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                                                                    EXHIBIT 10.4

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                             STOCK OPTION AGREEMENT

                                    BETWEEN

                            SILVERLEAF RESORTS, INC.

                                      AND

                              SHARON K. BRAYFIELD




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                               TABLE OF CONTENTS

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RECITALS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

ARTICLE I.
GRANT OF OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1

         Section 1.1.     Grant of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
         Section 1.2.     Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
         Section 1.3.     Purchase Price  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
         Section 1.4.     Time for Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
         Section 1.5.     Partial Exercise  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
         Section 1.6.     Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
         Section 1.7.     Method of Exercise  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
         Section 1.8.     Termination of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

ARTICLE II
RESTRICTIONS AND LIMITATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3

         Section 2.1.     Outstanding Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
         Section 2.2.     Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
         Section 2.3.     Effect on Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         Section 2.4.     Shares as Investment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         Section 2.5.     Reclassification, Consolidation, or Merger  . . . . . . . . . . . . . . . . . . . . . . . .   4
         Section 2.6.     Limitations Upon Transfer of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         Section 2.7.     Limitations Upon Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
         Section 2.8.     Rights as Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

ARTICLE III
ADMINISTRATIVE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5

         Section 3.1.     Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         Section 3.2.     Binding Effect  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         Section 3.3.     Incentive Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   5
         Section 3.4.     Incorporation of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
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                             STOCK OPTION AGREEMENT
                                    BETWEEN
                            SILVERLEAF RESORTS, INC.
                                      AND
                              SHARON K. BRAYFIELD


         This Incentive Stock Option Agreement (the "Option Agreement") is made
between SILVERLEAF RESORTS, INC., a Texas Corporation (the "Company"), and
SHARON K. BRAYFIELD("Employee") effective as of the date specified below.

                                   RECITALS:

         A.      As Optionee is a valuable Officer and Employee of Silverleaf
Resorts, Inc., and has recognized leadership and experience in the business of
the Company, the Company deems it to be in its interest and in the interest of
its shareholders to provide an incentive to Optionee by granting Optionee an
additional proprietary interest in the Company, and the Company desires to
enter into this Option Agreement with Optionee under the terms and conditions
hereinafter set forth and to grant Optionee an option to purchase additional
common shares of the Corporation; and

         B.      The stock options granted hereunder are granted pursuant to
the terms of the 1997 Stock Option Plan for Silverleaf Resorts, Inc., which was
adopted by the Company and approved by the shareholders effective as of May 15,
1997, (the "Plan") and are intended to be in part Incentive Options and in part
Non-Qualified Options as defined in the Plan and Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").

                                   AGREEMENT:

         NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter contained, and for other good and valuable
consideration, the Parties agree as follows:

                                   ARTICLE I.
                                GRANT OF OPTION

         SECTION 1.1.     GRANT OF OPTION.  The Company hereby grants to
Employee the right and option to purchase from it, on the terms and conditions
following, all or any part of an aggregate of ONE HUNDRED TWENTY FIVE THOUSAND
(125,000) shares of the authorized $0.01 par value common shares of the
Company.  The options covering TWENTY FIVE THOUSAND NINETY SIX (25,096) shares
shall be Incentive Options, and the options covering NINETY NINE THOUSAND NINE
HUNDRED FOUR (99,904) shares shall be Non-Qualified Options.

         SECTION 1.2.     FAIR MARKET VALUE.  The fair market value of the
Company's $0.01 par value common shares on the date of this Option Agreement is
FIFTEEN AND 9,375/10,000 DOLLARS ($15.9375) per share as determined by the
Company's Board of Directors pursuant to Section 7.3 of the Plan.
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         SECTION 1.3.     PURCHASE PRICE.  The purchase price for each share
purchasable hereunder shall be SIXTEEN AND NO/100 DOLLARS ($16.00).


         SECTION 1.4.     TIME FOR EXERCISE.   Employee may elect to exercise
the options at the times and for the number of shares indicated as follows:

         (a)     On or after June 25, 1999, to and including June 24, 2000,
                 6,274 shares covered by the Incentive Options and 24,976
                 shares covered by the Non-Qualified Options, for a total of
                 31,250 shares;

         (b)     On or after June 25, 2000, to and including June 24, 2001,
                 6,274 shares covered by the Incentive Options and 24,976
                 shares covered by the Non-Qualified Options, for a total of
                 31,250 shares;

         (c)      On or after June 25, 2001, to and including June 24, 2002,
                 6,274 shares covered by the Incentive Options and 24,976
                 shares covered by the Non-Qualified Options, for a total of
                 31,250 shares;and

         (d)     On or after June 25, 2002, to and including June 24, 2008 (the
                 "Option Termination Date"), 6,274 shares covered by the
                 Incentive Options and 24,976 shares covered by the
                 Non-Qualified Options, for a total of 31,250 shares.

