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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>/in/edgar/work/0000007536-00-000012/0000007536-00-000012.txt : 20001114
<SEC-HEADER>0000007536-00-000012.hdr.sgml : 20001114
ACCESSION NUMBER:		0000007536-00-000012
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20000930
FILED AS OF DATE:		20001113

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARROW ELECTRONICS INC
		CENTRAL INDEX KEY:			0000007536
		STANDARD INDUSTRIAL CLASSIFICATION:	 [5065
]		IRS NUMBER:				111806155
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		10-Q
			SEC ACT:		
			SEC FILE NUMBER:	001-04482
			FILM NUMBER:		758629
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		25 HUB DR
				CITY:			MELVILLE
				STATE:			NY
				ZIP:			11747
				BUSINESS PHONE:		5163911300
</BUSINESS-ADDRESS>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM 10-Q FOR SEPTEMBER 2000
<TEXT>



                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549


                                   FORM 10-Q



          [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended September 30, 2000
                                                ------------------
                                     OR

          [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934

              For the transition period from            to
                                             ----------    ---------
                         Commission file number 1-4482


                             ARROW ELECTRONICS, INC.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


           New York                                       11-1806155
- -------------------------------                    -----------------------
(State or other jurisdiction of                    (I.R.S. Employer
 incorporation or organization)                     Identification Number)

25 Hub Drive, Melville, New York                            11747
- --------------------------------                          ----------
(Address of principal executive                           (Zip Code)
 offices)

Registrant's telephone number,
 including area code                                    (516) 391-1300
                                                        --------------

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

            Yes     X                                  No
                  -----                                     -----

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

     Common stock, $1 par value: 98,199,931 shares outstanding at October 27,
2000.

<PAGE>
                       PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.
         --------------------

                            ARROW ELECTRONICS, INC.
                       CONSOLIDATED STATEMENT OF INCOME
                     (In thousands except per share data)
                                 (Unaudited)

                               Nine Months Ended       Three Months Ended
                                 September 30,           September 30,
                            ----------------------   ----------------------
                               2000        1999         2000        1999
                               ----        ----         ----        ----
Sales                       $9,268,162  $6,827,457   $3,337,068  $2,375,797
                            ----------  ----------   ----------  ----------
Costs and expenses:
  Cost of products sold      7,823,157   5,881,809    2,805,362   2,052,570
  Selling, general and
    administrative expenses    844,643     637,421      296,038     212,197
  Depreciation and
    amortization                63,009      53,448       22,325      17,404
  Integration charge                 -      24,560            -           -
                            ----------  ----------   ----------  ----------
                             8,730,809   6,597,238    3,123,725   2,282,171
                            ----------  ----------   ----------  ----------

Operating income               537,353     230,219      213,343      93,626

Equity in losses of
  affiliated companies          (2,635)       (173)        (725)       (211)

Interest expense               107,207      78,146       41,088      26,836
                            ----------  ----------   ----------  ----------
Earnings before income
  taxes and minority
  interest                     427,511     151,900      171,530      66,579

Provision for income taxes     175,249      67,447       68,612      28,828
                            ----------  ----------   ----------  ----------
Earnings before minority
  interest                     252,262      84,453      102,918      37,751

Minority interest                3,290       4,337          975         998
                            ----------  ----------   ----------  ----------
Net income                  $  248,972  $   80,116   $  101,943  $   36,753
                            ==========  ==========   ==========  ==========

Net income per share:
  Basic                          $2.58        $.84        $1.05        $.39
                                 =====        ====        =====        ====
  Diluted                        $2.53        $.83        $1.02        $.38
                                 =====        ====        =====        ====
Average number of shares
  outstanding:
    Basic                       96,392      95,097       97,403      95,176
                                ======      ======      =======      ======
    Diluted                     98,408      96,001      100,022      96,317
                                ======      ======      =======      ======


                             See accompanying notes.
<PAGE>

                             ARROW ELECTRONICS, INC.
                           CONSOLIDATED BALANCE SHEET
                             (Dollars in thousands)


                                             September 30,       December 31,
                                                 2000                1999
                                             -------------       ------------
                                              (Unaudited)

ASSETS
- ------

Current assets:
  Cash and short-term investments              $   43,565         $   44,885
  Accounts receivable, less allowance
    for doubtful accounts ($47,881 in 2000
    and $32,338 in 1999)                        2,282,899          1,638,654
  Inventories                                   1,926,305          1,444,929
  Prepaid expenses and other assets                42,696             29,469
                                               ----------         ----------
    Total current assets                        4,295,465          3,157,937

Property, plant and equipment at cost:
  Land                                             17,798             17,638
  Buildings and improvements                      119,659            114,158
  Machinery and equipment                         295,783            257,841
                                               ----------         ----------
                                                  433,240            389,637
   Less accumulated depreciation and
      amortization                               (192,334)          (165,987)
                                               ----------         ----------
                                                  240,906            223,650

Investments in affiliated companies                37,775             52,233

Cost in excess of net assets of
  companies acquired, net of amortization
  ($132,570 in 2000 and $113,762 in 1999)         999,694            960,770

Other assets                                      133,565             88,665
                                               ----------         ----------
                                               $5,707,405         $4,483,255
                                               ==========         ==========


                            See accompanying notes.

<PAGE>
                            ARROW ELECTRONICS, INC.
                          CONSOLIDATED BALANCE SHEET
                            (Dollars in thousands)


                                             September 30,       December 31,
                                                 2000                1999
                                             -------------       ------------
                                              (Unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------

Current liabilities:
  Accounts payable                             $1,140,499         $  805,468
  Accrued expenses                                408,150            263,216
  Short-term borrowings, including current
    maturities of long-term debt and capital
    lease obligations                           1,464,996            255,977
                                               ----------         ----------
    Total current liabilities                   3,013,645          1,324,661

Long-term debt and capital lease obligations      859,436          1,533,421

Deferred income taxes                              30,932             39,474

Other liabilities                                  22,775             23,754

Minority interest                                  14,863             11,416

Shareholders' equity:
  Common stock, par value $1:
    Authorized - 120,000,000 shares
    Issued - 103,741,595 shares in
      2000 and 102,949,640 shares in 1999         103,742            102,950
  Capital in excess of par value                  527,704            501,379
  Retained earnings                             1,487,951          1,238,979
  Foreign currency translation adjustment        (195,712)           (95,295)
                                               ----------         ----------
                                                1,923,685          1,748,013

  Less: Treasury stock (5,552,692 shares in
          2000 and 7,004,349 shares in 1999),
          at cost                                 148,498            187,269
        Unamortized employee stock awards           9,433             10,215
                                               ----------         ----------
                                                1,765,754          1,550,529
                                               ----------         ----------
                                               $5,707,405         $4,483,255
                                               ==========         ==========



                            See accompanying notes.

