<PAGE>   1
                                                                    EXHIBIT 10.2


                            SIERRA WELL SERVICE, INC.
                                 2000 STOCK PLAN


         SECTION 1.   Purpose of the Plan.

         The Sierra Well Service, Inc. 2000 Stock Plan (the "Plan") is intended
to promote the interests of Sierra Well Service, Inc., a Delaware corporation
(the "Company"), by encouraging officers, employees, directors and consultants
of the Company and its Affiliates to acquire or increase their equity interest
in the Company and to provide a means whereby they may develop a sense of
proprietorship and personal involvement in the development and financial success
of the Company, and to encourage them to remain with and devote their best
efforts to the business of the Company thereby advancing the interests of the
Company and its stockholders. The Plan is also contemplated to enhance the
ability of the Company and its Affiliates to attract and retain the services of
individuals who are essential for the growth and profitability of the Company.

         SECTION 2.   Definitions.

         As used in the Plan, the following terms shall have the meanings set
forth below:

         "Affiliate" shall mean (i) any entity in which the Company, directly or
indirectly, owns 50% or more of the combined voting power, as determined by the
Committee, and (ii) any "parent corporation" of the Company (as defined in
Section 424(e) of the Code) and any "subsidiary corporation" of any such parent
(as defined in Section 424(f) of the Code) thereof.

         "Award" shall mean any Option, Restricted Stock, Performance Award,
Phantom Shares, Bonus Shares, Other Stock-Based Award or Cash Award.

         "Award Agreement" shall mean any written or electronic agreement,
contract, or other instrument or document evidencing any Award, which may, but
need not, be executed or acknowledged by a Participant.

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

         "Bonus Shares" shall mean an award of Shares granted pursuant to
Section 6(d) of the Plan.

         "Cash Award" shall mean an award payable in cash granted pursuant to
Section 6(f) of the Plan.

         "Change in Control" shall mean the occurrence of any one of the
following:


<PAGE>   2

         (a) the consummation of any transaction (including without limitation,
         any merger, consolidation, tender offer, or exchange offer) the result
         of which is that any individual or "person" (as such term is used in
         Sections 13(d)(3) and 14(d)(2), of the Securities Exchange Act of 1934
         (the "Exchange Act")), other than Southwest Royalties Holdings, Inc.
         and its "affiliates" (as such term is defined in Rule 144 under the
         Exchange Act), is or becomes the "beneficial owner" (as such term is
         defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly
         or indirectly, of securities of the Company representing 30% or more of
         the combined voting power of the Company's then outstanding securities,

         (b) the individuals who, as of the effective date of the Plan,
         constitute the Board (the "Incumbent Board"), cease for any reason to
         constitute at least a majority of the Board; provided, however, that
         any individual becoming a director subsequent to the date hereof whose
         election, or nomination for election by the Company's stockholders, was
         approved by a vote of at least a majority of the directors then
         comprising the Incumbent Board shall be considered as though such
         individual were a member of the Incumbent Board, but excluding, for
         this purpose, any such individual whose initial assumption of office
         occurs as a result of either (i) an actual or threatened election
         contest (as such terms are used in Rule 14a-11 of Regulation 14A
         promulgated under the Exchange Act), or an actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Board or (ii) a plan or agreement to replace a majority of the
         members of the Board then comprising the Incumbent Board,

         (c) the sale, lease, transfer, conveyance or other disposition
         (including by merger or consolidation) in one or a series of related
         transactions, of all or substantially all of the assets of the Company
         to an unrelated person, or

         (d) the adoption of a plan relating to the liquidation or dissolution
         of the Company.

         "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations thereunder.

         "Committee" shall mean the committee appointed by the Board to
administer the Plan or, if none, the Board.

         "Consultant" shall mean any individual, other than a Director or an
Employee, who renders consulting services to the Company or an Affiliate for a
fee.

         "Director" shall mean a "non-employee director" of the Company, as
defined in Rule 16b-3.