         However, if Employee does not purchase the full number of shares to
which Employee is entitled in either period (a), (b) or (c) above, Employee is
permitted to purchase those remaining shares in a later period through and
including the Option Termination Date in addition to those shares which
Employee may otherwise be entitled to purchase.

         SECTION 1.5.     PARTIAL EXERCISE.  No partial exercise of such option
may be for less than 100 full shares.

         SECTION 1.6.     FRACTIONAL SHARES.  In no event shall the Company be
required to transfer fractional shares to the Employee.

         SECTION 1.7.     METHOD OF EXERCISE.  The option shall be exercised by
Employee as to all or part of the shares covered by the option by giving
written notice of such exercise to the Company, specifying the number of
Incentive Option or Non-Qualified Option shares to be purchased and specifying
a business day not more than fifteen (15) days from the date such notice is
given, for the payment of the purchase price against delivery of the shares
being purchased.  Such notice shall set forth a statement, pursuant to Section
8.8 of the Plan and Section 2.5 of this Option Agreement, that the shares are
being acquired for investment.

         Subject to any applicable laws or regulations and to the terms of
Sections 8.8, 11.5, and 12.1 of the Plan, the Company shall cause certificates
for the Shares so purchased to be delivered to Employee at the principal
business office of the Company, against payment of the





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full purchase price, on the date specified in the notice of exercise, such
payment to be made in cash or by certified check or by transfer and delivery of
shares of common stock of the Company as provided in Section 7.4 of the Plan.

         SECTION 1.8.     TERMINATION OF OPTION.  The option and all rights
granted by this Option Agreement, to the extent those rights have not been
exercised, will terminate and become null and void on the sooner of:

         (a)     Such date as is ten (10) years from the date of this Option 
                 Agreement;

         (b)     The Option Termination Date as defined in Section 1.4 hereof;

         (c)     The date which is three months after the date Employee ceases
                 to be in the continuous employ of the Company, if such
                 cessation is by disability, retirement, or dismissal other
                 than for cause, as defined in Section 9.4 of the Plan,
                 provided that in the event of Employee's cessation of
                 employment under such terms, Employee may exercise such option
                 only to the extent that Employee was entitled to exercise it
                 on the date of Employee's cessation of employment;

         (d)     The date Employee ceases to be in the continuous employ of the
                 Company if such cessation is by voluntary termination or
                 dismissal for cause as defined in Sections 9.3 and 9.4 of the
                 Plan; or

         (e)     The date which is one year following the death of Employee, if
                 Employee dies while employed by the Company or within the
                 three-month period following the termination of such
                 employment if such termination was by disability, retirement,
                 or dismissal other than for cause.  In the event of Employee's
                 death under such terms, the person or persons to whom
                 Employee's rights under the option shall pass, whether by will
                 or by the applicable laws of descent and distribution, may
                 exercise such option pursuant to Section 8.7 of the Plan only
                 to the extent that Employee was entitled to exercise it on the
                 date of Employee's death.

For purposes of the foregoing provisions, serving as an Employee of a
subsidiary of the Company shall be deemed to be serving as an Employee of the
Company.


                                   ARTICLE II
                          RESTRICTIONS AND LIMITATIONS

         SECTION 2.1.     OUTSTANDING OPTIONS.  The option granted to Employee
under this Option Agreement shall in no event be exercised while there is
outstanding any option previously granted to Employee to purchase common shares
of the Company at a price higher than the option price under the option herein
granted to Employee.





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         SECTION 2.2.     LIMITATIONS.  In accordance with the terms of Section
422 of the Code, the option granted under this Option Agreement is limited so
that the aggregate fair market value of the stock which Employee may purchase
hereunder for the first time in any calendar year does not exceed $100,000 as
to shares covered by the Incentive Options.

         SECTION 2.3.     EFFECT ON EMPLOYMENT AGREEMENTS.  Nothing herein
contained shall be deemed to modify the terms of any employment agreement
between the Company and Employee.

         SECTION 2.4.     SHARES AS INVESTMENT.  By accepting this option,
Employee acknowledges for Employee, Employee's heirs, and legatees that any and
all shares purchased under this Option Agreement shall be acquired for
investment and not for or with a view towards distribution, and upon the
transfer of any or all of the shares subject to the option granted hereunder,
Employee, or Employee's heirs or legatees receiving such shares, shall deliver
to the Company a representation in writing that such shares are being acquired
in good faith for investment and not for or with a view towards distribution.

         SECTION 2.5.     RECLASSIFICATION, CONSOLIDATION, OR MERGER.
Adjustments to the number of shares subject to this option and the option price
for them shall be proportionately adjusted, pursuant to Section 10.1 of the
Plan.

