<PAGE>   1
                                                                    EXHIBIT 10.1





                            DANIEL INDUSTRIES, INC.

                             1997 STOCK OPTION PLAN
<PAGE>   2
                            DANIEL INDUSTRIES, INC.

                             1997 STOCK OPTION PLAN

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                         Section
                                                                         -------
<S>                                                                         <C>
ARTICLE I - PLAN

       Purpose  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1.1
       Effective Date of Plan   . . . . . . . . . . . . . . . . . . . . . .  1.2

ARTICLE II - DEFINITIONS

       Affiliate  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.1
       Board of Directors   . . . . . . . . . . . . . . . . . . . . . . . .  2.2
       Code   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.3
       Committee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.4
       Company  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.5
       Employee   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2.6
       Fair Market Value  . . . . . . . . . . . . . . . . . . . . . . . . .  2.7
       Incentive Option   . . . . . . . . . . . . . . . . . . . . . . . . .  2.8
       Non-Employee Director  . . . . . . . . . . . . . . . . . . . . . . .  2.9
       Nonqualified Option  . . . . . . . . . . . . . . . . . . . . . . . . 2.10
       Option   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.11
       Option Agreement   . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
       Optionee   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.13
       Outside Director   . . . . . . . . . . . . . . . . . . . . . . . . . 2.14
       Plan   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.15
       Stock  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.16
       10% Stockholder  . . . . . . . . . . . . . . . . . . . . . . . . . . 2.17

ARTICLE III - ELIGIBILITY

ARTICLE IV - GENERAL PROVISIONS RELATING TO OPTIONS

       Authority to Grant Options   . . . . . . . . . . . . . . . . . . . .  4.1
       Dedicated Shares   . . . . . . . . . . . . . . . . . . . . . . . . .  4.2
       Non-Transferability  . . . . . . . . . . . . . . . . . . . . . . . .  4.3
       Requirements of Law  . . . . . . . . . . . . . . . . . . . . . . . .  4.4
       Changes in the Company's Capital Structure   . . . . . . . . . . . .  4.5

ARTICLE V - OPTIONS

       Type of Option   . . . . . . . . . . . . . . . . . . . . . . . . . .  5.1
       Option Price   . . . . . . . . . . . . . . . . . . . . . . . . . . .  5.2
       Duration of Options  . . . . . . . . . . . . . . . . . . . . . . . .  5.3
       Amount Exercisable   . . . . . . . . . . . . . . . . . . . . . . . .  5.4
       Exercise of Options  . . . . . . . . . . . . . . . . . . . . . . . .  5.5
       Substitution Options   . . . . . . . . . . . . . . . . . . . . . . .  5.6
       No Rights as Stockholder   . . . . . . . . . . . . . . . . . . . . .  5.7
</TABLE>
<PAGE>   3
<TABLE>
<S>                                                                         <C>
ARTICLE VI - ADMINISTRATION

ARTICLE VII - AMENDMENT OR TERMINATION OF PLAN

ARTICLE VIII - MISCELLANEOUS

       No Employment Obligation   . . . . . . . . . . . . . . . . . . . . .  8.1
       Tax Withholding  . . . . . . . . . . . . . . . . . . . . . . . . . .  8.2
       Written Agreement  . . . . . . . . . . . . . . . . . . . . . . . . .  8.3
       Indemnification of the Committee and the Board of Directors  . . . .  8.4
       Gender   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8.5
       Headings   . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8.6
       Other Compensation Plans   . . . . . . . . . . . . . . . . . . . . .  8.7
       Other Options  . . . . . . . . . . . . . . . . . . . . . . . . . . .  8.8
       Arbitration of Disputes  . . . . . . . . . . . . . . . . . . . . . .  8.9
       Governing Law  . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10
</TABLE>





<PAGE>   4
                                   ARTICLE I

                                      PLAN

       1.1    PURPOSE.  This Plan is a plan for employees, consultants and
advisors of the Company and its Affiliates and is intended to advance the best
interests of the Company, its Affiliates, and its stockholders by providing
those persons who have substantial responsibility for the management and growth
of the Company and its Affiliates with additional incentives and an opportunity
to obtain or increase their proprietary interest in the Company, thereby
encouraging them to continue in the employ of the Company or any of its
Affiliates.

