Document:

<PAGE>

Exhibit 4.2   2000 Stock Option Plan

                           ALLIANCE HEALTHCARD, INC.
                             2000 STOCK OPTION PLAN

        1.  Purpose.  This plan is intended to provide incentives:
            -------
                (a) to the officers and other employees of Alliance HealthCard,
Inc., (the "Company") and any of its Related Corporations (capitalized terms
used but not otherwise defined herein shall have the meaning set forth in
Section 17 below) by providing them with opportunities to purchase stock in the
Company pursuant to options granted hereunder which qualify as "incentive stock
options" under Section 422(b) of the Code ("Incentive Stock Option"); and
                                            ----------------------

                (b)  to directors, officers, employees of or service provider to
the Company and Related Corporations by providing them with opportunities to
purchase stock in the Company pursuant to options granted hereunder which do not
qualify as Incentive Stock Options ("Nonqualified Stock Option").
                                     -------------------------

        2.  Administration of the Plan.
            --------------------------

                (a) Except as otherwise provided in Section 2(d) below, the Plan
shall be administered by the Board of Directors of the Company (the "Board") or
                                                                     -----
the Board may appoint a Stock Plan Committee (the "Committee") of two or more of
                                                   ---------
its members to administer this Plan. All references in this Plan to the
Committee shall mean the Board if no Committee has been appointed. Subject to
ratification of the grant or authorization of each Option by the Board (but only
if so required by applicable state law), and subject to the terms of the Plan,
in administering this Plan and Options granted under this Plan, the Committee
shall have the authority to:

                        (i) determine the employees of the Company and Related
Corporations (from among the class of employees eligible under Section 3 below
to receive Incentive Stock Options) to whom Incentive Stock Options may be
granted, and to determine (from among the class of individuals eligible under
Section 3 below to receive Nonqualified Stock Options) to whom Nonqualified
Stock Options may be granted;

                        (ii) determine the time or times at which Options may be
granted and the number of shares of Stock that are subject to each Option;

                        (iii) determine the option price of Option Shares (which
price as to Incentive Stock Options shall not be less than the minimum price
specified in Section 5 below);

                        (iv) determine whether each Option granted shall be an
Incentive Stock Option or a Nonqualified Stock Option;

                        (v) determine the additional terms and conditions
applicable to each Option which are not inconsistent with the terms of this
Plan, including but not limited to, the type of consideration to be received
upon exercise of the Option(s), the adequacy of and timing of receipt of such
consideration, and all other related terms and conditions; and

                                       1
<PAGE>

                        (vi) interpret the Plan and prescribe and rescind rules
and regulations, if any, relating to and consistent with this Plan.

     If the Committee determines to issue a Nonqualified Stock Option, it shall
take whatever actions it deems necessary, under Section 422 of the Code and the
regulations promulgated thereunder, to ensure that such Option is not treated as
an Incentive Stock Option.  The interpretation and construction by the Committee
of any provisions of the Plan or of any Option granted thereunder shall be
final, binding and conclusive unless otherwise determined by the Board.  The
Committee may from time to time adopt such rules and regulations for carrying
out the Plan as it may deem necessary or appropriate.

        (b) The Committee may select one of its members as its chairman, and
shall hold meetings at such time and places as it may determine. Acts by a
majority of the Committee, or acts reduced to or approved in writing by a
majority of the members of the Committee, shall be valid acts of the Committee.
From time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies however caused, or remove
all members of the Committee and thereafter directly administer the Plan (except
as otherwise provided under Section 2(e) below).

        (c) Options may be granted to members of the Board, but no Options shall
be granted to any person who is, at the time of the proposed grant, a member of
the Board, unless such grant has been approved by a majority vote of the other
members of the Board. All grants of Options to members of the Board shall in all
other respects be made in accordance with the provisions of this Plan applicable
to other eligible persons. Members of the Board who are either (i) eligible for
Options pursuant to the Plan, or (ii) have been granted Options, may vote on any
matters affecting the administration of the Plan or the grant of any Options
pursuant to the Plan, except that no such member shall act upon the granting to
himself of Options, but any such member may be counted in determining the
existence of a quorum at any meeting of the Board during which action is taken
with respect to the granting to him of Options.

        (d) Notwithstanding any other provision of this Section 2, in the event
the Company registers any class of any equity security pursuant to the Exchange
Act, the Plan will thereafter be administered by a Committee consisting of two
or more directors of the Company, each of whom is a "disinterested person" as
defined in Rule 16b-3 under the Exchange Act.

        (e) No members of the Board or the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Option granted under it. No member of the Committee or the Board shall be liable
for any act or omission of any other member of the Committee or the Board or for
any act or omission on his own part, including but not limited to the exercise
of any power and discretion given to him under the Plan, except those resulting
from his own gross negligence or willful misconduct.

