<PAGE>   1

                                                                   EXHIBIT 10(a)

                  SECOND AMENDED AND RESTATED STOCK OPTION PLAN

                         FOR EXECUTIVE AND KEY EMPLOYEES

                                       OF

                                THE SANDS REGENT

              THE SANDS REGENT, a corporation organized under the laws of the
State of Nevada, by resolution of the Board of Directors of the Company (the
"Board") on August 14, 2000, adopted this Second Amended and Restated Stock
Option Plan for Executive and Key Employees of The Sands Regent (the "Plan").
This Plan was originally adopted by the Board and approved by the shareholders
of the Company in January 1985. The Plan was amended in 1990 and was amended and
restated on September 16, 1992. This Second Amended and Restated Stock Option
Plan incorporates amendments to the Amended and Restated Stock Option Plan, as
adopted and effective on November 3, 1997, December 12, 1997, August 17, 1998
and August14, 2000. The purposes of this Plan are as follows:

              (1) To further the growth, development and financial success of
the Company by providing additional incentives to certain of its executive and
other key employees who have been or will be given responsibility for the
management or administration of the Company's business affairs, by assisting
them to become owners of the capital stock of the Company and thus to benefit
directly from its growth, development and financial success.

              (2) To enable the Company to obtain and retain the services of the
type of professional, technical and managerial employees considered essential to
the long range success of the Company by providing and offering them an
opportunity to become owners of capital stock of the Company under options, some
of which are intended to qualify as "incentive stock options" under Section 422
of the Internal Revenue Code of 1986, as amended.

                                    ARTICLE I

                                   DEFINITIONS

              Whenever the following terms are used in this Plan they shall have
the meaning specified below unless the context clearly indicates to the
contrary.

Section 1.1 - Board

              "Board" shall mean the Board of Directors of the Company.

Section 1.2 - Code

              "Code" shall mean the Internal Revenue Code of 1986, as amended.


<PAGE>   2

Section 1.3 - Committee

              "Committee" shall mean the committee of the Board, appointed as
provided in Section 6.1.

Section 1.4 - Company

              "Company" shall mean The Sands Regent or any successor
corporation.

Section 1.5 - Director

              "Director" shall mean a member of the Board.

Section 1.6 - Employee

              "Employee" shall mean any employee (as defined in accordance with
the Regulations and Revenue Rulings then applicable under Section 3401(c) of the
Code) of the Company, or of any corporation which is then a Subsidiary, whether
such employee is so employed at the time this Plan is adopted or becomes so
employed subsequent to the adoption of this Plan.

Section 1.7 - Incentive Stock Option

              "Incentive Stock Option" shall mean an Option qualifying under
Section 422 of the Code and designated as such by the Committee.

Section 1.8 - Independent Director

              "Independent Director" shall mean a member of the Board who is not
an Employee of the Company.

Section 1.9 - Non-Qualified Option

              "Non-Qualified Option" shall mean an Option which is not an
Incentive Stock Option and which is designated as a Non-Qualified Option by the
Committee.

Section 1.10 - Officer

              "Officer" shall mean an officer of the Company, as defined in Rule
16a-1(f) under the Securities Exchange Act of 1934, as amended.

Section 1.11 - Option

              "Option" shall mean an option to purchase capital stock of the
Company, granted under the Plan. "Options" includes both Incentive Stock Options
and Non-Qualified Options.


                                       2

<PAGE>   3

Section 1.12 - Option Limit

               "Option Limit" shall mean Two Hundred Thousand (200,000) shares
of Common Stock, as adjusted pursuant to Section 2.3 and 4.6 of the Plan, the
method of counting such shares of Common Stock shall conform to any requirements
applicable to performance-based compensation under Section 162(m) of the Code or
the rules and regulations promulgated thereunder.

Section 1.13 - Optionee

               "Optionee" shall mean an Employee or Independent Director to whom
an Option is granted under the Plan.

Section 1.14 - Parent Corporation

               "Parent Corporation" shall mean any corporation in an unbroken
chain of corporations ending with the Company if each of the corporations other
than the Company then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.

Section 1.15 - Plan

               The "Plan" shall mean this Second Amended and Restated Stock
Option Plan for Executive and Key Employees of The Sands Regent, as amended
and/or restated from time to time.

