EXHIBIT 4.1
                        CARRINGTON LABORATORIES, INC.
                            2004 STOCK OPTION PLAN

                                  ARTICLE I

                                   General
                                   -------
      Section 1.01.  Purpose.  It is the purpose  of the Plan to promote  the
 interests of the Company and its  shareholders by attracting, retaining  and
 stimulating the performance of selected Employees, Directors and Consultants
 by giving  such  Employees, Directors  and  Consultants the  opportunity  to
 acquire a  proprietary interest  in the  Company and  an increased  personal
 interest in its continued success and progress.

      Section 1.02.  Definitions.  As  used herein the  following terms  have
 the following meanings:

           (a)  "Affiliate" means any parent or subsidiary corporation of the
      Company within the meaning of Section 424(e) and (f) of the Code.

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

           (c)  "Code" means the Internal Revenue Code of 1986, as amended.

           (d)  "Committee" means  the Stock  Option Committee  described  in
      Article II hereof.

           (e)  "Common Stock" means the $0.01 par value Common Stock of  the
      Company.

           (f)  "Company"  means  Carrington  Laboratories,  Inc.,  a   Texas
      corporation.

           (g)  "Consultant" means any consultant  or advisor of the  Company
      or an Affiliate who is not an Employee or Director, provided that  bona
      fide services  are  rendered by  the  consultant or  advisor  and  such
      services are not in connection with the offer or sale of securities  in
      a capital-raising transaction.

           (h)  "Director" means a member of the Board.

           (i)  "Employee" means any employee of the Company or an Affiliate.

           (j)  "Employee-Director" means an Employee who is a Director.

           (k)  "Fair Market Value" means (A) the closing sales price of  the
      Common Stock on the date in question (or, if there is no reported  sale
      on such date, then on the last preceding date on which a reported  sale
      occurred), as reported  on the NASDAQ  National Market  (if the  Common
      Stock is not listed on a national securities exchange and sales of  the
      Common Stock are regularly reported on such market), or as reported  on
      a national  securities exchange  (if the  Common  Stock is  listed  for
      trading on such  exchange), or  (B) the mean  between the  bid and  ask
      prices of the Common Stock on the date in question (or, if there is  no
      report of such prices on such date, then on the last preceding date  on
      which  such  prices  were  reported),  as  reported  by  the   National
      Association of Securities Dealers, Inc.

           (l)  "Option" means any option to purchase shares of Common  Stock
      granted pursuant to the provisions of the Plan.

           (m)  "Optionee" means an Employee, Outside Director or  Consultant
      who has been granted an Option under the Plan.

           (n)  "Outside Director" means a Director who is not an Employee.

           (o)  "Plan" means this  Carrington Laboratories,  Inc. 2004  Stock
      Option Plan.

      Section 1.03.  Number of Shares.  Options may be granted by the Company
 from time to time under the Plan to purchase an aggregate of  500,000 shares
 of the authorized Common Stock.  If any Option expires or terminates for any
 reason without having been exercised in full, the unpurchased shares subject
 to such expired or terminated Option shall be available for purposes of  the
 Plan.


                                  ARTICLE II
                                Administration
                                --------------
      The Plan shall be administered by a Stock Option Committee which  shall
 consist of two  or more  Outside Directors,  all of  whom are  both a  "Non-
 Employee Director" within the  meaning of  Rule  16b-3 under the  Securities
 Exchange Act of 1934,  as amended ("Rule 16b-3")  and an "outside  director"
 within the meaning of the definition  of such term as contained in  Treasury
 Regulation Section 1.162-27(e)(3) interpreting  Section 162(m) of the  Code,
 or any successor definitions adopted.  Each member of the Committee shall be
 appointed by and shall serve at the pleasure of the Board.  The Board  shall
 have the sole continuing authority to appoint members of the Committee  both
 in substitution  for  members previously  appointed  and to  fill  vacancies
 however caused.  The following provisions shall apply to the  administration
 of the Plan:

           (a)  The Committee shall designate one of its members as  Chairman
      and shall hold meetings at such  times and places as it may  determine.
      Each member of the Committee shall  be notified in writing of the  time
      and place of any meeting  of the Committee at  least two days prior  to
      such meeting, provided that  such notice may be  waived by a  Committee
      member.  A majority of the members of the Committee shall constitute  a
      quorum, and  any action  taken by  a  majority of  the members  of  the
      Committee present  at any  duly called  meeting at  which a  quorum  is
      present (as well as any action  unanimously approved in writing)  shall
      constitute action by the Committee.