   In addition to such other rights of indemnification as he may have as a
member of the Board or the Committee, and with respect to administration of the
Plan and the granting of Options thereunder, each member of the Board and of the
Committee shall be entitled without further act on his part to indemnity from
the Company for all expenses (including the amount of judgment and the amount of
approved settlements made with a view to the curtailment of costs of litigation,
other than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit or proceeding with respect to
the administration of the Plan or the granting of Options thereunder in which he
may be involved by reason of his being or having been a member of the Board or
the Committee, whether or not he continues to be such

                                       2
<PAGE>

a member of the Board or the Committee at the time of the incurring of such
expenses; provided, however, that such indemnity shall not include any expenses
incurred by such member of the Board or the Committee in respect of matters as
to which he shall be finally adjudged in such action, suit or proceeding to have
been guilty of gross negligence or willful misconduct in the performance of his
duties as a member of the Board or the Committee; and provided further that no
right of indemnification under this Plan shall be available to or accessible by
any such member of the Board or the Committee unless within thirty (30) days
after institution of any such action, suit or proceeding he shall have offered
the Company in writing the opportunity to handle and defend such action, suit or
proceeding at its own expense. The foregoing right of indemnification shall
inure to the benefit of the heirs, executors or administrators of each such
member of the Board or the Committee and shall be in addition to all other
rights to which such member of the Board or the Committee would be entitled to
as a matter of law, bylaws, contract or otherwise.

        3.  Persons Eligible to Be Granted Options.
            --------------------------------------

                (a) Incentive Stock Options may be granted to any employee of
the Company or any Related Corporation that the Committee may determine to be
granted an Incentive Stock Option. Those officers and directors of the Company
who are not employees may not be granted Incentive Stock Options under the Plan.

                (b) Nonqualified Stock Options may be granted to any director
(whether or not an employee), officer or employee of or service provider to the
Company or any Related Corporation.

                (c) The Committee may take into consideration a recipient's
individual circumstances in determining whether to grant an Incentive Stock
Option or Nonqualified Stock Option. Granting of any Option to any individual
shall neither entitle that individual to, nor disqualify him from, participation
in any other grant of Options.

        4. Stock and Number of Shares.  The stock subject to Options shall be
           --------------------------
authorized but unissued shares of Stock, or treasury shares of Stock held by the
Company. The aggregate number of shares of Stock which may be issued pursuant to
the Plan is 400,000 shares, subject to adjustment as provided in Section 12
below. Such number of shares of Stock may be issued under this Plan as Incentive
Stock Options, Nonqualified Stock Options, or a combination of both, so long as
the number of shares of Stock so issued does not exceed such number as adjusted.
If any Option granted under the Plan shall expire or terminate for any reason
without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, including but not limited to, any Option which
is forfeited due to its failure to vest within the time period applicable to
such Option, the shares of Stock subject to such Options shall again be
available for grants of Options under the Plan.

                                       3
<PAGE>

        5. Special Limitations Applicable to Incentive Stock Options.
           ---------------------------------------------------------

                (a) The price per share of Option Shares subject to any
Incentive Stock Option granted under the Plan shall not be less than Fair Market
Value per share of Stock on the date of such grant. In the case of an Incentive
Stock Option to be granted to an employee owning stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Related Corporation, the price per share of Option Shares subject
to such Incentive Stock Option shall not be less than 110 percent (110%) of the
Fair Market Value per share of Stock on the date of grant.

                (b) If, at the time an Option is granted under the Plan, the
Stock is not publicly traded, "Fair Market Value" shall be deemed to be the fair
                               -----------------
value of the Stock as determined by the Committee after taking into
consideration all factors which it deems appropriate, including, without
limitation, recent sale and offer prices of the Stock in private transactions
negotiated at arm's length. However, if at the time an Option is granted under
the Plan, the Stock is publicly traded, "Fair Market Value" shall be determined
                                         -----------------
as of the last business day for which the prices or quotes discussed in this
sentence are available prior to the date such Option is granted and shall mean
(i) the average (on that date) of the high and low prices of the Stock on the
principal national securities exchange on which the Stock is traded, if the
Stock is then traded on a national securities exchange; or (ii) the last
reported sale price (on that date) of the Stock on the NASDAQ National Market
List, if the Stock is not then traded on a national securities exchange; or
(iii) the closing bid price (or average of bid prices) last quoted (on that
date) by an established quotation service for over-the-counter securities, if
the Stock is not reported on the NASDAQ National Market List.

                (c) If the aggregate fair market value of Stock with respect to
which an Option intended to be Incentive Stock Option is exercisable for the
first time during any calendar year exceeds $100,000, the portion of the Option
which exceeds such limitation shall be treated as a Nonqualified Stock Option
and the Committee shall determine the extent to which the exercise of any such
Option is an exercise of the portion which is an Incentive Stock Option or a
Nonqualified Stock Option. For purposes of this Section 5(c), the fair market
value of Stock subject to an Option shall be determined as of the date of grant
of the Option.