<PAGE>
                           ARROW ELECTRONICS, INC.
                    CONSOLIDATED STATEMENT OF CASH FLOWS
                              (In thousands)

                                                       Nine Months Ended
                                                         September 30,
                                                   -------------------------
                                                       2000          1999
                                                       ----          ----
                                                           (Unaudited)
Cash flows from operating activities:
  Net income                                       $ 248,972       $  80,116
  Adjustments to reconcile net income to net
    cash provided by (used for) operations:
      Minority interest in earnings                    3,222           4,337
      Depreciation and amortization                   69,187          59,115
      Equity in losses of affiliated companies         2,635             173
      Integration charge                                   -          24,560
      Deferred income taxes                           (3,945)        (19,917)
      Change in assets and liabilities,
        net of effects of acquired businesses:
          Accounts receivable                       (627,032)       (189,200)
          Inventories                               (471,108)         23,222
          Prepaid expenses and other assets          (12,509)         (5,228)
          Accounts payable                           318,135          72,363
          Accrued expenses                           126,852          15,479
          Other                                      (27,359)          1,531
                                                   ---------       ---------
  Net cash provided by (used for) operating
   activities                                       (372,950)         66,551
                                                   ---------       ---------

Cash flows from investing activities:
  Acquisition of property, plant and
    equipment, net                                   (51,004)        (62,655)
  Cash consideration paid for acquired businesses    (92,704)       (430,390)
  Investments                                        (33,906)        (30,557)
                                                   ---------       ---------
  Net cash used for investing activities            (177,614)       (523,602)
                                                   ---------       ---------

Cash flows from financing activities:
  Change in short-term borrowings                    539,655           3,490
  Change in credit facilities                       (125,490)        429,478
  Change in long-term debt                           106,344         (38,621)
  Proceeds from exercise of stock options             34,407             382
  Purchases of common stock                             (321)           (100)
  Distribution to minority partners                        -         (37,852)
                                                   ---------       ---------
  Net cash provided by financing activities          554,595         356,777
                                                   ---------       ---------

Effect of exchange rate changes on cash               (5,351)         (9,393)
                                                   ---------       ---------

Net decrease in cash and short-term investments       (1,320)       (109,667)
Cash and short-term investments at beginning
  of period                                           44,885         158,924
                                                   ---------       ---------
Cash and short-term investments at end of period   $  43,565       $  49,257
                                                   =========       =========

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
    Income taxes                                   $  77,464       $  21,820
    Interest                                         104,579          79,439


                               See accompanying notes.

<PAGE>
                              ARROW ELECTRONICS, INC.
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                September 30, 2000
                                   (Unaudited)


Note A -- Basis of Presentation
- -------------------------------
The accompanying consolidated financial statements reflect all adjustments,
consisting only of normal recurring accruals, which are, in the opinion of
management, necessary for a fair presentation of the consolidated financial
position and results of operations at and for the periods presented.  Such
financial statements do not include all the information or footnotes necessary
for a complete presentation and, accordingly, should be read in conjunction with
the company's audited consolidated financial statements for the year ended
December 31, 1999 and the notes thereto.  The results of operations for the
interim periods are not necessarily indicative of results for the full year.

Note B -- Impact of Recently Issued Accounting Standards
- --------------------------------------------------------
In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities."  This
Statement is required to be adopted effective January 1, 2001.  The Statement
will require the company to recognize all derivatives on the balance sheet at
fair value.  Gains and losses resulting from changes in the value of the
derivatives would be accounted for depending on the intended use of the
derivative and whether it qualifies for hedge accounting.  Due to the company's
limited use of derivative financial instruments, adoption of Statement No. 133
is not expected to have a significant effect on the company's consolidated
results of operations, financial position, or cash flows.

Note C -- Debt
- --------------
During the quarter ended September 30, 2000, the global multi-currency
facility was reclassified from long-term debt to short-term debt, due to the
maturity date of September 30, 2001.  The commercial paper and bid facilities
were also reclassified to short-term, as such amounts are supported by the
global multi-currency facility.

Note D -- Integration of Acquisitions
- -------------------------------------
In 1999, the company recorded a special charge of $24.6 million related to the
acquisition and integration of the electronics distribution group of
Bell Industries, Inc. ("EDG") and Richey Electronics, Inc. ("Richey").  The
company also recorded an additional $38.2 million, as adjusted, as cost in
excess of net assets of companies acquired.  Of the total amounts recorded,
$41.7 million represented costs associated with closing facilities and severance
payments, $13 million represented costs associated with outside resources
related to the conversion of systems, professional fees principally related to
legal and accounting services, and certain other costs of the integration of
these businesses into Arrow, and $8.1 million represented the write-down of
property, plant and equipment and inventories to estimated fair value.  Of the
expected $54.7 million to be spent in cash in connection with the acquisition
and integration of EDG and Richey, $29.4 million has been spent to date.  The
remaining $25.3 million principally relates to vacated facilities leased with
various expiration dates through 2010.  Excluding the integration charge, net
income and net income per share on a basic and diluted basis were $96.6 million,
$1.02, and $1.01, respectively, for the nine months ended September 30, 1999.

Note E -- Earnings Per Share
- ----------------------------
The following table sets forth the calculation of basic and diluted earnings
per share (in thousands except per share data):

                                 For the Nine            For the Three
                                 Months Ended            Months Ended
                                 September 30,           September 30,
                             -------------------     --------------------
                               2000       1999         2000        1999
                               ----       ----         ----        ----
Net income                   $248,972    $80,116     $101,943     $36,753
                             ========    =======     ========     =======
Weighed average common
  shares outstanding
  for basic earnings
  per share                    96,392     95,097       97,403      95,176
Net effect of dilutive
  stock options and
  restricted stock
  awards                        2,016        904        2,619       1,141
                               ------     ------      -------      ------
Weighted average common
  shares outstanding
  for diluted earnings
  per share                    98,408     96,001      100,022      96,317
                               ======     ======      =======      ======

Basic earnings per share        $2.58       $.84        $1.05        $.39
                                =====       ====        =====        ====
Diluted earnings per share      $2.53       $.83        $1.02        $.38
                                =====       ====        =====        ====

Note F -- Comprehensive Income
- ------------------------------
Comprehensive income is defined as the aggregate change in shareholders'
equity excluding changes in ownership interests. For the company, the
components of comprehensive income are as follows (in thousands):

                                   For the Nine            For the Three
                                   Months Ended            Months Ended
                                   September 30,           September 30,
                                -------------------     -------------------
                                  2000       1999         2000       1999
                                  ----       ----         ----       ----
Net income                      $248,972    $80,116     $101,943    $36,753
Foreign currency
  translation adjustments(a)    (100,417)   (38,951)     (72,583)     9,576
                                --------    -------     --------    -------
Comprehensive income (b)        $148,555    $41,165     $ 29,360    $46,329
                                ========    =======     ========    =======

(a) The foreign currency translation adjustments have not been tax effected
    as investments in foreign affiliates are deemed to be permanent.

