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                                                                    Exhibit 10.2
                                                                    ------------

                             XCEL MANAGEMENT, INC.
                         2000 Long Term Incentive Plan

                                 I.    GENERAL

        1.    Purpose.  The XCEL Management, Inc. 2000 Long Term Incentive Plan
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     (the "Plan") has been established by XCEL Management, Inc. (the "Company")
     to:

        (a)  attract and retain key executive and managerial employees of the
     Company;

        (b)  attract and retain directors, independent contractors and
     consultants;

        (c)  motivate Participants by means of appropriate incentives to achieve
     long-range goals;

        (d)  provide incentive compensation opportunities that are competitive
     with those of comparable corporations; and

        (e)  further identify Participants' interests with those of the
     Company's other shareholders through compensation alternatives based on the
     Company's common stock;

and thereby promote the long-term financial interest of the Company and its
Subsidiaries (if any), including the growth in value of the Company's equity and
enhancement of long-term shareholder return.

        2.  Effective Date.  Subject to the approval of the holders of a
            --------------
     majority of the voting Stock of the Company, the Plan shall be effective as
     of February 21, 2000, provided, however, that awards made under the Plan
     prior to such approval of the Plan by stockholders of the Company are
     contingent on such approval of the Plan by the stockholders of the Company
     and shall be null and void if such approval of the stockholders of the
     Company is withheld. The Plan shall terminate on February 21, 2000, the
     tenth anniversary of the Plan's effective date.

        3.  Definitions.  The following definitions are applicable to the Plan.

        (a)  "Award Agreement" means a written agreement between the Company and
     a Participant documenting an award under this Plan.

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

        (c)  "Change of Control" has the meaning ascribed to it in Section 1.11.

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

        (e)  "Committee" means the Compensation Committee of the Board.

        (f)  "Disabled" means the inability of a Participant, by reason of a
     physical or mental impairment, to engage in any substantial gainful
     activity, of which the Board shall be the sole judge.

        (g)  "Fair Market Value" of any share of Stock means (i) if the Stock is
     listed on a national securities exchange, the closing price on the Stock on
     a given date; (ii) if the Stock is traded on an exchange or market in which
     prices are reported on a bid and asked price, the average of the mean
     between the bid and asked price for the Stock on a given date; and (iii) if
     the Stock is not listed on a national securities exchange nor traded on the
     over-the-counter market, such value as the Committee, in good faith, shall
     determine.

        (h)  "1934 Act" means the Securities Exchange Act of 1934, as amended,
     or any successor statute.
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        (i)  "Option Date" means, with respect to any Stock Option, the date on
     which the Stock Option is awarded under the Plan.

        (j)  "Participant" means (i) any regular full-time employee of the
     Company or any Subsidiary (meaning an employee who works twenty (20) hours
     or more per week) who is selected by the Committee to participate in the
     Plan, or (ii) any consultant, independent contractor or director of the
     Company or any Subsidiary.

        (k)  "Performance Award" has the meaning ascribed to it in Article VI.

        (l)  "Performance Period" has the meaning ascribed to it in Article VI.

        (m)  "Related Company" means any corporation during any period in which
     it is a Subsidiary, or during any period in which it directly or indirectly
     owns fifty percent (50%) or more of the total combined voting power of all
     classes of securities that are entitled to vote.

        (n)  "Restricted Period" has the meaning ascribed to it in Article V.

        (o)  "Restricted Stock" has the meaning ascribed to it in Article V.

        (p)  "Retirement" means (i) termination of employment in accordance with
     the retirement procedures set by the Company from time to time; (ii)
     termination of employment because a participant becomes Disabled; or (iii)
     termination of employment voluntarily with the consent of the Company (of
     which the Board shall be the sole judge).

        (q)  "Stock" means the common stock, $.001 par value per share, of XCEL
     Management, Inc.

        (r)  "Stock Appreciation Right" means the right of a holder of a Stock
     Option to receive Stock or cash as described in Article IV.

        (s)  "Stock Option" means the right of a Participant to purchase Stock
     pursuant to an Incentive Stock Option, a Non-Qualified Option or a Reload
     Option awarded pursuant to the provisions of the Plan.

        (t)  "Subsidiary" means any corporation during any period of which fifty
     percent (50%) or more of the total combined voting power of all classes of
     securities entitled to vote is owned, directly or indirectly, by the
     Company.