           (b)  The Committee  may appoint  a Secretary  (who need  not be  a
      member of the Committee) who shall  keep minutes of its meetings.   The
      Committee may make such  rules and regulations for  the conduct of  its
      business as it may determine.

           (c)  The Committee  shall  have  full authority,  subject  to  the
      express provisions  of the  Plan, to  interpret the  Plan, to  provide,
      modify and rescind rules and regulations relating thereto, to determine
      the terms and  provisions of each  Option and the  form of each  option
      agreement evidencing an Option granted under  the Plan and to make  all
      other determinations and  perform such actions  as the Committee  deems
      necessary or  advisable  to administer  the  Plan.   In  addition,  the
      Committee shall have full authority, subject to the express  provisions
      of  the  Plan,  to  determine  the  Employees,  Outside  Directors  and
      Consultants to whom Options shall be granted, the time or date of grant
      of each such  Option, the  number of  shares subject  thereto, and  the
      price  at  which  such  shares  may  be  purchased.    In  making  such
      determinations, the Committee may take into  account the nature of  the
      services rendered by the Employee, Outside Director or Consultant,  his
      present and potential  contributions to  the success  of the  Company's
      business and such other facts as the Committee in its discretion  shall
      deem appropriate to carry out the purposes of the Plan.

           (d)  Notwithstanding  the  authority   hereby  delegated  to   the
      Committee to grant Options  under the Plan, the  Board also shall  have
      full authority, subject to the express provisions of the Plan, to grant
      Options under the Plan, to interpret  the Plan, to provide, modify  and
      rescind rules and regulations  relating to it,  to determine the  terms
      and provisions of Options granted under the Plan and to make all  other
      determinations and perform such actions as the Board deems necessary or
      advisable to administer the Plan.

           (e)  No member of the Committee or  the Board shall be liable  for
      any action taken or  determination made in good  faith with respect  to
      the Plan or any Option granted hereunder.


                                 ARTICLE III
                    Grants of Options to Outside Directors
                    --------------------------------------
      Section 3.01.  Grants of  Options.   During the  term of  the Plan  and
 subject to the  express provisions  hereof, Options  may be  granted by  the
 Committee to any Outside Director for such number of shares of Common  Stock
 as the Committee in its discretion shall deem to be in the best interest  of
 the Company  and which  will serve  to  further the  purposes of  the  Plan.
 Options granted  to Outside  Directors need  not be  uniform.   The  Options
 granted under this Article  III shall not be  incentive stock options  under
 Section 422 of the Code.

      Section 3.02.  Price.  The  purchase price  per share  of Common  Stock
 under each Option granted under this Article III shall be determined by  the
 Committee but in no event shall be less  than 100% of the Fair Market  Value
 per share of Common Stock on the date of grant of such Option.

      Section 3.03.  Option Period and Terms of Exercise of Options.   Except
 as otherwise provided for herein, each Option granted to an Outside Director
 under the Plan shall be exercisable in  whole or in part during such  period
 as the Committee shall determine, which period shall not be longer than  ten
 years from the date of grant of  such Option.  Unless otherwise provided  in
 the option agreement, any Option granted to an Outside Director shall remain
 effective  during  its  entire  term  regardless  of  whether  the  Optionee
 continues to  serve as  a Director;  provided, however,  that the  otherwise
 unexpired portion of  any Option granted  hereunder to  an Outside  Director
 shall expire and become  null and void immediately  upon the termination  of
 such Outside Director's Board membership if such Outside Director ceases  to
 serve on  the  Board by  reason  of such  Outside  Director's (a)  fraud  or
 intentional misrepresentation,  or  (b)  embezzlement,  misappropriation  or
 conversion of  assets or  opportunities of  the  Company or  any  Affiliate.
 Nothing in the Plan or in any option agreement evidencing an Option  granted
 under the Plan to  an Outside Director shall  confer upon such Director  any
 right to continue as a Director of the Company.


