PIONEER STANDARD ELECTRONICS INC, DEF 14A, 2000-06-28

PIONEER STANDARD ELECTRONICS INC
DEF 14A, 2000-06-28
ELECTRONIC PARTS & EQUIPMENT, NEC

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SCHEDULE 14A
(RULE 14a)
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> <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 Under Rule 14a-12.
</TABLE>

PIONEER-STANDARD ELECTRONICS, INC.
(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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<PAGE> 2

[Pioneer Standard Logo]

PIONEER-STANDARD ELECTRONICS, INC.
6065 PARKLAND BOULEVARD / MAYFIELD HEIGHTS, OHIO 44124

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

June 28, 2000

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders of
Pioneer-Standard Electronics, Inc., which will be held at 11:00 a.m., local
time, on Tuesday, July 25, 2000, at Pioneer-Standard Electronics, Inc., Computer
Systems Division, 6675 Parkland Boulevard, Solon, Ohio 44139. Your Board of
Directors and management look forward to greeting personally those shareholders
able to attend.

At the meeting, in addition to electing three Class C Directors, your Board
is asking shareholders to approve the Pioneer-Standard Electronics, Inc. 2000
Stock Option Plan for Outside Directors, the Pioneer-Standard Electronics, Inc.
2000 Stock Incentive Plan and the Pioneer-Standard Electronics, Inc. 2000 Annual
Incentive Plan. Detailed information about these proposals is more fully set
forth in the accompanying Proxy Statement for your information.

It is important that your shares are represented and voted at the meeting
whether or not you plan to attend. Accordingly, please sign, date and mail the
enclosed Proxy in the envelope provided, at your earliest convenience.

Thank you for your cooperation and continued support.

/s/ James L. Bayman
James L. Bayman
Chairman of the Board and
Chief Executive Officer
<PAGE> 3

[Pioneer Standard Logo]

PIONEER-STANDARD ELECTRONICS, INC.
6065 PARKLAND BOULEVARD / MAYFIELD HEIGHTS, OHIO 44124

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The Annual Meeting of the Shareholders (the "Annual Meeting") of
Pioneer-Standard Electronics, Inc. (the "Company") will be held at
Pioneer-Standard Electronics, Inc., Computer Systems Division, 6675 Parkland
Boulevard, Solon, Ohio 44139, on Tuesday, July 25, 2000, at 11:00 a.m., local
time, for the following purposes:

1. To elect three Class C members of the Board of Directors of the
Company to hold office for a term of three years expiring in 2003;

2. To approve the Pioneer-Standard Electronics, Inc. 2000 Stock Option
Plan for Outside Directors;

3. To approve the Pioneer-Standard Electronics, Inc. 2000 Stock
Incentive Plan;

4. To approve the Pioneer-Standard Electronics, Inc. 2000 Annual
Incentive Plan; and

5. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.

Only shareholders of record at the close of business on June 5, 2000 are
entitled to notice of the Annual Meeting and to vote thereat.

By Order of the Board of Directors.

Lawrence N. Schultz
Secretary

June 28, 2000
<PAGE> 4

[Pioneer Standard Logo]

PIONEER-STANDARD ELECTRONICS, INC.
6065 PARKLAND BOULEVARD / MAYFIELD HEIGHTS, OHIO 44124

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

MAILED TO SHAREHOLDERS ON OR ABOUT JUNE 28, 2000

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JULY 25, 2000

The Proxy enclosed with this Proxy Statement is solicited by the Board of
Directors of Pioneer-Standard Electronics, Inc. (the "Company") and is to be
used at the Annual Meeting of Shareholders (the "Annual Meeting") to be held on
July 25, 2000, and any adjournments thereof. The time, place and purposes of the
Annual Meeting are stated in the Notice of Annual Meeting of Shareholders which
accompanies this Proxy Statement. Without affecting any vote previously taken, a
shareholder may revoke his, her or its Proxy by giving notice to the Company in
writing at any time before its exercise or in open meeting. Unless so revoked,
shares represented by a valid Proxy (in the form enclosed and properly signed)
received in time for voting will be voted in accordance with the directions
contained therein.

The holders of Common Shares of the Company (the only class of shares
outstanding) will be entitled to vote at the Annual Meeting. At the close of
business on June 5, 2000, the date fixed for the determination of persons
entitled to vote, there were 31,541,780 Common Shares outstanding and entitled
to vote at the Annual Meeting, each share being entitled to one vote. Under Ohio
law and the Company's Amended Code of Regulations, if a quorum is present at the
Annual Meeting, the three nominees for election as Directors who receive the
greatest number of votes cast for the election of Directors at the Annual
Meeting by the Common Shares present in person or represented by proxy and
entitled to vote will be elected Directors ("Proposal 1"). The affirmative vote
of the holders of a majority of the Common Shares present in person or
represented by proxy and entitled to vote is required to authorize, approve and
adopt the Pioneer-Standard Electronics, Inc. 2000 Stock Option Plan for Outside
Directors ("Proposal 2"), to authorize, approve and adopt the Pioneer-Standard
Electronics, Inc. 2000 Stock Incentive Plan ("Proposal 3") and to authorize,
approve and adopt the Pioneer-Standard Electronics, Inc. 2000 Annual Incentive
Plan ("Proposal 4"). Votes that are withheld with respect to the election of
Directors will not be counted in determining the outcome of the election. An
abstention from voting any share with respect to Proposal 2, Proposal 3 or
Proposal 4 will have the practical effect of a vote against such proposal. A
broker non-vote with respect to any share will not affect the approval of
Proposal 2, Proposal 3 or Proposal 4, since the share is not considered present
for voting purposes.

If notice in writing is given by any shareholder to the Chief Executive
Officer, President, a Vice President or the Secretary of the Company not less
than 48 hours before the time fixed for holding the Annual Meeting that he, she
or it desires the voting for the election of Directors to be cumulative, an
announcement of the giving of such notice shall be made upon the convening of
the meeting by the Chairman or Secretary or may be made by or on behalf of the
shareholder giving such notice. Cumulative voting permits each shareholder to
cumulate his or her voting power at such election by giving one nominee as many
votes as equals the product of the number of Directors to be elected multiplied
by the number of his votes, or by distributing his or her votes on the same
principle among two or more nominees, as the shareholder sees fit.
<PAGE> 5

ELECTION OF DIRECTORS

At this Annual Meeting, three Class C Directors are to be elected for a
three-year term ending at the Annual Meeting in 2003. The Board of Directors'
nominees for election are Charles F. Christ, Arthur Rhein and Thomas C.
Sullivan. Messrs. Christ, Rhein and Sullivan currently serve as Directors of the
Company.

The proxyholders named in the accompanying Proxy or their substitutes will
vote such Proxy at the Annual Meeting or any adjournments thereof for the
election as Directors of the three nominees named above unless the shareholder
instructs by marking the appropriate space on the Proxy that authority to vote
is withheld. If cumulative voting is in effect, the proxyholders shall have full
discretion and authority to vote for any one or more of such nominees. In the
event of cumulative voting, the proxyholders can vote the shares represented by
each Proxy so as to maximize the number of Board of Directors' nominees elected
to the Board. Each of the nominees has indicated his willingness to serve as a
Director, if elected. If any nominee should become unavailable for election
(which contingency is not now contemplated or foreseen), it is intended that the
shares represented by the Proxy will be voted for such substitute nominee as may
be named by the Board of Directors. In no event will the accompanying Proxy be
voted for more than three nominees or for persons other than those named above
and any such substitute nominee for any of them.

The following table sets forth, with respect to each of the nominees for
election and the other Directors whose terms will continue after the Annual
Meeting: his principal occupation for the past five years and his directorships
in other publicly-held corporations; the year during which his service as a
Director commenced; his age; and the expiration date of his term or the term for
which he is a nominee.

NOMINEES FOR ELECTION

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DIRECTOR PROPOSED
FOR PAST FIVE YEARS AND OTHER CONTINUOUSLY TERM
NAME DIRECTORSHIPS OF PUBLICLY-HELD CORPORATIONS SINCE AGE EXPIRATION
---- ------------------------------------------- ------------ --- ----------
<S> <C> <C> <C> <C>
CLASS C DIRECTORS
Charles F. Christ (3)................ Retired Vice President and General Manager 1997 61 2003
of Components Division, Digital Equipment
Corporation (Computer and Office Equipment)
from July 1994 to July 1997; prior thereto,
Vice President, Storage Business Unit,
Digital Equipment Corporation; Director,
Maxtor Corporation
Arthur Rhein......................... President and Chief Operating Officer of 1990 54 2003
the Company since April 1997; prior
thereto, Senior Vice President of the
Company from April 1993 until April 1997
and Vice President -- Marketing from 1986
to April 1993
</TABLE>

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<PAGE> 6

DIRECTORS CONTINUING IN OFFICE

CLASS A DIRECTORS
Victor Gelb(1)(2)(3)................. President, Victor Gelb, Inc. (Industrial 1971 73 2001
Fibers); Director, Specialty Chemical
Resources
Keith M. Kolerus..................... Retired Vice President, American Division, 1998 54 2001
National Semiconductor (Computer
Components), from 1996 to February 1998;
Vice President, Strategy -- International
Business, National Semiconductor, from 1995
to 1996; President, National Semiconductor
Japan Ltd., from 1992 to 1995; Chairman of
the Board of Directors, National
Semiconductor Japan Ltd., from 1995 to
1998; Director, Intelic Software Solutions
Inc., Embedded Solutions Ltd., Inc.
Edwin Z. Singer(1)(2)(3)............. Chairman of the Board, Sandusco, Inc. 1974 69 2001
(Wholesale Merchandising, Real Estate)

CLASS B DIRECTORS
James L. Bayman(1)................... Chief Executive Officer and Chairman of the 1984 63 2002
Board of the Company since April 1995;
President of the Company from June 1984 to
April 1997; Chief Operating Officer of the
Company from June, 1984 to April 1995
</TABLE>

3
<PAGE> 7

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DIRECTOR PROPOSED
FOR PAST FIVE YEARS AND OTHER CONTINUOUSLY TERM
NAME DIRECTORSHIPS OF PUBLICLY-HELD CORPORATIONS SINCE AGE EXPIRATION
---- ------------------------------------------- ------------ --- ----------
<S> <C> <C> <C> <C>
Thomas A. Commes..................... Retired President and Chief Operating 1999 58 2002
Officer of The Sherwin-Williams Company
(Paints and Painting Supplies Manufacture
and Distribution) from June 1986 to March
1999 and a Director of The Sherwin-Williams
Company from April 1980 to March 1999;
Director, Applied Industrial Technologies,
Inc., Generac Portable Products, Inc., and
KeyCorp
Karl E. Ware(2)...................... Chairman and Chief Executive Officer, Ware 1988 73 2002
Industries, Inc. (Metal Wire Forms and
Steel Components)
</TABLE>

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

(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.

INFORMATION REGARDING MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS AND
COMPENSATION OF DIRECTORS

The Board of Directors has an Executive Committee, an Audit Committee and a
Compensation Committee. The Executive Committee, which held no meetings during
the last fiscal year, exercises the power and authority of the Board of
Directors in the interim period between Board meetings. The Audit Committee,
which held four meetings during the last fiscal year, reviews with the Company's
independent auditors the proposed scope of the Company's annual audits and audit
results, reviews the adequacy of internal financial controls, reviews internal
audit functions, provides recommendations as to the engagement of independent
auditors, and reviews any problems identified by either the internal or external
audit functions. The Compensation Committee, which held three meetings during
the last fiscal year, reviews and makes recommendations concerning executive
officers' compensation and employment agreements and the Company's stock option
plans. The Compensation Committee also reviews and makes recommendations
concerning outside Director compensation. The Board of Directors serves as the
Company's nominating committee.

The Board of Directors held four meetings during the last fiscal year.
During the fiscal year, no Director attended less than 75% of the aggregate of
(i) the total number of meetings of the Board of Directors held during the
period he served as a Director and (ii) the total number of meetings held by
Committees of the Board on which he served, during the periods that he served,
except that Mr. Christ was unable to attend one of the two meetings of the
Compensation Committee held during the time Mr. Christ was a member of the
Compensation Committee.

Directors who are not also employees of the Company receive an annual fee
of $20,000 and $1,000 for each Board or Committee meeting attended. In addition,
such Directors receive $1,000 for each Board or Committee telephone conference
in which he participates. In the event that more than one Board or Committee
meeting is held on the same day, the Directors involved receive $500 for the
second meeting attended. As Chairman of the Audit Committee, Mr. Singer received
an annual fee of $4,000 in addition to

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<PAGE> 8

any fees he received as a Committee member, and, as Chairman of the Compensation
Committee, Mr. Gelb received an annual fee of $4,000 in addition to any fees he
received as a Committee member.

Upon their election or appointment to the Board of Directors, outside
Directors also receive, under the Company's 1999 Stock Option Plan for Outside
Directors, an option to purchase 7,500 Common Shares. Such option has an
exercise price equal to the fair market value of a Common Share on the date of
grant, becomes exercisable in full on the date of grant, and expires ten years
from the date of grant, unless the Director's services are earlier terminated.

The Company also provides a Deferred Compensation Plan for its outside
Directors. The Plan provides that a Director may elect, no later than 15 days
prior to the start of a fiscal year, to defer all or a part of such Director's
compensation for the following year, which deferral will continue until the
election is revoked. Deferred compensation is credited to a Director's account,
at the Director's option, as a cash allotment or stock allotment. Amounts
deferred as a cash allotment bear interest at the National City Bank prime
interest rate. Amounts deferred as a stock allotment are credited to the
Director's account as the stock equivalent of the number of Common Shares that
could be purchased with the dollar amount of the allotment at the last sales
price of the Common Shares on the last trading day of the applicable quarter.
Distributions of the final account balance in a Director's account are payable
in cash in five equal annual installments, or such other distribution schedule
requested by the Director which is acceptable to the Company, commencing six
months after the date on which the person ceases to be a Director or the date on
which the Director elects to terminate participation in the Plan. The Plan also
provides for various payment terms to beneficiaries in the event of the
Director's death.

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<PAGE> 9

SHARE OWNERSHIP

The following table sets forth the number of Common Shares beneficially
owned by each Director nominee and Director; the Chief Executive Officer and
each of the Executive Officers of the Company named in the Summary Compensation
Table below; all Directors and Executive Officers as a group; persons known to
the Company to own beneficially in excess of five percent of the Common Shares;
and the percent of the class so owned as of June 5, 2000, unless otherwise
indicated.

<TABLE>
<CAPTION>
NUMBER OF
COMMON SHARES
BENEFICIALLY PERCENT
NAME OWNED(1) OF CLASS
---- ------------- --------
<S> <C> <C>
DIRECTOR NOMINEES AND DIRECTORS (EXCLUDING EXECUTIVE
OFFICERS)(2)
Charles F. Christ........................................... 13,500(3) *
Thomas A. Commes............................................ 27,500(4) .1
Victor Gelb................................................. 45,252(5) .1
Keith M. Kolerus............................................ 15,500(6) *
Edwin Z. Singer............................................. 103,079(5)(7) .3
Thomas C. Sullivan.......................................... 21,375(5) *
Karl E. Ware................................................ 17,750(5) *
EXECUTIVE OFFICERS(2)
James L. Bayman............................................. 1,438,396(8) 4.5
Gregory T. Geswein.......................................... -- --
John V. Goodger............................................. 264,306(9) .8
Thomas G. Pitera............................................ 75,184(10) .2
Arthur Rhein................................................ 441,775(11) 1.4
All Directors and Executive Officers as a group (12
persons).................................................. 2,466,117(12) 7.5
OTHER PERSONS
Fiduciary Management, Inc.
225 East Mason Street
Milwaukee, Wisconsin 53202................................ 2,021,155(13) 6.41
Putnam Investments, Inc.
One Post Office Square
Boston, Massachusetts 02109............................... 2,084,616(14) 6.61
Wachovia Corporation
Wachovia Bank, National Association
100 North Main Street
Winston-Salem, North Carolina 27104....................... 4,056,202(15) 12.86
Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401............................ 1,610,625(16) 5.11
</TABLE>

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

* Shares owned are less than one-tenth of one percent of class.

(1) Except where otherwise indicated, beneficial ownership of the Common Shares
held by the persons listed in the table above comprises both sole voting
and dispositive power, or voting and dispositive power that is shared with
the spouses of such persons.

(2) The address of each Director nominee, Director and Executive Officer is
6065 Parkland Boulevard, Mayfield Heights, Ohio 44124.

(3) Includes 13,500 Common Shares which the Director has the right to acquire
within 60 days of June 5, 2000 through the exercise of stock options
granted to the Director under the 1995 and 1999 Stock Option Plans for
Outside Directors.

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<PAGE> 10

(4) Includes 7,500 Common Shares which the Director has the right to acquire
within 60 days of June 5, 2000 through the exercise of stock options
granted to the Director under the 1999 Stock Option Plan for Outside
Directors.

(5) Includes 15,000 Common Shares which the Director has the right to acquire
within 60 days of June 5, 2000 through the exercise of stock options
granted to the Director under the 1995 and 1999 Stock Option Plans for
Outside Directors.

(6) Includes 10,500 Common Shares which the Director has the right to acquire
within 60 days of June 5, 2000 through the exercise of stock options
granted to the Director under the 1995 and 1999 Stock Option Plans for
Outside Directors.

(7) Includes 70,000 Common Shares beneficially owned by a corporation
controlled by Mr. Singer.

(8) Includes (i) 167,434 Common Shares which Mr. Bayman has the right to
acquire within 60 days of June 5, 2000, through the exercise of stock
options granted to him under the 1991 Stock Option Plan and (ii) 611,567
restricted Common Shares which Mr. Bayman was granted under the Pioneer-
Standard Electronics, Inc. 1999 Restricted Stock Plan, as to which Mr.
Bayman has sole voting power but no dispositive power until such shares
have become vested.

(9) Includes (i) 145,688 Common Shares which Mr. Goodger has the right to
acquire within 60 days of June 5, 2000, through the exercise of stock
options granted to him under the 1982 Incentive Stock Option Plan and 1991
Stock Option Plan and (ii) 112,231 restricted Common Shares which Mr.
Goodger was granted under the Pioneer-Standard Electronics, Inc. 1999
Restricted Stock Plan, as to which Mr. Goodger has sole voting power but no
dispositive power until such shares have become vested.

(10) Includes 71,809 Common Shares which Mr. Pitera has the right to acquire
within 60 days of June 5, 2000 through the exercise of stock options
granted to him under the 1982 Incentive Stock Option Plan and the 1991
Stock Option Plan.

(11) Includes 189,050 Common Shares which Mr. Rhein has the right to acquire
within 60 days of June 5, 2000, through the exercise of stock options
granted to him under the 1982 Incentive Stock Option Plan and the 1991
Stock Option Plan.

(12) The number of Common Shares shown as beneficially owned by the Company's
Directors and Executive Officers as a group includes 665,481 Common Shares
which such persons have the right to acquire within 60 days of June 5, 2000
through the exercise of stock options granted to them under the 1982
Incentive Stock Option Plan, the 1991 Stock Option Plan, the 1995 Stock
Option Plan for Outside Directors and the 1999 Stock Option Plan for
Outside Directors.

(13) As reported on a Schedule 13G report dated February 9, 2000. The reporting
person has shared dispositive power with respect to 273,100 Common Shares.

(14) As reported on a Schedule 13G report dated February 7, 2000. The reporting
person has shared voting power with respect to 227,754 Common Shares and
shared dispositive power with respect to 2,084,616 Common Shares. Of the
Common Shares shown in the table, Putnam Investment Management, Inc. and
The Putnam Advisory Company, Inc., which are wholly owned subsidiaries of
Putnam Investments, Inc. and are located at the same address as Putnam
Investments, Inc., beneficially own 530,308 Common Shares and 1,554,308
Common Shares, respectively.

(15) The reporting person has shared voting power with respect to the 4,056,202
Common Shares. These Common Shares are held in The Pioneer Stock Benefit
Trust, of which the reporting person is trustee, pursuant to the Share
Subscription Agreement and Trust effective as of July 2, 1996, between the
Company and Wachovia Bank of North Carolina, N.A.

(16) As reported on a Schedule 13G report dated February 2, 2000.

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<PAGE> 11

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth information concerning the annual and
long-term compensation for services in all capacities to the Company for the
years ended March 31, 2000, 1999 and 1998, of all those persons who were during
the 2000 fiscal year (i) the Chief Executive Officer and (ii) the other four
most highly compensated Executive Officers of the Company for the fiscal year
(collectively, the "Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------- -----------------------
OTHER RESTRICTED SECURITIES
NAME AND ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1) AWARDS (2) OPTIONS COMPENSATION(3)
------------------ ---- -------- -------- ---------------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
James L. Bayman......... 2000 $500,000 $619,662 $-- $8,256,155 -- $45,152
Chairman of the 1999 425,000 398,653 -- -- 200,000 43,926
Board and Chief 1998 300,000 479,748 -- -- 25,000 43,816
Executive Officer
Arthur Rhein............ 2000 400,000 503,475 -- -- -- 33,966
President and Chief 1999 350,000 323,906 -- -- 150,000 33,184
Operating Officer 1998 271,250 390,108 -- -- 20,000 32,573
Thomas G. Pitera........ 2000 325,000 355,163 -- -- -- 8,219
President, Industrial 1999 331,246 90,417 -- -- 90,000 6,096
Electronics Division 1998 216,660 90,054 -- -- 14,000 7,826
John V. Goodger (4)..... 2000 225,000 139,187 -- 1,515,119 -- 28,906
Vice President, 1999 200,000 74,747 -- -- 80,000 28,513
Treasurer and 1998 150,000 89,640 -- -- 5,000 29,842
Assistant Secretary
Gregory T. Geswein
(5)................... 2000 300,000 271,390 -- -- 65,000 2,500
Senior Vice 1999 28,462 50,000 -- -- -- --
President and 1998 -- -- -- -- -- --
Chief Financial
Officer
</TABLE>

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

(1) Unless otherwise indicated, no Executive Officer named in the Summary
Compensation Table received personal benefits or perquisites in excess of
the lesser of $50,000 or 10% of his aggregate salary and bonus.

(2) The dollar value for the fiscal year ended March 31, 2000 was calculated by
multiplying the number of restricted Common Shares granted to Messrs. Bayman
and Goodger, respectively, by the closing price of $13.50 on July 27, 1999.
As of March 31, 2000, the 611,567 restricted Common Shares held by Mr.
Bayman had an aggregate value of $9,632,180.25, and the 112,231 restricted
Common Shares held by Mr. Goodger had an aggregate value of $1,767,638.25,
based upon the closing price of the Common Shares on March 31, 2000 of
$15.75 per share. The Company's Restricted Stock Plan provides for the
vesting of the Common Shares over a three-year period commencing when Mr.
Bayman or Mr. Goodger commences his Period of Transition described below.
See "Employment Agreements." Dividends on the restricted Common Shares are
payable to Messrs. Bayman and Goodger, respectively, in the same manner as
dividends on other Common Shares.

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<PAGE> 12

(3) Consists of (i) contributions by the Company on behalf of the Executive
Officers to the Pioneer-Standard Electronics, Inc. Employees' Profit Sharing
Retirement Plan, which during fiscal 2000 were as follows: James L. Bayman,
$7,039; Arthur Rhein, $7,444; Thomas G. Pitera, $8,219; John V. Goodger,
$5,146; and Gregory T. Geswein, $2,500; and (ii) premiums paid for split
dollar life insurance by the Company, which during fiscal 2000 were as
follows: James L. Bayman, $38,113; Arthur Rhein, $26,522; and John V.
Goodger, $23,760.

(4) Mr. Goodger elected to commence a three-year period of limited duties
pursuant to the terms of his Employment Agreement effective April 1, 2000.
See "Employment Agreements."