(b) Excluding the integration charge of $24.6 million ($16.5 million after
    taxes), comprehensive income was $57.6 million for the nine months ended
    September 30, 1999.

Note G -- Segment and Geographic Information
- --------------------------------------------
The company is engaged in the distribution of electronic components to
original equipment manufacturers and computer products to value-added
resellers (VARs).  The company has redefined its reportable segments to present
two distinct worldwide businesses that have different economic cycles,
structures, and competitors.  Computer products include North American Computer
Products Operations together with UK Microtronica, Nordic Microtronica, ATD (in
Iberia), and Arrow Computer Products (in France).  The prior year has been
restated for comparative purposes.  Revenue and operating income, by segment,
are as follows (in thousands):

                                For the Nine              For the Three
                                Months Ended              Months Ended
                                September 30,             September 30,
                           -----------------------   -----------------------
                              2000         1999         2000         1999
                              ----         ----         ----         ----
Revenue:
  Electronic Components    $7,027,775   $4,419,434   $2,601,334   $1,570,741
  Computer Products         2,240,387    2,408,023      735,734      805,056
                           ----------   ----------   ----------   ----------
    Consolidated           $9,268,162   $6,827,457   $3,337,068   $2,375,797
                           ==========   ==========   ==========   ==========

Operating income:
  Electronic Components    $  622,934   $  252,848   $  251,749   $   95,944
  Computer Products            26,948       45,974        7,635       14,647
  Corporate                  (112,529)     (68,603)     (46,041)     (16,965)
                           ----------   ----------   ----------   ----------
    Consolidated           $  537,353   $  230,219   $  213,343   $   93,626
                           ==========   ==========   ==========   ==========

Total assets, by segment, are as follows (in thousands):

                                          September 30,   December 31,
                                               2000           1999
                                          -------------   ------------
Total assets:
  Electronic Components                     $4,665,267     $3,317,253
  Computer Products                            841,358        991,785
  Corporate                                    200,780        174,217
                                            ----------     ----------
    Consolidated                            $5,707,405     $4,483,255
                                            ==========     ==========

As a result of the company's philosophy of maximizing operating efficiencies
through the centralization of certain functions, selected fixed assets and
related depreciation, as well as borrowings and goodwill amortization are not
directly attributable to the individual operating segments.

Revenues, by geographic area, are as follows (in thousands):

                       For the Nine                 For the Three
                       Months Ended                 Months Ended
                       September 30,                September 30,
                  ----------------------       ----------------------
                     2000        1999             2000        1999
                     ----        ----             ----        ----
Americas          $5,665,263  $4,560,417       $2,026,455  $1,588,049
Europe             2,588,802   1,733,839          918,003     574,769
Asia/Pacific       1,014,097     533,201          392,610     212,979
                  ----------  ----------       ----------  ----------
  Consolidated    $9,268,162  $6,827,457       $3,337,068  $2,375,797
                  ==========  ==========       ==========  ==========

Total assets, by geographic area, are as follows (in thousands):

                                         September 30,   December 31,
                                             2000            1999
                                         -------------   ------------
Americas                                   $3,067,198     $2,642,601
Europe                                      1,987,856      1,460,439
Asia/Pacific                                  652,351        380,215
                                           ----------     ----------
  Consolidated                             $5,707,405     $4,483,255
                                           ==========     ==========

Note H -- Subsequent Events
- ---------------------------
A special Meeting of Shareholders of the company was held on October 12, 2000
to vote on a proposed amendment to the Certificate of Incorporation to
increase the number of authorized shares of common stock from 120,000,000
shares to 160,000,000 shares.  The company's Certificate of Incorporation was
duly amended on October 24, 2000.

On October 16, 2000, the company completed its previously announced
acquisition of Wyle Components and Wyle Systems (collectively "Wyle"), which
reported combined 1999 sales in North America of about $2 billion, for
approximately $945 million (including the assumption of debt).

On October 30, 2000, the company completed its previously announced
acquisition of the Merisel Open Computing Alliance ("MOCA"), which reported
1999 revenues of about $950 million, for approximately $173 million (including
the repayment of off-balance sheet financing).

In October the company sold $1.075 billion of notes to finance the
acquisitions of Wyle and MOCA, as well as for general corporate purposes.  The
notes were sold in a Rule 144A offering in four tranches:  $200 million of
Floating Rate Notes due 2001; $425 million of 8.20% Senior Notes due 2003;
$250 million of 8.70% Senior Notes due 2005; and $200 million of 9.15% Senior
Notes due 2010.


Item 2.  Management's Discussion and Analysis of Financial Condition and
         ---------------------------------------------------------------
         Results of Operations.
         ---------------------

Sales
- -----
Consolidated sales for the first nine months and third quarter of 2000
increased 36 percent and 41 percent, respectively, compared with the
year-earlier periods.  The sales growth was driven by a 59 percent and 66
percent increase in sales of core components (net of foreign exchange rate
differences) for the first nine months and third quarter of 2000, respectively,
from the comparable year-earlier periods.  Sales of computer products decreased
by 7 percent and 9 percent for the first nine months and third quarter of 2000,
respectively, when compared to the year-earlier periods, principally as a result
of market conditions for mid-range products and lower sales of low margin
microprocessors (a product segment not considered a part of the company's core
business).