        6. Duration of Options.  Each option shall expire on the date specified
           -------------------
by the Committee and set forth in the applicable Option Agreement, but not more
than (i) ten (10) years after the date of grant in the case of Nonqualified
Stock Options, and Incentive Stock Options generally, and (ii) five (5) years
from the date of grant in the case of Incentive Stock Options granted to an
employee owning stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or any Related
Corporation.

        7. Limitation on Assignability of any Option.  Unless otherwise
           -----------------------------------------
expressly permitted in a particular Option Agreement for a Nonqualified Stock
Option only, no Option shall be assignable or transferable by an Optionee except
following death by will or by the laws of descent and distribution, and during
the lifetime of an Optionee each Option granted to the Optionee shall be
exercisable only by the Optionee.

        8. Option Agreements; Terms and Conditions Applicable to Options.  The
           -------------------------------------------------------------
grant of any Option shall be evidenced by the Company and the Optionee entering
into a written agreement (an "Option Agreement") in such form as the Committee
                              ----------------
may from time to time approve. The terms of Option Agreements need not be
identical. In the event of any inconsistency between the terms of an Option
Agreement and the terms of this Plan, the terms of this Plan shall in all events
govern and control.

                                       4
<PAGE>

   Each Option Agreement may contain such provisions as the Committee deems
advisable which are not inconsistent with this Plan, including, but not limited
to, the following:

                (a) restrictions applicable to shares of Stock issuable upon
exercise of Options;

                (b) vesting or forfeiture provisions which restrict an
Optionee's ability to exercise all or any portion of an Option at a particular
time;

                (c) acceleration of the exercisability of Options upon the
occurrence of events specified in the Option Agreement;

                (d) restrictions on the exercise of Options following the
termination of the Optionee's employment with the Company or any Related
Corporation;

                (e) restrictions on an Optionee's ability to transfer shares of
Stock acquired through the exercise of Options in addition to those set forth in
Section 10 hereof; and

                (f) provisions permitting payment of the purchase price for any
Option Shares with a promissory note or with previously-owned shares of Stock.

The proper officers of the Company are authorized and directed to take any and
all actions necessary or advisable from time to time to execute and deliver, and
to carry out the terms of, each Option Agreement.

        9.  Exercise of Options; Optionees' Rights as a Shareholder.
            -------------------------------------------------------

                (a)  Method of Exercise.  An Option (or any part or installment
                     ------------------
thereof) shall be exercised by the Optionee (or, if an Option Agreement permits
the transfer of an Option following an Optionee's death, the Optionee's post-
mortem transferee) giving written notice to the Treasurer of the Company at its
principal office address. Such notice shall (i) identify the Option being
exercised by reference to the relevant Option Agreement, (ii) specify the number
of Option Shares as to which such Option is being exercised, and (iii) be
accompanied by full payment of the purchase price therefor by such mean or means
as may be permitted under the relevant Option Agreement.

                An Optionee may purchase less than the number of Option Shares
for which an Option is then exercisable, provided that no partial exercise of
the Option may be for any fractional share or for less then ten (10) whole
shares.

                (b)  Satisfaction of the Company's Withholding Obligations.
                     -----------------------------------------------------
The Company's obligation to issue any shares of Stock following the exercise of
an Option shall in all events be contingent upon an Optionee making such
arrangements which the Company shall determine to be reasonably satisfactory to
permit the Company and/or any Related Corporation to satisfy any income and
employment tax withholding obligations associated with the exercise of the
Option. Such arrangements may include, but need not necessarily be limited to,
deposit by the Optionee with the Company of amounts sufficient to satisfy the
amount of such withholding obligations, and increased withholding from cash
compensation otherwise payable to the Optionee by the Company or a Related
Corporation.

                (c)  Delivery of Certificate Following Exercise of the Option.
                     --------------------------------------------------------
The Company shall, upon payment of the purchase price for the number of Option
Shares purchased and compliance with the other

                                       5
<PAGE>

applicable terms and conditions of this Plan and the relevant Option Agreement,
make prompt delivery of a certificate evidencing such number of shares of Stock
to the Optionee; provided, however, that if any law or regulation requires the
                 --------  -------  ----
Company to take any action with respect to such Option Shares before the
issuance thereof, then the date of delivery of such certificate shall be
extended for the period necessary to complete such action. No certificate shall
be issued and delivered upon exercise of any portion of an Option unless and
until, in the sole and absolute discretion of the Company, any applicable
requirements of the Federal Securities Act, any applicable state laws regulating
securities, any applicable listing requirements of any national securities
exchange on which stock of the same class is then listed, and any other
requirements of law or of any regulatory bodies having jurisdiction over such
issuance and delivery, shall have been fully complied with. Shares shall not be
considered to be issued and outstanding for any purpose unless and until the
certificate evidencing such share has been issued.