       1.2    EFFECTIVE DATE OF PLAN.  This Plan is effective June 17, 1997, if
within one year of that date it shall have been approved by at least a majority
vote of stockholders voting in person or by proxy at a duly held stockholders'
meeting, or if the provisions of the corporate charter, by-laws or applicable
state law prescribe a greater degree of stockholder approval for this action,
the approval by the holders of that percentage, at a duly held meeting of
stockholders.  No Option shall be granted pursuant to this Plan after June 16,
2007.





                                      I-1
<PAGE>   5
                                   ARTICLE II

                                  DEFINITIONS

       The words and phrases defined in this Article shall have the meaning set
out in these definitions throughout this Plan, unless the context in which any
such word or phrase appears reasonably requires a broader, narrower, or
different meaning.

       2.1    "AFFILIATE" means any parent corporation and any subsidiary
corporation. The term "parent corporation" means any corporation (other than
the Company) in an unbroken chain of corporations ending with the Company if,
at the time of the action or transaction, each of the corporations other than
the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain.
The term "subsidiary corporation" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.

       2.2    "BOARD OF DIRECTORS" means the board of directors of the Company.

       2.3    "CODE" means the Internal Revenue Code of 1986, as amended.

       2.4    "COMMITTEE" means the committee designated by the Board of
Directors.  The Committee shall be comprised solely of at least two members who
are both Outside Directors and Non-Employee Directors.

       2.5    "COMPANY" means Daniel Industries, Inc., a Delaware corporation.

       2.6    "EMPLOYEE" means a person employed by the Company or any
Affiliate.

       II.7   "FAIR MARKET VALUE" of the Stock as of any date means (a) the
average of the high and low sale prices of the Stock on that date (or, if there
was no sale on such date, the next preceding date on which there was such a
sale) on the principal securities exchange on which the Stock is listed; or (b)
if the Stock is not listed on a securities exchange, an amount as determined by
the Committee in its sole discretion.

       2.8    "INCENTIVE OPTION" means an Option granted under this Plan which
is designated as an "Incentive Option" and satisfies the requirements of
section 422 of the Code.

       2.9    "NON-EMPLOYEE DIRECTOR" means a "non-employee director" as that
term is defined in Rule 16b-3 of the Securities Exchange Act of 1934.

       2.10   "NONQUALIFIED OPTION" means an Option granted under this Plan
other than an Incentive Option.

       2.11   "OPTION" means either an Incentive Option or a Nonqualified
Option granted under this Plan to purchase shares of Stock.

       2.12   "OPTION AGREEMENT" means the written agreement which sets out the
terms of an Option.





                                      II-1
<PAGE>   6
       2.13   "OPTIONEE" means a person who is granted an Option under this
Plan.

       2.14   "OUTSIDE DIRECTOR" means a member of the Board of Directors
serving on the Committee who satisfies the criteria of section 162(m) of the
Code.

       2.15   "PLAN" means the Daniel Industries, Inc. 1997 Stock Option Plan,
as set out in this document and as it may be amended from time to time.

       2.16   "STOCK" means the common stock of the Company, $1.25 par value,
or, in the event that the outstanding shares of common stock are later changed
into or exchanged for a different class of stock or securities of the Company
or another corporation, that other stock or security.

       2.17   "10% STOCKHOLDER" means an individual who, at the time the Option
is granted, owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of any Affiliate.  An
individual shall be considered as owning the stock owned, directly or
indirectly, by or for his brothers and sisters (whether by the whole or half
blood), spouse, ancestors, and lineal descendants; and stock owned, directly or
indirectly, by or for a corporation, partnership, estate, or trust, shall be
considered as being owned proportionately by or for its stockholders, partners,
or beneficiaries.





                                      II-2
<PAGE>   7
                                  ARTICLE III

                                  ELIGIBILITY

       The individuals who shall be eligible to receive Incentive Options shall
be those key Employees as the Committee shall determine from time to time.  The
individuals who shall be eligible to receive Nonqualified Options shall be
those key Employees, consultants and advisors of the Company or any of its
Affiliates as the Committee shall determine from time to time.  However, no
member of the Committee shall be eligible to receive any Option or to receive
stock, stock options, or stock appreciation rights under any other plan of the
Company or any of its Affiliates, if to do so would cause the individual not to
be an Outside Director or a Non-Employee Director.  The Board of Directors may
designate one or more individuals who shall not be eligible to receive any
Option under this Plan or under other similar plans of the Company.