(5) Mr. Geswein resigned from his position with the Company effective April 1,
2000.

Shown below is information with respect to the exercise of options to
purchase Common Shares by the Executive Officers and unexercised options to
purchase Common Shares for the Executive Officers.

OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
ACQUIRED FISCAL YEAR-END AT FISCAL YEAR-END (1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James L. Bayman............. -- $ -- 109,354 120,646 $ 510,032 $ 626,218
Arthur Rhein................ 84,375 941,794 151,950 190,900 1,287,804 1,127,912
Thomas G. Pitera............ 3,375 47,375 71,809 104,266 419,156 475,712
John V. Goodger............. 3,375 33,348 145,436 252 917,612 851
Gregory T. Geswein.......... -- -- -- 65,000 -- 568,750
</TABLE>

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

(1) Based on the difference between the exercise price of such options and the
closing price of a share of Common Shares on Nasdaq on March 31, 2000
($15.75).

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

The Supplemental Executive Retirement Plan was established during the 2000
fiscal year to provide retirement cash benefits, in an amount not to exceed 50%
of final average earnings, to a select group of highly-compensated management
employees. The maximum cash benefit under the Supplemental Executive Retirement
Plan is limited to 50% of the participant's final average earnings, which for
this purpose would be the participant's base salary, including pre-tax
deferrals, plus annual incentive compensation, offset by other Company funded
retirement benefits. Pursuant to administrative provisions of the Supplemental
Executive Retirement Plan, no employees were enrolled or accrued benefits under
the Supplemental Executive Retirement Plan during the 2000 fiscal year. Messrs.
Bayman and Goodger do not participate in the Supplemental Executive Retirement
Plan, but instead are covered by the Restricted Stock Plan.

EMPLOYMENT AGREEMENTS

The Company entered into Amended and Restated Employment Agreements
effective April 1, 1999 (the "1999 Employment Agreements"), with Messrs. James
L. Bayman, Arthur Rhein, John V. Goodger and Gregory T. Geswein, pursuant to
which such officers were employed by the Company for the fiscal year ended March
31, 2000. Although Mr. Goodger's Agreement remains in effect, Mr. Bayman and Mr.
Rhein entered into new Employment Agreements with the Company effective April 1,
2000 (the "2000 Employment

9
<PAGE> 13

Agreements"), which replaced their 1999 Employment Agreements. Mr. Geswein
resigned from the Company effective April 1, 2000. The terms of both the 1999
Employment Agreements and the 2000 Employment Agreements are described below.

1999 Employment Agreements. For the fiscal year ending March 31, 2000,
Messrs. Bayman, Rhein, Goodger and Geswein received an annual base salary
pursuant to the 1999 Employment Agreements of $500,000, $400,000, $225,000 and
$300,000, respectively. Messrs. Bayman, Rhein, Goodger and Geswein received an
annual cash incentive bonus under the 1999 Employment Agreements for the fiscal
year ended March 31, 2000 of $619,662, $503,475, $139,187 and $271,390,
respectively. The 1999 Employment Agreement for Mr. Bayman provided for a term
of three years with an option on his part to reduce the term to two years. The
1999 Employment Agreement for Mr. Goodger provides for a term of two years with
an option on his part to reduce the term to one year, and the 1999 Employment
Agreements for Messrs. Rhein and Geswein had a term of one year, which term was
to be renewed automatically for successive one year terms unless terminated by
either the Company or the executive pursuant to the provisions of the Employment
Agreement. The 1999 Employment Agreements for Messrs. Bayman and Goodger also
provided for three year employment/consulting arrangements with the Company
after expiration of their respective terms as officers of the Company, pursuant
to which they would be paid $110,000 and $55,000 per year, respectively, for
their part time services and during which Period of Transition they will remain
employees of the Company for all purposes. On January 31, 2000, Mr. Goodger
elected to begin such Period of Transition, effective April 1, 2000.

2000 Employment Agreements. The Company entered into the 2000 Employment
Agreements with Messrs. Bayman and Rhein effective April 1, 2000, and with Mr.
Billick (who was elected Senior Vice President and Chief Financial Officer of
the Company on April 26, 2000) effective April 24, 2000. The 2000 Employment
Agreements for Messrs. Bayman, Rhein and Billick provide for a monthly base
salary of $50,000, $41,666.67 and $25,000, respectively. Each of Messrs. Bayman,
Rhein and Billick are eligible to participate in the Company's 2000 Annual
Incentive Plan under the 2000 Employment Agreements.

The 2000 Employment Agreement for Mr. Bayman has a term of two years, with
an option on his part to reduce the term to one year. As was also provided in
his 1999 Employment Agreement, the 2000 Employment Agreement for Mr. Bayman
provides a three year employment/consulting arrangement with the Company after
expiration of his term as an officer of the Company pursuant to which he will be
paid $110,000 per year for his part time services and during which Period of
Transition he will remain an employee of the Company for all purposes. The 2000
Employment Agreements for Mr. Rhein and Mr. Billick have a term of one year,
which term is renewed automatically for successive one year terms unless
terminated by either the Company or the executive pursuant to the provisions of
the 2000 Employment Agreements.

Messrs. Bayman, Rhein and Billick will be entitled to certain payments and
benefits under the 2000 Employment Agreements if their employment with the
Company is terminated under certain circumstances. In the event of discharge or
voluntary resignation during the one year period following a change in control
(or, in certain circumstances, in the event of discharge during a limited period
before an anticipated change in control) of the Company (as defined below),
Messrs. Bayman and Rhein are entitled to receive under the 2000 Employment
Agreements their base salary through the end of the month in which their
termination of employment occurs, plus an amount equal to 36 times their current
base salary payable in one payment immediately upon such termination. In
addition, each of Messrs. Bayman and Rhein are entitled to immediate payment of
an incentive cash bonus based upon his incentive cash bonus under the 2000
Annual Incentive Plan (or any predecessor annual incentive plan or arrangement)
for the preceding year, pro rated for the

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<PAGE> 14

current year, plus an amount equal to his earned incentive cash bonus under the
2000 Annual Incentive Plan (or any predecessor annual incentive plan or
arrangement) for the preceding three years. For three years following such
termination, Messrs. Bayman and Rhein also are entitled to all benefits and
service credits for benefits under all employee benefit plans, programs or
arrangements of the Company on the same basis as provided immediately prior to
his termination. In the event of discharge or voluntary resignation during the
one year period following a change in control of the Company, Mr. Billick is
entitled to receive under the 2000 Employment Agreement his base salary through
the end of the month in which his termination of employment occurs, plus an
amount equal to 12 times his current monthly base salary, payable in one payment
immediately upon such termination. In addition, Mr. Billick is entitled to
immediate payment of $100,000 if his termination of employment occurs prior to
April 1, 2001, or an incentive cash bonus based upon his incentive cash bonus
under the 2000 Annual Incentive Plan for the preceding year, pro rated for the
current year, plus an amount equal to his earned incentive cash bonus under the
2000 Annual Incentive Plan for the preceding year, if his termination of
employment occurs on or after April 1, 2001. For one year following such
termination, Mr. Billick also is entitled to all benefits and service credits
for benefits under all employee benefit plans, programs or arrangements of the
Company on the same basis as provided immediately prior to his termination.
"Change in control" is defined in the 2000 Employment Agreements as a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, including (i) the acquisition by any person of beneficial
ownership, directly or indirectly, of securities of the Company representing 20%
or more of the combined voting power of the Company's then outstanding
securities or (ii) the event that, during any period of 12 consecutive months,
individuals who were Directors of the Company at the beginning of the period,
and for whom such officers voted as a shareholder, cease for any reason to
constitute at least a majority of the Board of Directors. The 2000 Employment
Agreement for Mr. Rhein defines "change in control" to include, in addition to
the foregoing, the event that Mr. Rhein is not offered the position of Chief
Executive Officer of the Company within six months after the termination of Mr.
Bayman's status as such, or, at any time during the one year period following
the first day on which Mr. Rhein holds the title of Chief Executive Officer,
such title is revoked or his duties or obligations are materially inconsistent
with the duties or obligations of the Chief Executive Officer of the Company,
unless the failure of Mr. Rhein to be offered such position or such revocation
or assignation is due to his disability, death, termination of employment for
cause (as described below) or voluntary termination without a "good reason" (as
described below).

In the event of discharge without cause or voluntary resignation for a good
reason, each of Messrs. Bayman and Rhein is entitled to receive his base salary
for the month in which his termination of employment occurs; plus an incentive
cash bonus calculated on the basis of his earned incentive cash bonus under the
2000 Annual Incentive Plan (or any predecessor annual incentive plan or
arrangement) for the immediately preceding fiscal year, pro rated for the then
current fiscal year through his date of termination; plus a monthly payment, for
the 24 months following such termination of employment, of an amount equal to
1/24th of the sum of 24 times his current monthly base salary plus an amount
equal to his earned incentive cash bonus under the 2000 Annual Incentive Plan
(or any predecessor annual incentive plan or arrangement) for the two previously
completed fiscal years. For the 24 months following such termination, Messrs.
Rhein and Bayman also are entitled to all benefits and service credits for
benefits under all employee benefit plans, programs or arrangements of the
Company on the same basis as provided immediately prior to his termination. In
the event of discharge without cause or voluntary resignation for a good reason,
Mr. Billick is entitled to receive his base salary for the month in which his
termination of employment occurs; plus, if his termination of employment occurs
prior to April 1, 2001, $100,000 and an amount equal to 12 times his current
base salary, or, if his termination occurs on or after April 1, 2001, an
incentive cash bonus calculated on the basis of his

11
<PAGE> 15

earned incentive cash bonus under the 2000 Annual Incentive Plan, plus a monthly
payment, for the 12 months following such termination of employment, of an
amount equal to 1/12th of the sum of 12 times his current monthly base salary
plus an amount equal to his earned incentive cash bonus under the 2000 Annual
Incentive Plan for the previously completed fiscal year. For the 12 months
following such termination, Mr. Billick also is entitled to all benefits and
service credits for benefits under all employee benefit plans, programs or
arrangements of the Company on the same basis as provided immediately prior to
his termination. Amounts payable to any of Messrs. Bayman, Rhein or Billick as a
result of termination by the Company without cause or voluntary termination
without good reason will be reduced by any amounts which the executive to whom
payments are due actually receives from another employer during the 24 month
period (or, in the case of Mr. Billick, the 12 month period) following the date
of any such termination, and any benefits payable to such executive by reason of
any welfare benefit plan of the Company or perquisites will be reduced to the
extent comparable benefits or perquisites (or the cash equivalent thereof) are
actually received by such executive from another employer during such period.

The 2000 Employment Agreements also contain provisions regarding
confidentiality and, except upon voluntary or involuntary termination within one
year after a change in control, non-competition and non-interference (for two
years following termination of employment). All obligations of the Company to
make any payments or provide any benefits following termination of employment
under the 2000 Employment Agreements cease upon any breach of the
non-competition or confidentiality terms of the 2000 Employment Agreements.

"Cause" is defined in the 2000 Employment Agreements to mean that
termination of the executive's employment shall have been the result of (a) his
conviction of the offense of misappropriation of money or other property of the
Company or of any felony, provided that such offense or felony results in
material economic harm to the Company or has a materially adverse effect on the
Company's operations, property or business relationships; (b) a breach by the
executive of his obligation under the 2000 Employment Agreement to devote his
full time to the affairs of the Company (which breach is not cured within 30
days after the executive's receipt of written notice from the Company) or a
breach of any of the restrictive covenants relating to competition, disclosure
or solicitation contained in the 2000 Employment Agreement; or (c) the
substantial and continued failure or refusal to perform under the 2000
Employment Agreement which the executive fails to remedy within 30 days after
his receipt of written notice from the Company. "Good reason" is defined in the
2000 Employment Agreements generally to mean the occurrence of: (i) any
reduction in the executive's position, authority or title; (ii) any material
reduction in the executive's responsibilities or duties for the Company; (iii)
any material adverse change or reduction in the aggregate perquisites, benefits
and payments to which the executive is entitled under the 2000 Employment
Agreements; (iv) (except in Mr. Billick's case) any change in the executive's
reporting relationship; (v) any relocation of the executive's principal place of
work with the Company to a location that exceeds by 50 miles the distance from
the location of his residence at the time of such relocation of his principal
place of work with the Company to the Company's headquarters; or (vi) the
material breach or material default by the Company of any of its agreements or
obligations under any provision of the 2000 Employment Agreements, unless such
breach or default is substantially cured within 30 days after written notice
advising the Company of the acts or omissions constituting such breach or
default is actually received by the Company.

Upon either voluntary termination without good reason or termination for
cause, the executives whose employment with the Company is so terminated will
not be entitled to further remuneration payments under the 2000 Employment
Agreements. The 2000 Employment Agreements also prohibit the executives from
competing with the Company or interfering with the Company's relationships with
its customers and

12
<PAGE> 16

employees if the executive's employment with the Company is terminated for any
reason other than in connection with a change in control, and the breach of any
of such prohibitions by an executive will result in the termination of payments
by the Company to the executive under the 2000 Employment Agreements.

The 2000 Employment Agreements also provide that, if any payment received
by Messrs. Bayman, Rhein or Billick in connection with a change in control of
the Company is deemed a "parachute payment" under Section 280G of the Internal
Revenue Code of 1986, as amended, resulting in an "excess parachute payment"
within the meaning of Section 280G(b), such executive will be entitled to a cash
payment in an amount equal to the 20% excise tax, if any, payable by such
executive pursuant to the provisions of Section 4999, which amount will be
increased by the aggregate of the amount of any federal, state, and local income
taxes and excise taxes for which he may become liable on account of the receipt
of the excise tax payment. The 2000 Employment Agreements also provide for
payment by the Company of up to $500,000 of legal fees incurred by any of
Messrs. Bayman, Rhein or Billick in the event that, following a "change in
control," the executive may be caused to institute or defend proceedings to
enforce his rights under his 2000 Employment Agreement.

Had a "change in control" and termination of employment occurred on June 5,
2000, Mr. Bayman would have received $3,401,340 under his 2000 Employment
Agreement (36 times his current monthly base salary plus incentive bonuses) and
the 611,567 Common Shares issued to him under the Restricted Stock Plan valued
at $8,256,155 (on June 5, 2000 the Common Shares closed at $13.50 per share on
Nasdaq) would have become vested and would be considered additional taxable
income. Mr. Rhein would have received $2,801,402 under his 2000 Employment
Agreement, and Mr. Billick would have received $400,000 under his 2000
Employment Agreement. In addition, all stock options granted to the above
individuals would have become immediately vested. To the extent that any of the
above would be considered an excess parachute payment under Section 4999 subject
to the 20% excise tax, the Company would be obligated to reimburse the officers
for such tax plus any additional excise tax thereon, plus all federal, state and
local income taxes on the excise tax reimbursements at a combined assumed rate
of forty-seven percent (47%), all or part of which may not be tax deductible by
the Company as an ordinary and necessary business expense. These payments might
have the effect of discouraging any possible acquisition or hostile takeover of
the Company. However, depending on the facts and circumstances at the time of an
actual "change in control," the payments due to Messrs. Bayman, Rhein and
Billick under their 2000 Employment Agreements may be materially larger or
smaller, and may include additional benefits and payments under other employee
benefit plans, programs, perquisites or arrangements of the Company not
considered in the above analysis.

Non-Competition Agreement and Change of Control Agreement. On February 25,
2000, the Company entered into a non-competition agreement and a change of
control agreement with Mr. Pitera. Under the non-competition agreement, in the
event the Company terminates Mr. Pitera's employment without cause, Mr. Pitera
is entitled to his monthly base salary, target incentive and benefit coverage
for twelve months following such termination. In the event Mr. Pitera's
employment is terminated for cause or Mr. Pitera voluntarily resigns his
position, the Company has no obligations for such payments or benefits coverage
under the non-competition agreement. If Mr. Pitera is terminated for cause or
voluntarily terminates his employment, he is prohibited under the
non-competition agreement for the two-year period following any such termination
(the "Noncompetition Period") from being employed by, owning, operating or
similar involvement, directly or indirectly, with any business that competes
with the Company in the distribution of electronic parts, components or systems
in the geographical area in which the Company conducts its business. In the
event that Mr. Pitera is terminated without cause, the Company may, in its sole
discretion, elect to pay Mr. Pitera his regular base salary and target incentive
for all or any part of the Noncompetition Period, which payments are separate
and in addition to the severance payments and benefits coverage described above
and,

13
<PAGE> 17

so long as the Company makes such payments, Mr. Pitera will be bound by the
noncompetition provisions described above. Mr. Pitera's non-competition
agreement also contains nondisclosure and non-interference provisions. In the
event of a change of control, the provisions of the change of control agreement
described below will supersede those of the non-competition agreement with
respect to severance and non-competition terms.

Under Mr. Pitera's change of control agreement, if during the 12 month
period following a change of control (as described below), Mr. Pitera is
discharged without cause or voluntarily terminates his employment for any
reason, he is entitled to receive a lump sum amount within 30 days of such
termination of employment equal to 24 times the greater of (i) Mr. Pitera's
highest monthly base salary paid during the twelve month period preceding a
change in control or (ii) Mr. Pitera's highest monthly base salary paid or
payable by the Company at any time from the ninety day period preceding a change
in control through the date of termination. In addition, Mr. Pitera is entitled
to receive a lump sum amount equal to the greater of (i) four times Mr. Pitera's
highest aggregate amount of incentive compensation paid during any six
consecutive months of the 12 months preceding a change in control or (ii) four
times Mr. Pitera's highest aggregate amount of incentive compensation paid
during any six consecutive months preceding the date of termination. Further,
Mr. Pitera is entitled to receive 24 times the monthly amount paid Mr. Pitera as
an auto allowance immediately preceding a change in control. For two years
following such termination, Mr. Pitera also is entitled to all benefits and
service credits for benefits under all employee benefit plans, programs or
arrangements of the Company.

If any payment received by Mr. Pitera in connection with a change of
control of the Company is deemed a "parachute payment" under Section 280G of the
Internal Revenue Code of 1986, as amended, resulting in an "excess parachute
payment" within the meaning of such Section 280G(b), he will be entitled under
the change in control agreement to a cash payment in an amount equal to the 20%
excise tax, if any, payable by him pursuant to the provisions of Section 4999,
which amount will be increased by the aggregate of the amount of any federal,
state, and local income taxes and excise taxes for which he may become liable on
account of the receipt of the excise tax payment. For purposes of the change of
control agreement, a "change of control" is defined as (i) the acquisition by
any person of beneficial ownership, directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company's
then outstanding securities, (ii) the individuals who constitute the Board of
Directors of the Company as of February 25, 2000 (the "Incumbent Board") cease
to constitute a majority of the Board of Directors of the Company, provided that
any individual who subsequently becomes a director or whose election or
nomination for election was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual in connection with an actual or threatened election
contest) shall be considered as though such person were a member of the
Incumbent Board , or (iii) approval by the Company's shareholders of a
reorganization, merger or consolidation with respect to which persons who were
not shareholders before such reorganization, merger or consolidation own more
than 80% of the combined voting power of the Company, or a liquidation of the
Company or the sale of all or substantially all of the assets of the Company.

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<PAGE> 18

SHAREHOLDER RETURN PERFORMANCE PRESENTATION

The following chart compares the value of $100 invested in the Common
Shares with a similar investment in the S&P Stock Index ("S&P 500") and the
companies listed in the SIC Code 5065-Electronic Parts and Equipment N.E.C.
Index (the Company's "Peer Group") for the period March 31, 1995 through March
31, 2000.
[line graph]

<TABLE>
<CAPTION>
PIONEER-STANDARD S&P 500 INDEX PEER GROUP
---------------- ------------- ----------
<S> <C> <C> <C>
1995 $100.00 $100.00 $100.00
1996 127.00 132.00 122.00
1997 106.00 158.00 133.00
1998 103.00 234.00 141.00
1999 56.00 278.00 78.00
2000 136.00 327.00 162.00
</TABLE>

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<PAGE> 19

COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION

The Company's Compensation Committee (the "Committee") is comprised of four
outside Directors of the Company. The Committee is responsible for reviewing,
implementing and administering the Company's executive officer and director
compensation and employment arrangements and plans.

Set forth below is a report submitted by Messrs. Christ, Gelb, Singer and
Sullivan in their capacity as members of the Committee. The report addresses the
policies of the Committee with respect to the compensation and employment
arrangements applicable to the Company's executive officers and describes the
factors considered by the Committee in determining the compensation of James L.
Bayman, Chairman and Chief Executive Officer of the Company, for the Company's
2000 fiscal year.

COMPENSATION PHILOSOPHY AND OBJECTIVES

In November 1998, at the request of the Committee, the Company retained the
services of Ernst & Young LLP ("Ernst & Young") as consultants to conduct a
comprehensive review of the Company's executive officer compensation. This
review compared the Company's executive officers' base salaries, short term
annual cash bonus incentives, long term stock incentives, retirement benefits
and perquisites to those of a peer group of twenty companies compiled by Ernst &
Young. The companies selected for inclusion in the peer group (some of which are
included in the peer group used in the "Shareholder Return Performance
Presentation" above) were those (1) with lines of business comparable to the
Company's, or (2) which may compete with the Company for executive talent. Based
on its analysis of this peer group comparison, Ernst & Young was also asked to
recommend appropriate modifications to the Company's executive compensation
practices in order to enhance the Company's ability to attract, retain and
appropriately incent talented executive officers. After lengthy consideration of
the report submitted by Ernst & Young and with the concurrence of the Company's
executive officers, the Committee developed a philosophy for compensating the
Company's executive officers and identified the Company objectives which that
philosophy is intended to accomplish. On the basis of such philosophy and
objectives, the Committee recommended a revised compensation program to the
Board of Directors, the elements of which are described below.

Compensation Philosophy. In conjunction with Ernst & Young's analysis of
the Company's compensation practices, the Committee adopted a compensation
philosophy for executive officers incorporating the following objectives:

(1) The Company will pay competitive base salary at the 50th percentile of
its compensation peer group;

(2) The Company will pay an annual cash bonus incentive targeted at the
50th percentile of its compensation peer group;

(3) The Company will maintain a long-term stock incentive program that also
generally targets the 50th percentile of its compensation peer group;

(4) Executive compensation will be reviewed annually based on a
compensation peer group, which peer group may be modified from time to
time to reflect changes in the Company's business strategy.

Compensation Objectives. The Committee believes that the Company's
executive compensation program should promote the following objectives:

(1) To attract, retain and motivate executives who can significantly
contribute to the success of the Company;

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<PAGE> 20

(2) To reward the achievement of short- and long-term business objectives
that have been approved by the Board;

(3) To provide a rational, consistent and competitive executive
compensation program that is well understood by those to whom it
applies;

(4) To tie a significant portion of executive compensation to the long-term
performance of the Common Shares.

The Committee believes that if these compensation objectives are
consistently achieved, shareholder value will be enhanced over time.

Base Salary and Annual Incentive Cash Compensation. The peer group analysis
prepared by Ernst & Young demonstrated the Company's executive officers' base
salary compensation to be substantially below the 50th percentile market
consensus. Therefore, the Committee recommended, and the Board of Directors
approved, increases in the executive officers' base salaries for the fiscal year
ended March 31, 2000. The base salary for Mr. Bayman, the Chairman and Chief
Executive Officer of the Company, was increased from $425,000 to $500,000. The
Committee believes that the approved increases for Mr. Bayman and the other
executive officers appropriately balanced the Company's objectives of providing
competitive executive compensation and managing the impact of moving executive
compensation to the 50th percentile market level. The Committee recognizes that
even at these base salary levels, total cash compensation, including base salary
and cash incentive awards, paid to the Company's elected executive officers is
still below the 50th percentile market consensus of the above referenced peer
group. In view of these circumstances, the Committee determined to continue to
review base salaries during fiscal year 2000.

