DANKA BUSINESS SYSTEMS PLC, DEF 14A, 1999-09-23

DANKA BUSINESS SYSTEMS PLC
DEF 14A, 1999-09-23
PROFESSIONAL & COMMERCIAL EQUIPMENT & SUPPLIES

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<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
DANKA BUSINESS SYSTEMS PLC
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

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(DANKA LOGO) DANKA BUSINESS SYSTEMS PLC
MASTERS HOUSE, 107 HAMMERSMITH ROAD
LONDON W14 0QH ENGLAND

September 24, 1999

TO HOLDERS OF ORDINARY SHARES AND AMERICAN DEPOSITARY SHARES OF DANKA
BUSINESS SYSTEMS PLC (THE "COMPANY") AND, FOR INFORMATIONAL PURPOSES ONLY,
HOLDERS OF OPTIONS TO ACQUIRE ORDINARY SHARES AND HOLDERS OF OPTIONS TO ACQUIRE
AMERICAN DEPOSITARY SHARES.

Holders of Ordinary Shares are cordially invited to attend the Company's
1999 Annual General Meeting (the "Meeting"). The Meeting will be held on Monday,
October 18, 1999 at 3:30 p.m. (local time) at the Royal Garden Hotel, 2-24
Kensington High Street, London W8 4PT.

The Notice of the Annual General Meeting and the Proxy Statement on the
following pages cover the formal business of the Meeting, which includes
resolutions proposing (1), (2), (3), (4), (5) and (6) re-election of Directors;
(7) re-appointment of the Company's Auditors; (8) authorization for the
Directors to allot Ordinary Shares; (9) authorization to disapply pre-emption
rights; (10) authorization for purchase by the Company of its own shares; (11)
approval of the Company's amended U.S. Profit Sharing Plan, established under
Section 401 (k) of the U.S. Internal Revenue Code, to permit the Company to
match employee contributions with shares of the Company stock; and (12) approval
of the Company's 1999 Share Option Plan. We will also report on the progress of
the Company and comment on matters of current interest. Your Directors believe
that the above proposals are in the best interests of the Company and its
shareholders and unanimously recommend that holders vote in favor of all of the
resolutions. You will notice that the proxy materials are very comprehensive due
to the necessity of the Company complying with securities law requirements in
both the United Kingdom and United States.

It is important that Ordinary Shares be represented at the Meeting. We ask
that Ordinary Shareholders promptly sign, date and return the enclosed proxy
card (at least 48 hours before the time fixed for the holding of the Meeting) to
the Company's registrars, Computershare Services PLC, even if you plan to attend
the Meeting. Returning your proxy card will not prevent a holder of Ordinary
Shares from voting in person at the Meeting if they are present and choose to do
so. Holders of American Depositary Shares should follow the special voting
instructions provided by The Bank of New York as Depositary.

Your Board of Directors and management look forward to greeting you at the
Meeting.

Sincerely,

/s/ David W. Kendall
---------------------------------
DAVID W. KENDALL
Chairman
<PAGE> 3

(DANKA LOGO) DANKA BUSINESS SYSTEMS PLC

- --------------------------------------------------------------------------------
NOTICE OF THE ANNUAL GENERAL MEETING
MONDAY, OCTOBER 18, 1999
- --------------------------------------------------------------------------------

Notice is hereby given that the 1999 Annual General Meeting (the "Meeting")
of Danka Business Systems PLC (the "Company") will be held at the Royal Garden
Hotel, 2-24 Kensington High Street, London W8 4PT, on Monday, October 18, 1999
at 3:30 p.m. (local time) for the following purposes:

AGENDA

To consider and, if thought fit, approve the following ordinary resolutions:

1. THAT David W. Kendall, whose term as a Director expires at the 1999 Annual
General Meeting, be and hereby is re-elected to serve as Director of the
Company in accordance with the Company's Articles of Association.

2. THAT Larry K. Switzer, who was appointed as Director by the Board of
Directors since the 1998 Annual General Meeting and whose appointment
expires at the 1999 Annual General Meeting, be and hereby is re-elected to
serve as Director of the Company in accordance with the Company's Articles
of Association.

3. THAT Brian L. Merriman, who was appointed as Director by the Board of
Directors since the 1998 Annual General Meeting and whose appointment
expires at the 1999 Annual General Meeting, be and hereby is re-elected to
serve as Director of the Company in accordance with the Company's Articles
of Association.

4. THAT Michael B. Gifford, who was appointed as Director by the Board of
Directors since the 1998 Annual General Meeting and whose appointment
expires at the 1999 Annual General Meeting, be and hereby is re-elected to
serve as Director of the Company in accordance with the Company's Articles
of Association.

5. THAT Richard C. Lappin, who was appointed as Director by the Board of
Directors since the 1998 Annual General Meeting and whose appointment
expires at the 1999 Annual General Meeting, be and hereby is re-elected to
serve as Director of the Company in accordance with the Company's Articles
of Association.

6. THAT C. Anthony Wainwright, who was appointed as Director by the Board of
Directors since the 1998 Annual General Meeting and whose appointment
expires at the 1999 Annual General Meeting, be and hereby is re-elected to
serve as Director of the Company in accordance with the Company's Articles
of Association.

7. THAT KPMG Audit Plc, Chartered Accountants and Registered Auditor, be and
hereby are re-appointed to serve as the Company's Auditors until the
conclusion of the 2000 Annual General Meeting, and that the Board of
Directors of the Company or a duly appointed Committee thereof, be and
hereby is authorized to fix the Auditors' remuneration.

8. SPECIAL BUSINESS: To consider and, if thought fit, approve the following
ordinary resolution:

THAT the Directors be and hereby are generally and unconditionally
authorized, in place of all existing authorities under Section 80 of the
Companies Act 1985, as amended by the Companies Act 1989 (the "Companies
Act"), to exercise all powers of the Company to allot relevant securities
(within the meaning of Section 80 of the Companies Act) up to an aggregate
nominal amount of L950,282 (representing approximately thirty-three and one
third percent (33 1/3%) of the issued share capital of the Company),
provided that this authority shall expire on the earlier of the date of the
2000 Annual General Meeting of the Company or January 18, 2001, save that
the Company may before such expiry make an offer or agreement which would or
might require relevant securities to be allotted after such expiry, and the
Board of Directors may allot relevant securities in pursuance of such an
offer or agreement as if the authority conferred hereby had not expired.

(i)
<PAGE> 4

9. SPECIAL BUSINESS: To consider and, if thought fit, approve the following
special resolution:

THAT, subject to the passing of Resolution 8, the Directors be and hereby
are generally and unconditionally authorized to exercise all powers of the
Company to allot equity securities (within the meaning of Section 94(2) of
the Companies Act 1985, as amended by the Companies Act 1989 (the "Companies
Act")), as if Section 89(1) of the Companies Act did not apply to such
allotment, provided that this authority shall:

(i) expire on the earlier of the date of the 2000 Annual General Meeting of
the Company or January 18, 2001, save that the Directors may allot equity
securities under this authority after the expiry thereof pursuant to any
offer or agreement made by the Company on or before such expiry date
pursuant to this authority as if such authority had not expired; and

(ii) be limited to the allotment of equity securities:

(a) in connection with a rights issue or any other pre-emptive offer
concerning equity securities in the Company where it is, in the
opinion of the Directors, necessary or expedient to allot equity
securities otherwise than in accordance with Section 89 of the
Companies Act by reason of the rights attached to any shares or
securities of the Company or in relation to fractional entitlements or
legal or practical problems under the laws of or the requirements of
any recognized regulatory body or stock exchange in any territory;

(b) pursuant to the terms of any stock option plan or share option scheme
or other plan for employees and/or executive or non-executive
Directors approved by the Company in a general meeting, up to an
aggregate nominal value of (pound)285,085; or

(c) otherwise than pursuant to sub-paragraphs (a) and (b) above, up to an
aggregate nominal value not exceeding (pound)570,170.

10. SPECIAL BUSINESS: To consider and, if thought fit, approve the following
special resolution:

THAT the Company is hereby generally and unconditionally authorized to make
market purchases (within the meaning of Section 163 of the Companies Act
1985) of Ordinary Shares of 1.25 pence each in the capital of the Company
with effect from the conclusion of this meeting provided that:

(i) the maximum aggregate number of Ordinary Shares authorized to be
purchased is 34,210,000 representing approximately 15% of the issued
share capital of the Company as of March 31, 1999;

(ii) the minimum price which may be paid for each such Ordinary Share is
1.25 pence;

(iii) the maximum price (inclusive of expenses) which may be paid for each
such Ordinary Share is an amount equal to 105 percent of the average of
the middle market quotations as derived from The London Stock Exchange
Daily Official List for the five business days immediately preceding the
day on which such Ordinary Share is purchased;

(iv) the Company may make a contract to purchase its Ordinary Shares under
this authority prior to the expiry thereof, which will or may be executed
wholly or partly after the expiry of such authority, and may make a
purchase of its Ordinary Shares pursuant to any such contract; and

(v) the purchase is made in compliance with all applicable governmental
laws, rules and regulations.

The authority herein will expire at the conclusion of the 2000 Annual
General Meeting of the Company, or, if earlier, January 18, 2001.

11. SPECIAL BUSINESS: To consider and, if thought fit, approve the following
ordinary resolution:

(i) THAT the Danka Corporation 401(k) Profit Sharing Plan ("the Plan") be
operated in the future on the basis that, upon an employing subsidiary
making a cash contribution to the Plan ("a matching contribution"),
Ordinary Shares of the Company may, at the discretion of the Company, be
issued which will be converted into

(ii)
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American Depositary Shares to be held by the Plan for the benefit of
the employee for whom the matching contribution was paid, subject to
the rules concerning the vesting of benefits set out in the Plan.

(ii) THAT such Ordinary Shares can be issued to the Plan in respect of
matching contributions that were due to be made but have not been
made to the Plan since February 1999.

(iii) THAT the Directors may be counted in the quorum and vote in respect
of any matter connected with the Plan, notwithstanding that they may
be interested in the same (except that no Director may be counted in
the quorum or vote in respect of any matter solely concerning his own
participation in the Plan).

12. SPECIAL BUSINESS: To consider and, if thought fit, approve the following
ordinary resolution:

THAT the Danka 1999 Share Option Plan for employees, officers and executive
directors employed by the Company and its subsidiaries, materially in such
form as described in and attached to the Company Proxy Statement for the
Annual General Meeting as Appendix B, and in such final form as provided to
the Meeting by the Chairman be and hereby is approved and the Directors be
and are hereby authorized to do all such acts and things as may be necessary
to carry the same into effect.

Copies of contracts of service of the Directors and a register of Directors'
interests kept by the Company are available for inspection at the registered
office of the Company during normal working hours and will be available for
inspection at the place of the Meeting during the Meeting and for at least
fifteen (15) minutes prior to the Meeting.

Holders of Ordinary Shares entitled to attend and vote at the Meeting may
appoint a proxy to attend and, on a poll of such holders, to vote in their
place. A proxy need not be a holder of Ordinary Shares of the Company. Every
holder of Ordinary Shares who is entitled to vote and who is present or is
represented by a proxy will have one (1) vote on a show of hands. If voting is
by a poll, each holder of Ordinary Shares who is entitled to vote and who is
present or is represented by a proxy will have one (1) vote for each Ordinary
Share owned.

To be entitled to attend and vote at the Meeting (and for the purpose of the
determination by the Company of the number of votes they may cast), holders of
Ordinary Shares must be entered on the Company's register of members by 3:30
p.m. on Saturday, October 16, 1999.

By order of the Board of Directors

/s/ Paul G. Dumond
-----------------------------------
Paul G. Dumond, Secretary

London, England
September 24, 1999

(iii)
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THIS PROXY STATEMENT IS FOR HOLDERS OF ORDINARY SHARES, HOLDERS OF AMERICAN
DEPOSITARY SHARES ("ADSs") REPRESENTED BY AMERICAN DEPOSITARY RECEIPTS, AND, FOR
INFORMATIONAL PURPOSES ONLY, HOLDERS OF OPTIONS TO ACQUIRE ORDINARY SHARES OR
AMERICAN DEPOSITARY SHARES OF DANKA BUSINESS SYSTEMS PLC. THE PROXY STATEMENT
CONTAINS INFORMATION REQUIRED UNDER REGULATION 14A UNDER THE SECURITIES EXCHANGE
ACT OF 1934 OF THE UNITED STATES.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU
HAVE ANY DOUBT AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD IMMEDIATELY CONSULT
YOUR STOCKBROKER, BANK MANAGER, SOLICITOR/ATTORNEY, ACCOUNTANT OR OTHER
PROFESSIONAL ADVISER AUTHORIZED UNDER THE FINANCIAL SERVICES ACT 1986 OF THE
UNITED KINGDOM.

IF YOU HAVE SOLD ANY OF YOUR ORDINARY SHARES IN DANKA BUSINESS SYSTEMS PLC,
PLEASE SEND A COPY OF THIS DOCUMENT TO THE STOCKBROKER OR OTHER AGENT THROUGH
WHOM THE SALE WAS EFFECTED FOR TRANSMISSION TO THE PURCHASER.

DANKA BUSINESS SYSTEMS PLC
107 HAMMERSMITH ROAD
LONDON W14 0QH ENGLAND

(REGISTERED IN ENGLAND NO. 1101386)

PROXY STATEMENT

INTRODUCTION

GENERAL

This Proxy Statement is furnished by the Board of Directors of Danka
Business Systems PLC (the "Company") in connection with the solicitation of
specific voting instructions ("voting instructions") from holders of ADSs
("Holders of ADSs") and proxies ("proxies") from holders of Ordinary Shares
("Holders of Ordinary Shares") for voting at the Company's 1999 Annual General
Meeting (the "Meeting"), which will be held at 3:30 p.m. (local time) on October
18, 1999 at the Royal Garden Hotel, 2-24 Kensington High Street, London, W8 4PT.
For purposes of this Proxy Statement and related materials, the term
"Shareholders" shall mean Holders of Ordinary Shares and Holders of ADSs. The
approximate date on which this Proxy Statement and related materials has been
first mailed to Shareholders is September 24, 1999.

As of August 31, 1999, 228,067,865 Ordinary Shares of 1.25 pence each were
issued and outstanding ("Ordinary Shares"), of which approximately eighty
percent (80%) were held in the form of ADSs. Each ADS represents four Ordinary
Shares.

The cost of soliciting proxies and voting instructions will be borne by the
Company. In addition to the use of the mails, proxies and voting instructions
may be solicited personally or by telephone by employees of the Company. The
Company does not expect to pay any compensation for the solicitation of proxies
or voting instructions, but may reimburse brokers, The Bank of New York (the
"Depositary") and other persons holding stock in their names, or in the names of
nominees, for their expenses in sending proxy materials to their principals and
obtaining their proxies and/or voting instructions.

Prior to 1994, Holders of Ordinary Shares had adopted a resolution at each
Annual General Meeting to receive and approve the Directors' Report and Accounts
(financial information of the Company) prepared according to Generally Accepted
Accounting Principles of the United Kingdom ("U.K. GAAP"), for that year and the
report of the auditors thereon ("Report and Accounts"). Pursuant to the
Companies Act 1985, as amended by the Companies Act 1989 (the "Companies Act"),
it is no longer necessary for Holders of Ordinary Shares to approve the Report
and Accounts. Because

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of the unnecessary cost and inconvenience to the Company that would be
associated with such a vote due to the need for the Company to comply with
various disclosure requirements pursuant to United States securities laws, the
Company determined in 1994 not to propose such a resolution in conjunction with
its annual general meeting. However, as required by the Companies Act, the 1999
Annual Report and Accounts prepared in accordance with U.K. GAAP will be
presented at the Meeting and shareholders present at the Meeting may ask any
questions relating thereto. Additionally, the U.K. Shareholders have received a
copy of the 1999 Annual Report and Accounts in either the full or abbreviated
formats, as they have so elected. U.S. Shareholders have received the Company's
financial information prepared in accordance with United States Generally
Accepted Accounting Principles ("U.S. GAAP") in their copy of the Company's 1999
Annual Report. U.S. Shareholders who would like a copy of the 1999 Annual Report
and Accounts may contact the Company's registered office. Additionally, copies
of relevant contracts of service of the Directors and a register of Directors'
interests kept by the Company are available for inspection at the registered
office of the Company during normal working hours and will be available for
inspection at the place of the Meeting during the Meeting and for at least
fifteen (15) minutes prior to the Meeting.

In this Proxy Statement, references to "Company" are to Danka Business
Systems PLC or to Danka Business Systems PLC and its directly and indirectly
owned subsidiaries, as the context requires. In this Proxy Statement, references
to "pounds," "pence" or "L" are to United Kingdom currency, and references to
"U.S. dollars" or "$" are to United States currency. Amounts that have been paid
in currency of the United States are generally denominated herein in United
States currency, and amounts that have been paid in currency of the United
Kingdom are generally denominated herein in United Kingdom currency. Merely for
convenience of the reader, the pound equivalent of the dollar at the Noon Buying
Rate (as defined below) on March 31, 1999 was (pound)1.00 = $1.6140 and on
August 31, 1999 was (pound)1.00 = $1.6086. The noon buying rate is the exchange
rate in New York City for cable transfers in pounds sterling as certified for
customs purposes by the Federal Reserve Bank of New York (the "Noon Buying
Rate").

VOTING INSTRUCTIONS/HOLDERS OF ORDINARY SHARES

Holders of Ordinary Shares entitled to attend and vote at the Meeting may
appoint a proxy to attend and, on a poll of such holders, to vote in their
place. A proxy need not be a Holder of Ordinary Shares of the Company. Every
Holder of Ordinary Shares who is entitled to vote and who is present in person
will have one (1) vote on a show of hands. If voting is by a poll, each Holder
of Ordinary Shares who is entitled to vote and who is present in person or by a
proxy will have one (1) vote for each Ordinary Share owned. An ordinary
resolution requires the affirmative vote of a majority of the votes cast at the
Meeting. A special resolution requires an affirmative vote of at least
seventy-five percent (75%) of the votes cast at the Meeting. A form of proxy is
enclosed which, to be effective, must be deposited with the Company's
registrars, Computershare Services PLC, P.O. Box 82, Caxton House, Redcliffe
Way, Bristol BS99 7YA England, at least forty-eight (48) hours before the time
appointed for the holding of the Meeting.

Any proxy delivered pursuant to this solicitation may be revoked, at the
option of the person executing the proxy, at any time before it is exercised by
submitting a later-dated proxy or by delivering a signed revocation in no
specifically required form to the Company at least 48 hours before the Meeting,
or by attending the Meeting in person and casting a ballot. If proxies are
signed and returned without voting instructions, the Ordinary Shares represented
by the proxies will be voted as the proxy deems fit. Ordinary Shares that are
not voted by the Holders of Ordinary Shares or brokers entitled to vote them,
due to abstention or failure to cast a ballot in person or by returning a signed
proxy, will not be considered in the final tabulation.

VOTING INSTRUCTIONS/HOLDERS OF AMERICAN DEPOSITARY SHARES

Holders of ADSs should complete and return the voting instructional form
provided to them in their proxy materials by the Depositary in accordance with
the terms provided thereon not later than 12:00 noon Eastern standard time on
October 12, 1999. The close of business on September 21, 1999 has been fixed as
the record date for the determination of the Holders of ADSs entitled to provide
voting instructions to the Depositary. The Company has the right to instruct the
Depositary to give a discretionary proxy to a person designated by the Company
to vote all Ordinary Shares represented by Holders of ADSs that have failed to
timely file their voting instructional form with the Depositary.

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For purposes of the remainder of this document, the term "vote" shall mean
either a vote by a Holder of Ordinary Shares or instructions to the Depositary
by a Holder of ADSs, unless the context requires otherwise.

QUORUM

A quorum is necessary to hold a valid shareholder meeting. A quorum
comprises at least three holders of Ordinary Shares of record present in person
or by proxy at the Meeting.