                                     III-1
<PAGE>   8
                                   ARTICLE IV

                     GENERAL PROVISIONS RELATING TO OPTIONS

       4.1    AUTHORITY TO GRANT OPTIONS.  The Committee may grant Options to
those individuals as it shall from time to time determine under the terms and
conditions of this Plan.  Subject only to any applicable limitations set out in
this Plan, the number of shares of Stock to be covered by any Option shall be
as determined by the Committee.

       4.2    DEDICATED SHARES.  The total number of shares of Stock with
respect to which Options may be granted under the Plan shall be 730,000 shares.
The shares may be treasury shares or authorized but unissued shares.  The total
number of shares of Stock with respect to which Incentive Options may be
granted under the Plan shall be 730,000 shares.  The maximum number of shares
subject to Options which may be issued to any Optionee under the Plan during
any period of three consecutive years is 365,000 shares.  The number of shares
stated in this Section 4.2 shall be subject to adjustment in accordance with
the provisions of Section 4.5.

       If any outstanding Option expires or terminates for any reason or any
Option is surrendered, the shares of Stock allocable to the unexercised portion
of that Option may again be subject to an Option under the Plan.

       4.3    NON-TRANSFERABILITY.  Options shall not be transferable by the
Optionee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during the Optionee's lifetime, only by him.

       4.4    REQUIREMENTS OF LAW.  The Company shall not be required to sell
or issue any Stock under any Option if issuing that Stock would constitute or
result in a violation by the Optionee or the Company of any provision of any
law, statute, or regulation of any governmental authority.  Specifically, in
connection with any applicable statute or regulation relating to the
registration of securities, upon exercise of any Option, the Company shall not
be required to issue any Stock unless the Committee has received evidence
satisfactory to it to the effect that the holder of that Option will not
transfer the Stock except in accordance with applicable law, including receipt
of an opinion of counsel satisfactory to the Company to the effect that any
proposed transfer complies with applicable law.  The determination by the
Committee on this matter shall be final, binding and conclusive.  The Company
may, but shall in no event be obligated to, register any Stock covered by this
Plan pursuant to applicable securities laws of any country or any political
subdivision.  In the event the Stock issuable on exercise of an Option is not
registered, the Company may imprint on the certificate evidencing the Stock any
legend that counsel for the Company considers necessary or advisable to comply
with applicable law.  The Company shall not be obligated to take any other
affirmative action in order to cause the exercise of an Option and the issuance
of shares thereunder, to comply with any law or regulation of any governmental
authority.

       4.5    CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.  The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or its rights, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.





                                      IV-1
<PAGE>   9
       If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of the Stock outstanding, without
receiving compensation for it in money, services or property, then (a) the
number, class, and per share price of shares of Stock subject to outstanding
Options under this Plan shall be appropriately adjusted in such a manner as to
entitle an Optionee to receive upon exercise of an Option, for the same
aggregate cash consideration, the equivalent total number and class of shares
he would have received had he exercised his Option in full immediately prior to
the event requiring the adjustment; and (b) the number and class of shares of
Stock then reserved to be issued under the Plan shall be adjusted by
substituting for the total number and class of shares of Stock then reserved,
that number and class of shares of Stock that would have been received by the
owner of an equal number of outstanding shares of such class of Stock as the
result of the event requiring the adjustment.

       If the Company is merged or consolidated with another corporation and
the Company is not the surviving corporation, or if the Company is liquidated
or sells or otherwise disposes of substantially all its assets while
unexercised Options remain outstanding under this Plan, after the effective
date of the merger, consolidation, liquidation, sale or other disposition, as
the case may be, each holder of an outstanding Option shall be entitled, upon
exercise of the Option, to receive, in lieu of shares of Stock, the number and
class or classes of shares of stock or other securities or property to which
the holder would have been entitled if, immediately prior to the merger,
consolidation, liquidation, sale or other disposition, the holder had been the
holder of record of a number of shares of Stock equal to the number of shares
as to which the Option shall be so exercised; and (b) the Committee shall waive
any limitations set out in or imposed under this Plan so that, from and after
the effective date of the merger, consolidation, liquidation, sale or other
disposition, as the case may be, all Options shall be exercisable in full.
However, no Option will vest under the preceding sentence to the extent that
such vesting could result in a diminution of any compensation that would
otherwise be payable to the Optionee.