Ernst & Young's peer group analysis also concluded that annual cash
incentive awards paid by the Company to elected executive officers were below
the 50th percentile market consensus. These cash incentive awards historically
have been made to such executive officers in accordance with a formula set forth
in each such executive officer's employment agreement with the Company. Under
the annual cash incentive formula contained in Mr. Bayman's employment
agreement, Mr. Bayman was entitled to an amount equal to 8/10 of 1% of the
Company's 2000 operating income multiplied by a ratio contained in Mr. Bayman's
employment agreement. Based on the results of the Company for the 2000 fiscal
year, Mr. Bayman was paid a bonus of $619,662.

Although in fiscal 1999 the Committee did not revise significantly the
Company's annual cash incentive program for fiscal 2000, the Committee made a
commitment to review during the 2000 fiscal year the annual cash incentive
compensation paid to executive officers, including the possibility of
implementing a new annual cash incentive plan qualified under Section 162(m) of
the Internal Revenue Code of 1986. As a result of this review, the Committee has
recommended and the Board of Directors has approved Mr. Bayman's 2000 Employment
Agreement and the 2000 Annual Incentive Plan, which is being submitted to
shareholders for the purpose of satisfying the requirements for deductibility by
the Company under Section 162(m) of the Code.

Stock Option Target Awards. Based upon the report and recommendations of
Ernst & Young, the Committee recommended to the Board of Directors a target
annual grant rate of stock options of up to a maximum of 2% of diluted Common
Shares outstanding. The Committee also recommended that the five most
highly-compensated executive officers receive stock option grants based on the
Black-Scholes Multiple targeted generally at the 50th percentile, with all
remaining options available to be allocated to other executive officers and
other key employees based upon recommendations to the Committee by the Chief
Executive

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<PAGE> 21

Officer. However, no option awards were made to these individuals during fiscal
year 2000, as option grants had been made to executive officers and other key
employees in January, 1999 in lieu of grants during fiscal year 2000.

Change in Control Provisions Based upon Ernst & Young's analysis of the
Company's peer group's executive compensation practices, the Committee also
recommended, and the Board of Directors approved, an increase in the severance
payment payable to the Company's executive officers upon a "change in control"
from two (2) times the executive officer's base salary plus annual incentive
cash bonus compensation to three (3) times such amount. The executive officers
also were provided an excise and income tax gross up on any excise tax payment
owed by such executive officers as a result of any amount received by the
executive officer that is determined to be an "excess parachute payment" under
Section 280G of the Internal Revenue Code of 1986.

Retirement and Other Benefits. Based upon Ernst & Young's compensation
review, the Committee recognized that retirement and other benefits provided to
the Company's executive officers were significantly less than competitive. To
bring the Company's retirement and other benefits in line with those offered by
peer companies, the Committee recommended, and the Board of Directors adopted
(and, with respect to the Restricted Stock Plan, the Company's shareholders
approved), the following additional executive retirement and other benefits:

- SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (SERP)

A "SERP" was established during the 2000 fiscal year to provide retirement
cash benefits, in an amount not to exceed 50% of final average earnings, to a
select group of highly-compensated management employees, which includes elected
officers and others selected by the Committee. The maximum cash benefit under
the SERP is limited to 50% of the participant's final average earnings, which
for this purpose would be the participant's base salary, including pre-tax
deferrals, plus annual incentive compensation, offset by other Company funded
retirement benefits. Messrs. Bayman and Goodger do not participate in the SERP,
but instead are covered by the Restricted Stock Plan discussed below.

- RESTRICTED STOCK PLAN

Due to the nearness to retirement age of Messrs. Bayman and Goodger at the
time of the Committee's recommendation to provide retirement benefits to the
Company's executive officers, the Committee concluded that providing retirement
benefits under the SERP would have a substantial negative effect on the
Company's cash flow. Therefore, it was concluded that Messrs. Bayman and Goodger
would be excluded from the SERP and would instead be covered by a separate
Restricted Stock Plan. The Plan provides for a one-time grant of restricted
Common Shares to Messrs. Bayman and Goodger of 611,567 and 112,231 Common
Shares, respectively, which are the amounts calculated by Ernst & Young as an
actuarial approximation of participation in the SERP. The Restricted Stock Plan
provides for the vesting of the Common Shares over a three year period and is,
therefore, to a significant extent a reward for future service rather than
solely a substitute for the SERP.

- BENEFIT EQUALIZATION PLAN

A Benefit Equalization Plan has been established to permit the Company to
set aside amounts for retirement on a profit sharing and 401(k) type basis in
excess of amounts allowed under the Company's 401(k) Profit Sharing Plan.
Additional voluntary deferrals of compensation also are permitted under the
Benefit Equalization Plan. The Plan is limited to a select group of management
and other highly-compensated employees selected by the Committee.

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<PAGE> 22

- SUPPLEMENTAL EXECUTIVE DISABILITY PLAN

A Supplemental Executive Disability Plan has been established to provide
enhanced disability benefits to the Chief Executive Officer and to elected
officers and other key employees selected by the Chief Executive Officer. The
disability benefit payable to a participant is 60% of base salary, including
pre-tax deferrals, plus annual incentive compensation.

THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

Victor Gelb (Chairman)
Charles F. Christ
Edwin Z. Singer
Thomas C. Sullivan

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<PAGE> 23

PROPOSAL TO APPROVE THE 2000 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS

At the Annual Meeting, shareholders will be asked to vote on a proposal to
approve the Pioneer-Standard Electronics, Inc. 2000 Stock Option Plan for
Outside Directors (the "2000 Plan"), which provides for the granting of options
to purchase Common Shares to eligible Directors of the Company. The following
summary of the material provisions of the 2000 Plan is qualified in its entirety
by reference to the full text of the 2000 Plan, a copy of which is included with
this Proxy Statement as Exhibit A.

PURPOSE

The purpose of the 2000 Plan is to provide outside Directors of the Company
with greater incentive to serve and promote the interests of the Company and its
shareholders by encouraging outside Directors to acquire a proprietary interest
in the business of the Company or increase the proprietary interest they already
have. The 2000 Plan will replace the Company's 1999 Stock Option Plan for
Outside Directors (the "1999 Plan"), which provides for annual option grants of
7,500 Common Shares to each outside Director as of the Company's annual meeting
of shareholders and which will expire by its terms prior to the Company's next
annual meeting for fiscal year 2001. In addition, the 1999 Plan will no longer
have Common Shares available for grant after the Company's forthcoming annual
meeting. The Board of Directors believes that assisting its outside Directors to
have a proprietary interest in the Company promotes the interests of the Company
and its shareholders and that the adoption of the 2000 Plan will serve to
increase such proprietary interest.

ELIGIBLE PARTICIPANTS

Only Directors of the Company who are not also employees of the Company are
eligible to participate in the 2000 Plan.

ADMINISTRATION

The 2000 Plan will be administered by the Board of Directors of the
Company. The Board of Directors is authorized by the terms of the 2000 Plan to
appoint a committee, consisting of three or more "non-employee directors" within
the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, to carry
out the administrative duties of the Board of Directors under the 2000 Plan.

SHARES SUBJECT TO THE PLAN

The shares to be issued upon exercise of options granted under the 2000
Plan will be Common Shares, without par value, of the Company. Either treasury
or authorized and unissued Common Shares, or both, as the Board of Directors
shall from time to time determine, may be so issued. Common Shares which are the
subject of any lapsed, expired or terminated options may be made available for
reoffering under the 2000 Plan.

The aggregate number of Common Shares for which options may be granted
under the 2000 Plan will be 105,000, which is intended to provide sufficient
shares for two years of grants. However, in the event that subsequent to the
date of adoption of the 2000 Plan by the Board of Directors, the outstanding
Common Shares should be increased or decreased or changed into or exchanged for
a different number of kind of shares of stock or other securities of the Company
or of another corporation as a result of a stock split, stock dividend,
reclassification, merger or similar transaction, then the number or kind of
shares covered by unexercised options will be adjusted automatically to prevent
dilution or enlargement of the rights of optionees, and the Board will have the
authority to make any other adjustments as may be appropriate and equitable.

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<PAGE> 24

GRANT OF OPTIONS

Subject to the approval of the 2000 Plan by the shareholders, options will
be granted annually, on the date of the Annual Meeting of Shareholders
commencing with the Annual Meeting of Shareholders in 2001, to each outside
Director for the purchase of a maximum of 7,500 Common Shares by each such
Director.

OPTION PROVISIONS

Option Price. The option price per Common Share under the 2000 Plan will be
equal to the fair market value of a share on the date the options are granted.

Period of Option. Each option granted under the 2000 Plan will be
exercisable in full for a period of ten years from the date of grant.

Limitation on Exercise and Transfer of Options. Only the Director to whom
the option is granted may exercise the same, except where a guardian or other
legal representative has been appointed for such Director and except as
discussed below. No option granted under the 2000 Plan will be transferable
other than by (i) the Last Will and Testament of the Director to whom it is
granted or, if the Director dies intestate, by the applicable laws of descent
and distribution, (ii) to the extent approved by the Board of Directors,
pursuant to a domestic relations order, or (iii) to the extent approved by the
Board of Directors, by a Director who transfers such option to a member of his
or her immediate family. No option granted under the 2000 Plan may be pledged or
hypothecated, nor will any such option be subject to execution, attachment or
similar process, other than as provided by the terms of the 2000 Plan.

Exercise of Option. Each option granted under the 2000 Plan may be
exercised in whole or in part from time to time during the option period, but
this right of exercise will be limited to whole shares. Options may be exercised
by the optionee giving written notice to the Company of intention to exercise
the same, accompanied by full payment of the purchase price in cash or in whole
or in part in Common Shares having a fair market value on the date the option is
exercised equal to that portion of the purchase price for which payment in cash
is not made.

Termination of Directorship. If the optionee ceases to be a Director of the
Company because of his or her voluntary resignation or removal by the Board of
Directors for cause, the optionee's option will terminate on the effective date
of termination of his or her directorship and neither the optionee nor any other
person will have any right after such date to exercise all or any part of the
option. If, however, the optionee's directorship is terminated for any other
reason, then the option will remain exercisable until the first to occur of the
end of the option's ten-year term or the second anniversary of the effective
date of termination of his or her directorship by the optionee, or, if the
optionee's directorship is terminated because of death, by the optionee's estate
or by the person designated in the optionee's Last Will and Testament or to whom
transferred by the applicable laws of descent and distribution.

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<PAGE> 25

NEW PLAN BENEFITS

Set forth below are the number of options expected to be granted under the
2000 Plan to the individuals and groups shown in the table.

<TABLE>
<CAPTION>
NUMBER OF OPTIONS
NAME AND POSITION SHARES
----------------- -----------------
<S> <C>
James L. Bayman, Chairman of the Board and Chief Executive
Officer................................................... 0
Arthur Rhein, President and Chief Operating Officer......... 0
Thomas G. Pitera, President, Industrial Electronics
Division.................................................. 0
John V. Goodger, Vice President, Treasurer and Assistant
Secretary................................................. 0
Gregory T. Geswein, Senior Vice President and Chief
Financial Officer......................................... 0
Executive Group............................................. 0
Non-Executive Director Group................................ 105,000
Non-Executive Officer Employee Group........................ 0
</TABLE>

No options have been awarded to date under the 2000 Plan and none would be
granted under the terms of the 2000 Plan until the Company's annual meeting of
shareholders for fiscal year 2001 at which time, assuming that the 2000 Plan is
approved by shareholders and that seven (7) Outside Directors continue to serve
in such capacity, a total of 52,500 options would be awarded to the Company's
seven (7) Outside Directors. Under the 1999 Plan, a total of 52,500 options were
awarded to seven (7) Outside Directors on July 27, 1999 and (assuming that seven
(7) Outside Directors continue to serve in such capacity) an additional 52,500
options will be issued on July 25, 2000.

TERMINATION OF THE PLAN

The 2000 Plan will terminate ten years from the date of its adoption by the
Board of Directors and thereafter no options may be granted under the 2000 Plan.
All options outstanding at the time of such termination will continue in full
force and effect in accordance with and subject to their terms and the terms and
conditions of the 2000 Plan.

FEDERAL INCOME TAX CONSEQUENCES

All of the options granted under the 2000 Plan will be nonqualified stock
options for federal income tax purposes. Accordingly, an optionee will not
realize income upon the granting of such an option. At the time of exercise,
ordinary income will be recognized by the optionee in an amount equal to the
difference between the option price paid for the shares and the fair market
value of the shares on the date of exercise, and the Company will be entitled to
a tax deduction for a like amount in the same year, provided it complies with
applicable requirements. At the time of sale by the optionee of shares acquired
pursuant to the exercise of the option, any appreciation (or depreciation) in
the value of the shares after the date of exercise will be treated as either
short-term or long-term capital gain (or loss) depending on how long the shares
have been held.

RECOMMENDATION; REQUIRED VOTE

The Board of Directors recommends a vote FOR the proposal. The affirmative
vote of the holders of shares representing a majority of the Common Shares
present and entitled to vote at the Annual Meeting is required to authorize,
approve and adopt the 2000 Plan.

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<PAGE> 26

PROPOSAL TO APPROVE THE 2000 STOCK INCENTIVE PLAN

The shareholders are asked to consider and vote upon a proposal to approve
the Pioneer-Standard Electronics, Inc. 2000 Stock Incentive Plan (the "2000
Stock Plan"), the principal provisions of which are described below. The
following description of the 2000 Stock Plan is qualified in its entirety by
reference to the actual terms and provisions of the 2000 Stock Plan, which is
set forth as Exhibit B to this Proxy Statement.

The Board of Directors has determined that stock options and other
stock-based awards should be an important element of the Company's compensation
programs. They provide the means to: (i) attract and retain skilled and
qualified officers and employees in a competitive market for such individuals;
(ii) motivate individual performance; (iii) facilitate ownership of shares of
the Company; and (iv) align the personal interests of officers and employees in
the Company's long-term growth and profitability with the interests of the
Company's shareholders. The Board of Directors has determined that the number of
shares currently reserved and available for issuance under the Company's
existing stock option plan is insufficient to provide meaningful compensation on
a continuing basis and that the existing stock option plan needs to be replaced
to address its impending expiration. The 2000 Incentive Plan is intended to
replace the Company's 1991 Stock Option Plan, which will expire by its terms on
July 22, 2001.

The 2000 Stock Plan differs from the 1991 Stock Option Plan in that it
allows the Company the additional flexibility to grant a variety of stock and
stock-based awards, including stock options (with or without stock appreciation
rights), time-vested restricted stock, performance-vested restricted stock and
performance shares (shares granted upon the attainment of performance goals). In
addition, the 2000 Stock Plan allows participation by consultants, in contrast
to the 1991 Stock Option Plan, which does not allow such participation. The 2000
Stock Plan was also designed to comply with Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), to the maximum extent possible.
It is intended that stock options and awards under the 2000 Stock Plan with a
performance component (which does not include time-vested restricted stock
awards) will satisfy the requirements for performance-based compensation under
Section 162(m). Section 162(m) generally places a $1,000,000 limit on the tax
deduction allowable for compensation paid (or accrued for tax purposes) with
respect to each of the Chief Executive Officer and four other highest-paid
executives during a tax year unless the compensation meets certain requirements.
The 1991 Stock Option Plan does not meet the requirements of Section 162(m).
Nearly all stock incentive awards to the Company's most highly compensated
executives to be made over the next several years will be made from the 2000
Stock Plan. The Board of Directors believes that adoption of the 2000 Stock Plan
is in the best interests of the Company.

SUMMARY OF THE PLAN

Shares Subject to the 2000 Stock Plan. The aggregate number of Common
Shares that may be issued under the 2000 Stock Plan is 2,000,000 shares. The
2000 Stock Plan provides for appropriate adjustments in the number of shares
subject to the 2000 Stock Plan (and other share limitations contained therein
and described below) and to the grants previously made if there is a stock
split, stock dividend, reorganization or other relevant change affecting the
Company's corporate structure or its equity securities. If shares under an award
are not issued to the extent permitted prior to the expiration, termination,
cancellation or forfeiture of the award, then those shares would again be
available for inclusion in future grants.

Other Share Limitations. The maximum number of Common Shares that may be
granted under the 2000 Stock Plan pursuant to incentive stock options is
2,000,000 shares; the maximum number of Common Shares as Restricted Shares (as
defined in the 2000 Stock Plan) and Performance Shares (as defined in the

23
<PAGE> 27

2000 Stock Plan) under the 2000 Stock Plan is 2,000,000 shares; and the
aggregate number of Common Shares that may be granted under the 2000 Stock Plan
to any one participant in any calendar year, regardless of whether such awards
are thereafter canceled, forfeited or terminated, cannot exceed 1,000,000
shares.

Administration. The 2000 Stock Plan is administered by a Committee
consisting of not fewer than three Directors (all of whom meet both the
definition of "outside director" set forth in the regulations under Section
162(m) of the Code and the definition of "non-employee director" set forth in
Rule 16b-3 under the Securities Exchange Act of 1934, as amended) appointed by
the Board of Directors (and if none has been appointed, then by the Board of
Directors as a whole). The Committee has the authority under the 2000 Stock Plan
to (i) select the officers, employees and consultants to whom awards are
granted; (ii) determine the type and timing of awards; (iii) determine the
number of Common Shares covered by each award and all other terms and conditions
of awards not inconsistent with the terms of the 2000 Stock Plan; (iv) determine
if, when and how amounts payable with respect to an award may be deferred; (v)
determine whether terms, conditions and objectives have been met or should be
modified or waived; (vi) establish rules, regulations, guidelines,
administrative forms and practices for the operation of the 2000 Stock Plan; and
(vii) interpret the provisions of and otherwise supervise the administration of
the 2000 Stock Plan. With respect to any awards granted to consultants and to
employees other than those to executive officers, the Committee may delegate its
powers and duties to the Chief Executive Officer.

Eligible Participants. Officers, all other regular active employees and
consultants to the Company are eligible to be selected to receive awards under
the 2000 Plan. It is not possible to predict the number of officers, employees
and consultants who will be selected to receive awards under the 2000 Stock
Plan, and the number of grantees could vary from year to year.

Stock Options. Options granted under the 2000 Stock Plan will be in the
form of either incentive stock options ("ISOs"), which meet the requirements of
Section 422 of the Code, or nonqualified stock options ("NQSOs"), which do not
meet such requirements. The term of an option will be fixed by the Committee and
options will be exercisable at such time or times as determined by the
Committee. The exercise price of an option cannot be less than the fair market
value of the Common Shares on the date of grant, which generally means the last
closing price of a Common Share as reported on the composite tape of Nasdaq on
the date of the grant. On June 16, 2000, the closing price of a Common Share was
$14.00. The grantee may pay the option exercise price in cash or by tendering
Common Shares acquired at least six months in advance that have a fair market
value equal to the option exercise price or through a broker-handled same day
sale transaction.

Reload Options. The Committee may provide that an optionee who exercises
all or part of an NQSO by payment of the exercise price with previously owned
Common Shares will be granted an additional option (a "Reload Option") for a
number of Common Shares equal to the number of shares tendered in the exercise
of the original stock option. Each Reload Option will have a date of grant which
is the date as of which the original stock option to which it applies is
exercised and will vest on the six-month anniversary of date of grant. The
Reload Option will have the same expiration and all other terms and conditions
as the original stock option to which it applies, except that the exercise price
will be equal to at least 100% of the fair market value of the Common Shares as
of the date of grant.

Code Limitations on Incentive Stock Options. The Code currently places the
following limitations on the award of ISOs. An ISO may only be granted to full
or part-time employees (including officers and directors who are also employees)
of the Company or of an affiliate, provided that the affiliate is a "subsidiary

24
<PAGE> 28

corporation" as defined in the Code. No ISO may be exercisable on or after the
tenth anniversary of the date of grant nor may any ISO be granted on or after
April 26, 2010. If an ISO is granted to a participant who owns, at the date of
grant, in excess of 10% of the total outstanding Common Stock, the exercise
price of the ISO must be at least 110% of the fair market value on the date of
grant and the term of the ISO cannot be longer than five years from the date of
grant. The total fair market value of shares subject to ISOs which are
exercisable for the first time by any participant in any given calendar year
cannot exceed $100,000 (valued as of the date of grant). No ISO may be
exercisable more than three months following termination of employment for any
reason other than death or disability, nor more than one year with respect to
disability terminations, or such option will no longer qualify as an ISO and
shall therefore be treated as an NQSO. ISOs will also be non-transferable in
accordance with the provisions of the Code.

Stock Appreciation Rights. The Committee may grant a stock appreciation
right ("SAR") in connection with a stock option granted under the 2000 Stock
Plan or independently of a stock option. If a grantee exercises an SAR in
connection with a stock option, the grantee will receive an amount equal to the
excess of the then fair market value of the shares with respect to which the SAR
is being exercised over the option exercise price of the shares. If a grantee
exercises an independent SAR, the grantee will receive an amount equal to the
excess of the then fair market value of shares with respect to which the SAR is
being exercised over the exercise price of the SAR. Payment may be made in cash,
in shares, or in a combination of the two as the Committee determines. If an SAR
granted in connection with a stock option is exercised in whole or in part, the
right under the related option to purchase shares with respect to which the SAR
has been exercised will terminate to the same extent. If a stock option is
exercised, any SAR related to the shares purchased upon exercise of the stock
option will terminate.

Restricted Share Awards. The Committee may grant restricted share awards
("Restricted Shares") which consist of Common Shares issued by the Company to a
participant at a purchase price which may be well below their fair market value
(but may not be less than the par value) and are subject to forfeiture in the
event of termination of the participant's employment prior to vesting and
restrictions on their sale or other transfer by the participant. Restrictions,
as determined by the Committee, may lapse after the passage of time
(time-vested) or upon certain events (such as death, disability or retirement)
or upon the attainment of specified performance objectives (performance-vested).
The Committee may waive any restrictions or accelerate the date or dates on
which restrictions lapse except that with respect to performance-vested
restricted shares any such modifications must meet the requirements of Section
162(m) of the Code, to the extent applicable.

Performance Share Awards. The Committee may grant performance share awards
("Performance Shares") which are rights to receive Common Shares in the future
conditioned upon the attainment of specified performance objectives and such
other conditions, restrictions and contingencies as the Committee may determine.
At the time of grant of a Performance Stock award, the Committee must specify
the performance objectives which, depending on the extent to which they are met,
will determine the number of shares that will be distributed to the participant.
The Committee will also specify the time period or periods during which the
performance objectives must be met (the "Performance Period"). The Committee may
use performance objectives based on one or more of the following targets: cash
generation, profit, revenue, market share, profit or investment return ratios,
shareholder returns and/or specific, objective and measurable non-financial
objectives. The Committee may designate a single goal criterion or multiple goal
criteria for performance measurement purposes, with the measurement based on
absolute Company or business unit performance and/or on performance as compared
with that of other publicly-traded companies. The

25
<PAGE> 29

Committee may adjust or modify the performance objectives or periods, provided
that any such modifications meet the requirements of Section 162(m) of the Code,
to the extent applicable.

Transferability of Awards. The Committee may determine, at or after the
time of grant, that vested NQSOs and SARs are transferable to members of the
grantee's immediate family, a trust, partnership or other entity for the benefit
of family members or to a charitable organization qualified under Section 501(c)
of the Code. All other awards are non-transferable and may be exercised only by
the grantee and may not be transferred other than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order.
Non-transferable awards are exercisable during a participant's lifetime only by
the participant or, as permitted by applicable law, the participant's guardian
or other legal representative. Other than pursuant to a permitted transfer, no
award may be assigned, pledged, hypothecated or otherwise alienated or
encumbered (whether by operation of law or otherwise) and any attempt to do so
will be null and void.