        4.  Administration.  The authority to manage and control the operation
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     and administration of the Plan shall be vested in the Board. Subject to the
     provisions of the Plan, the Board will have authority to select employees
     to receive awards of Stock Options, with or without tandem Stock
     Appreciation Rights, Performance Awards and/or Restricted Stock, to
     determine the time or times of receipt, to determine the types of awards
     and the number of shares covered by the awards, to establish the terms,
     conditions, performance criteria, restrictions, and other provisions of
     such awards, and to amend, modify or suspend awards. In making such award
     determinations, the Board may take into account the nature of services
     rendered by the respective employee, his or her present and potential
     contribution to the Company's success and such other factors as the Board
     deems relevant.

     The Board is authorized to interpret the Plan, to establish, amend, and
rescind any rules and regulations relating to the Plan, to determine the terms
and provisions of any agreements made pursuant to the Plan, to modify such
agreements, and to make all other determinations that may be necessary or
advisable for the administration of the Plan.  With respect to persons subject
to Section 16 of the 1934 Act, transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successor rule or
statute under the 1934 Act.  To the extent any provision of the Plan or action
by the Board of Directors or the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law.
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       The Board, in its discretion, may delegate any or all of its authority,
powers and discretion under this Plan to the Committee, and the Board in its
discretion may revest any or all such authority, powers and discretion in itself
at any time.  If any or all of the authority, powers and discretion under this
Plan are delegated to the Committee and the Company has registered any of its
equity securities under Section 12 of the 1934 Act, the Committee shall consist
solely of two or more non-employee directors (as defined in Rule 16b-3 under the
1934 Act) until such time as such other requirements are imposed by applicable
law.  If appointed, the Committee shall function as follows:  A majority of the
Committee shall constitute a quorum, and the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in writing
by all members of the Committee, shall be the acts of the Committee, unless
provisions to the contrary are embodied in the Company's Bylaws or resolutions
duly adopted by the Board.  All actions taken and decisions and determinations
made by the Board or the Committee pursuant to the Plan shall be binding and
conclusive on all persons interested in the Plan.  No member of the Board or the
Committee shall be liable for any action or determination taken or made in good
faith with respect to the Plan.

        5.  Participation.  Subject to the terms and conditions of the Plan, the
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    Board shall determine and designate, from time to time, (i) the full-time
    employees of the Company and/or its Subsidiaries who will participate in the
    Plan, and (ii) any consultants, independent contractors or directors of the
    Company and/or its Subsidiaries who will participate in the Plan. In the
    discretion of the Board, a Participant may be awarded Stock Options with or
    without tandem Stock Appreciation Rights, Performance Units or Restricted
    Stock or any combination thereof, and more than one award may be granted to
    a Participant; provided, however, that Incentive Stock Options shall not be
    awarded to Participants who are not employees of the Company. Except as
    otherwise agreed to by the Company and the Participant, any award under the
    Plan shall not affect any previous award to the Participant under the Plan
    or any other plan maintained by the Company or its Subsidiaries.

        6.  Shares Subject to the Plan.  The shares of Stock with respect to
            --------------------------
    which awards may be made under the Plan shall be either authorized and
    unissued shares or issued and outstanding shares (including, in the
    discretion of the Board, shares purchased in the market). Subject to the
    provisions of Section 1.10, the number of shares of Stock available under
    the Plan for the grant of Stock Options with or without tandem Stock
    Appreciation Rights, Performance Units and Restricted Stock shall not exceed
    8,337,650 shares in the aggregate. If, for any reason, any award under the
    Plan or any portion of the award, shall expire, terminate or be forfeited or
    cancelled, or be settled in cash pursuant to the terms of the Plan and,
    therefore, any such shares are no longer distributable under the award, such
    shares of Stock shall again be available for award under the Plan.

        7.  Compliance With Applicable Laws and Withholding of Taxes.
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        (a)  Notwithstanding any other provision of the Plan, the Company shall
    have no liability to issue any shares of Stock under the Plan unless such
    issuance would comply with all applicable laws and the applicable
    requirements of any securities exchange or similar entity. Prior to the
    issuance of any shares of Stock under the Plan, the Company may require a
    written statement that the recipient is acquiring the shares for investment
    and not for the purpose or with the intention of distributing the shares.