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RESOLUTIONS

RESOLUTIONS 1 (ORDINARY), 2 (ORDINARY), 3 (ORDINARY), 4 (ORDINARY), 5 (ORDINARY)
AND 6 (ORDINARY): RE-ELECTION OF DIRECTORS

The Articles of Association of the Company set the size of the Board of
Directors at not less than two members. The Board currently consists of nine
Directors who serve pursuant to the Company's Articles of Association. One third
(1/3) of the Directors (excluding any directors who have been appointed by the
Board of Directors since the previous annual general meeting, who must
automatically seek re-election) are to retire at each Annual General Meeting.

Pursuant to the Company's Articles of Association, David W. Kendall will
retire at the Meeting.

The Board of Directors recommends in Resolution 1 that Mr. Kendall be
re-elected at the Meeting to serve as a Director. To accomplish the foregoing,
the Board of Directors proposes adoption of the following resolution:

Resolution 1:

THAT David W. Kendall, whose term as a Director expires at the 1999 Annual
General Meeting be and hereby is re-elected to serve as Director of the
Company in accordance with the Company's Articles of Association.

The Board of Directors has unanimously approved proposed Resolution 1 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

Pursuant to the Company's Articles of Association, the terms of five of the
Company's current Directors, Larry K. Switzer, Brian L. Merriman, Michael B.
Gifford, Richard C. Lappin and C. Anthony Wainwright, who were appointed by the
Board of Directors since the last Annual General Meeting, expire at the Meeting.

The Board of Directors recommends in Resolution 2 that Mr. Switzer be
re-elected at the Meeting to serve as a Director. To accomplish the foregoing,
the Board of Directors proposes adoption of the following Resolution:

Resolution 2:

THAT Larry K. Switzer, who was appointed as Director by the Board of
Directors since the 1998 Annual General Meeting and whose appointment
expires at the 1999 Annual General Meeting, be and hereby is re-elected to
serve as Director of the Company in accordance with the Company's Articles
of Association.

The Board of Directors has unanimously approved proposed Resolution 2 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

The Board of Directors recommends in Resolution 3 that Mr. Merriman be
re-elected at the Meeting to serve as a Director. To accomplish the foregoing,
the Board of Directors proposes adoption of the following Resolution:

Resolution 3:

THAT Brian L. Merriman, who was appointed as Director by the Board of
Directors since the 1998 Annual General Meeting and whose appointment
expires at the 1999 Annual General Meeting, be and hereby is re-elected to
serve as Director of the Company in accordance with the Company's Articles
of Association.

The Board of Directors has unanimously approved proposed Resolution 3 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

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<PAGE> 10

The Board of Directors recommends in Resolution 4 that Mr. Gifford be
re-elected at the Meeting to serve as a Director. To accomplish the foregoing,
the Board of Directors proposes adoption of the following Resolution:

Resolution 4:

THAT Michael B. Gifford, who was appointed as Director by the Board of
Directors since the 1998 Annual General Meeting and whose appointment
expires at the 1999 Annual General Meeting, be and hereby is re-elected to
serve as Director of the Company in accordance with the Company's Articles
of Association.

The Board of Directors has unanimously approved proposed Resolution 4 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

The Board of Directors recommends in Resolution 5 that Mr. Lappin be
re-elected at the Meeting to serve as a Director. To accomplish the foregoing,
the Board of Directors proposes adoption of the following Resolution:

Resolution 5:

THAT Richard C. Lappin, who was appointed as Director by the Board of
Directors since the 1998 Annual General Meeting and whose appointment
expires at the 1999 Annual General Meeting, be and hereby is re-elected to
serve as Director of the Company in accordance with the Company's Articles
of Association.

The Board of Directors has unanimously approved proposed Resolution 5 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

The Board of Directors recommends in Resolution 6 that Mr. Wainwright be
re-elected at the Meeting to serve as a Director. To accomplish the foregoing,
the Board of Directors proposes adoption of the following Resolution:

Resolution 6:

THAT C. Anthony Wainwright, who was appointed as Director by the Board of
Directors since the 1998 Annual General Meeting and whose appointment
expires at the 1999 Annual General Meeting, be and hereby is re-elected to
serve as Director of the Company in accordance with the Company's Articles
of Association.

The Board of Directors has unanimously approved proposed Resolution 6 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

RESOLUTION 7 (ORDINARY): RE-APPOINTMENT OF AUDITORS

At the Meeting, the Company is required, pursuant to Sections 384 and 385 of
the Companies Act, to appoint auditors to serve until the conclusion of the
Company's next Annual General Meeting and to set their remuneration. KPMG Audit
Plc, Chartered Accountants and Registered Auditor ("KPMG"), have served as the
Company's Auditors for more than twenty (20) years. The Board of Directors
recommends in Resolution 7 that KPMG be re-appointed to serve as the Company's
Auditors until the conclusion of the next Annual General Meeting and that the
Board of Directors be authorized to fix the Auditors' remuneration. To
accomplish the foregoing, the Board of Directors proposes adoption of the
following resolution:

Resolution 7:

THAT KPMG Audit Plc, Chartered Accountants and Registered Auditor, be and
hereby are re-appointed to serve as the Company's Auditors until the
conclusion of the 2000 Annual General Meeting, and that the Board of
Directors of the Company, or a duly appointed Committee thereof, be and
hereby is authorized to fix the Auditors' remuneration.

The Board of Directors has unanimously approved proposed Resolution 7 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed

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<PAGE> 11

resolution. The Company expects representatives of KPMG to be present at the
Meeting, have an opportunity to make a statement if they desire to do so and to
be available to respond to appropriate questions at the Meeting.

RESOLUTIONS 8 (ORDINARY) AND 9 (SPECIAL): AUTHORITY TO ALLOT SHARES/PRE-EMPTIVE
RIGHTS WAIVER

The Board of Directors recognizes that there may be instances where it is
desirable for the Company to be able to issue (allot) securities in connection
with various matters without the prior specific consent of Holders of Ordinary
Shares. Before the Board of Directors may exercise any such power to allot
relevant securities, however, Section 80 of the Companies Act requires (with
certain exceptions) that the Company authorize a general power at a general
meeting. The Board of Directors, therefore, is seeking authority in Resolution 8
to allot securities up to an aggregate nominal amount of (pound)950,282
(representing approximately thirty-three and one third percent (33 1/3%) of the
Company's present issued share capital) before the earlier of the date of its
next Annual General Meeting or January 18, 2001(subject to extensions upon the
occurrence of the events set forth below) for such purposes as desired in the
discretion of the Directors. To accomplish the foregoing, the Board of Directors
proposes adoption of the following resolution:

Resolution 8:

THAT the Directors be and hereby are generally and unconditionally
authorized, in place of all existing authorities under Section 80 of the
Companies Act 1985, as amended by the Companies Act 1989 (the "Companies
Act"), to exercise all powers of the Company to allot relevant securities
(within the meaning of Section 80 of the Companies Act) up to an aggregate
nominal amount of (pound)950,282 (representing approximately thirty-three
and one third percent (33 1/3%) of the issued share capital of the Company),
provided that this authority shall expire on the earlier of the date of the
2000 Annual General Meeting of the Company or January 18, 2001, save that
the Company may before such expiry make an offer or agreement which would or
might require relevant securities to be allotted after such expiry, and the
Board of Directors may allot relevant securities in pursuance of such an
offer or agreement as if the authority conferred hereby had not expired.

The Board of Directors has unanimously approved proposed Resolution 8 and
recommends that you vote "FOR" its adoption. An affirmative vote of a majority
of the votes cast at the Meeting will be required for adoption of the proposed
resolution.

Subject to the passing of proposed Resolution 8, the Board of Directors is
seeking authority in Resolution 9 to issue Ordinary Shares for cash, other than
effecting such issuance only after first offering the Ordinary Shares to
existing Holders of Ordinary Shares pro-rata to their holdings ("pre-emptive
rights"). Pursuant to Section 95 of the Companies Act, a special resolution of
the Company is generally necessary (with some exceptions) to permit an allotment
by Directors without providing the pre-emptive rights provided by Section 89 of
the Companies Act. Apart from other authority to the Directors permitting
allotments, the power would be limited to the issuance of Ordinary Shares up to
a maximum aggregate nominal amount of L570,170 (representing approximately
twenty percent (20%) of the Company's present issued share capital). This level
of authority is consistent with the limitations placed on NASDAQ Stock Market's
National Market companies to issue shares without further approval. The power
that is sought by Resolution 9 would expire on the earlier of the date of the
2000 Annual General Meeting or January 18, 2001, (subject to extensions upon the
occurrence of the events set forth below). To accomplish the foregoing, the
Board of Directors proposes adoption of the following resolution:

Resolution 9:

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<PAGE> 12

agreement made by the Company on or before such expiry date pursuant to
this authority as if such authority had not expired; and

(ii) be limited to the allotment of equity securities:

(c) otherwise than pursuant to sub-paragraphs (a) and (b) above, up to an
aggregate nominal value not exceeding (pound)570,170.

The Board of Directors has unanimously approved proposed Resolution 9 and
recommends that you vote "FOR" its adoption. An affirmative vote of at least
seventy-five percent (75%) of the votes cast at the Meeting will be required for
adoption of the proposed resolution.

RESOLUTION 10 (SPECIAL): PURCHASE OF OWN SHARES

Under Section 166 of the Companies Act, a company is required to obtain
shareholder approval before it is able to buy back its own shares. The
resolution must be subject to certain restrictions. The resolution as set out
will enable the Company to buy back up to 34,210,000 Ordinary Shares
representing approximately 15% of its issued share capital at the higher of the
nominal value or the market value of the shares, as calculated from The London
Stock Exchange Daily Official List of mid-market prices for the five days prior
to the purchase. If this resolution is passed, the authority shall continue
until the earlier of the date of the 2000 Annual General Meeting or January 18,
2001(subject to extensions upon the occurrence of the events set forth below).
No purchases will be made unless the effect is expected to increase earnings per
share and the Directors consider the purchases to be in the interests of
shareholders generally.

While there is no current plan to repurchase any shares, the Board of
Directors believes maintaining such flexibility is beneficial to the Company. To
accomplish the foregoing, the Board of Directors proposes adoption of the
following resolution:

Resolution 10:

(i) the maximum aggregate number of Ordinary Shares authorized to be
purchased is 34,210,000 representing approximately 15% of the issued
share capital of the Company as of March 31, 1999;

(ii) the minimum price which may be paid for each such Ordinary Share is
1.25 pence;

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<PAGE> 13
(v) the purchase is made in compliance with all applicable governmental
laws, rules and regulations.

The authority herein will expire at the conclusion of the 2000 Annual
General Meeting of the Company, or, if earlier, January 18, 2001.

The Board of Directors has unanimously approved proposed Resolution 10 and
recommends that you vote "FOR" its adoption. An affirmative vote of at least
seventy-five percent (75%) of the votes cast at the Meeting will be required for
adoption of the proposed resolution.

RESOLUTION 11 (ORDINARY): ISSUE OF SHARES TO THE DANKA CORPORATION 401(k) PROFIT
SHARING PLAN

Danka Office Imaging Company ("Danka"), the Company's major U.S. subsidiary,
has operated a 401(k) Profit Sharing Plan ("the Plan") for a number of years.
This is a retirement plan open to virtually all U.S. employees with the relevant
service requirement.

Under the Plan, employees can contribute part of their pre-tax pay into an
investment fund established by Danka. There has until February 1999 been a
matching cash contribution by Danka. For the first 3% of pay contributed, Danka
has matched dollar for dollar. For the next 3% of pay contributed, Danka has
matched 50 cents on the dollar. There is no matching contribution on
contributions in excess of 6% of pay. Matching contributions to the 401(k) Plan
by Danka have historically been at a level of approximately $10.0 million per
annum.

Danka is conscious that it is very common for matching employer
contributions to be made to 401(k) profit sharing plans. Although Danka has
temporarily stopped making matching contributions, this is not viable on a
permanent basis without risking the goodwill of the U.S. workforce.

Accordingly, it is proposed that matching employer contributions will be
resumed, but on the basis that the matching contributions may, at the discretion
of the Company, be used to subscribe for Ordinary Shares in the Company
("Shares") which will be converted into American Depositary Shares in the
Company ("ADSs"). This approach would enable cash to be retained in the Company
if considered appropriate at the time of the matching contribution. It is
proposed that matching contributions will be made for the employee contributions
made since February 1999 and that these contributions will be converted into
ADSs.

The issue price of the Shares will be the closing price on the last business
day of the month. Therefore, any Company matching contribution in shares of
stock will be valued each month using the closing price of the Shares on the
last business day of each respective month. Since the issue of Shares will
enable the Company to conserve cash, it is not considered appropriate to have a
limit on the number of Shares that may be issued to the trustee of the Plan.

It is currently intended that matching contributions in shares of stock
will, as a minimum, be made in respect of the period from February 1999 to
October 1999. By way of illustration the number of shares of stock which are
required to match employee contributions for the period from February 1, 1999 to
August 31, 1999 is approximately 1.2 million ADSs (Ordinary Share equivalent of
4.8 million).

The Board of Directors is seeking your approval to issue Shares under the
Plan in a move to reduce the cash costs of the Plan. A summary description of
the Plan is attached to this Proxy Statement as Appendix A.

The Board reserves the right up to the time of the Meeting to make such
amendments and additions to the Plan as it may consider necessary or
appropriate, provided that such amendments and additions do not conflict in any
material respect with the summary set out above.

To accomplish the foregoing, the Board of Directors proposes adoption of the
following resolution:

Resolution 11:

(i) THAT the Danka Corporation 401(k) Profit Sharing Plan ("the Plan") be
operated in the future on the basis that, upon an employing
subsidiary making a cash contribution to the Plan ("a matching
contribution"), Ordinary Shares of the Company may, at the discretion
of the Company, be issued which will be converted into

8
<PAGE> 14

American Depositary Shares to be held by the Plan for the benefit of the
employee for whom the matching contribution was paid, subject to the
rules concerning the vesting of benefits set out in the Plan.

(ii) THAT such Ordinary Shares can be issued to the Plan in respect of
matching contributions that were due to be made but have not been made to
the Plan since February 1999.

(iii) THAT the Directors may be counted in the quorum and vote in respect of
any matter connected with the Plan, notwithstanding that they may be
interested in the same (except that no Director may be counted in the
quorum or vote in respect of any matter solely concerning his own
participation in the Plan).

The Board of Directors has unanimously approved the proposed Resolution 11
and recommends that you vote "FOR" its adoption. An affirmative vote of a
majority of the votes cast at the Meeting will be required for adoption of the
proposed resolution.

RESOLUTION 12 (ORDINARY): APPROVAL OF THE DANKA 1999 SHARE OPTION PLAN

The Company is seeking approval by the Shareholders of The Danka 1999 Share
Option Plan (the "1999 Plan").

The Company currently has authority to grant options to its employees under
the Danka 1996 Share Option Plan. This provided authority to allot up to
22,000,000 Ordinary Shares (equivalent to 5,500,000 American Depositary Shares)
as a result of option exercises. This represents approximately 9.6% of the
currently issued share capital. There are currently approximately 21 million
Ordinary Shares under option under the 1996 plan, of which approximately one
third ( 1/3) are at exercise prices substantially in excess of the current share
price, following declines in the value of the Company's stock. In view of U.S.
accounting rules, it is not proposed that these options should be cancelled and
re-issued.

The Board believes that it is important for the Company to be able to issue
share options to attract and retain highly qualified individuals and are
therefore proposing that a new share option plan should be approved by
Shareholders which would allow for the issue of additional shares totaling up to
approximately 5% of the Company's currently issued share capital.

The following summary description of the proposed Danka 1999 Share Option
Plan is qualified in its entirety by reference to the full text of the 1999 Plan
which is attached to this Proxy Statement as Appendix B.

SUMMARY OF THE 1999 PLAN

The 1999 Plan is intended to provide an opportunity to officers, executive
directors and certain key employees of the Company and its subsidiaries, 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 shareholders, and increase the ability of the Company to attract
and retain individuals of exceptional skill. Under the 1999 Plan, all employees
of the Company are eligible, however it is anticipated that no more than 600
persons will be granted options under the plan.

The 1999 Plan authorizes the granting of options to purchase American
Depositary Shares or Ordinary Shares ("Options") which may, in the case of U.S.
Option holders, be either Incentive Stock Options ("ISO") meeting the
requirements of Section 422 of the Internal Revenue Code, or Non-Qualifying
Options. The total number of Shares that may be issued under the 1999 Plan is
3,000,000 ADSs (equivalent to 12,000,000 Ordinary Shares), provided that no
participant may be issued, under the 1999 Plan, in the aggregate in any five
year period Options over more than 1,000,000 ADSs (equivalent to 4,000,000
Ordinary Shares). Options may not be granted under the 1999 Plan more than ten
years after its adoption by shareholders. The 1999 Plan is structured in two
parts. Part A provides for option grants in all of the countries in which the
Company currently has operations. It is intended that Part B will be submitted
to the U.K. Inland Revenue for approval and will allow for options up to an
exercise value of (pound)30,000 per individual to be granted to U.K. based
employees on a tax-efficient basis (in a similar manner to U.S. ISOs).

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<PAGE> 15

The 1999 Plan will be administered by the Company's Human Resources
Committee (the "Committee") consisting wholly of non-employee Directors of the
Company qualifying as "disinterested" directors as defined pursuant to
Regulations under the United States Securities Exchange Act of 1934. Upon the
recommendation of management, the Committee will independently determine the
persons to whom Options will be granted, the dates of grant, and the number of
Shares to be subject to each Option. In the event of a change of control of the
Company, the Options may be exercised immediately or rolled-over (exchanged) for
options of the acquiring company. Options will be granted for a term of up to
ten years, but generally may be exercised as to one-third of the number of
Shares one year after the date of grant, the next one-third two years after the
date of grant, and the final one-third three years after the date of grant.
Options will generally terminate within 30 days following termination of
employment or, in the event of death, cessation of employment through
ill-health, injury, disability, retirement, or the employing company or business
leaving the Danka group, within one year thereafter. An Option that lapses,
terminates or is forfeited will be available for future grant. Options will not
be transferable except by will or the laws of descent and distribution.

Options may be granted to purchase Shares at a price per Share fixed by the
Committee and generally at not less than the fair market value on the date of
the grant. All Options available under the 1999 Plan are subject to adjustments
that may be made for a merger, reorganization, stock dividend, stock split or
other similar change affecting the number of outstanding Shares of the Company.
The Board of Directors may amend or terminate the 1999 Plan in any manner and at
any time, except that no such amendment or termination may adversely affect the
rights of the Option holders of outstanding Options, without the Option holders'
consent, nor may any amendment be made to the advantage of Option holders
without the prior approval by ordinary resolution of the Shareholders of the
Company in a general meeting (except for minor alterations to benefit the 1999
Plan administration or to obtain or maintain favorable tax, exchange of control
or regulatory treatment of holders or any Shareholder).

For purposes of U.S. Proxy requirements, the following description of the
U.S. income tax consequences of the issuance and exercise of Options under the
1999 Plan to U.S. Option holders and the Company is being provided in this Proxy
Statement. ISOs granted pursuant to the 1999 Plan are intended to qualify as
"incentive stock options" within the meaning of Section 422, or any successor
section, of the Internal Revenue Code, as amended. If an optionee makes no
disposition of the shares acquired pursuant to the exercise of an ISO within one
year after the transfer of shares to such optionee and within two years from
grant of the option, such optionee will realize no taxable income as a result of
the grant or exercise of such option; any gain or loss that is subsequently
realized may be treated as long-term capital gain or loss, as the case may be.
(However, the optionee will recognize an item of tax preference in the amount of
the difference between the fair market value of the shares received upon
exercise and the exercise price for alternative minimum tax purposes.) Under
these circumstances, the Company will not be entitled to a deduction for federal
income tax purposes with respect to the issuance of such ISOs, the transfer of
shares upon their exercise or the ultimate disposition of such shares.