Termination of Employment. With respect to NQSOs and related SARs, the
Committee has discretion to determine whether and when such awards terminate
prior to their stated expiration upon the termination of the participant's
employment for various reasons. Unless otherwise specified at or after the time
of grant: (i) upon the death or disability of the participant, vested and
unvested options can generally be exercised for a period no longer than one year
after the termination of employment; (ii) upon the retirement of the
participant, vested and unvested options can generally be exercised for a period
no longer than two years after the termination of employment; (iii) upon
termination of employment by the Company for cause, vested and unvested options
immediately expire; and (iv) upon termination of employment for any other
reason, unvested options immediately expire and vested options can generally be
exercised for a period no longer than three months.

With respect to Restricted Share awards, if, because of termination of
employment for any reason, a participant fails to satisfy the restrictions and
other conditions relating to the Restricted Shares prior to the lapse or waiver
(at the Committee's discretion) of such restrictions and conditions, the
participant is required to forfeit the Restricted Shares and transfer the shares
back to the Company in exchange for a refund of the consideration paid by the
participant or such other amount which may be specifically set forth in the
award agreement.

With respect to Performance Share awards, the award or unearned portion
thereof will terminate without the issuance of shares upon the termination of
employment of the participant during the Performance Period. If the
participant's employment terminates by reason of death, disability or
retirement, the Committee in its discretion at or after the time of grant may
determine that the participant (or the heir, legatee or legal representative of
the participant's estate) will receive a payout of a portion of the
participant's then outstanding Performance Share awards in an amount which is
not more than the number of shares which would have been earned by the
participant if 100% of the performance objectives for the current Performance
Period had been achieved prorated based on the ratio of the number of months of
active employment in the Performance Period to the total number of months in the
Performance Period.

Termination of employment by a participant will be deemed not to have
occurred upon: (i) transfer of a participant among the Company and its
affiliates; (ii) a leave of absence for a Company approved purpose that does not
exceed ninety days; (iii) an approved leave of absence for a longer period if
the employee's right to reemployment is guaranteed either by statute or contract
and the employee returns to work within thirty days after the end of such leave;
and (iv) any other absence determined by the Committee in its discretion not to
constitute a break in service.

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<PAGE> 30

Change in Control. Except as otherwise provided in an award agreement, upon
a "change in control": (i) all outstanding stock options automatically become
fully exercisable; (ii) all Restricted Share awards automatically become fully
vested; and (iii) all participants holding Performance Share awards become
entitled to receive a partial payout in an amount equal to the number of shares
which would have been earned by the participant if 100% of the performance
objectives for the current Performance Period had been achieved prorated based
on the ratio of the number of months of active employment in the Performance
Period to the total number of months in the Performance Period. A "change in
control" is defined as the occurrence of any of the following: (i) all or
substantially all of the assets of the Company are sold or transferred to
another corporation or entity, or the Company is merged, consolidated or
reorganized with or into another corporation or entity, with the result that
upon conclusion of the transaction less than 51% of the outstanding securities
entitled to vote generally in the election of Directors or other capital
interests of the acquiring corporation or entity are owned, directly or
indirectly, by the holders of voting stock of the Company generally prior to the
transaction; (ii) a report is filed on Schedule 13D or Schedule 14D-1 under the
Exchange Act disclosing that any person (other than the Company, any affiliate
of the Company, any employee benefit plan of the Company or an affiliate,
including the trustee of any such plan, or the Pioneer Stock Benefit Trust) has
become the beneficial owner of securities representing 20% or more of the
combined voting power of the then-outstanding voting stock of the Company; (iii)
the Company files a report or proxy statement with the Commission disclosing
that a change in control of the Company has or may have occurred or will or may
occur in the future pursuant to any then-exiting contract or transaction; or
(iv) the individuals who, at the beginning of any period of two consecutive
calendar years, constituted the Directors of the Company cease for any reason to
constitute at least a majority thereof unless the nomination for election by the
Company's shareholders of each new Director of the Company was approved by a
vote of at least two-thirds of the Directors of the Company still in office who
were Directors of the Company at the beginning of any such period. These
provisions are intended to protect option holders in the event of a change in
control, but could tend to inhibit an acquisition due to increased acquisition
costs resulting from additional outstanding shares.

Conditions Upon Delivery of Stock Certificates and Deferrals. Common Shares
may not be issued or delivered with respect to awards under the 2000 Stock Plan
until the participant pays in full any amount due for the shares plus any
required tax withholding and, if applicable, the completion of registration of
the shares under federal or state securities laws, listing of the shares on any
stock exchange, qualification of the issuance of the shares as a private
placement, or obtaining any other required approvals. The Committee may
unilaterally postpone the exercising of awards, the issuance or delivery of
Common Shares under any award or the taking of any action permitted under the
2000 Stock Plan to prevent the Company or any affiliate from being denied a
Federal income tax deduction with respect to any award other than an ISO. The
Committee may also permit, subject to such rules and procedures as the Committee
may determine, a participant to defer receipt of the payment of cash or the
delivery of shares that would otherwise be delivered to a participant under the
2000 Stock Plan.

CERTAIN FEDERAL TAX CONSEQUENCES WITH RESPECT TO STOCK OPTIONS AND SARS

There are no Federal income tax consequences to a participant or the
Company upon the grant of stock options and SARs. When an NQSO or SAR is
exercised, the participant realizes taxable compensation (ordinary income) at
that time equal to, for an NQSO, the difference between the aggregate option
exercise price and the fair market value of the stock on the date of exercise
and, for an SAR, the aggregate amount of cash and fair market value of any
shares received upon exercise. The Company is entitled to a tax deduction to

27
<PAGE> 31

the extent, and at the time, that the participant realizes compensation income.
Upon the exercise of an NQSO or SAR, the 2000 Stock Plan requires the
participant to pay to the Company any amount necessary to satisfy applicable
federal, state or local tax withholding requirements. Upon the exercise of an
ISO, a participant recognizes no immediate taxable income, except that the
excess of the fair market value of the shares acquired over the option exercise
price will constitute a tax preference item for the purpose of computing the
participant's alternative minimum tax liability. Income recognition is deferred
until the shares acquired are disposed of and will be treated as long-term
capital gain if the minimum holding period is met (two years from the date of
grant and one year from the date of exercise). There is no tax deduction for the
Company when an ISO is exercised. The participant's tax treatment upon a
disposition of shares acquired through the exercise of a stock option is
dependent upon the length of time the shares have been held. There is no tax
consequence to the Company in connection with the disposition of these shares
except that the Company would be entitled to a tax deduction in the case of a
disposition of shares acquired upon exercise of an ISO before the ISO holding
period has been satisfied.

Discontinuation of Plan, Amendments and Award Substitutions. The Board of
Directors may amend, alter or discontinue the 2000 Stock Plan at any time,
provided that any such amendment, alteration or discontinuance has been approved
by the Company's shareholders, if shareholder approval is required under
applicable laws, regulations or exchange requirements (including for the purpose
of qualification under Section 162(m) of the Code as "performance-based
compensation"), and does not impair the rights of any grantee, without his or
her consent, under any award previously granted. The Committee may amend,
prospectively or retroactively, the terms of any outstanding award, or
substitute new awards for previously granted awards, provided that no amendment
or substitution is inconsistent with the terms of the 2000 Stock Plan or impairs
the rights of any award grantee without his or her consent. Outstanding stock
options may not be amended to reduce the exercise price to be less than 100% of
the fair market value of the Common Shares as of the date of grant, unless such
modification is pursuant to the antidilution provisions of the 2000 Stock Plan.
However, outstanding stock options may be replaced with new stock options having
a lower exercise price. In practice (under the Company's existing stock option
plans), the Board of Directors has never authorized the replacement of
out-of-the money stock options held by officers of the Company.

Awards Granted. The following table sets forth the awards that have been
granted to date under the 2000 Stock Plan. Such awards are contingent on
shareholder approval of the 2000 Stock Plan.

NEW PLAN BENEFITS

PIONEER-STANDARD ELECTRONICS, INC. 2000 STOCK INCENTIVE PLAN

<TABLE>
<CAPTION>
DOLLAR NUMBER OF
NAME AND POSITION VALUE ($) STOCK OPTIONS
----------------- --------- -------------
<S> <C> <C>
James L. Bayman, Chairman and Chief Executive
Officer.......................................... -- 100,000
Arthur Rhein, President and Chief Operating
Officer.......................................... -- 100,000
Thomas G. Pitera, President, Industrial Electronics
Division......................................... 0
John V. Goodger, Vice President, Treasurer and
Assistant Secretary.............................. 0
Gregory T. Geswein, Senior Vice President and Chief
Financial Officer................................ 0
Executive Group.................................... -- 200,000
Non-Executive Director Group....................... 0
Non-Executive Officer Employee Group............... 0
</TABLE>

28
<PAGE> 32

On April 26, 2000, subject to shareholder approval of the 2000 Stock
Incentive Plan, Messrs. Bayman and Rhein were awarded options to purchase
100,000 Common Shares, respectively, at $13.75 per share, the closing price of a
Common Share on the date of grant. On June 5, 2000, the closing price of a
Common Share was $13.50.

RECOMMENDATION; REQUIRED VOTE

Adoption of the Pioneer-Standard Electronics, Inc. 2000 Stock Incentive
Plan requires the affirmative vote by holders of at least a majority of the
Common Shares voting on such matter. The Board of Directors recommends that you
vote FOR the adoption of the Pioneer-Standard Electronics, Inc. 2000 Stock
Incentive Plan.

PROPOSAL TO APPROVE THE 2000 ANNUAL INCENTIVE PLAN

The shareholders are asked to consider and vote upon a proposal to approve
the Pioneer-Standard Electronics, Inc. 2000 Annual Incentive Plan (the
"Incentive Plan"), the principal provisions of which are described below. The
following description of the Incentive Plan is qualified in its entirety by
reference to the actual terms and provisions of the Incentive Plan, which is set
forth as Exhibit C to this Proxy Statement.

The Board of Directors believes that the Incentive Plan promotes the
Company's compensation objectives by (i) providing short-term financial awards
to key employees of the Company in order to encourage them to improve the
Company's operating results; and (ii) enabling the Company to recruit and retain
such key employees by making the Company's overall compensation program
competitive with the compensation programs of similar companies.

The Incentive Plan will replace the Company's annual cash incentive
obligation to senior executive officers as previously provided for in their
respective employment agreements prior to approval of the 2000 Employment
Agreements described earlier. The 2000 Employment Agreements instead provide for
annual incentive compensation pursuant to the Incentive Plan, which can not be
amended as to any senior executive party to a 2000 Employment Agreement without
such executive's prior written consent. Consistent with the prior employment
agreements, the Incentive Plan provides for annual incentive awards in
accordance with a formula containing performance criteria established and
administered by the Compensation Committee of the Board of Directors. The
formula and criteria are not substantially different from those applicable under
the previous employment agreements, although specific threshold minimum
performance levels have been added.

Previous employment agreement provisions for annual incentive compensation
were not designed to satisfy the requirements for deductibility by the Company
under Section 162(m) of the Code, which generally places a $1,000,000 limit on
the tax deduction allowable for compensation paid (or accrued for tax purposes)
with respect to each of the Chief Executive Officer and four other highest-paid
executives during a tax year, unless the compensation meets certain
requirements. It is preferred that awards under the Incentive Plan will satisfy
the requirements for "performance-based compensation" under Section 162(m) of
the Code and therefore will be deductible by the Company. These requirements
include the requirement that performance-based compensation be paid pursuant to
a plan approved by shareholders after adequate disclosure of the material terms
of the plan and the applicable performance goals but before the compensation is
paid. The Board of Directors believes that maximizing the tax deductibility of
the Company's compensation expense is in the best interests of the Company's
shareholders and therefore is submitting the Incentive Plan to shareholders for
this purpose.

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<PAGE> 33

SUMMARY OF THE PLAN

Administration. The Compensation Committee of the Board of Directors is
authorized to administer the Incentive Plan, provided that the Compensation
Committee consists entirely of persons who meet both the definition of "outside
director" set forth in the regulations under Section 162(m) of the Code and the
definition of "non-employee director" set forth in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended. The Committee has the exclusive
right to (i) interpret the Incentive Plan; (ii) determine eligibility for
participation in the Incentive Plan; (iii) decide all questions concerning
eligibility for and the amount of awards payable under the Incentive Plan; (iv)
establish and administer the performance goals and certify whether, and to what
extent, they are attained; (v) construe the provisions of the Incentive Plan and
correct any default, supply any omission, and reconcile any inconsistency in the
Incentive Plan; (vi) issue administrative guidelines, regulations and forms
necessary or as an aid to administering the Incentive Plan; and (vii) decide any
and all questions arising in the administration, interpretation and application
of the Incentive Plan. All decisions of the Committee and its action with
respect to the Incentive Plan are final, binding and conclusive upon any person
claiming a right or interest in or under the Incentive Plan The Incentive Plan
permits the Committee to delegate some or all of its authority under the
Incentive Plan to any person, except the selection and granting of awards to
participants who are "covered employees" within the meaning of Section 162(m) of
the Code.

Eligible Participants. The employees eligible to receive compensation under
the Incentive Plan are key employees of the Company and key employees of any
member of the Company's affiliated group of corporations consisting of the
Company and other corporations which are part of its affiliated group as
determined under Section 1504 of the Code (determined without regard to Section
1504(b)). Generally, this means the Company and its subsidiaries. Key employees
are eligible to receive compensation under the Incentive Plan only if selected
for participation in the Incentive Plan for the fiscal year or other measurement
period by the Committee. To date, the only key employees selected as
participants are James L. Bayman, Arthur Rhein, and Steven M. Billick.

Procedure for Determining Awards. Within the first 90 days of a fiscal year
or other period appropriate in accordance with Section 162(m) of the Code, as
applicable, the Committee will establish the performance goals which, if
attained, will result in awards to the participants under the Incentive Plan.
The performance goals for the Company as a whole or the operating units of the
Company may include, but are not limited to, earnings, operating income,
increases in revenues, return on capital, assets, investment, sales or equity,
market share, share price, total shareholder return, or any combination thereof.
If more than one performance goal for a fiscal year is established, the
Committee will also establish the weighting of the performance goals. If the
Committee fails to establish new performance goals for a fiscal year, the
performance goals for the prior fiscal year will be deemed to be the performance
goals for the fiscal year.

The Committee may at any time during the first 90 days of a fiscal year or
at any time thereafter in its sole and absolute discretion, adjust or modify the
calculation of a performance goal for the fiscal year in order to prevent the
dilution or enlargement of the rights of participants (i) in the event or in
anticipation of any unusual or extraordinary corporate item, transaction, event
or development; (ii) in recognition or in anticipation of any other unusual or
nonrecurring events affecting the Company, or the financial statements of the
Company, or in response to or in anticipation of changes in applicable laws,
regulations, accounting principles or business conditions; and (iii) in view of
the Committee's assessment of the business strategy of the Company, performance
of comparable organizations, economic and business conditions, and any other
circumstances deemed relevant. However, if any such adjustment would cause
awards to "covered employees"

30
<PAGE> 34

under Section 162(m) of the Code to fail to qualify for deductibility under
Section 162(m), such adjustment will not apply to such covered employees.

The actual level of achievement of the performance goals will serve as the
basis for establishing the amount of the award payable to a participant for the
fiscal year. If the performance goals established for the fiscal year are not
satisfied, no award will be made under the Incentive Plan for such fiscal year.

Amount and Form of Awards. The Committee will set forth in writing a
formula to be used to determine whether any award is payable and the amount of
the award payable to each participant upon satisfaction of the applicable
performance goal for the fiscal year. The amount of the award will depend upon
the level of attainment of the performance goal(s) for such fiscal year,
provided that no participant's award for a fiscal year may exceed $1,500,000. As
soon as practicable after the Company's financial results for the fiscal year
have been approved by the Board of Directors or the Audit Committee of the Board
of Directors, the Committee will certify in writing the attainment of the
performance goals established for the fiscal year and will calculate the award,
if any, payable to each participant. Awards may be paid in cash, in Common
Shares, or in a combination at the Committee's discretion, and may be subject to
such terms, conditions, restrictions and limitations (including, but not limited
to, restrictions on transferability and vesting) as the Committee may determine,
provided that such terms, conditions, restrictions and limitations are not
inconsistent with the terms of the Incentive Plan. The payment of an award under
the Incentive Plan in Common Shares will be based on the closing price of the
Common Shares on Nasdaq on the latest date Nasdaq is open preceding the date of
payment.

Termination of Employment. If a participant's employment is terminated
during a fiscal year by reason of his disability or death, or his involuntary
termination of employment other than for "cause" or his voluntary termination of
employment for "good reason," the participant will be eligible to receive a
prorated award for the fiscal year in which such termination of employment
occurs, provided that the participant has been a participant in the Incentive
Plan for at least three months of the fiscal year. If a participant's employment
is terminated for any other reason (except as provided in any employment
agreement between the Company and the participant or in the case of a change in
control (as defined in the Incentive Plan)) prior to the date on which awards
for the fiscal year are paid, the participant's participation in the Incentive
Plan will end, and the participant will not be entitled to any award for the
fiscal year.

Change in Control. In the event of a change in control, a participant who
is participating in the Incentive Plan at the time of the change in control will
be entitled to a single sum cash payment equal to the maximum award that could
be paid under the Incentive Plan to the participant for the fiscal year in which
the change in control occurs. If the maximum award that could be paid to a
participant for the fiscal year is not determinable, the participant generally
will be entitled to an amount equal to (a) the award, if any (or, if applicable,
any annual award under any predecessor annual incentive plan of the Company),
payable to the participant for the fiscal year immediately preceding the fiscal
year in which such change in control occurs, or (b) if any participant did not
participate in the Plan or any predecessor annual incentive plan during the
immediately preceding fiscal year, an amount equal to 50% of such participant's
annual base salary at the rate in effect at the time of the change in control.
Further, all terms, conditions, restrictions and limitations in effect on any
outstanding award shall immediately lapse on the date of the change in control.
However, if a participant is entitled to any payment under the Incentive Plan in
connection with a change in control pursuant to any employment agreement between
the Company and such participant, the participant will not be entitled to
duplicative payments.

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<PAGE> 35

The Committee has the sole discretion to determine whether and the date on
which a change in control occurred.

A "change in control" is defined in the Incentive Plan as the occurrence of
any of the following: (i) all or substantially all of the assets of the Company
are sold or transferred to another corporation or entity, or the Company is
merged, consolidated or reorganized with or into another corporation or entity,
with the result that upon conclusion of the transaction less than 51% of the
outstanding securities entitled to vote generally in the election of Directors
or other capital interests of the acquiring corporation or entity are owned,
directly or indirectly, by the holders of voting stock of the Company generally
prior to the transaction; (ii) a report is filed on Schedule 13D or Schedule
14D-1 under the Exchange Act disclosing that any person (other than the Company,
any affiliate of the Company, any employee benefit plan of the Company or an
affiliate, including the trustee of any such plan, or the Pioneer Stock Benefit
Trust) has become the beneficial owner of securities representing 20% or more of
the combined voting power of the then-outstanding voting stock of the Company;
(iii) the Company files a report or proxy statement with the Commission
disclosing that a change in control of the Company has or may have occurred or
will or may occur in the future pursuant to any then-exiting contract or
transaction; or (iv) the individuals who, at the beginning of any period of two
consecutive calendar years, constituted the Directors of the Company cease for
any reason to constitute at least a majority thereof unless the nomination for
election by the Company's shareholders of each new Director was approved by a
vote of at least two-thirds of the Directors of the Company still in office who
were Directors at the beginning of any such period. These provisions are
intended to protect the participants in the Incentive Plan in the event of a
change in control, but could tend to inhibit an acquisition due to increased
acquisition costs resulting from payments under the Incentive Plan.

Applicable Business Criteria. For the fiscal year ending March 31, 2001
only, the Incentive Plan provides for the Committee to establish a performance
goal for the six month period ending September 30, 2000 as well as for the
fiscal year ending March 31, 2001. The performance goal established by the
Committee for the six month period ending September 30, 2000 and for fiscal year
2001 consists of two parts or sub-goals. The first part is a threshold
requirement of the attainment of a minimum operating profit to sales ratio. If
this threshold performance requirement is not attained, no award will be paid
under the Incentive Plan.

Upon the Committee's certification of the attainment of the foregoing
performance requirement based on the unaudited financial results for the Company
and its consolidated subsidiaries and affiliates for the six month period ending
September 30, 2000, an "interim award" will be payable to participants
calculated pursuant to the second part of the performance goal. Each
participant's interim award will be calculated by multiplying the participant's
"participation percentage" (as established by the Committee) by the product of
the "actual operating income" of the Company for this six month period,
multiplied by the ratio of the Company's "actual return on capital" for this six
month period to a return standard established by the Committee. "Actual
operating income" is defined as the Company's income for the period before state
and federal income tax and interest expense. "Actual return on capital" is
defined as the Company's "actual operating income" divided by the sum of its
interest-bearing debt, plus equity, as the average of such amounts as at the
beginning of the fiscal year and at the end of each of the Company's fiscal
quarters in the period. All amounts used to calculate the award payable reflect
the operations of the Company and its consolidated subsidiaries and affiliates
and will be calculated in conformity with generally accepted accounting
principles. This second part of the performance goal is satisfied if the formula
yields a positive result, subject to attainment of the threshold performance
requirement described above.

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<PAGE> 36

The performance goal and the method for calculating awards for the fiscal
year ending March 31, 2001 are identical to the performance goal and method for
calculating interim awards for the six month period ending September 30, 2000,
except that the performance goal and the method for calculating awards for the
fiscal year ending March 31, 2001 will be based on the audited financial results
of the Company for the fiscal year. In addition, any award payable to a
participant for a fiscal year ending March 31, 2001 will be offset by any
interim award paid to such participant for the six month period ending September
30, 2000.

The performance goal and method for calculating awards with respect to
participants subject to Section 162(m) of the Code will remain the same
thereafter, subject to the power of the Board of Directors to amend the
Incentive Plan, subject to consents required under the 2000 Employment
Agreements, and applicable law.

The Committee has designated Messrs. Bayman, Rhein and Billick to
participate in the Incentive Plan for the six month period ending September 30,
2000 and the fiscal year ending March 31, 2000. The "participation percentages"
of each participant are set forth below:

<TABLE>
<CAPTION>
NAME AND POSITION PARTICIPATION PERCENTAGE
----------------- ------------------------
<S> <C>
James L. Bayman, Chairman and Chief Executive
Officer............................................. 80/100%
Arthur Rhein, President and Chief Operating Officer... 65/100%
Steven M. Billick, Senior Vice President and Chief
Financial Officer................................... 20/100%
</TABLE>

Because the award payable to each participant depends upon the Company's
future financial results, it is not possible to determine the amount of the
award payable to the participants in the Incentive Plan for the fiscal year
ending March 31, 2001. If the Incentive Plan had been in effect during the prior
fiscal year, awards would have been payable in the following amounts to the
following persons and groups:

<TABLE>
<CAPTION>
DOLLAR
NAME AND POSITION VALUE ($)
----------------- ----------
<S> <C>
James L. Bayman, Chairman and Chief Executive Officer....... $ 619,662
Arthur Rhein, President and Chief Operating Officer......... 503,475
Thomas G. Pitera, President, Industrial Electronics
Division.................................................. 355,163
John V. Goodger, Vice President, Treasurer and Assistant
Secretary................................................. 139,187
Gregory T. Geswein, Senior Vice President and Chief
Financial Officer......................................... 271,390
Executive Group............................................. 1,888,877
Non-Executive Director Group................................ 0
Non-Executive Officer Employee Group........................ 0
</TABLE>

Changes to Targets. The Incentive Plan grants to the Committee the
authority to administer the Incentive Plan, including the authority to change
performance goal targets, such as the threshold percentage requirement for
operating profit to sales and the applicable return standard. Participation
percentages, while not technically targets, also are subject to change by the
Committee subject to consents required under the 2000 Employment Agreements. To
allow for such flexibility in establishing targets and for continued
qualification under 162(m) of the Code, the Company anticipates seeking renewed
approval of the Incentive Plan and the material terms of its performance goals
not later than the first shareholder meeting that occurs in the fifth year
following the current year.