        (b)  All awards and payments under the Plan are subject to withholding
    of all applicable taxes, which withholding obligations may be satisfied,
    with the consent of the Board, through the surrender of shares of Stock that
    the Participant already owns, or to which a Participant is otherwise
    entitled under the Plan. The Company shall have the right to deduct from all
    amounts paid in cash in consequence of the exercise of a Stock Option,
    Performance Unit or Stock Appreciation Right or in connection with an award
    of Restricted Stock under the Plan any taxes required by law to be withheld
    with respect to such cash payments. Where an employee or other person is
    entitled to receive shares of Stock pursuant to the exercise of a Stock
    Option, a Performance Unit or a Stock Appreciation Right pursuant to the
    Plan, the Company shall have the right to require the employee or such other
    person to pay to the Company the amount of any taxes that the Company is
    required to withhold with respect to such shares, or, in lieu thereof, to
    retain, or sell without notice, a sufficient number of such shares to cover
    the amount required to be withheld.
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        (c)  Upon the disposition (within the meaning of Code Section 424(c)) of
     shares of Stock acquired pursuant to the exercise of an Incentive Stock
     Option prior to the expiration of the holding period requirements of Code
     Section 422(a)(1), the employee shall be required to give notice to the
     Company of such disposition and the Company shall have the right to require
     the employee to pay to the Company the amount of any taxes that are
     required by law to be withheld with respect to such disposition.

        (d)  Upon termination of the Restricted Period with respect to an award
     of Restricted Stock (or such earlier time, if any, as an election is made
     by the employee under Code Section 83(b), or any successor provisions
     thereto, to include the value of such shares in taxable income), the
     Company shall have the right to require the employee or other person
     receiving shares of Stock in respect of such Restricted Stock award to pay
     to the Company the amount of taxes that the Company is required to withhold
     with respect to such shares of Stock or, in lieu thereof, to retain or sell
     without notice a sufficient number of shares of Stock held by it to cover
     the amount required to be withheld. The Company shall have the right to
     deduct from all dividends paid with respect to Restricted Stock the amount
     of taxes that the Company is required to withhold with respect to such
     dividend payments.

        8.  Transferability.  Performance Awards, Incentive Stock Options with
            ---------------
     or without tandem Stock Appreciation Rights, and, during the period of
     restriction, Restricted Stock awarded under the Plan are not assignable or
     transferable except as designated by the Participant by will or by the laws
     of descent and distribution. Incentive Stock Options may be exercised
     during the lifetime of the Participant only by the Participant or his
     guardian or legal representative.

        9.  Employee and Stockholder Status.  The Plan does not constitute a
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     contract of employment, and selection as a Participant will not give any
     employee the right to be retained in the employ of the Company or any
     Subsidiary or any director or consultant the right to continue to provide
     services to the Company or any Subsidiary. No award under the Plan shall
     confer upon the holder thereof any right as a stockholder of the Company
     prior to the date on which he fulfills all service requirements and other
     conditions for receipt of shares of Stock. If the redistribution of shares
     is restricted pursuant to Section 1.7, certificates representing such
     shares may bear a legend referring to such restrictions.

        10.  Adjustments to Number of Shares Subject to the Plan.  In the event
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     of any change in the outstanding shares of Stock of the Company by reason
     of any stock dividend, split, spinoff, recapitalization, merger,
     consolidation, combination, extraordinary dividend, exchange of shares or
     other similar change, the aggregate number of shares of Stock with respect
     to which awards may be made under the Plan, the terms and the number of
     shares of any outstanding Stock Options, Stock Appreciation Rights,
     Performance Units and Restricted Stock, and the purchase price of a share
     of Stock under Stock Options, may be equitably adjusted by the Board in its
     sole discretion.