If shares subject to ISOs are disposed of prior to the expiration of the
above time periods, the optionee will recognize ordinary income in the year in
which the disqualifying disposition occurs, the amount of which will generally
be the lesser of (i) the excess of the market value of the shares on the date of
exercise over the option price; and (ii) the gain recognized on such
disposition. Such amount will ordinarily be deductible by the Company for
federal income tax purposes in the same year, provided that the Company
satisfies certain federal income tax information reporting requirements. In
addition, the excess, if any, of the amount realized on a disqualifying
disposition over the market value of the shares on the date of exercise will be
treated as capital gain.

Non-Qualifying options may be granted under the 1999 Plan. An optionee who
exercises a Non-Qualifying option will recognize as taxable ordinary income, at
the time of exercise, an amount equal to the excess of the fair market value of
the shares on the date of exercise over the exercise price. Such amount will
ordinarily be deductible by the Company in the same year, provided that the
Company satisfies certain federal income tax information reporting requirements.

Section 162(m) of the U.S. Internal Revenue Code generally limits the
Company's federal income tax deduction for compensation paid in any year to each
of its chief executive officer and its four highest paid executive officers,
other than its chief executive officer, to $1 million per year, to the extent
that such compensation is not "performance based". Under U.S. tax regulations, a
stock option will, in general, qualify as "performance based" compensation if
(i) it has an exercise

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<PAGE> 16

price of not less than the fair market value of the underlying stock on the date
of grant, (ii) it is granted under a plan that limits the number of shares for
which options may be granted to any participant during a specified period, which
plan is approved by a majority of the stockholders entitled to vote thereon, and
(iii) it is granted by a compensation committee consisting solely of at least
two independent directors. If a stock option grant to an executive referred to
above is not "performance based", the amount that would otherwise be deductible
by the Company in respect of the grant of such option will be disallowed to the
extent that the executive's aggregate non-performance based compensation in the
relevant year exceeds $1 million.

The U.S. income tax consequences of Option grants and exercises are complex
and the above description is general in nature. The above description does not
purport to be complete and is subject to changes in the U.S. income tax laws.

The Directors reserve the right up to the time of the Meeting to make such
amendments and additions as they may consider necessary or desirable, provided
that such amendments and additions do not conflict in any material respect with
the summary set out above.

To accomplish the foregoing, the Board of Directors proposes adoption of the
following resolution:

Resolution 12:

The Board of Directors has unanimously approved the proposed Resolution 12
and recommends that you vote "FOR" its adoption. An affirmative vote of a
majority of the votes cast at the Meeting will be required for adoption of the
proposed resolution.

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<PAGE> 17

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information regarding the Directors
and executive officers of the Company and its primary operating subsidiaries.
The executive officers serve at the pleasure of the respective Boards of
Directors.

<TABLE>
<CAPTION>
NAME AGE POSITION(S) DIRECTOR'S ROTATION
- ---- --- ----------- -------------------
<S> <C> <C> <C>
David W. Kendall.......................... 64 Director(3) 1999
Larry K. Switzer.......................... 56 Chief Executive Officer 1999
Brian L. Merriman......................... 62 President and Chief Operating Officer 1999
Michael B. Gifford........................ 63 Director(2)(3) 1999
Richard C. Lappin......................... 55 Director(1)(3) 1999
Keith J. Merrifield....................... 57 Director(1) 2000
J. Ernest Riddle.......................... 57 Director(2)(3) 2000
C. Anthony Wainwright..................... 66 Director(1)(3) 1999
James F. White, Jr........................ 59 Director(2) 2000
Paul G. Dumond............................ 44 Company Secretary --
F. Mark Wolfinger......................... 44 Executive Vice President and Chief
Financial Officer --
Martin G. St. Quinton..................... 41 Chief Executive, Danka International --
David P. Berg............................. 38 Executive Vice President and General
Counsel --
</TABLE>

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

(1) Member of the Human Resources Committee.
(2) Member of the Audit Committee.
(3) Member of the Nominations Committee.

DAVID W. KENDALL. Mr. Kendall was named Chairman of the Company in October
1998. Prior to Mr. Kendall's appointment as Chairman, he served the Company as a
Director since July 1993. He is also Chairman of Whitecroft plc, a conglomerate,
Ruberoid PLC, a manufacturer and supplier of building products, Celtic Energy
Ltd., a Welsh coal mining company, Blagden Industries plc, a packaging company,
Wagon plc, an engineering company, and a non-executive director of Gowrings plc,
a motor distributor, all of which, with the exception of Celtic Energy Ltd, are
publicly owned U.K. companies. Celtic Energy Ltd is a private company.
Previously, Mr. Kendall has served as executive deputy chairman of British Coal,
a coal mining company, chairman of Bunzl plc, a U.K. conglomerate, and chief
executive of BP Oil Ltd., an oil refining and marketing company.

LARRY K. SWITZER. Mr. Switzer joined the Company in September 1998 and
currently serves as Chief Executive Officer and Director. Prior to his
appointment as Chief Executive Officer in October 1998, Mr. Switzer served as
the Company's Chief Financial Officer. Prior to joining the Company, Mr. Switzer
served as Senior Executive Vice President and Chief Financial Officer of Fruit
of the Loom, Inc. since 1994, where he was a member of both the Executive
Committee and Board of Directors. Mr. Switzer has also previously served as
Chief Financial Officer for Alco Standard Corporation and S.C. Johnson & Son,
Inc.

BRIAN L. MERRIMAN. Mr. Merriman joined the Company in July 1998 and was
appointed to the Board of Directors in July 1999. Mr. Merriman was also
appointed in July 1999 to serve as the President and Chief Operating Officer of
Danka worldwide and is responsible for the sales, service and marketing activity
of Danka's global operations. Prior to Mr. Merriman's appointment in July 1999,
he served as President and Chief Operating Officer of Danka Americas, including
the U.S., Canada and Latin America regions. Prior to joining the Company, Mr.
Merriman served as Senior Vice President of the Electronic Imaging Division of
Toshiba America Information Systems, Inc. since 1994. Mr. Merriman has also held
several senior level positions with Savin Corporation and Konica Business
Machines USA, Inc.

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<PAGE> 18

MICHAEL B. GIFFORD. Mr. Gifford was appointed as a Director in September
1999. From 1983 through 1996 Mr. Gifford was Group Chief Executive of the Rank
Organisation Plc, a London based leisure and entertainment conglomerate and the
joint venture partner for Xerox operations outside the Americas. During this
period he served as the Rank representative on the Rank Xerox Board, and was
also a director of Fuji Xerox, whose operations cover the Eastern Hemisphere.
Mr. Gifford also served on the Board of English China Clays Plc from 1992 to
1999 and is currently a Director of The Gillette Company, a U.S. quoted global
consumer products company.

RICHARD C. LAPPIN. Mr. Lappin was appointed as a Director in September
1999. Mr. Lappin has been a Senior Managing Director at Blackstone Group since
1999. Prior to joining Blackstone, Mr. Lappin served as President of Farley
Industries, which included West Point-Pepperell, Inc., Acme Boot Company Inc.,
Tool and Engineering, Inc., Magnus Metals, Inc., and Fruit of the Loom, Inc.,
and President and CEO of Doehler-Jarvis and Southern Fastening Systems. Mr.
Lappin has also held senior executive positions with Champion Spark Plug Company
and RTE Corporation. Mr. Lappin currently serves as a director of American Axle,
a manufacturer of light truck driveline systems, and Collins & Aikman, a global
supplier of automotive interior systems.

KEITH J. MERRIFIELD. Mr. Merrifield was elected as a Director in January
1997. From 1975 through 1990, Mr. Merrifield was the Managing Director of
Wellcome International, a division of the United Kingdom pharmaceutical company
Wellcome plc. During this time Mr. Merrifield significantly developed Wellcome's
pharmaceutical business in Asia, Africa and Eastern Europe. In 1990 Mr.
Merrifield was appointed as Director of International Operations and in addition
Director of Group Marketing worldwide in 1994. Mr. Merrifield also played a key
role in the integration process following Glaxo's acquisition of Wellcome plc.
Since resigning from Wellcome plc in June 1995, Mr. Merrifield has served as a
director of British Biotech PLC, an innovative pharmaceutical company based in
Oxford, England, and also Coats Viyella PLC, the largest textile company in the
U.K.

C. ANTHONY WAINWRIGHT. Mr. Wainright was appointed as a Director in
September 1999. Since 1997, Mr. Wainright has served as Vice Chairman of
McKinney & Silver, a North Carolina advertising agency and a unit of USWeb/CKS.
From 1995 to 1997 Mr. Wainright was the Chairman of Harris Drury Cohen, a Ft.
Lauderdale advertising agency. Prior to Harris Drury Cohen, Mr. Wainright was
the Chairman of Compton Partners, Saatchi & Saatchi, an international
advertising agency and subsidiary of Cordiant, PLC. Mr. Wainright also serves as
a director of six public companies including, Advanced Polymer Systems, Inc.,
America Woodmark Corporation, Caribiner International, Del Webb Corporation,
Gibson Greeting Cards, Inc. and Marketing Services Group Inc., and various
private and charitable boards.

J. ERNEST RIDDLE. Mr. Riddle was appointed as a Director in January 1998.
From March 1997 to July 1999, Mr. Riddle was President and Chief Operating
Officer of Norrell Services, Inc., an outsourcing information technology and
staffing services company based in Atlanta, Georgia. Prior to joining Norrell,
Mr. Riddle spent four years with Ryder System, Inc., a logistics and
transportation group, primarily in marketing and sales, and was President of
Ryder International from October 1995 to December 1996. Mr. Riddle also has
considerable experience in the photocopier industry, having worked for Xerox
Corporation from 1966 to 1992 where he held several executive positions
including Vice President Marketing and Vice President Operations for the U.S.
group, and Vice President Worldwide Marketing Operations and Vice President
Marketing/Sales Director for Rank Xerox in London. Mr. Riddle serves as a
trustee of Brevard College and is on the Board of the Visitors of the University
of North Carolina.

JAMES F. WHITE, JR. Mr. White has served the Company as a Director since
July 1993. Since January 1996, he has served of counsel to the law firm of
Shumaker, Loop & Kendrick, Toledo, Ohio. Mr. White served as an executive
officer and director of Checkers Drive-In Restaurants, Inc. from January 1993
through December 1995, most recently as Vice Chairman of the Board and as a
non-executive director of Arbor Health Care Company prior to its sale in
November 1997. For more than 20 years prior to January 1993, Mr. White was a
partner in the law firm of Shumaker, Loop & Kendrick. Mr. White is a director of
numerous private companies.

PAUL G. DUMOND. Mr. Dumond, who is a Chartered Accountant, has been the
Company Secretary of the Company since March 1986. Mr. Dumond is also the owner
and director of Nautilus Management Limited, a management services company, and
a non-executive director of two publicly owned U.K. companies; Horace Small
Apparel PLC, which formerly manufactured and distributed uniforms and Mid-States
PLC, which distributes auto parts. He was previously

13
<PAGE> 19

with Thomson McLintock, Chartered Accountants, now part of KPMG, following which
he held the positions of finance manager and later finance director in the oil
and gas industry.

F. MARK WOLFINGER. Mr. Wolfinger joined the Company in August 1998 and
currently serves as Executive Vice President and Chief Financial Officer. Prior
to his appointment to Chief Financial Officer in December 1998, Mr. Wolfinger
served as the President of the Company's Specialty Markets, including the
Canada, Latin America and Omnifax divisions. Prior to joining the Company, Mr.
Wolfinger served as Executive Vice President and Chief Financial Officer for
Hollywood Entertainment Corporation since 1997. Mr. Wolfinger also served in a
variety of roles at Metromedia Restaurant Group, Grand Metropolitan PLC and
PepsiCo before joining Hollywood Entertainment Corporation.

MARTIN G. ST. QUINTON. Mr. St. Quinton joined the Company in June 1993 upon
the acquisition of Saint Group plc, the Company's first acquisition in Europe.
Mr. St. Quinton was named Chief Executive, Danka International in September
1997, which position is responsible for the Company's sales, service, finance,
marketing, wholesale and outsourcing operations throughout Europe. Prior to this
appointment, Mr. St. Quinton supervised the development of the Company's
European network. Mr. St. Quinton was Chief Executive and majority owner of
Saint Group plc prior to its acquisition. Mr. St. Quinton will be leaving the
Company by the end of October 1999.

DAVID P. BERG. Mr. Berg joined the Company in July 1997 as Vice President
and General Counsel to develop the Company's in-house legal department. Prior to
joining the Company, Mr. Berg served as Senior Vice President, General Counsel
and Secretary of Nordic Track, Inc. since 1994, where he had responsibility for
the legal, business development and international divisions. Mr. Berg has also
served in various capacities at BellSouth Corporation including general counsel
roles in BellSouth's wireless data and computer services subsidiaries.

The Articles of Association of the Company set the size of the Board of
Directors at not less than two persons. The Board of Directors currently
consists of nine members who serve pursuant to the Company's Articles of
Association. One third (1/3) of the Directors are to retire and shall be
eligible for re-election at each Annual General Meeting. In addition, Directors
may be appointed by the Board of Directors, but Directors so appointed hold
office only until the next Annual General Meeting of the Company, when they are
eligible for re-election. Other than the service agreements that the Company has
entered into with Mr. Kendall, Mr. Switzer and Mr. Merriman, as described in the
"Report of the Human Resources Committee" section of this Proxy Statement,
during fiscal 1999 there was no understanding regarding any executive officer or
Director and the Company or any other person pursuant to which any executive
officer or Director was, or is, to be elected or appointed to such position. No
executive officer is related to any other executive officer or Director. The
Board of Directors held 25 meetings (including conference calls) during fiscal
1999.

The Nominations Committee, as it deems appropriate, makes recommendations to
the full Board of Directors with respect to the size and composition of the
Board and its committees and with respect to nominees for election as directors.
The current members of the Nominations Committee are Messrs. Gifford, Kendall,
Lappin, Riddle and Wainwright. The Nominations Committee met twice in fiscal
1999. The Nominations Committee will consider suggestions regarding candidates
for election to the Board submitted by Shareholders in writing to the Secretary
of the Company. With regard to the 2000 Annual General Meeting, any such
suggestion must be received by the Secretary no later than the date by which
Shareholder proposals for such annual general meeting must be received as
described below under the heading "Shareholders Proposals for Presentation at
the 2000 Annual General Meeting".

The Company has an audit committee (the "Audit Committee") which is composed
of Messrs. White, Gifford, and Riddle. The functions of the Audit Committee are
to recommend annually to the Board of Directors the appointment of the
independent public accountants (Chartered Accountants and Registered Auditor) of
the Company, discuss and review the scope and the fees of the prospective annual
audit, review the results thereof with the independent public accountants,
review and approve nonaudit services of the independent public accountants,
review compliance with existing major accounting and financial policies of the
Company, review the adequacy of the financial organization of the Company,
review management's procedures and policies relative to the adequacy of the
Company's internal accounting control, monitor compliance with relevant laws
relating to accounting practices and review and approve transactions, if any,
with affiliated parties. The Audit Committee met nine times in fiscal 1999.

14
<PAGE> 20

The function of the Human Resources Committee, which is composed of Messrs.
Merrifield, Lappin, and Wainwright, independent outside Directors, is to review
and approve annual salaries and bonuses for executive Directors and certain
officers and to review, approve and/or generally recommend to the Board of
Directors the terms and conditions of periodic stock option grants and employee
benefit plans or changes thereto. The Human Resources Committee met nine times
in fiscal 1999.

In fiscal 1999, each incumbent Director attended in excess of seventy-five
percent (75%), collectively, of the meetings of the Board of Directors and of
each committee of which he was a member.

SECURITY OWNERSHIP OF MANAGEMENT AND OTHERS

The following table sets forth, as of August 31, 1999, information as to the
beneficial ownership of the Company's Ordinary Shares or Ordinary Share
equivalents (whether held in Ordinary Shares or ADSs, each ADS being equivalent
to four Ordinary Shares), by (i) each person known to the Company as having
beneficial ownership of more than five percent (5%) of the Company's equity
securities, (ii) each Director, (iii) each "named executive officer" (as defined
in Item 402(a) (3) of Regulation S-K under the Securities Exchange Act of 1934
(the "1934 Act") ("Named Executive Officer")), and (iv) all Directors and
Executive Officers of the Company as a group.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
NAME OF BENEFICIAL OWNER(1) AS OF AUGUST 31, 1999(2)
- ------------------------------------------------------ -----------------------------------------------
NUMBER OF
ORDINARY ADS
HOLDINGS OF GREATER THAN 5 PERCENT SHARES(12) EQUIVALENT PERCENT(12)
- ------------------------------------------------------ ------------------- ---------- -----------
<S> <C> <C> <C>
Massachusetts Financial Services(3)................... 18,400,000 4,600,000 8.1%
Wellington Management Company, LLP(4)................. 16,000,000 4,000,000 7.0%
Prudential Corporation plc(5)......................... 14,513,984 3,628,496 6.4%
Merrill Lynch Asset Management(6)..................... 14,440,000 3,610,000 6.3%
HOLDINGS BY DIRECTORS AND EXECUTIVE OFFICERS
- ------------------------------------------------------
David W. Kendall...................................... 15,000 3,750 *
Larry K. Switzer(7)................................... 1,266,667 316,667 *
Brian L. Merriman(8).................................. 933,332 233,333 *
Michael B. Gifford.................................... 8,000 2,000 *
Richard C. Lappin..................................... 10,000 2,500 *
Keith J. Merrifield................................... 15,000 3,750 *
J. Ernest Riddle...................................... 20,000 5,000 *
C. Anthony Wainwright................................. -- -- *
James F. White, Jr.................................... 16,000 4,000 *
F. Mark Wolfinger(9).................................. 666,668 166,667 *
Martin G. St. Quinton(10)............................. 3,296,266 824,067 1.5%
David P. Berg(11)..................................... 333,332 83,333 *
Daniel M. Doyle(13)................................... -- -- *
All Directors and Executive Officers as a group (18
persons)............................................ 6,930,018 1,732,505 3.0%
</TABLE>

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

(*) Represents less than one percent (1%) of the share capital.
(1) Except for Messrs. Wolfinger, St. Quinton, Berg and Doyle, all of the listed
individuals are currently Directors of the Company. Messr. Switzer and
Merriman are executive officers of the Company.
(2) Except as otherwise indicated, all Ordinary Shares are held of record with
sole voting and investment power.
(3) Massachusetts Financial Services is a mutual fund organization. The address
of Massachusetts Financial Services is 500 Boylston Street, Boston,
Massachusetts 02116.
(4) Wellington Management Company, LLP is a mutual fund organization. The
address of Wellington Management Company, LLP is 75 State Street, 19th
Floor, Boston, Massachusetts 02109.

15
<PAGE> 21
(5) Prudential Corporation plc is affiliated with Prudential Client (MSS)
Nominees Ltd. The address of Prudential Corporation plc is 142 Holborn
Bars, London EC1N 2NH England.

(6) Merrill Lynch Asset Management is a mutual fund organization. The address
of Merrill Lynch Asset Management is 800 Scudders Hill Road, Plainsboro,
New Jersey 08536.

(7) Includes options held by Mr. Switzer to purchase 306,667 ADSs (equivalent
of 1,226,667 Ordinary Shares), all of which are currently exercisable.

(8) Includes options held by Mr. Merriman to purchase 233,333 ADSs (equivalent
of 933,332 Ordinary Shares), all of which are currently exercisable.

(9) Includes options held by Mr. Wolfinger to purchase 166,667 ADSs
(equivalent of 666,668 Ordinary Shares), all of which are currently
exercisable.

(10) Includes options held by Mr. St. Quinton to purchase 563,333 Ordinary
Shares (equivalent of 140,833 ADSs), all of which are currently
exercisable.

(11) Includes options held by Mr. Berg to purchase 83,333 ADSs (equivalent of
333,332 Ordinary Shares), all of which are currently exercisable.