Section 1.16 - Pronouns

               The masculine pronoun shall include the feminine and neuter and
the singular shall include the plural, where the context so indicates.

Section 1.17 - Secretary

               "Secretary" shall mean the Secretary of the Company.

Section 1.18 - Section 162(m) Employee

               "Section 162(m) Employee" shall mean any Employee designated by
the Board or Committee as a Employee whose compensation for the fiscal year in
which the Employee is so designated or a future fiscal year may be subject to
the limit on deductible compensation imposed by Section 162(m) of the Code.


                                       3

<PAGE>   4

Section 1.19 - Subsidiary

               "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50% or
more of the total combined voting power of all such classes of stock in one of
the other corporations in such chain.

Section 1.20 - Termination of Employment

               "Termination of Employment" shall mean the time when the
employee-employer relationship between the Optionee and the Company or a
Subsidiary is terminated for any reason, including but not by way of limitation,
a termination by resignation, discharge, death or retirement, but excluding
terminations where there is a simultaneous reemployment by the Company or a
Subsidiary. The Committee, in its absolute discretion, shall determine the
effect of all other matters and questions relating to Termination of Employment,
whether a Termination of Employment resulted from a discharge for good cause,
and all questions of whether particular leaves of absence constitute
Terminations of Employment; provided, however, that, with respect to Incentive
Stock Options, a leave of absence shall constitute a Termination of Employment
if, and to the extent that, such leave of absence interrupts employment for the
purposes of Section 422(a)(2) of the Code and then applicable Regulations and
Revenue Rulings under said Section.

Section 1.21 - Termination of Directorship

               "Termination of Directorship" shall mean the time when an
Optionee who is an Independent Director ceases to be a member of the Board for
any reason, including but not by way of limitation, a termination by
resignation, failure to be re-elected, death, disability or retirement. The
Board, in its sole and absolute discretion, shall determine the effect of all
matters and question relating to Termination of Directorship with respect to
each Independent Director.

                                   ARTICLE II

                             SHARES SUBJECT TO PLAN

Section 2.1 - Shares Subject to Plan

              The shares of stock subject to Options shall be shares of the
Company's common stock, par value $.10 per share (the "Common Stock"). The
aggregate number of shares of Common Stock which have been or may be issued upon
exercise of Options granted under the Plan shall not exceed One Million One
Hundred Thousand (1,100,000) shares.

              The maximum number of shares of Common Stock which may be subject
to Options granted under the Plan to any Section 162(m) Employee in any calendar
year shall not exceed the Option Limit. To the extent required by Section 162(m)
of the Code, shares subject to Options which are canceled continue to be counted
against the Option Limit.


                                       4

<PAGE>   5

Section 2.2 - Additional Shares

              If any Option expires or is cancelled without having been fully
exercised, the number of shares subject to such Option but as to which such
Option was not exercised prior to its expiration or cancellation may again be
optioned hereunder subject to the limitations of Section 2.1. Shares of Common
Stock withheld or delivered in payment of the exercise price or tax withholding
upon exercise of Options granted under this Plan may again be optioned hereunder
subject to the limitations of Section 2.1.

Section 2.3 - Changes in Company's Shares

              In the event that the outstanding shares of Common Stock of the
Company are hereafter changed into or exchanged for a different number or kind
of shares or other securities of the Company, or of another corporation, by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend or combination of shares,
appropriate adjustments shall be made by the Committee in the number and kind of
shares for the purchase of which Options may be granted, including adjustments
of the limitations in Section 2.1 on the maximum number and kind of shares which
may be issued on exercise of Options and adjustments to the Option Limit.

Section 2.4 - Granting of Options to Independent Directors

              (a) During the term of the Plan, a person who continues as an
Independent Director at the 1998 Annual Meeting of Shareholders of the Company
automatically shall be granted (i) an Option to purchase seven thousand five
hundred (7,500) shares of Common Stock on the date of the 1998 Annual Meeting of
Shareholders of the Company, and (ii) an Option to purchase seven thousand five
hundred (7,500) shares of Common Stock on the date of each annual meeting of
shareholders following the 1998 Annual Meeting of Shareholders at which such
Independent Director is re-elected to the Board or continues to serve on the
Board; provided, however, that there shall be no grant of Options to an
Independent Director pursuant to clause (i) if the date of the 1998 Annual
Meeting of Shareholders is less than six months following the date of an initial
grant of options to such Independent Director in connection with such
Independent Director's initial appointment or election to the Board.

