Document:

2001 Long Term Incentive Plan amended 10-22-2002

  
 Exhibit 4.7 
  
 DANKA 2001 LONG TERM INCENTIVE PLAN 
 (As amended effective October 22, 2002)

  
 1.    PURPOSE OF THE PLAN 
  
 The Plan is intended to provide an opportunity to officers, executive directors and certain key employees of the Company to acquire a proprietary interest in the Company.
Such opportunity should provide an increased incentive for these individuals to contribute to the future success and prosperity of the Company, thus enhancing the value of the stock for the benefit of the Company’s shareholders and increasing
the ability of the Company to attract and retain individuals of exceptional skill. 
  
 2.    DEFINITIONS

  
 In these Rules the following words and expressions have the following meanings: 
  
 (a)  Acquiring Person:    Any person who: 
  
 (i)  either alone or together with any person acting in concert with him has obtained Control of the Company
either:- 
  
 (1)  as a result of making a Takeover Offer; or 
  
 (2)  in pursuance of a Compromise; or 
  
 (ii)  having such Control makes a general offer to acquire the whole of the issued share capital of the Company (other than that which is already
owned by him and/or any person acting in concert with him); or 
  
 (iii)  has served
Section 429 Notices in relation to the Company. 
  
 (b)  American Depositary
Share:    An authorized depositary security representing for the time being four Ordinary Shares and for the time being evidenced by an authorized depositary receipt issued by the Bank and quoted on the Nasdaq SmallCap
Market. 
  
 (c)  Award:    A Restricted Share Unit, Share
Appreciation Right or Other Share-Based Award granted pursuant to the Plan. 
  
 (d)  Awardholder:    An Eligible Employee who has been granted an Award. 
  
 (e)  Award Date:    The date on which an Award is made under the Plan. 

 

  
 (f)  Bank:    The Bank Of
New York or such other bank as the Company may from time to time appoint for the purposes of serving as its depositary for its American Depositary Shares. 
  
 (g)  Board:    The Board of Directors of the Company. 
  
 (h)  Committee:    A committee of the Board that has been designated by the Board to administer the Plan. 

 
 (i)  Company:    Danka Business Systems Public Limited Company.

  
 (j)  Compromise:    In relation to the Company means a
compromise or arrangement sanctioned by the Court under Section 425 of the Companies Act 1985. 
  
 (k)  Control:    A person is deemed to obtain control of the Company when (i) he acquires pursuant to a tender offer or exchange offer securities of the Company representing 30% or more of the
combined voting power of the then outstanding voting securities of the Company or (ii) he secures by means of the holding of shares or the possession of voting power in or in relation to the Company or any other body corporate that the affairs of
the Company are conducted in accordance with his wishes. 
  
 (l)  Effective
Date:    9 October 2001. 
  
 (m)  Eligible
Employees:    Any employee, officer or executive director for the time being holding employment in or with any member of the Group and who is nominated by the Committee to participate in the Plan. 
  
 (n)  Group:    The Company and any Subsidiary of the Company and member of the Group
shall be construed accordingly. 
  
 (o)  Market Value:    With
respect to American Depositary Shares, means an amount equal to the average of the high and low reporited sales prices of an American Depositary Share on the Nasdaq SmallCap Market on the date for which market value is being determined and, with
respect to Ordinary Shares, means the middle market quotation on the London Stock Exchange Daily Official List on the date for which market value is being determined. 
  
 (p)  Ordinary Share:    Fully paid ordinary shares of 1.25 pence each in the capital of the Company. 

 
 (q)  Other Share-Based Awards:    Awards granted pursuant to Section 8 of
the Plan. 
  
 (r)  Plan:    The Danka 2001 long term incentive
plan. 
  
 (s)  Restricted Share Unit or RSU:    A restricted
share unit, granted pursuant to Rule 7 of the Plan, that represents the right to receive Scheme Shares. 

 
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 (t)  Scheme
Shares:    Ordinary Shares and/or American Depositary Shares as the case may be. 
  
 (u)  Section 429 Notice:    In relation to the Company, a notice served by a person who has become entitled to serve such a notice on the shareholders of the Company under section 429 of the
Companies Act 1985 (rights of 90% shareholders to buy out minority shareholders). 
  
 (v)  Share Appreciation Right or SAR:    A share appreciation right granted pursuant to Rule 9 of the Plan in relation to Scheme Shares. 
  
 (w)  Subsidiary:    A subsidiary as defined by Section 736 of the Companies Act 1985 of the Company. 

 
 (x)  Takeover Offer:    In relation to the Company means either:-

  
 (i)  a general offer to acquire the whole or part of the issued share capital of the
Company which is either made on a condition such that if it is satisfied the person making the offer will have Control of the Company or which results in the person making the offer having control of the Company; or 
  
 (ii)  a general offer to acquire all the shares in the Company of the same class as the Ordinary Shares.

  
 3.    ELIGIBILITY 
  
 No Eligible Employee shall be granted an Award under the Plan unless at the time of grant he is an employee, officer or executive director of a member of the Group. 
  
 4.    SCHEME SHARES SUBJECT TO THE PLAN 
  
 4.1  The total number of unissued and previously issued Ordinary Shares that may be used to satisfy Awards under the Plan (whether in the form of Ordinary Shares or American Depositary
Shares) shall not exceed 18,000,000. The issuance or transfer of Ordinary Shares or the payment of cash to an Awardholder upon the exercise or payment of an Award shall reduce the total number of Ordinary Shares available under the Plan.