Operating Income
- ----------------
The company recorded operating income of $537.4 million and $213.3 million
in the first nine months and third quarter of 2000, respectively, compared
with $230.2 million and $93.6 million, respectively, in the year-earlier
periods.  Excluding the integration charge relating to EDG and Richey (see
Note D), operating income was $254.8 million for the nine months ended
September 30, 1999.  The increase in operating income is due to increased
sales and improving gross profit margins in the core components businesses
around the world, as well as a change in mix resulting in greater weighting
of the core components business.  In addition, operating expenses as a
percentage of sales decreased to 9.8 percent and 9.5 percent for the nine
months and third quarter ended September 30, 2000, respectively, from 10.1
percent and 9.7 percent, respectively, in the year-earlier periods.

Interest Expense
- ----------------
Interest expense of $107.2 million and $41.1 million in the first nine months
and third quarter of 2000, respectively, increased from $78.1 million and
$26.8 million, respectively, in the year-earlier periods.  The increase is the
result of additional debt incurred to fund acquisitions, internet-related joint
ventures, and capital expenditures, and investments in working capital to
support accelerated sales growth.

Income Taxes
- ------------
The company recorded a provision for taxes at an effective rate of 41 percent
and 40 percent for the first nine months and third quarter of 2000,
respectively, compared with 44.4 percent and 43.3 percent in the comparable
year-earlier periods.  Excluding the impact of the aforementioned integration
charge, the effective rate was 42.8 percent for the nine months ended
September 30, 1999.  The company's effective tax rate is principally impacted
by, among other factors, the statutory tax rates in the countries in which it
operates, the related level of earnings generated by these operations, and the
nondeductibility of goodwill amortization.

Net Income
- ----------
The company recorded net income of $249 million and $101.9 million in the
first nine months and third quarter of 2000, respectively, compared with $80.1
million and $36.8 million, respectively, in the year-earlier periods.  Excluding
the integration charge of $24.6 million ($16.5 million after taxes), net income
was $96.6 million for the first nine months of 1999.  The increase in net income
is due to increased sales and improving gross profit margins, offset, in part,
by higher levels of interest.

Liquidity and Capital Resources
- -------------------------------
The company maintains a high level of current assets, primarily accounts
receivable and inventories.  Consolidated current assets as a percentage of
total assets were approximately 75 percent at September 30, 2000 compared with
70 percent at September 30, 1999.

The net amount of cash used for the company's operating activities during the
first nine months of 2000 was $373 million, principally reflecting investments
in working capital, offset, in part, by earnings for the nine months.  The net
amount of cash used for investing activities was $177.6 million, including $51
million for various capital expenditures, $92.7 million primarily for the
acquisitions of Rapac Electronics Ltd., Tekelec Europe, Jakob Hatteland AS, and
Dicopel S.A. de C.V., and $33.9 million for internet-related joint ventures. The
net amount of cash provided by financing was $554.6 million, primarily
reflecting borrowings under the company's commercial paper program, credit
facilities, and various short-term bank borrowings.

The net amount of cash provided by the company's operating activities during
the first nine months of 1999 was $66.6 million, principally reflecting
earnings, offset, in part, by investments in working capital.  The net amount
of cash used for investing activities was $523.6 million, including $62.7
million for various capital expenditures and $460.9 million principally for
the acquisitions of Richey, EDG, the remaining 10% of Spoerle Electronic, the
remaining interest in Support Net, Inc., and the additional interest in
Scientific and Business Minicomputers, Inc., as well as certain internet-
related investments.  The net amount of cash provided by financing activities
was $356.8 million, reflecting borrowings under the company's credit
facilities, offset, in part, by the repayment of Richey's 7.0% convertible
subordinated notes and debentures and distributions to partners.

Year 2000 Update
- ----------------
The company has experienced no significant failures or disruptions of its
internal systems either on or after January 1, 2000.  Additionally, to date,
there have been no material Year 2000 related failures or disruptions with
respect to principal third-party business partners.

The company continues to monitor its systems and the capabilities of its
customers and suppliers to ensure that any previously unidentified Year 2000
issues that may arise are addressed promptly.  In the unlikely event that any
issues should occur, the company anticipates that they will be resolved
through implementation of its comprehensive contingency planning efforts.

Information Relating to Forward-Looking Statements
- --------------------------------------------------
This report includes forward-looking statements that are subject to certain
risks and uncertainties which could cause actual results or facts to differ
materially from such statements for a variety of reasons, including, but not
limited to:  industry conditions, changes in product supply, pricing, and
customer demand, competition, other vagaries in the electronic components and
commercial computer products markets, and changes in relationships with key
suppliers.  Shareholders and other readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
on which they are made.  The company undertakes no obligation to update
publicly or revise any of the forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.
        ----------------------------------------------------------

The company is exposed to market risk from changes in foreign currency exchange
rates and interest rates.

The company, as a large international organization, faces exposure to adverse
movements in foreign currency exchange rates.  These exposures may change over
time as business practices evolve and could have a material impact on the
company's financial results in the future.  The company's primary exposure
relates to transactions in which the currency collected from customers is
different from the currency utilized to purchase the product sold in Europe,
the Asia/Pacific region, and Latin America.  At the present time, the company
hedges only those currency exposures for which natural hedges do not exist.
Anticipated foreign currency cash flows and earnings and investments in
businesses in Europe, the Asia/Pacific region, and Latin America are not hedged
as in many instances there are natural offsetting positions.  The translation of
the financial statements of the non-North American operations is impacted by
fluctuations in foreign currency exchange rates.  Had the various average
foreign currency exchange rates remained the same during the first nine months
of 2000 as compared with December 31, 1999, 2000 sales and operating income
would have been $284 million and $27 million higher, respectively, than the
reported results.

The company's interest expense, in part, is sensitive to the general level of
interest rates in the Americas, Europe, and the Asia/Pacific region.  The
company manages its exposure to interest rate risk through the proportion of
fixed rate and variable rate debt in its total debt portfolio.  At September 30,
2000, the company had approximately 37 percent of its debt as fixed rate
borrowings and 63 percent of its debt subject to variable rates.  Interest
expense would fluctuate by approximately $7 million if average interest rates
had changed by one percentage point during the first nine months of 2000.  This
amount was determined by considering the impact of a hypothetical interest rate
on the company's borrowing cost.  This analysis does not consider the effect of
the level of overall economic activity that could exist in such an environment.
Further, in the event of a change of such magnitude, management could likely
take actions to further mitigate any potential negative exposure to the change.
However, due to the uncertainty of the specific actions that would be taken and
their possible effects, the sensitivity analysis assumes no changes in the
company's financial structure.