              (b) During the term of the Plan, a person who is initially
elected or appointed to the Board on or after the effective date of this Section
2.4 (i.e., August 17, 1998) and is at the time of such election or appointment
an Independent Director (i) may be granted, by the Board, an Option to purchase
not more than twenty-five thousand (25,000) shares of Common Stock effective as
of the date of such initial election or appointment to the Board and (ii)
automatically shall be granted an Option to purchase seven thousand five hundred
(7,500) shares of Common Stock on the date of each annual meeting of
shareholders following such initial election or appointment to the Board at
which the Independent Director is re-elected to the Board or continues to serve
on the Board; provided, however, that there shall be no grant of Options to an
Independent Director pursuant to clause (ii) if the annual meeting date
referenced in clause (ii) is


                                       5

<PAGE>   6

less than six months following the date of an initial grant of Options to such
Independent Director pursuant to clause (i).

              (c) A member of the Board who is an employee of the Company but
whose employment with the Company is terminated after the effective date of this
Section 2.4 (i.e., August 17, 1998) and who remains on the Board as an
Independent Director after such terminated employment will not receive an
initial Option grant pursuant to subparagraph (b)(i), but to the extent that he
or she is otherwise eligible, will receive, after termination of employment with
the Company, Options as described in subparagraph (b)(ii).

                                   ARTICLE III

                               GRANTING OF OPTIONS

Section 3.1 - Eligibility

              Any executive or other key Employee of the Company or of any
corporation which is then a Subsidiary shall be eligible to be granted Options.

Section 3.2 - Qualification of Incentive Stock Options

              No Incentive Stock Option shall be granted unless such Option,
when granted, qualifies as an "incentive stock option" under Section 422 of the
Code.

Section 3.3 - Granting of Options

              (a) The Committee shall from time to time, in its absolute
discretion:

                  (i) Determine which Employees are executive or key Employees
        and select from among the executive or key Employees (including those to
        whom Options have been previously granted under the Plan) such of them
        as in its opinion should be granted Options; and

                  (ii) Subject to the Option Limit, determine the number of
        shares to be subject to such Options granted to such selected executive
        or key Employees; and

                  (iii) Determine the terms and conditions of such Options,
        consistent with the Plan; and

                  (iv) Subject to Section 3.2, determine whether such Options
        are to be Incentive Stock Options or Non-Qualified Options and whether
        such Options are to qualify as performance-based compensation as
        described in Section 162(m)(4)(C) of the Code; and

                  (v) Determine the terms and conditions of such Options,
        consistent with the Plan.


                                       6
<PAGE>   7

              (b) Upon the selection of an executive or key Employee to be
granted an Option, the Committee shall instruct the Secretary to issue such
Option and may impose such conditions on the grant of such Option as it deems
appropriate.

              (c) Notwithstanding the foregoing, Options may not be granted to
executive or key Employees who are then Directors or Officers unless such grants
comply with any applicable requirements of Rule 16b-3 and related applicable
rules, as amended from time to time, promulgated under Section 16 of the
Securities Exchange Act of 1934, as amended from time to time.

                                   ARTICLE IV

                                TERMS OF OPTIONS

Section 4.1 - Option Agreement

              Each Option shall be evidenced by a written Stock and Option
Agreement, which shall be executed by the Optionee and an authorized Officer of
the Company and which shall contain such terms and conditions as the Committee
shall determine, consistent with the Plan. Stock Option Agreements evidencing
Options intended to qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code shall contain such terms and conditions as may
be necessary to meet the applicable provisions of Section 162(m) of the Code.
Stock Option Agreements evidencing Incentive Stock Options shall contain such
terms and conditions as may be necessary to qualify such Options as "incentive
stock options" under Section 422 of the Code.

Section 4.2 - Option Price

              (a) The price of the shares subject to each Option shall be set by
the Committee; provided, however, that the price per share shall be not less
than 100% of the fair market value of such shares on the date such Option is
granted; provided, further, that, in the case of an Incentive Stock Option, the
price per share shall not be less than 110% of the fair market value of such
shares on the date such Option is granted in the case of an individual then
owning (within the meaning of Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the Company, any
Subsidiary or any Parent Corporation.