  
 4.2  The total number of Awards that may be granted under the Plan during any financial year of the
Company to any one person shall not exceed the equivalent of 2,000,000 Ordinary Shares. 
  
 4.3  The Scheme
Shares may consist, in whole or in part, of unissued Scheme Shares or previously-issued Scheme Shares. The issuance or transfer of Scheme Shares or the payment of cash to an Eligible Employee upon the exercise or payment of an Award shall reduce the
total number of Scheme Shares available under the Plan, as applicable. Scheme Shares that are subject to Awards which terminate, lapse or are cancelled may again be used to satisfy Awards under the Plan. 

 
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 5.    ADMINISTRATION 
  

5.1  The Plan shall be administered by the Committee, which may delegate its duties and powers in whole or in part as it determines; provided, however, that
the Board may, in its sole discretion, take any action designated to the Committee under this Plan as it may deem necessary. 
  
 5.2  The Committee may grant Awards under this Plan only to Eligible Employees; provided that Awards may also, in the discretion of the Committee, be made under the Plan in assumption of, or in substitution for, outstanding
awards previously granted by a member of the Group. The number of Scheme Shares underlying such substitute Awards shall be counted against the aggregate number of Scheme Shares available for Awards under the Plan. 
  
 5.3  The Committee is authorized to interpret the Plan, to establish, amend and rescind any rules and regulations relating to
the Plan, and to make any other determinations that it deems necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the
extent the Committee deems necessary or desirable. 
  
 5.4  Any decision of the Committee in the
interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Eligible Employees and their
beneficiaries or successors). 
  
 5.5  The Committee shall have the full power and authority to establish
the terms and conditions of any Award consistent with the provisions of the Plan and to waive any such terms and conditions at any time (including, without limitation, accelerating or waiving any vesting conditions). 
  
 5.6  The Committee may require payment of any amount it may determine to be necessary to withhold in respect of taxes, social
security contributions or similar liabilities of any relevant jurisdiction as a result of, or as a condition to, the granting or exercise of an Award, the delivery of cash or Scheme Shares pursuant to an Award, or upon the sale of Scheme Shares
acquired pursuant to an Award. 
  
 5.7  The Committee may establish future plans for the benefit of
employees located in particular jurisdictions based on the Plan but modified to the extent necessary or desirable to take account of tax, securities and exchange control laws and regulations of such jurisdiction, provided that such plans must
operate within the limits specified in Rule 4 above. 
  
 6.    DURATION OF PLAN 
  
 No Award may be granted under the Plan after the tenth anniversary of the Effective Date, but Awards granted before the tenth anniversary
of the Effective Date may extend beyond that date. 

 
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 7.    TERMS AND CONDITIONS OF RSUS 
  
 7.1.  RSUs granted under the Plan shall be subject to the following terms and conditions and to such other terms and conditions,
not inconsistent therewith, as the Committee shall determine: 
  
 7.1.1  Time of grant
of RSUs.    No RSUs shall be granted over Scheme Shares the Market Value of which would be determined by reference to a dealing day or days within a period prescribed by the Company’s code on insider dealing, nor may
RSUs be granted within such period, but they may be granted at any other time. 
  
 7.1.2  Grant of RSUs.    There shall be no monetary consideration for the grant of RSUs under the Plan, and accordingly any such RSUs shall be granted by deed. In granting any RSUs, the Committee
may in its discretion impose any objective conditions and limitations on the RSUs, provided that such objective conditions and limitations shall be set out in the Award agreement. 
  
 7.1.3  Transfer of Scheme Shares.    Except as otherwise provided in the Plan or in an Award agreement, the Scheme
Shares subject to RSUs shall be transferred to an Awardholder at the time(s) and in the circumstances set out in the Award agreement. No Awardholder shall have any rights to dividends or other rights of a shareholder with respect to Scheme Shares
subject to an RSU until the Scheme Shares in question have been registered in his name (or the name of his nominees) in the Company’s register of shareholders and, if applicable, the Awardholder has satisfied any other conditions imposed by the
Committee pursuant to the Plan. 
  
 8.    CASH EQUIVALENT 
  

8.1  Before Scheme Shares are transferred to an Awardholder under his RSUs, the Committee may determine that, in substitution for the Awardholder receiving
such number of the Scheme Shares subject to RSUs as the Committee may decide (but in full and final satisfaction of that number of RSUs), the Awardholder shall be paid a sum equal to the cash equivalent of that number of Scheme Shares. 

 
 8.2  For the purposes of this Rule, the cash equivalent of any Scheme Shares is their Market Value on the dealing day
immediately preceding the date on which the Scheme Shares are due to be transferred to the Awardholder. 
  
 8.3  Subject to Rule 8.4 below, as soon as reasonably practicable after a determination has been made under Rule 8.1 above that an Awardholder shall be paid a sum in substitution for receiving any number of Scheme Shares,
the Company shall pay to him or procure the payment to him of that sum in cash. 
  
 8.4  If the Committee
in its discretion so decides: 
  
 8.4.1  the whole or part of the sum payable under Rule
8.3 above shall, instead of being paid to the Awardholder in question in cash, be applied on his behalf in subscribing for Scheme Shares in the Company at a price equal to their Market 

 
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 Value by reference to which the cash equivalent is calculated, or in purchasing Scheme Shares, or partly in one way and
partly in the other; and 
  
 8.4.2  the Company shall allot to him (or a nominee for him)
or procure the transfer to him (or a nominee for him) of the Scheme Shares so subscribed for or purchased. 
  