         "Employee" shall mean any employee of the Company or an Affiliate.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

                                      -2-

<PAGE>   3

         "Fair Market Value" shall mean, with respect to Shares, the closing
sales price (or, if applicable, the highest reported bid price) of a Share on
the applicable date (or if there is no trading in the Shares on such date, on
the next preceding date on which there was trading) as reported in The Wall
Street Journal (or other reporting service approved by the Committee). In the
event the Shares are not publicly traded at the time a determination of its fair
market value is required to be made hereunder, the determination of fair market
value shall be made in good faith by the Committee.

         "Option" shall mean an option granted under Section 6(a) of the Plan.
Options granted under the Plan may constitute "incentive stock options" for
purposes of Section 422 of the Code or nonqualified stock options.

         "Other Stock-Based Award" shall mean an award granted pursuant to
Section 6(g) of the Plan that is not otherwise specifically provided for, the
value of which is based in whole or in part upon the value of a Share.

         "Participant" shall mean any Director, Employee or Consultant granted
an Award under the Plan.

         "Performance Award" shall mean any right granted under Section 6(c) of
the Plan.

         "Performance Objectives" means the objectives, if any, established by
the Committee that are to be achieved with respect to an Award granted under
this Plan, which may be described in terms of Company-wide objectives, in terms
of objectives that are related to performance of a division, subsidiary,
department or function within the Company or a subsidiary in which the
Participant receiving the Award is employed or in individual or other terms, and
which will relate to the period of time determined by the Committee. The
Performance Objectives intended to qualify under Section 162(m) of the Code
shall be with respect to one or more of the following (i) net earnings; (ii)
operating income; (iii) earnings before interest and taxes ("EBIT"); (iv)
earnings before interest, taxes, depreciation, and amortization expenses
("EBITDA"); (v) earnings before taxes and unusual or nonrecurring items; (vi)
revenue; (vii) return on investment; (viii) return on equity; (ix) return on
total capital; (x) return on assets; (xi) total stockholder return; (xii) return
on capital employed in the business; (xiii) stock price performance; (xiv)
earnings per share growth; and (xv) cash flows. Which objectives to use with
respect to an Award, the weighting of the objectives if more than one is used,
and whether the objective is to be measured against a Company-established budget
or target, an index or a peer group of companies, shall be determined by the
Committee in its discretion at the time of grant of the Award. A Performance
Objective need not be based on an increase or a positive result and may include,
for example, maintaining the status quo or limiting economic losses.

         "Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.

                                      -3-

<PAGE>   4

         "Phantom Shares" shall mean an Award of the right to receive Shares
issued at the end of a Restricted Period which is granted pursuant to Section
6(e) of the Plan.

         "Restricted Period" shall mean the period established by the Committee
with respect to an Award during which the Award either remains subject to
forfeiture or is not exercisable by the Participant.

         "Restricted Stock" shall mean any Share, prior to the lapse of
restrictions thereon, granted under Sections 6(b) of the Plan.

         "Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect from time
to time.

         "SEC" shall mean the Securities and Exchange Commission, or any
successor thereto.

         "Shares" or "Common Shares" or "Common Stock" shall mean the common
stock of the Company, $1.00 par value, and such other securities or property as
may become the subject of Awards under the Plan.

         SECTION 3.  Administration.

         The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee. Subject to the terms of the Plan and applicable
law, and in addition to other express powers and authorizations conferred on the
Committee by the Plan, the Committee shall have full power and authority to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted
to a Participant; (iii) determine the number of Shares to be covered by, or with
respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited, or suspended and the method or methods by
which Awards may be settled, exercised, canceled, forfeited, or suspended; (vi)
determine whether, to what extent, and under what circumstances cash, Shares,
other securities, other Awards, other property, and other amounts payable with
respect to an Award shall be deferred either automatically or at the election of
the holder thereof or of the Committee; (vii) interpret and administer the Plan
and any instrument or agreement relating to an Award made under the Plan; (viii)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (ix) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations, and other decisions under or with respect to
the Plan or any Award shall be within the sole discretion of the Committee, may
be made at any time and

                                      -4-

<PAGE>   5

shall be final, conclusive, and binding upon all Persons, including the Company,
any Affiliate, any Participant, any holder or beneficiary of any Award, any
stockholder and any Employee.