(12) Based on 228,067,865 Ordinary shares outstanding. Pursuant to the rules of
the Securities and Exchange Commission, certain of the Ordinary Shares or
ADSs, which a person has a right to acquire within 60 days of the date
hereof pursuant to the exercise of stock options or the conversion of the
Company's convertible subordinated notes, are deemed to be outstanding for
the purpose of computing the percentage ownership of such person but are
not deemed to be outstanding for the purpose of computing the percentage
ownership of any other person.

(13) Mr. Doyle resigned as a Director and Chief Executive Officer of the
Company in October 1998.

On August 31, 1999, The Bank of New York, as depositary for the Company's
ADS program, held 182,477,723 Ordinary Shares representing 80.0% of the issued
share capital.

16
<PAGE> 22

The information contained in the following sections "Report of the Human
Resources Committee" and "Performance Graph" is not deemed to be "Soliciting
Material" or to be "Filed" with the SEC or subject to Regulation "14-A" under
the 1934 Act, or to the liabilities of Section 18 of the 1934 Act.

REPORT OF THE HUMAN RESOURCES COMMITTEE

EXECUTIVE COMPENSATION

Compensation Philosophy

The guiding philosophy of Danka's executive compensation program is to:

(a) provide an industry-competitive program with emphasis on incentive pay which
links pay to performance, both long and short term;

(b) ensure that executive compensation over time closely reflects long term
shareholder return.

Compensation of the Company's top executives is reviewed and approved by the
Human Resources Committee which, during fiscal 1999, comprised three
non-employee, independent directors including the Company's non-executive
chairman, David W. Kendall. The Human Resources Committee has access, at its
discretion, to compensation consultants and survey information on executive
compensation in comparable companies. In determining the compensation of top
executives, the generally accepted practices on executive compensation in the
geographic markets in which they are principally based are taken into account.

Compensation Elements

There are three elements to the Company's executive compensation program:

- base salary, other benefits and relevant perquisites

- annual incentives

- long term incentives -- currently executive share options and stock
appreciation rights

Base Salary

Base salaries for senior executives are designed to be generally competitive
with other companies in similar industries. Such companies include Xerox, Ikon
Office Solutions, Pitney Bowes, Lexmark, Harris and Tech Data. Actual base
salary levels vary from this target level based upon the potential impact of the
individual executive on the Company, the skills and experience that the
executive brings to the job and the individual's performance.

Further details of other benefits and perquisites provided are given below.

Annual and long term incentives

Annual incentive compensation for executives including the CEO is based on
pre-established performance goals, including revenue and EBITDA targets of the
Company. Certain executives are eligible for incentive compensation based on
business unit operating performance. In addition, performance compensation may
be earned for achievement of personal goals as approved by the Human Resources
Committee. The maximum annual incentives for executives range from 50% to 200%
of base salary based on performance metrics that are pre-determined or approved
by the Committee.

Long term incentive compensation mainly consists of the award of stock
options. The number of stock options awarded to an executive is based on the
executive's target option level, the targets being set as a range depending on
staff grade and the individual's performance. Currently, neither the number of
options previously granted to, nor the options currently held by, a potential
recipient are considered when grants are awarded. Stock options are granted at
the fair market value on the date of the grant, have a 10-year maximum term and
in respect of options granted before July 1998

17
<PAGE> 23

generally vest 100% three years after the date of the grant. Options issued
since July 1998 may generally be exercised as to one-third of the number of
shares one year after the date of grant, the next one-third two years after the
date of grant, and the final one-third three years after the date of the grant
(although certain options have been granted on different vesting terms).

One million dollar limit on deductibility

Section 162(m) of the Internal Revenue Code limits the U.S. tax deduction
the Company may claim for non-deferred compensation paid to its Chief Executive
Officer or to any one of the other four executive officers named in the Summary
Compensation Table in a single fiscal year to $1,000,000, unless the portion
exceeding $1,000,000 qualifies as performance-based compensation under the U.S.
tax laws. The Human Resources Committee has determined that it will make every
reasonable effort, consistent with sound executive compensation principles and
the needs of the Company, to ensure that all amounts paid to the Company's Chief
Executive Officer or to any of the other Named Executive Officers in excess of
$1,000,000 will qualify as performance-based pay and be deductible by the
Company.

Other Benefits

The Company may provide other benefits (including perquisites) to its senior
executives in line with accepted practice in the geographic territories in which
they are based. These include the use of an automobile or the provision of an
automobile allowance, health insurance, life insurance, 401(k) plans and, in the
case of executives based in Europe, Company pension schemes.

The Company also established a Deferred Compensation Plan in fiscal 1997 for
its U.S. based executives, which allows participants to defer all or a portion
of their annual salary and/or bonus until the plan retirement age of 60. Upon
retirement, each participant will receive their deferred balances in either a
lump sum, or in annual installments over 5, 10 or 15 years. (See the table
captioned "Summary Compensation Table".)

The Company has purchased and holds whole life insurance policies on the
lives of those executive officers participating in the Deferred Compensation
Plan, to provide a source of funds available to satisfy its obligations under
this plan.

CEO COMPENSATION

Mr. Larry K Switzer was appointed interim Chief Executive Officer of the
Company on October 23, 1998 having previously joined the Company on September 1,
1998 as Chief Financial Officer and Finance Director. Subsequently, in January
1999 his position as Chief Executive Officer was confirmed at which time his
compensation arrangements were reviewed.

Mr. Switzer's appointment as Chief Financial Officer followed the retirement
of Mr. David Snell at the Company's 1998 Annual General Meeting. The appointment
followed an executive search by outside consultants working under the direction
of the Nominations Committee of the Board of Directors. His compensation
arrangements were also advised upon by outside consultants and were designed to
be aligned with the principles of executive compensation referred to above.

On his appointment as Chief Financial Officer Mr. Switzer's salary was
$500,000 per annum and he was entitled to a bonus of up to $250,000 which in
future years was structured to be performance-dependent (based upon achievement
of established corporate and individual objectives). In the year ended March 31,
1999 this amount was guaranteed. Mr. Switzer was also paid an amount of $200,000
shortly after joining the Company, representing benefits forgone at his previous
employer. In addition he was awarded options to acquire up to 80,000 American
Depository Shares ("ADSs") in the Company at a price of $6.875 per ADS under the
terms of the Company's 1996 Share Option Scheme, as subsequently amended.

18
<PAGE> 24

When Mr. Daniel M. Doyle, the Company's former Chief Executive Officer, left
the Company on October 23, 1998, the Human Resources and Nominations Committees
reviewed the alternative candidates to take over the position. Given Mr.
Switzer's considerable experience in the area of financial restructuring, as
well as his previous experience in the industry, the members of the Committees
considered that he was best qualified to take over as interim Chief Executive
Officer.

On his permanent appointment as Chief Executive Officer with effect from
January 1, 1999, new compensation arrangements were entered into. Mr. Switzer's
salary was increased to $800,000.

Mr. Switzer is also eligible for annual incentive compensation based on
pre-established performance goals, including revenue and EBITDA targets of the
Company. The maximum annual incentive is equivalent to 200% of Mr. Switzer's
base salary.

Under the terms of his revised employment arrangements, Mr. Switzer was also
awarded options on February 19, 1999 to acquire 920,000 ADSs at a price of $5.25
per ADS under the Company's 1996 Share Option Scheme. These options vest in
three equal annual tranches beginning on the first anniversary of the date of
grant. However, in the event of the market price of Company's ADSs exceeding
specified levels as set forth below, each of the tranches may become exercisable
on an accelerated basis contingent upon such a price being achieved.

The first tranche of 306,667 ADS's became exercisable on June 4, 1999 when
the price of the Company's ADSs had appreciated 43% to $7.50. The second tranche
of 306,667 options may be exercised before the second anniversary of their date
of grant (but in any event not before the first anniversary of the date of
grant) in the event of the price of the Company's ADSs reaching $12.50 (a 138%
increase over the option price). Similarly, the third tranche of 306,666 options
may be exercised before the third anniversary of the grant (but in any event not
before the second anniversary of the date of grant) if the price of the
Company's ADSs reaches $20.00 (a 280% increase over the option price).

In addition, Mr. Switzer was awarded stock appreciation rights in respect of
80,000 ADSs with effect from February 19, 1999. Under this arrangement he is
entitled to receive a cash payment equivalent to the difference between the
closing ADS price on February 19, 1999 ($5.125 per ADS) and the price on the day
of crystallization of the stock appreciation right (the "Value Gain per Share")
multiplied by the relevant number of ADSs. For these purposes, the dates of
determination of the Value Gain per Share are the respective dates on which the
options to acquire the 920,000 ADSs referred to above are exercised and the
total value crystallized on each date is the Value Gain per Share, multiplied by
80,000 and multiplied by the proportion of the total 920,000 ADSs being acquired
by option exercise on that date.

In addition to the stock appreciation rights listed above, Mr. Switzer is
also entitled to be paid an amount totaling $812,500 over the period of the
exercise of the 920,000 ADSs shown above. This amount represents 1,000,000
multiplied by $0.8125, the appreciation of the Company's share price between
$4.3125, the market price of the ADSs on January 14, 1999 and $5.125, the
closing price on February 19, 1999, the date of the grant of options referred to
above. This amount is paid out in pro-rata tranches at the time he exercises the
options to acquire 920,000 ADSs.

The above mentioned contract with Mr. Switzer was for a term ending on
August 28, 2000. It was subject to automatic renewals of one year annually
commencing on that day. If terminated by the Company, the contract provided for
an amount equivalent to one year's salary plus target bonus payable over the
following twelve months from the date of termination.

Following the 1999 fiscal year end, the Company entered into a new
employment arrangement with Mr. Switzer with terms similar to those discussed
above. The terms of the new agreement extend through August 31, 2002 and
provide, among other things, notice of termination provisions, enhanced
severance benefits including the vesting of options under certain circumstances,
and enhanced non-compete provisions.

The new compensation arrangements for Mr. Switzer as Chief Executive Officer
of the Company were determined and agreed by the Human Resources Committee which
has taken advice from independent consultants in respect of U.S. based
compensation programs. In addition, he received (pound)4,375 ($7,235) in
director's fees.

19
<PAGE> 25

The Human Resources Committee believes that the arrangements entered into
during the year in respect of Mr. Switzer's compensation were market competitive
and essential to secure his services as Chief Executive Officer of the Company
during a difficult time period.

Former CEO

Mr. Daniel M. Doyle was Chief Executive Officer until October 23, 1998 when
he left the Company. Under his employment contract he was entitled to an annual
salary of $800,000 and performance related bonuses. He also held share options
in the Company and his contract called for further annual grants of options
during its term. The contract provided for set notice periods and amounts to be
paid in the event of a termination of the contract before its normal expiration.

During the year Mr. Doyle received a salary of $587,692 in respect of his
services through October 23, 1998. He did not receive a bonus as the financial
targets set by the Human Resources Committee had not been met. In addition, he
received directors fees of (pound)3,750 ($6,202).

Following his departure from the Company a dispute arose in relation to Mr.
Doyle's entitlements under his employment contract. The dispute was resolved
following the financial year end and an amount of $750,000 was paid to Mr. Doyle
in full and final settlement of any and all claims he might have against the
Company.

OTHER NAMED EXECUTIVE OFFICERS

Messrs. Merriman, Wolfinger and Berg also entered similar arrangements
during the year which were designed to be consistent with the Company's
compensation philosophy, and in addition, were designed to incentivise these
individuals and ensure their retention at a time when the financial situation of
the Company was particularly challenging.

Subsequent to the year end, on July 9, 1999 Mr. Merriman was appointed to
the Board of Directors and became President and Chief Operating Officer of Danka
worldwide.

As noted above, Mr. David C. Snell retired from the Company at the Annual
General Meeting. During the financial year he received a base salary but no
bonus as the financial targets set by the Human Resources Committee had not been
met.

The members of the Human Resources Committee are currently Keith J.
Merrifield, Richard C. Lappin and C. Anthony Wainwright.

Signed on Behalf of the Human Resources Committee by Keith J. Merrifield

20
<PAGE> 26

COMPENSATION OF NAMED EXECUTIVE OFFICERS AND DIRECTORS

The following table provides information concerning the annual and long-term
compensation for services rendered in all capacities to the Company for the last
three (3) fiscal years for each of the two persons who served as Chief Executive
Officer during fiscal 1999 and the other four most highly compensated Named
Executive Officers.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------------------------- -------------------
NAME AND FISCAL OTHER ANNUAL NUMBER OF ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) OPTIONS/SARS(2) COMPENSATION
------------------ ------ -------------- -------------- ---------------- ------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Larry K. Switzer,(3)
Chief Executive
Officer.................... 1999 $ 328,846 $ 850,000 $ 7,235 4,000,000/4,320,000 --
Martin G. St. Quinton,
Chief Executive, Danka
International.............. 1999 (pound)290,000 (pound)337,500 -- 200,000/-- (pound)70,587(5)
1998 (pound)200,000 (pound)500,000(4) -- 110,000/-- (pound)34,817(5)
1997 (pound)210,000 (pound)325,000 -- 80,000/-- (pound)41,422(5)
Brian L. Merriman,(6)
President and Chief
Operating Officer.......... 1999 $ 400,126 $ 557,000 -- 3,340,000/3,000,000 $119,000(7)
F. Mark Wolfinger,(8)
Executive Vice President
and Chief Financial
Officer.................... 1999 $ 228,462 $ 617,500 -- 2,280,000/2,000,000 $174,000(9)
David P. Berg,(10)
Executive Vice President
and General Counsel........ 1999 $ 246,154 $ 370,400 -- 1,000,000/1,000,000 $ 6,413(11)
Daniel M. Doyle,(12)
Chief Executive Officer.... 1999 $ 587,692 -- $ 6,202 --/-- $807,979(13)
1998 $ 795,000 -- $12,310 400,000/-- $ 63,716(13)
1997 $ 630,000 -- $11,900 180,000/-- $121,846(13)
</TABLE>

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

(1) The amounts listed represent sums received as Director fees.
(2) Options are granted to acquire either Ordinary Shares or American
Depositary Shares ("ADS") depending on where the individual is resident.
Each ADS represents four Ordinary Shares. All numbers shown represent
Ordinary Shares or the equivalent number of Ordinary Shares based on the
4:1 ratio. All options were granted at the fair market value of the
underlying Ordinary Shares or ADSs on the date of the grant. All stock
appreciation rights ("SARs") have been granted in the form of ADSs and
shown here as the equivalent Ordinary Shares.
(3) Mr. Switzer commenced serving as a Named Executive Officer in September
1998 upon joining the Company. Mr. Switzer was appointed Chief Executive
Officer in October 1998.

(4) Includes (pound)410,000 which was not reported in the Company's 1998 Proxy
Statement, as such amount, which related to fiscal 1998, was not
established and paid until after the Company filed its 1998 Proxy Statement
with the Securities and Exchange Commission.

(5) Mr. St. Quinton's other compensation consists of Company pension
contributions and automobile allowances.
(6) Mr. Merriman commenced serving as a Named Executive Officer in July 1998
upon joining the Company.
(7) Mr. Merriman's other compensation represents relocation reimbursements.
(8) Mr. Wolfinger commenced serving as a Named Executive Officer in August 1998
upon joining the Company.

21
<PAGE> 27

(9) Mr. Wolfinger's other compensation represents relocation reimbursements.
(10) Mr. Berg commenced serving as a Named Executive Officer in fiscal 1999.
(11) Mr. Berg's other compensation consists of a Company matching contribution
to the Company's 401(k) plan of $3,440 and $2,973 of above-market interest
earned on deferred compensation arrangements.
(12) Mr. Doyle resigned as Director and Chief Executive Officer of the Company
in October 1998.
(13) Includes net premiums of $41,855 in each year paid by the Company as
advances under a $3,000,000 split-dollar term life insurance agreement on
behalf of Daniel M. Doyle for the benefit of beneficiaries designated by
Mr. Doyle. Also includes Company matching contributions to the 401(k) plan
of $2,288, $9,228, and $6,296 in fiscal 1999, 1998 and 1997, respectively.
Fiscal 1999, 1998 and 1997 also include $13,836, $12,633 and $13,695,
respectively of above-market interest earned on deferred compensation
arrangement. Fiscal 1999 also includes $750,000 for a full and final
settlement which related to a dispute that arose in relation to Mr. Doyle's
entitlements under his employment contract. Fiscal 1997 also includes
Company contribution of $60,000 to the Supplemental Executive Retirement
Plan.

SHARE OPTION PLANS

The Company has options outstanding under its Share Option Plans. Options
granted are for the right to acquire Ordinary Shares or ADSs. The following
table provides information concerning options issued under the Company's Share
Option Plans, and stock appreciation rights ("SARs") granted to the Named
Executive Officers during fiscal 1999.

OPTION/SAR GRANTS IN FISCAL 1999

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------------------------------- AT ASSUMED ANNUAL RATES
% OF TOTAL OF SHARE PRICE
OPTIONS/SARS EXERCISE APPRECIATION
NUMBER OF GRANTED TO OR BASE FOR OPTION/SAR TERM(3)
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME GRANTED(1) FISCAL 1999 ($/SHARE)(2) DATE 5% 10%
- ---- ------------------- ------------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Larry K. Switzer......... 320,000/--(4) 2.3%/-- $1.64 09/10/2008 $ 346,144 $ 877,196
3,680,000/--(5) 25.9%/-- $1.30 02/19/2009 $3,037,561 $7,697,776
--/320,000(6) --/3.1% $1.28 02/19/2009 $ 257,847 $ 653,434
--/4,000,000(6) --/38.7% $0.20 02/19/2009 $ 812,500(6) --
Martin G. St. Quinton.... 200,000/--(4) 1.4%/-- $2.06 08/18/2008 $ 258,834 $ 655,937
Brian L. Merriman........ 340,000/--(4) 2.4%/-- $1.64 09/10/2008 $ 367,778 $ 932,021
3,000,000/--(5) 21.1%/-- $1.30 02/19/2009 $2,476,273 $6,275,361
--/3,000,000(7) --/29.1% $0.20 02/19/2009 $ 609,375(7) --
F. Mark Wolfinger........ 280,000/--(4) 2.0%/-- $1.64 09/10/2008 $ 302,876 $ 767,546
2,000,000/--(5) 14.1%/-- $1.30 02/19/2009 $1,650,848 $4,183,574
--/2,000,000(8) --/19.4% $0.20 02/19/2009 $ 406,250(8) --
David P. Berg............ 1,000,000/--(5) 7.0%/-- $1.30 02/19/2009 $ 825,424 $2,091,787
--/1,000,000(9) --/9.7% $0.20 02/19/2009 $ 203,125(9) --
Daniel M. Doyle(10)...... -- -- -- -- -- --
</TABLE>

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

(1) The options granted are for Ordinary Shares, or the Ordinary Share
equivalent number in the case of ADSs.

(2) The exercise or base price is reflected in U.S. dollars using the Noon
Buying Rate conversion rate of (pound)1.00 = $1.614 on March 31, 1999.

(3) The U.S. dollar amounts under these columns are the result of calculations
at 5% and 10% which reflect rates of potential appreciation set by the
Securities and Exchange Commission and therefore are not intended to
forecast possible future appreciation, if any, of the Company's Ordinary
Share or ADS price. The Company's stock options and stock appreciation
rights ("SARs") are granted with a pence per Ordinary Share or U.S. dollar
per ADS exercise price. The U.S. dollar appreciation is calculated using
the March 31, 1999 Noon Buying Rate of (pound)1.00 = $1.614.

(4) Options vest in three (3) equal annual installments beginning after the
first anniversary date.