                       PART II.  OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders.
         ---------------------------------------------------

A Special Meeting of Shareholders of the company was held on October 12, 2000
to vote on a proposed amendment to the Certificate of Incorporation to
increase the number of authorized shares of common stock from 120,000,000
shares to 160,000,000 shares.  The resolution amending the Certificate of
Incorporation was adopted by a vote of 85,380,575 shares in favor and 560,220
shares against with 91,238 shares abstaining and no broker non-votes.


Item 6.  Exhibits and Reports on Form 8-K.
         --------------------------------

    (a)  Exhibits
           (22) Proxy Statement
           (27) Financial Data Schedule

    (b)  Reports on Form 8-K.
           During the quarter ended September 30, 2000 the following Current
         Reports on Form 8-K were filed:


           Date of Report                         Item Reported
          -----------------                  --------------------------
          September 1, 2000                  Announcement of agreement
                                             to acquire Wyle Components
                                             and Wyle Systems.

          September 18, 2000                 Announcement of agreement
                                             to acquire Merisel Open
                                             Computing Alliance, Inc.


                                 SIGNATURES



     Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                                ARROW ELECTRONICS, INC.





Date:  November 13, 2000                        By:/s/ Sam R. Leno
                                                   -------------------------
                                                   Sam R. Leno
                                                   Senior Vice President and
                                                    Chief Financial Officer


Date:  November 13, 2000                        By:/s/ Paul J. Reilly
                                                   ----------------------
                                                   Paul J. Reilly
                                                   Vice President-Finance






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-27
<SEQUENCE>2
<FILENAME>0002.txt
<TEXT>

<TABLE> <S> <C>

<ARTICLE>  5
<LEGEND>   This schedule contains summary financial information extracted
           from the 2000 10-Q and is qualified in its entirety by reference
           to such financial statements.
</LEGEND>
<MULTIPLIER>                                      1000

<S>                                        <C>
<PERIOD-TYPE>                                    9-MOS
<FISCAL-YEAR-END>                          DEC-31-2000
<PERIOD-START>                              JAN-1-2000
<PERIOD-END>                               SEP-30-2000
<CASH>                                          43,565
<SECURITIES>                                         0
<RECEIVABLES>                                2,330,780
<ALLOWANCES>                                    47,881
<INVENTORY>                                  1,926,305
<CURRENT-ASSETS>                             4,295,465
<PP&E>                                         433,240
<DEPRECIATION>                                 192,334
<TOTAL-ASSETS>                               5,707,405
<CURRENT-LIABILITIES>                        3,013,645
<BONDS>                                        859,436
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                       103,742
<OTHER-SE>                                   1,662,012
<TOTAL-LIABILITY-AND-EQUITY>                 5,707,405
<SALES>                                      9,268,162
<TOTAL-REVENUES>                             9,268,162
<CGS>                                        7,823,157
<TOTAL-COSTS>                                8,730,809
<OTHER-EXPENSES>                                     0
<LOSS-PROVISION>                                32,595
<INTEREST-EXPENSE>                             107,207
<INCOME-PRETAX>                                427,511
<INCOME-TAX>                                   175,249
<INCOME-CONTINUING>                            248,972
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   248,972
<EPS-BASIC>                                       2.58
<EPS-DILUTED>                                     2.53


</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-22
<SEQUENCE>3
<FILENAME>0003.txt
<TEXT>


<PAGE>   1

                            SCHEDULE 14A INFORMATION

          PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S>                                     <C>
[ ]  Preliminary Proxy Statement        [ ]  Confidential, for Use of the
                                             Commission
                                        Only (as permitted by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
[ ]  Confidential for the Use of the Commission Only (as permitted by
     Rule 14a-6(e)(2))
</TABLE>

                            ARROW 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)(4) and 0-12.

     (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:
        ------------------------------------------------------------------------
<PAGE>   2


ARROW ELECTRONICS, INC.

25 HUB DRIVE
MELVILLE, NEW YORK 11747

[ARROW LOGO]

STEPHEN P. KAUFMAN
CHAIRMAN OF THE BOARD


                                                               September 8, 2000


Dear Shareholder:


     You are cordially invited to attend a Special Meeting of Shareholders of
Arrow Electronics, Inc., which will be held on Thursday, October 12, 2000 at
11:00 A.M., at the company's offices at 25 Hub Drive, Melville, New York. The
formal Notice of Special Meeting and Proxy Statement, fully describing the
matters to be acted upon at the meeting, appear on the following pages.


     The only matter scheduled to be considered at the meeting is a proposal to
amend the company's Certificate of Incorporation to increase the number of
authorized shares of common stock.


     The Board of Directors recommends the approval of the proposal being
presented at the Special Meeting of Shareholders as being in the best interest
of Arrow. We urge you to read the Proxy Statement and give the proposal your
careful attention before completing the enclosed proxy card.


     Your vote is important regardless of the number of shares you own. Please
be sure you are represented at the meeting, whether or not you plan to attend,
by signing, dating and mailing the proxy card promptly. A postage-paid return
envelope is enclosed for your convenience. You may also vote your shares by
touch-tone telephone from the U.S. and Canada by using the toll-free telephone
number on your proxy card.

                                          Sincerely yours,

                                              /s/ Stephen P. Kaufman

                                               Stephen P. Kaufman
                                                 Chairman of the Board
<PAGE>   3


                            ARROW ELECTRONICS, INC.

                                  25 HUB DRIVE
                            MELVILLE, NEW YORK 11747
                            ------------------------

                   NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

                          TO BE HELD OCTOBER 12, 2000
                            ------------------------


                                                               September 8, 2000


To the Shareholders of
  Arrow Electronics, Inc.:


     A Special Meeting of Shareholders of Arrow Electronics, Inc., a New York
corporation ("Arrow"), is being called by the Board of Directors of the company
and will be held at the company's offices at 25 Hub Drive, Melville, New York,
on October 12, 2000 at 11:00 A.M., prevailing local time, for the following
purposes:


     1.  To consider and act upon a proposal to amend the Certificate of
         Incorporation of Arrow to increase the number of authorized shares of
         common stock from 120,000,000 shares to 160,000,000 shares.

     2.  To transact such other business as may properly come before the meeting
         or any adjournments thereof.

     Only shareholders of record at the close of business on August 31, 2000 are
entitled to notice of and to vote at the meeting or any adjournments thereof.