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<PAGE> 37

Discontinuation of Plan and Amendment. The Board of Directors may suspend
or terminate the Incentive Plan at any time with or without prior notice. In
addition, the Board of Directors may, from time to time and with or without
prior notice, amend this Plan in any manner but may not without shareholder
approval adopt any amendment that would require the vote of the shareholders of
the Company pursuant to Section 16 of the Exchange Act or Section 162(m) of the
Code. However, no suspension, termination or amendment will be effective as to
any of Messrs. Bayman, Rhein or Billick unless prior written consent has been
given by such senior executive officer, as provided under their respective
employment agreements with the Company.

RECOMMENDATION; REQUIRED VOTE

Adoption of the Pioneer-Standard Electronics, Inc. 2000 Annual Incentive
Plan requires the affirmative vote by holders of at least a majority of the
Common Shares voting on such matter. The Board of Directors recommends that you
vote FOR the adoption of the Pioneer-Standard Electronics, Inc. 2000 Annual
Incentive Plan.

INDEPENDENT AUDITORS

The Board of Directors has selected Ernst & Young LLP to audit the accounts
of the Company for the fiscal year ending March 31, 2001, and to perform such
other accounting services as may be appropriate. Ernst & Young LLP and its
predecessors have audited the accounts of the Company annually since 1964.

Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting, and they will have the opportunity to make a statement if they
desire to do so. They will also be available to respond to appropriate questions
from shareholders.

OTHER MATTERS

Reports will be laid before the Annual Meeting, including a letter from the
Chairman of the Board and Chief Executive Officer which accompanies the
financial statements of the Company and the Auditor's Report prepared by
independent auditors. The Board of Directors does not contemplate and does not
intend to present for consideration the taking of action by shareholders with
respect to any reports to be laid before the Annual Meeting or with respect to
the minutes of the Annual Meeting of Shareholders held on July 27, 1999, which
will be read at the Annual Meeting on July 25, 2000, unless a motion to dispense
with a reading is adopted.

The Board of Directors is not aware of any matter to come before the Annual
Meeting other than those mentioned in the accompanying Notice. However, if other
matters shall properly come before the Annual Meeting, it is the intention of
the persons named in the accompanying Proxy to vote in accordance with their
best judgment on such matters.

The cost of solicitation of Proxies, including the cost of preparing,
assembling and mailing the Notice, Proxy Statement and Proxy, will be borne by
the Company. In addition to solicitation by mail, arrangements may be made with
brokerage houses and other custodians, nominees and fiduciaries to send proxy
materials to their principals, and the Company may reimburse them for their
expenses in so doing. To the extent necessary to assure sufficient
representation, officers and employees of the Company may in person or by
telephone or telegram request the return of Proxies. The Company has also
retained D.F. King & Co., Inc., a professional

34
<PAGE> 38

proxy solicitation firm, to aid in the solicitation of proxies, for whose
services the Company will pay a fee of $9,000 plus reimbursement of
out-of-pocket expenses.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's Directors and certain of its executive officers and
persons who beneficially own more than 10% of the Common Shares to file reports
of ownership and changes in ownership on Forms 3, 4 and 5 with the Commission.
Such persons are further required to furnish the Company with copies of all such
forms filed by them. Based solely on the Company's review of the copies of such
forms it has received, the Company believes that all of the Section 16(a) filing
requirements were satisfied by the Company's Directors, executive officers and
beneficial owners of more than 10% of the Common Shares.

SHAREHOLDER PROPOSALS

Any shareholder proposal intended to be presented at the 2001 Annual
Meeting of Shareholders must be received by the Company's Secretary at the
Company's principal executive offices not later than February 1, 2001, for
inclusion in the Proxy Statement and form of Proxy relating to that Annual
Meeting. Each proposal submitted should be accompanied by the name and address
of the shareholder submitting the proposal and the number of Common Shares
owned. If the proponent is not a shareholder of record, proof of beneficial
ownership should also be submitted. All proposals must be a proper subject for
action and comply with the proxy rules of the Commission.

UPON THE RECEIPT OF A WRITTEN REQUEST FROM ANY SHAREHOLDER ENTITLED TO VOTE
AT THE FORTHCOMING ANNUAL MEETING, THE COMPANY WILL MAIL, AT NO CHARGE TO THE
SHAREHOLDER, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING THE
FINANCIAL STATEMENTS AND SCHEDULES REQUIRED TO BE FILED WITH THE COMMISSION
PURSUANT TO RULE 13a-1 UNDER THE EXCHANGE ACT, FOR THE COMPANY'S MOST RECENT
FISCAL YEAR. REQUESTS FROM BENEFICIAL OWNERS OF THE COMPANY'S VOTING SECURITIES
MUST SET FORTH A GOOD-FAITH REPRESENTATION THAT, AS OF THE RECORD DATE FOR THE
ANNUAL MEETING, THE PERSON MAKING THE REQUEST WAS THE BENEFICIAL OWNER OF
SECURITIES ENTITLED TO VOTE AT SUCH ANNUAL MEETING. WRITTEN REQUESTS FOR SUCH
ANNUAL REPORT SHOULD BE DIRECTED TO:

Steven M. Billick
Senior Vice President and Chief Financial Officer
Pioneer-Standard Electronics, Inc.
6065 Parkland Boulevard
Mayfield Heights, Ohio 44124

You are urged to sign and return your Proxy promptly in order to make
certain your shares will be voted at the Annual Meeting. For your convenience a
return envelope is enclosed requiring no additional postage if mailed in the
United States.

By Order of the Board of Directors.

LAWRENCE N. SCHULTZ
Secretary

June 28, 2000

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<PAGE> 39

EXHIBIT A

PIONEER-STANDARD ELECTRONICS, INC.
2000 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS

Pioneer-Standard Electronics, Inc., hereinafter called the "Company,"
hereby adopts a stock option plan for eligible directors of the Company pursuant
to the following terms and provisions:

1. PURPOSE OF THE PLAN. The purpose of this plan, hereinafter called the
"Plan," is to provide additional incentive to those directors of the Company who
are not employees of the Company or any of its subsidiaries or affiliates by
encouraging them to acquire a new or an additional share ownership in the
Company, thus increasing their proprietary interest in the Company's business
and providing them with an increased personal interest in the Company's
continued success and progress. These objectives will be promoted through the
grant of options to acquire the Company's Common Shares, without par value (the
"Common Shares"), pursuant to the terms of the Plan. Only those directors who
meet the qualifications stated above are eligible for and shall receive options
under this Plan.

2. EFFECTIVE DATE OF THE PLAN. The Plan shall become effective upon
adoption by the Board of Directors on April 26, 2000, subject to approval by
holders of a majority of the outstanding shares of voting capital stock of the
Company. In the event the Plan is not so approved within twelve (12) months
after the date the Plan is adopted by the Board of Directors, the Plan and the
options granted hereunder shall be null and void.

3. SHARES SUBJECT TO THE PLAN. The shares to be issued upon the exercise of
the options granted under the Plan shall be Common Shares of the Company. Either
treasury or authorized and unissued Common Shares, or both, as the Board of
Directors shall from time to time determine, may be so issued. Common Shares
which are the subject of any lapsed, expired or terminated options may be made
available for reoffering under the Plan. If an option granted under this Plan is
exercised pursuant to the terms and conditions of subsection 5(b), any Common
Shares which are the subject thereof shall not thereafter be available for
reoffering under the Plan.

Subject to the provisions of the next succeeding paragraph of this Section
3, the aggregate number of Common Shares for which options may be granted under
the Plan shall be One Hundred Five Thousand (105,000) Common Shares.

In the event that, after the date of adoption of the Plan by the Board of
Directors, the Common Shares should, as a result of a stock split, stock
dividend, combination or exchange of shares, exchange for other securities,
reclassification, reorganization, redesignation, merger, consolidation,
recapitalization, spin-off or other such change, be increased or decreased or
changed into or exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation, then (i) there shall
automatically be substituted for each Common Share subject to an unexercised
option (in whole or in part) granted under the Plan and each Common Share made
available for grant to each eligible director pursuant to Section 4 hereof, the
number and kind of shares of stock or other securities into which each
outstanding Common Share shall be changed or for which each such Common Share
shall be exchanged, (ii) the option price per Common Share or unit of securities
shall be increased or decreased proportionately so that the aggregate purchase
price for the securities subject to the option shall remain the same as
immediately prior to such event, and (iii) the Board shall make such other
adjustments as may be appropriate and equitable to prevent enlargement or
dilution of option rights. Any such adjustment may provide for the elimination
of fractional shares.

A-1
<PAGE> 40

4. GRANT OF OPTIONS. Subject to the terms of the Plan, options shall be
granted to each eligible director annually on the date of the Annual Meeting of
Shareholders of the Company, commencing with the Annual Meeting of Shareholders
to be held in 2001, for the purchase of seven thousand five hundred (7,500)
Common Shares by each such director at an option price per share equal to the
fair market value of a Common Share of the Company on the date said options are
granted. Each such option granted shall be immediately exercisable in full upon
grant and shall remain exercisable for a period of ten (10) years from the date
of grant, subject to the provisions of section 5 hereof.

5. OPTION PROVISIONS.

(a) Limitation on Exercise and Transfer of Options. Only the director
to whom the option is granted may exercise the same except where a guardian
or other legal representative has been duly appointed for such director and
except as otherwise provided in the case of such director's death. Except
as otherwise provided in the event of a director's death, only the director
may exercise an option, provided that (i) a guardian or other legal
representative who has been duly appointed for such director may exercise
an option on behalf of the director and (ii) a transferee of an option that
has been transferred as permitted pursuant to subparagraph (C) below may
exercise such transferred option subject to the terms and conditions of the
Plan. No option granted hereunder shall be transferable other than (A) by
the Last Will and Testament of the director or, if the director dies
intestate, by the applicable laws of descent and distribution, (B) to the
extent approved by the Board of Directors, pursuant to a domestic relations
order, or (C) to the extent approved by the Board of Directors, by a
director who transfers such option to a member of his or her Immediate
Family (as defined below) or to a trust or partnership established for the
exclusive benefit of the members of his or her Immediate Family. The words
"Immediate Family" shall mean a director's children, stepchildren,
grandchildren, parents, stepparents, grandparents, spouse, siblings
(including half brothers and sisters), in-laws and other individuals who
have a relationship to the director arising because of a legal adoption.
Notwithstanding subparagraph (C) to the contrary, no transfer shall be made
pursuant to said subparagraph (C):

(i) to the extent the transfer is made for consideration; or

(ii) to the extent that such transferability would cause Form S-8
not to be available to register the Common Shares that are issuable upon
exercise of the options so transferred.

Any purported assignment, transfer, pledge hypothecation or other
disposition of any of the options contrary to the provisions of this Plan,
or any levy of execution, attachment or other process attempted upon any of
the options, shall be null and void and without effect. Any person to whom
an option is transferred by the director as permitted by paragraph (C)
above shall thereafter succeed to all of the rights of the director with
respect to exercising the option, provided that the transferee shall have
the right to exercise such option only if and to the extent the Optionee
would have had the right to exercise such option had the transfer not been
made.

(b) Exercise of Option. Each option granted hereunder may be exercised
in whole or in part from time to time during the option period, but this
right of exercise shall be limited to whole shares. Options shall be
exercised by the optionee giving written notice to the Secretary or the
Vice President, Treasurer and Assistant Secretary of the Company at its
principal business office, by certified mail, return receipt requested, of
the intention to exercise the same and the number of Common Shares with
respect to which the Option is being exercised (the "Notice of Exercise of
Option") accompanied by full payment of the purchase price in cash or in
whole or in part in Common Shares having a fair market value on the date

A-2
<PAGE> 41

before the option is exercised equal to that portion of the purchase price
for which payment in cash is not made. Such Notice of Exercise of Option
shall be deemed delivered upon deposit into the mails.

(c) Termination of Directorship. If the optionee ceases to be a
director of the Company as a result of his or her voluntary resignation
during his or her term or his or her removal from the Board of Directors
with cause (as determined in the sole discretion of the Board of
Directors), his or her option shall terminate on the effective date of
termination of his or her directorship and neither he or she nor any other
person shall have any right after such date to exercise all or any part of
such option. If the optionee ceases to be a director of the Company for any
reason other than the foregoing, including death or disability or not
standing for reelection as a director, then the option will remain
exercisable, subject to the terms and provisions contained herein and in
the Option Agreement pursuant to which such option was granted, until the
earlier of (i) the tenth anniversary of the date on which the option was
granted or (ii) the second anniversary of the effective date of
termination, by the optionee or, in the case of the optionee's death, by
the optionee's estate or by the person designated in the optionee's Last
Will and Testament or to whom transferred by the applicable laws of descent
and distribution.

(d) Option Agreements. Options granted under the Plan shall be subject
to the further terms and provisions of an Option Agreement, the execution
of which by each optionee shall be a condition to the receipt of an option.

6. INVESTMENT REPRESENTATION, APPROVALS AND LISTING. The options to be
granted hereunder shall be further conditioned upon receipt of the following
investment representation from the optionee:

"I further agree that any Common Shares of Pioneer-Standard
Electronics, Inc., which I may acquire by virtue of this option shall be
acquired for investment purposes only and not with a view to distribution
or resale; provided, however, that this restriction shall become
inoperative in the event the said Common Shares subject to this option
shall be registered under the Securities Act of 1933, as amended, or in the
event there is presented to Pioneer-Standard Electronics, Inc. an opinion
of counsel satisfactory to Pioneer-Standard Electronics, Inc., to the
effect that the offer or sale of the Common Shares subject to this option
may lawfully be made without registration under the Securities Act of 1933,
as amended."

The Company shall not be required to issue any certificate or certificates
for Common Shares upon the exercise of an option granted under the Plan prior to
(i) the obtaining of any approval from any governmental agency which the Company
shall, in its sole discretion, determine to be necessary or advisable, (ii) the
admission of such Common Shares to listing on any national securities exchange
or transaction reporting system on which the Common Shares may be listed, (iii)
the completion of any registration or other qualification of the Common Shares
under any state or federal law or ruling or regulations of any governmental body
which the Company shall, in its sole discretion, determine to be necessary or
advisable or the determination by the Company, in its sole discretion, that any
registration or other qualification of the Common Shares is not necessary or
advisable; (iv) the obtaining of an investment representation from the optionee
in the form stated above or in such other form as the Company, in its sole
discretion, shall determine to be adequate; and (v) counsel for the Company
determining that the issuance and delivery of such Common Shares is in
compliance with all applicable laws, regulations of governmental authority, or
the requirements of the Nasdaq National Market or any securities exchange on
which the Common Shares are traded.

7. GENERAL PROVISIONS. For all purposes of this Plan the fair market value
of a Common Share shall be determined as follows: so long as the Common Shares
of the Company are listed upon an established stock exchange or exchanges or on
the Nasdaq National Market such fair market value shall be determined to be

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the highest closing price of such Common Shares on such stock exchange or
exchanges or on such transaction reporting system on the day the option is
granted (or the day before the Common Shares are tendered as payment, in the
case of determining fair market value for that purpose) or if no sale of such
Common Shares shall have been made on any stock exchange or transaction
reporting system on that day, then on the next preceding day on which there was
a sale of such Common Shares; and during any period of time as such Common
Shares are not listed upon an established stock exchange or the Nasdaq National
Market the fair market value per share shall be the last sales price of such
Common Shares in the over-the-counter market on the day the option is granted
(or the day before the shares are tendered as payment, in the case of
determining fair market value for that purpose), as reported by The Nasdaq Stock
Market Inc.

The liability of the Company under the Plan and any distribution of Common
Shares made hereunder is limited to the obligations set forth herein with
respect to such distribution and no term or provision of the Plan shall be
construed to impose any liability on the Company in favor of any person with
respect to any loss, cost or expense which the person may incur in connection
with or arising out of any transaction in connection with the Plan, including,
but not limited to, any liability to any Federal, state, or local tax authority
and/or any securities regulatory authority.

Nothing in the Plan or in any option agreement shall confer upon any
optionee any right to continue as a director of the Company, or to be entitled
to any remuneration or benefits not set forth in the Plan or such option.

Nothing contained in the Plan or in any option agreement shall be construed
as entitling any optionee to any rights of a shareholder as a result of the
grant of an option until such time as Common Shares are actually issued to such
optionee pursuant to the exercise of an option.

The Plan may be assumed by the successors and assigns of the Company.

The cash proceeds received by the Company from the issuance of Common
Shares pursuant to the Plan will be used for general corporate purposes or in
such other manner as the Board of Directors deems appropriate.

This Plan shall be administered by the Board of Directors of the Company.
The Board of Directors may appoint a committee consisting of three or more
"non-employee directors" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, as amended, and may, to the full extent permitted by law,
authorize and empower such committee to do any and all things which the Board is
authorized and empowered to do with respect to the Plan. The Board of Directors
shall have all the powers and authority vested in it by the terms of the Plan,
such powers and authority to include, without limitation, the authority to
interpret the Plan and the Options granted under the Plan, to determine the
persons eligible to participate in the Plan, to establish, amend and rescind any
rules and regulations relating to the Plan, and to make any other determinations
which it believes necessary or advisable for the administration of the Plan. The
Board of Directors may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any Option in the manner and to the extent the
Board of Directors deems necessary or desirable to carry it into effect. Any
decision of the Board of Directors in the administration of the Plan, as
described herein, shall be final and conclusive. The Board may act only by a
majority of its members in office, except that the members thereof may authorize
any one or more of their number or any officer of the Company to execute and
deliver documents on behalf of the Board of Directors. The expense of
administering the Plan shall be borne by the Company.

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The captions and section numbers appearing in the Plan are inserted only as
a matter of convenience. They do not define, limit, construe or describe the
scope or intent of the provisions of the Plan.

8. TAXES. A participant may satisfy any Federal, state and local tax
obligations associated with the exercise of an option by the transfer to the
Company of Common Shares or a combination of cash and Common Shares, or by
requesting the Company to withhold a sufficient number of Common Shares to
satisfy such tax obligations. If a participant does not satisfy his or her tax
obligations in the manner described in the preceding sentence, the Company may
withhold, or require a participant to remit to the Company, an amount of cash
sufficient to pay any federal, state and local taxes associated with the
exercise of an option.

9. VENUE. The venue of any claim brought hereunder by an eligible Director
shall be Cleveland, Ohio.

10. CHANGES IN GOVERNING RULES AND REGULATIONS. All references herein to
the Internal Revenue Code of 1986, as amended, or sections thereof, or to rules
and regulations of the Department of Treasury or of the Securities and Exchange
Commission, shall mean and include the Code sections thereof and such rules and
regulations as are now in effect or as they may be subsequently amended,
modified, substituted or superseded.

11. AMENDMENT OF THE PLAN. The Plan may be amended, modified or suspended
from time to time prior to its termination by the Board of Directors. In no
event, however, without the approval of shareholders, shall any action of the
Board of Directors result in (a) materially amending, modifying or altering the
eligibility requirements provided in Section 1 hereof; (b) increasing, except as
provided in Section 3 hereof, the maximum number of Common Shares available for
purchase under the Plan; or (c) increasing the benefits accruing to optionees
under the plan, except to conform this Plan and any agreements made hereunder to
changes in the Internal Revenue Code of 1986, as amended, or governing law.

12. TERMINATION OF THE PLAN. The Plan shall terminate ten years from the
date of its adoption by the Board of Directors of the Company and thereafter no
options shall be granted hereunder. All options outstanding at the time of
termination of the Plan shall continue in full force and effect in accordance
with and subject to their terms and the terms and conditions of the Plan.

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EXHIBIT B

PIONEER-STANDARD ELECTRONICS, INC.
2000 STOCK INCENTIVE PLAN

ARTICLE I

GENERAL PURPOSE OF PLAN; DEFINITIONS

1.1 Name and Purposes. The name of this plan is the Pioneer-Standard
Electronics, Inc. 2000 Stock Incentive Plan (the "Plan"). The purpose of this
Plan is to enable Pioneer-Standard Electronics, Inc. (the "Company") and its
Affiliates to (i) attract and retain officers and other employees and
consultants who are expected to contribute to the Company's success by providing
long-term incentive compensation opportunities competitive with those made
available by other companies, (ii) motivate Plan participants to achieve the
long term success and growth of the Company and (iii) align the interests of the
Plan participants with those of the Company's public shareholders.

1.2 Certain Definitions. Unless the context otherwise indicates, the
following words used herein shall have the following meanings whenever used in
this instrument:

(a) The word "Affiliate" means any corporation, partnership, joint
venture or other entity, directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control with
the Company as determined by the Board of Directors in its discretion.

(b) The word "Award" means any grant under this Plan of a Stock
Option, Stock Appreciation Right, Restricted Shares or Performance Shares
to any Plan participant.

(c) The words "Board of Directors" mean the Board of Directors of the
Company, with any individual members thereof being referred to as a
"Director."

(d) The word "Cause" means a participant's termination of employment
shall have been the result of:

(i) his conviction of any of the following offenses, provided that
such offense results in material economic harm to the Company or any
Affiliate or has a materially adverse effect on the operations, property
or business relationships of the Company or an Affiliate: (A)
misappropriation of money or other property of the Company or any
Affiliate or (B) any felony;

(ii) a participant's failure, during his employment with the
Company or any Affiliate, to devote his full time and undivided
attention during normal business hours to the business and affairs of
the Company or any Affiliate, except for reasonable vacations and for
illness or incapacity; provided, however, that a participant may, with
the consent of the Company, serve as a director or member of an advisory
committee of any organization involving no conflict of interest with the
interests of the Company, engage in charitable and community activities,
and manage his personal affairs, provided that such activities do not
materially interfere with the regular performance of his duties and
responsibilities of employment;

(iii) a participant's failure to substantially perform his
employment duties with the Company or an Affiliate; or

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(iv) conduct by a participant that is in material competition with
the Company or conduct by a participant that breaches his or her duty of
loyalty to the Company or that is materially injurious to the Company,
monetarily or otherwise, which conduct may include, but is not limited
to, (A) disclosing or misusing any confidential information pertaining
to the Company or an Affiliate or (B) attempting, directly or
indirectly, to induce any employee or agent of the Company to be
employed or perform services elsewhere.

The determination of whether any conduct, action or failure to act
constitutes "Cause" shall be made by the Committee in its sole
discretion.

(e) The word "Code" means the Internal Revenue Code of 1986, as
amended. A reference to any provision of the Code includes a reference to
any lawful regulation or pronouncement promulgated thereunder and to any
successor provision.

(f) The word "Committee" means the entity administering this Plan as
provided in Section 2.1 hereof or, if none has been appointed, then the
Board of Directors as a whole.

(g) The words "Common Shares" mean the Common Shares, without par
value, of the Company.

(h) The word "Company" means Pioneer-Standard Electronics, Inc., a
corporation organized under the laws of the State of Ohio (or any successor
corporation).

(i) The words "Date of Grant" mean the date on which the Committee
grants an Award or a future date that the Committee designates at the time
of the Award.

(j) The word "Director" means a member of the Board of Directors.

(k) The word "Disability" means a participant's physical or mental
incapacity resulting from personal injury, disease, illness or other
condition, which (i) prevents him or her from performing his or her duties
for the Company, as the same is determined by the Committee or its designee
after reviewing any medical evidence or requiring any medical examinations
which the Committee or its designee considers necessary to its
determination, and (ii) results in a termination of his or her employment
with the Company.