        11.  Business Combinations.  In addition to the rights and obligations
             ---------------------
     of the Committee to modify, adjust or accelerate exercisability of
     outstanding options, in the event that, while any Stock Options, Stock
     Appreciation Rights, Performance Units or Restricted Shares are outstanding
     under the Plan, there shall occur (i) a merger or consolidation of the
     Company with or into another corporation in which the Company shall not be
     the surviving corporation (for purposes of this Section 1.11, the Company
     shall not be deemed the surviving corporation in any such transaction if,
     as the result thereof, the existing shareholders of the Company hold less
     than 51% of the outstanding stock of the Company), (ii) a dissolution of
     the Company, or (iii) a transfer of all or substantially all of the assets
     or shares of stock of the Company in one transaction or a series of related
     transactions to one or more other persons or entities (any of the foregoing
     events as described in (i)-(iii) above, a "Change of Control"), then, with
     respect to each Stock Option, Stock Appreciation Right, Performance Unit
     and share of Restricted Stock outstanding immediately prior to the
     consummation of such transaction and without the necessity of any action by
     the Committee:

        (a)  If provision is made in writing in connection with such transaction
     for the continuance and/or assumption of the Stock Options, Stock
     Appreciation Rights, Performance Units and Restricted Shares granted under
     the Plan, or the substitution for such Stock Options, Stock Appreciation
     Rights, Performance Units and
<PAGE>

     Restricted Shares of new Stock Options, Stock Appreciation Rights,
     Performance Units and Restricted Shares, with appropriate adjustment as to
     the number and kind of shares or other securities deliverable with respect
     thereto, the Stock Options, Stock Appreciation Rights, Performance Units
     and Restricted Shares granted under the Plan, or the new Stock Options,
     Stock Appreciation Rights, Performance Units and Restricted Shares
     substituted therefor, shall continue, subject to such adjustment, in the
     manner and under the terms provided in the respective agreements.

        (b)  In the event provision is not made in connection with such
     transaction for the continuance and/or assumption of the Stock Options,
     Stock Appreciation Rights, Performance Units and Restricted Shares granted
     under the Plan, or for the substitution of equivalent options, rights,
     units and awards, then (i) each holder of an outstanding option shall be
     entitled, immediately prior to the effective date of such transaction, to
     purchase the full number of shares that he or she would otherwise have been
     entitled to purchase during the entire remaining term of the option; (ii)
     the holder of any right or unit shall be entitled, immediately prior to the
     effective date of such transaction, to exercise such right to the extent
     the related option is or becomes exercisable at such time in accordance
     with its terms; (iii) all restrictions on any award of Restricted Shares
     shall lapse, and (iv) any restriction or risk of forfeiture imposed under
     the Plan shall lapse immediately prior to the effective date of such
     transaction. The unexercised portion of any option or right shall be deemed
     cancelled and terminated as of the effective date of such transaction.

        12.  Agreement With Company.  At the time of any awards under the Plan,
             ----------------------
     the Board will require a Participant to enter into an agreement with the
     Company in a form specified by the Board (the "Award Agreement"), agreeing
     to the terms and conditions of the Plan and to such additional terms and
     conditions, not inconsistent with the Plan, as the Board may, in its sole
     discretion, prescribe.

        13.  Amendment and Termination of Plan.  Subject to the following
             ---------------------------------
     provisions of this Section 13, the Board may at any time and in any way
     amend, suspend or terminate the Plan. No amendment of the Plan and, except
     as provided in Section 1.10, no action by the Board shall, without further
     approval of the stockholders of the Company, increase the total number of
     shares of Stock with respect to which awards may be made under the Plan,
     materially increase the benefits accruing to Participants under the Plan or
     materially modify the requirements as to eligibility for participation in
     the Plan, if stockholder approval of such amendment is a condition of
     Securities and Exchange Commission Rule 16b-3 or its successor rule or
     statute, the Code or any exchange or market system on which the Stock is
     listed at the time such amendment is adopted. No amendment, suspension or
     termination of the Plan shall alter or impair any Stock Option with or
     without tandem Stock Appreciation Right, Performance Award or share of
     Restricted Stock previously awarded under the Plan without the consent of
     the holder thereof.

                         II.  INCENTIVE STOCK OPTIONS

        1.  Definition.  The award of an Incentive Stock Option under the Plan
            ----------
     entitles the Participant to purchase shares of Stock at a price fixed at
     the time the option is awarded, subject to the following terms of this
     Article II.

        2.  Eligibility.  The Board shall designate the Participants to whom
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     Incentive Stock Options, as described in Code Section 422(b) or any
     successor section thereto, are to be awarded under the Plan and shall
     determine the number of option shares to be offered to each of them.
     Incentive Stock Options may be awarded only to employees. In no event shall
     the aggregate Fair Market Value (determined at the time the option is
     awarded) of Stock with respect to which Incentive Stock Options are
     exercisable for the first time by an individual during any calendar year
     (under all plans of the Company and all Related Companies) exceed $100,000.