 8.5  There shall be made from any payment under this Rule such deductions (on account of tax or similar liabilities) as may be required by law or as the Committee may reasonably consider to be necessary or desirable.

  
 9.    TERMS AND CONDITIONS OF SHARE APPRECIATION RIGHTS 
  

9.1  SARs granted under the Plan shall be subject to the following terms and conditions and to such other terms and conditions, not inconsistent therewith,
as the Committee shall determine: 
  
 9.1.1  Time of grant of
SARs.    No SARs shall be granted in relation to Scheme Shares the Market Value of which would be determined by reference to a dealing day or days within a period prescribed by the Company’s code on insider dealing, nor
may SARs be granted within such period, but they may be granted at any other time. 
  
 9.1.2  Grant of SARs.    There shall be no monetary consideration for the grant of SARs under the Plan, and accordingly any such SARs shall be granted by deed. In granting any SARs, the Committee
may in its discretion impose any objective conditions and limitations on the SARs, provided that such objective conditions and limitations shall be set out in the Award agreement. 
  
 9.1.3  Exercise of SARs.    The exercise price per Scheme Share under SARs shall be the Market Value of an Ordinary
Share or American Depositary Share, as applicable, on the Award Date. Each SAR shall entitle an Awardholder upon exercise to a payment from the Company of an amount equal to (i) the excess of (A) the Market Value on the exercise date of one Scheme
Share over (B) the exercise price per Scheme Share, times (ii) the number of Scheme Shares covered by the SAR. The date a notice of exercise is received by the Company shall be the exercise date. Payment by the Company shall be made in Scheme Shares
or in cash, or partly in Scheme Shares and partly in cash (any such Scheme Shares valued at such Market Value), all as shall be determined by the Committee. SARs may be exercised from time to time upon actual receipt by the Company of written notice
of exercise stating the number of Scheme Shares with respect to which the SAR is being exercised. No fractional Scheme Shares will be issued in payment for SARs and all fractional entitlements will be aggregated and rounded downward to the next
whole Scheme Share. 
  
 10.    OTHER SHARE-BASED AWARDS 
  

The Committee, in its sole discretion, may grant Awards of Scheme Shares, Awards of restricted Scheme Shares and other Awards that are valued in whole or in part by

 
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 reference to, or are otherwise based on the Market Value of, Scheme Shares (“Other Share-Based Awards”). Such Other Share-Based Awards
shall be in such form, and dependent on such conditions, as the Committee shall determine, including, without limitation, the right to receive one or more Scheme Shares (or the equivalent cash value of such Scheme Shares) upon the completion of a
specified period of service, the occurrence of an event and/or the attainment of performance objectives. Other Share-Based Awards may be granted alone or in addition to any other Awards granted under the Plan. Subject to the provisions of the Plan,
the Committee shall determine: (i) to whom and when the Other Share-Based Awards will be made; (ii) the number of Scheme Shares to be awarded under (or otherwise in relation to) such Other Share-Based Awards; (iii) whether such Other Share-Based
Awards shall be settled in cash, Scheme Shares or a combination of cash and Scheme Shares; and (iv) all other terms and conditions of such Other Share-Based Awards (including, without limitation, the vesting provisions thereof and provisions
ensuring that all Scheme Shares so awarded and issued shall be fully paid and non-assessable). 
  
 11.    VARIATION
OF CAPITAL 
  
 11.1  In the event of any variation of the share capital of the Company or in the case
of a demerger, special dividend or other event which, in the opinion of the Committee, would affect the share price to a material extent, then the Committee may make such adjustments as it considers appropriate. 
  
 11.2  An adjustment shall be to one or more of the following: 
  
 (a)  the number of Scheme Shares comprised in an Award; 
  
 (b)  the price (if any) at which Scheme Shares may be acquired pursuant to an Award; 
  
 (c)  where any Award has been exercised but no Scheme Shares have been allotted or transferred pursuant to such exercise, the number of Scheme
Shares which may be so allotted or transferred and the price (if any) at which they may be acquired. 
  
 11.3  An adjustment may have the effect of reducing the price at which Scheme Shares may be subscribed for to less than the nominal value of such Scheme Shares, but only if and to the extent that the Committee shall be
authorised to capitalise from the reserves of the Company a sum equal to the amount by which the nominal value of the Scheme Shares exceeds the price (if any) at which the Scheme Shares may be subscribed for and to apply that sum in paying up such
amount on the Scheme Shares; and so that on the allotment of Scheme Shares in respect of which such a reduction shall have been made the Board shall capitalise that sum (if any) and apply it in paying up that amount. 
  
 12.    CHANGE IN CONTROL 
  
 12.1  Takeover.    If an Acquiring Person obtains Control of the Company as a result of making a Takeover Offer the Committee shall as soon as practicable
thereafter notify every Awardholder accordingly. 

 
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 12.1.1  RSUs.    The Company
will, except to the extent expressly provided otherwise in the Award agreement, transfer or procure the transfer of Scheme Shares to the holders of RSUs (or make a cash payment to the Awardholder in accordance with Rule 8), within one month of
making the notification mentioned in Rule 12.1 above, following which period, all RSUs will lapse. 
  
 12.1.2  SARs.    Each SAR Awardholder may, except to the extent expressly provided otherwise in the Award agreement and also subject to Rule 12.3 below, within six months of the making by the
Company of the notification mentioned in Rule 12.1 above and, notwithstanding that the exercise period specified in the Award agreement has not commenced, exercise his SAR at any time or from time to time in whole or in part. To the extent that SARs
which have become exercisable pursuant to Rule 12.1 have not been exercised within six months of the making by the Company of the notification mentioned in Rule 12.1 above, they shall thereupon lapse. 
  