                                  ARTICLE IV
                        Grants of Options to Employees
                        ------------------------------
      Section 4.01.  Grants of Options.   At any time and  from time to  time
 during the term of  the Plan and subject  to the express provisions  hereof,
 Options may be granted by the Committee  to any Employee for such number  of
 shares of Common Stock as the Committee  in its discretion shall deem to  be
 in the best  interest of the  Company and which  will serve  to further  the
 purposes of the  Plan.  Options  granted to Employees  need not be  uniform.
 The Committee, in  its discretion, may  designate any Option  granted to  an
 Employee as an incentive stock option intended to qualify under  Section 422
 of the Code; provided, however, that the aggregate Fair Market Value of  the
 Common Stock with  respect to which  incentive stock options  granted to  an
 Employee under the Plan (including all options qualifying as incentive stock
 options pursuant to Section 422 of the  Code granted to such Employee  under
 any other plan  of the  Company or any  Affiliate) are  exercisable for  the
 first time  by such  Employee  during any  calendar  year shall  not  exceed
 $100,000, determined as of the date  the incentive stock option is  granted.
 If an Option  that is  intended to  be an  incentive stock  option shall  be
 granted and such Option does not comply with the proviso of the  immediately
 preceding sentence, such Option shall not be void but shall be deemed to  be
 an incentive  stock  option to  the  extent it  does  not exceed  the  limit
 established by such proviso and shall be deemed a nonqualified stock  option
 to the extent it exceeds that limit.

      The aggregate number of shares of  Common Stock for which any  Employee
 may be granted Options under the Plan during any one calendar year shall not
 exceed 50,000.

      Section 4.02.  Price.  The  purchase price  per share  of Common  Stock
 under each Option granted under this  Article IV shall be determined by  the
 Committee but in no event shall be less  than 100% of the Fair Market  Value
 per share  of Common  Stock at  the time  the Option  is granted;  provided,
 however, that  the  purchase price  per  share  of Common  Stock  under  any
 incentive stock  option  granted  to  an Optionee  who,  at  the  time  such
 incentive stock option is  granted, owns stock possessing  more than 10%  of
 the total combined voting power  of all classes of  stock of the Company  or
 any Affiliate shall be at least 110% of  the Fair Market Value per share  of
 Common Stock at the date of grant.

      Section 4.03.  Option Period and Terms of Exercise of Employee Options.
 Except as  otherwise provided  herein, each  Option granted  to an  Employee
 under the Plan  shall be  exercisable during  such period  as the  Committee
 shall determine.   The option  agreement embodying  the award  of an  Option
 shall set forth the  extent to which  the Employee shall  have the right  to
 exercise the Option  following termination of  the Employee's employment  of
 the Company.  Such  provisions shall be determined  by the Committee in  its
 absolute discretion, need not be uniform among all Options granted under the
 Plan and may reflect  distinctions based on the  reasons for termination  of
 employment.  In the event an Employee's option agreement embodying the award
 of an Option does not set  forth such termination provisions, the  otherwise
 unexpired portion of  any Option  granted to  an Employee  shall expire  and
 become null  and void  no later  than upon  the first  to occur  of  (i) the
 expiration of ten  years from  the date  such Option  was granted,  (ii) the
 expiration of  30  days from  the  date  of termination  of  the  Optionee's
 employment with the Company  or an Affiliate for  any reason other than  his
 retirement, death or disability (within the  meaning of Section 22(e)(3)  of
 the Code), (iii) the expiration of one year from the date of termination  of
 the Optionee's employment with the Company or an Affiliate by reason of  his
 death or disability (within  the meaning of Section  22(e)(3) of the  Code),
 (iv) the expiration  of three  years from the  date of  termination of  such
 Optionee's employment with  the Company  or an  Affiliate by  reason of  his
 retirement, or  (v) the  expiration of  two  years  from the  date  of  such
 Optionee's death  following  the  termination of  his  employment  with  the
 Company or an Affiliate by reason of his retirement.

      Anything  herein  to  the   contrary  notwithstanding,  the   otherwise
 unexpired portion  of any  Option granted  to  an Employee  hereunder  shall
 expire and become  null and void  immediately upon the  termination of  such
 Employee's employment with  the Company or  an Affiliate by  reason of  such
 Employee's fraud, dishonesty or performance of other acts detrimental to the
 Company or an Affiliate, or if, following the termination of the  Employee's
 employment with the  Company or an  Affiliate, the  Company determines  that
 there is good cause to cancel such Option.