                (d)  Optionees' Rights as a Shareholder.  An Optionee shall not
                     ----------------------------------
have the rights of a shareholder with respect to the Option Shares until the
date of issuance of a stock certificate to him for such shares. Except as
expressly provided in Section 12 of this Plan with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.

        10.  Right of First Refusal.
             ----------------------

                (a)  Applicable to All Plan Stock.  All Plan Stock shall be
                     ----------------------------
subject to the right of first refusal procedure specified in this Section 10,
unless the relevant Option Agreement specifically provides that the right of
first refusal is inapplicable to the Plan Stock. Notwithstanding anything in
this Section 10 to the contrary, the right of first refusal shall cease to apply
upon the completion of an Initial Public Offering.

                (b)  Right of First Refusal.  If a Plan Stockholder receives a
                     ----------------------
bona fide offer from a third party to sell any Plan Stock, and he desires to
accept such offer, he shall first promptly notify the Treasurer of the Company
in writing of such offer, accompanied by a copy of such written third party
offer. Thereafter, the Company shall have a period of forty-five (45) days in
which to elect to purchase all the Plan Stock which is subject to such offer
(the "Offered Stock") on the same terms as contained in the offer received from
      -------------
the third party. If the Company elects to purchase all the Offered Stock
pursuant to the terms of the offer, then the Plan Stockholder shall be obligated
to sell the Offered Stock to the Company and such sale shall close within twenty
(20) days after the giving of notice of election. The closing shall take place
at a reasonable time and place designated by the Company.

                If within the forty-five (45) day period set forth in the
immediately preceding paragraph, the Plan Stockholder does not receive written
notice from the Company of an election by the Company to purchase all the
Offered Stock, the Plan Stockholder shall have the right to sell his Stock on
the same terms and to the same purchaser as contained in the third party offer,
provided the sale is closed within sixty (60) days after the close of such
forty-five (45) day period, and further provided that such transfer complies
with Section 10(c) below. If the sale is not consummated within such sixty (60)
day period, then all of such Stock shall remain subject to the terms and
conditions of this Section 10.

                (c)  All Transferees of Plan Stock Must Agree in Writing to Be
                     ---------------------------------------------------------
Subject to the Right of First Refusal.  Any purported transfer of Plan Stock,
-------------------------------------
whether following compliance with the right of first refusal procedure described
in Section 10(b) above or pursuant to a gift or transfer at death, shall be
subject to the transferee's agreement in writing, in such form and substance as
the Company shall in its sole and absolute

                                       6
<PAGE>

discretion determine appropriate, that the Plan Stock so transferred shall
continue to be subject to the right of first refusal described in this Section
10.

        11.  Legends Upon Certificates for Plan Stock.  Certificates evidencing
             ----------------------------------------
Plan Stock shall bear such legends as the Company, in its sole and absolute
discretion, may determine to be necessary to comply with applicable state and
federal securities laws.  In addition, each such certificate shall contain the
following legend:

                The shares represented by this certificate are subject to
                restrictions against transfer under the terms of Section 10 of
                that certain Alliance HealthCard, Inc. 2000 Stock Option Plan
                (the "Plan"), which Plan requires, among other things, that the
                holder hereof offer to sell his shares to Alliance HealthCard,
                Inc. (the "Company") prior to making any transfer of his shares.
                The Company will furnish a copy of the plan, without charge, to
                the holder of this certificate upon written request to it at its
                principal place of business or registered office.

        12.  Effect of Recapitalization; Merger and Other Transactions
             ---------------------------------------------------------
Affecting the Company.
---------------------

                (a)  Effect on Option Shares Subject to Existing Option Grants.
                     ----------------------------------------------------------
Upon the occurrence of any of the following events, an Optionee's rights with
respect to Options granted to him hereunder shall be adjusted as hereinafter
provided, unless otherwise specifically provided in the Option Agreement
relating to such Option:

                        (i) If the shares of Stock shall be subdivided or
combined into a greater or smaller number of shares, or if the Company shall
issue any shares of Stock as a stock dividend on its outstanding Stock, the
number of Options shares of Stock deliverable upon the exercise of Options shall
be appropriately increased or decreased proportionately, and appropriate
adjustments shall be made in the purchase price per share to reflect such
subdivision, combination or stock dividend, all as determined by the Committee
in its sole and absolute discretion.