        3.  Price.  The purchase price of a share of Stock under each Incentive
     Stock Option shall be determined by the Board, provided, however, that in
     no event shall such price be less than the greater of (i) 100% of the Fair
     Market Value of a share of Stock as of the Option Date (or 110% of such
     Fair Market Value if the holder of the option owns stock possessing more
     than 10% of the combined voting power of all classes of stock of the
     Company or any Subsidiary) or (ii) the par value of a share of Stock on
     such date. To the extent provided by the Board, the full purchase price of
     each share of Stock purchased upon the exercise of any Incentive Stock
     Option shall be paid in cash or in shares of Stock (valued at Fair Market
<PAGE>

     Value as of the day of exercise), or in any combination thereof, at the
     time of such exercise and, as soon as practicable thereafter, a certificate
     representing the shares so purchased shall be delivered to the person
     entitled thereto.

        4.  Exercise.  Each Option shall become and be exercisable at such time
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     or times and during such period or periods, in full or in such installments
     as may be determined by the Board at the Option Date. In addition, if
     permitted by the Board or the terms of the Award Agreement evidencing such
     Stock Option, Participants may elect to pay the purchase price of shares of
     Stock purchased upon the exercise of Incentive Stock Options in cash or
     through delivery at the time of such exercise of shares of Stock (valued at
     Fair Market Value as of the date of exercise) already owned by the
     Participant, or any combination thereof, equivalent to the purchase price
     of such Incentive Stock Options. A Participant's payment of the purchase
     price in connection with the exercise of an Incentive Stock Option through
     delivery of share of Stock ("ISO Stock") that were acquired through the
     exercise of an Incentive Stock Option and that have not been held for more
     than one year will be considered a disposition (within the meaning of Code
     Section 422(c)) of ISO Stock, resulting in the disqualification of the ISO
     Stock from treatment as an Incentive Stock Option under Code Section 422,
     and the Participant's recognition of ordinary income. Participants should
     consult with their tax advisors prior to electing to exercise an Incentive
     Stock Option by this method.

        5.  Option Expiration Date.  Unless otherwise provided by the Award
            ----------------------
     Agreement, the "Expiration Date" with respect to an Incentive Stock Option
     or any portion thereof awarded to a Participant under the Plan means the
     earliest of:

        (a)  the date that is ten (10) years after the date on which the
     Incentive Stock Option is awarded (or, if the Participant owns stock
     possessing more than ten percent (10%) of the combined voting power of all
     classes of stock of the Company or any Subsidiary, the date that is five
     (5) years after the date on which the Incentive Stock Option is awarded);

        (b)  the date that is one year after the Participant's employment with
     the Company and all Related Companies is terminated by reason of the
     Participant becoming Disabled or by reason of the Participant's death; or

        (c)  thirty (30) days following the date that the Participant's
     employment with the Company and all Related Companies is terminated by
     reasons other than death or becoming Disabled.  All rights to purchase
     shares of Stock pursuant to an Incentive Stock Option shall cease as of
     such option's Expiration Date.

All rights to purchase shares of Stock pursuant to an Incentive Stock Option
shall cease as of such option's Expiration Date.

        6.  Reload Options.  The Committee may, in its discretion, provide in
            --------------
     the terms of any Award Agreement that if the Participant delivers shares of
     Stock already owned or to be received upon exercise of the Option in full
     or partial payment of the option price, or in full or partial payment of
     the tax withholding obligations incurred on account of the exercise of the
     Option, the Optionee shall automatically and immediately upon such exercise
     be granted an additional option (a "Reload Option") to purchase the number
     of shares of Stock delivered by the Optionee to the Company, on such terms
     and conditions as the Committee may determine under the terms of the Plan.
     Notwithstanding the preceding, the purchase price of shares of Stock
     acquired under a Reload Option shall be not less than the Fair Market Value
     of a share of Stock on the date the Reload Option is issued.