         SECTION 4.   Shares Available for Awards.

         (a) Shares Available. Subject to adjustment as provided in Section
4(c), the aggregate number of Shares with respect to which Awards may be granted
under the Plan shall be equal to 10% of the number of Shares outstanding at the
date of any grant, but in no event to exceed 2 million Shares. If any Award is
exercised, paid, forfeited, terminated or canceled without the delivery of
Shares, then the Shares covered by such Award, to the extent of such payment,
exercise, forfeiture, termination or cancellation, shall again be Shares with
respect to which Awards may be granted.

         (b) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.

         (c) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number and type of Shares
(or other securities or property) with respect to which Awards may be granted,
(ii) the number and type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Award.

         SECTION 5.   Eligibility.

         Any Employee, Director or Consultant shall be eligible to be designated
a Participant and receive an Award under the Plan.

         SECTION 6.   Awards.

         (a) Options. Subject to the provisions of the Plan, the Committee shall
have the authority to determine the Participants to whom Options shall be
granted, the number of Shares to be covered by each Option, the purchase price
therefor and the conditions and limitations applicable to the exercise of the
Option, including the following terms and conditions and such additional terms
and conditions, as the Committee shall determine, that are not inconsistent with
the provisions of the Plan.


                                      -5-
<PAGE>   6

                  (i) Exercise Price. The purchase price per Share purchasable
         under an Option shall be determined by the Committee at the time the
         Option is granted, but shall not be less than the Fair Market Value per
         Share on such grant date.

                  (ii) Time and Method of Exercise. The Committee shall
         determine the time or times at which an Option may be exercised in
         whole or in part (which may include the achievement of one or more
         Performance Objectives), and the method or methods by which, and the
         form or forms, in which payment of the exercise price with respect
         thereto may be made or deemed to have been made (which may include,
         without limitation, cash, check acceptable to the Company, Shares held
         for the period required to avoid a charge to the Company's reported
         financial earnings and owned free and clear of any liens, claims,
         encumbrances or security interests, outstanding Awards, a
         "cashless-broker" exercise (through procedures approved by the
         Company), other securities or other property, loans, notes approved by
         the Committee, or any combination thereof, having a Fair Market Value
         on the exercise date equal to the relevant exercise price).

                  (iii) Incentive Stock Options. The terms of any Option granted
         under the Plan intended to be an incentive stock option shall comply in
         all respects with the provisions of Section 422 of the Code, or any
         successor provision, and any regulations promulgated thereunder.
         Incentive stock options may be granted only to employees of the Company
         and its parent corporation and subsidiary corporations, within the
         meaning of Section 424 of the Code. To the extent the aggregate Fair
         Market Value of the Shares (determined as of the date of grant) of an
         Option to the extent exercisable for the first time during any calendar
         year (under all plans of the Company and its parent and subsidiary
         corporations) exceeds $100,000, such Option Shares in excess of
         $100,000 shall be nonqualified stock options.

                  (iv)   Limits. The maximum number of Options that may be
         granted to any Participant during any calendar year shall not exceed
         500,000 Shares.

         (b) Restricted Stock. Subject to the provisions of the Plan, the
Committee shall have the authority to determine the Participants to whom
Restricted Stock shall be granted, the number of Shares of Restricted Stock to
be granted to each such Participant, the duration of the Restricted Period
during which, and the conditions, including Performance Objectives, if any,
under which if not achieved, the Restricted Stock may be forfeited to the
Company, and the other terms and conditions of such Awards.