      Any incentive stock option granted to an Optionee who, at the time such
 incentive stock option is  granted, owns stock possessing  more than 10%  of
 the total combined voting power  of all classes of  stock of the Company  or
 any Affiliate shall not  be exercisable after the  expiration of five  years
 from the date of its grant.

      Under the  provisions  of any  option  agreement evidencing  an  Option
 granted to  an  Employee, the  Committee  may  limit the  number  of  shares
 purchasable thereunder in  any period or  periods of time  during which  the
 Option is exercisable and  may impose such other  terms and conditions  upon
 the exercise of  an Option as  are not inconsistent  with the  terms of  the
 Plan;  provided,  however,  that  the  Committee,  in  its  discretion,  may
 accelerate the exercise date of any such Option.

      Section 4.04.  Termination of  Employment.   A transfer  of  employment
 among the Company and any of its Affiliates shall not be considered to be  a
 termination of employment for the purposes of the Plan.  Nothing in the Plan
 or in any option agreement evidencing an Option granted under the Plan to an
 Employee, including an Employee-Director, shall confer upon any Optionee any
 right to continue in the employ  of the Company or  any Affiliate or in  any
 way interfere with the  right of the Company  or any Affiliate to  terminate
 the employment of the Optionee at any time, with or without cause.


                                  ARTICLE V
                       Grant of Options to Consultants
                       -------------------------------
      Section 5.01.  Grant of Options.   At any  time and from  time to  time
 during the term of  the Plan and subject  to the express provisions  hereof,
 Options may be granted by the Committee to any Consultant for such number of
 shares of Common Stock as the Committee  in its discretion shall deem to  be
 in the best  interest of the  Company and which  will serve  to further  the
 purposes of the Plan.  Options  granted to Consultants need not be  uniform.
 The Options  granted under  this  Article V  shall  not be  incentive  stock
 options under Section 422 of the Code.

      Section 5.02.  Price.  The  purchase price  per share  of Common  Stock
 under each Option granted  under this Article V  shall be determined by  the
 Committee but in no event shall be less  than 100% of the Fair Market  Value
 per share of Common Stock at the time the Option is granted.

      Section 5.03.  Option  Period  and  Terms  of  Exercise  of  Consultant
 Options.  Except as otherwise provided for herein, each Option granted to  a
 Consultant under the  Plan shall be  exercisable during such  period as  the
 Committee shall determine.  Unless the option agreement provides  otherwise,
 the otherwise unexpired portion of any Option granted to a Consultant  shall
 expire and become null and void no later than upon the first to occur of (i)
 the expiration of ten years  from the date such  Option was granted or  (ii)
 the expiration  of  one  year  from the  date  of  the  Consultant's  death.
 Anything herein  to the  contrary notwithstanding,  the otherwise  unexpired
 portion of any  Option granted to  a Consultant hereunder  shall expire  and
 become null and void  immediately upon the  termination of the  Consultant's
 services to the Company or an Affiliate by reason of the Consultant's fraud,
 dishonesty or performance  of other acts  detrimental to the  Company or  an
 Affiliate, or  if,  at any  time  during or  after  the performance  of  the
 Consultant's services to the Company or an Affiliate, the Company determines
 that there is good cause to cancel such Option.

      Under the  provisions  of any  option  agreement evidencing  an  Option
 granted to  a Consultant,  the  Committee may  limit  the number  of  shares
 purchasable thereunder in  any period or  periods of time  during which  the
 Option is exercisable and  may impose such other  terms and conditions  upon
 the exercise of  an Option as  are not inconsistent  with the  terms of  the
 Plan;  provided,  however,  that  the  Committee,  in  its  discretion,  may
 accelerate the exercise date of any such Option.

      Section 5.04.  Termination of Consulting Services.  Nothing in the Plan
 or in any option agreement evidencing an Option granted under the Plan to  a
 Consultant shall  confer upon  any Consultant  any right  to continue  as  a
 consultant or  advisor  of  the Company  or  any  Affiliate or  in  any  way
 interfere with the right  of the Company or  any Affiliate to terminate  the
 services of the Consultant at any time, with or without cause.