              (b) For the purpose of Section 4.2(a), the fair market value of a
share of the Company's stock on the date the option is granted shall be: (i) the
closing price of a share of the Company's stock on the principal exchange on
which shares of the Company's stock are then trading, if any, on such date, or,
if shares were not traded on such date, then on the next preceding trading day
during which a sale occurred; or (ii) if such stock is not traded on an exchange
but quoted on NASDAQ or a successor quotation system, (1) the last sales price
(if the stock is then listed as a National Market Issue under the NASDAQ
National Market System) or (2) the mean between the closing representative bid
and asked prices (in all other cases) for the


                                       7
<PAGE>   8

stock on such date as reported by NASDAQ or such successor quotation system; or
(iii) if such stock is not publicly traded on an exchange and not quoted on
NASDAQ or a successor quotation system, the mean between the closing bid and
asked prices for the stock on such date as determined in good faith by the
Committee; or (iv) if the Company's stock is not publicly traded, the fair
market value established by the Committee acting in good faith.

Section 4.3 - Commencement of Exercisability

              (a) Except as the Committee may otherwise provide, no Option may
be exercised in whole or in part during the first year after such Option is
granted.

              (b) Subject to the provisions of Sections 4.3(a), 4.3(c) and 7.3,
Options shall become exercisable at such times and in such installments (which
may be cumulative) as the Committee shall provide in the terms of each
individual Option; provided, however, that by a resolution adopted after an
Option is granted the Committee may, on such terms and conditions as it may
determine to be appropriate and subject to Sections 4.3(a), 4.3(c) and 7.3,
accelerate the time at which such Option or any portion thereof may be
exercised.

              (c) No portion of an Option which is unexercisable at Termination
of Employment shall thereafter become exercisable.

              (d) Notwithstanding any other provision of this Plan, the
aggregate fair market value (determined at the time the Incentive Stock Option
is granted) of the shares of the Company's stock with respect to which
"incentive stock options" (within the meaning of Section 422 of the Code) are
exercisable for the first time by the Optionee during any calendar year (under
the Plan and all other incentive stock option plans of the Company, any
Subsidiary and any Parent Corporation) shall not exceed $100,000.

Section 4.4 - Expiration of Options

              (a) No Incentive Stock Option may be exercised to any extent by
anyone after the first to occur of the following events:

                  (i) The expiration of ten years from the date the Option was
        granted; or

                  (ii) In the case of an Optionee owning (within the meaning of
        Section 424(d) of the Code), at the time the Option was granted, more
        than 10% of the total combined voting power of all classes of stock of
        the Company, any Subsidiary or any Parent Corporation, the expiration of
        five years from the date the Option was granted.

No Non-Qualified Option may be exercised to any extent by anyone after the
expiration of ten years and one day from the date the Option was granted.

              (b) Subject to the provisions of Section 4.4(a), the Committee
shall provide, in the terms of each individual Option, when such Option expires
and becomes


                                       8
<PAGE>   9
unexercisable; except that if the option is exercised after the expiration of
three (3) months from the date of Termination of Employment by reason other than
death or permanent disability (within the meaning of Section 22(e)(3) of the
Code), the Option will not be considered an Incentive Stock Option but rather
will be taxed as a Non-Qualified Option.

              Without limiting the generality of the foregoing, the Committee
may provide in the terms of individual Options that said Options expire
immediately upon a Termination of Employment for any reason.

Section 4.5 - Consideration

              In consideration of the granting of the Option, the Optionee shall
agree, in the written Stock Option Agreement to remain in the employ of the
Company or a Subsidiary for a period of at least one year after the Option is
granted. Nothing in this Plan or in any Stock Option Agreement hereunder shall
confer upon any Optionee any right to continue in the employ of the Company or
any Subsidiary or shall interfere with or restrict in any way the rights of the
Company and Subsidiaries, which are hereby expressly reserved, to discharge any
Optionee at any time for any reason whatsoever, with or without good cause.