                  (i) Dividends. Dividends paid on Restricted Stock may be paid
         directly to the Participant, may be subject to risk of forfeiture
         and/or transfer restrictions during any period established by the
         Committee or sequestered and held in a bookkeeping cash account (with
         or without interest) or reinvested on an immediate or deferred basis in
         additional shares of Common Stock, which account or shares may be
         subject to the same restrictions as the underlying Award or such other
         restrictions, all as determined by the Committee in its discretion.

                                      -6-

<PAGE>   7

                  (ii) Registration. Any Restricted Stock may be evidenced in
         such manner as the Committee shall deem appropriate, including, without
         limitation, book-entry registration or issuance of a stock certificate
         or certificates. In the event any stock certificate is issued in
         respect of Restricted Stock granted under the Plan, such certificate
         shall be registered in the name of the Participant and shall bear an
         appropriate legend referring to the terms, conditions, and restrictions
         applicable to such Restricted Stock.

                  (iii) Forfeiture and Restrictions Lapse. Except as otherwise
         determined by the Committee or the terms of the Award that granted the
         Restricted Stock, upon termination of a Participant's employment (as
         determined under criteria established by the Committee) for any reason
         during the applicable Restricted Period, all Restricted Stock shall be
         forfeited by the Participant and reacquired by the Company.
         Unrestricted Shares, evidenced in such manner as the Committee shall
         deem appropriate, shall be issued to the holder of Restricted Stock
         promptly after the applicable restrictions have lapsed or otherwise
         been satisfied.

                  (iv)  Transfer Restrictions. During the Restricted Period,
         Restricted Stock will be subject to the limitations on transfer as
         provided in Section 6(h)(i).

                  (v) Limits. The maximum number of Shares of Restricted Stock
         that may be granted to any Participant during any calendar year shall
         not exceed 100,000 Shares.

         (c) Performance Awards. The Committee shall have the authority to
determine the Participants who shall receive a Performance Award, which shall be
denominated as a cash amount (e.g., $100 per award unit) at the time of grant
and confer on the Participant the right to receive payment of such Award, in
whole or in part, upon the achievement of such Performance Objectives during
such performance periods as the Committee shall establish with respect to the
Award.

                  (i) Terms and Conditions. Subject to the terms of the Plan and
         any applicable Award Agreement, the Committee shall determine the
         Performance Objectives to be achieved during any performance period,
         the length of any performance period, the amount of any Performance
         Award and the amount of any payment or transfer to be made pursuant to
         any Performance Award.

                  (ii)  Payment of Performance Awards. Performance Awards, to
         the extent earned, shall be paid (in cash and/or in Shares, in the sole
         discretion of the Committee) in a lump sum following the close of the
         performance period.

                  (iii) Limits. The maximum value of Performance Awards that may
         be granted to any Participant during any calendar year shall not exceed
         $500,000.

         (d) Bonus Shares. The Committee shall have the authority, in its
discretion, to grant Bonus Shares to Participants. Each Bonus Share shall
constitute a transfer of an unrestricted Share to the Participant, without other
payment therefor, as additional compensation for the Participant's

                                      -7-

<PAGE>   8

services to the Company. Bonus Shares shall be in lieu of a cash bonus that
otherwise would be granted.

         (e) Phantom Shares. The Committee shall have the authority to grant
Awards of Phantom Shares to Participants upon such terms and conditions as the
Committee may determine.

                  (i) Terms and Conditions. Each Phantom Share Award shall
         constitute an agreement by the Company to issue or transfer a specified
         number of Shares or pay an amount of cash equal to a specified number
         of Shares, or a combination thereof to the Participant in the future,
         subject to the fulfillment during the Restricted Period of such
         conditions, including Performance Objectives, if any, as the Committee
         may specify at the date of grant. During the Restricted Period, the
         Participant shall not have any right to transfer any rights under the
         subject Award, shall not have any rights of ownership in the Phantom
         Shares and shall not have any right to vote such shares.