(l) The words "Early Retirement" mean a participant's retirement from
active employment with the Company on and after the later of attainment of
age 55 or the completion of seven years of service.

(m) The acronym "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended. A reference to any provision of ERISA includes a
reference to any lawful regulation or pronouncement promulgated thereunder
and to any successor provision.

(n) The words "Exchange Act" mean the Securities Exchange Act of 1934,
as amended.

(o) The words "Exercise Price" mean the purchase price of a Share
covered by a Stock Option.

(p) The words "Fair Market Value" mean the last closing price of a
Share as reported on the Nasdaq National Market, or, if applicable, on the
national securities exchange on which the Common Shares are principally
traded, on the date for which the determination of fair market value is
made, or, if there are no sales of Common Shares on such date, then on the
most recent immediately preceding date on which there were any sales of
Common Shares. If the Common Shares are not or cease to be traded on the
Nasdaq National Market or a national securities exchange, the "Fair Market
Value" of Common Shares shall be determined in the manner prescribed by the
Committee.

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<PAGE> 46

(q) The words "Incentive Stock Option" and the acronym "ISO" mean a
Stock Option that is clearly identified as such and which meets the
requirements of Section 422 of the Code, or any successor provision, and
therefore qualifies for favorable tax treatment.

(r) The words "Non-Qualified Stock Option" and the acronym "NQSO" mean
a Stock Option that does not meet the requirements of Section 422 of the
Code and which is governed by Section 83 of the Code, or a Stock Option
that does not meet the requirements of Section 422 of the Code, but which
is clearly identified as a Non-Qualified Stock Option and therefore is
governed by Section 83 of the Code.

(s) The words "Normal Retirement" mean retirement from active
employment with the Company on or after the age of 65.

(t) The words "Outside Director" mean a Director who meets the
definition of "outside director" set forth in Section 162(m) of the Code
and regulations promulgated thereunder and the definition of "non-employee
director" set forth in Rule 16b-3 under the Exchange Act, or any successor
definitions adopted by the Internal Revenue Service and Securities and
Exchange Commission, respectively.

(u) The word "Parent" means any corporation which qualifies as a
"parent corporation" of the Company under Section 424(e) of the Code.

(v) The words "Performance Shares" are defined in Article 9.

(w) The acronym "QUADRO" means a qualified domestic relations order as
defined by the Code.

(x) The words "Reload Option" are defined in Section 5.3.

(y) The word "Retirement" means Normal Retirement or Early Retirement.

(z) The words "Restricted Shares" are defined in Article 8.

(aa) The word "Share" or "Shares" means one or more of the Common
Shares.

(bb) The words "Stock Appreciation Rights" and the acronym "SAR" mean
any right pursuant to an Award granted under Article 7.

(cc) The words "Stock Option" mean any right to purchase a specified
number of Shares at a specified price which is granted pursuant to Article
5 herein and may be an Incentive Stock Option, a Non-Qualified Stock Option
or a Reload Option.

(dd) The word "Subsidiary" means any corporation which qualifies as a
"subsidiary corporation" of the Company under Section 424(f) of the Code.

(ee) The word "Vested" means that the time has been reached, with
respect to Stock Options, when the option to purchase Shares first becomes
exercisable; with respect to Stock Appreciation Rights, when the Stock
Appreciation Right first becomes exercisable for payment, and with respect
to Restricted Shares, when the Shares are no longer subject to forfeiture
and restrictions on transferability. The words "Vest" and "Vesting" have
meanings correlative to the foregoing.

ARTICLE II

ADMINISTRATION

2.1. Authority and Duties of the Committee.

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(a) The Plan shall be administered by a Committee of not less than
three Directors who are appointed by the Board of Directors and serve at
its pleasure. Unless otherwise determined by the Board of Directors, the
Compensation Committee shall serve as the Committee, and all of the members
of the Committee shall be Outside Directors.

(b) The Committee has the power and authority to grant Awards pursuant
to the terms of this Plan to officers and other employees (including those
who also serve as Directors) and to consultants.

(i) select the employees and consultants to whom Awards are
granted;

(ii) determine the types of Awards granted and the timing of such
Awards;

(iii) determine the number of Shares to be covered by each Award
granted hereunder;

(iv) determine the other terms and conditions, not inconsistent
with the terms of this Plan and any operative employment agreement, of
any Award granted hereunder. Such terms and conditions include, but are
not limited to, the exercise price the time or times when Options or
Stock Appreciation Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or
Stock Appreciation Right or the Common Shares relating thereto, based in
each case on such factors as the Committee, in its sole discretion,
shall determine;

(v) determine whether any conditions or objectives related to
Awards have been met;

(vi) subsequently modify or waive any terms and conditions of
Awards, not inconsistent with the terms of this Plan and any operative
employment agreement;

(vii) determine whether, to what extent and under what
circumstances, Shares and other amounts payable with respect to any
Award are deferred either automatically or at the election of the
participant;

(viii) adopt, alter and repeal such administrative rules,
guidelines and practices governing this Plan as it deems advisable from
time to time;

(ix) promulgate such administrative forms as they from time to time
deem necessary or appropriate for administration of the Plan;

(x) interpret the terms and provisions of this Plan and any Award
(and any agreements relating thereto); and

(xi) otherwise supervise the administration of this Plan.

(d) All decisions made by the Committee pursuant to the provisions of
this Plan are final and binding on all persons, including the Company, its
shareholders and Plan participants, but may be made subject to ratification
or approval by the Board of Directors, another committee of the Board of
Directors, or shareholders.

2.2 Delegation of Authority. The Committee may delegate its powers and
duties under this Plan to the Chief Executive Officer of the Company, subject to
such terms, conditions and limitations as the Committee may establish in its
sole discretion; provided, however, that the Committee may not delegate its
powers and

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duties under this Plan with regard to Awards to the Company's executive officers
or any participant who is a "covered employee" as defined in Section 162(m) of
the Code. In addition, the Committee may delegate to any other person or persons
ministerial duties, and it may employ attorneys, consultants, accountants or
other professional advisers.

ARTICLE III

STOCK SUBJECT TO PLAN

3.1 Total Shares Limitation. Subject to the provisions of this Article 3,
the maximum number of Shares that may be issued pursuant to Awards granted under
this Plan is 2,000,000, which may be newly issued Shares or Shares that have
been reacquired in the open market or in private transactions.

3.2 Other Limitations.

(a) ISO Limitations. The maximum number of Shares available with
respect to all Stock Options granted under this Plan that are intended to
be Incentive Stock Options is 2,000,000 Shares.

(b) Stock Award Limitation. The maximum number of Shares available
with respect to all Restricted Share and Performance Share Awards granted
under this Plan is 2,000,000 Shares.

(c) Participant Limitation. The aggregate number of Shares underlying
Awards granted under this Plan to any one participant in any calendar year,
regardless of whether such Awards are thereafter canceled, forfeited or
terminated, shall not exceed 1,000,000 Shares. The foregoing annual
limitation is intended to include the grant of all Awards representing
"qualified performance-based compensation" within the meaning of Section
162(m) of the Code.

3.3 Awards Not Exercised. In the event any outstanding Award, or portion
thereof, expires, or is terminated, canceled or forfeited, the Shares that would
otherwise be issuable with respect to the unexercised portion of such expired,
terminated, canceled or forfeited Award shall be available for subsequent Awards
under this Plan.

3.4 Dilution and Other Adjustments. In the event that the Committee
determines that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under this Plan, then the
Committee may, in such manner as it deems equitable, adjust any or all of (i)
the number and type of Shares (or other securities or other property) which
thereafter may be made the subject of Awards, (ii) the number and type of Shares
(or other securities or other property) subject to outstanding Awards, (iii) the
limitations set forth above, and (iv) the purchase or exercise price or any
performance measure with respect to any Award; provided, however, that the
number of Shares or other securities covered by any Award or to which such Award
relates is always a whole number.

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ARTICLE IV

PARTICIPANTS

4.1 Eligibility. Officers, all other regular active employees of the
Company or any its Affiliates (excluding any Director who receives compensation
by the Company solely in relation to his services as a Director), and
consultants to the Company or any of its Affiliates are eligible to participate
in this Plan. The Plan participants may be selected from time to time by the
Committee in its sole discretion, or, with respect to employees other than
executive officers or participants who are "covered employees" as defined in
Section 162(m) of the Code, by the Chief Executive Officer with proper
delegation from the Committee. (See Article 17 hereof with respect to the
shareholder approval requirement.)

ARTICLE V

STOCK OPTION AWARDS

5.1 Option Grant. Each Stock Option granted under this Plan (or delegation
of authority to the Chief Executive Officer to grant Stock Options) will be
evidenced by minutes of a meeting, or by a unanimous written consent without a
meeting, of the Committee and by a written agreement dated as of the Date of
Grant and executed by the Company and by the Plan participant.

5.2 Terms and Conditions of Grants. Stock Options granted under this Plan
are subject to the following terms and conditions and may contain such
additional terms, conditions, restrictions and contingencies with respect to
exercisability and/or with respect to the Shares acquired upon exercise, not
inconsistent with the terms of this Plan and any operative employment agreement,
as the Committee deems desirable:

(a) Exercise Price. The Exercise Price fixed at the time of grant will
not be less than 100% of the Fair Market Value of the Shares as of the Date
of Grant. If a variable Exercise Price is specified at the time of grant,
the Exercise Price may vary pursuant to a formula or other method
established by the Committee which provides a floor for Fair Market Value
as of the Date of Grant. Except as otherwise provided in Section 3.4
hereof, no subsequent amendment of an outstanding Stock Option may reduce
the Exercise Price to be less than 100% of the Fair Market Value of the
Shares as of the Date of Grant.

(b) Option Term. Any unexercised portion of a Stock Option granted
hereunder shall expire at the end of the stated term of the Stock Option.
The Committee shall determine the term of each Stock Option at the time of
grant and may thereafter extend the term in its discretion. If a definite
term is not specified by the Committee at the time of grant, then the term
is deemed to be ten years.

(c) Vesting. Stock Options, or portions thereof, are exercisable at
such time or times as determined by the Committee in its discretion at or
after grant. If the Committee provides that any Stock Option becomes Vested
over a period of time, in full or in installments, the Committee may waive
or accelerate such Vesting provisions at any time. If no other Vesting
provision is specified by the Committee at the time of grant, then the
Stock Option is deemed to Vest in three installments (as equal as possible
to the whole Share) on the first, second and third anniversaries of the
Date of Grant. (Also see the Change in Control provisions in Article 11.)

(d) Method of Exercise. Vested portions of any Stock Option may be
exercised in whole or in part at any time during the option term by giving
written notice of exercise to the Company specifying the number of Shares
to be purchased. The notice must be given by or on behalf of a person
entitled to exercise the Stock Option, accompanied by payment in full of
the Exercise Price, along with any required

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<PAGE> 50

tax withholding pursuant to Section 16.3 hereof. Subject to the approval of
the Committee, the Exercise Price may be paid:

(i) in cash in any manner satisfactory to the Committee;

(ii) by tendering (by either actual delivery of Shares or by
attestation) previously owned Shares acquired at least six months prior
to such tender and having an aggregate Fair Market Value on the date of
exercise equal to the Exercise Price applicable to such Stock Option
exercise, and, with respect to the exercise of NQSOs, including
Restricted Shares granted at least six months prior to such tender;

(iii) by a combination of cash and Shares; or

(iv) by authorizing a broker to sell, on behalf of the participant,
the appropriate number of Shares otherwise issuable to the participant
upon the exercise of a Stock Option with the proceeds of sale applied to
pay the Exercise Price and tax withholding, provided that the Company
has implemented such a broker-handled same day sale program.

If the Exercise Price of a NQSO is paid by tendering Restricted
Shares, then the Shares received upon the exercise will contain
identical restrictions as the Restricted Shares so tendered. Except as
otherwise provided by law and in the Committee's sole discretion,
required tax withholding may be paid by only cash or through a same day
sale transaction.

(e) Issuance of Shares. The Company will issue or cause to be issued
such Shares promptly upon exercise of the Option. No Shares will be issued
until full payment has been made. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) of the stock certificate evidencing such
Shares, no right to vote or receive dividends or any other rights as a
shareholder will exist with respect to the Shares, notwithstanding the
exercise of the Option.

(f) Form. Unless the grant of a Stock Option is designated at the time
of grant as an ISO, it is deemed to be an NQSO. ISOs are also subject to
the terms and conditions stated in Article 6 hereof.

5.3 Grant of Reload Options. If the Committee so provides in its discretion
at or after grant, an optionee who exercises all or part of a Non-Qualified
Stock Option by payment of the Exercise Price with previously owned Shares will
be granted an additional Stock Option (a "Reload Option") for a number of Shares
equal to the number of Shares tendered in the exercise of the original Stock
Option. Each Reload Option will have a Date of Grant which is the date as of
which the original Stock Option to which it applies is exercised and will become
Vested on the six-month anniversary of the Date of Grant of the Reload Option.
The Reload Option will have the same expiration and all other terms and
conditions as the original Stock Option to which it applies, except that the
Exercise Price will be equal to at least 100% of the Fair Market Value as of the
Date of Grant of the Reload Option.

5.4 Termination of Grants Prior to Expiration. Unless otherwise provided in
an employment agreement entered into between the optionee and the Company and
approved by the Committee, either before or after the Date of Grant, or
otherwise specified at or after the time of grant, and subject to Article 6
hereof with respect to ISOs, the following early termination provisions apply to
all Stock Options:

(a) Termination by Death. If an optionee's employment by the Company
or its Affiliates terminates by reason of his or her death, all Stock
Options held by such optionee will immediately become Vested, but
thereafter may only be exercised (by the legal representative of the
optionee's estate,

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<PAGE> 51

or by the legatee or heir of the optionee pursuant to a will or the laws of
descent and distribution) for a period of one year (or such other period as
the Committee may specify at or after the time of grant) from the date of
such death, or until the expiration of the original term of the Stock
Option, whichever period is the shorter.

(b) Termination by Reason of Disability. If an optionee's employment
by the Company or its Affiliates terminates by reason of his or her
Disability, all Stock Options held by such optionee will immediately become
Vested, but thereafter may only be exercised for a period of one year (or
such other period as the Committee may specify at or after the time of
grant) from the date of such termination of employment, or until the
expiration of the original term of the Stock Option, whichever period is
the shorter. If the optionee dies within such one-year period (or such
other period as applicable), any unexercised Stock Option held by such
optionee will thereafter be exercisable by the legal representative of the
optionee's estate, or by the legatee or heir of the optionee pursuant to a
will or the laws of descent and distribution, for the greater of the
remainder of the one-year period (or other period as applicable) or for a
period of twelve months from the date of such death, but in no event shall
any portion of the Stock Option be exercisable after its original stated
expiration date.

(c) Termination by Reason of Retirement. If an optionee's employment
by the Company or its Affiliates terminates by reason of his or her
Retirement, all Stock Options held by such optionee immediately become
Vested but thereafter may only be exercised for a period of two years (or
such other period as the Committee may specify at or after the time of
grant) from the date of such termination of employment, or until the
expiration of the original term of the Stock Option, whichever period is
the shorter. If the optionee dies within such two-year period (or such
other period as applicable), any unexercised Stock Option held by such
optionee will thereafter be exercisable by the legal representative of the
optionee's estate, or by the legatee or heir of the optionee pursuant to a
will or the laws of descent and distribution, for the greater of the
remainder of the two-year period (or such other period as applicable) or
for a period of twelve months from the date of such death, but in no event
shall any portion of the Stock Option be exercisable after its original
stated expiration date.

(d) Termination for Cause. If an optionee's employment by the Company
or its Affiliates is terminated for Cause, all Stock Options (or portions
thereof) which have not been exercised, whether Vested or not, are
automatically forfeited immediately upon termination.

(e) Other Termination. If an optionee's employment by the Company or
its Affiliates terminates, voluntarily or involuntarily, for any reason
other than death, Disability, Retirement or for Cause, any Vested portions
of Stock Options held by such optionee at the time of termination may be
exercised by the optionee for a period of three months (or such other
period as the Committee may specify at or after the time of grant) from the
date of such termination or until the expiration of the original term of
the Stock Option, whichever period is the shorter. No portion of any Stock
Option which is not Vested at the time of such termination will thereafter
become Vested.

ARTICLE VI

SPECIAL RULES APPLICABLE TO INCENTIVE STOCK OPTIONS

6.1 Eligibility. Notwithstanding any other provision of this Plan to the
contrary, an ISO may only be granted to full or part-time employees (including
officers and Directors who are also employees) of the

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Company or of an Affiliate, provided that the Affiliate is also a "subsidiary
corporation" within the meaning of Section 424(f) of the Code.

6.2 Special ISO Rules.

(b) Term. No ISO may be exercisable on or after the tenth anniversary
of the Date of Grant, and no ISO may be granted under this Plan on or after
the tenth anniversary of the effective date of this Plan. (See Section 17.1
hereof.)

(c) Ten Percent Shareholder. No grantee may receive an ISO under this
Plan if such grantee, at the time the Award is granted, owns (after
application of the rules contained in Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes
of the Company's stock, unless (i) the option price for such ISO is at
least 110% of the Fair Market Value of the Shares as of the Date of Grant
and (ii) such ISO is not exercisable on or after the fifth anniversary of
the Date of Grant.

(d) Limitation on Grants. The aggregate Fair Market Value (determined
with respect to each ISO at the time such ISO is granted) of the Shares
with respect to which ISOs are exercisable for the first time by a grantee
during any calendar year (under this Plan or any other plan adopted by the
Company or its Parent or its Subsidiary) shall not exceed $100,000. If such
aggregate fair market value shall exceed $100,000, such number of ISOs as
shall have an aggregate fair market value equal to the amount in excess of
$100,000 shall be treated as NQSOs.

(e) Non-Transferability. Notwithstanding any other provision herein to
the contrary, no ISO granted hereunder (and, if applicable, related Stock
Appreciation Right) may be transferred except by will or by the laws of
descent and distribution, nor may such ISO (or related Stock Appreciation
Right) be exercisable during a grantee's lifetime other than by him.

(f) Termination of Employment. No ISO may be exercised more than three
months following termination of employment for any reason (including
retirement) other than death or disability, nor more than one year
following termination of employment for the reason of death or disability
(as defined in Section 422 of the Code), or such option will no longer
qualify as an ISO and shall thereafter be, and receive the tax treatment
applicable to, an NQSO.

(g) Fair Market Value. For purposes of any ISO granted hereunder (or,
if applicable, related Stock Appreciation Right), the Fair Market Value of
Shares shall be determined in the manner required by Section 422 of the
Code.

6.3 Subject to Code Amendments. The foregoing limitations are designed to
comply with the requirements of Section 422 of the Code and shall be
automatically amended or modified to comply with

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amendments or modifications to Section 422 or any successor provisions. Any ISO
which fails to comply with Section 422 of the Code is automatically treated as a
NQSO under this Plan.

ARTICLE VII

STOCK APPRECIATION RIGHTS

7.1 SAR Grant and Agreement. Stock Appreciation Rights may be granted under
this Plan, either independently or in conjunction with the grant of the Stock
Option. Each SAR granted under this Plan (or delegation of authority to the
Chief Executive Officer to grant SARs) will be evidenced by minutes of a
meeting, or by a unanimous written consent without a meeting, of the Committee
and by a written agreement dated as of the Date of Grant and executed by the
Company and by the Plan participant.

7.2 SARs Granted in Conjunction with Option. Stock Appreciation Rights may
be granted in conjunction with all or part of any Stock Option granted under
this Plan, either at the same time or after the grant of the Stock Option, and
will be subject to the following terms and conditions:

(a) Term. Each Stock Appreciation Right, or applicable portion
thereof, granted with respect to a given Stock Option or portion thereof
terminates and is no longer exercisable upon the termination or exercise of
the related Stock Option, or applicable portion thereof.

(b) Exercisability. A Stock Appreciation Right is exercisable only at
such time or times and to the extent that the Stock Option to which it
relates is Vested and exercisable in accordance with the provisions of
Article 5 hereof or otherwise as the Committee may determine at or after
the time of grant.

(c) Method of Exercise. A Stock Appreciation Right may be exercised by
the surrender of the applicable portion of the related Stock Option. Stock
Options which have been so surrendered, in whole or in part, are no longer
exercisable to the extent the related Stock Appreciation Rights have been
exercised and are deemed to have been exercised for the purpose of the
limitation set forth in Article 3 hereof on the number of Shares to be
issued under this Plan, but only to the extent of the number of Shares
actually issued under the Stock Appreciation Right at the time of exercise.
Upon the exercise of a Stock Appreciation Right, subject to satisfaction of
tax withholding requirements pursuant to Section 15.3, the holder of the
Stock Appreciation Right is entitled to receive up to, but not more than,
an amount in cash or Shares equal in value to the excess of the Fair Market
Value of one Share over the Exercise Price per Share specified in the
related Stock Option, multiplied by the number of Shares in respect of
which the Stock Appreciation Right is exercised, with the Committee having
the right in its discretion to determine the form of payment. At any time
the Exercise Price per Share of the Related Stock Option shall not exceed
the Fair Market Value of one Share, the holder of the Stock Appreciation
Right shall not be permitted to exercise such right.

7.3 Independent SARs. Stock Appreciation Rights may be granted without
related Stock Options, and independent Stock Appreciation Rights will be subject
to the following terms and conditions:

(a) Term. The Committee determines the term of the Stock Appreciation
Right, at the time of grant and may thereafter extend the term in its
discretion. If a definite term is not specified by the Committee at the
time of grant, then the term is deemed to be ten years.

(b) Exercisability. A Stock Appreciation Right is exercisable, in
whole or in part, at such time or times as determined by the Committee at
or after the time of grant.

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(c) Method of Exercise. A Stock Appreciation Right may be exercised in
whole or in part during the term by giving written notice of exercise to
the Company specifying the number of Shares in respect of which the Stock
Appreciation Right is being exercised. The notice must be given by or on
behalf of a person entitled to exercise the Stock Appreciation Right. Upon
the exercise of a Stock Appreciation Right, subject to satisfaction of tax
withholding requirements pursuant to Section 15.3, the holder of the Stock
Appreciation Right is entitled to receive an amount in cash or Shares equal
in value to the excess over the Exercise Price of the Stock Appreciation
Right, with the Committee having the right in its discretion to determine
the form of payment.

(d) Early Termination Prior to Expiration. Unless otherwise provided
in an employment agreement entered into between the holder of the Stock
Appreciation Right and the Company and approved by the Committee, either
before or after the Date of Grant, or otherwise specified at or after the
time of grant, the early termination provisions set forth in Section 5.4 as
applied to Non-Qualified Stock Options will apply to Stock Appreciation
Rights.

7.4 Other Terms and Conditions of SAR Grants. Stock Appreciation Rights are
subject to such other terms and conditions, not inconsistent with the provisions
of this Plan and any operative employment agreement, as are determined from time
to time by the Committee.

ARTICLE VIII

RESTRICTED SHARE AWARDS

8.1 Restricted Share Grant and Agreement. Restricted Share Awards consist
of Shares which are issued by the Company to a participant at no cost or at a
purchase price determined by the Committee which may be below their Fair Market
Value but are subject to forfeiture and restrictions on their sale or other
transfer by the participant. Each Restricted Share Award granted under this Plan
(or delegation of authority to the Chief Executive Officer to make Restricted
Share Awards) will be evidenced by minutes of a meeting, or by a unanimous
written consent without a meeting, of the Committee and by a written agreement
dated as of the Date of Grant and executed by the Company and by the Plan
participant. The timing of Restricted Share Awards and the number of Shares to
be issued (subject to Section 3.2(b) hereof) are to be determined by the
Committee in its discretion. By accepting a grant of Restricted Shares, the
participant agrees to remit to the Company when due any required tax withholding
as provided in Section 15.3 hereof.