                        (ii) If the Company is to be consolidated with or
acquired by another entity in a merger, sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"), the Committee or the Board of
                                   -----------
Directors of any entity assuming the obligations of the Company hereunder (the
"Successor Board"), shall, as to outstanding Options, either (A) make
 ----------------
appropriate provision for the continuation of such Options by substituting on an
equitable basis for the shares then subject to such Options the consideration
payable with respect to the outstanding shares of Stock in connection with the
Acquisition; (B) upon written notice to the Optionees, provide that all Options
must be exercised (to the extent then exercisable and, if not otherwise then
exercisable, to the extent, if any, then deemed appropriate by the Committee),
within a specified number of days of the date of such notice, at the end of
which period the Options shall terminate; or (C) terminate all Options in
exchange for a cash payment equal to the excess of the Fair Market Value of the
shares subject to such Options (to the extent then exercisable and, if not
otherwise then exercisable, to the extent, if any, then deemed appropriate by
the Committee), over the exercise price thereof.

                        (iii) If there is a recapitalization or reorganization
of the Company (other than a transaction described in Section 12(a)(ii) above)
pursuant to which securities of the Company or of another corporation are issued
with respect to the outstanding shares of Stock, an Optionee upon exercising an

                                       7
<PAGE>

Option shall be entitled to receive for the purchase price paid upon such
exercise the securities he would have received if he had exercised his Option
prior to such recapitalization or reorganization.

                        (iv) Upon the proposed dissolution or liquidation of the
Company, each Option will terminate on the date immediately prior to the
consummation of such proposed action or at such other time and subject to such
other conditions consistent with this Plan and applicable state law as shall be
determined by the Committee giving written notice thereof to the Optionees.

                (b)  Absence of Adjustments.  Except as expressly provided
                     ----------------------
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Option Shares subject to Options. No adjustments shall be made with respect
to Option Shares for dividends paid in cash or in property other than securities
of the Company.

                (c)  Adjustment in Number of Shares of Plan Stock.  Upon the
                     --------------------------------------------
happening of any of the events described in Sections 12(a)(i), (ii), or (iii)
above, the class and aggregate number of shares set forth in Section 4 hereof
that are subject to Options which previously have been or subsequently may be
granted under the Plan shall also be appropriately adjusted to reflect the
events described in such Subsections. The Committee or the Successor Board shall
determine the specific adjustments to be made under this Section 12 and, subject
to Section 2, its determination shall be conclusive.

                (d)  Application of Restrictions Following Transactions.  If
                     --------------------------------------------------
any person or entity owning Plan Stock subject to any restrictions imposed with
respect thereto pursuant to this Plan (including, without limitation, the
restrictions provided in Section 10 hereof) receives shares or securities or
cash in connection with a corporate transaction described in Sections 12(a)(i),
(ii) or (iii) above as a result of owning such Plan Stock, such shares or
securities or cash shall be subject to all of the conditions and restrictions
applicable to the Plan Stock with respect to which such shares or securities or
cash were issued, unless otherwise determined by the Committee or the Successor
Board.

        13.  Term and Amendment Plan.
             -----------------------

                (a) This Plan shall be effective on January 1, 2000, (the
"Effective Date"), subject to approval by the board of directors of the Company
 --------------
being obtained within 12 months thereof; provided, however, that all Option
grants made hereunder prior to this Plan having been approved by the Company's
board of directors are hereby expressly made contingent upon obtaining such
approval. Options may be granted under the Plan at any time prior to the date
which is ten (10) years after the Effective Date, whereupon no further grants of
Options may be made, though the Plan will continue thereafter to apply with
respect to outstanding grants of Options and outstanding Plan Stock.

                (b) The Board may terminate or amend the Plan in any respect at
any time. The following action may not be taken without the approval of the
Board: (i) any increase in the total number of shares that may be issued under
the Plan (except by adjustment pursuant to Section 12(c) above); (ii) a change
in the employees eligible for grants of Incentive Stock Options pursuant to
Section 3 above; (iii) a decrease in the minimum exercise price at which shares
may be offered pursuant to Incentive Stock Options pursuant to Section 5(a)
above (except by adjustment pursuant to Section 12 above); and (iv) an extension
of the term of this Plan specified in Section 13(a) above. Except as otherwise
provided in this Plan, in no event may action

                                       8
<PAGE>

of the Board or stockholders alter or impair the rights of an Optionee, without
his consent, under any Option previously granted to him.

        14. Legends Upon Certificate for Plan Stock.  Certificates evidencing
            ---------------------------------------
Plan Stock shall bear such legends as the Company, in its sole and absolute
discretion, may determine to be necessary to comply with applicable state and
federal laws.

        15. Application of Funds.  The proceeds received by the Company from
            --------------------
the sale of shares pursuant to Options granted under the Plan shall be used for
general corporate purposes.

        16. Government Regulations.  The Company's obligation to sell and
            ----------------------
deliver shares of the Stock under this Plan is subject to the approval of any
governmental authority and compliance with any applicable state or federal
securities laws required in connection with the authorization, issuance or sale
of such shares.