22
<PAGE> 28

(5) Options vest in three (3) equal annual installments beginning after the
first anniversary date, subject to acceleration based on certain targets
measured by the price of the Company's ADSs trading on Nasdaq.
(6) Mr. Switzer received two grants of SARs in the form of ADSs during fiscal
1999. The value of the first grant, 80,000 ADSs (equivalent of 320,000
Ordinary Shares), has not yet crystallized. Refer to the Report of the
Human Resources Committee for details. Mr. Switzer was granted an
additional 1,000,000 ADS SAR's (equivalent of 4,000,000 Ordinary Shares)
under which the value has already been determined at $812,500. The value is
based on the appreciation ($0.8125 per ADS) of the Company's share price
between $4.3125, the market price of the ADSs on January 14, 1999, and
$5.125, the closing price on February 19, 1999 multiplied by 1,000,000.
This payment is available in pro-rata tranches at the time his options are
exercised to acquire the 920,000 ADSs (equivalent of 3,680,000 Ordinary
Shares) granted on February 19, 1999.
(7) Mr. Merriman was granted 750,000 ADS SARs (equivalent of 3,000,000 Ordinary
Shares) under which the value has already been determined at $609,375. The
value is based on the appreciation ($0.8125 per ADS) of the Company's share
price between $4.3125, the market price of the ADSs on January 14, 1999,
and $5.125, the closing price on February 19, 1999 multiplied by 750,000.
This payment is available in pro-rata tranches at the time his options are
exercised to acquire the 750,000 ADSs (equivalent of 3,000,000 Ordinary
Shares) granted on February 19, 1999.
(8) Mr. Wolfinger was granted 500,000 ADS SARs (equivalent of 2,000,000
Ordinary Shares) under which the value has already been determined at
$406,250. The value is based on the appreciation ($0.8125 per ADS) of the
Company's share price between $4.3125, the market price of the ADSs on
January 14, 1999, and $5.125, the closing price on February 19, 1999
multiplied by 500,000. This payment is available in pro-rata tranches at
the time his options are exercised to acquire the 500,000 ADSs (equivalent
of 2,000,000 Ordinary Shares) granted on February 19, 1999.
(9) Mr. Berg was granted 250,000 ADS SARs (equivalent of 1,000,000 Ordinary
Shares) under which the value has already been determined at $203,125. The
value is based on the appreciation ($0.8125 per ADS) of the Company's share
price between $4.3125, the market price of the ADSs on January 14, 1999,
and $5.125, the closing price on February 19, 1999 multiplied by 250,000.
This payment is available in pro-rata tranches at the time his options are
exercised to acquire the 250,000 ADSs (equivalent of 1,000,000 Ordinary
Shares) granted on February 19, 1999.
(10) Mr. Doyle resigned as Director and Chief Executive Officer of the Company
in October 1998.

23
<PAGE> 29

The following table provides detailed information concerning aggregate share
option/stock appreciation rights ("SARs") exercises in fiscal 1999 and share
option/SAR values at the end of fiscal 1999 for unexercised share options/SARs
held by each of the Named Executive Officers.

AGGREGATED OPTIONS/SARS EXERCISED IN FISCAL 1999
AND FISCAL YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ORDINARY SHARES OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
ACQUIRED ON VALUE AT FISCAL YEAR-END AT FISCAL YEAR-END
NAME EXERCISE(1) REALIZED EXERCISABLE/UNEXERCISABLE(1) EXERCISABLE/UNEXERCISABLE
---- --------------- -------- ---------------------------- -------------------------
<S> <C> <C> <C> <C>
Larry K. Switzer............. -- -- --/4,000,000 --/--
-- -- --/4,320,000(2) --/$812,500
Martin St. Quinton........... -- -- 416,666/390,000 --/--
Brian L. Merriman............ -- -- --/3,340,000 --/--
-- -- --/3,000,000(2) --/$609,375
F. Mark Wolfinger............ -- -- --/2,280,000 --/--
-- -- --/2,000,000(2) --/$406,250
David P. Berg................ -- -- --/1,050,000 --/--
-- -- --/1,000,000(2) --/$203,125
Daniel M. Doyle(3)........... -- -- --/-- --/--
</TABLE>

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

(1) The options granted are for Ordinary Shares or the Ordinary Share equivalent
of ADSs and were granted at the fair market value underlying the Ordinary
Shares or ADSs on the date of the grant.
(2) Represents stock appreciation rights ("SARs") granted during fiscal 1999.
(3) Mr. Doyle resigned as Director and Chief Executive Officer of the Company in
October 1998.

COMPENSATION OF DIRECTORS

The Company entered into an agreement with David W. Kendall with effect from
his appointment as Chairman on October 23, 1998. The agreement provides for
annual remuneration of (pound)125,000 and is terminable on six months notice.

Each non-employee Director of the Company, other than David W. Kendall,
received the following compensation. Each was paid the equivalent of an annual
sum of (pound)7,500 for fiscal 1999. If a non-employee Director is a member of
sub- committees of the Board of Directors, he is eligible to receive a further
(pound)22,500. Each non-employee Director of the Company will be paid the same
annual sum for fiscal 2000. Each Director also serving as an executive officer
received the equivalent of (pound)7,500 in Directors' fees for fiscal 1999 and
will receive the equivalent of (pound)7,500 for fiscal 2000. Additionally, each
non-employee Director receives the equivalent of (pound)750 for each day in
which a Board of Directors or committee meeting is attended and is reimbursed
for expenses in connection with such attendance. However, in the case of the
chairman of a committee, a daily allowance of (pound)1,000 is given. In
addition, each non-employee Director receives an allowance of (pound)250 in
respect of each participation in a telephone conference call constituting a
meeting of the board or any of its sub-committees.

NON-EMPLOYEE, INDEPENDENT ("NON EXECUTIVE") DIRECTORS

Compensation payable to the non-employee Directors is determined by the
executive members of the board and is reviewed annually. Emoluments comprise a
fee together with an additional allowance as noted above.

HUMAN RESOURCES COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Company's Human Resources Committee in fiscal 1999 were
Messrs. Kendall, Merrifield and Riddle. Neither Mr. Kendall, Mr. Merrifield nor
Mr. Riddle has at any time been an Executive Officer of the Company. There were
no Human Resources Committee interlocks or insider participation in compensation
decisions in fiscal 1999.

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<PAGE> 30

PERFORMANCE GRAPH

COMPARISON OF FIVE (5) YEAR CUMULATIVE TOTAL RETURN* AMONG DANKA BUSINESS
SYSTEMS PLC,** S&P 500 INDEX AND S&P OFFICE EQUIPMENT AND SUPPLIES INDEX

<TABLE>
<CAPTION>
DANKA BUSINESS SYSTEMS S&P OFFICE EQUIPMENT &
PLC S&P 500 SUPPLIES
---------------------- ------- ----------------------
<S> <C> <C> <C>
1994 $ 100 $ 100 $ 100
1995 135 116 116
1996 218 153 142
1997 163 183 191
1998 96 271 304
1999 26 321 372
</TABLE>

Assumes $100 invested on April 1, 1994 in Danka Business Systems PLC, S&P
500 Index and S&P Office Equipment and Supplies Index. Comparison is made for
the five (5) year period from March 31, 1994 to March 31, 1999, with the base
measurement point fixed at the close of trading on March 31, 1994. The Company's
fiscal year ends on March 31.
* Total return assumes reinvestment of any dividends for all companies
considered within the comparison and is based on the current four-to-one
ratio of Ordinary Shares to each ADS.
** Assumes investment in the Company's ADSs traded on the NASDAQ National
Market.
Note: The performance shown on the graph above is not necessarily indicative of
future Ordinary Share or ADS price performance.

25
<PAGE> 31

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information set forth herein briefly describes certain relationships and
transactions between the Company and affiliated parties. Management of the
Company believes that such relationships and transactions have been established
on terms no less favorable to the Company than those that could have been
obtained from unaffiliated parties. These relationships and transactions have
been approved by a majority of the Company's independent outside Directors (and
the Audit Committee since its creation). Future relationships and transactions,
if any, with affiliated parties will be approved by a majority of the Company's
independent outside Directors and the Audit Committee and will be on terms no
less favorable to the Company than those that could be obtained from
unaffiliated parties.

The Company occupies its principal business headquarters in St. Petersburg,
Florida under a lease dated December 22, 1986 between Danka Industries, Inc.,
now known as Danka Holding Company, and Daniel M. Doyle, a former Director and
Chief Executive of the Company, and Frances J. McPeak, Jr., a previous
shareholder of Danka Holding Company. Mr. Doyle resigned October 1998. The lease
was assigned from the individuals on March 1, 1987, to Mid-County Investments,
Inc., a Florida corporation of which Mr. Doyle is a fifty percent (50%)
shareholder. An Addendum to the Lease Agreement was entered into on September 1,
1992, extending the lease term until December 31, 2003 and providing for a
rental of $580,000 per annum. Danka Holding Company's payments made under the
lease for fiscal 1999 amounted to $580,000. The aggregate sum owed for the
remainder of the lease was approximately $2,753,000 as of March 31, 1999. An
amount of $36,000 has been deposited with the landlord as security for the
performance by Danka Holding Company of its obligations under the lease.
Additionally, since 1987, the Company has had a contingent liability for a
guarantee by Danka Holding Company for the financing of the building by Mr.
Doyle and Mr. McPeak. Danka Holding Company's contingent liability for repayment
in the event of a default of the obligation totaled $485,000 as of March 31,
1999. Further, Danka Holding Company leases two other offices from Mr. Doyle and
Mr. McPeak. The aggregate rent (including tax) paid by Danka Holding Company on
these leases during fiscal 1999 was $141,000. In addition, the Company paid
approximately $2.1 million to a real estate services Company whose former
president is related to Mr. Doyle.

On January 1, 1996, Director James F. White, Jr. became of counsel to the
law firm of Shumaker, Loop & Kendrick, LLP, which has served as outside Counsel
to the Company since 1993.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the 1934 Act requires the Company's Directors, officers and
holders of more than ten percent (10%) of the Company's Ordinary Shares to file
with the SEC initial reports of ownership and reports of changes in ownership of
Ordinary Shares and any other equity securities of the Company. To the Company's
knowledge, based solely upon a review of the forms, reports and certificates
filed with the Company by such persons, all such Section 16(a) filing
requirements were complied with by such persons in fiscal 1999.

CHANGE OF CONTROL AGREEMENTS

In November 1998, the Company entered into change of control agreements
("Change of Control Agreements") with certain executives of the Company and its
subsidiaries, including each of the following Named Executive Officers: Messrs.
Switzer, Merriman, Wolfinger and Berg. Under each Change of Control Agreement,
if the executive's employment with the Company is terminated without "Cause,"
other than due to death, "Disability," or "Retirement" (each as defined in each
Change of Control Agreement) or the executive terminates his employment for
"Good Reason" (which includes adverse changes in the executive's status or
position, decrease in base salary, relocation, or the Company's failure to
continue in effect any compensation or benefit plan), in either case within two
years after a "Change of Control," the executive shall be entitled to receive
certain benefits, including the immediate vesting and exercisability of his
stock options for three years after termination.

The severance benefits to which the executive would be entitled include (i)
a lump-sum cash payment in an amount equal to two (2) times such executive's
"Base Salary" (Mr. Merriman would be entitled to a lump-sum payment equal to

26
<PAGE> 32

three (3) times his "Base Salary") (for purposes of the Change of Control
Agreements, "Base Salary" is defined as the executive's base salary at the time
of the Change of Control or time of the termination of the executive's
employment, whichever is greater), (ii) a pro rata annual bonus for the fiscal
year of termination calculated as if the Company's financial performance targets
for such fiscal year were deemed to be satisfied at the level equal the
performance achieved through the date of termination or, if greater, the pro
rata amount of any performance bonus the executive is guaranteed to receive for
such fiscal year, (iii) an amount equal to two (2) times the annual bonus for
the fiscal year of termination calculated as if the Company's financial
performance targets for such fiscal year were deemed to be satisfied at the
level equal the performance achieved through the date of termination (Mr.
Merriman would be entitled to an amount equal to three (3) times such an annual
bonus) or, if greater, any performance bonus the executive is guaranteed to
receive for such fiscal year and (iv) continued coverage under the Company's
welfare plans for up to 24 months. If the severance benefits are paid in
connection with a Change of Control, the Change of Control Agreements provide
for these employees to be made whole for any federal excise taxes imposed on
payments that constitute excess "golden parachute payments."

"Change of Control" for purposes of the Change of Control Agreements will be
deemed to have occurred at such time as (i) any person or group unaffiliated
with the Company acquires pursuant to certain general offers, a tender offer or
an exchange offer securities representing more than 30 percent of the combined
voting power of the Company; (ii) a merger or consolidation involving the
Company is consummated and results in less than 50 percent of the outstanding
voting securities of the surviving or resulting entity being owned by the then
existing stockholders of the Company; (iii) the Company sells substantially all
of its assets (or substantially all of the assets of Danka Holding Company) to a
person or entity which is not a wholly-owned subsidiary of the Company or any of
its affiliates; or (iv) during any period of two consecutive years, individuals
who, at the beginning of such period, constituted the Board of Directors of the
Company cease, for any reason, to constitute at least a majority of the Board of
Directors, unless the election or nomination for election for each new Director
was approved by the vote of at least two-thirds of the Directors then still in
office who were Directors at the beginning of such two-year period.

EMPLOYMENT AGREEMENTS

In August 1998, the Company entered into employment agreements ("Employment
Agreements") with each of Messrs. Switzer, Merriman and Wolfinger. The
Employment Agreements with Messrs. Switzer, Merriman and Wolfinger provide for,
respectively (i) annual base salaries of $500,000, $650,000 and $360,000, (ii)
annual target bonuses based on individual and corporate performance of up to
$250,000, $250,000 and $180,000, and (iii) eligibility for additional "stretch"
bonuses based on certain corporate objectives of up to $200,000, $100,000 and
$180,000. For the Company's 1999 fiscal year, Messrs. Switzer and Wolfinger were
guaranteed bonuses of $250,000 and $112,500, respectively, and for the first
year of his Employment Agreement, Mr. Merriman was guaranteed a bonus of
$100,000. In connection with benefits forgone at their previous employers,
Messrs. Switzer, Merriman and Wolfinger were paid one-time bonuses of $200,000,
$132,000 and $280,000, respectively. Mr. Merriman's Employment Agreement
provided him with a grant of options for 340,000 Ordinary Shares (equal to
85,000 ADSs) upon his employment, with one-third of such options vesting on each
of the three anniversaries the date of grant, and provides him with annual
grants, subject to the approval of the Board of Directors, of options for 80,000
Ordinary Shares (equal to 20,000 ADSs). Mr. Wolfinger's Employment Agreement
provided him with a grant of options for 280,000 Ordinary Shares (equal to
70,000 ADSs) upon his employment and a grant on or before March 31, 1999,
subject to the approval of the Board of Directors, for an additional 120,000
Ordinary Shares (equal to 30,000 ADSs). Messrs. Merriman's and Wolfinger's
Employment Agreements provide that they are entitled to a company car and
airline club membership. Mr. Merriman also receives $15,000 in premiums for a
life insurance policy.

The initial term of the Employment Agreements for Messrs. Merriman and
Wolfinger expire on August 1, 2001, the term of Mr. Switzer's Employment
Agreement expires on August 28, 2000, but each are subject to automatic one year
renewals. See reference below for new employment agreements with Mssrs. Switzer
and Merriman. In the event that an executive's employment is terminated (other
than by reason of death of the executive or for cause by the Company), the
Employment Agreements provide that the Company shall continue to pay the
executive his then-current base salary and continue his benefits for either (i)
the remainder of the initial term of his Employment Agreement, if the executive
was

27
<PAGE> 33

terminated during the initial term of his Employment Agreement, or (ii) twelve
months, if such executive was terminated after the initial term of his
Employment Agreement. Such severance payments are conditioned on the executive
providing a general release and waiver of the Company and its affiliates.
Following the termination of their employment, the executives would be required
to comply with certain non-compete and confidentiality provisions for a period
of one year (but Mr. Merriman's Employment Agreement only requires his
compliance with non-compete and confidentiality provisions for a period of six
months).

In February 1999, the Company entered into modifications of the Employment
Agreements with each of Messrs. Switzer, Merriman, Wolfinger and Berg. The
modified Employment Agreements provide (i) an increase in Mr. Switzer's annual
base salary from $500,000 to $800,000, an increase Mr. Wolfinger's annual base
salary from $360,000 to $450,000 and an increase in Mr. Berg's annual salary
from $250,000 to $325,000, (ii) increases in potential target bonuses for each
of Messrs. Switzer, Merriman, Wolfinger and Berg to up to 100% of his
then-current base salary, and (iii) grants to Messrs. Switzer, Merriman,
Wolfinger and Berg, respectively, of options for 1,000,000, 750,000, 500,000 and
250,000 ADSs, with such options having a term of ten years and being exercisable
in three equal tranches. Options with respect to the first one-third tranche
became exercisable on June 4, 1999 when the price of the Company's ADSs had
reached $7.50. The second one-third tranche of options may be exercised on the
first to occur of either the second anniversary of their date of grant or the
date on which the price of the Company's ADSs reaches $12.50 but in any event
not before the first anniversary of the date of grant. Similarly, the third
tranche of options may be exercised on the first to occur of either the third
anniversary of their date of grant or the date on which the price of the
Company's ADSs reaches $20.00 but in any event not before the second anniversary
of the date of grant. The modified Employment Agreement further provide stock
appreciation rights to each executive in an amount equal to the product of (i)
the number of options for ADSs provided to such executive, i.e., 1,000,000,
750,000, 500,000 and 250,000 for Messrs. Switzer, Merriman, Wolfinger and Berg,
respectively, and (ii) the lesser of (a) $2.00 and (b) the excess over $4.3125
of the price of an ADS, with the value of such stock appreciation rights to be
calculated and paid at such times as and in the such proportions as the
executive exercises his options for ADSs. For example, if Mr. Wolfinger
exercises options with respect to 50,000 ADSs (10% of his 500,000 options for
ADSs), then 10% of the value of his stock appreciation rights shall be
calculated and paid at the time of such option exercise.

In addition, the employment agreements of Mssrs. Switzer, Merriman,
Wolfinger and Berg entitle each to severance benefits, which shall be paid in
one lump sum and shall not be less than the aggregate of twelve months of base
compensation and the target bonus as outlined above.

Following the 1999 fiscal year end, the Company entered into new employment
agreements with Mr. Switzer and Mr. Merriman. The new agreements set forth the
terms of Mr. Switzer and Mr. Merriman's employment arrangement with the Company,
including salary, bonuses ad other benefits and perquisites through August 31,
2002. The agreement also provides, among other things, certain enhanced
severance benefits including the vesting of options in certain circumstances as
well as certain cash payments. Also included in the new agreements were
provisions for notice of termination and more restrictive non-compete covenants.

28
<PAGE> 34

SHAREHOLDERS PROPOSALS FOR
PRESENTATION AT THE 2000 ANNUAL GENERAL MEETING

If a Holder of Ordinary Shares desires to present a proposal for action at
the Annual General Meeting to be held in 2000, and such proposal conforms to the
laws of the United Kingdom, such proposal must be received by the Company by May
1, 2000 to be included in the Company's Proxy Statement and proxy for such 2000
meeting.

If a Holder of American Depositary Shares desires to present a proposal for
action at the Annual General Meeting to be held in 2000, and such proposal
conforms to the rules and regulations of the SEC and is in accordance with other
U.S. federal laws, such proposal must be received by the Company by April 20,
2000 to be included in the Company's Proxy Statement and proxy for such 2000
meeting.

By Order of the Board of Directors

/s/ Paul G. Dumond
Paul G. Dumond,
Company Secretary

Dated: September 24, 1999

29
<PAGE> 35

APPENDIX A

SUMMARY OF THE DANKA 401(K) PROFIT SHARING PLAN

The Plan has been approved by the U.S. Internal Revenue Service. The Plan
consists of a Trust (to hold Plan investments) which has an independent trustee,
currently Merrill Lynch Trust Company.

U.S. Employees who have completed three months' employment are eligible to
join the Plan on the first day of the calendar quarter (other than leased
employees, non-resident aliens, non-U.S. nationals working in the U.S. on
temporary assignments and employees who are under a collective bargaining
agreement).

An eligible employee can contribute between 2% and 15% of his pre-tax pay to
the Plan through payroll deductions. $10,000 is the maximum a participant can
contribute in 1999 and the maximum amount of pay that can be recognized is
$160,000. The employee can direct that his contributions are invested in one of
a variety of investment options, including the Company's ADSs.