 12.2  Compromise.    If, under Section 425 of the Companies Act 1985, a Compromise between the
Company and its members is proposed for the purposes of or in connection with a scheme for the reconstruction of the Company or its amalgamation with any other company or companies, the Company shall give notice thereof to all Awardholders on the
same date as it dispatches the notice which is sent to each member of the Company summoning the meeting to consider such a Compromise and thereupon: 
  
 12.1.1  the Company will, except to the extent expressly provided otherwise in the Award Agreement, transfer or procure the transfer of Scheme
Shares to the holders of RSUs (or make a cash payment to the Awardholder in accordance with Rule 8), as soon as practicable following the Court sanctioning the Compromise, following which period, all RSUs will lapse; and 
  
 12.2.2  each SAR Awardholder may, except to the extent expressly provided otherwise in the Award Agreement,
notwithstanding that the exercise period specified in the Award agreement has not commenced, exercise his SARs until the expiry of the period commencing with the date of the notification mentioned in Rule 12.2 above and ending with the earlier of
the date six months thereafter and the date on which such Compromise is sanctioned by the Court, but the exercise of SARs as aforesaid shall be conditional upon such Compromise being sanctioned by the Court and becoming effective. Upon such
Compromise becoming effective all SARs to the extent unexercised shall lapse. 
  
 12.3  Section 429
Notice.    If any person (either alone or together with any person acting in concert with him) as a result of making a general offer to acquire the whole of the issued Ordinary Shares of the Company or that part of the issued
Ordinary Share capital not already owned by him (or by any person acting in concert with him) becomes bound or entitled to acquire shares in the Company under sections 428 to 430F of the Companies Act 1985 all RSUs, to the extent unsatisfied, and
all SARs, to the extent unexercised, shall lapse one month after such person became so bound or entitled. 

 
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 12.4  For the avoidance of doubt, Awardholders of Other Share-Based
Awards may, in the circumstances described in Rules 12.1 and 12.2 above, exercise their other Share-Based Awards according to the terms of their Award Agreements. 
  
 12.5  In this Rule 12, any references to Awardholders includes the personal representatives of any Awardholder who has died prior to his Award being exercised or
satisfied. 
  
 13.    NO RIGHT TO EMPLOYMENT OR AWARDS 
  
 The rights and obligations of any individual under the terms of his office or employment with any member of the Group shall not be affected by his participation in this
Plan or any right which he may have to participate therein. An individual who participates therein shall waive any and all rights to compensation or damages in consequence of the termination of his office or employment for any reason whatsoever
insofar as those rights arise or may arise from his ceasing to have rights under any Award under this Plan as a result of such termination. 
  
 14.    NONTRANSFERABILITY OF AWARDS 
  
 Unless otherwise determined by the
Committee, an Award shall not be transferable or assignable by the Eligible Employee (and if so transferred shall immediately lapse) other than by will or by the laws of descent and distribution. 
  

15.    ADMINISTRATION AND AMENDMENT 
  
 15.1  The Plan shall be subject to the administration of the Committee whose decision (save as otherwise provided herein) shall be final and binding on all parties. The Committee may at any time resolve to terminate the
operation of the Plan and in such event no further Awards will be granted, but the provisions of the Plan shall remain in force in relation to Awards granted and remaining exercisable or potentially exercisable hereunder. 
  
 15.2  Subject to the remaining provisions of this Rule 15, the Committee may at any time and from time to time alter or add to
the Plan in any respect. 
  
 15.3  No alteration or addition to the advantage of Awardholders shall be made
without the prior approval by ordinary resolution of the members of the Company in general meeting provided that the prior approval of the members of the Company is not required for any minor alteration or addition to: 
  
 (a)  benefit the administration of the Plan, or 
  
 (b)  maintain favourable tax, exchange control or regulatory treatment of Awardholders or any member of the Group, or solely relating to any
conditions imposed on an Award. 
  
 15.4  No material alteration or addition to the disadvantage of any
Awardholder shall be made unless: 

 
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 (a)  the Committee shall have invited every such
Awardholder to give an indication as to whether or not he approves the alteration or addition, and 
  
 (b)  the alteration or addition is approved by a majority of those Awardholders who have given such an indication. 
  
 15.5  As soon as reasonably practicable after making any alteration or addition, the Committee shall give notice in writing to any holder of an Award affected thereby. 

 
 15.6  This Plan and all Awards granted under it shall be governed by and construed in accordance with the law of
England and Wales. 
  
 16.    EFFECTIVENESS OF THE PLAN 
  

The Plan shall be effective as of the Effective Date, subject to the approval of the shareholders of the Company 

 
 10EXHIBIT 10.1

                 ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN

SECTION 1.        INTRODUCTION

         1.1 Establishment. Effective as provided in Section 17, Itec
Environmental Group, Inc., a Delaware corporation (the "Company"), hereby
establishes this plan of stock-based compensation incentives for selected
Eligible Participants of the Company and its affiliated corporations. This Plan
shall be known as the Itec Environmental Group, Inc. 2002 Stock Plan (the
"Plan").

         1.2 Purpose. The purpose of this Plan is to promote the best interest
of the Company, and its stockholders by providing a means of non-cash
remuneration to selected Eligible Participants.

SECTION 2.        DEFINITIONS

         The following definitions shall be applicable to the terms used in this
Plan:

         2.1 "Affiliated Corporation" means any corporation that is either a
parent corporation with respect to the Company or a subsidiary corporation with
respect to the Company (within the meaning of Sections 424(e) and (f),
respectively, of the Internal Revenue Code).