       The issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services either upon direct sale or upon the exercise of rights or
warrants to subscribe for them, or upon conversion of shares or obligations of
the Company convertible into shares or other securities, shall not affect, and
no adjustment by reason of such issuance shall be made with respect to, the
number, class, or price of shares of Stock then subject to outstanding Options.


                                   ARTICLE V

                                    OPTIONS

       5.1    TYPE OF OPTION.  The Committee shall specify whether a given
Option shall constitute an Incentive Option or a Nonqualified Option.

       5.2    OPTION PRICE.  The price at which Stock may be purchased under an
Option shall not be less than the greater of:  (a) 100% of the Fair Market
Value of the shares of Stock on the date the Option is granted or (b) the
aggregate par value of the shares of Stock on the date the Option is granted.
In the case of any 10% Stockholder, the price at which shares of Stock may be
purchased under an Incentive Option shall not be less than 110% of the Fair
Market Value of the Stock on the date the Incentive Option is granted.





                                      IV-2
<PAGE>   10
       5.3    DURATION OF OPTIONS.  No Option shall be exercisable after the
earlier of (a) 10 years from the date the Option is granted or (b) 30 days
after the severance of the employment relationship between the Optionee and the
Company and all Affiliates for any reason other than death.  In the case of a
10% Stockholder, no Incentive Option shall be exercisable after the earlier of
(a) five years from the date the Incentive Option is granted or (b) 30 days
after the severance of the employment relationship between the Optionee and the
Company and all Affiliates.

       5.4    AMOUNT EXERCISABLE.  Each Option may be exercised from time to
time, in whole or in part, in the manner and subject to the conditions the
Committee, in its sole discretion, may provide in the Option Agreement, as long
as the Option is valid and outstanding.  To the extent that the aggregate Fair
Market Value (determined as of the time an Incentive Option is granted) of the
Stock with respect to which Incentive Options first become exercisable by the
Optionee during any calendar year (under this Plan and any other incentive
stock option plan(s) of the Company or any Affiliate) exceeds $100,000, the
Incentive Options shall be treated as Nonqualified Options.  In making this
determination, Incentive Options shall be taken into account in the order in
which they were granted.

       5.5    EXERCISE OF OPTIONS.  Each Option shall be exercised by the
delivery of written notice to the Committee setting forth the number of shares
of Stock with respect to which the Option is to be exercised, together with:
(a) cash, check, bank draft, or postal or express money order payable to the
order of the Company for an amount equal to the option price of the shares, or
(b) Stock at its Fair Market Value on the date of exercise, and/or any other
form of payment which is acceptable to such committee, and specifying the
address to which the certificates for the shares are to be mailed.  Subject to
Section 8.3, as promptly as practicable after receipt of written notification
and payment, the Company shall deliver to the Optionee certificates for the
number of shares with respect to which the Option has been exercised, issued in
the Optionee's name.  If shares of Stock are used in payment of the exercise
price, the aggregate Fair Market Value of the shares of Stock tendered must be
equal to or less than the aggregate exercise price of the shares being
purchased upon exercise of the Option, and any difference must be paid by cash,
check, bank draft, or postal or express money order payable to the Company.
Delivery of the shares shall be deemed effected for all purposes when a stock
transfer agent of the Company shall have deposited the certificates in the
United States mail, addressed to the Optionee, at the address specified by the
Optionee.