         SECTION 2.6.     LIMITATIONS UPON TRANSFER OF OPTION.  During the
lifetime of Employee, the option and all rights granted in this Option
Agreement shall be exercisable only by the Employee, and except as Section
1.8(e) of this Option Agreement otherwise provides, the option and all rights
granted under this Option Agreement shall not be transferred, assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise),
and shall not be subject to execution, attachment, or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of such
option or of such rights contrary to the provisions in this Option Agreement,
or upon the levy of any attachment or similar process upon such option or such
rights, such option and such rights shall immediately become null and void.

         SECTION 2.7.     LIMITATIONS UPON TRANSFER OF SHARES.  No shares
acquired by Employee pursuant to this Option Agreement and covered by the
Incentive Options may be "disposed of", within the meaning of Section 424(c) of
the Code, by Employee within two (2) years from the date of granting of the
option nor within one year after the transfer of such share(s) to Employee.  No
shares acquired by Optionee pursuant to this Option Agreement and covered by
the Non-Qualified Options shall be sold or disposed of within six (6) months
following the date of acquisition of such shares, unless either the grant of
the Non-Qualified Options are approved by the Board of Directors, or a
committee of the Board of Directors that is composed solely of two or more
non-employee directors as defined in Rule 16b-3 of the Exchange Act, or the
grant of the Non-Qualified Options are approved or ratified, in compliance with
section 14 of the Exchange Act, by either:  the affirmative votes of the
holders of a majority of the securities of the Company present, or represented,
and entitled to vote at a meeting duly held in accordance with the applicable
laws of the state or other jurisdiction in which the Company is incorporated,
or the written consent of the holders of a majority of the securities of the
Company entitled to vote, provided that such ratification occurs no later than
the date of the next annual meeting of





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the shareholders.  Any attempted sale, disposal or transfer of shares in
violation of the foregoing restrictions shall be without effect.  All shares
transferred to Employee pursuant to the exercise of the option granted hereby
shall be clearly marked with the foregoing restrictions on transfer to the
extent applicable.

         SECTION 2.8.     RIGHTS AS SHAREHOLDER.  Neither Employee nor
Employee's executor, administrator, heirs, or legatees, shall be or have any
rights or privileges of a shareholder of the Company in respect of the shares
transferable upon exercise of the option granted under this Option Agreement,
unless and until certificates representing such shares shall have been
endorsed, transferred, and delivered and the Employee, or the Employee's
executor, administrator, heirs or legatees, as the case may be, has caused his
name to be entered as the shareholder of record on the books of the Company.


                                  ARTICLE III
                           ADMINISTRATIVE PROVISIONS

         SECTION 3.1.     NOTICES.  Any notice to be given under the terms of
this Option Agreement shall be addressed to the Parties as follows:

                 If to the Company:

                                  Silverleaf Resorts, Inc.
                                  Attn:  Robert E. Mead, Chief Executive Officer
                                  1221 Riverbend Drive, Suite 120
                                  P.O.Box 358
                                  Dallas, Texas 75221


                 If to Employee:

                                  Sharon K. Brayfield
                                  2135 Texas Ash
                                  Irving, Texas  75063

         Any Party may change its address by giving notice in writing, stating
its new address, to the other Party as provided in the foregoing manner.  Any
notice shall be deemed duly given when enclosed in a properly sealed envelope
or wrapper addressed as herein required certified and deposited (postage and
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.

         SECTION 3.2.     BINDING EFFECT.  This Option Agreement shall be
binding upon the heirs, executors, administrators, and successors of the
parties hereto.

         SECTION 3.3.     INCENTIVE OPTIONS.  The options granted hereunder
which are designated as Incentive Options are intended to be Incentive Options
as defined in the Plan and Section 422





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of the Code, but the Company makes no warranty as to the qualification of any
option as an Incentive Option.  The options granted hereunder which are
designated as Non-Qualified Options are intended to be Non-Qualified Options as
defined in the Plan.

         SECTION 3.4.     INCORPORATION OF THE PLAN.  The terms, conditions and
limitations contained in the Plan are incorporated herein by reference and such
provisions shall control to the extent they are not specifically contrary to a
provision of this Option Agreement.


         EXECUTED this 3rd day of August, 1998, but EFFECTIVE as of the 25th 
day of June, 1998.

                                    SILVERLEAF RESORTS, INC., the Company
                                    
                                    
                                    
                                    By:  /s/ ROBERT E. MEAD
                                         -------------------------------------
                                         ROBERT E. MEAD,
                                         Chief Executive Officer
                                    
                                    
                                    
                                    /s/ SHARON K. BRAYFIELD
                                    ------------------------------------------
                                    SHARON K. BRAYFIELD





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