                                  ARTICLE VI
                                Miscellaneous
                                -------------
      Section 6.01.  Adjustments Upon Changes in Common Stock.  In the  event
 the Company shall effect a split of  the Common Stock or a dividend  payable
 in Common  Stock, or  in the  event the  outstanding Common  Stock shall  be
 combined into a smaller number of shares, the maximum number of shares as to
 which Options may be granted under the Plan shall be decreased or  increased
 proportionately.  In the event that,  before delivery by the Company of  all
 of the shares of Common  Stock for which any  Option has been granted  under
 the Plan,  the  Company  shall  have effected  such  a  split,  dividend  or
 combination, the shares still subject to  such Option shall be increased  or
 decreased  proportionately  and  the  purchase  price  per  share  shall  be
 decreased or increased proportionately so that the aggregate purchase  price
 for all of the shares then subject to  such Option shall remain the same  as
 immediately prior to such split, dividend or combination.

      In the event of a reclassification  of Common Stock not covered by  the
 foregoing, or in the event of  a liquidation or reorganization (including  a
 merger, consolidation or  sale of assets)  of the Company,  the Board  shall
 make such adjustments,  if any, as  it may deem  appropriate in the  number,
 purchase price and  kind of shares  covered by the  unexercised portions  of
 Options theretofore granted under the Plan.  The provisions of this  Section
 shall only be applicable  if, and only to  the extent that, the  application
 thereof does not conflict with any valid governmental statute, regulation or
 rule.

      Subject to Article VI,  Section 6.02 of  the Plan, and  notwithstanding
 any indication to the contrary in  the preceding paragraphs of this  Section
 6.01, upon the occurrence of a "Change in Control" (as hereinafter  defined)
 of the Company, the maturity of all Options then outstanding under the  Plan
 (other than Options  granted under Article  V hereof)  shall be  accelerated
 automatically, so that  all such Options  shall become  exercisable in  full
 with respect to all shares as to  which they shall not have previously  been
 exercised  or   become  exercisable;   provided,  however,   that  no   such
 acceleration shall occur  with respect to  Options held  by Optionees  whose
 employment with the Company or an  Affiliate shall have terminated prior  to
 the occurrence of such Change in Control.   To the extent that an Option  is
 not  exercised  upon  a  Change  of  Control,  the  Committee  may,  in  its
 discretion, cancel any such Option and pay to the Optionee an amount in cash
 equal to the  excess, if  any, of  the aggregate  Fair Market  Value of  the
 shares of Common Stock subject to the Option as of the date of the Change of
 Control over the  applicable exercise price,  or provide  for a  replacement
 option with  respect  to  such  property  and on  such  terms  as  it  deems
 appropriate.

      For purposes of the Plan, a "Change in Control" of the Company shall be
 deemed to have occurred if:

           (a)  the shareholders of the Company shall approve:

                (i)  any  merger,  consolidation  or  reorganization  of  the
           Company (a "Transaction") in which the shareholders of the Company
           immediately prior to the Transaction would not, immediately  after
           the Transaction, beneficially own, directly or indirectly,  shares
           representing in the aggregate more than 50% of all votes to  which
           all shareholders of the corporation issuing cash or securities  in
           the Transaction (or  of its ultimate  parent corporation, if  any)
           would be entitled under ordinary circumstances in the election  of
           directors,  or  in  which  the  members  of  the  Company's  Board
           immediately prior to the Transaction would not, immediately  after
           the Transaction, constitute a majority  of the board of  directors
           of the corporation issuing cash  or securities in the  Transaction
           (or of its ultimate parent corporation, if any),

                (ii) any sale,  lease, exchange  or  other transfer  (in  one
           transaction or a  series of related  transactions contemplated  or
           arranged by any party  as a single plan)  of all or  substantially
           all of the Company's assets, or

                (iii)     any  plan  or  proposal  for  the  liquidation   or
           dissolution of the Company;

           (b)  individuals who constitute  the Company's Board  as of  March
      12, 2004 (the "Incumbent Directors") cease for any reason to constitute
      at least a majority of the Board; provided, however, that for  purposes
      of this subparagraph (b), any individual who becomes a Director of  the
      Company subsequent to March 12, 2004, and whose election, or nomination
      for election by the Company's shareholders, is approved by a vote of at
      least a majority of  the Incumbent Directors who  are Directors at  the
      time of such vote, shall be considered an Incumbent Director; or