         2.2 "Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.

         2.3 "Committee" means a committee designated by the Board of Directors
to administer this Plan or, if no committee is so designated, the Board of
Directors. Any Committee member who is also an Eligible Participant may receive
an Option or Stock Award only if he abstains from voting in favor of a grant to
himself, and the grant is determined and approved by the remaining Committee
members. The Board of Directors, in its sole discretion, may at any time remove
any member of the Committee and appoint another Director to fill any vacancy on
the Committee.

         2.4 "Common Stock" means the Company's $.001 par value common stock.

         2.5 "Company" means Itec Environmental Group, Inc., a Delaware
corporation.

         2.6 "Effective Date" means the effective date of this Plan, as set
forth in Section 17 hereof.

         2.7 "Eligible Participant" means any employee, director, officer,
consultant, or advisor of the Company who is determined (in accordance with the
provisions of Section 4 hereof) to be eligible to receive an Option or Stock
Award hereunder. Eligible Participants shall only be natural persons.
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ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                       PAGE 1 OF 8

<PAGE>

         2.8 "Option" means the grant to an Eligible Participant of a right to
acquire shares of Common Stock.

         2.9 "Plan" means this Itec Environmental Group, Inc. 2002 Stock Plan,
dated October 29, 2002.

         2.10 "Stock Award" means the grant to an Eligible Participant of shares
of Common Stock issuable directly under this Plan rather than upon exercise of
an Option.

         Wherever appropriate, words used in this Plan in the singular may mean
the plural, the plural may mean the singular, and the masculine may mean the
feminine.

SECTION 3.        ADOPTION AND ADMINISTRATION OF THIS PLAN

         Upon adoption by the Company's Board of Directors, this Plan became
effective as of October 29, 2002. In the absence of contrary action by the Board
of Directors, and except for action taken by the Committee pursuant to Section 4
in connection with the determination of Eligible Participants, any action taken
by the Committee or by the Board of Directors with respect to the
implementation, interpretation or administration of this Plan shall be final,
conclusive and binding.

SECTION 4.        ELIGIBILITY AND AWARDS

         The Committee shall determine at any time and from time to time after
the effective date of this Plan: (i) the Eligible Participants; (ii) the number
of shares of Common Stock issuable directly or to be granted pursuant to an
Option; (iii) the price per share at which each Option may be exercised, in cash
or cancellation of fees for services for which the Company is liable, if
applicable, or the value per share if a direct issue of stock pursuant to a
Stock Award; and (iv) the terms on which each Option may be granted. Such
determination, as may from time to time be amended or altered at the sole
discretion of the Committee. Notwithstanding the provisions of Section 3 hereof,
no such determination by the Committee shall be final, conclusive and binding
upon the Company unless and until the Board of Directors has approved the same;
provided, however, that if the Committee is composed of a majority of the
persons then comprising the Board of Directors of the Company, such approval by
the Board of Directors shall not be necessary.

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ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                       PAGE 2 OF 8

<PAGE>

SECTION 5.        GRANT OF OPTION OR STOCK AWARD

         Subject to the terms and provisions of this Plan, the terms and
conditions under which an Option or Stock Award may be granted to an Eligible
Participant shall be set forth in a written agreement (i.e., a Consulting
Agreement, Services Agreement, Fee Agreement, or Employment Agreement) or, if an
Option, a written Grant of Option in the form attached hereto as Exhibit A
(which may contain such modifications thereto and such other provisions as the
Committee, in its sole discretion, may determine).

SECTION 6.        TOTAL NUMBER OF SHARES OF COMMON STOCK

         The total number of shares of Common Stock reserved for issuance by the
Company either directly as Stock Awards or underlying Options granted under this
Plan shall not be more than 4,000,000. The total number of shares of Common
Stock reserved for such issuance may be increased only by a resolution adopted
by the Board of Directors and amendment of this Plan. Such Common Stock may be
authorized and unissued or reacquired Common Stock of the Company.

SECTION 7.        AWARD OF SHARES OF COMMON STOCK OR OPTIONS

         7.1 As soon as practicable after the determination by the Committee and
approval by the Board of Directors (if necessary, pursuant to Section 4 hereof)
of the Eligible Participants and the number of shares an Eligible Participant
may be issued directly as a Stock Award or eligible to purchase pursuant to an
Option, the Committee shall give written notice thereof to each Eligible
Participant, which notice may be accompanied by the Grant of Option, if
appropriate, to be executed by such Eligible Participant.

         7.2 The negotiated cost basis of stock issued directly as a Stock Award
or the exercise price for each Option to purchase shares of Common Stock
pursuant to paragraph 7.1 shall be as determined by the Committee, it being
understood that the price so determined by the Committee may vary from one
Eligible Participant to another. In computing the negotiated direct issue price
as a Stock Award or the Option exercise price per share of Common Stock, the
Committee shall take into consideration, among other factors, the restrictions
set forth in Section 11 hereof.

SECTION 8.        TERMS AND CONDITIONS OF OPTIONS

         The Committee shall determine the terms and conditions of each Option
granted to Eligible Participants, which terms shall be set forth in writing. The
terms and conditions so set by the Committee may vary from one Eligible
Participant to another. In the event that all the Committee approves an Option
permitting deferred payments, the Eligible Participant's obligation to pay for
such Common Stock may be evidenced by a promissory note executed by such
Eligible Participant and containing such modifications thereto and such other
provisions as the Committee, in its sole discretion, may determine.