Section 4.6 - Adjustments in Outstanding Options

              In the event that the outstanding shares of the stock subject to
Options are changed into or exchanged for a different number or kind of shares
of the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up, stock
dividends or combination of shares, the Committee shall make an appropriate and
equitable adjustment in the number and kind of shares as to which all
outstanding Options, or portions thereof then unexercised, shall be exercisable,
to the end that after such event the Optionee's proportionate interest shall be
maintained as before the occurrence of such event. Such adjustment in an
outstanding Option shall be made without change in the total price applicable to
the Option or the unexercised portion of the Option (except for any change in
the aggregate price resulting from rounding-off of share quantities or prices)
and with any necessary corresponding adjustment in option price per share;
provided, however, that, in the case of Incentive Stock Options each such
adjustment shall be made in such manner as not to constitute a "modification"
within the meaning of Section 424(h)(3) of the Code. Any such adjustment made by
the Committee shall be final and binding upon all Optionees, the Company and all
other interested persons.

Section 4.7 - Merger, Consolidation, Exchange, Acquisition, Liquidation or
              Dissolution

              In its absolute discretion, and on such terms and conditions as it
deems appropriate, the Committee may provide by the terms of any Option that
such Option cannot be exercised after the merger or consolidation of the Company
into another corporation, the acquisition by another corporation of all or
substantially all of the Company's assets or 80% or more of the Company's then
outstanding voting stock or the liquidation or dissolution of the


                                       9
<PAGE>   10

Company; and if the Committee so provides, it may, in its absolute discretion
and on such terms and condition as it deems appropriate, also provide either by
the terms of such Option or by a resolution adopted prior to the occurrence of
such merger, consolidation, exchange, acquisition, liquidation or dissolution,
that, for some period of time prior to such event, such Option shall be
exercisable as to all shares covered thereby, notwithstanding anything to the
contrary in Section 4.3(a), Section 4.3(b), 4.3(d) and/or in any installment
provisions of such Option.

Section 4.8 - Terms of Options Granted to Independent Directors

              Notwithstanding anything in the Plan to the contrary, the terms
set forth in this Section 4.8 shall apply to Options granted to Independent
Directors.

              (a) Each Option granted to an Independent Director shall be a
Non-Qualified Option.

              (b) The price per share of the shares subject to each Option
granted to an Independent Director shall equal 100% of the fair market value of
a share of Common Stock (as determined pursuant to the provisions of Section
4.2(b)) on the date the Option is granted.

              (c) Options granted to Independent Directors shall become
exercisable in full on the first anniversary of the date of Option grant,
without variation or acceleration hereunder except as provided in Section 4.7.
No portion of an Option which is unexercisable at Termination of Directorship
shall thereafter become exercisable.

              (d) No Option granted to an Independent Director may be exercised
to any extent by anyone after the first to occur of the following events:

                  (i) The expiration of one (1) year following the date of the
        Optionee's death, permanent and total disability (within the meaning of
        Section 22(e)(3) of the Code), retirement, resignation, failure to be
        re-elected, discharge or termination; or

                  (ii) The expiration of ten (10) years from the date the Option
        was granted.

              (e) The Board shall administer the Plan, and assume all duties of
the Committee under the Plan, as to all Options granted to Independent
Directors.


                                       10

<PAGE>   11

                                    ARTICLE V

                               EXERCISE OF OPTIONS

Section 5.1 - Person Eligible to Exercise

              During the lifetime of the Optionee, only he may exercise an
Option granted to him, or any portion thereof. After the death of the Optionee,
any exercisable portion of an Option may, prior to the time when such portion
becomes unexercisable under Section 4.4 or Section 4.7, be exercised by his
personal representative or by any person empowered to do so under the deceased
Optionee's will or under the then applicable laws of descent and distribution.

Section 5.2 - Partial Exercise

              At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof becomes unexercisable under
Section 4.4 or Section 4.7, such Option or portion thereof may be exercised in
whole or in part; provided, however, that the Company shall not be required to
issue fractional shares and the Committee may, by the terms of the Option,
require any partial exercise to be with respect to a specified minimum number of
shares.

Section 5.3 - Manner of Exercise

              Any exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his office of all of the
following prior to the time when such Option or such portion becomes
unexercisable under Section 4.4 or Section 4.7.