                      III.   NON-QUALIFIED STOCK OPTIONS

        1.  Definition.  The award of a Non-Qualified Stock Option under the
            ----------
     Plan entitles the Participant to purchase shares of Stock at a price fixed
     at the time the option is awarded, subject to the following terms of this
     Article III.
<PAGE>

        2.  Eligibility.  The Board shall designate the Participants to whom
            -----------
     Non-Qualified Stock Options are to be awarded under the Plan and shall
     determine the number of option shares to be offered to each of them.

        3.  Price.  The purchase price of a share of Stock under each Non-
            -----
     Qualified Stock Option shall be determined by the Board; provided, however,
     that in no event shall such price be less than the Fair Market Value of a
     share of Stock as of the Option Date.

        4.  Exercise.  Each Option shall become and be exercisable at such time
            --------
     or times and during such period or periods, in full or in such installments
     as may be determined by the Board at the Option Date. To the extent
     provided by the Board, the full purchase price of each share of Stock
     purchased upon the exercise of any Non-Qualified Stock Option shall be paid
     in cash or in shares of Stock (valued at Fair Market Value as of the day of
     exercise), or in any combination thereof, at the time of such exercise and,
     as soon as practicable thereafter, a certificate representing the shares so
     purchased shall be delivered to the person entitled thereto. In addition,
     unless restricted by the Board, Participants may elect to pay the purchase
     price of shares of Stock purchased upon the exercise of Non-Qualified Stock
     Options in cash or through the constructive delivery at the time of such
     exercise of shares of Stock (valued at Fair Market Value as of the day of
     exercise) already owned by the Participant, or any combination thereof,
     equivalent to the purchase price of such Non-Qualified Stock Options, and,
     as soon as practicable thereafter, a certificate representing the net
     number of shares so purchased shall be delivered to the person entitled
     thereto. Participants also may elect to pay, unless restricted by the
     Board, the purchase price, in whole or in part, of shares of Stock
     purchased upon the exercise of Non-Qualified Options through the Company's
     withholding of shares of Stock (valued at Fair Market Value as of the day
     of exercise) that would otherwise by issuable upon exercise of such options
     equivalent to the purchase price of such Non-Qualified Stock Options and,
     as soon as practicable thereafter, a certificate representing the net
     number of shares so purchased shall be delivered to the person entitled
     thereto.

        5.  Option Expiration Date.  Unless otherwise provided in a
            ----------------------
     Participant's Award Agreement, the "Expiration Date" with respect to a Non-
     Qualified Stock Option or any portion thereof awarded to a Participant
     under the Plan means the earliest of:

        (a) the date that is one (1) year after the Participant's employment
     with the Company and all Related Companies is terminated by reason of the
     Participant becoming Disabled or by reason of the Participant's death; or

        (b) thirty (30) days following the date that the Participant's
     employment with the Company and all Related Companies is terminated by
     reasons other than death or becoming Disabled.

All rights to purchase shares of Stock pursuant to a Non-Qualified Stock Option
shall cease as of such option's Expiration Date.

        6.  Reload Options.  The Committee may, in its discretion, provide in
            --------------
     the terms of any Award Agreement that if the Participant delivers shares of
     Stock already owned or to be received upon exercise of the Option in full
     or partial payment of the option price, or in full or partial payment of
     the tax withholding obligations incurred on account of the exercise of the
     Option, the Optionee shall automatically and immediately upon such exercise
     be granted a Reload Option to purchase the number of shares of Stock
     delivered by the Optionee to the Company, on such terms and conditions as
     the Committee may determine under the terms of the Plan. Notwithstanding
     the preceding, the purchase price of shares of Stock acquired under a
     Reload Option shall be not less than the Fair Market Value of a share of
     Stock on the date the Reload Option is issued.

                        IV.   STOCK APPRECIATION RIGHTS

        1.  Definition.  A Stock Appreciation Right is an award that may or may
            ----------
     not be granted in tandem with a Non-Qualified Stock Option or Incentive
     Stock Option, and entitles the holder to receive an amount equal to the
     difference between the Fair Market Value of the shares of option Stock at
     the time of
<PAGE>

     exercise of the Stock Appreciation Right and the option price, subject to
     the applicable terms and conditions of the tandem options and the following
     provisions of this Article IV.

        2.  Eligibility.  The Board may, in its discretion, award Stock
            -----------
     Appreciation Right under this Article IV concurrent with, or subsequent to,
     the award of the option.

