

          6.  Option  Price.  The  price at which  each  share of  Common  Stock
(subject to adjustment  pursuant to Section 8 hereof) may be purchased  upon the
exercise of an Option (the "Option Price") shall be the Fair Market Value of the
shares of Common Stock subject to the Option at the Grant Date.

          7.      Exercise of Options.

                  (a) An Optionee  shall be  entitled  to  exercise  all of such
         Optionee's  Options (not  theretofore  exercised)  at any time and from
         time to time on or after  the Grant  Date and  prior to the  Expiration
         Date.

                  (b) For purposes of this Plan, the "Expiration  Date" as to an
         Optionee means the earliest of:

                      (i)  the fifth anniversary of the date of grant; or

                      (ii) if the Optionee ceases to be a Director,  ninety (90)
         days after the date the Optionee so ceases.

                  (c) Each  Option  granted  under  the Plan by its terms may be
         transferable  by the  Optionee,  and such Option  shall be  exercisable
         during such Optionee's lifetime only by such Optionee.  In the event of
         the  death  of an  Optionee,  then  such  Optionee's  Options  shall be
         exercisable  to the extent herein  provided by the executor or personal
         representative  of the Optionee's  estate or by any person who acquired
         the right to exercise such Option by bequest under the Optionee's  will
         or by inheritance.

                  (d) Each Option shall be confirmed by a Stock Option Agreement
         executed  by the  Company  and by the  Optionee  to whom such Option is
         granted.

                  (e) The Option Price for each share of Common Stock  purchased
         pursuant  to the  exercise  of each  Option  shall,  at the time of the
         exercise  of the  Option,  be paid in  full in cash or  equivalent.  An
         Option  shall be  deemed  exercised  only when  written  notice of such
         exercise,  together with payment of the Option Price,  is received from
         the Optionee by the Company at its principal  office. No Optionee shall
         have any rights as a shareholder  of the Company with respect to Common
         Stock issuable  pursuant to such Optionee's Option until such Option is
         duly exercised.

                  (f) To the extent that an Option is not  exercised  within the
         period of time prescribed therefor as set forth in the Plan, the Option
         shall lapse and all rights of the Optionee thereunder shall terminate.

          8. Adjustment of Number of Shares.  In the event that a dividend shall
be declared upon the Common Stock payable in shares of Common Stock,  the number
of shares of Common  Stock  then  subject to any Option and the number of shares
reserved for  issuance  pursuant to the Plan shall be adjusted by adding to each
such share the number of shares  which  would be  distributable  thereon if such
share had been  outstanding on the date fixed for determining  the  shareholders
entitled  to receive  such  stock  dividend.  In the event that the  outstanding
shares of Common  Stock  generally  shall be  changed  into or  exchanged  for a
different  number or kind of shares of stock or other  securities of the Company
or of another corporation,  or changed into or exchanged for cash or property or
the right to receive cash or property (but not including any dividend payable in
cash  or  property  other  than a  liquidating  distribution),  whether  through
reorganization,  recapitalization, stock split-up, combination of shares, merger
or consolidation, then there shall be substituted for each share of Common Stock
subject to any Option,  and for each share of Common Stock reserved for issuance
pursuant to the Plan, the number and kind of shares of stock or other securities
or cash or  property  or right to  receive  cash or  property  into  which  each
outstanding  share of Common  Stock  shall be so  changed or for which each such
share shall be exchanged.  In the case of any such substitution or adjustment as
provided  for in this  Paragraph  8, the  Option  Price for each  share  covered
thereby prior to such  substitution or adjustment  shall be the Option Price for
all shares of stock or other  securities or cash or property or right to receive
cash or property  which shall have been  substituted  for such share or to which
such share shall have been adjusted  pursuant to this Paragraph 8. No adjustment
or  substitution  provided for in this  Paragraph 8 shall require the Company in
any  Stock  Option   Agreement  to  issue  a  fractional  share  and  the  total
substitution or adjustment with respect to each Stock Option  Agreement shall be
limited accordingly.

          9. Amendment of Plan.  The Board of Directors  shall have the right to
amend,  suspend or terminate the Plan at any time;  provided that, except as and
to the extent  authorized and permitted by Paragraph 8 above,  (a) no amendment,
suspension or termination  shall adversely  affect the rights of any Optionee as
to any outstanding  Option without the consent of such Optionee,  subject to any
limitation on such rights set forth in the Plan or such Optionee's  Stock Option
Agreement and except for any amendment the Board deems  necessary to preserve or
provide  exemptions  from the  applicability  of Section 16(b) of the Act to the
grant,  lapse,  disposition,  cancellation  or exercise  of Options;  and (b) no
amendment relating to the determination of the Optionees or of the Grant Date or
of the number of Options  granted to any  Optionee  shall be made more than once
every six months,  other than to comport with  changes in the  Internal  Revenue
Code of 1986 or the rules thereunder.

         10. Resales of Shares.  The Company may impose such restrictions on the
sale or other  disposition of shares issued  pursuant to the exercise of Options
as the  Board  deems  necessary  to  comply  with  applicable  securities  laws.
Certificates  for shares  issued  upon the  exercise  of  Options  may bear such
legends as the Company deems necessary to give notice of such restrictions.

         11. Compliance with Law and Other Conditions. No shares shall be issued
pursuant  to the  exercise  of any  Option  granted  under  the  Plan  prior  to
compliance  by  the  Company,  to the  satisfaction  of its  counsel,  with  any
applicable  laws.  The  Company  shall  not  be  obligated  to  (but  may in its
discretion)  take any action under  applicable  federal or state securities laws
(including  registration or qualification of the Plan, the Options or the Common
Stock)  necessary  for  compliance  therewith in order to permit the issuance of
shares  upon  the  exercise  of  Options  or the  immediate  resale  thereof  by
Optionees,  except for actions (other than registration or  qualification)  that
may be taken by the Company without  unreasonable  effort or expense and without
the incurrence of any material exposure to liability.

         12.  Nonqualified  Options.  Options granted under the Plan will not be
treated as "incentive  stock options" under Section 422 of the Internal  Revenue
Code of 1986.

         13.  Effective  Date.  The effective date of the Plan shall be December
17,  1997,  subject to  approval of the Plan by the holders of a majority of the
outstanding  shares of the Common Stock at or before the 1998 Annual  Meeting of
Stockholders.  Until  such  approval  shall be  obtained,  no  Options  shall be
exercised and if such approval shall not be obtained prior to the earlier of the
completion of the 1998 Annual Meeting of Shareholders  or the first  anniversary
of the Grant Date, this Plan and all Options granted hereunder shall be void.

         14.  Duration of Plan.  This Plan shall  terminate  upon the earlier of
December  17,  2002 and the date upon which all  shares  reserved  for  issuance
pursuant to the Plan have been issued or are subject to outstanding Options.

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