Danka proposes to match employee contributions on the terms set out below.
Any matching contributions by Danka in future may, at the discretion of the
Company, be used to subscribe for Shares which will be converted into ADSs. Any
such subscriptions will take place monthly (but no Shares will be issued under
the Plan more than 10 years after the approval of this arrangement by
shareholders without further shareholder approval). The matching contribution
will be valued at the closing price on the last business day of each month.
Danka will match the first 3% of pay contributed on a dollar for dollar basis
and the next 3% of pay at 50 cents on the dollar. Employees will only receive
the Danka match if they have completed at least three months of service.

The Company contributions matching those made by employees from February
1999 will be used to subscribe for Shares, which will be converted to ADSs.
Participants are at liberty to direct that vested ADSs (as explained below) be
sold twice annually and the proceeds reinvested in one of a number of investment
choices.

"Vesting" means a participant will not be subject to forfeiture in respect
of funds held in a participant's account. A participant will be fully vested in
his own contributions. In the case of Danka matching contributions (including
ADSs purchased with such contributions), these will vest over a period of four
years (25% after one year, 50% after two years, 75% after three years). If a
participant leaves Danka before he is fully vested in Danka's matching
contributions, he will forfeit the unvested portion. The forfeited portion will
not be returned to Danka but will be held in the Plan and available to reduce
future matching contributions by Danka.

A participant is entitled to receive payment of the value of the funds
purchased with his contributions, and the vested proportion of Danka's matching
contributions, upon leaving Danka, for any reason at any age. The participant is
also entitled to receive his funds if he:

(a) retires early at aged 55 or older (but under 65) with at least ten
years of vesting service;

(b) retires at age 65;

(c) becomes permanently disabled with a physical or mental condition that
renders him incapable of gaining employment for at least 12 months;

(d) attains age 59 1/2, even if still employed by Danka.

In the event of death, the vested value of the account will be paid to the
beneficiary.

30
<PAGE> 36

A participant in active employment can borrow from his vested account. The
amount of the loan cannot exceed the lower of 50% of the total vested account
balance or $50,000 minus the highest loan account balance during the year before
the loan was requested.

The provisions relating to the persons who are eligible to participate, the
limit on employee and matching contributions, the issue of Shares and the issue
price, and the basis for determining a participant's entitlement to a payment
from the Plan cannot be altered to the advantage of participants without the
prior approval of shareholders in general meeting (except for minor amendments
to benefit administration of the Plan, to take account of a change in
legislation or to obtain or maintain favorable tax, exchange control or
regulatory treatment for the participants in the Plan or the Company or any
other group company).

The contributions into the Plan purchase investments under the Plan, but do
not attract any separate pensionable rights.

The above summarizes the main features of the Plan, but does not form part
of it and shall not be taken as affecting the interpretation of its detailed
Plan Document or the Trust Agreement. A copy of the full Plan Document and the
Trust Agreement will be available for inspection at the offices of the Company's
solicitors, Clifford Chance, 200 Aldersgate Street, London EC1A 4JJ during
normal business hours on weekdays (Saturdays and Public Holidays excepted) up to
the date of the Annual General Meeting and at the Meeting itself.

31
<PAGE> 37

APPENDIX B

DANKA BUSINESS SYSTEMS PUBLIC LIMITED COMPANY
RULES OF THE 1999 SHARE OPTION PLAN

PART A: UNAPPROVED OPTIONS

1. CONSTRUCTION

1.1 These Rules shall be construed and take effect in accordance with the law
of England and Wales and the courts of England and Wales shall be the
exclusive forum for the administration hereof.

1.2 Reference to any Act of the United Kingdom shall include any statutory
modification amendment or re-enactment thereof from time to time in force
unless the contrary is expressly stated.

1.3 References to the exercise of an option shall where the context allows
include the partial exercise of the option.

1.4 Where the context so admits the singular shall include the plural and
vice versa and the masculine gender shall include the feminine.

1.5 In these Rules a word or words beginning with capital letters indicates a
term which has been defined in Rule 2.

2. DEFINITIONS

In these Rules the following words and expressions have the following
meanings:-

2.1 "Acquiring Person" Any person who:-

(a) either alone or together with any person
acting in concert with him has obtained
Control of the Company either:-

(i) as a result of making a Takeover
Offer; or

(ii) in pursuance of a Compromise; or

(b) 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

2.2 "Appropriate Period" In relation to:-

(a) a Takeover Offer means the period beginning
with the date on which the person making
the Takeover Offer has obtained Control of
the Company and ending on the expiry of a
period of six months or when any condition
subject to which the Takeover Offer is made
is satisfied (whichever is the later);

(b) an Acquiring Person who obtains Control or
who having Control of the Company makes a
general offer for the whole of the issued
share capital means the period of six
months beginning with the date on which the
Acquiring Person obtains Control or makes
the offer as the case may be;

32
<PAGE> 38

(d) a Section 429 Notice means the period
during which the Acquiring Person is
entitled and bound to acquire shares on the
terms of the offer contained in such
Section 429 Notice.

2.3 "American Depositary
Share" means 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 Stock Market's
National Market.

2.4 "The 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 depositary for its
American Depositary Shares.

2.5 "The Committee" means a duly authorized committee of the Board
of Directors of the Company consisting wholly
of directors of the Company who are outside
directors within the meaning of the Internal
Revenue Service Regulations 1.162-27(e)(3) and
"disinterested persons" within the meaning of
US Securities and Exchange Commission Rule
16b-3(c)(i).

2.6 "The Company" means Danka Business Systems Public Limited
Company.

2.7 "Compromise" in relation to the Company means a compromise
or arrangement sanctioned by the Court under
section 425 of the Companies Act 1985.

2.8 "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.

2.9 "Date of Grant" means the date on which an option is granted
under the Plan in accordance with the
provisions of Rule 5.

2.10 "Exercise Period" in relation to an option means the period
beginning when the option first becomes
exercisable under the provisions of Rule 7.2(c)
(or, as the case may be, Rule 5.5) and ending
on the tenth anniversary of the Date of Grant
of the option (or such other shorter period as
the Committee may have determined before the
grant thereof).

2.11 "Exercise Price" on exercise of an option means the Option Price
multiplied by the number of shares in respect
of which such option is exercised.

2.12 "The Group" means the Company and the Subsidiaries and
"member of the Group" shall be construed
accordingly.

2.13 "Market Value" means, with respect to American Depositary
Shares, an amount equal to the average of the
high and low reported sales prices of an
American Depositary Share on the Nasdaq Stock
Market's National 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

33
<PAGE> 39

Stock Exchange Limited Daily Official List on
the date for which market value is being
determined.

2.14 "Non-Qualifying Option" means an option which is not a Qualifying
Option.

2.15 "Option-Holder" Any person who holds an option granted under
the Plan or (where the context admits) his
personal representatives.

2.16 "Option Price" means (save as provided in Rule 13) the Market
Value of an American Depositary Share or an
Ordinary Share, as applicable, on the Date of
Grant of the option.

2.17 "Option Roll-Over" in relation to an option means a release by the
Option-holder with the consent of an Acquiring
Person of his rights ("old rights") under the
Plan in consideration of the grant to him of
rights ("new rights") which are equivalent to
the old rights but which relate to shares in:-

(a) the Acquiring Person; or

(b) a company which has Control of the
Acquiring Person; or

(i) is a member of a consortium owning
either the Acquiring Person or a
company having Control of the
Acquiring Person; and

(ii) beneficially owns not less than three
twentieths of the ordinary share
capital of the Acquiring Person or
a company having control of the
company.

2.18 "Ordinary Share" means a fully paid ordinary share of 1.25p each
in the capital of the Company.

2.19 "Participating Employee" means any employee, officer or executive
director for the time being holding employment
in or with any member of the Group and who is
nominated to participate in the Plan by the
Committee.

2.20 "The Plan" means the 1999 Share Option Plan of the Company
set out herein, as amended from time to time.

2.21 "Qualifying Option" means an option which qualifies as an incentive
stock option within the meaning of section 422
of the Internal Revenue Code of the United
States.

2.22 "Rolled Over" means the action of effecting an Option
Roll-over or its completion.

2.23 "Section 429 Notice" means 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).

2.24 "The Subsidiaries" means subsidiaries as defined by section 736 of
the Companies Act 1985 of the Company.

2.25 "Takeover Offer" in relation to the Company means either:-

(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 Com-

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<PAGE> 40

pany or which results in the person making
the offer having control of the Company; or

(b) a general offer to acquire all the shares
in the Company of the same class as the
Ordinary Shares.

2.26 "The Trustees" means the trustee or trustees for the time
being of the Danka Employees' Share Trust.

3. PURPOSE

Part A of this 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 shareholders and increasing the ability of
the Company to attract and retain individuals of exceptional skill.

4. ELIGIBILITY

No Participating Employee shall be granted an option under Part A of this
Plan unless at the time of the grant he is an employee, officer, or
executive director of the Company or a Subsidiary.

5. GRANT OF OPTIONS

5.1 Subject to statutory restrictions and to the Rules of this Plan, the
Committee may grant options to acquire Ordinary Shares in the Company (or
the American Depositary Share equivalent), and for this purpose an option
to acquire includes an option to purchase and an option to subscribe.

5.2 No option shall be granted in contravention of relevant insider dealing
laws and regulations.

5.3 All options shall be granted by a certificate under seal specifying the
Date of Grant, the number of shares which are the subject of the option,
whether the option is over American Depositary Shares or Ordinary Shares,
the Option Price and the Exercise Period.

5.4 These Rules apply to all grants of options made under the Plan and no
options shall be granted under the Plan more than ten years after the Plan
is adopted and approved by the shareholders of the Company in general
meeting.

5.5 In granting any option the Committee may in its discretion impose any
objective conditions and limitations (additional to or in place of any
conditions and limitations contained in any other of these Rules) upon the
exercise of such option, provided that such additional or alternative
objective conditions and limitations shall

(i) be set out in full in, or details thereof be given with, the
certificate under seal granting the option;

(ii) be such that rights to exercise such option after the fulfilment or
attainment of any conditions and/or limitations so specified shall
not be dependent upon the further discretion of the Committee or any
person; and

(iii) not be capable of amendment or waiver unless events occur which, in
the opinion of the Committee, cause those conditions and/or
limitations to have ceased to be appropriate.

Any amendment to the terms of an option pursuant to this Rule 5.5
shall be reasonably made by the Committee imposing such conditions
or limitations which in its opinion are more appropriate and, so
far as is reasonably practicable, are equivalent to those
conditions and/or limitations originally imposed.

6. LIMITS

6.1 The total number of shares in the Company which may be issued under the
Plan, whether in the form of American Depositary Shares or Ordinary
Shares, shall not exceed the equivalent of 12,000,000 Ordinary Shares
and the total

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<PAGE> 41

number of American Depositary Shares or Ordinary Shares over which options
may be granted under this Plan during any five consecutive financial years
of the Company to any person shall not exceed the equivalent of 4,000,000
Ordinary Shares, subject to the provisions of Rule 5.4.

6.2 No options shall be granted under the Plan which would, at the time they
are granted, cause the number of American Depositary Shares or Ordinary
Shares which shall have been or may be issued in pursuance of options
granted in the period of 10 years ending at that time under the Plan to
exceed such number as represents 5% of the ordinary share capital of the
Company in issue at that time.

7. TERMS OF OPTIONS

7.1 EXERCISE OF OPTIONS

Subject as provided in these Rules 7.1, 7.2 and 7.8, the option shall be
exercisable by an Option-holder in whole or in part at any time provided
always that a partial exercise of an option cannot be made except in
respect of shares which equal or exceed the lesser of 500 Ordinary Shares
or the American Depositary Share equivalent thereof and any exercisable
balance of shares remaining the subject of that option, and provided
further that the option shall lapse (and any notice in purported exercise
thereof shall have no effect) on cessation of the employment of the
Option-holder with the Group but so that:-

(a) an Option-holder ceasing to be employed by the Group by reason of:

(i) ill-health or injury or disability (evidenced to the satisfaction
of the Committee);

(ii) retirement in accordance with the provisions of any one of the
Group retirement plans relevant to that Option-holder; or

(iii) the Company by which the Option-holder is employed leaving the
Group or the business or part of a business for which the
Option-holder works being transferred to a person which is not a
member of the Group

in the case of all options, shall notwithstanding Rule 7.2(c) be
entitled to exercise the option within the period which shall expire
twelve months after the date of cessation and may notwithstanding Rule
7.2(c) be entitled to such extent and on such conditions as the
Committee shall in its absolute discretion determine to exercise the
option at such later date as the Committee, in its absolute
discretion, may decide, not exceeding three years. For the purposes of
this Rule 7.1(a) and (b) only (and for no other purposes), Exercise
Period means the period of one year from the date of cessation of
employment of the Option-holder with the Group or such longer period,
not to exceed three years, as the Committee shall in its absolute
discretion determine.

(b) The personal representative(s) of an Option-holder who has died while
employed by, or while serving as an officer or executive director of,
the Company or a Subsidiary, or the personal representative of an
Option-holder who has ceased to be an employee of the Group as the
result of a permanent and total disability as defined in Internal
Revenue Code section 22(e) shall, notwithstanding Rule 7.2(d) or any
conditions to be fulfilled in the future under Rule 7.2(c), be entitled
to exercise the option within twelve months of such Option-holder's
death or the date the Option-holder ceases to be employed by reason of
such disability, provided however, that no Exercise Period may extend
more than ten years after the Date of Grant.

(c) For the purposes of Rule 7.1 only (and for no other purpose) where an
Option-holder ceases to be employed by the Group for any reason not set
forth in Rule 7.1(a) or 7.1(b) where an Option-holder's employment by
virtue of which he is an Option-holder ceases without notice, the
Option-holder's employment shall be deemed to have ceased on a date
thirty (30) days (or such later date as the Committee in its absolute
discretion may decide, not exceeding three years) from the date on
which the termination takes effect, and where the said employment is
terminated with notice, the Option-holder's employment shall be deemed
to have ceased upon the later of the date specified in the notice or
thirty (30) days (or such later date as the Committee in its absolute
discretion may decide, not exceeding three years) from the date on
which that notice is given.

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<PAGE> 42

7.2 RESTRICTIONS ON EXERCISE OF OPTIONS PURSUANT TO RULE 7.1

Notwithstanding the provisions of Rule 7.1

(a) Subject to Rule 7.2(b), an option shall only be exercisable during the
Exercise Period (including as defined in Rule 7.1(a) for those
purposes, provided however that no Exercise Period may extend more
than 10 years after the Date of Grant) and to the extent not exercised
at the end of the Exercise Period the option shall terminate.

(b) An option shall, except as specifically provided otherwise pursuant to
Rule 5.5, be fully exercisable during the Exercise Period in
accordance with Rule 7.2(c)

(c) An option shall, except where exercised pursuant to Rule 7.1(a) or (b)
or Rule 9 or as specifically provided otherwise pursuant to Rule 5.5,
not be exercisable before the first anniversary of the Date of Grant
and shall, when added to the number of Ordinary Shares (or ADSs) in
respect of which the option has previously been exercised, not be
exercisable over more than one-third of the Ordinary Shares (or ADSs)
originally subject to the option on or after the first anniversary of
the Date of Grant and before the second anniversary of the Date of
Grant, more than two-thirds of the Ordinary Shares (or ADSs)
originally subject to the option before the third anniversary of the
Date of Grant and only exercisable in full on or after the third
anniversary of the Date of Grant. Where any adjustment has been made
under Rule 7.5 to any unexercised option rights, a corresponding
adjustment shall be assumed for this purpose to have been made to the
number of Ordinary Shares (or ADSs) subject to the option and to the
number of Ordinary Shares (or ADSs) in respect of which the option has
been previously exercised.

(d) An option shall not be exercisable until any additional (or
alternative) conditions and/or limitations imposed on the Option under
the provisions of Rule 5.5 have been fulfilled.

(e) Option-holders may exercise options under this Plan only during such
period as if such option was treated as an Ordinary Share in the
Company they would be permitted to deal under the internal codes
relating to securities transactions by directors and relevant
employees of the Company from time to time in force unless the
Committee acting fairly and reasonably determines otherwise.

(f) If an Option-holder at any time ceases to be an executive director or
officer or employee of the Group for reasons of dishonesty or fraud,
his options will lapse on the date of termination of his employment.

(g) In the event that the exercise of a Qualifying Option occurs for any
reason except as specified in Rule 7.1(b) outside the 3 months from
date of cessation of employment period specified in Internal Revenue
Code Section 422(a)(2), the Company shall treat Qualifying Options as
Non-Qualifying Options for the purposes of determining the income
taxes of the Group and the Option-holder. For this purpose, the date
of cessation of employment shall be determined without regard to Rule
7.1(c).

7.3 METHOD OF EXERCISE OF OPTIONS

(a) Exercise of an option by an Option-holder shall be by notice in writing
on a form prescribed by the Committee for the purpose addressed to the
Company. The form of notice shall specify the number of shares in
respect of which the options are being exercised on that occasion,
whether the option is over American Depositary Shares or Ordinary
Shares and be accompanied by the relevant option certificate and
payment in full of the Exercise Price (or, at the Committee's
discretion and only in the case of an option to purchase shares, an
irrevocable agency instruction to the Trustees to sell either all such
shares or as many thereof as shall when multiplying the same by their
Market Value on the date of exercise be equal in value to the Exercise
Price plus the Trustees' dealing costs arising on such sale plus
applicable state and federal withholding taxes, if any, and to remit
the withholding taxes to the Company within thirty days of such
exercise), together with such other documents as the Committee may
determine, as well as any payment due 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.

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<PAGE> 43

(b) Any payment required to be made under Rule 7.3(a) above shall be made
to the Company or such other person as may from time to time be
notified by the Company to the Option-holder.

(c) Any documents required to be delivered under Rule 7.3(a) above shall be
sufficiently delivered if delivered to such office as may from time to
time be notified by the Company to Option-holders.

(d) Any payment required to be made under Rule 7.3(a) above shall be by
check (or at the discretion of the Committee and only in the case of an
option to purchase shares, by tender of either Ordinary Shares of the
Company or American Depositary Shares of the Company). For the purpose
of determining that payment of the Exercise Price is made in full as
required by Rule 7.3(a), Ordinary Shares of the Company and American
Depositary Shares of the Company tendered in payment of the Exercise
Price shall be valued at their Market Value on date of tender.

7.4 ALLOTMENT OR TRANSFER OF SHARES PURSUANT TO EXERCISE OF OPTIONS

(a) Subject to such consents or other required action of any competent
authority under regulations or enactments for the time being in force
as may be necessary, and subject to compliance with the terms of the
option and any instructions given by the Option-holder to the Company
on giving notice of exercise of the Option, the Company shall, as soon
as practicable after it has received the payment and documents referred
to in Rule 7.3 above or after it has received confirmation of the
receipt of such payment and documents on its behalf and no later than
thirty days thereafter, either allot to the Option-holder (or his
nominee) or procure the transfer to the Option-holder (or his nominee),
or in the case of an exercise of the Rule 7.1(b) above his personal
representative(s) of the number of shares specified in the form of
notice or (as the case may be) the unsold balance and the delivery to
the Option-holder (or such personal representative(s)) of an
appropriate certificate.

(b) Notwithstanding the provisions of Rule 7.4(a) above, in those instances
where an Option-holder exercises Qualifying Options, the Committee in
its absolute discretion may elect to hold and retain or cause to be
held and retained as agent and fiduciary for the Option-holder the
relevant American Depositary Shares certificate for a period of no
longer than two years from the date on which the Qualifying Options
were granted or one year after the issuance of the shares. During the
retention period, if the Option-holder should wish to resell the
relevant American Depositary Shares the Committee shall cause this to
be done on his behalf and pursuant to his reasonable instructions and
remit to said Option-holder the net proceeds of said resale, but the
Committee shall have the right to withhold or require the Option-holder
to remit to the Company the amount necessary to satisfy any federal,
state and local tax withholding requirements imposed by reason of such
resale.