        17.  Continued Employment.  The grant of an Option shall not be
             --------------------
construed to imply or to constitute evidence of any agreement, express or
implied, on the part of the Company or any Related, Corporation to retain the
Optionee in the employ of the Company or a Related Corporation, as a member of
the Company's Board of Directors or in any other capacity, whichever the case
may be.

        18. Governing Law; Construction; Severability.  The validity and
            -----------------------------------------
construction of the Plan and the instruments evidencing Options shall be
governed by the laws of the state of Georgia. This Plan is not intended to be,
and in no event shall it be construed to be, an "employee benefit plan" subject
to regulation under the Employee Retirement Income Security Act of 1974, as
amended. The validity or enforceability of any particular provision of this Plan
shall not affect the other provisions hereof, and this Plan shall be construed
in all respects as if such invalid or unenforceable provision were omitted. In
construing this Plan, the singular shall include the plural and the masculine
gender shall include the feminine and neuter, unless the context otherwise
requires.

        19. Definitions.  As used in this Plan, the following terms have the
            -----------
indicated specified meanings:

            (a)  Acquisition.  Has the meaning set forth in Section 12(a)(ii)
                 -----------
hereof.

            (b)  Board.  Has the meaning set forth in Section 2(a) hereof.
                 -----

            (c)  Code.  The Internal Revenue Code of 1986, as amended.
                 ----

            (d)  Committee.  Has the meaning set forth in Section 2(a) hereof.
                 ---------

            (e)  Company.       , a Georgia corporation, and its successors and
                 -------
assigns.

            (f)  Effective Date.  Has the meaning set forth in Section 13(a)
                 --------------
hereof.

            (g)  Exchange Act.  The Securities Exchange Act of 1934, as amended.
                 ------------

            (h)  Fair Market Value.  Has the meaning set forth in Section 5(b)
                 -----------------
hereof.

            (i)  Federal Securities Act.  The Securities Act of 1933, as
                 ----------------------
amended.

            (j)  Incentive Stock Option.  Has the meaning set forth in Section
                 ----------------------
1(a) hereof.

                                       9
<PAGE>

            (k)  Initial Public Offering.  Means an initial underwritten
                 -----------------------
public offering of the Company's capital stock registered under the Securities
Act of 1933, as amended.

            (l)  Nonqualified Stock Option.  Has the meaning set forth in
                 -------------------------
Section 1(b) hereof.

            (m)  Offered Stock.  Has the meaning set forth in Section 10(b)
                 -------------
hereof.

            (n)  Option.  An Incentive Stock Option or a Nonqualified Stock
                 ------
Option.

            (o)  Option Agreement.  Has the meaning set forth in Section 8
                 ----------------
hereof.

            (p)  Option Shares.  Shares of Stock that may be issued upon the
                 -------------
exercise of an Option.

            (q)  Optionee.  A person to whom an Option is granted pursuant to
                 --------
this Plan.

            (r)  Plan.  This Alliance Healthcard, Inc. 1999 Stock Option Plan
                 ----
as amended from time to time in accordance with the terms hereof.

            (s)  Plan Stock.  Stock which is issued upon the exercise of an
                 ----------
Option, and any stock into which such stock may be converted by virtue of
merger, reorganization, recapitalization or otherwise.

            (t)  Plan Stockholder.  A person who owns Plan Stock.
                 ----------------

            (u)  Related Corporation.  A corporation which is a parent
                 -------------------
corporation or a subsidiary corporation with respect to the Company, within the
meaning of Section 424(e) or (f) of the Code.

            (v)  Stock.  Class A common stock of the Company, no par value, and
                 -----
any stock into which such stock may be converted by virtue of merger,
reorganization, recapitalization or otherwise.

            (w)  Successor Board.  Has the meaning set forth in Section
                 ---------------
12(a)(ii) hereof.

                                      10<PAGE>

                                                                   EXHIBIT 10.20

                    EIGHTH AMENDMENT dated as of June 30, 2000 (this
                    "Eighth Amendment"), to the Credit Agreement dated
                     ----------------
                    as of December 13, 1995 (as amended prior to the
                    date hereof, the "Credit Agreement"), among Star Gas
                                      ----------------
                    Propane, L.P., a Delaware limited partnership (the
                    "Borrower"), the lenders party thereto, Fleet
                     --------
                    National Bank (formerly known as BankBoston, N.A.),
                    as Administrative Agent (the "Administrative
                                                  --------------
                    Agent"), and Bank of America, N.A. (formerly known
                    -----
                    as NationsBank, N.A.), as Documentation Agent (the
                    "Documentation Agent", and together with the
                     -------------------
                    Administrative Agent, the "Agents").
                                               ------

     The Borrower has requested the Agents and the Lenders to make certain
changes to the Credit Agreement.  The parties hereto have agreed, subject to the
terms and conditions hereof, to amend the Credit Agreement as provided herein.

     Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement (the Credit Agreement,
as amended by, and together with, this Eighth Amendment, and as hereinafter
amended, modified, extended or restated from time to time, being called the
"Amended Agreement").
 -----------------

     Accordingly, the parties hereto hereby agree as follows:

     SECTION 1.01   Amendment to Section 4.03(a). Section 4.03(a) of the Credit
                    ----------------------------
Agreement is hereby deleted in its entirety and the following is hereby
substituted in lieu thereof:

     "(a)  At the time of and immediately after any Tranche B Revolving Credit
Borrowing made or any Tranche B Letter of Credit issued (i) on or before June
30, 1999, the Leverage Ratio as of the date of such Borrowing or issuance (after
giving effect to the acquisition or Growth-Related Capital Expenditure for which
such Borrowing or Letter of Credit is being used) shall be no greater than
5.00:1.00, (ii) after June 30, 1999 and on or before September 30, 1999, the
Leverage Ratio as of the date of such Borrowing or issuance (after giving effect
to the acquisition or Growth-Related Capital Expenditure for which such
Borrowing or Letter of Credit is being used) shall be no greater than 5.25:1.00,
(iii) after September 30, 1999 and on or before November 29, 1999, the Leverage
Ratio as of the date of such Borrowing or issuance (after giving effect to the
acquisition or Growth-Related Capital Expenditure for which such Borrowing or
Letter of Credit is being used) shall be no greater than 5.25:1.00, (iv) after
November 29, 1999 and on or before December 30, 1999, the Leverage Ratio as of
the date of such Borrowing or issuance (after giving effect to the acquisition
or Growth-Related Capital Expenditure for which such Borrowing or Letter of
Credit is being used) shall be no greater than 4.90:1.00 and (v) (A) after
December 30, 1999 and on or before March 30, 2001, the Leverage Ratio as of the
date of
<PAGE>

such Borrowing or issuance (after giving effect to the acquisition or Growth-
Related Capital Expenditure for which such Borrowing or Letter of Credit is
being used) shall be no greater than 5.25:1.00 and (B) after March 30, 2001, the
Leverage Ratio as of the date of such Borrowing or issuance (after giving effect
to the acquisition or Growth-Related Capital Expenditure for which such
Borrowing or Letter of Credit is being used) shall be no greater than 4.50:1.00;
and, in the case of each such Borrowing or issuance of each such Letter of
Credit, the Borrower shall have prepared and furnished to the Agents prior to
such Borrowing or issuance pro forma financial statements demonstrating the
fulfillment of such condition to the satisfaction of the Agents. For purposes of
calculating the Leverage Ratio as required by this Section 4.03(a), Consolidated
Cash Flow for the Reference Period shall mean the greater of (A) Consolidated
Cash Flow for the most recent period of four consecutive fiscal quarters prior
to the date of determination and (B) 50% of Consolidated Cash Flow for the most
recent period of eight consecutive fiscal quarters prior to the date of
determination."

     SECTION 1.02   Amendment to Section 6.31(a).  Section 6.31(a) of the Credit
                    ----------------------------
Agreement is hereby deleted in its entirety and the following is hereby
substituted in lieu thereof:

     "(a)  The Borrower will not permit the ratio on any day (the "date of
determination") of (i) Total Funded Debt as of the last day of the Reference
Period with respect to such date of determination to (ii) Consolidated Cash Flow
for such Reference Period to be greater than the ratio set forth below opposite
the calendar period during which such date of determination occurs:

     Calendar Period                    Ratio
     ---------------                    -----

     January 1, 1996 through            5.00:1.00
     June 30, 1997

     July 1, 1997 through               4.75:1.00
     September 30, 1997

     October 1, 1997 through            4.95:1.00
     December 31, 1997

     January 1, 1998 through            5.00:1.00
     September 30, 1998

     The period ending                  5.40:1.00
     December 31, 1998

     January 1, 1999 through            5.00:1.00
     June 30, 1999

     July 1, 1999 through               5.25:1.00
     September 30, 1999

                                       2
<PAGE>

     October 1, 1999 through            5.25:1.00
     November 29, 1999

     November 30, 1999 through          4.90:1.00
     December 30, 1999

     December 31, 1999 through          5.25:1.00
     March 30, 2001

     March 31, 2001 and thereafter      4.50:1.00"

     SECTION 1.03   Representations and Warranties.  The Borrower hereby
                    ------------------------------
represents and warrants to each of the Agents and the Lenders, as follows:

          (a) The representations and warranties set forth in Article III of the
     Amended Agreement, and in each other Loan Document, are true and correct in
     all material respects on and as of the date hereof and on and as of the
     Eighth Amendment Effective Date (as hereinafter defined) with the same
     effect as if made on and as of the date hereof or the Eighth Amendment
     Effective Date, as the case may be, except to the extent such
     representations and warranties expressly relate solely to an earlier date.