              (a) Notice in writing signed by the Optionee or other person then
entitled to exercise such option or portion, stating that such Option or portion
is exercised, such notice complying with all applicable rules established by the
Committee; and

              (b) Full payment (in cash or check) must be made for the shares
with respect to which such Option or portion thereof is exercised. The Committee
(or the Board, in the case of Options granted to Independent Directors),
however, may in its discretion:

                  (i) allow a delay in payment of not more than thirty (30) days
        following the date the Option, or portion thereof, is exercised; or

                  (ii) allow payment, in whole or in part, through the delivery
        of shares of the Company's Common Stock which have been owned by the
        Optionee for at least six months, duly endorsed for transfer to the
        Company with a fair market value (as determined pursuant to the
        provisions of Section 4.2(b))on the date of delivery equal to the
        aggregate exercise price of the Option or exercised portion thereof; or


                                       11
<PAGE>   12

                  (iii) allow payment, in whole or in part, through the
        surrender of shares of the Company's Common Stock then issuable upon
        exercise of the Option having a fair market value (as determined
        pursuant to the provisions of Section 4.2(b)) on the date of Option
        exercise equal to the aggregate exercise price of the Option or
        exercised portion thereof; or

                  (iv) allow payment, in whole or in part, through the delivery
        of a full recourse promissory note bearing interest (at no less than
        such rate as shall then preclude the imputation of interest under the
        Code) and payable upon such terms as may be prescribed by the Committee
        (or the Board, in the case of Options granted to Independent Directors);
        or

                  (v) allow payment, in whole or in part, through the delivery
        of a notice that the Optionee has placed a market sell order with a
        broker with respect to shares of Common Stock then issuable upon
        exercise of the Option, and that the broker has been directed to pay a
        sufficient portion of the net proceeds of the sale to the Company in
        satisfaction of the aggregate exercise price of the Option or exercised
        portion thereof; or

                  (vi) allow payment through any combination of the
        consideration provided in the foregoing subparagraphs (i), (ii), (iii),
        (iv) and (v).

              In the case of a promissory note, the Committee (or the Board, in
the case of Options granted to Independent Directors) may also prescribe the
form of such note and the security to be given for such note. The Option may not
be exercised, however, by delivery of a promissory note or by a loan from the
Company when or where such loan or other extension of credit is prohibited by
law.

              (c) Such representations and documents as the Committee, in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee may, in its
absolute discretion, also take whatever additional actions it deems appropriate
to effect such compliance including, without limitation, placing legends on
share certificates and issuing stop-transfer orders to transfer agents and
registrars; and

              (d) In the event that the Option or portion thereof shall be
exercised pursuant to Section 5.1 by any person or persons other than the
Optionee, appropriate proof of the right of such person or persons to exercise
the Option or portion thereof.

Section 5.4 - Conditions to Issuance of Stock Certificates

              The shares of stock issuable and deliverable upon the exercise of
an Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the Company.
The Company shall not be required to issue


                                       12
<PAGE>   13

or deliver any certificate or certificates for shares of stock purchased upon
the exercise of any Option or portion thereof prior to fulfillment of all of the
following conditions:

              (a) The admission of such shares to listing on all stock exchanges
on which such class of stock is then listed, if the Company's stock is then
publicly traded; and

              (b) The completion of any registration or other qualification of
such shares under any state or federal law or under the rulings or regulations
of the Securities and Exchange Commission or any other governmental regulatory
body, which the Committee shall, in its absolute discretion, determine to be
necessary or advisable; and

              (c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and

              (d) The payment to the Company of all amounts which it is required
to withhold under federal, state or local laws in connection with the exercise
of the Option, which in the discretion of the Committee (or the Board, in the
case of Options granted to Independent Directors) may be in the form of
consideration used by the Optionee to pay for such shares under Section 5.3(b);
and

              (e) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may establish from time to time for
reasons of administrative convenience.

Section 5.5 - Rights as Shareholders

              The holders of Options shall not be, nor have any of the rights or
privileges of, shareholders of the Company in respect of any shares purchasable
upon the exercise of any part of an Option unless and until certificates
representing such shares have been issued by the Company to such holders.

                                   ARTICLE VI

                                 ADMINISTRATION

Section 6.1 - Committee

              The Committee shall be the Compensation Committee of the Board (or
another committee or a subcommittee of the Board assuming the functions of the
Committee under the Plan) and shall consist solely of two or more Directors,
appointed by and holding office at the pleasure of the Board. As to Option
grants intended to qualify as performance-based compensation as described in
Section 162(m)(4)(c) of the Code, such Options shall be granted and administered
by a committee consisting solely of two or more Directors appointed by and
holding office at the pleasure of the Board, each of whom is an "outside
director" for purposes of


                                       13
<PAGE>   14

Section 162(m) of the Code. Appointment of Committee members shall be effective
upon acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee may be filled
by the Board.

