Exhibit 10.2


                                   APPENDIX B

                  APPLIANCE RECYCLING CENTERS OF AMERICA, INC.
                                  AMENDMENT TO
                         RESTATED 1997 STOCK OPTION PLAN
                                  ("1997 PLAN")

         I. Section 2 of the 1997 Plan was amended, effective May 1, 2000
subject to shareholder approval, to add 200,000 shares to the 1997 Plan,
bringing the total number of shares of Common Stock subject to the 1997 Plan to
400,000. To the extent that this amendment is not approved by the shareholders
of the Company prior to April 30, 2001, these additional 200,000 shares may only
be used for the grant of nonqualified options (whether pursuant to Section 4 or
Section 6 of the 1997 Plan).

         II.      Section 6 of the 1997 Plan was amended to read in its entirety
                  as follows:

                  "6. GRANT OF INDEPENDENT DIRECTOR OPTIONS. Each Independent
                  Director who is an Independent Director on May 1, 2000 [the
                  effective date of the amendment to the Plan] shall be granted,
                  in addition to the options to purchase shares under the Plan
                  currently outstanding, a stock option under the Plan to
                  purchase 2,500 shares of Common Stock effective on May 1,
                  2000.

                  Each Independent Director, upon his or her initial election to
                  a first term on the Board of Directors, shall, on the date of
                  such initial election, automatically be granted an option to
                  purchase 7,500 shares of Common Stock. In addition, on the
                  date of each annual meeting of shareholders of the Company,
                  beginning with the annual meeting to be held in 2001, each
                  Independent Director shall automatically be granted options to
                  purchase 7,500 shares of Common Stock upon the re-election of
                  such Independent Director to the Board by the shareholders of
                  the Company."