       Whenever an Option is exercised by exchanging shares of Stock owned by
the Optionee, the Optionee shall deliver to the Company certificates registered
in the name of the Optionee representing a number of shares of Stock legally
and beneficially owned by the Optionee, free of all liens, claims, and
encumbrances of every kind, accompanied by stock powers duly endorsed in blank
by the record holder of the shares represented by the certificates, (with
signature guaranteed by a commercial bank or trust company or by a brokerage
firm having a membership on a registered national stock exchange).  The
delivery of certificates upon the exercise of Options is subject to the
condition that the person exercising the Option provide the Company with the
information the Company might reasonably request pertaining to exercise, sale
or other disposition of an Option.

       5.6    SUBSTITUTION OPTIONS.  Options may be granted under this Plan
from time to time in substitution for stock options held by employees of other
corporations who are about to become employees of or affiliated with the
Company or any Affiliate as the result of a merger or consolidation of the
employing corporation with the Company or any Affiliate, or the acquisition by
the Company or any Affiliate of the assets of the employing corporation, or the
acquisition by the Company or any Affiliate of stock of the employing
corporation as the result of which it





                                      V-2
<PAGE>   11
becomes an Affiliate of the Company.  The terms and conditions of the
substitute Options granted may vary from the terms and conditions set out in
this Plan to the extent the Committee, at the time

of grant, may deem appropriate to conform, in whole or in part, to the
provisions of the stock options in substitution for which they are granted.

       5.7    NO RIGHTS AS STOCKHOLDER.  No Optionee shall have any rights as a
stockholder with respect to Stock covered by his Option until the date a stock
certificate is issued for the Stock.





                                      V-3
<PAGE>   12
                                   ARTICLE VI

                                 ADMINISTRATION

       This Plan shall be administered by the Committee.  All questions of
interpretation and application of this Plan and Options shall be subject to the
determination of the Committee.  A majority of the members of the Committee
shall constitute a quorum.  All determinations of the Committee shall be made
by a majority of its members.  Any decision or determination reduced to writing
and signed by a majority of the members shall be as effective as if it had been
made by a majority vote at a meeting properly called and held.  This Plan shall
be administered in such a manner as to permit the Options granted under it
which are designated to be Incentive Options to qualify as Incentive Options.
In carrying out its authority under this Plan, the Committee shall have full
and final authority and discretion, including but not limited to the following
rights, powers and authorities, to:

              (a)    determine the persons to whom and the time or times at
       which Options will be made,

              (b)    determine the number of shares and the purchase price of
       Stock covered in each Option, subject to the terms of the Plan,

              (c)    determine the terms, provisions and conditions of each
       Option, which need not be identical,

              (d)    accelerate the time at which any outstanding Option may be
       exercised,

              (e)    define the effect, if any, on an Option of the death,
       disability, or retirement of the Optionee,

              (f)    prescribe, amend and rescind rules and regulations
       relating to administration of this Plan, and

              (g)    make all other determinations and take all other actions
       deemed necessary, appropriate, or advisable for the proper
       administration of this Plan.

The actions of the Committee in exercising all of the rights, powers, and
authorities set out in this Article and all other Articles of this Plan, when
performed in good faith and in its sole judgment, shall be final, conclusive
and binding on all parties.





                                      VI-1
<PAGE>   13
                                  ARTICLE VII

                        AMENDMENT OR TERMINATION OF PLAN

       The Board of Directors of the Company may amend, terminate or suspend
this Plan at any time, in its sole and absolute discretion; provided, however,
that to the extent required to maintain the status of any Incentive Option
under the Code, no amendment that would (a) change the aggregate number of
shares of Stock which may be issued under Incentive Options, (b) change the
class of employees eligible to receive Incentive Options, or (c) decrease the
exercise price for Incentive Options below the Fair Market Value of the Stock
at the time it is granted, shall be made without the approval of the Company's
stockholders.  Subject to the preceding sentence, the Board shall have the
power to make any changes in this Plan and in the regulations and
administrative provisions under it or in any outstanding Incentive Option as in
the opinion of counsel for the Company may be necessary or appropriate from
time to time to enable any Incentive Option granted under this Plan to continue
to qualify as an incentive stock option or such other stock option as may be
defined under the Code so as to receive preferential Federal income tax
treatment.