8.2 Terms and Conditions of Restricted Share Grants. Restricted Shares
granted under this Plan are subject to the following terms and conditions, which
need not be the same for each participant, and may contain such additional
terms, conditions, restrictions and contingencies not inconsistent with the
terms of this Plan and any operative employment agreement, as the Committee
deems desirable:

(a) Purchase Price. The Committee shall determine the prices, if any,
at which Restricted Shares are to be issued to a participant, which may
vary from time to time and among participants and which may be below the
Fair Market Value of such Shares at the date of grant.

(b) Restrictions. All Restricted Shares issued under this Plan will be
subject to such restrictions as the Committee may determine, including,
without limitation, the following:

(i) a prohibition against the sale, transfer, pledge or other
encumbrance of the Restricted Shares, such prohibition to lapse at such
time or times as the Committee determines (whether in

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installments, at the time of the death, Disability or Retirement of the
holder of such shares, or otherwise, but see Change in Control
provisions in Article 11);

(ii) a requirement that the participant forfeit such Restricted
Shares in the event of termination of the participant's employment prior
to Vesting; and

(iii) a prohibition against employment of the participant by any
competitor of the Company or its Affiliates, or against dissemination by
the participant of any secret or confidential information belonging to
the Company or a subsidiary of the Company.

The Committee may at any time waive such restrictions or accelerate the
date or dates on which the restrictions will lapse. However, if the
Committee determines that restrictions lapse upon the attainment of
specified performance objectives, then the provisions of Section 9.2 and
9.3 below will apply.

(c) Delivery of Shares. Restricted Shares will be registered in the
name of the participant and deposited, together with a stock power endorsed
in blank, with the Company. Each such certificate will bear a legend in
substantially the following form:

"The transferability of this certificate and the Common Shares
represented by it are subject to the terms and conditions (including
conditions of forfeiture) contained in the 2000 Stock Incentive Plan of the
Company, and an agreement entered into between the registered owner and the
Company. A copy of this Plan and agreement are on file in the office of the
Secretary of the Company."

At the end of any time period during which the Restricted Shares are
subject to forfeiture and restrictions on transfer, such Shares will be
delivered free of all restrictions to the participant.

(d) Forfeiture of Shares. If a participant who holds Restricted Shares
fails to satisfy the restrictions and other conditions relating to the
Restricted Shares prior to the lapse or waiver of such restrictions and
conditions, the participant is required to forfeit the Shares and transfer
them back to the Company in exchange for a refund of the consideration paid
by the participant or such other amount which may be specifically set forth
in the Award agreement.

(e) Voting and Other Rights. Except to the extent prohibited by
Section 162(m) of the Code, during any period in which Restricted Shares
are subject to forfeiture and restrictions on transfer, the participant
holding such Restricted Shares has all the rights of a shareholder with
respect to such Shares, including, without limitation, the right to vote
such Shares and the right to receive any dividends paid with respect to
such Shares.

ARTICLE IX

PERFORMANCE SHARE AWARDS

9.1 Performance Share Grant and Agreement. A Performance Share Award is a
right to receive Shares in the future conditioned upon the attainment of
specified performance objectives and such other conditions, restrictions and
contingencies as the Committee may determine. Each Performance Share Award
granted under this Plan (or delegation of authority to the Chief Executive
Officer to make Performance Share Awards) will be evidenced by minutes of a
meeting, or by a unanimous written consent without a meeting, of the Committee
and by a written agreement dated as of the Date of Grant and executed by the
Company and by the Plan participant. The timing of Performance Share Awards and
the number of Shares covered by each Award (subject to Section 3.2(b) hereof)
are to be determined by the Committee in its discretion. By

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accepting a grant of Performance Shares, the participant agrees to remit to the
Company when due any required tax withholding as provided in Section 15.3
hereof.

9.2 Performance Objectives. At the time of grant of a Performance Share
Award, the Committee will specify the performance objectives which, depending on
the extent to which they are met, will determine the number of Shares that will
be distributed to the participant. The Committee will also specify the time
period or periods (the "Performance Period") during which the performance
objectives must be met. The performance objectives and periods need not be the
same for each participant nor for each Award. The Committee may use performance
objectives based on one or more of the following targets: cash generation,
profit, revenue, market share, profit or investment return ratios, shareholder
returns and/or specific, objective and measurable non-financial objectives. The
Committee may designate a single goal criterion or multiple goal criteria for
performance measurement purposes, with the measurement based on absolute Company
or business unit performance and/or on performance as compared with that of
other publicly-traded companies.

9.3 Adjustment of Performance Objectives. The Committee may modify, amend
or otherwise adjust the performance objectives specified for outstanding
Performance Share Awards if it determines that an adjustment would be consistent
with the objectives of this Plan and taking into account the interests of the
participants and the public shareholders of the Company. Any such adjustments
must comply with the requirements of Section 162(m) of the Code to the extent
applicable. The types of events which could cause an adjustment in the
performance objectives include, without limitation, accounting changes which
substantially affect the determination of performance objectives, changes in
applicable laws or regulations which affect the performance objectives, and
divisive corporate reorganizations, including spin-offs and other distributions
of property or stock.

9.4 Other Terms and Conditions. Performance Share Awards granted under this
Plan are subject to the following terms and conditions and may contain such
additional terms, conditions, restrictions and contingencies not inconsistent
with the terms of this Plan and any operative employment agreement as the
Committee deems desirable:

(a) Delivery of Shares. As soon as practicable after the applicable
Performance Period has ended, the participant will receive a distribution
of the number of Shares earned during the Performance Period, depending
upon the extent to which the applicable performance objectives were
achieved. Such Shares will be registered in the name of the participant and
will be free of all restrictions except for any pursuant to Section 14.2
hereof.

(b) Termination. A Performance Share Award or unearned portion thereof
will terminate without the issuance of Shares on the termination date
specified at the time of grant or upon the termination of employment of the
participant during the Performance Period. If a participant's employment by
the Company or its Affiliates terminates by reason of his or her death,
Disability or Retirement, the Committee in its discretion at or after the
time of grant may determine that the participant (or the heir, legatee or
legal representative of the participant's estate) will receive a
distribution of a portion of the participant's then outstanding Performance
Share Awards in an amount which is not more than the number of shares which
would have been earned by the participant if 100% of the performance
objectives for the current Performance Period had been achieved prorated
based on the ratio of the number of months of active employment in the
Performance Period to the total number of months in the Performance Period.

(c) Voting and Other Rights. Awards of Performance Shares do not
provide the participant with voting rights or rights to dividends prior to
the participant becoming the holder of record of shares issued

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pursuant to an Award. Prior to the issuance of Shares, Performance Share
Awards may not be sold, transferred, pledged, assigned or otherwise
encumbered.

ARTICLE X

TRANSFERS AND LEAVES OF ABSENCE

10.1 Transfer of Participant. For purposes of this Plan, the transfer of a
participant among the Company and its Affiliates is deemed not to be a
termination of employment.

10.2 Effect of Leaves of Absence. For purposes of this Plan, the following
leaves of absences are deemed not to be a termination of employment:

(a) a leave of absence, approved in writing by the Company, for
military service, sickness or any other purpose approved by the Company, if
the period of such leave does not exceed 90 days;

(b) a leave of absence in excess of 90 days, approved in writing by
the Company, but only if the employee's right to reemployment is guaranteed
either by a statute or by contract, and provided that, in the case of any
such leave of absence, the employee returns to work within 30 days after
the end of such leave; and

ARTICLE XI

EFFECT OF CHANGE IN CONTROL

11.1 Change in Control Defined. "Change in Control" means the occurrence of
any of the following:

(a) all or substantially all of the assets of the Company are sold or
transferred to another corporation or entity, or the Company is merged,
consolidated or reorganized with or into another corporation or entity,
with the result that upon conclusion of the transaction less than fifty-one
percent (51%) of the outstanding securities entitled to vote generally in
the election of Directors ("Voting Stock") or other capital interests of
the acquiring corporation or entity are owned, directly or indirectly, by
the holders of Voting Stock of the Company generally prior to the
transaction;

(b) there is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Exchange Act disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), excluding the
Company, any Affiliate, any employee benefit plan of the Company or an
Affiliate, including the trustee of any such plan, or The Pioneer Stock
Benefit Trust) has become the beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing twenty
percent (20%) or more of the combined voting power of the then-outstanding
Voting Stock of the Company;

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change in control of the Company has or may have occurred or will or may
occur in the future pursuant to any then-existing contract or transaction;
or

(d) the individuals who, at the beginning of any period of two (2)
consecutive calendar years, constituted the Directors of the Company cease
for any reason to constitute at least a majority thereof unless the
nomination for election by the Company's shareholders of each new Director
of the Company was approved by a vote of at least two-thirds (2/3) of the
Directors of the Company still in office who were Directors of the Company
at the beginning of any such period.

11.2 Acceleration of Award. Except as otherwise provided in this Plan or an
Award agreement, immediately upon the occurrence of a Change in Control:

(a) all outstanding Stock Options automatically become fully
exercisable;

(b) all Restricted Share Awards automatically become fully Vested; and

(c) all participants holding Performance Share Awards become entitled
to receive a partial payout in an amount which is the number of Shares
which would have been earned by the participant if 100% of the performance
objectives for the current Performance Period had been achieved prorated
based on the ratio of the number of months of active employment in the
Performance Period to the total number of months in the Performance Period.

NOTWITHSTANDING THE FOREGOING, THE COMMITTEE WILL RETAIN THE RIGHT TO REVOKE THE
AUTOMATIC ACCELERATION OF VESTING IN CONNECTION WITH ANY BUSINESS COMBINATION IF
THE ACCELERATION WILL CAUSE THE USE OF POOLING OF INTERESTS ACCOUNTING TO BE
DISALLOWED AND SUCH ACCOUNTING IS DETERMINED TO BE IN THE BEST INTERESTS OF THE
COMPANY.

ARTICLE XII

TRANSFERABILITY OF AWARDS

12.1 Awards Deemed Non-Transferable. Other than pursuant to Section 12.2
below, Awards are deemed to be non-transferable. Awards may be exercised only by
the participant and may not be transferred other than by will or by the laws of
descent and distribution. Awards are exercisable during a participant's lifetime
only by the participant or, as permitted by applicable law, the participant's
guardian or other legal representative. No Award may be assigned, pledged,
hypothecated or otherwise alienated or encumbered (whether by operation of law
or otherwise) and any attempts to do so are null and void.

12.2 Limited Transferability of NQSOs. The Committee in its discretion may
allow at or after the time of grant the transferability of Vested Non-Qualified
Stock Options (with or without accompanying Stock Appreciation Rights), provided
that the permitted transfer is made (a) pursuant to a QUADRO or other applicable
domestic relations order to the extent permitted by law; or (b) by the
participant for no consideration to Immediate Family Members or to a bona fide
trust, partnership or other entity controlled by and for the benefit of one or
more Immediate Family Members. "Immediate Family Members" means the
participant's spouse, children, stepchildren, parents, stepparents, siblings
(including half brothers and sisters), in-laws and other individuals who have a
relationship to the participant arising because of a legal adoption. No transfer
may be made to the extent that transferability would cause Form S-8 or any
successor form thereto

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not to be available to register the Shares issuable upon exercise of the
transferred NQSOs. The Committee in its discretion may impose such additional
terms and conditions upon transferability.

ARTICLE XIII

AMENDMENT AND DISCONTINUATION

13.1 Amendment or Discontinuation of this Plan. The Board of Directors may
amend, alter, or discontinue this Plan at any time, provided that no amendment,
alteration, or discontinuance may be made:

(a) which would adversely affect the rights of a participant under any
Award granted prior to the date such action is adopted by the Board of
Directors without the participant's express consent thereto; and

(b) without shareholder approval, if shareholder approval is required
under applicable laws, regulations or exchange requirements (including
Section 422 with respect to ISOs, and for the purpose of qualification
under Section 162(m) of the Code as "performance-based compensation").

13.2 Amendment of Grants. The Committee may amend, prospectively or
retroactively, the terms of any outstanding Award or substitute new Awards for
previously granted Awards, provided that no amendment or substitution is
inconsistent with the terms of this Plan or impairs the rights of any holder
without his or her consent.

ARTICLE XIV

SHARE CERTIFICATES

14.1 Delivery of Share Certificates. The Company is not required to issue
or deliver any certificates for Shares issuable with respect to Awards under
this Plan prior to the fulfillment of all of the following conditions:

(a) payment in full for the Shares and for any required tax
withholding (See Section 15.3 hereof);

(b) completion of any registration or other qualification of such
Shares under any Federal or state laws or under the rulings or regulations
of the Securities and Exchange Commission or any other regulating body
which the Committee in its discretion deems necessary or advisable;

(c) admission of such Shares to listing on the Nasdaq National Market
or any stock exchange on which the Shares are listed;

(d) in the event the Shares are not registered under the Securities
Act of 1933, qualification as a private placement under said Act;

(e) obtaining of any approval or other clearance from any Federal or
state governmental agency which the Committee in its discretion determines
to be necessary or advisable; and

(f) the Committee is fully satisfied that the issuance and delivery of
Shares under this Plan is in compliance with applicable Federal, state or
local law, rule, regulation or ordinance or any rule or regulation of any
other regulating body, for which the Committee may seek approval of counsel
for the Company.

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14.2 Applicable Restrictions on Shares. Shares issued with respect to
Awards may be subject to such stock transfer orders and other restrictions as
the Committee may determine necessary or advisable under any applicable Federal
or state securities law rules, regulations and other requirements, the rules,
regulations and other requirements of the Nasdaq National Market or any stock
exchange upon which the Shares are then listed, and any other applicable Federal
or state law and will include any restrictive legends the Committee may deem
appropriate to include.

14.3 Book Entry. In lieu of the issuance of stock certificates evidencing
Shares, the Company may use a "book entry" system in which a computerized or
manual entry is made in the records of the Company to evidence the issuance of
such Shares. Such Company records are, absent manifest error, binding on all
parties.

ARTICLE XV

GENERAL PROVISIONS

15.1 No Implied Rights to Awards or Employment. No potential participant
has any claim or right to be granted an Award under this Plan, and there is no
obligation of uniformity of treatment of participants under this Plan. Neither
this Plan nor any Award thereunder shall be construed as giving any employee any
right to continued employment with the Company or any Affiliate. The Plan does
not constitute a contract of employment, and the Company and each Affiliate
expressly reserve the right at any time to dismiss a participant free from
liability, or any claim under this Plan, except as may be specifically provided
in this Plan or in an Award agreement.

15.2 Other Compensation Plans. Nothing contained in this Plan prevents the
Board of Directors from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only in specific
cases.

15.3 Withholding. Each participant must, no later than the date as of which
the value of an Award first becomes includible in the gross income of the
participant for income tax purposes, pay to the Company, or make arrangements
satisfactory to the Company regarding payment of, any Federal, state or local
taxes of any kind required by law or other amounts to be withheld with respect
to the Award. The obligations of the Company under this Plan are conditioned on
such payment, and the Company, to the extent permitted by law, has the right to
deduct any such taxes or other amounts from any payment of any kind otherwise
due to a participant.

15.4 Rule 16b-3 Compliance. The Plan is intended to comply with all
applicable conditions of Rule 16b-3 of the Exchange Act, as such rule may be
amended from time to time. All transactions involving any participant subject to
Section 16(a) shall be subject to the conditions set forth in Rule 16b-3,
regardless of whether such conditions are expressly set forth in this Plan. Any
provision of this Plan that is contrary to Rule 16b-3 does not apply to such
participants.

15.5 162(m) Compliance. The Plan is intended to comply with all applicable
conditions of Section 162(m) of the Code, as such section may be amended from
time to time. All transactions involving any participant the deductibility of
whose compensation is subject to Section 162(m) of the Code shall be subject to
the conditions set forth in Section 162(m) of the Code, regardless of whether
such conditions are expressly set forth in this Plan. Any provision of this Plan
that is contrary to Section 162(m) of the Code does not apply to such
participants.

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15.6 Deferrals. The Committee may unilaterally postpone the exercising of
Awards, the issuance or delivery of Shares under any Award or any action
permitted under this Plan to prevent the Company or any Affiliate from being
denied a Federal income tax deduction with respect to any Award other than an
Incentive Stock Option. The Committee, in its discretion, may permit a
participant to defer receipt of the payment of cash or the delivery of Stock
that would otherwise be delivered to a participant under this Plan. Any deferral
elections are subject to such rules and procedures as the Committee may
determine.

15.7 Successors. All obligations of the Company with respect to Awards
granted under this Plan are binding on any successor to the Company, whether as
a result of a direct or indirect purchase, merger, consolidation or otherwise of
all or substantially all of the business and/or assets of the Company.

15.8 Severability. In the event any provision of this Plan, or the
application thereof to any person or circumstances, is held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
parts of this Plan, or other applications, and this Plan is to be construed and
enforced as if the illegal or invalid provision had not been included.

15.9 Governing Law. To the extent not preempted by Federal law, this Plan
and all Award agreements pursuant thereto are construed in accordance with and
governed by the laws of the State of Ohio. This Plan is not intended to be
governed by ERISA and shall be so administered.

15.10 Tax Information. To the extent required by law, the Company shall
furnish the participant with tax reporting and related information.

ARTICLE XVI

EFFECTIVE DATE OF THIS PLAN

16.1 Plan Adoption. Subject to the approval of the shareholders of the
Company at the Annual Meeting of Shareholders held in 2000, the effective date
of this Plan is the date of its adoption by the Board of Directors on April 26,
2000. To the extent that Awards are made under this Plan prior to its approval
by shareholders, they shall be contingent on shareholder approval of this Plan.

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EXHIBIT C

PIONEER-STANDARD ELECTRONICS, INC. 2000 ANNUAL INCENTIVE PLAN

ARTICLE I

THE PLAN AND ITS PURPOSE

1.1. Adoption of Plan. This 2000 Annual Incentive Plan (hereinafter
referred to as the "Plan") is hereby adopted by Pioneer-Standard Electronics,
Inc. (hereinafter referred to as the "Company"), effective as of April 1, 2000,
in order to set forth the terms and provisions of the annual incentive bonus
program of the Company applicable to selected key employees of the Company and
other members of its Affiliated Group (as hereinafter defined) on and after such
date.

1.2. Purpose. The purpose of the Plan is (a) to provide an incentive to
selected key employees of the Company and other members of its Affiliated Group
in order to encourage them with short-term financial awards to improve the
Company's operating results, (b) to enable the Company to recruit and retain
such key employees by making the Company's overall compensation program
competitive with compensation programs of similar companies and (c) to satisfy
the requirements of Section 162(m) of the Code (as hereinafter defined) so that
the deductibility of awards hereunder will not be limited by such Section
162(m).

ARTICLE II

DEFINITIONS

Unless the context otherwise indicates, the following words used herein
shall have the following meanings whenever used in this instrument:

2.1. "Affiliate" means any corporation, partnership, joint venture or other
entity, directly or indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with the Company as determined by the
Board in its discretion.

2.2. "Affiliated Group" means the affiliated group of corporations, as
defined in Section 1504 of the Code (determined without regard to Section
1504(b) of the Code) consisting of the Company and all such affiliated
corporations.

2.3. "Award" means the payment earned by a Participant as such payment is
determined in accordance with Article VI.

2.4. "Base Salary" means, for any Fiscal Year, the Participant's annual
rate of base salary as it has been approved as of the Performance Goals Date for
such Fiscal Year, or if the Participant's employment with the Company and other
members of its Affiliated Group commences after the Performance Goals Date but
prior to January 1 of such Fiscal Year or if the Participant is promoted into a
position of substantially greater responsibilities after the Performance Goals
Date but prior to January 1 of such Fiscal Year, the Participant's annual rate
of base salary at the commencement of such employment or as effective upon such
promotion.

2.5. "Board of Directors" means the Board of Directors of the Company as it
may be constituted from time to time.

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2.6. "Change in Control" means the occurrence of any of the following
events:

(a) all or substantially all of the assets of the Company are sold or
transferred to another corporation or entity, or the Company is merged,
consolidated or reorganized with or into another corporation or entity,
with the result that upon conclusion of the transaction less than 51% of
the outstanding securities entitled to vote generally in the election of
Directors ("Voting Stock") or other capital interests of the acquiring
corporation or entity are owned, directly or indirectly, by the holders of
Voting Stock of the Company generally prior to the transaction;

(b) there is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report), each as promulgated pursuant to the
Exchange Act disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), excluding the
Company, any Affiliate, any employee benefit plan of the Company or an
Affiliate, including the trustee of any such plan, or The Pioneer Stock
Benefit Trust) has become the beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of securities representing 20% or more
of the combined voting power of the then-outstanding Voting Stock of the
Company;

(c) the Company shall file a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act disclosing
in response to Item 1 of Form 8-K thereunder or Item 6(e) of Schedule 14A
thereunder (or any successor schedule, form or report or item therein) that
a change in control of the Company has or may have occurred or will or may
occur in the future pursuant to any then-existing contract or transaction;
or

(d) the individuals who, at the beginning of any period of two
consecutive calendar years, constituted the Directors of the Company cease
for any reason to constitute at least a majority thereof unless the
nomination for election by the Company's shareholders of each new Director
of the Company was approved by a vote of at least two-thirds of the
Directors of the Company still in office who were Directors of the Company
at the beginning of any such period.

2.7. "Code" means the Internal Revenue Code of 1986, as amended, and any
lawful regulations or other pronouncements promulgated thereunder. Whenever a
reference is made herein to a specific Code Section, such reference shall be
deemed to include any successor Code Section having the same or a similar
purpose.

2.8. "Committee" means the Compensation Committee of the Board of Directors
as it may be constituted from time to time; provided that if at any time the
Compensation Committee is not composed solely of Outside Directors, "Committee"
shall mean the committee consisting of at least three (3) Outside Directors
appointed by the Board of Directors to administer the Plan.

2.9. "Common Shares" means the Common Shares, without par value, of the
Company or any other class of shares subsequently denominated as common shares.

2.10. "Company" means Pioneer-Standard Electronics, Inc., an Ohio
corporation, or any successor organization.

2.11. "Continuing Director" means any member of the Board of Directors (a)
was a member of the Board of Directors on April 1, 2000 or (b) was nominated for
election or elected to the Board of Directors with the affirmative vote of a
majority of the Continuing Directors who were members of Board of Directors at
the time of such nomination or election.

2.12 "Director" means any member of the Board of Directors.

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2.13. "Disability" means, with respect to any Participant, a medically
determinable physical or mental impairment which qualifies the Participant to
receive benefits under the Company's (or Affiliated Group member's) long term
disability plan, or which would qualify the Participant to receive benefits
under such plan had he been covered by such plan; except that no Participant
shall be deemed to have a Disability if such disability:

(a) was contracted, suffered or incurred while the Participant was
engaged in, or resulted from his having engaged in a criminal act or
enterprise;

(b) resulted from the Participant's addiction, habituation or use of
alcohol, narcotics or hallucinogens, provided, however, that where such
Participant is determined to be a qualified individual with a disability
within the meaning of the Americans With Disabilities Act (42 United States
Code sec. 12101 et seq.) with respect to such disability, the exclusion
contained in this Subsection (b) shall be limited to such Participant's
engaging in the illegal use of drugs or alcohol within the meaning of 42
United States Code sec. 12114; or

A determination of Disability shall be made by the Committee with the advice of
competent medical authority.

2.14. "Eligible Employee" has the meaning ascribed to such term in Section
3.1 hereof.

2.15. "Exchange Act" means the Securities Exchange Act of 1934, as amended.

2.16. "Fiscal Year" means a fiscal year of the Company.