7.5 ADJUSTMENTS TO OPTION RIGHTS

In the event of any increase or variation of the issued share capital of
the Company, such adjustments may be made to the total number of shares in
respect of which options may be granted under the Plan and to any
unexercised option rights as the Committee may determine. If any adjustment
is to be made pursuant to this Rule 7.5, the Company shall notify each
Option-holder of particulars of the adjustment as soon as practicable after
the determination thereof.

7.6 TRANSFER OF OPTIONS

An option is personal to the Option-holder and, accordingly, subject as
provided in Rule 7.1(b) above, an Option-holder shall not transfer, assign,
charge, encumber or otherwise alienate an Option or create in favour of any
third party any interest therein. Upon any breach of this Rule 7.6, the
Committee shall cancel the option.

7.7 LOSS OF OFFICE

If any Option-holder shall cease to be employed by a member of the Group
for any reason, he shall not be entitled by way of compensation for loss of
office or otherwise howsoever to any sum or other benefit to compensate him
for the loss of any rights under the Plan.

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<PAGE> 44

7.8 LIQUIDATION

If notice of a meeting to consider a resolution for the voluntary winding
up (excluding any resolution for the voluntary winding up of the Company
for the purpose of reorganisation or reconstruction) of the Company shall
be duly given, the Committee may give notice thereof to all Option-holders
and thereupon each such Option-holder shall, notwithstanding that the
Exercise Period has not commenced forthwith and until the commencement of
the winding up be entitled subject to Rule 7.2(a) (provided however, that
no Exercise Period may extend more than ten years after the Date of Grant)
and on such terms (including the waiver of all or any conditions imposed on
the option under Rule 5.5) as may be determined by the Committee in its
absolute discretion, be entitled to give notice in writing to the Company
electing to exercise his option, but the exercise of such option as
aforesaid shall be conditional upon such resolution being duly passed. Upon
commencement of the winding up all options shall lapse except insofar as
exercised under this Rule 7.8.

8. CASH EQUIVALENT

8.1 Subject to Rule 8.6, where an option granted under Part A of this Plan has
been exercised by any person in respect of any number of shares, and those
shares have not yet been allotted or transferred to him in accordance with
Rule 7.4 above, the Committee may determine that, in substitution for his
right to acquire such number of those shares as the Committee may decide
(but in full and final satisfaction of his said right), he shall be paid
by way of additional emoluments a sum equal to the cash equivalent of that
number of shares.

8.2 For the purpose of this Rule, the CASH EQUIVALENT of any shares is the
amount by which the Market Value of those shares on the dealing day last
preceding the date on which the option was exercised exceeds the price at
which those shares may be acquired by the exercise of the option.

8.3 Subject to Rule 8.4 below, as soon as reasonably practicable after a
determination has been made under Rule 8.1 that a person shall be paid a
sum in substitution for his right to acquire any number of shares:-

(a) the Company shall pay to him or procure the payment to him of that sum
in cash, and

(b) if he has already paid the Company for those shares, the Company shall
return to him the amount so paid by him.

8.4 If the Committee in its discretion so decides:-

(a) the whole or part of the sum payable under Rule 8.3(a) above shall
after any deduction required by law as set out in Rule 8.5, instead of
being paid to the person in question in cash, be applied on his behalf
in subscribing for shares in the Company at a price equal to the Market
Value by reference to which the cash equivalent is calculated, or in
purchasing such shares, or partly in one way and partly in the other,
and

(b) the Company shall allot to him (or his nominee) or procure the transfer
to him (or his nominee) of the 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.

8.6 The provisions of this Rule 8 shall not apply to Qualifying Options.

9. CHANGE IN CONTROL OF THE COMPANY

9.1 If an Acquiring Person:-

(a) obtains Control of the Company as a result of making a Takeover Offer;
or

(b) obtains Control of the Company in pursuance of a Compromise; or

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<PAGE> 45

the Committee shall as soon as practicable thereafter notify every
Option-holder accordingly and each Option-holder may within the Appropriate
Period and notwithstanding that the Exercise Period has not commenced:-

(i) exercise his option at any time or from time to time in whole or
in part; and

(ii) to the extent that any option is not or has not been exercised,
execute with the consent of such Acquiring Person an Option
Roll-over.

9.2 To the extent that an option which has become exercisable and capable of
being Rolled-over pursuant to Rule 9.1 has not been exercised and/or
Rolled-over at the expiry date of the Appropriate Period it shall
thereupon lapse.

9.3 For the purposes of an Option Roll-over under Part A of this Plan the new
rights shall only be regarded as equivalent to the old rights if:-

(a) the new rights are exercisable in substantially the same manner as
the old rights and subject to the provisions of this Plan as it may
have effect immediately before an Option Roll-over (except that
additional (but not alternative) conditions and/or limitations
imposed pursuant to Rule 5.5 may for this purpose be ignored); and

(b) the total Market Value of shares subject to an option which is being
Rolled-over is equal immediately before such Option Roll-over to the
total market value (determined in accordance with Part VIII of the
Taxation of Chargeable Gains Act 1992) of the shares in respect of
which an Option-holder's new rights are being granted immediately
after such Option Roll-over.

9.4 For the purposes of any application of the provisions of Part A of this
Plan following an Option Roll-over:-

(a) any new rights granted pursuant to Rule 9 shall be regarded as having
been granted at the time the corresponding old rights were granted;
and

(b) Rules 7, 9, 10, 11 and 12 shall in relation to the new rights be
construed as if the following terms have the meanings assigned to them
in this Rule 9.4 and not the meanings assigned to them in Rule 2.

"American Depositary Shares"

An authorized depositary security representing Ordinary Shares and
for the time being evidenced by an authorized depositary receipt
quoted on the Nasdaq Stock Market's National Market.

"Committee"

The Board of Directors of the company in respect of whose shares new
rights have been granted or a duly authorized committee thereof.

"Company"

The company in respect of whose shares new rights have been granted.

"Option Price"

The Option Price multiplied by a fraction the numerator of which is
the total number of shares subject to the option prior to the Option
Roll-over and the denominator of which is the total number of shares
over which new rights have been granted to the Option-holder on the
Option Roll-over.

9.5 If, under Section 425 of the Companies Act 1985, a Compromise or
arrangement 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 Option-holders 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 or arrangement and
thereupon each Option-holder (or where permitted his personal
representative(s)) may notwithstanding that the Exercise Period has not
commenced forthwith and, (provided however, that no Exercise Period may
extend more than ten years after the Date of Grant) until the

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<PAGE> 46

expiry of the period commencing with such date and ending with the earlier
of the date six calendar months thereafter and the date on which such
Compromise or arrangement is sanctioned by the Court be entitled to
exercise his option, but the exercise of an option as aforesaid shall be
conditional upon such Compromise or arrangement being sanctioned by the
Court and becoming effective. Upon such Compromise or arrangement becoming
effective all options to the extent unexercised shall lapse except that an
Option-holder may with the consent of the Committee exercise an Option
Roll-over in respect of his option in accordance with Rule 9.1 within the
Appropriate Period.

9.6 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 or acquire shares in the
Company under sections 428 to 430F of the Companies Act 1985 all options
to the extent unexercised shall lapse one month after such person became
so bound or entitled.

10. ADMINISTRATION AND AMENDMENT

10.1 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 terminate the operation of the
Plan and in such event no further options will be granted, but the
provisions of the Plan shall remain in force in relation to options
granted and remaining exercisable or potentially exercisable hereunder at
the date of such termination.

10.2 Subject to Rule 10.3, 10.5 and 12.3 below, the Committee may at any time
and from time to time alter or add to the Plan in any respect.

10.3 Subject to Rule 10.4 below, no alteration or addition to the advantage of
Option-holders shall be made under Rule 10.2 above without the prior
approval by ordinary resolution of the members of the Company in general
meeting.

10.4 Rule 10.3 shall not apply:-

(a) to any minor alteration or addition to benefit the administration of
the Plan, or

(b) to any alteration or addition to obtain or maintain favourable tax,
exchange control or regulatory treatment of Option-holders or any
member of the Group, or solely relating to any conditions imposed on
the option under Rule 5.5.

10.5 No material alteration or addition to the disadvantage of any
Option-holder shall be made under Rule 10.2 unless:-

(a) the Committee shall have invited every such Option-holder 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
Option-holders who have given such an indication.

10.6 As soon as reasonably practicable after making any alteration or addition
under Rule 10.2, the Committee shall give notice in writing to any
Option-holder affected thereby.

11. NOTICES

11.1 All Option-holders shall be entitled while they have subsisting rights
under the Plan to receive copies of all notices and other documents sent
by the Company to its shareholders.

11.2 Any notice or other document required to be given hereunder to any
Option-holder shall be delivered to him or sent by post to him at his home
address according to the records of the Company or such other address as
may appear to the Company to be appropriate. Any notice or other document
required to be given to the Company shall be delivered to the Secretary of
the Company or sent by post to the Secretary of the Company at the
registered office of the Company or such other office as may from time to
time be notified by the Company. All notices given to the

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<PAGE> 47

Company shall be deemed to have been given on the date of receipt by the
Company or by any person for the time being authorized to receive such
notices on its behalf. All notices given to Option-holders shall be deemed
to have been given on the date of posting if sent by post (but only in the
case of Option-holders outside the UK if sent by air mail) or the date of
delivery if delivered.

12. REQUIREMENTS FOR UNITED STATES OF AMERICA

12.1 In respect of an Option-holder who is primarily subject to taxation on his
remuneration in the United States of America:-

(a) Rule 5 shall (for the avoidance of doubt) be construed so as to refer
to and to permit both a grant of a Qualifying Option and a grant of a
Non-Qualifying Option unless the Committee shall in its absolute
discretion determine otherwise in which case Rule 5 shall (for the
avoidance of doubt) be construed to refer to and permit a grant of a
Non-Qualifying Option only;

(b) As regards Qualifying Options, the aggregate Market Value as at the
Date of Grant of the shares in respect of which Qualifying Options are
first exercisable under the terms of the option and this Plan by an
Option-holder during any calendar year (under all share option schemes
of the Group) shall not exceed US $100,000; and

(c) In the event of a grant to an Option-holder of more than $100,000 worth
of option stock which can first be exercised in a given year, the first
$100,000 of such options shall be designated as Qualifying Options and
the remaining portion designated as Non-Qualifying Options (and the
certificate under seal granting the option shall in addition to the
matters stated in Rule 5.3 specify whether the option so granted is a
Qualifying Option or Non-Qualifying Option). Upon the exercise of such
options, the Company will designate the shares issued with respect to
Qualifying Options and issued with respect to Non-Qualifying Options by
issuing separate share certificates so stating and by identifying the
Qualifying Shares as such in the stock transfer records.

12.2 In the case of the issue of shares by the Company with respect to
Non-Qualifying Options, the Company shall have the right in advance of the
issue of such shares to the Option-holder to require the Option-holder to
remit to the Company the amount necessary to satisfy any federal, state or
local tax withholding imposed by reason of the issue of such shares.

12.3 If any of the terms or provisions of the Plan conflict with the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934 (as
the same shall be amended from time to time) and/or Section 422 of the
United State's Internal Revenue Code of 1986 (as amended from time to
time), then such terms or provisions shall be deemed inoperative to the
extent that they conflict with the requirements of said Rule 16b-3 and/or
with respect to Qualifying Options Section 422.

13. JURISDICTIONS OTHER THAN THE UNITED STATES OF AMERICA

13.1 In respect of an Option-holder who is resident in the Netherlands for tax
purposes,

(a) the Exercise Period shall be the period of five years beginning with
the Date of Grant;

(b) Rule 8 shall not apply to any options granted to such persons;

(c) where the Option-holder ceases to be employed by the Group within a
period of three years after the date on which the option was granted to
him for any reason other than those provided for in Rule 7.1(a) and (b)
of the

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Plan and before so ceasing he has already exercised the option in whole or
in part, the Option-holder shall pay to the Company an amount calculated
to the following formula: (X - Y) x Z where:-

X = the market value of shares in the Company on the date on which the
option was exercised

Y = the Exercise Price

Z = the number of shares acquired on the exercise of the option

Where the Option-holder has exercised the option on more than one occasion
the aforesaid formula shall be applied to each such exercise and the
amount payable by him to the Company pursuant to this Rule shall be the
aggregate of the amounts so calculated.

13.2 In respect of an Option-holder who is resident in France for tax purposes,

(a) Option Price shall mean the average Market Value of a share for the
20 dealing days immediately prior to the Date of Grant;

(b) no options may be granted to such persons under the Plan on any day
on which the Company pays a dividend whether in cash or in shares or
within 20 dealing days immediately following such day;

(c) no options may be granted to such a person under the Plan if he/she
holds more than 10% of the aggregate nominal amount of the total
issued share capital of the Company;

(d) options may only be granted to such persons over Ordinary Shares and
not American Depositary Shares;

(e) options may only be granted to such persons who are employees (i.e.
persons having an employment contract with a member of the Group) or
the "President Directeur General", the "Directeur General" or the
"Membres du Directoire" or the "Gerant" of French joint stock
companies which are members of the Group;

(f) such persons may only be granted an option to subscribe under the
Plan and not an option to purchase;

(g) Rule 7.1(b) shall be amended for such persons so that options granted
to them may only be exercised within six months, not twelve months,
of death;

(h) Rule 8 shall not apply to options granted to such persons;

(i) no options may be granted to such persons under the Plan within the
period referred to in article 208-4 (fifth paragraph) of the French
Company Act (Law n1/2 66-537 dated of 24 July 1966 as amended by
article 10 of Law n1/2 96-314 dated of 12 April 1996) immediately
prior or immediately succeeding (i) the establishment and
announcement of the Company's results or (ii) any event which may
affect significantly the Company's position or expectations.

PART B: UK INLAND REVENUE APPROVED OPTIONS

1. CONSTRUCTION

1.1 These Rules shall be construed and take effect in accordance with the law
of England and Wales and the courts of England and Wales shall be the
exclusive forum for the administration hereof.

1.2 Reference to any Act of the United Kingdom shall include any statutory
modification amendment or re-enactment thereof from time to time in force
unless the contrary is expressly stated.

1.3 References to the exercise of an option shall where the context allows
include the partial exercise of the option.

1.4 Where the context so admits the singular shall include the plural and vice
versa and the masculine gender shall include the feminine.

1.5 In these Rules a word or words beginning with capital letters indicates a
term which has been defined in Rule 2.

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<PAGE> 49

2. DEFINITIONS

In these Rules the following words and expressions have the following
meanings:-

2.1 "Acquiring Person" Any person who:-

(a) either alone or together with any person
acting in concert with him has obtained
Control of the Company either:-

(i) as a result of making a Takeover
Offer; or

(ii) in pursuance of a Compromise; or

2.2 "Appropriate Period" In relation to:-

(d) a Section 429 Notice means the period
during which the Acquiring Person is
entitled and bound to acquire shares on the
terms of the offer contained in such
Section 429 Notice.

2.4 "The 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 depositary for its
American Depositary Shares.

2.6 "The Company" means Danka Business Systems Public Limited
Company.

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<PAGE> 50

2.7 "Compromise" in relation to the Company means a compromise
or arrangement sanctioned by the Court under
section 425 of the Companies Act 1985.

2.9 "Date of Grant" means the date on which an option is granted
under the Plan in accordance with the
provisions of Rule 5.

2.10 "Exercise Period" in relation to an option means the period
beginning when the option first becomes
exercisable under the provisions of rule 7.2(c)
(or, as the case may be, Rule 5.5) and ending
on the tenth anniversary of the Date of Grant
of the option (or such other shorter period as
the Committee may have determined before the
grant thereof).

2.11 "Exercise Price" on exercise of an option means the Option Price
multiplied by the number of shares in respect
of which such option is exercised.

2.12 "The Group" means
(a) any Participating Company or body corporate
which is (within the meaning of section 736
of the Companies Act 1985) the Company's
holding company or a subsidiary of the
Company's holding company; or

(b) a body corporate which is (within the
meaning of section 258 of that Act) a
subsidiary undertaking of a body corporate
within paragraph (1) above and has been
designated by the Committee for this
purpose.

2.14 "Non-Qualifying Option" means an option which is not a Qualifying
Option.

2.15 "Option-Holder" means any person who holds an option granted
under the Plan or (where the context admits)
his personal representatives.

2.16 "Option Price" means the Market Value of an American
Depositary Share or an Ordinary Share, as
applicable, on the Date of Grant of the option.

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<PAGE> 51

(a) the Acquiring Person; or

(b) a company which has Control of the
Acquiring Person; or

(i) is a member of a consortium owning
either the Acquiring Person or a
company having Control of the
Acquiring Person; and

(ii) beneficially owns not less than three
twentieths of the ordinary share
capital of the Acquiring Person or a
company having control of the
company.

2.18 "Ordinary Share" means a fully paid ordinary share of 1.25p each
in the capital of the Company.

2.19 "Participating Company" means the Company or any of the Subsidiaries to
which the Committee has with the approval of
the Inland Revenue resolved that the Plan shall
for the time being extend.

2.20 "Participating Employee" means any employee or executive director who
holds an option granted under Part B of the
Plan.

2.21 "The Plan" means the 1999 Share Option Plan of the Company
set out herein, as amended from time to time.

2.22 "Qualifying Option" means an option which qualifies as an incentive
stock option within the meaning of section 422
of the Internal Revenue Code of the United
States.

2.23 "Rolled Over" means the action of effecting an Option
Roll-over or its completion.

2.24 "Schedule 9" means Schedule 9 to the Taxes Act 1988.

2.25 "Section 429 Notice" means 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).

2.26 "The Subsidiaries" means subsidiaries as defined by section 736 of
the Companies Act 1985 of the Company and which
are under the control of the Company within the
meaning of section 840 of the Taxes Act 1988.

2.27 "Takeover Offer" in relation to the Company means either:-

(b) a general offer to acquire all the shares
in the Company of the same class as the
Ordinary Shares.

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<PAGE> 52

2.28 "The Taxes Act 1988" means the Income and Corporation Taxes Act
1988.

2.29 "The Trustees" means the trustee or trustees for the time
being of the Danka Employees' Share Trust

and expressions not otherwise defined herein have the same meanings as
they have in Schedule 9.

3. PURPOSE

Part B of the Plan is intended to provide an opportunity to officers,
executive directors and certain key employees of the Company, who satisfy
the conditions specified in Rule 4 below, 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 shareholders and increasing the ability of the Company to
attract and retain individuals of exceptional skill.

4. ELIGIBILITY

4.1 Subject to Rule 4.2 below, a person is eligible to be granted an option
under Part B of the Plan if (and only if) he is a full-time director or a
qualifying employee of a Participating Company.

4.2 For the purposes of Rule 4.1 above:-

(a) a person shall be treated as a full-time director of a Participating
Company if he is obliged to devote to the performance of the duties
of his office or employment with that or any other Participating
Company not less than 25 hours a week;

(b) a qualifying employee, in relation to a Participating Company, is an
employee of the Participating Company (other than one who is a
director of a Participating Company).

4.3 A person is not eligible to be granted an option under this Part B of the
Plan at any time when he is not eligible to participate in the Plan by
virtue of paragraph 8 of Schedule 9.

5. GRANT OF OPTIONS

5.1 Subject to statutory restrictions and to the Rules of this Plan, the
Committee may grant options to acquire Ordinary Shares in the Company (or
the American Depositary Share equivalent) which satisfy the requirements
of paragraphs 10-14 of Schedule 9 and for this purpose an option to
acquire includes an option to purchase and an option to subscribe.

5.2 No option shall be granted in contravention of relevant insider dealing
laws and regulations.

5.5 In granting any option the Committee may in its discretion impose any
objective conditions and limitations (additional to (or in place of) any
conditions and limitations contained in any other of these Rules) upon the
exercise of such option, provided that such additional or alternative
objective conditions and limitations shall

(i) be set out in full in, or details thereof be given with, the
certificate under seal granting the option;

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<PAGE> 53
(iii) not be capable of amendment or waiver unless events occur which, in
the opinion of the Committee, cause those conditions and/or
limitations to have ceased to be appropriate. Any amendment to the
terms of an option pursuant to this Rule 5.5 shall be reasonably made
by the Committee imposing such conditions or limitations which in its
opinion are more appropriate and, so far as is reasonably
practicable, are equivalent to those conditions and/or limitations
originally imposed.