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ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                      PAGE 3 OF 8

<PAGE>

SECTION 9.        DELIVERY OF SHARES OF COMMON STOCK UPON EXERCISE OF OPTION

         The Company shall deliver to each Eligible Participant such number of
shares of Common Stock as such Eligible Participant is entitled to receive
pursuant to a Stock Award or elects to purchase upon exercise of the Option.
Such shares, which shall be fully paid and nonassessable upon the issuance
thereof (unless a portion or all of the purchase price shall be paid on a
deferred basis) shall be represented by a certificate or certificates registered
in the name of the Eligible Participant and stamped with an appropriate legend
referring to the restrictions thereon, if any. Subject to the terms and
provisions of the Delaware General Corporation Law and the written agreement to
which he is a party, an Eligible Participant shall have all the rights of a
stockholder with respect to such shares, including the right to vote the shares
and to receive all dividends or other distributions paid or made with respect
thereto (except to the extent such Eligible Participant defaults under a
promissory note, if any, evidencing the deferred purchase price for such
shares), provided that such shares shall be subject to the restrictions
hereinafter set forth. In the event of a merger or consolidation to which the
Company is a party, or of any other acquisition of a majority of the issued and
outstanding shares of Common Stock of the Company involving an exchange or a
substitution of stock of an acquiring corporation for Common Stock of the
Company, or of any transfer of all or substantially all of the assets of the
Company in exchange for stock of an acquiring corporation, a determination as to
whether the stock of the acquiring corporation so received shall be subject to
the restrictions set forth in Section 11 shall be made solely by the acquiring
corporation.

SECTION 10.       RIGHTS OF EMPLOYEES; ELIGIBLE PARTICIPANTS

         10.1 Employment. Nothing contained in this Plan or in any Option or
Stock Award granted under this Plan shall confer upon any Eligible Participant
any right with respect to the continuation of his or her employment by the
Company or any Affiliated Corporation, or interfere in any way with the right of
the Company or any Affiliated Corporation, subject to the terms of any separate
employment agreement to the contrary, at any time to terminate such employment
or to increase or decrease the compensation of the Eligible Participant from the
rate in existence at the time of the grant of an Option or Stock Award. Whether
an authorized leave of absence, or absence in military or government service,
shall constitute termination of employment shall be determined by the Committee
at the time.

         10.2 Non-transferability. No right or interest of any Eligible
Participant in an Option or Stock Award shall be assignable or transferable
during the lifetime of the Eligible Participant, either voluntarily or
involuntarily, or subjected to any lien, directly or indirectly, by operation of
law, or otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy. However, the Board of Directors may, in its sole discretion, permit

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ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                      PAGE 4 OF 8

<PAGE>

transfers to family members if and to the extent such transfers are permissible
under applicable securities laws. In the event of an Eligible Participant's
death, an Eligible Participant's rights and interest in an Option or Stock Award
shall be transferable by testamentary will or the laws of descent and
distribution, and delivery of any shares of Common Stock due under this Plan
shall be made to, and exercise of any Options may be made by, the Eligible
Participant's legal representatives, heirs or legatees. If in the opinion of the
Committee a person entitled to payments or to exercise rights with respect to
this Plan is unable to care for his or her affairs because of mental condition,
physical condition, or age, payment due such person may be made to, and such
rights shall be exercised by, such person's guardian, conservator or other legal
personal representative upon furnishing the Committee with evidence satisfactory
to the Committee of such status.

SECTION 11.       GENERAL RESTRICTIONS

         11.1 Representations. The Company may require any Eligible Participant
to whom an Option or Stock Award is granted, as a condition of exercising such
Option, or receiving such Stock Award, to give written assurances in substance
and form satisfactory to the Company and its counsel to the effect that such
person is acquiring the Common Stock subject to the Option or Stock Award for
his or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Company deems necessary or appropriate in order to comply with federal and
applicable state securities laws.

         11.2 Restrictions on Transfer of Common Stock. The shares of Common
Stock issuable directly as a Stock Award or upon exercise of an Option may not
be offered for sale, sold or otherwise transferred except pursuant to an
effective registration statement or pursuant to an exemption from registration,
the availability of which is to be established to the satisfaction of the
Company, and any certificates representing shares of Common Stock will bear a
legend to that effect. However, the Company may, in the sole discretion of the
Board of Directors, register with the Securities and Exchange Commission some or
all of the shares of Common Stock reserved for issuance under this Plan. Special
resale restrictions may, however, continue to apply to officers, directors,
control shareholders and affiliates of the Company and such persons will be
required to obtain an opinion of counsel as regards their ability to resell
shares received pursuant to this Plan.

         11.3 Compliance with Securities Laws. Each Option or Stock Award shall
be subject to the requirement that if at any time counsel to the Company shall
determine that the listing, registration or qualification of the shares of
Common Stock subject to such Option or Stock Award upon any securities exchange
or under any state or federal law, or the consent or approval of any

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ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                       PAGE 5 OF 8

<PAGE>

governmental or regulatory body, is necessary as a condition of, or in
connection with, the issuance or purchase of shares thereunder, such Option or
Stock Award may not be accepted or exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained on conditions acceptable to the Committee. Nothing herein
shall be deemed to require the Company to apply for or to obtain such listing,
registration or qualification.