           (c)  any "person," as that term is  defined in Section 3(a)(9)  of
      the Securities Exchange Act  of 1934, as  amended (the "Exchange  Act")
      (other than the Company, any of its subsidiaries, any employee  benefit
      plan of  the  Company  or  any  of  its  subsidiaries,  or  any  entity
      organized, appointed or established by the  Company for or pursuant  to
      the  terms  of   such  plan),  together   with  all  "affiliates"   and
      "associates" (as  such  terms  are defined  in  Rule  12b-2  under  the
      Exchange Act) of such  person, shall become  the "beneficial owner"  or
      "beneficial owners"  (as defined  in Rules  13d-3 and  13d-5 under  the
      Exchange Act), directly  or indirectly,  of securities  of the  Company
      representing in  the aggregate  20%  or more  of  either (i)  the  then
      outstanding shares of Common Stock or (ii) the combined voting power of
      all then outstanding securities of the  Company having the right  under
      ordinary circumstances to vote  in an election  of the Company's  Board
      ("Voting Securities"), in either  such case other than  as a result  of
      acquisitions of such securities directly from the Company.

      Notwithstanding the foregoing,  a "Change  in Control"  of the  Company
 shall not be  deemed to have  occurred for purposes  of subparagraph (c)  of
 this Section 6.01 solely  as the result of  an acquisition of securities  by
 the Company which, by reducing the number of shares of Common Stock or other
 Voting Securities  outstanding, increases  (i) the  proportionate number  of
 shares of Common Stock beneficially  owned by any person  to 20% or more  of
 the shares of Common Stock then outstanding or (ii) the proportionate voting
 power represented by the Voting Securities beneficially owned by any  person
 to 20% or more of the combined  voting power of all then outstanding  Voting
 Securities; provided, however, that if any person referred to in clause  (i)
 or (ii) of this sentence shall thereafter become the beneficial owner of any
 additional shares of Common Stock or other Voting Securities (other than  as
 a result of a  stock split, stock dividend  or similar transaction), then  a
 "Change in Control"  of the  Company shall be  deemed to  have occurred  for
 purposes of subparagraph (c) of this Section 6.01.

      Section 6.02.  Amendment and Termination of the  Plan.  Subject to  the
 right of  the Board  to terminate  the Plan  prior thereto,  the Plan  shall
 terminate at the expiration of ten years from  March 12, 2004.   No  Options
 may be granted after  termination of the Plan.   The Board  may at any  time
 suspend, terminate, amend  or modify the  Plan; provided,  however, that  no
 amendment or modification  of the Plan  shall become  effective without  the
 approval of  such  amendment or  modification  by the  shareholders  of  the
 Company if  the Company,  on the  advice of  counsel, determines  that  such
 shareholder approval is  necessary or desirable.   Upon  termination of  the
 Plan, the  terms and  provisions of  the  Plan shall,  notwithstanding  such
 termination, continue to apply to Options granted prior to such termination.
 No suspension,  termination, amendment  or modification  of the  Plan  shall
 adversely affect the rights of an Optionee under an Option, except with  the
 consent of such Optionee.

      Section 6.03.  Payment of Purchase Price;  Application of Funds.   Upon
 exercise of an Option, the purchase price shall be paid in full in cash or a
 cash equivalent acceptable to the Committee; provided,  however, that at the
 request of an Optionee  and to the extent  permitted by applicable law,  the
 Company shall approve reasonable arrangements with Optionees who are Outside
 Directors and may, in its sole  and absolute discretion, approve  reasonable
 arrangements with one or more Optionees who are Employees or Consultants and
 their respective brokerage firms, under which such an Optionee may  exercise
 his Option by delivering to the  Company an irrevocable notice of  exercise,
 together with such  other documents as  the Company shall  require, and  the
 Company shall, upon receipt  of full payment in  cash or an acceptable  cash
 equivalent of the  purchase price and  any other amounts  due in respect  of
 such exercise,  deliver  to  such Optionee's  brokerage  firm  one  or  more
 certificates representing the shares  of Common Stock  issued in respect  of
 such exercise.  The proceeds of any sale of Common Stock covered by  Options
 shall constitute general funds of the Company.