                                           By Order of the Board of Directors,

                                                    Robert E. Klatell
                                                        Secretary

                                   IMPORTANT
     Please complete, sign, and date the enclosed proxy and return it promptly
in the enclosed return envelope which has been provided for your convenience or
vote your shares by touch-tone telephone, whether or not you plan to attend the
meeting. Your prompt response will assure a quorum and reduce solicitation
expense.
<PAGE>   4


                            ARROW ELECTRONICS, INC.

                                  25 HUB DRIVE

                            MELVILLE, NEW YORK 11747

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

                        SPECIAL MEETING OF SHAREHOLDERS

                          TO BE HELD OCTOBER 12, 2000

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

                                PROXY STATEMENT

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


     This Proxy Statement, mailed to shareholders on September 8, 2000, is
furnished in connection with the solicitation by the Board of Directors of Arrow
Electronics, Inc., a New York corporation ("Arrow"), of proxies to be voted at
the Special Meeting of Shareholders to be held in Melville, New York, on October
12, 2000, and any adjournments thereof, for the purposes set forth in the
accompanying notice. Each proxy will be voted with respect to all shares
represented by it in accordance with the directions specified thereon and
otherwise in accordance with the judgment of the persons designated as proxies.
Any proxy on which no directions are specified will be voted in favor of the
actions described by the proxy. Any proxy may be revoked at any time prior to
exercise by written notice to the Secretary of Arrow by the person giving the
proxy.


     The cost of soliciting proxies will be borne by Arrow. Solicitation of
proxies is being made by Arrow through the mail, in person, and by telephone. In
addition to regular employees of Arrow who may engage in such solicitation, but
who will not be specifically compensated for such services, Arrow has retained
D.F. King & Co., Inc. to assist in soliciting proxies at an anticipated cost of
$8,500 plus expenses. Arrow will also request brokers and other nominees to
forward soliciting materials to the beneficial owners of the stock held of
record by such persons and will reimburse such persons for their expenses in
forwarding such materials.


     Only shareholders of record of Arrow's common stock at the close of
business on August 31, 2000 are entitled to notice of and to vote at the meeting
or any adjournments thereof. On August 31, 2000, Arrow had outstanding
98,137,820 shares of common stock.

<PAGE>   5

                         PROPOSED AMENDMENT TO ARROW'S
                    CERTIFICATE OF INCORPORATION TO INCREASE
                     THE AUTHORIZED SHARES OF COMMON STOCK
                                 TO 160,000,000

     On August 21, 2000, Arrow's Board of Directors adopted resolutions
amending, subject to shareholder approval at the special meeting, Article THIRD
of the Certificate of Incorporation to increase the authorized number of shares
of common stock. A copy of the amendment is attached to this proxy statement as
Annex A.


     Of the 120,000,000 currently authorized shares of common stock, as of
August 31, 2000, 98,137,820 shares of common stock were outstanding and
16,166,880 shares of common stock were required to be reserved for issuance
relating to outstanding options and restricted stock awards, and options
available for grant. The proposed amendment to the Certificate of Incorporation
would increase the number of authorized shares of common stock to 160,000,000.


     The affirmative vote of the holders of a majority of the outstanding shares
of the common stock of Arrow is sufficient for the adoption of the proposal to
approve the amendment to the Certificate of Incorporation increasing the number
of authorized shares of common stock. Consequently, any shares not voted
(whether by abstention or broker non-votes) have the same effect as votes
against the proposed amendment to the Certificate of Incorporation.


     THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THIS
PROPOSAL.



                       REASONS FOR THE PROPOSED AMENDMENT


                      OF THE CERTIFICATE OF INCORPORATION



     The reasons for the proposed increase in the number of authorized shares of
common stock are to make such additional shares available for future issuances
for acquisitions of property or stock of other corporations, for cash, as share
dividends and stock splits, as restricted stock awards, upon the exercise of
stock options, and for other purposes, as occasion may arise. The Board of
Directors believes it is desirable that Arrow have such additional shares
available for situations in which their issuance may be suitable without the
delay which would result from holding a meeting of shareholders to authorize the
issuance of additional shares.



     On August 7, 2000, a consortium consisting of Arrow, Schroder Ventures, and
Avnet, Inc. entered into a share purchase agreement to purchase the VEBA
Electronics Group from the Germany-based energy company, E.ON AG, for
approximately $2.35 billion in cash, including the assumption of debt.



     Under the terms of the share purchase agreement, Arrow will acquire Wyle
Systems, Wyle Components, and ATLAS Services North America (collectively
referred to as the "Wyle Businesses") for approximately $840 million, including
the assumption of debt, subject to closing adjustments. The Wyle Businesses,
based in Irvine, California, have approximately 1,900 employees and had sales of
approximately $2 billion in 1999.


                                        2
<PAGE>   6


     Wyle Components, which specializes in semiconductor distribution, will
complement Arrow's existing core components distribution businesses in North
America. Arrow believes that Wyle Systems, which specializes in the distribution
of computer products, will complement Arrow's computer distribution businesses
in North America and strengthen Arrow's distribution business in the western and
southwestern United States. Arrow also believes that the integration of the Wyle
Businesses with Arrow will produce sizeable synergies and the transaction will
be accretive to earnings in the first year following the combination.



     Arrow intends to offer for sale, in one or more transactions, a portion of
the additionally authorized common stock and, potentially, other securities
convertible into common stock to refinance part of the indebtedness incurred to
purchase the Wyle Businesses. Arrow has not determined the terms of the offer of
such common stock or other securities. If the proposed amendment is adopted, the
additional shares of common stock may be issued by the Board of Directors
without further action by the shareholders, except as may be required by law or
pursuant to Arrow's listing agreement with the New York Stock Exchange.


     The additional authorized shares of common stock would have the same rights
and privileges as the shares of common stock presently authorized and/or
outstanding. The issuance of additional shares of common stock other than on a
pro-rata basis to all holders of such stock would reduce the proportionate
interest of such shareholders.


     The authorized but unissued shares of common stock also could be used by
incumbent management to make more difficult, and thereby discourage, an attempt
to acquire control of Arrow. For example, the shares could be privately placed
with purchasers who might support the Board of Directors in opposing a hostile
takeover bid. The issuance of the new shares also could be used to dilute the
stock ownership and voting power of a third party seeking to remove directors,
replace incumbent directors, accomplish certain business combinations, or alter,
amend, or repeal provisions of the Certificate of Incorporation. To the extent
that it impedes any such attempts, the issuance of shares of common stock
following the amendment may serve to perpetuate existing management.