                  (ii) Dividends. Any Phantom Share award may provide that
         amount equal to any or all dividends or other distributions paid on
         Shares during the Restricted Period be credited in a cash bookkeeping
         account (without interest) or that equivalent additional Phantom Shares
         be awarded, which account or shares may be subject to the same
         restrictions as the underlying Award or such other restrictions as the
         Committee may determine.

                  (iii) Limits. The maximum number of Phantom Shares that may be
         granted to any Participant during any calendar year shall not exceed
         100,000.

         (f) Cash Awards. The Committee shall have the authority to determine
the Participants to whom Cash Awards shall be granted, the amount, and the terms
or conditions, if any, as additional compensation for the Participant's services
to the Company or its Affiliates. If granted, a Cash Award shall be granted
(simultaneously or subsequently) in tandem with another Award and shall entitle
a Participant to receive a specified amount of cash from the Company upon such
other Award becoming taxable to the Participant, which cash amount may be based
on a formula relating to the anticipated taxable income associated with such
other Award and the payment of the Cash Award.

         (g) Other Stock-Based Awards. The Committee may also grant to
Participants an Other Stock-Based Award, which shall consist of a right which is
an Award denominated or payable in, valued in whole or in part by reference to,
or otherwise based on or related to, Shares as is deemed by the Committee to be
consistent with the purposes of the Plan. Subject to the terms of the Plan,
including the Performance Objectives, if any, applicable to such Award, the
Committee shall determine the terms and conditions of any such Other Stock-Based
Award. The maximum number of Shares or value for which Other Stock-Based Awards
may be granted to any Participant during any calendar year shall not exceed
100,000 Shares, if the Award is in Shares, or $500,000, if the Award is in
dollars.

                                      -8-

<PAGE>   9

         (h)      Automatic Director Options.

                  (i) Each person who is a Director immediately following the
         closing of the initial public offering of the Shares shall
         automatically receive a nonqualified Option for 5,000 shares of Common
         Stock.

                  (ii) On the date of the regular annual meeting of stockholders
         of the Company in each year that this Plan is in effect (commencing
         with the annual meeting of stockholders in 2001), each Director who is
         serving immediately after that meeting, including a Director who was
         elected for the first time at such annual meeting, shall automatically
         receive a nonqualified Option grant for 1,000 shares of Common Stock.

                  (iii) Each Option automatically granted to a Director pursuant
         to this paragraph will be subject to the following provisions:

                           (1) Each such Option shall be exercisable (vested) in
                  full on its grant date.

                           (2) The purchase price of each such Option shall be
                  the Fair Market Value of the Common Stock on its grant date.

                           (3) Each such Option may be exercised in full at one
                  time or in part from time to time by giving written notice to
                  the Company, stating the number of shares of Common Stock with
                  respect to which the Director Option is being exercised,
                  accompanied by payment in full of the option purchase price
                  for such shares, which payment may be (i) in cash or check
                  acceptable to the Company, (ii) by the transfer to the Company
                  of shares of Common Stock owned by the Director for the period
                  required to avoid a charge to the Company's reported financial
                  earnings and free and clear of any liens, claims, encumbrances
                  or security interests, (iii) if the Shares are publicly
                  traded, from the proceeds of a "cashless broker" sale through
                  procedures approved by the Company, or (iv) by any combination
                  of such methods of payment.

                           (4) Each such Option shall expire on the earlier of
                  10 years from its grant date or the first anniversary of the
                  date the Director ceases to be a member of the Board.

         (i)      General.

                  (i)      Limits on Transfer of Awards.

                           (A) Except as provided in (C) below, each Award, and
                  each right under any Award, shall be exercisable only by the
                  Participant during the Participant's lifetime, or by the
                  person to whom the Participant's rights shall pass by will or
                  the laws of descent and distribution.