      Section 6.04.  Requirements of Law.   The granting  of Options and  the
 issuance of Common Stock upon the exercise of an Option shall be subject  to
 all  applicable  laws,  rules  and  regulations  and  to  such  approval  by
 governmental agencies as may be required.  The Plan shall be governed by and
 construed in  accordance with  the internal  laws  (and not  the  principles
 relating to conflicts of laws) of the State of Texas.

      Section 6.05.  Nontransferability of Options.  An Option granted  under
 the Plan shall not be transferable by the Optionee except by will or by  the
 laws of  descent  and  distribution and  shall  be  exercisable  during  the
 lifetime of the Optionee only by the Optionee.

      Section 6.06.  Investment Letter.  The Company's obligation to  deliver
 Common Stock with respect to an Option shall be conditioned upon its receipt
 from the  Optionee to  whom such  Common  Stock is  to  be delivered  of  an
 executed investment letter containing such representations and agreements as
 the Committee may determine to be necessary or advisable in order to  enable
 the Company  to issue  and deliver  such Common  Stock to  such Optionee  in
 compliance with the  Securities Act of  1933 and  other applicable  federal,
 state or local securities laws or regulations.

      Section 6.07.  Date of Adoption  and  Effective Date  of the Plan.  The
 Plan shall become effective as of March  12, 2004, the date of its  adoption
 by the Board, provided it is duly approved  by the holders of a majority  of
 the shares of Common Stock present or represented and entitled to vote at  a
 meeting of  shareholders  of  the  Company  duly  held  in  accordance  with
 applicable law within 12 months  after the date of  adoption of the Plan  by
 the Board.  If the Plan is not so approved, the Plan shall terminate and any
 Option granted hereunder shall be null and void.

      Section 6.08.  Withholding Taxes.   The  Company shall  be entitled  to
 deduct from any payment made under the Plan, regardless of the form of  such
 payment, the amount of all applicable  income and employment taxes  required
 by law to be withheld with respect to such payment, may require the Optionee
 to pay to the Company such withholding taxes prior to and as a condition  of
 the making of  any payment  or the  issuance or  delivery of  any shares  of
 Common Stock under the Plan, and shall be entitled to deduct from any  other
 compensation payable  to  the  Optionee  any  withholding  obligations  with
 respect to  Options under  the  Plan.  In  accordance  with  any  applicable
 administrative guidelines it establishes, the Board may allow an Optionee to
 pay the amount of taxes  required by law to  be withheld by (i)  withholding
 shares of Common Stock from any payment of  Common Stock due as a result  of
 the Option  or  (ii) permitting  the  Optionee  to deliver  to  the  Company
 previously acquired  shares of  Common Stock,  in each  case having  a  Fair
 Market Value equal  to the amount  of such required  withholding  taxes.  No
 payment shall be made and no shares of Common Stock shall be issued pursuant
 to any Option  unless and  until the applicable tax withholding  obligations
 have been satisfied.

      Section 6.09.     Fractional  Shares.  No  fractional shares of  Common
 Stock shall be issued or delivered pursuant  to the Plan, and no payment  or
 other adjustment shall be made in respect of any such fractional shares.

      Section 6.10.   No Guarantee of Tax Consequences.  No person  connected
 with the Plan in any capacity, including, but not limited to the Company and
 its  Affiliates  and  their  respective  directors,  officers,  agents   and
 employees, makes any  representation, commitment or  guarantee that any  tax
 treatment, including, but not limited to,  federal, state and local  income,
 estate and  gift tax  treatment,  will be  applicable  with respect  to  any
 Options granted  hereunder or  that  such tax  treatment  will apply  or  be
 available to an Optionee on account of participation in the Plan.

      Section 6.11.  Miscellaneous.  Headings are  given to the articles  and
 sections of the  Plan solely for  convenience and  to facilitate  reference.
 Such headings shall not be deemed  in any way material   or relevant to  the
 construction of the Plan or any provisions hereof.  Words of any gender used
 in the  Plan shall  be construed  to include  any other  gender, unless  the
 context requires otherwise.  Wherever the context of the Plan dictates,  the
 use of the singular  shall also include within  its meaning the plural,  and
 vice versa.

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