         11.4 Changes in Accounting Rules. Notwithstanding any other provision
of this Plan to the contrary, if, during the term of this Plan, any changes in
the financial or tax accounting rules applicable to Options or Stock Awards
shall occur that, in the sole judgment of the Committee, may have a material
adverse effect on the reported earnings, assets or liabilities of the Company,
the Committee shall have the right and power to modify as necessary, or cancel,
any then outstanding and unexercised Options.

SECTION 12.       COMPLIANCE WITH TAX REQUIREMENTS

         Each Eligible Participant shall be liable for payment of all applicable
federal, state and local income taxes incurred as a result of the receipt of a
Stock Award or an Option, the exercise of an Option, and the sale of any shares
of Common Stock received pursuant to a Stock Award or upon exercise of an
Option. The Company may be required, pursuant to applicable tax regulations, to
withhold taxes for an Eligible Participant, in which case the Company's
obligations to deliver shares of Common Stock upon the exercise of any Option
granted under this Plan or pursuant to any Stock Award, shall be subject to the
Eligible Participant's satisfaction of all applicable federal, state and local
income and other income tax withholding requirements.

SECTION 13.       PLAN BINDING UPON ASSIGNS OR TRANSFEREES

         In the event that, at any time or from time to time, any Option or
Stock Award is assigned or transferred to any party (other than the Company)
pursuant to the provisions of Section 10.2 hereof, such party shall take such
Option or Stock Award pursuant to all provisions and conditions of this Plan,
and, as a condition precedent to the transfer of such interest, such party shall
agree (for and on behalf of himself or itself, his or its legal representatives
and his or its transferees and assigns) in writing to be bound by all provisions
of this Plan.

SECTION 14.       COSTS AND EXPENSES

         All costs and expenses with respect to the adoption, implementation,
interpretation and administration of this Plan shall be borne by the Company.

- ------------------------------------------------------------------------------
ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                       PAGE 6 OF 8

<PAGE>

SECTION 15.       CHANGES IN CAPITAL STRUCTURE OF THE COMPANY

         Appropriate adjustments shall be made to the number of shares of Common
Stock issuable pursuant to an incomplete or pending Stock Award that has not yet
been delivered or upon exercise of any Options and the exercise price thereof in
the event of: (i) a subdivision or combination of any of the shares of capital
stock of the Company; (ii) a dividend payable in shares of capital stock of the
Company; (iii) a reclassification of any shares of capital stock of the Company;
or (iv) any other change in the capital structure of the Company.

SECTION 16.       PLAN AMENDMENT, MODIFICATION AND TERMINATION

         The Board, upon recommendation of the Committee or at its own
initiative, at any time may terminate and at any time and from time to time and
in any respect, may amend or modify this Plan, including:

                  (a) Increase the total amount of Common Stock that may be
         awarded under this Plan, except as provided in Section 15 of this Plan;

                  (b) Change the classes of persons from which Eligible
         Participants may be selected or materially modify the requirements as
         to eligibility for participation in this Plan;

                  (c) Increase the benefits accruing to Eligible Participants;
         or

                  (d) Extend the duration of this Plan.

         Any Option or other Stock Award granted to a Eligible Participant prior
to the date this Plan is amended, modified or terminated will remain in effect
according to its terms unless otherwise agreed upon by the Eligible Participant;
provided, however, that this sentence shall not impair the right of the
Committee to take whatever action it deems appropriate under Section 11 or
Section 15. The termination or any modification or amendment of this Plan shall
not, without the consent of a Eligible Participant, affect his rights under an
Option or other Stock Award previously granted to him.

SECTION 17.       EFFECTIVE DATE OF THIS PLAN

         17.1 Effective Date. This Plan is effective as of October 29, 2002, the
date it was adopted by the Board of Directors of the Company.

         17.2 Duration of this Plan. This Plan shall terminate at midnight on
October 28, 2007, which is the day before the 5th anniversary of the Effective
Date, and may be extended thereafter or terminated prior thereto by action of
the Board of Directors; and no Option or Stock Award shall be granted after such
termination. Options and Stock Awards outstanding at the time of this Plan
termination may continue to be exercised, or become free of restrictions, in
accordance with their terms.

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ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                       PAGE 7 OF 8

<PAGE>

SECTION 18.       BURDEN AND BENEFIT

         The terms and provisions of this Plan shall be binding upon, and shall
inure to the benefit of, each Eligible Participant, his executives or
administrators, heirs, and personal and legal representatives.

         Dated as of the 29th day of October, 2002.

                    ITEC ENVIRONMENTAL GROUP, INC.

                    By: /s/ Gary M. DeLaurentiis
                        ---------------------------------------------------
                        Gary M. DeLaurentiis, President and Chief Executive
                        Officer

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ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                       PAGE 8 OF 8

<PAGE>

                                    EXHIBIT A

                                     FORM OF
                         GRANT OF OPTION PURSUANT TO THE
                 ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN

         Itec Environmental Group, Inc., a Delaware corporation (the "Company"),
hereby grants to ________________________________ ("Optionee") an Option to
purchase _________ shares of common stock, $.001 par value (the "Shares") of the
Company at the purchase price of $______ per share (the "Purchase Price"), in
accordance with and subject to the terms and conditions of the Itec
Environmental Group, Inc. 2002 Stock Plan (the "Plan"). This option is
exercisable in whole or in part, and upon payment in cash or cancellation of
fees, or other form of payment acceptable to the Company, to the principal
office of the Company. This Grant of Option supersedes and replaces any prior
notice of option grant, description of vesting terms or similar documents
previously delivered to Optionee for options granted on the date stated below.