                                      -9-

<PAGE>   10

                           (B) Except as provided in (C) below, no Award and no
                  right under any such Award may be assigned, alienated,
                  pledged, attached, sold or otherwise transferred or encumbered
                  by a Participant otherwise than by will or by the laws of
                  descent and distribution (or, in the case of Restricted Stock,
                  to the Company) and any such purported assignment, alienation,
                  pledge, attachment, sale, transfer or encumbrance shall be
                  void and unenforceable against the Company or any Affiliate.

                           (C) Notwithstanding anything in the Plan to the
                  contrary, to the extent specifically provided by the Committee
                  with respect to a grant, a nonqualified stock option may be
                  transferred to immediate family members or related family
                  trusts, or similar entities on such terms and conditions as
                  the Committee may establish.

                  (ii)  Term of Awards. The term of each Award shall be for such
         period as may be determined by the Committee; provided, that in no
         event shall the term of any Award exceed a period of 10 years from the
         date of its grant.

                  (iii) Share Certificates. All certificates for Shares or other
         securities of the Company delivered under the Plan pursuant to any
         Award or the exercise thereof shall be subject to such stop transfer
         orders and other restrictions as the Committee may deem advisable under
         the Plan or the rules, regulations, and other requirements of the SEC,
         any stock exchange upon which such Shares or other securities are then
         listed, and any applicable federal or state laws, and the Committee may
         cause a legend or legends to be put on any such certificates to make
         appropriate reference to such restrictions.

                  (iv) Consideration for Grants. Awards may be granted for no
         cash consideration or for such consideration as the Committee
         determines including, without limitation, such minimal cash
         consideration as may be required by applicable law.

                  (v) Delivery of Shares or other Securities upon Payment by
         Participant of Consideration. No Shares or other securities shall be
         delivered pursuant to any Award until payment in full of any amount
         required to be paid pursuant to the Plan or the applicable Award
         Agreement is received by the Company.

         SECTION 7.   Amendment and Termination.

         Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:

                  (a) Amendments to the Plan. Except as required by applicable
         law or the rules of the principal securities market on which the shares
         are traded and subject to Section 7(b) below, the Board or the
         Committee may amend, alter, suspend, discontinue, or terminate the Plan
         without the consent of any stockholder, Participant, other holder or
         beneficiary of an Award, or other Person.

                                      -10-

<PAGE>   11

                  (b) Amendments to Awards. Subject to (d) below, the Committee
         may waive any conditions or rights under, amend any terms of, or alter
         any Award theretofore granted, provided no change, other than pursuant
         to Section 7(c), in any Award shall reduce the benefit to Participant
         without the consent of such Participant. In no event shall the
         Committee take action that constitutes a "repricing" of an Option for
         financial accounting purposes.

                  (c) Adjustment of Awards Upon the Occurrence of Certain
         Unusual or Nonrecurring Events. Subject to (d) below, the Committee is
         hereby authorized to make adjustments in the terms and conditions of,
         and the criteria included in, Awards in recognition of unusual or
         nonrecurring events (including, without limitation, the events
         described in Section 4(c) of the Plan) affecting the Company, any
         Affiliate, or the financial statements of the Company or any Affiliate,
         or of changes in applicable laws, regulations, or accounting
         principles, whenever the Committee determines that such adjustments are
         appropriate in order to prevent dilution or enlargement of the benefits
         or potential benefits intended to be made available under the Plan.

                  (d) Section 162(m). The Committee, in its sole discretion and
         without the consent of the Participant, may amend (i) any stock-based
         Award to reflect (1) a change in corporate capitalization, such as a
         stock split or dividend, (2) a corporate transaction, such as a
         corporate merger, a corporate consolidation, any corporate separation
         (including a spinoff or other distribution of stock or property by a
         corporation), any corporate reorganization (whether or not such
         reorganization comes within the definition of such term in Section 368
         of the Code), (3) any partial or complete corporate liquidation, or (4)
         a change in accounting rules required by the Financial Accounting
         Standards Board and (ii) any Award that is not intended to meet the
         requirements of Section 162(m) of the Code, to reflect significant
         event that the Committee, in its sole discretion, believes to be
         appropriate to reflect the original intent in the grant of the Award.
         With respect to an Award that is subject to Section 162(m) of the Code,
         the Committee (i) shall not take any action that would disqualify such
         Award and (ii) must first certify that the Performance Objectives, if
         applicable, have been achieved before the Award may be paid.