6. LIMITS

6.1 The total number of shares in the Company which may be issued under the
Plan whether in the form of American Depository Shares or Ordinary Shares
shall not exceed the equivalent of 12,000,000 Ordinary Shares and the
total number of American Depositary Shares or Ordinary Shares over which
options may be granted under this Plan during any five consecutive
financial years of the Company to any person shall not exceed the
equivalent of 4,000,000 Ordinary Shares, subject to the provisions of
Rule 5.4;

6.2 No options shall be granted under the Plan which would, at the time they
are granted, cause the number of American Depositary Shares or Ordinary
Shares which shall have been or may be issued in pursuance of options
granted in the period of 10 years ending at that time under the Plan to
exceed such number as represents 5%. of the ordinary share capital of the
Company in issue at that time.

6.3 No person shall be granted options which would, at the time they are
granted, cause the aggregate market value of the Ordinary Shares and
American Depositary Shares which he may acquire in pursuance of options
granted to him under the Plan or under any other share option plan, not
being a savings-related option scheme, approved under Schedule 9 and
established by the Company or by any associated company of the Company
(and not exercised) to exceed or further exceed L30,000;

6.4 For the purposes of this Rule 6, the market value of the shares in
relation to which an option was granted shall be calculated:-

(a) in the case of an option granted under the Plan, as on the day by
reference to which the price at which Ordinary Shares or American
Depositary Shares may be acquired by the exercise thereof was
determined in accordance with Rule 5.2 above;

(b) in the case of an option granted under any approved scheme, as at the
time when it was granted or, in a case where an agreement relating to
the Ordinary Shares or American Depositary Shares has been made under
paragraph 29 of Schedule 9, such earlier time or times as may be
provided in the agreement; and

(c) in the case of any other option, as on the day or days by reference
to which the price at which Ordinary Shares may be acquired by the
exercise thereof was determined.

7. TERMS OF OPTIONS

7.1 EXERCISE OF OPTIONS

(a) an Option-holder ceasing to be employed by the Group by reason of:

(i) ill-health or injury or disability (evidenced to the
satisfaction of the Committee);

(ii) retirement in accordance with the provisions of any one of the
Group retirement plans relevant to that Option-holder; or

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<PAGE> 54
(iii) the Company by which the Option-holder is employed leaving the
Group or the business or part of a business for which the
Option-holder works being transferred to a person which is not
a member of the Group

in the case of all options, shall notwithstanding Rule 7.2(c) be
entitled to exercise the option within the period which shall expire
twelve months after the date of cessation and may notwithstanding
Rule 7.2(c) be entitled to such extent and on such conditions as the
Committee shall in its absolute discretion determine to exercise the
option at such later date as the Committee, in its absolute
discretion, may decide, not exceeding three years. For the purposes
of this Rule 7.1(a) and (b) only (and for no other purposes),
Exercise Period means the period of one year from the date of
cessation of employment of the Option-holder with the Group or such
longer period, not to exceed three years, as the Committee shall in
its absolute discretion determine.

(b) The personal representative(s) of an Option-holder who has died while
employed by, or while serving as an officer or executive director of,
the Company or a Subsidiary, or the personal representative of an
Option-holder who has ceased to be an employee of the Group as the
result of a permanent and total disability as defined in Internal
Revenue Code section 22(e) shall, notwithstanding Rule 7.2(d) or any
conditions to be fulfilled in the future under Rule 7.2(c), be
entitled to exercise the option within twelve months of such
Option-holder's death or the date the Option-holder ceases to be
employed by reason of such disability, provided however, that no
Exercise Period may extend more than ten years after the Date of
Grant.

(c) For the purposes of Rule 7.1 only (and for no other purpose) where an
Option-holder ceases to be employed by the Group for any reason not
set forth in Rule 7.1(a), 7.1(b) [or 7.2(e)], where an
Option-holder's employment by virtue of which he is an Option-holder
ceases without notice, the Option-holder's employment shall be deemed
to have ceased on a date thirty (30) days (or such later date as the
Committee in its absolute discretion may decide, not exceeding three
years) from the date on which the termination takes effect, and where
the said employment is terminated with notice, the Option-holder's
employment shall be deemed to have ceased upon the later of the date
specified in the notice or thirty (30) days (or such later date as
the Committee in its absolute discretion may decide, not exceeding
three years) from the date on which that notice is given.

(d) An Option-holder shall not be eligible to exercise an option under
Part B of the Plan at any time when he is not eligible to participate
in Part B of the Plan by virtue of paragraph 8 of Schedule 9.

7.2 RESTRICTIONS ON EXERCISE OF OPTIONS PURSUANT TO RULE 7.1

Notwithstanding the provisions of Rule 7.1

(a) An option shall only be exercisable during the Exercise Period
(including as defined in Rule 7.1(a) for those purposes, provided
however that no Exercise Period may extend more than 10 years after
the Date of Grant) and to the extent not exercised at the end of the
Exercise Period the option shall terminate.

(b) An option shall, except as specifically provided otherwise pursuant
to Rule 5.5, be fully exercisable during the Exercise Period.

(c) An option shall, except where exercised pursuant to Rule 7.1(a) or
(b) or Rule 8 or as specifically provided otherwise pursuant to Rule
5.5, not be exercisable before the first anniversary of the Date of
Grant and shall, when added to the number of Ordinary Shares (or
ADSs) in respect of which the option has previously been exercised,
not be exercisable over more than one-third of the Ordinary Shares
(or ADSs) originally subject to the option on or after the first
anniversary of the Date of Grant and before the second anniversary of
the Date of Grant, more than two-thirds of the Ordinary Shares (or
ADSs) originally subject to the option before the third anniversary
of the Date of Grant and only exercisable in full on or after the
third anniversary of the Date of Grant. Where any adjustment has been
made under Rule 7.5 to any unexercised option rights, a corresponding
adjustment shall be assumed for this purpose to have been made to the
number of Ordinary

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<PAGE> 55

Shares (or ADSs) subject to the option and to the number of Ordinary
Shares (or ADSs) in respect of which the option has been previously
exercised.

(d) An option shall not be exercisable until any additional (or
alternative) conditions and/or limitations imposed on the Option under
the provisions of Rule 5.5 have been fulfilled.

(e) Option-holders may exercise options under this Plan only during such
period as if such option was treated as an Ordinary Share in the Company
they would be permitted to deal under the internal codes relating to
securities transactions by directors and relevant employees of the
Company from time to time in force unless the Committee acting fairly
and reasonably determines otherwise.

(f) If an Option-holder at any time ceases to be an executive director or
officer or employee of the Group for reasons of dishonesty or fraud, his
options will lapse on the date of termination of his employment.

(g) In the event that the exercise of a Qualifying Option occurs for any
reason except as specified in Rule 7.1(b) outside the 3 months from date
of cessation of employment period specified in Internal Revenue Code
Section 422(a)(2), the Company shall treat Qualifying Options as
Non-Qualifying Options for the purposes of determining the income taxes
of the Group and the Option-holder. For this purpose, the date of
cessation of employment shall be determined without regard to Rule
7.1(c).

7.3 METHOD OF EXERCISE OF OPTIONS

(a) Exercise of an option by an Option-holder shall be by notice in writing
on a form prescribed by the Committee for the purpose addressed to the
Company. The form of notice shall specify the number of shares in
respect of which the options are being exercised on that occasion,
whether the option is over American Depositary Shares or Ordinary Shares
and be accompanied by the relevant option certificate and payment in
full of the Exercise Price (or, at the Committee's discretion and only
in the case of an option to purchase shares, an irrevocable agency
instruction to the Trustees to sell either all such shares or as many
thereof as shall when multiplying the same by their Market Value on the
date of exercise be equal in value to the Exercise Price plus the
Trustees' dealing costs arising on such sale plus applicable state and
federal withholding taxes, if any, and to remit the withholding taxes to
the Company within thirty days of such exercise), together with such
other documents as the Committee may determine, as well as any payment
due 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.

(b) Any payment required to be made under Rule 7.3(a) above shall be made
to the Company or such other person as may from time to time be notified
by the Company to the Option-holder.

(c) Any documents required to be delivered under Rule 7.3(a) above shall be
sufficiently delivered if delivered to such office as may from time to
time be notified by the Company to Option-holders.

(d) Any payment required to be made under Rule 7.3(a) above shall be by
cheque.

7.4 ALLOTMENT OR TRANSFER OF SHARES PURSUANT TO EXERCISE OF OPTIONS

(a) Subject to such consents or other required action of any competent
authority under regulations or enactments for the time being in force as
may be necessary, and subject to compliance with the terms of the option
and any instructions given by the Option-holder to the Company on giving
notice of exercise of the Option, the Company shall, as soon as
practicable after it has received the payment and documents referred to
in Rule 7.3 above or after it has received confirmation of the receipt
of such payment and documents on its behalf and no later than thirty
days thereafter, either allot to the Option-holder (or his nominee) or
procure the transfer to the Option-holder (or his nominee), or in the
case of an exercise of the Rule 7.1(b) above his personal
representative(s) of the number of shares specified in the form of
notice or (as the case may be) the unsold balance and the delivery to
the Option-holder (or such personal representative(s)) of an appropriate
certificate.

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(b) Notwithstanding the provisions of Rule 7.4(a) above, in those instances
where an Option-holder exercises Qualifying Options, the Committee in
its absolute discretion may elect to hold and retain or cause to be held
and retained as agent and fiduciary for the Option-holder the relevant
American Depositary Shares certificate for a period of no longer than
two years from the date on which the Qualifying Options were granted or
one year after the issuance of the shares. During the retention period,
if the Option-holder should wish to resell the relevant American
Depositary Shares the Committee shall cause this to be done on his
behalf and pursuant to his reasonable instructions and remit to said
Option-holder the net proceeds of said resale, but the Committee shall
have the right to withhold or require the Option-holder to remit to the
Company the amount necessary to satisfy any federal, state and local tax
withholding requirements imposed by reason of such resale.

7.5 ADJUSTMENTS TO OPTION RIGHTS

7.6 TRANSFER OF OPTIONS

7.7 LOSS OF OFFICE

7.8 LIQUIDATION

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<PAGE> 57

8. CHANGE IN CONTROL OF THE COMPANY

8.1 If an Acquiring Person:-

(a) obtains Control of the Company as a result of making a Takeover
Offer; or

(b) obtains Control of the Company in pursuance of a Compromise; or

the Committee shall as soon as practicable thereafter notify every
Option-holder accordingly and each Option-holder may within the
Appropriate Period and notwithstanding that the Exercise Period has
not commenced:-

(i) exercise his option at any time or from time to time in whole or
in part; and

(ii) to the extent that any option is not or has not been exercised,
execute with the consent of such Acquiring Person an Option
Roll-over.

8.2 To the extent that an option which has become exercisable and capable of
being Rolled-over pursuant to Rule 8.1 has not been exercised and/or
Rolled-over at the expiry date of the Appropriate Period it shall
thereupon lapse.

8.3 For the purposes of an Option Roll-over under Part B of the Plan the new
rights shall only be regarded as equivalent to the old rights if the
conditions set out in paragraph 15(3) of Schedule 9 are satisfied.

8.4 For the purposes of any application of the provisions of Part B of the
Plan following an Option Roll-over:-

(a) any new rights granted pursuant to Rule 8 shall be regarded as having
been granted at the time the corresponding old rights were granted;
and

(b) Rules 7, 8, 9 and 10 shall in relation to the new rights be construed
as if the following terms have the meanings assigned to them in this
Rule 8.4 and not the meanings assigned to them in Rule 2.

"American Depositary Shares"

An authorized depositary security representing Ordinary Shares and for
the time being evidenced by an authorized depositary receipt quoted on
the Nasdaq Stock Market's National Market.

"Committee"

The Board of Directors of the company in respect of whose shares new
rights have been granted or a duly authorized committee thereof.

"Company"

The company in respect of whose shares new rights have been granted.

"Option Price"

The Option Price multiplied by a fraction the numerator of which is the
total number of shares subject to the option prior to the Option
Roll-over and the denominator of which is the total number of shares over
which new rights have been granted to the Option-holder on the Option
Roll-over.

8.5 If, under Section 425 of the Companies Act 1985, a Compromise or
arrangement 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 Option-holders 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 or arrangement and
thereupon each Option-holder (or where permitted his personal
representative(s)) may notwithstanding Rule 7.2(c) and (provided that no
Exercise Period may extend more than ten years after the Date of Grant)
until the expiry of the period commencing with such date and

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<PAGE> 58

ending with the earlier of the date six calendar months thereafter and the
date on which such Compromise or arrangement is sanctioned by the Court be
entitled to exercise his option, but the exercise of an option as
aforesaid shall be conditional upon such Compromise or arrangement being
sanctioned by the Court and becoming effective. Upon such Compromise or
arrangement becoming effective all options to the extent unexercised shall
lapse except that an Option-holder may with the consent of the Committee
exercise an Option Roll-over in respect of his option in accordance with
Rule 8.1 within the Appropriate Period.

8.6 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 or acquire shares in the
Company under sections 428 to 430F of the Companies Act 1985 all options
to the extent unexercised shall lapse one month after such person became
so bound or entitled.

9. ADMINISTRATION AND AMENDMENT

9.1 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 terminate the operation of the
Plan and in such event no further options will be granted, but the
provisions of the Plan shall remain in force in relation to options
granted and remaining exercisable or potentially exercisable hereunder at
the date of such termination.

9.2 Subject to Rule 9.3 and 9.5 below, the Committee may at any time and from
time to time alter or add to the Plan in any respect (having regard to the
fact that, if an alteration or addition which does not solely relate to a
special term is made to any provision of Part B of this Plan, or the terms
of any option granted under Part B of this Plan at a time when Part B of
this Plan is approved by the Inland Revenue under Schedule 9, the approval
will not thereafter have effect unless the Inland Revenue have approved
the alteration or addition).

9.3 Subject to Rule 9.4 below, no alteration or addition to the advantage of
Option-holders shall be made under Rule 9.2 above without the prior
approval by ordinary resolution of the members of the Company in general
meeting.

9.4 Rule 9.3 shall not apply:-

(a) to any minor alteration or addition to benefit the administration of
the Plan, or

9.5 No material alteration or addition to the disadvantage of any
Option-holder shall be made under Rule 9.2 unless:-

(a) the Committee shall have invited every such Option-holder 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
Option-holders who have given such an indication.

9.6 No alteration or addition which solely relates to a special term subject
to which an option has been granted under Part B of this Plan shall be
made under Rule 9.2 above unless:-

(a) there shall have occurred an event which shall have caused the
Committee reasonably to consider that the special term would not,
without the alteration or addition, achieve its original purpose, and

(b) the Committee shall act fairly and reasonably in making the alteration
or addition.

9.7 As soon as reasonably practicable after making any alteration or addition
under Rule 9.2, the Committee shall give notice in writing to any
Option-holder affected thereby and, if the alteration or addition relates
to Part B of this

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<PAGE> 59

Plan and is made at a time when Part B of this Plan is then approved by
the Inland Revenue under Schedule 9 to the Inland Revenue.

9.8 Any reference in this Rule 9 to a special term is a reference to any
additional (but not alternative) conditions and limitations specified by
the Committee as mentioned in Rule 5.5 above.

10. NOTICES

10.1 All Option-holders shall be entitled while they have subsisting rights
under the Plan to receive copies of all notices and other documents sent
by the Company to its shareholders.

10.2 Any notice or other document required to be given hereunder to any
Option-holder shall be delivered to him or sent by post to him at his home
address according to the records of the Company or such other address as
may appear to the Company to be appropriate. Any notice or other document
required to be given to the Company shall be delivered to the Secretary of
the Company or sent by post to the Secretary of the Company at the
registered office of the Company or such other office as may from time to
time be notified by the Company. All notices given to the Company shall be
deemed to have been given on the date of receipt by the Company or by any
person for the time being authorized to receive such notices on its
behalf. All notices given to Option-holders shall be deemed to have been
given on the date of posting if sent by post (but only in the case of
Option-holders outside the UK if sent by air mail) or the date of delivery
if delivered.

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<PAGE> 60
DANKA BUSINESS SYSTEMS PLC
INSTRUCTIONS TO THE BANK OF NEW YORK, AS DEPOSITARY
(MUST BE RECEIVED PRIOR TO 12:00 P.M. NEW YORK TIME ON OCTOBER 12, 1999)

The undersigned Owner of American Depositary Receipts hereby requests
and instructs The Bank of New York, as Depositary, to endeavor, insofar as
practicable, to vote or cause to be voted the Deposited Securities represented
by such Receipts registered in the name of the undersigned on the books of the
Depositary as of the close of business on September 21, 1999 at the Annual
General Meeting of Danka Business Systems PLC to be held in London, England, on
October 18, 1999 in respect of the resolutions specified in the Notice of the
Meeting.

NOTE:

INSTRUCTIONS AS TO VOTING ON THE SPECIFIED RESOLUTIONS SHOULD BE
INDICATED BY AN "X" IN THE APPROPRIATE BOX. THE DEPOSITARY SHALL NOT VOTE OR
ATTEMPT TO EXERCISE THE RIGHT TO VOTE THAT ATTACHES TO THE SHARES OR OTHER
DEPOSITED SECURITIES OTHER THAN IN ACCORDANCE WITH SUCH INSTRUCTIONS. IF THE
DEPOSITARY DOES NOT RECEIVE INSTRUCTIONS FROM THE OWNER OF AMERICAN DEPOSITARY
RECEIPTS, THE DEPOSITARY SHALL GIVE DISCRETIONARY PROXY FOR THE SHARES
EVIDENCED BY SUCH RECEIPT TO A PERSON DESIGNATED BY THE ISSUER.

DANKA BUSINESS SYSTEMS PLC
P.O. BOX 11124
NEW YORK, NY 10203-0124

(CONTINUED AND TO BE DATED AND SIGNED ON THE REVERSE SIDE.)

<PAGE> 61

Resolutions:

<C> <C> <C> <C>
1. To re-elect Mr. David W. 2. To re-elect Mr. Larry K. 3. To re-elect Mr. Brian L. 4. To re-elect Mr. Michael B.
Kendall as a Director. Switzer as a Director. Merriman as a Director. Gifford as a Director.

FOR AGAINST FOR AGAINST FOR AGAINST FOR AGAINST
[ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]

5. To re-elect Richard C. 6. To re-elect C. Anthony 7. To re-appoint the auditors 8. To empower the Board of
Lappin as a Director. Wainwright as a Director. and authorize the Board of Directors to allot securities
Directors to fix their up to an aggregate nominal
FOR AGAINST FOR AGAINST remuneration. amount of (pound)950,282.
[ ] [ ] [ ] [ ]
FOR AGAINST FOR AGAINST
[ ] [ ] [ ] [ ]

9. Special Resolution: To 10. Special Resolution: To 11. To approve the amendments 12. To approve the Danka 1999
empower the Board of authorize the Company to to the Danka Corporation Share Option Plan
Directors to allot buy back up to 15% of its 401(k) Profit Sharing
securities subject to issued shared capital. Plan. FOR AGAINST
certain limitations [ ] [ ]
without providing certain FOR AGAINST FOR AGAINST
pre-emptive rights. [ ] [ ] [ ] [ ]

FOR AGAINST
[ ] [ ]
Change of Address Mark Here [ ]

The Voting Instructions must be
signed by the person in whose name
the relevant Receipt is registered
on the books of the Depositary. In
the case of a Corporation, the
Please Mark, Sign, Date and Voting Instructions must be
Return the Voting Instruction executed by a duly authorized
Card Promptly Using the Enclosed Officer or Attorney. In the case
Envelope. of joint holders, the signature of
any one will suffice.

VOTES MUST BE INDICATED (X) IN
BLACK OR BLUE INK. Dated ______________________, 1999

-----------------------------------
Signature

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