        3.  Exercise.  A Stock Appreciation Right shall entitle the holder of a
            --------
     Stock Option to receive, upon the exercise of the Stock Appreciation Right,
     shares of Stock (valued at their Fair Market Value at the time of
     exercise), cash or a combination thereof, in the discretion of the Board,
     in an amount equal in value to the excess of the Fair Market Value of the
     shares of Stock subject to the Stock Appreciation Right as of the date of
     such exercise over the purchase price of the Stock Appreciation Right, as
     shall be prescribed by the Board in its sole discretion and as shall be
     contained in the Participant's Award Agreement. If granted in tandem with
     an option, the exercise of a Stock Appreciation Right will result in the
     surrender of the related Incentive Stock Option or Non-Qualified Stock
     Option and, unless otherwise provided by the Board in its sole discretion,
     the exercise of a Stock Option will result in the surrender of a related
     Stock Appreciation Right, if any.

        4.  Expiration Date.  The "Expiration Date" with respect to a Stock
            ---------------
     Appreciation Right shall be determined by the Board and documented in the
     Participant's Award Agreement, and if granted in tandem with an option,
     shall be not later than the Expiration Date for the related Stock Option.
     If neither the right nor the related Stock Option is exercised before the
     end of the day on which the right ceases to be exercisable, such right
     shall be deemed exercised as of such date and payment shall be made to the
     holder in cash.

                             V.   RESTRICTED STOCK

        1.  Definition.  Restricted Stock awards are grants of Stock to
            ----------
     Participants, the vesting of which is subject to a required period of
     employment and any other conditions established by the Board.

        2.  Eligibility.  The Board shall designate the Participants to whom
     Restricted Stock is to be awarded and the number of shares of Stock that
     are subject to the award.

     3.  Terms and Conditions of Awards.  All shares of Restricted Stock
         ------------------------------
awarded to Participants under the Plan shall be subject to the following terms
and conditions and to such other terms and conditions, not inconsistent with the
Plan, as shall be prescribed by the Board in its sole discretion and as shall be
contained in the Participant's Award Agreement.

        (a) Restricted Stock awarded to Participants may not be sold, assigned,
     transferred, pledged or otherwise encumbered, except as hereinafter
     provided, for a period of ten (10) years or such shorter period as the
     Board may determine, but not less than one (1) year, after the time of the
     award of such stock (the "Restricted Period"). Except for such
     restrictions, the Participant as owner of such shares shall have all the
     rights of a shareholder, including but not limited to the right to vote
     such shares and, except as otherwise provided by the Board, the right to
     receive all dividends paid on such shares.

        (b) The Board may in its discretion, at any time after the date of the
     award of Restricted Stock, adjust the length of the Restricted Period to
     account for individual circumstances of a Participant or group of
     Participants, but in no case shall the length of the Restricted Period be
     less than one (1) year.

        (c) Except as otherwise determined by the Board in its sole discretion,
     a Participant whose employment with the Company and all Related Companies
     terminates prior to the end of the Restricted Period for any reason shall
     forfeit all shares of Restricted Stock remaining subject to any outstanding
     Restricted Stock Award.

        (d) Each certificate issued in respect of shares of Restricted Stock
     awarded under the Plan shall be registered in the name of the Participant
     and, at the discretion of the Board, each such certificate
<PAGE>

     may be deposited in a bank designated by the Board. Each such certificate
     shall bear the following (or a similar) legend:

          "The transferability of this certificate and the shares of stock
          represented hereby are subject to the terms and conditions (including
          forfeiture) contained in the XCEL Management, Inc. 2000 Stock
          Incentive Plan and an agreement entered into between the registered
          owner and XCEL Management, Inc.  A copy of such plan and agreement is
          on file in the office of the Secretary of XCEL Management, Inc. in
          Tacoma, Washington.

          (e) At the end of the Restricted Period for Restricted Stock, such
     Restricted Stock will be transferred free of all restrictions to a
     Participant (or his or her legal representative, beneficiary or heir).

                            VI.   PERFORMANCE UNITS

          1.  Definition.  Performance Units are awards to Participants who may
              ----------
     receive value for the units at the end of a Performance Period. The number
     of units earned, and value received for them, will be contingent on the
     degree to which the performance measures established at the time of the
     initial award are met.