          (b) Each of the Borrower and the Subsidiaries is in compliance with
     all the terms and conditions of the Amended Agreement and the other Loan
     Documents on its part to be observed or performed and no Default or Event
     of Default has occurred or is continuing.

          (c) The execution, delivery and performance by the Borrower of this
     Eighth Amendment have been duly authorized by the Borrower.

          (d) This Eighth Amendment constitutes the legal, valid and binding
     obligation of the Borrower, enforceable against it in accordance with its
     terms.

          (e) The execution, delivery and performance by the Borrower of this
     Eighth Amendment (i) will not violate (A) any provision of law, statute,
     rule or regulation, or of the agreement of limited partnership of the
     Borrower, (B) any order of any Governmental Authority or (C) any provision
     of any indenture, agreement or other instrument to which the Borrower is a
     party or by which it or any of its property may be bound and (ii) do not
     require any consents under, result in a breach of or constitute (with
     notice or lapse of time or both) a default or give rise to increased,
     additional, accelerated or guaranteed rights of any Person under any such
     indenture, agreement or other instrument.

     SECTION 1.04   Effectiveness.  This Eighth Amendment shall become effective
                    -------------
only upon satisfaction of the following conditions precedent (the first date
upon which each such condition has been satisfied being herein called the
"Eighth Amendment Effective Date"):

                                       3
<PAGE>

          (a) the Administrative Agent shall have received duly executed
     counterparts of this Eighth Amendment which, when taken together, bear the
     authorized signatures of the Borrower and the Required Lenders.

          (b) The Agents shall be satisfied that the representations and
     warranties set forth in Section 1.06 are true and correct on and as of the
     Eighth Amendment Effective Date.

          (c) There shall not be any action pending or any judgment, order or
     decree in effect which, in the judgment of the Agents or the Lenders, is
     likely to restrain, prevent or impose materially adverse conditions upon
     performance by the Borrower of its obligations under the Amended Agreement.

          (d) The Agents shall have received such other documents, legal
     opinions, instruments and certificates relating to this Eighth Amendment as
     they shall reasonably request and such other documents, legal opinions,
     instruments and certificates shall be satisfactory in form and substance to
     the Agents and the Lenders.  All corporate and other proceedings taken or
     to be taken in connection with this Eighth Amendment and all documents
     incidental thereto, whether or not referred to herein, shall be
     satisfactory in form and substance to the Agents and the Lenders.

          (e) The Borrower shall have paid all fees and expenses referred to in
     Section 1.06 of this Eighth Amendment.

     SECTION 1.05   APPLICABLE LAW.  THIS EIGHTH AMENDMENT SHALL BE GOVERNED BY,
                    --------------
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO
THE EXTENT THAT THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA MAY APPLY.

     SECTION 1.06   Expenses.  The Borrower shall pay (i) all reasonable out-of-
                    --------
pocket expenses incurred by the Agents and the Lenders in connection with the
preparation, negotiations execution, delivery and enforcement of this Eighth
Amendment, including, but not limited to, the reasonable fees and disbursements
of counsel and (ii) an amendment fee in the aggregate amount of $75,000, payable
pro rata to the Lenders based on their respective Commitments.

     SECTION 1.07   Counterparts.  This Eighth Amendment may be executed in any
                    ------------
number of counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one agreement.

     SECTION 1.08   Loan Documents.  Except as expressly set forth herein, the
                    --------------
amendments provided herein shall not by implication or otherwise limit,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders, the Agents, the Trustee or the other Secured Parties under the Amended
Agreement or any other Loan Document, nor shall they constitute a waiver of any
Default or Event of Default, nor shall they alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or agreements
contained in the Amended Agreement or any other Loan Document. Each of the
amendments provided herein

                                       4
<PAGE>

shall apply and be effective only with respect to the provisions of the Amended
Agreement specifically referred to by such amendments. Except as expressly
amended herein, the Amended Agreement and the other Loan Documents shall
continue in full force and effect in accordance with the provisions thereof. As
used in the Amended Agreement, the terms "Agreement", "herein", "hereinafter",
"hereunder", "hereto" and words of similar import shall mean, from and after the
date hereof, the Amended Agreement.

                                       5
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Eighth Amendment to
be duly executed by duly authorized officers, all as of the date first above
written.

                              STAR GAS PROPANE, L.P., as Borrower

                                   By:  Star Gas LLC, its General Partner

                                        By______________________________________
                                          Name:
                                          Title:

                              FLEET NATIONAL BANK (formerly known as BankBoston,
                              N.A.), as Administrative Agent and as a Lender

                              By________________________________________________
                                Name:
                                Title:

                              BANK OF AMERICA, N.A., as Documentation Agent
                              and as a Lender

                              By________________________________________________
                                Name:
                                Title:

                                       6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]