                                     VII-1
<PAGE>   14
                                  ARTICLE VIII

                                 MISCELLANEOUS


       8.1    NO EMPLOYMENT OBLIGATION.  The granting of any Option shall not
constitute an employment contract, express or implied, nor impose upon the
Company or any Affiliate any obligation to employ or continue to employ any
Optionee.  The right of the Company or any Affiliate to terminate the
employment of any person shall not be diminished or affected by reason of the
fact that an Option has been granted to him.

       8.2    TAX WITHHOLDING.  The Company or any Affiliate shall be entitled
to deduct from other compensation payable to each Optionee any sums required by
federal, state, or local tax law to be withheld with respect to the grant or
exercise of an Option.  In the alternative, the Company may require the
Optionee (or other person exercising the Option) to pay the sum directly to the
Company or an Affiliate.  If the Optionee (or other person exercising the
Option) is required to pay the sum directly, payment in cash or by check of
such sums for taxes shall be made on the date of exercise.  The Company shall
have no obligation upon exercise of any Option until payment has been received,
unless withholding (or offset against a cash payment) as of or prior to the
date of exercise is sufficient to cover all sums due with respect to that
exercise.  The Company and its Affiliates shall not be obligated to advise an
Optionee of the existence of the tax or the amount which the employer
corporation will be required to withhold.

       8.3    WRITTEN AGREEMENT.  Each Option shall be embodied in a written
Option Agreement which shall be subject to the terms and conditions of this
Plan and shall be signed by the Optionee and by a member of the Committee on
behalf of the Committee and the Company.  The Option Agreement may contain any
other provisions that the Committee in its discretion shall deem advisable
which are not inconsistent with the terms of this Plan.

       8.4    INDEMNIFICATION OF THE COMMITTEE AND THE BOARD OF DIRECTORS.
With respect to administration of this Plan, the Company shall indemnify each
present and future member of the Committee and the Board of Directors against,
and each member of the Committee and the Board of Directors shall be entitled
without further act on his part to indemnity from the Company for, all expenses
(including attorney's fees, the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit, or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and/or the Board of Directors, whether or not he continues to be a member of
the Committee and/or the Board of Directors at the time of incurring the
expenses--including, without limitation, matters as to which he shall be
finally adjudged in any action, suit or proceeding to have been found to have
been negligent in the performance of his duty as a member of the Committee or
of the Board of Directors.  However, this indemnity shall not include any
expenses incurred by any member of the Committee and/or the Board of Directors
in respect of matters as to which he shall be finally adjudged in any action,
suit or proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as a member of the Committee or the
Board of Directors.  In addition, no right of indemnification under this Plan
shall be available to or enforceable by any member of the Committee or the
Board of Directors unless, within 60 days after institution of any action, suit
or proceeding, he shall have offered the Company, in writing, the opportunity
to handle and defend same at its own expense.  This right of indemnification
shall inure to the benefit of the heirs, executors or administrators of each
member of the Committee and the





                                     VIII-1
<PAGE>   15
Board of Directors and shall be in addition to all other rights to which a
member of the Committee and the Board of Directors may be entitled as a matter
of law, contract, or otherwise.

       8.5    GENDER.  If the context requires, words of one gender when used
in this Plan shall include the others and words used in the singular or plural
shall include the other.

       8.6    HEADINGS.  Headings of Articles and Sections are included for
convenience of reference only and do not constitute part of this Plan and shall
not be used in construing the terms of this Plan.

       8.7    OTHER COMPENSATION PLANS.  The adoption of this Plan shall not
affect any other stock option, incentive or other compensation or benefit plans
in effect for the Company or any Affiliate, nor shall this Plan preclude the
Company from establishing any other forms of incentive or other compensation
for employees of the Company or any Affiliate.

       8.8    OTHER OPTIONS.  The grant of an Option shall not confer upon an
Optionee the right to receive any future or other Options under this Plan,
whether or not Options may be granted to similarly situated Optionees, or the
right to receive future Options upon the same terms or conditions as previously
granted.

       8.9    ARBITRATION OF DISPUTES.  Any controversy arising out of or
relating to the Plan or an Option Agreement shall be resolved by arbitration
conducted pursuant to the arbitration rules of the American Arbitration
Association.  The arbitration shall be final and binding on the parties.

       8.10   GOVERNING LAW.  The provisions of this Plan shall be construed,
administered, and governed under the laws of the State of Texas.





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