         SECTION 8.   Change in Control.

         Notwithstanding any other provision of this Plan to the contrary, in
the event of a Change in Control of the Company all outstanding Awards
automatically shall become fully vested immediately prior to such Change in
Control (or such earlier time as set by the Committee), all restrictions, if
any, with respect to such Awards shall lapse, all performance criteria, if any,
with respect to such Awards shall be deemed to have been met in full (at the
highest level). Unless the Company survives as an independent publicly traded
company, all Options outstanding at the time of the event or transaction shall
terminate and the Optionee shall be paid, with respect to each Option, an amount
in cash equal to the excess of the Fair Market Value of a Share over the
Option's exercise price (if the Option exercise price exceeds the Fair Market
Value of a Share on such date,

                                      -11-

<PAGE>   12

the Optionee shall be paid an amount in cash equal to the lesser of $1.00 or the
Black-Scholes value of the cancelled Option as determined in good faith by the
Board), unless and except to the extent provision is made in writing in
connection with such Change in Control event or transaction for the continuation
of the Plan and/or the assumption of the Options theretofore granted, or for the
substitution for such Options of new options covering the stock of a successor
entity, or the parent or subsidiary thereof, with appropriate adjustments as to
the number and kinds of shares and exercise prices, in which event the Plan and
Options theretofore granted shall continue as fully vested Options in the manner
and under the terms so provided.

        SECTION 9.   General Provisions.

        (a) No Rights to Awards. No Director, Employee, Consultant or other
Person shall have any claim to be granted any Award, and there is no obligation
for uniformity of treatment of Employees, Consultants, or holders or
beneficiaries of Awards. The terms and conditions of Awards need not be the same
with respect to each recipient.

        (b) Withholding. The Company or any Affiliate is authorized to withhold
from any Award, from any payment due or transfer made under any Award or under
the Plan or from any compensation or other amount owing to a Participant the
amount (in cash, Shares, other securities, Shares that would otherwise be issued
pursuant to such Award, other Awards or other property) of any applicable taxes
payable in respect of an Award, its exercise, the lapse of restrictions thereon,
or any payment or transfer under an Award or under the Plan and to take such
other action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes. In addition, the Committee may
provide, in an Award Agreement, that the Participant shall have the right to
direct the Company to satisfy the Company's tax withholding obligation through
the "constructive" tender of already-owned Shares or the withholding of Shares
otherwise to be acquired upon the exercise or payment of such Award.

        (c) No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.

        (d) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable federal law.

        (e) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent

                                      -12-

<PAGE>   13

of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award and the remainder of the Plan and any such Award
shall remain in full force and effect.

        (f) Other Laws. The Committee may refuse to issue or transfer any Shares
or other consideration under an Award if, acting in its sole discretion, it
determines that the issuance of transfer or such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.

        (g) No Trust or Fund Created. Neither the Plan nor the Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any general unsecured creditor of the
Company or any Affiliate.

        (h) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities, or other property shall be paid or transferred
in lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated, or otherwise eliminated.

        (i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

        SECTION 10.   Effective Date of the Plan.

        The Plan shall be effective on the date it is approved by the
stockholders of the Company, provided such approval is obtained within 12 months
of the date the Plan is approved by the Board.

        SECTION 11.   Term of the Plan.

        No Award shall be granted under the Plan after the 10th anniversary of
the date this Plan is adopted by the Board. However, unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted
prior to such termination, and the authority of the Board or the Committee to
amend, alter, adjust, suspend, discontinue, or terminate any such Award or to
waive any conditions or rights under such Award, shall extend beyond such
termination date.


                                      -13-