         Unless otherwise set forth in a separate written agreement, in the
event that Optionee's employee or consultant status with the Company or any of
its subsidiaries ceases or terminates for any reason whatsoever, including, but
not limited to, death, disability, or voluntary or involuntary cessation or
termination, this Grant of Option shall terminate with respect to any portion of
this Grant of Option that has not vested prior to the date of cessation or
termination of employee or consultant status, as determined in the sole
discretion of the Company. In the event of termination for cause, this Grant of
Option shall immediately terminate in full with respect to any un-exercised
options, and any vested but un-exercised options shall immediately expire and
may not be exercised. Unless otherwise set forth in a separate written
agreement, vested options must be exercised within six months after the date of
termination (other than for cause), notwithstanding the Expiration Date set
forth below.

         Subject to the preceding paragraph, this Grant of Option, or any
portion hereof, may be exercised only to the extent vested per the attached
schedule, and must be exercised by Optionee no later than _____________________
(the "Expiration Date") by (i) notice in writing, signed by Optionee; and (ii)
payment of the Purchase Price of a minimum of $1,000 (unless the Purchase Price
for the exercise of all vested options available to be exercised totals less
than $1,000) pursuant to the terms of this Grant of Option and the Plan. Any
portion of this Grant of Option that is not exercised on or before the
Expiration Date shall lapse. The notice must refer to this Grant of Option, and
it must specify the number of shares being purchased, and recite the
consideration being paid therefor. Notice shall be deemed given on the date on
which the notice is received by the Company.

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ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                          PAGE A-1

<PAGE>

         This Option shall be considered validly exercised once payment therefor
has cleared the banking system or the Company has issued a credit memo for
services in the appropriate amount, or receives a duly executed acceptable
promissory note, if the Option is granted with deferred payment, and the Company
has received written notice of such exercise. If payment is not received within
two business days after the date the notice is received, the Company may deem
the notice to be invalid.

         If Optionee fails to exercise this Option in accordance with this Grant
of Option, then this Grant of Option shall terminate and have no force and
effect, in which event the Company and Optionee shall have no liability to each
other with respect to this Grant of Option.

         This Option may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

         The validity, construction and enforceability of this Grant of Option
shall be construed under and governed by the laws of the State of Colorado,
without regard to its rules concerning conflicts of laws, and any action brought
to enforce this Grant of Option or resolve any controversy, breach or
disagreement relative hereto shall be brought only in a court of competent
jurisdiction within the State of Colorado.

         The shares of common stock issuable upon exercise of the Option (the
"Underlying Shares") may not be sold, exchanged, assigned, transferred or
permitted to be transferred, whether voluntarily, involuntarily or by operation
of law, delivered, encumbered, discounted, pledged, hypothecated or otherwise
disposed of until (i) the Underlying Shares have been registered with the
Securities and Exchange Commission pursuant to an effective registration
statement on Form S-8, or such other form as may be appropriate, in the
discretion of the Company; or (ii) an Opinion of Counsel, satisfactory to the
Company, has been received, which opinion sets forth the basis and availability
of any exemption for resale or transfer from federal or state securities
registration requirements.

         This Grant of Option relates to options granted on _____________,
________.

                             ITEC ENVIRONMENTAL GROUP, INC.

                             BY THE BOARD OF DIRECTORS
                             OR A SPECIAL COMMITTEE THEREOF

                                NOT FOR EXECUTION

                             By:  ----------------------------

OPTIONEE:

NOT FOR EXECUTION

--------------------------------

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ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                          PAGE A-2

<PAGE>

GRANT OF OPTION PURSUANT TO THE
ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN.

OPTIONEE:                ___________________
OPTIONS GRANTED:         ___________________
PURCHASE PRICE:          $______per Share
DATE OF GRANT:           ___________________
EXERCISE PERIOD:         ________ to _______

<TABLE>
<CAPTION>
VESTING SCHEDULE:           OPTION ON           DATE VESTED
                            #SHARES             (ASSUMING CONTINUED EMPLOYMENT, ETC.)
                            ---------           -----------
<S>                    <C>                      <C>
                       ------------------       ---------------

                       ------------------       ---------------

                       ------------------       ---------------

                       ------------------       ---------------

                       ------------------       ---------------
</TABLE>

EXERCISED TO DATE:                     INCLUDING THIS EXERCISE
                           ---------
BALANCE TO BE EXERCISED:
                           ---------

--------------------------------------------------------------------------------
ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                          PAGE A-3

<PAGE>

================================================================================

                               NOTICE OF EXERCISE
                 (TO BE SIGNED ONLY UPON EXERCISE OF THE OPTION)

TO:      Itec Environmental Group, Inc. ("Optionor")

         The undersigned, the holder of the Option described above, hereby
irrevocably elects to exercise the purchase rights represented by such Option
for, and to purchase thereunder, _________ shares of the Common Stock of
Itec Environmental Group, Inc., and herewith makes payment of
_______________________ therefor. Optionee requests that the certificates for
such shares be issued in the name of Optionee and be delivered to Optionee at
the address of _____________________________________________, and if such shares
shall not be all of the shares purchasable hereunder, represents that a new
Notice of Exercise of like tenor for the appropriate balance of the shares, or a
portion thereof, purchasable under the Grant of Option pursuant to the Itec
Environmental Group, Inc. 2002 Stock Plan, be delivered to Optionor when and as
appropriate.

                                           OPTIONEE:

                                           NOT FOR EXECUTION
Dated:
       ------------------------            -------------------------------------

--------------------------------------------------------------------------------
ITEC ENVIRONMENTAL GROUP, INC. 2002 STOCK PLAN                          PAGE A-4

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