                                        3
<PAGE>   7

                         SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information with respect to:(a) the
only shareholders known to management to own beneficially more than 5% of the
outstanding common stock of Arrow as of August 31, 2000; (b) each of Arrow's
directors; (c) each of the executive officers of Arrow; and (d) all of Arrow's
directors and executive officers as a group.


<TABLE>
<CAPTION>
                                               SHARES OF
                                                COMMON           PERCENTAGE OF
                                             STOCK OWNED          OUTSTANDING
                                          BENEFICIALLY AS OF        COMMON
NAME                                         AUGUST 31, 2000        STOCK(1)
- ----                                      ------------------     -------------
<S>                                                <C>                    <C>
Sanford C. Bernstein & Co., Inc.                   13,886,400(2)          14.1%
767 Fifth Avenue
New York, New York 10153
Wellington Management Company, LLP                  8,268,200(3)           8.4%
75 State Street
Boston, Massachusetts 02109
Vanguard Windsor Funds -- Vanguard Windsor Fund     8,147,200(4)           8.3%
Post Office Box 2600
Valley Forge, Pennsylvania 19482
The Prudential Insurance Company of America         4,913,746(5)             5%
751 Broad Street
Newark, New Jersey 07102
Daniel W. Duval                                        33,319(6)            --%
Director
Carlo Giersch                                         294,400(7)            .3%
Director, Chairman of Spoerle Electronic
John N. Hanson                                         29,826(6)            --%
Director
Stephen P. Kaufman                                  3,886,130(8)             4%
Chairman of the Board
Roger King                                             31,119(6)            --%
Director
Robert E. Klatell                                   2,557,610(9)           2.6%
Director, Executive Vice President,
General Counsel and Secretary

Karen Gordon Mills                                     33,838(6)            --%
Director
Barry W. Perry                                         24,044(10)           --%
Director
Richard S. Rosenbloom                                  32,300(11)           --%
Director
Francis M. Scricco                                    662,305(12)           .7%
Director, President and Chief Executive Officer
</TABLE>


                                        4
<PAGE>   8


<TABLE>
<CAPTION>
                                                 SHARES OF
                                                  COMMON          PERCENTAGE OF
                                                STOCK OWNED        OUTSTANDING
                                            BENEFICIALLY AS OF       COMMON
NAME                                           AUGUST 31, 2000       STOCK(1)
- ----                                        ------------------    -------------
<S>                                            <C>                       <C>
John C. Waddell                                  2,239,655(13)           2.3%
Vice Chairman of the Board
All executive officers
and directors (30 persons)                       6,980,384(14)           7.1%
</TABLE>


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

 (1) Calculation is based upon 98,137,820 shares of common stock outstanding as
     of August 31, 2000.


 (2) Based upon a Schedule 13G dated February 8, 2000 filed with the Securities
     and Exchange Commission and reflects sole dispositive power with respect to
     13,886,400 shares, sole voting power with respect to 7,351,270 shares, and
     shared voting power with respect to 1,591,049 shares beneficially owned by
     Sanford C. Bernstein & Co., Inc., a registered investment adviser.

 (3) Based upon a Schedule 13G dated February 9, 2000 filed with the Securities
     and Exchange Commission and reflects shared dispositive power with respect
     to 8,268,200 shares and shared voting power with respect to 3,000 shares
     beneficially owned by Wellington Management Company, LLP, a registered
     investment adviser.

 (4) Based upon a Schedule 13G dated February 8, 2000 filed with the Securities
     and Exchange Commission and reflects sole voting power and shared
     dispositive power with respect to the shares beneficially owned by Vanguard
     Windsor Funds -- Vanguard Windsor Fund, a registered investment company.

 (5) Based upon a Schedule 13G dated January 31, 2000 filed with the Securities
     and Exchange Commission and reflects shared voting power and shared
     dispositive power with respect to 4,351,996 shares and sole voting power
     and sole dispositive power with respect to 561,750 shares beneficially
     owned by The Prudential Insurance Company of America, an insurance company
     and registered investment adviser.

 (6) Includes shares owned individually, options to purchase shares granted
     under Arrow's Non-Employee Directors Stock Option Plan, and common stock
     units deferred under Arrow's Non-Employee Directors Deferral Plan.

 (7) Includes shares owned individually, options to purchase shares granted
     under Arrow's Stock Option Plan, and shares awarded under Arrow's
     Restricted Stock Plan.

 (8) Includes options to purchase shares granted under Arrow's Stock Option
     Plan, shares awarded under Arrow's Restricted Stock Plan, and shares held
     by Arrow's Stock Ownership Plan.

 (9) Includes shares owned individually, options to purchase shares granted
     under Arrow's Stock Option Plan, shares awarded under Arrow's Restricted
     Stock Plan, and shares held by Arrow's Stock Ownership Plan.

(10) Includes options to purchase shares granted under Arrow's Non-Employee
     Directors Stock Option Plan and common stock units deferred under Arrow's
     Non-Employee Directors Deferral Plan.

                                        5
<PAGE>   9

(11) Includes shares owned individually and options to purchase shares granted
     under Arrow's Non-Employee Directors Stock Option Plan.

(12) Includes options to purchase shares granted under Arrow's Stock Option
     Plan, shares awarded under Arrow's Restricted Stock Plan, and shares
     allocated under Arrow's Stock Ownership Plan.

(13) Includes shares owned individually, options to purchase shares granted
     under Arrow's Non-Employee Directors Stock Option Plan, and shares held by
     Arrow's Stock Ownership Plan.