Section 6.2 - Duties and Powers of the Committee and the Board

              It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan and the Options and to adopt such
rules for the administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules. Any such
interpretations and rules in regard to Incentive Stock Options shall be
consistent with the basic purpose of the Plan to grant "incentive stock options"
within the meaning of Section 422 of the Code. In its absolute discretion, the
Board may at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan, except with respect to matters which
under Rule 16b-3 or Section 162(m) of the Code, or any regulations or rules
issued thereunder, are required to be determined in the sole discretion of the
Committee. Notwithstanding the foregoing, the full Board, acting by a majority
of its members in office, shall conduct the general administration of the Plan
with respect to Options granted to Independent Directors.

Section 6.3 - Majority Rule

              The Committee shall act by a majority of its members in office and
the Committee may act either by vote at a meeting or by a memorandum or other
written instrument signed by a majority of the Committee.

Section 6.4 - Compensation; Professional Assistance; Good Faith Actions

              Members of the Committee shall not receive compensation for their
services as members but all expenses and liabilities they incur in connection
with the administration of the Plan shall be borne by the Company. The Committee
may, with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company and its
Officers and Directors shall be entitled to rely upon the advice, opinions or
valuations of any such person. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all Optionees, the Company and all other interested persons. No member of
the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options and
all members of the Committee shall be fully protected by the Company in respect
to any such action, determination or interpretation.


                                       14
<PAGE>   15

                                   ARTICLE VII

                            MISCELLANEOUS PROVISIONS

Section 7.1 - Options Not Transferable

              No Option or interest or right therein or part thereof shall be
liable for the debts, contracts or engagements of the Optionee or his successors
in interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy) and any attempted disposition thereof shall be null and
void and of no effect provided, however, that nothing in this Section 7.1 shall
prevent transfers by will or by the applicable laws of descent and distribution.

Section 7.2 - Amendment, Suspension or Termination of the Plan

              The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Committee or the
Board. However, without approval of the Company's shareholders given within 12
months before or after the action by the Board or the Committee, no action of
the Committee or Board may, except as provided in Section 2.3, (i) increase any
limit imposed in Section 2.1 on the maximum number of shares which may be issued
on exercise of Options, (ii) extend the limit imposed in this Section 7.2 on the
period during which Options may be granted, (iii) amend or modify the Option
Limit, or (iv) amend the Plan in any manner requiring shareholder approval under
any applicable law, rule or regulation. Neither the amendment, suspension nor
termination of the Plan shall, without the consent of the holder of the Option,
alter or impair any rights or obligations under an Option theretofore granted.
No Option may be granted during any period of suspension nor after termination
of the Plan, and in no event may any Option be granted under this Plan after
August14, 2010.

Section 7.3 - Approval of Plan By Shareholders

              The Company shall take such actions with respect to the Plan as
may be necessary to satisfy the requirements of any applicable law, rule or
regulation. Options may be granted prior to any shareholder approval which may
be required under any law or regulation; provided, however, that such options
shall not be exercisable prior to the time the Plan, as amended, is approved by
the shareholders; provided, further, that if such approval has not been obtained
at the end of said 12-month period, all Options granted pursuant to the terms of
the Plan amendment shall thereupon be cancelled and become null and void.

Section 7.4 - Effect of Plan Upon Other Options and Compensation Plans

              The adoption of this Plan shall not affect any other compensation
or incentive plans in effect for the Company or any subsidiary. Nothing in this
Plan shall be construed to


                                       15
<PAGE>   16

limit the right of the Company or any Subsidiary (a) to establish any other
forms of incentives or compensation for employees of the Company or any
Subsidiary or (b) to grant or assume options otherwise than under this Plan in
connection with any proper corporate purpose, including, but not by way of
limitation, the grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.

Section 7.5 - Titles

              Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan.


                                       16

<PAGE>   17

                  I hereby certify that the foregoing Plan was duly adopted by
the Board of Directors of The Sands Regent on August 14, 2000, and was duly
approved by the shareholders of The Sands Regent on November 6, 2000.

Executed this 6th day of November, 2000.


                                           /s/ PETE CLADIANOS III
                                               -----------------------------
                                               Pete Cladianos III, Secretary


Corporate Seal


                                       17