2.17. "Interim Award" means the payment, if any, earned by a Participant
for the six month period ended September 30, 2000 as such payment is determined
in accordance with Section 6.2(a) hereof.

2.18. "162(m) Employee" means a Participant who is a "covered employee"
within the meaning of Section 162(m) of the Code, which, generally means an
individual who as of the last day of the Taxable Year is:

(a) the Chief Executive Officer of the Company, or

(b) among the four highest compensated officers of the Company other
than the Chief Executive Officer.

2.19. The words "Outside Director" mean any member of the Board who meets
the definition of "outside director" set forth in Section 162(m) of the Code and
the definition of "non-employee director" set forth in Rule 16b-3 under the
Exchange Act, or any successor definitions adopted by the Internal Revenue
Service and Securities and Exchange Commission, respectively.

2.20. "Participant" means an Eligible Employee selected by the Committee
for participation in the Plan pursuant to Section 3.2 hereof.

2.21. "Performance Goals" has the meaning ascribed to such term in Section
5.1 hereof.

2.22. "Performance Goals Date" means the date on which the Committee
establishes the Performance Goals for a Fiscal Year in accordance with Section
5.2 hereof or Performance Goals for the six month period ending September 30,
2000 in accordance with Section 5.4 hereof.

2.23. "Plan" means the Pioneer-Standard Electronics, Inc. 2000 Annual
Incentive Plan.

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2.24. "Retirement" means retirement from active employment with the Company
and all of the members of its Affiliated Group under any retirement policy or
plan maintained by the Company or any member of such group.

2.25 "Taxable Year" means a tax year of the Company.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.1. Eligibility. All key employees of the Company or any other members of
the Affiliated Group (each an "Eligible Employee") are eligible to participate
in the Plan.

3.2. Participation. The following rules shall be applicable to
participation in this Plan by an Eligible Employee:

(a) Designation. Subject to Subsection (c) of this Section 3.2, the
Committee shall, in its discretion, designate for a Fiscal Year (or such
shorter period as provided in Section 5.4 hereof) which Eligible Employees,
if any, will participate in the Plan for such Fiscal Year (or such shorter
period as provided in Section 5.4 hereof). Each Eligible Employee approved
for participation will be notified of the selection as soon after approval
as is practicable and shall become a Participant upon acceptance by him or
her of such selection.

(b) Participation For Employees Hired After Commencement Of Fiscal
Year. Subject to Subsection (c) of this Section 3.2, an Eligible Employee
whose employment with the Company or other member of the Affiliated Group
commences after the first day of a Fiscal Year but prior to January 1 of
such Fiscal Year and who remains actively employed through the end of the
Fiscal Year may, at the Committee's discretion, participate in the Plan for
the Fiscal Year on a pro rata basis. An Eligible Employee whose employment
with the Company or other member of the Affiliated Group commences after
January 1 of a particular Fiscal Year may not participate in the Plan for
the Fiscal Year in which such employment commences.

(c) No Right To Participate. No Participant or Eligible Employee has
or at any time will have any right hereunder to be selected for current or
future participation in the Plan. Notwithstanding the foregoing or any
other provision hereof, the Committee's right to select Participants shall
be subject to the terms of any employment agreement between the Company and
the Participant or Eligible Employee.

ARTICLE IV

PLAN ADMINISTRATION

4.1. Responsibility. The Committee has total and exclusive responsibility
to control, operate, manage and administer the Plan in accordance with its
terms.

4.2. Authority of the Committee. The Committee has and will have all the
authority that may be necessary or helpful to enable it to discharge its
responsibilities with respect to the Plan. Without limiting the generality of
the foregoing, the Committee has the exclusive right to (a) interpret the Plan,
(b) determine eligibility for participation in the Plan, (c) decide all
questions concerning eligibility for and the amount of Awards payable under the
Plan, (d) determine Performance Goals under the Plan and, before payment of any
Award hereunder, evaluate performance and certify whether Performance Goals and
any other material terms

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were in fact satisfied, (e) construe any ambiguous provision of the Plan, (f)
correct any default, (g) supply any omission, (h) reconcile any inconsistency,
(i) issue administrative guidelines as an aid to administer the Plan, (j) make
regulations for carrying out the Plan and to make changes in such regulations as
they from time to time deem proper, (k) promulgate such administrative forms as
they from time to time deem necessary or appropriate for administration of the
Plan, and (l) decide any and all questions arising in the administration,
interpretation and application of the Plan.

4.3. Discretionary Authority. The Committee shall have full discretionary
authority in all matters related to the discharge of its responsibilities and
the exercise of its authority under the Plan including, without limitation, its
construction of the terms of the Plan and its determination of eligibility for
participation and Awards under the Plan. It is the intent of the Company in
establishing the Plan that the decisions of the Committee and its action with
respect to the Plan will be final, binding and conclusive upon all persons
having or claiming to have any right or interest in or under the Plan.

4.4. Section 162(m) of the Code. With regard to all 162(m) Employees, the
Plan shall for all purposes be interpreted and construed in order to assure
compliance with the provisions of Section 162(m) of the Code.

4.5. Delegation of Authority. Only the Committee may select, set
Performance Goals for and determine satisfaction of Performance Goals and other
material facts by Participants who are 162(m) Employees or executive officers of
the Company or its Affiliates. Except for such limitation and to the extent
otherwise prohibited by law, the Committee may delegate some or all of its
authority under the Plan to any person or persons.

ARTICLE V

PERFORMANCE GOALS AND MEASUREMENT

5.1. Definition of Performance Goals. Awards under this Plan will be paid
solely on account of the attainment of one or more preestablished (as provided
in Section 5.2 hereof) objective Performance Goals for a Fiscal Year or other
predetermined period. A Performance Goal is a target level or levels of
performance. A Performance Goal is objective if a third party having knowledge
of the relevant facts could determine whether the Performance Goal has been met.
Performance Goals can be based on one or more business criteria that apply to
the Participant, a business unit, or the Company and related entities as a
whole. Such business criteria could include, for example, stock price, market
share, sales, earnings per share, return on equity, or cash. A Performance Goal
need not, however, be based upon an increase or positive result under a business
criterion and could include, for example, maintaining the status quo or limiting
economic losses (measured, in each case, by reference to a specific business
criterion). A Performance Goal does not include the mere continued employment of
the Participant.

The Performance Goal shall state, in terms of an objective formula or
standard, the method of computing the amount of the Award payable to the
Participant if the Performance Goal is attained. A formula or standard is
objective if a third party having knowledge of the relevant performance results
could calculate the amount of the Award. In addition, the formula or standard
must specify the individual Participants or class or group of Participants to
which it applies.

The terms of the objective formula or standard shall preclude discretion to
increase the amount of Award that would otherwise be due upon attainment of the
goal except to the extent the amount is related to other compensation and then
only to the extent permitted by Section 162(m) of the Code to the extent
applicable. The objective formula may grant the Committee discretion to reduce
or eliminate the Award otherwise due

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upon attainment of the Performance Goal, provided that such negative discretion
is expressly set forth at the time of establishment of the Performance Goal and
provided that exercise of such negative discretion with respect to a Participant
does not result in an increase in the Award to another Participant.

The Plan's Performance Goals shall be established by action of the
Committee not later than the time specified in Section 5.2 or 5.4 hereof. The
Committee shall retain the discretion to change the targets under the
Performance Goals subject to the restrictions of Section 162(m) of the Code, to
the extent applicable.

5.2. Establishment of Performance Goals. Except as hereinafter provided in
this Section 5.2 or as provided in Section 5.4 hereof, the Committee will, on or
before the 90th day of the Fiscal Year, and while the outcome is substantially
uncertain, establish in writing (a) the Performance Goal or Goals applicable to
such Fiscal Year and identify the Participant or group of Participants to whom
such Performance Goal or Goals are applicable and (b) if more than one
Performance Goal for such Fiscal Year is established, the weighting of the
Performance Goals. If, for a given Fiscal Year, the Committee shall not
establish new Performance Goals for a Participant or group of Participants on or
before the 90th day of the Fiscal Year, the Performance Goals for the
immediately preceding Fiscal Year shall be deemed to be the Performance Goals
established by the Committee for such Fiscal Year for such Participant or group
of participants.

In addition to, or in lieu of, use of the Fiscal Year as a performance
period to measure attainment of a Performance Goal, the Committee may, not later
than the 90th day after the commencement of the period of service to which the
Performance Goal relates, establish one or more Performance Goals for one or
more Participants or groups of Participants for such other period. Any such
Performance Goal may not be established after 25% of the performance period (as
scheduled in good faith at the time the Performance Goal is established) has
elapsed, and while the outcome is substantially uncertain.

5.3. Adjustments to Performance Goals. The Committee may at any time during
the first 90 days of a Fiscal Year (or such other period as provided in Section
5.2 or 5.4 hereof), or, subject to the second paragraph of this Section 5.3
hereof, at any time thereafter in its sole and absolute discretion, adjust or
modify the calculation of a Performance Goal for such Fiscal Year (or such other
period) in order to prevent the dilution or enlargement of the rights of
Participants (a) in the event or in anticipation of any unusual or extraordinary
corporate item, transaction, event or development; (b) in recognition or in
anticipation of any other unusual or nonrecurring events affecting the Company,
or the financial statements of the Company, or in response to or in anticipation
of changes in applicable laws, regulations, accounting principles or business
conditions; and (c) in view of the Committee's assessment of the business
strategy of the Company, performance of comparable organizations, economic and
business conditions, and any other circumstances deemed relevant.

Notwithstanding the foregoing, to the extent the exercise of such authority
after the first 90 days of a Fiscal Year (or such other period as provided in
Section 5.2 or 5.4 hereof) would cause the Awards granted to the 162(m)
Employees for the Fiscal Year (or such other period) to fail to qualify as
"performance-based compensation" under Section 162(m) of the Code, then such
authority shall only be exercised with respect to those Participants who are not
162(m) Employees.

5.4. Six Month Period Ended September 30, 2000. The Committee will, during
the first 45 days of the six month period ended September 30, 2000, establish in
writing the Performance Goal applicable to the six month period ended September
30, 2000.

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ARTICLE VI

PERFORMANCE AWARDS

6.1. Incentive Opportunity. During the applicable period specified in
Section 5.2 or 5.4 hereof, the Committee shall determine and set forth in
writing the amount of or method of calculating the Award that may be payable to
each Participant under the Plan. The amount of an Award payable to a Participant
will depend upon the level of attainment of the Performance Goals for such
Fiscal Year (or such shorter period as provided in Section 5.2 or 5.4 hereof) or
whether the Performance Goals for such Fiscal Year (or such shorter period) were
attained.

6.2. Certification of Attainment of Performance Goals. The Committee shall
certify attainment of Performance Goals, and other material facts, and shall
calculate the amount of Awards and authorize payment in accordance with the
following procedure:

(a) For the Six Month Period Ended September 30, 2000 and the Fiscal
Year Ended March 31, 2001. As soon as practicable after the Company's
unaudited consolidated financial results for the six month period ended
September 30, 2000 have become available, the Committee shall certify in
writing the attainment of the Performance Goal for such period, and
thereupon shall authorize the Company to pay to each Participant the Award
(the "Interim Award"), if any, payable to such Participant, which shall be
payable within 15 days after such certification. As soon as practicable
after the Company's audited consolidated financial results for the Fiscal
Year ended March 31, 2001 have been approved by the Board of Directors or
the Audit Committee of the Board of Directors, the Committee will certify
in writing the attainment of the Performance Goals established for the
Fiscal Year and will calculate the Award, if any, payable to each
Participant pursuant to Section 6.1 hereof. Any amount by which a
Participant's Award exceeds the Interim Award, if any, earlier paid to such
Participant pursuant to this Section 6.2(a) shall be paid to such
Participant as soon thereafter as reasonably practicable.

(b) For Each Fiscal Year After the Fiscal Year Ended March 31,
2001. As soon as practicable after the Company's financial results for the
Fiscal Year have been approved by the Board of Directors or the Audit
Committee of the Board of Directors, the Committee will certify in writing
the attainment of the Performance Goals established for the Fiscal Year and
other material facts and will calculate the Award, if any, payable to each
Participant pursuant to Section 6.1 hereof, upon which the Award shall be
paid to the Participant as soon thereafter as reasonably practicable. If
such Award is calculated as a percentage of the Participant's Base Salary
and the Participant's Base Salary is changed after the Performance Goals
Date for the Fiscal Year, such Participant's Award shall be adjusted to
reflect the change in the Participant's Base Salary.

6.3. Form of Payment. Except as provided in Section 6.2(a) hereof, Awards
may, at the Committee's sole discretion, be paid in cash, Common Shares or a
combination thereof, and be subject to such terms, conditions, restrictions and
limitations (including, but not limited to, restrictions on transferability and
vesting) as the Committee may determine, provided that such terms, conditions,
restrictions and limitations are not inconsistent with the terms of the Plan.
For purposes of the Plan, the payment of an Award in Common Shares will be based
on the average of the closing price of the Common Shares on the Nasdaq National
Market for the day immediately preceding the date of payment (or if the Nasdaq
National Market shall be closed on such day, on the latest day preceding the
date of payment on which the Nasdaq National Market shall be open.

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6.4. Termination of Employment Due to Disability, Death or Certain Other
Events. If (a) a Participant's employment is terminated during a Fiscal Year by
reason of his Disability or death, or subject to Section 162(m) of the Code, if
applicable, his involuntary termination of employment not for "cause" or
voluntary termination for "good reason" as defined in any employment agreement
or similar agreement with the Participant, and (b) the Participant has been a
Participant in the Plan for at least three months of such Fiscal Year, the
Participant will be eligible to receive a prorated Award for the Fiscal Year in
which such termination of employment occurs. If a Participant shall terminate
his employment for any such reason during the Fiscal Year ended March 31, 2001,
such prorated Award shall be offset by any Interim Award paid to the
Participant.

6.5. Other Terminations of Employment. Except as provided in Sections 6.4
and 6.6 hereof or subject to Section 162(m) of the Code, if applicable, in any
employment agreement between the Company and the Participant, if a Participant's
employment is terminated prior to the date on which Awards for the Fiscal Year
are paid, the Participant's participation in the Plan shall end, and the
Participant shall not be entitled to any Award for such Fiscal Year.

6.6. Payment Following a Change in Control. In the event of a Change in
Control, notwithstanding anything contained herein to the contrary, the Company
shall pay each Participant who is participating in the Plan at the time of such
Change in Control a single sum cash payment equal to the maximum Award that
could be paid hereunder to each Participant for the Fiscal Year in which the
Change in Control occurs; or if such maximum Award is not determinable, an
amount (less any Interim Award paid to such Participant pursuant to Section
6.2(a) hereof) equal to the (a) the Award, if any (or, if applicable, any annual
award under any predecessor annual incentive plan or arrangement), payable to
such Participant for the Fiscal Year immediately preceding the Fiscal Year in
which such Change in Control occurs, or (b) if any Participant did not
participate in the Plan or any predecessor annual incentive plan or arrangement
during the immediately preceding Fiscal Year, an amount equal to 50% of such
Participant's annual base salary at the rate in effect at the time of the Change
in Control. Further, all terms, conditions, restrictions and limitations in
effect on any outstanding Award shall immediately lapse on the date of such
Change in Control. For purposes of this Plan, the Committee has and will have
the sole discretion to determine whether and the date on which a Change in
Control occurred. Notwithstanding the foregoing, a Participant shall receive no
additional payment pursuant to this Section 6.6 if, pursuant to any employment
or similar agreement between the Company or other member of the Affiliated Group
and such Participant, the Participant is entitled to receive any payment under
this Plan in connection with a Change in Control.

6.7. Limitations on Payments. Notwithstanding any provision herein to the
contrary, (a) no Award will be paid for a Fiscal Year (or such shorter period as
provided in Section 5.4 hereof) in which performance fails to attain or exceed
any minimum level established for any of the Performance Goals; and (b) no Award
for a Fiscal Year shall exceed $1,500,000.

6.8. Payment of Awards by Participant's Employer. The payment of any Awards
under this Plan may be made to a Participant by the member of the Affiliated
Group that employs the Participant or by the Company.

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ARTICLE VII

MISCELLANEOUS

7.1. Employment. Nothing in this Plan will interfere with or limit in any
way the right of the Company to terminate a Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of the
Company or any Affiliate thereof or any other member of the Affiliated Group.

7.2. Nonassignability. No Award under this Plan may be subject in any
manner to alienation, anticipation, sale, transfer (except by will or the laws
of descent and distribution), assignment, pledge or encumbrance, nor may any
Award be payable to anyone other than the Participant to whom it was granted
(other than by will or the laws of descent and distribution).

7.3. Laws Governing. This Plan is to be construed in accordance with and
governed by the laws of the State of Ohio.

7.4. Withholding Taxes. The Company may deduct from all payments under this
Plan any federal, state or local other taxes or other amounts required by law to
be withheld with respect to such payments.

7.5. Plan Binding on Company and Successors. This Plan will be binding upon
and inure to the benefit of the Company, its successors and assigns and each
Participant and his or her beneficiaries, heirs, executors, administrators and
legal representatives.

7.6. Amendment and Termination. The Board of Directors may suspend or
terminate this Plan at any time with or without prior notice. In addition, the
Board of Directors may, from time to time and with or without prior notice,
amend this Plan in any manner but may not without shareholder approval adopt any
amendment that would require the vote of the shareholders of the Company
pursuant to applicable laws, regulations or exchange requirements, specifically
including Section 16 of the Exchange Act or Section 162(m) of the Code.

7.7. Regulatory Approvals and Listings. Notwithstanding anything contained
herein to the contrary, the Company will have no obligation to issue or deliver
certificates of Common Shares evidencing Awards or any other Award resulting in
the payment of Common Shares prior to (a) the obtaining of any approval from any
governmental agency that the Company, in its sole discretion, determines to be
necessary or advisable, (b) the admission, if required, of such shares to
listing on the stock exchange or quotation system on which the Common Shares may
be listed and (c) the completion of any registration or other qualification of
said shares under any state or federal law or ruling of any governmental body
which the Company, in its sole discretion, deems necessary or advisable.

7.8. Compliance with Section 162(m). If any provision of this Plan would
cause the Awards granted to a 162(m) Employee not to constitute qualified
"performance-based compensation" under Section 162(m) of the Code for any Fiscal
Year, that provision, insofar as it pertains to the 162(m) Employee, shall be
severed from, and shall be deemed not to be a part of this Plan, but the other
provisions hereof shall remain in full force and effect.

7.9. Shareholder Approval Pursuant to 162(m). The material terms under
which Awards are to be paid, including the Performance Goals, will be disclosed
to shareholders of the Company in advance of the 2000 annual meeting of
shareholders. Unless, at that meeting, in a separate shareholder vote, this Plan
is approved by a majority of the vote in such separate shareholder vote, no
Award shall be paid hereunder to any 162(m) Employee. Furthermore, no Award
shall be payable under this Plan to any 162(m) Employee prior to such vote.

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[MAP]

FROM THE AIRPORT:
Follow 480 East to Route 422 East (Solon/Warren). Follow Route 422 East to the
Harper Road exit.

FROM THE NORTHEAST:
Follow I-271 South to Route 422 East (Solon/Warren). Follow Route 422 East to
the Harper Road exit.

FROM THE SOUTH:
Follow I-71 North to 480 East. Follow 480 East to Route 422 East (Solon/Warren).
Follow Route 422 East to the Harper Road exit.
--------------------------------------------------------------------------------

DIRECTIONS FROM HARPER ROAD EXIT:
Turn right (south) onto Harper Road. Follow Harper Road which turns into Cochran
Road after crossing Aurora Road. Turn left on Carter Street and right on
Parkland Boulevard.
<PAGE> 72

DETACH CARD
-------------------------------------------------------------------------------

INSTRUCTION CARD

PIONEER-STANDARD ELECTRONICS, INC.
ANNUAL MEETING OF SHAREHOLDERS -- JULY 25, 2000

THIS CARD IS SOLICITED ON BEHALF OF WACHOVIA BANK, N.A.

The undersigned hereby instructs Wachovia Bank, N.A. to vote Common Shares
of Pioneer-Standard Electronics, Inc. which he or she is entitled to vote as a
participant in an employee benefit plan which may be funded by The Pioneer Stock
Benefit Trust at the Annual Meeting of Shareholders of the Company to be held at
Pioneer-Standard Electronics, Inc., Computer Systems Division, 6675 Parkland
Boulevard, Solon, Ohio 44139, at 11:00 a.m., local time, and at any adjournments
thereof. The undersigned authorizes and directs Wachovia Bank, N.A. to vote all
of the Common Shares of the Company represented by this Card as follows, WITH
THE UNDERSTANDING THAT IF NO DIRECTIONS ARE GIVEN BELOW SAID COMMON SHARES WILL
BE VOTED "FOR" PROPOSALS 1, 2, 3 AND 4. The Board of Directors recommends a vote
"FOR" proposals 1, 2, 3 and 4.

1. ELECTION OF DIRECTORS:

<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
</TABLE>

Charles F. Christ, Arthur Rhein and Thomas C. Sullivan

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the following line)

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

(Continued, and to be signed, on the other side)
<PAGE> 73

DETACH CARD
-------------------------------------------------------------------------------

(INSTRUCTION CARD -- Continued from other side)

2. Approve the 2000 Stock Option Plan for Outside Directors.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Approve the 2000 Stock Incentive Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

4. Approve the 2000 Annual Incentive Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

5. In its discretion, to act on any other matter or matters which may properly
come before the meeting.

Dated: , 2000

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

------------------------------
Signature(s)

Your signature to this card
should be exactly the same as
the name imprinted hereon.

PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE ACCOMPANYING ENVELOPE.
<PAGE> 74

DETACH CARD
-------------------------------------------------------------------------------

PROXY

PIONEER-STANDARD ELECTRONICS, INC.
ANNUAL MEETING OF SHAREHOLDERS -- JULY 25, 2000

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby (i) appoints Steven M. Billick and Lawrence N.
Schultz, and each of them, as Proxy holders and attorneys, with full power of
substitution, to appear and vote all of the Common Shares of Pioneer-Standard
Electronics, Inc. which the undersigned shall be entitled to vote at the Annual
Meeting of Shareholders of the Company, to be held at Pioneer-Standard
Electronics, Inc., Computer Systems Division, 6675 Parkland Boulevard, Solon,
Ohio 44139, at 11:00 a.m., local time, and at any adjournments thereof, hereby
revoking any and all proxies heretofore given, and (ii) authorizes and directs
said Proxy holders to vote all of the Common Shares of the Company represented
by this Proxy as follows, WITH THE UNDERSTANDING THAT IF NO DIRECTIONS ARE GIVEN
BELOW, SAID COMMON SHARES WILL BE VOTED "FOR" PROPOSALS 1, 2, 3 AND 4. The Board
of Directors recommends a vote "FOR" proposals 1, 2, 3 and 4.

1. ELECTION OF DIRECTORS:

<TABLE>
<S> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed below
</TABLE>

Charles F. Christ, Arthur Rhein and Thomas C. Sullivan

(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the following line)

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

(Continued, and to be signed, on the other side)
<PAGE> 75

DETACH CARD
-------------------------------------------------------------------------------

(PROXY -- Continued from other side)

2. Approve the 2000 Stock Option Plan for Outside Directors.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Approve the 2000 Stock Incentive Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

4. Approve the 2000 Annual Incentive Plan.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

5. In their discretion, to act on any other matter or matters which may properly
come before the meeting.

Dated: , 2000

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

------------------------------
Signature(s)

Your signature to this Proxy
form should be exactly the
same as the name imprinted
hereon. Persons signing as
executors, administrators,
trustees or in similar
capacities should so indicate.
For joint accounts, the name
of each joint owner must be
signed.

PLEASE DATE, SIGN AND RETURN PROMPTLY IN THE ACCOMPANYING ENVELOPE.