(14) Includes 2,227,630 shares held by the Arrow Electronics Stock Ownership
     Plan, of which Mr. Stephen P. Kaufman, Mr. Robert E. Klatell, and Mr. John
     C. Waddell are the trustees, including shares allocated to the accounts of
     Messrs. Kaufman, Klatell, and Waddell (pursuant to certain regulations
     promulgated by the Securities and Exchange Commission, Messrs. Kaufman,
     Klatell, and Waddell may be deemed to have beneficial ownership of these
     shares by virtue of their shared power as trustees to vote such shares);
     options to purchase 3,535,887 shares granted under Arrow's Stock Option
     Plan or under stock option plans of companies acquired by Arrow and assumed
     by Arrow as part of the acquisition (of which 2,480,297 options are
     currently exercisable), including options to purchase 1,561,250 shares,
     527,000 shares, 213,000 shares, 17,500 shares, 152,500 shares and 105,000
     shares granted to Mr. Kaufman, Mr. Francis M. Scricco, Mr. Klatell, Mr.
     Carlo Giersch, Mrs. Betty Jane Scheihing, and Ms. Jan Salsgiver,
     respectively (of which 1,362,500 options, 121,000 options, 179,250 options,
     no options, 109,375 options, and 82,500 options, respectively, are
     currently exercisable); 732,222 shares awarded under Arrow's Restricted
     Stock Plan (of which 380,672 shares have vested and are not forfeitable),
     including 97,250 shares, 135,000 shares, 95,450 shares, 23,900 shares,
     37,250 shares, and 26,000 shares awarded to Mr. Kaufman, Mr. Scricco, Mr.
     Klatell, Mr. Giersch, Mrs. Scheihing, and Ms. Salsgiver, respectively (of
     which 91,250 shares, 58,000 shares, 76,600 shares, 13,800 shares, 15,750
     shares, and 9,750 shares, respectively, have vested and are not
     forfeitable); options to purchase 170,000 shares granted under Arrow's
     Non-Employee Directors Stock Option Plan (of which 75,250 shares are
     currently exercisable); and 11,346 common stock units deferred under
     Arrow's Non-Employee Directors Deferral Plan.


                                 OTHER MATTERS

     Management does not expect any matters to come before the meeting other
than those to which reference is made in this Proxy Statement. However, if any
other matters should properly come before the meeting, it is intended that
proxies in the accompanying form will be voted thereon in accordance with the
judgment of the person or persons voting such proxies.

                                          By Order of the Board of Directors,

                                               Robert E. Klatell
                                                   Secretary

                                        6
<PAGE>   10

                                                                         ANNEX A

                            CERTIFICATE OF AMENDMENT
                                       OF
                   THE RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                            ARROW ELECTRONICS, INC.

               UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW

                                   * * * * *

     I, THE UNDERSIGNED, Robert E. Klatell, being the Secretary of Arrow
Electronics, Inc. hereby certify:

     1. The name of the corporation is Arrow Electronics, Inc.


     2. The certificate of incorporation of said corporation was filed in the
        office of the Department of State on the 20th day of November, 1946.


     3. (a) The certificate of incorporation is amended to increase the number
        of authorized shares of stock from 122,000,000 shares at $1 par value to
        162,000,000 shares at $1 par value. To effect this increase, the
        certificate of incorporation is amended to increase the number of
        authorized shares of common stock from 120,000,000 to 160,000,000. The
        2,000,000 authorized shares of preferred stock will remain the same.

        (b) To effect the foregoing, the first paragraph of Article Third
        relating to the number of authorized shares of stock is amended to read
        as follows:

     "THIRD: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is one hundred sixty-two million
(162,000,000) shares, consisting of:


     (a) Two million (2,000,000) shares of Preferred Stock having a par value of
         $1 per share (hereinafter referred to as "Preferred Stock"); and


     (b) One Hundred Sixty Million (160,000,000) shares of Common Stock having a
         par value of $1 per share (hereinafter referred to as "Common Stock")."


     4. The amendment hereinabove set forth was authorized by unanimous written
        consent of the Board of Directors dated August 21, 2000, followed by the
        vote of the holders of a majority of all the outstanding shares entitled
        to vote thereon.


     IN WITNESS WHEREOF, I have signed this certificate on the      day of
October 2000 and I affirm the statements contained herein as true under
penalties of perjury.

                                          By:
                                            ------------------------------------
                                            Name: Robert E. Klatell
                                            Title: Secretary

                                       A-1
<PAGE>   11
PROXY



                             ARROW ELECTRONICS, INC.

               This Proxy is Solicited by the Board of Directors.
        PROXY for the Special Meeting of Shareholders, October 12, 2000

         The undersigned hereby appoints Stephen P. Kaufman, Robert E. Klatell,
and Francis M. Scricco, and any one or more of them, with full power of
substitution, as proxy or proxies of the undersigned to vote all shares of stock
of ARROW ELECTRONICS, INC. which the undersigned would be entitled to vote if
personally present at the Special Meeting of Shareholders to be held on October
12, 2000, at 11:00 A.M., prevailing local time, at the company's offices at 25
Hub Drive, Melville, New York, or any adjournments thereof, as set forth on the
reverse hereof.

           Please Return This Proxy Promptly in the Enclosed Envelope

                 (CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

- --------------------------------------------------------------------------------
                              FOLD AND DETACH HERE

<PAGE>   12
                                                                     Please mark
                                                                   your votes as
                                                                    indicated in
                                                                   this example.
                                                                           [ x ]



1. Authority to vote FOR the adoption of a proposed amendment to the Certificate
   of Incorporation of Arrow Electronics, Inc., to increase the number of
   authorized shares of common stock from 120,000,000 to 160,000,000.


<TABLE>
<S>                                  <C>                       <C>
             FOR                     AGAINST                   ABSTAIN
             [ ]                       [ ]                       [ ]
</TABLE>

2. In accordance with their discretion upon such other matters as may properly
   come before the meeting or any adjournments thereof.

THIS PROXY IS BEING SOLICITED BY THE MANAGEMENT AND WILL BE VOTED AS SPECIFIED.
IF NOT OTHERWISE SPECIFIED, IT WILL BE VOTED FOR THE PROPOSAL DESCRIBED IN ITEMS
1 ABOVE AND OTHERWISE IN ACCORDANCE WITH THEIR DISCRETION.


                                          DATE ______________/_____/2000

                                          ____________________________________
                                          Signature
                                          ____________________________________
                                          Signature, if Jointly Held
                                          IF ACTING AS ATTORNEY, EXECUTOR,
                                          TRUSTEE OR IN OTHER REPRESENTATIVE
                                          CAPACITY, PLEASE SIGN NAME AND TITLE.


- --------------------------------------------------------------------------------
                              FOLD AND DETACH HERE


[PHONE GRAPHIC]                VOTE BY TELEPHONE                 [PHONE GRAPHIC]


                            QUICK***EASY***IMMEDIATE

Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.

- - -   You will be asked to enter a Control Number which is located in the box in
    the lower right hand corner of this form.

    PROPOSAL 1: To vote as the Board of Directors recommends FOR,
    Press 1; AGAINST, Press 9; ABSTAIN, Press 0.

               WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.

          PLEASE DO NOT RETURN THE ABOVE PROXY CARD IF VOTED BY PHONE.

                  CALL **TOLL FREE** ON A TOUCH-TONE TELEPHONE
                            1-800-840-1208 - ANYTIME

                    There is NO CHARGE to you for this call.





</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