        2.  Eligibility.  The Board shall designate the Participants to whom
            -----------
     Performance Units are to be awarded, and the number of units to be the
     subject of such awards.

        3.  Terms and Conditions of Awards.  For each Participant, the Board
            ------------------------------
     will determine the timing of awards; the number of units awarded; the value
     of units, which may be stated either in cash or in shares of Stock; the
     performance measures used for determining whether the Performance Units are
     earned; the performance period during which the performance measures will
     apply; the relationship between the level of achievement of the performance
     measures and the degree to which Performance Units are earned; whether,
     during or after the performance period, any revision to the performance
     measures or performance period should be made to reflect significant events
     or changes that occur during the performance period; and the number of
     earned Performance Units that will be paid in cash and/or shares of Stock,
     as shall be prescribed by the Board in its sole discretion and as shall be
     contained in the Participant's Award Agreement.

        4.  Payment.  The Board will compare the actual performance to the
            -------
     performance measures established for the performance period and determine
     the number of units to be paid and their value. Payment for units earned
     shall be wholly in cash, wholly in Stock or in a combination of the two, in
     a lump sum or installments, and subject to vesting requirements and such
     other conditions as the Board shall provide. The Board will determine the
     number of earned units to be paid in cash and the number to be paid in
     Stock. For Performance Units valued when awarded in shares of Stock, one
     share of Stock will be paid for each unit earned, or cash will be paid for
     each unit earned equal to either (i) the Fair Market Value of a share of
     Stock at the end of the Performance Period or (ii) the Fair Market Value of
     the Stock averaged for a number of days determined by the Board. For
     Performance Units valued when awarded in cash, the value of each unit
     earned will be paid in its initial cash value, or shares of Stock will be
     distributed based on the cash value of the units earned divided by (i) the
     Fair Market Value of a share of Stock at the end of the Performance Period
     or (ii) the Fair Market Value of a share of Stock averaged for a number of
     days determined by the Board.

        5.  Retirement, Death or Termination.  A Participant whose employment
            --------------------------------
     with the Company and Related Companies terminates during a performance
     period because of Retirement or death shall be entitled to the prorated
     value of earned Performance Units, issued with respect to that performance
     period, at the conclusion of the performance period based on the ratio of
     the months employed during the period to the total months of the
     performance period. If the Participant's employment with the Company and
     Related Companies terminates during a performance period for any reason
     other than Retirement or death, the Performance Units issued with respect
     to that performance period will be forfeited on the date his employment
     with the Company and Related Companies
<PAGE>

     terminates. Notwithstanding the foregoing provisions of this Part VI, if a
     Participant's employment with the Company and Related Companies terminates
     before the end of the Performance Period with respect to any Performance
     Units awarded to him, the Board may determine that the Participant will be
     entitled to receive all or any portion of the units that he or she would
     otherwise receive, and may accelerate the determination and payment of the
     value of such units or make such other adjustments as the Board, in its
     sole discretion, deems desirable.
<PAGE>


                              AMENDMENT NO. 1 TO
                  INSYNQ, INC. 2000 LONG-TERM INCENTIVE PLAN


     WHEREAS, Insynq, Inc. (the "Company") has heretofore adopted the Insynq,
Inc. 2000 Long-Term Incentive Plan (the "Plan"); and

     WHEREAS, the Company desires to amend the Plan in certain respects as
hereinafter provided;

     NOW, THEREFORE, effective September 1, 2000, the Company does hereby amend
the Plan as follows:

     1.   Section III, paragraph 3 of the Plan hereby is revised to provide in
its entirety as follows:

          "3.  Price. The purchase price of a share of Stock under each Non-
               -----
     Qualified Stock Option shall be determined by the Board; provided, however,
     that in no event shall such price for Non-Qualified Stock Options issued to
     Employees and Directors be less than the Fair Market Value of a share of
     Stock as of the Option Date; the purchase price of a share of Stock issued
     to a consultant may be less than Fair Market Value."


     IN WITNESS WHEREOF, the Company has caused this AMENDMENT NO.1 TO THE
INSYNQ, INC. 2000 LONG-TERM INCENTIVE PLAN to be executed in its name and on its
behalf this ____ day of September, 2000, effective as of September 1, 2000.

                                        INSYNQ, INC.


                                        By:________________________________
                                        Its:_______________________________